FINM3005 Ass 4 - Team 10 ABC - EVM Worksheets

Current Valuation of Comparative Companies Enterprise Value Multiples (December 2012) Company ABC BLD CSR FBU Reported EBITDA 248.37 646.28 251.91 727.31 Less Income from Non-Operating Assets Joint Ventures 0 0 0 0 Associates 0 17.9 11.25 0 Investments 0 0 0 0 Interest on Operating Leases 0 0 13.88 0 EBITDA from Operations 248.37 628.38 226.78 727.31 Market Value of Equity 1940.65 2867.4 882.97 3352.88 Value of Non-Equity Claims ST Debt 0.7 163 3.1 139 LT Debt 267.7 1869.05 1.4 1918.7 Excess Cash 12.58 -122.14 -23.62 -1.64 Minorities 2.9 40.25 69.25 34 Capitalised Operating Leases 15 0 201.19 0 Retirement Related Liability 11 0 0 34 Preference Shares 0 0 0 0 Employee Options 12.05 24.72 0 4.68 Restructuring Provision 19 0 0 0 Convertible Notes 0 0 0 0 Enterprise Value 2281.58 4842.28 1134.29 5481.62 Less Value of Non-Operating Assets Joint Ventures 432 0 0 0 Associates 0 37.8 16.4 204 Investments 0 0 0 75 Tax Losses 0 47.9 0 15 Enterprise Value of Operations 1849.58 4756.58 1117.89 5187.62 Enterprise Value Multiple 7.45 7.57 4.93 7.13 Weighting for ABC EVM n/a 0.5 0 0.35 EVM for ABC based on compcos 7.33 Table Notes: 1 . Boral, CSR, Fletcher Building and Heildelberg Cement (European) were chosen as the best com for ABC because they followed similar historic trends in a similar range of values. 2 . Reported EBITDA for HEI a to be operating EBITDA. We know ABC's EBITDA is operating. 3 . Assume interest on lease is 6.9% (=kd). ABC's already accounted for in KGW Model 4 . Mkt Value Equity (30/04/12). 5 . HEI records total debt. 6 . Assume ope sales. 7 .Assume a cost of debt of 6.9% and an asset life of 8 years for ABC, CSR, HEI. BLD and FBU so not capit 8 . Employee options = (number of executive shares*share price at 30/4/12) CSR offered nill executive shares 9 . These are book values of non-operating assets (market value is the ideal measure but the data was unavail valued using bare bones DCF. 10 . BLD is ABC's closest competitor based on operations and clientel, hence it is weighting. FBU is weighted slightly higher than HEI on the basis that they are a domestic competitor and deal market pressures as ABC. CSR is given no weight due to its significant difference in EVM. General Notes: A combination of our DCF valuation, class data file, brokers reports, annual reports and interim on to complete this table. A weighted average was applied when brokers reports were used to reverse engine values - for BLD, FBU (1/2*Jun12+1/2*Jun13) and CSR (3/12*Mar12+9/12*Mar13).

Share Price Share Price = Mkt Value Equity/Number of Shares Mkt Value Equity = EVM*EBITDA + Other Assets - Non-Equity Claims Share Price Calculation EVM 7.62 EBITDA 248.37 Other Assets 432 Non-Equity Claims 282.48 Mkt Value Equity 2042.10 Number of Shares 636278 Share Price 3.21 Method EVM Weight Historic 7.8 0.35 Comparable Companies 7.33 0.25 Fundamental Determinants 7.64 0.4 Final EVM 7.62

Notes Comments HEI 1 See 'EVM Comps Input' tab for detail on the inputs and ke 2491.75 2 0 0 57.48 3 2434.27 7815.37 4 - 9801 5 -2351 6 951.6 899.46 7 842.4 0 6.16 8 0 0 17964.99 9 0 390.7 63.9 564.7 16945.69 6.96 0.15 10 mparitive companies and FBU was assumed s interest on leases is erating cash is 2% of talise operating leases. at last reporting date. lable). ABC's JV was s given the largest l with the same m reports were relied eer December 2012