Discounted Cash Flow Calculation for WBAG:EVK using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
WBAG:EVK DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Evonik Industries's share price is below the future cash flow value, and at a moderate discount (> 20%).
Evonik Industries's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Evonik Industries's earnings available for a low price, and how does
this compare to other companies in the same industry?
Evonik Industries's earnings are expected to grow by 0.3% yearly, however this is not considered high growth (20% yearly).
Evonik Industries's revenue is expected to grow by 1.4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Evonik Industries's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Evonik Industries's finances.
The net worth of a company is the difference between its assets and liabilities.
Evonik Industries is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Evonik Industries's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Evonik Industries's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 1.4x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Christian Kullmann has been Chairman of Executive Board ance Chief Executive Officer of Evonik Industries AG since May 23, 2017. Mr. Kullmann served as Deputy Chairman of Executive Board at Evonik Industries AG from May 6, 2016 to May 23, 2017 and its Member of Executive Board from July 1, 2014 to May 23, 2017. He serves as an Executive Vice President of Evonik. He has been a Member of Supervisory Board at Borussia Dortmund GmbH & Co. Kommanditgesellschaft auf Aktien since May 23, 2007. He served as Chief Strategic Officer at Evonik Industries AG since July 1, 2014 until May 12, 2016.
Christian's compensation has increased by more than 20% in the past year.
Insufficient data for Christian to establish whether their remuneration is reasonable compared to companies of similar size in .
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Evonik Industries management team is about average.
CEO & Chairman of the Executive Board
Deputy Chairman of the Executive Board
CFO & Member of Executive Board
Chief Human Resource Officer
Head of Production and Technology
Head of Investor Relations
Vice President M&A
Head of Corporate Communications
Head of Supply Chain Management & Production and Head of Controlling Resource Efficiency
Managing Director of Operations In Taiwan
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Evonik Industries board of directors is about average.
Evonik Industries AG engages in the specialty chemicals business worldwide. It operates through Nutrition & Care, Resource Efficiency, Performance Materials, and Services segments. The Nutrition & Care segment offers specialty chemicals, including amphoteric surfactants, ceramides, phytosphingosines, oleochemicals, quaternary derivatives, polyurethane additives, organically modified silicones, superabsorbents, amino acids and amino acid derivatives, synthesis products, pharmaceutical polymers, and DL-methionine for use in consumer goods, and animal nutrition and healthcare products. The Resource Efficiency segment provides high-performance materials and specialty additives, such as hydrogen peroxide, activated nickel catalysts, precious metal powder catalysts, oil and fat hydrogenation catalysts, amorphous polyalphaolefins, polybutadienes, polyester resins, thermoplastic and reactive methacrylate resins, organically modified silicones, isophorone chemistry, PEEK, polyamide 12, oil additives, organosilanes, chlorosilanes, fumed silicas, fumed metal oxides, precipitated silicas, and matting agents for the automotive, paints, coatings, adhesives, construction, and various other sectors. The Performance Materials segment produces polymer materials and intermediates, including butene-1, DINP, isononanol, cyanuric chloride, alkoxides, TAA and TAA derivatives, and methacrylate monomers and polymers for rubber, plastics, and agriculture industries. The Services segment provides site management, utilities and waste management, technical, process technology, engineering, and logistics services. The company is headquartered in Essen, Germany. Evonik Industries AG is a subsidiary of RAG-Stiftung.
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