Discounted Cash Flow (DCF) Analysis Levered

Richelieu Hardware Ltd. (RCH.TO)

$38.65

+0.52 (+1.36%)

All numbers are in Millions, Currency in USD

Stock DCF: 45.77 | 38.65 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	942.54	1,004.40	1,041.65	1,127.84	1,440.42	1,607	1,792.85	2,000.20	2,231.52	2,489.59
Revenue (%)
Operating Cash Flow	55.96	42.27	88.17	145.71	104.41	124.63	139.04	155.12	173.06	193.08
Operating Cash Flow (%)
Capital Expenditure	-13.12	-12.37	-10.56	-12.44	-17.05	-19.04	-21.24	-23.70	-26.44	-29.50
Capital Expenditure (%)
Free Cash Flow	42.84	29.90	77.61	133.27	87.35	105.59	117.80	131.42	146.62	163.58

Weighted Average Cost Of Capital

Share price	$ 38.65
Beta	1.069
Diluted Shares Outstanding	56.31
Cost of Debt
Tax Rate	27.20
After-tax Cost of Debt	1.97%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.809
Total Debt	99.49
Total Equity	2,176.57
Total Capital	2,276.07
Debt Weighting	4.37
Equity Weighting	95.63
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	942.54	1,004.40	1,041.65	1,127.84	1,440.42	1,607	1,792.85	2,000.20	2,231.52	2,489.59
Operating Cash Flow	55.96	42.27	88.17	145.71	104.41	124.63	139.04	155.12	173.06	193.08
Capital Expenditure	-13.12	-12.37	-10.56	-12.44	-17.05	-19.04	-21.24	-23.70	-26.44	-29.50
Free Cash Flow	42.84	29.90	77.61	133.27	87.35	105.59	117.80	131.42	146.62	163.58
WACC
PV LFCF						98.18	101.84	105.64	109.59	113.68
SUM PV LFCF										528.93

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.55
Free cash flow (t + 1)	166.85
Terminal Value	3,006.34
Present Value of Terminal Value	2,089.23

Intrinsic Value

Enterprise Value	2,618.16
Net Debt	40.79
Equity Value	2,577.37
Shares Outstanding	56.31
Equity Value Per Share	45.77