Discounted Cash Flow (DCF) Analysis Unlevered

Centrais Elétricas Brasileiras S.A.... (EBR-B)

$8.44

+0.47 (+5.90%)

All numbers are in Millions, Currency in USD

Stock DCF: 36.66 | 8.44 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	24,975.75	27,725.53	29,080.51	37,616.24	34,074.23	37,126.67	40,452.56	44,076.38	48,024.84	52,327
Revenue (%)
EBITDA	17,756.85	11,755.11	9,134.12	13,472.75	11,729.26	15,975.11	17,406.19	18,965.48	20,664.44	22,515.61
EBITDA (%)
EBIT	16,054.87	9,947.68	7,271.26	11,391.29	9,039	13,512.26	14,722.72	16,041.61	17,478.65	19,044.42
EBIT (%)
Depreciation	1,701.99	1,807.43	1,862.87	2,081.46	2,690.27	2,462.85	2,683.48	2,923.87	3,185.79	3,471.18
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	13,005.35	16,689.64	24,690.87	15,833.43	23,621.14	22,913.67	24,966.32	27,202.86	29,639.74	32,294.93
Total Cash (%)
Account Receivables	13,141.58	14,028.20	13,522.54	16,389.92	17,070.11	18,071.98	19,690.90	21,454.85	23,376.82	25,470.97
Account Receivables (%)
Inventories	890.93	1,010.65	938.33	1,115.47	1,256.80	1,269.20	1,382.90	1,506.78	1,641.76	1,788.84
Inventories (%)
Accounts Payable	3,360.55	3,095.47	3,904.05	4,031.53	3,517.17	4,387.22	4,780.24	5,208.47	5,675.05	6,183.43
Accounts Payable (%)
Capital Expenditure	-1,261.04	-2,020.20	-2,396.79	-2,692.24	-33,624.41	-9,386.69	-10,227.57	-11,143.78	-12,142.06	-13,229.78
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 8.44
Beta	0.533
Diluted Shares Outstanding	2,301.23
Cost of Debt
Tax Rate	-8.70
After-tax Cost of Debt	7.69%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.209
Total Debt	61,149.29
Total Equity	19,422.36
Total Capital	80,571.65
Debt Weighting	75.89
Equity Weighting	24.11
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	24,975.75	27,725.53	29,080.51	37,616.24	34,074.23	37,126.67	40,452.56	44,076.38	48,024.84	52,327
EBITDA	17,756.85	11,755.11	9,134.12	13,472.75	11,729.26	15,975.11	17,406.19	18,965.48	20,664.44	22,515.61
EBIT	16,054.87	9,947.68	7,271.26	11,391.29	9,039	13,512.26	14,722.72	16,041.61	17,478.65	19,044.42
Tax Rate	10.04%	-67.97%	8.83%	48.65%	-8.70%	-1.83%	-1.83%	-1.83%	-1.83%	-1.83%
EBIAT	14,442.26	16,708.77	6,629.16	5,849.99	9,825.29	13,759.41	14,992.01	16,335.02	17,798.35	19,392.76
Depreciation	1,701.99	1,807.43	1,862.87	2,081.46	2,690.27	2,462.85	2,683.48	2,923.87	3,185.79	3,471.18
Accounts Receivable	-	-886.61	505.66	-2,867.39	-680.19	-1,001.86	-1,618.93	-1,763.95	-1,921.97	-2,094.14
Inventories	-	-119.72	72.32	-177.14	-141.33	-12.40	-113.70	-123.88	-134.98	-147.07
Accounts Payable	-	-265.08	808.58	127.48	-514.36	870.05	393.02	428.22	466.59	508.38
Capital Expenditure	-1,261.05	-2,020.20	-2,396.79	-2,692.24	-33,624.41	-9,386.69	-10,227.57	-11,143.78	-12,142.06	-13,229.78
UFCF	14,883.20	15,224.59	7,481.80	2,322.16	-22,444.73	6,691.36	6,108.30	6,655.50	7,251.71	7,901.34
WACC
PV UFCF						6,234.38	5,302.47	5,382.91	5,464.57	5,547.47
SUM PV UFCF										27,931.80

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.33
Free cash flow (t + 1)	8,059.36
Terminal Value	151,207.56
Present Value of Terminal Value	106,161.70

Intrinsic Value

Enterprise Value	134,093.49
Net Debt	49,721.81
Equity Value	84,371.69
Shares Outstanding	2,301.23
Equity Value Per Share	36.66