Discounted Cash Flow (DCF) Analysis Unlevered

Micro Focus International plc (MFGP)

$6.48

-0.03 (-0.46%)

All numbers are in Millions, Currency in USD

Stock DCF: 586.57 | 6.48 | undervalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,380.70	3,208.68	3,348.40	3,001	2,899.90	3,791.66	4,957.64	6,482.18	8,475.53	11,081.86
Revenue (%)
EBITDA	526.40	872.85	2,204.70	-1,935.10	810.20	717.60	938.27	1,226.80	1,604.05	2,097.32
EBITDA (%)
EBIT	278.17	243.87	1,682.60	-2,744.20	-253.20	-168.17	-219.88	-287.50	-375.91	-491.51
EBIT (%)
Depreciation	248.23	628.98	522.10	809.10	1,063.40	885.77	1,158.15	1,514.30	1,979.96	2,588.83
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Projected	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	150.98	350.88	366.16	328.17	317.11	414.63	542.13	708.84	926.82	1,211.83
Total Cash (%)
Account Receivables	-	-	1,019.10	776.70	816.57	1,067.67	1,395.99	1,825.28	2,386.57	3,120.48
Account Receivables (%)
Inventories	0.06	0.15	0.16	0.14	0.13	0.18	0.23	0.30	0.39	0.51
Inventories (%)
Accounts Payable	16.89	39.25	40.96	36.71	35.48	46.39	60.65	79.30	103.69	135.57
Accounts Payable (%)
Capital Expenditure	-43.16	-122.50	-56.30	-26.30	-65.20	-89.11	-116.51	-152.33	-199.18	-260.43
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 6.48
Beta	0.000
Diluted Shares Outstanding	336.50
Cost of Debt
Tax Rate	18.04
After-tax Cost of Debt	4.38%
Risk-Free Rate
Market Risk Premium
Cost of Equity	3.380
Total Debt	4,742.90
Total Equity	2,180.52
Total Capital	6,923.42
Debt Weighting	68.51
Equity Weighting	31.49
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,380.70	3,208.68	3,348.40	3,001	2,899.90	3,791.66	4,957.64	6,482.18	8,475.53	11,081.86
EBITDA	526.40	872.85	2,204.70	-1,935.10	810.20	717.60	938.27	1,226.80	1,604.05	2,097.32
EBIT	278.17	243.87	1,682.60	-2,744.20	-253.20	-168.17	-219.88	-287.50	-375.91	-491.51
Tax Rate	19.58%	-840.46%	4,407.33%	-0.99%	18.04%	720.70%	720.70%	720.70%	720.70%	720.70%
EBIAT	223.71	2,293.48	-72,475.16	-2,771.36	-207.53	1,043.82	1,364.81	1,784.51	2,333.27	3,050.77
Depreciation	248.23	628.98	522.10	809.10	1,063.40	885.77	1,158.15	1,514.30	1,979.96	2,588.83
Accounts Receivable	-	-	-	242.40	-39.87	-251.10	-328.32	-429.29	-561.30	-733.90
Inventories	-	-0.08	-0.01	0.02	0	-0.04	-0.05	-0.07	-0.09	-0.12
Accounts Payable	-	22.36	1.71	-4.25	-1.24	10.91	14.26	18.65	24.39	31.88
Capital Expenditure	-43.16	-122.50	-56.30	-26.30	-65.20	-89.11	-116.51	-152.33	-199.18	-260.43
UFCF	428.78	2,822.23	-72,007.66	-1,750.39	749.57	1,600.25	2,092.34	2,735.76	3,577.05	4,677.03
WACC
PV UFCF						1,537.66	1,931.89	2,427.18	3,049.46	3,831.27
SUM PV UFCF										12,777.45

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.07
Free cash flow (t + 1)	4,770.57
Terminal Value	230,462.49
Present Value of Terminal Value	188,787.17

Intrinsic Value

Enterprise Value	201,564.62
Net Debt	4,184.50
Equity Value	197,380.12
Shares Outstanding	336.50
Equity Value Per Share	586.57