Discounted Cash Flow (DCF) Analysis Unlevered

Richelieu Hardware Ltd. (RCH.TO)

$40

+0.30 (+0.76%)

All numbers are in Millions, Currency in USD

Stock DCF: 38.90 | 40 | overvalue

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	1,004.40	1,041.65	1,127.84	1,440.42	1,802.79	2,095.09	2,434.78	2,829.55	3,288.32	3,821.48
Revenue (%)
EBITDA	105.99	109.51	154.46	234.40	287.44	280.65	326.16	379.04	440.50	511.92
EBITDA (%)
EBIT	92.79	94.04	120.44	197.44	238.80	234.22	272.20	316.33	367.62	427.23
EBIT (%)
Depreciation	13.20	15.47	34.02	36.96	48.65	46.43	53.96	62.70	72.87	84.69
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	7.41	24.70	73.93	58.71	21.22	62.50	72.64	84.41	98.10	114.01
Total Cash (%)
Account Receivables	138.77	138.93	156.91	199.59	222.24	281.78	327.47	380.57	442.27	513.98
Account Receivables (%)
Inventories	270.28	275.15	287.34	395.46	660.24	598.69	695.76	808.57	939.67	1,092.03
Inventories (%)
Accounts Payable	88.36	90.14	120.19	155.01	169.91	202.36	235.17	273.30	317.61	369.11
Accounts Payable (%)
Capital Expenditure	-12.37	-10.56	-12.44	-17.05	-22.58	-24.24	-28.17	-32.74	-38.04	-44.21
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 40
Beta	1.000
Diluted Shares Outstanding	56.34
Cost of Debt
Tax Rate	27.31
After-tax Cost of Debt	1.96%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.453
Total Debt	264.13
Total Equity	2,253.80
Total Capital	2,517.93
Debt Weighting	10.49
Equity Weighting	89.51
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	1,004.40	1,041.65	1,127.84	1,440.42	1,802.79	2,095.09	2,434.78	2,829.55	3,288.32	3,821.48
EBITDA	105.99	109.51	154.46	234.40	287.44	280.65	326.16	379.04	440.50	511.92
EBIT	92.79	94.04	120.44	197.44	238.80	234.22	272.20	316.33	367.62	427.23
Tax Rate	26.91%	27.67%	27.63%	27.20%	27.31%	27.34%	27.34%	27.34%	27.34%	27.34%
EBIAT	67.82	68.01	87.16	143.73	173.58	170.18	197.77	229.83	267.10	310.41
Depreciation	13.20	15.47	34.02	36.96	48.65	46.43	53.96	62.70	72.87	84.69
Accounts Receivable	-	-0.16	-17.98	-42.68	-22.65	-59.55	-45.69	-53.10	-61.70	-71.71
Inventories	-	-4.88	-12.19	-108.12	-264.78	61.55	-97.07	-112.81	-131.10	-152.36
Accounts Payable	-	1.78	30.05	34.82	14.90	32.45	32.81	38.13	44.31	51.50
Capital Expenditure	-12.37	-10.56	-12.44	-17.05	-22.58	-24.24	-28.17	-32.74	-38.04	-44.21
UFCF	68.66	69.67	108.62	47.65	-72.88	226.82	113.61	132.03	153.44	178.31
WACC
PV UFCF						208.72	96.20	102.88	110.02	117.66
SUM PV UFCF										635.49

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.67
Free cash flow (t + 1)	181.88
Terminal Value	2,726.83
Present Value of Terminal Value	1,799.33

Intrinsic Value

Enterprise Value	2,434.82
Net Debt	242.91
Equity Value	2,191.92
Shares Outstanding	56.34
Equity Value Per Share	38.90