Discounted Cash Flow (DCF) Analysis Unlevered

Telefônica Brasil S.A. (VIV)

$8.125

-0.26 (-3.04%)

All numbers are in Millions, Currency in USD

Stock DCF: 103.51 | 8.125 | 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	43,462.74	44,268.17	43,126.47	44,032.61	48,041.16	49,299.70	50,591.20	51,916.54	53,276.60	54,672.29
Revenue (%)
EBITDA	20,342.75	18,289.79	18,013.58	19,126.31	19,714.29	21,136.07	21,689.77	22,257.98	22,841.07	23,439.44
EBITDA (%)
EBIT	11,974.13	7,370	6,786.08	7,087.97	7,054.41	8,944.48	9,178.80	9,419.26	9,666.01	9,919.23
EBIT (%)
Depreciation	8,368.62	10,919.79	11,227.50	12,038.33	12,659.87	12,191.59	12,510.97	12,838.72	13,175.06	13,520.20
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	3,381.33	3,393.38	5,762.08	6,478.59	2,274.85	4,757.87	4,882.52	5,010.42	5,141.68	5,276.38
Total Cash (%)
Account Receivables	13,253.19	13,307.45	11,214.24	12,198.82	11,884.74	13,705.33	14,064.36	14,432.81	14,810.91	15,198.91
Account Receivables (%)
Inventories	462.05	578	633.10	639.83	789.72	683.66	701.57	719.95	738.81	758.16
Inventories (%)
Accounts Payable	7,642.78	6,871.80	6,613	7,132.40	7,415.80	7,895.46	8,102.29	8,314.55	8,532.37	8,755.89
Accounts Payable (%)
Capital Expenditure	-8,517.46	-8,838.64	-8,289.26	-9,295.48	-9,894.12	-9,908.22	-10,167.78	-10,434.15	-10,707.49	-10,988
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 8.125
Beta	0.018
Diluted Shares Outstanding	1,670.85
Cost of Debt
Tax Rate	15.45
After-tax Cost of Debt	9.62%
Risk-Free Rate
Market Risk Premium
Cost of Equity	3.784
Total Debt	19,301.80
Total Equity	13,575.66
Total Capital	32,877.46
Debt Weighting	58.71
Equity Weighting	41.29
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	43,462.74	44,268.17	43,126.47	44,032.61	48,041.16	49,299.70	50,591.20	51,916.54	53,276.60	54,672.29
EBITDA	20,342.75	18,289.79	18,013.58	19,126.31	19,714.29	21,136.07	21,689.77	22,257.98	22,841.07	23,439.44
EBIT	11,974.13	7,370	6,786.08	7,087.97	7,054.41	8,944.48	9,178.80	9,419.26	9,666.01	9,919.23
Tax Rate	20.83%	21.79%	20.60%	-4.70%	15.45%	14.80%	14.80%	14.80%	14.80%	14.80%
EBIAT	9,479.78	5,763.90	5,388.14	7,420.80	5,964.36	7,621.05	7,820.70	8,025.58	8,235.83	8,451.58
Depreciation	8,368.62	10,919.79	11,227.50	12,038.33	12,659.87	12,191.59	12,510.97	12,838.72	13,175.06	13,520.20
Accounts Receivable	-	-54.27	2,093.22	-984.59	314.08	-1,820.58	-359.04	-368.44	-378.10	-388
Inventories	-	-115.95	-55.10	-6.73	-149.90	106.06	-17.91	-18.38	-18.86	-19.35
Accounts Payable	-	-770.98	-258.79	519.40	283.40	479.66	206.84	212.26	217.82	223.52
Capital Expenditure	-8,517.46	-8,838.64	-8,289.26	-9,295.48	-9,894.12	-9,908.22	-10,167.78	-10,434.15	-10,707.49	-10,988
UFCF	9,330.94	6,903.85	10,105.69	9,691.73	9,177.70	8,669.56	9,993.78	10,255.58	10,524.25	10,799.95
WACC
PV UFCF						8,086.52	8,694.79	8,322.51	7,966.18	7,625.10
SUM PV UFCF										40,695.10

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.21
Free cash flow (t + 1)	11,015.95
Terminal Value	211,438.62
Present Value of Terminal Value	149,282.14

Intrinsic Value

Enterprise Value	189,977.23
Net Debt	17,027.96
Equity Value	172,949.27
Shares Outstanding	1,670.85
Equity Value Per Share	103.51