Company Valuation Under IFRS : Interpreting and Forecasting ...

Chapter Seven – An introduction to consolidation
Exhibit 7.16: Wal-Mart/Metro merger model
Wal-mart ($ million)
Year 2003 2004 2005 2006 2007 20082009
Input ratios
Sales growth 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
EBITDA margin 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Net interest rate 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1%
Taxation rate 35.3% 35.3% 35.3% 35.3% 35.3% 35.3% 35.3%
Fixed asset turn 4.5 4.5 4.5 4.5 4.5 4.5 4.5
Working capital turn 271.4 271.4 271.4 271.4 271.4 271.4 271.4
Net debt/equity 55.6% 55.6% 55.6% 55.6% 55.6% 55.6% 55.6%
Depreciation (years) 15.9 15.9 15.9 15.9 15.9 15.9 15.9
Pension provisions/Operating costs 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other provisions/sales 0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Earning from associates/Recurring net profit 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Minority/Net profit 2.4% 2.4% 2.4% 2.4% 2.4% 2.4% 2.4%
Profit and loss account
Sales 244,524 254,305 264,477 275,056 286,058 297,501 309,401
EBITDA 17,076 17,759 18,469 19,208 19,977 20,776 21,607
Depreciation (3,432) (3,569) (3,712) (3,861) (4,015) (4,176) (4,343)
Goodwill amortisation 0 0 0 0 0 0 0
EBIT 13,644 14,190 14,757 15,348 15,962 16,600 17,264
Non recurring items 0 0 0 0 0 0 0
Net interest (925) (941) (974) (1,009) (1,045) (1,082) (1,121)
Pre-tax profit 12,719 13,249 13,783 14,339 14,917 15,518 16,143
Taxation (4,487) (4,674) (4,862) (5,058) (5,262) (5,474) (5,695)
Net profit 8,232 8,575 8,921 9,280 9,655 10,044 10,448
Earnings from associates 0 0 0 0 0 0 0
Minority interest (193) (206) (214) (223) (232) (241) (251)
Attributable profit 8,039 8,369 8,706 9,058 9,423 9,803 10,198
Closing balance sheet
Financial assets and other long term assets 0 0 0 0 0 0 0
Goodwill 9,521 9,521 9,521 9,521 9,521 9,521 9,521
Tangible and intangible assets 54,681 56,868 59,143 61,509 63,969 66,528 69,189
Total fixed assets 64,202 66,389 68,664 71,030 73,490 76,049 78,710
Non-cash working capital 901 937 975 1,014 1,054 1,096 1,140
Capital employed 65,103 67,326 69,638 72,043 74,544 77,145 79,850
Net debt 22,643 23,438 24,264 25,124 26,018 26,948 27,915
Pension liabilities 0 0 0 0 0 0 0
Other deferred LT liabilities 1,761 1,761 1,761 1,761 1,761 1,761 1,761
Minority interest 1,362 1,568 1,782 2,005 2,237 2,478 2,729
Shareholders' funds 39,337 40,560 41,831 43,153 44,529 45,959 47,446
Capital employed 65,103 67,326 69,638 72,043 74,544 77,145 79,850
Check 0.0 (0.0) 0.0 0.0 (0.0) (0.0) 0.0
Cash flow
Attributable profit 8,039 8,369 8,706 9,058 9,423 9,803 10,198
Minority interest 193 206 214 223 232 241 251
Dividends - earnings from associates 0 0 0 0 0 0 0
Pension provisions 0 0 0 0 0 0 0
Other provisions 1,758 0 0 0 0 0 0
Depreciation 3,432 3,569 3,712 3,861 4,015 4,176 4,343
Goodwill amortisation 0 0 0 0 0 0 0
Change in working capital (890) (36) (37) (39) (41) (42) (44)
Cash flow from operations 12,532 12,108 12,595 13,102 13,629 14,177 14,747
Capital expenditure (9,709) (5,757) (5,987) (6,226) (6,475) (6,734) (7,004)
Dividends paid/shares repurchased (4,560) (7,146) (7,435) (7,735) (8,048) (8,373) (8,710)
Change in net cash/net debt (1,737) (795) (827) (860) (894) (930) (967)
Per share statistics
Shares issued (million) 4,395.0 4,395.0 4,395.0 4,395.0 4,395.0 4,395.0 4,395.0
EPS after goodwill amortization 1.83 1.90 1.98 2.06 2.14 2.23 2.32
EPS before goodwill amortization 1.83 1.90 1.98 2.06 2.14 2.23 2.32
DPS 0.30 1.63 1.69 1.76 1.83 1.91 1.98
Share price 53.1
369