More Related Content Similar to Presentation (20) 7. • 2.5% in Canada
• 3.8% in the US
Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Market Growth
8. Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Margins
25.00%
35.00%
45.00%
55.00%
65.00%
75.00%
$-
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
2010 2011 2012 2013 2014
Revenues
Gross Margins
22. • Competitors
• DCF
• Business Operating Units
• Revenue Growth
• Executive Compensation
• Industry Revenue
• Firm sizes
• Market Share
• Industry Growth Rates
• Revenue Breakdown
• Income Statement
• Balance Sheet (assets)
• Balance Sheet (liabilities and
equity)
Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Appendices
• Stock Overview
• Industry
• Market Growth
• Margins
• Goodwill
• Financial Analysis
• WACC
• DCF Assumptions
• Catalysts
• Risks
• Recommendation
24. Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
DCF Model
Stantec
Discounted Cash Flow Analysis
($ in millions, except per share data)
Historical Projection Period Terminal
Base year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Perpetuity
Revenues 2,529.9 $ 2,770.3 $ 3,033.4 $ 3,321.6 $ 3,637.2 $ 3,982.7 $ 4,306.0 $ 4,596.1 $ 4,842.2 $ 5,034.7 $ 5,175.1 $ 5,319.5
% growth 9.50% 9.50% 9.50% 9.50% 9.50% 8.12% 6.74% 5.36% 3.97% 2.79% 2.79%
EBIT (Operating income) 223.2 $ 244.4 $ 267.6 $ 293.0 $ 320.9 $ 351.4 $ 379.9 $ 405.5 $ 427.2 $ 444.2 $ 456.6 $ 469.3
% margin 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82% 8.82%
Tax rate 26.30% 26.30% 26.30% 26.30% 26.30% 26.30% 27.04% 27.78% 28.52% 29.26% 30.00% 30.00%
EBIT(1-t) 164.5 $ 180.1 $ 197.2 $ 216.0 $ 236.5 $ 259.0 $ 2,771.7 $ 292.8 $ 305.4 $ 314.2 $ 319.6 $ 328.5
- Reinvestment 35.1 39.2 43.8 48.9 54.7 52.2 47.8 41.4 33.0 24.6 129.2
Free Cash Flows To The Firm $ 145.0 $ 158.0 $ 172.2 $ 187.6 $ 204.3 $ 225.0 $ 245.0 $ 264.0 $ 281.2 $ 295.0 $ 199.3
WACC 8.61% 8.61% 8.61% 8.61% 8.61% 8.30% 8.00% 7.70% 7.40% 7.09% 7.09%
Cumulated discount factor 0.9207 0.8478 0.7806 0.7187 0.6617 0.6110 0.5657 0.5253 0.4891 0.4567
Present Value of Free Cash Flows $ 133.5 $ 134.0 $ 134.4 $ 134.8 $ 135.2 $ 137.4 $ 138.6 $ 138.7 $ 137.5 $ 134.7 $ 2,022.6
WACC Equity Debt Capital
Market Value $ 2,932.49 $ 810.58 $ 3,743.07
Weight in Cost of Capital 78.34% 21.66% 100.00%
Cost of Component 10.52% 1.69% 8.61%
Sum of PV 3,381.5 Equity Debt Output
Value of equity 3,225.9 Number of Shares outstanding = 93.54 Book Value of Straight Debt = $ 309.27 Estimating Market Value of Straight Debt = $ 311.27
- Value of options 35.7 Current Market Price per share = $ 31.35 Interest Expense on Debt = 8.515 Estimated Value of Straight Debt in Convertible = $ -
Value of equity in common stock 3,190.3 Average Maturity = 2 Value of Debt in Operating leases = $ 499.32
Number of shares 93.5 Unlevered beta = 0.83 Pre-tax Cost of Debt = 2.4182% Estimated Value of Equity in Convertible = $ -
Estimated value /share 34.1 Riskfree Rate = 2.59% Tax Rate = 30% Levered Beta for equity = 0.99
Price 31.4 Equity Risk Premium = 8.00%
33. Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Income Statement
2010-2014 (in 000's) 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014
REAL % REAL % REAL % REAL % REAL %
Gross revenue 1513062 100.00% 1683403 100.00% 1870259 100.00% 2236410 100.00% 2529918 100.00%
Less subconsultant and other direct expenses 287022 18.97% 304856 18.11% 316445 16.92% 404031 18.07% 454607 17.97%
Net revenue 1226040 81.03% 1378547 81.89% 1553814 83.08% 1832379 81.93% 2075311 82.03%
Direct payroll costs 537704 35.54% 615136 36.54% 699657 37.41% 829926 37.11% 936918 37.03%
Gross margin 688336 45.49% 763411 45.35% 854157 45.67% 1002453 44.82% 1138393 45.00%
Administrative and marketing expenses 510724 33.75% 565164 33.57% 632086 33.80% 746138 33.36% 846148 33.45%
Depreciation of property and equipment 25461 1.68% 27933 1.66% 27849 1.49% 32389 1.45% 38698 1.53%
Impairment of goodwill 0 0.00% 90000 5.35% 0 0.00% 0 0.00% 0 0.00%
Amortization of intangible assets 17289 1.14% 18395 1.09% 20008 1.07% 21235 0.95% 24252 0.96%
Net interest expense 7862 0.52% 9723 0.58% 8681 0.46% 8620 0.39% 8515 0.34%
Other net finance expense -219 -0.01% 2848 0.17% 2773 0.15% -1346 -0.06% 3083 0.12%
Share of income from joint ventures and
associates -2209 -0.15% -793 -0.05% -2026 -0.11% -2276 -0.10% -2419 -0.10%
Gain on sale of equity investments -7183 -0.47% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Foreign exchange loss 994 0.07% 501 0.03% 181 0.01% -184 -0.01% -425 -0.02%
Other (income) expense 838 0.06% -36 0.00% 147 0.01% -1035 -0.05% -2659 -0.11%
Income before income taxes 134779 8.91% 49676 2.95% 164458 8.79% 198912 8.89% 223200 8.82%
Current Income Taxes 42435 2.80% 32733 1.94% 44516 2.38% 60141 2.69% 59728 2.36%
Deferred Income Taxes -2397 -0.16% 4281 0.25% -1077 -0.06% -7430 -0.33% -1026 -0.04%
Total income taxes 40038 2.65% 37014 2.20% 43439 2.32% 52711 2.36% 58702 2.32%
Net income for the period 94741 6.26% 12662 0.75% 121019 6.47% 146201 6.54% 164498 6.50%
Basic EPS 2.07 0.28 2.65 3.16 1.76
Diluted EPS 2.06 0.28 2.64 3.14 1.74
34. Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Balance Sheet (assets)
2010-2014 (in 000's) 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014
REAL % REAL % REAL % REAL % REAL %
ASSETS
Current
Cash and cash equivalents 62731 4.69% 36111 2.72% 40708 2.78% 143030 8.57% 153704 7.65%
Trade and other receivables 295740 22.11% 310669 23.41% 353451 24.14% 384907 23.07% 431751 21.48%
Unbilled Revenue 104696 7.83% 133881 10.09% 148908 10.17% 143894 8.63% 192310 9.57%
Income Taxes Recoverable 12313 0.92% 16800 1.27% 3840 0.26% 8792 0.53% 11171 0.56%
Prepaid Expenses 10699 0.80% 13908 1.05% 14283 0.98% 18959 1.14% 23425 1.17%
Other financial assets 10589 0.79% 14612 1.10% 17670 1.21% 21418 1.28% 31526 1.57%
Other assets 4176 0.31% 3172 0.24% 4106 0.28% 5231 0.31% 530 0.03%
Total Current Assets 500944 37.46% 529153 39.87% 582966 39.81% 726231 43.53% 844417 42.00%
Non-Current
Property and Equipment 113689 8.50% 107853 8.13% 114994 7.85% 133534 8.00% 152707 7.60%
Goodwill 548272 41.00% 509028 38.35% 566784 38.71% 594826 35.66% 760631 37.83%
Intangible Assets 72136 5.39% 72047 5.43% 85748 5.86% 78857 4.73% 97243 4.84%
Investment in joint ventures and associates 2831 0.21% 2365 0.18% 5286 0.36% 4996 0.30% 4975 0.25%
Deferred Tax assets 40912 3.06% 43647 3.29% 40975 2.80% 45383 2.72% 58801 2.92%
Other financial assets 57235 4.28% 61606 4.64% 63691 4.35% 83163 4.99% 90667 4.51%
Other assets 1339 0.10% 1657 0.12% 3791 0.26% 1188 0.07% 1029 0.05%
Total non-current assets 836414 62.54% 798203 60.13% 881269 60.19% 941947 56.47% 1166053 58.00%
TOTAL ASSETS 1337358 100.00% 1327356 100.00% 1464235 100.00% 1668178 100.00% 2010470 100.00%
35. Business
Overview
Industry and
Competitive
Analysis
Financial
Analysis
Valuation Risk Analysis Conclusion
Balance Sheet (Liabilities and equity)
2010-2014 (in 000's) 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014
REAL % REAL % REAL % REAL % REAL %
LIABILITIES AND EQUITY
Current
Trade and other payables 186287 13.93% 191859 14.45% 211726 14.46% 259113 15.53% 300293 14.94%
Billings in excess of cost 56741 4.24% 49441 3.72% 60822 4.15% 77803 4.66% 96082 4.78%
Income taxes payable 4595 0.34% 0 0.00% 159 0.01% 9127 0.55% 0 0.00%
Current Portion of long-term debt 46394 3.47% 59593 4.49% 42888 2.93% 37130 2.23% 53172 2.64%
Provisions 17297 1.29% 16373 1.23% 14863 1.02% 12047 0.72% 10796 0.54%
Other financial liabilities 9365 0.70% 5042 0.38% 1672 0.11% 1927 0.12% 2773 0.14%
Other liabilities 3313 0.25% 5208 0.39% 8650 0.59% 9837 0.59% 11953 0.59%
Total Current Liabilities 323992 24.23% 327516 24.67% 340780 23.27% 406984 24.40% 475069 23.63%
Non-current
Long-term debt 275636 20.61% 236601 17.82% 256408 17.51% 200943 12.05% 256093 12.74%
Provisions 39143 2.93% 42076 3.17% 36959 2.52% 49539 2.97% 51596 2.57%
Deferred tax Liabilities 47780 3.57% 54564 4.11% 57840 3.95% 58082 3.48% 74602 3.71%
Other financial liabilities 5789 0.43% 2257 0.17% 2342 0.16% 2041 0.12% 2547 0.13%
Other liabilities 29330 2.19% 37191 2.80% 42778 2.92% 57955 3.47% 64318 3.20%
Total non-current liabilities 397678 29.74% 372689 28.08% 396327 27.07% 368560 22.09% 449156 22.34%
TOTAL LIABILITIES 721670 53.96% 700205 52.75% 737107 50.34% 775544 46.49% 924225 45.97%
Shareholders' Equity
Share Capital 225158 16.84% 226744 17.08% 240369 16.42% 262573 15.74% 276698 13.76%
Contributed Surplus 13340 1.00% 14906 1.12% 14291 0.98% 12369 0.74% 13490 0.67%
Retained Earnings 393844 29.45% 397847 29.97% 491227 33.55% 606056 36.33% 735917 36.60%
Accumulated other comprehensive income -16757 -1.25% -12449 -0.94% -18862 -1.29% 11636 0.70% 60140 2.99%
TOTAL EQUITY 615585 46.03% 627048 47.24% 727025 49.65% 892634 53.51% 1086245 54.03%
Non-controlling interests 103 0.01% 103 0.01% 103 0.01% 0 0.00% 0 0.00%
TOTAL LIABILITIES AND EQUITY 1337358 100.00% 1327356 100.00% 1464235 100.00% 1668178 100.00% 2010470 100.00%
