Intrinsic value of Ardagh Group Cl A - ARD

Previous Close

$18.39

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$18.39

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ARD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Ardagh Group Cl A (ARD) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.05
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  6,697
  6,831
  6,988
  7,168
  7,369
  7,593
  7,838
  8,105
  8,394
  8,705
  9,039
  9,396
  9,778
  10,184
  10,615
  11,073
  11,559
  12,072
  12,615
  13,189
  13,795
  14,435
  15,109
  15,820
  16,569
  17,358
  18,188
  19,063
  19,982
  20,950
  21,968
Variable operating expenses, $m
 
  6,257
  6,401
  6,566
  6,750
  6,955
  7,179
  7,424
  7,689
  7,974
  8,280
  8,607
  8,956
  9,328
  9,724
  10,143
  10,588
  11,058
  11,556
  12,082
  12,637
  13,222
  13,840
  14,491
  15,177
  15,900
  16,661
  17,461
  18,304
  19,190
  20,123
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  6,295
  6,257
  6,401
  6,566
  6,750
  6,955
  7,179
  7,424
  7,689
  7,974
  8,280
  8,607
  8,956
  9,328
  9,724
  10,143
  10,588
  11,058
  11,556
  12,082
  12,637
  13,222
  13,840
  14,491
  15,177
  15,900
  16,661
  17,461
  18,304
  19,190
  20,123
Operating income, $m
  402
  574
  587
  602
  619
  638
  658
  681
  705
  731
  759
  789
  821
  855
  892
  930
  971
  1,014
  1,060
  1,108
  1,159
  1,213
  1,269
  1,329
  1,392
  1,458
  1,528
  1,601
  1,679
  1,760
  1,845
EBITDA, $m
  920
  1,031
  1,055
  1,082
  1,112
  1,146
  1,183
  1,223
  1,267
  1,314
  1,364
  1,418
  1,476
  1,537
  1,602
  1,672
  1,745
  1,822
  1,904
  1,991
  2,082
  2,179
  2,281
  2,388
  2,501
  2,620
  2,746
  2,878
  3,016
  3,162
  3,316
Interest expense (income), $m
  587
  679
  402
  418
  436
  456
  478
  502
  528
  557
  588
  621
  656
  694
  734
  776
  822
  869
  920
  974
  1,031
  1,090
  1,154
  1,220
  1,290
  1,364
  1,442
  1,524
  1,611
  1,702
  1,797
Earnings before tax, $m
  -1
  -105
  185
  184
  183
  182
  181
  179
  177
  174
  172
  169
  166
  162
  158
  154
  149
  145
  140
  134
  128
  122
  116
  109
  101
  94
  85
  77
  68
  58
  48
Tax expense, $m
  57
  0
  50
  50
  50
  49
  49
  48
  48
  47
  46
  46
  45
  44
  43
  42
  40
  39
  38
  36
  35
  33
  31
  29
  27
  25
  23
  21
  18
  16
  13
Net income, $m
  -58
  -105
  135
  134
  134
  133
  132
  131
  129
  127
  125
  123
  121
  118
  115
  112
  109
  106
  102
  98
  94
  89
  84
  79
  74
  68
  62
  56
  49
  42
  35

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  786
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  10,860
  10,272
  10,508
  10,778
  11,082
  11,418
  11,786
  12,188
  12,622
  13,090
  13,593
  14,130
  14,703
  15,314
  15,963
  16,652
  17,381
  18,154
  18,971
  19,834
  20,745
  21,707
  22,721
  23,790
  24,916
  26,102
  27,351
  28,665
  30,049
  31,504
  33,035
Adjusted assets (=assets-cash), $m
  10,074
  10,272
  10,508
  10,778
  11,082
  11,418
  11,786
  12,188
  12,622
  13,090
  13,593
  14,130
  14,703
  15,314
  15,963
  16,652
  17,381
  18,154
  18,971
  19,834
  20,745
  21,707
  22,721
  23,790
  24,916
  26,102
  27,351
  28,665
  30,049
  31,504
  33,035
Revenue / Adjusted assets
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
  0.665
Average production assets, $m
  3,680
  3,750
  3,836
  3,935
  4,046
  4,168
  4,303
  4,450
  4,608
  4,779
  4,962
  5,159
  5,368
  5,591
  5,828
  6,079
  6,346
  6,628
  6,926
  7,241
  7,574
  7,925
  8,295
  8,685
  9,096
  9,529
  9,985
  10,465
  10,970
  11,502
  12,060
Working capital, $m
  1,250
  478
  489
  502
  516
  531
  549
  567
  588
  609
  633
  658
  684
  713
  743
  775
  809
  845
  883
  923
  966
  1,010
  1,058
  1,107
  1,160
  1,215
  1,273
  1,334
  1,399
  1,467
  1,538
Total debt, $m
  9,312
  5,512
  5,725
  5,968
  6,240
  6,543
  6,875
  7,236
  7,627
  8,048
  8,500
  8,984
  9,500
  10,050
  10,634
  11,253
  11,910
  12,605
  13,341
  14,117
  14,938
  15,803
  16,716
  17,678
  18,691
  19,759
  20,883
  22,066
  23,311
  24,621
  25,998
Total liabilities, $m
  13,045
  9,245
  9,458
  9,701
  9,973
  10,276
  10,608
  10,969
  11,360
  11,781
  12,233
  12,717
  13,233
  13,783
  14,367
  14,986
  15,643
  16,338
  17,074
  17,850
  18,671
  19,536
  20,449
  21,411
  22,424
  23,492
  24,616
  25,799
  27,044
  28,354
  29,731
Total equity, $m
  -2,185
  1,027
  1,051
  1,078
  1,108
  1,142
  1,179
  1,219
  1,262
  1,309
  1,359
  1,413
  1,470
  1,531
  1,596
  1,665
  1,738
  1,815
  1,897
  1,983
  2,075
  2,171
  2,272
  2,379
  2,492
  2,610
  2,735
  2,867
  3,005
  3,150
  3,303
Total liabilities and equity, $m
  10,860
  10,272
  10,509
  10,779
  11,081
  11,418
  11,787
  12,188
  12,622
  13,090
  13,592
  14,130
  14,703
  15,314
  15,963
  16,651
  17,381
  18,153
  18,971
  19,833
  20,746
  21,707
  22,721
  23,790
  24,916
  26,102
  27,351
  28,666
  30,049
  31,504
  33,034
Debt-to-equity ratio
  -4.262
  5.370
  5.450
  5.540
  5.630
  5.730
  5.830
  5.940
  6.040
  6.150
  6.250
  6.360
  6.460
  6.560
  6.660
  6.760
  6.850
  6.940
  7.030
  7.120
  7.200
  7.280
  7.360
  7.430
  7.500
  7.570
  7.640
  7.700
  7.760
  7.820
  7.870
Adjusted equity ratio
  -0.295
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -58
  -105
  135
  134
  134
  133
  132
  131
  129
  127
  125
  123
  121
  118
  115
  112
  109
  106
  102
  98
  94
  89
  84
  79
  74
  68
  62
  56
  49
  42
  35
Depreciation, amort., depletion, $m
  518
  457
  468
  480
  493
  508
  525
  543
  562
  583
  605
  629
  655
  682
  711
  741
  774
  808
  845
  883
  924
  966
  1,012
  1,059
  1,109
  1,162
  1,218
  1,276
  1,338
  1,403
  1,471
Funds from operations, $m
  -54
  352
  603
  614
  627
  641
  657
  673
  691
  710
  731
  752
  775
  800
  826
  854
  883
  914
  946
  981
  1,017
  1,056
  1,096
  1,138
  1,183
  1,230
  1,280
  1,332
  1,387
  1,445
  1,506
Change in working capital, $m
  -549
  9
  11
  13
  14
  16
  17
  19
  20
  22
  23
  25
  27
  28
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
Cash from operations, $m
  495
  343
  592
  602
  613
  626
  640
  655
  671
  688
  707
  727
  749
  772
  796
  822
  849
  878
  908
  941
  975
  1,011
  1,049
  1,089
  1,131
  1,175
  1,222
  1,271
  1,323
  1,377
  1,435
Maintenance CAPEX, $m
  0
  -449
  -457
  -468
  -480
  -493
  -508
  -525
  -543
  -562
  -583
  -605
  -629
  -655
  -682
  -711
  -741
  -774
  -808
  -845
  -883
  -924
  -966
  -1,012
  -1,059
  -1,109
  -1,162
  -1,218
  -1,276
  -1,338
  -1,403
New CAPEX, $m
  -340
  -70
  -86
  -99
  -111
  -123
  -135
  -147
  -159
  -171
  -183
  -196
  -209
  -223
  -237
  -251
  -266
  -282
  -298
  -315
  -333
  -351
  -370
  -390
  -411
  -433
  -456
  -480
  -505
  -531
  -559
Cash from investing activities, $m
  -3,169
  -519
  -543
  -567
  -591
  -616
  -643
  -672
  -702
  -733
  -766
  -801
  -838
  -878
  -919
  -962
  -1,007
  -1,056
  -1,106
  -1,160
  -1,216
  -1,275
  -1,336
  -1,402
  -1,470
  -1,542
  -1,618
  -1,698
  -1,781
  -1,869
  -1,962
Free cash flow, $m
  -2,674
  -176
  48
  35
  23
  10
  -3
  -17
  -30
  -44
  -59
  -74
  -90
  -106
  -123
  -140
  -159
  -178
  -198
  -219
  -241
  -264
  -288
  -313
  -339
  -367
  -396
  -427
  -458
  -492
  -527
Issuance/(repayment) of debt, $m
  2,855
  -3,792
  213
  243
  273
  302
  332
  361
  391
  421
  452
  484
  516
  550
  584
  620
  657
  695
  735
  777
  820
  865
  913
  962
  1,014
  1,068
  1,124
  1,183
  1,245
  1,310
  1,378
Issuance/(repurchase) of shares, $m
  6
  4,096
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  7
  17
  28
  39
  50
  63
  75
  89
  103
  118
Cash from financing (excl. dividends), $m  
  3,139
  304
  213
  243
  273
  302
  332
  361
  391
  421
  452
  484
  516
  550
  584
  620
  657
  695
  735
  777
  820
  872
  930
  990
  1,053
  1,118
  1,187
  1,258
  1,334
  1,413
  1,496
Total cash flow (excl. dividends), $m
  516
  127
  261
  278
  295
  312
  328
  345
  361
  377
  393
  410
  426
  444
  461
  479
  498
  517
  537
  558
  579
  609
  642
  677
  713
  751
  790
  832
  875
  921
  969
Retained Cash Flow (-), $m
  93
  -4,096
  -24
  -27
  -30
  -34
  -37
  -40
  -43
  -47
  -50
  -54
  -57
  -61
  -65
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -107
  -113
  -119
  -125
  -131
  -138
  -146
  -153
Prev. year cash balance distribution, $m
 
  778
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -3,191
  237
  251
  265
  278
  292
  304
  317
  330
  343
  356
  369
  383
  396
  410
  425
  440
  455
  471
  488
  512
  540
  570
  600
  632
  666
  700
  737
  775
  816
Discount rate, %
 
  14.30
  15.02
  15.77
  16.55
  17.38
  18.25
  19.16
  20.12
  21.13
  22.18
  23.29
  24.46
  25.68
  26.96
  28.31
  29.73
  31.22
  32.78
  34.41
  36.14
  37.94
  39.84
  41.83
  43.92
  46.12
  48.42
  50.85
  53.39
  56.06
  58.86
PV of cash for distribution, $m
 
  -2,791
  179
  162
  144
  125
  107
  89
  73
  59
  46
  36
  27
  20
  14
  10
  7
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  49.8
  49.4
  48.8
  48.1
  47.1
  46.0
  44.8
  43.4
  42.0
  40.5

Ardagh Group SA, formerly Ardagh Finance Holdings SA, is a Luxembourg-based company engaged in the packing industry. The Company focuses on the design and manufacture of rigid packaging solutions mainly for food and beverage markets. Its activities are divided into two business segments: Metal packing, which supplies aluminum and steel beverage cans, two-piece aluminum, two-piece tinplate and three-piece tinplate food and specialty cans, as well as a range of can ends, among others, and Glass packing, which delivers glass containers, bottles and jars, among others. Its products are distributed in customized sizes and shapes, as well as are decorated with printed graphics. The Company operates in Europe, the Americas, Asia and Africa.

FINANCIAL RATIOS  of  Ardagh Group Cl A (ARD)

Valuation Ratios
P/E Ratio -74.2
Price to Sales 0.6
Price to Book -2
Price to Tangible Book
Price to Cash Flow 8.7
Price to Free Cash Flow 27.8
Growth Rates
Sales Growth Rate 22.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.3%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 98
Current Ratio 0
LT Debt to Equity -425.8%
Total Debt to Equity -426.2%
Interest Coverage 1
Management Effectiveness
Return On Assets 378.1%
Ret/ On Assets - 3 Yr. Avg. 126.3%
Return On Total Capital -1%
Ret/ On T. Cap. - 3 Yr. Avg. -9.3%
Return On Equity 2.7%
Return On Equity - 3 Yr. Avg. 22.7%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 18%
Gross Margin - 3 Yr. Avg. 17.2%
EBITDA Margin 16.5%
EBITDA Margin - 3 Yr. Avg. 10.8%
Operating Margin 6%
Oper. Margin - 3 Yr. Avg. 4.5%
Pre-Tax Margin -0%
Pre-Tax Margin - 3 Yr. Avg. -4.2%
Net Profit Margin -0.9%
Net Profit Margin - 3 Yr. Avg. -4.8%
Effective Tax Rate -5700%
Eff/ Tax Rate - 3 Yr. Avg. -1926.7%
Payout Ratio -491.4%

ARD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ARD stock intrinsic value calculation we used $6697 million for the last fiscal year's total revenue generated by Ardagh Group Cl A. The default revenue input number comes from 2016 income statement of Ardagh Group Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ARD stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.3%, whose default value for ARD is calculated based on our internal credit rating of Ardagh Group Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Ardagh Group Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ARD stock the variable cost ratio is equal to 91.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ARD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.3% for Ardagh Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for Ardagh Group Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ARD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ARD are equal to 54.9%.

Life of production assets of 8.2 years is the average useful life of capital assets used in Ardagh Group Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ARD is equal to 7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-2185 million for Ardagh Group Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 237.441 million for Ardagh Group Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Ardagh Group Cl A at the current share price and the inputted number of shares is $4.4 billion.

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Financial statements of ARD
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