Intrinsic value of G. Willi-Food International, Ltd. - WILC

Previous Close

$8.34

  Intrinsic Value

$2.03

stock screener

  Rating & Target

str. sell

-76%

Previous close

$8.34

 
Intrinsic value

$2.03

 
Up/down potential

-76%

 
Rating

str. sell

We calculate the intrinsic value of WILC 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.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.70
  16.43
  15.29
  14.26
  13.33
  12.50
  11.75
  11.07
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.61
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
Revenue, $m
  106
  123
  142
  162
  184
  207
  231
  257
  284
  312
  342
  372
  404
  438
  472
  508
  545
  584
  625
  667
  710
  756
  803
  852
  903
  957
  1,012
  1,070
  1,131
  1,194
Variable operating expenses, $m
  97
  113
  130
  149
  169
  189
  212
  235
  259
  285
  310
  338
  367
  398
  429
  462
  496
  531
  568
  606
  645
  687
  730
  774
  821
  869
  920
  973
  1,028
  1,085
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
  97
  113
  130
  149
  169
  189
  212
  235
  259
  285
  310
  338
  367
  398
  429
  462
  496
  531
  568
  606
  645
  687
  730
  774
  821
  869
  920
  973
  1,028
  1,085
Operating income, $m
  8
  10
  12
  14
  16
  18
  20
  22
  25
  27
  31
  34
  37
  40
  43
  46
  50
  53
  57
  61
  65
  69
  73
  78
  82
  87
  92
  98
  103
  109
EBITDA, $m
  11
  13
  15
  17
  19
  21
  24
  27
  29
  32
  35
  38
  42
  45
  49
  52
  56
  60
  64
  69
  73
  78
  83
  88
  93
  99
  104
  110
  117
  123
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
Earnings before tax, $m
  8
  10
  12
  13
  15
  17
  20
  22
  24
  27
  30
  33
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  75
  80
  84
  89
  94
  100
  105
Tax expense, $m
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
Net income, $m
  6
  7
  9
  10
  11
  13
  14
  16
  18
  19
  22
  24
  26
  28
  31
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  62
  65
  69
  73
  77

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  68
  79
  91
  104
  118
  133
  149
  165
  182
  200
  219
  239
  259
  281
  303
  326
  350
  375
  401
  428
  456
  485
  515
  547
  580
  614
  650
  687
  726
  767
Adjusted assets (=assets-cash), $m
  68
  79
  91
  104
  118
  133
  149
  165
  182
  200
  219
  239
  259
  281
  303
  326
  350
  375
  401
  428
  456
  485
  515
  547
  580
  614
  650
  687
  726
  767
Revenue / Adjusted assets
  1.559
  1.557
  1.560
  1.558
  1.559
  1.556
  1.550
  1.558
  1.560
  1.560
  1.562
  1.556
  1.560
  1.559
  1.558
  1.558
  1.557
  1.557
  1.559
  1.558
  1.557
  1.559
  1.559
  1.558
  1.557
  1.559
  1.557
  1.557
  1.558
  1.557
Average production assets, $m
  13
  16
  18
  21
  23
  26
  29
  33
  36
  40
  43
  47
  51
  56
  60
  65
  69
  74
  79
  85
  90
  96
  102
  108
  115
  121
  129
  136
  144
  152
Working capital, $m
  40
  47
  54
  62
  70
  79
  88
  97
  108
  118
  129
  141
  153
  166
  179
  193
  207
  221
  237
  253
  269
  286
  304
  323
  342
  363
  384
  406
  429
  453
Total debt, $m
  1
  2
  4
  5
  6
  8
  10
  11
  13
  15
  17
  19
  21
  24
  26
  28
  31
  34
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  75
Total liabilities, $m
  7
  8
  10
  11
  13
  14
  16
  17
  19
  21
  23
  25
  28
  30
  32
  35
  37
  40
  42
  45
  48
  51
  55
  58
  61
  65
  69
  73
  77
  81
Total equity, $m
  61
  71
  82
  93
  106
  119
  133
  148
  163
  179
  196
  214
  232
  251
  271
  292
  313
  335
  358
  383
  408
  434
  461
  489
  518
  549
  581
  614
  649
  685
Total liabilities and equity, $m
  68
  79
  92
  104
  119
  133
  149
  165
  182
  200
  219
  239
  260
  281
  303
  327
  350
  375
  400
  428
  456
  485
  516
  547
  579
  614
  650
  687
  726
  766
Debt-to-equity ratio
  0.020
  0.030
  0.040
  0.050
  0.060
  0.070
  0.070
  0.080
  0.080
  0.080
  0.090
  0.090
  0.090
  0.090
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
Adjusted equity ratio
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894
  0.894

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6
  7
  9
  10
  11
  13
  14
  16
  18
  19
  22
  24
  26
  28
  31
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  62
  65
  69
  73
  77
Depreciation, amort., depletion, $m
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
Funds from operations, $m
  9
  10
  11
  13
  15
  16
  18
  20
  22
  24
  26
  29
  31
  33
  36
  39
  42
  45
  48
  51
  54
  58
  61
  65
  69
  73
  77
  81
  86
  91
Change in working capital, $m
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
Cash from operations, $m
  3
  3
  4
  5
  6
  8
  9
  10
  12
  14
  15
  17
  19
  21
  23
  25
  28
  30
  32
  35
  38
  40
  43
  46
  49
  53
  56
  59
  63
  67
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
New CAPEX, $m
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
Cash from investing activities, $m
  -3
  -3
  -3
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -8
  -8
  -8
  -9
  -9
  -11
  -11
  -11
  -12
  -12
  -14
  -14
  -15
  -15
  -17
  -18
  -18
  -19
  -21
  -21
Free cash flow, $m
  0
  0
  0
  1
  2
  3
  3
  4
  6
  7
  8
  9
  10
  12
  13
  15
  17
  19
  20
  22
  24
  26
  28
  31
  33
  35
  38
  40
  43
  46
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Issuance/(repurchase) of shares, $m
  3
  3
  2
  2
  1
  1
  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 from financing (excl. dividends), $m  
  4
  4
  3
  3
  2
  3
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Total cash flow (excl. dividends), $m
  4
  4
  4
  4
  4
  5
  5
  6
  7
  9
  10
  11
  13
  14
  16
  18
  19
  21
  23
  25
  27
  29
  32
  34
  36
  39
  41
  44
  47
  50
Retained Cash Flow (-), $m
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
Prev. year cash balance distribution, $m
  68
  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
  62
  -6
  -7
  -7
  -8
  -9
  -9
  -9
  -8
  -8
  -7
  -7
  -6
  -5
  -4
  -3
  -2
  -1
  0
  1
  2
  3
  5
  6
  7
  8
  9
  11
  12
  14
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  60
  -6
  -6
  -6
  -6
  -6
  -6
  -5
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  94.1
  89.8
  86.7
  84.7
  83.5
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1

G. Willi-Food International Ltd. is a holding company. The Company is engaged directly and through subsidiaries, in the development, import, export, marketing and distribution of a range of over 600 food products around the world. The principal products in the import segment product line include Canned Vegetables and Pickles, Canned Fish, Canned Fruit, Edible Oils, Dairy and Dairy Substitute Products, Dried Fruit, Nuts and Beans, and Other Products. Its brands include Willi-Food, Gold-Frost, Gold Food, Tifeeret, Donna Rozza, Completa, Raskas and Del Monte, among others. The Company's products are marketed and sold to approximately 1,500 customers throughout Israel and outside of Israel. The Company's customers generally fall within one of the two groups, including retail supermarket chains in the organized market, and private supermarket chains, mini-markets, wholesalers, food manufacturers, institutional consumers, such as catering halls, hotels, hospitals and food producers.

FINANCIAL RATIOS  of  G. Willi-Food International, Ltd. (WILC)

Valuation Ratios
P/E Ratio 36.8
Price to Sales 1.4
Price to Book 1
Price to Tangible Book
Price to Cash Flow 22.1
Price to Free Cash Flow 22.1
Growth Rates
Sales Growth Rate -5.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 2.8%
Return On Equity - 3 Yr. Avg. 3.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 26.3%
Gross Margin - 3 Yr. Avg. 24.8%
EBITDA Margin 6.3%
EBITDA Margin - 3 Yr. Avg. 6.6%
Operating Margin 8.8%
Oper. Margin - 3 Yr. Avg. 5.9%
Pre-Tax Margin 5%
Pre-Tax Margin - 3 Yr. Avg. 5.5%
Net Profit Margin 3.8%
Net Profit Margin - 3 Yr. Avg. 3.9%
Effective Tax Rate 25%
Eff/ Tax Rate - 3 Yr. Avg. 29%
Payout Ratio 166.7%

WILC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WILC stock intrinsic value calculation we used $90 million for the last fiscal year's total revenue generated by G. Willi-Food International, Ltd.. The default revenue input number comes from 0001 income statement of G. Willi-Food International, Ltd.. 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 WILC stock valuation model: a) initial revenue growth rate of 17.7% 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 4.3%, whose default value for WILC is calculated based on our internal credit rating of G. Willi-Food International, Ltd., 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 G. Willi-Food International, Ltd..
    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 WILC stock the variable cost ratio is equal to 92.2%.

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 WILC 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 5.4% for G. Willi-Food International, Ltd..

Corporate tax rate of 27% is the nominal tax rate for G. Willi-Food International, Ltd.. 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 WILC 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 WILC are equal to 12.7%.

Life of production assets of 10.8 years is the average useful life of capital assets used in G. Willi-Food International, Ltd. 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 WILC is equal to 37.9%. 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 - $119.694988479 million for G. Willi-Food International, Ltd. - 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 13.240 million for G. Willi-Food International, Ltd. 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 G. Willi-Food International, Ltd. at the current share price and the inputted number of shares is $0.1 billion.

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