Corporate Evaluation of Fielmann AG

Table of Contents

1. Introduction

1.1. Problem Definition and Objective

1.2. Scope of Work

2. Framework of a Corporate Evaluation

3. The Corporate Valuation Theses

3.1. Net Asset Value Methods

3.1.1. Liquidation Value

3.1.2. Reproductive Value

3.2. Discounted Cash Flow Methods

3.2.1. Entity Approach

3.2.2. Equity Approach

3.3. Multiplier Approach

3.3.1. Comparative Company Approach

3.3.2. Multiplier Design in the Comparative Company Approach

4. Evaluation of Fielmann AG

4.1. Company Profile of Fielmann

4.2. Discounted Cash Flow (DCF) Methods

4.2.1. Forecast of Future Cash Flows

4.2.2. Cost of Capital

4.2.3. Entity Approach

4.2.4. Equity Approach

4.3. Multiplier Method

4.3.1. Analysis of the Valuated Company

4.3.2. Building up the Peer Group

4.3.3. Calculations and Aggregations

5. Result Comparison and Conclusion

Objectives and Topics

This work aims to determine the corporate value of Fielmann AG from a buyer's perspective as of December 31st, 2011, utilizing both theoretical valuation frameworks and practical application of selected methods to provide an informed investment range.

• Fundamentals of corporate valuation frameworks and the IDW-Standard
• Theoretical analysis of Net Asset Value, Discounted Cash Flow (DCF), and Multiplier methods
• Practical application of Entity and Equity DCF approaches for Fielmann AG
• Comparative Company Approach (CCA) design and peer group selection
• Synthesis and verification of results to define a fair corporate value range

Excerpt from the Book

Summary of Chapters

1. Introduction: Presents the motivation and objective of the work, emphasizing the distinction between price and value in a corporate transaction context.

2. Framework of a Corporate Evaluation: Outlines the economic and legal conditions, specifically referencing the IDW-Standard as the primary guideline for corporate valuations in Germany.

3. The Corporate Valuation Theses: Discusses theoretical methods including Net Asset Value, Discounted Cash Flow (DCF) approaches (Entity and Equity), and the Multiplier approach.

4. Evaluation of Fielmann AG: Applies the theoretical frameworks to the specific case of Fielmann AG, including company profiling, DCF calculations, and the Multiplier Method.

5. Result Comparison and Conclusion: Synthesizes the findings from the DCF and Multiplier methods to provide a definitive recommendation on the fair corporate value of Fielmann AG.

Keywords

Corporate Evaluation, Fielmann AG, Discounted Cash Flow, DCF, Entity Approach, Equity Approach, Multiplier Method, Comparative Company Approach, CCA, Terminal Value, Cost of Capital, Market Capitalization, Valuation, Financial Analysis, Investment

Frequently Asked Questions

What is the primary focus of this research?

The work focuses on the practical corporate valuation of Fielmann AG from the perspective of a potential buyer as of the fiscal year-end 2011.

Which valuation methods are applied?

The authors employ the Discounted Cash Flow (DCF) method, specifically the Entity and Equity approaches, alongside the Multiplier Method (Comparative Company Approach).

What is the core objective of the study?

The objective is to calculate a fair corporate value and a price-per-share range for Fielmann AG to assist in investment decision-making.

What is the role of the peer group in this analysis?

The peer group serves as a benchmark for the Multiplier Method, enabling the verification of the DCF-based valuation through relative market comparisons.

Why are both DCF and Multiplier methods used?

The DCF method provides the core valuation based on future cash flows, while the Multiplier method acts as a vital validation tool to check the plausibility of the results.

What do the final valuation results suggest?

The authors recommend a value range between 2,923 and 3,000 million EUR, corresponding to 69.62 to 71.42 EUR per share.

How is the problem of circular reference in the WACC calculation addressed?

The authors solve the circularity by utilizing an iteration (recursion) method, starting from a fixed balance sheet value until the results stabilize.

What significant challenge did the authors face when selecting a peer group?

The authors noted the difficulty in finding a perfectly comparable listed optician, necessitating the selection of a broader group of consumer-sector companies.