Drivers

Selected Case

Inflation
Expected Long- term Inflation Italy (Annual)
Expected Long- term Inflation Vietnam (Annual)

Price of Product (In EUR)

Price of Product in Italy
Price of Product in Vietnam

Estimated initial investment (in EUR)

Best Case
Base Case
Worst Case

Useful Life Span

WC Italy
DIO
DPO
Net Trading Cyle (Days)

Finacing Facilities
Senior Faacility (EUR)
Interest Rate senior facility
Repay senior facilty
use as much debt as possible;

Loan Schedule
Repayment

Covenant 1
Production Should Not less than 15,000 Per Year
Otherwise penalty of $1,000,000 per year

Taxable Rate

Residual Value of the project

Company beta

Comparable companies
Company A
Company B
Company C

Market risk premium in Vietnam

Market risk premium in Italy

Risk-free rate in Vietnam

Risk-free rate in Italy
 1 Case 1: Best Case
Case 2: Base Case
Case 3: Worst Case

1%
3%

15,500
11,000

320,000,000
350,000,000
380,000,000

10

25
30
-5

200,000,000
5%
10

0 1 2 3 4 5 6 7
0% 0% 5% 10% 10% 10% 10% 10%

30%

100,000,000

0.9

Leverage (D/E) Beta

80% 0.6
90% 0.65
85% 0.57

6%
5%

3%
2%
 8 9 10
10% 10% 10%
Saving Forecast

Best Volume 22,000

Base Volume 20,000
Worst Volume 18,000

Volume (in units) 1 2 3

Best Volume 18,700 19,140 19,580
Base Volume 16,000 17,000 17,400
Worst Volume 13,500 14,400 14,760
Selected Case 18,700 19,140 19,580

Productivity (as ) 1 2 3
Best Volume 85% 87% 89%
Base Volume 80% 85% 87%
Worst Volume 75% 80% 82%

Expected Long- term Inflation Italy 1%

Expected Long- term Inflation Vietnam 3%

Price of Product (In EUR) 1 2 3

Price of Product in Italy 15,500 15,655 15,812
Price of Product in Vietnam 11,000 11,330 11,670
Saving Per Unit 4,500 4,325 4,142

Total Savings (EUR) 1 2 3

Best Volume 84,150,000 82,780,500 81,093,507
Base Volume 72,000,000 73,525,000 72,064,710
Worst Volume 60,750,000 62,280,000 61,130,754
Selected Case 84,150,000 82,780,500 81,093,507
 4 5 6 7 8 9
20,240 19,800 19,580 19,140 18,700 18,480
18,000 17,600 17,400 17,000 16,600 16,400
15,120 14,940 14,760 14,400 14,040 13,860
20,240 19,800 19,580 19,140 18,700 18,480

4 5 6 7 8 9
92% 90% 89% 87% 85% 84%
90% 88% 87% 85% 83% 82%
84% 83% 82% 80% 78% 77%

4 5 6 7 8 9
15,970 16,129 16,291 16,454 16,618 16,784
12,020 12,381 12,752 13,135 13,529 13,934
3,950 3,749 3,539 3,319 3,089 2,850

4 5 6 7 8 9
79,941,290 74,225,552 69,286,590 63,525,413 57,773,378 52,664,453
71,094,033 65,978,268 61,572,353 56,422,780 51,285,458 46,736,852
59,718,988 56,006,553 52,230,341 47,793,414 43,376,376 39,498,339
79,941,290 74,225,552 69,286,590 63,525,413 57,773,378 52,664,453
 10
18,260
16,200
13,680
18,260

10
83%
81%
76%

10
16,952
14,353
2,600

10
47,469,001
42,113,791
35,562,757
47,469,001
Fixed Assets Roll Forward

Estimated initial investment (in EUR)

Best Case 320,000,000
Base Case 350,000,000
Worst Case 380,000,000

Useful Life (Year) 10

Invested Plan 0 1
Year 1 80% 10%

in EUR 1 2
Beginning PPE&E 256,000,000 262,400,000
Capex 32,000,000 32,000,000
D&A (25,600,000) (28,800,000)
Ending PP&E 262,400,000 265,600,000

D&A Schedule (in EUR) 1 2

D&A Year 1 (25,600,000) (25,600,000)
D&A Year 2 (3,200,000)
D&A Year 3
D&A Year 4
D&A Year 5
D&A Year 6
D&A Year 7
D&A Year 8
D&A Year 9
D&A Year 10
Total D&A (25,600,000) (28,800,000)
 2 3 4 5
10% 3% 3% 3%

3 4 5 6
265,600,000 243,200,000 219,840,000 195,520,000
9,600,000 9,600,000 9,600,000 9,600,000
(32,000,000) (32,960,000) (33,920,000) (34,880,000)
243,200,000 219,840,000 195,520,000 170,240,000

3 4 5 6
(25,600,000) (25,600,000) (25,600,000) (25,600,000)
(3,200,000) (3,200,000) (3,200,000) (3,200,000)
(3,200,000) (3,200,000) (3,200,000) (3,200,000)
(960,000) (960,000) (960,000)
(960,000) (960,000)
(960,000)

(32,000,000) (32,960,000) (33,920,000) (34,880,000)

 6 7 8 9
3% 3% 3% 3%

7 8 9 10
170,240,000 144,000,000 116,800,000 88,640,000
9,600,000 9,600,000 9,600,000 9,600,000
(35,840,000) (36,800,000) (37,760,000) (38,720,000)
144,000,000 116,800,000 88,640,000 59,520,000

7 8 9 10
(25,600,000) (25,600,000) (25,600,000) (25,600,000)
(3,200,000) (3,200,000) (3,200,000) (3,200,000)
(3,200,000) (3,200,000) (3,200,000) (3,200,000)
(960,000) (960,000) (960,000) (960,000)
(960,000) (960,000) (960,000) (960,000)
(960,000) (960,000) (960,000) (960,000)
(960,000) (960,000) (960,000) (960,000)
(960,000) (960,000) (960,000)
(960,000) (960,000)
(960,000)
(35,840,000) (36,800,000) (37,760,000) (38,720,000)
10
3%
WC Italy
DIO 25
DPO 30
Net Trading Cyle (Days) -5

WC Vietnam
DIO 45
DIO 25
Net Trading Cyle (Days) 20

in Eur 1 2 3
Extra Production Value 205,700,000 216,856,200 228,496,642
Delta Net Tracing Cyle (Days) 25 25 25
Working Capital (14,284,722) (15,059,458) (15,867,822)
Delta Working Capital (14,284,722) (774,736) (808,364)

DIO Vietnam
Best Case 45 1
Base Case 50
Worst Case 55

DPO Italy
Best Case 25
Base Case 30
Worst Case 35
 4 5 6 7 8 9
243,284,739 245,135,819 249,684,450 251,395,771 252,985,054 257,509,022
25 25 25 25 25 25
(16,894,774) (17,023,321) (17,339,198) (17,458,040) (17,568,407) (17,882,571)
(1,026,951) (128,547) (315,877) (118,842) (110,367) (314,164)
 10
262,076,742
25
(18,199,774)
(317,203)
Financing

Investment Year 256,000,000

Financing Facilities
Senior Faacility (EUR) 200,000,000
Interest Rate senior facility 5%
Repay senior facilty 10

in EUR 0 1
Beginning Debt 200,000,000 200,000,000
Repayment - -
Repayment % 0% 0%
Ending Dept 200,000,000 200,000,000

Interest Expense - (10,000,000)

-
Volume 18,700
Volume Lower than 15,000? YES NO
Covenant Penalty - -

Net Cash Flow (256,000,000) 13,300,278

Equity Enancing 56,000,000 56,000,000
 2 3 4 5 6
200,000,000 190,000,000 170,000,000 150,000,000 130,000,000
(10,000,000) (20,000,000) (20,000,000) (20,000,000) (20,000,000)
5% 10% 10% 10% 10%
190,000,000 170,000,000 150,000,000 130,000,000 110,000,000

(10,000,000) (9,500,000) (8,500,000) (7,500,000) (6,500,000)

19,140 19,580 20,240 19,800 19,580

NO NO NO NO NO
- - - - -

16,811,614 29,307,091 29,269,952 27,155,339 24,498,736

56,000,000 56,000,000 56,000,000 56,000,000 56,000,000
 7 8 9 10
110,000,000 90,000,000 70,000,000 50,000,000
(20,000,000) (20,000,000) (20,000,000) (20,000,000)
10% 10% 10% 10%
90,000,000 70,000,000 50,000,000 30,000,000

(5,500,000) (4,500,000) (3,500,000) (2,500,000)

19,140 18,700 18,480 18,260

NO NO NO NO
- - - -

21,650,947 18,620,997 15,828,952 13,177,098

56,000,000 56,000,000 56,000,000 56,000,000
P&L

in EUR 1 2 3
Savings (EBTDA) 84,150,000 82,780,500 81,093,507
D&A (25,600,000) (28,800,000) (32,000,000)
EBT 58,550,000 53,980,500 49,093,507
Interest Expense (10,000,000) (10,000,000) (9,500,000)
Covenants - - -
EBT 48,550,000 43,980,500 39,593,507
Taxes (14,565,000) (13,194,150) (11,878,052)
Net Income 33,985,000 30,786,350 27,715,455
 4 5 6 7 8 9
79,941,290 74,225,552 69,286,590 63,525,413 57,773,378 52,664,453
(32,960,000) (33,920,000) (34,880,000) (35,840,000) (36,800,000) (37,760,000)
46,981,290 40,305,552 34,406,590 27,685,413 20,973,378 14,904,453
(8,500,000) (7,500,000) (6,500,000) (5,500,000) (4,500,000) (3,500,000)
- - - - - -
38,481,290 32,805,552 27,906,590 22,185,413 16,473,378 11,404,453
(11,544,387) (9,841,666) (8,371,977) (6,655,624) (4,942,013) (3,421,336)
26,936,903 22,963,886 19,534,613 15,529,789 11,531,364 7,983,117
 10
47,469,001
(38,720,000)
8,749,001
(2,500,000)
-
6,249,001
(1,874,700)
4,374,301
Cash Flow
in EUR 0 1
Saving Per Unit (EBITDA) - 84,150,000
Taxes - (14,565,000)
Delta Working Capital - (14,284,722.22)
Capex (256,000,000.0) (32,000,000)
Operating Cash Flow (256,000,000) 23,300,278
Debt Repayment -
Interest Expense - (10,000,000.00)
Covenant Penalty - -
Increase of Equity - -
Project Cash Flow (256,000,000) 13,300,278
 2 3 4 5 6
82,780,500 81,093,507 79,941,290 74,225,552 69,286,590
(13,194,150) (11,878,052) (11,544,387) (9,841,666) (8,371,977)
(774,736.11) (808,364.03) -1026951 (128,547.19) (315,877.17)
(32,000,000) (9,600,000.00) (9,600,000) (9,600,000.00) (9,600,000.00)
36,811,614 58,807,091 57,769,952 54,655,339 50,998,736
(10,000,000) (20,000,000) -(20,000,000) (20,000,000) (20,000,000)
(10,000,000) (9,500,000) (8,500,000) (7,500,000) (6,500,000)
- - - - -
- - - - -
16,811,614 29,307,091 29,269,952 27,155,339 24,498,736
 7 8 9 10 Residual Value
63,525,413 57,773,378 52,664,453 47,469,001
(6,655,624) (4,942,013) (3,421,336) (1,874,700)
(118,841.69) (110,366.92) (314,164.45) (317,203)
(9,600,000.00) (9,600,000.00) (9,600,000.00) (9,600,000)
47,150,947 43,120,997 39,328,952 35,677,098
(20,000,000) (20,000,000) (20,000,000) (20,000,000)
(5,500,000) (4,500,000) (3,500,000) (2,500,000)
- - - -
- - - -
21,650,947 18,620,997 15,828,952 13,177,098 70,000,000
WACC

Cost of debt 5%
Risk-free in Vietnam 3%
Tax rate 30%
Market risk premium in Vietnam 6%

Comparable companies Leverge (D/E) BETA

Company A 80% 0.6
Company B 90% 0.65
Company C 85% 0.57

in EUR 0 1
Debt financing 200,000,000 200,000,000
Equity financing 56,000,000 56,000,000
Total financing 256,000,000 256,000,000

Debt financing % 78.1% 78.1%

Equity financing % 21.9% 21.9%
Total financing % 100.0% 100.0%

Comparable companies:
Average leverage 85%
Average beta 0.61

Project beta:
Debt / Equity 3.57 3.57
Beta unlevered 0.38 0.38
Project beta 1.33 1.33

Cost of Equity 11.0% 11.0%

WACC 5.1% 5.1%

 2 3 4 5 6
190,000,000 170,000,000 150,000,000 130,000,000 110,000,000
56,000,000 56,000,000 56,000,000 56,000,000 56,000,000
246,000,000 226,000,000 206,000,000 186,000,000 166,000,000

77.2% 75.2% 72.8% 69.9% 66.3%

22.8% 24.8% 27.2% 30.1% 33.7%
100.0% 100.0% 100.0% 100.0% 100.0%

3.39 3.04 2.68 2.32 1.96

0.38 0.38 0.38 0.38 0.38
1.28 1.19 1.09 1.00 0.90

10.7% 10.1% 9.6% 9.0% 8.4%

5.1% 5.1% 5.1% 5.2% 5.2%

 7 8 9 10
90,000,000 70,000,000 50,000,000 30,000,000
56,000,000 56,000,000 56,000,000 56,000,000
146,000,000 126,000,000 106,000,000 86,000,000

61.6% 55.6% 47.2% 34.9%

38.4% 44.4% 52.8% 65.1%
100.0% 100.0% 100.0% 100.0%

1.61 1.25 0.89 0.54

0.38 0.38 0.38 0.38
0.81 0.71 0.62 0.52

7.8% 7.3% 6.7% 6.1%

5.2% 5.2% 5.2% 5.2%

DISCOUNTED CASH FLOW
Selected case 1
Residual Value 70,000,000

0 1
Net Cash Flow (56,000,000) 13,300,278
Net Cash Flow + Residual Value (56,000,000) 13,300,278
Cost of Equity 11.0%
Discounted Cash Flow (56,000,000) 11,983,586
Present Value Residual Value
Discounted Cash Flow with Residual Value (56,000,000) 11,983,586

Sum of Discounted Cash Flows (NPV) 122,736,134

IRR 37.1%

Sensitivity Analysis
37.1%
70,000,000 37.1%
80,000,000 37.1%
85,000,000 37.1%
95,000,000 37.1%
115,000,000 37.1%
 2 3 4 5 6
16,811,614 29,307,091 29,269,952 27,155,339 24,498,736
16,811,614 29,307,091 29,269,952 27,155,339 24,498,736
10.7% 10.1% 9.6% 9.0% 8.4%
13,718,194 21,939,975 20,314,027 17,656,723 15,082,931

13,718,194 21,939,975 20,314,027 17,656,723 15,082,931

ity Analysis
 7 8 9 10 Residual Value
21,650,947 18,620,997 15,828,952 13,177,098 70,000,000
21,650,947 18,620,997 15,828,952 83,177,098
7.8% 7.3% 6.7% 6.1%
12,757,016 10,614,152 8,823,936 7,262,959
38,582,633
12,757,016 10,614,152 8,823,936 45,845,592