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    Siemens

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    Siemens

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    Siemens

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    Cam S
    Case excel

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    You are on page 1of 9

    This spreadsheet supports STUDENT analysis of the case "Siemens and Healthineers: Valuing the IPO" (UVA-F-1913).

    This spreadsheet was prepared by Robert S. Harris, C. Stewart Sheppard Professor of Business Administration, and Paul Holtz, Case Writer. Copyright © 2019 by the University of
    Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. For customer service inquiries, send an email tosales@dardenbusinesspublishing.com. No part of this
    publication may be reproduced, stored in a retrieval system, posted to the Internet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or
    otherwise—without the permission of the Darden School Foundation. Our goal is to publish materials of the highest quality, so please submit any errata to
    editorial@dardenbusinesspublishing.com.

    Sept. 13, 2019


    Exhibit 3
    Siemens and Healthineers: Valuing the IPO
    Peer Comparison: Operating and Evaluation Metrics

    Peer List EBITDA margin EBIT margin


    2018E 2019E 2020E 2018E 2019E

    Largest direct competitors (mcap weighted) 25.2% 25.7% 26.7% 22.3% 22.8%
    Imaging & Adv. Therapies peers (mcap weighted) 20.1% 20.7% 22.6% 17.4% 18.3%
    Diagnostics peers (mcap weighted) 28.0% 28.6% 29.2% 25.3% 25.8%
    EU MedTech peers (mcap weighted) 22.0% 22.4% 22.9% 17.8% 18.3%
    US MedTech peers (mcap weighted) 31.9% 32.9% 33.5% 25.7% 26.7%
    All peers (mcap weighted) 26.1% 26.8% 27.7% 22.0% 22.8%

    Siemens Healthineers 20.8% 21.6% 22.4% 17.8% 18.7%

    Peer List EV/Sales EV/EBITDA


    2018E 2019E 2020E 2018E 2019E

    Largest direct competitors (mcap weighted) 2.9 2.7 2.5 11.6 10.6
    Imaging & Adv. Therapies peers (mcap weighted) 2.2 2.0 2.0 10.1 9.2
    Diagnostics peers (mcap weighted) 4.3 4.0 3.6 15.6 14.0
    EU MedTech peers (mcap weighted) 3.2 2.9 2.7 13.8 12.4
    US MedTech peers (mcap weighted) 4.3 4.0 3.7 13.6 11.9
    All peers (mcap weighted) 3.6 3.3 3.1 12.6 11.2

    Largest direct competitors : Abbot Laboratories, General Electric, Philips, Roche


    Imaging & Adv. Therapies peers: GE, Hitachi Medical (Hitachi), Hologic, Medtronic, Neusoft, Philips, Shimadzu, Toshiba Medica
    Diagnostics peers: 23 companies; Abbott Laboratories, Danaher, Roche, and Thermo Fisher Scientific have sales levels much la
    EU MedTech peers: 19 companies; Philips and Fresenius have sales levels much larger than the other peers
    US MedTech peers: 15 companies; Abbot Laboratories, Johnson & Johnson, and Medtronic all have sales larger than the other

    Note: EV = enterprise value; E = expected, CAGR = compound annual growth weight; mcap = market capitalization.
    Source: Deutsche Bank Markets Research report, 2018.
    EBIT margin CAGRs 2017–20E Net Debt/EBITDA
    2020E Sales EBITDA EBIT NI 2018E

    23.7% 3.7% 5.2% 7.1% 6.8% 1.8


    19.1% 2.7% 5.8% 7.1% 6.6% 2.2
    2.5% 6.2% 7.9% 7.2% 9.4% 1.2
    18.7% 6.4% 9.1% 9.9% 8.6% 1.8
    27.2% 6.1% 9.0% 8.9% 9.6% 1.0
    23.6% 5.3% 7.6% 8.0% 8.3% 1.3

    19.0% 2.1% 4.7% 5.1% 7.8% 0.9

    EV/EBITDA P/E
    2020E 2018E 2019E 2020E

    9.4 15.9 14.6 13.3


    8.7 15.7 14.3 13.4
    12.4 21.9 19.8 17.8
    11.0 23.7 21.1 18.8
    11.3 18.5 16.6 15.9
    10.4 18.5 16.6 15.5

    imadzu, Toshiba Medical (Canon)


    have sales levels much larger than any of the other peers

    les larger than the other peers

    apitalization.
    Exhibit 4
    Siemens and Healthineers: Valuing the IPO
    Cash Flow Analysis

    During the transition period, percentage values are gradually transitioned over 10 years from their values in 2022 to the ones
    Changes in highlighted cells will flow through to the cash flow analysis.

    Explicit forecasts based on business analysis


    2018 2019 2020 2021 2022
    Revenue growth 3.2% 4.3% 4.7% 4.7%
    EBIT margin 16.8% 17.8% 18.3% 18.8%
    Tax rate 27.7% 27.9% 28.1% 28.2%
    D&A as % of revenue 4.2% 4.1% 4.1% 4.0%
    Working capital as % of revenue 21.0% 20.6% 20.2% 19.8% 19.4%
    Capex as % of revenue 4.7% 4.5% 4.4% 4.3%

    EUR millions 2018 2019 2020 2021 2022


    Revenue 13,271 13,696 14,285 14,956 15,659

    EBIT 1,855 2,301 2,543 2,737 2,944


    Taxes 490 638 710 768 830
    Net operating profit after tax 1,365 1,663 1,833 1,969 2,114

    add D&A 559 575 586 613 642


    subtract increase in working capital (127) 35 63 77 78
    subtract capex 636 644 643 658 673

    Free cash flow (FCF) 1,415 1,559 1,713 1,847 2,005

    Working capital 2,786.91 2,822 2,885 2,962 3,040


    Change in working capital 21.0% 35 63 77 78

    Note: D&A = depreciation and amortization; capex = capital expenditure.


    Source: Deutsche Bank Markets Research report, 2018. The author has made minor modifications of the cash flow forecasts m
    by Deutsche Bank analysts and adjusted to fit the time frame of early 2018.
    heir values in 2022 to the ones in 2032.

    Transition period to 2032 assumptions


    2023 2024 2025 2026 2027 2028 2029 2030 2031
    4.4% 4.2% 3.9% 3.6% 3.4% 3.1% 2.8% 2.5% 2.3%
    19.3% 19.8% 20.3% 20.8% 21.0% 21.0% 21.0% 21.0% 21.0%
    29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0% 29.0%
    3.9% 3.8% 3.7% 3.6% 3.5% 3.4% 3.3% 3.2% 3.1%
    19.1% 18.8% 18.5% 18.4% 18.2% 18.1% 18.0% 18.0% 17.9%
    4.2% 4.0% 3.9% 3.8% 3.7% 3.5% 3.4% 3.3% 3.1%

    2023 2024 2025 2026 2027 2028 2029 2030 2031


    16,353 17,033 17,695 18,336 18,950 19,534 20,083 20,593 21,060

    3,156 3,373 3,592 3,814 3,980 4,102 4,217 4,325 4,423


    915 978 1,042 1,106 1,154 1,190 1,223 1,254 1,283
    2,241 2,394 2,550 2,708 2,825 2,913 2,994 3,070 3,140

    638 647 655 660 663 664 663 659 653


    79 81 82 83 83 83 83 83 82
    682 688 692 693 692 688 681 671 659

    2,118 2,273 2,431 2,592 2,714 2,806 2,893 2,975 3,052

    3,119 3,200 3,282 3,365 3,448 3,531 3,614 3,697 3,779


    79 81 82 83 83 83 83 83 82

    ons of the cash flow forecasts made


    2032
    2.0%
    21.0%
    29.0%
    3.0%
    18.0%
    3.0%

    2032
    21,482

    4,511
    1,308
    3,203

    644
    82
    644

    3,121

    3,861
    82
    Exhibit 5
    Siemens and Healthineers: Valuing the IPO
    Divisional Multiples for Health Care Sectors

    EV/EBITDA EV/Sales
    Comparable company
    Imaging Philips 11.0 1.9
    Elekta 11.5 2.9
    Varex 10.6 2.0
    Varian 16.2 3.4
    Hologic 10.7 3.6
    Mean 12.0 2.8
    Median 11.0 2.9

    Diagnostics Qiagen 11.2 3.8


    Hologics 10.7 3.6
    Tecan 17.3 3.5
    Thermo Fisher 15.4 4.0
    Danaher 14.8 3.6
    Mean 13.9 3.7
    Median 14.8 3.6

    Advanced Therapies Philips 11.0 1.9


    Elekta 11.5 2.9
    Varex 10.6 2.0
    Varian 16.2 3.4
    Hologic 10.7 3.6
    Intuitive Surgical 30.0 11.8
    Mean 15.0 4.3
    Median 11.3 3.2

    Note: EV = enterprise vaule


    Source: JPMorgan Chase & Co. estimates, based on 2019 estimates of EBITDA and Sales using JPMorgan and
    Bloomberg Estimates, priced close of business April 23, 2018.
    Exhibit 6
    Siemens and Healthineers: Valuing the IPO
    Healthineers Divisional EBITDA for 2019 (in millions of euros)

    % EBITDA
    Company Level 100% 2876
    Imaging 61% 1754
    Diagnostics 27% 777
    Advanced Therapies 12% 345

    Source: Author analysis using Deutsche Bank forecast of 2019 EBITDA at company level, and 2017 actual percentages of EBITD
    IPO
    euros)

    vel, and 2017 actual percentages of EBITDA by division.

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