Three scenarios for value creation in the takeover of T-Mobile Netherlands, based on a number of assumptions:
- TMNL's 2021 results
- Not paying taxes.
- Not paying dividends, instead reducing debt.
- Slowing revenue growth; EBITDA growth 2x revenue growth (margin expansion); Capex growth 0.9x revenue growth (Capex-to-Sales declining).
Three scenarios:
- Base case: return CAGR 16.5%. FCF generation is insufficient to prevent a multiple contraction. The enterprise value increases from EUR 5.1 to 5.5 billion.
- Stable multiple case (8.0x): return CAGR 25.3%. EV increases from EUR 5.1 to 8.1 billion.
- Expanding multiple (to 11.0x): return CAGR 32.2%. EV grows from EUR 5.1 to 11.1 billion.
| (EUR millions) | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
| LBO debt redux scenario 1: multiple contraction | | | | | | | |
| Revenue | 2071 | 2175 | 2283 | 2375 | 2470 | 2544 | 2620 |
| rev growth (%) | | 5% | 5% | 4% | 4% | 3% | 3% |
| EBITDA AL | 634 | 697 | 767 | 829 | 895 | 948 | 1005 |
| EBITDA growth (%) | | 10% | 10% | 8% | 8% | 6% | 6% |
| EBITDA margin (%) | 30.6% | 32.1% | 33.6% | 34.9% | 36.2% | 37.3% | 38.4% |
| Capex | 274 | 286 | 299 | 310 | 321 | 330 | 339 |
| Capex growth (%) | | 4.5% | 4.5% | 3.6% | 3.6% | 2.7% | 2.7% |
| Capex/Sales ratio (%) | 13.2% | 13.2% | 13.1% | 13.1% | 13.0% | 13.0% | 12.9% |
| Oper FCF | 360 | 411 | 468 | 519 | 574 | 619 | 667 |
| Oper FCF/Sales ratio (%) | 17.4% | 18.9% | 20.5% | 21.8% | 23.2% | 24.3% | 25.4% |
| Net debt | 3750 | 3546 | 3282 | 2950 | 2554 | 2086 | 1554 |
| Interest | 156 | 147 | 136 | 122 | 106 | 87 | 64 |
| Net FCF | 204 | 264 | 332 | 396 | 468 | 532 | 602 |
| Net FCF/Sales ratio (%) | 9.9% | 12.1% | 14.5% | 16.7% | 18.9% | 20.9% | 23.0% |
| Net FCF cumulative | 204 | 468 | 800 | 1196 | 1664 | 2196 | 2798 |
| Equity value | 1350 | 1614 | 1946 | 2342 | 2809 | 3342 | 3944 |
| CAGR | | | | | | | 16.5% |
| Enterprise value (EV) | 5100 | 5160 | 5227 | 5292 | 5363 | 5428 | 5498 |
| EV/EBITDA (x) | 8.0 | 7.4 | 6.8 | 6.4 | 6.0 | 5.7 | 5.5 |
| | | | | | | |
| LBO debt redux scenario 2: multiple stabilisation | | | | | | | |
| EV/EBITDA (x) | 8.0 | 8.0 | 8.0 | 8.0 | 8.0 | 8.0 | 8.0 |
| Enterprise value (EV) | 5100 | 5610 | 6171 | 6665 | 7198 | 7630 | 8088 |
| Equity value | 1350 | 2064 | 2889 | 3715 | 4644 | 5544 | 6533 |
| CAGR | | | | | | | 25.3% |
| | | | | | | |
| LBO debt redux scenario 3: multiple expansion | | | | | | | |
| EV/EBITDA (x) | 8.0 | 8.5 | 9.0 | 9.5 | 10.0 | 10.5 | 11.0 |
| Enterprise value (EV) | 5100 | 5928 | 6904 | 7871 | 8948 | 9959 | 11059 |
| Equity value | 1350 | 2382 | 3623 | 4921 | 6394 | 7873 | 9505 |
| CAGR | | | | | | | 32.2% |
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