FLT Business Growth Drivers

Variables
Revenue Growth Rate
Cost of Goods / Revenue
Depreciation rate (Depreciation/Non Current Assets)
Current Assets / Revenue
Net Non Current Assets / Revenue
Current and Other Liabilities / Revenue
Interest rate on debt
Dividend Payout ratio
Tax Rate

<Actual>

2013

2014

2015

-79%
-8%
89%
29%
65%
-29%
-48%
30%

8%
77%
-8%
90%
30%
65%
-29%
50%
30%

8%
75%
-8%
94%
30%
65%
-29%
50%
30%

<Forecast>

2016

2017

2018

2019

2020

2021

8%
73%
-8%
98%
30%
65%
-29%
50%
30%

8%
71%
-8%
103%
30%
65%
-29%
50%
30%

8%
70%
-8%
107%
30%
65%
-29%
50%
30%

8%
70%
-8%
111%
30%
65%
-29%
50%
30%

8%
70%
-8%
115%
30%
65%
-29%
50%
30%

8%
70%
-8%
119%
30%
65%
-29%
50%
30%

<Terminal Value>

2022

2023

2024

8%
70%
-8%
122%
30%
65%
-29%
50%
30%

8%
70%
-8%
125%
30%
65%
-29%
50%
30%

2.85%
70%
-8%
130%
30%
65%
-29%
60%
30%

FLT FCFE FORECAST

PROFIT AND LOSS
Operating Revenue
Other Revenue
Interest Revenue
Total Revenue
Operating Expenses
EBITDA
Depreciation and Amortisation
EBIT
Interest Expense
Profit Before Tax (PBT)
Tax
Net Profit After Tax (NPAT)
Dividend Distributions
Retained Earnings
Tax Rate (Effective)
BALANCE SHEET
Cash and Marketable Securities
Other Current Assets
Total Current Assets
Gross Non Current Assets
Less Accumulated Depreciation
Net Non Current Assets
Total Assets
Current and Other Liabilities
Short Term Debt
Long Term Debt
Total Liabilities
Equity / Reserves
Retained Earnings
Total Equity
Total Liabilities + Equity
FCFE
EBIT after Tax
Add Depreciation
Less Capital Expenditure
Less change in Net Working Capital
Free Cash Flow to Firm (FCFF)
Less interest on debt after tax
Less repayments of debt
Free Cash flow to Equity (FCFE)
FCFE RECONCILIATION
Dividends
Change in issued equity
FCFE Distributed
Number of shares on Issue

<Actual>

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2012
1,032,467
527,274
1,559,741
703,248
(142,731)
560,517
2,120,258
1,155,954
45,162
62,013
1,263,129
312,010
545,119
857,129
2,120,258
2012

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2012
$
$
$

<Forecast>

2013
('000)
1,944,557
24,687
35,306
2,004,550
(1,574,005)
430,545
(49,812)
380,733
(31,524)
349,209
103,127
246,082
(117,295)
128,787
30%
2013
1,227,019
557,947
1,784,966
780,121
(192,543)
587,578
2,372,544
1,300,164
43,550
2,636
1,346,350
352,288
673,906
1,026,194
2,372,544
2013
268,296
49,812
(76,873)
(81,015)
160,220
(22,214)
(60,989)
77,017
2013
(117,295)
40,278
(77,017)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2014
('000)
2,100,122
26,662
38,130
2,164,914
(1,666,984)
497,930
(55,059)
442,871
(3,116)
439,755
131,926
307,828
(153,914)
153,914
30%
2014
1,339,382
609,040
1,948,423
897,076
(247,602)
649,474
2,597,897
1,407,194
7,959
2,636
1,417,789
352,288
827,820
1,180,108
2,597,897
2014
310,010
55,059
(116,955)
(56,427)
191,687
(2,181)
(35,592)
153,914
2014
(153,914)
(153,914)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2015
('000)
2,268,131
28,795
41,181
2,338,107
(1,753,580)
584,527
(59,464)
525,063
(5,116)
519,947
155,984
363,963
(181,981)
181,981
30%
2015
1,510,823
686,998
2,197,821
1,008,498
(307,066)
701,432
2,899,253
1,519,770
14,758
2,636
1,537,163
352,288
1,009,802
1,362,090
2,899,253
2015
367,544
59,464
(111,422)
(136,823)
178,763
(3,581)
6,799
181,981
2015
(181,981)
(181,981)
100,427

NOTES:
1. 'Change in Net Working Capital' includes '(Total Current Assets) - (Total liabilities excluding Short Term and Long Term Debt)'.
2. 'Repayment of Debt' includes 'Short Term Debt' and 'Long Term Debt'

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2016
('000)
2,449,582
31,099
44,475
2,525,156
(1,843,364)
681,792
(64,221)
617,571
(4,134)
613,437
184,031
429,406
(214,703)
214,703
30%
2016
1,701,122
773,530
2,474,653
1,128,834
(371,287)
757,547
3,232,199
1,641,351
11,420
2,636
1,655,407
352,288
1,224,504
1,576,792
3,232,199
2016
432,300
64,221
(120,336)
(155,250)
220,935
(2,894)
(3,338)
214,703
2016
(214,703)
(214,703)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2017
('000)
2,645,548
33,586
48,033
2,727,168
(1,936,289)
790,879
(69,359)
721,520
(3,775)
717,745
215,323
502,421
(251,211)
251,211
30%
2017
1,921,574
873,773
2,795,347
1,258,797
(440,646)
818,150
3,613,498
1,772,659
10,200
2,636
1,785,495
352,288
1,475,715
1,828,003
3,613,498
2017
505,064
69,359
(129,963)
(189,387)
255,074
(2,643)
(1,220)
251,211
2017
(251,211)
(251,211)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2018
('000)
2,857,192
36,273
51,876
2,945,342
(2,061,739)
883,602
(74,908)
808,695
(3,148)
805,547
241,664
563,883
(281,942)
281,942
30%
2018
2,166,411
985,105
3,151,516
1,399,156
(515,554)
883,602
4,035,118
1,914,472
8,066
2,636
1,925,174
352,288
1,757,657
2,109,945
4,035,118
2018
566,086
74,908
(140,360)
(214,355)
286,279
(2,203)
(2,134)
281,942
2018
(281,942)
(281,942)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

<Terminal Value>

2019
('000)
3,085,768
39,175
56,026
3,180,969
(2,226,678)
954,291
(80,900)
873,391
(2,711)
870,680
261,204
609,476
(304,738)
304,738
30%
2019
2,431,563
1,105,674
3,537,237
1,550,744
(596,454)
954,291
4,491,528
2,067,630
6,580
2,636
2,076,845
352,288
2,062,394
2,414,682
4,491,528
2019
611,373
80,900
(151,588)
(232,564)
308,121
(1,897)
(1,486)
304,738
2019
(304,738)
(304,738)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2020
('000)
3,332,629
42,309
60,508
3,435,446
(2,404,813)
1,030,634
(87,372)
943,262
(2,285)
940,977
282,293
658,684
(329,342)
329,342
30%
2020
2,718,190
1,236,009
3,954,199
1,714,460
(683,826)
1,030,634
4,984,833
2,233,040
5,133
2,636
2,240,809
352,288
2,391,736
2,744,024
4,984,833
2020
660,283
87,372
(163,715)
(251,551)
332,389
(1,599)
(1,447)
329,342
2020
(329,342)
(329,342)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2021
('000)
3,599,239
45,694
65,349
3,710,282
(2,597,198)
1,113,085
(94,362)
1,018,723
(1,616)
1,017,106
305,132
711,975
(355,987)
355,987
30%
2021
3,027,464
1,376,641
4,404,105
1,891,272
(778,188)
1,113,085
5,517,190
2,411,683
2,859
2,636
2,417,178
352,288
2,747,724
3,100,012
5,517,190
2021
713,106
94,362
(176,813)
(271,263)
359,392
(1,131)
(2,274)
355,987
2021
(355,987)
(355,987)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2022
('000)
3,887,178
49,349
70,577
4,007,105
(2,804,973)
1,202,131
(101,911)
1,100,221
(1,672)
1,098,549
329,565
768,984
(384,492)
384,492
30%
2022
3,363,316
1,529,359
4,892,675
2,082,230
(880,099)
1,202,131
6,094,806
2,604,618
3,048
2,636
2,610,302
352,288
3,132,216
3,484,504
6,094,806
2022
770,154
101,911
(190,958)
(295,635)
385,472
(1,170)
189
384,491
2022
(384,492)
(384,492)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2023
('000)
4,198,153
53,297
76,223
4,327,673
(3,029,371)
1,298,302
(110,064)
1,188,238
(1,041)
1,187,197
356,159
831,038
(415,519)
415,519
30%
2023
3,724,604
1,693,643
5,418,247
2,288,464
(990,162)
1,298,302
6,716,549
2,812,988
903
2,636
2,816,527
352,288
3,547,735
3,900,023
6,716,549
2023
831,767
110,064
(206,234)
(317,202)
418,394
(729)
(2,145)
415,520
2023
(415,519)
(415,519)
100,427

$
$
$
$
$
$
$
$
$
$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

2024
('000)
4,317,800
54,816
78,395
4,451,012
(3,115,708)
1,335,304
(113,201)
1,222,103
(1,041)
1,221,062
366,319
854,743
(512,846)
341,897
30%
2024
3,977,621
1,808,694
5,786,315
2,438,666
(1,103,363)
1,335,304
7,121,619
2,893,158
903
2,636
2,896,697
335,290
3,889,632
4,224,922
7,121,619
2024
855,472
113,201
(150,202)
(287,898)
530,572
(729)
529,843
2024
(512,846)
(16,998)
(529,844)
95,581

FLT FCFE VALUATION MODEL

NPV
FCFE Value
CAPM Required Rate of Return
Terminal Value Growth Rate (g)
Shares Outstanding
NPV
SHARE VALUE

<Actual>

2013
('000)
77,017

100,427
$
$

46.11

2014
('000)
153,914 $
9.81%

2015
('000)
181,981
9.81%

100,427
140,164.03

100,427
150,918.60

<Forecast>

2016
('000)
214,703 $
9.81%

2017
('000)
251,211 $
9.81%

2018
('000)
281,942 $
9.81%

2019
('000)
304,738 $
9.81%

2020
('000)
329,342 $
9.81%

2021
('000)
355,987
9.81%

100,427
162,148.16

100,427
172,770.95

100,427
176,583.35

100,427
173,809.97

100,427
171,062.39

100,427
168,383.52

2022
('000)
384,491 $
9.81%
100,427
165,618.63

<Terminal
Value>
2023
2024
('000)
('000)
415,520 $
529,843
9.81%
9.81%
2.85%
100,427
95,581
162,994.59 $
2,986,203

FLT DDM VALUATION MODEL

NPV
Dividend Paid Per Share
CAPM Required Rate of Return
Terminal Value Growth Rate (g)
Shares Outstanding
NPV
SHARE VALUE

<Actual>
2013
('000)
$

2014
('000)
1.17

100,427
$
$

46.62

2015
('000)
1.53 $
9.81%

100,427
1.40

1.81
9.81%
100,427
1.50

<Forecast>
2016
('000)
$

2017
('000)
2.14 $
9.81%

100,427
1.61

2018
('000)
2.50 $
9.81%

100,427
1.72

2019
('000)
2.81 $
9.81%

100,427
1.76

2020
('000)
3.03 $
9.81%

100,427
1.73

2021
('000)
3.28 $
9.81%

100,427
1.70

3.54
9.81%
100,427
1.68

2022
('000)
$

3.83 $
9.81%
100,427
1.65

<Terminal
Value>
2023
2024
('000)
('000)
4.14 $
5.37
9.81%
9.81%
2.85%
100,427
95,581
1.62 $
30.24

FLT P/E ANALYSIS

COMPANY
Flight Centre (@$49.78 per share)
Jetset Travelworld
Webjet
Wotif
Corporate Travel Management
Qantas Airways
Virgin Australia
P/E Industry Average

<Actual>
PRICE/EARNINGS
MULTIPLE
18.85
4.61
28.52
10.38
40.65
14.34
-0.09
16.75

Source: Bloomberg 2014 (http://www.bloomberg.com/quote/FLT:AU), (Morninstar Inc, 2014 (http://datanalysis.morningstar.com.au.sims

rningstar.com.au.simsrad.net.ocs.mq.edu.au/af/dathome?xtm-licensee=datpremium)