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CEZ GROUP
CFA INVESTMENT RESEARCH CHALLENGE
MARCH 3, 2011
MADRID
INVESTMENT RECOMMENDATION TO DECEMBER 21, 2010
11
CEZ GROUP
CZECH
CZECH REPUBLIC
•Technical University of Ostrava
CEZ GROUP
•European power utility
VALUATION
•2 phases DCF equity method
INVESTMENT RECOMMENDATION
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
22
VALUATION ASSUMPTIONS
CZECH
Company
profile
ASSIGNMENT
Beta, cost
of capital
Industry
profile
• Risk averse investor
• Three years perspective
• Valuation to 21.12.2010
TARGET PRICE
VALUATION
Free cash
flow
prediction
807 CZK
• 2 phases DCF equity method
• Investment risks
• Actual issues
Financial
analysis
RECOMMENDATION
HOLD
Planned
statements
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
33
CEZ AS INTERNATIONAL UTILITY
CZECH
MAJOR ELECTRICITY PRODUCER IN THE CZECH REPUBIC
74% of market
70% MoF
32.707 emp
ONE OF TEN BIGGEST EUROPEAN POWER UTILITIES
65,3 TWh
17 countries
60 plants
PRODUCTION BASED ON LIGNITE AND NUCLEAR POWER
45% lignite
42% nuclear
13% other
44% OF REVENUES IN POWER PRODUCTION
39% distribution
4% mining
14% other
Source: Company data, Czech team research
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
44
COMPANY COMPARISON
50.0
CZECH
14
EBITDA margin
12
43
40.0
Dividend yield
10
Industry average 25,5
30.0
8
6,48%
6
20.0
4
10.0
2
0
0.0
20.0
P/E
EV/EBITDA
15.0
14
12
10
8
6
4
2
0
Industry average 7,6x
Industry average 12,1x
9,7x
10.0
6x
5.0
0.0
Data to 21/12/2010
ASSUMPTIONS
Industry average 5,6%
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
Source: Czech team estimates, Reuters
RECOMMENDATION
55
FINANCIAL ANALYSIS
CZECH
EBIT/Assets
250%
EBITDA margin
Revenues/Assets
200%
150%
100%
ROCE
Revenues/Current Assets
50%
2005
0%
2006
ROC
Equity/Assets
ROS
ROE
ROA
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
66
FINANCIAL ANALYSIS
CZECH
EBIT/Assets
250%
EBITDA margin
Revenues/Assets
200%
150%
100%
ROCE
Revenues/Current Assets
50%
2005
0%
2007
ROC
Equity/Assets
ROS
ROE
ROA
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
77
FINANCIAL ANALYSIS
CZECH
EBIT/Assets
250%
EBITDA margin
Revenues/Assets
200%
150%
100%
ROCE
Revenues/Current Assets
50%
2005
0%
2008
ROC
Equity/Assets
ROS
ROE
ROA
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
88
FINANCIAL ANALYSIS
CZECH
EBIT/Assets
250%
EBITDA margin
Revenues/Assets
200%
150%
100%
ROCE
Revenues/Current Assets
50%
2005
0%
2009
ROC
Equity/Assets
ROS
ROE
ROA
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
99
FINANCIAL ANALYSIS
CZECH
EBIT/Assets
250%
EBITDA margin
Revenues/Assets
200%
150%
100%
ROCE
Revenues/Current Assets
50%
2005
0%
2010
ROC
Equity/Assets
ROS
ROE
ROA
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
10
10
FINANCIAL ANALYSIS
CZECH
ROE
EBIT/Assets
100%
EBITDA margin
95%
90%
85%
ROCE
Assets
80%
75%
ROC
Equity/Assets
ROS
Enel
35
30
25
20
15
Revenues/Assets
10
5
Revenues/Current 0
ROE
ROA
2009
CEZ
EDF
RWE
Iberdrola
E.ON
2005
2006
12
10
8
6
4
2
0
2007
2008
2009
2010*
ROA 2010*
2010
Source: Reuters, Bloomberg, Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
11
11
VALUATION BASE
TEAM
CZECHE
Estimated free cash flows to equity (mil. CZK)
40,000
35,000
30,000
25,000
20,000
Relative changes of chosen value drivers
Y.oY.change of EBITDA margin
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2,010
2,011
2,012
-2.00%
-4.00%
-6.00%
-8.00%
-10.00%
Y.oY.change of sales
2,013
2,014
Y.oY.change of dividends
2,015
2,016
Y.oY.change of Price
2,017
2,018
Y.oY.change of EAT
2,019
2,020
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
12
12
VALUATION
TEAM E
Phase 1 : 2011 - 2017 Phase 2 : 2018 - ∞
Share price as for 21/12/2010 (in CZK per diluted share)
Levered β
0,99
0,99
Rm
6,29%
6,99%
900
Rf
3,64%
4,00%
850
Re
6,26%
8,50%
g
max, 942
950
In 52 weeks
Target price, 807
800
1,49%
Market price, 772
750
Values in mil. CZK
Value of phase 1
148 795
Continuing value (perpetuity)
436 668
Value of phase 2
285 405
TOTAL VALUE
434 201
min, 741.5
700
Ratio between
of DCF
equity
Ratio phases
between
phases
of DCF equity
Number of issued shares
(pieces)
537 989 759
VALUE OF SHARE (in CZK)
807,080
Enterprise value
532 200
Indebtness
32,61%
34%
1. PHASE
2. PHASE
66%
Source: Company data, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
13
13
INVESTMENT RISKS
TEAM
CZECHE
Volatility of
exchange
rate
Possible
drop in
rating
Unstable
political
situation
Low power
prices
• Business
with foreign
countries
• Possible
price
increase of
debt
• In the Czech
Republic
and in other
countries
• Contra high
fixed costs
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
14
14
POWER PRICES
CZECH
Historical power prices (EUR)
90
70
50
30
1/1/2005
1/1/2006
1/1/2007
1/1/2008
1/1/2009
1/1/2010
Estimated power prices (EUR)
70.00
65.00
60.00
55.00
50.00
52
52
52
51
54
57
56
59
61
65
63
PXE
EEX
ČEZ
45.00
40.00
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: EEX, PXE, Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
15
15
ACTUAL ISSUES
CZECH
Development of subsidiary, taxed and bought emission allowances (mil. CZK)
Emission allowances - gift tax
Emission allowances - buy
9450
4569.6
4636.8
4004
11970
13965
15960
19950
17955
6344.8
Estimated prices of emission allowances (EUR)
70
Dividend per share (CZK)
60
20
19
18
17
16
15
14
13
12
50
40
30
20
10
0
Source: Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
16
16
SENSITIVITY ANALYSIS
Influence of 1% change of
the factor to the value
of Equity (mil. CZK)
CZECH
Sensitivity of value to the factor (mil. CZK)
100,000
80,000
60,000
40,000
4,290
20,000
0
-766
-20,000
Return on capital
8,889 -40,000
-60,000
-4,811
-80,000
-100,000
-9%
Dividends
Sales
-5%
-2%
0%
Return on capital
Emmision Allowances
Emmision allowances
Return on capital
2%
5%
9%
Sales
Dividends
Source: Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
17
17
SENSITIVITY ANALYSIS
CZECH
18.0%
15.7%
16.0%
16.1%
13.2%
14.0%
Probability
16.4%
10.3%
12.0%
9.4%
10.0%
8.0%
6.1%
6.0%
802
Variance
10122
Standard deviation
101
Min
487
Max
1126
4.3%
4.0%
2.0%
Mean
0.0%
0.5%
485
528
1.2%
2.6%
2.1%
1.0%
0.7%
0.4%
1041
1084
1127
0.0%
571
613
656
699
742
785
827
870
913
956
999
Stock price
Probability
Percentil
VaR
CVaR
1%
-33,8%
-38,8%
5%
-20,6%
-28,2%
10%
-14,6%
-22,8%
100.00%
Probability density
80.00%
Distribution function
60.00%
Var
1010%
%
VaR
40.00%
20.00%
-50.00%
-40.00%
-30.00%
-20.00%
-10.00%
0.00%
0.00%
10.00%
Continuous yield
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
20.00%
30.00%
40.00%
Source: Czech team estimates
INVESTMENT
RISKS
RECOMMENDATION
18
18
SUMMARY
TEAM
CZECHE
Good stable company with Czech political support
Majority of indexes around industry average or higher
TICKER
NYSE
EURONEXT:
CEZ
Reasonable financial analysis indicators
Stable production of free cash flow
UNDERVALUED
HOLD
Necessity of cutting down costs
TARGET
PRICE:
807 CZK
Uncertainity about allowances
Existing drop in dividends
Investment risks
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
19
19
SUMMARY
TEAM
CZECHE
1150
1050
Recommendation to 21 December 2010
TICKER
NYSE
EURONEXT:
CEZ
CZK
950
850
HOLD
750
TARGET
PRICE:
807 CZK
650
550
1/7/2010
20/8/2010
9/10/2010
28/11/2010
17/1/2011
Date
Source: Czech team estimates
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
20
20
RECOMMENDATION TO DECEMBER 21, 2010
TEAM
CZECHE
TICKER NYSE EURONEXT: CEZ
HOLD
TARGET PRICE: 807 CZK
ASSUMPTIONS
CEZ GROUP
PEER GROUP
COMPARISON
FINANCIAL
ANALYSIS
VALUATION
INVESTMENT
RISKS
RECOMMENDATION
21
21
CZECH
APPENDIX
22
APPENDIX - HIGHLIGHTS
CZECH
Market profile
23
XI/2010
IX/2010
Source: Czech team estimates, Company data
VII/2010
21%
V/2010
Return on Equity
III/2010
35%
I/2010
Debt to Total Equity
XI/2009
1 018,94CZK
IX/2009
Book Value per Share
VII/2009
0,84%
V/2009
Insider Holdings
III/2009
79,86 %
I/2009
Institutional Holdings
XI/2008
415 059
IX/2008
Market Capitalization
VII/2008
537 989 759
V/2008
Shares Outstanding
III/2008
6,48%
I/2008
Dividend Yield (Estimated)
CEZ stock price (CZK)
1600
1400
1200
1000
800
600
400
200
0
XI/2007
0,99
IX/2007
Beta
VII/2007
490 953,30
V/2007
Average Daily Volume
III/2007
950,00 – 736,00
I/2007
52 Week Price Range
APPENDIX – INVESTMENT SUMMARY
CZECH
FCFE and EBITDA (mil CZK)
155,000
105,000
55,000
5,000
2,010
2,011
2,012
2,013
2,014
2,015
2,016
2,017
2,018
2,019
FCFE
2,020
EBITDA
EU50 (EUR)
1600
1400
1200
1000
800
600
400
200
0
4000
3000
2000
1000
0
XI/2010
IX/2010
VII/2010
V/2010
III/2010
I/2010
XI/2009
IX/2009
VII/2009
V/2009
III/2009
I/2009
XI/2008
IX/2008
VII/2008
V/2008
III/2008
I/2008
XI/2007
IX/2007
VII/2007
V/2007
III/2007
I/2007
Source: Czech team estimates, Company data, Eurostoxx50
CEZ (CZK)
EU50 : CEZ
5000
EU50
CEZ
24
APPENDIX – STATEMENT OF CASH FLOW
CZECH
Statement of Cash Flows (in millions CZK)
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
47 163
44 259
42 877
45 790
49 149
50 320
52 861
55 655
58 669
22 634
22 860
23 089
23 320
23 553
23 788
23 500
23 500
23 500
69 797
67 119
65 966
69 109
72 702
74 109
76 361
79 155
82 169
67 751
59 610
61 468
45 723
47 706
33 380
35 000
35 000
50 000
∆ Current assets
6 168
774
-456
5 744
8 960
6 319
6 193
6 297
6 564
∆ Current liabilities
7 011
880
-518
6 529
10 185
7 183
7 039
7 158
7 462
∆ Working capital
-843
-105
62
-785
-1 225
-863
-847
-860
-897
8 078
3 035
2 300
426
0
0
0
0
0
74 986
62 539
63 830
45 363
46 481
32 516
34 153
34 139
49 103
28 520
25 940
24 342
23 583
25 184
27 032
27 676
29 073
30 610
5 797
5 797
5 797
5 797
5 797
5 797
5 797
5 797
5 797
EAT
Amortization
CASH GENERATED FROM
OPERATIONS
CAPEX
Financial investments
CASH USED IN INVESTING
ACTIVITIES
Dividends
Part payment of debts
CASH USED IN FINANCING
ACTIVITIES
DIFFERENCE OF CASH FLOW
34 317
31 736,51
30 139
29 379
30 981
32 829
33 473
34 870
36 407
-39 506
-27 156
-28 003
-5 633
-4 760
8 763
8 734
10145
-3 341
Net debts
39 506
27 157
28 003
5 634
4 760
-8 763
-8 734
-10 146
3 341
Condition of debts
190 519
211 879
234 086
233 922
232 886
218 325
203 794
187 851
185 395
Source: Czech team estimates, Company data
25
APPENDIX – BALANCE SHEET (ASSETS)
CZECH
Balance Sheet (in millions CZK)
ASSETS
NON-CURRENT ASSETS
Plant in service
Less accumulated provision for depreciation
Net plant in service
Nuclear fuel, at amortized cost
Construction work in progress
Investment in associates and jointventures
Investments and other financial assets
Intangible assets, net
Deferred tax assets
CURRENT ASSETS
Cash and cash equivalents
Receivables, net
Materials and supplies, net
Fossil fuel stocks
Emission rights
Other financial assets
Other current assets
Source: Czech team estimates, Company data
2009
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
530 259
584 179
621 702
659 626
687 773
720 886
736 796
754 489
772 286
805 351
414 955
462 707
499 457
537 836
560 239
584 392
593 984
605 484
616 984
643 484
509 618
577 369
636 979
698 447
744 170
791 876
825 256
860 256
895 256
945 256
266 377 -289 011 -311 871 -334 960 -358 280 -381 833 -405 621 -429 121 -452 621 -476 121
243 241
288 358
325 108
363 487
385 890
410 043
419 635
431 135
442 635
469 135
5 439
6 000
6 000
6 000
6 000
6 000
6 000
6 000
6 000
6 000
80 125
80 125
80 125
80 125
80 125
80 125
80 125
80 125
80 125
80 125
17 250
17 400
17 400
17 400
17 400
17 400
17 400
17 400
17 400
17 400
49 423
50 000
50 000
50 000
50 000
50 000
50 000
50 000
50 000
50 000
18 653
20 000
20 000
20 000
20 000
20 000
20 000
20 000
20 000
20 000
824
824
824
824
824
824
824
824
824
824
115 304
121 472
122 246
121 790
127 534
136 494
142 812
149 005
155 302
161 867
26 727
38 537
43 258
42 333
47 884
56 429
61 815
67 083
72 449
78 063
47 347
41000
37000
37500
38000
38500
39000
39500
40000
40500
4 959
5 224
5 258
5 238
5 485
5 870
6 142
6 408
6 679
6 962
2 944
3 101
3 121
3 110
3 256
3 485
3 646
3 804
3 965
4 133
1 212
1 400
1 400
1 400
700
0
0
0
0
0
29 706
29800
29800
29800
29800
29800
29800
29800
29800
29800
2 409
2 409
2 409
2 409
2 409
2 409
2 409
2 409
2 409
2 409
26
APPENDIX – BALANCE SHEET (LIABILITIES)
CZECH
Balance Sheet (in millions CZK)
EQUITY AND LIABILITIES
TOTAL EQUITY
Equity attributable to equity holders of the parent
Stated capital
Treasury shares
Retained earnings and other reserves
Non controlling interests
TOTAL LIABILITIES
LONG-TERM LIABILITIES
Long-term debt, net of current portion
Accumulated provision for nuclear
decommissioning and fuel storage
Other long-term liabilities
DEFERRED TAX LIABILITY
CURRENT LIABILITIES
Short term loans and current portion of long-term
debt
Trade and other payables
Accurated liabilities
Source: Czech team estimates, Company data
2009
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
530 259
584 179
621 702
659 626
687 773
720 886
736 796
754 489
772 286
805 351
206 675
219 861
235 146
251 381
273 162
297 127
320 415
345 599
372 181
400 240
200 361
214 361
229 646
245 881
267 662
291 627
314 915
340 099
366 681
394 740
53 799
53 799
53 799
53 799
53 799
53 799
53 799
53 799
53 799
53 799
-5 151
-4 600
-4 600
-4 600
-4 600
-4 600
-4 600
-4 600
-4 600
-4 600
151 713
165 162
180 447
196 682
218 463
242 428
265 716
290 900
317 482
345 541
6 314
5 500
5 500
5 500
5 500
5 500
5 500
5 500
5 500
5 500
323 584
364 317
386 557
408 245
414 611
423 759
416 382
408 890
400 105
405 111
177 181
211 238
232 598
254 805
254 641
253 605
239 044
224 513
208 570
206 114
118 921
152 630
173 990
196 197
196 033
194 997
180 436
165 905
149 962
147 506
37 152
37 500
37 500
37 500
37 500
37 500
37 500
37 500
37 500
37 500
21 108
21 108
21 108
21 108
21 108
21 108
21 108
21 108
21 108
21 108
15 335
15 000
15 000
15 000
15 000
15 000
15 000
15 000
15 000
15 000
131 068
138 079
138 959
138 441
144 970
155 155
162 337
169 376
176 535
183 997
37 889
37 889
37 889
37 889
37 889
37 889
37 889
37 889
37 889
37 889
78 212
87 670
88 550
88 032
94 561
107 250
116 436
125 077
133 518
142 005
14 967
12 520
12 520
12 520
12 520
10 016
8 013
6 410
5 128
4 103
27
APPENDIX – INCOME STATEMENT
CZECH
Income statement (in millions CZK)
2 009
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
REVENUES
196 352
206 855
208 173
207 397
217 179
232 436
243 196
253 742
264 466
275 644
Sales of electricity
Heat sales and other revenues
173 494
188 050
189 248
188 543
197 453
211 305
221 088
230 674
240 423
250 585
22 858
18 805
18 925
18 854
19 744
21 131
22 109
23 067
24 042
25 059
Operating costs
128 153
118 155
116 577
116 142
121 620
130 164
136 190
142 095
148 101
154 361
4 570
4 637
4 004
6 345
9 450
11 970
13 965
15 960
Gift tax
Allowances
OPERATING COSTS AFTER ALLOWANCES
128153
118 155
121 146
120 779
125 624
136 509
145 640
154 065
162 066
170 321
Amortization
EBITDA
EBIT
Interests
EBT
Income tax
EAT
22 876
22 634
22 860
23 089
23 320
23 553
23 788
23 500
23 500
23 500
97 075
88 700
87 026
86 618
91 555
95 927
97 556
99 676
102 400
105 323
68 199
66 066
64 166
63 529
68 235
72 374
73 768
76 176
78 900
81 823
3 303
7 841
9 526
10 594
11 704
11 696
11 644
10 916
10 190
9 393
64 946
58 226
54 640
52 935
56 531
60 678
62 124
65 260
68 710
72 431
13 091
51 855
11 063
47 163
10 382
44 259
10 058
42 877
10 741
45 790
11 529
49 149
11 803
50 320
12 399
52 861
13 055
55 655
13 762
58 669
Dividends
EAR
26 899
24 956
28 520
18 642
25 940
18 319
24 342
18 535
23 583
22 207
25 184
23 965
27 032
23 288
27 676
25 185
29 073
26 582
30 610
28 059
Source: Czech team estimates, Company data
28
APPENDIX – FREE CASH FLOW
CZECH
Free cashflow (in millions CZK)
FCFF
2010E
2011E
2012E
2013E
2014E
2015E
2016E
2017E
2018E
EAT
47 163
44 259
42 877
45 790
49 149
50 320
52 861
55 655
58 669
ODPISY
22 634
22 860
23 089
23 320
23 553
23 788
23 500
23 500
23 500
-843
-106
62
-785
-1 225
-864
-847
-861
-897
INV
67 751
59 610
61 468
45 723
47 706
33 380
35 000
35 000
50 000
úroky
7 841
9 526
10 594
11 704
11 696
11 644
10 916
10 190
9 393
úroky(1-t)
6 351
7 716
8 581
9 480
9 474
9 432
8 842
8 254
7 608
FCFF
9 240
15 331
13 017
33 652
35 695
51 024
51 049
53 270
40 674
FCFE
2 010
2 011
2 012
2 013
2 014
2 015
2 016
2 017
2 018
EAT
47 163
44 259
42 877
45 790
49 149
50 320
52 861
55 655
58 669
Odpisy
22 634
22 860
23 089
23 320
23 553
23 788
23 500
23 500
23 500
ČPK
-843
-106
62
-785
-1 225
-864
-847
-861
-897
INV
67 751
59 610
61 468
45 723
47 706
33 380
35 000
35 000
50 000
Saldo U
33 709
21 360
22 206
-163
-1 037
-14 560
-14 531
-15 943
-2 456
FCFE
36 598
28 975
26 642
24 009
25 184
27 032
27 676
29 073
30 610
změna ČPK
Source: Czech team estimates, Company data
29
APPENDIX – VALUATION
CZECH
DCF method
2 010
2 011
2 012
2 013
2 014
2 015
2 016
2 017
Free cash flow to the equity 36 598 28 975
26 642
24 009
25 184
27 032
27 676
29 073 30 610
27266,7 23594,0 20008,4 19751,2
19950,7
19222,1 19002,3
Discounted free cash flow
Values in CZK
Phase 1 : 2011 - 2018
2 018
Phase 2 : 2018 and more
Value od phase 1
148 795
Levered β
0,99
Levered β
0,99
Continuing value (perpetuity)
436 668
Re
6,26%
Re
8,50%
Value od phase 2
285 405
Rm
6,29%
Rm
6,99%
Total value
434 201
Rf
3,64%
Rf
4,00%
Number of issued shares
537989759
CZ/A
32,61%
CZ/A
23,02%
Value of share
807,080
E/A
37,64%
E/A
49,70%
Counted growth in the
second phase was 1,49%
based on planned
growth of sales
Source: Czech team estimates, Company data
30
APPENDIX
CZECH
Cross-border power flows (2009)
STATE
TRANSMISSION SYSTEM
PLAN
FACT
50 Hertz Trans.
-3720 GWh
-1400 GWh
TenneT
-4077 GWh
-6321 GWh
Poland
PSE Operator
-726 GWh
5849 GWh
Slovakia
SEPS
-5229 GWh
-5825 GWh
Austria
APG
-1997 GWh
-6599GWh
Czech Republic
ČEPS
-14297 GWh
-14296GWh
Germany
DE - 51,14€/MWh
PL – 50,25€/MWh
SK – 49,15€/MWh
HU - 51,05€/MWh
Source: ČEPS
31
APPENDIX
CZECH
50%
Rentability
40%
ROC
30%
EAT/Equity
100%
EBIT/Assets
80%
60%
10%
ROA
0%
40%
ROC
ROE
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
EBITDA margin
ROS
20%
Revenues/Assets
20%
0%
Revenues/Current 100%
Assets
80%
ROS
Financial stability
Total
Indebtedness
Debt on
Equity
60%
ROA
2009
Equity/Assets
2010
ROE
40%
Financial
Independence
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0%
Source: Comapny data, Czech team estimates
32