Company

GE
United Technologies
Honeywell International
Lockheed Martin
General Dynamics
Rolls-Royce
Northrop Grumman
B/E Aerospace
Zodiac Aerospace
Meggitt
Huntington Ingalls
Avg.
Median
Max
Min

(US$mm)
Market cap
Firm Value
183226
188059
105910
122991
74302
75747
51051
53939
39,779
39,394
34375
32247
25951
27993
9817
11391
9661
11096
6947
7906
4618.5
5655

Safran

26863

29029

Using Revenue multiple

Using Revenue multiple
Revenue Euro
Revenue USD
Valuation

14,695
19691.3
33385.70409

Using the EBITDA multiple

EBITDA Euro
EBITDA USD
Valuation

2319
3107.46
29407.87145

Using the price-to-earnings multiple

Earning Euro
earning USD
Valuation

EURO Dollar conversion rate

All figures in Million

1386
1857.24
29715.84

1.34

20 SMA

FV/Revenue
2014E
2015E
1.74
1.68
1.88
1.8
1.86
1.78
1.2
1.21
1.3
1.29
1.23
1.19
1.18
1.21
2.75
2.46
1.9
1.77
2.78
2.64
0.83
0.83
1.70
1.62
1.74
1.68
2.78
2.64
0.83
0.83
1.37

1.29

FV/EBITDA
2014E
10.7
10
10.3
8.4
9.3
7.6
7.7
13
11.4
9.4
6.3
9.46
9.4
13
6.3
7.8

FV/EBITDA
2015E
10
9.4
9.4
8.2
8.8
7.2
7.6
11.3
10.4
8.9
5.9
8.83
8.9
11.3
5.9
7

P/E
2014E
2015E
18.4
16.2
16.9
15.2
17.1
15.4
14.6
13.7
15.9
14.7
16.2
14.5
13.2
12.3
21.2
17.8
16.5
14.8
13.4
12.4
12.6
11.1
16.00
14.37
16.2
14.7
21.2
17.8
12.6
11.1
15.5

13.5

Target
Schneller Holdings
Satair
Microtecnica
Vector Aerospace
Pacific Scientific
Satair
TSI
McKechnie Aerospace
Aviation Worldwide Services
Beechcraft
ARINC
Valent Aerostructures
Avio
Landmark Aviation
Volvo Aero
Interturbine
AmSafe
Goodrich
UFC Aerospace Corp

Acquirer
TransDigm
EADS
Goodrich
EADS
Aerospace Meggitt
B/E Aerospace
B/E Aerospace
TransDigm
AAR
Textron
Rockwell Collins
LMI Aerospace
GE
Carlyle Group
GKN
BE Aerospace
TransDigm
United Technologies
BE Aerospace
Average

FV/EBITDA
8.2
14
11.5
9.6
8.7
10
9.5
12.5
4
9.9
11.3
8.6
8.5
11
8.4
9.5
13
12.9
9.5
10.03157895

Using the EBITDA multiple

Safran EBITDA
EURO Dollar conversion rate
EBITDA In USD
Valuation
All figures in Million

2319
1.34
3107.46
31172.73032

20 SMA

Cash Flow statement

FY13
Net profit for cash flow
1854
Depreciation
762
Other items
-632
Working Capital changes
155
Capex
-492
Other Investing cash flow
-972
FCF Predividend
675
NPV

Cost of capital

Terminal calculation
8%

Total present value of forecasted cashflows

Growth rate
4.00%
3.00%
2.00%
1.00%
0.00%
-1.00%
-2.00%

at 2%
Value in USD

(in million euros)

FY14
FY15
FY16
1272
1477
1614
852
878
943
98
99
100
-15
-50
-110
-514
-527
-522
-877
-789
-756
816
1087
1270
757.7375591
937.318 1016.93

2711.98

Firm Value
38515.72298
30609.18836
25482.24052
21888.24166
19229.08448
17182.0017
15557.47702

34146.2023

FCFF STABLE GROWTH MODEL

All values in million euro
Assumptions in the model:
1. The firm is in steady state and will grow at a stable rate forever.
2. The firm's leverage is known and constant.

User defined inputs

The user has to define the following inputs to the model:
1. Current FCFF and tax rate
2. Capital Spending and Depreciation
3. Change in working capital
4. Debt ratio
5. Cost of Equity or Inputs to the CAPM (Beta, Riskfree rate, Risk Prem
6. Expected Growth Rate in free cashflows to firm forever.
Please enter inputs to the model:
Current tax rate =
32%
Debt ratio =
Beta of the stock =
Riskfree rate =
Risk Premium=

17% ( in percent)
56%
5% (in percent)
6% (in percent)

Enter the cost of debt =

9%

Expected Growth Rate =

2% (in percent)The expected growth rat

cannot be significantly hi
growth rate in the econo
operates. It can be lower

Terminal free Cashflow to Firm =

Cost of Equity =
Cost of Debt =
Cost of Capital =
Expected Growth rate =

1270

8%
6%
8%
2%

Terminal value of Firm

Growth rateFirm Value

4.00% 38515.72
3.00% 30609.19
2.00% 25482.24
1.00% 21888.24
0.00% 19229.08

This is a pre-tax cost of b

22770.26

-1.00%
17182
-2.00% 15557.48

Value of Stock

Value vs. Expected Grow

45000
40000
35000
30000
25000
20000
15000
10000
5000
0
0.04

0.03

0.02

Expected Grow

t a stable rate forever.

to the model:

a, Riskfree rate, Risk Premium) and Cost of Debt

o firm forever.

This is a pre-tax cost of borrowing.

The expected growth rate for a stable firm
cannot be significantly higher than the nominal
growth rate in the economy in which the firm
operates. It can be lower.

alue vs. Expected Growth

0.02

0.01

-0.01 -0.02

Expected Growth Rate

Aerospace Propulsion
Sales
Sale contribution
Recurring operating income
Profit (loss) from operations
Add Depriciation
Total
Ratio

7791
0.530180333
1,359
1345
239
1584
9.54

Aircraft Equipment
4,121
0.280435522
380
378
173
551
7.96

15111.36

4385.96

Total

All figures in Million

Aircraft Equipment Structures & Support

SPR
AIR
BBD.B
ERJ
TGI
LMIA
TXT
LAT
BA

5.9
6.5
6.9
7.5
7.7
7.9
9.6
9.8
9.8

Average

7.955555556

Defence
1,278
0.086968357
87
94
52
146
7.63

Security
1,502
0.102211637
120
117
39
156
10.1

Other

Total

3
0.000204151
-158
-177
28
-149

1113.98

1575.6

1343

14,695
1788
1757
531

23529
Other Investment
Valuation = asset - Depriciation= 1371-28

Mechanical, Propulsion & Landing

AIR
RR
SAF
MGGT
SNR
MOGA
CW
UTX
PCP
TDG

6.6
7.4
8.6
9.1
9.1
9.3
9.8
9.9
11.9
13.7
9.54

Electronics, Avionics & Security

HO
DCO
ULE
ESL
COB
COL
ATRO
ZC
BEAV
AME

5.3
7
9.7
10.2
10.2
10.4
11.1
11.1
12.8
13.2
10.1

Military & Defense

FNC
BA
SAAB B
NDC
ATK
CHG
RTN
LMT
LLL
GD

5.5
6.6
6.9
7
7.4
7.6
8.2
8.6
9.3
9.2
7.63

General dynamics
B/E aerospace
Northrop grumman
United tech.
Honeywell
lockheed martin
Average
GE

General dynamics
B/E aerospace
Northrop grumman
United tech.
Honeywell
lockheed martin
Rolls Royce
Average
GE

Leverage Ratio
D\E
26.96
75.1
55.84
63.52
50.55
125.09
66.17666667
293.37

Liquidty Analysis
Current
1.47
3.59
1.63
1.29
1.49
1.2
1.28
1.707142857
2.86

age Ratio
Debt\Total Capital
21.23
42.89
35.83
38.85
33.58
55.57
37.99166667

Debt\Total asset
11.03
34.4
22.48
22.34
19.43
17
21.11333333

74.58

58.3

Quick
0.83
1.38
1.51
0.84
1.19
0.93
0.9
1.082857143

Cash
0.43
0.73
0.89
0.2
0.45
0.24
0.49

2.73

0.67

ty Analysis

Sales
Operating income (EBITDA)
Operating profit (EBIT)
Pre-Tax Profit (EBT)
Net Income
EPS()

GE
146
43.523
33.751
16.151
14.055
1.37

Safran
19.6913
3.10746
2.39592
2.57146
1.85724
4.4622

Consolidated
165.6913
46.63046
36.14692
18.72246
15.91224

100% EQUITY
Consolidated Income statement
GE
Sales
146
Operating income (EBITDA)
43.523
Operating profit (EBIT) 33.751
Pre-Tax Profit (EBT)
16.151
Net Income
14.055
No. of shares
10.06
Share issues
Total Share
EPS (USD)
1.397117296

100% Cash Deal

Safran
19.6913
3.10746
2.39592
2.57146
1.85724

165.6913
46.63046
36.14692
18.72246
15.91224

1.16
11.22
1.418203209

( 80% Cash + 20% Debt)

Consolidated Income statement

In this method we are able to meet Cash ratio industry average
Because of 7% return we are not using invested cash because cost of debt is 5.25%

Sales
146
Operating income (EBITDA)
43.523
Operating profit (EBIT) 33.751
Additional Interest from Debt raised

19.6913
3.10746
2.39592

Pre-Tax Profit (EBT)

16.151
Tax Benefit
Net Income
14.055
No. of shares
10.06
Share issues
Total Share
EPS (USD)
1.397117296

2.57146
1.85724

100% Debt

165.6913
46.63046
36.14692
0.4284315

0.149951025
15.63375953

0
10.06
1.554051643

Total Debt
Cost of Debt

37.339
5.25%

Sales
146
Operating income (EBITDA)
43.523
Operating profit (EBIT) 33.751
Additional Interest from Debt raised

19.6913
3.10746
2.39592

Pre-Tax Profit (EBT)

16.151
Tax Benefit
Net Income
14.055
No. of shares
10.06
Share issues
Total Share
EPS (USD)
1.397117296

2.57146
1.85724

165.6913
46.63046
36.14692
1.9891725

0.696210375
14.61927788

0
10.06
1.453208536

50% Cash 50% Debt

Deal
Cash
GE
Sales
146
Operating income (EBITDA)
43.523
Operating profit (EBIT) 33.751
Pre-Tax Profit (EBT)
16.151
Net Income
14.055
No. of shares
10.06
Share issues
Total Share
EPS
1.397117296

37.339
18.6695
Safran
19.6913
3.10746
2.39592
2.57146
1.85724

165.6913
46.63046
36.14692
18.72246
15.91224

0.58
10.64
1.495511278

Number of shares
GE Share Price
Safran Share Price
Per Share GE shares
Safran Total Share
New Shared Shares

All values in Bil USD

ost of debt is 5.25%

Total cash
Investment
Total Current Liabilities
Cash Ratio Industry avg.

Average cash needed

Retain Invested cash
Retain from Availble Cash
Excess cash for deal
Excess cash for deal
Total Deal Value
Debt

All values in Bil USD

All values in Bil USD

All values in Bil USD

25.64
71.3575
2.783053822
417,029,585
1160615780

86.57
43.981
206.883
0.49
101.37267
43.883
57.3916
29.1784
29.1784
37.339
8.1606

1.16 bil

57.3916 cash needed

Return on invested cash is 7%

GE Share Price
Safran Share Price
Per Share GE shares
Total share
Safran Total Share
New Shared Shares

Shares Issued
25.64
71.3575
2.783053822
417,029,585
208514792.5
580307890.2

.58 bil

Deal
Transportation
Cash

Sales
Operating income (EBITDA)
Operating profit (EBIT)
Pre-Tax Profit (EBT)
Net Income
Less Transporation profit
Interest Benefit
Total profit
No. of shares
Share issues
Total Share
EPS

37.339
15.239
22.1
GE
146
43.523
33.751
16.151
14.055

Safran
19.6913
3.10746
2.39592
2.57146
1.85724

10.06
0
1.397117296

165.6913
46.63046
36.14692
18.72246
15.91224
1.166
14.74624
0.57462
15.32086

10.06
1.52294831

All values in Bil USD

Long Term Debt

Other liabilities
Total Liabilities
Total Interest
Benefit of Interest
Rate

216.845 Total Reenue of GE

87.978 Rev from Transport
304.823 Transport revenue
10.116
contribution
0.574628482

103602
5885
0.056804