Valuation Case D’Ieteren Group
Supervisor(s): Prof. Dr. Tom Vanacker
Course: Valuation and Risk Management
Academic year: 2019 – 2020
,Contents
1 Introduction...........................................................................................................................................2
1.1 D’Ieteren Group.........................................................................................................................2
1.2 SWOT analysis............................................................................................................................4
1.3 Objective and analysis of setting of the case..............................................................................4
2 The Discounted Cash Flow Model..........................................................................................................6
2.1 Calculation of WACC...................................................................................................................6
2.2 Adjustments.............................................................................................................................10
2.3 Growth pattern.........................................................................................................................11
2.4 Free cash flow to the firm........................................................................................................12
2.5 Value per share........................................................................................................................13
3 Multiples..............................................................................................................................................14
3.1 Search for comparable companies...........................................................................................14
3.2 Standardize for appropriate multiples......................................................................................16
3.3 Apply the multiple....................................................................................................................18
4 Conclusion............................................................................................................................................20
5 Bibliography.........................................................................................................................................21
, 1 INTRODUCTION
1.1 D’Ieteren Group
2 D’Ieteren is a Belgian family business founded in 1805. From the start, D’Ieteren has been a
pioneer in the automotive industry. Through pursuing their long-term strategy, they were able to
realize long-term growth and value creation. Today, D’Ieteren has grown into D’Ieteren Group and is
active in various businesses and have a very high customer loyalty. In each of their business D’Ieteren
tries to sustain their diversification strategy by continuously reinventing the businesses. D’Ieteren is
currently searching to add more activities to their group, which would weapon them more against the
expected upcoming recession. At the moment D’Ieteren owns 100% of D’Ieteren Auto, Moleskine and
D’Ieteren Immo and 54,10% of the shares of Belron.
2.1.1 D’Ieteren Auto
3 D’Ieteren Auto represents the historical activities of D’Ieteren in the automotive industry. They
started as wheelwright and manufacturer of wheels. Over time, they evolved to importer and retailer
of different car brands. In Belgium, they were able to obtain the position of the number one car
distributor, with a market share of approximately 21% and 1,243,000 vehicles on the road. The
activities of D’Ieteren auto can be classified into four activities, namely; import, retail, D’Ieteren Sport
and VDFin. D’Ieteren imports vehicles of different brands but also spare parts and accessories, this
includes the management of maintenance and warranty contracts. The company also retails new
vehicles, after-sales activities, used vehicles and luxury brand cars. D’Ieteren Sport represents the
distribution of Yamaha articles in Belgium and Luxemburg. VDFin stands for the joint venture between
D’Ieteren and VW Financial Services offering, which provides financial services and long-term car
rental. However, this makes D’Ieteren very dependent on a few specific car companies. Car sharing
could be a threat for D’Ieteren on the long run because the demand for cars slightly decreases every
year, especially cars who drive on petrol derived fuels. European vehicle testing procedures can cause
cancellation of certain models or delays in delivery, which happened in the second half of 2018.
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Supervisor(s): Prof. Dr. Tom Vanacker
Course: Valuation and Risk Management
Academic year: 2019 – 2020
,Contents
1 Introduction...........................................................................................................................................2
1.1 D’Ieteren Group.........................................................................................................................2
1.2 SWOT analysis............................................................................................................................4
1.3 Objective and analysis of setting of the case..............................................................................4
2 The Discounted Cash Flow Model..........................................................................................................6
2.1 Calculation of WACC...................................................................................................................6
2.2 Adjustments.............................................................................................................................10
2.3 Growth pattern.........................................................................................................................11
2.4 Free cash flow to the firm........................................................................................................12
2.5 Value per share........................................................................................................................13
3 Multiples..............................................................................................................................................14
3.1 Search for comparable companies...........................................................................................14
3.2 Standardize for appropriate multiples......................................................................................16
3.3 Apply the multiple....................................................................................................................18
4 Conclusion............................................................................................................................................20
5 Bibliography.........................................................................................................................................21
, 1 INTRODUCTION
1.1 D’Ieteren Group
2 D’Ieteren is a Belgian family business founded in 1805. From the start, D’Ieteren has been a
pioneer in the automotive industry. Through pursuing their long-term strategy, they were able to
realize long-term growth and value creation. Today, D’Ieteren has grown into D’Ieteren Group and is
active in various businesses and have a very high customer loyalty. In each of their business D’Ieteren
tries to sustain their diversification strategy by continuously reinventing the businesses. D’Ieteren is
currently searching to add more activities to their group, which would weapon them more against the
expected upcoming recession. At the moment D’Ieteren owns 100% of D’Ieteren Auto, Moleskine and
D’Ieteren Immo and 54,10% of the shares of Belron.
2.1.1 D’Ieteren Auto
3 D’Ieteren Auto represents the historical activities of D’Ieteren in the automotive industry. They
started as wheelwright and manufacturer of wheels. Over time, they evolved to importer and retailer
of different car brands. In Belgium, they were able to obtain the position of the number one car
distributor, with a market share of approximately 21% and 1,243,000 vehicles on the road. The
activities of D’Ieteren auto can be classified into four activities, namely; import, retail, D’Ieteren Sport
and VDFin. D’Ieteren imports vehicles of different brands but also spare parts and accessories, this
includes the management of maintenance and warranty contracts. The company also retails new
vehicles, after-sales activities, used vehicles and luxury brand cars. D’Ieteren Sport represents the
distribution of Yamaha articles in Belgium and Luxemburg. VDFin stands for the joint venture between
D’Ieteren and VW Financial Services offering, which provides financial services and long-term car
rental. However, this makes D’Ieteren very dependent on a few specific car companies. Car sharing
could be a threat for D’Ieteren on the long run because the demand for cars slightly decreases every
year, especially cars who drive on petrol derived fuels. European vehicle testing procedures can cause
cancellation of certain models or delays in delivery, which happened in the second half of 2018.
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