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Unlevered Free Cash Flow $1,883.3 $2,703.1 $2,742.0 $2,864.0 $2,917.8 $3,031.6 $3,144.1 $3,254.8 $3,368.0 $3,478.2 $3,584.8 $3,687.2
YOY % 43.5% 1.4% 4.5% 1.9% 3.9% 3.7% 3.5% 3.5% 3.3% 3.1% 2.9%
Present Value of Unlevered Free Cash Flow $1,883.3 $2,617.6 $2,512.9 $2,484.0 $2,394.9 $2,354.8 $2,311.3 $2,264.4 $2,217.5 $2,167.2 $2,113.9 $2,057.7
Assumptions CY2022 CY2023 CY2024 CY2025 CY2026 CY2027 CY2028 CY2029 CY2030 CY2031 CY2032 CY2033
Sales Growth -0.7% 4.8% 4.0% 4.2% 4.0% 3.7% 3.4% 3.1% 2.9% 2.6% 2.3% 2.0%
EBIT Margin 19.8% 20.2% 20.5% 21.6% 21.9% 22.1% 22.4% 22.6% 22.9% 23.1% 23.4% 23.6%
CapEx % of Sales 2.5% 2.7% 3.0% 3.0% 3.0% 3.2% 3.3% 3.5% 3.6% 3.7% 3.8% 4.0%
Change in Net Working Capital % of Sales -4.5% 0.9% 0.6% 0.0% -0.5% -0.5% -0.5% -0.5% -0.5% -0.5% -0.5% -0.5%
Source: Company reports, Bloomberg Finance L.P, Damodaran Online, and J.P. Morgan estimates.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
40
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J P M O R G A N
Table 9: KVUE DCF Sensitivity Based on Terminal EV/EBITDA Multiples
$31 4.2% 4.7% 5.2% 5.7% 6.2% 6.7% 7.2%
11x $32 $31 $29 $28 $27 $26 $24
12x $34 $33 $31 $30 $28 $27 $26
13x $36 $35 $33 $31 $30 $29 $27
14x $38 $36 $35 $33 $32 $30 $29
15x $40 $38 $37 $35 $33 $32 $30
16x $42 $40 $38 $37 $35 $33 $32
Discount Rate
Terminal
Value
EBITDA
Multiple
Source: J.P. Morgan estimates.
Table 10: KVUE DCF Sensitivity Based on Perpetual Growth Rate
$32 4.2% 4.7% 5.2% 5.7% 6.2% 6.7% 7.2%
0.0% $40 $35 $31 $28 $25 $23 $21
0.5% $44 $38 $34 $30 $27 $24 $22
1.0% $50 $42 $37 $32 $29 $26 $23
1.5% $58 $48 $41 $35 $31 $27 $25
2.0% $69 $55 $46 $39 $34 $30 $26
2.5% $87 $66 $53 $44 $37 $32 $28
Discount Rate
Long-Term
Growth
Rate
Source: J.P. Morgan estimates.
This document is being provided for the exclusive use of DAVID WANG at MARLOWE PARTNERS LP.
41
Andrea Teixeira, CFA AC
(1-212) 622-6735
andrea.f.teixeira@jpmorgan.com
North America Equity Research
29 May 2023 J P M O R G A N
Most Recent Point of Sales Trends in the
U.S. (NielsenIQ)
Tracked Channel 4Y CAGR Accelerated Sequentially QTD in the U.S. Based on
NielsenIQ
The most recent tracked channel data (QTD for 5-weeks ending 5/6) shows that
KVUE􀋖s dollar takeaway (total company in tracked channel) was up +4.2% driven by
pricing (up +14.5%) while volumes were down -9.0%. This print shows a sequential
deceleration (only on the headline but when normalizing for the pandemic, it accelerated
on a 4-year CAGR) from 12-week period ending 4/1 (bracketing Q123) in which
KVUE􀋖s dollar takeaway was up +5.5% (pricing up +11.9% while volume was down -
5.7%). It also decelerated slightly from the 12-week period ending 12/31/22 (bracketing
4Q22) which was up +4.4% (pricing up +11.0% but volume down -5.9%). On a 4Y
CAGR basis, takeaway was up +4.1% for the 12-week period ending 12/31, +1.5% for
the 12-week period ending 4/01 and +2.3% in the 5-week period ending 5/06.
Figure 52: KVUE􀋖s $ Takeaway in Tracked Channels Driven by Pricing
Rolling 12W Period Ending 5/06
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
01/16/21
02/13/21
03/13/21
04/10/21
05/08/21
06/05/21
07/03/21
07/31/21
08/28/21
09/25/21
10/23/21
11/20/21
12/18/21
01/15/22
02/12/22
03/12/22
04/09/22
05/07/22
06/04/22
07/02/22
07/30/22
08/27/22
09/24/22
10/22/22
11/19/22