AYI Intrinsic Value

AYI

Acuity Brands, Inc. – Commercial, Industrial, and Institutional Electric Lighting Fixture Manufacturing

Acuity Brands, Inc. is a market-leading industrial technology company. The Company designs, manufactures, and brings to market products and services that make the world more brilliant, productive, and connected including building management systems, lighting, lighting controls, and location-aware applications. Acuity Brands achieves growth through the development of innovative new products and services. Through the Acuity Business System, Acuity Brands achieves customer-focused efficiencies that allow the Company to increase market share and deliver superior returns. The Company looks to aggressively deploy capital to grow the business and to enter attractive new verticals. Acuity Brands is based in Atlanta, Georgia, with operations across North America, Europe, and Asia. The Company is powered by approximately 11,000 dedicated and talented associates.

Analysis Results

Intrinsic Value	$357.04
Latest Price	$160.87
Relative Value	55% undervalued

Share results:

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Cash Flow (Millions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 11.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 11.2%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (million)	Present value (million)
2023	630	578
2024	700	589
2025	778	601
2026	865	613
2027	961	625

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 14000 million. This corresponds to a present value of 8350 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3000 million. Adding in the terminal value gives a total present value of 11400 million.

There are presently 31.8 million outstanding shares, so the intrinsic value per share is 357.04.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	1,466,000,000
Current Cash	223,200,000
Current Liabilities	733,600,000
Current Debt	18,000,000
Non-Cash Working Capital (NCWC)	527,200,000
Change in NCWC	166,400,000
EBIT	509,700,000
Tax Provision	109,900,000
Depreciation and Amortization	94,800,000
Capital Expenditure	-56,500,000
Unlevered Free Cash Flow	600,984,268

Current Assets	1,544,300,000
Current Cash	491,300,000
Current Liabilities	692,200,000
Current Debt	0
Non-Cash Working Capital (NCWC)	360,800,000
Change in NCWC	75,100,000
EBIT	430,900,000
Tax Provision	89,900,000
Depreciation and Amortization	100,100,000
Capital Expenditure	-43,800,000
Unlevered Free Cash Flow	464,526,375

Current Assets	1,439,700,000
Current Cash	560,700,000
Current Liabilities	617,600,000
Current Debt	24,300,000
Non-Cash Working Capital (NCWC)	285,700,000
Change in NCWC	-108,100,000
EBIT	373,900,000
Tax Provision	76,400,000
Depreciation and Amortization	101,100,000
Capital Expenditure	-54,900,000
Unlevered Free Cash Flow	224,023,529

Current Assets	1,441,800,000
Current Cash	461,000,000
Current Liabilities	596,100,000
Current Debt	9,100,000
Non-Cash Working Capital (NCWC)	393,800,000
Change in NCWC	-5,900,000
EBIT	464,700,000
Tax Provision	94,500,000
Depreciation and Amortization	88,300,000
Capital Expenditure	-53,000,000
Unlevered Free Cash Flow	390,748,270

Current Assets	1,211,100,000
Current Cash	129,100,000
Current Liabilities	682,700,000
Current Debt	400,000
Non-Cash Working Capital (NCWC)	399,700,000
Change in NCWC	65,700,000
EBIT	460,200,000
Tax Provision	76,300,000
Depreciation and Amortization	80,300,000
Capital Expenditure	-43,600,000
Unlevered Free Cash Flow	480,155,153

Current Assets	1,245,600,000
Current Cash	311,100,000
Current Liabilities	600,900,000
Current Debt	400,000
Non-Cash Working Capital (NCWC)	334,000,000
Change in NCWC	96,600,000
EBIT	530,100,000
Tax Provision	170,900,000
Depreciation and Amortization	74,600,000
Capital Expenditure	-67,300,000
Unlevered Free Cash Flow	450,089,951

Current Assets	1,322,900,000
Current Cash	413,200,000
Current Liabilities	672,500,000
Current Debt	200,000
Non-Cash Working Capital (NCWC)	237,400,000
Change in NCWC	78,600,000
EBIT	490,200,000
Tax Provision	153,800,000
Depreciation and Amortization	62,600,000
Capital Expenditure	-83,700,000
Unlevered Free Cash Flow	378,125,641

Current Assets	1,436,500,000
Current Cash	756,800,000
Current Liabilities	520,900,000
Current Debt	0
Non-Cash Working Capital (NCWC)	158,800,000
Change in NCWC	-4,900,000
EBIT	388,700,000
Tax Provision	121,500,000
Depreciation and Amortization	45,800,000
Capital Expenditure	-56,500,000
Unlevered Free Cash Flow	235,652,240

Current Assets	1,186,700,000
Current Cash	552,500,000
Current Liabilities	470,500,000
Current Debt	0
Non-Cash Working Capital (NCWC)	163,700,000
Change in NCWC	-4,500,000
EBIT	298,900,000
Tax Provision	89,900,000
Depreciation and Amortization	43,400,000
Capital Expenditure	-35,300,000
Unlevered Free Cash Flow	201,366,729

Current Assets	913,500,000
Current Cash	359,100,000
Current Liabilities	386,200,000
Current Debt	0
Non-Cash Working Capital (NCWC)	168,200,000
Change in NCWC	38,500,000
EBIT	230,000,000
Tax Provision	65,700,000
Depreciation and Amortization	40,800,000
Capital Expenditure	-40,600,000
Unlevered Free Cash Flow	190,445,209

Current Assets	779,000,000
Current Cash	284,500,000
Current Liabilities	364,800,000
Current Debt	0
Non-Cash Working Capital (NCWC)	129,700,000
Change in NCWC	800,000
EBIT	221,300,000
Tax Provision	62,700,000
Depreciation and Amortization	39,800,000
Capital Expenditure	-31,400,000
Unlevered Free Cash Flow	152,983,184

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