Now I just need to work out my free cash flows going forward, which means going to the assumptions tab. On the assumptions tab, we need to use the management's estimates that they gave us in the handouts as well as making up some of our own reasonable assumptions. Let's have a think about revenue growth. We were told that revenue growth of circa 8% per annum over the next few years, and that's very ambiguous. We can use that and then we need an eight year revenue CAGR of 6%. Hmm, right. Okay. Well 8% over the next few years, I'm arbitrarily going to say that's the next three years, but importantly might revenue growth by the final period, which will then go into our terminal value that cannot have growth that's higher than US GDP, ATI is a US company. So we can't just plug in a 6% here or a 7% or an 8% because US GDP growth rate is about 3.5% at the moment. So I'm going to put in 3% and I now need to get from the 8% down to the 3%. Now the time period you do that over, it is up to you. You may want to grow at a higher rate for like, like the 8% for a bit longer. I'm going to taper down gently and leaving this gap means I can go in a nice straight line. So I can go down to 7, 6, 5, and 4. If we go back to the activity tab, I can now see my revenues have filled in, but there was one other check we could do with revenue and we were told that there was an eight year revenue CAGR of 6% expected. Now this is a common figure. You might be able to get it from management, you might be able to get it from an industry report looking at the state of the industry and the average that it's expected to grow over a certain time period. So let's check how much revenue has grown by, I'm going to say the eighth year, divide that by our 2024 year. Then I want to take that to the power of one divided by 8 and going to hard code that in bit naughty that minus 1 if I make it a percentage, 6.1%. So my figures here are growing ever so slightly higher than that 6% CAGR, but I'm pretty happy with that. Going back to the assumptions, the next one was EBITDA margin. If we go back to the management estimates, we were told they were targeting an EBITDA margin of 23%. Hmm. But after year six, so we can get there. Let's count it. 1, 2, 3, 4, 5, 6. So 23% for the years after that. That's great. But again, I need to bridge this gap from the current position up to there. Now again, you may have some information that's relevant here. Maybe you have access to industry experts or better access to the management. I'm going to go with a relatively straight line between our actual and the 23. And that means putting in an 18%, 19, 20 and then 21 and 22. Next up is CapEx percentage of sales and we were told CapEx will remain elevated for the next three years. Seems like they're doing some investments, but it will then drop to 4% of revenue. So let's definitely grab that 4% and put it in there. We're also told CapEx guidance for FY 2025 is the 260 to 280 million mark.

Okay? If it's going to remain elevated, then that suggests it remains similar to the previous year. That's my guidance. I'm going to start with that 5.5%, copy that to the right. Let's see if that gives us the CapEx of around 260 to 280 capacity activity tab. And it's given me CapEx of, oh, just really scraping in at the bottom there. So 259.1, I'm going to say that's okay, but admittedly is slightly outside that 260, 280 guidance we were given. Now, D&A percentage of CapEx, this is really important. So I want to skip that for just a second because I want to come back. I wanna spend some time on it. But the effective tax rate, we were told in the handout it was going to stay similar to the pass. So let's go 21.3 and operating working capital percentage of sales. We were told that was going to return to 20 22, 23 levels. So let's go 25%.

Now, D&A percentage of CapEx is really important. I want to go back to the activity tab now to help me get that D&A figure. I want to start looking at this invested capital section.

We've got beginning invested capital and it goes up due to net reinvestment in OWC. Those figures, those assumptions we've done, that's fine.

But then we've got net reinvestment in PP&E which is our CapEx less the D&A.

The difference gives us growth. In PP&E, you might think, oh, it's reasonable to have no D&A, no depreciation, no amortization, but let's check what's happening to the invested capital growth. This is such an important figure when doing a DCF initially it's very high, the company's growing, it's profitable, it's reinvesting. That seems okay. But if I go to the terminal period, the terminal year at the end, we're still growing our invested capital at 6%. Oh dear, something's going wrong there. Because if you remember, our revenue is only growing by 3%. The invested capital is growing too quickly.

If it's growing too quickly, that means my free cashflow must be wrong because my CapEx and D&A the to play between the two, they must be wrong.

So we need to get this invested capital growth down. We'll get that down by putting in some D&A. Now admittedly, this is going to be done through some trial and improvement. I've had a go at this already. I think the first few years. It's okay for the company to be growing quite quickly. So I'm going to go with 65% quite aggressive growth. Certainly depreciating less than we've seen the last two years. So that is still quite aggressive growth. But that definitely needs to slow down.

So if we, if, just for the sake of discussion, if we copy that all the way to the right, let's see what's still happened to invested capital growth and it's still too high between 3.5% that's still growing faster than revenue. So I think we need to pick the D&A up a bit. Let's put it to 80% my invested capital growth now a much more sensible number. I feel much happier about that. This has been a key number for us getting our free cashflow correct up here. We can now just do some final checks by looking at these ratios at the bottom. The ROIC, we would expect that to be growing and then flatten out as we got into the terminal value period. That's exactly what we've got happening here. NOPAT margin again, we would expect margins to flatten out as you get to the terminal value because you're not growing really quickly and your capital turnover exactly the same again.