Okay, so what we're gonna do today, guys, we're going to describe what is a football field. We'll go through the concept and considerations.

We will then choose your numbers, and that for me is the most important thing.

You've got to be able to choose the numbers correctly, right? Building the charts, once you know how to build it, it's actually very straightforward once you know, but choosing the numbers, this is where you can go wrong.

It's where your client can get annoyed or your boss can get annoyed.

We'll then build the charts. That'll just take a few minutes at the end.

So what is a football field? It's a visual summary of a company's value from a number of different methodologies.

Now, on screen, if I just do this quickly onscreen, I've got five standalone valuation techniques.

I'm gonna call 'em standalone valuations, and they act as a check on each other.

So my standalone valuation is going to suggest the company is not being taken over, it's not being merged with another.

The ownership is basically gonna stay the same.

Maybe a few shares, small number of shares will be bought by someone.

Maybe the company's doing an IPO of 10% of its shares.

That's a standalone valuation.

If we just looked at the top one, this would give us a valuation somewhere between six thousand five hundred and nine thousand three hundred.

But when we bring them all together, we can see that they all overlap between these two red lines.

My valuation here is somewhere around the 8,000.

It's kind of 8,800 mark.

So that's great. I've now got a nice narrow valuation range.

We're going, so I'll tell you the example we're gonna use today.

We're going to use the example of Coca-Cola, perhaps buying Red Bull.

We'll use real numbers for Red Bull and all of its peer group and the real numbers for the DCF real numbers for D for Coca-Cola, but it's not a real deal.

It's not actually happening.

So we could provide some uh uh, an opinion to our clients Coca-Cola.

If they're just looking to buy 5%, we might say, Hey, this is the valuation range we think that you should, you should target towards what if we were doing a takeover? What if Coca-Cola are looking to buy 100% of Red Bull or really 50% and above? Well, in that case, then we would use the transaction comps and the DCF with synergies as our evaluation techniques.

The interesting thing here, why just change color slightly? I want those two boxes to overlap and we get a higher valuation range.

I'm getting a valuation somewhere between 10,000, roughly about 13 half thousand.

Now that valuation range is higher than the standalone valuation we got earlier.

That's because in a takeover, there is a premium to be paid.

I need to convince all shareholders that they want to sell to me.

I can't just pay the standalone valuation range where I convince 5% of shareholders to sell to me.

I need to convince everyone to sell to me. Cool.

So this is quite nice.

I've got a standalone valuation in red and I've got a takeover, premium paid valuation in blue.

The blue valuation for me, it's a bit wide, but we'll have to go with that for now.

And I'll, when we look at the numbers, I'll show you how to bring that down.

The odd one out here, there is one that's on its own.

It's on standing out.

It's the LBO valuation, a leveraged buyout.

Now the acquirer there is going to be private equity.

Your acquirer equals private equity. And private equity.

When they do a deal, they're looking to buy low and then a few years later sell high.

That only works if you buy low.

And in this example, we can see that the valuation range is extremely low between four eight hundred and six three hundred.

But often it is useful to include the LBO valuation.

Even though an LBO cl, this LBO is below the standalone valuation, there's no way the shareholders are gonna sell to private equity. They're not gonna sell an even lower range than they could be selling for at the moment.

So why include it in the football field? And the answer is, you are saying to Coca-Cola, Coca-Cola, don't worry about an LBO.

They can't possibly work.

They're not gonna be a part of this, this deal.

They're not gonna be bidding against you.

So it is useful for context.

Your client is gonna appreciate the fact you've put it in there, but you're not gonna spend much time talking about it.

Okay? So that's what a football field is, okay? Now a couple of key considerations.

You need to choose which number you're gonna put in.

And the quick way to decide this, if you are looking at a private company, it's okay to use enterprise value on your graph.

You could instead use equity value, absolutely fine. You've just got over the EV bridge.

But if you're looking at a public company which has a share price, you'd use the share price because I know in my head the current share price is about 10 pounds or $10 or whatever.

And the value we're putting on our football field is 13 pounds or 14 pounds.

It's much easier for your client to understand, use the share price if it's publicly traded after that, use all the methodologies that we've mentioned.

But an important extra is to put in some assumptions.

Now, I'm particularly going to look at these two for DCF, and I'm gonna show you why it's really important to show the growth rate, your growth assumption in your DCF and why. You have to show the wack assumption in your DCF.

You've got to show them on your foot field.

I'll show you that a little bit later.

Okay, multiples as well.

Also really useful to show them.

Uh, if I just go back to the previous slide, no multiples being shown here. It's much nicer if you can show the multiples. Okay? Now a few other considerations you might notice.

This is just trying to bring all the data together.

The data will normally try and group the data into certain categories.

I'm gonna go back to red so everyone can see it here.

I've grouped the standalone valuation methods together.

And then on the football field, they will be grouped together as well.

The controlled valuation methods, the takeover valuation methods, they've been grouped together as well.

It makes it easier for your client to compare these two situations.

Again, we just mentioned the assumptions earlier.

My DCF, I've then put the whack in here. We've got a whack ranging from 6.45 to 7.25 and G growth ranging from 1.6% to 2.4%.

Again, I'll show you that when we do Coca-Cola Bel.

Finally then on the football field, here we go. We see some multiples going into the labels. That's really nice to see my DCF.

See those assumptions really nice. So include them.

If it's a publicly traded company, then it's always nice to include the current share price.

And we've included this here as a vertical line.

That means if I've got my current share price there, let's say that's $20 just for argument's sake, I can then compare that to our suggested valuation range here, which seems to be around the 25 to 27 mark.

If I've got a valuation range from 25 to 27 and the current share price is 20, it seems reasonable that the current shareholders would sell $20 share price and I could sell for 27.

This deal could be on.

So it is quite handy to show these dash lines.

However, however, however, however, let's go real world for a second.

A lot of bankers would decide not to include those dash lines.

Instead, they'll take this slide in a pitch book to their clients and they'll say to the client, Hey, let's have a chat.

We've got loads of slides on trading comps and we've got loads of slides on DCF, and we've got loads of slides on transaction comps. But actually what you'll do in the meeting is you'll just spend 45 minutes talking about this slide and you'll bring up some knowledge that you've got about trading comps from the other slides.

But you'll talk about it on this slide and you'll gradually build up to your suggestion of a range between 25 and 27.

But you'll talk about it and the client might give some pushback.

You might decide, okay, well actually maybe we'd move it around 24, 28 or something.

So a lot of bankers would leave that suggested range off the slide.

A lot of bankers do like to include it.

Okay, so guys, that's my intro.

What does the football field got some good considerations there.

What I'd love to do is look at some real numbers.

So in the chat guys, in the Zoom chat, I am now putting a link to the Excel file we're going to use, it's in the chat, it's in the Zoom chat right now.

If I go to Zoom, click on it, it opens up this page here.

Now it says Quick comps table.

Don't worry, that's just a placeholder on Monday that will change to football field live. It'll be a recording of this. But what I care about is this download in the right hand corner and it's this empty file that I care about.

Can you guys please download that empty file? We're gonna talk through the numbers in there and we'll build the football field.

Cool. So if you've just come in, I could, there's people always coming in and out of this session. There's loads, loads of you guys in the Zoom chat.

That's where you get this Excel file. Okay? I'm gonna open it up and it should open up onto this yellow, yellow onto this orange valuation summary.

Okay, let's have a little chat through it.

I should say this is an enormous file with loads of numbers that unfortunately we're not gonna go through.

I'm gonna try and keep the whole thing kind of small so that we don't look at absolutely everything and and you get bamboos.

Okay? So let's just try and give you guys an idea of what we've got here.

If I go to the blue tabs at the bottom, there's a trading comps tab.

We'll source some numbers from there, but we, we won't look at too many.

And then in orange we've got the DCF tab rates.

Again, we'll just source a couple of numbers from here.

Then we've got a transaction comps tab, and then finally the valuation summary, bringing it all together.

Now, as I said, this is the idea here is Coca-Cola buying Red Bull.

We're just looking at Coca-Cola's numbers.

Uh, sorry, my gosh, we're just looking at Red Bull's numbers, but that'll mean we'll have to look at peer companies like Coca-Cola, like Monster, like Pepsi, like Kig, Dr.

Pepper. Okay, so let's start going through our first valuation technique, which is trading comps.

And here we've come up with three different valuations.

Oh my gosh. So what have we done? We started out by using this EV.

Let's change to red. There we go.

We started out by using this EV EBITDA multiple, but importantly it's for the wider industry.

If I go further down to road 26, I see EV ebitda.

But for a short list, this is really important.

This is really important. Let's have a quick look.

My wider industry, this includes quite a few companies, we'll look at them in a second.

It gives us a minimum multiple from Keurig, Dr. Pepper of 12.6.

Now I happen to know Red Bull and that's really low.

I see a maximum multiple from a comparable company being Monster Beverage, a fantastic comp for Rebel, a brilliant comp for Rebel that's got a multiple of 22.10.

This gives me a huge range and it turns into an enterprise value between 42 billion euros and 74 billion euros.

If I took that to Coca-Cola and I said, Hey, I know you are paying me like a hundred thousand euros for my advice, I recommend you pay somewhere between 42 and 74 billion euros.

Coca-Cola would say we could have worked that out ourselves.

Okay, that's ridiculously wide and it's not benefiting Coca-Cola at all.

So what we do instead is if I go down to Road 26, we're going to use this industry shortlist.

Let's go see where the numbers are coming from to help you understand this.

If we go to the trading comps tab, I'm gonna look at column A J and in AJ here we've got EV.

Ebitda great, but my trading comp's long list is really long and includes some companies that are just bad comps.

We've got San Miguel Food and beverage. We're not Bed Bull is not food, okay? We've got a Sahi A as Sahi sell lots of alcohol.

Dan on is also food.

These companies are not necessarily the best comps.

So we then went for this little list here.

This list is the industry wider list.

It gave us the 12.6 low and the 22.1 high.

It's still including some companies that I really want to get rid of.

Keurig, Dr. Pepper saddled with loads of debt.

They're big conglomerate.

They have loads and loads of different products there that are not relevant.

So instead, we've then gone for this short list and the best comps for Red Bull are Coca-Cola and Monster, and they give us this much tighter range.

Now you do have to be able to def defend your choice here.

If you've got an absolutely amazing comparable company like Monster and you exclude it, you need to have a really good reason.

But we've got really good reason here. We've got loads of things there that are just not relevant at all.

So back to my valuation summary.

I'm very happy with this industry shortlist, excuse me for a second, but my clients, sorry.

You might ask, why would I show this wide industry to the short to the client? Why would I show the wider number? And I think it's useful.

I think it's useful to say to the client client, this is where if you take the whole industry, you get some horrible numbers.

But when we provide our value adding advice, we get some much um, narrower range.

So it is useful even just to say to the client, here's the context of the whole industry.

Here's the range within the industry we're going to use.

Okay, excuse me.

Now the next thing I notice is that we've used CY one EBITDA each time and there were basically kind of three years we could use.

You could use the last 12 months, which is known as LTM.

You could then use a forecast year.

In this case, we've used CY one calendar year one for this year that we're in at the moment, that would be 2025.

And then you could use another forecast year, which is the next year on calendar. Year two for the year we're in at the moment, that would be 2026.

So which one would I go for? I would say most bankers would ideally go for CY one or financial year one, fiscal year one, whatever. It's the reason for this.

As I'm buying the company, I want to know the profits I'm going to get.

I'm not getting any historical profits.

Historical profits went to the historical shareholders.

I am the future shareholder.

Coca-Cola's gonna be the future shareholder.

So CY one, I think most bankers would prefer to use that.

Now what about forecasting two years CY two or FY two or something? If you don't like CY one for a good reason, maybe something's happening to the company, maybe something's happening in the markets, maybe there's a global pandemic, then it's reasonable to go to CY two.

We are gonna be using CY one and they are the numbers we've cracked.

Okay, next up then is the DCF.

Now the DCF, we've put our assumptions on screen here. Don't worry about these crazy, horrible formulas up at the top there.

We could, we could easily just have typed those numbers in.

Now, where does a range come from in a DCF? A DCF normally gives you a a kind of a pounds or euros or a dollar figure.

So I just want to go to the DCF tab very briefly.

I don't want to go through a whole DCF.

I know there's gonna be a lot of numbers that you are not gonna be familiar with, but let's just go to the DCF tab.

And here you've got DCF calculation, D, C, F, big calculation here.

But the output of this calculation is this data table, okay? And in the data table, what you do is you flex some of your assumptions and we flex the long-term growth G, we flexed it from 2.4% to 2.8, and we flex the WAC from 6.3% to 5.9%.

This gives us a range of enterprise values. Gives us 25 in fact, and the highest in that range is 75 billion and the lowest is 61 billion.

Now we need to make a judgment call here.

Is that too wide, just right or too narrow? For me? That's too wide.

I've got a valuation roughly 14 billion valuation range, 14 billion wide between 61 and 75.

I'd like to bring that down a bit.

So instead of using those orange cells that are currently on screen, you might notice that we have this gray area in the middle that gives us a range from 64 to 71.

Now if that was still too narrow, if these nine cells were still too sorry, too wide or too narrow, then you'd consider changing these long-term growth rates instead of 2.5 to 2.7.

Maybe you'd go 2.55 to 2.65, similar with the wack.

So get yourself a nice range that's not crazy narrow.

It's not like five euros wide, but it's also not 15 billion wide either.

So those numbers, 64 to 71, they're the ones we're going to use.

And if I go back to the valuation summary, 64 to 71, great, but what's it? So that gives us all of our standalone valuation methods.

That's four. But what if it's a takeover? What if Coca-Cola say we wants to buy all the company, in which case we move down to DCF, including synergies, we have valued the synergies at 19.689 billion and we add it onto the DCF to get 83 to 90.

Again, a nice tide range. Then.

So quick common sense, check my valuation ranges for the standalone.

We've got figures of 64, 65, 75 up to 71, 74, 79.

They all seem to be vaguely in line with each other.

That's nice. We'll ignore this crazy one at the top.

My DCF plus synergies is a bit higher because we're paying a premium.

So a takeover means a premium is paid.

Great. So we now come to our final valuation technique, the transaction multiples, and we have a problem.

By the way, these numbers are completely real.

Uh, we valued, we, we did this case study in March.

It's about the 7th of March, but it, the numbers are completely and utterly real.

We've looked at real transactions, grabbed their multiples and applied them to rebel ebitda.

Great. And it gives us a really low range.

In fact, the range is below all of the standalone techniques used up here, apart from the very lowest being for the wider industry.

So I've got a bit of an issue.

I'm still going to include this in my football field and I've tried really hard to find better transactions. They don't exist, but I am still going to include it in my football field.

I just need to back up why I've included it.

So let's just go. Let's just go have a look at the numbers just for a second.

I'm gonna go to the transactions comps tab and to describe very high level what is here, we've got lots and lots of old transactions. These are real transactions.

You've got Thai beverage buying Saigon beer, you've got Kig Green mounting, buying Dr. Pepper, real transactions that really happened.

We've excluded many of them. Some of them are old, some of them are alcohol deals.

And what we've got to at the bottom, we've got ourselves a comparable transactions, shortlist transactions that we think are the best out of that list.

We've got companies like Coca-Cola buying Body Armor.

Great Body Armor is actually an energy drink. So that's, that's brilliant.

Celsius buying Alani new, not quite energy, it's more in the kind of nutrition space, but reasonably comparable.

And yet when we look at the EV EBITDAs here, we get to this minimum 13.4 and the max 19 and they're just too low.

Okay? So this is in line with what we saw in the football field.

The valuation is way too low. I don't like this.

I need to back up my evidence.

The evidence here that these transactions are just too low is that the target companies are just not brilliant comps for Red Bull.

Red Bull we know should be valued in the kind of 70, 80, maybe 90 billion Euros.

These companies, wow, two of them were valued at the kind of six or 5 billion.

The rest are around a two one or even less than 1 billion.

So number one, the targets are much smaller, but number two, have you really ever heard of any of them? Red Bull has this immense brand.

The brand awareness of it worldwide is fantastic.

And because of that, they can charge huge profit margins.

These companies are not there. Monster.

If Monster were taken over 100% take over at Monster, that would be an amazingly good comp.

These are just not great comps.

So that's the story I take into Coca-Cola.

Yes, we've got these comps.

Yes, they give us this range, but with respect to Coca-Cola, we're going to ignore that range.

Okay? That's your story. And that gives us all the numbers.

We're going to ignore the LBO.

The LBO gives a crazy low valuation, so it, it would be ignored by Coca-Cola immediately.

So all we need to do now is actually build the football field.

Now, we'll do it first by putting numbers into this table.

They will then populate this pre-built football field here.

If you are working in a bank or a boutique or somewhere guaranteed, you'll have some football field builder that does this for you.

However, I know loads of people want to be able to build their own.

So afterwards we will build one from scratch.

It'll only take a few minutes.

So how and are we going to do this? We need to fill in this table.

The first one is the EV EBITDA of the wider industry.

So I'm gonna grab the minimum enterprise value.

If I scroll up guys, this is something for us all to do.

Okay? So let's do it together.

I'm gonna scroll up to that top orange line I've got there, EV ebitda, why didn't treat 42 billion done.

And then over here in this max sell, I'm going to grab the max EV EBITDA figure of 74 billion.

Great, we'll do the difference column in just a second.

Let me reveal my formulas so you guys can see.

So revenue go up, grab that. The max revenue.

Yeah, got that shortlist.

Yep.

And then the DCF.

And that's all of our standalone techniques done.

Takeover synergies, the yellow figures and transaction comps, yellow figures.

I'll give you guys just a couple of seconds to catch up with me.

Okay, I've got my numbers in.

I then just need to calculate the difference between, okay, so the difference between is the max minus the men and in our prebuilt, but fulfill underneath, I press enter valuation range appears.

Let's drag that difference calculation down so it fills in all the others underneath.

And we get our valuation range appear great.

In this example, a standalone valuation range.

Very much focused around this level here.

That would be your standalone valuation range.

Our takeover valuation range would be here we are ignoring the transaction multiples because they were bad, bad, comparable deals.

So the last thing we need to do is we need to build this from scratch to show you guys how to do, it only takes a couple of minutes.

So I'm gonna move this one, move it out the way, get rid of all that stuff up there and let's do it from scratch.

The way we're gonna do this is we're going to select our evaluation methodologies.

I'm going to ignore the LBA and I'll select the min and the difference in this way of building the football field, I'm not going to include the max, but there is another way you do this where you have a min, you have a max, you overlap them, and then the difference appears the di. The difference is literally the difference between the two columns.

Okay, not this time. So I've selected my numbers and then I go to the insert ribbon at the top.

And then in the chart section near the top left of that, we've got this insert column or bar chart button, click that.

And if I go down to the bars here, it's the middle one, the stacked bar.

Great. I'm going to expand that out a little bit just so we can see a bit better.

There we go.

The only thing I really need to do now is make these blue.

These dark blue bars need to make them white.

So I've clicked on them once, which gets these blue balls around to show they're all selected and I right click and I format data series on the right hand side format data series appears.

I want this paint tin. So I click on that.

And remember we're going to change the color to white.

So the fill, I'm going to change it to solid fill.

Mine's defaulted to white, but if I go down to color here, drop down, there we go.

You can select wine to yourselves.

The only other thing to do is this border.

I want no border around. Excuse me a second guys.

Excuse me. I want no border around it. So I select no line.

You are almost there. You're almost done now.

So the only thing is we've got these vertical lines.

Now those vertical lines are making it really obvious that we've got these white horizontal bars.

So let's click on the vertical lines.

You get the blue balls appear, then just press delete, delete on your keyboard.

That's starting to look quite nice like that.

Let's do some tidying up at the top.

I want to chart title. I'm gonna click into the formula bar.

I'm gonna say Red bull enterprise value in Euro billions.

Next up, down the left hand side, I see something annoying that happens in lots of graphs like this.

I see transaction multiples is at the top of my axis here, but when I actually did it, excuse me, when I put it into Excel, transaction multiples was at the bottom of my selection.

And what's happened is the ordering of the labels has been flipped.

It's not the end of the world at all. Transaction multiples. It is linking to the right numbers.

I just prefer it to be the other way around.

So to do that, I'm gonna click away.

I'm gonna click on the axes labels and I right click format axis on the right hand side.

I'm in this little column chart button here and I need to do two things.

I'm gonna click on categories in reverse order that will flip them.

Brilliant, but rather annoyingly, my horizontal axis is now at the top.

I don't want them at the top, I want 'em at the bottom.

So I'm then gonna change this horizontal axis crosses away from automatic to at maximum category. This is what we want to click. That Looks a bit better.

Finally, then I'm looking at the horizontal axis and there are lots of zeros here. There are loads and loads of zeros.

I think I could tidy that up.

So I click on my horizontal axis.

If the menu on the right has not appeared for you, you right click or my axis and I'm in the right place.

I want to be in this little column chart. At the moment.

I want to get rid of some of these zeros.

So I go to display units and let's change that to thousands.

Great. Now the bottom right hand corner, it now says the word thousands.

I don't think I really need that.

I've got euro billions up the top here.

So let's just untick thousands disappears.

This big white area here.

I don't think I need this big white area.

I'd like to get rid of it. So let's change so that we're not showing from zero all the way up to a hundred.

Let's change the minimum number here to 20,000.

Nice. Cool.

Finally, finally, you've got the legend at the bottom.

You could click on it and you could delete it could go to your chart elements at the right hand side here.

Could just untick legend. There you go. That's gone.

Now Red Bull does not have a share price, but if it did have a share price and you want to put a vertical line on, choose the simplest method, just draw a line.

I'm gonna go to the insert ribbon in the illustration section.

I've got a dropdown. You, you might not have the dropdown, you might be able to go straight to shapes.

So I click on shapes, I'm gonna grab a line and I'm having to make up what I think their share price is or their some kind of valuation.

And I just draw a vertical line, the weighting of that line at the moment, it's very thin, it's very difficult to see.

So I've now gone to shape formats, shape out, outline, weight.

Gonna make it a little bit heavier. There we go.

You could also make it dashed if you want to make it dash, it's actually your thing.

No problem at all. And lastly, if you want to show your valuation range, I know some backers like to do this. Some people, some banks, Duffy don't like to do this. They like to do it verbally.

But to do your valuation range, inserts, illustrations, shapes, and I'm gonna grab a rectangle, My rectangle, it's gonna be a standalone valuation range.

Gonna move it bit to the right. There we go.

I'm going to change the transparency a little bit so I can see through it.

So on the right hand side in the fill that's popped up.

Transparency. Let's try 60%.

That looks a bit better like that.

The outside of this, maybe you want it to be dashed. So click, Shape, format, shape outline, make it get dashed.

Uh, let's go that. Let's go that one. Nice.

Let, excuse me.

And then you could put a little bit of text at the top here. Suggested valuation Range or something.

Great.

And there you go. Football field, all done for you guys.

Cool guys, I hope you've found that useful.

Uh, the recording for this will be available on Monday.

However, if you want to go and see more recordings about the football fields, you absolutely can.

They're all available on Felix.

If I go to the top, hit click on Felix, I could then go to topics.

Investment banking valuation.

This is where you're gonna find loads of stuff in valuation topics, investment banking Valuation.

The two on the football field are pulling the analysis together and football field model.

There are different ways to build the football field. In there. You can do, um, um, where you've got the two bars that overlap, uh, how to put, uh, a share price line in as well if you want to do the really complicated version.

But also the DCF valuation, the transaction comps valuation, the trading comps loads more in There.

And guys, if you want access to information, there's loads of real information here.

If you want information on Coca-Cola, type in Coca-Cola at the front page here.

You'd then click on this valuation tab.

You've got the real EV bridge For Coca-Cola.

You've got the real whack for Coca-Cola.

If you want see, um, comparable information.

Coca-Cola here, you've got Pepsi Curig, national Beverage.

You can add more companies if you want. You wanna add in Monster, go ahead. Forecast earnings. This is all from fact set guys.

This is all available to you. It's really good information.

Do use it at your disposal.

Otherwise, guys, I hope you've enjoyed this.

Hope to see you on another Felix Live soon.

Have a great Friday and the rest of Your weekend. See you guys. Bye-bye.