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1. Company Snapshot

1.a. Company Description

Forbo Holding AG produces and sells floor coverings, building and construction adhesives, and power transmission and conveyor belt solutions in Switzerland and internationally.The company operates through two divisions, Flooring Systems and Movement Systems.The Flooring Systems division develops, produces, and sells linoleum, vinyl floorings, entrance flooring systems, carpet tiles, needle felt floor coverings, washable textile floorings, and building and construction adhesives, as well as various accessory products for laying, processing, cleaning, and care of flooring.


This division also provides ready-made adhesives for floor covering installations, parquet flooring, and ceramic tiles, as well as leveling compounds for the construction industry and liquid floors under the trade name of Eurocol.Its products are used in public buildings, department stores, hospitals and other healthcare facilities, schools, libraries, commercial and office spaces, leisure centers, shops, hotels, restaurants, and cafeterias; as well as for applications in the residential market.The Movement Systems division offers conveyor and processing belts, plastic modular belts, power transmission belts, and timing and flat belts under the Siegling brand name.


Its products are used in various applications in industry, trade, and the service sector, including conveyor and processing belts in the food industry; treadmill belts in fitness studios; and flat belts in mail distribution centers.The company was founded in 1928 and is headquartered in Baar, Switzerland.

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1.b. Last Insights on FORN

Forbo Holding AG's recent performance has been positively driven by encouraging signs of undervaluation, with an estimated fair value of CHF 1,294, representing a 43% upside. Additionally, the company's recent earnings release showed a decline in earnings over five years, but shareholders have seen a significant uptick. A potential share buyback could further boost shareholder value by reducing outstanding shares. According to recent reports, investors may be undervaluing the company, which could lead to a re-rating.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Is Forbo Holding AG's (VTX:FORN) Recent Stock Performance Influenced By Its Fundamentals In Any Way?

Jan -21

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Is Forbo Holding AG (VTX:FORN) Potentially Undervalued?

Jan -07

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Forbo Holding's (VTX:FORN) earnings have declined over five years, contributing to shareholders 36% loss

Dec -16

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Are Investors Undervaluing Forbo Holding AG (VTX:FORN) By 43%?

Oct -17

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The recent CHF80m market cap decrease is likely to have disappointed insiders invested in Forbo Holding AG (VTX:FORN)

Sep -30

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LVMH: Share transactions disclosure

Sep -09

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The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

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Cointreau Launches First-Ever Ready-To-Serve Range – Introducing Cointreau Citrus Spritz

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.27%)

6. Segments

Flooring Systems

Expected Growth: 2.5%

Forbo Holding AG's Flooring Systems segment growth of 2.5% is driven by increasing demand for sustainable and eco-friendly flooring solutions, expansion in emerging markets, and rising investments in infrastructure and construction projects. Additionally, the trend towards renovation and refurbishment of existing buildings, as well as the growing popularity of luxury vinyl tiles (LVT) and other resilient flooring products, contribute to the segment's growth.

Movement Systems

Expected Growth: 1.8%

Forbo Holding AG's Movement Systems segment growth of 1.8% is driven by increasing demand for flooring and construction materials, particularly in the commercial and industrial sectors. Additionally, the company's focus on sustainable and eco-friendly products, as well as its strategic acquisitions and partnerships, have contributed to its growth momentum.

7. Detailed Products

Flooring Systems

Forbo's Flooring Systems segment offers a wide range of flooring solutions, including linoleum, project vinyl, and luxury vinyl tiles, as well as installation and maintenance services.

Bonding Systems

Forbo's Bonding Systems segment provides a range of adhesives, sealants, and coatings for various industries, including construction, automotive, and electronics.

Movement Systems

Forbo's Movement Systems segment offers a range of conveyor belts and processing belts for various industries, including food, tobacco, and logistics.

Belts and Architectural Products

Forbo's Belts and Architectural Products segment provides a range of products, including conveyor belts, transmission belts, and architectural products such as wall and floor coverings.

8. Forbo Holding AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Forbo Holding AG is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Forbo Holding AG is low, as the company has a diverse customer base and no single customer has a significant impact on the business.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Forbo Holding AG is moderate, as the company relies on a few key suppliers for raw materials, but has some flexibility to switch to alternative suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Forbo Holding AG is low, as the company has a strong brand presence and significant barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Forbo Holding AG is high, as the company operates in a highly competitive industry with several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.75%
Debt Cost 8.16%
Equity Weight 93.25%
Equity Cost 8.16%
WACC 8.16%
Leverage 7.24%

11. Quality Control: Forbo Holding AG passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Forbo

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

909.0$

Current Price

909$

Potential

-0.00%

Expected Cash-Flows