1. Estimate future Free cash flow (FCF) of the firm based on the following definition: FCF=(NOPAT- change in NWC-capital expenditure + Depreciation), where NOPAT=EBIT (1-tax rate). Complete the 2-stage model to assign a price to LOccitanes shares. List and justify the assumptions that you make.

2. Post-IPO follow up Where did LOccitane actually list? What was the actual list price after the IPO? Compared to your estimation, was there any money left on the table? If so, how much? Type your answers in your model.

L'Occitane Valuations in millions of euros, unless stated otherwise) Lont-term Growth rate 5.00% Discount rate 10% Tax rate 23% 1 2 3 4 Projected New Stores 2010 2011 2012 2013 2014 2015 Est. Proj. Proj. Proj. Proj. Proj. 5 609 951 Net sales EBIT NOPAT(=EBIT(1-t)) 729 135 847 160 1,055 200 1,159 219 180 NWC(=Trade receivables+Inventory-Trade payables) Capital expenditures Depreciation FCF=(NOPAT-change in NWC-capital exp+Dep) Terminal value PV Value of operation Debt Equity value =(Vop-debt) Shares outstandig Price/share L'Occitane Valuations in millions of euros, unless stated otherwise) Lont-term Growth rate 5.00% Discount rate 10% Tax rate 23% 1 2 3 4 Projected New Stores 2010 2011 2012 2013 2014 2015 Est. Proj. Proj. Proj. Proj. Proj. 5 609 951 Net sales EBIT NOPAT(=EBIT(1-t)) 729 135 847 160 1,055 200 1,159 219 180 NWC(=Trade receivables+Inventory-Trade payables) Capital expenditures Depreciation FCF=(NOPAT-change in NWC-capital exp+Dep) Terminal value PV Value of operation Debt Equity value =(Vop-debt) Shares outstandig Price/share