Beruflich Dokumente
Kultur Dokumente
Hosted by
Local Challenge CFA France
Universit Lille 2/SKEMA
Market
ProYile
52-week
Price
Range
Average
3M
Daily
Volume
265-314
228.4
6.82
2 062
Free Float
4.4%
Unibel Holding
67.4%
Beta
0.41
Financials
2012
EPS ()
18.7
18.5
13.9
21.4
6.25
7.91
DPS ()
6.25
6.25
Sales (m)
2 649
EBIT (m)
238
240
169
247
126
94
146
7.0%
9.7%
0.2
-0.1
ROCE
11.4% 9.3%
Net
debt/
EBITDA
(x)
0.2
0.1
2012
EV/EBIT (x)
5.5
7.8
11.7
8.0
EV/Sales (x)
0.5
0.7
0.8
0.7
Valuation
DCF
Transac
Mult
Estimated Prices
373
442
432
Weights
60%
20%
20%
Target Price ()
399
Alexandre
RAVERDY
alexandre.raverdy@gmail.com
+33(0)6.19.25.79.26
Manon
RICHARD
manonrichard_2@hotmail.fr
+33(0)6.16.95.32.54
Ran
XU
cindyhit08@gmail.com
+33(0)6.98.13.06.40
Konan
KOUASSI
kkrprive@yahoo.fr
+33(0)6.66.69.25.96
Maxime
PARRA
maxime.parra@newtrading.fr
+33(0)6.47.61.90.40
BEL
Consumer Staples
Recommendation:
BUY
Target
Price
:
399
(+33%)
Bel
Stock
Price
(100
at
31st
Dec
2010)
%
TP: 399
250
200
150
100
50
Dec-10
Dec-11
Dec-12
UNIBEL
Dec-13
Dec-14
Fromageries
Bel
Source:
Factset
Investment
Summary
We
based
our
target
price
on
a
weighted
average
of
three
valuation
models
(DCF,
Transaction
method
and
Relative
valuation).
Despite
its
weak
liquidity
taken
into
account
in
each
method
we
issue
a
BUY
recommendation
on
Bel
with
a
target
price
of
399
(33%
upside)
relying
on
its
international
expansion
(attractive
for
investors
given
the
signiSicant
growth
potential),
its
competitive
advantage
in
miniaturization
and
its
acquisition
Sirepower.
From
a
valuation
standpoint,
Bel
is
currently
trading
at
an
undeserved
28%
discount
to
its
peers
on
2015E
EV/EBIT
and
a
25%
discount
to
2015E
EV/Sales,
both
adjusted
for
liquidity,
providing
strong
support
to
our
BUY
recommendation.
CAGR
2013-18E
Europe
2.7%
9.9%
Americas - APAC
10.7%
World
5.9%
10.0%
8.0%
6.0%
3.1%
4.0%
3.7%
1.3%
2.0%
0.0%
World
Europe
NME
&
Africa
2013
2018E
Americas
-
APAC
250
200
150
100
50
0
2006
Sources:
FactSet,
Bel
2007
2009
2010
2011
2012
2013
2014
Business Description
Bel
is
the
3rd
largest
branded
cheese
manufacturer
worldwide.
Operations
started
in
1865
for
this
French
family-held
group
when
Jules
Bel
created
a
cheese
ripening
and
trading
business.
After
he
died,
(Core
market)
Lon
Bel,
his
son,
took
over
the
business
and
set
out
for
an
industrial
adventure
by
creating
Fromageries
Bel
in
1922,
which
produced
the
well-known
Laughing
Cow
brand.
The
company
then
B
Catering
grew
Sirst
through
the
construction
of
modern
plants
both
domestically
and
internationally,
and
E
(Bel
Foodservices)
secondly
by
broadening
its
range
of
products.
In
particular,
it
launched
the
Sirst
fat-free
cheese
in
the
L
early
1930s,
leading
the
way
in
healthy
products.
Industry
Since
then,
the
company
has
developed
throughout
the
world.
Today,
the
company
is
active
in
5
(Bel
Industries)
continents
with
28
production
plants
and
30
subsidiaries
(Appendix
9).
Its
portfolio
comprises
5
core
brands
(The
Laughing
Cow,
Mini
Babybel,
Leerdammer,
Kiri,
Boursin)
and
25
local
brands.
In
2013,
the
NB:
Bel
does
not
provide
the
%
of
each
activity
company
employed
10,830
people.
Source:
Bel
Its
easy-to-carry
and
easy-to-keep
cheeses
also
make
Bel
a
leading
company
in
on-the-go
consumption
with
three
segments
(3
S):
Spread
(soft
spreadable
cheese
and
product
containing
Figure
6:
Bel
production
3
S
cheese),
Snacks,
and
Slices
(hard
cheese)
(Figure
6).
To
achieve
its
goals,
Bel
manufactures
three
types
of
cheese,
distributed
in
120
countries:
Processed
cheese
for
which
the
group
is
a
leader
thanks
to
The
15%
Laughing
Cow
(Bels
oldest
brand),
Pressed
cheese
(e.g.
Mini
Babybel
and
Leerdammer)
and
Fresh
&
Spreadable
cheese
(e.g.
Kiri,
Boursin).
25%
60%
Current
strategy
of
the
company
can
be
described
with
the
following
3
pillars:
Industrial
Expertise
and
Innovation
Leadership
(Appendix
10).
With
two
R&D
centers
in
Europe
and
R&D
expenses
(1%
of
sales)
two
times
higher
than
its
closest
peers,
industrial
expertise
and
innovation
are
the
cornerstone
of
Bel
and
ensure
it
keeps
a
strong
Spread
Snacks
Slices
competitive
advantage.
Since
the
industry
is
mature,
the
group
is
changing
its
product
mix
(e.g.
co-
Source:
Bel
branding).
This
is
why
it
aims
at
broadening
the
range
of
its
brands
as
well
as
renewing
its
recipes
(a
dedicated
team
is
in
charge
of
understanding
the
consumers
needs).
Besides,
the
company
aims
at
conquering
Asia
by
developing
new
Slavors
while
respecting
their
culture
and
habits.
Its
industrial
Figure
7:
Sales
breakdown
by
region
(m)
expertise
will
enable
the
group
to
increase
its
footprint
in
countries
like
Vietnam,
Japan,
China
and
South
Korea.
3
000
Internationalization
And
Strengthening
of
The
5
Core
Brands
In
2013,
the
core
brands
accounted
for
70%
of
total
sales
(vs.
32%
in
2008),
4
of
them
among
the
2
000
worlds
12
leading
cheese
brands
(Appendix
11).
The
group
aims
at
increasing
its
sales
by
building
new
production
plants
in
high
potential
regions.
For
instance,
the
new
plant
in
Brookings
(USA)
will
produce
10
thousand
tons
of
cheese
each
year
to
meet
the
growing
demand
for
Mini
Babybel.
The
group
thus
plans
to
reach
$1bn
of
sales
in
N.
America
by
2025
(x3
in
10
years).
1
000
Acquisition-Led
Growth
Focus
On
Premium
Branded
Cheeses
Acquisition-led
growth
gradually
complements
innovation-led
growth.
Indeed,
since
1985,
the
company
has
already
acquired
16
brands
(Figure
8
&
Appendix
12)
and
puts
a
particular
emphasis
on
0
2010
2011
2012
2013
the
quality
of
the
brands
it
acquires.
The
Laughing
Cow
Mini
Babybel
Boursin
(400m)
Americas
-
APAC
Africa
-
Middle
East
Europe
Figure
8.
Core
brands
(1921)
(1977)
(2008)
development
Source:
Bel
Brand
Creation
Acquisition
Figure
9:
Shareholder
structure
Kiri
Leerdammer
(190m)
Sources:
Bel,
FactSet
0.7%
(1966)
(2002)
4.4%
Bels
Management,
A
Well-Functioned
Network
of
Experts
Fitting
The
Group
Strategy
Antoine
Fivet,
representing
the
5th
generation
of
the
shareholding
family,
became
CEO
and
Chairman
24.1%
of
the
group
in
2009.
In
the
executive
committee,
the
other
three
deputy
general
managers
all
have
extensive
experience:
Bruno
Schoch
(Finance,
Legal
and
IT)
has
a
strong
knowledge
in
M&A
67.4%
transactions
perfectly
Sitting
the
group
strategy;
Francis
le
Cam
(Operations)
has
substantial
3.5%
background
in
International
Management;
and
Hubert
Mayet
is
an
expert
in
manufacturing
and
technology
(Appendix
13).
Unibel
Fivet/Bel
Family
Shareholder
Structure
SoSil
SA
(Lactalis
Group)
Other
public
Though
Bel
has
been
listed
on
the
Paris
Stock
Exchange
since
1946,
it
remains
controlled
by
the
Treasury
Stock
founding
family.
It
is
the
major
shareholder
today
with
71%
of
the
shares
(of
which
67.4%
is
held
by
Unibel,
its
listed
family
holding
company).
Lactalis,
one
of
Bels
competitors,
holds
24%
of
the
shares
Source:
Bel
(Figure
9).
Free
Sloat
is
therefore
very
low
(4.4%)
but
the
stable
shareholder
structure
allows
an
effective
long-term
strategy.
Free
Sloat
could
increase
should
Lactalis
dispose
of
its
shares:
it
would
boost
liquidity
and
attract
interest
from
institutional
and
retail
shareholders
in
the
stock.
A
move
toward
more
visibility
is
witnessed
by
the
availability
of
the
annual
report
in
English
since
2013.
3
Consumers
30
kg
25
25
20
20
15
15
10
10
2020
The
cheese
industry
offers
attractive
market
dynamics
while
offering
good
resilience
to
economic
cycles.
Product
innovation,
new
social
trends
and
increased
penetration
in
rapidly
growing
regions
such
as
Latin
America,
the
Middle
East
and
Africa
are
the
main
drivers
of
growth.
A
Defensive
Industry
BeneYitting
From
A
Positive
Macro
Backdrop
The
cheese
industry
is
characterized
by
its
defensive
nature:
it
provides
upside
potential
during
expansions
and
protection
during
downturns.
For
instance,
over
the
period
2008-2009,
while
global
GDP
growth
fell
by
2.9%,
cheese
production
growth
remained
positive
and
went
from
0.8%
in
2008
to
0.3%
in
2009
(Figure
10).
As
for
Bel,
its
output
increased
by
0.2%
in
2009.
Cheese
consumption
varies
signiYicantly
from
one
region
to
another
(Figure
11).
The
global
cheese
market
is
valued
at
around
100bn,
dominated
by
Europe
followed
by
North
America
and
Latin
America.
However,
the
global
cheese
market
is
expected
to
grow
strongly
going
forward,
spurred
by
emerging
countries,
especially
in
Asia-PaciSic
(China,
Indonesia,
Vietnam).
The
global
cheese
output
reached
19m
tons
last
year
(+19%
2005-13)
and
global
demand
is
likely
to
continue
to
be
strong.
Europe:
Steady
As
It
Goes
The
EU-28
accounted
for
48%
of
global
output
in
2013.
With
approximately
48%
of
the
EU
output
derived
from
Germany
(27%)
and
France
(21%),
those
countries
are
the
two
largest
cheese
producers
in
Europe
(Appendix
14).
In
Western
Europe,
cheese
market
is
very
mature,
with
annual
per
capita
consumption
of
85.
We
thus
expect
a
limited
but
steady
value-led
growth
(0.5%
growth
pa,
as
reSlected
in
our
estimates).
Americas:
A
Growing
Appetite
In
2013,
a
quarter
of
global
total
volume
growth
in
cheese
came
from
just
Brazil
and
the
US.
American
consumers
eat
an
average
15.4kg
(Appendix
15),
and
sales
of
cheese
are
expected
to
increase
as
additional
cheese
varieties
are
continuously
introduced
in
the
market.
Brazil,
with
per
capita
consumption
of
just
6kg,
is
a
very
interesting
market:
further
penetration
should
generate
substantial
new
sales
as
cheese
becomes
a
more
important
food
item
in
the
Brazilian
diet.
Emerging
Markets:
The
New
Eldorado
Emerging
markets
offer
higher
growth
potential
as
consumption
levels
are
still
low
while
the
potential
consumer
base
is
large.
The
two
main
growth
drivers
of
consumption
are
(1)
rising
disposable
incomes
and
(2)
urban
population
growth.
Asia-PaciYic
has
the
highest
potential
as
cheese
is
still
a
very
nascent
market.
This
goes
hand-in-hand
with
demographic
change
and
growth
of
middle
classes
(whose
global
spending
share
should
represent
59%
in
2030E
from
23%
in
2009
(Figure
12),
and
reSlects
a
more
general
trend
of
rising
demand.
In
China
for
instance,
where
Bel
has
been
active
since
2007,
per
capita
consumption
is
still
low
(40g)
due
to
the
sheer
size
of
its
population.
The
bright
outlook
is
reSlected
by
an
expected
CAGR
consumption
of
12%
for
the
period
2014E-18E
according
to
Euromonitor.
In
Near
Middle
East
(NME)
and
Africa,
while
there
is
a
high-growth
potential,
the
region
is
constrained
by
an
underdeveloped
environment:
the
lack
of
a
developed
retail
environment
with
a
limited
cold
chain
infrastructure
in
place
as
an
important
factor
holding
back
cheese
sales.
2030
APAC
Americas
Europe
Calcium (mg)
700
600
Leerdammer
800
The
Laughing
Cow
Mini
Babybel
500
Cur de Lion
NRV*
Kiri
400
300
200
Philadelphia
100
Boursin
0
15
20
25
30
Fat
(g)
Bel
35
40
Competitors
Product
Innovation
With
penetration
of
cheese
nearing
saturation
in
developed
regions
such
as
Western
Europe
or
North
America,
value
creation
is
key.
Different
usages
of
cheese
thus
offer
opportunities,
e.g.
cheese
being
promoted
as
a
cooking
product
in
addition
to
its
conventional
use.
In
emerging
countries,
the
product
mix
will
change
from
the
traditional
types
of
cheese
to
new
cheeses
that
suit
the
demand
(e.g.
sweet
cheese
for
Asia).
On-The-Go
Consumption
Is
Likely
To
Strengthen
Cheese
is
gradually
positioned
as
an
on-the-go
snack
both
for
children
and
adults.
This
goes
together
with
the
trend
of
new
cheese
eating
occasions,
where
frequency
of
use
is
increasing
(e.g.
breakfast
+
snacking
or
snacking
+
dinner).
Rising
Interest
in
Healthier
Products
Given
mounting
obesity
concerns,
people
tend
to
move
to
reduced
or
fat-free
products
low
fat
and
salt
but
high
calcium
and
vitamin
D
-
following
the
inclination
towards
a
healthier
lifestyle.
Bel
has
been
a
pioneer
in
healthy
products
and
keeps
its
advantage
over
its
peers
(Figure
13).
French
Cheese
Going
Mainstream
As
one
of
the
largest
cheese
exporters
worldwide,
France
has
an
outstanding
reputation
in
cheese.
French
cheese
might
thus
be
sold
as
a
premium
product,
just
like
wine
in
some
countries.
In
addition,
in
many
countries,
there
tends
to
be
growing
awareness
of
Western
cuisine,
including
French
cuisine.
A
Fragmented
Industry
The
global
branded
cheese
production
is
divided
in
four
main
types
of
cheese
manufacturers
(Figure
14):
Major
diversiYied
competitors
(e.g.
Kraft,
Mondelez)
which
hold
competitive
advantages
through
better
economies
of
scale
and
beneSit
from
a
lower
vulnerability
to
the
cheese
market
thanks
to
product
diversiSication
and
strong
bargaining
power
towards
customers
and
suppliers.
Dairy
specialized
family-held
businesses
(e.g.
Bongrain,
Lactalis,
Bel)
with
a
portfolio
of
core
brands;
Small
regional
competitors
(e.g.
Arla
Food,
Dairy
Crest)
that
control
different
stages
of
the
supply
chain
and
beneSit
from
a
strong
presence,
identity
and
substantial
knowledge
of
their
market;
Retail
labels
(e.g.
ReSlets
de
France
for
Carrefour,
Tesco
brand),
which
are
cheaper
and
belong
to
retailers.
They
are
the
only
direct
substitutes
to
branded
cheese.
Regulation:
What
Will
Be
The
Impact
of
The
Quota
Abolition
in
Europe?
The
EU
introduced
a
national
quota
regime
for
milk
production
in
1984
to
limit
excess
supply
and
maintain
farmer
proSitability.
This
regime
will
come
to
an
end
in
April
2015
as
the
EU
moves
the
dairy
sector
towards
a
more
market-orientated
future,
but
one
that
protects
producer
interests.
We
therefore
expect
(1)
an
overall
increase
in
production
coupled
with
declining
prices
which
would
be
favorable
to
Bel,
albeit
a
modest
impact
due
to
the
soft
landing
provided
by
the
EU;
and
(2)
no
reduction
in
current
price
volatility
after
the
end
of
quotas.
For
further
information,
please
refer
to
Appendices
16
&
17.
1
Lactalis
2
Kraft
3
Fromageries
Bel
4
Bongrain
5
Arla
Food
6
Mondelez
*in
terms
of
branded
cheese
sales
Source:
Bel
Figure
15:
Porters
5
Forces
Porters 5 Forces
Rivalry
(4.5)
5
Threat
of
New
Entrants
(1)
Bargaining
Power
of
Customers
(4)
Threat
of
Substitutes
(3)
Bargaining
Power
of
Suppliers
(1.5)
NB:
Since
Bel
derives
100%
of
its
revenue
from
industrial
cheese,
we
will
exclusively
focus
on
it
(Figure
15).
Rivalry:
as
more
than
20%
of
the
market
is
held
by
six
companies
competing
Siercely,
we
consider
the
branded
cheese
market
as
rather
fragmented.
Bargaining
power
of
customers:
in
most
countries,
the
main
customers
are
the
retailers
or
supermarket
chains,
which
are
likely
to
offer
alternatives,
such
as
retail
labels.
They
thus
have
signiSicant
bargaining
power.
Bargaining
power
of
suppliers:
suppliers
have
a
low
bargaining
power
since
most
inputs
(milk,
butter,
cream,
cheddar)
are
commodities.
Threat
of
substitutes:
the
direct
substitutes
to
industrial
cheese
are
craft
cheeses.
There
are
also
indirect
substitutes,
such
as
yogurts.
Threat
of
new
entrants:
barriers
to
entry
are
high
because
of
(1)
substantial
capital
requirements;
and
(2)
the
strength
of
the
existing
brands.
Those
features
could
deter
potential
competitors
from
challenging
the
incumbents.
12%
3 500
10%
3
000
8%
2 500
6%
2
000
1
500
4%
1
000
2%
500
0%
Sales
(rhs)
Net
proSit
margin
EBIT margin
A
Long-Standing
Expertise
In
Portion
Format
Meeting
Industry
Trends
Cheese
becomes
more
and
more
commoditized.
Yet
Bel
offers
differentiated
products
that
are
small-
sized
and
easy
to
carry
thanks
to
its
expertise
in
miniaturization
technology,
backed
by
a
strong
R&D
(at
1%
of
sales,
2x
higher
than
its
closest
peers).
This
historic
know-how
is
in
line
with
the
new
social
trends
(on-the-go
consumption,
healthy
diet,
etc.).
A
Pure
Player
Status
Bel
is
one
of
the
few
companies
whose
business
is
100%
focused
on
cheese.
As
such,
Bel
can
achieve
better
economies
of
scale
on
operating
costs
than
its
closest
peers:
Bels
focused
strategy
and
concentrated
core
brand
portfolio
management
allows
leverage
on
R&D
investment,
product
innovation
expenses
and
other
marketing
and
promotional
expenses.
Financial
Analysis
Growing
Sales
Bel
has
delivered
revenue
growth
every
year
over
the
past
5
years,
even
in
2009
in
the
recession
though
partly
thanks
to
the
acquisition
of
Boursin.
In
2013,
sales
grew
by
2.7%
(+5.3%
on
a
like-for-
like
basis,
i.e.
excluding
the
impact
of
forex
Sluctuations,
Figure
17).
Besides,
Bel's
revenues
are
more
and
more
geographically
diversiSied,
in
line
with
the
internationalization
strategy
of
the
core
brands.
We
analyzed
and
estimated
Bel
sales
based
on
the
cheese
market
size
(per
capita
consumption
and
population
size)
and
the
expected
market
share
of
Bel
(Appendix
19).
In
Europe,
the
Sive
core
brands
allowed
Bel
to
expend
its
market
share
(estimated
at
3.3%
in
2013)
and
sustain
its
growth,
particularly
in
Eastern
Europe
with
an
effective
marketing
strategy.
We
forecast
a
2014E-18E
CAGR
of
2.8%,
reSlecting
continued
market
share
gains
in
Eastern
Europe
and
a
more
limited
value-led
growth
in
Western
Europe.
5
9%
8%
7.30%
7%
6%
5%
4%
3%
2%
1%
0%
2010
Source: Bel
2011
2012
2013
In
the
Americas,
Mini
Babybel
(+23%
in
the
US
last
year)
and
the
Laughing
Cow
drove
revenue
growth.
In
Asia-PaciYic
(APAC),
the
solid
revenue
growth
driven
by
Mini
Babybel
and
Belcube
has
been
offset
by
quality
issues
at
Kiri
in
Japan.
The
expected
2014E-18E
CAGR
of
13.3%
for
the
whole
region
reSlects
both
the
high
growth
potential
of
Mini
Babybel
in
the
US
with
the
new
production
plant
in
Brookings
and
the
huge
growth
potential
in
APAC.
In
Middle
East
and
Africa,
forex
Sluctuations
and
political
uncertainties
hit
revenues,
despite
a
favorable
macro
environment
and
a
strong
growth
driven
by
Kiri
and
The
Laughing
Cow.
The
2014E-18E
CAGR
of
9.9%
will
be
led
by
the
development
of
modern
distribution
channels.
8.90%
7.00%
(2.50%)
5.30%
(2.60%)
4.80%
1.40%
4.50%
3.40%
2.70%
Source:
Bel
Uneven
Margins
To
Stabilize
Bel
achieves
better
EBIT
margins
(9%
in
2013
and
an
historical
average
of
8.5%)
compared
to
its
closest
peers
(7.4%
on
average).
It
is
a
pure
player
in
the
premium
cheese
industry
which
allows
the
company
to
achieve
superior
economies
of
scale
(with
premium
pricing).
However,
the
major
diversiSied
Sirms
achieve
even
better
economies
of
scales
than
Bel
due
to
their
size
(and
the
implied
bargaining
power)
and
the
broadness
of
their
brand
portfolio.
Though
Bel
has
a
strong
internal
control
to
reduce
costs,
three
external
factors
regularly
hit
operating
and
net
proSit
margins:
(1)
raw
materials
prices
volatility,
(2)
one-offs
linked
to
political
instabilities
mainly
in
Near
and
Middle
East
and
(3)
the
currency
exchange
rate
(Appendix
21).
More
precisely,
an
analysis
of
EBIT
margins
by
region
(Figure
18)
leads
to
the
following
conclusion:
stability
in
Western
Europe
has
been
offset
by
risks
in
the
Near
and
Middle
East.
Between
2010
and
2013,
EBIT
margin
in
Western
Europe
averaged
10%
(ranging
from
8.1%
to
11.2%)
while
that
of
Near
and
Middle
East
averaged
7.3%
(ranging
from
2.8%
to
9.8%).
Moreover,
the
peak
of
commodity
prices
reached
in
2011
impacted
all
regions
except
Americas
-
APAC
thanks
to
the
US
entities
hedging
policy.
The
exchange
rate
largely
explains
the
decrease
in
EBIT
margin
in
2013
in
Americas
APAC
(due
to
the
fading
off
of
the
hedging
effect).
In
Greater
Africa,
the
operating
margin
is
stable
and
reached
11%
in
2013.
In
the
short-run,
given
the
high
volatility
of
raw
materials
and
the
unfavorable
forex,
we
estimate
an
operating
margin
of
6%
in
2014E.
However,
in
the
midterm,
we
expect
EBIT
margin
to
recover
from
2015E
to
reach
9.9%
in
2018E,
thanks
to
operating
leverage
(volume
growth)
and
favorable
input
pricing
effects
from
(1)
the
end
of
quotas
in
Europe
in
2015;
(2)
the
increase
of
milk
output
worldwide;
and
(3)
the
introduction
of
European
dairy
futures
for
skimmed
milk
powder,
butter,
etc.
by
Euronext
in
early
2015.
Concerns
about
the
exit
of
Greece
from
the
Eurozone
following
the
coming
legislative
elections,
the
slowdown
in
inSlation
mainly
in
Europe
due
to
the
ongoing
decline
in
oil
prices
(versus
superior
growth
and
imported
inSlation
in
the
US
leading
to
an
interest
rate
differential)
and
the
likely
response
from
the
ECB
(QE
announcement)
are
the
cause
of
the
substantial
depreciation
of
the
euro
against
the
dollar
(from
1.39
EUR/USD
in
March
2014
to
1.18
at
January
2015).
We
believe
this
situation
should
be
favorable
on
Bels
margins.
6
NOPAT Margin
600
500
400
300
200
100
0
Source:
Bel
Figure
21:
Evolution
of
cash
Slows
400
300
200
100
0
Valuation
(
100)
(
200)
(
300)
(
400)
Source:
Bel
Figure
22:
Sales
forecasts
4
000
10%
Bel
currently
trades
at
8.8x
EV/EBIT
2015E,
which
is
a
9.5%
discount
to
its
historical
average.
The
stock
also
trades
on
a
28%
discount
to
its
peers,
despite
showing
stronger
EBIT
CAGR
2013-15E
(8.2%
vs.
5.6%
for
its
closest
peers).
We
valued
Bel
using
a
blend
of
DCF
(60%),
relative
(20%)
and
transaction
(20%)
valuation.
We
took
liquidity
into
account
in
each
method
by
applying
a
discount
of
11%
based
on
Damodaran
synthetic
bid-ask
spread
method
(Appendix
23).
We
derived
a
target
price
of
399,
which
points
to
33%
upside
potential,
in
full
support
of
our
BUY
recommendation.
By
incorporating
the
company
strategy
over
a
longer
period
and
giving
an
intrinsic
value,
the
DCF
method
appears
quite
appropriate
for
Bel,
we
thus
gave
it
a
60%
weighting.
The
transaction
method
was
given
a
weight
of
20%
because
it
represents
the
M&A
trend
in
the
Food
&
Beverages
(F&B)
industry.
Finally,
we
used
relative
valuation
with
a
blend
of
peers
multiples
and
a
multiple
factor
regression.
We
decided
to
give
a
weight
of
20%
to
this
method
since
this
reSlects
the
markets
current
value
assessment
of
sector
peers
and,
hence,
of
Bel
itself.
5%
0%
2014E
2015E
2016E
2017E
2018E
Americas
-
APAC
Africa
-
Middle
East
Europe
Sales
growth
The
DCF
model
captures
the
long-term
potential
of
gaining
market
share
in
the
smaller,
but
faster
growing
emerging
markets,
which
embodies
Bel
strategy.
The
DCF
analysis
gave
us
a
target
value
of
373
(+24%)
assuming
a
WACC
of
5.5%
(derived
entirely
from
the
cost
of
equity,
which
itself
is
impacted
by
the
stocks
low
beta
of
0.4)
and
a
liquidity
discount
of
11%.
0.8%
Beta
0.41
5.9%
SMB Premium
3.4%
HML Premium
-1.1%
Cost of equity
5.5%
100%
WACC
5.5%
5.5%
7%
Liquidity
6%
Discount
11%
465
393
341
440
373
323
16%
415
352
305
2.5
EV/Sales 15E
MDLZ
KRFT
2.0
GL9
1.5
DMND
LNCE
1.0
0.5
PLT
BH
0.0
0%
5%
BN
SAP
THS
FBEL
10%
15%
1.0
Leverage
0.1
0.2
Payout
0.4
Beta
0.4
ln(Market Cap)
21.7
ROE
0.1
Amihud
0.0007
S50
fP/E
18
20%
II.
Transaction-based
Valuation
We
analyzed
M&A
deals
(Appendices
30
to
32)
executed
over
the
last
two
years
(except
for
Boursin
which
took
place
in
2007-08)
within
the
Food
&
Beverages
sector
(we
did
not
identify
any
relevant
transaction
in
the
Cheese
sector).
Only
full
ownership
acquisitions
were
retained,
and
we
deemed
relevant
to
include
Bels
acquisition
of
Boursin
as
it
perfectly
Sits
the
business
proSile
(international
brands)
and
reSlects
transactions
in
the
cheese
sector.
We
used
the
Adj.
Deal
Value/Sales
multiple
to
compute
the
estimated
price
from
which
we
subtracted
a
takeover
premium
of
29%
(average
premium
since
2011).
We
obtained
a
target
value
of
442
(pointing
to
47%
upside).
III.
Relative
Valuation
1.
Peers
Multiples
We
derived
a
target
price
of
450
(50%
upside)
using
EV/Sales
and
EV/EBIT
multiples,
both
based
on
12-month
forward
means
and
adjusted
for
liquidity
(Appendix
33).
Why
We
Chose
These
Two
Multiples
We
favored
using
EV/Sales
and
EV/EBIT
over
other
multiples
because
the
relationship
is
more
signiSicant
and
seems
more
useful
in
predicting
future
performance
(Figures
24
&
25).
We
treat
both
multiples
equally
in
our
valuation
as
there
is
no
evidence
of
predominance
of
one
over
the
other.
Choice
of
Peers
Closest
peers,
with
a
core
business
as
similar
as
possible
to
Bels
(Bongrain,
Parmalat,
Glanbia).
High-growth
small
caps
in
the
F&B
sector,
to
reSlect
Bels
growth
model
(Saputo,
Diamond
Foods,
Synders-Lance,
TreeHouse
Foods).
Large
diversiYied
groups,
as
they
are
similar
in
terms
of
international
strategy
with
their
core
brands
(Kraft
Foods,
Danone,
Mondelez
Int.).
Given
the
varying
features
of
the
three
peer
groups,
we
applied
a
different
liquidity
discount
as
well
as
a
different
weight
to
compute
liquidity-adjusted
weighted
average
multiples
(details
provided
in
Appendix
33).
2.
Multiple
Factor
Regression
A
broad
sample
of
200
Sirms
was
used
to
regress
forward
P/E
against
7
variables:
leverage
(LT
Debt/
Total
Assets),
EPS
long-term
growth
rate
(g),
payout,
beta,
market
capitalization
(logarithm),
return
on
equity,
illiquidity
ratio
(based
on
Amihuds
research).
The
5
last
variables
are
dummies
corresponding
to
sub-sectors.
(Figure
26
&
Appendix
34).
LTDebt
fP / E = 0 + 1 (
) + 2g + 3payout + 4 beta + 5 ln(marketcap) + 6 ROE + 7 Amihud
TotalAssets
With
an
expected
EPS
2015E
of
21.4,
we
derived
a
target
value
of
415
(38%
upside).
Combining
both
target
prices
with
a
50-50
weighting,
we
obtained
a
target
value
of
432
(44%
upside)
for
relative
valuation.
Investment
Risks
(Appendix 35)
10%
8%
LT Average: 3%
6%
4%
2%
0%
Oct. 14
Nov. 14
Dec. 14
Source:
FactSet
Figure
28:
Raw
materials
prices
5
000
$/t
4
000
3
000
2
000
1
000
0
Butter
Skim
milk
in
pouder
Whole
milk
in
pouder
Source:
OECD
Figure
29:
Eurozone
HICP
(%
y/y)
5.0
4.0
3.0
2.0
Source: Eurostat
Dec-14
Dec-13
Dec-12
Dec-11
Dec-10
Dec-09
Dec-08
Dec-07
- 1.0
Dec-06
0.0
Dec-05
1.0
In
2013,
Bel
issued
publicly
its
CSR
report
for
the
Sirst
time.
It
shows
high
performance
results
in
using
the
Ecovadis
Rating
tools.
Bel
is
rated
with
65/100
in
2013
which
has
achieved
the
Gold
Status
(Figure
30
and
Appendix
36).
Suppliers
Environmental
70/100
Bel
has
been
striving
to
improve
its
environmental
performance.
As
a
partner
of
WWF,
Bel
has
developed
and
complied
with
many
internal
and
external
reference
standards
(for
both
their
production
sites
and
their
suppliers)
aimed
at
reducing
water
and
energy
production,
reducing
the
waste
disposal
and
limiting
greenhouse
gas
emissions.
As
a
result,
Bel
has
reduced
its
water
consumption
by
11%
with
a
sales
growth
of
23%
from
2008-13.
Social
Subcontractors
As
a
signatory
to
the
United
Nations
Global
Compact
since
2003,
Bel
has
always
focused
on
respecting
human
rights.
Since
its
establishment
in
2008,
Bel
Foundation
has
not
only
taken
action
in
the
interest
of
children,
their
well-being,
but
has
also
supported
associations
and
other
philanthropic
projects.
Furthermore,
training
programs
are
taken
to
develop
the
skills
and
promote
internal
mobility,
43/100
as
well
as
other
measures
to
improve
the
working
conditions.
Governance
Bel
keeps
an
ongoing
governance
dialogue
within
the
family,
in
pursuit
of
the
most
efSicient
balance
between
family
and
business
forces.
In
accordance
with
AFEP/MEDEF
and
Middlenext
Codes,
Bel
Bel
(Gold
Status)
meets
the
independence
requirement
of
board
of
directors.
We
do
however
highlight
a
conSlict
of
interest
as
the
CEO,
Antoine
Fievet
(member
of
the
family
shareholder),
is
also
the
Chairman
of
the
Board
of
Directors.
The
establishment
of
different
committees
and
existence
of
Internal
Audit
65/100
Department
ensures
the
continuous
good
functioning
of
the
company.
The
compensation
and
beneSits
are
publicly
released
and
all
their
decisions
are
taken
in
the
shareholders
interest
(Appendix
37).
Source:
EcoVadis
Rating
deYinitions:
total
return
greater
than
6%
BUY
Forecast
12-month
absolute
total
return
of
+6%
to
-6%
HOLD
Forecast
12-month
absolute
SELL
Forecast
12-month
absolute
total
return
less
than
-6%
10
Appendix
Table
of
Contents
Appendix
1.
Income
Statement
Appendix
2.
Balance
Sheet
Appendix
3.
Cash
Flow
Statement
Appendix
4.
Vertical
Common
Size
Income
Statement
Appendix
5.
Horizontal
Common
Size
Income
Statement
Appendix
6.
Vertical
Common
Size
Balance
Sheet
Appendix
7.
Horizontal
Common
Size
Balance
Sheet
Appendix
8.
Key
Ratios
Business
Description
Appendix
9.
Factories
and
R&D
Centers
Worldwide
Appendix
10.
Industrial
Expertise
Appendix
11.
Five
Core
Brands
Appendix
12.
Acquisitions
Appendix
13.
Corporate
Structure
Industry
Overview
Appendix
14.
EU-27
Cheese
Production
Appendix
15.
Cheese
Consumption
Worldwide
Appendix
16.
EU
Quota
Regime
Appendix
17.
PESTLE
Appendix
18.
SWOT
Analysis
Financial
Analysis
Appendix
19.
Sales
Forecasts
Appendix
20.
Financial
Statements
Forecasts
Explanations
Appendix
21.
Non
Recurring
Income
and
Expense
Appendix
22.
DuPont
Analysis
Valuation
Discounted
Cash
Flows
Appendix
23.
Liquidity
Discount
Calculation
Appendix
24.
Free
Cash
Flows
Appendix
25.
Target
Price
Calculation
Appendix
26.
Fama-French
Model
Appendix
27.
WACC
Components
Appendix
28.
Sensitivity
Analyses
Appendix
29.
Monte
Carlo
Simulation
Transactions
Relative
Valuation
Appendix
33.
Peers
Multiples
Appendix
34.
P/E
Ratio
Regression
Model
Investment
Risks
Appendix
35.
Risk
Matrix
Other
Headings
Appendix
36.
ESG
Appendix
37.
Management
Board
11
Back to content
2009
2010
2011
2012
2013
Sales
2 221
2 418
2 527
2 649
2 720
2 828
3 619
Growth
0.2%
8.9%
4.5%
4.8%
2.7%
4.0%
6.1%
6.2%
6.4%
6.7%
Europe
1 472
1 517
1 597
1 612
1 670
1 711
1 759
1 809
1 859
1 911
--
561
549
618
633
696
766
841
924
1 014
Americas - APAC
--
340
381
419
417
421
475
537
609
693
(1
445)
(1
577)
(1
727)
(1
741)
(1
821)
(1
960)
(2
010)
(2
119)
(2
239)
(2
370)
776
841
800
34.9%
34.8%
31.7%
34.3% 33.1%
SG&A Expense
(509)
(544)
(531)
(581)
267
297
269
327
12.0%
12.3%
10.6%
(72)
(86)
(82)
(89)
(77)
(91)
(98)
(102)
(106)
(110)
EBIT
195
211
187
238
240
169
247
281
318
360
EBIT margin
8.8%
8.7%
7.4%
9.0%
8.8%
6.0%
8.2%
8.8%
9.4%
9.9%
(4)
(6)
(6)
(2)
Interest Expense
(24)
(19)
(21)
(17)
(20)
(9)
(9)
(9)
(9)
(9)
(42)
(11)
(16)
(26)
(5)
(20)
(20)
(20)
(20)
(20)
EBT
125
175
144
193
220
145
222
256
293
335
Income Taxes
(37)
(57)
(47)
(63)
(88)
(48)
(74)
(85)
(98)
(112)
88
118
97
130
131
96
148
171
196
223
Minority Interest
(3)
(1)
(1)
(2)
(6)
(2)
(2)
(2)
(2)
(2)
Net Income
85
117
96
129
126
94
146
169
194
221
EPS (basic)
12.40
16.98
14.07
18.65
18.45
13.85
21.37
24.70
28.38
32.46
EPS (diluted)
12.40
16.98
14.07
18.65
18.45
13.85
21.37
24.70
28.38
32.46
6.86
6.86
6.84
6.89
6.82
6.82
6.82
6.82
6.82
6.82
DPS
6.00
5.00
6.25
6.25
6.25
6.25
7.91
10.00
12.65
16.00
48.4%
29.4%
44.4%
EBITDA
EBITDA
margin
12
908
899
1 068 1 153
1 248
30.7%
34.5%
(582)
(608)
(645)
(685)
(729)
(778)
317
260
345
382
424
470
12.4% 11.7%
868
9.2%
990
13.0%
Back to content
2009
2010
2011
2012
2013
117
140
143
451
510
379
464
504
584
509
Short-Term Receivables
414
444
455
458
491
508
528
560
595
631
Inventories
179
224
244
237
259
239
249
264
280
308
Current Assets
709
809
841
1 126
1 240
1 328
1 460
1 447
Net PP&E
549
540
530
524
588
639
661
686
716
752
Net Goodwill
383
389
388
385
381
381
381
381
381
381
311
306
303
296
288
288
288
288
288
288
LT Investments
48
63
64
85
116
116
116
116
116
116
Other Assets
12
11
11
11
10
15
15
15
11
1 303
1 309
1 439
1 461
1 486
1 512
1 545
2 012
2 118
2 701
2 814
2 972
2 992
1 146 1 260
2
566
63
56
78
144
153
47
47
47
47
47
Accounts Payable
275
333
359
368
413
404
442
454
479
508
143
158
158
156
182
182
199
205
216
236
Current Liabilities
482
547
595
669
748
633
688
706
742
792
Long-Term Debt
410
324
258
363
378
378
378
361
361
198
Provisions
45
49
51
52
78
78
78
78
78
78
Other Liabilities
154
169
172
197
213
198
186
196
210
226
609
543
481
612
668
654
642
635
649
502
1 090
1 090
1 287
1 330
1 341
1 391
1 293
10
10
10
10
10
10
10
10
10
10
22
22
22
22
22
22
22
22
22
22
Retained Earnings
106
135
113
145
1 248
1 300
1 392
1 492
1 599
1 716
(27)
(10)
(17)
(28)
(59)
(59)
(59)
(59)
(59)
(59)
789
852
923
1 018
--
--
--
--
--
--
Treasury Stock
(7)
(7)
(6)
(11)
(8)
(8)
(8)
(8)
(8)
(8)
892
1 002
1 264
1 356
1 457
1 564
1 680
31
26
15
16
17
18
19
923
1 027
1279
1372
1473
1581
1699
2 013
2 118
2566
2701
2814
2972
2992
Total Liabilities
11
14
13
Back
to
content
2009
2010
2011
2012
2013
125
175
144
193
220
145
222
256
293
335
122
92
79
93
77
91
98
102
106
110
Other Funds
(15)
(40)
(41)
(41)
(73)
(73)
(73)
(73)
(73)
(73)
231
227
182
245
224
162
247
285
326
373
(4)
(4)
(20)
12
(8)
(6)
(35)
(27)
(34)
227
223
162
257
216
156
255
250
300
338
Capital Expenditures
(79)
(64)
(75)
(81)
(149)
(141)
(120)
(127)
(136)
(145)
Maintenance CapEx
(122)
(92)
(79)
(93)
(77)
(91)
(98)
(102)
(106)
(110)
Growth CapEx
43
28
11
(72)
(51)
(22)
(26)
(30)
(34)
(1)
(3)
(0)
(0)
Purchase/Sale of Investments
(0)
(1)
(1)
(0)
Other Funds
13
(0)
(66)
(65)
(74)
(80)
(146)
(138)
(117)
(124)
(133)
(142)
(24)
(40)
(48)
(41)
(52)
(43)
(54)
(68)
(86)
(109)
(7)
(263)
(84)
(52)
178
26
(17)
(163)
(106)
Other Funds
(7)
10
(2)
14
(286)
(131)
(91)
127
(12)
(148)
(54)
(85)
(86)
(272)
(2)
(0)
(8)
(127)
26
(1)
304
50
(131)
84
40
81
(76)
14
2009
2010
Back
to
content
2011
2012
2013
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
65.1%
65.2%
Gross Income
34.9% 34.8% 31.7% 34.3% 33.1% 30.7% 33.0% 33.5% 34.0% 34.5%
SG&A Expense
22.9%
EBITDA
22.5%
3.2%
3.6%
3.2%
3.4%
2.8%
3.2%
3.3%
3.2%
3.1%
3.1%
EBIT
8.8%
8.7%
7.4%
9.0%
8.8%
6.0%
8.2%
8.8%
9.4%
9.9%
EBT
5.6%
7.2%
5.7%
7.3%
8.1%
5.1%
7.4%
8.0%
8.6%
9.3%
Net Income
3.8%
4.8%
3.8%
4.9%
4.6%
3.3%
4.9%
5.3%
5.7%
6.1%
2011
2012
2013
2009
2010
Sales
100.0% 108.9% 113.8% 119.3% 122.5% 127.3% 135.1% 143.5% 152.8% 163.0%
100.0% 109.1% 119.5% 120.5% 126.0% 135.6% 139.1% 146.7% 154.9% 164.0%
Gross Income
100.0% 108.4% 103.2% 117.0% 115.9% 111.9% 127.6% 137.6% 148.7% 160.9%
SG&A Expense
100.0% 107.0% 104.5% 114.2% 114.5% 119.5% 126.8% 134.7% 143.4% 153.0%
EBITDA
100.0% 111.1% 100.7% 122.5% 118.8% 97.4% 129.2% 143.2% 158.7% 176.1%
100.0% 119.6% 113.3% 123.6% 107.0% 125.8% 136.6% 141.2% 146.7% 153.1%
EBIT
100.0% 107.9% 96.0% 122.2% 123.1% 86.9% 126.3% 143.8% 163.1% 184.5%
EBT
100.0% 140.4% 115.8% 155.1% 176.4% 116.2% 178.1% 205.4% 235.6% 269.2%
Net Income
100.0% 136.9% 113.1% 151.1% 148.0% 111.0% 171.4% 198.1% 227.6% 260.3%
15
Back to content
52.8%
50.9%
51.6%
52.7%
53.4%
61.2%
48.3%
47.3%
46.6%
38.8%
51.8%
52.6%
56.2%
2009
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
2010
2011
2012
2013
16
Back to content
Key
Ratios
Activity
Ratios
1.
Receivables
Turnover
2.
Days
of
Sales
Outstanding
(DSO)
3.
Inventory
Turnover
4.
Days
of
Inventory
on
Hand
(DOH)
5.
Payables
Turnover
6.
Number
of
Days
of
Payables
7.
Total
Asset
Turnover
8.
Fixed
Asset
Turnover
9.
Working
Capital
Turnover
10.
WC/Sales
11.
WCR/Sales
12.
CapEx/Sales
2009
5.1
71.2
7.6
47.8
5.8
62.7
1.0
4.0
12.6
7.8%
14.3%
3.6%
2010
5.6
64.8
7.8
46.6
6.5
56.1
1.2
4.4
13.8
7.3%
13.8%
2.6%
2011
5.6
64.9
7.4
49.4
6.3
57.6
1.2
4.7
14.1
7.2%
13.4%
3.0%
2012
5.8
62.9
7.2
50.4
6.1
59.8
1.2
5.0
15.1
6.4%
12.3%
3.1%
Liquidity
ratios
1.
Current
Ratio
2.
Quick
Ratio
3.
Cash
Ratio
4.
Cash
Conversion
Cycle
5.
ST
Debt/Cash
6.
CFO/Sales
1.5
1.1
0.2
56.3
0.5
10.2%
1.5
1.1
0.3
55.2
0.4
9.2%
1.4
1.0
0.2
56.7
0.5
6.4%
1.7
1.4
0.7
53.5
0.3
9.7%
Solvency
ratios
1.
Net
Debt
2.
Net
Debt/Equity
3.
Net
Debt/EBITDA
4.
Net
Debt/EBITDA
Minus
CapEx
5.
Total
Debt/Total
Assets
6.
Total
Debt/EBITDA
7.
LT
Debt/EBITDA
8.
Asset/Equity
9.
Interest
Coverage
10.
CFO/Interest
Expense
11.
EBITDA/Interest
Expense
356.6
0.4
1.3
1.9
0.2
1.8
1.5
2.4
8.0
9.3
10.9
239.7
0.3
0.8
1.0
0.2
1.3
1.1
2.1
11.0
11.7
15.5
193.3
0.2
0.7
1.0
0.2
1.2
1.0
2.0
8.8
7.6
12.6
56.7
0.1
0.2
0.2
0.2
1.5
1.1
2.1
13.7
14.7
18.8
ProYitability
ratios
1.
Net
ProSit
Margin
2.
Gross
ProSit
3.
EBITDA
Margin
4.
EBIT
Margin
5.
EBT
Margin
6.
ROA
7.
Operating
ROA
8.
Return
on
Total
Capital
9.
ROE
(Shareholder
Equity)
10.
ROCE
(SH
Equity
+
LT
Debt)
3.8%
34.9%
12.0%
8.8%
5.6%
4.0%
9.1%
6.3%
9.5%
10.0%
4.8%
34.8%
12.3%
8.7%
7.2%
5.6%
10.2%
8.5%
11.9%
10.8%
3.8%
31.7%
10.6%
7.4%
5.7%
4.5%
8.8%
7.0%
9.2%
9.6%
4.9%
34.3%
12.4%
9.0%
7.3%
5.6%
10.4%
8.4%
11.5%
11.4%
1.1
0.9
1.1
1.0
-2.4
1.1
-2.8
5.7
1.1
6.1
DOL
DFL
DTL
17
2013
5.7
63.7
7.3
49.7
5.9
61.5
1.1
4.9
16.7
5.7%
12.4%
5.5%
1.7
1.3
0.7
51.8
0.3
7.9%
20.7
0.0
0.1
0.1
0.2
1.7
1.2
2.1
12.3
11.0
16.2
4.6%
33.1%
11.7%
8.8%
8.1%
4.9%
9.4%
7.4%
10.5%
9.3%
0.3
1.1
0.3
2014E
5.7
64.4
7.9
46.4
6.0
60.7
1.1
4.6
17.9
5.7%
12.1%
5.0%
2015E
5.8
63.0
8.2
44.3
5.9
61.8
1.1
4.6
20.2
4.5%
11.2%
4.0%
2016E
5.9
62.3
8.3
44.2
5.9
62.1
1.2
4.7
21.2
5.2%
11.6%
4.0%
2017E
5.9
62.1
8.2
44.4
6.0
61.2
1.2
4.8
19.6
5.3%
11.7%
4.0%
2018E
5.9
61.8
8.1
45.3
6.0
60.9
1.2
4.9
19.3
5.4%
11.9%
4.0%
1.8
1.4
0.6
50.2
0.1
5.5%
1.8
1.4
0.7
45.5
0.1
8.5%
1.9
1.5
0.7
44.3
0.1
7.8%
2.0
1.6
0.8
45.3
0.1
8.8%
1.8
1.4
0.6
46.2
0.1
9.4%
60.0
0.0
0.2
0.5
0.2
1.7
1.5
2.1
19.3
17.8
29.6
3.3%
30.7%
9.2%
6.0%
5.1%
3.6%
6.5%
5.5%
7.5%
7.0%
-23.4
0.0
-0.1
-0.1
0.2
1.3
1.1
2.0
28.0
29.0
39.2
-62.7
0.0
-0.2
-0.2
0.2
1.2
1.0
1.9
31.8
28.3
43.4
-142.4
-0.1
-0.3
-0.5
0.1
1.0
0.9
1.9
36.0
33.9
48.0
-65.6
0.0
-0.1
-0.2
0.1
0.9
0.8
1.8
40.6
38.2
53.1
4.9%
33.0%
11.5%
8.2%
7.4%
5.5%
9.4%
8.3%
11.0%
9.7%
5.3%
33.5%
12.0%
8.8%
8.0%
6.1%
10.2%
9.1%
11.8%
10.5%
5.7%
34.0%
12.5%
9.4%
8.6%
6.7%
11.0%
9.9%
12.7%
11.3%
6.1%
34.5%
13.0%
9.9%
9.3%
7.4%
12.1%
10.7%
13.5%
12.6%
-7.4
1.1
-7.8
7.5
1.0
7.7
2.2
1.0
2.3
2.1
1.0
2.1
2.0
1.0
2.0
Back to content
Legend:
Factories
R&D
Centers
Bel
Headquarters
Source: Bel
18
Back to content
Mini Babybel
The
curd
grains
are
molded
and
will
then
be
pressed.
After
an
average
resting
period
of
15
hours,
the
Mini
Babybel
cheeses
will
be
wrapped
in
a
wax
coating
designed
to
protect
and
conserve
them.
Kiri
The
milk
and
cream
are
mixed
and
then
pasteurized.
Lactic
ferments,
dairy
proteins,
emulsifying
salts,
and
a
pinch
of
salt
and
milk
calcium
are
added
to
the
mix.
Kiri
is
cooked
then
hot
molded
in
aluminum
shells.
Source: Bel
19
Brand
Back to content
Ranking
Worldwide
# Countries
#4
136
#12
N/A
1977
Pressed Cheese
#6
76
2002
Pressed Cheese
#11
27
2008
N/A
Year
Type of Cheese
Creation
1921
Processed Cheese
1966
Acquisition
Source: Bel
Target Name
Target Nation
% Acquired
United
States
Belgium
Italy
Spain
United
States
Portugal
Czech
Republic
Slovak
Rep
Netherlands
Turkey
Czech
Republic
Ukraine
France
Czech
Republic
Czech
Republic
Spain
100%
100%
75%
83%
100%
100%
100%
51.1%
100%
-
100%
100%
100%
100%
71.5%
100%
Back to content
Board
of
Directors
Luc
Luyten
James Lightburn
Philippe Deloffre
Fatine Layt
Michel Arnaud
Florian Sauvin
Executive Committee
Bruno
Schoch
Deputy
General
Manager
in
charge
of
Finance,
Legal
affairs
and
IT
systems
Antoine
Fivet
CEO
&
Chairman
Francis
Le
Cam
Deputy
General
Manager
in
charge
of
Operations
Hubert
Mayet
General
Manager
in
charge
of
Group
Manufacturing
and
Technical
Division
Chantal
Layuela
Vice-President
Research
and
Innovation
Philippe
Champlong
Vice-President
Bel
Asia-PaciSic
Etienne
Lecomte
Vice-President
Bel
Western
Europe
Eric
de
Poncins
Executive
Vice-President
Group
Strategy,
Development
and
Transformation
Guillaume
Jouet
Vice-President
Human
Resources,
Communications
and
Corporate
Social
Responsibility
Management Committee
Frdric
Nalis
Vice-President
Bel
America
Joe
Tayard
Vice-President
Bel
Near
and
Middle
East
Robert
Schlingensiepen
Vice-President
Bel
North
East
Europe
Source: Bel
21
Jennifer
Marquet
Vice-President
Marketing
Chakib
Seddiki
Vice-President
Bel
Greater
Africa
Back to content
16
Slovenia
Cyprus
Latvia
Slovakia
Estonia
Bulgaria
Hungary
Portugal
Romania
Belgium
Sweden
Finland
Lithuania
Czech
Rep.
Austria
Greece
Spain
Denmark
United
Kingdom
Poland
Netherlands
Italy
France
Germany
20
33
33
44
68
68
70
70
79
2013
89
102
2007
113
118
158
187
315
325
349
732
793
1158
1936
2182
500
1000
1500
2000
2500
Source: Eurostat
China
South Africa
1.7
South Korea
2.2
U.K.
11.6
U.S.
15.4
Sweden
19.8
Austria
19.9
Lithuania
20.1
Italy
20.7
Switzerland
21.3
Estonia
21.7
Germany
24.3
Finaland
24.7
Iceland
25.2
France
25.9
0
10
15
22
20
25
30
Back to content
The
EU
introduced
a
national
quota
regime
for
milk
production
in
1984
to
limit
excess
supply
and
maintain
farmer
proSitability.
This
regime
will
come
to
an
end
in
April
2015
as
the
EU
moves
the
dairy
sector
towards
a
more
market-orientated
future,
but
one
that
protects
producer
interests.
It
is
worth
noting
that
the
vast
majority
of
European
countries
have
produced
materially
below
quota
in
recent
years
(except
Germany
and
the
Netherlands),
because
the
EU
has
been
attempting
a
soft
landing
through
the
gradual
increase
of
quota
levels
(+1%
per
year
from
2009
through
2013)
and
reduction
of
support
levels.
Here
is
a
summary
of
the
main
academic
papers
on
the
abolition
of
EU
milk
quotas
(actual
vs.
baseline
scenario
in
2020):
Date
Source
Conclusions
2012
2011
2008
2008
2008
We
therefore
expect:
1. An
overall
increase
in
production
coupled
with
declining
prices.
We
expect
the
impacts
to
be
modest
due
to
the
soft
landing
provided
by
the
EU.
2. No
reduction
in
current
price
volatility
after
the
end
of
quotas.
23
P
E
S
T
L
E
Back to content
POLITICAL
Rise
of
protection
barriers
against
consumption
and
manufactured
goods
Geopolitical
crisis
ECONOMIC
High
volatility
of
forex
and
commodities
exchange
markets
Substantial
growth
in
urbanization
and
Middle
Class
in
emerging
markets
SOCIAL
TECHNOLOGICAL
Development
of
the
product
mix
particularly
focusing
on
the
higher
value
added
products
in
order
to
be
less
reliant
on
low
margin
commodity
product
(miniaturization
and
new
formula)
Involvement
of
genomic
technology
LEGAL
ENVIRONMENTAL
Climate
change
adaptation
Ecological
footprint
STRENGTHS
Strong
product
identity:
5
core
brands
OPPORTUNITIES
OPPORTUNITIES
SWOT
THREATS
24
Back to content
To
forecast
Bel
sales,
we
used
a
model
based
on
the
cheese
market
size
(per
capita
consumption
of
cheese
and
population
size)
and
Bel
market
share.
Due
to
the
various
degrees
in
the
maturity
of
the
cheese
market,
we
based
our
model
on
the
market
size
by
region.
Since
Bel
changed
its
geographical
breakdown
in
2010,
we
lacked
historical
sales
before
that
year.
To
obtain
the
market
size
for
the
period
2014E-18E,
we
multiplied
the
population
of
each
region
(source:
United
Nations)
by
per
capita
consumption
in
USD
(source:
Euromonitor).
Then,
we
translated
it
in
EUR
with
EUR/USD
of
1.3391
at
1st
August
2014
(release
date
of
the
Euromonitor
report).
The
biggest
growth
comes
from
Asia-PaciSic,
followed
by
Near
Middle
East
&
Greater
Africa
and
Latin
America,
which
has
pushed
up
the
sales
of
soft
cheese
in
2014
and
should
have
a
high
potential
in
the
future.
Table
1:
Estimates
of
per
capita
cheese
consumption
2014E
2018E
CAGR 2014E-18E
Europe
86
88
0.5%
6.0%
APAC
18.5%
Northern America
55
58
1.0%
Latin America
30
36
5.0%
Source: Euromonitor
We
estimate
that
Bel
global
market
share
should
reach
3.1%
in
2018E
from
2.8%
in
2013.
In
Europe,
the
market
share
should
grow
steadily
to
reach
3.7%
in
2018E.
In
the
rest
of
the
world,
the
market
share
should
grow
more
rapidly,
and
in
2018E,
the
market
share
outside
of
Europe
should
reach
2.6%.
2018E
World
2.8%
3.1%
Europe
3.4%
3.7%
9.3%
9.8%
1%
1.3%
Americas
-
APAC
Sources:
Team
estimates,
United
Nations
2014E
2018E
CAGR 2014E-18E
World
2 828
3 619
6.4%
Europe
1 711
1 911
2.8%
696
1 014
9.9%
Americas - APAC
421
693
13.3%
Back to content
Explanations
Based
on
our
Sales
forecasts
(Appendix
19)
Diminishing
proportion
of
sales
Historical
trend
Historical
median
of
DAn
/
PPE
n-1
Constant
Interest
Expense
=
Total
Debtn
*
interest
rate
Constant
Constant
Income
Taxes
=
EBTn
*
effective
tax
rate
Historical
average
Explanations
Cash
&
ST
Inv.n
=
Cashn-1
+
Net
change
in
Cash
Historical
median
of
Receivablesn
/
Salesn+1
Historical
median
of
Inventoriesn/
Salesn+1
Net
PPEn
=
Net
PPEn-1
-
DAn
+
CapExn
Constant
Constant
Constant
Historical
trend
ST
Debtn
=
ST
Debtn-1
+
Issuance
or
Reduction
of
ST
Debtn
Historical
median
of
ACC
Payablen
/
(COGSn-1
+
Inventoriesn)
Historical
median
of
Other
Current
Liabsn
/
(COGSn-1
+
Inventoriesn)
Bond
reductions:
17m
in
2016,
163m
in
2018
/
Constant
the
other
years
Constant
Historical
trend
Constant
Constant
Retained
earningsn=
Retained
earningsn-1
+
NIn
-Dividend
paidn
None
None
Constant
Constant
percentage
of
sales
Explanations
Historical
median
of
DAn
/
PPE
n-1
Constant
WC=Inventories+Receivables-Payables
Capital
Expenditures
Maintenance
Capex
Growth
Capex
Purchase/Sale
of
Inv.
Cash
Dividends
Paid
Change
in
Capital
Stock
Issuance/Reduction
of
LT
Debt,
Net
Issuance/Reduction
of
ST
Debt,
Net
Other
Funds
Exchange
Rate
Effect
Depreciation
Total
CapEx
Maintenance
CapEx
Purchase/Sales
of
Inv.=LT
Debtn-LT
Debtn-1
Team
estimates
None
Issuance
or
Reduction
of
LT
Debt
=
LT
debtn
-
LT
Debt
n-1
None
None
None
50 000
Back to content
45
000
40
000
35
000
30
000
25
000
20
000
15
000
10
000
5
000
0
2009
2010
2011
2012
2013
Restructuring costs
Year
Explanations
2009
Write-downs of goodwill in Ukraine, Turkey and the Czech Republic for 20.9m.
2010
2011
The
group
wrote
down
a
further
9m
on
its
Iranian
entity
based
on
impairment
testing.
Additionally,
in
Syria,
the
group
suspended
its
manufacturing
activity
in
mid-July
2012
for
safety
reasons,
and
recorded
a
non-recurring
expense
of
13.9m,
including
net
provision
charges.
2012
The
group
suspended
its
manufacturing
activity
in
mid-July
2012
in
Syria
for
safety
reasons,
and
recorded
a
non-
recurring
expense
of
13.9m,
including
net
provision
charges.
The
group
wrote
down
a
further
7.5m
on
its
Iranian
entity
based
on
impairment
testing.
2013
4.5m
impairment
loss
write-down
on
local
US
brands.
The
write-down
was
offset
by
the
reversal
of
provisions
totaling
4.2m
for
tangible
and
intangible
assets
and
current
assets
belonging
to
the
Syrian
and
Iranian
entities.
Source: Bel
27
2010
2013
2016E
Legend
2011
2014E
2017E
Back to content
2012
2015E
2018E
ROE
9.2%
7.5%
12.7%
11.9%
10.5%
11.8%
5.6%
4.9%
6.1%
4.8%
4.6%
5.3%
ROA
4.5%
3.6%
6.7%
5.6%
5.5%
7.4%
4.9%
4.9%
6.1%
11.5%
11.0%
13.5%
211.8%
212.7%
193.5%
117.1%
212.7%
193.5%
Leverage
203.7%
207.7%
189.3%
Asset
Turnover
118.8%
207.7%
189.3%
205.8%
198.3%
182.0%
115.6%
198.3%
182.0%
14%
3.0
12%
2.5
10%
2.0
8%
1.5
6%
1.0
4%
0.5
2%
0%
0.0
ROE
ROA
28
Leverage
Back to content
2The Monthly trading volume of Bel is based on the company data in 2013.
2.
Liquidity
of
peers
Each
peer
group
has
a
different
liquidity
proSile.
This
is
why
we
analyzed
the
liquidity
of
each
company,
looking
at
the
daily
average
volume
in
2014.
Since
the
Large
DiversiSied
F&B
peer
group
is
highly
liquid,
we
applied
the
11%
liquidity
discount
to
adjust
the
multiples.
However,
we
did
not
apply
any
liquidity
discount
to
the
other
two
peer
groups
as
they
also
have
weak
liquidity.
Figure:
Daily
average
volume
in
2014
(m)
m
7.92
8
7
6
5
4
2.65
1.64
2
1
0.00
0.00
0.30
0.68
0.47
Source: Bel
29
0.34
0.16
0.28
Back to content
Year
EBIT
as
a
%
of
sales
2009
195
8.8%
2010
211
8.7%
2011
187
7.4%
2012
238
9.0%
2013
240
8.8%
2014E
169
6.0%
2015E
247
8.2%
2016E
281
8.8%
2017E
318
9.4%
2018E
360
9.9%
Tax
Tax
rate
37
29.5%
57
32.6%
47
32.7%
63
32.6%
88
40.1%
48
33.3%
74
33.3%
85
33.3%
98
33.3%
112
33.3%
EBIT
(1-t)
as
a
%
of
sales
158
7.1%
154
6.4%
140
5.5%
175
6.6%
152
5.6%
121
4.3%
173
5.8%
195
6.1%
220
6.5%
248
6.9%
Depreciation
as
a
%
of
sales
72
3.2%
86
3.6%
82
3.2%
89
3.4%
77
2.8%
91
3.2%
98
3.3%
102
3.2%
106
3.1%
110
3.1%
-4
-4
-20
12
-8
-6
-35
-27
-34
Capex
as
a
%
of
sales
79
3.6%
64
2.6%
75
3.0%
81
3.1%
149
5.5%
141
5.0%
120
4.0%
127
4.0%
136
4.0%
145
4.0%
156
180
167
172
88
77
143
135
204
184
217
185
248
200
2
578
Change in NWC
To
estimate
terminal
value
in
2018E,
we
used
a
residual
income
model
(Ohlson).
This
model
suggests
that
g2018E
(deSined
as
ROE
x
Rentention
Rate,
RR)
converges
on
a
value
implying
a
gradual
decrease
between
ROCE
and
the
WACC,
using
a
persistence
factor
().
Terminal
value
is
therefore
equal
to
the
following:
1/
EBIT2019E (1/ t)
WACC
TV2018E = (NetPPE2018E + NWC2018E )
+
1+ WACC /
WACC
1+ WACC /
where:
EBIT2019E
=
EBIT2018E
x
(1+g2018E)
g2018E
=
ROE2018E
x
RR2018E
=
7%
=1-
ke=
0.945
Appendix
25.
Target
Value
Calculation
Discounted
Cash
Flows
704
25%
2 080
75%
Implied
EV
(2014E)
Net
Debt
(2014E)
Minorities
(2014E)
2
783
60
15
2 709
2 858
6.8
419
Liquidity Discount
11%
373
e)
30
Back to content
Since
Bel
is
a
small-cap,
we
decided
to
use
the
Fama-French
three-factor
model
(FFM)
to
compute
the
cost
of
equity,
which
appears
to
be
a
better
measure
of
market
returns
compared
to
the
CAPM.
In
fact,
research
shows
that
two
classes
of
stocks
have
tended
to
do
better
than
the
market
as
a
whole:
(1)
small-caps
and
(2)
stocks
with
a
low
Price-to-Book
ratio.
The
three
factors
are:
RMRF,
which
is
the
equity
risk
premium
as
in
the
CAPM.
SMB
(Small
Minus
Big),
a
size
factor.
It
is
the
difference
between
small-cap
and
large-cap
returns.
It
is
thus
a
small-cap
return
premium.
HML
(High
Minus
Low),
a
value
factor.
It
is
the
difference
in
returns
between
value
and
growth
stocks.
The
FFM
estimate
of
the
required
rate
of
return
is:
size
value
k e = rf + mkt RMRF
HML
+ SMB+
We
regressed
the
excess
return
of
Bel
monthly
stocks
(since
2000)
and
Rf
(Fama-French
data)
against
the
three
FF
factors
(RMRF,
SMB,
HML
based
on
FF
European
data
since
2000).
The
linear
regression
gives
us
an
R-Squared
of
21%.
We
applied
Dimson
(1979)
and
Scholes
(1977)
methodology
to
obtain
the
beta.
In
fact,
the
true
systematic
risk
(market
beta)
can
be
obtained
from
security
price
data
subject
to
infrequent
trading.
We
thus
ran
a
multiple
regressions
of
security
returns
against
lagged,
matching
and
leading
market
terms.
A
consistent
estimate
of
beta
is
obtained
by
aggregating
the
slope
coefSicients
from
this
regression
(here,
from
variables
RMRFT-2
to
RMRFT+2).
The
same
methodology
has
been
used
to
obtain
an
estimate
of
SMB
and
HML
coefSicients.
Below
is
a
summary
of
the
results
of
the
regression:
Regression
Statistics
0.45
0.21
0.13
6.06
Multiple
R
R-Squared
Adjusted
R-Squared
Standard
Error
Observations
ANOVA
174
Regression
Residual
Total
Intercept
RMRF
T-2
RMRF
T-1
RMRF
T
RMRF
T+1
RMRF
T+2
SMB
T-2
SMB
T-1
SMB
T
SMB
T+1
SMB
T+2
HML
T-2
HML
T-1
HML
T
HML
T+1
HML
T+2
df
15
158
173
CoefYicients
0.50
0.23
0.13
0.04
0.17
-0.15
-0.09
0.32
0.13
0.42
0.15
0.24
-0.47
-0.05
-0.05
0.02
SS
1512.48
5808.13
7320.61
Standard
Error
0.51
0.10
0.10
0.09
0.10
0.09
0.25
0.24
0.22
0.25
0.26
0.22
0.22
0.20
0.23
0.21
MSS
100.83
36.76
t-Statistic
0.99
2.34
1.37
0.43
1.67
-1.66
-0.36
1.34
0.60
1.68
0.58
1.09
-2.13
-0.22
-0.21
0.12
F
2.74
SigniYicance
F
8.9338E-04
Betas
0.41
0.94
-0.29
Back to content
WACC
Assumptions
Current
Risk-free
Rate
Beta
Market
risk
Premium
(RMRF)
Premium
for
stock
Size
beta
Size
Premium
(SMB)
Premium
for
stock
Value
beta
Value
Premium
(HML)
Premium
for
stock
Cost
of
equity
Equity
as
a
%
of
target
capital
structure
WACC
0.8%
0.41
5.9%
2.4%
0.94
3.6%
3.4%
-0.29
3.7%
-1.1%
5.5%
100%
5.5%
Explanations
France's
10-Year
OAT
(9
January
2015)
Fama-French
(FF)
and
Dimson
models
A.Damodaran:
Total
equity
risk
premium
of
France
-
Fama-French
and
Dimson-Scholes
models
Median
over
the
last
20
years
in
Europe
(FF)
-
Fama-French
and
Dimson-Scholes
models
Median
over
the
last
20
years
in
Europe
(FF)
-
Fama-French
model
Team
estimates
Team
estimates
Liquidity
discount
9.5%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
4.0%
447
445
442
440
438
435
433
4.5%
423
420
418
416
413
411
409
5.0%
400
398
396
394
392
389
387
WACC
5.5%
379
377
375
373
371
369
367
6.0%
361
359
357
355
353
351
349
6.5%
344
342
340
339
337
335
333
7.0%
329
327
325
323
321
319
318
Date
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Rf
3.6%
3.3%
3.3%
2.1%
2.4%
0.8%
WACC
8.3%
8.1%
8.0%
6.8%
7.1%
5.5%
32
Back to content
In
addition
to
our
sensitivity
analyses,
we
performed
a
Monte
Carlo
simulation
to
analyze
how
the
long-term
growth
rate
(deSined
as
ROE*RR)
and
the
WACC
may
affect
the
target
price.
We
added
liquidity
as
well
since
it
constitutes
a
key
feature
of
the
stock.
The
results
of
the
simulation
gives
support
to
our
BUY
recommendation.
Base
assumptions
are
summarized
in
the
table
below:
Factor
Data range
g2018E
WACC
N = 5000
Parameters
Mean
=
7%
=
1%
Mean
=
5.5%
=
0.5%
Mean
=
11%
=
0.5%
LIQ
DCF: 373
Frequency
200
150
100
50
SELL
HOLD
BUY
Statistics
Mean
339.6
Median
337.3
Max
501.3
Min
261.7
25th percentile
320.1
75th percentile
355.8
33
Back to content
Date Announced
Acquiror Name
Target Name
%
of
Shares
Acquired
Deal
Value
($m)
November-07
Fromageries Bel SA
Boursin
100.00
579.21
December-13
Alival SpA
100.00
103.41
April-13
100.00
1 218.58
Saputo Inc
100.00
459.72
October-13
NB:
We
used
the
deals
of
the
last
two
years
in
the
Food
and
Beverages
sector
(except
for
Boursin).
Source:
Thomson
Reuters
Acquiror Name
Country
Fromageries
Bel
SA
FR
IT
FR
Saputo Inc
CA
Country
Business description
FR
IT
UK
AU
Source: FactSet
Target Name
Deal Value/Sales
Alival SpA
0.41
0.29
2.14
1.51
Boursin
4.21
2.97
1.06
0.75
Median
1.60
1.13
*Adj.
Deal
Value/Sales
is
equal
to
Deal
Value/Sales
less
the
transaction
premium
in
the
Food
&
Beverages
sector
observed
over
the
last
two
years
(29%)
Source:
Thomson
Reuters
34
Back to content
Transaction-based
Valuation
Median
Adj.
Deal
Value/Sales
1.13
3 000
3 385
6.82
Implied Price ()
496
Liquidity discount
11%
Target Price ()
442
2
007
723
4
318
3
730
EV/EBIT
(x)
EV/Sales
(x)
EBIT
margin
(%)
2014E
2015E
2014E
2015E
2014E
2015E
2
235
1
421
3
439
4
208
13.2
7.3
11.8
20.8
13.3
(1%)
9.1
6.8
10.5
18.7
12.0
(25%)
0.8
0.3
0.7
1.5
0.8
(2%)
0.7
0.2
0.6
1.4
0.8
(1%)
6.0%
3.6%
5.5%
7.2%
5.4%
10%
8.2%
3.5%
5.8%
7.6%
5.6%
46%
Fromageries
Bel
Bongrain
Parmalat
Glanbia
Closest
Peers
-
Mean
Premimum
/
(Discount)
to
mean
FBEL
BH
PLT
GL9
300.0
51.5
2.4
12.6
KRFT
BN
MDLZ
53.9
53.2
31.5
31
736
38
927
34
263
39
983
52
834
65
727
13.5
14.1
18.4
15.3
(14%)
12.0
13.3
16.6
13.9
(35%)
2.2
1.9
2.2
2.1
(62%)
2.2
1.8
2.1
2.0
(63%)
16.6%
13.4%
11.8%
13.9%
(57%)
18.2%
13.5%
12.6%
14.7%
(44%)
Saputo
Diamond
Foods
Snyder's-Lance
TreeHouse
Foods
High-Growth
Small
Caps
(F&B)
-
Mean
Premimum
/
(Discount)
to
mean
SAP
DMND
LNCE
THS
24.7
22.9
25.2
77.1
9
648
720
1
774
3
262
14.7
21.3
17.5
15.2
17.2
(23%)
13.4
16.6
14.9
12.5
14.4
(37%)
1.4
1.7
1.4
1.4
1.5
(47%)
1.3
1.5
1.3
1.2
1.3
(45%)
9.5%
7.9%
8.1%
9.4%
8.7%
(31%)
9.5%
9.3%
8.9%
9.9%
9.4%
(13%)
11
092
1
237
2
041
4
475
Figures:
EV/Sales
15E
vs.
EBIT
margin
15E
and
EV/EBIT
15E
vs.
EBIT
CAGR
13-15E
3.0
21
R
=
0.81098
2.5
KRFT
2.0
DMND
1.5
LNCE
1.0
BN
SAP
THS
LNCE
15
SAP
KRFT
DMND
MDLZ
17
EV/EBIT 15E
EV/Sales 15E
MDLZ
GL9
GL9
19
R = 0.18641
BN
13
THS
11
PLT
FBEL
9
0.5
PLT
BH
0.0
0%
5%
FBEL
BH
10%
15%
(20%)
20%
(10%)
5
0%
10%
20%
30%
40%
Back to content
Weight
EV/EBIT (x)
Applied discount
Closest Peers
70%
12.0
0%
12.0
10%
13.9
11%
12.6
20%
14.4
0%
14.4
Weighted Average
12.5
Weight
EV/Sales (x)
Applied discount
Closest Peers
70%
0.8
0%
0.8
10%
2.0
11%
1.8
20%
1.3
0%
1.3
Weighted Average
1.0
EV/Sales
EV/EBIT
Weighted
avg
liq.
adj.
2015E
EV/EBIT
(x)
EBIT
2015E
(m)
Enterprise
Value
2015E
(m)
12.5
247
3 000
2 996
3 090
-23
16
1.0
-23
16
3 132
3 003
6.82
6.82
Target Value ()
459
Target Value ()
440
EV/EBIT
(x)
Weight
EV/Sales (x)
50%
50%
36
Target
Value
()
450
Back to content
Below
are
the
results
of
the
P/E
regression
model
used
to
compute
the
estimated
forward
P/E.
The
7
variables
used
are:
leverage,
EPS
long-term
growth
rate
(g),
payout,
beta,
market
capitalization
(logarithm),
return
on
equity,
illiquidity
ratio
(based
on
Amihuds
research).
Regression
Statistics
Multiple
R
R-Squared
Adjusted
R-Squared
Standard
Error
Observations
0.81
0.65
0.62
8.11
200
ANOVA
df
16
183
199
Regression
Residual
Total
SS
22239.67
12033.00
34272.67
MSS
1389.98
65.75
CoefYicients
Standard Error
t-Statistic
Intercept
-33.33
8.50
-3.92
Leverage
19.30
4.75
4.06
37.79
2.31
16.36
Payout
0.39
2.07
0.19
Beta
-8.90
1.83
-4.87
LMV
2.12
0.38
5.51
ROE
6.68
4.54
1.47
-1292.07
3522.17
-0.37
S10
-6.08
5.00
-1.22
S15
-2.40
4.13
-0.58
S20
1.72
3.62
0.47
S25
1.46
3.69
0.39
S30
-1.26
3.93
-0.32
S35
1.71
3.96
0.43
S40
1.01
3.66
0.28
S45
-0.92
3.79
-0.24
S50
2.33
5.80
0.40
Amihud
F
21.14
SigniYicance
F
1.84801E-33
NB:
S10
to
S50
are
dummy
variables
corresponding
to
the
sub-sectors
of
the
companies
(S30
for
Bel).
BEL
Estimated
P/E
18
EPS 2015E
21.4
415
37
Back to content
Liquidity Risk
Raw
Material
Price
Volatility
Governance Risk
I
M
P
A
C
T
World
GDP
Growth
Slowdown
Forex
Headwinds
Lack
of
Aggressiveness
Unplanned
Breakdown
of
a
Production
Site
DeSlation
Risk
Threats
of
Geopolitical
Events
Contamination
Risk
PROBABILITY
Governance
Risk
Market Risk
Economic Risk
Strategic Risk
38
Political Risk
Operational Risk
Back
to
content
Social
2013
:
EcoVadis
,
GOLD
statut
obtained
2014:
"Aressy
Award
(for
CSR
(corporate
Social
Responsibility)
communication)
2014
:
CR
Reporting
Awards
2014
Sinalists
2013
:
CSR
trophy
was
given
to
the
Lebanese
team
to
reward
the
Happiness
Heroes
initiative,
led
by
the
Picon
brand
2013
:
"The
Best
and
Brightest
Companies
to
Work
For"
awards
2003
:
membership
to
the
United
Nations
Global
Compact
2008
:
creation
of
Bel
Foundation
(children)
"Responsible
Purchasing
Charter"
"Purchasing
Ethics
Charter
for
buyers"
2013
:
join
the
"Supply
Chain
Initiative"
(to
promote
balanced
relationships
throughout
the
food
supply
chain)
2013:
creation
of
the
Sharing
Cities
program
Partnership
with
SOS
Childrens
Villages,
Le
rire
mdecin,
Comic
Relief
and
Arcenciel
association
The
Groups
Health
and
Safety
manual
and
policy
Environmental
Gouvernance
Rewards
2012
:
"
Lean
&
Green
Award
"
(for
reducing
CO2
emission)
Ranked
between
the
top
5
of
GAIA
index
(120
enterprises)(
reward
its
CSR
policy)
2013
:
Little
Chute
site
in
the
US
was
awarded
the
title
of
Dairy
plant
of
the
year
by
industry
magazine
Dairy
Foods
CertiYications
OHSAS
18001
for
occupational
health
and
safety
ISO
14001
for
environmental
management
management
Leerdammer
products
certiSied
by
the
Forest
Global
Food
Safety
Initiative
standards
:
82%
of
their
Stewardship
Council
(FSC)
"Best
livestock
farming
practices
charter"
:
100%
of
products
are
manufactured
on
sites
certiSied
their
producers
have
signed
in
France
&
"The
Cow
Compass"
in
Netherland
Source:
Company
Source: Bel
Name
Previous experiences
Antoine
Chairman
and
2001-2009
Director
of
Board
in
Bel
and
a
managing
2009
Fivet
CEO
partner
of
Unibel
SA
2005
Chairman
of
the
51
Management
Board
1 161 219
Paid
by
Unibel
2005
Member
of
the
50
Management
Board
763 096
Paid
by
Unibel
781 332
Paid
by
Bel
NONE
67
Disclosures: