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CFA Research Challenge - Autogrill SpA - UniPV Team

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CFA Research Challenge - Autogrill SpA - UniPV Team

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Team Leader - Università degli Studi di Pavia

Objective of the competition: writing an initiation of coverage report on the listed Italian company
Autogrill S.p.A.

Team Leader - Università degli Studi di Pavia

Objective of the competition: writing an initiation of coverage report on the listed Italian company
Autogrill S.p.A.

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CFA Research Challenge - Autogrill SpA - UniPV Team

  1. 1. AUTOGRILL S.p.A. CFA Institute Research Challenge Milan, 11 March 2013 Universita degli Studi di Pavia Liechtenstein Stock Exchange Alessandro Greppi ,Fitria, Kinga Karkus, Alberto Scarioni, Leyla Tanzi
  2. 2. INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATION FINANCIAL ANALYSIS RISK ANALYSIS HIGHLIGHTS RECOMMENDATION: BUY TARGET PRICE: EUR 11.4 (20.1% upside) W H Y I S A B U Y ?  Value through diversification  Expectations for the two division (CAGR):  F&B: 1%; TR&DF: 7.2%  YTD: 14.4%  Last 3 years performance: 17.5% M A C R O E C O N O M I C R I S K S :  Short-term: raw material costs ↑  Long-term: concession costs and airport rents ↑ VA L U AT I O N = > Ta r g e t P r i c e 1 1 . 4 €  50%: DCF valuation  40%: Peers comparison (industrial & financial)  10%: Real option WHY IS A BUY? MACROECONOMIC RISKS: VALUATION => Target Price EUR 11.4
  3. 3. INVESTMENT SUMMARY AGL IM Equity Price range (last 52 weeks) EUR 6.5 – 9.5 Price (1/2/2013) EUR 9.45 Price target EUR 11.4 (20.1% upside) P/E 21.1x INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATION FINANCIAL ANALYSIS RISK ANALYSIS R E L E VA N T E V E N T S 2 0 1 2 :  Spanish concession renewal (100% retention rate)  New and renewed TR&DF in Jamaica, Germany, Mexico, Brazil, Amsterdam, Atlanta  Entrance into Turkey and United Arab Emirates
  4. 4. COMPANY OVERVIEW  Italian multinational company  Deals with people on the move  Two main business channels: Food & Beverage and Travel Retail & Duty Free  Operates mainly in airports and motorways (also present at railway stations, museums, shopping centers, high street, trade fairs)  Present in 37 countries through more than 5,300 POS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS Strong cash flow generation Flexible cost structre High retention rates Long-lasting concessions
  5. 5. BUSINESS ANALYSIS & COMPETITIVE POSITIONING A world leader in the concession industry that serves travellers around the world. DISTRIBUTION CHANNELSGEOGRAPHICAL PRESENCE BRANDS & PRODUCTS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  6. 6. BUSINESS ANALYSIS & COMPETITIVE POSITIONING FOOD & BEVERAGE EUR 15-20 bln AGL SALES (2011):  44% US  35% Italy  21% Other European Competitors: TRAVEL RETAIL & DUTY FREE EUR 34-40 bln AGL SALES (2011):  75% Europe  25% US Competitor: INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  7. 7. INDUSTRIAL ANALYSIS Role of GDP  62 % of business is in Europe => GDP of Euro area  Flexible cost structure and financial solidity  Main engine of growth  Slowing economic recovery  High fuel prices  Airport Council International forecast (ACI) : 4.5% p.a international traffic growth  High impact on F&B’s performance  Recession and high fuel price  Italy will decrease, but US contributes to growth Airport traffic Motorway traffic INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS Italian Motorway traffic vs AGL SalesAGL vs NA Traffic GrowthAGL vs Euro GDP Growth
  8. 8. EXPLOITING NEW MARKETS 50 75 100 125 150 175 200 225 250 275 300 0 100 200 300 400 500 600 700 800 900 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Passengers mln$ Revenues (mln $) Fees and Maintenance Costs (mln $) Passengers (mln) WHY TURKEY?  May 2013: Istanbul 3rd international hub (2017, 90mln passengers)  Geographical & economical bridge  Up to 118 mln tourists in 2011  Corporate taxation: 20%
  9. 9. FINANCIAL ANALYSIS Growth and Profitability AGL Sales and Ebitda Margin Evolution  FY2009: Hurricane years => Sales: -6%  Flat sales in 2010-12: o F&B down by 2.5% o Tremendous growth of TR&D +5.4%  Sales CAGR 2012-18E : 3.4%  Historical outperformance of the group  EBITDA margin 2012E : 9.6% INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  10. 10. FINANCIAL ANALYSIS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS AGL TR&DF Sales and EBITDA margin evolution AGL F&B Sales and EBITDA margin evolution Upward trends from airport traffic:  New emerging markets  Presence at European hubs Sales CAGR: 7.2 % Sales CAGR: 1 % Stable Ebitda margin and growth:  Struggling European markets  Growth after 2014 (post-crisis)
  11. 11. FINANCIAL ANALYSIS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS Debt Evolution and Maturity Profile  Covenants : ND/EBITDA < 3.5x  EBITDA interest coverage ratio > 4.5x FCFF  Acc. operating profit 2012-18e : EUR 1.9 bio  Acc. operating cash flow 2012-18e : EUR 3.9 bio  Cash Conversation rate : 50%
  12. 12. VALUATION I. III. II. 50%: DCF valuation 40%: Peers comparison (Industrial & Financial) 10%: Real option INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  13. 13. VALUATION INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS DCF ANALYSIS WACC Assumptions Risk Free Rate 3.4 % Implicit risk related to the geographical areas where AGL is present at Market Risk Premium 6.7 % Implicit risk related to the geographical areas where AGL is present at Beta 0.83 Regressed weekly returns of AGL stock against FTSE MIB INDEX Cost Of Debt 5.45 % (4.7 %) Cost of debt equals to 5.45%, later expected to reduce to 4.7% Debt/Equity 220% Renewal of Spanish contracts wil increase it to 230%, from 2014:166% Tax Rate 31.4 % Weighted average of enterprise tax rates according to sales relevance TWO-STAGES DCF:  Target price: EUR 11.3 (19.6% upside)  Period: 2012-2018  Long term growth rate: 1.5%  Long run WACC: 8.2% FCFF
  14. 14. CENTRAL SCENARIOBEAR CASE VALUATION INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS EUR 10.0 Upside of 6.3% BULL CASE EUR 11.3 Upside of 19.7% EUR 12.6 Upside of 33.1%
  15. 15. VALUATION REAL OPTION: to capture information and opportunities and to strengthen DCF analysis. Estimate assets’ market values by:  DCF at weighted cost of capital  Using prices from the market Application to valuation Debt over Equity ratio 69 % Enterprise Value EUR 3,944 million Maturity of the debt 3.59 Risk free rate 3.4 % Long term growth rate 1.5 % Long term Wacc 8.1 % TARGET PRICE: EUR 11.7 REAL OPTION INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  16. 16. Very similar to AGL in terms of overall business I. INDUSTRIAL PEERS P/E multiple PEERS COMPARISONVALUATION INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS SW DUFN AGL CPG R² = 0.9443 0.00 5.00 10.00 15.00 20.00 25.00 0% 5% 10% 15% 20% P/E frw 2013 vs. EPS GROWTH P/E forward '13 Linear (P/E forward '13)
  17. 17.  Different business model  BUT listed in the same financial segment: Restaurant  Shares investors’ preferences II. FINANCIAL PEERS EV/EBITDA multiple PEERS COMPARISONVALUATION X Y Intercept Ebitda % Sales growth Beta EV/SALES AGL 1 9.2% 3.9% 0.85 0.63 MCD 1 36.3% 6.1% 0.49 3.67 SBUX 1 20.7% 11.2% 0.80 2.61 YUM 1 20.5% 11.1% 0.69 2.20 SW 1 7.0% 6.7% 0.45 0.61 THI 1 24.1% 7.2% 0.24 2.36 BKW 1 60.5% 0.6% 1.00 7.60 DRI 1 13.0% 7.1% 0.80 1.00 PNRA 1 17.9% 9.7% 0.99 1.86 DNKN 1 52.5% 7.1% 1.00 7.67 DUFN 1 15.9% 10.0% 1.07 1.40 ARCO 1 8.4% 9.3% 1.34 0.78 WTB 1 25.0% 10.1% 0.78 2.44 EAT 1 13.9% 2.6% 0.94 1.03 CPG 1 8.9% 5.1% 0.72 0.85 DPZ 1 18.3% 2.8% 0.78 2.36 INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS X1= Ebitda % X2=Sales Growth X3= Beta Statistics F=142 R2=0.97
  18. 18. INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS Very similar to AGL in terms of overall business I. INDUSTRIAL PEERS PEERS COMPARISONVALUATION  Different business model  BUT listed in the same financial segment: Restaurant  Shares investors’ preferences II. FINANCIAL PEERS P/E multiple EV/EBITDA multiple TARGET PRICE: EUR 11.2
  19. 19. RISK ANALYSIS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS RISKS Financial Strategic Operating
  20. 20. RISK ANALYSIS I. INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS FINANCIAL RISKS INTEREST RATE RISK FOREIGN CURRENCY CREDIT RISK LIQUIDITY RISK EFFECTS  40% fixed-rate debt  60% floating-rate debt  Sales:  32%: North-America  15% : UK  95% of sales comes from concessions AGL’SPOLICY  Duration of concession portfolio = duration of the debt  Interest rate swaps  Matching assets & liabilities in currencies  Forward FX  End consumers‘ transactions are made in cash  Invoiced trade receivables => bank guarantees  Long contracts duration & high retention rates  Strong CF generation & flexibility on costs and capital expenditure
  21. 21. RISK ANALYSIS II. STRATEGIC RISKS TRAFFIC FLOWS MACROECONOMY EFFECTS High impact of traffic on sales Effects traffic and well-being of people AGL’SPOLICY  Channel diversification  Constant innovation of products & customer services  Cost cutting to limit impacts on CF INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  22. 22. RISK ANALYSIS III. INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS OPERATING RISKS REPUTATION CONSUMPTION HABITS CONCESSION FEES CUSTOMER SATISFACTION SHOP EFFECTIVENESS RISKS  Not being able to satisfy contractual commitments (effects on retention rate & new contracts)  Effects of changes  Influence on profitability  False predictions of performance  Fail to keep service standards and products in line with customers’ expectations  Challenge to provide modern & appealing assortment AGL’SPOLICY  Monitoring procedures & processes  Trainings to keep high standards  Review of methods & procedures  Wide range of products & brands  High flexibility to respond to changes  High importance on appraising & negotiating contracts  Constant R&D  Quality control (services & raw materials)  Effective & efficient supply chain management
  23. 23. FINAL REMARKS Recommendation: BUY (EUR 11.4)  Upside of +20%  Market leadership  Strong cash flow generation  Business diversification  Wide range of brand portfolio INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS
  24. 24. Q & A SESSION
  25. 25. APPENDIX
  26. 26. SWOT ANALYSIS STRENGTHS WEAKNESSES  T&R presence is strategically positioned around the world in order to catch the most of air traffic  AGL works with a lot of brands, specially in the USA  T&R is performing well despite the world economic crisis  High concessions retention rate (80-85%), the losses are covered by the new winnings  Cash generated from AGL activities is instantly received and is used for investments  AGL invest on products and machineries innovation, collaborating directly with the producers  AGL is present in 37 countries and manages more than 5300 points of sale in over 1200 locations  AGL invests only after winning a concession: the company can forecast in advance its returns  AGL is a value company  AGL T&R won new concessions in 2012, Spanish concessions 100% retention rate  AGL margins depend on commoditires trends  AGL F&B sensitive to electricity price  Passengers flows, both in airports and motorways, are linked to oil price F&B is sensitive to electricity price commodities trend  AGL businesses are very exposed to uncontrollable macro-shocks  A consistent part of AGL businesses is in ITA and SPA that have a sluggish recover from crisis  Bad performances on Italian motorways will last in the future  Licensing strategy in the USA make the business subject to increasing price of raw materials  AGL does not hedge from the risk connected to oil price and raw material increases OPPORTUNITIES THREATS  New concession contracts or concessions expiring around the world  Potential expansion on high speed railways network  Fairs and events around the world will make a lot of people travel  Emerging markets growth could create new travelers flows  The spin-off between F&B and T&R division could unleash the T&R hidden value  If economic cycle is negative, AGL cut dividends meanwhile the competitors do not  Terrorism could negatively affect traffic, specially in airports  Travelers trends became more volatile from 2008 onwards  In 2016 we have the most, EUR 1,350 mln, of AGL debt reaching maturity  Crisis could be longer and heavier than expected in Italy and Spain  Emerging markets law suit are different from western countries and sometimes less transparent  AGL is exposed to credit, market (cash flow future fluctuations) and liquidity risks  AGL is exposed to the changes in consumer tastes and their consumption behavior  AGL T&R division is exposed to changes in the cost of rents  T&R in UK could suffer of exchange rate risk
  27. 27. AUTOGRILL Food & Beverage Retail Situation Italian-listed company Product mix Food & beverage, confectionary/food and other ancillary consumer goods (books, CD, lottery) sold in the little store beside the bars and restaurants Perfumes, wines and spirits, tobacco, confectionary/foods Geographical mix 2011 Sales 44.2% were generated in US, 35% in Italy and the rest coming from other European counties 2011 sales EUR1820m of which around 75% generated in Europe. T&R has been benefiting from the launch of Terminal 5 at Heathrow UK(47% of T&R sales) Well-positioned in western countries. Indirect exposure to emerging market through European hubs (London, Madrid and Barcelona) Channel mix Present in airports (63%), motorways (30%), railways (2%), Others - high streets, trade fair, museums and shopping centers(5%) Capex 3.4% - 4.8% of sales 1.8% - 5.4% of sales Growth CAGR 2012-18E 1% CAGR 2012-18E 7.4% Focus on organic growth Contract average 10-25 years 5-10 years Sales share 69% 31% Sales FY12e EUR 4088mio EUR 2000mio EBITDA FY12e EUR 334.6mio EUR 252.6mio EBITDA margin 8.20% 12.60% Competitors Compass, Sodexo, Restaurant Group, IMC, Cremonini, Farmi, Elior, SSP Dufry
  28. 28. BENCHMARKING WITH COMPETITORS TR&DF FOOD SERVICE Benchmarking with Dufry Compass Sodexo Listed public company located in Switzerland. British multinational contract food service and support services France company focus on quality of life services Higher exposure to luxury items (watches, jewellery,fashion and leather) perfumes & cosmetics. Low-margin products such as newspapers, books and confectionary Food service, facility management, service vouchers. Brands : Bon appetit management, canteen vending, all leisure hospitality, rastaurant On-site services 96% of group revenue: Flagship product in Meal & Food : Cheque restaurant (France, Belgium and Chile). Alimentacao Pass (Brazil), Passlunch (Italy), Meal Card (India), Restaurant Pass (Romania), Ramadan Gift Pass (Turkey) Strong presence in America (75% of its revenues). Strong leadership in Brazil. Direct exposure to emerging market in South, North and Central America NA 43%, Continental Europe 24%, UK & Ireland 12%, RoW 21%. Core business : Food Present in North America 37%, Continental Europe 32%, RoW 19%, UK & Ireland 8%. Strategy: food services, non-food vouchers, support services Little exposure to motorways. 90% of its revenues coming from airports Business and industry (41%), Education (16%), Healtchcare & Seniors (19%), Sports and Leisure (11%), Defence (13%) Corporate (50%), Healthcare & seniors (27%), Education (23%) 3-4% of sales 1.5%-2% of sales 2% of sales Proactive approach in new concessions and acquisitions (Hudson Group, Brasif and InterBaires and Folli Follie) Focus on expanding presence in the fast growing & emerging economies (currently 20% of business) and cost efficiency. 2011: 9.2% revenue growth on a constant currency basis Organic revenue driver : focus on large clients and integrated contracts. 2012e: revenue growth target 7% p.a (JPM estimates) Concession length 2009 : 3-5 years 41%, 6-9 years 24%, 10+ years 24%, 1-2 years 11% 94% group retention rate Client retention : 94% 8% share of the global travel Largest global food service operator (4% of its addressable market, of which only 42% has shifted to outsourcing) Second largest global food service operator CHF 3182.8mio EUR 16095 EUR 16729mio CHF482mio EUR 1452mio EUR 1210mio Higher EBITDA margin due to lower concession rents 8-9% 6-7% Autogrill Sodexo, AGL and Aramark OSS : Compass group, AGL; MS :Edenred
  29. 29. P&L ACCOUNT P&L Account (Em) 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Sales 5,844.6 6,088.4 6,287.5 6,545.8 6,835.3 7,125.6 7,405.7 7,676.7 %growth 2.5% 4.2% 3.3% 4.1% 4.4% 4.2% 3.9% 3.7% Other revenues 154 152.00 163.00 180.00 190.00 206.00 225.00 249.00 %sales 2.6% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3.2% Value of Production 5,998.6 6,240.4 6,450.5 6,725.8 7,025.3 7,331.6 7,630.7 7,925.7 Cost of Production -2,139.6 -2,190.6 -2,254.1 -2,334.8 -2,438.0 -2,541.6 -2,641.5 -2,738.1 %revenue -35.7% -35.1% -34.9% -34.7% -34.7% -34.7% -34.6% -34.5% Gross Profit 3,859.0 4,049.8 4,196.4 4,391.0 4,587.3 4,790.0 4,989.2 5,187.5 % margin 66.0% 66.5% 66.7% 67.1% 67.1% 67.2% 67.4% 67.6% % growth 2.8% 4.9% 3.6% 4.6% 4.5% 4.4% 4.2% 4.0% Renting/royalties -1193.9 -1293.0 -1381.0 -1477.0 -1579.0 -1653.1 -1725.5 -1796.3 Personnel Expense -1472.6 -1539.0 -1576.0 -1649.5 -1699.9 -1772.1 -1836.6 -1903.8 Other Operating costs -575.5 -631.6 -663.5 -654.6 -661.3 -680.5 -705.0 -725.1 EBITDA 617.0 586.2 575.9 609.9 647.0 684.2 722.0 762.2 % margin 10.6% 9.6% 9.2% 9.3% 9.5% 9.6% 9.7% 9.9% % growth 1.9% -5.0% -1.8% 5.9% 6.1% 5.8% 5.5% 5.6% Depreciation & Amortization -298.8 -330.0 -336.0 -354.0 -373.0 -391.0 -411.0 -433.0 %sales 5.1% 5.4% 5.3% 5.4% 5.5% 5.5% 5.5% 5.6% EBIT 318.2 256.2 239.9 255.9 274.0 293.2 311.0 329.2 % margin 5.4% 4.2% 3.8% 3.9% 4.0% 4.1% 4.2% 4.3% % growth 14.4% -19.5% -6.4% 6.7% 7.1% 7.0% 6.1% 5.8% Net Financial expense -82.8 -89.1 -92.7 -90.9 -92.7 -93.8 -94.8 -97.6 Pre-tax profit 234.7 167.1 147.2 165.0 181.3 199.4 216.3 231.6 Taxes -80.3 -52.5 -46.2 -51.8 -56.9 -62.6 -67.9 -72.7 Tax rate 34.2% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% Total profit 154.4 114.7 101.0 113.2 124.4 136.8 148.4 158.9 Minorities -12.8 -18.3 -18.9 -19.6 -20.5 -21.4 -22.2 -23.0 Net Profit 141.6 96.4 82.1 93.6 103.9 115.4 126.2 135.9 Net margin 2.4% 1.6% 1.3% 1.4% 1.5% 1.6% 1.7% 1.8% % growth 85.5% -31.9% -14.8% 13.9% 11.0% 11.1% 9.3% 7.7%
  30. 30. BALANCE SHEET Balance Sheet (Em) 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Intangible assets 2154.5 2253.4 2339.5 2448.1 2583.8 2707.6 2829.0 2944.5 Tangible assets 923.4 974.5 1018.8 1073.5 1134.7 1197.0 1259.0 1318.9 Fin. Assets 26.5 26.5 26.5 26.5 26.5 26.5 26.5 26.5 Total Fixed Assets 3,104.4 3,254.4 3,384.8 3,548.1 3,744.9 3,931.1 4,114.5 4,289.9 Inventory 266 275.9 288.6 300.2 313.2 326.2 338.9 352.2 Receivables 53.5 60.9 69.2 78.5 88.9 99.8 162.9 184.0 Other receivables 227.9 243.6 257.8 274.9 293.9 313.5 333.3 352.7 Payable -632.4 -657.0 -685.5 -711.2 -740.4 -764.3 -792.5 -821.7 Other liabilities -406.2 -418.3 -433.0 -445.6 -460.4 -474.6 -488.4 -502.7 Total NWC -491.2 -494.8 -502.8 -503.2 -504.7 -499.5 -445.8 -435.5 Invested Capital 2613.2 2759.6 2882.0 3045.0 3240.2 3431.6 3668.8 3854.4 Risk fund provisions -66.5 -91.4 -94.3 -98.2 -102.5 -106.9 Severance fund and other -194.5 -182.7 -188.7 -196.4 -205.1 -213.8 -222.2 -230.0 Asset held for sales 0 0 0 0 0 0 0 NET CAPITAL EMPLOYED 2352.1 2485.5 2599.0 2750.4 2932.6 3111.0 3335.5 3509.3 Group Net equity 779.8 829.9 844.7 944.2 1051.2 1166.6 1327.4 1396.6 Minorities 19.6 21.3 21.7 24.2 27.0 29.9 34.0 35.8 Total Net Equity 799.4 851.2 866.3 968.5 1,078.2 1,196.5 1,361.4 1,432.4 Convertible bonds 0 0 0 0 0 0 0 0 L T Liabilities 1568.6 1650.9 1750.3 1800.1 1873.3 1933.9 1994.2 2098.1 L T LIABILITY 1568.6 1639.4 1741.5 1796.4 1871.4 1933.9 1998.0 2106.3 S T Liabilities 214.2 237.0 247.8 249.5 257.8 264.1 268.5 278.3 Liquidity and loans -230 -242.1 -256.6 -263.9 -274.7 -283.6 -292.4 -307.6 S T LIABILITY -15.8 -5.1 -8.9 -14.5 -16.9 -19.5 -23.9 -29.3 NFP 1,552.8 1,634.3 1,732.7 1,782.0 1,854.4 1,914.4 1,974.1 2,076.9 TOTAL SOURCES 2352.2 2485.5 2599.0 2750.4 2932.6 3111.0 3335.5 3509.3
  31. 31. CASH FLOW Cash Flow (Em) 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Group Net Sales 5,844.6 6,088.4 6,287.5 6,545.8 6,835.3 7,125.6 7,405.7 7,676.7 % change YoY 2.5% 4.2% 3.3% 4.1% 4.4% 4.2% 3.9% Group EBITDA 617.0 586.2 575.9 609.9 647.0 684.2 722.0 762.2 % margin 10.6% 9.6% 9.2% 9.3% 9.5% 9.6% 9.7% 9.9% % change YoY 1.9% -5.0% -1.8% 5.9% 6.1% 5.8% 5.5% D&A 298.8 330.0 336.0 354.0 373.0 391.0 411.0 433.0 % of sales 5.1% 5.4% 5.3% 5.4% 5.5% 5.5% 5.5% 5.6% Group EBIT 318.2 256.2 239.9 255.9 274.0 293.2 311.0 329.2 % margin 5.4% 4.2% 3.8% 3.9% 4.0% 4.1% 4.2% 4.3% % change YoY 6.0% -19.5% -6.4% 6.7% 7.1% 7.0% 6.1% Taxes -80.3 -80.4 -75.3 -80.4 -86.0 -92.1 -97.7 -103.4 Theoretical tax rate 34.2% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% NOPLAT 237.9 175.8 164.6 175.5 188.0 201.2 213.4 225.9 D&A and other provisions 298.8 330.0 336.0 354.0 373.0 391.0 411.0 433.0 Gross Operating Cash Flow 536.7 505.8 500.6 529.5 561.0 592.2 624.4 658.9 Capex -209.4 -273 -220 -258 -275 -290 -310 -327 % of sales -3.6% -4.5% -3.5% -3.9% -4.0% -4.1% -4.2% -4.3% Change in NWC -98.9 -3.6 -8.0 -0.4 -1.6 5.2 53.7 Free Cash Flow to Firm 228.4 236.4 288.6 271.9 287.5 296.9 260.7 321.6
  32. 32. P&L – FOOD & BEVERAGE P&L F&B (Em) 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Sales F&B division 4027.8 4023.8 4088.0 4095.0 4140.5 4215.0 4277.4 4330.8 4381.5 % growth 6.4% -0.1% 1.6% 0.2% 1.1% 1.8% 1.5% 1.3% 1.2% % of AGL group sales 70.6% 68.8% 67.1% 65.1% 63.3% 61.7% 60.0% 58.5% 57.1% Other revenues 96.9 114 103.6 90.1 103.5 113.8 115.5 112.6 113.9 % sales 2.4% 2.8% 2.5% 2.2% 2.5% 2.7% 2.7% 2.6% 2.6% Cost of production -1356.1 -1374.5 -1443.0 -1474.2 -1455.8 -1458.1 -1467.1 -1468.2 -1474.4 % sales -33.7% -34.2% -35.3% -36.0% -35.2% -34.6% -34.3% -33.9% -33.7% Rents and royalties -644.2 -642 -735.2 -776.2 -768.1 -788.2 -808.4 -831.5 -850.0 % sales -16.0% -16.0% -18.0% -19.0% -18.6% -18.7% -18.9% -19.2% -19.4% Personnel expense -1240.4 -1256.6 -1194.9 -1156.0 -1230.9 -1274.2 -1293.0 -1317.8 -1337.6 % sales -30.8% -31.2% -29.2% -28.2% -29.7% -30.2% -30.2% -30.4% -30.5% Other operating costs -445.2 -450.9 -458.1 -455.4 -459.3 -472.2 -481.4 -476.6 -477.4 % sales -11.1% -11.2% -11.2% -11.1% -11.1% -11.2% -11.3% -11.0% -10.9% EBITDA 438.8 413.8 360.3 323.3 329.9 336.2 342.9 349.3 356.0 Corporate cost -27.2 -25.3 -25.7 -25.7 -26.0 -26.5 -26.9 %sales -0.7% -0.6% -0.6% -0.6% -0.6% -0.6% -0.6% -0.6% -0.6% EBITDA after corporate cost 411.6 388.5 334.6 297.6 303.9 309.7 316.0 322.1 328.4 EBITDA Margin 10.2% 9.7% 8.2% 7.3% 7.3% 7.3% 7.4% 7.4% 7.5% EBITDA growth -5.5% -5.6% -13.9% -11.1% 2.1% 1.9% 2.0% 1.9%
  33. 33. P&L – TRAVEL RETAIL & DUTY FREE P&L TR&DF (Em) 2010 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Sales TR&DF division 1675.7 1820.8 2000.0 2192.5 2405.0 2630.0 2858.8 3086.1 3305.2 % growth 8.9% 8.7% 9.8% 9.6% 9.7% 9.4% 8.7% 7.9% 7.1% % of AGL group sales 29.4% 31.2% 32.8% 34.9% 36.7% 38.5% 40.1% 41.7% 43.1% Other revenues 31.4 24.1 28.0 31.8 36.1 40.8 45.7 50.9 59.2 % sales 1.9% 1.3% 1.4% 1.5% 1.5% 1.6% 1.6% 1.7% 1.8% Cost of production -733.8 -765.1 -844.0 -926.3 -1014.9 -1109.9 -1203.0 -1296.2 -1388.2 % sales -43.8% -42.0% -42.2% -42.3% -42.2% -42.2% -42.1% -42.0% -42.0% Rents and royalties -505.7 -551.2 -608.9 -667.0 -732.9 -802.2 -872.0 -941.6 -1008.5 % sales -30.2% -30.3% -30.4% -30.4% -30.5% -30.5% -30.5% -30.5% -30.5% Personnel expense -180.6 -192.4 -208.0 -229.1 -251.3 -275.4 -300.2 -324.3 -347.4 % sales -10.8% -10.6% -10.4% -10.5% -10.5% -10.5% -10.5% -10.5% -10.5% Other operating costs -93.4 -107.8 -114.4 -123.9 -136.7 -146.4 -160.7 -173.5 -183.5 % sales -5.6% -5.9% -5.7% -5.7% -5.7% -5.6% -5.6% -5.6% -5.6% EBITDA 193.6 228.4 252.6 277.9 305.3 337.0 368.7 401.4 436.9 EBITDA Margin 11.6% 12.5% 12.6% 12.7% 12.7% 12.8% 12.9% 13.0% 13.2% EBITDA growth 29.5% 18.0% 10.6% 10.0% 9.8% 10.4% 9.4% 8.9%
  34. 34. DEBT STRUCTURE Debt Issue Available Amount Original Tenor Maturity Rate Drawn (as of 30/09/12) Covenants Private Placement Jan-03 $266m 10 years Jan-13 Fixed 6.01% $266m Ebitda interest coverage > 4.5x; Net debt/Ebitda < 3.5 May-07 $150m 10 years May-17 Fixed 5.73% $150m Jan-03 $60m 8 years Jan-11 Fixed 5.66% $60m Term Loan Mar-08 E275 5 years Mar-13 Floating E275 Mar-08 GBP398 5 years Mar-13 Floating GBP398 Jun-05 €200m 10 years Jun-15 Floating (Euribor) 3 months + 0.75% b.p €200m Ebitda interest coverage > 4.5x Net debt/Ebitda < 3.5 Syndicated revolving credit facilities Jun-12 €200m 17 months Nov-13 Floating (Euribor) 0 Ebitda interest coverage > 4.5x; Net debt/Ebitda < 3.5 Jun-05 E300 7 years Jun-12 Floating (Euribor) 3 months + 0.35% b.p 0 Autogrill Spa Jul-11 €700m 5 years Jul-16 Floating (Euribor) €294m + GBP 31m + $250m May-07 E500 7 years May-14 Floating $60m + E355m WDF Group SA Jul-11 €650m 5 years Jul-16 Floating (Euribor) Ebitda interest coverage > 4.5x Net debt/Ebitda < 3.5 Mar-08 E125m 5 years Mar-13 Floating GBP20m
  35. 35. DEBT COMPOSITION DEBT IN CURRENCY DEBT RATE
  36. 36. DEBT RATIO Debt Key Ratios 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Net Debt/EBITDA (x) 2.52 2.79 3.01 2.92 2.87 2.80 2.73 2.72 Coverage Ratio (x) 3.84 2.89 2.52 2.76 2.89 3.06 3.23 3.36 Net Debt/Equity (x) 1.94 1.92 2.00 1.84 1.72 1.60 1.45 1.45 Debt/Equity (x) 2.23 2.20 2.30 2.11 1.97 1.84 1.66 1.66 (EUR)m 2011 2012E 2013E 2014E 2015E 2016E 2017E 2018E Total Debt 1782.8 1876.4 1989.3 2045.9 2129.1 2198.0 2266.5 2384.6 Total Net Debt 1552.8 1634.3 1732.7 1782.0 1854.4 1914.4 1974.1 2076.9 Cash 230.0 242.1 256.6 263.9 274.7 283.6 292.4 307.6 Cost of debt 5.3% 5.5% 5.4% 5.1% 5.0% 4.9% 4.8% 4.7%
  37. 37. RAW MATERIALS’ COSTS
  38. 38. DCF - BULL CASE DCF Bull case (EUR mln) 2012 2013 2014 2015 2016 2017 2018 Sales Rev Turn 6088.4 6340.0 6645.8 6959.3 7265.5 7563.4 7850.8 Growth 4.1% 4.8% 4.7% 4.4% 4.1% 3.8% Ebitda 586.80 595.00 639.00 688.00 737.45 784.33 831.40 Growth 1.4% 7.4% 7.7% 7.2% 6.4% 6.0% Ebitda margin 9.64% 9.38% 9.62% 9.89% 10.15% 10.37% 10.59% Amortization & other provisions 329.7 330.0 347.0 363.0 379.3 393.3 406.7 Amortization & Other/Capex 5.4% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% Ebit 257.06 265.00 292.00 325.00 358.19 391.03 424.73 Growth 3.1% 10.2% 11.3% 10.2% 9.2% 8.6% Ebit margin 4.22% 4.18% 4.39% 4.67% 4.93% 5.17% 5.41% Capex 273 265 285 300 315 335 360 Capex /Sales 4.5% 4.2% 4.3% 4.3% 4.3% 4.4% 4.6% Free Operating CF 236.7 254.8 262.7 287.6 304.8 272.8 327.8 FCFF ps 0.93 1.00 1.03 1.13 1.20 1.07 1.29 Wacc calculations Years 2012 2013 2014 2015 2016 2017 2018 Risk free rate 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% Beta Equity 0.82 0.84 0.86 0.88 0.9 0.92 0.93 Mkt risk premium 6.7% 6.6% 6.5% 6.4% 6.3% 6.2% 6.0% Cost of Equity 8.9% 9.0% 9.2% 9.4% 9.5% 9.5% 9.7% Tax Rate 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% Debt/ Equity 220.0% 230.0% 205.0% 192.0% 181.0% 166.0% 150.0% Cost of debt 5.45% 5.25% 5.10% 4.95% 4.80% 4.71% 4.60% WACC 7.9% 7.9% 8.0% 8.0% 8.0% 8.1% 8.1% Discount Rate 0.93 0.86 0.79 0.74 0.68 0.63 Valuation Summary Cur Mkt Cap 2404 Curr Entp Val 3944 Eqy Sh Out (mln) 254 Long Term Growth Rate 2.0% Long Term WACC 8.1% Net Financial pos. (mln) 1540 Cumulated FCF ps 2017 5.15 Terminal Value 21.5 Discount Rate TV 8.1% Discounted Terminal Value 13.5 Cumulated DCF 18.6 Equity Value ps 12.6 Price as date 9.45 Upside/(downside) 33.20%
  39. 39. DCF - BEAR CASE DCF Bear case (EUR mln) 2012 2013 2014 2015 2016 2017 2018 Sales Rev Turn 6088.3 6200 6340.8 6510.3 6666.5 6815.9 6954.9 Growth 1.8% 2.3% 2.7% 2.4% 2.2% 2.0% Ebitda 586.00 555.00 571.00 591.00 609.99 627.75 644.72 Growth -5.3% 2.9% 3.5% 3.2% 2.9% 2.7% Ebitda margin 9.62% 8.95% 9.01% 9.08% 9.15% 9.21% 9.27% Amortization & other provisions 325 325 329 336 343 350 355 Amortization& Other/Capex 5.3% 5.2% 5.2% 5.2% 5.2% 5.1% 5.1% Ebit 260.88 230.00 242.00 255.00 266.66 278.09 289.33 Growth -11.8% 5.2% 5.4% 4.6% 4.3% 4.0% Ebit margin 4.28% 3.71% 3.82% 3.92% 4.00% 4.08% 4.16% Capex 272 201 190 198 209 219 231 Capex /Sales 4.5% 3.2% 3.0% 3.0% 3.1% 3.2% 3.3% Free Operating CF 235.7 289.8 305.4 314.5 312.1 267.7 308.7 FCFF ps 0.93 1.14 1.20 1.24 1.23 1.05 1.22 Wacc calculations Years 2012 2013 2014 2015 2016 2017 2018 Risk free rate 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.1% Beta Equity 0.82 0.84 0.86 0.88 0.9 0.92 0.93 Mkt risk premium 6.7% 6.6% 6.5% 6.4% 6.3% 6.2% 6.0% Cost of Equity 8.9% 9.1% 9.3% 9.4% 9.5% 9.6% 9.7% Tax Rate 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% Debt/ Equity 220.0% 230.0% 221.0% 215.0% 212.0% 205.0% 192.0% Cost of Debt 5.5% 5.4% 5.4% 5.3% 5.3% 5.2% 5.1% WACC 8.0% 8.0% 8.1% 8.1% 8.1% 8.2% 8.2% Discount Rate 0.93 0.86 0.79 0.73 0.68 0.63 Valuation Summary Cur Mkt Cap 2404 Curr Entp Val 3944 Eqy Sh Out (mln) 254 Long Term Growth Rate 1.0% Long Term WACC 8.2% Net Financial pos. (mln) 1540 Cumulated FCF ps 2017 5.43 Terminal Value 17.1 Discount Rate TV 8.2% Discounted Terminal Value 10.7 Cumulated DCF 16.1 Equity Value ps 10.04 Price as date 9.45 Upside/(downside) 6.27%
  40. 40. DCF – CENTRAL SCENARIO (WACC CALCULATIONS) Valuation Summary Cur Mkt Cap 2.404 Curr Entp Val 3.944 Eqy Sh Out (mln) 254.4 Long Term Growth Rate 1.5% Long Term WACC 8.1% Net Financial pos. (mln) 1.54 Cumulated FCF ps 2017 5.21 Terminal Value 19.3 Discount Rate TV 8.2% Discounted TV 12.1 Cumulated DCF 17.2 Equity Value ps 11.3 Price as date 9.45 Upside/(downside) 19.66% Wacc calculations Year 2012 2013 2014 2015 2016 2017 2018 Free Risk Rate 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% Beta Equity 0.82 0.84 0.86 0.88 0.9 0.92 0.93 Mkt Risk Premium 6.7% 6.6% 6.5% 6.4% 6.3% 6.2% 6.0% Cost of Equity 8.9% 9.0% 9.2% 9.4% 9.5% 9.6% 9.8% Beta Leveraged 2.06 2.17 2.07 2.97 2.04 1.97 1.99 Cost of Equity 17.2% 17.8% 17.4% 17.0% 16.6% 16.0% 16.2% Tax Rate 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% 31.4% Debt/ Equity 220.0% 230.0% 211.0% 197.0% 184.0% 166.0% 166.0% Debt / D+E 68.8% 69.7% 67.8% 66.3% 64.8% 62.4% 62.4% Cost of debt 5.5% 5.4% 5.1% 5.0% 4.9% 4.8% 4.7% Wacc 7.9% 7.9% 8.0% 8.0% 8.0% 8.1% 8.1% Compound Wacc 7.9% 16.5% 25.9% 36.0% 47.0% 58.8% Discount Rate 0.93 0.86 0.79 0.74 0.68 0.63 AGL DCF (m €) 2012 2013 2014 2015 2016 2017 2018 Sales Rev Turn 6088.4 6287.5 6545.8 6835.3 7126.6 7406.7 7677.7 Growth 3.3% 4.1% 4.4% 4.2% 3.9% 3.6% Ebitda 586.80 575.00 609.00 647.00 684.73 722.35 762.59 Growth -2.0% 5.9% 6.2% 5.8% 5.6% 5.5% Ebitda margin 9.64% 9.15% 9.30% 9.47% 9.60% 9.75% 9.92% Amortization&other provisions 330 336 354 373 391 411 433 Amortization & other / Capex 5.4% 5.3% 5.4% 5.5% 5.5% 5.6% 5.6% Ebit 257.98 239.80 255.12 274.20 292.28 311.86 328.53 Growth -9.0% 6.9% 7.3% 6.8% 6.5% 6.3% Ebit margin 4.22% 3.81% 3.90% 4.01% 4.11% 4.20% 4.28% Capex 273 220 258 275 290 310 327 Capex /Sales 4.5% 3.5% 3.9% 4.0% 4.1% 4.2% 4.3% Change in Net Working Capital (3.6) (8.0) (0.4) (1.6) 5.2 53.7 10.2 Change in NWCapital / Sales -0.06% -0.13% -0.01% -0.02% 0.07% 0.72% 0.13% Free Operating Cash Flow 237 288 271 288 297 261 321 FCFF ps 0.93 1.13 1.07 1.13 1.17 1.02 1.26
  41. 41. DCF - FOOD & BEVERAGE DCF Bear case (EUR mln) 2012 2013 2014 2015 2016 2017 2018 Sales Rev Turn 4088.0 4095.0 4140.5 4215.0 4277.4 4330.8 4381.5 Growth 0.2% 1.1% 1.8% 1.5% 1.3% 1.2% Ebitda 334.00 297.50 303.80 310.00 316.10 322.22 328.18 Growth -10.9% 2.1% 2.0% 2.0% 1.9% 1.8% Ebitda margin 8.17% 7.26% 7.34% 7.35% 7.39% 7.44% 7.49% Amortization & other provisions 197 186 189 191 193 196 199 Amortization& Other/Capex 4.8% 4.5% 4.6% 4.5% 4.5% 4.5% 4.5% Ebit 137.48 111.50 114.90 119.20 123.19 126.46 129.25 Growth -18.9% 3.0% 3.7% 3.3% 2.7% 2.2% Ebit margin 3.36% 2.72% 2.78% 2.83% 2.88% 2.92% 2.95% Capex 237 180 188 180 172 161 152 Capex /Sales 5.8% 4.4% 4.5% 4.3% 4.0% 3.7% 3.5% Free Operating CF 48.9 68.5 66.6 81.3 81.0 99.0 123.9 FCFF ps 0.19 0.27 0.26 0.32 0.32 0.39 0.49 Wacc calculations Years 2012 2013 2014 2015 2016 2017 2018 Risk free rate 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% Beta Equity 0.82 0.84 0.86 0.88 0.9 0.92 0.93 Mkt risk premium 6.7% 6.6% 6.5% 6.4% 6.3% 6.2% 6.0% Cost of Equity 8.9% 9.0% 9.2% 9.4% 9.5% 9.6% 9.7% Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% Debt/ Equity 220.0% 230.0% 205.0% 192.0% 181.0% 165.0% 155.0% Cost of Debt 5.5% 5.4% 5.1% 5.0% 4.9% 4.8% 4.7% WACC 7.7% 7.7% 7.7% 7.8% 7.8% 7.9% 7.9% Discount Rate 0.93 0.86 0.80 0.74 0.69 0.64 Valuation Summary Cur Mkt Cap 1603 Curr Entp Val 2604 Eqy Sh Out (mln) 1.0 Long Term Growth Rate 7.9 Long Term WACC 1000 Net Financial pos. (mln) 1.55 Cumulated FCF ps 2017 7.19 Terminal Value 7.9 Discount Rate TV 4.53 Discounted TV 6.11 Cumulated DCF 2.17 Equity Value ps 1603 Price as date 2604 Upside/(downside) 1.0
  42. 42. DCF - TRAVEL RETAIL & DUTY FREE DCF Bear case (EUR mln) 2012 2013 2014 2015 2016 2017 2018 Sales Rev Turn 2000.0 2192.5 2405.0 2630.0 2858.8 3086.1 3305.2 Growth 9.6% 9.7% 9.4% 8.7% 8.0% 7.1% Ebitda 252.40 278.00 305.80 337.00 368.50 400.88 434.63 Growth 10.1% 10.0% 10.2% 9.3% 8.8% 8.4% Ebitda margin 12.62% 12.68% 12.72% 12.81% 12.89% 12.99% 13.15% Amortization & other provisions 133 150 165 182 198 215 234 Amortization& Other/Capex 6.7% 6.8% 6.9% 6.9% 6.9% 7.0% 7.1% Ebit 119.00 128.50 141.00 155.40 170.39 185.47 200.29 Growth 8.0% 9.7% 10.2% 9.6% 8.9% 8.0% Ebit margin 5.95% 5.86% 5.86% 5.91% 5.96% 6.01% 6.06% Capex 36 40 70 95 128 149 170 Capex /Sales 1.8% 1.8% 2.9% 3.6% 4.5% 4.8% 5.1% Free Operating CF 183.1 182.0 174.3 173.5 167.8 174.9 183.6 FCFF ps 0.72 0.72 0.69 0.68 0.66 0.69 0.72 Wacc calculations Years 2012 2013 2014 2015 2016 2017 2018 Risk free rate 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% Beta Equity 0.82 0.84 0.86 0.88 0.9 0.92 0.93 Mkt risk premium 6.7% 6.6% 6.5% 6.4% 6.3% 6.2% 6.0% Cost of Equity 8.9% 9.0% 9.2% 9.4% 9.5% 9.6% 9.7% Tax Rate 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% 28.0% Debt/ Equity 220.0% 230.0% 215.0% 210.0% 200.0% 191.0% 188.0% Cost of Debt 5.45% 5.35% 5.10% 5.00% 4.90% 4.80% 4.75% WACC 8.2% 8.2% 8.2% 8.2% 8.2% 8.3% 8.3% Discount Rate 0.92 0.85 0.79 0.73 0.67 0.62 Valuation Summary Cur Mkt Cap 801 Curr Entp Val 1341 Eqy Sh Out (mln) 2.7% Long Term Growth Rate 8.3% Long Term WACC 540 Net Financial pos. (mln) 3.17 Cumulated FCF ps 2017 12.7 Terminal Value 8.3% Discount Rate TV 8.07 Discounted TV 11.2 Cumulated DCF 9.12 Equity Value ps 801 Price as date 1341 Upside/(downside) 2.7%
  43. 43. REAL OPTION DCF real option 2012 2013 2014 2015 2016 2017 2018 FCF ps 0.93 1.13 1.07 1.13 1.17 1.02 1.26 Wacc 7.9% 7.9% 7.9% 8.0% 8.0% 8.1% 8.1% Compound Cost of Equity 7.9% 16.5% 25.9% 36.0% 47.0% 58.5% Discount Rate 0.93 0.86 0.79 0.74 0.68 0.63 DCF EVALUATION Discounted Cash Flow 1.05 0.92 0.90 0.86 0.70 0.79 Cumulated 1.05 1.96 2.86 3.72 4.42 5.21 VALUATION Cumulated FCF ps 2018 5.21 Discounted Terminal Value 12.1 Cumulated DCF 17.36 Price (S) 17.36 Strike (K) 6.3 Expiration Date 09.17.2016 Volatility 11.8% LN (S/K) 1.022 d1 5,150 d2 4,926 N(d1) 1,000 N(d2) 1,000 Call Price 11.75
  44. 44. PORTFOLIO STRUCTURE COMPANY NAME MKT CAP (MLN €) WEIGHT AUTOGRILL 2404 7.45% DUFRY 3072 9.52% SODEXO 10473 32.45% COMPASS 16322 50.58% TOTAL 32271 100.00% BETA STATISTICS BETA ALPHA 1.21 0.00 STD ERROR 0.13 0.00 R^2 - STD ERROR ESTIMATION Y 0.32 0.04 STATISTIC F – DEGREE OF FREEDOM 94.16 202.00 SS REGRESSION – SS RESIDUALS 0.12 0.27
  45. 45. MULTIPLES
  46. 46. MULTIPLES
  47. 47. BOARD OF DIRECTORS & SHAREHOLDERS STRUCTUREExecutive NonExecutive Independentfor Code Independentfor T.U.F. Board of directors Internalcontrol &Corp.Gov. Commitee Humanresources Committee Strategy &Investments Committee Related-party Transaction Commitee X Benetton Gilberto Chairman X Tondato Da Ruos Gianmario Chief Executive Officer X Benetton Alessandro Director X X X Barracco Alessandro Director X X X X Camuffo Arnaldo Director X X X X Giavazzi Francesco Director X X X X Jesi Marco Director X X X X Malguzzi Alfredo Director X X X X X X Mangiagalli Marco Lead Director X X X Mion Gianni Director X X X X Orlando Stefano Director X X X Roverato Paolo Director X X
  48. 48. INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS GEOGRAPHICAL PRESENCE BACK
  49. 49. DISTRIBUTION CHANNELS INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS 47% 44% 4% 5% F&B Sales breakdown Airports Motorways Railway stations Others 98% 2% TR&DF Sales breakdown Airports Motorways BACK
  50. 50. BRAND AND PRODUCT PORTFOLIO FOOD & BEVERAGE TRAVEL RETAIL & DUTY FREE INVESTMENT SUMMARY COMPANY & INDUSTRY OVERVIEW VALUATIONFINANCIAL ANALYSIS RISK ANALYSIS BRANDSPRODUCTS  First and second dishes  Salads  Desserts  Coffee  Spirits  Cigars and cigarettes  Fashion brand glasses, jewelrys  Perfums and cosmetics  Chocolate and food  Travel essentials BACK

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