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Valuation Measuring and managing the value ofpanies - Koller T.

Koller T., Murrin J. Valuation Measuring and managing the value ofpanies - Wiley & sons , 2000. - 508 p.
ISBN 0-471-36190-9
Download (direct link): valuationmeasuringandmanaging2000.pdf
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Adjusted EBITA/revenues 10.0% 9.7% 10.1% 9.6% 10.6%
Return on invested capital (beg of yr) Net PPE/revenues Working capital/revenues Net other assets/revenues Revenues/invested capital Pre-tax ROIC Cash tax rate After-tax ROIC
After tax ROIC (ind. goodwill)
Return on invested cap (avg)
Net PPE/revenues Working capital/revenues Net other assets/revenues Revenues/invested capital Pre-tax ROIC After-tax ROIC
After-tax ROIC (ind. goodwill)
Growth rates Revenue growth rate Adjusted EBITA growth rate NOPLAT growth rate Invested capital growth rate Net income growth rate
Investment rates Gross investment rate Net investment rate
Financing Coverage (adjusted EBITA/interest) Cash coverage (gross CF/interest) Debt/total cap (book)
Debt/total cap (market)
Average ROE
Mkt val op inv cap/BV op inv cap Mkt val op inv cap/adj EBITA
43.7% 45.0% 38.7% 40.7% 40.9%
3.6% 3.2% 2.6% 4.4% 4.3%
-1.3% -1.1% -1.0% -0.7% -0.7%
2.2 2.1 2.5 2.3 2.2
21.7% 20.6% 25.1% 21.7% 23.8%
30.8% 31.6% 28.1% 34.9% 35.7%
15.0% 14.1% 18.0% 14.1% 15.3%
13.5% 12.5% 15.7% 11.2% 12.0%
45.4% 45.1% 41.9% 41.3% 41.5%
3.5% 3.1% 3.7% 4.4% 3.5%
-1.3% -1.1% -0.9% -0.7% -0.7%
2.1 2.1 2.2 2.2 2.3
21.0% 20.6% 22.6% 21.4% 23.8%
14.5% 14.1% 16.2% 13.9% 15.3%
12.9% 12.4% 13.4% 11.0% 11.6%
10.2%
7.1%
27.6%
71.4%
217.1%
4.7% 16.7% 10.9% 2.3%
1.8% 21.5% 5.6% 12.3%
0.5% 27.6% -4.3% 10.9%
0.1% 22.0% 2.6% -0.6%
0.4% -1.4% 16.2% 28.8%
44.7%
160.8%
113.0%
263.5%
56.6%
194.2%
44.5%
171.0%
9.7 10.2 9.0 106 12.5
12.4 12.6 11.1 12.9 150
14.2% 14.3% 11.5% 17.1% 19.4%
7.3% 6.1% 8.5% 6.7% 4.2%
15.9% 14.6% 14.2% 15.8% 19.3%
1.9 2.5 2.3 2.5 5.3
9.2 12.2 11.1 11.9 22.3
Page 193
Exhibit 9.20 Heineken—Supporting Calculations
----------------------------------------------------------------------------\
NLG million 1994 1995 1996 1997 1998
Change in working capital
Increase in operating cash 31 5 36 30 6
Increase in accounts receivable 134 SS 341 55 (57)
Increase in inventories (3) 106 192 40 (30)
Increase in other current assets 44 3 115 7 4
(Increase) in accounts payable (54) (117) (184) (17) (4)
(Increase) in other current liabilities (172) (101) (230) (110) (144)
Net change in working capital (19) (16) 272 5 (225)
Capital expenditures
Increase in net PPE 332 20 755 151 170
Depreciation 58G 5% 626 744 622
Capital expenditures (net of disposals) 919 575 1,414 895 992
Nonoperating cash flow
Extraordinary Items 59 0 0 0 0
Change in restructuring provisions 0 0 0 0 0
Revaluation effect (13! P) 139 134 (151)
Change in investments and advances (105) (92) (100) (107) (135)
Nonoperating cash flow (59) (101) 39 29 !286:
v__________________________________________________________________________________________J
Exhibit 9.21 Worldwide Beer Growth
Page 194
Exhibit 9.22 National Market Share
acquisitions (Exhibit 9.24). Miller, owned by Philip-Morris, started a price war in 1997, and it is continuing. Price competition will force companies to drive down costs, leverage brand names, and rationalize excess capacity.
There are two distinct strategies for brewers: They can specialize by focusing on a specific link in the value chain or become a geographic integrator. The specialization strategy involves breaking the industry business system into product development, brewing, packaging, distribution, and marketing, and subsequently becoming the global leader in one or two of these links. Guinness, for example, has focused on a product with a unique flavor that it exports from its home base with aggressive global marketing. Boston Beer Company runs a ''virtual" beer company in which it controls product development and marketing but contracts out most production. Geographic integrators such as Heineken and Interbrew, on the other hand, purchase underperforming breweries or breweries in developing countries and apply best practices in brewing, distribution, and marketing.
Heineken’s Financial Performance
To evaluate Heineken's financial performance, we compared its performance to that of other large, publicly traded beer companies using both stock market-based measures and underlying financial indicators. We compared Heineken to companies that produce mostly beer, as opposed to broader consumer goods companies where beer is just one of a host of products: Anheuser-Busch, Carlsberg, and South African Breweries. Exhibit 9.25 shows Heineken's size relative to its peers. Of these companies, Heineken is the second largest in revenues, at $7 billion in 1998. That is
Page 195
Exhibit 9.23 Domestic/Non-Domestic Split of Sales
about half as large as Anheuser-Busch and marginally larger than South African Breweries. Heineken's 1998 EBITA is also second largest at $0.7 billion, but in this case only about a third as large as the leader, Anheuser-Busch.
Performance in the Stock Market
We compared these companies using two indicators of stock market performance: total returns to shareholders and market value added. TRS includes share price appreciation and dividends and measures the wealth creation of companies during a specific time period.
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