If scientific projects are financially mismanaged, they may fail to reach end-users and their benefits are regrettably unrealised. This presentation looks at some of the key financial considerations food and beverage industry businesses should take into account when seeking to grow their brands.

1. Achieving Maximum Value
in the Food Industry
Through Financial Analysis
Raphaëlle O’Connor, Ph.D.
info@inewtrition.com

2. Science-based projects like those involved in new product
development plans depend on Financial Analysis to make smart
decisions and maximise value.
Capital budgeting is the key competitive advantage business leaders
can attain.
• Does project A have a positive NPV?
• How does project B’s valuation change if Phase 1 is successful?
• How do we manage projects A & B to maximum Enterprise
Value?
Financial Analysis, conducted with scientific expertise, combines
unique analytical and problem-solving skills to quantify these vital
questions and deliver data-based decisions.
Financial Analysis for Scientific Projects
Financial
Analysis
Cash Flow
Analysis
Capital
Budget
Risk/Return
Optimisation
Options
Valuation
Net Present
Valuation

3. CF Analysis & NPV
CFs is the oxygen for your enterprise. NPV is the health of your project:
Cash Outflows = Operating Cost + Tax + CAPEX
Liabilities:
•Debt
•Equity
Assets:
•Cash
•Capital
Cash Inflows = Operating Revenues + Net Income
Achieve:
» Positive ROI & IRR
» Capital budget strategy
» Manage risk
𝑁𝑃𝑉 = ෍ 𝑃𝑉(𝐶𝐹𝑠)
Managing CFs:
» What/when to buy/sell
» How to finance projects

4. Options Valuation
• Quantifying Decisions, Uncertainty & Expected CFs
• Generate value from multiple outcomes
• Example: Drug candidate risk-adjusted-NPV
Phase I
Phase III (20%)
Approval (75%)
Abandon (25%)
Phase II (50%)
Phase III (70%)
Approval (90%)
Abandon (10%)
Abandon (30%)
Abandon (30%)
CF = –$50M
CF = –$100M
CF = –$20M
CF = $800M
CF = $500M
Project Timeline (n): Year 0 Year 2 Year 5 Year 7
rNPV = ෍ (
E[CF]
1 + r n
)

5. Investments Management
Challenge: Future CFs are unknown and the Cost-of-Capital is uncertain
Solution:
1. Calculate Expected Returns and Covariance of your Projects
2. Identify Negatively Correlating Innovations
3. Allocate capital and financing for Optimal Return & Risk
Investing in Multiple
Innovations
• Why?
• We don’t know
which project
outcomes will be
optimal
Diversification
• How?
• Scientific / Engineering
assessments
• CF variance analysis
• Project correlation
analysis
Financial Tools
• Expected Returns
• Cost of Capital
(Hurdle Rate)
• CAPM
• Covariance
• Plan for multiple
outcomes

6. Financial Multiples
Challenge: Future CFs are unknown & competitive marketplace must be considered.
Solution: Financial Multiples will optimise your Enterprise Valuation & compare with similar
companies.
Pre-Earnings Post-Earnings
EV
R&D Expense
EV
Products in R&D
EV
Physical Assets
EBIT
ROC
EBIT
EV
P
FCF
Are R&D operations efficient
and producing value?
Indicate value of each product
and diversification position
Efficient use of Plant, Property
& Equipment?
Management Performance:
How well is capital allocated and utilised?
Earnings Yield:
What value does the enterprise deliver?
Enterprise Heath:
Growth prospects and financial position

7. What does
success look like
to you?
info@inewtrition.com