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EQUITY VALUATION
REPORT
Submitted to: Farhana Zahir
Senior Lecturer, Department of Accounting & Finance North South
University
Submitted by:
Team Olympics
1 | P a g e
INVESTMENT SUMMARY
Olympic Industries is the largest manufacturer, distributor
and marketer of biscuits in Bangladesh. It has a market share
of 39% of the total branded market for biscuits and
confectionary items.
HIGHLIGHTS
We have issued a BUY recommendation on a 1-year target
price of BDT 276BDT, representing 32.5% capital gain from
its April 21, 2019 closing price of BDT 219. To get this price,
50% weight for DCF model and 50% weight for P/E multiple
was used. (Figure2). Our recommendations are based on the
following catalysts.
• The revenue of Olympic Industries is mainly from the
biscuit and confectionary items and most of the sales
are from domestic arena. So, dominating on the
domestic market is fairly easier for Olympic Industries
with huge market share.
• Investment in expansion projects for Olympic Industries
is remarkable. In May 2018, they successfully launched
an instant noodles manufacturing line, which has an
annual production capacity of 9,000 metric tons. We
assume that Olympic Industries will continue the
historical trend of investment in expansion projects in
coming years.
• Olympic Industries have 8 biscuits production lines and
the 9th line of biscuits production has been started
commercial operation since May 2017 and all other
vertical expansion projects like Carton manufacturing
line, Snacks & Noodles manufacturing line in May 2018.
• The key raw materials used by the Olympic Industries
are wheat, egg, palm oil, soya bean oil, sugar etc.
According to World Bank, there will be no significant
changes in the price of the raw materials in next 3 or 4
years , Olympic will be able to stabilize the costs from
raw materials and sustain the sales growth.
• VAT exemption on Palm Oil and Soya Bean Oil has been
extended up to June 30, 2019 in the budget of 2017-18
which will help Olympic to stabilize their direct cost of
raw materials for another two years.
Date: 21 April 2019
Current Price (22 April’19): BDT 219 (USD )
Exchange Rate: TK. 83.05/ USD
Recommendation: BUY
Target Price: 276 BDT
Capital Gain: 32.5%
Sector: Food & Allied
DSE: OLYMPIC
Bloomberg: OLYMPI:BD
Company Fundamentals
Market Cap (Million BDT) 43,886.585
Market Weight 1.5%
No. of Share Outstanding (Million) 199.9mn
Paid-up Capital (Million BDT) 1,999.39
52-Week Price Range (BDT) 185.00-281.00
Valuation Summary
Valuation Date 21 April 2019
Methodology Weight Price
FCFF 50% 269 BDT
P/E Multiple 50% 292.35BDT
One Year Target Price (31 Dec’19) 276 BDT
Current Market Price (09 Apr’18) 219 BDT
Expected Capital Gain 32.5%
Expected Dividend Yield 5 BDT
2 | P a g e
Biscuits and Confectionaries Industry of Bangladesh
Industry Fundamentals
Market Share $597-717mn
Big Brands’ share 52%
Net export earnings(FY 18-19) $80.41mn
Net Export Earnings ( FY 17-18) $43.09mn
Net Export Earnings( next two years) $240mn
Big Brands’ Worth $358mn
Total Annual Production 65,000MT
Supporting Industry Fundamentals
Wheat Imports FY 19 6.5MMT
Wheat Demand FY 19 364,390 MT
What Demand FY 17 177, 330 MT
Sugar Demand FY 19 2.99MMT
Edible Oil Demand FY 19 2.4 MMT
As the purchasing power of the middle income tier
of the population is increasing, a significant portion
of the population is going for bakery items for the
go-to snack and as a result the companies are going
for full automation process which increases
efficiency and reduces cost at the same time. The
industry is being driven by the fact that the target
market demands high quality products but at a
reasonable price which has made the market more
competitive than ever before.
Figure 01: The Major players in the biscuit industry
The annual production of 65,000MT is on excess
compared to the market demand. The net export
earnings has double from the previous years and it
expected to triple in the next two years respectively
thus making the industry a lucrative one for
investments with big brands like Danish, Olympic,
Pran and others holding up the market share of 49-
50% with total worth of $358mn.
Industry Fundamentals
Figure 02 Source: Lightcastleparters.bd, BABBA
3 | P a g e
Source: USDA BD Grain & Annual Feed
Olympic Industries Limited
Total Revenue in FY 18 $154.4mn
Sales growth rate in comparison, FY 18 8.28%
Export Revenue from FY 18 1.56mn
Confectionary Product Growth 14.08%
Market Share 30%
0
1
2
3
4
5
6
7
8
FY 15 FY 16 FY 17 FY 18 FY 19
Wheat Imports ( MMT)
Supporting Industry Fundamentals
Supporting ingredients for this industry is sugar, oil
and wheat. Due to the increase of confectionary
consumption, these key ingredients’ demand is on
the rise. Sugar’s price is expected to fall by 8.7%
and duty on imports of sugar has seen a decrease
of 40%. Currently 139000 MT of sugar is on stock
and so the price is going down. Increase in income
along with GDP growth and falling prices have
ensured long term survival for the biscuit industry.
Source:BangladeshTrading
Corporation,Lightcastlepartners.bd
0
5
10
15
20
25
30
35
40
FY 15 FY 16 FY 17 FY 18 FY 19
Supply of Products, MT ( Brands Vs. Local Bakeries)
Top Brands Bakeries Growth
Competitive Landscape
In the early stages of Bakery production in the market,
the local bakeries and confectionaries dominated the
whole market but as demand grew, the top brands with
high products and attractive packaging took over the
market. There are around 5000 bakeries and
confectionaries and 100 automated factories. Most of
the bakery goods (mostly biscuits) are supplied by the
top brands and the rest of the market demand of are
supplied by the small bakeries and confectionaries.
Olympic Industries Limited
The company’s net profit margin declined from the
previous year due to a change in accounting policy
and a corporate reorganization of sales and
marketing department causing selling expensed to
rise by $ 2.03mn to achieve greater performance in
the long run. Biscuits, confectionaries and snacks
made up 97% of the total revenue. The company
saw a CAGR of 13.72% in net profit margin and 7%
in gross profit margin from 2012-2016. The
company is vertically integrating its supply chain to
achieve greater efficiency and overcoming
challenges of full automation.
Source: Olympic Annual Report 18, Lightcastlepartners.bd
4 | P a g e
Brands of Olympic Industries Limited
Nutty
Energy Tip
Milk Marie
Queen Marie
Malay Cream
Orange
Nutty Real Peanut
Dry Cake Biscuits
30%
11%
7%6%5%
4%
37%
MARKET SHARE
Olympic AL Amin Pran
Nabisco Romania New Olympia
Others
Olympic Industries Limited
The top brands altogether makes up the 52%-
63% share and by being the market leader
Olympic captures 30% of the market share.
The company mainly produces biscuits and
confectionaries and alongside batteries and
plastics. The plastics are produced for their
own usage although a limited portion is
targeted towards the plastic market. The
company is also the largest distributor and
marketer of the country.
Source: DATABD.Co, Team Analysis, EBL Securities
Source: Olympicbd.com
Target & Segmentation
Age group: 13-50 years old
Psychographic: Energy Driven, Health Conscious,
Prefer products with variation
Socio-Economic: Middle Class, Upper Middle
Class
Geographic: Mass market throughout the country
Management
Muhammad Bhai has acted as the chairman till January 2018 and currently the company is run by the Managing Director and the
company does not have a CEO. The MD is responsible for implementing policies and decisions of the board of directors as well as
looking after overall management of the company.
5 | P a g e
Company Positives
Expansion Projects Total cost Declaration date Exp. Start Date`
PET Sheet Forming & 56mn/10mn trays 31/12/15 29/01/17
Tray making unit
8th
biscuit line 104mn/9600mt 31/12/15 15/11/16
Cookies Line 133mn/7200mt 04/05/16 02/05/17
Land( N.gong) 3.475mn/5.59 14/08/16 -
Decimals
Land (Lalita ) 6.8mn/34 08/15/16 -
Decimals
Carton Manufacturing 120mn/66mn pieces 18/01/17 -
Line
Snacks Manufacturing 77mn/3700MT 18/01/17 -
Line
Noodles Line 187mn/9000MT 18/01/17 2017
Factory Building 250mn/88000sq.ft 18/01/17 2017
Source: EBL Securities
Strengths Weaknesses
• Market Leader
• Loyal Customer Base
• Large Infrastructural Investment
• Largest Distributor & Marketer
• Efficient management
• Quality Products
• Perception of being Costly
• Rigid government regulations
Opportunities Threats
• Population is increasing
• Income level is rising
• Digital Marketing is booming
• Use of AI based inventory management
system
• Political Instability
• Rising concern of natural disasters
• Increase in tax rates
Source: Team Analysis
Company Positives
The growth is the reflection of strong efforts to maximize production
efficiencies and capitalizing on economies of scale such as distributing fixed
administrative, marketing, selling and operational costs across higher sales.
Olympic Industries regularly invest for the enhancement of its capacity and
product innovation. During the last two years, it invested BDT 970mn for
purchases of fixed assets. It has taken several expansion projects to be
implemented in this year and next year. The company invested around BDT
652mn in fixed assets in FY 2016-2017.
SWOT ANALYSIS
6 | P a g e
PESTEL ANALYSIS
Political Technological
• Growing political unrest
• Inefficient Tax systems & unreliable data
• Use of AI in inventory management system.
• Use of robots in manufacturing
Economical Environmental
• Increase in per capita income • Air quality depreciates
• Carbon emission
Social Legal
• Changing Lifestyle
• Positive perception about the biscuit as the
go-to snack
• Trade License
• Production & Distribution license
PORTER’S FIVE FORCES
Competitive Rivalry
Supplier Power
Buyer PowerThreat of Substitues
Threat of New
Entrance
7 | P a g e
1.0 Threats of New Entry: Negligible restrictions for entrants and since the market is lucrative there is potential
chance for new companies to enter the market.
2.0 Threat of New Substitutes: There are close substitutes for every products of Olympic so the customers can forgo
the products and try out new ones.
3.0 Power of Customers: Power of customers is high since the switching cost is low, customers will react indifferent
to price hikes and in a drop of quality.
4.0 Power of Suppliers: Power of suppliers is low for Olympic as the company has options to buy from different
suppliers at lower prices.
5.0 Competitive rivalry: The industry is saturated with 5000 bakeries altogether. In addition there are quality
products being imported from outside so customers have the choice to switch to different brands.
0
20,000
40,000
60,000
80,000
100,000
FY 17-18 FY 16-17 FY 15-16 FY 14-15
Amount of Biscuits Sold
Units Sold
Strategic Business Units
Confectionaries
Bakeries
Biscuits
Battery
Olympic Industries Limited
Olympic Industries Limited is the pioneer in the biscuit
industry with market share of approximately 39% the
company has been serving the best of the products at a
reasonable price to its customers. The company emphasizes
mainly on its bakery and confectionary products and carries
on automation process to make the production of biscuits
more affordable. The company has invested huge amount of
capital for further expansion and building new factories to
increase the production since the population is increasing.
The company also is taking a huge leap in the digital marketing
to connect emotionally to its customers.
The company has seen an export earnings of $ 1.51mn in the
last year with the export earnings expected to rise to triple the
amount in the upcoming days.
8 | P a g e
BUSINESS STRATEGY
Protecting the Market and Expanding the Market Share: The Company now holds 39% of the market share and it
fiercely protects the market by constantly bringing in changes in product lines. The company follows the market trend
and ventures into producing new products. For example, the company brought 33 different sorts of products for its
different customer base and continuously working on new products to be launched in the market.
Operational Strategy: The Company follows a low cost strategy thus by providing high quality products and it has high
variety in its product offerings.
Source: CIA
World Fact book
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
2006 2008 2010 2012 2014 2016 2018
Comparison of GDP Growth
Bangladesh
South Asia
Emerging Markets & Developing Economies
INDUSTRY OVERVIEW & COMPETITIVE POSITIONING
Strong Economic Growth: According to IMF, the
GDP growth in 2016-17 is 7.28% which is higher
than that the average GDP growth of South Asian
countries and, emerging market and developing
economies. The Government’s goal is to become
middle income country by 2021 and the country is
on the verge of achieving the goal as we can see
that per capita income was USD 1,610.00 in 2016-
17 (Source: Bangladesh Bureau of Statistics). In the
process of meeting the goal, the Government is
implementing numerous policies which is eventually
causing potential rise in living standard and income
level of the people.
Declining Unemployment Rate: Employment level
of a country has a huge impact on consumer
spending and the spending depends on consumer’s
disposable income. Hence, a strong relationship
prevails between the amount of disposable income
and the unemployment rate According to
Bangladesh Bureau of Statistics, unemployment
rate will go down in upcoming years. So, declining
unemployment rate will certainly contribute to
increase the disposable income of people.
Demography: Bangladesh has a growing population
of young and vibrant people who will boost the
country’s economic growth engine and to raise the
consumer base for the upcoming years.
28%
19%
40%
7%
6%
0-14
year
s
15-
24year
s
25-54
years
55-64
years
>64
years
9 | P a g e
VALUATION
DCF: Free Cash Flow to Firm
Weighted Average Cost of Capital
Tax Rate 27
Terminal Growth Rate 4%
WACC 14.46%
TERMINAL GROWTH RATE
PV of FCFF 53,039,976,377
Add: Cash 527,984,173
Less: Interest bearing Debt (308,234,882)
Equity Value 53,876,195,433
No. of stock outstanding 199,938,886
Projected 269
Our valuation for Olympic reaches a target
price of BDT 276 and cash dividend of BDT 5,
Driven by 70% of FCFF model at a price of BDT
269, and 30% of P/E Multiple model at a price
of BDT 292.35. So gain of 32.5%.
FCFF model has been used for Olympic’s valuation as they maintained significant growth in free cash flow for the
last years. Although the growth was little bit slowly the previous year but our assumptions promises significant
growth of future free cash flows. FCFF reflects the overall fundamentals of a company. Hence FCFF is more suitable
for determining the stock price of Olympic industries limited. As the model suggests we have determined two
phases of growth rates. First we have forecasted 5 years growth (2019-2023), then we have come up with a terminal
growth rate for the rest of the years till liquidation of the company.
As we know WACC consists of two elements. One is
cost of equity and another is cost of debt. For
Olympic’s cost of equity we have used CAPM model
which gives us a figure of 15%. Beta of 1 has been
chosen, neglecting the abnormal periods we have
chosen periods of 2017 and 2018 for it. The cost of
debt was calculated as 14% and the final WACC was
14.16%.
We expected a terminal growth rate of only 4%. As we believe the company is in a matured potion. Despite
of their new strategies, we believe there we be little space for them in the future to grow further as we
have to acknowledge the competitive atmosphere of the market as well. For the next 5 years our estimation
is very high because of their new strategies and effective investments. But at the rate the market is
booming right now, it won’t take time before it reaches its maturity, then there will very few spaces to
grow. We are considering the terminal growth rate lower than the estimated GDP as we believe market
growth will be more relevant with the population growth rather than the GDP based on the product
category.
10 | P a g e
RELATIVE VALUATION
DIVIDEND DISCOUNT MODEL
Although Olympic gives constant dividends, but the valuation figure is an outlier considering our other two methods. So,
we won’t be considering it in our model.
SENSITIVITY ANALYSIS
Sensitivity analysis has been conducted to determine the sensitivity of our FCFF model to terminal growth rate and
WACC. Here, terminal growth rate defines the growth of cash for the period beyond our forecasted five years whereas
we used WACC to discount our cash flows. Our 0sensitivity analysis promises a great future for this investment. We will
remain in our buy call even if the WACC increases to 18% and terminal growth reduces as low as 2%.
Peer firms in DSE P/E
Olympic 22.5
Golden harvest 29.4
AMCL Pran 28.2
RD Food 32.5
Fu Wang Foods 22.74
Peer firms average 27.068
Industry P/E
27.068
EPS of Olympic 10.80
Intrinsic Value 292.35
WACC
269 10% 12% 14% 16% 18%
2% 508.2 507.1 506.0 505.1 504.1
Terminal
Growth
Rate
3% 350.7 349.5 348.5 347.5 346.6
4% 271.9 270.7 269.7 268.7 267.8
5% 224.6 223.5 222.4 221.4 220.5
6% 193.1 192.0 190.9 189.9 189.0
7% 170.6 169.5 168.4 167.4 166.5
8% 153.7 152.6 151.5 150.5 149.6
We have calculated the Price to Earnings per share multiples as we think it will be most appropriate
multiples comparing with its peers. We have taken 5 companies to calculate the industry average of P/E
which comes up 27.068. Our EPS was 10.08 which gives us the value of 292.35. Golden Harvest, Pran, RD
food and Fu Wang Foods have been considered as pers. Since there is no exact same public company that
runs the same operations as Olympic (97% biscuit), we have given 30% weight of relative valuation in our
final valuation.
11 | P a g e
Financial Analysis
We have forecasted their different product sectors separately. They have already disinvested their pen business and will
do the same for noodles this year. Other investments are less than 1%. Major focus of our model is on biscuits which is
97% of their business, their battery business may not be disinvested but won’t be their major headache anymore, we
can clearly say from their CAPEX and advertising costs that battery will always be in the 2% to 3% zone in their portfolio.
1.1.1 Revenue forecasting: Biscuits (Top down Analysis)
a) Population Growth
Biscuit is such kind of product which is driven by the population growth. As higher income does not affect the
consumption of the product although it affects the quality of the product consumed. Olympic has varieties of biscuits
but most of them (almost 70%) of them are for rational people rather than top or bottom of the pyramid. So the
population growth will be a most effective driver for it.
b) Supply demand gap
There is 10% of demand and supply gap in the market. We assume it will reduce in the future because of the lucrative
market and reduced cost of goods sold. As we know Market supply of 2017-2018 was 205869.769 metric tons, with 10%
market gap we can easily forecast the demand which I s approximately 228744.188 metric tons.
0.90%
0.95%
1.00%
1.05%
1.10%
1.15%
1.20%
2015 2016 2017 2018 2019 2020 2021 2022 2023
Population Growth
12 | P a g e
c) Market share
We have forecasted Olympic’s market share to grow at 3% annually (current share is 39%), this is too much growth for a
company with that amount of market share but since we are very conservative about our market growth and Olympic’s
CAPEX and high advertising cost that has noted with high level of traction based on Bangladesh Brand Forum, we can
easily assume that growth. Next two years forecasted growth of 8% and 14% clearly simulating the market predictions of
the expert economists of the country.
d) Price Growth
We have forecasted the selling price to grow at 5%. To be in the safe side are considering it lower than the expected
GDP and inflation rate.
180000
190000
200000
210000
220000
230000
240000
250000
2017 2018 2019 2020 2021 2022 2023
MetricTons
Biscuit: Demand and Supply
Series1 Series2
35%
36%
37%
38%
39%
40%
41%
42%
43%
44%
45%
46%
2017 2018 2019 2020 2021 2022 2023
Market Share
13 | P a g e
1.1.2 Revenue forecasting: Biscuits (Regression)
By our regression method we also get growth of 9.116% which is close to our top down analysis but we believe the
previous analysis we be more accurate for this as we are considering all the demand and supply dynamics for this.
1.2 Revenue forecasting: Battery (Historical average)
Historical Growth of battery is very constant, so we are taking average of the past years which is 4% of growth.
2. Cost of Goods Sold
It is expected that the cost of goods sold will decline at a sharp rate, but since our company is a matured one and will
have to offer variety of products in future to survive and it will cost some efficiency. So, we believe it will be 65% of the
revenue.
2013-2023
Revenue
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
98.00%
100.00%
102.00%
2012 -
2013
2013 -
2014
2014 -
2015
2015 -
2016
2016 -
2017
2017 -
2018
2018 -
2019
2019 -
2020
2020 -
2021
2021 -
2022
2022 -
2023
Product Weight
Biscuit Battery Others
14 | P a g e
3. Distribution and administrative expenses
Advertising expenses were very high in the last two years. As there are so many products to be released in the future,
we have forecasted it based on the year over year growth of revenue. For administrative expense we are taking 6%,
keeping peer with the forecasted inflation rate of the scholars.
4. Financial Expenses
Financial expenses include short term and long term interest rate, lease expense, bank charges, financial consultancy
and so on. They are expecting a major turn in the debt to equity ratio as in the annual book they are clear that they be
more focus on operations rather than non-operational expense and they don’t want to bear the cost of debt severely.
5. Inventory, capital work in progress
Inventory along with receivables, payables and wrong capital has been forested based on the day’s method.
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2012 -
2013
2013 -
2014
2014 -
2015
2015 -
2016
2016 -
2017
2017 -
2018
2018 -
2019
2019 -
2020
2020 -
2021
2021 -
2022
2022 -
2023
COGS
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
2018 -2019
2019 -2020
2020 -2021
2021 -2022
2022 -2023
Inflation and Admin Cost
Series2 Series1
15 | P a g e
6. Interest bearing debt
As the company wants to get rid of their long term debt and lower their interest expense, they would start paying back
their debts.
7. CAPEX
We are assuming capital expenditure whenever the capacity reaches 90%. After the last expenditure, we are assuming
4% to 5% constant capacity expansion and no major expense will be needed.
8. Depreciation
Depreciation has been considered 4% straight line.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2012 -
2013
2013 -
2014
2014 -
2015
2015 -
2016
2016 -
2017
2017 -
2018
2018 -
2019
2019 -
2020
2020 -
2021
2021 -
2022
2022 -
2023
Gross Profit margin
0.000%
2.000%
4.000%
6.000%
8.000%
10.000%
12.000%
14.000%
16.000%
18.000%
2012 -
2013
2013 -
2014
2014 -
2015
2015 -
2016
2016 -
2017
2017 -
2018
2018 -
2019
2019 -
2020
2020 -
2021
2021 -
2022
2022 -
2023
Net profit Margin
16 | P a g e
Appendix 1: Pro Forma Income Statement
Period 0 1 2 3 4 5 6 7 8 9 10
2012 -
2013
2013 -
2014
2014 -
2015
2015 -
2016
2016 -
2017
2017 -
2018
2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
Revenue
7,093,179,
369
7,922,353
,876
8,996,148
,594
10,965,04
2,877
11,290,55
7,541
12,928,50
1,078
13,955,358,
592.18
15,847,458,
148.49
16,306,716,
939.42
17,132,738,
788.14
17,627,547,
829.92
Biscuit
6,501,608,
210
7,389,179
,460
8,555,337
,313
10,541,79
2,222
10,929,11
0,261
12,546,54
8,322
13,558,127,
725.94
15,434,338,
047.60
15,877,072,
034.49
16,685,908,
087.02
17,162,843,
900.76
Battery
327,704,8
87
335,115,5
69
298,672,1
33
354,170,8
85
361,447,2
80
381,952,7
56
397,230,86
6
413,120,10
1
429,644,90
5
446,830,70
1
464,703,92
9
Others
263,866,2
73
198,058,8
47
142,139,1
48
69,079,77
0
- -
YoY growth 12% 14% 22% 3% 15% 8% 14% 3% 5% 3%
COGS
5,271,458,
122
5,639,774
,637
6,338,235
,058
7,274,288
,716
7,523,115
,147
8,707,718,
622
9,070,983,0
85
10,300,847,
797
10,599,366,
011
11,136,280,
212
11,457,906,
089
COGS % 74.3% 71.2% 70.5% 66.3% 66.6% 67.4% 65% 65% 65% 65% 65%
Gross Profit
1,821,721,
247
2,282,579
,239
2,657,913
,536
3,690,754
,161
3,767,442
,394
4,220,782,
456
4,884,375,5
07
5,546,610,3
52
5,707,350,9
29
5,996,458,5
76
6,169,641,7
40
Gross Profit
margin
25.7% 28.8% 29.5% 33.7% 33.4% 32.6% 35.0% 35.0% 35.0% 35.0% 35.0%
Distribution
expenses 714,449,1
68
881,467,8
43
997,451,1
89
1,248,601
,191
1,322,222
,891
1,497,230,
341
1,616,149,1
71
1,835,270,3
86
1,888,456,4
59
1,984,116,8
12
2,041,419,9
05
Administrative
expenses 176,002,0
08
216,195,6
27
229,292,3
00
325,712,8
90
292,089,9
09
328,563,8
59
348,277,69
1
369,174,35
2
391,324,81
3
414,804,30
2
439,692,56
0
Growth 22.8% 6.1% 42.1% -10.3% 12.5% 6.0% 6.0% 6.0% 6.0% 6.0%
Total Operating
Expenses 890,451,1
76
1,097,663
,470
1,226,743
,489
1,574,314
,081
1,614,312
,800
1,825,794,
200
1,964,426,8
62
2,204,444,7
38
2,279,781,2
72
2,398,921,1
14
2,481,112,4
65
Operating Profit
931,270,0
71
1,184,915
,769
1,431,170
,047
2,116,440
,080
2,153,129
,594
2,394,988,
256
2,919,948,6
45
3,342,165,6
14
3,427,569,6
57
3,597,537,4
62
3,688,529,2
75
Other expenses
45,723,55
7
60,785,40
2
177,489,6
32
110,866,4
89
111,296,2
78
119,981,8
56
121,243,60
7
122,600,87
1
124,045,29
3
125,342,41
3
126,660,32
4
% of revenue 0.64% 0.77% 1.97% 1.01% 0.99% 0.93% 1.05% 1.12% 1.18% 1.05% 1.05%
Other revenues
and profits 112,784,2
21
146,934,4
58
291,867,4
53
286,394,2
47
299,186,8
03
280,149,8
45
286,741,66
1
293,853,18
4
301,447,39
0
308,906,26
1
316,478,88
4
% of revenue 1.59% 1.85% 3.24% 2.61% 2.65% 2.17% 2.35% 2.48% 2.58% 2.47% 2.45%
EBIT
998,330,7
35
1,271,064
,825
1,545,547
,868
2,291,967
,838
2,341,020
,119
2,555,156,
245
3,085,446,7
00
3,513,417,9
27
3,604,971,7
54
3,781,101,3
10
3,878,347,8
35
Finance Expenses
93,955,60
1
64,214,39
9
98,632,36
1
89,632,36
1
118,234,7
67
155,519,1
17
112,000,00
0.00
112,000,00
0.00
112,000,00
0.00
112,000,00
0.00
112,000,00
0.00
Rate 31% 12% 25% 36% 40% 32% 36% 45% 64% 119% #DIV/0!
EBT
904,375,1
34
1,206,850
,426
1,446,915
,507
2,202,335
,477
2,222,785
,352
2,399,637,
128
2,973,446,7
00
3,401,417,9
27
3,492,971,7
54
3,669,101,3
10
3,766,347,8
35
Tax
289,018,0
74
337,814,2
13
451,207,3
79
578,617,5
03
579,534,6
78
608,569,5
08
814,021,06
9
931,183,95
5
956,248,04
8
1,004,465,8
85
1,031,088,4
31
Tax Rate 32% 28% 31% 26% 26% 25% 27% 27% 27% 27% 27%
Profit after TAX
615,357,0
60
869,036,2
13
995,708,1
28
1,623,717
,974
1,643,250
,674
1,791,067,
620
2,159,425,6
31
2,470,233,9
72
2,536,723,7
06
2,664,635,4
25
2,735,259,4
04
17 | P a g e
Dividend
899,724,9
87
999,694,43
0
999,694,43
0
999,694,43
0
999,694,43
0
999,694,43
0
Dividend payout
ratio
10% 20% 30% 40% 45% 50.2% 50% 50% 50% 50% 50%
Number of shares
199,938,8
86
199,938,88
6
199,938,88
6
199,938,88
6
199,938,88
6
199,938,88
6
Face value 10 10 10 10 10 10 10 10 10 10 10
EPS 1.99 2.16 2.47 2.54 2.67 2.74
18 | P a g e
Period012345678910
2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
Inventory517,702,890661,070,355697,852,284581,286,241889,663,2381,306,910,3321,311,714,6571,489,559,9411,532,727,3371,610,368,1201,656,877,012
DaysofInventory3638363132333434343434
Trade&otherreceivables22,881,92718,264,397107,576,409170,337,813163,380,305178,459,95482,973,259.3494,222,964.3396,953,542.59101,864,754.62104,806,701.16
Daysofrecievables1.1770.9482.0112.6553.1193.1102.172.172.172.172.17
Recievablestorevenue0.32%0.23%1.20%1.55%1.45%1.38%0.59%0.59%0.59%0.59%0.59%
YoYgrowthinrecievables-20%489%58%-4%9%-54%14%3%5%3%
Shortterminvestments1,080,072,6091,309,303,0942,083,950,5053,570,416,8144,095,492,1623,970,700,9213,970,700,9213,970,700,9213,970,700,9213,970,700,9213,970,700,921
%ofrevenue15.23%16.53%23.16%32.56%36.27%30.71%28.45%25.06%24.35%23.18%22.53%
Cash&cashequivalents135,168,749486,934,939456,924,258381,708,726247,347,709461,316,250527,984,1731,115,362,2652,594,020,4263,761,019,2275,519,499,994
YoYgrorthofcash&cashequialents260.24%-6.16%-16.46%-35.20%86.51%14.45%111.25%132.57%44.99%46.76%
Advance,Deposits&Prepayment505,029,905703,599,909507,430,253973,767,4391,360,608,0251,725,403,8752,093,303,7892,377,118,7221,956,806,0332,055,928,6551,762,754,783
%ofrevenue7.12%8.88%5.64%8.88%12.05%13.35%15.00%15.00%12.00%12.00%10.00%
YOYgrowthofdeposit39.32%-27.88%91.90%39.73%26.81%21.32%13.56%-17.68%5.07%-14.26%
CurrentAssets2,260,856,0803,179,172,6943,853,733,7095,677,517,0336,756,491,4397,642,791,3327,986,676,7999,046,964,81410,151,208,25911,499,881,67713,014,639,411
YoYgrowthofcurrentasset40.62%21.22%47.33%19.00%13.12%4.50%13.28%12.21%13.29%13.17%
PropertyPlant&Equipment1,102,174,4311,142,580,8781,679,103,3301,671,383,3851,907,118,3672,243,553,8212,140,450,3792,561,390,1102,955,969,5863,235,715,8313,398,601,133
IntangibleAssets-25,811,46019,358,59512,905,7306,452,8651
CapitalWorkinProgress330,642,042701,072,154211,484,151278,962,060450,255,126930,608,133616,037,040699,560,756.52719,834,003.13756,297,419.79778,139,975.51
Daysofworkinprogress1724171313141616161616
Non-CurrentAssets1,432,816,4731,869,464,4921,909,946,0761,963,251,1752,363,826,3583,174,161,9552,756,487,4193,260,950,8673,675,803,5893,992,013,2514,176,741,109
YoYgrowthofnon-currentasset30.47%2.17%2.79%20.40%34.28%-13.16%18.30%12.72%8.60%4.63%
TotalAssets3,693,672,5535,048,637,1865,763,679,7857,640,768,2089,120,317,79710,816,953,28710,743,164,21812,307,915,68113,827,011,84815,491,894,92817,191,380,520
Trade&otherpayables-125,387,611653,271,734587,102,902544,984,324468,999,344501,682,783.89569,702,087.49586,212,034.35615,906,788.36633,694,735.26
Dayspayable6161515131313131313
Longtermloanspayablewithinoneyear108,825,419104,587,517---------
Shorttermloans104,653,74714,385,163138,262,703214,166,383846,439,2651,571,406,579546,940,828.66621,096,321.87639,095,671.87671,469,263.09690,861,904.67
%ofworkingcapital31.652%2.052%65.377%76.773%187.991%168.858%88.784%88.784%88.784%88.784%88.784%
Amountduetorelatedparties525,923,700592,994,929236,831,561-------
Leaserentalpayablewithinoneyear--34,364,99836,151,18825,410,8119,248,0533,699,221.20----
Taxpayable477,222,034580,949,742388,485,302968,656,3781,138,136,9951,149,733,3081,166,013,7291,184,637,4081,203,762,3691,223,851,6871,244,473,456
Adjustmentoftaxpayable103,727,708(192,464,440)580,171,076169,480,61711,596,31316,280,42118,623,67919,124,96120,089,31820,621,769
Tax289,018,074337,814,213451,207,379578,617,503579,534,678608,569,508814,021,069.48931,183,955.15956,248,047.901,004,465,885.391,031,088,430.84
%oftaxadjustedaspayable30.71%-42.66%100.27%29.24%1.91%2%2%2%2%2%
Dividendspayable24,014,17530,344,33343,791,02570,194,750111,632,675160,773,483149,954,165149,954,165149,954,165149,954,165149,954,165
%ofDividend17.87%15%15%15%15%15%
Interestpayable--172,977,248196,356,242144,803,219174,225,982112,000,000.00112,000,000.00112,000,000.00112,000,000.00112,000,000.00
Interest93,955,60164,214,39998,632,36189,632,361118,234,767155,519,117112,000,000.00112,000,000.00112,000,000.00112,000,000.00112,000,000.00
%ofpayabletointerest219%122%112%
OthersLiabilities414,522,864528,582,749320,114,410787,089,136597,235,522488,396,554488,396,554488,396,554488,396,554488,396,554488,396,554
CurrentLiabilities1,655,161,9391,977,232,0441,988,098,9812,859,716,9793,408,642,8114,022,783,3032,968,687,2823,125,786,5363,179,420,7943,261,578,4573,319,380,814
InterestBearingBorrowings204,538,362444,933,166245,819,608136,749,676176,148,442361,912,071308,234,882246,506,115175,518,03393,881,739-
DefferredTaxLiabilities56,991,34069,487,52694,673,26893,768,113107,703,766123,429,925
Obligationunderfinance&operatingleases45,258,26734,586,90453,433,82919,261,08014,971,6924,634,2692,317,134.501,158,567.25579,283.6300
Non-CurrentLiabilities306,787,969549,007,596393,926,705249,778,869298,823,900489,976,265310,552,016.75247,664,682.43176,097,316.6893,881,738.61-
TotalLiabilities1,961,949,9082,526,239,6402,382,025,6863,109,495,8483,707,466,7114,512,759,5683,279,239,298.403,373,451,218.783,355,518,110.853,355,460,195.723,319,380,814.21
ShareCapital783,613,1201,175,419,6801,586,816,5601,904,179,8701,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,860
RetainedEarnings948,109,5251,346,977,8661,794,837,5392,627,092,4903,413,462,2264,304,804,8595,464,536,059.776,935,075,601.738,472,104,877.6110,137,045,872.2711,872,610,846.04
TotalEquity1,731,722,6452,522,397,5463,381,654,0994,531,272,3605,412,851,0866,304,193,7197,463,924,9208,934,464,46210,471,493,73812,136,434,73213,871,999,706
TotalLiabilties&Equity3,693,672,5535,048,637,1865,763,679,7857,640,768,2089,120,317,79710,816,953,28710,743,164,21812,307,915,68113,827,011,84815,491,894,92817,191,380,520
Appendix 2: Pro Forma Balance Sheet
19 | P a g e
Appendix 3: Pro Forma Cash Flow Statement
Period 6 7 8 9 10
2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
Net income 2,159,425,631 2,470,233,972 2,536,723,706 2,664,635,425 2,735,259,404
Depriciation 336,020,760 401,843,411 471,097,575 536,388,342 597,194,746
Change in other net operating assets 600,295,123 (149,548,771) (50,903,680) (77,246,451) (54,860,411)
Change in Working Capital (314,571,093) 83,523,716 20,273,247 36,463,417 21,842,556
Cash flow from operating activity 2,209,722,360 2,938,102,438 3,038,451,714 3,241,806,801 3,365,472,005
Capex 857,878,158 822,783,143 865,677,051 816,134,587 760,080,048
Change in Investment
Change in non-current asset
Cash flow from investing activity (857,878,158) (822,783,143) (865,677,051) (816,134,587) (760,080,048)
Change in lease (2,317,135) (1,158,567) (579,284) (579,284) -
Change in interest bearing debt (53,677,189) (61,728,767) (70,988,082) (81,636,294) (93,881,739)
Cash dividend paid (999,694,430) (999,694,430) (999,694,430) (999,694,430) (999,694,430)
Cash flow from Financing activities (1,055,688,753) (1,062,581,764) (1,071,261,796) (1,081,910,008) (1,093,576,169)
Net increase in cash and cash equivilents 296,155,449 1,052,737,531 1,101,512,868 1,343,762,206 1,511,815,788
Beginning cash flow 461,316,250 757,471,699 1,810,209,229 2,911,722,097 4,255,484,303
Ending cashflow 757,471,699 1,810,209,229 2,911,722,097 4,255,484,303 5,767,300,090
20 | P a g e
Appendix 4: Property Plant and Equipment (Opening balance) & Depreciation
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023
PropertyPlantandEquipment(Openingbalance)
Land&Landdevelopment 118,664,411 140,530,307 152,918,445 165,503,842 213,080,584
FactoryBuildings&OtherConstruction 224,939,136 579,987,022 688,901,674 693,620,912 707,500,809
Plant&Machinery 794,728,442 970,921,872 1,694,012,396 1,875,484,544 2,259,853,046
OfficeEquipment 9,084,246 13,973,563 19,690,429 20,944,969 23,795,715
Furniture&Fixtures 10,371,083 13,923,713 17,218,664 23,032,334 28,621,181
Transport&Vehicles 63,556,356 67,070,356 80,593,672 84,550,144 109,530,002
TotalPPE(OpeningBalance) 1,221,343,674 1,786,406,833 1,843,653,032.00 2,653,335,280 2,863,136,745 3,342,381,337 4,200,259,495 5,023,042,638 5,888,719,689 6,704,854,276 7,464,934,324
2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
Depriciation
Factory Buildings & Other Construction 53,541,307 53,358,296 59,249,801 57,609,551 56,284,104
Plant & Machinery 76,848,354 30,838,201 147,534,224 174,316,247 215,819,739
Office Equipment 1,410,906 2,035,716 2,100,603 2,238,118 2,510,646
Furniture & Fixtures 1,239,013 1,288,162 1,384,539 1,644,495 2,164,748
Transport & Vehicles 9,717,752 8,959,005 7,252,242 7,701,199 11,746,150
Total depriciation of the year 142,757,332 96,479,380 144,001,009 217,521,409 243,509,610 288,525,387 336,020,759.63 401,843,411.05 471,097,575.10 536,388,342.06 597,194,745.93
%of depriciable asset 11.69% 5.40% 7.81% 8.20% 8.50% 8.63% 8.00% 8.00% 8.00% 8.00% 8.00%
Growth 11.9% 18.5% 16.5% 19.6% 17.2% 13.9% 11.3%
Accumulated depriciation(Beg. Balance) 541,839,070 684,596,402 781,075,782 925,076,791 1,142,598,200 1,386,107,810 1,723,788,357 2,059,809,117 2,461,652,528 2,932,750,103 3,469,138,445
Accumulated depriciation(End Balance) 684,596,402 781,075,782 925,076,791 1,142,598,200 1,386,107,810 1,723,788,357 2,059,809,117 2,461,652,528 2,932,750,103 3,469,138,445 4,066,333,191
Depriciation of the year
21 | P a g e
2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
Property Plant andEquipment (Depriciated)
Land &Land Development 140,530,307 149,964,495 152,918,445 165,503,842 213,080,584 221,991,351
FactoryBuildings &Other Construction 440,251,658 387,593,362 439,971,152 385,440,589 341,710,935 418,513,653
Plant&Machinery 488,790,905 574,382,464 1,053,776,731 1,087,714,654 1,297,766,909 1,502,126,493
Office Equipment 6,193,308 9,447,731 7,821,071 6,975,008 7,587,636 9,584,143
Furniture &Fixtures 5,731,762 5,992,341 6,454,433 10,883,564 14,827,916 18,896,106
Transport&Vehicles 20,676,491 15,200,486 18,161,498 14,865,728 32,144,387 72,442,075
TotalPPE 1,102,174,431 1,142,580,879 1,679,103,330 1,671,383,385 1,907,118,367 2,243,553,821 2,140,450,378.70 2,561,390,110.41 2,955,969,585.99 3,235,715,830.96 3,398,601,133.31
YoYGrowth 3.67% 46.96% -0.46% 14.10% 17.64% -4.60% 19.67% 15.40% 9.46% 5.03%
Property Plant andEquipment (Depriciated)
Appendix 5: Asset Schedule
2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
CAPEX
Land & Land development 24856896 9,434,188 12,585,397 47,576,742 8,910,767
Factory Buildings & Other Construction 355047886 700,000 4,719,238 13,879,897 133,086,822
Plant & Machinery 176193430 116,429,760 181,472,148 384,368,502 420,179,323
Office Equipment 4889317 5,290,138 1,254,540 2,850,746 4,507,153
Furniture & Fixtures 3552630 1,548,741 5,813,670 5,588,847 6,232,938
Transport & Vehicles 3514000 3,483,000 3,956,472 24,979,858 52,043,838
Total additional CAPEX(at cost) 568,054,159 136,885,827 2,024,240,078 209,801,465 479,244,592 624,960,841 857,878,158 822,783,143 865,677,051 816,134,587 760,080,048
CAPEX growth -75.90% 1378.78% -89.64% 128.43% 30.41% 37.27% -4.09% 5.21% -5.72% -6.87%
%of revenue 8.01% 1.73% 22.50% 1.91% 4.24% 4.83% 6.15% 5.19% 5.31% 4.76% 4.31%
DRIVERS
Installed Capacity(MT) 49,339 73,656 76,886 81,068 86,332 105,219 111,006.05 116,793.09 122,343.39 128,183.05 133,688.50
Capacity Expansion(MT) 6,859 24,317 3,230 4,182 5,264 18,887 5,787 5,550 5,840 5,505 5,127
Capacity Growth 49.29% 4.39% 5.44% 6.49% 21.88% 6% 5% 5% 5% 4%
Production 44,199.75 51,581.67 58,867.10 65,706.15 79,551.90 81,426.70 86032.32152 91255.34376 98936.67107 96928.25664 97015.36775
Sales(MT) 42,423.35 50,912.51 58,955.85 65,733.86 80,156.68 80,289.00 85,172.00 90,342.79 97,947.30 95,958.97 96,045.21
Production-Sales gap 95.98% 1.30% -0.15% -0.04% -0.76% 1.40% 1% 1% 1% 1% 1%
Capacity Utilization 90% 70% 77% 81% 92% 77% 78% 78% 81% 76% 73%
Cost of capacity expansion 82818.8 5629.2 626699.7 50167.7 91041.9 33089.5 148,241 148,241 148,241 148,241 148,241
CAPEXCALCULATION
22 | P a g e
Discount Rate Calculations (Cost of Debt) - Assumptions
Shareholder's Equity 7,463,924,920
Interest Bearing Debt 310,552,017
Interest expense / Total interest bearing debt 15%
Tax rate 27%
After-tax cost of debt 14%
Discount Rate Calculations (WACC) - Assumptions
Total Liabilities / Total Debt & Equity 31%
Equity / Total Debt & Equity 69%
WACC 14.46%
Appendix 6: WACC
Discount Rate Calculations (Cost of Equity) - Assumptions
10 Year T-Bond average 9.5%
Equity Risk Premium 5%
Beta of Olympic 1.000
Cost of Equity 15%
23 | P a g e
Appendix 7: DCF (FCFF)
2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
EBIT 3,085,446,700 3,513,417,927 3,604,971,754 3,781,101,310 3,878,347,835
Tax 27% 27% 27% 27% 27%
2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
EBIT*(1-TAX) 2,252,376,091 2,564,795,087 2,631,629,380 2,760,203,956 2,831,193,919
Depreciation 336,020,760 401,843,411 471,097,575 536,388,342 597,194,746
(less) CAPEX (857,878,158.33) (822,783,142.76) (865,677,050.68) (816,134,587.03) (760,080,048.28)
(less) Investment in Working Capital -616037040.3 -699560756.5 -719834003.1 -756297419.8 -778139975.5
Free cash flows 1,114,481,652 1,444,294,599 1,517,215,902 1,724,160,292 1,890,168,641
Terminal value
Total cash flows 1,114,481,652 1,444,294,599 1,517,215,902 1,724,160,292 1,890,168,641
Time Line 0 1 2 3 4
PV of cash flows 1,114,481,652 1,261,869,688 1,158,150,043 1,149,883,393 1,101,375,566
47,254,216,034.92
PV of FCFF 53,039,976,377
Add: Cash 527,984,173
Less: Interest bearing Debt (308,234,882)
Equity Value 53,876,195,433
No. of stock outstanding 199,938,886
Projected 269
24 | P a g e
Peer firms in DSE P/E
Olympic 22.5
Golden harvest 29.4
AMCL Pran 28.2
RD Food 32.5
Fu Wang Foods 22.74
Peer firms average 27.068
Industry P/E 27.068
EPS of Olympic 10.80
Intrinsic Value 292.35
Appendix 8: Relative Valuation
25 | P a g e
Appendix 9: Ratios
2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023
Liquidity Ratio
Current Ratio 1.37 1.61 1.94 1.99 1.98 1.90 2.69 2.89 3.19 3.53 3.92
Quick Ratio 1.05 1.27 1.59 1.78 1.72 1.57 2.25 2.42 2.71 3.03 3.42
Cash Ratio 0.08 0.25 0.23 0.13 0.07 0.11 0.18 0.36 0.82 1.15 1.66
Operating Efficiency Ratios
Inventory Turnover Ratio 10.18 8.53 9.08 12.51 8.46 6.66 6.92 6.92 6.92 6.92 6.92
Operating Profitability Ratios
Gross Profit Margin 25.68% 28.81% 29.55% 33.66% 33.37% 32.65% 35.00% 35.00% 35.00% 35.00% 35.00%
Op. Profit Margin 13.13% 14.96% 15.91% 19.30% 19.07% 18.52% 20.92% 21.09% 21.02% 21.00% 20.92%
Pre Tax Profit 12.75% 15.23% 16.08% 20.09% 19.69% 18.56% 21.31% 21.46% 21.42% 21.42% 21.37%
Net Profit Margin 8.68% 10.97% 11.07% 14.81% 14.55% 13.85% 15.47% 15.59% 15.56% 15.55% 15.52%
Return on Total Assets (ROA) 16.66% 17.21% 17.28% 21.25% 18.02% 16.56% 20.10% 20.07% 18.35% 17.20% 15.91%
Return on Equity (ROE) 35.53% 34.45% 29.44% 35.83% 30.36% 28.41% 28.93% 27.65% 24.23% 21.96% 19.72%
Leverage Ratios
Total Debt to Equity 1.13 1.00 0.70 0.69 0.68 0.72 0.44 0.38 0.32 0.28 0.24
Debt to Total Assets 0.531 0.500 0.413 0.407 0.407 0.417 0.305 0.274 0.243 0.217 0.193
Valuation Ratios
Dividend Payout Ratio 10.00% 20.00% 30.00% 40.00% 45.00% 50.23% 50.00% 50.00% 50.00% 50.00% 50.00%
Growth Rates
Sales Growth Rate 12% 14% 22% 3% 15% 8% 14% 3% 5% 3%
Gross Profit Growth 25.3% 16.4% 38.9% 2.1% 12.0% 15.7% 13.6% 2.9% 5.1% 2.9%
Net Income Growth 41.22% 14.58% 63.07% 1.20% 9.00% 20.57% 14.39% 2.69% 5.04% 2.65%
Total Asset Growth Rate 36.7% 14.2% 32.6% 19.4% 18.6% -0.7% 14.6% 12.3% 12.0% 11.0%
DUPONT Analysis
Net Profit/Pretax Profit 68.04% 72.01% 68.82% 73.73% 73.93% 74.64% 72.62% 72.62% 72.62% 72.62% 72.62%
Pretax Profit/EBIT 90.59% 94.95% 93.62% 96.09% 94.95% 93.91% 96.37% 96.81% 96.89% 97.04% 97.11%
EBIT/Sales 14.07% 16.04% 17.18% 20.90% 20.73% 19.76% 22.11% 22.17% 22.11% 22.07% 22.00%
Sales/Assets 192.04% 156.92% 156.08% 143.51% 123.80% 119.52% 129.90% 128.76% 117.93% 110.59% 102.54%
Assets/Equity 2.13 2.00 1.70 1.69 1.68 1.72 1.44 1.38 1.32 1.28 1.24
ROE 35.53% 34.45% 29.44% 35.83% 30.36% 28.41% 28.93% 27.65% 24.23% 21.96% 19.72%

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Olympic Industries Limited Equity Valuation 2019

  • 1. EQUITY VALUATION REPORT Submitted to: Farhana Zahir Senior Lecturer, Department of Accounting & Finance North South University Submitted by: Team Olympics
  • 2. 1 | P a g e INVESTMENT SUMMARY Olympic Industries is the largest manufacturer, distributor and marketer of biscuits in Bangladesh. It has a market share of 39% of the total branded market for biscuits and confectionary items. HIGHLIGHTS We have issued a BUY recommendation on a 1-year target price of BDT 276BDT, representing 32.5% capital gain from its April 21, 2019 closing price of BDT 219. To get this price, 50% weight for DCF model and 50% weight for P/E multiple was used. (Figure2). Our recommendations are based on the following catalysts. • The revenue of Olympic Industries is mainly from the biscuit and confectionary items and most of the sales are from domestic arena. So, dominating on the domestic market is fairly easier for Olympic Industries with huge market share. • Investment in expansion projects for Olympic Industries is remarkable. In May 2018, they successfully launched an instant noodles manufacturing line, which has an annual production capacity of 9,000 metric tons. We assume that Olympic Industries will continue the historical trend of investment in expansion projects in coming years. • Olympic Industries have 8 biscuits production lines and the 9th line of biscuits production has been started commercial operation since May 2017 and all other vertical expansion projects like Carton manufacturing line, Snacks & Noodles manufacturing line in May 2018. • The key raw materials used by the Olympic Industries are wheat, egg, palm oil, soya bean oil, sugar etc. According to World Bank, there will be no significant changes in the price of the raw materials in next 3 or 4 years , Olympic will be able to stabilize the costs from raw materials and sustain the sales growth. • VAT exemption on Palm Oil and Soya Bean Oil has been extended up to June 30, 2019 in the budget of 2017-18 which will help Olympic to stabilize their direct cost of raw materials for another two years. Date: 21 April 2019 Current Price (22 April’19): BDT 219 (USD ) Exchange Rate: TK. 83.05/ USD Recommendation: BUY Target Price: 276 BDT Capital Gain: 32.5% Sector: Food & Allied DSE: OLYMPIC Bloomberg: OLYMPI:BD Company Fundamentals Market Cap (Million BDT) 43,886.585 Market Weight 1.5% No. of Share Outstanding (Million) 199.9mn Paid-up Capital (Million BDT) 1,999.39 52-Week Price Range (BDT) 185.00-281.00 Valuation Summary Valuation Date 21 April 2019 Methodology Weight Price FCFF 50% 269 BDT P/E Multiple 50% 292.35BDT One Year Target Price (31 Dec’19) 276 BDT Current Market Price (09 Apr’18) 219 BDT Expected Capital Gain 32.5% Expected Dividend Yield 5 BDT
  • 3. 2 | P a g e Biscuits and Confectionaries Industry of Bangladesh Industry Fundamentals Market Share $597-717mn Big Brands’ share 52% Net export earnings(FY 18-19) $80.41mn Net Export Earnings ( FY 17-18) $43.09mn Net Export Earnings( next two years) $240mn Big Brands’ Worth $358mn Total Annual Production 65,000MT Supporting Industry Fundamentals Wheat Imports FY 19 6.5MMT Wheat Demand FY 19 364,390 MT What Demand FY 17 177, 330 MT Sugar Demand FY 19 2.99MMT Edible Oil Demand FY 19 2.4 MMT As the purchasing power of the middle income tier of the population is increasing, a significant portion of the population is going for bakery items for the go-to snack and as a result the companies are going for full automation process which increases efficiency and reduces cost at the same time. The industry is being driven by the fact that the target market demands high quality products but at a reasonable price which has made the market more competitive than ever before. Figure 01: The Major players in the biscuit industry The annual production of 65,000MT is on excess compared to the market demand. The net export earnings has double from the previous years and it expected to triple in the next two years respectively thus making the industry a lucrative one for investments with big brands like Danish, Olympic, Pran and others holding up the market share of 49- 50% with total worth of $358mn. Industry Fundamentals Figure 02 Source: Lightcastleparters.bd, BABBA
  • 4. 3 | P a g e Source: USDA BD Grain & Annual Feed Olympic Industries Limited Total Revenue in FY 18 $154.4mn Sales growth rate in comparison, FY 18 8.28% Export Revenue from FY 18 1.56mn Confectionary Product Growth 14.08% Market Share 30% 0 1 2 3 4 5 6 7 8 FY 15 FY 16 FY 17 FY 18 FY 19 Wheat Imports ( MMT) Supporting Industry Fundamentals Supporting ingredients for this industry is sugar, oil and wheat. Due to the increase of confectionary consumption, these key ingredients’ demand is on the rise. Sugar’s price is expected to fall by 8.7% and duty on imports of sugar has seen a decrease of 40%. Currently 139000 MT of sugar is on stock and so the price is going down. Increase in income along with GDP growth and falling prices have ensured long term survival for the biscuit industry. Source:BangladeshTrading Corporation,Lightcastlepartners.bd 0 5 10 15 20 25 30 35 40 FY 15 FY 16 FY 17 FY 18 FY 19 Supply of Products, MT ( Brands Vs. Local Bakeries) Top Brands Bakeries Growth Competitive Landscape In the early stages of Bakery production in the market, the local bakeries and confectionaries dominated the whole market but as demand grew, the top brands with high products and attractive packaging took over the market. There are around 5000 bakeries and confectionaries and 100 automated factories. Most of the bakery goods (mostly biscuits) are supplied by the top brands and the rest of the market demand of are supplied by the small bakeries and confectionaries. Olympic Industries Limited The company’s net profit margin declined from the previous year due to a change in accounting policy and a corporate reorganization of sales and marketing department causing selling expensed to rise by $ 2.03mn to achieve greater performance in the long run. Biscuits, confectionaries and snacks made up 97% of the total revenue. The company saw a CAGR of 13.72% in net profit margin and 7% in gross profit margin from 2012-2016. The company is vertically integrating its supply chain to achieve greater efficiency and overcoming challenges of full automation. Source: Olympic Annual Report 18, Lightcastlepartners.bd
  • 5. 4 | P a g e Brands of Olympic Industries Limited Nutty Energy Tip Milk Marie Queen Marie Malay Cream Orange Nutty Real Peanut Dry Cake Biscuits 30% 11% 7%6%5% 4% 37% MARKET SHARE Olympic AL Amin Pran Nabisco Romania New Olympia Others Olympic Industries Limited The top brands altogether makes up the 52%- 63% share and by being the market leader Olympic captures 30% of the market share. The company mainly produces biscuits and confectionaries and alongside batteries and plastics. The plastics are produced for their own usage although a limited portion is targeted towards the plastic market. The company is also the largest distributor and marketer of the country. Source: DATABD.Co, Team Analysis, EBL Securities Source: Olympicbd.com Target & Segmentation Age group: 13-50 years old Psychographic: Energy Driven, Health Conscious, Prefer products with variation Socio-Economic: Middle Class, Upper Middle Class Geographic: Mass market throughout the country Management Muhammad Bhai has acted as the chairman till January 2018 and currently the company is run by the Managing Director and the company does not have a CEO. The MD is responsible for implementing policies and decisions of the board of directors as well as looking after overall management of the company.
  • 6. 5 | P a g e Company Positives Expansion Projects Total cost Declaration date Exp. Start Date` PET Sheet Forming & 56mn/10mn trays 31/12/15 29/01/17 Tray making unit 8th biscuit line 104mn/9600mt 31/12/15 15/11/16 Cookies Line 133mn/7200mt 04/05/16 02/05/17 Land( N.gong) 3.475mn/5.59 14/08/16 - Decimals Land (Lalita ) 6.8mn/34 08/15/16 - Decimals Carton Manufacturing 120mn/66mn pieces 18/01/17 - Line Snacks Manufacturing 77mn/3700MT 18/01/17 - Line Noodles Line 187mn/9000MT 18/01/17 2017 Factory Building 250mn/88000sq.ft 18/01/17 2017 Source: EBL Securities Strengths Weaknesses • Market Leader • Loyal Customer Base • Large Infrastructural Investment • Largest Distributor & Marketer • Efficient management • Quality Products • Perception of being Costly • Rigid government regulations Opportunities Threats • Population is increasing • Income level is rising • Digital Marketing is booming • Use of AI based inventory management system • Political Instability • Rising concern of natural disasters • Increase in tax rates Source: Team Analysis Company Positives The growth is the reflection of strong efforts to maximize production efficiencies and capitalizing on economies of scale such as distributing fixed administrative, marketing, selling and operational costs across higher sales. Olympic Industries regularly invest for the enhancement of its capacity and product innovation. During the last two years, it invested BDT 970mn for purchases of fixed assets. It has taken several expansion projects to be implemented in this year and next year. The company invested around BDT 652mn in fixed assets in FY 2016-2017. SWOT ANALYSIS
  • 7. 6 | P a g e PESTEL ANALYSIS Political Technological • Growing political unrest • Inefficient Tax systems & unreliable data • Use of AI in inventory management system. • Use of robots in manufacturing Economical Environmental • Increase in per capita income • Air quality depreciates • Carbon emission Social Legal • Changing Lifestyle • Positive perception about the biscuit as the go-to snack • Trade License • Production & Distribution license PORTER’S FIVE FORCES Competitive Rivalry Supplier Power Buyer PowerThreat of Substitues Threat of New Entrance
  • 8. 7 | P a g e 1.0 Threats of New Entry: Negligible restrictions for entrants and since the market is lucrative there is potential chance for new companies to enter the market. 2.0 Threat of New Substitutes: There are close substitutes for every products of Olympic so the customers can forgo the products and try out new ones. 3.0 Power of Customers: Power of customers is high since the switching cost is low, customers will react indifferent to price hikes and in a drop of quality. 4.0 Power of Suppliers: Power of suppliers is low for Olympic as the company has options to buy from different suppliers at lower prices. 5.0 Competitive rivalry: The industry is saturated with 5000 bakeries altogether. In addition there are quality products being imported from outside so customers have the choice to switch to different brands. 0 20,000 40,000 60,000 80,000 100,000 FY 17-18 FY 16-17 FY 15-16 FY 14-15 Amount of Biscuits Sold Units Sold Strategic Business Units Confectionaries Bakeries Biscuits Battery Olympic Industries Limited Olympic Industries Limited is the pioneer in the biscuit industry with market share of approximately 39% the company has been serving the best of the products at a reasonable price to its customers. The company emphasizes mainly on its bakery and confectionary products and carries on automation process to make the production of biscuits more affordable. The company has invested huge amount of capital for further expansion and building new factories to increase the production since the population is increasing. The company also is taking a huge leap in the digital marketing to connect emotionally to its customers. The company has seen an export earnings of $ 1.51mn in the last year with the export earnings expected to rise to triple the amount in the upcoming days.
  • 9. 8 | P a g e BUSINESS STRATEGY Protecting the Market and Expanding the Market Share: The Company now holds 39% of the market share and it fiercely protects the market by constantly bringing in changes in product lines. The company follows the market trend and ventures into producing new products. For example, the company brought 33 different sorts of products for its different customer base and continuously working on new products to be launched in the market. Operational Strategy: The Company follows a low cost strategy thus by providing high quality products and it has high variety in its product offerings. Source: CIA World Fact book 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 2006 2008 2010 2012 2014 2016 2018 Comparison of GDP Growth Bangladesh South Asia Emerging Markets & Developing Economies INDUSTRY OVERVIEW & COMPETITIVE POSITIONING Strong Economic Growth: According to IMF, the GDP growth in 2016-17 is 7.28% which is higher than that the average GDP growth of South Asian countries and, emerging market and developing economies. The Government’s goal is to become middle income country by 2021 and the country is on the verge of achieving the goal as we can see that per capita income was USD 1,610.00 in 2016- 17 (Source: Bangladesh Bureau of Statistics). In the process of meeting the goal, the Government is implementing numerous policies which is eventually causing potential rise in living standard and income level of the people. Declining Unemployment Rate: Employment level of a country has a huge impact on consumer spending and the spending depends on consumer’s disposable income. Hence, a strong relationship prevails between the amount of disposable income and the unemployment rate According to Bangladesh Bureau of Statistics, unemployment rate will go down in upcoming years. So, declining unemployment rate will certainly contribute to increase the disposable income of people. Demography: Bangladesh has a growing population of young and vibrant people who will boost the country’s economic growth engine and to raise the consumer base for the upcoming years. 28% 19% 40% 7% 6% 0-14 year s 15- 24year s 25-54 years 55-64 years >64 years
  • 10. 9 | P a g e VALUATION DCF: Free Cash Flow to Firm Weighted Average Cost of Capital Tax Rate 27 Terminal Growth Rate 4% WACC 14.46% TERMINAL GROWTH RATE PV of FCFF 53,039,976,377 Add: Cash 527,984,173 Less: Interest bearing Debt (308,234,882) Equity Value 53,876,195,433 No. of stock outstanding 199,938,886 Projected 269 Our valuation for Olympic reaches a target price of BDT 276 and cash dividend of BDT 5, Driven by 70% of FCFF model at a price of BDT 269, and 30% of P/E Multiple model at a price of BDT 292.35. So gain of 32.5%. FCFF model has been used for Olympic’s valuation as they maintained significant growth in free cash flow for the last years. Although the growth was little bit slowly the previous year but our assumptions promises significant growth of future free cash flows. FCFF reflects the overall fundamentals of a company. Hence FCFF is more suitable for determining the stock price of Olympic industries limited. As the model suggests we have determined two phases of growth rates. First we have forecasted 5 years growth (2019-2023), then we have come up with a terminal growth rate for the rest of the years till liquidation of the company. As we know WACC consists of two elements. One is cost of equity and another is cost of debt. For Olympic’s cost of equity we have used CAPM model which gives us a figure of 15%. Beta of 1 has been chosen, neglecting the abnormal periods we have chosen periods of 2017 and 2018 for it. The cost of debt was calculated as 14% and the final WACC was 14.16%. We expected a terminal growth rate of only 4%. As we believe the company is in a matured potion. Despite of their new strategies, we believe there we be little space for them in the future to grow further as we have to acknowledge the competitive atmosphere of the market as well. For the next 5 years our estimation is very high because of their new strategies and effective investments. But at the rate the market is booming right now, it won’t take time before it reaches its maturity, then there will very few spaces to grow. We are considering the terminal growth rate lower than the estimated GDP as we believe market growth will be more relevant with the population growth rather than the GDP based on the product category.
  • 11. 10 | P a g e RELATIVE VALUATION DIVIDEND DISCOUNT MODEL Although Olympic gives constant dividends, but the valuation figure is an outlier considering our other two methods. So, we won’t be considering it in our model. SENSITIVITY ANALYSIS Sensitivity analysis has been conducted to determine the sensitivity of our FCFF model to terminal growth rate and WACC. Here, terminal growth rate defines the growth of cash for the period beyond our forecasted five years whereas we used WACC to discount our cash flows. Our 0sensitivity analysis promises a great future for this investment. We will remain in our buy call even if the WACC increases to 18% and terminal growth reduces as low as 2%. Peer firms in DSE P/E Olympic 22.5 Golden harvest 29.4 AMCL Pran 28.2 RD Food 32.5 Fu Wang Foods 22.74 Peer firms average 27.068 Industry P/E 27.068 EPS of Olympic 10.80 Intrinsic Value 292.35 WACC 269 10% 12% 14% 16% 18% 2% 508.2 507.1 506.0 505.1 504.1 Terminal Growth Rate 3% 350.7 349.5 348.5 347.5 346.6 4% 271.9 270.7 269.7 268.7 267.8 5% 224.6 223.5 222.4 221.4 220.5 6% 193.1 192.0 190.9 189.9 189.0 7% 170.6 169.5 168.4 167.4 166.5 8% 153.7 152.6 151.5 150.5 149.6 We have calculated the Price to Earnings per share multiples as we think it will be most appropriate multiples comparing with its peers. We have taken 5 companies to calculate the industry average of P/E which comes up 27.068. Our EPS was 10.08 which gives us the value of 292.35. Golden Harvest, Pran, RD food and Fu Wang Foods have been considered as pers. Since there is no exact same public company that runs the same operations as Olympic (97% biscuit), we have given 30% weight of relative valuation in our final valuation.
  • 12. 11 | P a g e Financial Analysis We have forecasted their different product sectors separately. They have already disinvested their pen business and will do the same for noodles this year. Other investments are less than 1%. Major focus of our model is on biscuits which is 97% of their business, their battery business may not be disinvested but won’t be their major headache anymore, we can clearly say from their CAPEX and advertising costs that battery will always be in the 2% to 3% zone in their portfolio. 1.1.1 Revenue forecasting: Biscuits (Top down Analysis) a) Population Growth Biscuit is such kind of product which is driven by the population growth. As higher income does not affect the consumption of the product although it affects the quality of the product consumed. Olympic has varieties of biscuits but most of them (almost 70%) of them are for rational people rather than top or bottom of the pyramid. So the population growth will be a most effective driver for it. b) Supply demand gap There is 10% of demand and supply gap in the market. We assume it will reduce in the future because of the lucrative market and reduced cost of goods sold. As we know Market supply of 2017-2018 was 205869.769 metric tons, with 10% market gap we can easily forecast the demand which I s approximately 228744.188 metric tons. 0.90% 0.95% 1.00% 1.05% 1.10% 1.15% 1.20% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Population Growth
  • 13. 12 | P a g e c) Market share We have forecasted Olympic’s market share to grow at 3% annually (current share is 39%), this is too much growth for a company with that amount of market share but since we are very conservative about our market growth and Olympic’s CAPEX and high advertising cost that has noted with high level of traction based on Bangladesh Brand Forum, we can easily assume that growth. Next two years forecasted growth of 8% and 14% clearly simulating the market predictions of the expert economists of the country. d) Price Growth We have forecasted the selling price to grow at 5%. To be in the safe side are considering it lower than the expected GDP and inflation rate. 180000 190000 200000 210000 220000 230000 240000 250000 2017 2018 2019 2020 2021 2022 2023 MetricTons Biscuit: Demand and Supply Series1 Series2 35% 36% 37% 38% 39% 40% 41% 42% 43% 44% 45% 46% 2017 2018 2019 2020 2021 2022 2023 Market Share
  • 14. 13 | P a g e 1.1.2 Revenue forecasting: Biscuits (Regression) By our regression method we also get growth of 9.116% which is close to our top down analysis but we believe the previous analysis we be more accurate for this as we are considering all the demand and supply dynamics for this. 1.2 Revenue forecasting: Battery (Historical average) Historical Growth of battery is very constant, so we are taking average of the past years which is 4% of growth. 2. Cost of Goods Sold It is expected that the cost of goods sold will decline at a sharp rate, but since our company is a matured one and will have to offer variety of products in future to survive and it will cost some efficiency. So, we believe it will be 65% of the revenue. 2013-2023 Revenue 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00% 102.00% 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020 2020 - 2021 2021 - 2022 2022 - 2023 Product Weight Biscuit Battery Others
  • 15. 14 | P a g e 3. Distribution and administrative expenses Advertising expenses were very high in the last two years. As there are so many products to be released in the future, we have forecasted it based on the year over year growth of revenue. For administrative expense we are taking 6%, keeping peer with the forecasted inflation rate of the scholars. 4. Financial Expenses Financial expenses include short term and long term interest rate, lease expense, bank charges, financial consultancy and so on. They are expecting a major turn in the debt to equity ratio as in the annual book they are clear that they be more focus on operations rather than non-operational expense and they don’t want to bear the cost of debt severely. 5. Inventory, capital work in progress Inventory along with receivables, payables and wrong capital has been forested based on the day’s method. - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020 2020 - 2021 2021 - 2022 2022 - 2023 COGS 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Inflation and Admin Cost Series2 Series1
  • 16. 15 | P a g e 6. Interest bearing debt As the company wants to get rid of their long term debt and lower their interest expense, they would start paying back their debts. 7. CAPEX We are assuming capital expenditure whenever the capacity reaches 90%. After the last expenditure, we are assuming 4% to 5% constant capacity expansion and no major expense will be needed. 8. Depreciation Depreciation has been considered 4% straight line. 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020 2020 - 2021 2021 - 2022 2022 - 2023 Gross Profit margin 0.000% 2.000% 4.000% 6.000% 8.000% 10.000% 12.000% 14.000% 16.000% 18.000% 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 - 2019 2019 - 2020 2020 - 2021 2021 - 2022 2022 - 2023 Net profit Margin
  • 17. 16 | P a g e Appendix 1: Pro Forma Income Statement Period 0 1 2 3 4 5 6 7 8 9 10 2012 - 2013 2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Revenue 7,093,179, 369 7,922,353 ,876 8,996,148 ,594 10,965,04 2,877 11,290,55 7,541 12,928,50 1,078 13,955,358, 592.18 15,847,458, 148.49 16,306,716, 939.42 17,132,738, 788.14 17,627,547, 829.92 Biscuit 6,501,608, 210 7,389,179 ,460 8,555,337 ,313 10,541,79 2,222 10,929,11 0,261 12,546,54 8,322 13,558,127, 725.94 15,434,338, 047.60 15,877,072, 034.49 16,685,908, 087.02 17,162,843, 900.76 Battery 327,704,8 87 335,115,5 69 298,672,1 33 354,170,8 85 361,447,2 80 381,952,7 56 397,230,86 6 413,120,10 1 429,644,90 5 446,830,70 1 464,703,92 9 Others 263,866,2 73 198,058,8 47 142,139,1 48 69,079,77 0 - - YoY growth 12% 14% 22% 3% 15% 8% 14% 3% 5% 3% COGS 5,271,458, 122 5,639,774 ,637 6,338,235 ,058 7,274,288 ,716 7,523,115 ,147 8,707,718, 622 9,070,983,0 85 10,300,847, 797 10,599,366, 011 11,136,280, 212 11,457,906, 089 COGS % 74.3% 71.2% 70.5% 66.3% 66.6% 67.4% 65% 65% 65% 65% 65% Gross Profit 1,821,721, 247 2,282,579 ,239 2,657,913 ,536 3,690,754 ,161 3,767,442 ,394 4,220,782, 456 4,884,375,5 07 5,546,610,3 52 5,707,350,9 29 5,996,458,5 76 6,169,641,7 40 Gross Profit margin 25.7% 28.8% 29.5% 33.7% 33.4% 32.6% 35.0% 35.0% 35.0% 35.0% 35.0% Distribution expenses 714,449,1 68 881,467,8 43 997,451,1 89 1,248,601 ,191 1,322,222 ,891 1,497,230, 341 1,616,149,1 71 1,835,270,3 86 1,888,456,4 59 1,984,116,8 12 2,041,419,9 05 Administrative expenses 176,002,0 08 216,195,6 27 229,292,3 00 325,712,8 90 292,089,9 09 328,563,8 59 348,277,69 1 369,174,35 2 391,324,81 3 414,804,30 2 439,692,56 0 Growth 22.8% 6.1% 42.1% -10.3% 12.5% 6.0% 6.0% 6.0% 6.0% 6.0% Total Operating Expenses 890,451,1 76 1,097,663 ,470 1,226,743 ,489 1,574,314 ,081 1,614,312 ,800 1,825,794, 200 1,964,426,8 62 2,204,444,7 38 2,279,781,2 72 2,398,921,1 14 2,481,112,4 65 Operating Profit 931,270,0 71 1,184,915 ,769 1,431,170 ,047 2,116,440 ,080 2,153,129 ,594 2,394,988, 256 2,919,948,6 45 3,342,165,6 14 3,427,569,6 57 3,597,537,4 62 3,688,529,2 75 Other expenses 45,723,55 7 60,785,40 2 177,489,6 32 110,866,4 89 111,296,2 78 119,981,8 56 121,243,60 7 122,600,87 1 124,045,29 3 125,342,41 3 126,660,32 4 % of revenue 0.64% 0.77% 1.97% 1.01% 0.99% 0.93% 1.05% 1.12% 1.18% 1.05% 1.05% Other revenues and profits 112,784,2 21 146,934,4 58 291,867,4 53 286,394,2 47 299,186,8 03 280,149,8 45 286,741,66 1 293,853,18 4 301,447,39 0 308,906,26 1 316,478,88 4 % of revenue 1.59% 1.85% 3.24% 2.61% 2.65% 2.17% 2.35% 2.48% 2.58% 2.47% 2.45% EBIT 998,330,7 35 1,271,064 ,825 1,545,547 ,868 2,291,967 ,838 2,341,020 ,119 2,555,156, 245 3,085,446,7 00 3,513,417,9 27 3,604,971,7 54 3,781,101,3 10 3,878,347,8 35 Finance Expenses 93,955,60 1 64,214,39 9 98,632,36 1 89,632,36 1 118,234,7 67 155,519,1 17 112,000,00 0.00 112,000,00 0.00 112,000,00 0.00 112,000,00 0.00 112,000,00 0.00 Rate 31% 12% 25% 36% 40% 32% 36% 45% 64% 119% #DIV/0! EBT 904,375,1 34 1,206,850 ,426 1,446,915 ,507 2,202,335 ,477 2,222,785 ,352 2,399,637, 128 2,973,446,7 00 3,401,417,9 27 3,492,971,7 54 3,669,101,3 10 3,766,347,8 35 Tax 289,018,0 74 337,814,2 13 451,207,3 79 578,617,5 03 579,534,6 78 608,569,5 08 814,021,06 9 931,183,95 5 956,248,04 8 1,004,465,8 85 1,031,088,4 31 Tax Rate 32% 28% 31% 26% 26% 25% 27% 27% 27% 27% 27% Profit after TAX 615,357,0 60 869,036,2 13 995,708,1 28 1,623,717 ,974 1,643,250 ,674 1,791,067, 620 2,159,425,6 31 2,470,233,9 72 2,536,723,7 06 2,664,635,4 25 2,735,259,4 04
  • 18. 17 | P a g e Dividend 899,724,9 87 999,694,43 0 999,694,43 0 999,694,43 0 999,694,43 0 999,694,43 0 Dividend payout ratio 10% 20% 30% 40% 45% 50.2% 50% 50% 50% 50% 50% Number of shares 199,938,8 86 199,938,88 6 199,938,88 6 199,938,88 6 199,938,88 6 199,938,88 6 Face value 10 10 10 10 10 10 10 10 10 10 10 EPS 1.99 2.16 2.47 2.54 2.67 2.74
  • 19. 18 | P a g e Period012345678910 2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023 Inventory517,702,890661,070,355697,852,284581,286,241889,663,2381,306,910,3321,311,714,6571,489,559,9411,532,727,3371,610,368,1201,656,877,012 DaysofInventory3638363132333434343434 Trade&otherreceivables22,881,92718,264,397107,576,409170,337,813163,380,305178,459,95482,973,259.3494,222,964.3396,953,542.59101,864,754.62104,806,701.16 Daysofrecievables1.1770.9482.0112.6553.1193.1102.172.172.172.172.17 Recievablestorevenue0.32%0.23%1.20%1.55%1.45%1.38%0.59%0.59%0.59%0.59%0.59% YoYgrowthinrecievables-20%489%58%-4%9%-54%14%3%5%3% Shortterminvestments1,080,072,6091,309,303,0942,083,950,5053,570,416,8144,095,492,1623,970,700,9213,970,700,9213,970,700,9213,970,700,9213,970,700,9213,970,700,921 %ofrevenue15.23%16.53%23.16%32.56%36.27%30.71%28.45%25.06%24.35%23.18%22.53% Cash&cashequivalents135,168,749486,934,939456,924,258381,708,726247,347,709461,316,250527,984,1731,115,362,2652,594,020,4263,761,019,2275,519,499,994 YoYgrorthofcash&cashequialents260.24%-6.16%-16.46%-35.20%86.51%14.45%111.25%132.57%44.99%46.76% Advance,Deposits&Prepayment505,029,905703,599,909507,430,253973,767,4391,360,608,0251,725,403,8752,093,303,7892,377,118,7221,956,806,0332,055,928,6551,762,754,783 %ofrevenue7.12%8.88%5.64%8.88%12.05%13.35%15.00%15.00%12.00%12.00%10.00% YOYgrowthofdeposit39.32%-27.88%91.90%39.73%26.81%21.32%13.56%-17.68%5.07%-14.26% CurrentAssets2,260,856,0803,179,172,6943,853,733,7095,677,517,0336,756,491,4397,642,791,3327,986,676,7999,046,964,81410,151,208,25911,499,881,67713,014,639,411 YoYgrowthofcurrentasset40.62%21.22%47.33%19.00%13.12%4.50%13.28%12.21%13.29%13.17% PropertyPlant&Equipment1,102,174,4311,142,580,8781,679,103,3301,671,383,3851,907,118,3672,243,553,8212,140,450,3792,561,390,1102,955,969,5863,235,715,8313,398,601,133 IntangibleAssets-25,811,46019,358,59512,905,7306,452,8651 CapitalWorkinProgress330,642,042701,072,154211,484,151278,962,060450,255,126930,608,133616,037,040699,560,756.52719,834,003.13756,297,419.79778,139,975.51 Daysofworkinprogress1724171313141616161616 Non-CurrentAssets1,432,816,4731,869,464,4921,909,946,0761,963,251,1752,363,826,3583,174,161,9552,756,487,4193,260,950,8673,675,803,5893,992,013,2514,176,741,109 YoYgrowthofnon-currentasset30.47%2.17%2.79%20.40%34.28%-13.16%18.30%12.72%8.60%4.63% TotalAssets3,693,672,5535,048,637,1865,763,679,7857,640,768,2089,120,317,79710,816,953,28710,743,164,21812,307,915,68113,827,011,84815,491,894,92817,191,380,520 Trade&otherpayables-125,387,611653,271,734587,102,902544,984,324468,999,344501,682,783.89569,702,087.49586,212,034.35615,906,788.36633,694,735.26 Dayspayable6161515131313131313 Longtermloanspayablewithinoneyear108,825,419104,587,517--------- Shorttermloans104,653,74714,385,163138,262,703214,166,383846,439,2651,571,406,579546,940,828.66621,096,321.87639,095,671.87671,469,263.09690,861,904.67 %ofworkingcapital31.652%2.052%65.377%76.773%187.991%168.858%88.784%88.784%88.784%88.784%88.784% Amountduetorelatedparties525,923,700592,994,929236,831,561------- Leaserentalpayablewithinoneyear--34,364,99836,151,18825,410,8119,248,0533,699,221.20---- Taxpayable477,222,034580,949,742388,485,302968,656,3781,138,136,9951,149,733,3081,166,013,7291,184,637,4081,203,762,3691,223,851,6871,244,473,456 Adjustmentoftaxpayable103,727,708(192,464,440)580,171,076169,480,61711,596,31316,280,42118,623,67919,124,96120,089,31820,621,769 Tax289,018,074337,814,213451,207,379578,617,503579,534,678608,569,508814,021,069.48931,183,955.15956,248,047.901,004,465,885.391,031,088,430.84 %oftaxadjustedaspayable30.71%-42.66%100.27%29.24%1.91%2%2%2%2%2% Dividendspayable24,014,17530,344,33343,791,02570,194,750111,632,675160,773,483149,954,165149,954,165149,954,165149,954,165149,954,165 %ofDividend17.87%15%15%15%15%15% Interestpayable--172,977,248196,356,242144,803,219174,225,982112,000,000.00112,000,000.00112,000,000.00112,000,000.00112,000,000.00 Interest93,955,60164,214,39998,632,36189,632,361118,234,767155,519,117112,000,000.00112,000,000.00112,000,000.00112,000,000.00112,000,000.00 %ofpayabletointerest219%122%112% OthersLiabilities414,522,864528,582,749320,114,410787,089,136597,235,522488,396,554488,396,554488,396,554488,396,554488,396,554488,396,554 CurrentLiabilities1,655,161,9391,977,232,0441,988,098,9812,859,716,9793,408,642,8114,022,783,3032,968,687,2823,125,786,5363,179,420,7943,261,578,4573,319,380,814 InterestBearingBorrowings204,538,362444,933,166245,819,608136,749,676176,148,442361,912,071308,234,882246,506,115175,518,03393,881,739- DefferredTaxLiabilities56,991,34069,487,52694,673,26893,768,113107,703,766123,429,925 Obligationunderfinance&operatingleases45,258,26734,586,90453,433,82919,261,08014,971,6924,634,2692,317,134.501,158,567.25579,283.6300 Non-CurrentLiabilities306,787,969549,007,596393,926,705249,778,869298,823,900489,976,265310,552,016.75247,664,682.43176,097,316.6893,881,738.61- TotalLiabilities1,961,949,9082,526,239,6402,382,025,6863,109,495,8483,707,466,7114,512,759,5683,279,239,298.403,373,451,218.783,355,518,110.853,355,460,195.723,319,380,814.21 ShareCapital783,613,1201,175,419,6801,586,816,5601,904,179,8701,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,8601,999,388,860 RetainedEarnings948,109,5251,346,977,8661,794,837,5392,627,092,4903,413,462,2264,304,804,8595,464,536,059.776,935,075,601.738,472,104,877.6110,137,045,872.2711,872,610,846.04 TotalEquity1,731,722,6452,522,397,5463,381,654,0994,531,272,3605,412,851,0866,304,193,7197,463,924,9208,934,464,46210,471,493,73812,136,434,73213,871,999,706 TotalLiabilties&Equity3,693,672,5535,048,637,1865,763,679,7857,640,768,2089,120,317,79710,816,953,28710,743,164,21812,307,915,68113,827,011,84815,491,894,92817,191,380,520 Appendix 2: Pro Forma Balance Sheet
  • 20. 19 | P a g e Appendix 3: Pro Forma Cash Flow Statement Period 6 7 8 9 10 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Net income 2,159,425,631 2,470,233,972 2,536,723,706 2,664,635,425 2,735,259,404 Depriciation 336,020,760 401,843,411 471,097,575 536,388,342 597,194,746 Change in other net operating assets 600,295,123 (149,548,771) (50,903,680) (77,246,451) (54,860,411) Change in Working Capital (314,571,093) 83,523,716 20,273,247 36,463,417 21,842,556 Cash flow from operating activity 2,209,722,360 2,938,102,438 3,038,451,714 3,241,806,801 3,365,472,005 Capex 857,878,158 822,783,143 865,677,051 816,134,587 760,080,048 Change in Investment Change in non-current asset Cash flow from investing activity (857,878,158) (822,783,143) (865,677,051) (816,134,587) (760,080,048) Change in lease (2,317,135) (1,158,567) (579,284) (579,284) - Change in interest bearing debt (53,677,189) (61,728,767) (70,988,082) (81,636,294) (93,881,739) Cash dividend paid (999,694,430) (999,694,430) (999,694,430) (999,694,430) (999,694,430) Cash flow from Financing activities (1,055,688,753) (1,062,581,764) (1,071,261,796) (1,081,910,008) (1,093,576,169) Net increase in cash and cash equivilents 296,155,449 1,052,737,531 1,101,512,868 1,343,762,206 1,511,815,788 Beginning cash flow 461,316,250 757,471,699 1,810,209,229 2,911,722,097 4,255,484,303 Ending cashflow 757,471,699 1,810,209,229 2,911,722,097 4,255,484,303 5,767,300,090
  • 21. 20 | P a g e Appendix 4: Property Plant and Equipment (Opening balance) & Depreciation 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 PropertyPlantandEquipment(Openingbalance) Land&Landdevelopment 118,664,411 140,530,307 152,918,445 165,503,842 213,080,584 FactoryBuildings&OtherConstruction 224,939,136 579,987,022 688,901,674 693,620,912 707,500,809 Plant&Machinery 794,728,442 970,921,872 1,694,012,396 1,875,484,544 2,259,853,046 OfficeEquipment 9,084,246 13,973,563 19,690,429 20,944,969 23,795,715 Furniture&Fixtures 10,371,083 13,923,713 17,218,664 23,032,334 28,621,181 Transport&Vehicles 63,556,356 67,070,356 80,593,672 84,550,144 109,530,002 TotalPPE(OpeningBalance) 1,221,343,674 1,786,406,833 1,843,653,032.00 2,653,335,280 2,863,136,745 3,342,381,337 4,200,259,495 5,023,042,638 5,888,719,689 6,704,854,276 7,464,934,324 2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Depriciation Factory Buildings & Other Construction 53,541,307 53,358,296 59,249,801 57,609,551 56,284,104 Plant & Machinery 76,848,354 30,838,201 147,534,224 174,316,247 215,819,739 Office Equipment 1,410,906 2,035,716 2,100,603 2,238,118 2,510,646 Furniture & Fixtures 1,239,013 1,288,162 1,384,539 1,644,495 2,164,748 Transport & Vehicles 9,717,752 8,959,005 7,252,242 7,701,199 11,746,150 Total depriciation of the year 142,757,332 96,479,380 144,001,009 217,521,409 243,509,610 288,525,387 336,020,759.63 401,843,411.05 471,097,575.10 536,388,342.06 597,194,745.93 %of depriciable asset 11.69% 5.40% 7.81% 8.20% 8.50% 8.63% 8.00% 8.00% 8.00% 8.00% 8.00% Growth 11.9% 18.5% 16.5% 19.6% 17.2% 13.9% 11.3% Accumulated depriciation(Beg. Balance) 541,839,070 684,596,402 781,075,782 925,076,791 1,142,598,200 1,386,107,810 1,723,788,357 2,059,809,117 2,461,652,528 2,932,750,103 3,469,138,445 Accumulated depriciation(End Balance) 684,596,402 781,075,782 925,076,791 1,142,598,200 1,386,107,810 1,723,788,357 2,059,809,117 2,461,652,528 2,932,750,103 3,469,138,445 4,066,333,191 Depriciation of the year
  • 22. 21 | P a g e 2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Property Plant andEquipment (Depriciated) Land &Land Development 140,530,307 149,964,495 152,918,445 165,503,842 213,080,584 221,991,351 FactoryBuildings &Other Construction 440,251,658 387,593,362 439,971,152 385,440,589 341,710,935 418,513,653 Plant&Machinery 488,790,905 574,382,464 1,053,776,731 1,087,714,654 1,297,766,909 1,502,126,493 Office Equipment 6,193,308 9,447,731 7,821,071 6,975,008 7,587,636 9,584,143 Furniture &Fixtures 5,731,762 5,992,341 6,454,433 10,883,564 14,827,916 18,896,106 Transport&Vehicles 20,676,491 15,200,486 18,161,498 14,865,728 32,144,387 72,442,075 TotalPPE 1,102,174,431 1,142,580,879 1,679,103,330 1,671,383,385 1,907,118,367 2,243,553,821 2,140,450,378.70 2,561,390,110.41 2,955,969,585.99 3,235,715,830.96 3,398,601,133.31 YoYGrowth 3.67% 46.96% -0.46% 14.10% 17.64% -4.60% 19.67% 15.40% 9.46% 5.03% Property Plant andEquipment (Depriciated) Appendix 5: Asset Schedule 2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 CAPEX Land & Land development 24856896 9,434,188 12,585,397 47,576,742 8,910,767 Factory Buildings & Other Construction 355047886 700,000 4,719,238 13,879,897 133,086,822 Plant & Machinery 176193430 116,429,760 181,472,148 384,368,502 420,179,323 Office Equipment 4889317 5,290,138 1,254,540 2,850,746 4,507,153 Furniture & Fixtures 3552630 1,548,741 5,813,670 5,588,847 6,232,938 Transport & Vehicles 3514000 3,483,000 3,956,472 24,979,858 52,043,838 Total additional CAPEX(at cost) 568,054,159 136,885,827 2,024,240,078 209,801,465 479,244,592 624,960,841 857,878,158 822,783,143 865,677,051 816,134,587 760,080,048 CAPEX growth -75.90% 1378.78% -89.64% 128.43% 30.41% 37.27% -4.09% 5.21% -5.72% -6.87% %of revenue 8.01% 1.73% 22.50% 1.91% 4.24% 4.83% 6.15% 5.19% 5.31% 4.76% 4.31% DRIVERS Installed Capacity(MT) 49,339 73,656 76,886 81,068 86,332 105,219 111,006.05 116,793.09 122,343.39 128,183.05 133,688.50 Capacity Expansion(MT) 6,859 24,317 3,230 4,182 5,264 18,887 5,787 5,550 5,840 5,505 5,127 Capacity Growth 49.29% 4.39% 5.44% 6.49% 21.88% 6% 5% 5% 5% 4% Production 44,199.75 51,581.67 58,867.10 65,706.15 79,551.90 81,426.70 86032.32152 91255.34376 98936.67107 96928.25664 97015.36775 Sales(MT) 42,423.35 50,912.51 58,955.85 65,733.86 80,156.68 80,289.00 85,172.00 90,342.79 97,947.30 95,958.97 96,045.21 Production-Sales gap 95.98% 1.30% -0.15% -0.04% -0.76% 1.40% 1% 1% 1% 1% 1% Capacity Utilization 90% 70% 77% 81% 92% 77% 78% 78% 81% 76% 73% Cost of capacity expansion 82818.8 5629.2 626699.7 50167.7 91041.9 33089.5 148,241 148,241 148,241 148,241 148,241 CAPEXCALCULATION
  • 23. 22 | P a g e Discount Rate Calculations (Cost of Debt) - Assumptions Shareholder's Equity 7,463,924,920 Interest Bearing Debt 310,552,017 Interest expense / Total interest bearing debt 15% Tax rate 27% After-tax cost of debt 14% Discount Rate Calculations (WACC) - Assumptions Total Liabilities / Total Debt & Equity 31% Equity / Total Debt & Equity 69% WACC 14.46% Appendix 6: WACC Discount Rate Calculations (Cost of Equity) - Assumptions 10 Year T-Bond average 9.5% Equity Risk Premium 5% Beta of Olympic 1.000 Cost of Equity 15%
  • 24. 23 | P a g e Appendix 7: DCF (FCFF) 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 EBIT 3,085,446,700 3,513,417,927 3,604,971,754 3,781,101,310 3,878,347,835 Tax 27% 27% 27% 27% 27% 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 EBIT*(1-TAX) 2,252,376,091 2,564,795,087 2,631,629,380 2,760,203,956 2,831,193,919 Depreciation 336,020,760 401,843,411 471,097,575 536,388,342 597,194,746 (less) CAPEX (857,878,158.33) (822,783,142.76) (865,677,050.68) (816,134,587.03) (760,080,048.28) (less) Investment in Working Capital -616037040.3 -699560756.5 -719834003.1 -756297419.8 -778139975.5 Free cash flows 1,114,481,652 1,444,294,599 1,517,215,902 1,724,160,292 1,890,168,641 Terminal value Total cash flows 1,114,481,652 1,444,294,599 1,517,215,902 1,724,160,292 1,890,168,641 Time Line 0 1 2 3 4 PV of cash flows 1,114,481,652 1,261,869,688 1,158,150,043 1,149,883,393 1,101,375,566 47,254,216,034.92 PV of FCFF 53,039,976,377 Add: Cash 527,984,173 Less: Interest bearing Debt (308,234,882) Equity Value 53,876,195,433 No. of stock outstanding 199,938,886 Projected 269
  • 25. 24 | P a g e Peer firms in DSE P/E Olympic 22.5 Golden harvest 29.4 AMCL Pran 28.2 RD Food 32.5 Fu Wang Foods 22.74 Peer firms average 27.068 Industry P/E 27.068 EPS of Olympic 10.80 Intrinsic Value 292.35 Appendix 8: Relative Valuation
  • 26. 25 | P a g e Appendix 9: Ratios 2012 -2013 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 2019 -2020 2020 -2021 2021 -2022 2022 -2023 Liquidity Ratio Current Ratio 1.37 1.61 1.94 1.99 1.98 1.90 2.69 2.89 3.19 3.53 3.92 Quick Ratio 1.05 1.27 1.59 1.78 1.72 1.57 2.25 2.42 2.71 3.03 3.42 Cash Ratio 0.08 0.25 0.23 0.13 0.07 0.11 0.18 0.36 0.82 1.15 1.66 Operating Efficiency Ratios Inventory Turnover Ratio 10.18 8.53 9.08 12.51 8.46 6.66 6.92 6.92 6.92 6.92 6.92 Operating Profitability Ratios Gross Profit Margin 25.68% 28.81% 29.55% 33.66% 33.37% 32.65% 35.00% 35.00% 35.00% 35.00% 35.00% Op. Profit Margin 13.13% 14.96% 15.91% 19.30% 19.07% 18.52% 20.92% 21.09% 21.02% 21.00% 20.92% Pre Tax Profit 12.75% 15.23% 16.08% 20.09% 19.69% 18.56% 21.31% 21.46% 21.42% 21.42% 21.37% Net Profit Margin 8.68% 10.97% 11.07% 14.81% 14.55% 13.85% 15.47% 15.59% 15.56% 15.55% 15.52% Return on Total Assets (ROA) 16.66% 17.21% 17.28% 21.25% 18.02% 16.56% 20.10% 20.07% 18.35% 17.20% 15.91% Return on Equity (ROE) 35.53% 34.45% 29.44% 35.83% 30.36% 28.41% 28.93% 27.65% 24.23% 21.96% 19.72% Leverage Ratios Total Debt to Equity 1.13 1.00 0.70 0.69 0.68 0.72 0.44 0.38 0.32 0.28 0.24 Debt to Total Assets 0.531 0.500 0.413 0.407 0.407 0.417 0.305 0.274 0.243 0.217 0.193 Valuation Ratios Dividend Payout Ratio 10.00% 20.00% 30.00% 40.00% 45.00% 50.23% 50.00% 50.00% 50.00% 50.00% 50.00% Growth Rates Sales Growth Rate 12% 14% 22% 3% 15% 8% 14% 3% 5% 3% Gross Profit Growth 25.3% 16.4% 38.9% 2.1% 12.0% 15.7% 13.6% 2.9% 5.1% 2.9% Net Income Growth 41.22% 14.58% 63.07% 1.20% 9.00% 20.57% 14.39% 2.69% 5.04% 2.65% Total Asset Growth Rate 36.7% 14.2% 32.6% 19.4% 18.6% -0.7% 14.6% 12.3% 12.0% 11.0% DUPONT Analysis Net Profit/Pretax Profit 68.04% 72.01% 68.82% 73.73% 73.93% 74.64% 72.62% 72.62% 72.62% 72.62% 72.62% Pretax Profit/EBIT 90.59% 94.95% 93.62% 96.09% 94.95% 93.91% 96.37% 96.81% 96.89% 97.04% 97.11% EBIT/Sales 14.07% 16.04% 17.18% 20.90% 20.73% 19.76% 22.11% 22.17% 22.11% 22.07% 22.00% Sales/Assets 192.04% 156.92% 156.08% 143.51% 123.80% 119.52% 129.90% 128.76% 117.93% 110.59% 102.54% Assets/Equity 2.13 2.00 1.70 1.69 1.68 1.72 1.44 1.38 1.32 1.28 1.24 ROE 35.53% 34.45% 29.44% 35.83% 30.36% 28.41% 28.93% 27.65% 24.23% 21.96% 19.72%