pitch book sample - food sector

Discussions Material – ABC & Co.

MONTH DD, 20XX

Potential Targets in Food Sector

• Aranca – Overview

• Situation Overview – Asia-Pacific Food & Beverage Industry

• Potential Targets – Short Profiles

Key Discussion Points

ABC & CO. 2

Aranca

OVERVIEW

ABC & CO. 3

Aranca – Company Overview

ABC & CO. 4

Company Overview Key Management

• Founded in UK in 2003, Aranca is a provider of customized investment research, business research, valuation services and intellectual property research services

• The company research solutions includes:

• Investment Research: Provides customized, equity research outsourcing, financial research outsourcing, economic research outsourcing and analytical support

• Business Research: Provides customized research solutions on markets, competition, customers, supply chain, innovation and technology trends

• Valuation and Advisory Services: Provides defensible valuations and fairness opinions for tax compliance and financial reporting (US GAAP/IFRS)

• Intellectual Property Research: Provides intellectual property research, analytics, valuation and out-licensing support services

• Company’s clientele includes Fortune 500 corporations, large financial institutions like investment banks, hedge funds, PE/VC firms, brokers, and startup firms

• The company has global presence including in the US, Europe and Middle East, and a state-of-the-art delivery center in Mumbai, India

Hemendra AranFounder & CEO• Served at Infosys where he worked with global

corporations such as Goldman Sachs, Reebok and Thomson Electronics

• Alumnus of London Business School (MBA), Haas School of Business, University of California, Berkeley and Indian Institute of Technology (Madras)

Madhusudan RajagopalanDirector, India Operations• Served as a management consultant with

Accenture where he handled strategy and business performance improvement assignments

• Alumnus of the Indian Institute of Management, Bangalore and IIT Madras (B.Tech)

Neeraj BhardwajDirector, Business Development• Over 10 years of experience in financial services,

outsourcing and consulting

• Founded a business process outsourcing company after serving as Bank Analyst at with the Bank of England

• Holds a Bachelors in Finance from the London School of Economics and an MBA from London Business School

Source: Company Website

Aranca – Experience & Coverage

ABC & CO. 5

Sector Experience Across Regions Coverage

Source: Company Website

Sector / IndustryNorth

America

Latin

America

Western

Europe

Eastern &

Central

Europe

Middle

East &

Africa

Asia

Pacific

Aerospace & Defense • • • •

Automobiles & Components • • • •

Banking • • • • • •

Capital Goods • • • • •

Chemicals • • • •

Construction & Engineering • • • •

Diversified Financials • • • • • •

Energy Equipment & Services • • • • •

Food Beverage & Tobacco • • • •

Health Care Equipment & Services • • • •

Hotels Restaurants & Leisure • • • • • •

Household & Personal Products • • • •

Household Durables • • • •

Insurance • • • • •

IT Software & Services • • • •

Media • • •

Metals & Mining • • • • • •

Oil & Gas • • • • • •

Paper & Forest Products • • • •

Pharmaceuticals • • • • •

Real Estate • • • • • •

Retailing • • • • • •

Semiconductors & Equipment • • •

Telecommunication Services • • • • • •

Textiles, Apparel & Luxury Goods • • • •

Transportation & Logistics • • • • • •

North America34%

Asia Pacific16%

Middle East & Africa18%

Europe18%

Latin America14%

Coverage by Geography

Large Cap32%

Mid Cap46%

Small Cap22%

Coverage by Market Cap

Aranca – Assignments Handled

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Selected Assignments Handled

Source: Company Website Case Studies

Private Equity / Venture Capital Firms

Identification and profiling of companies in target

sectors with specific technology capabilities

PE – VC Research

Identifying investment opportunities in the global

Toll Road theme

Investment Banking Analytics

Identifying potential acquisition targets in the

bakery segment in Europe

Enterprises

Profiling and short-listing suitable acquisition

candidates in the chemicals sector

PE – VC Research

Dedicated analyst support – preparation of sector and

thematic report, PPM documents and monthly

newsletters

Equity Research

Investment screening of stocks based on

fundamental parameters –quantitative & qualitative

Situation Overview

ASIA-PACIFIC FOOD & BEVERAGE INDUSTRY

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$174.0

$1.4

$112.2

$15.0

$21.8

$52.0

$44.7

$12.7

$11.5

$141.8

$24.6

$19.1

$47.5

$18.1

Alcoholic Drinks

Baby Food

Beer

Bottled Water

Confectionery

Dairy Products

Frozen Food

Functional Drinks

Juices

Meat, Fish & Poultry

Milk

Savory Snacks

Spirits

Wine

2009 Market Size

F&B – Industry Overview

ABC & CO. 8

Industry Overview Asia-Pacific F&B Market

• The global food and beverage (F&B) industry was valued at $5.7 trillion in 2008 and is expected to increase to more than $7 trillion by 2014, at a CAGR of 3.5%

• The global food products industry, which consists of agricultural products and packaged foods, generated revenues of $3.2 trillion in 2008 and is expected to increase at a CAGR of 4.6% to $4 trillion by 2013

• The global beverage industry, which consists of soft drinks, beers, ciders, spirits and wines, was valued at $1.4 trillion in 2008 and is expected to rise at a CAGR of 2.6% to $1.6 trillion by 2013

• The share of Asia Pacific region in the global F&B industry's value is projected to increase from 31.5% in 2011 to 34.2% by 2015

• The developing countries in Asia Pacific region including India, China and Indonesia are likely to drive the sales of processed food in Asia

• India’s F&B market was valued at $182 billion in 2007-08 while the food processing sector alone was worth $72 billion in 2008

• China’s food processing sector is valued at $50 billion in 2008

($ in billions)

Source: IMAP, ASSOCHAM-TechSci study, and Datamonitor

Industry Value Chain

• This industry is involved in the production and collection of raw agricultural commodities such as rice, wheat and corn

• Food processing is an integral part of the value chain and involves the processing of raw food commodities into forms that can be easily distributed and sold to consumers. This division is further divided into the following:

• Food, Major Diversified• Beverages, Alcoholic & Non-

Alcoholic• Confectioners

• This is the final stage of the F&B value chain and entails the distribution of finished or near-finished food products to consumers. This industry includes:

• Grocers/Supermarkets• Restaurants• Casual & Upscale Restaurants

Farming

Processing

Distribution

F&B – Industry Trends

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Source: IMAP

Key Trends

• Asia-Pacific is emerging as a major contributor of raw materials to the F&B industry

• Food purchases are shifting from staple foods rich in carbohydrates to more expensive foods such as meat and dairy products

• China, Russia and India have increased their production capacities

• China increased its wheat production capacity by 26% in 2003-07

• Russia raised its capacity by 45%

• At present, approximately 58% of produced food is consumed by developing countries

• This is expected to climb to 72% by 2050 supported by the fact that 37% of the world’s population currently lives in China and India

• Demand for cereals is expected to rise from the current 2.1 billion tonnes to more than 3 billion tonnes by 2050

• Demand for meat production is likely to grow by 200 million tonnes to 470 million tonnes over the same period

$697.4

$353.2 $324.7

$178.4 $84.5

$26.2

$1,032.8

$452.7 $386.7

$212.8

$101.9 $30.5

China India Russia Indonesia South Korea Malaysia China India Russia Indonesia South Korea Malaysia

2012 2017

Food Beverage

F&B –Geographic Overview

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Asia-Pacific – Opportunities & Risk Factors

Source: Linklaters

Asia-Pacific – Major Countries F&B Market($ in billions)

Countries China India Russia Indonesia South Korea Malaysia

Market Size

Market Growth in Real Terms

Market Growth in % Terms

Production Base Potential

Highest Opportunity Lowest Opportunity

Growth Forecast Risk

Sovereign Risk

Corruption Risk

F&B Investment Restrictiveness

Quality of Investor Protection

Highest Risk Lowest Risk

Ris

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Fact

ors

Potential Targets

SHORT PROFILES

ABC & CO. 11

Potential Targets

ABC & CO. 12

Company Business OverviewEngages in the manufacture and sale of snack confectionary, bakery food and cereal food. Operates in two business segments• Food Manufacture and Sale segment manufactures and sells potato

series snacks, bakery foods and prepared food bread, among others

• Others segment is engaged in the operation of logistics, planning, production and dispatching of sales promotion tools

Source: Company Website, Reuters, Bloomberg, and Google Finance

Financial InfoMarket Info

Calbee, Inc.Founded: 1949HQ: Tokyo, JapanCEO: Akira Matsumoto

(JPY in millions)

Stock Price (11/1/13) ¥2,502.00

Market Cap ¥330,073

LTM P/E 31.6x

LTM P/Sales 1.8x

• A meat products provider offering high-temperature meat products, low-temperature meat products, fresh meat and frozen meat

• Also offers technical consulting services, logistics services and chemical products

• Mainly operates its businesses within domestic markets

Henan Shuanghui Invt & Dev. Co LtdFounded: 1988HQ: Henan, ChinaChairman: Wan Long

Engages in production and distribution of dairy products and mixed feedstuffs• Major products include liquid milk products, including milk, dairy

drinks, milk and dairy drinks for children; milk powder and milk products, including milk powder for infants, milk powder for adults, soybean powder and dairy snacks, as well as cold drink products and mixed feedstuffs, among others

Inner Mongolia YiliFounded: 1993HQ: Mongolia, ChinaChairman: Pan Gang

A rice miller and Basmati Rice exporter. Operates in two segments:• Agri segment engages in agri commodities, such as rice, cotton,

seed, bran and bran oil• Energy segment is engaged in power generation from wind turbine

and husk based power plantOffers number of brands to its customers, such as India Gate, Doon, Nur Jahan, Indian Farm, Bemisal, Aarati, Unity, Lotus, Taj Mahal Tilla, Shubh Mangal, Necklace and Lion

KRBL Ltd.Founded: 1988HQ: Delhi, IndiaMD: Anil Kumar Mittal

(JPY in millions)

Revenue ¥183,666

Gross Margin % 43.9%

EBITDA % 12.8%

LTM EPS ¥87.43

(CNY in millions)

Stock Price (11/4/13) ¥45.28


LTM P/E 29.5x

LTM P/Sales 2.4x

(CNY in millions)

Revenue ¥43,148


EBITDA % 10.7%

LTM EPS ¥2.13

(CNY in millions)

Stock Price (11/4/13) ¥39.56

Market Cap ¥80,695

LTM P/E 27.1x

LTM P/Sales 1.8x

(CNY in millions)

Revenue ¥44,831


EBITDA % 5.9%

LTM EPS ¥1.51

(INR in millions)

Stock Price (11/3/13) ₹ 29.65

Market Cap ₹ 6,993

LTM P/E 4.9x

LTM P/Sales 0.3x

(INR in millions)

Revenue ₹ 22,628

Operating Margin % 37.0%

Net Margin % 0.5%

LTM EPS ₹ 5.37

(Public)

Potential Targets

ABC & CO. 13

Company Business OverviewEngages in the food manufacturing business• Products portfolio consists of pies under the brand names of Choco

Pie, Fresh Pie and Haute; snacks under the brand names of POCHACHIP, Cornchip HOT, Oh! Gamja, SWINGCHIP, Toonies and others; biscuits under the brand names of Gosomi, Choco Chip Cookie, Digesta, Bebe, O'Tato and others, and chocolates under the brand names of Mini Pole, Eggmon, Choco Boy, To You, Hotbreak Chocobar and others, as well as candies and gums



Orion CorpFounded: 1956HQ: Seoul, South KoreaCEO: Sang Woo Kim

Engages in the manufacturing and marketing of cocoa ingredients and consumer chocolate confectionery products and investment holding. Operating segments include:• Branded Consumer Division engages in the manufacture and

marketing of chocolate confectionery products• Cocoa Ingredients Division, engages in the manufacture and

marketing of a range of speciality cocoa butter, liquor and powder

Petra Foods Ltd.Founded: 1984HQ: SingaporeCEO: Chuang Tiong Choon "John"

• An integrated oilseed solvent extraction and edible oil refining company

• Engages in processing of oil-seeds and refining of crude oil for edible use

• Produces oil meal, food products from soya and value added products from downstream and upstream processing

• Manufactures edible oils, vanaspati, bakery fats and soya foods

Ruchi Soya IndustriesFounded: 1986HQ: Mumbai, IndiaMD: Dinesh Shahra

Specializes in the production and distribution of instant noodles, beverages and baked goods. Operates in following segments:• Instant noodles segment provides bowl noodles, packet noodles

and fried crispy noodles with pickled series, and Lu Xiang series• Beverages segment provides diluted juices, carbonated drinks,

ready-to-drink tea, bottled water, fruit juice drinks, and milk tea• Instant food segment provides sandwich crackers, muffins, egg rolls

and leisure puffed food made of potatoes

Tingyi Cayman Islands Holding CorpFounded: 1991HQ: Tianjin, ChinaCEO: Wei Ing-Chou

(SGD in millions)

Stock Price (11/5/13) $3.48

Market Cap $2,151

LTM P/E 32.1x

LTM P/Sales 2.4x

(SGD in millions)

Revenue $733


EBITDA % 13.2%

LTM EPS $0.02

(INR in millions)

Stock Price (11/5/13) ₹ 34.15

Market Cap ₹ 11,875

LTM P/E 4.2x

EV/EBITDA 1.1x

(INR in millions)

Revenue ₹ 298,710

EBITDA % 3.5%

Net Margin % 0.9%

LTM EPS ₹ 8.19

(HKD in millions)

Stock Price (11/4/13) $22.20

Market Cap $126,461

LTM P/E 44.5x

LTM P/Sales 1.6x

(HKD in millions)

Revenue $78,062


EBITDA % 10.8%

LTM EPS $0.51

(KRW in millions)

Stock Price (11/5/13) ₩1,009,000

Market Cap ₩6,154,792

LTM P/E 38.9x

LTM P/Sales 2.5x

(KRW in millions)

Revenue ₩1,844,649


EBITDA % 14.4%

LTM EPS ₩26,479

(Public)

Potential Targets

ABC & CO. 14

Company Business OverviewA food manufacturing company. Operates in following major divisions:• Seafood division is engages in the purchase, processing and sale of

seafoods in domestic and overseas markets• Instant Noodles division provides cup and bag noodles• Low Temperature Food division manufactures/sells steamed &

roasted buckwheat noodles and commercial cocking products• Prepared Food division manufactures/sells of sterile packaged rice



Toyo Suisan Kaisha LtdFounded: 1953HQ: Tokyo, JapanChairman: Tadasu Tsutsumi

A food product company involved in a range of food-related businesses, including the manufacture and distribution of branded consumer foods. Operates in following major divisions:• Branded consumer foods segment manufactures and distributes

salty snacks, chocolates, candies, biscuits, and bakery products• Agro-industrial products segment engages in hog & poultry

farming, producing animal feeds and animal health products Commodity food segment engages in sugar milling &refining

Universal Robina CorpFounded: 1954HQ: Manila, PhilippinesPresident: Lance Y Gokongwei

Engages in manufacturing, distribution and sale of rice crackers, dairy products and beverages, snack foods and other products. Segments:• Manufacturing & sale of Rice crackers, including sugar coated

crackers• Dairy products and beverages, including flavored milk, yogurt

drinks• Snack foods, including candies, popsicles and jellies, and ball cakes

Want China Holdings LtdFounded: 2007HQ: Shanghai, ChinaCEO: Tsai Eng-Meng

Operates in following major segments:• Palm and laurics: Merchandising & processing of palm oil & laurics• Oilseeds and grains: Merchandising and processing of edible oils,

oilseeds and grains• Consumer products: Packaging & sales of consumer pack edible

oils, rice, flour and grains• Plantation and palm oil mills: Oil palm cultivation and milling• Milling: Milling of sugarcane to produce raw sugar and by-products

Wilmar InternationalFounded: 1991HQ: SingaporeCEO: Kuok Khoon Hong

(JPY in millions)

Stock Price (11/5/13) ¥2,958.00


LTM P/E 14.3x

LTM P/Sales 0.9x

(JPY in millions)

Revenue ¥362,546


EBITDA % 10.6%

LTM EPS ¥212.13

(PHP in millions)

Stock Price (11/5/13) 126.10

Market Cap 277,487

LTM P/E 26.5x

LTM P/Sales 3.5x

(PHP in millions)

Revenue 78,486


EBITDA % 15.6%

LTM EPS 4.81

(HKD in millions)

Stock Price (11/4/13) $11.96

Market Cap $158,685

LTM P/E 32.5x

LTM P/Sales 5.7x

(HKD in millions)

Revenue $27,791


EBITDA % 25.1%

LTM EPS $0.37

(SGD in millions)

Stock Price (11/4/13) $3.41

Market Cap $22,093

LTM P/E 12.6x

LTM P/Sales 1.8x

(SGD in millions)

Revenue $12,274

Gross Margin % 8.5%

EBITDA % 5.1%

LTM EPS $0.22

(Public)

Potential Targets

ABC & CO. 15

Company Business OverviewManufactures & supplies food & beverage products• Product lines include dairy drinks, bottled water, carbonated drinks,

bottled tea, juices, canned food, medicine and health care products, infant food, and snacks

• Designs, manufactures, and sells fashionable kids wear for newborns and children up to fourteen years of age

• Also owns and operates a boutique shopping mall

Source: Company Website and Bloomberg Businessweek

Key Products/Brands

Hangzhou Wahaha GroupFounded: 1987HQ: Zhejiang, ChinaFounder: Qinghou Zong

Operates as a wholesaler in the food industry• Merchandizing portfolio includes dried foods; chilled foods, such as

dairy products, yogurt, and desserts; and a line of frozen food products for professional and consumer markets

• Offers retail support services, which include provision of an informational common tool for sales promotion, a trading area analysis tool, and a sales promotion magazine

Nippon Access, Inc.Founded: 1952HQ: Tokyo, JapanCEO: Shigeharu Tanaka

Manufactures, markets, and sells biscuits and confectioneries• Offers glucose, milk, sweet and salted cream, wafer crème, cumin

seed, and cheese biscuits; toffees and hard-boiled candies in chocolate, mint, cola, and tropical fruit flavors; and snacks, including chips and wafers

Parle Products Ltd.Founded: 1929HQ: Mumbai, IndiaOwners: Chauhan family

Engages in the manufacture and sale of beverage and food products. The company three main areas of operation:• Producing alcoholic beverages (including MIDORI melon-flavored

liqueur)• Producing health food and supplement and non-alcoholic beverages• Running restaurant, fitness, and floral operations

Suntory Holdings Ltd.Founded: 1899HQ: Osaka, JapanChairman: Nobutada Saji

(Private)

pitch book sample - food sector

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