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Green Mountain Coffee Roasters, Inc. April 30, 2013. Hada Jang Shicheng Tang Yijin (Iris) Zhang. Agenda. Introduction Company Overview Industry Overview Stock Performance Financial Analysis Valuation Recommendation. Company Profile. Introduction. Company. Industry. Valuation.
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Green Mountain Coffee Roasters, Inc. April 30, 2013 Hada Jang Shicheng Tang Yijin (Iris) Zhang
Agenda • Introduction • Company Overview • Industry Overview • Stock Performance • Financial Analysis • Valuation • Recommendation
Company Profile Introduction Company Industry Valuation • Headquartered in Waterbury, Vermont • One of the leading companies in the specialty coffee and coffee maker businesses. • Employed about 5,800 people as of Sep 29, 2012 • Top four best-selling coffeemakers by dollar volume in the United States Source: GMRC Inc. 2012 Annual Report
Company History Introduction Company Industry Valuation 2011: GMCR sold the "Filterfresh" US coffee service portion of Van Houtte's business to Aramark 2006: GMCR acquired KEURIG, Incorporated, a manufacturer of single-cup brewing systems. 1981: Green Mountain Coffee Roaster was established as a small café in Vermont 1981 1993 2006 2010 2011 1981 1993 2006 2010 2004 2010: Green Mountain Coffee acquired Diedrich Coffee for $305.3 million and bought coffee services company Van Houtte for $907.8M 1993: GMCR started publicly trading on the NASDAQ national market Source: GMRC Inc. 2012 Annual Report
Product Segments Introduction Company Industry Valuation • The Company manages its operations through three operating segments, the Specialty Coffee business unit (“SCBU”), the KEURIG business unit (“KBU”) and the Canadian business unit (“CBU”). • SCBU sources, produces and sells coffee, hot cocoa, teas and other beverages, in a variety of packaging formats, to consumers in the United States. • KBU targets its premium patented single cup brewing systems for use both at-home (“AH”) and away-from-home (“AFH”), in the United States. • CBU sources, produces and sells coffees and teas and other beverages to Canadian consumers. Source: GMRC Inc. 2012 Annual Report
Sales Breakdown Introduction Company Industry Valuation • Net sales for fiscal 2012 increased 46% to $3,859.2 million, up from $2,650.9 million reported in fiscal 2011. The primary drivers of the increase in the Company’s net sales were a 59%, or $1,004.9 million, increase in single serve pack net sales, and a 45%, or $235.1 million, increase in KEURIG Single Cup Brewer and accessories sales. Source: GMRC Inc. 2012 Annual Report
Historical Financials Introduction Company Industry Valuation Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg
Competitive Strength – SWOT Analysis Introduction Company Industry Valuation Source: Marketline
Porter’s Five Forces Introduction Company Industry Valuation
Macroeconomic Indicators Introduction Company Industry Valuation
Stock Performance Introduction Company Industry Valuation Equity Snapshot • Price: $ 56.47 (April 29, 2013) • Beta: 0.31 (0.94 on 5yr avg.) • Trailing P/E: 24.39 • Forward P/E: 17.54 • PEG Ratio (5 yr. expected): • 1.04 • P/B Ratio: 3.63 • No divined Source: Finance.yahoo.com
Stock Performance Introduction Company Industry Valuation
Key Financial Ratios Introduction Company Industry Valuation Source: Capital IQ
Valuation – Trading Comparables Introduction Company Industry Valuation
Valuation – Trading Comparables (Cont’d) Introduction Company Industry Valuation
Valuation – WACC Analysis Introduction Company Industry Valuation
Valuation – Revenue Projection Introduction Company Industry Valuation FY 2009: acquired the wholesale business and certain assets of Tully’s Coffee Corporation FY 2010: acquired Timothy’s Coffee of the World Inc. (Nov 13, 2009); Diedrich Coffee, Inc. (May 11, 2010) FY 2011: acquired LJVH Holdings, Inc. and Subsidiaries (“Van Houtte”) on December 17, 2010
Valuation – DCF Introduction Company Industry Valuation
Risks & Drivers Introduction Company Industry Valuation
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