Corporate valuation: Laurent Perrier analysis
Summary :
Table of Contents
- Executive summary.
- Business overview.
- Company's overview.
- The champagne market.
- Valuation of Laurent Perrier.
- Net restated asset value method.
- Discounted cash flow model.
- DCF based on a 30-years period.
- DCF with a cash flow fade.
- Multiples model: 1st method and 2nd method.
- Sensitivity analysis.
- Grape and bottle prices.
- Growth in sales' volume.
- Sensitivity to Wacc.
- References.
Abstract
laurent perrier is a French company specialized in champagne, which is a luxury product. laurent perrier manages both the production and the distribution of its champagne and wines. The Group owns its distribution network (through restaurants, hotels, bars, retailers and direct sales). This is a force for the Group since it can capture margins and reduce sales volatility. laurent perrier is considered to have the best growth potential in the beverage sector. The Group tends to export more and more where bottle prices do not stop to increase. The company also has the highest percentage of self-grown grapes on the markets, which allows it to have a strong balance sheet, with an expected decrease of the gearing more important than the competitors' one. Nowadays laurent perrier is considered to be the best group on the champagne market and has the best growth of share price. Société Générale is one of the leading banks worldwide. The SG note we chose to study was released in May 2007. Consequently, in our analysis, we tried as much as we could to have a critical look on the broker's valuation assumptions but yet, taking into account that it dated of more than 6 months ago.
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