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Date: 30/06/2017 Headquarters: Portugal Target Price: 10.

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Ticker: ELI: COR Potential: -20.6% Price: 12.86

Market Profile
52Week High/Low 7.21-12.89
xxxEquity Report
Avg. Volume (3M) 47 210

Shares Out. 133 M Business Overview


Market Cap. 1 700.41 M

Dividend Yield 1.41% The Amorim Group is one of the largest, most entrepreneurial and dynamic multinatio-
BETA 0.79 nals of Portuguese origin. Its origins were in the cork business, back in 1870 and today it
EPS 0.4 is the world leader in the sector. The company, whose securities are admitted to trading
PER 26.21 on the regulated market (NYSE Euronext Lisbon), is headquartered at Rua de Meladas
Closing Price 12.86 380, and as said before as over 100 years of age.
In addition, since the administration of Amrico Amorim, 1952, the company has been
Source: Yahoo Finance
diversifying the sectors where to operate without losing the family hallmark. The com-
Share Price pany's products include stoppers for wine and other spirits, granulated cork, rubber cork,
cork floorings, and giftware.

Key Ratios 2015 2016E 2017F 2018F 2019F 2020F 2021F 2022F
Total Revenues 605 641 667 694 722 750 780 812
Net Profit 56 105 56 58 58 60 62 59
EBITDA Margin 16.6% 19.0% 16.4% 16.6% 16.5% 16.8% 17.2% 16.7%
Return on Assets 11.3% 13.2% 11.0% 10.7% 10.2% 10.0% 9.6% 8.8%
Source: Yahoo Finance
Return on Equity 15.7% 27.0% 13.4% 12.8% 11.9% 11.6% 11.1% 9.9%
Cash Cycle 153 147 153 154 155 156 158 160
EV/EBITDA / PER Debt/Assets 22.6% 18.5% 18.1% 17.1% 16.3% 15.5% 14.7% 14.0%
Fin. Leverage 42.6% 34.6% 32.0% 29.7% 27.7% 25.8% 24.1% 22.7%
Interest Coverage 3.8% -0.9% 5.6% 5.5% 5.5% 5.3% 5.1% 5.4%
PER 24.7 24.8 25.2 25.3 26.5 26.6 26.7 29.6
EV/EBITDA 13.6 13.0 12.9 12.4 11.9 12.0 11.1 11.0
NetDebt / EBITDA 1.3 0.9 0.9 0.8 0.7 0.5 0.4 0.4

Source: Team Estimates


Source: Team Estimates
Investment Analysis
ROC / WACC
Corticeira Amorim, since the international financial crisis that rocked the world, has been
recovering regularly. The sales, since 2012, have been growing and it is expected that
continue in this path due to the new investments the company is planning on making, in
order to develop their products. EBITDA has an approximate target, in fact, of 16% of
operating income. On the other hand, the continuous expansion of investments in intagi-

Source: Team Estimates


ble assets sets a return on assets to decrease almost 3 pp. Furthermore, the company, due
to this decrease will, probably, suffer problems in terms of possible future growth. One
Sensitivity Analysis
aspect that shows this perfectly is the net profitability that do not change during this pe-
WACC
riod.
Growth Rate

6.3% 7.3% 8.3%


1% 10.74 9.01 7.76
2% 12.61 10.21 8.58
3% 15.60 11.97 9.72

Source: Team Estimates

Corporate Finance Department | www.fepfinanceclub.org


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Revenue P&L
(Millions EUR) 2015 2016 2017E 2018F 2019F 2020F 2021F 2022F
Total revenues 605 641 667 694 722 750 780 812
Cost of goods 307 294 329 341 355 367 379 398
Services 101 103 107 111 115 120 125 130
Staff 112 113 120 125 130 135 140 146
Others 22 -16 2 2 2 2 2 3
EBITDA 101 122 109 115 119 126 134 135
Source: Team Estimates
D&A 25 26 27 31 35 39 45 50
Debt EBIT 76 96 82 84 84 87 90 85
Profit After Taxes 56 105 56 58 58 60 62 59
Net income 55 103 55 57 57 59 61 57
EPS 0.41 0.77 0.42 0.43 0.43 0.44 0.46 0.43
Source: Team Estimates

Source: Team Estimates


Balance Statment
Multiples
(Millions EUR) 2015 2016 2017E 2018F 2019F 2020F 2021F 2022F
Tobin-q PER PBV Total Assets 667 727 744 785 826 869 915 957
Property and Eq. 195 202 207 213 220 226 233 240
C. Amorim 2.75 24.8 4.40
Intangible Assets 2 3 4 5 6 7 9 11
SONI-PT 0.67 - 0.93 Other nc. assets 8 10 12 15 18 21 26 31
WUG-DE 1.21 17.8 1.31 Clients 133 147 150 156 162 169 175 182
Inventories 272 294 300 312 324 337 351 365
BMA-NO 0.99 0.12 0.96
Cash and Eq. 7 10 15 27 37 47 58 63
Average 1.41 14.2 1.90 Investments 20 23 24 25 26 27 29 31
Source: Team Estimates / Yahoo Finance Other c. Assets 32 42 37 38 40 41 43 44
Equity 354 388 420 453 486 521 558 591
DCF Total Liabilities 313 339 325 332 340 348 357 366
Source: Team Estimates
IBD 151 134 134 134 134 134 134 134
Enterprise Value 1 486 Suppliers 121 141 141 146 152 158 165 171
Provisions 32 34 35 36 38 39 41 42
NOA 35
Other Liabilities 9 28 15 15 16 16 17 18
Firm Value 1 521
Source: Team Estimates
Debt 134
Minority Interests 29
Equity 1 358
Value of Share 10.21 FCFF
Current Share Price 12.86 (Millions EUR) 2017E 2018F 2019F 2020F 2021F 2022F
Source: Team Estimates EBIT 82 84 84 87 90 85
EBIT (1-T) 76 65 66 66 69 71
WACC CAPEX 33 37 41 46 51 57
D&A 27 31 35 39 45 50
Rf 3% -WC 20 14 15 17 18 19
FCFF 90 73 76 76 80 83
Kd 3.41%
Source: Team Estimates
BETA 0.98
MRP 6%
Ke 9%
WACC 7.3%
Source: Team Estimates

Corporate Finance Department | www.fepfinanceclub.org


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The team:

Analysts Email Linkedin

Joo Miguel Sousa Santos joaomsantos1996@gmail.com linkedin.com/in/joo-santos-


878644116/
Tiago Pontes Silva tiagopontesilva@gmail.com linkedin.com/in/tiagopontesilva/

Director

Pedro Andr Seabra da Silva pedroasilvawork@gmail.com linkedin.com/in/pedroassilva

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