RubinBrown Food & Beverage Mid-Year Review 2014
Public Equity Markets: Food & Beverage Valuation Multiples
Larger Food & Beverage Companies Continue to See Increasing Valuations Valuation multiples for the S&P F&B Index continued their expansion to all-time highs during the first half of 2014 – with EV/EBITDA multiples up 5.3% since December 31, 2013 (from 10.8x to 11.4x), while the S&P 500 only saw multiple expansion of 0.6% during the same period. Valuation multiples for smaller subsectors of the food and beverage universe (companies with less than $1 billion in TTM revenue) told a different story during the first half of 2014 – with EV/EBITDA multiples contracting 26.6% (from 13.4x to 9.9x), 11.5% (from 19.5x to 17.3x), and 2.0% (from 16.3x to 15.9x) for agriculture/food ingredients companies, beverage companies, and food production companies, respectively It would appear that part of the story for the decline in valuations can be attributed to . investors locking in profits from the runup in prices into the end of 2013, as illustrated on the previous page; it is unclear why the larger indices did not witness a similar selloff during the first half of the year.
Highlights • F&B Index valuation multiples finished the first half of 2014 at an all time - • Beverage company valuation multiples declined during the first half of 2014 as investors locked in profits.
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EV / EBITDA (LTM) - Indices
EV / EBITDA (LTM) – Subsectors
25.0x 15.0x 17.0x 19.0x 21.0x 23.0x 11.0x 13.0x
25.0x 15.0x 17.0x 19.0x 21.0x 23.0x 11.0x 13.0x
S&P 500 Index
S&P 500 Consumer Staples Sector Index S&P Food& Beverage Select Industry Index S&P 500 Index
Food ProductionCompanies Beverage Companies Agriculture/Food Production Ingredients
17.3x
15.9x
11 6
. x
11.4x
10.3x
10.3x
5 0x 7.0x 9.0x .
5 0x 7.0x 9.0x .
9.9x
Source: S&P Capital IQ
Source: S&P Capital IQ
Food & Beverage Sector: 2014 Mid-Year Update
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