RubinBrown Food & Beverage Year in Review 2013

Public Equity Markets: Food & Beverage Valuation Multiples

Valuation Multiples At Record Highs Valuation metrics for the S&P Food & Beverage Select Index improved considerably over the past year, with its average EV/EBITDA multiple improving nearly 32.0% (from 8.2x to 10.8x) over the course of the year. The S&P Food & Beverage Index average EV/EBITDA multiple reached a record high of 11.1x during August 2013, and finished the year down slightly from that high. Increases in both the industry and the S&P 500 in the past year reflect additional consumer spending and increased confidence in the economic recovery. The impressive returns earned by the Beverage Companies subsector index (as discussed on the previous page) led to EV/EBITDA multiple expansion of approximately 54.0% (from 12.7x to 19.5x) for the index over the course S ( %) of the year. This exceeded the level of multiple expansion for the &P 500 20.4 as well as the Food Production Companies (8.8%) and Agriculture/Food Production Ingredients (5.7%) subsector indices.

Highlights • S&P Food & Beverage industry valuation multiples reached 5 year highs in Q3 • S&P Food & Beverage multiple expansion outpaced the broader market, with EV/EBITDA multiples expanding 32% in 2013. 2013.

EV / EBITDA (LTM)

EV / EBITDA (LTM)

25 0x .

25 0x .

S&P 500 Index

S&P 500 Consumer Staples Sector Index

Food Production Companies

S&P Food & Beverage Select Industry Index S&P 500 Index

20.0x

20.0x

19.5x

Agriculture/Food Production Ingredients Beverage Companies

16.1x

15.0x

15.0x

11 5x .

13.4x

10.8x

10.3x

10.0x

10.0x

10.3x

5.0x

5.0x

Source: Capital IQ

Source: Capital IQ

Food & Beverage Sector: 2013 Review

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