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Nestl é Module 10: A More Detailed Analysis of the Financial Reports

Nestl é Module 10: A More Detailed Analysis of the Financial Reports. Dan Finan. Processed & Packaged Goods Industry. Overview of Nestle. Six reportable segments: Zone Europe Zone Americas Zone Asia, Oceania and Africa Nestle Waters Nestle Nutrition Other Food and Beverages.

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Nestl é Module 10: A More Detailed Analysis of the Financial Reports

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  1. NestléModule 10: A More Detailed Analysis of the Financial Reports Dan Finan

  2. Processed & Packaged Goods Industry

  3. Overview of Nestle • Six reportable segments: • Zone Europe • Zone Americas • Zone Asia, Oceania and Africa • Nestle Waters • Nestle Nutrition • Other Food and Beverages

  4. Overview of Nestle • Products are categorized under: • Powdered and Liquid Beverages • Milk Products and Ice cream • Prepared Dishes and Cooking Aids • Confectionery • Pet Care • Water • Pharmaceuticals • Nutrition

  5. NEA Revisited

  6. Expanded Enterprise Assets

  7. Expanded Enterprise Assets

  8. Expanded Enterprise Assets

  9. Expanded Enterprise Liabilities

  10. New NEA Calculations Old

  11. NFL Revisited

  12. Expanded Financial Assets

  13. Expanded Financial Liabilities

  14. Income Statement Revisited

  15. Expanded Income Statement

  16. Expanded Income Statement

  17. Rate Calculations

  18. Key Ratios

  19. Parsimonious Forecasts

  20. New Valuations Previous Valuation: $192,818

  21. Discounted Cash Flow Model

  22. Residual Enterprise Income Model

  23. Abnormal Enterprise Income Growth Model

  24. Stock Price Analysis

  25. My Recommendation • At first, this valuation seems quite low…but I think Nestle is maturing and has struggled to expand operations to take advantage of new markets and opportunities. • Paul Bulcke, Nestlé CEO: “The macro-environment in 2013 was one of soft growth, minimal in the developed world and below recent levels in the emerging markets. Our response was to increase brand support, accelerate innovation, and to ensure our pricing was sensitive to consumer needs.

  26. My Recommendation • 10-K is not very transparent…admittedly, being able to identify information that points out one-time charges and temporary restructuring costs would undoubtedly push this valuation up toward the current market price. • No information re: leases, ESOP

  27. My Recommendation Based on my current valuation, and the information I know… SELL

  28. Questions?

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