Date: 30/06/2017 Headquarters: Portugal Target Price: 2.

09
Ticker: ELI: SUCO Potential: 22.8% Price: 1.70

Market Profile
52Week High/Low 1.05-1.84
xxxEquity Report
Avg. Volume (3M) 1 548
Shares Out. 60.5 M Business Overview
Market Cap. 93.77 M

Dividend Yield 5.48%

SUMOL + COMPAL, S.A. has as main activity the production and marketing of soft
BETA 0.2 drinks and fruit juices. In addition to Sumol and Compal, Sumol + Compal belongs to
EPS 0.173 brands such as Serra da Estrela Water, Frize, and Tagus and Damm beers.
PER 8.79
In Portugal, it is the market leader in non-alcoholic beverages and intends to spread to
Closing Price 1.70
new markets. Half of its sales are made in the Iberian peninsula, but it also has some
Source: Yahoo Finance weight in Lusophone Africa and French-speaking Africa.

Share Price
Key Ratios 2016 2017E 2018F 2019F 2020F
Total Revenues 370 904 383 777 398 649 414 116 430 202
Net Profit 10 460 6 528 7 686 9 860 11 841
EBITDA Margin 14.05% 13.49% 13.70% 13.91% 14.11%
Return on Assets 8.34% 8.21% 8.52% 8.78% 9.00%
Return on Equity 9.29% 5.80% 6.82% 8.76& 10.52%
Cash Cycle 76 66 66 66 66
Debt/Assets 0.71 0.71 0.72 0.72 0.73
Source: Yahoo Finance Fin. Leverage 4.49% 4.46% 4.72% 4.72% 4.75%
Interest Coverage 1.80 1.61 1.62 1.70 1.76
PER / EV/EBITDA PER 18.89 26.75 23.99 19.60 17.07
EV/EBITDA 12.05 12.31 11.95 11.61 11.24
NetDebt / EBITDA 4.84 5.19 4.97 4.77 4.56
Source: Team Estimates

Investment Analysis
Source: Team Estimates

ROC / WACC
We issue a Buy recommendation based on the analysis done. SUMOL + COMPAL at the
current price of 1.70 is undervalued based on the DCF estimated share value of 2.09.

SUMOL + COMPAL, S.A. had a recovery period in 2015 and 2016 compared to the pre-
vious crisis. EBITDA has an approximate target, in fact, of 14% of operating income. On
the other hand, the continuous expansion of investments sets a return on assets to the 9%
Source: Team Estimates level. However, the company will be able to increase its net profitability by maintaining
its own capital at similar levels, thus increasing the return on capital to 10.5%.
WACC
Growth Rate

5.54% 6.54% 7.54%

1% 1.23 1.09 0.95
2% 2.26 2.09 1.92
3% 3.87 3.65 3.44

Source: Team Estimates

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 Revenues P&L

Thousands EUR 2016 2017E 2018F 2019F 2020F

Revenues 370 903 383 776 398 648 414 116 430 202
Operating expenses 334 905 332 010 344 037 356 528 369 501
EBITDA 52 115 51 766 54 611 57 588 60 701
Depreciation & amortization 16 117 19 589 19 508 19 482 19 457
EBIT 35 999 32 177 35 104 38 106 41 244
Net Cost of Net Debt 20 010 20 011 20 940 22 293 23 197
Source: Team Estimates
EBT 15 987 12 166 14 164 15 814 18 048
Taxes 5 528 5 639 5 752 5 867 5 984
Net Debt Consolidated net income 10 459 6 528 8 412 9 947 12 064

Source: Team Estimates

Balance Statment

Thousands EUR 2016 2017E 2018F 2019F 2020F

Total Assets 624 548 630 500 640 681 655 218 673 558
Source: Team Estimates Intangible assets 287 542 286 990 286 813 286 646 286 646
Tangible assets 94 064 93 028 92 696 92 382 92 382
Goodwill 113 453 113 453 113 453 113 453 113 453
DCF
Long t. receivables 1 789 1 789 1 789 1 789 1 789
Inventories 40 339 41 501 43 161 44 887 46 683
Enterprise Value 637 417 Short t. receivables 57 223 58 991 61 350 63 804 66 356
Cash and equivalents 16 991 22 288 29 074 39 612 53 592
NOA 22 321 Others assets 13 144 12 459 12 342 12 642 12 654

Cash 189 297 Equity 179 145 181 685 181 685 181 685 181 685
Total Liabilities 445 403 449 038 459 476 474 279 492 898
Firm Value 659 927
IBD 269 040 281 537 299 726 311 876 323 128
Source: Team Estimates
Debt 291 308 Long term payable 3 862 3 862 3 862 3 862 3 862
Short term payable 79 667 75 664 85 920 89 513 90 379
Minority Interests 242 346
Provisions 3 900 1 909 2 024 2 197 2 241
Equity 126 272 Others 88 932 76 293 66 784 63 835 64 933
Source: Team Estimates
Value of Share 2.09
Current Price 1.70

Source: Team Estimates

FCFF
WACC Thousands EUR 2016 2017E 2018F 2019F 2020F
EBIT 35 999 35 177 35 104 38 107 41 244
EBIT (1-T) 28 439 25 420 27 732 30 104 32 583
Rf 3.00% CAPEX 7 888 18 000 19 000 19 000 19 457
Kd 7.44% D&A 16 117 19 589 19 508 19 482 19 457
-WC 6 719 2 343 2 707 2 816 2 928
BETA 0,91
FCFF 29 949 24 666 25 532 27 770 29 655
MRP 6.00%
Source: Team Estimates
Ke 8,19%
WACC 6,54%

Source: Team Estimates

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The team:

Analysts Email Linkedin

Jos Tiago Gonalves de Sousa up201306222@fep.up.pt linkedin.com/in/jos-tiago-gonalves

-de-sousa-8a8238132

Gonalo Andr Jarnalo Calheno jarnalocalheno@gmail.com linkedin.com/in/gonalo-jarnalo-

calheno-7152a2121

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

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