Pinar Süt has the most stable ratios among our formerly selected ﬁve companies namely Pinar Sut, Turk Traktor, Nuh Cimento, Dyo Boya and Kelebek Mobilya. Throughout the report we will present the company proﬁle and analyze free cash ﬂows of Pinar Sut to value the company and give a concluding recommendation to potential investors of Pinar Sut.
C O M PA N Y P R O F I L E
Pınart süt was founded in 1975 in İzmir, with the largest manufacturing factory of Middle East, today; Pınar is the number one known company in its sector according to AC Nielsen. Besides milk, there are other product categories such as yogurt and cheese, that are produced by the company and company is known as an innovative producer. In 1981, Pıar Süt Company joined Yaşar Holding. After than Pınar Süt became an innovative company in the industry. Pınar Süt was the ﬁrst company that opened a factory for producing water bottles with packing paper in 1984. One year after Pınar Süt was exporting bottled water to Germany. At that time, Pınar Süt introduced the ﬁrst integrated modern meat plant, which produces salami, sausage and several other products in a hygienic environment. In the same year Pınar Süt also introduced the ﬁrst marine aquaculture, and the company started to produce sea products. There were other leading innovations made by Pınar Süt such as, the ﬁrst hamburger meat of Turkish Republic, the ﬁrst pasteurized cheese, the ﬁrst integrated turkey production, and the ﬁrst organic milk in the market. 21% of total exports of Turkey on milk and milk products made by Pınar Süt, and Pınar Süt exports its products to over 29 countries including United States, European Union and Asia. Export sales are tripled since 2002. According to 2010 researches Pınar Süt exports $25 million worth of good annualy and Pınar Süt milks are entered to one of the two residents in Turkey. The total revenue of Pınar Süt in 2010 is almost 2.75 billion TL, and the company target of growth in net sales in 2011 is between 10% and 12%. 39% of the shares of the company belongs to public and the rest of the shares are belonging to Yaşar Holding. Initial public offering was made in 3rd February, 1986.
F I N A N C I A L A N A LY S I S
The goal is to calculate the free cash ﬂows for the next 5 years and to calculate the ﬁrm value and stock price some assumptions and estimations has been made, such as sales growth, costs, working capital, net ﬁxed assets, depreciation, long term growth rate and WACC. While making the assumptions and estimations, we refer to past data, sector growth, position of Pınar Süt in the sector, some external references such as Financial Times and a report made for FAO and prepared Ministry of Agriculture and Rural Affairs in Rome, July 2007.
Sales Growth Pinar Sut has a very stable sales growth ﬁgure in the last ﬁve years except 2009. Although average sales growth rate from the last ﬁve years data was above 7%, as the company has a negative sales growth in 2009; The forecasted average sales growth is 7%. Financial Times also suggests a long term sales growth of 7.12% on markets data section of their website. Furthermore, our forecast also complies with the expected market growth rate of 5% to 9%. Sales Growth Sales (Million TL) 2010 7% 515 2011 7% 551 2012 7% 589 2013 7% 630 2014 7% 675
Costs When the ﬁnancial datas of the last ﬁve year is analyzed, although there are some ﬂuctuations the average cost is 78% of sales for Pinar Sut. Therefore, the forecasted costs is 78% of sales. Costs (Percent of Sales) Cost of Goods Sold (Million TL) 2010 78% 402 2011 78% 430 2012 78% 459 2013 78% 491 2014 78% 527
Working Capital When the ﬁnancial datas of the last ﬁve year is analyzed, the average working capital is calculated as 10% of sales for Pinar Sut. Therefore, the forecasted working capital is 10% of sales. Working Capital (Percent of Sales) Working Capital (Million TL) 2010 10% 52 2011 10% 55 2012 10% 59 2013 10%...