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We are positive about the company's financial results for FY 2007. The management's updated positive forecasts for the company’s financials in 2008 and the growth of target indicators for FY 2010, to USD 4.5 bn in revenue and to USD 630-650 mn in EBITDA should boost the company's stock valuations.
Wimm-Bill-Dann released its financial results for FY 2007 on Friday, which was generally in line with our estimates. The company's revenue grew by 38.4% y-o-y in US dollar terms to USD 2.43 bn. High revenue growth was attributed to an increase of prices in all segments due to a dynamic upturn in sales prices. Additionally, we highlight WBD's margin which dropped insignificantly despite a sharp increase of prices for raw milk, 77.5% in dollar terms.
Table. Wimm-Bill-Dann: Key financials FY 2007 USD mn
| Indicator | 2006 | 2007 | 2007/2006 |
|---|
| Revenue | 1,762.1 | 2,438.3 | 38.4% | | including: | | | | | Dairy | 1,320.9 | 1,852.5 | 40.2% | | Beverages | 324.1 | 414.1 | 27.8% | | Baby food | 117.2 | 171.8 | 46.6% | | Cost of production | 1,194.2 | 1,654.9 | 38.6% | | Gross profit | 568.0 | 783.4 | 37.9% | | Gross margin | 32.2% | 32.1% | | | Business expenses | 246.10 | 387.90 | 57.6% | | General and administrative expenses | 134.50 | 180.90 | 34.5% | | EBITDA | 218.0 | 300.5 | 37.8% | | EBITDA margin | 12.4% | 12.3% | | | Net profit | 95.4 | 140.0 | 46.8% | | Net margin | 5.4% | 5.7% | |
Source: company data, Finam estimations
We are generally upbeat on the company's financials for FY 2007, however, we believe that they were expected by the market and are not likely to produce any significant impact on the company's stock valuations in the short-term. Nonetheless, we are positive about the management's updated plans to achieve USD 3-3.2 bn revenue and USD 410-430 mn EBITDA in FY 2008, which is likely to boost the company's stock valuations.
Our recommendation for Wimm-Bill-Dann's shares is currently under review due to the publication of FY 2007 results. However, we retain our positive view on the company's shares due to their presently substantial undervaluation by the market. Sergey Filchenkov
Other comments of the day
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Wimm-Bill-Dann
Capitalization: $495 000 000,00
Common shares:
Price: $11,25
Delta week: -2,2%
Delta month: -53,1%
Delta year: -86,3%
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0.553
1.6
