European cider trends offer a growing market with increased competition. Total cider volume in European countries reached an average CAGR of 24,71% 2011-2016. Kopparberg’s market share is expected to decrease in Sweden, whilst the UK will remain stable at a 0,07% YoY growth rate. The rest of the market will be Kopparberg’s primary source of growth with an estimated 10% YoY growth rate during 2019E-2026E.

A pub expansion and eyes set on the global market. Kopparberg’s pub concept John Scott is expected to continue to grow with 2 pubs per year, contributing in an increased awareness of the Kopparberg brand. The sights have been set on global growth, targeting the growing markets of Eastern Europe, the US and Australia/New Zeeland in particular.

Brexit and weather dependency are two important risks to consider. As 50% of Kopparberg’s sales are estimated to originate from the UK, they are highly dependent on the GBP/SEK exchange rate. Furthermore, cider is generally considered one of the most weather dependent alcoholic beverages. During 2017 and 2018 Europe in particular experienced unusually warm summers. The good weather had a positive impact on Kopparberg’s sales.

With a DCF-valuation base case indicates a share price of 191 SEK. In a Base case scenario we expect Kopparberg to grow 2,1% in sales and keep its EBIT-margin at 10% 2019E-2026E. This gives Kopparberg an intrinsic value of approximately 3,9 billion SEK and a share price of 191 SEK. An upside of 11% from todays share price of 172 SEK.

Analysts: Sebastian Bechmann & Carl-Fredrik Gärtner

Kopparberg-case