With our usual eclecticism, and after Orange: Taking a Step Back, it's time for us to cross the Atlantic Ocean to take a look at Keuring Dr Pepper's nine-month results.
The beverage group's current structure - 30 factories and 150 distribution centers - is the result of the 2018 mega-merger between coffee specialist Keurig Green Mountain and famous cherry cola brand Dr Pepper.
It also results in a portfolio of 125 brands, owned or operated in partnership. For example, in addition to its eponymous brands, Keuring Dr Pepper bottles and/or distributes Evian, 7up, Canada Dry, McCafé, A&W, Van Houtte, La Colombe and Schweppes, among others.
Utra-dominant in the coffee segment, and expanding elsewhere, the group has enjoyed remarkable growth since the merger, with annual sales rising from $11 billion to $15 billion.
The results are, however, difficult to interpret due to, on the one hand, heavy adjustments to working capital requirements in cash flow, and, on the other hand, numerous exceptional items - typically following major changes in scope - in accounting profits.
Excluding growth assumptions, however, we can safely project an annual earnings capacity of $2.5 billion - the MarketScreener team is in line with the analyst consensus here - which, based on a market capitalization of $47 billion, would bring the current valuation to nineteen times earnings.
This multiple is lower than the one investors assign to Coca-Cola or Pepsico, but Keuring Dr Pepper's profitability is much lower than theirs.
It's the advantage of size and scale that comes into play here, as Keuring Dr Pepper already makes intensive use of financial leverage. As such, it's a safe bet that the company will continue to aggressively pursue an external growth strategy in the future, as demonstrated by the announcement accompanying the third-quarter results of the acquisition of Ghost, whose popularity is growing in North America.
Keuring Dr Pepper is buying the energy drink brand at a multiple of three times sales. A detail that will certainly not go unnoticed by Celsius shareholders.