Abstract
The FFT Company is involved in the production, design and marketing of wine holding products such as oak barrels. Its customers are France, America, Hungary, Switzerland, Italy, Germany, Spain, Australia and South America. 73% of its activity is manufacturing wine casks. 87% of its overall production is for export. FFT plays the card of excellence and expertise in its production.
It is established in two main markets which are super premium & exclusive wines and whisky/alcohol markets. The world wine consumption is expected to grow by 6% between 2008 and 2012. As for the whisky market, it increased by 5% between 2008 and 2012. FFT also knows about the opportunities of the mass market and has been considering it to add to its business.
FFT major events:
We can observe two series of major events: one linked with the upstream integration and the other linked with the downstream integration. FFT prefers partnerships to acquisitions as the process is faster.
Extract
[...] FFT also see the opportunities of the mass market and thinks about it. FFT major events: We can observe 2 series of major events: one linked with the upstream integration and the other linked with the downstream integration. FFT prefers partnership to acquisition as the processes are faster. The upstream integration is composed of: - 1999: Acquisition of SOGIBOIS, - 2009: Acquisition of cooperage plant in China and Scotland The downstream integration is composed of: - Partnership with Trust Hongrie, - Partnership with Fosters (distribution network in the southern hemisphere), - Partnership with Classik Oak (distribution in Australia and New Zealand), - Partnership with Denitos (Distribution in South America). [...]
[...] Observée Valeur de l'indice Variation sur 1 mois Variation sur 12 mois Moyenne annuelle Septembre 2010 nd Août 2010 nd Juillet 2010 nd Juin 2010 120,6 12,0% Mai 2010 121,2 14,7% Avril 2010 120,5 12,9% Mars 2010 118,1 10,2% Février 2010 117,5 Janvier 2010 117,3 Décembre 2009 116,6 110,3 Novembre 2009 116,5 Octobre 2009 115,7 Septembre 2009 113,3 Août 2009 109,9 Juillet 2009 107,4 Juin 2009 107,7 Mai 2009 105,7 Avril 2009 106,7 Mars 2009 107,2 Février 2009 108,3 Janvier 2009 108,9 Décembre 2008 110,0 114,7 Novembre 2008 110,6 Octobre 2008 111,7 Septembre 2008 112,2 Août 2008 113,1 Juillet 2008 114,7 Juin 2008 113,5 Mai 2008 114,4 Avril 2008 116,6 Mars 2008 118,5 Février 2008 120,0 Janvier 2008 121,0 - The other operating and non operating cost was of the sales 2008 and is of the sales 2009. There is a big increase of the non operating income in 2009. They are probably the result of the acquisition operations conducted in 2009. Therefore, they will probably go down again in 2010. The economic profitability is quite high thanks to the diversification and the premium market on which FFT operates. This allows high margin, however, FFT could increase this profitability by reducing the inventories. NATO: NATO is [...]
[...] We suppose that the management of the acquisition is not yet optimal because it may takes some time before being efficient ( more profitable). We can also explain the small increase in EBT with the economic crisis of 2008 as the impact on profit only appears one year later. This crisis brings a little decrease in the wine sector. In addition, the year 2008 was very bad for the wine sector with a decrease of 15% in the grapes crop in France. [...]
[...] NPM: In and in For each 100 Euros of sales, the company generates 1 euros less than the previous year. When we analyze the costs in % of sales, we observe that there are two costs that increase significantly (as a % of sales): - The raw material consumption cost which represented of the revenue in 2008 and that represents of the 2009 revenue. We thought it could be because of the price of the wood when we look at it, we see that the average price of wood in 2008 is and in 2009 is so it does not seem to be for this reason. [...]
[...] It is good for the quick ratio but is it good for the company development? This is not sure they should maybe better think about their expansion and the satisfaction of its shareholders and particularly the public ones as they need them anyway. The working management is done with too much cautiousness and is then more costly (huge level of inventories). Solvency analysis: Main part of the capital employed come from the equity (76.5%) and more especially from the retained earnings that is quiet normal in a high margin sector. [...]
