Session 04 · Capital Allocation

BerryGroup Value Creation

You are CEO of BerryGroup acquiring FieldFresh SA.

This exercise has four phases: read the performance dashboard and stress-test the key metrics, then run a live M&A model to see whether the FieldFresh deal creates value at different deal structures, then make three post-acquisition capital allocation decisions, and finally build a board briefing on your 3-year value creation strategy.

Phase 1 of 40% complete

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Performance

Acquisition

Allocation

Strategy

Phase 1 — Reading the Business Performance

BerryGroup — Annual Performance Dashboard

Revenue

$900m

+7% vs target +5%

EBITDA Margin

15%

$135m — in line

ROIC

11.0%

vs WACC 8.5%

TLSV

+14%

Sector +9%

Cash Conv. Cycle

42 days

Sector avg 28 days

Net Debt / EBITDA

1.5×

Acquisition Target — FieldFresh SA

Revenue$250m

EBITDA$35m (14% margin)

ROIC7.0% (below WACC)

Mkt Cap$350m

Question 1 of 3

BerryGroup's ROIC is 11% vs WACC 8.5%. What does the 2.5pp spread tell you?

Question 2 of 3

BerryGroup's Cash Conversion Cycle is 42 days vs the sector average of 28 days. What does this 14-day gap represent?

Question 3 of 3

FieldFresh SA earns ROIC of 7% — below BerryGroup's WACC of 8.5%. What is the strategic implication of acquiring it?