Food & Consumer Goods: Beta, Multiples & WACC by Sector

← Swipe left or right to move through the sections →

What the numbers say.

The consumer goods sector has shifted noticeably this month. It is valued notably higher than a month ago: the median EV/EBITDA rose to 10.8x and most companies became more expensive, the beta eased to 0.46, and the cost of capital stands at 6.4 %. The sector is more unsettled than in September: the choice of peers and settings moves the value more than it did.

EV/EBITDA is the multiple to use

It is the tightest of the multiples the fundamentals explain, a dispersion of 19 % across the 20 companies, and the companies are comparable in growth and capital intensity (EBIT/EBITDA). EV/Sales spreads by 29 % because it carries the margin differences with it.

The beta to use: 5 years, monthly, 0.46

Among the stable settings it has the tightest spread across the 20 companies; R² 14 %, 17 of 20 betas significant, liquid group (median bid-ask spread 0.13 %). It is the smartZebra standard setting. The settings alone move the median beta from 0.21 to 0.46.

The settings matter

Ten of the twenty companies move the EV/EBITDA median by −10 % to +12 %, the settings by up to 50 %. Consumer goods sits in the settings corner of the map.

Gross margin is confirmed

The usual yardsticks for consumer goods: gross margin and expected growth. Gross margin: confirmed (rank correlation +0.61 with EV/Sales (NTM)). Expected growth: rejected (rank correlation +0.06 with EV/EBITDA (NTM)).

EV/EBITDA (NTM): median 10.1x → 10.8x

19 more expensive · 1 cheaper

Coca-Cola HBC fell most (−3 %), Imperial Brands rose most (+13 %).

{"m":[["L'Oreal","16.9","19.1","+13%"],["Diageo","17.0","18.4","+8%"],["Unilever","14.9","16.5","+11%"],["Nestle","13.0","14.3","+10%"],["Chocoladefabriken Lindt & Spruengli","12.7","13.6","+7%"],["Kerry Group","11.8","13.2","+12%"],["Coca-Cola HBC","12.9","12.6","−3%"],["Beiersdorf","10.6","11.4","+8%"],["Anheuser-Busch InBev Sa/nv","10.6","11.0","+4%"],["Orkla","10.3","10.9","+5%"],["Danone","9.9","10.7","+8%"],["Reckitt Benckiser Group","9.9","10.6","+7%"],["British American Tobacco p.l.c.","9.4","10.1","+8%"],["Pernod Ricard","9.1","9.7","+6%"],["Carlsberg","8.6","9.3","+8%"],["Essity","7.8","8.4","+7%"],["Henkel","7.8","8.3","+7%"],["Heineken","7.3","8.1","+11%"],["Imperial Brands","6.2","7.0","+13%"],["Associated British Foods","5.7","5.9","+3%"]],"b":[["Associated British Foods","0.89","0.90",62],["L'Oreal","0.83","0.76",53],["Henkel","0.70","0.70",77],["Coca-Cola HBC","0.70","0.66",57],["Kerry Group","0.58","0.55",47],["Carlsberg","0.55","0.53",69],["Chocoladefabriken Lindt & Spruengli","0.52","0.49",54],["Beiersdorf","0.50","0.49",44],["Heineken","0.51","0.47",40],["Unilever","0.48","0.47",72],["Anheuser-Busch InBev Sa/nv","0.49","0.46",46],["Essity","0.48","0.45",46],["Nestle","0.49","0.43",68],["Pernod Ricard","0.41","0.37",45],["Reckitt Benckiser Group","0.38","0.35",60],["Diageo","0.36","0.33",60],["Danone","0.27","0.27",49],["Orkla","0.22","0.18",32],["Imperial Brands","0.19","0.15",50],["British American Tobacco p.l.c.","0.09","0.07",45]],"w":["Orkla","Heineken","Beiersdorf","Pernod Ricard","British American Tobacco p.l.c."]}

Beta (5 years, monthly): median 0.49 → 0.46

17 of 20 significant

Each line runs from last month’s beta (light dot) to this month’s (blue dot), on the same beta setting.

Do the usual yardsticks hold this month?

The usual yardsticks for consumer goods, tested on the 20 companies this month.

Gross margin

Confirmed

Rank correlation +0.61 with EV/Sales (NTM) · clear link from +0.60

Expected growth

Rejected

Rank correlation +0.06 with EV/EBITDA (NTM) · clear link from +0.60

Position on the sector map

This sector in gold, the other 19 sectors in blue. Dashed lines at 40 pp are illustrative.

Construction

Chemicals

Utilities

158

Telecom

Media

Travel & Leisure

Retail

Luxury

Consumer Goods

Logistics

Business Serv.

Aero & Defence

Electrical Eq.

Medtech

Pharma

IT Services

Semiconductors

Software

Automotive

Machinery

Consumer Goods

How much the choices move the result

Beta and fit

R² (median)

14 %

Significant betas

17 of 20

Median bid-ask spread

0.13 %

Beta range across settings

0.21–0.46

What moves the value?

Change vs. prior month

+7 % vs. September

Peer impact on the median

−10 % to +12 %

Spread from peer choice (pp)

Spread from beta settings (pp)

Position on the sector map

Settings decide

Cost of capital

Cost of equity (CAPM)

“kE = rf + β · MRP”

rf = base rate, MRP = market risk premium, β = sector median beta.

WACC

“WACC = E/(D+E) · kE + D/(D+E) · kD · (1 − t)”

kD = base rate + credit spread; t = peer-average tax rate.

Tax rate

“t = average tax rate of the 20 peers”

Shown above as Tax rate (%).

Selection rules

Best-fit multiple

“lowest dispersion across the 20 companies”

The reference multiple is used only as a fallback.

Beta setting

“tightest spread among stable settings”

Replaces 5y monthly only if it passes the two-month rule.

Status

“|Δ value| ≤ 1 % and |Δ β| ≤ 0.03 → stable”

Up to ±5 % / ±0.06 → shifted a bit; beyond → shifted noticeably.

Scope

The 20 largest European listed companies by market value with core business in food, beverages, tobacco, household and personal care; primary listing on a European exchange; banks, insurers, financial services and real estate are excluded.