Okay, so my name is Maria Weber.

I'm one of the trainers at Financial Edge and I'm going to be taking the session.

We've got about an hour, not sure we'll take the full hour, but we'll see um, what we get through.

And we are dealing with trading comps, pro forma adjustments.

We've got three documents in the download section.

I'm not gonna be using all of those during class.

The first two documents are workouts taking us through different scenarios that could impact trading multiples.

But what I thought might be a bit more fun is to use a real live example that's happening now and we can do it together and go and find the information where we are gonna look for the information and do an adjustment to some trading comps live.

Okay? So what I'm gonna be using is that Celsius proforma Felix live.

Okay? So we are dealing with trading comps, pro forma adjustments.

So you have to have some valuations knowledge in order to do this. That's what I'm assuming. So you need to know the difference between equity value and enterprise value.

How to go over the bridge.

You need to know what a multiple is, so what a trading comp is.

But please don't just sign off and give up and not listen in on the session if you're not quite sure of that stuff.

But I would definitely recommend going back and watching I did in March, I think it was valuation fundamentals as a starting point, a Felix life session on that.

Now we dealing with trading comps.

So we looking at multiples, but specifically we dealing with situations where those multiples are distorted.

And so they're not giving us a true reflection of say the trend in multiples.

And especially if we are doing a multiples analysis, we wanna be able to compare different companies to each other.

I wanna be able to maybe value another company relative to its peers and if the multiples I'm using don't make sense, obviously that's a bit of a problem.

So what are the different scenarios that could arise that cause this distortion to multiples? Well acquisitions where company buys another company, the opposite of that, which is disposals or divestitures.

And then there also could be some financing issues and that is what you will see the workouts deal with.

These are the ones that we are not going to be using in class.

For those of you that have just joined, I'm just typing the link to the materials again in the chat, okay? Just bringing that in the chat again. But you can find this on Felix under the Felix life section.

But just to show you, these are workouts.

We've got acquisitions, disposals financing, you've got the empty file and the full solution file taking you through that.

You can see this is using real examples, but they historic examples and I want us to use Felix and do this live.

So the spreadsheet I'm gonna be using is the one called Celsius.

It's an empty spreadsheet, okay? In terms of, it doesn't have any numbers in it yet, but the numbers are relatively easy to put in.

We are not gonna be doing very, you know, loads and loads of numbers.

So hopefully should be easy to follow.

But I just wanted to give us some structure that we can all work with together.

Any questions as we go? Please do not be shy to ask.

Let's start by going to Felix and pulling up the company Celsius.

Okay, so if we go just to the homepage in Felix, the ticker for Celsius, you don't need to know the ticker, but you will see as you start typing and it's Celsius with an S, I always want to do CELC, but it's CELS and you can see there's the ticker CELH.

And if you click in there, we come to the categorized or no, actually I'm on the valuations page already, but by default I think you'll open on the categorized page.

So this is where you'll find their financial filings, the news, transcripts of earnings calls and various other things.

Let's go to the business overview in case you're not familiar with Celsius, just so we can have an idea of what they do, we can see that they are a functional energy drink company operating in the US and internationally.

Now I don't know Celsius very well, okay, but looking into it a bit, it's not just energy drinks.

I know they do energy drinks with caffeine but they also do things like I think sort of vitamins and they have like healthy drinks.

I think it's quite focused at the gym market.

So if you read, I mean we don't need to know all of this detail to adjust the trading comps, but it's nice that we know the kind of company we are working with.

Okay, so Celsius is an energy drinks company based in the us so it's listed in the us Okay, so those that have just joined, I'm just gonna put this link again in the chat so you can access the documents that we're gonna be using.

If we go to the valuations tab for Celsius, we can see that we have in the EV bridge Celsius equity value, their diluted market cap.

And then we go over the bridge by adding debt, subtracting cash and financial assets and we get to an enterprise value.

And we given that if we were now doing trading comps analysis, this is the data we would download and put in our list.

So just to make sure that we clear on the kind of thing, the scenario that we are looking at.

Imagine I want to value another energy drinks company.

So imagine Red Bull.

I want to come up with a valuation for Red Bull.

I want to know where similar companies are trading.

So I would look at the broader beverages market, but I would definitely wanna look at other energy drinks companies here by default, Felix brings up some pumps for Celsius, an obvious one Monster we know Monster US company, they also do energy drinks and then we've got some other companies coming up as well.

I'm gonna use this table and look at the multiples.

So specifically what we focusing on today is the enterprise value to EBITDA multiple.

And I'm gonna say, okay, well Celsius is trading at 21 times forward earnings.

So where do we think Red Bull should be trading based on, you know, the characteristics of Red Bull versus Celsius? And we do the same with Monster.

Problem is I can't just pull this data and not think about it because Celsius is multiples are distorted.

Now it's not that clear to see just from the information that I've got on the screen, but I'll show you how I realized that something was up because it just looked a little bit off.

What actually happened with Celsius is that they did an acquisition and the company that they acquired, and maybe some of you would know this company, it's called Ani knew.

So um, hopefully I'm saying it correctly.

I think the Ani party is definitely right.

Ani knew and they bought Ani on um, in February they made the announcement and the transaction actually closed on the 1st of April.

Ani, if you look into it, I'm just taken by the beautiful packaging of their products, but it is also a drinks company, energy thickness related.

They're very big in the female demographic.

So it's an exciting brand. Fits very well with Celsius.

I mean we are not here to analyze the transaction.

We here to look at how this has affected Celsius trading multiples.

Okay, first thing I wanna start off with is I want to go and calculate Celsius unadjusted multiples.

So I'm pulling this data, I'm putting it into a comps table and then I'm gonna use it to value another company or just see where the industry's trading.

So let's go get the unadjusted multiples for those that have just joined, you can find this data if you don't have access to the chat topics Felix live and then just go find today's session.

Okay, so let's forget about the acquisition for now I'm just pulling the trading comps.

I'm gonna come here to row 15 and in Felix I'm gonna take the equity, uh, not equity value, the enterprise value and we can see for Celsius ticker CELH for those that are looking for it.

Enterprise value is 11 7 4 2 0.9 and that is in millions of dollars.

So 11 7 4 2 0.9.

So that is from Felix Unadjusted, just checking, I've put it in 11 7 4 2 0.9.

Let's now go and find their CY one ebitda.

We're gonna get this from Felix as well.

So CY one calendar year one we are looking to December, 2025 and in Felix you need to scroll down.

That's gonna be here under the earning section where we've got analysts consensus estimates for Celsius.

We can see for Celsius their financial year end is the same as the calendar year end because the analyst estimates are two December.

So calendar year one, same as their financial year.

And here I've got EBITDA in millions of dollars, we are working in millions and that is 4 1 7 0.3.

So 4 1 7 0.3.

That is the CY one EBITDA for Celsius in Felix.

Let's use these two numbers to calculate the unadjusted multiple, the multiple as it is now.

So we've got the enterprise value and we are dividing that by CY one ebitda and that gives us a multiple of 28.1 times just to give it a quick sense check, get some comfort that we've put these numbers in correctly.

If we go to Felix and you scroll up a little bit, you can see here in the comps builder EV to CY one EBITDA for Celsius is that 28.1 that we have just calculated.

So the enterprise value is 28.1 times calendar year one's earnings fine, let's do the same and calculate the LTM EBITDA multiple.

So last 12 months EBITDA multiple, I'm gonna go to Felix to find the March LTM EBITDA for Celsius.

So we are not making any adjustments at this point.

We go back to the analyst's forecast.

This is obviously historic so it's not a forecast, but I've got March LTM 2 3, 6 0.9 2, 3, 6 0.9 And now I can calculate the unadjusted multiple.

I know we are jumping around the spreadsheet a little bit, sorry about that.

But when I put this together I was just working on adjusting the multiples first and then comparing to the unadjusted multiples. But I think it's actually useful to look at the unadjusted first so we know what looked off.

So our unadjusted multiple, remember when you're doing multiples analysis, you are using the enterprise value or if you're doing an equity multiple today and then we compare that to different earnings metrics.

So maybe last 12 months calendar year one calendar year two EBIT ebitda maybe revenue.

So it's the same enterprise value. We take that enterprise value from today and we divide it by the last 12 months EBITDA and I get a multiple of 49.6 times that looks very high.

And also there is a big drop between these two multiples.

Visually I think it's nice for us to put this next to each other and then at the end we can compare.

So let's use the space at the end of the document here to just, I mean we're just gonna copy the numbers but I think it's quite useful to put in here our unadjusted multiples.

Let's put in the EV to LTM first ebitda.

So EV to LTM EBITDA and then we will do EV to CY one.

Um, literally just going and picking up, okay, the unadjusted EV to LTM is 49.6 and forward is 28.1.

My formatting's a bit off here.

If we do wanna make it look nice and change the formatting to look like a multiple and you want that x, this is just done with a cell style.

So alt hj, if you are not on a Mac, if you're on a Mac, just go to cell styles and we can see we've got a multiple style there.

Okay? And I just changed my font to black as this is linked somewhere else.

Okay, so we've got these two multiples.

This looks weird to me.

What's gonna help me also assess, assess why this looks weird or if I'm right is do you agree that forward multiples are usually lower than historic multiples because I'm taking the enterprise value today and I'm dividing by either last 12 months numbers or next coming upcoming years numbers.

And so generally for companies earnings grow as your denominator gets bigger, your multiple gets smaller, right? So it's normal for a forward multiple to be lower.

If you have a forward multiple that's higher, just double check. You haven't made a mistake.

It's not a mistake if that company's earnings are contracting.

Okay? So it's normal but it's the size of this fall that makes me a bit worried.

So what I'm gonna do, I'm gonna calculate the implied growth in the ebitda and I can do this by looking at the two multiples because the denominator is ebitda.

If I take the oldest EBITDA divided by the newest one and minus one, if I wanna change this to a percentage, it's just al hp, okay? Or you can click on your percentage button, but I've got the 76.2% implied growth in EBITDA.

We can double check this number.

You can go look at the EBITDA and say, okay, what's CY one ebitda? Divide that by LTM ebitda and if we minus one we get exactly the same answer because EBITDA appears in my multiple, it's on the bottom of the multiple.

So my formula's the other way around, instead of taking this year minus uh, over last year, I take last year over this year.

So 76.2% growth guys that I know you get companies that are high growth companies.

But that got me thinking something has happened here.

This looks like an acquisition.

This looks like a situation where I've got another company's earnings included for CY one and I haven't got their earnings historically.

And then if you go investigate, you'll see that's exactly what happened.

So if we start thinking of information sources, first of all, if you cover a certain industry, you're gonna have news coming through all the time, right? So you're gonna be alert to the companies in that industry, the news you would already have known that Celsius did this acquisition, okay? But otherwise you can go have a look on um, at their press releases when a company does something significant, they have to issue a press release.

And if I look in this categorized tab we see there under news Celsius holdings to acquire Alani knew and that was an announcement from February.

Okay? So announcement came out in Feb.

Last thing I just wanted to say, just to check, I mean this growth of 70%, it could be, I don't know that this is an exceptional company and they are growing super fast like this.

But if you go then look at what their growth is for next year.

I mean this is revenue growth, it's not uh, EBITDA growth but I mean for December 26th, that's only um, 23.8%.

Okay? So us seeing this massive growth just looks a bit off.

Hopefully everyone's with me.

If you are not, please don't be shy, come in the chat, come in the Q and a pod and I actually don't need, I suppose I could keep that up for now.

Let's get back to our spreadsheet, right? So what we've gotta go now do is we've gotta go and fix this multiple or these multiples. They both actually have a problem with them to make sure that this acquisition has been properly reflected in our multiples.

I'm going to get rid of the colors just otherwise we've got too much going on can be a bit confusing.

So let's get rid of those colors. Let's start at the top.

So we've already men mentioned sources of information.

One of those sources is looking at press releases from the company where you can pick up that they've done an acquisition.

Another place that you should always look for significant events that have happened after the reporting date is in the latest financials.

Look at the subsequent events note.

That's what I've linked to.

If you click on this link, it should take you to Felix date of transaction Close.

We can see that we are in the 10 Q in the top right hand corner.

The 10 Q which is their quarterly report.

So this is the first quarter of 2025.

If you scroll up a little bit, you can see it's for the period ending 31st of March, 2025.

Here we see in the subsequent events note it's normally one of the last notes on the 1st of April, 2025.

The company completed the acquisition of ANI new.

They go on to give us more information.

We'll use this info as we need it.

But that is really significant.

It's significant because the data that we have in these financials goes up to the 31st of March, 2025.

The transaction is only going to be consolidated.

Alani news results are only gonna be reflected in Celsius results from the 1st of April.

So these results on the 31st of March do not reflect the acquisition at all.

Let's go look at the deal announcement to get a bit more information and then we're gonna extract the relevant information we need so we can start making our adjustments.

I've linked here to the press release. Press release.

If you click in there, you'll see exhibit 99.1, top right hand corner.

If you scroll up to the top, this is announcing the deal and there's loads of interesting stuff in here.

If we were doing m and a analysis, we would now be spending time looking for things like what was the transaction multiple.

Please don't confuse that with what we are doing.

We are doing the trading multiples.

Now, transaction multiple is what they paid for this company.

I'm just looking at how this has affected my trading multiple now.

But here we've got all the information on the deal.

But for us what's important now is the deal is worth $1.8 billion in that 1.8 billion.

150 million was for tax assets.

And then if you take those tax assets off, we've got 1.65 billion.

And then they say that is gonna be paid for using a mixture of cash and stock.

So they're gonna be issuing shares for part of the um, purchase price and they're gonna be using cash.

We need to think about how they're gonna be raising that cash.

Are they're gonna be using cash on hand? Have they issued debt? And we'll get to that in a moment.

For now, let's just extract this information from the press release into our spreadsheet.

So we've got the transaction value being made up of cash.

Let's go pull out the ca. Oh dear.

So sorry, I'm thinking everything that we need is up here in the um, in the press release.

We need to scroll a little bit further down to get our breakdown of that. There we go. Okay, so I just wanted to copy straight from the top but we need to scroll down a little bit in the press release.

Sorry guys, I'm not feeling the best today. You can hear my voice is already going.

It's been a very long um, few, couple of weeks.

Um, right, so if we scroll down we can see the purchase price consideration is comprised of 1 2, 7 5 million in cash.

So let's go copy that. I'm just gonna click on it.

I've already copied it so I could just copy the link.

But you know Felix, if you double click on something and save it, you can then copy it to your clipboard and then we can paste the number in here, right? So that 1, 2, 7 5 we got from the press release, they're paying in cash.

Then we see that they have an earnout of 25 million.

An earnout is contingent consideration.

This means that if certain targets are met then the sellers will get an additional 25 million.

So it's contingent on those performance targets being met.

Let's copy that because it is part of the 1.8 billion.

So if we just copy you, save it if you haven't saved it already and then paste it and then shares to the value of 500 million or approximately 22.5 million shares based on the share price.

So we can just copy this.

I've got so many things copied here that I need to just make sure I get the right link.

There we go. Shares to the value of 500.

And let's just double check ourselves because we're getting information in bits and pieces.

Let's just check we haven't missed anything.

Yes, 1.8 billion, that was the transaction value.

So I know how this is being paid for.

Okay, how is it being financed? Any questions please ask.

What we've gotta do now is we've gotta think, okay, okay we've got the information but what adjustments do I need to make? What is already reflected in this enterprise value that I'm using and in the EBITDA numbers that I'm using and what do I now need to manually bring in? If we go back to Felix and look at that 11 7 4 2 enterprise value.

So we just need to go back to the valuation tab in Felix that 11 7 4 2 0.9 enterprise value.

How has that been arrived at? Well we know that we start with equity value and then we go over the bridge to get equity value for a traded company.

We take diluted shares outstanding multiplied by the share price.

If I look at diluted shares outstanding, obviously we first start with the basic number of shares outstanding.

Then do our our dilution adjustments.

If you look at the shares outstanding, that 2 5, 7 0.7, if you click in there, that is not the shares outstanding on the 31st of March.

Those are the shares outstanding on the 30th of April.

So the new shares that were issued to do the deal have been taken into account.

So this is tricky because we've got a mixture.

Some things are reflected in EV but some things are not.

So because we're using this most up-to-date number of shares, that two five 7 million already takes into account the 22 million shares that were issued.

And you can go back and check they have made an announcement, they did issue some shares and I just as an extra check went and looked at the December 24 financials to look at the share count.

And then I looked at these March 25 financials to look at the share account on the frontier and it did go up by about 22 million.

Okay? So the equity value has already been taken into account.

Okay? So this already reflects the equity component.

So we don't need to adjust for the equity component that 500, okay? Because my enterprise value starts with equity value, it's in there already.

The other adjustments I need to go look at now is, okay, well what about this cash component to the deal? So I started writing adjustments, adjustments, adjustments, and then I thought, no, let me be clearer and sorry, I forgot to change this one.

So this should be instead of adjustment, add the debt that was issued, the term loan or that was drawn down.

So add the term loan, this information we find in the subsequent events note you should already have that open, but I know you've probably got loads of tabs open if you wanna go find that subsequent events note, it's if you click into this 1st of April, it'll just take you straight back to subsequent events.

So that 1st of April linked to the 10 Q.

So the 10 Q subsequent events note, we can see the part that I've highlighted.

A term loan facility in a principle amount of 900 million which was fully drawn, drawn at closing.

So 900 million fully drawn at closing and then remaining cash consideration is funded with existing cash on hand.

Let's go get that 900 million number.

So I'm just gonna double click on that 900 million and then we can copy that.

I mean I know you could just type in 900 million, right? Instead of copying it. But it's really nice to be able to link back and see, oh I got this from subsequent events notes.

So as an audit trail doing this linking is really useful.

So you know where your numbers have come from.

Now we've gotta think about, okay, so we slowly correcting the enterprise value we have got in the shares that were issued that was already in enterprise value.

We've now added the debt component.

So our debt number's looking right and I do just wanna double check, I mean, but I'm being a bit paranoid here, but it's always good to check yourself if you go back to the debt that was in the bridge, right? The debt in this bridge.

'cause we working with this 11 7 4 2, I need to understand what went into it.

If I look at that debt of 824, I'm just gonna click into the biggest number, the preference share number that takes me to the March 31st 10 Q and we know for sure March 31st, this hadn't been drawn down the 900 million, okay? So that does not include the 900 million.

In fact those are pre shares. It's not even pure debt like the term loan. Okay? So we are comfortable that we are making the right adjustments.

Now we've gotta look at, okay 900 of the cash funding for the deal came from a term loan.

So the balance would've come from cash on hand.

So let's go find that cash consideration.

The 1, 2, 7 5 in row 10 and 900 of that has now been provided by the term loan.

So the remaining that I would've taken out of the cash balance is 375.

So it's simply saying cash funding 1, 2, 7, 5, 900 is my funding from a loan.

So I must have used 3, 7, 5 cash on hand instinct might be that you need to deduct this cash.

That might be your instinct, okay? I know that was my initial instinct, deduct it 'cause we know okay you've used the cash take it off.

But guys, let's remember we are going over the bridge.

When we go over the bridge we are adding debt to equity and subtracting cash.

If I have used up some of that cash in the bridge, I'm gonna be subtracting less cash, which means my enterprise value is going to be higher in the bridge that we've got at the moment, I am deducting 977 of cash and short term financial assets, that's lower.

I'm deducting a lower amount.

Just someone in the previous session asked me to re-explain this. So I'll just quickly do it doesn't take very long.

But if I'm just gonna do a rough little drawing at the bottom just to prove it.

If we just put in some very easy numbers, simple numbers.

Let's say equity value's a hundred, let's say debt value is 30.

Okay? So all of my funding market value of equity plus debt, that's 130.

If I wanna go over the bridge to get to enterprise value, what I need to do is I'm gonna add the debt, okay? So a hundred plus 30 and then I need to subtract the cash and cash equivalent. So let's say cash was 10, I'm gonna be subtracting the cash and therefore my equity value would be 120, right? So I'm not equity enterprise value would be 120, okay? Because I'm subtracting the cash.

What I'm saying to you now is I'm saying we are using that cash.

Let's just imagine the whole 10 got used.

So what is my enterprise value gonna be Now it's the a hundred equity plus the 30 debt minus no cash.

So my enterprise value is 130.

So can you see I'm actually adding the 10 cash to my enterprise value.

So that's just to explain why we add that 3 75.

So we are getting there, we are almost done because the hardest part is fixing this enterprise value.

And then we've gotta look at earnings.

But the enterprise value's the big one.

The next thing we need to think about is, okay, I've started on the right, I've got the right number for equity now I've fixed the debt number by adding on an extra 900 of debt.

I fixed the cash number by adding on the 3 75 to reflect that that cash has been used.

So enterprise value's actually gonna be higher.

But then I've gotta think about are there any other financial assets, anything that falls outside of enterprise value? Because remember, enterprise value is only the value of the operating business.

It's the value of my operations.

If we go back to that deal announcement, part of the 1.8 billion for this deal was actually for a tax asset and the amount of those tax assets is $150 million.

Now I don't know all the detail of this but I'm imagining it's something like a net operating loss a Noel.

So maybe Alani had accrued up some losses that they could then use as deductions going forward, but whatever it is, that 150 million in tax assets that they paid as part of the 1.8 billion package, that is not enterprise value.

Okay? That's outside enterprise value.

I want just the value of the operations of Celsius.

So I'm going to have to deduct that one 50 million because that funding of 1.8, I'm not, um, it's not all in enterprise value.

So let's go find that amount paid for the tax assets.

You could just easily type in 150 million, okay? But I like to know where I get my numbers from.

So if you just double click on that 150 million, save it or copy the link and then we can paste it in here and then we just need to turn that into a negative because we are deducting it.

Hey so this is not part of enterprise value and now I can work out my adjusted enterprise value and I get an adjusted EV of 12, 8 6 7 0.9.

So another word for adjusted enterprise value is proforma because it's now fully reflected this acquisition.

Any questions guys, please don't be shy.

Use the chat if you don't wanna use the chat.

You can use the anonymous q and a pod.

We have been pulling numbers from here, there, everywhere.

And I just wanna do another check just for myself to see that this actually makes sense.

Do the adjustments that I've made make sense? So here's my little sense check.

I'm gonna work out well what is the actual adjustments I've made to the enterprise value? I have an adjusted EV of 12, 8, 6 7.

I'm gonna subtract what the reported or not reported because it's not really a reported number but what the number in the database is at the moment, 11 7 4 2.

And I see that I've made an adjustment of 11 1 2 5, right? So that's just the difference between those two.

Now I want to check, does this adjustment make sense to me? The 1 1 2 5, what have I actually adjusted for? Because the things that I should be adjusting for is I should be adjusting for this um, cash part of the transaction.

I should not be adjusting for the shares part of the transaction.

I also don't wanna be adjusting for that.

I also don't wanna be including the one 50 deferred tax assets and then I could think about should I include this earnout or not? Okay? That you could argue you should maybe include the earnout because it is a defacto financial liability.

It is contingent on them hitting certain targets.

So you could include that in your bridge, okay? I don't think it's not gonna make a big difference to the multiple anyway, okay, so I've left it out but if I look at that 1 1 2 5 that I have adjusted for effectively that is the cash proceeds of 1 2 7 5, right? It's the cash proceeds of 1 2 7 5 minus the one 50 tax asset.

And that makes sense to me.

It's the 1 2 7 5 minus the one 50 tax assets 1 1 2 5 is what I've adjusted for.

Why does it make sense to me It makes sense because the shares were already reflected.

I shouldn't have adjusted for the shares and I don't want to add in those deferred tax assets to enterprise value because they sit outside enterprise value.

And so I'm happy I've done that.

The only thing I, like I said, you could have maybe added in that 20 five's a contingent liability.

Okay, so I've got comfort, my numbers are making sense.

The last thing left for us to do is now use this proforma EV and recalculate our multiples and see if we get numbers that make a little bit more sense that tell a sensible story.

So let's first have a look at our CY one ebitda.

We got that CY one EBITDA from Felix and that is from equity research analyst forecasts.

That's for December, 2025.

And that does reflect the acquisition that will incorporate IOLANI'S results because it's forward looking and equity research analysts will update their models and will take that into account.

Okay? So model will have been updated, we need to make no adjustment, right? This already includes AL'S earnings.

So to work out my adjusted multiple, I'm just gonna take the adjusted enterprise value divided by the CY one ebitda. There's no problem with that number.

And now I get 30.8 quick sense check.

It's higher than the unadjusted multiple because our enterprise value is higher, we have reflected the value of the acquisition.

It's not just the enterprise value of Celsius anymore, it's the enterprise value of Celsius plus the acquisition plus Alani.

Okay? So we've got a higher enterprise value, same earnings numbers before and so I do get a higher multiple.

Let's now turn our attention to the LTM numbers.

LTM numbers. We need to adjust.

We can only for accounting purposes consolidate the results of an acquisition from the day the acquisition is completed.

If I announce an acquisition, I do not include their results in mine until the acquisition closes.

So these last 12 months numbers in Felix do not take Ani into account.

This is just Celsius numbers on their own.

And so what I wanna do is I wanna say yes, I know for accounting purposes you can't do this guys, we are not doing accounting here.

We are doing analysis, we are doing valuation and I want the numbers to make sense.

I wanna compare like with like I wanna look at growth rates that make a bit more sense.

So I'm gonna say well let me put this in as if the acquisition had already happened.

Okay? So I'm gonna adjust the numbers.

So I've got a like for like comparison of LTM and forward looking.

Okay? So where we're gonna find this, we are gonna look subsequent events. They don't tell us we are gonna look at the press release, press release, we could find the information and we do find it in the press release if by some chance you don't find it in the press release.

Very useful source of information is also the company's website and investor presentations.

I mean these are even on Felix as well.

You can find presentations, um, their transcript calls, everything, okay? But go look at in the presentations as well.

We found this in the press release.

If you wanna just go back to the press release easily, okay, you've got it open but we've got so many things open press release, it's just clicking into that transaction detail and you've gotta scroll quite a bit down.

It looks like it's finished because it's talking about forward looking statements, it, et cetera.

And then if you go all the way down, we find these proforma numbers.

We've got them to December 31st, 2024.

Yes, that's not last 12 months to march, but it's the best we've got and it's a full year's worth of earnings. That's what's important. It's a full year's worth of earnings.

And so I've got the EBITDA number and we want a clean adjusted EBITDA number.

So we take that 86 9 7 4, you can double click on it, save it, copy it.

So we've got an order trail now need to do a quick sense check.

We like working so fast, we've got stuff to do, wanna be efficient, wanna get it done.

But you always sense checking as you're working.

This looks weird to me.

Celsius, the company that's buying alani, their LTM earnings is 2 3 6 and all of a sudden I've got 86 9 7 4 for the company they're buying massive.

It's because the press release is giving us numbers in thousands, right? I know this sounds obvious, I'm really not trying to insult anyone, okay? Because you'd say obviously I'm gonna check for that.

But I know when you're working fast sometimes you miss these little things, right? So this is in thousands.

We working in millions, let's just make sure that we put a decimal in there.

And I'm a little bit paranoid so I, instead of putting a decimal, just divide by a thousand, so I've got 87 now I've got the adjusted proforma LTM EBITDA for the group as if the acquisition had always been in there and I can now use that proforma LTM EBITDA number to calculate my proforma or adjusted EV LTM EBITDA multiple.

So I go take the proforma EV the adjusted one, I divide it by the 3, 2, 3 and I get a multiple of 39.7.

Yes that's still quite a high multiple but it's looking a lot more reasonable than the 49.6 as a final check or not check.

I just wanna see, okay, how does this compare to that growth rate that we had earlier that was so high.

I mean we had that implied growth rate of 76.2% in ebitda.

That's massive growth. That doesn't quite make sense.

Let's look at our adjusted numbers.

So I'm just pulling straight from above.

Let me go get that 39.7 LTM EBITDA rather.

And I'm gonna go get the 30.8 from row 24.

And if I wanna format this nicely, just remember it's under sell styles.

LHJ, I can turn that into a multiple and I can copy my formula down.

I take last year's multiple divided by this year's multiple feels counterintuitive 'cause growth is normally the other way around.

But remember EBITDA on the bottom of your formula here that you are working with and now that is a much more sensible number.

28.8% implied growth in ebitda.

A lot more reasonable than 76.2.

So to sum up, I'm using a multiples grid for valuation purposes.

Whether that's looking at how my company that I'm looking at is trading relative to its peers or whether that's taking another company and trying to value it on the same basis as its peers.

I want that comps table to not be distorted and I want it to make sense.

Some things cause distortion in multiples because as you can see there's like this mismatch almost between reported numbers, the latest financial information stuff that has happened after balance sheet date financing of that transaction.

So what we've gotta do is where there's this distortion, we go fix it to make sure that in our case that acquisition has been properly reflected and then we've got more reasonable numbers that make sense that are not distorted that we can work with Any questions please do ask.

I just wanna talk about one more thing.

So we've still got a little bit of time.

I didn't think I was gonna use the full hour but I might as well keep going.

If I've got 11 minutes I'm gonna use it.

Okay, so one thing I do just wanna talk about is, um, different scenarios.

So you know you've got those other spreadsheets, you've got the empty and full I left them there even though I'm not using them.

So if you wanna practice a little bit and go look at some other examples of this distortion that can happen.

You've got the other spreadsheets with the answers.

Um, what we've dealt with is we've dealt with acquisitions and then actually the financing issue.

But now think about what's gonna happen.

This is not gonna be like this forever, right? In Felix in a few months time when you open up Felix and you look at the enterprise value for Ani, not Ani for Celsius, that debt will be reflected because it is gonna be in their next balance sheet.

Some of the earnings of ANI will be incorporated in the historic numbers because now from the 1st of April, ANI is actually part of the Celsius company, the Celsius group.

So this is gonna evolve.

And one of the things, if we just now go further, let's look into the future for Celsius. What adjustments would you have to make in future for Celsius? We are gonna have to adjust the earnings side of things.

The EV will sort itself out because like I said, that balance sheet will be updated so we don't have to manually add the debt, change the cash, take out the deferred tax, blah blah blah. We don't have to do that. But what we will have to think about is thinking about those historic earnings numbers.

We've got an example here.

It's using slightly different Yearend um, uh uh, using slightly different dates to our Celsius example.

But with consolidation accounting we've already mentioned you only consolidate from the day of closing.

So from the 1st of April in Celsius case that means for December, 2025 for Celsius, all they're gonna have for ANI is from April to December.

So they're gonna have nine months worth of iolani's earnings in their income statement.

The first three months of the year, from the 1st of January to the 31st of March, they will not include Iolani's earnings for the first three months of for for the first three months of the year.

So what we would have to do is we would then have to just go add on an extra three months of earnings for ani because we want a full year.

It doesn't make sense. Enterprise value now includes ani.

I can't have in my L TM multiple only nine months of Iolani's earnings for a year.

I need a hundred percent full year's earnings.

So just using slightly different dates and numbers on the slide.

An acquisition closes on the 30th of September.

The acquirer has a 31st of December year end.

So they will only consolidate three out of 12 months in this consolidated number.

Everything of the targets, three out of 12 months, which is a quarter of the year will be included.

So there we go. It includes 25% of the target's numbers and we are saying no, we need to include the full year.

So don't get confused with these percentages, right? It's not like ownership percentages we own a hundred percent or even if we don't, if we control it, we include a hundred percent.

It's the portion of the year that we talking about here.

So what I would need to do is I would need to then go and gross up these numbers and say actually I need to add a full 12 months.

So 12 out of 12 months I need to include instead of just the three out of 12.

So I go add the other 75% of the year in.

So that's what's gonna be happening next for Celsius down the line.

The historic income statement for December 25 or the year before two December 25 will only include the nine months that they've actually owned Alani.

So we would just need to go add on the other three months.

That is it from my side.

I know we still have a few minutes to spare, but if anyone has any questions I'm very happy to take them.

Otherwise, thank you very much for your participation.

Hope you found that useful and please do join us for future Felix live sessions and enjoy the rest of your day, your evening and have a lovely weekend.

So thanks very much and do let me know if there are any questions.