Tupperware Brands Corporation

Authors:
Manal Al-Terekmani
Grigoriu Costin
Chinedu Samuel Nnaji
Elie Tannous
Alexander Ucar
Table of Content
Tupperware Brands Corporation ............................................................................................................. 1
1. Introduction ......................................................................................................................................... 3
1.1 History ........................................................................................................................................... 3
1.2 Market ........................................................................................................................................... 3
1.3 Strategy.......................................................................................................................................... 4
2. Accounting and financial statements .................................................................................................. 4
2.1 Description of accounting and financial statement analysis ......................................................... 4
2.2 Historical performance .................................................................................................................. 6
2.3 Peer benchmarks ........................................................................................................................... 7
3. Forecast ............................................................................................................................................... 7
3.1 Revenue ......................................................................................................................................... 7
3.2 Profit margins and Investment needs ........................................................................................... 8
3.2.1 Step 1 ...................................................................................................................................... 8
3.2.2 Step 2 ...................................................................................................................................... 9
3.3 Terminal Value ............................................................................................................................. 10
3.3.1 Introduction .......................................................................................................................... 10
3.3.2 Forecast of terminal value of FCFF ....................................................................................... 10
3.3.3 Discussion cost of capital calculations and forecasts ........................................................... 11
4. Scenario Analysis ............................................................................................................................... 12
5. Analysis of DCF Valuation of Tupperware Brands Corporations ........................................................ 15
6. Performance differences in the comparable valuation ..................................................................... 16
7. Conclusion ......................................................................................................................................... 18
Appendix................................................................................................................................................ 20
References ............................................................................................................................................. 25

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 1. Introduction Very vague. What exactly does the company produce and sell?
Would a reader understand what this company does if they
didn't already know of the firm?
1.1 History
In order to get a better understanding of the company's history, Finchat Ai and annual reports
were analyzed. Tupperware brand corporation was founded back in 1940ths in the United
States by a man called Earl S. Tupper. The first product ever to emerge on the market was the
iconic Wonderlier bowl in Massachusetts and was disclosed in the first commercial party held
by Earl. Subsequently in later years the owner experienced significant growth for the
company and shared an incredible success. Accordingly, in 1950ths Earl received an
appealing offer from an outside party and sold the corporation to Rexall Drugs Company
(Nowadays called Dart Industries) (Tupperware Brands, 2023).
In order for the company to grow and become as big as it is, many acquisitions and
expansions had to occur. Some of the most impactful expansions took place in 1950-1960s
where the company expanded its product portfolio to include kitchen and household items.
The Tupperware brand entered the international markets in the 1960s and started to become a
household name around the world (Tupperware Brands, 2023).
Descriptive, but how do
you connect it to your
valuation?
1.2 Market
Tupperware Brands Corporation is renowned for its market presence in the global kitchen and
food storage products industry. Tupperware has been a pioneer in crafting innovative home
and kitchen solutions for over 75 years, aiming to save time, space, energy, all while
prioritizing functionality and environmental responsibility. Their offerings have earned the
trust of countless households and kitchens worldwide, serving as indispensable companions.
(tupperware brands corp). Additionally, the company has adapted to the digital age by
incorporating e-commerce into its distribution strategy.
Tupperware operates in the market for the consumer goods industry, specializing in food
storage products (Yahoo Finance, 2023). The consumer goods sector encompasses businesses
that cater to individual consumers and households, as opposed to manufacturers and industrial
enterprises. These companies manufacture products designed for the direct consumption of
buyers. This sector encompasses businesses engaged in food production, packaged goods,
clothing, beverages, automobiles, and electronics, among others (Investopedia, 2021).
Tupperware Brands faces numerous competitors in both domestic and international markets.
Competition primarily revolves around marketing strategies, pricing, product quality and

3
Who are the competitors and how does Tupperware position itself in the
market? Do they have any competitive advantages?
innovation. Given the direct selling industry's nature, it's vital for the company to offer an
attractive income potential to its sales force while continuously introducing fresh and
innovative products. Tupperware Brands sustains its competitive edge partly by offering
robust incentives and promotional initiatives (Tupperware Brand, 2020).
Don't all companies offer incentives
What is the core business and promotions? What makes
1.3 Strategy channel? Tupperware different?

One of the strategies conducted was to enhance the core business channel through data driven
How?
approaches to reinforce sales, marketing, communication and recruitment. Consequently,
doing the business more efficiently and stronger towards their competitors. Moreover, the
enterprise has tried to retrieve information from customers' behavior to improve their
customer experience. This approach is still under consideration and will hopefully help the
corporation to give a better customer experience (TupperwareBrand, 2020).
In order to expand further, the company focuses on business-to-business distributions and
digital marketing which will help grow sales in revenue. Furthermore, the company focuses
on sustainable innovations by producing environmentally friendly and reusable products
which aligns with the growing demand for sustainable options. The company also recognized
the obstacles within the retail and consumer goods industry, such as heightened competition
and shifts in consumer purchasing behavior, Tupperware adopted a strategy of flexibility and
evolution. They proactively modify their business model and product offerings to effectively
This section mentions some strategies, but
address and overcome these challenges (TupperwareBrand, 2022).there is no analysis. Can you give examples
with figures? Connect with business
segments? How does this connect with what
2. Accounting and financial statements drives value for the firm?

2.1 Description of accounting and financial statement analysis

The description of the accounting and financial statements analysis simply refers to a request
for an explanation or summary of the methods, processes, and findings related to an
organization's examination of its accounting records and financial statements.
The Consolidated Financial Statements include the accounts of Tupperware Brands
Corporation and its subsidiaries collectively. The Company prepared the Consolidated
Financial Statements in accordance with United States generally accepted accounting
principles ("GAAP") and the rules and regulations of the United States Securities and
Exchange Commission (the "SEC") (TupperwareBrand, 2021). To determine this the authors

?
4
 ?

looked at some essential detailed accounts that outline how the analysis of the financial data
was conducted and what insights or conclusions were drawn from that analysis.
In assessing hedge effectiveness, the Company made an accounting policy change at the
beginning of 2019 to include forward points in the assessment of effectiveness for cash flow
hedges causing the impact from forward points to be recorded as part of other comprehensive
income compared to interest expense as it previously had been recorded. Based on the interest
expense incurred for open cash flow hedges as of December 30, 2018, the Company recorded
an adjustment of $1.2 million, net of taxes, to accumulate comprehensive income and retained
earnings to reflect this accounting policy change. (TupperwareBrand, 2020)
The effective tax rates for 2017, 2018, and 2019 stood at 243.4 percent, 43.6 percent, and 87,9
percent, respectively. In 2019, the effective tax rate exceeded the U.S. statutory rate due to the
persisting adverse effects of tax reform provisions such as GILTI inclusions, restrictions on
interest deductions, a mix of offshore earnings in jurisdictions with tax rates higher than the
U.S., and specific valuation allowances set against existing deferred tax assets in 2019.
Adhering to U.S. GAAP, the Company made an accounting policy choice to treat GILTI as a
current-period expense starting in the fiscal year 2018. Consequently, the Company did not
account for any deferred tax implications of GILTI in the Consolidated Financial Statements.
For the fiscal years ending on December 28, 2019, and December 29, 2018, the Company
recorded tax costs related to GILTI (before factoring in credits) amounting to $16.9 million
and $10.9 million, respectively.
The Company, along with some of its subsidiary entities, currently faces litigation and a range
of legal challenges as a regular aspect of its business operations. These legal issues involve
various types of cases, including those pertaining to environmental matters. It's important to
note that the Company does not include anticipated future legal costs within the accruals
designated for these particular legal matters. Rental Kraft Foods, Inc., a former affiliate of
Premark International, Inc., the Company's former parent company, has assumed the
responsibility for any obligations arising from specific divested or discontinued business
activities. These assumed liabilities encompass a wide spectrum of cases, including those
related to product liability, environmental obligations, and patent infringement allegations.
On February 26, 2020, the Company experienced a credit rating downgrade by S&P,
transitioning from BB+ to B. Simultaneously, S&P placed all its ratings under CreditWatch
with a negative outlook. Following this, on February 27, 2020, Moody's also downgraded the
Company's credit rating, moving it from Baa3 to B1. Consequently, the Company was
obligated to ensure that specific domestic subsidiaries acted as guarantors for the Credit

5
Agreement. Furthermore, both the Company and select domestic subsidiaries were required to
provide additional collateral. The Amendment to the Credit Agreement was officially
executed on February 28, 2020. (Tupperware brand, 2020)
Key financial adjustments in business are a necessary and integral part of financial
management. They serve a multitude of motivations such as: supporting strategic decision-
making, tax planning, and stakeholder communication. These adjustments are crucial for
businesses to adapt, thrive, and remain competitive in the dynamic and complex world of
modern finance.

2.2 Historical performance

Throughout the analyzed period there has been a decreasing trend in revenue growth. A
significant decrease by 22% in 2019 can be observed which was due to factors impacting
different segments. Some of the main reasons are lower consumer spending, less active sales
force and less outlet openings (Tupperware Brand, 2019). Furthermore, a decrease by 3,50%
in 2020 due to Covid-19 that impacted all the company’s segments. On the other hand, the
company noted a positive consumer trend due to the increase of people cooking at home
(Tupperware Brand, 2020).
In order to calculate the cost of capital efficiency (return on capital efficiency), the authors
exhibited essential components associated with EBIT and capital employed (total assets minus
current liabilities). The authors observed the numbers between 29%-62% in the analyzed
period. Year 2020 stands out in comparison to the other years, possessing the highest
percentage number. This significant increase is due to the increase in current liabilities and
EBIT. Moreover, this provides information that the company has a higher ability of its
corporation value to give as profits to their shareholders (Tupperware Brand, 2020).
Tupperware brands invested heavily in molds used in the manufacturing of products, new
technology projects, buildings, and lands during the covered period. In 2018 the number was
75,4 million dollars which was the highest among all years. This may imply a year of
expansion to try to enter new markets, increase the capacity of manufacturing goods and
expansion of supply chain capabilities (Tupperware Brand, 2018).
In accordance with the profitability, the company experienced a net loss of 265,4 million in
2017, mainly due to non-cash income tax and goodwill impairment (Tupperware Brand,
2017). As for 2019, the company experienced mainly a decrease in segment profit and
impairment charges which led to a decrease in net income (Tupperware Brand, 2019).

6
2.3 Peer benchmarks
There are a few companies in the global kitchen and food storage products industry but due to
time restrictions, two peer companies were chosen with the help of Finchat Ai as peer
benchmarks to Tupperware Brands. The companies that will be used in the comparison are
Newell Brands and Lifetime Brands since they operate in the same industry and are
approximately as big and popular as Tupperware Brands.
Looking at the operating profit margin, Tupperware Brands had the best margins in the
benchmark with margins between 10% and 16%. As for Lifetime Brands, the numbers were
slightly worse with margins between negative 3% and 6%. Furthermore, Newell Brands had
more volatile numbers of negative 91% in 2018 and positive 9% in 2021.
As for the company’s net profit margin, Tupperware Brands’ results can be seen in the
interval of negative 12% and positive 8% throughout the period. As for Lifetime Brands the
results were slightly worse with net profits between negative 6% and positive 2%. Overall,
Tupperware Brands generated a higher profit for each dollar of revenue.
An important ratio to look at in the industry is return on assets (Roa) which shows the
company's profitability in relation to its assets. Tupperware brands dominated this criteria
with margins between 13% and 24%. As for the other two companies the ratios were slightly
positive and, in some instances, negative.
Another important ratio in the sector is the inventory turnover ratio which shows how many
times a company managed to replace its inventory in a year. Compared with its competitors
Tupperware Brands had the best ratio with an average of 156 times during the analyzed
period, compared to an average of 137 times and 98 times for Lifetime Brands and Newell
Brands respectively.
In conclusion, compared to its peer benchmark Tupperware Brands show better profit
margins, better return on its assets and a faster inventory turnover which generates more
revenue overtime.

3. Forecast
3.1 Revenue
The authors of this valuation project have determined to cover a forecast period of 5 years
beyond 2021. The main choice behind this forecast period was particularly due to the actual
covered period from 2017 to 2021, similar observed periods will in turn lead to a fairer

7
valuation of Tupperware brand. Moreover, the scribes thought that the audience of this paper
would receive a better perception if a comparison of the actual period versus the forecast
period was addressed. How did you arrive at this
number?
Table 1 “Revenue growth”

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

- -8,25% -22,01 % -3,49% 2,86% 2,86% 2,86% 2,86% 2,86% 2,86%

According to the exhibited table 1 the authors assumed that the growth rate from the year
2021 will be constant in the future, therefore all later years will have the same growth rate of
2,86%. To receive the accurate growth rate for each year of the forecast period, the writers
would need more tools and numbers. Consumer products and household goods is an appealing
industry which drags attention to potential consumers from around the world. Since people
will always make food and subsequently store food somewhere in the future, Tupperware
Brand will have good prospects for the future, therefore a positive constant growth rate in
revenue for the future.
??!!!
Table 2 “Revenue forecast “

2022 in millions $ 2023 in million $ 2024 in million $ 2025 in million $ 2026 in million $

1648 1695 1744 1794 1845

Table 2 shows that revenue increases year by year and is highly associated with the positive
growth rate for the forecasting period.

3.2 Profit margins and Investment needs

3.2.1 Step 1

Table 3 “Ratios and Tax rate “

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In this section the authors conducted a forecast for several components associated with
NOPAT (Net operating profit after tax), Working capital, Fixed capital, Invested capital (IC )
, Invested capital net ( ICInv Net ) and Free cash flow to the firm ( FCFF) . To do this the
writers derived essential pillars of ratios to include in its forecast. Since numbers from the
financial statement were only available for the year 2021 the scribes could only derive
accurate ratios for this year. Forthcoming years are considered to be constant in accordance
with the benchmark (2021) since the writers are not able to receive numbers from the future.

3.2.2 Step 2 ?

Table 4 “Calculation of main forecast components “

In accordance with table 4 the writers stated all important components. Net operating profit
after tax (NOPAT) is computed as operating income minus operating taxes (tax rate 21,49 %).
Thereafter, working capital was calculated as revenue divided by working capital turnover for
each year. Subsequent fixed capital was obtained by dividing revenue by fixed capital
turnover for each year. Invested capital (IC) was retrieved by taking the sum of working
capital and fixed capital. Moreover, invested capital net (ICInv Net) was obtained by taking
the difference year by year of invested capital. Finally, free cash flow to the firm was obtained
by taking Net operating profit after tax (NOPAT) minus Invested capital net (ICInv Net). Key
consideration in deriving these components was to be very careful in inclusion of numbers in
these calculations. For example, fixed capital net is an equation of “Fixed assets minus non-
current operating liabilities (operating lease liabilities + liabilities held for sale). The writers
observed the balance sheet very carefully and included assets that were not current (from
deferred tax to assets held for sale) for the fixed assets. Looking at table 4, is it obvious that

9
all components have great prospects for the future since all numbers are increasing year by
year and could be a potential opportunity for the enterprise to enter new markets and thus be a
superior figure within its industry.
Invested capital was positive throughout the whole period and implies that the company is
efficient in allocating its money to differential projects and receives an acceptable yield on
those investments (Accounting Tools, 2023).

3.3 Terminal Value Yes, but this isn't what

you do...
3.3.1 Introduction

Terminal value is a fundamental concept in finance and investment analysis. It is the estimated
value of an investment at a future point in time, normally at the end of a defined forecasted
timeframe, which is beyond the explicit forecast horizon. The terminal value is critical in
various financial and investment methodologies, including discounted cash flow (DCF)
analysis, business valuations, and investment decision-making (Investopedia, 2023).

3.3.2 Forecast of terminal value of FCFF These are not terminal

values.
Table 5 “Terminal value forecast of FCFF “

2022 in 2023 in 2024 in 2025 in 2026 in 2027 in

millions $ millions $ millions $ millions $ millions $ millions $

637 655 674 693 713 680

According to table 5, the writers derived terminal values of free cash flow to the firm for the
forecast period. From the inception to the end, it is obvious that the terminal value has
increased successively. The most interesting year in this table according to the authors is 2026
since it represents the last year of the forecast period and will determine the FCFF for the year
2027. In accordance with the calculations of the forecast, it was clear that the FCFF in the
year 2027 displayed a decreasing number in comparison to the year 2026. The underlying
reason for this is the negative sustainable growth rate that was approximately estimated to -
4,52 %. Hence, the free cash flow to the firm and the terminal values beyond this forecast
period will follow a decreasing pattern and imply a successively loss of value (cash flows)
linked to the firm (to start with 2027 according to table 5).

having a negative
sustainable growth rate is
problematic. 10
Inputs used in computing these terminal values for Tupperware Brand were stated as weighted
average cost of capital (WACC), sustainable growth rate and FCFF. The growth rate was
obtained by taking the retention rate (1- dividend payout ratio) multiplied with return on
equity (ROE). Since a lot of years did not pay out even a single dollar of dividends, the
average method approach for retention rate for the actual cover period (2017 -2021) was not
possible because otherwise the result would not be fair and biased. Thus, the writers focused
on the last year of the covered period and thought that the estimated growth rate would be
constant in the future. Moreover, that year the company did not pay out any dividends and
retention rate was equal to 1. Return on equity was obtained by taking the net income for year
2021 in the numerator divided by the average shareholder equity of year 2021 and 2020 in the
denominator.
Sustainable growth rate is a perfect tool used for the future periods since it presumes that the
capital structure is constant throughout the future and no additional shares are issued (Pinto, et
al, 2020). Weighted average cost of capital will be expressed in more detail in the
forthcoming section of this paper. What can you say about
your sustainable growth
rate then?
3.3.3 Discussion cost of capital calculations and forecasts

Table 6 “Cost of Capital” Why do you calculate

WACC historically?

In order to calculate the cost of debt, which is stated in pre-tax form, it is important to know
how much the company needs to pay in interest for its loans. Since Tupperware Brands has a
credit rating of single B, the data of “ICE BofA Single-B US High Yield Index Effective
Yield” index was downloaded from FRED’s economic data and the last available yield which
happened to take place on the 24th of October 2023 was used in the calculations (9,47%).
Furthermore, the synthetic risk free (9,2%) rate was calculated by taking the average monthly
close of the analyzed period of the 10-year US. bond (1,92 %) and adding the expected
inflation forecast of 2022 for the United States (8%) downloaded from OECD’s website.
Finally, adding both the credit rating yield and the synthetic risk-free rate led to a cost of debt
of 18,67%.
If you you proxy the cost of debt with the yield on an
index, why are you adding it to a risk free rate?
11
In order to calculate the cost of equity, a few different estimations had to be done. To start off
with the beta, monthly closing data for Tupperware Brands and SP500 index were
downloaded and calculated using the slope method in excel. The equity risk premium was
downloaded from Damodaran's website by taking the result of Stocks-t-bonds of 1928-2022
due to the arithmetic mean. Finally, the beta was multiplied by the equity risk premium and
the synthetic risk-free rate was added.
Besides cost of debt and equity, the market value of debt and equity need to be included in
order to calculate the cost of capital. The market value of debt shows some slight volatility
throughout the period which indicates that investors were uncertain about how much they
were willing to pay for the company’s debt. As for the market value of Equity the volatile
outcomes are due to a volatile period in the company’s stock price and slight difference in the
outstanding shares. The last factor which is the tax rate is consistent throughout the period
being 21,49% following the same tax rate as the forecasted period. Looking at the trend of the
cost of capital, it shows a downslope throughout the period. This indicates a positive sign for
the company and its investors since it shows that the company needs to pay less for its debt
and equity, therefore less risk in financing its business and higher return on investments.
As for the forecast of cost of capital, the authors see that the positive trend of lower WACC
will continue in the foreseeable future. This is based on the lower cost of debt the company is
focusing on, which with time will give the investors a better outlook and push the stock price
higher leading to a higher market value of equity and lower cost of capital.
There is no reason to
forecast the WACC
4. Scenario Analysis
Scenario analysis was used to determine a range of potential intrinsic value estimates based
on a variety of different assumptions about the future. The main objective for this analysis is
to contemplate multiple possibilities. which allows the analyst to try different options to
observe how any change to key variables can affect others. Three scenarios were analyzed:

What value do you place

on your firm in each
scenario?

12
Table 7 “Base case”

The base case is often the most reasonable or realistic scenario. The basic assumption simply
means that no extreme or unexpected changes will occur. In other words, the values for the
key variables will be what could be reasonably expected following previous behavior.

Table 8 “Best case”

In this scenario, the assumption is that the values for key external variables are the best
possible ones. This method is used in strategic planning and financial modeling to assess the
most favorable outcomes that could potentially be achieved under certain conditions. It
involves considering the most optimistic or ideal assumptions and circumstances. It is the
ideal projected scenario to achieve goals and objectives.

13
Table 9 “Worst case”

This scenario contemplates the consequences of the worst possible set of circumstances: i.e.,
increased costs. This case helps us to identify our biggest dependencies and weaknesses.
The motivation of this analysis was to analyze how addition of a new product might affect
Tupperware Brand or how it will impact the revenue, operating income, and net income in the
forecast period, also the authors analyzed what would happen if the cost of labor and other
associated costs changed.
The key variables that championed this analysis are the revenue, cost of goods sold, selling,
general and administrative expenses, interest expenses and tax rate.
In the best-case scenario, we will assume that the new materials that are used in the line of the
products has decreased the costs and produced a very good quality which attracted the
consumers and the revenue increased.
In the worst scenario we will assume that the new materials increased the costs of goods, the
product's price increased without giving better quality, so the consumers felt it was not worth
it to buy them, so the revenue decreased.
Tupperware has been attempting to reposition itself to a younger audience but has failed to
stop a slide in its sales. It has also expanded its range of cooking products, such as a grill that
works in a microwave.
Neil Saunders, managing director of retail at the consultancy Global Data, said Tupperware
has "failed to change with the times in terms of its products and distribution". He said that the
method of selling directly to younger customers through Tupperware parties "was not
connecting" and that even older customers who "remembered Tupperware in its heyday" have
moved on - customers can now buy cheaper or more fashionable containers in shops or
online. (BBC News, 2023).
On this note, the introduction of new products that suit the young generation will improve its
revenue as shown in our best-case scenario. Also, Tupperware can reduce its selling, general,

14
and administrative expenses by venturing more into online selling. And can reduce its costs
by trimming down its staff and reducing the cost of transportation among others, since the
new market target would mostly prefer to order online. This would reduce costs and improve
its sales respectively, which saw its net income increase as shown in table 8, and table 9 if the
worst-case scenario happens. The point of a DCF valuation is to discount
forecasted future cash flows. Why are you
using historical FCFF??

5. Analysis of DCF Valuation of Tupperware

Brands Corporations
Discounted Cash Flow is a valuation method used to determine the intrinsic value of a
company by forecasting its future cash flows and then discounting them back to their present
value. In this part, the report will illustrate the application of DCF analysis using the financial
data of Tupperware Company for the years 2017 to 2021.
The cost of debt and equity serves as a starting point for DCF analysis. For the Tupperware
Company valuation, we assume that, both the cost of debt and cost of equity remained
constant at 18.67% and 28.15%, respectively, throughout the five years. This stable cost
structure allowed us to assume that the company's perceived risk profile remained relatively
constant throughout the period analyzed. The market value of debt experienced a gradual
increase, from 738.1 million in 2017 to 875.4 million in 2019 after falling again to 709.4
million in 2021. This upward trend might indicate that the company took on more debt or that
market interest for the company's debt grew. On the other hand, the market value of equity
exhibited fluctuations, with the highest value in 2017 at 2800.57 million and falling to
1187.84 million in 2021.From 2017 to 2021, Invested Capital decreased, signifying that the
company allocated less capital.
NOPAT fluctuated from 132.60 million in 2019 to 196.67 million in 2021, showing changes
in profitability. In comparison, FCFF demonstrated significant variation, with the highest
value of 1044.74 million in 2017, then decreasing and stabilizing in subsequent years. WACC
fluctuated from 23.11% in 2021 to 25.34% in 2017. These changes influenced the discount
rate applied to future cash flows, affecting the resulting valuations.
For the DCF analysis, we calculated the present value of FCFF for each year and the
continuing value of FCFF. The sum of FCFF's present values which is 1.323.19 million
represents the present value of all future cash flows from 2017 to 2021. We calculated the
present value of the continuing value of the firm as 319.037 million considering a sustainable
growth rate of minus 0.0452 consistent with the company growth rate potential. The value of

15
the firm was determined to be 1.642.2 million, which is the sum of the PV of FCFF and the
PV of the Continuing Value. This number represents the worth of the entire company
regardless of Tupperware's Brand capital structure. The Tupperware Company debt increased
from 258.6 million in 2020 to 700.5 million in 2021. Subtracting the outstanding debt from
the firm value, we arrive at an equity value of 726.7 million.
In conclusion, the DCF valuation of the Tupperware Brand demonstrates its evolving
financial strength and growth potential. The rising firm value and equity value indicate that
Tupperware Brand has become a more valuable company to invest in. The DCF analysis
reveals that the company's intrinsic value has increased, making it an attractive investment
opportunity.

6. Performance differences in the comparable

valuation
Every investor must cautiously consider financial metrics and valuation ratios when
evaluating potential investments (Magni, 2020). These indicators, such as P/E proportions,
EV/EBIT proportions, and net profit margin, furnish critical understandings of a company's
historical performance and current market sentiment, enabling informed investment
judgments (Magni, 2020). The key assumptions in this examination are brought forward by
the requirement to appraise the relative valuations and productivity of Tupperware, Newell
Brands, and Lifetime Brands. These suppositions offer a base for comprehending the investor
perspective, conceivable risks, and opportunities within these companies' financial
performances.

Table 10 “Price-to-Earning (P/E)”

2017-2021 Tupperware P/E Newell P/E Lifetime P/E

Mean 2.86 14.26 -4.94

By examining the relationships between the stock prices and reported earnings of
Tupperware, Newell Brands, and Lifetime Brands via their respective P/E ratios, one can
clearly see the information regarding how the market appraises the overall profitability and
worth of these corporations. The historical P/E ratios for Tupperware vary, with some
negative values and others positive. While Tupperware's average price-to-earnings ratio of
2.86 may seem rather modest when considering what investors have historically been

16
prepared to pay for each dollar in reported profits, this valuation implies that shareholders
have recently been content with paying a more reasonable cost for the company's
demonstrated earnings power. Newell Brands has a higher average P/E ratio of 14.26. This
indicates that investors have been willing to pay a relatively higher price for each dollar of
earnings compared to Tupperware. It suggests that the market has had a more positive view of
Newell Brands' profitability. The historical P/E ratios for Lifetime Brands also show
significant variations. The average P/E ratio for Lifetime Brands is -4.94, which is notably
lower than both Tupperware and Newell Brands. This below-average P/E ratio could suggest
that shareholders have had doubts regarding the corporation's earnings potential.

Table 11 “EV/EBIT”

2017- 2021 Tupperware EV/EBIT Newell EV/EBIT Lifetime EV/EBIT

Mean 12.53 1.382 0.017

While Tupperware's enterprise value to earnings before interest and taxes ratio averages
12.53, suggesting that investors are prepared to pay nearly 12 and a half times the firm's
operating profits for its overall worth, the relationship between price and performance
requires a closer examination given the multinational company's recent struggles and an
uncertain economic outlook. This suggests that Tupperware is relatively more expensive
when compared to its operating earnings. Newell Brands has an average EV/EBIT ratio of
1.38, which is significantly lower than Tupperware's ratio. This suggests that Newell Brands'
valuation is relatively lower compared to its operating earnings, making it appear more
attractive in terms of EV/EBIT.

Table 12 “P/S”

2017-2021 Tupperware P/S Newell P/S Lifetime P/S

Mean 0,735 0,86 0,32

Tupperware Brands Price to sales ratio of 0,735 can be seen as slightly high compared to its
peer Lifetime Brands (0,32), since the market is willing to pay a higher price for every dollar
of revenue (investopedia,2022). Compared to Newell Brands (0,86) the P/S ratio can be an
advantage to Tupperware Brands since its price to sales ratio multiply indicates that the share
is undervalued in comparison to Newell but in meantime overvalued due to Lifetime. This
indicates that the company is hard to determine from an investing standpoint taking into
17
consideration Lifetime's low P/S ratio. Accordingly, Lifetime brands’ stock is a more
attractive investment according to this ratio.

Table 13 “P/CF”

2017-2021 Tupperware P/CF Newell P/CF Lifetime P/CF

Mean 0,26 0,81 7,34

Price to cash flow ratio, which indicates how much cash the company generates relative to its
stock price, is a good ratio to include since cash flow is more stable than earnings and
therefore more reliable than P/E ratio (Pinto, et al, 2020). Tupperware exhibits a very low
ratio in relation to its peers and would imply that the company’s stock is undervalued.

7. Conclusion
This project reviews Tupperware Brands Corporation with respect to its financial performance
and valuation. It explores different dimensions of the financial performance of Tupperware
Brands such as the essential key financial metrics and a discounted cash flow (DCF)
valuation. The study considers P/E ratios, EV/EBIT ratios, P/S ratio, and P/CF ratio from
2017 to 2021 (Tupperware Brands Corp. 2020). The company’s intrinsic value is estimated by
use of the DCF valuation method.

Based on the DCF Valuation analysis, it turns out that, Tupperware Brands has had positive
financial changes whereby, FCFF turned positive and the WACC was decreasing. As such,
the company may be able to generate future cash inflows. According to the DCF analysis, the
intrinsic value of Tupperware Brand share (14,8 dollar) exceeds its current share price (1,61
dollar), implying that the company may be undervalued by the market. Investors could find
this an attractive move. This means that the stock could have growth capabilities and that the
market might need to realize the company’s future cash flow appreciation (Magni, 2020).

According to the calculated ratios compared to peers, a mixed signal can be observed.
Tupperware Brands is undervalued according to P/E ratio and P/cash flow ratio. On the other
hand, P/S ratio exhibited a slightly higher ratio compared to Lifetime Brands but lower to
Newell Brands. Furthermore, the EV/EBIT ratio suggests that investors would prefer to invest
in the peer companies due to the lower ratio and less risk. However, it should be noted that
market forces and the moods of investors could also contribute to shaping a company’s share

18
value. Other external factors to consider include the prevailing trends and levels of
competition.

19
Appendix
Summary income statement:

Summary balance sheet 1:

Summary balance sheet 2 (Reconcile invested capital with total funds invested ) :

Forecast FCFF (years 2022-2027):

FCFF 2022= NOPAT - ICInv Net = 202,286-18,091= 184,195

FCFF 2023 = 208,064-18,608= 189,456
FCFF 2024 = 214,008-19,139= 194,868
FCFF 2025= 220,121 - 19,686 = 200,435
FCFF 2026 = 226,406 - 20,248= 206,161

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Sustainable growth rate = -0,0452 (-4,52%)
FCFF 2027 = FCFF 2026 x - 0,0452 = 188,088

Calculations Cost of Capital:

Step 1 Cost of equity:

• Synthetic risk-free rate:
(Average risk free rate from 10 year government bond (US) 2017 to 2021) + (inflation
forecast US 2022) = 0,0192+ 0,08 = 0,0992 (9,92 % ) .
• Beta: 2,854
• Equity risk premium retrieved from Damodaran due to the arithmetic mean 6,64 %

Applied the capital asset pricing model to derive cost of equity:

CAPM = rf + b x (rm -rf)
CAPM = 0,0992 + (2,854 x 0,064) = 0,2889 (28,89 %)

Step 2 Pretax cost of debt:

• Yield to maturity for B rating companies (Index) was obtained and estimated to
0,0947 (9,47%)
• Synthetic risk-free rate (9,92 %)

Cost of debt = 0,0947 + 0,092 = 0,1867 (18,67 %)

Step 3 Beta:
• Compare Tupperware brand with S&P 500
• Get the returns
• Slope tool was used to derive beta
• Beta approximately 2,854

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Step 4 Market value of equity:
• Average share price per year from 2017- 2021
• Outstanding shares per year
Market value of equity 2021: Average share price 2021 (24,2913) x Outstanding shares (48,9)
Market value of equity 2021: 1187,84 million dollars

Step 5 Market value of debt:

• Long term debt and finance lease obligations
• Current debt and finance lease obligations
Market value of debt 2021 =700,5 + 8,9 = 709,4

Step 5 Calculation of WACC

• WACC 2021= MV DMV D+ MV Ex rd x (1-tc)+MV EMV E+MV Dx r
• WACC 2021=709,4709,4+1187,84x 0,1867 x (1-0,2149)
+1187,841187,84+709,4x0,092=23,11 %

Calculations of firm value:

Present value FCFF 2017=FCFF(1+WACC) year
Present value FCFF 2017=1044,74(1+0,2534)1=833,546
Sum of FCFF (PV)=PV FCFF2017+PV FCFF2018+PV FCFF2019+PV FCFF2020+PV
FCFF2021
Sum of FCFF (PV)=833,546+181,486+98,426+132,532+77,197= 1323,19

Continuing value (CV) FCFF 2021 =FCFF x (1+g) WACC -g

Continuing value (CV) FCFF 2021 = 218,27 x (1- 0,045)0,2311- (-0,045) =902,045
Present value CV FCFF 2021 = CV FCFF 2021 (1+WACC)5
Present value CV FCFF 2021 = 902,045(1+0,2311)5=319,037

Value of firm=Present value CV FCFF 2021+Sum of FVFF (PV)

Value of firm=319,037+1323,19

Outstanding debt =

Long-term debt and finance lease obligations

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+

Operating lease liabilities

Other liabilities

Liabilities held for sale

Current debt and finance lease obligations

Outstanding debt 2021= 700,5+57,3+ 131+ 17,8+ 8,9 =915,5

Equity value = Value of firm - outstanding debt

Equity value = 1642,2 - 915,5=726,7
Intrinsic share price: Equity value Average outstanding shares (2017-2021) =
726,749,018=14,8 dollar per share

• Revenue growth year by year:

Revenue growth = (Revenue n / Revenue n-1)-1

• Revenue forecast: Revenue n+1= Revenue n-1 x (1+revenue growth rate forecast)
• Cost of goods sold forecast:

Cost of goods sold (COGS) n = Revenue n x (COGS/Revenue forecast)

• Selling, general and administrative expense forecast:

Selling, general and administrative expense n=Revenue n x (SGA / Revenue forecast)

• Invested capital (IC):

Working capital + Fixed capital

• Invested capital net (ICInv net ) :

23
 Increase in IC from one year to another.

• Working capital turnover:

Revenue / Working capital.

• Fixed capital turnover:

Revenue / Fixed capital

• Working capital forecast:

WC n = Revenue n / (Revenue / WC turnover forecast)

• Fixed capital forecast:

FC n = Revenue n / (Revenue / FC turnover forecast)

24
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