L'évaluation de la valeur des vignobles

Abstract

In the field of equity valuation, a lot of research has been conducted over many industries and by various authors. The “wine production” industry, however, does not seem to have been thoroughly analyzed yet. In France, in particular, experts in vineyard valuation tend to use shortcuts as to determine lands’ market prices. In merger-related valuations as well as informational valuations, such shortcuts are blurring the close links between the risk/return characteristics of the asset with market prices. In this document, an in-depth analysis of appropriate discount rates, and a broad set of scenarios have been used to determine whether (known) market values of lands were converging with return-based valuations. The important parts of the thesis include the wine production industry analysis. This analysis includes several key features of the industry, some of which common to the small-and-medium enterprise segment, and some specific to vineyards and wineries operations. In the discount rate analysis, several options over the drivers of the required rate on equity have been taken into account. This way, five scenarios about discount rate have been constructed, from very pessimistic to very optimistic. Both the industry and discount rate analyses were used in two valuation cases for which a market price had been previously determined. These cases do not have the pretention to be exhaustive, but have the interest of being very different from each other, with one producing common consumption (relatively cheap) wines, while the second producing Burgundy “Grand-Crus”. Using further scenario analyses over cash-flow growth, large spreads were constructed over the “market value” of the equity of these companies. The whole research, as described hereinabove, has shown a lack of convergence of return-based valuation with applied market prices. This lack of convergence could possibly be explained by hidden risk-return expectations on the market (such as capital gain realized at the moment of the sale of the vineyard), or by personal preferences (such as the right to use the house and the satisfaction of owning various lands).