Pet Retail Market and Valuation Outlook
Appendix 4
74
4. Revenue Build-Up (B): SSS & Industry Growth
We understand the importance of estimating the growth of the pet segment in Brazil,
given the history of annual double-digit growth and pulverization. Thus, we decided
to break the sector into price and quantity, where the price is the average spend per
pet in the country and quantity is the growth in the number of pets in Brazil
(considering only dogs and cats). In the first point, we decided to calculate the average
spend per pet from two valuable proxies.
First, we consider using comparables from developed and underdeveloped countries.
The second point is to compare this average spending data with each country's GDP
per capita, given that average spending per pet is strongly correlated with purchasing
power. In this case, we found a 90% correlation between the base data used. Thus, we
used linear regression to estimate the average spending per pet for the next ten years
summed to a premium per humanization, using the GDP and population growth
projections.
CHN
Countries
BRA
GDP per Capita (000's)
Average Expenditure
Regression Statistics
36
304
Multiple R
90%
56
193
MEX
44
213
R Square
81%
FRA
205
978
Adjusted R Square
78%
JAP
213
1109
Standard Error
52
DEU
242
961
UK
214
1443
Observations
8
USA
337
1255
Nominal GDP
Population
BRA 21E
38
363
8,094.6
213.3
BRA 22E
39
365
8,272.7
214.8
BRA 23E
39
368
8,520.9
216.8
BRA 24E
40
371
8,759.5
217.6
BRA 25E
41
374
9,004.8
219.1
BRA 26E
42
378
9,256.9
220.3
BRA 27E
43
381
9,516.1
221.5
BRA 28E
44
385
9,782.5
222.7
BRA 29E
BRA 30E
45
46
389
10,056.4
223.8
392
10,338.0
224.8
After that, we tried to understand what correlates with Petz's SSS. We did a test analysis with different correlation scenarios (GDP, Stores Outside São Paulo, and
CPI). In all cases, the natural growth of the pet industry was the one that achieved the highest correlation, reaching up to 85% with CPI-adjusted values. From this,
we again did a statistical study to project SSS growth and then readjusted it to nominal growth, given that our model is nominal.
Source: Team 7
Pet Industry Pet Retail Growth SSS (inc. CPI)
Mature SSS
25%
Pet Retail Growth
SSS (inc. CPI)
17'
16.9
7.0%
9.7%
13%
29%
Pet Retail Growth
Mature SSS
18'
20.8
7.7%
2.2%
6.1%
19'
23.5
8.3%
3.3%
7.7%
20%
24%
20'
27.8
13.2%
21.1%
26.5%
21E
33.1
9.5%
5.9%
15.2%
15%
19%
22E
37.0
7.3%
3.9%
8.2%
23E
41.0
7.3%
4.7%
8.1%
24E
45.5
7.4%
5.1%
8.6%
10%
14%
25E
50.5
7.4%
5.2%
8.7%
26E
55.6
6.6%
2.6%
6.0%
5%
9%
27E
61.1
6.4%
2.0%
5.4%
28E
67.2
6.5%
2.3%
5.6%
29E
74.0
6.6%
2.7%
6.1%
0%
4%
30E
81.5
6.6%
2.7%
6.1%
17'
19'
21E 23E
25E
27E
29E
17'
19'
21E
23E
25E
27E
29EView entire presentation