Pet Retail Market and Valuation Outlook

Appendix 13 84 | 13. DCF: Zee.Dog Assumptions and Valuation Income Statement (mn) 20' 21E 22E 23E 24E 25E 26E 27E 28E 29E 30E Gross Revenue 125 228 361 522 743 971 1235 1488 1693 1904 2123 Zee.Dog growth YOY 83% 58% 44% 42% 31% 27% 20% 14% 12% 11% Growth Multiplier 1.2x 1.2x 1.2x 1.0x 1.0x 1.0x 0.8x 0.8x 0.8x Petz Growth YOY 49% 37% 35% 31% 27% 20% 17% 16% 14% Gross Revenue Brazil as % of total Gross Revenue Global as % of total (-) Deductions 157 253 370 535 709 902 1,086 1,236 1,390 1,550 69% 70% 71% 72% 73% 73% 73% 73% 73% 73% 71 108 151 208 262 334 402 457 514 573 31% 30% 29% 28% 27% 27% 27% 27% 27% 27% 35 56 80 114 150 190 229 261 293 327 % of Gross Revenue Net Revenue 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 193 306 441 628 822 1,045 1,259 1,433 1,611 1,796 growth YOY N.A 58% 44% 42% 31% 27% 20% 14% 12% 11% (-) COGS 93 147 212 302 394 502 604 688 773 862 growth YOY N.A 58% 44% 42% 31% 27% 20% 14% 12% 11% % of Net Revenue 48% 48% 48% 48% 48% 48% 48% 48% 48% 48% Gross Profit 100 159 230 327 427 544 655 745 838 934 growth YOY N.A 58% 44% 42% 31% 27% 20% 14% 12% 11% % of Net Revenue (-) SG&A growth YOY % of Net Revenue % of Net Revenue 52% 52% 52% 52% 52% 52% 52% 52% 52% 52% 59 92 130 182 234 298 359 408 459 512 N.A 56% 42% 40% 28% 27% 20% 14% 12% 11% 31% 30% 30% 29% 29% 29% 29% 29% 29% 29% 22% 22% 23% 23% 24% 24% 24% 24% 24% 24% EBIT (Proxy) 39 64 94 137 183 233 281 320 359 401 OCF Zee.DOG 21E 22E 23E 24E 25E 26E 27E 28E 29E 30E Perpetuity Main Assumptions Zee Dog Valuation EBIT (-) Taxes 39 64 94 137 183 233 281 320 359 401 -13 -22 -32 -47 -62 -79 -96 -109 -122 -136 NOPAT 26 42 62 90 121 154 185 211 237 265 (+) D&A. 2 4 5 7 10 12 15 17 19 21 (+/-) Change in WS -2 -3 -3 -4 -5 -5 -5 -4 -4 -4 (-) Capex -9 -14 -21 -30 -39 -49 -60 -68 -76 -85 Tax Rate Capex/Sales 34% +) Cash Flows 520 4% (+) Perpetuity 1,045 WC/Gross Revenue 2% (=) Equity Value 1,565 WACC 12% Shares 394 D&A/Sales 1% Value per Share BRL 3.97 g (perpetuity) 4.4% FCFF Period NPV Source: Team 7 21E-30E Perpertuity 17 28 43 64 87 112 136 156 176 196 2,871 Total 0.25 1.25 2.25 3.25 4.25 5.25 6.25 7.25 8.25 9.25 9.25 17 25 34 45 55 63 69 71 71 72 1,045 33.2% 66.8% 100%

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