This spreadsheet supports STUDENT analysis of the case "Milagrol Ltda." (UVA-F-1578).

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Rev. Jul. 16, 2014

Exhibit 1
MILAGROL LTDA.
Free Cash Flow Forecast
(numbers in thousands of Brazilian reias for the 12 months ending in June 30 of the given year)
2010

2012

2013

15.00%
6.00%
57.00%
16.00%
15%
2.25

15.00%
7.00%
57.00%
16.00%
15%
2.25

Projected
10.00%
6.00%
57.00%
14.00%
15%
2.25

185,467
104,574
31,224
49,669

226,084
128,868
36,173
61,043
18,313
42,730
5,647
16,938
20,144

278,197
158,572
44,511
75,113
22,534
52,579
7,817
23,161
21,601

324,377
184,895
45,413
94,069
28,221
65,849
6,927
20,525
38,397

28,265
83,544

33,913
100,482

41,730
123,643

48,657
144,168

Financial Ratios
Real Sales Growth (%)
Inflation (%)
Cost of Goods Sold to Sales (%)
Selling/Admin/Research to Sales (%)
Net Working Capital to Sales (%)
Property, Plant and Equipment Turnover
Free Cash Flow (BRL)
Sales
Cost of Goods Sold
Administrative and Research
EBIT
Tax (30%)
Net Operating Profit after Tax
Less: Change in Net Working Caital
Less: Change in Net PPE
Free Cash Flow
Schedule of Assets
Net Working Capital
Net Property, Plant and Equipment

Source: Created by case writer.

2011

given year)
2014

2015

10.00%
5.50%
57.00%
12.00%
15%
2.25

5.00%
5.00%
57.00%
12.00%
15%
2.25

376,440
214,571
45,173
116,696
35,009
81,687
7,809
23,139
50,739

415,025
236,564
49,803
128,658
38,597
90,060
5,788
17,149
67,124

56,466
167,307

62,254
184,456

Exhibit 2
MILAGROL LTDA.
Market Information and Currency Forecast
Selected Market Information (June 19, 2010)
Spot Exchange Rate (USD/BRL)
Yield on BZ10 year govt. USD-denominated
Brazilian Target Inflation

0.549
4.85%
4.50%

Yields by Maturity denominated in the given currency

3 mo.
6 mo.
1 yr.
3 yr.
5 yr.
7 yr.
10 yr.

USD
0.09%
0.16%
0.26%
1.20%
2.01%
2.68%
3.22%

Econo-Metrics Exchange Rate Forecast (as of June 30 of the year indicated)

2011
2012
2013
2014
2015
2016

0.560
0.540
0.480
0.430
0.390
0.380

Data sources: http://www.bloomberg.com/markets/rates/brazil.htm (accessed Jun. 19, 2010); http://www.tradingeconomics.com/Economics/

BRL
10.80%
11.30%
12.00%
12.38%
12.37%
12.32%
12.44%

www.tradingeconomics.com/Economics/Government-Bond-Yield.aspx?Symbol=BRL (accessed Jun. 19, 2010); expectations generated by case writer.

enerated by case writer.

Monthly Exchange Rates

Source: US Federal Reserve

2000-01
2000-02
2000-03
2000-04
2000-05
2000-06
2000-07
2000-08
2000-09
2000-10
2000-11
2000-12
2001-01
2001-02
2001-03
2001-04
2001-05
2001-06
2001-07
2001-08
2001-09
2001-10
2001-11
2001-12
2002-01
2002-02
2002-03
2002-04
2002-05
2002-06
2002-07
2002-08
2002-09
2002-10
2002-11
2002-12
2003-01
2003-02
2003-03
2003-04
2003-05

Realized Exchange Rate

0.5549389567
0.5652911249
0.5740528129
0.5540166205
0.5473453749
0.5543237251
0.5630630631
0.5527610414
0.5435668859
0.5315473343
0.5132679772
0.5093724531
0.5112213077
0.4985044865
0.4772130756
0.4559131941
0.4361859897
0.4203800235
0.4043508148
0.3980574795
0.3735943513
0.3648569761
0.3924492759
0.4231013328
0.4201857221
0.4125072189
0.4264392324
0.4305334309
0.4039914354
0.3684055408
0.339974162
0.3217296184
0.2980803625
0.2633935627
0.2783654381
0.2757251572
0.2909090909
0.2781254346
0.2892932566
0.3216468318
0.3387878172

PPP Expected Rate

0.5549389567
0.55750896
0.5608735808
0.5588434914
0.5594331165
0.5610842072
0.5534787145
0.5463179996
0.5478903836
0.5480810407
0.5466494474
0.543136834
0.543473709
0.5431402007
0.5423232862
0.5413313046
0.5415566674
0.5396586296
0.5310983309
0.5273934608
0.5282793004
0.5221848113
0.5176350956
0.5122492646
0.5107572332
0.510946474
0.5107544381
0.5095210408
0.5084409858
0.5066006887
0.5011997186
0.4996234585
0.4968925939
0.4912709529
0.4768755602
0.4660441632
0.4577878758
0.454183814
0.4513630807
0.4460638158
0.4426396337

Inflation
USD
BRL
0.2971%
0.6207%
0.5924%
0.1286%
0.8246%
0.2198%
0.0582%
0.4217%
0.1163%
0.0108%
0.5250%
0.2291%
0.2322%
1.6095%
0.0000%
1.3107%
0.5210%
0.2325%
0.1731%
0.1383%
0.0572%
0.3193%
-0.0572%
0.5891%
0.6319%
0.5695%
0.3993%
0.4609%
0.2277%
0.3787%
0.3979%
0.5819%
0.4515%
0.4097%
0.1692%
0.5216%
-0.2809%
1.3264%
0.0000%
0.7025%
0.4500%
0.2816%
-0.3363%
0.8269%
-0.1681%
0.7093%
-0.3952%
0.6520%
0.2266%
0.5194%
0.3948%
0.3576%
0.5624%
0.6002%
0.5592%
0.8027%
0.0000%
0.2124%
0.0565%
0.4199%
0.1107%
1.1895%
0.3329%
0.6494%
0.1664%
0.7169%
0.1662%
1.3124%
0.0000%
3.0187%
-0.2208%
2.0982%
0.4415%
2.2530%
0.7706%
1.5703%
0.6016%
1.2303%
-0.2173%
0.9681%
-0.1636%
0.6087%

2003-06
2003-07
2003-08
2003-09
2003-10
2003-11
2003-12
2004-01
2004-02
2004-03
2004-04
2004-05
2004-06
2004-07
2004-08
2004-09
2004-10
2004-11
2004-12
2005-01
2005-02
2005-03
2005-04
2005-05
2005-06
2005-07
2005-08
2005-09
2005-10
2005-11
2005-12
2006-01
2006-02
2006-03
2006-04
2006-05
2006-06
2006-07
2006-08
2006-09
2006-10
2006-11
2006-12
2007-01
2007-02

0.3461764808
0.3468248188
0.332745483
0.3424188467
0.3493083694
0.3430531732
0.3418219108
0.350471384
0.3408083975
0.3440327519
0.3438907803
0.3223414886
0.319560285
0.3291205898
0.3331334533
0.3458532199
0.350631136
0.358718657
0.3683241252
0.3718163227
0.3850448577
0.3695354939
0.3881987578
0.4072656186
0.41411297
0.4219053244
0.4235672837
0.4357488344
0.4437344693
0.4523044914
0.4384234293
0.4411894467
0.4632417659
0.4645113341
0.4699027301
0.460893211
0.4445827591
0.4569757346
0.4639725328
0.4612758891
0.4660266567
0.4639294827
0.4656360589
0.4678143713
0.4775777258

0.4437812713
0.4433784548
0.4435616351
0.4415605261
0.4398005659
0.437117814
0.4343993743
0.433218997
0.4329177808
0.4336664215
0.4334507469
0.4337835714
0.4320887908
0.4275107894
0.4248107679
0.4243135872
0.4246733441
0.4219828224
0.416847467
0.4153225703
0.4152654657
0.4159736747
0.4151545843
0.4126998537
0.413002248
0.4138781235
0.4152992905
0.4188962429
0.4166151331
0.4110126821
0.4078793048
0.4085844526
0.4077379169
0.4082366899
0.4108454456
0.4124718145
0.4141542885
0.4145921035
0.4152003634
0.4123014178
0.408712453
0.4068524402
0.4055103423
0.4049396402
0.4053227125

0.1086%
0.1095%
0.3802%
0.3258%
-0.1086%
-0.2702%
-0.1080%
0.4885%
0.5399%
0.6440%
0.3199%
0.5859%
0.3171%
-0.1585%
0.0526%
0.2113%
0.5265%
0.0522%
-0.3660%
0.2104%
0.5766%
0.7820%
0.6729%
-0.1034%
0.0522%
0.4619%
0.5127%
1.2211%
0.2014%
-0.8029%
-0.4052%
0.7621%
0.2019%
0.5543%
0.8504%
0.4962%
0.1977%
0.2955%
0.1967%
-0.4904%
-0.5419%
-0.1490%
0.1493%
0.3048%
0.5355%

-0.1490%
0.2005%
0.3387%
0.7805%
0.2911%
0.3418%
0.5172%
0.7623%
0.6099%
0.4702%
0.3698%
0.5087%
0.7105%
0.9106%
0.6885%
0.3287%
0.4414%
0.6901%
0.8614%
0.5783%
0.5904%
0.6104%
0.8715%
0.4908%
-0.0210%
0.2493%
0.1688%
0.3519%
0.7500%
0.5492%
0.3599%
0.5882%
0.4099%
0.4315%
0.2100%
0.1000%
-0.2093%
0.1896%
0.0499%
0.2093%
0.3315%
0.3075%
0.4807%
0.4462%
0.4404%

2007-03
2007-04
2007-05
2007-06
2007-07
2007-08
2007-09
2007-10
2007-11
2007-12
2008-01
2008-02
2008-03
2008-04
2008-05
2008-06
2008-07
2008-08
2008-09
2008-10
2008-11
2008-12
2009-01
2009-02
2009-03
2009-04
2009-05
2009-06
2009-07
2009-08
2009-09
2009-10
2009-11
2009-12
2010-01
2010-02
2010-03
2010-04
2010-05
2010-06

0.4788584016
0.4925623091
0.504133898
0.5175179837
0.53157559
0.5096839959
0.5256794407
0.5559570801
0.565962986
0.5601613265
0.5646527386
0.5783689994
0.5851375073
0.5930142916
0.6029544769
0.6180851721
0.6289308176
0.6200781298
0.5546004104
0.4585052728
0.4404510218
0.4174668114
0.4332943368
0.4304778304
0.4317602867
0.4539882871
0.4833486394
0.5105687736
0.517384106
0.5419173034
0.5498432947
0.5754402118
0.5791058606
0.5711674663
0.5612617163
0.542888165
0.5600672081
0.5692167577
0.5512071436
0.5542622769

0.407498736
0.4091428021
0.4105023399
0.4101628215
0.4090832287
0.4064349374
0.4068373537
0.406494665
0.4073567433
0.404108057
0.4039453972
0.4031438995
0.4047032042
0.4049284118
0.4051329446
0.4062184081
0.40619941
0.4034490531
0.4018380483
0.3959980297
0.3870189732
0.3819466734
0.3817794866
0.3815809314
0.3817510125
0.3808739045
0.3801894712
0.3820826805
0.3805616846
0.380846438
0.3801765361
0.3794827622
0.3782042408
0.3761433564
0.374620519
0.3718054808
0.371401767
0.3699351258
0.3686394165
0.3678633127

0.9098%
0.6505%
0.6104%
0.1944%
-0.0262%
-0.1828%
0.2752%
0.2145%
0.5935%
-0.0669%
0.4965%
0.2905%
0.8672%
0.6064%
0.8418%
1.0079%
0.5257%
-0.3995%
-0.1382%
-1.0105%
-1.9153%
-1.0343%
0.4357%
0.4967%
0.2439%
0.2497%
0.2885%
0.8593%
-0.1594%
0.2249%
0.0624%
0.0959%
0.0714%
-0.1760%
0.3418%
0.0243%
0.4109%
0.1741%
0.0770%
0.2145%

0.3709%
0.2460%
0.2772%
0.2773%
0.2376%
0.4676%
0.1760%
0.2990%
0.3806%
0.7365%
0.5370%
0.4899%
0.4785%
0.5504%
0.7909%
0.7380%
0.5304%
0.2795%
0.2622%
0.4494%
0.3603%
0.2800%
0.4797%
0.5490%
0.1992%
0.4806%
0.4690%
0.3596%
0.2397%
0.1500%
0.2388%
0.2788%
0.4097%
0.3709%
0.7497%
0.7816%
0.5200%
0.5712%
0.4288%
0.4259%

2000-01
2000-06
2000-11
2001-04
2001-09
2002-02
2002-07
2002-12
2003-05
2003-10
2004-03
2004-08
2005-01
2005-06
2005-11
2006-04
2006-09
2007-02
2007-07
2007-12
2008-05
2008-10
2009-03
2009-08
2010-01
2010-06

USD/BRL
0.7
Realized Exchange Rate
PPP Expected Rate

0.6

0.5

0.4

0.3

0.2

0.1