aswathdamodaran.blogspot.com · 2023-10-06 · 972d

Invisible, yet Invaluable: Valuing Intangibles in the Birkenstock IPO

This article examines how intangible assets (brand name, management quality, celebrity endorsements) should be valued in intrinsic valuation models rather than through accounting frameworks. Using Birkenstock's IPO as a case study, the author demonstrates that intangibles affect value only through their impact on cash flows (revenue growth, operating margins) or discount rates, and estimates Birkenstock's intrinsic value at €8.38 billion by decomposing the contribution of each intangible asset.

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Metrics in this report

Birkenstock Customer Base (Income <$50k)

20%percent

null

Sales from customers earning under $50,000 annually

Birkenstock Operating Margin

22.3%percent

null

12 months preceding IPO filing

Birkenstock Revenue Growth (CAGR)

18.2%percent

null

Decade leading into IPO (2012-2023)

Birkenstock Revenue from Gen X and Gen Z

40%percent

null

Current age-based customer mix

Birkenstock Revenue from United States

50%percent

null

Current sales mix

Goodwill as % of Intangible Assets

60%percent

null

US corporate balance sheets over last 25 years

Gross Margin

70%percent

median

Large branded apparel and footwear companies

Median Revenue

170million USD

median

All 86 listed footwear companies globally as of September 2023

Operating Loss Rate

25%percent

null

Footwear companies globally; over one-quarter reporting operating losses

Operating Margin

24%percent

median

Large branded apparel and footwear companies

Revenue Growth (CAGR)

8.66%percent

median

Large branded apparel and footwear companies over last decade

Tangible Assets as % of Book Value

30%percent

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US companies in 2022, down from 70% in 1980