New Risk • Jun 09
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 3.0% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 3.0% per year for the foreseeable future. Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (3.6% net profit margin). New Risk • May 11
New minor risk - Financial position The company has a high level of debt. Net debt to equity ratio: 75% This is considered a minor risk. Having a high level of debt increases the company's balance sheet risk. The company has a higher interest repayment burden, leading to the need to allocate a greater amount of its earnings towards servicing the debt, potentially limiting growth options or shareholder distributions. It can also increase the risk of bankruptcy if business conditions deteriorate enough that the company can no longer meet its debt obligations. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 11% per year for the foreseeable future. Minor Risks High level of debt (75% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (3.8% net profit margin). Reported Earnings • May 10
First quarter 2026 earnings: EPS exceeds analyst expectations while revenues lag behind First quarter 2026 results: EPS: ر.س0.96 (up from ر.س0.63 in 1Q 2025). Revenue: ر.س7.29b (down 4.0% from 1Q 2025). Net income: ر.س284.5m (up 50% from 1Q 2025). Profit margin: 3.9% (up from 2.5% in 1Q 2025). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 1.7%. Earnings per share (EPS) exceeded analyst estimates by 75%. Revenue is forecast to grow 5.3% p.a. on average during the next 3 years, compared to a 5.7% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 46% per year but the company’s share price has fallen by 42% per year, which means it is significantly lagging earnings. Upcoming Dividend • Apr 30
Upcoming dividend of ر.س1.70 per share Eligible shareholders must have bought the stock before 07 May 2026. Payment date: 21 May 2026. Payout ratio is a comfortable 58% but the company is paying out more than the cash it is generating. Trailing yield: 6.3%. Within top quartile of Saudi dividend payers (5.8%). Higher than average of industry peers (4.0%). Announcement • Apr 14
Savola Group Company, Annual General Meeting, May 06, 2026 Savola Group Company, Annual General Meeting, May 06, 2026, at 19:30 Arab Standard Time. Location: jeddah Saudi Arabia Major Estimate Revision • Apr 08
Consensus EPS estimates fall by 19% The consensus outlook for earnings per share (EPS) in fiscal year 2026 has deteriorated. 2026 revenue forecast decreased from ر.س27.8b to ر.س27.3b. EPS estimate also fell from ر.س2.40 per share to ر.س1.93 per share. Net income forecast to shrink 23% next year vs 2.8% decline forecast for Food industry in Saudi Arabia. Consensus price target broadly unchanged at ر.س30.61. Share price was steady at ر.س26.56 over the past week. Major Estimate Revision • Mar 25
Consensus EPS estimates increase by 22% The consensus outlook for earnings per share (EPS) in fiscal year 2026 has improved. 2026 revenue forecast increased from ر.س27.5b to ر.س27.8b. EPS estimate increased from ر.س1.96 to ر.س2.40 per share. Net income forecast to shrink 23% next year vs 1.9% growth forecast for Food industry in Saudi Arabia . Consensus price target broadly unchanged at ر.س30.83. Share price rose 5.1% to ر.س25.94 over the past week. New Risk • Mar 14
New minor risk - Dividend sustainability The dividend is not well covered by cash flows. Cash payout ratio: 242% Dividend yield: 7.0% This is considered a minor risk. Dividends are ultimately paid out of the company's available cash reserves. Companies that pay out too much of their cash flow are at risk of having to reduce or cut their dividend in future. If cash flow growth slows or cash flows fall, then there may not be enough cash reserves to maintain the same dividend. Or in extreme cases, companies may opt to take on debt to maintain the dividend. This risk is mitigated by the fact the dividend is covered by earnings, however, cash flows are generally more important. For dividend paying companies, any reduction in the dividend can significantly impact the share price. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 12% per year for the foreseeable future. Minor Risks Dividend is not well covered by cash flows (242% cash payout ratio). Profit margins are more than 30% lower than last year (3.4% net profit margin). Reported Earnings • Mar 10
Full year 2025 earnings released: EPS: ر.س2.93 (vs ر.س45.64 in FY 2024) Full year 2025 results: EPS: ر.س2.93 (down from ر.س45.64 in FY 2024). Revenue: ر.س26.1b (up 8.7% from FY 2024). Net income: ر.س874.5m (down 92% from FY 2024). Profit margin: 3.4% (down from 47% in FY 2024). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 5.0% p.a. on average during the next 2 years, compared to a 5.6% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 66% per year but the company’s share price has fallen by 38% per year, which means it is significantly lagging earnings. Major Estimate Revision • Dec 09
Consensus EPS estimates increase by 13% The consensus outlook for fiscal year 2025 has been updated. 2025 consensus EPS increased from ر.س1.90 to ر.س2.16. Revenues were reaffirmed at ر.س27.1b. Net income forecast to shrink 94% next year vs 3.5% growth forecast for Food industry in Saudi Arabia . Consensus price target broadly unchanged at ر.س30.79. Share price rose 2.6% to ر.س25.00 over the past week. New Risk • Nov 08
New major risk - Financial position The company's interest payments are not well covered by earnings. Net interest cover: 2.3x This is considered a major risk. If the company is unable to fund interest repayments on its debt through profits, it may be forced into reducing its debt burden through selling assets, undertaking a potentially costly capital raising or even into bankruptcy in the worst case scenario. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (2.3x net interest cover). Earnings are forecast to decline by an average of 114% per year for the foreseeable future. High level of non-cash earnings (113% accrual ratio). Reported Earnings • Nov 06
Third quarter 2025 earnings released: EPS: ر.س1.29 (vs ر.س0.72 in 3Q 2024) Third quarter 2025 results: EPS: ر.س1.29 (up from ر.س0.72 in 3Q 2024). Revenue: ر.س6.63b (up 9.3% from 3Q 2024). Net income: ر.س385.6m (up 113% from 3Q 2024). Profit margin: 5.8% (up from 3.0% in 3Q 2024). Revenue is forecast to grow 3.1% p.a. on average during the next 3 years, compared to a 6.2% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 89% per year but the company’s share price has fallen by 37% per year, which means it is significantly lagging earnings. Major Estimate Revision • Aug 29
Consensus EPS estimates fall by 16%, revenue upgraded The consensus outlook for fiscal year 2025 has been updated. 2025 revenue forecast increased from ر.س25.5b to ر.س25.8b. EPS estimate fell from ر.س1.89 to ر.س1.59 per share. Net income forecast to shrink 95% next year vs 5.4% growth forecast for Food industry in Saudi Arabia . Consensus price target down from ر.س32.06 to ر.س31.10. Share price was steady at ر.س24.10 over the past week. Reported Earnings • Aug 12
Second quarter 2025 earnings released: EPS: ر.س0.34 (vs ر.س0.98 in 2Q 2024) Second quarter 2025 results: EPS: ر.س0.34 (down from ر.س0.98 in 2Q 2024). Revenue: ر.س6.06b (up 13% from 2Q 2024). Net income: ر.س103.5m (down 24% from 2Q 2024). Profit margin: 1.7% (down from 2.5% in 2Q 2024). Revenue is forecast to grow 3.4% p.a. on average during the next 3 years, compared to a 7.1% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 92% per year but the company’s share price has fallen by 43% per year, which means it is significantly lagging earnings. Price Target Changed • May 30
Price target decreased by 21% to ر.س43.65 Down from ر.س55.30, the current price target is an average from 8 analysts. New target price is 64% above last closing price of ر.س26.55. Stock is down 84% over the past year. The company is forecast to post earnings per share of ر.س1.80 for next year compared to ر.س45.64 last year. New Risk • May 09
New major risk - Financial position The company's interest payments are not well covered by earnings. Net interest cover: 1.0x This is considered a major risk. If the company is unable to fund interest repayments on its debt through profits, it may be forced into reducing its debt burden through selling assets, undertaking a potentially costly capital raising or even into bankruptcy in the worst case scenario. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (1.0x net interest cover). Earnings are forecast to decline by an average of 102% per year for the foreseeable future. High level of non-cash earnings (86% accrual ratio). Shareholders have been substantially diluted in the past year (113% increase in shares outstanding). Reported Earnings • May 08
First quarter 2025 earnings released: EPS: ر.س0.63 (vs ر.س2.48 in 1Q 2024) First quarter 2025 results: EPS: ر.س0.63 (down from ر.س2.48 in 1Q 2024). Revenue: ر.س7.60b (down 2.4% from 1Q 2024). Net income: ر.س189.2m (down 46% from 1Q 2024). Profit margin: 2.5% (down from 4.5% in 1Q 2024). Revenue is forecast to grow 4.1% p.a. on average during the next 3 years, compared to a 7.0% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 103% per year but the company’s share price has fallen by 41% per year, which means it is significantly lagging earnings. Price Target Changed • Apr 22
Price target decreased by 19% to ر.س55.07 Down from ر.س68.24, the current price target is an average from 8 analysts. New target price is 81% above last closing price of ر.س30.50. Stock is down 84% over the past year. The company is forecast to post earnings per share of ر.س2.70 for next year compared to ر.س45.64 last year. Major Estimate Revision • Apr 17
Consensus EPS estimates increase by 53% The consensus outlook for fiscal year 2025 has been updated. 2025 EPS estimate increased from ر.س1.82 to ر.س2.79. Revenue forecast unchanged at ر.س25.6b. Net income forecast to shrink 95% next year vs 12% growth forecast for Food industry in Saudi Arabia . Consensus price target reaffirmed at ر.س68.24. Share price rose 2.8% to ر.س29.35 over the past week. Announcement • Apr 10
Savola Group Company, Annual General Meeting, May 06, 2025 Savola Group Company, Annual General Meeting, May 06, 2025, at 19:00 Arab Standard Time. Location: jeddah Saudi Arabia Price Target Changed • Mar 27
Price target decreased by 13% to ر.س68.24 Down from ر.س78.25, the current price target is an average from 8 analysts. New target price is 129% above last closing price of ر.س29.80. Stock is down 86% over the past year. The company is forecast to post earnings per share of ر.س1.82 for next year compared to ر.س45.64 last year. Major Estimate Revision • Mar 26
Consensus EPS estimates fall by 69% The consensus outlook for earnings per share (EPS) in fiscal year 2025 has deteriorated. 2025 revenue forecast decreased from ر.س26.1b to ر.س24.5b. EPS estimate also fell from ر.س4.46 per share to ر.س1.36 per share. Net income forecast to shrink 96% next year vs 12% growth forecast for Food industry in Saudi Arabia . Consensus price target broadly unchanged at ر.س77.69. Share price was steady at ر.س29.85 over the past week. Price Target Changed • Mar 25
Price target increased by 10.0% to ر.س85.97 Up from ر.س78.19, the current price target is an average from 7 analysts. New target price is 197% above last closing price of ر.س28.90. Stock is down 86% over the past year. The company is forecast to post earnings per share of ر.س5.14 for next year compared to ر.س45.64 last year. Reported Earnings • Mar 14
Full year 2024 earnings: EPS and revenues miss analyst expectations Full year 2024 results: EPS: ر.س10.61 (up from ر.س6.39 in FY 2023). Revenue: ر.س24.0b (down 11% from FY 2023). Net income: ر.س9.97b (up ر.س9.08b from FY 2023). Profit margin: 42% (up from 3.4% in FY 2023). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 6.6%. Earnings per share (EPS) also missed analyst estimates by 79%. Revenue is forecast to grow 7.4% p.a. on average during the next 2 years, compared to a 7.1% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 39% per year but the company’s share price has fallen by 39% per year, which means it is significantly lagging earnings. Price Target Changed • Dec 27
Price target decreased by 10% to ر.س107 Down from ر.س119, the current price target is an average from 8 analysts. New target price is 197% above last closing price of ر.س36.00. Stock is down 74% over the past year. The company is forecast to post earnings per share of ر.س49.47 for next year compared to ر.س6.39 last year. Major Estimate Revision • Dec 25
Consensus EPS estimates increase by 141% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from ر.س32.51 to ر.س78.48. Revenue forecast steady at ر.س25.7b. Net income forecast to grow 195% next year vs 13% growth forecast for Food industry in Saudi Arabia. Consensus price target up from ر.س118 to ر.س122. Share price rose 7.0% to ر.س35.95 over the past week. Major Estimate Revision • Dec 18
Consensus EPS estimates increase by 11% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from ر.س3.04 to ر.س3.36. Revenue forecast steady at ر.س25.7b. Net income forecast to grow 69% next year vs 13% growth forecast for Food industry in Saudi Arabia. Consensus price target up from ر.س112 to ر.س119. Share price fell 65% to ر.س33.60 over the past week. Valuation Update With 7 Day Price Move • Dec 17
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to ر.س30.55, the stock trades at a forward P/E ratio of 23x. Average forward P/E is 18x in the Food industry in Saudi Arabia. Total returns to shareholders of 63% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at ر.س18.53 per share. Price Target Changed • Nov 29
Price target decreased by 8.8% to ر.س29.76 Down from ر.س32.63, the current price target is an average from 7 analysts. New target price is 23% above last closing price of ر.س24.24. Stock is down 35% over the past year. The company is forecast to post earnings per share of ر.س0.85 for next year compared to ر.س1.69 last year. Major Estimate Revision • Nov 12
Consensus EPS estimates increase by 25% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from ر.س0.68 to ر.س0.853. Revenue forecast steady at ر.س25.8b. Net income forecast to grow 60% next year vs 16% growth forecast for Food industry in Saudi Arabia. Consensus price target broadly unchanged at ر.س32.63. Share price was steady at ر.س25.90 over the past week. Major Estimate Revision • Nov 04
Consensus EPS estimates fall by 49% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate fell from ر.س1.34 to ر.س0.68. Revenue forecast unchanged from ر.س25.7b at last update. Net income forecast to grow 38% next year vs 16% growth forecast for Food industry in Saudi Arabia. Consensus price target down from ر.س37.93 to ر.س32.74. Share price was steady at ر.س25.55 over the past week. Buy Or Sell Opportunity • Oct 30
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 43% to ر.س25.60. The fair value is estimated to be ر.س32.21, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 28%. Revenue is forecast to grow by 9.4% in 2 years. Earnings are forecast to grow by 73% in the next 2 years. Reported Earnings • Oct 29
Third quarter 2024 earnings released: EPS: ر.س0.19 (vs ر.س0.28 in 3Q 2023) Third quarter 2024 results: EPS: ر.س0.19. Revenue: ر.س6.06b (down 4.6% from 3Q 2023). Net income: ر.س181.0m (up 23% from 3Q 2023). Profit margin: 3.0% (up from 2.3% in 3Q 2023). The increase in margin was driven by lower expenses. Revenue is forecast to grow 4.6% p.a. on average during the next 3 years, compared to a 7.0% growth forecast for the Food industry in Saudi Arabia. Price Target Changed • Oct 29
Price target decreased by 13% to ر.س32.74 Down from ر.س37.76, the current price target is an average from 8 analysts. New target price is 26% above last closing price of ر.س26.00. Stock is down 27% over the past year. The company is forecast to post earnings per share of ر.س0.68 for next year compared to ر.س1.69 last year. Buy Or Sell Opportunity • Sep 18
Now 20% undervalued after recent price drop Over the last 90 days, the stock has fallen 34% to ر.س28.05. The fair value is estimated to be ر.س35.01, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 4.7% over the last 3 years. Earnings per share has grown by 28%. Revenue is forecast to grow by 7.4% in 2 years. Earnings are forecast to grow by 73% in the next 2 years. Major Estimate Revision • Sep 18
Consensus EPS estimates increase by 18% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from ر.س1.13 to ر.س1.34. Revenue forecast steady at ر.س26.4b. Net income forecast to grow 32% next year vs 12% growth forecast for Food industry in Saudi Arabia. Consensus price target down from ر.س44.17 to ر.س37.76. Share price was steady at ر.س28.05 over the past week. Price Target Changed • Sep 17
Price target decreased by 9.1% to ر.س41.55 Down from ر.س45.72, the current price target is an average from 8 analysts. New target price is 46% above last closing price of ر.س28.40. Stock is down 22% over the past year. The company is forecast to post earnings per share of ر.س1.29 for next year compared to ر.س1.69 last year. New Risk • Aug 30
New major risk - Shareholder dilution The company's shareholders have been substantially diluted in the past year. Increase in shares outstanding: 113% This is considered a major risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (1.5x net interest cover). Share price has been highly volatile over the past 3 months (14% average weekly change). Shareholders have been substantially diluted in the past year (113% increase in shares outstanding). Minor Risk Dividend is not well covered by cash flows (254% cash payout ratio). Valuation Update With 7 Day Price Move • Aug 27
Investor sentiment deteriorates as stock falls 39% After last week's 39% share price decline to ر.س26.25, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 21x in the Food industry in Saudi Arabia. Total returns to shareholders of 15% over the past three years. New Risk • Aug 26
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Saudi stocks, typically moving 5.4% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. Currently, the following risks have been identified for the company: Major Risks Interest payments are not well covered by earnings (1.5x net interest cover). Share price has been highly volatile over the past 3 months (5.4% average weekly change). Minor Risk Dividend is not well covered by cash flows (119% cash payout ratio). Price Target Changed • Aug 26
Price target decreased by 9.3% to ر.س45.72 Down from ر.س50.43, the current price target is an average from 8 analysts. New target price is 79% above last closing price of ر.س25.55. Stock is down 30% over the past year. The company is forecast to post earnings per share of ر.س1.45 for next year compared to ر.س1.69 last year. Major Estimate Revision • Aug 20
Consensus EPS estimates increase by 12%, revenue downgraded The consensus outlook for fiscal year 2024 has been updated. 2024 revenue forecast fell from ر.س27.1b to ر.س26.4b. EPS estimate rose from ر.س1.54 to ر.س1.73. Net income forecast to grow 19% next year vs 19% growth forecast for Food industry in Saudi Arabia. Consensus price target broadly unchanged at ر.س50.50. Share price rose 3.6% to ر.س43.00 over the past week. Reported Earnings • Aug 09
Second quarter 2024 earnings released: EPS: ر.س0.26 (vs ر.س0.25 in 2Q 2023) Second quarter 2024 results: EPS: ر.س0.26 (up from ر.س0.25 in 2Q 2023). Revenue: ر.س5.37b (down 12% from 2Q 2023). Net income: ر.س135.4m (up 2.5% from 2Q 2023). Profit margin: 2.5% (up from 2.2% in 2Q 2023). The increase in margin was driven by lower expenses. Revenue is forecast to grow 5.3% p.a. on average during the next 3 years, compared to a 7.2% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 28% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Major Estimate Revision • May 16
Consensus EPS estimates fall by 26% The consensus outlook for earnings per share (EPS) in fiscal year 2024 has deteriorated. 2024 revenue forecast decreased from ر.س27.6b to ر.س26.7b. EPS estimate also fell from ر.س2.09 per share to ر.س1.54 per share. Net income forecast to grow 17% next year vs 14% growth forecast for Food industry in Saudi Arabia. Consensus price target broadly unchanged at ر.س47.57. Share price fell 8.8% to ر.س45.00 over the past week. Reported Earnings • May 11
First quarter 2024 earnings: EPS and revenues miss analyst expectations First quarter 2024 results: EPS: ر.س0.66 (down from ر.س0.74 in 1Q 2023). Revenue: ر.س7.78b (flat on 1Q 2023). Net income: ر.س348.7m (down 11% from 1Q 2023). Profit margin: 4.5% (down from 5.0% in 1Q 2023). Revenue missed analyst estimates by 2.2%. Earnings per share (EPS) also missed analyst estimates by 2.9%. Revenue is forecast to grow 3.6% p.a. on average during the next 3 years, compared to a 6.5% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 17% per year but the company’s share price has only increased by 7% per year, which means it is significantly lagging earnings growth. Announcement • Apr 19
Savola Group Company, Annual General Meeting, May 07, 2024 Savola Group Company, Annual General Meeting, May 07, 2024, at 16:30 Coordinated Universal Time. Buy Or Sell Opportunity • Apr 04
Now 20% undervalued Over the last 90 days, the stock has risen 22% to ر.س52.50. The fair value is estimated to be ر.س65.86, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 9.0% over the last 3 years. Earnings per share has grown by 6.4%. For the next 3 years, revenue is forecast to grow by 3.8% per annum. Earnings are also forecast to grow by 11% per annum over the same time period. Reported Earnings • Mar 30
Full year 2023 earnings: EPS exceeds analyst expectations Full year 2023 results: EPS: ر.س1.69 (up from ر.س1.39 in FY 2022). Revenue: ر.س26.8b (down 4.4% from FY 2022). Net income: ر.س899.2m (up 21% from FY 2022). Profit margin: 3.4% (up from 2.6% in FY 2022). The increase in margin was driven by lower expenses. Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 9.5%. Revenue is forecast to grow 3.8% p.a. on average during the next 3 years, compared to a 7.0% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 6% per year but the company’s share price has increased by 13% per year, which means it is tracking significantly ahead of earnings growth. Buy Or Sell Opportunity • Feb 28
Now 20% undervalued Over the last 90 days, the stock has risen 41% to ر.س52.70. The fair value is estimated to be ر.س66.14, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 9.0% over the last 3 years. Earnings per share has grown by 6.4%. For the next 3 years, revenue is forecast to grow by 4.1% per annum. Earnings are also forecast to grow by 11% per annum over the same time period. Valuation Update With 7 Day Price Move • Feb 19
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to ر.س56.70, the stock trades at a forward P/E ratio of 30x. Average forward P/E is 26x in the Food industry in Saudi Arabia. Total returns to shareholders of 52% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at ر.س62.83 per share. Price Target Changed • Feb 16
Price target increased by 9.2% to ر.س44.59 Up from ر.س40.82, the current price target is an average from 9 analysts. New target price is 17% below last closing price of ر.س53.60. Stock is up 88% over the past year. The company is forecast to post earnings per share of ر.س1.91 for next year compared to ر.س1.69 last year. Reported Earnings • Feb 09
Full year 2023 earnings: EPS exceeds analyst expectations Full year 2023 results: EPS: ر.س1.69 (up from ر.س1.39 in FY 2022). Revenue: ر.س26.8b (down 4.3% from FY 2022). Net income: ر.س899.2m (up 21% from FY 2022). Profit margin: 3.3% (up from 2.6% in FY 2022). The increase in margin was driven by lower expenses. Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 9.5%. Revenue is forecast to grow 3.8% p.a. on average during the next 3 years, compared to a 7.0% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has increased by 6% per year whereas the company’s share price has increased by 8% per year. Announcement • Feb 08
The Savola Group Announces Not to Distribute Cash Dividend for the Year 2023 The Savola Group announced with reference to Savola Group Dividends Policy, and in relation to the Board of Director’s recommendation to issue rights to strengthen the financial position and to enable the distribution of Savola’s entire stake in Almarai Company to Savola’s shareholders, accordingly, Savola announced the decision of the Board of Directors not to distribute cash dividends for the year 2023. Reported Earnings • Nov 10
Third quarter 2023 earnings released: EPS: ر.س0.28 (vs ر.س0.31 in 3Q 2022) Third quarter 2023 results: EPS: ر.س0.28 (down from ر.س0.31 in 3Q 2022). Revenue: ر.س6.35b (down 10% from 3Q 2022). Net income: ر.س147.4m (down 9.9% from 3Q 2022). Profit margin: 2.3% (in line with 3Q 2022). Revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 6.3% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has fallen by 7% per year whereas the company’s share price has fallen by 6% per year. Announcement • Oct 21
Savola Reportedly Reviewing Sale of 35% Stake in Almarai Savola Group Company (SASE:2050) is reviewing strategic options for a possible sale of its 35% stake in Almarai Company (SASE:2280), the Middle East's largest dairy group, estimated to be worth $5.3 billion (€5 billion), media sources reported. Almarai specializes in food and beverage manufacturing and distribution. It was set up in the 1970s as a dairy company. Since then, it has branched out into other areas such as bakery products and poultry. A key investor in the food and retail sectors, Savola also has interests in venture capital and private equities. Savola has mandated New York -boutique investment banking firm, Moelis & Co, to advise on the sale of the stake. New Risk • Oct 18
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Saudi stocks, typically moving 5.6% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Interest payments are not well covered by earnings (1.3x net interest cover). Minor Risk Share price has been volatile over the past 3 months (5.6% average weekly change). Reported Earnings • Aug 11
Second quarter 2023 earnings released: EPS: ر.س0.25 (vs ر.س0.40 in 2Q 2022) Second quarter 2023 results: EPS: ر.س0.25 (down from ر.س0.40 in 2Q 2022). Revenue: ر.س6.09b (down 12% from 2Q 2022). Net income: ر.س132.0m (down 38% from 2Q 2022). Profit margin: 2.2% (down from 3.1% in 2Q 2022). The decrease in margin was driven by lower revenue. Revenue is forecast to grow 4.1% p.a. on average during the next 3 years, compared to a 6.9% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has fallen by 15% per year but the company’s share price has only fallen by 9% per year, which means it has not declined as severely as earnings. Price Target Changed • May 25
Price target increased by 13% to ر.س36.49 Up from ر.س32.41, the current price target is an average from 8 analysts. New target price is approximately in line with last closing price of ر.س37.40. Stock is up 3.2% over the past year. The company is forecast to post earnings per share of ر.س1.87 for next year compared to ر.س1.39 last year. Valuation Update With 7 Day Price Move • May 22
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to ر.س38.00, the stock trades at a forward P/E ratio of 20x. Average forward P/E is 16x in the Food industry in Asia. Total loss to shareholders of 3.1% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at ر.س64.94 per share. Reported Earnings • May 12
First quarter 2023 earnings released: EPS: ر.س0.74 (vs ر.س0.51 in 1Q 2022) First quarter 2023 results: EPS: ر.س0.74 (up from ر.س0.51 in 1Q 2022). Revenue: ر.س7.81b (up 4.3% from 1Q 2022). Net income: ر.س392.7m (up 45% from 1Q 2022). Profit margin: 5.0% (up from 3.6% in 1Q 2022). The increase in margin was driven by higher revenue. Revenue is forecast to grow 2.6% p.a. on average during the next 3 years, compared to a 6.1% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has fallen by 18% per year but the company’s share price has only fallen by 5% per year, which means it has not declined as severely as earnings. Reported Earnings • Apr 08
Full year 2022 earnings released: EPS: ر.س1.39 (vs ر.س0.42 in FY 2021) Full year 2022 results: EPS: ر.س1.39 (up from ر.س0.42 in FY 2021). Revenue: ر.س28.1b (up 14% from FY 2021). Net income: ر.س742.8m (up 235% from FY 2021). Profit margin: 2.6% (up from 0.9% in FY 2021). The increase in margin was driven by higher revenue. Revenue is forecast to grow 4.3% p.a. on average during the next 3 years, compared to a 6.3% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has fallen by 20% per year but the company’s share price has only fallen by 12% per year, which means it has not declined as severely as earnings. Board Change • Nov 16
Less than half of directors are independent Following the recent departure of a director, there are only 5 independent directors on the board. The company's board is composed of: 5 independent directors. 6 non-independent directors. Independent Board Member Bader Al-Rabiah was the last independent director to join the board, commencing their role in 2019. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Major Estimate Revision • Nov 07
Consensus EPS estimates increase by 13% The consensus outlook for earnings per share (EPS) in 2022 has improved. 2022 revenue forecast increased from ر.س27.6b to ر.س29.3b. EPS estimate increased from ر.س1.49 to ر.س1.69 per share. Net income forecast to grow 110% next year vs 19% growth forecast for Food industry in Saudi Arabia. Consensus price target down from ر.س33.90 to ر.س33.06. Share price was steady at ر.س29.10 over the past week. Reported Earnings • Nov 02
Third quarter 2022 earnings released: EPS: ر.س0.30 (vs ر.س0.23 in 3Q 2021) Third quarter 2022 results: EPS: ر.س0.30 (up from ر.س0.23 in 3Q 2021). Revenue: ر.س7.07b (up 17% from 3Q 2021). Net income: ر.س163.6m (up 34% from 3Q 2021). Profit margin: 2.3% (up from 2.0% in 3Q 2021). Revenue is forecast to grow 4.4% p.a. on average during the next 3 years, compared to a 6.8% growth forecast for the Food industry in Saudi Arabia. Over the last 3 years on average, earnings per share has fallen by 6% per year whereas the company’s share price has fallen by 1% per year. Major Estimate Revision • Sep 20
Consensus EPS estimates increase by 14% The consensus outlook for earnings per share (EPS) in 2022 has improved. 2022 revenue forecast increased from ر.س28.5b to ر.س28.8b. EPS estimate increased from ر.س1.43 to ر.س1.64 per share. Net income forecast to grow 155% next year vs 19% growth forecast for Food industry in Saudi Arabia. Consensus price target broadly unchanged at ر.س34.79. Share price fell 3.5% to ر.س30.75 over the past week. Major Estimate Revision • Sep 01
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast increased from ر.س26.1b to ر.س29.0b. EPS estimate fell from ر.س1.73 to ر.س1.46. Net income forecast to grow 142% next year vs 20% growth forecast for Food industry in Saudi Arabia. Consensus price target down from ر.س36.22 to ر.س35.45. Share price fell 3.2% to ر.س31.95 over the past week. Announcement • Aug 30
Savola Group Company, Annual General Meeting, Sep 20, 2022 Savola Group Company, Annual General Meeting, Sep 20, 2022, at 16:30 Coordinated Universal Time. Location: Savolas Headquarter in Jeddah, Al-Shati District Jeedah Saudi Arabia 
