Starbucks Equity Story

THE COFFEE MARKET & STARBUCKS FINANCIAL ANALYSIS

Table of Contents •  Executive Summary •  Recent Capital Markets Activity •  Coffee Industry Overview •  Company Considerations –  –  –  – 

Share price performance Recent Corporate Actions Operating Performance Valuation

•  Trade Idea

EXECUTIVE SUMMARY This presentation evaluates the consumer services industry in which Starbucks (“SBUX”) operates. In this analysis, I have identified the fundamental drivers of the coffee industry and company; to evaluate the intrinsic price of SBUX’s shares using a fully integrated financial statements forecast model and discounted cash flow valuation. I have observed the following key valuation drivers with respect to the company’s operating performance and documented assumptions for SBUX growth: • 

• 

• 

Growth of revenues in traditional markets and existing stores: Americas unit growth is likely to rise. SBUX is increasing its performance in the US by designing all of its bakery, lunch and evening initiatives to optimize revenues throughout the day. SBUX expanding to new markets: China retail opportunity is very attractive. Year-1 cash-on-cash returns of 67% are almost double the U.S. in its nascent stage, with portfolio returns >100%. With a total unit opportunity of 12K in China, a sustained runway of annual 30%+ co-owned unit growth is expected. Innovations: SBUX is expanding its product offering beyond ready-to-drink-coffee through beverage innovations and new acquisitions (Teavana, La Boulange). The new mobile app platform is also a key contributor to current and ongoing comp momentum.

CAPITAL MARKETS OVERVIEW

Investor Sentiment Quotes • 

“The recent unprecedented weather has affected both the 2014-15 and the 2015-16 crops (…) even under the most optimistic scenario, we expect a second consecutive coffee market deficit”. (Volcafe Ltd)

• 

“Foolish investors should strongly consider initiating positions in Starbucks right now, because I believe its long-term potential is far greater than that of any other company in the industry” (Joseph Solitro, former financial analyst at Capital Guardian LLC)

• 

Starbucks is quickly making an impact in grocery stores with the sale of packaged coffee, Starbucks Refreshers, and even Oprah-branded Chai Tea. These initiatives, combined with the ongoing changes to Starbucks' menu offerings, outline a diverse set of growth drivers that leave little reason to doubt that Starbucks will continue to drive earnings-per-share growth of 15%.” (Brian Shaw, former financial analyst at Atlantic Financial)

Investor Sentiment Quotes • 

“It used to be possible to be a global brand by dominating the US market. That’s changing rapidly. Now you have to be number one in Asia.” (Melanie McShane, strategist at Wolff Olins)

• 

“The opportunity is absolutely in India and China, but I’ve seen opportunities all over the world.” (Troy Alstead, Starbucks chief financial officer)

• 

“India is a very slow market, and unlike China Starbucks probably understand that here it will take a lot of time.” (Pinakiranjan Mishra, head of retail and consumer goods for India at Ernst & Young)

• 

“Starbucks is a symbolic representative of unrefined food culture.” (Rui Chenggang, presenter at CCTV)

• 

“Starbucks stock is still reasonable in light of the powerful global brand, growth opportunities and innovation. In other words, the pros outweigh the cons on the stock.” (Tom Taulli, InvestorPlace Writer)

COFFEE INDUSTRY OVERVIEW

Coffee Industry Overview (consumption and production)

• 

• 

Steady growth in world production, interspersed with periodic falls Expansion of niche value markets in traditional consuming countries/ Considerable potential in exporting countries (although per capita consumption levels are still low)/ Growing demand from emerging markets

World coffee production by region 300   250   200   150   100   50   0  

Rise in costs of coffee production inputs, particularly fertilizers and labour

World coffee consumption by market

South  America   Central  America   Asia  &Oceania   Africa   1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

• 

Production costs in exporting countries 200  

ExporFng  countries   +2.5% aver.p.y Emerging  markets  

+4.3% aver.p.y

100   50   0  

Brazil  Arabica  

150  

Brazil  Robusta  

100  

Columbia  Arabica  

50   0  

1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 200 2002 200 200 200 2010 2012

Mio  bags  

150  

US  cents/lb    

TradiFonal  markets   +0.9% aver.p.y

Costa  Rica  Arabica   Kenya  Arabica  

Coffee Industry Overview (prices and production)

• 

Coffee price forecasts 200

181.1

188.4

Seasonal Surplus/ Deficit 8

Mio bags

• 

Brazilian drought will affect both the 2014-15 and 2015-16 crop seasons Production has a much weaker influence on price than availability or stocks Starbucks bias to hedge its coffee exposure 12-18 months into the future means the company should benefit from favourable input prices

US cents per pound

• 

5

5 0

09/10

10/11

11/12

12/13

13/14

14/15

-7 -11

Supply and demand ratios 190.0

150.0

173.0

150 100

1965-1989

1990-2012

Global Availability/ Consumption

1.81

1.50

World Production/ Consumption

1.02

1.00

World Stocks/ Consumption

0.80

0.50

50 0 2013

2014

2015

2016

2017

Competitive Landscape – US Restaurant Brands

COMPANY CONSIDERATIONS

Key Company Considerations Starbucks grew revenues in 2013 thanks to growth in comparable-store sales, openings of 853 new stores and a series of new initiatives. • 

SBUX increased its performance in existing stores and in the US by designing all of its bakery, lunch and evening initiatives (wine, beer, and shareable small plates) – to optimise revenues throughout the day.

• 

The company is expanding in new markets: in particular China, India and Korea.

• 

The acquisitions of Teavana and Evolution Fresh expanded Starbucks’ offering beyond ready-to-drink coffee, giving tea (cf. Oprah-branded Chai Tea) and juice options to customers. Benchmark product quality and price also increased with its new range of La Boulange products.

• 

The company updated its mobile app platform, enabling customers to pull up their card by shaking their mobile device  and transmit discretionary tips to servers via smartphone.

The company sits on solid fundamentals. A one-time litigation charge resulted in negative free cash flow of $1.7 billion; however, minus this charge, growth in free cash flow would have increased y-o-y.

Share Price Performance vs Competitors (Last 12 Months) Starbucks 200.0 180.0

Index  re-­‐based  on  100  

160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

Dunkin's Brands

Krispy Kreme

Chipotle

Starbucks Financial Forecasts • 

The opening of new stores, diversification of products on sale, the amelioration of margins and the average augmentation of products quality and prices explain the global revenues growth

EBIT & Margin (‘14-’18) EBIT

• 

Movements in coffee prices imply Starbucks could realize $350 million+ in cost savings in FY14 and FY15 Channel Development (Teavana, La Boulange) is a high-margin wild care for growth.

Sales 20000

16,338  

18,072  

Growth (%)

19,782  

21,575  

23,551  

0 2014E

2015E

2016E

2017E

2018E

20% 15% 10% 5%

1000 0

0% 2014E

2015E

2016E

Profit 5000

11%

4000

9%

5000

21%  

20%  

2000

11%

10%

10000

19%  

2017E

2018E

Profit & Margin (‘14-’18)

10%

15000

18%  

22%  

3000

Sales & Growth (‘14-’18) 25000

25%

5000 4000

• 

Margin (%)

6000

0.095

8.3%  

3000 2000

9%

1000

8%

0

Margin (%)

8.4%  

8.7%  

9.0%   0.09

0.085 0.08

7.7%  

0.075 0.07 0.065

2014E

2015E

2016E

2017E

2018E

Key Financial Metrics - Gearing Net Debt / EBITDA • 

Starbucks Corp.'s debt-to-equity ratio deteriorated significantly from 2012 to 2013, since the company paid $2.76 billion in litigation charges to settle a dispute with Kraft over coffee distribution.

0.31 2013A

• 

• 

This cyclical cash deficit was unique and Starbucks should pay down long-term debt outstanding during FY14.

2014E

2015E

0.31

0.32

0.35

2016E

2017E

2018E

0.36 -4.31

Net Debt / (Cash)

Given Starbucks robust gearing position, there is significant debt capacity to reduce cost of capital or deploy through further acquisitions

1288

2013A

-1276

2014E

1343

1473

1735

2015E

2016E

2017E

2192

2018E

Headline Operational Metrics • 

The Americas represent  the most important operating region with 74% of total sales. In Europe margins were negative due to: –  –  – 

• 

Higher occupancy costs Less productive stores Economic uncertainty.

China is now a core market for Starbucks. In 2013, it was a record year for the region, where they opened 317 stores - with the highest regional profit margin across all divisions. The rest of Asia shows much promise including South Korea and India.

Opened stores 2012-213

Sales performance Index re-based on 100

• 

250

Americas  

200

EMEA  

150

CAP  

100

Other  

50

Channel  

0 2014

2015

2016

35%   35%  

40% Other  segments  

8000

30%

CAP  

6000 EMEA  

4000

Americas  

2000

20%

2012  

24%   18%  

2013  

6%   1%  

10% 0%

0 2012

2013

2018

EBIT Margins

12000 10000

2017

Americas

EMEA

CAP

Acquisition History •  •  • 

Since 1999, SBUX has acquired 7 businesses with $912.3 million total cumulative revenues. SBUX’s strategy has been to gradually expand the product line and gain control of the input costs and supply chain needed to gain the most profit from that expansion. This has provided SBUX rapid cost savings and the addition of installed base and channels which has created significant cross-sell/up-sell opportunities.

M&A Transaction History Date

Target

Description

Deal

1999

Tazo Tea

tea & herbal tea manufacturer and distributor

$8.1m

2003

Seattle Coffee Company

specialty coffee retailer and wholesaler based in Seattle

$72m

2005

Ethos Water

brand of bottled water with a social mission of "helping children get clean water."

$8m

2008

Coffee Equipment Company

Seattle-based manufacturer of coffee equipment

$74.2m

2011

Evolution Fresh

American-based company producing fruit juices, fruit smoothies, gourmet soups, salads and signature bowls

$30m

2012

Teavana

specialty tea and tea accessory retailer based in Atlanta

$620m

2012

La Boulange

French Bakery

$100m

TRADE IDEA

Valuation Considerations To evaluate the fundamental value of Starbucks’ shares, I have built a 5-year discounted cash flow forecast for FY14-18E, incorporating my key assumptions about the future potential of the company. On a DCF basis, the company is intrinsically valued at $83.7. Starbucks’ shares are currently trading on the NASDAQ Capital Market $78.86 per share (6%).

Tax rate

32%

Cost of debt:

4.7%

Long-term growth rate

1.8%

Cost of equity:

10.5%

WACC:

10.3%

2013 negative free cash flow of $1.7 billion is the result of a one-time litigation charge. Minus this charge, growth in free cash flow would have increased. So we should not overweight this factor in the company valuation. Given (i) industry-leading comp momentum and cash-on-cash returns, (ii) accelerating U.S. unit growth, (iii) an outsized international opportunity (particularly China) and (iv) multiple drivers of medium-to-long term CPG growth that altogether I believe in an OUTPERFORM rating and $84 price target.

Discounted Cash Flow Analysis Financial Year (Dec. Year end) Total Turnover growth (%)   EBIT margin (%)   Depreciation & Amortisation   Tax @ 32.0% Capital Expenditure Capex/Sales (%)   Working Capital Working Capital / Sales (%)   Free Cash Flow   Discount Factor   Terminal Value   Present Value Enterprise Value (m) Net Debt as at (Dec 2013) Market Capitalisation (m) No. Shares (m) Share Price ($)

2013 14,892

2014 16,338 9.7%

2015 18,072 10.6%

2016 19,782 9.5%

2017 21,575 9.1%

2018 23,551 9.2%

-325 -2.2%

2,859 17.5%

3,488 19.3%

3,956 20.0%

4,531 21.0%

5,181 22.0%

621.4

736.1

792.3

859.4

934.8

1,017.5

Terminal Period                

104.1 (1151.2) 7.7%

(914.9) 980.3 -6.0%

(1116.1) 1084.3 -6.0%

(1266.1) 1186.9 -6.0%

(1449.9) 1294.5 -6.0%

(1658.0) 1413.1 -6.0%

0.0 0.0%

(588.9) 3.6%

(126.4) 0.7%

(109.8) 0.6%

(123.2) 0.6%

(137.5) 0.6%

1,551.3

1,111.1

1,953.4

2,253.1

2,598.0

2,990.2

              2,990.2  

0.9064

0.8216

0.7447

0.6750

0.6119

0.6119   35,485  

1,007.1 65,071 1299.4 63,771 762 83.7

 

1,604.9

 

1,677.9

 

1,753.7

 

1,829.6

 

21,712          

APPENDIX

Starbucks Income Statement Starbucks

Hist.

Hist.

Hist

Proj.

Proj.

Proj.

Proj.

Proj.

31-Dec-11

31-Dec-12

31-Dec-13

31-Dec-14

31-Dec-15

31-Dec-16

31-Dec-17

31-Dec-18

Net Sales

11,700.4

13,299.5

14,892.2

16,337.6

18,072.0

19,782.2

21,575.4

23,551.3

COGS

4,915.5

5,813.3

6,382.3

6,739.3

7,292.1

7,912.9

8,522.3

9,185.0

SG&A

5,056.4

5,488.8

8,835.3

6,739.3

7,292.1

7,912.9

8,522.3

9,185.0

EBIT

1,728.5

1,997.4

(325.4)

2,859.1

3,487.9

3,956.4

4,530.8

5,181.3

523.3

550.3

621.4

736.1

792.3

859.4

934.8

1,017.5

 

 

 

0.0

0.0

0.0

0.0

0.0

2,251.8

2,547.7

296.0

3,595.2

4,280.2

4,815.9

5,465.6

6,198.8

0.0

Income Statement

Depreciation&Amortization Amortization EBITDA

Non-recurring items

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Interest Income

115.9

94.4

123.6

12.9

0.0

0.0

0.0

0.0

Interest Expense

(33.3)

(32.7)

(28.1)

58.2

65.8

70.4

80.2

98.2

1,811.1

2,059.1

(229.9)

2,813.8

3,422.1

3,886.0

4,450.6

5,083.1

Profit before taxes

Taxes Profit after tax Net earnings attribut. to nncontr. Interests Net income

563.1

674.4

(238.7)

1,547.6

1,882.2

2,137.3

2,447.8

2,795.7

1,248.0 2.3

1,384.7 0.9

8.8 0.5

1,266.2

1,540.0

1,748.7

2,002.8

2,287.4

1.0

1.0

1.0

1.0

1.0

1,245.7

1,383.8

8.3

1,265.2

1,539.0

1,747.7

2,001.8

2,286.4

748.3

754.4

749.3

Shareholder information Basic weighted average shares outstanding Diluted weighted average shares outstanding

769.7

773.0

762.3

770.0

770.0

770.0

770.0

770.0

Diluted earnings per share

$1.62

$1.79

$0.01

$1.64

$2.00

$2.27

$2.60

$2.97

Dividends per share

$0.56

$0.72

$0.89

$1.11

$1.39

$1.74

$2.17

$2.72

419.0

543.2

666.9

856.6

1,070.8

1,338.5

1,673.1

2,091.4

Dividends

Starbucks Balance Sheet Starbucks Balance Sheet Assets Current assets Cash and cash equivalents

Sales, maturities and calls Accounts receivable Inventories Other current assets Total current assets Non-current assets Net PP&E Goodwill Other intangibles Other assets Total assets Liabilities Current liabilities Short term debt Accounts payable and accruals Accrued litigation charge Total current liabilities Non-current liabilities Total long-term debt Other long-term liabilities Total liabilities Equity Common stock Retained earnings Treasury stock Noncontrolling interests Total equity Total Liab.& Equity Balance?

Hist. 31-Dec-11

Hist. 31-Dec-12

Hist. 31-Dec-13

Proj. 31-Dec-14

Proj. 31-Dec-15

Proj. 31-Dec-16

Proj. 31-Dec-17

Proj. 31-Dec-18

1,148.1   386.5 965.8 1,294.5

1,188.6   485.9 1,241.5 1,283.6

2,575.7   561.4 1,111.2 1,223.1

0.0

0.0

0.0

0.0

0.0

571.8 1,179.4 1,633.8

632.5 1,276.1 1,807.2

692.4 1,384.8 1,978.2

755.1 1,491.4 2,157.5

824.3 1,607.4 2,355.1

3,794.9

4,199.6

5,471.4

3,384.9

3,715.8

4,055.4

4,404.1

4,786.8

2,355.0 321.6 0.0 888.9

2,658.9 399.1 0.0 961.6

3,200.5 862.9 0.0 1,981.9

7,360.4

8,219.2

11,516.7

3,444.6 862.9 0.0 1,470.4 9,162.9

3,736.7 862.9 0.0 1,626.5 9,941.9

4,064.2 862.9 0.0 1,780.4 10,762.8

4,423.9 862.9 0.0 1,941.8 11,632.7

4,819.5 862.9 0.0 2,119.6 12,588.8

0.0 2,075.8 0.0

0.0 2,209.8 0.0

0.0 2,593.2 2,784.1

2,075.8

2,209.8

5,377.3

1,288.4 2,493.5 0.0 3,782.0

1,342.7 2,698.1 0.0 4,040.8

1,473.4 2,927.8 0.0 4,401.2

1,735.3 3,153.2 0.0 4,888.6

2,192.0 3,398.4 0.0 5,590.4

549.5 347.8

549.6 345.3

1,299.4 357.7

2,973.1

3,104.7

7,034.4

0.0 490.1 4,272.1

0.0 542.2 4,583.0

0.0 593.5 4,994.7

0.0 647.3 5,535.9

0.0 706.5 6,296.9

0.7 4,297.4 86.8 2.4

0.7 5,046.2 62.1 5.5

0.8 4,130.3 349.1 2.1

4,387.3 7,360.4

5,114.5 8,219.2

4,482.3 11,516.7

0.7 4,538.9 349.1 2.1 4,890.8 9,162.9

0.7 5,007.0 349.1 2.1 5,358.9 9,941.9

0.7 5,416.3 349.1 2.1 5,768.2 10,762.8

0.7 5,745.0 349.1 2.1 6,096.9 11,632.7

0.7 5,940.0 349.1 2.1 6,291.9 12,588.8

OK

OK

OK

OK

OK

OK

OK

OK

Starbucks Cash Flow Statement Starbucks Cash Flow Statement

 

Hist.

Hist.

Hist.

Proj.

Proj.

Proj.

Proj.

Proj.

 

31-Dec-11

31-Dec-12

31-Dec-13

31-Dec-14

31-Dec-15

31-Dec-16

31-Dec-17

31-Dec-18

Net Income Depreciation Amortisation Change in OWC Change in other assets

1248.0 550.0 0 166.4 -306.0

1384.7 580.6 0 189.0 -488.5

8.8 655.6 0 (1016.9) 249.2

1265.2 736.1 0.0 (3373.0) 511.5

1539.0 792.3 0.0 (126.4) (156.1)

1747.7 859.4 0.0 (109.8) (153.9)

2001.8 934.8 0.0 (123.2) (161.4)

2286.4 1017.5 0.0 (137.5) (177.8)

Change in other liabilities Litigation charge Cash from Operating Activities

-46.0 0.0 1612.4

84.5 0.0 1750.3

227.5 2784.1 2908.3

132.4 0.0 -727.8

52.0 0.0 2100.8

51.3 0.0 2394.7

53.8 0.0 2705.7

59.3 0.0 3047.8

Sales, maturities and calls of investments Capex Others Cash from Investing Activities

430.0 531.9 1027.6 -1989.5

1796.4 856.2 1914.2 -4566.8

1040.2 1151.2 1300.2 -3491.6

0.0 980.3 0.0 -980.3

0.0 1084.3 0.0 -1084.3

0.0 1186.9 0.0 -1186.9

0.0 1294.5 0.0 -1294.5

0.0 1413.1 0.0 -1413.1

Change in Common Stock Dividends Long Term Debt Repayment Other Change in Non Controlling Int. Cash from Financing Activities

-305.5 -389.5 0.0 87.0   (608.0)

-312.5 (513.0) 0.0 80.0 3.1 (742.4)

-340.9 (628.9) 714.5 147.1 (3.4) (111.6)

-0.1 (856.6) (1299.4) 0.0 0.0 (2156.1)

0.0 (1070.8) 0.0 0.0 0.0 (1070.8)

0.0 (1338.5) 0.0 0.0 0.0 (1338.5)

0.0 (1673.1) 0.0 0.0 0.0 (1673.1)

0.0 (2091.4) 0.0 0.0 0.0 (2091.4)

Effect of exchange rate Net Cash Flow

-0.8 -985.9

9.7 -3549.2

-1.8 -696.7

0 (3864.1)

0 (54.3)

0 (130.7)

0 (261.9)

0 (456.6)

1164 1148.1

1148.1 1188.6

1188.6 2575.7

2575.7 (1288.4)

(1288.4) (1342.7)

(1342.7) (1473.4)

(1473.4) (1735.3)

(1735.3) (2192.0)

Beginning Cash Ending Cash

Starbucks Financial Assumptions  

Hist.

Hist.

Hist.

Proj.

Proj.

Proj.

Proj.

Proj.

 

31-Dec-11

31-Dec-12

31-Dec-13

31-Dec-14

31-Dec-15

31-Dec-16

31-Dec-17

31-Dec-18

13.7%

12.0%

9.7%

10.6%

9.5%

9.1%

9.2%

54.5%

43.7%

42.9%

41.3%

40.4%

40.0%

39.5%

39.0%

Sales growth COGS as % of sales

23.4%

23.4%

23%

23%

23%

23%

23%

43.2%

41.3%

59.3%

41.3%

40.4%

40.0%

39.5%

39.0%

Amortization of other intangibles amount

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Non-recurring items amount

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Effective tax rate

31.1%

32.8%

103.8%

55.0%

55%

55%

55%

55%

Diluted weighted average shares outstanding

769.7

Annual depr. as % of previous PPE SG&A as % of sales

Dividend per share growth rate

773.0

762.3

770

770

770

770

770

28.6%

23.6%

25%

25%

25%

25%

25%

Accounts receivable as % of sales

3.3%

3.7%

3.8%

3.50%

3.50%

3.50%

3.50%

3.50%

Inventories % of COGS

15.1%

21.4%

17.4%

17.50%

17.50%

17.50%

17.50%

17.50%

Other current assets % of sales

11.1%

9.7%

8.2%

10%

10%

10%

10%

10%

Capital expenditures % of sales

4.5%

6.4%

7.7%

6%

6%

6%

6%

6%

Other assets % of sales

7.6%

7.2%

13.3%

9%

9%

9%

9%

9%

Accounts payable and accruals % of COGS

32.5%

38.0%

40.6%

37%

37%

37%

37%

37%

Accrued litigation charge % of tax expense

0.0%

0.0%

(1166.4%)

0%

0%

0%

0%

0%

Other long-term liabilities % of sales

3.0%

2.6%

2.4%

3%

3%

3%

3%

3%

Common stock amount

0.7

Share repurchases $ amount (show as positive)

0.7

0.8

0.7

0.7

0.7

0.7

0.7

24.7

(287.0)

0.0

0.0

0.0

0.0

0.0

Loans due for repayment

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other long-term debt repayment

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term debt

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

Loans due for repayment

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

Other long-term debt repayment

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

4.00%

Cash

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

1.00%

Starbucks Revenue Forecasts FINAL REVENUES FORECAST Americas EMEA CAP Other Channel Total

Operating Profit (EBIT)   EBIT EBIT Margin (%) EBIT Growth (%)

2014

2015

2016

2017

2018

10,532 1,183 1,100 504 3,018 16,338

11,006 1,207 1,320 562 3,976 18,072

11,501 1,231 1,585 620 4,845 19,782

12,019 1,256 1,901 906 5,493 21,575

12,560 1,281 2,282 993 6,436 23,551

Actual 2011 1728.5 15%

Actual 2012 1997.4 15% 16%

Actual 2013 -325.4 -2% -116%

Forecast 2014 2331 18% -816%

Forecast 2015 2720 19% 17%

Forecast 2016 2987 20% 10%

Forecast 2017 3056 21.00% 2%

Forecast 2018 3252 22.00% 6%

Starbucks Operating Assumptions    

   

   

   

   

   

   

   

Opened stores

Americas EMEA CAP Other segments Worldwide

Stores open as of sept 30, 2012

Opened

Closed

Net

Stores open as of sept 29, 2013

7802 882 666 14 9364

319 34 252 353 958

-43 -63 -12 -10 -128

276 -29 240 343 830

8078 853 906 357 10194

2011 8% 3% 22% 8%

2012 8% 0% 15% 7%

2013 -10% 2% 27% 7%

2014 6% 2% 20% 7%

2015 5% 2% 20% 7%

Revenues growth Americas EMEA CAP Consolidated

2016 5% 2% 20% 7%

2017 5% 2% 20% 7%

2018 5% 2% 20% 7%

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