Material Complementario - Cafes Monte Bianco

Cafes Monte Bianco
Harvard Business School Case #198-088

Case Software #XLS032
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Exhibit 1 Cafes Monte Bianco's 2000 Financial Statements (estimated as of December 15, 2000)
Note: 1 U.S. dollar = 1,800 Italian
Income Statement for the year ending December 31, 2000

(thousands of Italian liras)
Revenues 56,112,408
Private brand 9,934,848
Premium brand 46,177,560
Costs of goods sold (*) 33,233,867

Gross margin 22,878,541
Marketing expenses 4,155,980

R&D expenses 3,328,130
Selling expenses 3,574,710
Administrative expenses 4,752,000
Interest expense 3,825,000
Profits 3,242,721
Taxes (40%) 1,297,089
Net profit 1,945,632
(*) includes 2,593,700 depreciation
Balance Sheet at December 31, 2000

(in thousands of Italian liras)
Assets Liabilities and Shareholders' Equity
Cash 1,121,450 Accounts payable 487,331

Raw material inventory 2,907,963 Credit line 25,000,000
Finished goods (174,000 kg.) 1,148,400
Accounts Receivable 9,368,467 Long term debt 10,000,000
Shareholders' Equity 9,165,869
Property, plant and equipment (*) 42,374,000
Depreciation (12,267,080)
44,653,200 44,653,200
(*) includes vacant land with a cost of 13,000,000

Exhibit 2 Estimated Yearly Volume (in kilograms) for Different Prices / Grades and Advertising Expenditures
Coffee Grade D C B BB A AA AAA

Price per kilogram 8,800 19,500 26,600 30,000 35,500 39,000 42,600
VOLUME (kg.)
Advertising /Sales
0% 6,000,000 2,395,000 1,645,000 1,529,000 1,103,000 667,000 127,000
1% 2,455,000 1,696,000 1,566,000 1,145,000 717,000 157,000
2% 2,545,000 1,720,700 1,649,000 1,226,000 799,000 229,000
3% 2,665,000 1,896,000 1,760,000 1,334,000 910,000 325,000
4% 2,800,000 2,024,000 1,884,000 1,456,000 1,034,000 433,000
5% 2,950,000 2,166,000 2,022,000 1,591,000 1,172,000 553,000
6% 3,130,000 2,367,000 2,157,000 1,723,000 1,307,000 667,000
7% 3,196,000 2,417,000 2,195,000 1,792,000 1,345,000 694,000
8% 3,268,000 2,446,000 2,231,000 1,823,000 1,366,000 752,000
9% 3,310,000 2,465,000 2,258,000 1,837,000 1,495,000 875,000
10% 3,340,000 2,494,000 2,286,000 1,843,000 1,523,000 935,000
Exhibit 3 Estimated Cost per Unit for Different Prices / Grades and Volume
Coffee Grade D C B BB A AA AAA

Prices per kilogram 8,800 19,500 26,600 30,000 35,500 39,000 42,600
Unit cost (liras) 6,600 12,485 14,275 16,288 17,791 19,166 20,441
Fixed costs (thousands of liras3,319,500 4,100,500 4,100,500 4,100,500 4,100,500 4,100,500 4,100,500
Volume COST PER UNIT

400,000 14,899 22,736 24,526 26,539 28,042 29,417 30,692
600,000 12,133 19,319 21,109 23,122 24,625 26,000 27,275
800,000 10,749 17,611 19,401 21,414 22,917 24,292 25,567
1,000,000 9,920 16,586 18,376 20,389 21,892 23,267 24,542
1,200,000 9,366 15,902 17,692 19,705 21,208 22,583
1,400,000 8,971 15,414 17,204 19,217 20,720 22,095
1,600,000 8,675 15,048 16,838 18,851 20,354 21,729
1,800,000 8,444 14,763 16,553 18,566 20,069
2,000,000 8,260 14,535 16,325 18,338 19,841
2,200,000 8,109 14,349 16,139 18,152
2,400,000 7,983 14,194 15,984 17,997
2,600,000 7,877 14,062 15,852
2,800,000 7,786 13,949
3,000,000 7,707 13,852
3,200,000 7,637 13,766
3,400,000 7,576 13,691
6,000,000 7,153
* Fixed costs for premium coffees include private brand fixed costs.
Exhibit 4 Sales During 2000
Sales Private Sales Premium Percent of

Year 2000 (kilograms) (kilograms) Total
January 81,792 84,916 7.1%

February 103,680 107,640 9.0%
March 135,936 141,128 11.8%
April 86,400 89,700 7.5%
May 93,312 96,876 8.1%
June 57,600 59,800 5.0%
July 48,384 50,232 4.2%
August 38,016 39,468 3.3%
September 78,336 81,328 6.8%
October 150,912 156,676 13.1%
November 139,392 144,716 12.1%
December 138,240 143,520 12.0%
1,152,000 1,196,000 100.0%

Exhibit 5 Dino's Production Plan for Private Brand Only
Production Inventory Sales 2000 Actual

Capacity Private Private Private Sales Percent
Initial Inventory 174,000

January 500,000 500,000 248,000 426,000 7.1%
February 500,000 500,000 208,000 540,000 9.0%
March 500,000 500,000 - 708,000 11.8%
April 500,000 450,000 - 450,000 7.5%
May 500,000 486,000 - 486,000 8.1%
June 500,000 390,000 90,000 300,000 5.0%
July 500,000 500,000 338,000 252,000 4.2%
August 500,000 500,000 640,000 198,000 3.3%
September 500,000 500,000 732,000 408,000 6.8%
October 500,000 500,000 446,000 786,000 13.1%
November 500,000 500,000 220,000 726,000 12.1%
December 500,000 500,000 - 720,000 12.0%
6,000,000 5,826,000 - 6,000,000 100.0%

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Cafes Monte Bianco

Harvard Business School Case #198-088

Note: 1 U.S. dollar = 1,800 Italian

Income Statement for the year ending December 31, 2000

Costs of goods sold (*) 33,233,867

Marketing expenses 4,155,980

(*) includes 2,593,700 depreciation

Balance Sheet at December 31, 2000

Assets Liabilities and Shareholders' Equity

Cash 1,121,450 Accounts payable 487,331

(*) includes vacant land with a cost of 13,000,000

Coffee Grade D C B BB A AA AAA

Coffee Grade D C B BB A AA AAA

Volume COST PER UNIT

Sales Private Sales Premium Percent of

January 81,792 84,916 7.1%

1,152,000 1,196,000 100.0%

Production Inventory Sales 2000 Actual

Initial Inventory 174,000

6,000,000 5,826,000 - 6,000,000 100.0%

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