How to value Evian or Fiji Water?

If it's clean and it's cold you've got some high-quality H2O.

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Do they own or have sole rights to the reserves? What is the life of a water reserve? I would imagine SOTP would have to play a role in this, keep us updated. To the above poster, you don't have to pick NAV or DCF. Typically you perform a number of valuation techniques and football field it out for any company, they aren't mutually exclusive.

Evian and Fiji come from naturally replenishing sources, as does most water, so there's not really reserves. Unlike O&G, minerals, etc, you can count on the water being replaced every year obviously with some years better than others. Because of that, there's no need for net asset value (NAV) model/reserves valuation.

A water company such as Evian/Fiji is just like any old basic company. They get revenue from sales of water, there's cost to get the water, bottle it, transport it, sell it, pay employees, etc and you'll be to get to EBITDA. Specialty water is going to sell better when the economy is doing well but EBITDA margins are going to be pretty flat y-y. Because of this, if you don't want a DCF, you can use EV/EBITDA, EV/EBIT, probably even P/E if it's public. Just come up with a good comp set and you're good to go.

OP, see my other comments above about the actual valuation but I wanted to address the reserves vs. ops part.

If we were talking about using a NAV, reserves and ops are one in the same. If you assume that water is not replenished then as YBB said, you would get a decline curve, get a price deck and get the water. You'd have cost/gallon to get it out and bottle it and sell it but you'd eventually get to the revenue and variable costs associated with each water well as well as how bottles of water were produced by the well (you'd also discount the CFs like a DCF, since it's a modified DCF, and get to CF from the well). Assuming all of your wells are in the same area, same elevation, same depth, etc, you'd just take the CF from a given well and then multiply that by the number of wells and you'd have a NAV.

So to answer your question, reserves = operations

I do some field work in sub-Saharan Africa, so always have my TDS water meter handy.

Fiji is on par (if not worse) than your run of the mill, generic supermarket bottled water.
TDS readings in the 100-130 range. Some US cities have cleaner tap water. Mindblowing.

Revenue = number of water bottles can be sold annual x price per water Cost = how much do I need to pay off the relevant authorities on an annual basis + factory overhead + variable cost per bottle Gross Profit = Revenue - Cost Net Income = Gross Profit - Admin - Marketing - Tax - Interest Price of the Company = Net Income x Price Per Earning Ratio (about 8-12 times) Can we just call it a day after this? Lol.