Anheuser-Busch InBev NV
Result of a
merger between
the American
brewing company
Anheuser Busch
and the Belgian
InBev
•Worlds largest brewing
company, as well as
one of the top 5
companies producing
consumer products
• The companies 36
billion dollar revenue
comes from its three
worldwide flagship
brands
• As well as over 200
local and regional
beer brands
Income Statement
Observations
• Massive drop in net income in 2008
– Surprisingly not due to reduced revenue from the
financial crisis, but rather from unusual expenses
incurred due to restructuring after the merger
• Massive growth from 2008 to 2009
– Revenue up 55% ($23 billion – $36 billion)
• Fairly stable figures between 2009 and 2010
– Continued growth in revenue, while COGS dropped
slightly
– The only negative is the slight loss in Minority Interest
Balance Sheet
Observations
• The balance sheet is a bit more worrying
• Of $114 billion in assets, $75 billion are Goodwill
and other Intangible assets
– Tangible assets are less than the company’s debts
– Current Assets less than Current Liabilities
• Debt to Equity has been very high in recent
years
– Peaked in 2008 at 4.06
– AB InBev has been successful in managing this debt
– Down to 2.24 in 2010
CEO’s Comments
• Closed 2010 with 4.4% growth in revenue
– This is not entirely accurate, he is actually talking
about profits here
• Grew or maintained market share across the
board
– Lost 1 point in the share of US market, due to
underrepresentation in the high-end beer market, the
fastest growing segment
– The plan to reduce the price gap between subpremium and premium beers, in order to initiate
trading up seems like a promising way to make up
this loss in the future
For Investors
• AB InBev’s has shown growth in the past several
years, and an ability to maintain success in
times of financial uncertainty
• There are also risks
– Recent growth has been financed by significant
amounts of debt
– Although the company has been successful in
managing this debt so far, there is no guarantee that it
will not become problematic
• It is generally the policy of the company to issue
dividends, but this did not happen in 2010
The Verdict
• Investors for whom dividends are very
important should be aware that this may
not necessarily happen, but for the midhigh risk investor, AB InBev shows great
prospects, and a good chance of high
return on investment