The trend of complication of Russian beer market is going on and in several directions at the same time. The range has got wider, the import and small segments are growing, namely craft beer, alcohol-free beer and special flavor beer. At the same time, all ex-mega brands and light lagers by Russian brewers are experiencing a decline of their shares. AB InBev Efes, Heineken, MBC and Pivzavod Trekhsosenskiy have exceeded the market, Carlsberg was developing slower than the market and Ochakovo as well as some other mid-sized breweries have been cutting down their volumes. To a big extent brewers’ performance was connected to their ability to reach agreement with networks, sacrifice their margin and enter new markets. Craft brewers are facing a serious danger of producers’ registration introduction – de facto licensing. ...
The global outlooks of the legal market of cannabis are excellent. It is possible to simultaneously imagine dry law repeal and craft brewing boom but not in one but in several consumer categories. For alcohol is contained in liquids and cannabis derivatives can be in three physical forms.The value of legal market of cannabis and its products can reach 10% of the world beer market in five years, and in 2030-2040 even reach the same scope provided the current rates of legalization and development of market infrastructure remain at the same level. Cannabinoids are actively integrating into the food industry from chewing gum to beverages deforming the pharmaceutical and alcohol markets, they influence the trends of healthy lifestyle and beauty. ...
Beer market of Kazakhstan acquired both traits of East European countries and South Eastern Asia taking a transitional position between them by many criteria and consumption style. Yet there is a positive trend in beer production which differs Kazakhstan from most of the neighboring countries. The market has remained consolidated in the hands of two international players because of its small size. However, it faces dynamic processes such as fast growth of draft beer sales, up and downs of regional companies and Carlsberg Group’s ultimate expansion. Excessive mainstream segment has declined over the recent years, yet, Zhigulevskoe and national brands with regional links have yielded their positions to a range of new products. In our review special attention was paid to regional analysis of the markets. In 14 regions of Kazakhstan we compared the companies’ positions, the market price segmentation and DIOT channel development. Besides we have compared the beer market of Kazakhstan to neighboring countries. ...
Who Fancies a BUD?
Rupert is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.
Beer. Although some would not like to admit it, it is a staple of modern day life. This kind of product has a certain defensive quality about it; unless there is a huge overnight change in perceptions, beer sales and their growth will rise in line with global population growth. The case for investment in the industry is simple--it is a fairly stable industry, and last year beer sales rose last year for the 27th year in a row.
So then should we consider investing in one of the world's largest brewers - Anheuser-Busch InBev (NYSE: BUD)?
World Beer Rankings
|Rank||Brand||Main market||2010-2011 growth||Owner|
|2||BUD Light||USA||-4.4%||AB InBEV|
|4||Corona Extra||Worldwide||9%||AB InBev|
|7||Coors Light||UK/US||25%||Molson Coors (NYSE: TAP)|
|9||Brahma||South America||-3.4%||AB InBev|
|10||Asahi Super Dry||Japan||2.5%||Asahi|
|Total top 10 Growth||32.24%|
As we can see, ABInBev produce some of the best-selling beers in the world. Anheuser-Busch also produce:
- 3 ‘Global brands’ – Stella Artois, Becks, Budwiser
- 2 ‘Multi-country brands’ – Leffe, Hoegaarden
- 200 + Local Champions
What about the company's finanicals?
Data Source: Motley Fool CAPS
ABInBev generates a very respectable gross margin of 65.5% and a pre-tax profit margin of 25.5%. This gives the company plenty of free cash flow, which it can use to return cash to shareholders or re-invest into the business.
However, this margin could come under pressure from increasing commodity prices.
Data Source: Motley Fool CAPS
ABInBev's growth strategy has been aggressive. It has been driven through acquisitions and aggressive pricing by the firm. This has led to a large increase in sales, but slow growth in EPS. (Although these figures are somewhat distorted by abnormally low growth in, Q4 2010 and Q1 2011). ABInBev is effectively buying market share from its competitors.
If we look at 3 year growth on a company level we get a much better growth picture:
|ABInBev||SABMiller||Heineken NV||Molson Coors|
|Revenue - 3 Yr Growth Rate||7.00%||21%||16.5%||7.45%|
|EPS - 3 Yr Growth Rate||18.43%||33%||25%||-4.22%|
|Dividend - 3 Yr Growth Rate||235.90%||34%||25%||11.82%|
|Dividend Cover 2011||3.5||2.4||3.2||3|
Data Source: Motley Fool CAPS
This data presents an interesting picture of BUD versus its competitors. Although BUD has the slowest revenue growth amongst its US-listed competitors, it has a EPS growth rate that is slightly better (second in the group). BUD has the highest dividend growth in the group, with the highest dividend cover, leaving plenty of room for extra dividend growth and plenty of free cash flow.
So in conclusion, ABInBev looks to be a decent investment. It products are some of the most popular in the world. However, its revenue figures are lacking behind its competitors as it seeks to drive sales volumes through lower prices. I believe BUD will continue to improve investor returns, with its vast portfolio of products.
With all these factors in mind i think ABInvBev is a good investment for the long and short term. Although if you are looking for more growth, bothSABMiller (NASDAQOTH: SBMRY) and Heineken NV (NASDAQOTH:HINKY) could be better stocks.
20 Ноя. 2012