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Anheuser-Busch InBev NV

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.

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Anheuser-Busch InBev NV

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  1. Anheuser-Busch InBev NV

  2. Result of a merger between the American brewing company Anheuser Busch and the Belgian InBev

  3. 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

  4. Income Statement

  5. 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

  6. Balance Sheet

  7. 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

  8. 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 sub-premium and premium beers, in order to initiate trading up seems like a promising way to make up this loss in the future

  9. 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

  10. The Verdict • Investors for whom dividends are very important should be aware that this may not necessarily happen, but for the mid-high risk investor, AB InBev shows great prospects, and a good chance of high return on investment

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