AB Inbev historical performance – a truly global brewer

Anheuser-Busch InBev NV brews beer and is the leading global brewer and one of the world’s top five consumer products companies. The Company manufactures ale, lager, stout, and bitter beer with a portfolio of well over 200 beer brands which includes global brands like Budweiser®, Corona® and Stella Artois®. Anheuser-Busch InBev owns brands that are both nationally and internationally prominent. The Company has production plants in Europe, America, and Asia.

Turnover in growth trajectory

Anheuser-Busch Inbev registered a turnover of $43.20 Billion in fiscal year 2013 as compared to $39.56 Billion in fiscal year 2012, witnessing a growth of 9%. Historically, the company’s turnover is more than doubled since fiscal year 2007 with a compounded annual growth rate of 14% during the period CY07-13. Similarly, for the quarter ended Jun’14, the company clocked in net sales of $12.20 Billion as compared to Euro10.59 Billion in the corresponding quarter last year, thereby registering a stupendous growth of 15%.

Healthy gross margin levels coupled with revenue growth aided in EPS growth

Anheuser-Busch Inbev has been maintaining its average gross margins at a healthy level of 57% over the past 7 years, which shows the company’s ability to pass on any cost increases and its pricing power. Infact, for the fiscal year 2013, the company recorded peak gross margin of 59% in the last 7 years. During the last reported quarter ending Jun ’14, gross margin stood at 60% as compared to 58% during the quarter ending Jun ’13. The company’s net profit stood at $14.39 Billion for the fiscal year 2013 as compared to $7.16 Billion for the fiscal year 2012 largely on account of booking of exceptional income of $6.41 Billion. Adjusted for this, the company net profit grew by 11.5% for the fiscal year 2013, with net margins of 18.5% as compared to 18.0% for the fiscal year 2012. Over the years the company net margin has improved substantially from 12%-15% range to 18% trajectory.

Growth in revenue coupled with net margin expansion has fairly percolated down to the EPS, which grew at a compounded annual growth rate of 21% over the last 5 years. On an adjusted basis, EPS came in at $4.94 for the fiscal year as compared to $4.48 for the fiscal year 2012, registering a growth of 10%. Extrapolating the past results, it is expected that the company is well-positioned to grow further in the years to come.

Comfortable leverage with sevenfold increase in dividend per share in the last 5 years

Anheuser-Busch Inbev’s net debt stood at $39.2bn as of fiscal year ended 2013, with a net-debt equity ratio of 0.7x and net-debt to EBITDA (Earnings before interest, depreciation & taxes) ratio of 2.3 times. Considering, the expansion of the business, reasonable EBITDA generation and comparison with peers; net-debt appears to be at comfortable levels. The company has been consistently paying dividend since fiscal year 2008, with dividend per share at $2.12 in fiscal year 2013 versus $0.28 in fiscal year 2008, increasing more than sevenfold. The company has been able to maintain its return ratios with ROE hovering in the range of 18-20%.

Steady performer with consistent growth in stock price largely led by revenue growth, margin expansion and stability in financial performance

Abninbevgraph

Source: http://finance.yahoo.com

Summary

Anheuser-Busch Inbev has been posting spectacular set of numbers year after year. The best part of the performance stood in the fact that the company has been continuously increasing its turnover along with margin expansion which fairly percolates down to the net profit level (EPS witnessed a compounded annual growth rate of 21% over the last 5 years). On the capital structure front, net-debt to equity ratio appears to be at comfortable levels and from the cashflow standpoint, the company regularly pays increasing dividends year on year (dividends went sevenfold in fiscal year 2013 versus 2008).