Anheuser Busch Essay

Company Financial Analysis Project 10

AC303-01 ? Intermediate Accounting III

Company Financial Analysis Project

Anheuser-Busch

Bridgette Barron ? Aliniece

Alyssa Tiedeman

Anheuser-Busch InBev SA/NV?name is derived from several mergers and?acquisition in the last decades. Anheuser Busch was started in 1852 in St. Louis Missouri named Anheuser & Co. ?Anheuser-Busch is the largest brewing company in the United States and employs over 30,000 people.? July 13, 2008, Anheuser Busch was acquired by the World?s largest brewer, InBev for 11.5 billion. InBev became the No.1 Beer maker in the world with the merger Interbrew and Ambev, the 3rd?and 5th largest brewers.

In 2008, the acquisition by InBev of Anheuser-Busch was completed,

and new company was formed under the name Anheuser?Busch InBev, securing's the market position as the world's largest brewer, and one of the top five consumer products companies in the world. (Wikipedia, 2018).
On October 2009, AB InBev sold Busch Entertainment theme park division for $2.7 billion in the United States. (Wikipedia, 2018).
Anheuser-Busch InBev submitted a bid to its largest rival SABMiller for $107 billion on October 13, 2018. Once approved this would give the company a third of the global market share for beer sales and a half of the global profit. The deal required antitrust approval by U.S. Department of Justice (DOJ). ?In 2015, the DOJ approved the deal with the following stipulations, SABMiller spin off all its MillerCoors holdings in the U.S and Miller brands out of the U.S.? (Wikipedia, 2018).
Currently the new Anheuser-Busch InBev SA/NV based in Leuven, Belgium owns over 500 brands of which nineteen brands generate over 1 billion dollars in revenues a year. Among the top selling brands are Budweiser, Stella Artois and Beck?s.
ABInBev SA/NV main competitors are Miller, Molson Coors, Heineken International, Kirin and UB group. Using the SWOT analysis below is my analysis.
SWOT Analysis of Anheuser-Busch with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis
ABInBev SA/NV

Parent Company
InBev

Category
Beverages

Sector
Food and Beverages

Tagline/ Slogan
King of Beers

USP
It is one of the highest selling breweries in the World.

STP

Segment
Beverages for all segments

Target Group
Its product portfolio contains drinks that cater to the needs of all types of beer drinkers

Positioning
The market leader in terms of volumes of bottles sold annually.

Product Portfolio

Brands
1.?Budweiser
2.?Bud Light
3.?Michelob ULTRA
4.?Busch
5.?Bacardi
6.?Tilt
7.?Beck?s

SWOT Analysis

Strengths
1. Core competencies in marketing, distribution, production, and procurement.
2. An acknowledged leader as it is one of the biggest globally
3. Outstanding image and reputation.
4. Economies of scales ? cost advantage due to volume of production (90+ billion barrel).
5. Advertising know-how ? lots of memorable campaigns.
6. Product innovativeness.
7. Lower overall unit cost relative to competitors.
8. Cultural diversification due to its wide international presence and partnerships.
9. Excellent manufacturing facilities established worldwide.
10. Strong tradition in quality and service.

Weaknesses
1. Heavily leveraged.
2. Restrictive with regards to distributors.
3. Conflict among top management and union officials being a global entity is a concern

Opportunities
1. ?Expansion into new markets and segments
2. ?Expand product line ? for new areas and to accommodate changes in taste and preference.
3. Ability to transfer skill to new business units domestically and internationally.
4. Integration forwards and backward.
5. Ability to grow rapidly because of expansion into new markets.
6. Falling trade and ownership regulations in foreign countries.

Threats
1. Tax regulations on the beer industry.
2. Declining segments within the domestic market.
3. Slowed industry growth rate.
4. Legal issues dealing with underage drinking ? retailer?s license may be revoked or suspended.
5. High quality import beers with lower prices.
6. Changing buyer taste and preference.
7. Consumer health concern (switching to non-alcoholic beverages).

Competition

Competitors
1. Miller
2. Molson Coors
3. Heineken International
4. Kirin
5. UB Group

The table above concludes the Anheuser-Busch SWOT analysis along with its marketing and brand parameters.
Profitability?This table compares Anheuser Busch Inbev and its competitors' net margins, return on equity and return on assets.
Net Margins
Return on Equity
Return on Assets

Anheuser Busch Inbev
14.17%
19.47%
6.40%

Anheuser Busch Inbev Competitors
-20.05%
-50.01%
-7.81%

Earnings & Valuation?This table compares Anheuser Busch Inbev and its competitors revenue, earnings per share and valuation.
Gross Revenue
Net Income
Price/Earnings Ratio

Anheuser Busch Inbev
$56.44 billion
$8.00 billion
26.37

Anheuser Busch Inbev Competitors
$7.33 billion
$718.23 million
-2.01

Anheuser Busch Inbev has higher revenue and earnings than its competitors. Anheuser Busch Inbev is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry. Analyst RatingsThis is a breakdown of recent ratings and target prices for Anheuser Busch Inbev and its competitors, as provided by MarketBeat.com.
Sell Ratings
Hold Ratings
Buy Ratings
Strong Buy Ratings
Rating Score

Anheuser Busch Inbev
1
1
8
0
2.70

Anheuser Busch Inbev Competitors
309
1438
1690
64
2.43

A
Anheuser Busch Inbev has higher revenue and earnings than its rivals. Anheuser Busch Inbev is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.
Institutional & Insider Ownership5.9% of Anheuser Busch Inbev shares are held by institutional investors.

Comparatively, 30.8% of shares of all "BEVERAGES" companies are held by institutional investors. 4.5% of Anheuser Busch Inbev shares are held by company insiders. Comparatively, 20.7% of shares of all "BEVERAGES" companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.Analyst Recommendations?This is a summary of recent ratings for Anheuser Busch Inbev and its rivals, as provided by

MarketBeat.com.
Industry/Sector Perspective Identify (through research and analysis) the economics and broad business financial risks and opportunities of the industry and economic sector in which a given organization operates.

Identification of these risks and opportunities should include both issues specific to the enterprise, as well as those pervasive throughout the industry/sector. Are there industry standards for accounting that most companies in this industry adhere to?? Does your company comply with those standards?? How does that affect the analysis of your company?

International/Global Perspective Identify global issues relevant to business decisions.? Describe uncertainties about the cultural and financial impacts of moving into new markets and expanding existing markets. Analyze the cultural and financial impacts this company faces when moving into new markets and operating in expanding, existing markets. Discuss unique global customer and supplier demographics.? Identify and communicate the variety of threats and opportunities they face in conducting business in a borderless world. ?

In additon, Anheuser Busch Company also owns a soft drinks business that has bottling contracts with PepsiCo through its subsidiary, Ambev. In December 2016, Coca-Cola Co. bought many of the former SABMiller's Coca Cola operations, including those in

Africa.
Legal/Regulatory Perspective Describe the legal and regulatory environment that this business and industry face and analyze the impact of changes in relevant requirements, constraints, and competitive practices.?? Describe the legal and governmental/regulatory environment in which entities operate and the significant costs and benefits of regulation
? Sustainability Identify sustainable business practices described in the company's annual reports.? Assess those practices to determine if the company has a meaningful policy on sustainability.? Include recommendations which could enhance company sustainable business practices

References
? Sales of the leading beer companies worldwide 2017
https://www.statista.com/statistics/257670/sales-of-the-leading-beer-companies-worldwide/
Newstex Finance & Accounting Blogs;?Chatham
"Financial Report 2017" (PDF). AB Inbev. Retrieved 2 March 2018.
www.ab-inbev.com/content/dam/universaltemplate/ab-inbev/investors/reports-and-filings/annual-and-hy-reports/2018/03/Financials.pdf
https://en.wikipedia.org/wiki/Anheuser-Busch_InBev
SWOT analysis of Anheuser Busch- February 19, 2018?By?Hitesh Bhasi
https://www.marketing91.com/swot-analysis-anheuser-busch/

http://investors.monsterbevcorp.com/news-releas...
http://wikivisually.com/lang-nl/wiki/Lloyds_Ban...
https://wikivisually.com/lang-nl/wiki/Lloyds_Banking_Group
(2018, May 24). Retrieved from https://en.wikipedia.org/wiki/Abinbev
https://en.wikipedia.org/wiki/SeaWorld_Parks_%26_Entertainment

Ethical Issues of Financial Reporting
https://bizfluent.com/info-8417975-ethical-issues-financial-reporting.html
250 Accounting Changes and Error Corrections > 10 Overall > S99 SEC Materials
Hamburger, R. (2007). Ethical breaches can break an agency. National Underwriter.P & C, 111(16), 42-42,44. Retrieved from http://proxy.cityu.edu/login?url=https://search-proquest-com.proxy.cityu.edu/docview/228636329?accountid=1230
Code of Ethics and Standards of Professional Conduct (effective 1 July 2014)
https://www.cfapubs.org/toc/ccb/2014/2014/6

References
(2018, May 24). Retrieved from https://en.wikipedia.org/wiki/Abinbev