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15 Jul 2020
SECTOR UPDATE | Beverages | Back to basics
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SECTOR UPDATE | Beverages | Back to basics
Molson Coors Beverage Company Class B (0K2K:LON), 0 | AB INBEV (ABI:EBR), 0 | Heineken Holding N.V. (HEIO:WBO), 0 | Heineken NV (HEIA:WBO), 0 | Royal Unibrew A/S (RBREW:CSE), 0
- Published:
15 Jul 2020 -
Author:
Nikolaas Faes -
Pages:
34
In this research we examine the brewer’s return on invested capital. In the first place, ROIC is an indication of how well past management has allocated capital to profitable investments. AB InBev’s decline in ROIC to 6.4% in 2019, demonstrates the destruction of value that has occurred owing to the 2016 SABMiller acquisition. Also Carlsberg’s previous management destroyed value with its Scottish & Newcastle and Baltika acquisitions leading to a ROIC hovering around 6% in the period until 2016, when new management came in and improved the ratio to 9.4%. Royal Unibrew’s 18.9% ROIC reveals the zeal of its management to create value for its shareholders. Heineken’s ROIC of 8.1%, in line with WACC, is only middle of the road.