SABMiller: A Study of Plzensky Prazdroj Miroslava Hoškova Erik Rundquist Justin Woods.
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Transcript of SABMiller: A Study of Plzensky Prazdroj Miroslava Hoškova Erik Rundquist Justin Woods.
SABMiller:
A Study of Plzensky Prazdroj
Miroslava Hoškova
Erik Rundquist
Justin Woods
Plzeňský Prazdroj, a.s. as a part of
SABMiller plc
3
SABMiller
60 Countries; 5 Continents
North and South America
Europe
Africa and Asia
North America: Miller Brewing Co. (2nd largest U.S. brewer)
Europe: Leading brewer in 8 countries including the Czech Rep.
Brands: Peroni Nastro Azzurro; Pilsner Urquell; Miller Genuine Draft; Castle Lager; Miller Lite
4
Plzeňský Prazdroj Ownership: SABMiller plc
Sales: 570 US$m
Total Sales Volume: 10.7 mil. hl. (+5.7% year-over-year)
Domestic Sales Volume: 8.1 mil. hl (+2.4%)
Export Volume: 786,000 hl (+10.6%)
Primary Importer: Germany
Key Brands: Pilsner Urquell; Gambrinus; Radegast; Velkopopovicky Kozel
Brand leader: Pilsner Urquell
Employees: 2,575
Breweries: 3
Sales and Distribution Centers: 13
5
Plzensky Prazdroj - Overview
Pilsner Urquell exportsto 53 countries world-wide
Pilsner Urquell
September 2002 mergered with the Brewery RADEGAST and the Brewery Velké
Popovice → formation of a single joint-stock company called Plzeňský Prazdroj,
expansion of the operating area
6
SABMiller Brand Portfolio
Miller Lite: Most Successful Miller Product
MGD: Marketed towards a more distinguished drinker
Premium International Beer: 45% Increase in International Sales (31 March 06)
Premium International Beer
7
Brand Portfolio
PILSNER URQUELLOriginal Pilsner, iconic superpremium, international flag ship
GAMBRINUSThe most popular Czech brand, every 4th beer sold, origins in
Pilsen
RADEGASTThe second largest, regional No1
in North Moravia, the only non-alcoholic in portfolio
VELKOPOPOVICKY KOZELTraditional Czech brand, dynamic growth, the only dark in portfolio
FRISCOLaunched May 2004, refreshing
malt beverage - cooler, lemon&apple taste
KLASIK; PRIMUSEconomy brands,
bottles only,no mktg support,
off-tradeprice fighters
8
SABMiller Financial Highlights
9
SABMiller: Impact on Financials
Strong Performance by Miller Brewing in the U.S. (meeting 3-year turnaround targets)
Market Share Gain Driving Growth in Europe
Group lager volumes +19% to 176 million hl (organic growth of 5%)
10
SABMiIler – NORTH AMERICA
2006 2005 %
Revenue (US$m) 4,912 4,892 -
EBITA (US$m) 454 487 (7)
EBITA margin (%) 9.3 10.0
Large Breweries 8 8
Avg # of Employees 5,887 5,760
0
100
200
300
400
500
2003 2004 2005 2006
NORTH AMERICA EBITA PERFORMANCE US$m
EBITA US$m
11
SABMiller – EUROPE
2006 2005 %
Revenue (US$m) 3,258 2,909 12
EBITA (US$m) 569 482 18
EBITA margin (%) 17.5 16.6
Large Breweries 19 18
Avg # of Employees 11,622 11,424
0
100
200
300
400
500
600
2002 2003 2004 2005 2006
EUROPEAN EBITA PERFORMANCE US$m
EBITA US$m
12
Financial Highlights of Plzeňský Prazdroj, a.s.
Revenue: Growth of 4%, to CZK
13.55bn ≈ 573.6 US$m
Operating Profit: Growth of 11%
to CZK 4.62bn ≈ 195.6 US$m
Net Profit for the current period
after tax: Increase of 15% to
CZK 3.38bn ≈ 143 US$m
13
Revenues
Revenues from Sales in US$m
$468
$564
$574
2004
2005
2006
14
Profits: Year-Over-Year
135
105
180
128
195
143
0
50100
150200
250
300350
2004 2005 2006
Years ended 31 March
Profits US$m
Profit for the currentperiod after tax
Operating profit
15
0100020003000400050006000700080009000
10000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Financial year
Progress of Trading Income and Owner's Equity CZK millions
Trading Income Ow ner's Equity
CZK mil. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Trading Income 67 181 494 170 839 1 637 1 637 2 826 2 962 3 377
Owner's Equity 2 584 2 759 3 227 3 390 4 224 5 989 5 989 6 915 7 964 9 446
Progress of Trading Income and Owner’s Equity
16
Structure of Assets and Liabilities
Total 680.5(100%) Total 680.5(100%)
Receivables for Capital Subscription
0( 0%)
Equity 399.865(58.8%)
Fixed Assets 560.11(82.3%)
Liabilities 280.57(41.2%)
Current Assets 95.7(14.1%)
Other Liabilities 0,072(0%)
Other Current Assets 24.683(3.6%)
The fixed assets created the biggest part of total assets (82.3%), current assets made only
14.1 %. Concerning the liabilities structure you can see that the owner’s equity created the
more then half of total liabilities (58.8%).
17
Financial Ratios for the year ended 31 March 2006Profitability Ratios
Gross Profit Margin of Business Activity 27.96 %
Basic Earning Power Ratio (BEP) 28.76%
Return on Assets (ROA) 21.01 %
Return on Equity (ROE) 35.75 %
Return on Sales (ROS) 33 %
Return on Costs (ROC) 30%
Operating Ratio ( 1-ROS) 70%
Profitability ratios offer a glimpse into a company’s operational performance and help business owners determine if they are maximizing their bottom line.
All these ratios could be considered for the company as suitable and quite high.
18
Inventory Turnover10.69
Inventory Period34 days
Asset Turnover0.85
Receivables Turnover17.06
Average Collection Period21 days
Assets Turnover (Efficiency) Ratios
All these ratios are suitable because the periods are very short. The company does not have any problems with the inventory and collection of receivables.
The value of the Asset Turnover is quite low. The company should investigate the causes in order to improve it (by an increase in enterprise activity).
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Days 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Inventory Period 43 38 32 31 35 35 35 30 35 34
Average Collection Period 44 33 48 46 35 31 31 24 24 24
Progress of Inventory and Average Collection Period
Period
0
10
20
30
40
50
60
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Years ended 31 March
Day
s
Inventory Period Average Collection Period
20
Liquidity Ratios
Year 2002 2003 2004 2005 2006
Current Ratio 1.18 1.17 0.96 1.19 0.95
Minimum 1.5 1.5 1.5 1.5 1.5
Maximum 2.5 2.5 2.5 2.5 2.5
Current Ratio 0.95
Quick Ratio 0.42
Cash Ratio 0.01
Liquidity ratios focus on a company’s ability
to pay its bills when they come due.
All the liquidity ratios are relatively low.
Progress of Current Ratio for last 5 years:
Progress of Current Ratio for last 5 years:
Year 2002 2003 2004 2005 2006
Quick Ratio 0.56 0.66 0.44 0.54 0.42
Minimum 1 1 1 1 1
Maximum 1.5 1.5 1.5 1.5 1.5
21
Financial Leverage Ratios
Debt Ratio 41.24 %
Debt-to-Equity Ratio 70.18 %
Times – Interest –Earned Ratio 88.09 %
Leverage ratios indicate how well a company’s uses borrowed funds (rather than stockholders’ equity or investments) to expand its business.
The company’s debt is appropriate. The chart below shows the progress for the last ten years. Debt has been gradually decreased except in the years 1998 and 2005.
Percentage 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Debt Ratio 66 61 40 69 62 61 61 54 49 41
Debt Ratio
0
10
20
30
40
50
60
70
80
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Years ended 31 March
Per
cen
tag
eDebt Ratio
Thank You for Your Attention.
Questions?