Anheuser-Busch InBev SA/NV

Dominant global brewer with a wide moat and huge cash generation, but flat revenue and only moderate returns.

Strengths

• FCF $11.2B (98.8th pct) and operating margin 26% (90.1st pct) — scale and pricing power
• Net margin 14.3% (79.1st pct) with NI growth 14.3% (60.9th pct)

Risks

• Revenue flat/declining (-0.7%, 29.3rd pct) — a real top-line stall
• ROE 8.7% (57th pct) and ROIC 7.1% (61.9th pct) are only mid-pack
• Leverage (D/E 70.4th pct) and EM currency/inflation exposure

Notable findings

• Weak liquidityCurrent ratio 0.72 (<1)
• Strong balance sheetStrong balance sheet — $11.6B cash & investments
• China exposure• If we do not successfully comply with applicable anti-corruption laws, export control regulations and trade restrictions, we could become subject to fines, penalties or other regulatory sanctions