巴克莱-全球-消费品行业-全球必需品消费：Q2行业会议前的300+个管理问题-2019.6.5-104页.pdf

Equity Research 5 June 2019 CORE Barclays Capital Inc.and/or one of its affiliates does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 97.Restricted-Internal Global Consumer Staples 300+questions for management ahead of Q2 and industry conferences In this note,we publish our questions for management ahead of the Q2 reporting season and industry conferences.As interactions with companies step up over the coming weeks,we take the opportunity to set out the key questions.For further detail on the sectors and stocks,below are the links to the initiations across Beverages,Food,Food Ingredients,HPC,Cannabis and Global Tobacco.European Beverages:Identifying global premium growth European Food Producers:Disrupting the disrupters European Consumer Ingredients:Winners in the food revolution European HPC:The search for sustainable growth Global Cannabis:Slow Burn Toward Legalization Tobacco:Accelerating disruption,uncertain regulation INDUSTRY UPDATE European Consumer Staples NEUTRAL Unchanged U.S.CHPC&Beverages NEUTRAL Unchanged U.S.Food NEUTRAL Unchanged European Consumer Staples Warren Ackerman+44(0)20 3134 1903 Barclays,UK Arthur Reeves+44(0)20 7773 3622 Barclays,UK Iain Simpson+44(0)20 7773 3616 Barclays,UK Laurence Whyatt+44(0)20 7773 5324 Barclays,UK Ewan Mitchell+44(0)20 3134 3724 Barclays,UK Gaurav Jain+44(0)20 3555 2501 Barclays,UK U.S.CHPC&Beverages Lauren R.Lieberman+1 212 526 3112 BCI,US U.S.Food Andrew Lazar+1 212 526 4668 BCI,US Barclays|Global Consumer Staples 5 June 2019 2 CONTENTS BEVERAGES.4 AG Barr(UW,720p PT).4 AB InBev(EW,85 PT).6 Britvic(EW,1000p PT).8 Carlsberg(OW,DKK 1033 PT).10 Coca-Cola Hellenic(OW,3150p PT).12 Campari(EW,9.40 PT).14 Diageo(OW,3,700p PT).16 Heineken(OW,111 PT).18 Pernod-Ricard(OW,200 PT).20 Rmy Cointreau(EW,127 PT).22 CONSUMER INGREDIENTS.24 Bakkavor(UW,125p PT).24 Barry Callebaut(OW,CHF 2100 PT).26 Chr.Hansen(OW,DKK 800 PT).28 Glanbia(EW,16 PT).30 Greencore(UW,205p PT).32 Kerry(EW,105 PT).34 Tate&Lyle(OW,850p PT).36 FOOD.38 ABF(OW,3,400p PT).38 Danone(OW,82 PT).40 Lindt(UW,CHF67,700 PT).42 Nestl(OW,CHF106 PT).44 Unilever(UW,46 PT).46 HPC.49 Beiersdorf(OW,110 PT).49 Essity(UW,SEK 250 PT).51 Henkel(EW,93 PT).53 LOral(EW,260 PT).55 Ontex(EW,15.10 PT).57 Reckitt Benckiser(OW,7500p PT).59 TOBACCO.61 Altria(OW,$64 PT).61 British American Tobacco(OW,GBp 4,000 PT).63 Imperial Brands(OW,GBp 3,000 PT).65 Japan Tobacco(UW,$10 PT).67 Philip Morris(EW,$82 PT).69 Swedish Match(OW,SEK 530 PT).71 U.S.CHPC&BEVERAGES.73 Barclays|Global Consumer Staples 5 June 2019 3 Brown-Forman(EW,PT$51).73 Church&Dwight Co.,Inc.(UW,PT$63).75 Clorox Company(EW,PT$142).77 Coca-Cola European Partners(OW,PT$59).79 Colgate-Palmolive(EW,PT$68).81 International Flavors&Fragrances(UW,$122 PT).83 Procter&Gamble(OW,$116 PT).85 The Coca-Cola Company(OW,PT$53).87 U.S.FOOD.89 General Mills(OW,$49 PT).89 Mondelez International(OW,$55 PT).91 Nomad Foods(OW,$24 PT).93 Barclays|Global Consumer Staples 5 June 2019 4 BEVERAGES AG Barr(UW,720p PT)Investment case For AG Barr we forecast 2%to 3%top-line growth with Irn Bru moving further south and Rubicon Springs development.However,with the prospect of little continued margin expansion,we estimate only mid-single-digit EPS growth,which we do not see as worthy of a valuation premium.We put it on a-5%discount to the beverages sector(on par with wider Consumer Staples)in a comparative PE exercise,which uses CY19 P/E expectations and our CY20 earnings forecasts.10 Questions for management 1.Where do you think the Irn Bru brand could be in 10 years?2.Will you look to implement your local delivery routes in England as you have in Scotland?3.Do you see more or less fragmentation in the consumer over the next five years?4.Barriers to entry have come down,do you think that route to market has become a more significant barrier with the ability to meet convenience a strength of the larger companies?5.What do you think your optimal margin is?6.How do you view direct to consumer?An opportunity or increased logistics away from your core?7.Is there a critical volume that when reached you would consider bringing Funkin production in house?8.Is geographic expansion on your mind or is better execution in your current markets the only priority?9.What are the return hurdles that you look to meet when identifying an acquisition?10.Would the family fully participate in any further share buybacks?European Consumer Staples:Beverages Ewan Mitchell+44(0)203 134 3724 Barclays,UK Laurence Whyatt+44(0)20 7773 5324 Barclays,UK Barclays|Global Consumer Staples 5 June 2019 5 European Consumer Staples Industry View:NEUTRAL A.G.Barr PLC(BAG.L)Stock Rating:UNDERWEIGHT Income statement(mn)2019A 2020E 2021E 2022E CAGR Price(04-Jun-2019)GBp 933 Price Target GBp 720 Why Underweight?Irn Bru is moving further south and Rubicon Spring is developing noticeably.However,with the prospect of little continued margin expansion,we do not see as worthy of a valuation premium.Upside case GBp 810 There is potential for AG Barr to outperform the UK market,taking significant share and growing well ahead of competitors.Competitor disruption cannot be ruled out after last years CO2 shortage.Being the subject of M&A activity would also put a substantial premium.Downside case GBp 600 We believe a sharp downturn in the UK consumer as a result of continued Brexit uncertainty has the potential to cause a slowdown in the soft drinks industry,with the added potential of supply chain issues and vilification of the sugar in soft drinks.Upside/Downside scenarios Revenue 279 285 294 304 2.9%EBITDA(adj)55 56 58 60 3.1%EBIT(adj)46 47 48 50 2.9%Pre-tax income(adj)45 47 48 50 3.2%Net income(adj)36 38 39 40 3.2%EPS(adj)(GBp)32.0 33.2 34.7 36.3 4.3%Diluted shares(mn)113.8 113.0 111.5 110.2-1.1%DPS(GBp)16.64 17.60 18.40 19.24 5.0%Margin and return data Average EBITDA(adj)margin(%)19.6 19.7 19.7 19.7 19.7 EBIT(adj)margin(%)16.4 16.4 16.4 16.4 16.4 Pre-tax(adj)margin(%)16.2 16.3 16.3 16.3 16.3 Net(adj)margin(%)13.0 13.2 13.2 13.2 13.1 ROA(%)12.8 12.6 12.7 12.7 12.7 ROE(%)17.7 17.6 17.6 17.5 17.6 ROCE(%)17.9 17.7 17.6 17.5 17.7 Cash flow and balance sheet(mn)CAGR Cash flow from operations 45 46 48 49 3.2%Cash flow from investing-9-11-12-12 N/A Cash flow from financing-29-32-31-31 N/A Capital expenditure-9-11-12-12 N/A Equity free cash flow 36 35 36 37 1.2%Tangible fixed assets 95 99 102 106 3.6%Intangible fixed assets 103 102 100 99-1.4%Cash and equivalents 22 25 31 36 18.5%Total assets 298 305 315 326 3.0%Short and long-term debt 0 0 0 0 N/A Total liabilities 89 89 91 93 1.6%Shareholders equity 210 216 224 233 3.5%Net debt/(funds)-22-25-31-36 N/A Valuation and leverage metrics Average P/E(adj)(x)29.2 28.1 26.9 25.7 27.5 EV/sales(x)3.8 3.7 3.6 3.4 3.6 EV/EBITDA(adj)(x)19.3 18.7 18.0 17.4 18.3 EV/EBIT(adj)(x)23.0 22.4 21.6 20.8 22.0 Equity FCF yield(%)3.4 3.3 3.4 3.6 3.4 P/BV(x)5.1 4.9 4.6 4.4 4.7 Dividend yield(%)1.8 1.9 2.0 2.1 1.9 Net debt/EBITDA(adj)(x)-0.4-0.4-0.5-0.6-0.5 Selected operating metrics Average Organic growth(%)5.6 2.2 3.2 3.3 3.6 Tax rate(%)19 19 19 19 19 Capex/sales(%)3.2 4.0 4.0 4.0 3.8 Source:Company data,Barclays Research Note:FY End Jan Barclays|Global Consumer Staples 5 June 2019 6 AB InBev(EW,85 PT)Investment case With the bulk of ABIs US beer offering being mainstream,we are concerned with its positioning against the trends of beer premiumisation and spirits gaining share from beer.We view Latin America as a difficult market,with Brazil experiencing sustained economic problems.However,we note Mexico represents an opportunity.Mexican beer growth shows no signs of slowing,and we view ABIs access to Oxxo store distribution as a positive.Following the acquisition of SABMiller,ABI roll out of premium beers in South Africa is going well.Although,high per capita consumption in mainstream beer presents limited potential for volume growth.We also note the limited scope for additional large-scale M&A,which has been a source of growth in the past.We value ABI at a 20%discount to the beverage sector,as we view its 3-4%top-line growth and 30-40bps to be below the majority of beverages stocks.10 Questions for management 1.What can be done to stem the declines in the US?The marketing campaigns appear to gain critical acclaim,but sell no more beer?Is a structural rethink required?2.How important is craft to your US portfolio?3.CCU is opening a brewery in Colombia where you have a monopolistic position.How are you responding to the threat?4.What impact would the ability to sell in Oxxo stores have on your Mexican business?Are beer sales growing in this channel,or are you simply taking share?5.How will the growth of the value channel in Brazil affect your margins in the region?Can you maintain cost savings to offset this?6.How has your Russian operation changed since the JV creation with Efes?What is your view on regulatory changes in the region?7.Is your premium position in China secure in the light of the Heineken investment into CRSnow?What changes are you seeing in the region?8.Following the acquisition of SABMiller,how is the brand portfolio changing in the South African market?Why do you need a portfolio of premium brands?Where is the balance of required advertising spend to maintain many premium brands struck?9.If the Castel African assets(in which you own a 20%stake)were to become available,would you look to exercise your right of first refusal on the assets?If so,how could you fund a deal?Would it require an equity issuance?What is your maximum level of net debt/EBITDA that you would be comfortable with?10.Other than Castel,there doesnt appear to be any more available beer assets of any size.Is your model of acquisition in the beer world broken?Would you consider expanding your soft drinks or spirits offering by acquisition?European Consumer Staples:Beverages Laurence Whyatt+44(0)20 7773 5324 Barclays,UK Ewan Mitchell+44(0)203 134 3724 Barclays,UK Barclays|Global Consumer Staples 5 June 2019 7 European Consumer Staples Industry View:NEUTRAL Anheuser-Busch InBev(ABI.BR)Stock Rating:EQUAL WEIGHT Income statement($mn)2018A 2019E 2020E 2021E CAGR Price(04-Jun-2019)EUR 74.30 Price Target EUR 85.00 Why Equal Weight?With a challenged market for mainstream beer and political and economic uncertainty in some of ABIs emerging markets,we are sceptical about the chances of a near-term share price recovery.However,the business has a good track record of cost-cutting and acquisitions,so we dont anticipate a material decline in profitability.Upside case EUR 98.60 Recovery in emerging markets,particularly Brazil and South Africa.We expect capitalization of the route to market in Oxxo stores in Mexico,and an acceleration of sales in China.Downside case EUR 71.40 Further deterioration of the mainstream US beer market with continued weakness in emerging markets.No opportunities for acquisitions emerge and overhang of locked-in shares weigh on the share price.Upside/Downside scenarios Revenue 54,636 55,101 57,670 60,801 3.6%EBITDA(adj)22,076 23,030 24,402 25,781 5.3%EBIT(adj)17,825 18,740 19,898 21,013 5.6%Pre-tax income(adj)8,534 15,121 15,766 17,173 26.2%Net income(adj)6,797 9,800 10,208 11,176 18.0%EPS(adj)($)3.44 4.96 5.17 5.66 18.0%Diluted shares(mn)1,975.0 1,975.0 1,975.0 1,975.0 0.0%DPS($)1.80 2.29 2.33 2.55 12.3%Margin and return data Average EBITDA(adj)margin(%)40.4 41.8 42.3 42.4 41.7 EBIT(adj)margin(%)32.6 34.0 34.5 34.6 33.9 Pre-tax(adj)margin(%)15.6 27.4 27.3 28.2 24.7 Net(adj)margin(%)12.4 17.8 17.7 18.4 16.6 ROA(%)6.0 7.3 7.9 8.4 7.4 ROE(%)9.4 15.2 14.6 14.8 13.5 ROCE(%)7.7 9.0 9.7 10.4 9.2 Cash flow and balance sheet($mn)CAGR Cash flow from operations 14,662 15,486 16,140 17,442 6.0%Cash flow from investing-4,979-3,582-3,749-3,952 N/A Cash flow from financing-7,755-4,521-4,594-5,029 N/A Capital expenditure-4,649-3,582-3,749-3,952 N/A Equity free cash flow 8,085 4,521 4,594 5,029-14.6%Tangible fixed assets 25,910 26,037 26,340 26,833 1.2%Intangible fixed assets 133,311 133,311 133,311 133,311 0.0%Cash and equivalents 7,074 7,074 7,074 7,074 0.0%Total assets 232,103 231,230 231,313 231,659-0.1%Short and long-term debt 109,800 102,417 94,619 86,158-7.8%Total liabilities 160,199 152,410 145,421 138,089-4.8%Shareholders equity 64,486 69,765 75,379 81,526 8.1%Net debt/(funds)102,462 95,079 87,281 78,820-8.4%Valuation and leverage metrics Average P/E(adj)(x)24.2 16.8 16.1 14.7 17.9 EV/sales(x)4.9 4.8 4.4 4.0 4.5 EV/EBITDA(adj)(x)12.2 11.4 10.4 9.5 10.9 EV/EBIT(adj)(x)15.1 14.0 12.8 11.7 13.4 Equity FCF yield(%)4.9 2.8 2.8 3.1 3.4 P/BV(x)2.5 2.4 2.2 2.0 2.3 Dividend yield(%)2.2 2.8 2.8 3.1 2.7 Net debt/EBITDA(adj)(x)4.6 4.1 3.6 3.1 3.9 Selected operating metrics Average Organic growth(%)4.6 5.1 5.2 5.4 5.1 Tax rate(%)27 26 26 26 26 Capex/sales(%)8.5 6.5 6.5 6.5 7.0 Source:Company data,Barclays Research Note:FY End Dec Barclays|Global Consumer Staples 5 June 2019 8 Britvic(EW,1000p PT)Investment case For Britvic we forecast 2-3%top-line growth over the next three years and organic margin expansion of 20-50bps.This results in our estimates of mid-single-digit EPS growth,in line with the wider sector.We therefore put it on a-30%discount to the beverages sector(-25%to wider Consumer Staples)in a comparative PE exercise in line with its 10-year historical average.This is using 12-month PE expectations and our 24-month earnings forecasts.We back this up with a SOTP.10 Questions for management 1.How are Fruit Shoot and London Essence growing in the US?2.What do you think the long-term outlook for Fruit Shoot entails?3.How fast do you expect private label to decline in France in the coming years?4.Do you see yourself entering the wider soft drinks market in France?5.How do you view the rapidly growing presence of no and low alcohol beer?6.How do you intend to manage the impact of a consumer deposit scheme on your PET products?Given the young target demographic of Fruit Shoot do you think that return rates will be lower and there for impact sales?7.As Brazil grows where do you see the next areas for investment?8.How is the relationship with Pepsi and should we be concerned about negotiation of the bottling contract in the coming years?9.At what level do you think your balance sheet becomes inefficient and will you return capital to shareholders in the absence of attractive M&A opportunities?10.Where do you feel are the greatest areas for expansion in the Britvic portfolio and will you look to add this in the near future?European Consumer Staples:Beverages Ewan Mi