Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Boston Beer Company<br />Group 4<br />Jose Aleman<br />Andrew Fulham<br />Scott Sorensen<br />Stephanie Soybel<br />Taylor...
Recommendation<br />We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these ...
Agenda	<br />Overview<br />Financials<br />Strategy<br />Valuation<br />3<br />
Boston Beer Company History<br />1984<br /><ul><li>Jim Koch founds Boston Beer</li></ul>1995<br /><ul><li>IPO at $20 per s...
Boston Beer FeelsCompetition from All Sides<br />Imports<br />Wine & Spirits<br />Craft Beers<br />Industry Leaders<br />O...
Consolidation ofDomestic Beer Production<br />Source: www.ibisworld.com<br />Overview<br />Financials<br />Strategy<br />V...
Domestic Beer Production is Decreasing<br />Source: www.ibisworld.com<br />Overview<br />Financials<br />Strategy<br />Val...
Boston Beer operates within the “Better Beer” category<br />Craft, Import, and Specialty Beer<br />20% of Domestic Beer Ma...
Craft Beer: Growth within Stagnation <br />Craft Beer experienced 12% growth in 2009<br />6th Straight year this category ...
Sierra Nevada
New Belgium</li></ul>Craft Beer drinkers are loyal to the Craft Beer Industry<br />Overview<br />Financials<br />Strategy<...
Boston Beer sells 2 of the top 3 Craft Beers<br />Top Selling US Craft Beers in 2009<br />1) Sierra Nevada Pale Ale<br />2...
3 Tier Distribution System<br />Brewery<br />Wholesalers<br />Retailers<br />Overview<br />Financials<br />Strategy<br />V...
Diverse Product Portfolio<br />Boston Beer Co. (SAM)<br />8 Flavored <br />Malt Beverages (13%)<br />1 Hard Cider (0.06%) ...
Current Market Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />13<br />
Market Opportunities and Risk<br />Overview<br />Financials<br />Strategy<br />Valuation<br />14<br />
Overview<br />Financials<br />Strategy<br />Valuation<br />15<br />
Historical Revenue Growth<br />Overview<br />Financials<br />Strategy<br />Valuation<br />16<br />
Projected Revenue<br />Overview<br />Financials<br />Strategy<br />Valuation<br />17<br />
Cost of Goods Sold<br />Overview<br />Financials<br />Strategy<br />Valuation<br />18<br />
Financial Analysis<br />Financial Analysis<br />Net profit margin of 7.5% in 2009<br />Boston Beer has no short or long te...
ABInbev:12.55%
SABMiller:10.6%</li></ul>Source: Global Business Browser<br />Overview<br />Financials<br />Strategy<br />Valuation<br />1...
Overview<br />Financials<br />Strategy<br />Valuation<br />20<br />
Competitive Strengths<br />Leadership built on scale, quality and branding<br />Consumer preferences are shifting towards ...
Threats<br />Increasingly competitive segment<br />Low switching costs among consumers<br />Intensified efforts from indus...
Opportunities<br />Geographic expansion<br />Domestic<br />International – Emerging markets<br />Risks<br />Direct competi...
Overview<br />Financials<br />Strategy<br />Valuation<br />24<br />
Discounted Cashflow Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />25<br />
Best and Worst Cases<br />Overview<br />Financials<br />Strategy<br />Valuation<br />26<br />
Sensitivity Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />27<br />
Sensitivity Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />28<br />
Recommendation<br />We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these ...
Appendices<br />30<br />
Five Forces Summary<br />31<br />
Larger Competition<br />AB Inbev<br />Shock Top<br />Colorado Native<br />Redhook<br />MillerCoors produces several craft ...
Assumptions<br />33<br />
Income Statement 2005-2014<br />Source: Global Business Browser / Reuters<br />34<br />
Balance Sheet 2005-2009<br />Source: Global Business Browser / Reuters<br />35<br />
Key Employees<br />36<br />
Upcoming SlideShare
Loading in …5
×

Samuel Adams %281%29

3,639 views

Published on

  • Be the first to comment

  • Be the first to like this

Samuel Adams %281%29

  1. 1. Boston Beer Company<br />Group 4<br />Jose Aleman<br />Andrew Fulham<br />Scott Sorensen<br />Stephanie Soybel<br />Taylor Williams<br />1<br />
  2. 2. Recommendation<br />We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these securities.<br />Current Market Price of $65.21<br />Increased competition will hinder revenue growth and company expansion <br />Market Growth within Industry Stagnation<br />2<br />
  3. 3. Agenda <br />Overview<br />Financials<br />Strategy<br />Valuation<br />3<br />
  4. 4. Boston Beer Company History<br />1984<br /><ul><li>Jim Koch founds Boston Beer</li></ul>1995<br /><ul><li>IPO at $20 per share</li></ul>2001<br /><ul><li>Twisted Tea launched</li></ul>2002<br /><ul><li>Sam Adams Light launched</li></ul>2007<br /><ul><li>Purchase of PA brewery</li></ul>2008<br /><ul><li>Product recall in April</li></ul>Overview<br />Financials<br />Strategy<br />Valuation<br />4<br />
  5. 5. Boston Beer FeelsCompetition from All Sides<br />Imports<br />Wine & Spirits<br />Craft Beers<br />Industry Leaders<br />Overview<br />Financials<br />Strategy<br />Valuation<br />5<br />
  6. 6. Consolidation ofDomestic Beer Production<br />Source: www.ibisworld.com<br />Overview<br />Financials<br />Strategy<br />Valuation<br />6<br />
  7. 7. Domestic Beer Production is Decreasing<br />Source: www.ibisworld.com<br />Overview<br />Financials<br />Strategy<br />Valuation<br />7<br />
  8. 8. Boston Beer operates within the “Better Beer” category<br />Craft, Import, and Specialty Beer<br />20% of Domestic Beer Market<br />Category profitability realized by Major Brewers<br />Samuel Adams is the largest domestic brewer and 3rd largest Brewer in the Better Beer Category<br />Overview<br />Financials<br />Strategy<br />Valuation<br />8<br />
  9. 9. Craft Beer: Growth within Stagnation <br />Craft Beer experienced 12% growth in 2009<br />6th Straight year this category has outperformed the Beer Industry<br />Major Craft Beers: <br /><ul><li>Sam Adams
  10. 10. Sierra Nevada
  11. 11. New Belgium</li></ul>Craft Beer drinkers are loyal to the Craft Beer Industry<br />Overview<br />Financials<br />Strategy<br />Valuation<br />9<br />
  12. 12. Boston Beer sells 2 of the top 3 Craft Beers<br />Top Selling US Craft Beers in 2009<br />1) Sierra Nevada Pale Ale<br />2) Samuel Adams Boston Lager<br />3) Sam Adams Seasonal <br />4) New Belgium Fat Tire Amber Ale<br />5) Shiner Bock<br />6) WidmerHefeweizen<br />7) Sam Adams Variety Pack<br />8) Sam Adams Lite<br />Source: Beverage Industry Magazine<br />Overview<br />Financials<br />Strategy<br />Valuation<br />10<br />
  13. 13. 3 Tier Distribution System<br />Brewery<br />Wholesalers<br />Retailers<br />Overview<br />Financials<br />Strategy<br />Valuation<br />11<br />
  14. 14. Diverse Product Portfolio<br />Boston Beer Co. (SAM)<br />8 Flavored <br />Malt Beverages (13%)<br />1 Hard Cider (0.06%) <br />20 Unique Beers (87%)<br />Overview<br />Financials<br />Strategy<br />Valuation<br />12<br />
  15. 15. Current Market Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />13<br />
  16. 16. Market Opportunities and Risk<br />Overview<br />Financials<br />Strategy<br />Valuation<br />14<br />
  17. 17. Overview<br />Financials<br />Strategy<br />Valuation<br />15<br />
  18. 18. Historical Revenue Growth<br />Overview<br />Financials<br />Strategy<br />Valuation<br />16<br />
  19. 19. Projected Revenue<br />Overview<br />Financials<br />Strategy<br />Valuation<br />17<br />
  20. 20. Cost of Goods Sold<br />Overview<br />Financials<br />Strategy<br />Valuation<br />18<br />
  21. 21. Financial Analysis<br />Financial Analysis<br />Net profit margin of 7.5% in 2009<br />Boston Beer has no short or long term debt<br /><ul><li>Can finance its own capital expenditures
  22. 22. ABInbev:12.55%
  23. 23. SABMiller:10.6%</li></ul>Source: Global Business Browser<br />Overview<br />Financials<br />Strategy<br />Valuation<br />19<br />
  24. 24. Overview<br />Financials<br />Strategy<br />Valuation<br />20<br />
  25. 25. Competitive Strengths<br />Leadership built on scale, quality and branding<br />Consumer preferences are shifting towards premium beer<br />Agreements with suppliers and distributors yield stability and predictability.<br />Overview<br />Financials<br />Strategy<br />Valuation<br />
  26. 26. Threats<br />Increasingly competitive segment<br />Low switching costs among consumers<br />Intensified efforts from industry leaders to penetrate the market<br />Low barriers to entry at the microbrewer level<br />Need to increase differentiation from premium products in wine and spirits industry<br />Overview<br />Financials<br />Strategy<br />Valuation<br />
  27. 27. Opportunities<br />Geographic expansion<br />Domestic<br />International – Emerging markets<br />Risks<br />Direct competition with regional brewers<br />Competition with major industry leaders <br />Product diversification<br />23<br />Overview<br />Financials<br />Strategy<br />Valuation<br />
  28. 28. Overview<br />Financials<br />Strategy<br />Valuation<br />24<br />
  29. 29. Discounted Cashflow Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />25<br />
  30. 30. Best and Worst Cases<br />Overview<br />Financials<br />Strategy<br />Valuation<br />26<br />
  31. 31. Sensitivity Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />27<br />
  32. 32. Sensitivity Analysis<br />Overview<br />Financials<br />Strategy<br />Valuation<br />28<br />
  33. 33. Recommendation<br />We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these securities.<br />Current Market Price of $65.21<br />Increased competition will hinder company expansion <br />Market Growth within Industry Stagnation<br />29<br />
  34. 34. Appendices<br />30<br />
  35. 35. Five Forces Summary<br />31<br />
  36. 36. Larger Competition<br />AB Inbev<br />Shock Top<br />Colorado Native<br />Redhook<br />MillerCoors produces several craft beers<br /> Blue Moon<br />Henry Weinhard<br />Leinenkugel<br />32<br />
  37. 37. Assumptions<br />33<br />
  38. 38. Income Statement 2005-2014<br />Source: Global Business Browser / Reuters<br />34<br />
  39. 39. Balance Sheet 2005-2009<br />Source: Global Business Browser / Reuters<br />35<br />
  40. 40. Key Employees<br />36<br />
  41. 41. SWOT<br /><ul><li>Strengths
  42. 42. Strong recent financial performance
  43. 43. Robust network of breweries for local distribution
  44. 44. Diversified in products and geographical distribution
  45. 45. Strong market position
  46. 46. Expanding market share
  47. 47. Strong growth prospects
  48. 48. Weaknesses
  49. 49. Much smaller player than most competitors
  50. 50. Declining profitability
  51. 51. Limited liquidity position
  52. 52. Low return on equity
  53. 53. Product recalls
  54. 54. Opportunities
  55. 55. Focused strategy on reducing
  56. 56. Dependencies on other brewers
  57. 57. Production expansion
  58. 58. Growing craft beer market
  59. 59. Threats
  60. 60. Changing consumer preferences
  61. 61. Limitations on advertising
  62. 62. Stringent governmental regulations
  63. 63. Consolidation in beer industry</li></ul>37<br />
  64. 64. Financial Ratios<br />Source: Global Business Browser<br />38<br />
  65. 65. Final Notes<br />A large amount of information in this presentation was taken from the Boston Beer Company 2009 10k<br />39<br />
  66. 66. Sensitivity Analysis<br />40<br />

×