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Monster Beverage Corp

Monster Beverage Corp. Founded in 1985 Previously known as Hansen Natural Corp Changed its name to Monster Beverage Corporation in Jan 2012 Headquartered in Corona, CA Takes up 1.4% of the market Gained volume in 2012 Competitors lost volume Two reportable segments

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Monster Beverage Corp

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  1. Monster Beverage Corp • Founded in 1985 • Previously known as Hansen Natural Corp • Changed its name to Monster Beverage Corporation in Jan 2012 • Headquartered in Corona, CA • Takes up 1.4% of the market • Gained volume in 2012 • Competitors lost volume • Two reportable segments • DSD took up 95.6% of sales • Warehouse took up 4.4% of sales

  2. Monster Beverage Corp • Brands include: • Monster Energy • Hansen’s • Peace Tea • Worx Energy • Blue Sky

  3. Monster Cont. • Largest seller of energy drinks in the US convenience store channel • Has a 34% market share matching Red Bull • Significant growth potential in international markets • Increase its share in noncarbonated drinks in US • The Coca Cola Company is its largest distributor • Coke could eventually seek higher economic rents • Company’s standard of corporate governance= average • CEO: Rodney Sacks

  4. Comparable Companies • 10k describes them as “alternative” beverage category • Combines non-carbonated RTD beverages with “new age” beverages • Top 3 Competitors control 88% of the market • The Coca-Cola Company • Dr. Pepper Snapple • PepsiCo • Monster Beverage

  5. Monster Balance Sheet

  6. Monster BS Cont.

  7. Monster BS Cont.

  8. Monster Income Statement

  9. Assumptions • EPM 17.7% • EATO 5.2 • Sales Growth Rate 6%

  10. Accounting Methods • All of the adjustments accounted for less than 1% of the change • For example with operating leases:

  11. Forecasting out to 2022

  12. DCF Model

  13. REI Model

  14. AEIG Model

  15. Recommendation • Mod 3 • Enterprise Value: $11.5B ($11,213 + $300 [NFL]) • Price per share: $67.55 • No. of Shares Outstanding: 166 million • Yahoo Key Statistics • Enterprise Value: $11.31B • AEIG/REI/DCF • Enterprise Value: $11.23B • Hold • Somewhat similar • Contrary to analysts who say to BUY

  16. Questions?

  17. Sources Cited • Photos from Google images • Yahoo Finance: MNST • http://www.beverage-digest.com/pdf/top-10_2013.pdf

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