Monster Beverage Q3 2024 $MNST (+1,28%)

Financial performance:

• Net sales: Net sales increased 1.3% to $1.88 billion in the third quarter of 2024, compared to $1.86 billion in the prior year. For the first nine months of 2024, net sales increased 5.0% to USD 5.68 billion, reflecting moderate growth.
• Net income: Net income decreased by 18.1% to USD 370.9 million in the third quarter of 2024, compared to USD 452.7 million in the same quarter of 2023. Adjusted net income decreased by 8.8% to USD 392.4 million.
• EBITDA and operating result: Although no explicit EBITDA is provided, operating income decreased to USD 479.9 million from USD 510.5 million in the third quarter of 2023, indicating increased costs or decreasing efficiency.

Balance sheet overview:

• Assets: As of September 30, 2024, total assets were USD 8.05 billion, compared to USD 9.69 billion as of December 31, 2023, indicating a significant decrease.
• Liabilities: Current liabilities amounted to USD 1.25 billion, a healthy figure compared to total assets.
• Equity: Shareholders' equity amounted to USD 5.78 billion, indicating a stable financial base.

Income structure:

• Main revenue drivers: The main revenue drivers are from the Monster Energy® Drinks, Strategic Brands and Alcohol Brands segments.
• Cost of sales: Cost of sales for the third quarter of 2024 amounted to USD 881.2 million.
• Margins: Gross profit margin as a percentage of net sales was 53.2%, slightly improved from 53.0% in the third quarter of 2023, indicating a slight improvement in efficiency.

Cash flow overview:

No specific details on cash flows from operating, investing or financing activities were provided, making it difficult to assess liquidity.

Key ratios and profitability metrics:

• Net income margin: Net income margin was 19.7% in Q3 2024, demonstrating a healthy net income to revenue ratio.
• Other key figures: Historical data on other key metrics such as ROIC, ROE and leverage are missing, making it difficult to assess long-term profitability.

Segment information:

• Monster Energy® Drinks: Sales increased by 0.8% to USD 1.72 billion, keeping the core business stable.
• Strategic Brands: Sales in this segment increased by an impressive 14.0% to USD 112.6 million.
• Alcohol Brands: Sales fell by 6.0% to USD 39.8 million, which is a challenge.

Competitive Position:

The company noted that the energy drink category is growing globally, but at a slower rate in the US convenience channel.

Forecasts and management comments:

• Price increase: A price increase of approximately 5.0% has been implemented for certain brands from November 1, 2024, which could strengthen margins in the short term.
• Growth potential: Management sees growth opportunities in household penetration and per capita consumption, particularly through international expansion and innovation.

Risks and opportunities:

• Risks: The risks include unfavorable exchange rates and a tense consumer environment, which could have a negative impact on sales development.
• Opportunities: Growth potential lies in innovation and expansion on international markets, which can strengthen the market position.

Summary of results:

Positive aspects:

Net sales growth: Record sales growth of 1.3% in the third quarter, despite challenging conditions.

Strong growth in the Strategic Brands segment: An increase of 14.0% demonstrates the successes in this emerging business area.

Improved gross profit margin: The slight improvement to 53.2% shows stability and efficiency.

Growth in international business: Sales outside the USA increased by 3.6%, underlining the success of the global expansion strategy.

Innovative strength: New product launches such as Monster Energy® Ultra Vice Guava™ were positively received by consumers, strengthening the market position.

Negative aspects:

Decline in net result: An 18.1% decline in net profit shows challenges in profitability.

Decrease in operating profit: Operating profit fell to USD 479.9 million, indicating rising costs or weaker revenues.

Decline in Alcohol Brands segment: A 6.0% decline in sales indicates difficulties in this segment.

Higher operating expenses: Operating expenses increased as a percentage of net sales, impacting profitability.

Exchange rate impact: Unfavorable exchange rates impacted net sales and could continue to be a challenge.