Analysis of Reportable Segments
Monster Beverage Corp. operates in 4 segments: Monster Energy® Drinks; Strategic Brands; Alcohol Brands; and Other.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Segment Profit Margin
Monster Beverage Corp., profit margin by reportable segment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Monster Energy® Drinks | |||||
| Strategic Brands | |||||
| Alcohol Brands | |||||
| Other |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Monster Energy® Drinks Segment Profit Margin
- The profit margin demonstrated a fluctuating trend over the analyzed period. Beginning at 40.14% in 2019, it peaked at 42.29% in 2020, indicating an improvement. However, the margin declined sharply in the following years, dropping to 38.16% in 2021 and further down to 31.77% in 2022. There was a slight recovery observed in 2023 with a margin increase to 35.73%, although it remained below the 2019 and 2020 levels.
- Strategic Brands Segment Profit Margin
- This segment's profit margin showed a generally downward trend throughout the period. Starting at 59.67% in 2019, the margin decreased slightly to 58.21% in 2020, with a modest increase to 58.94% in 2021. From 2021 onwards, the margin consistently declined, reaching 55.97% in 2022 and further declining to 55.02% in 2023. Despite the decrease, Strategic Brands maintained the highest profit margin among the segments presented.
- Alcohol Brands Segment Profit Margin
- Profit margin data for this segment is available only for 2022 and 2023, and both values are negative indicating losses. The margin was -31.33% in 2022, which deteriorated further to -44.04% in 2023. This reflects significant and increasing unprofitability in this segment during the reported period.
- Other Segment Profit Margin
- The Other segment exhibited variable profit margin performance. Initially, the margin increased from 16.72% in 2019 to 21.94% in 2020, followed by a notable rise to 26.76% in 2021. However, there was a pronounced decline in 2022 to 13.25%, with a partial rebound to 15.37% in 2023. Overall, margins fluctuated considerably but ended below the peak levels noted in 2021.
- Summary of Trends
- Across the segments, the Strategic Brands segment consistently maintained the highest profit margins despite a gradual decline. The Monster Energy® Drinks segment showed an early strength with a peak in 2020 but experienced a significant drop thereafter, though with some recovery in 2023. The Alcohol Brands segment revealed substantial challenges with negative margins increasing over time, suggesting rising losses. The Other segment's margins were volatile, indicating instability or varying performance factors impacting profitability in this category.
Segment Profit Margin: Monster Energy® Drinks
Monster Beverage Corp.; Monster Energy® Drinks; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Income before tax | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Income before tax ÷ Net sales
= 100 × ÷ =
The financial results for the reportable segment of Monster Energy® Drinks demonstrate notable movements over the five-year period ending December 31, 2023. Overall, the segment exhibits growth in both net sales and income before tax, although the segment profit margin shows variability with a downward trend followed by partial recovery in the last year.
- Income Before Tax
- Income before tax increased from $1,567,022 thousand in 2019 to $2,342,355 thousand in 2023. After steadily rising from 2019 through 2021, reaching nearly $1.99 billion, income before tax experienced a decline in 2022 to $1.85 billion. However, it rebounded significantly in 2023, surpassing prior years and reaching the highest value in the observed timeframe.
- Net Sales
- Net sales have consistently grown year-over-year, expanding from $3,904,029 thousand in 2019 to $6,555,089 thousand in 2023. This steady increase indicates strong top-line performance, with particularly pronounced growth occurring after 2020, when sales jumped from approximately $4.3 billion to over $6.5 billion by 2023.
- Segment Profit Margin
- The segment profit margin started at 40.14% in 2019, increasing slightly to 42.29% in 2020. From 2020 onwards, the margin declined notably to 38.16% in 2021 and continued to fall to 31.77% in 2022. In 2023, the margin experienced a partial recovery, rising to 35.73%. Despite this rebound, the margin remained below the initial years, suggesting a potential increase in operating costs or other expenses relative to sales during the middle of the period.
In summary, the segment shows healthy revenue growth and substantial income before tax gains over five years. The profit margin trend implies pressure on profitability margins during the middle years, followed by some improvement in the final year observed. These dynamics may point to strategic adjustments or changing cost structures impacting profitability despite increasing sales volumes.
Segment Profit Margin: Strategic Brands
Monster Beverage Corp.; Strategic Brands; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Income before tax | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Income before tax ÷ Net sales
= 100 × ÷ =
The analysis of the financial data for the "Strategic Brands" segment over the five-year period reveals several noteworthy trends and patterns.
- Income Before Tax
- There is a general upward trend in income before tax, which increased from $164,049 thousand in 2019 to $207,202 thousand in 2023. Despite a slight decline in 2020, income before tax recovered and grew consistently, reaching the highest value in 2023.
- Net Sales
- Net sales exhibited a rising trend over the period, with a dip in 2020 from $274,925 thousand to $266,354 thousand, followed by steady growth thereafter. By 2023, net sales reached $376,589 thousand, representing a significant increase compared to 2019.
- Segment Profit Margin
- The segment profit margin showed a gradual decline over the five years, starting at 59.67% in 2019 and decreasing annually to 55.02% in 2023. This indicates a reduction in profitability relative to sales, despite the growth in absolute income before tax and net sales.
Overall, the segment demonstrated strong revenue growth and increasing income before tax, albeit with a decreasing profit margin percentage. This suggests that while the segment is expanding in absolute terms, certain costs or pricing pressures may be affecting efficiency or profitability ratios.
Segment Profit Margin: Alcohol Brands
Monster Beverage Corp.; Alcohol Brands; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Income before tax | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Income before tax ÷ Net sales
= 100 × ÷ =
- Net Sales
- The net sales in the segment demonstrated significant growth between 2022 and 2023. Starting from a value of 101,405 thousand US dollars in 2022, net sales increased substantially to 184,855 thousand US dollars in 2023, reflecting a strong upward trajectory in revenue generation within the segment.
- Income Before Tax
- Income before tax shows negative values in the available years, with a loss of 31,772 thousand US dollars recorded in 2022, which worsened to a larger loss of 81,405 thousand US dollars in 2023. This indicates an increasing pre-tax loss over the observed period, suggesting growing expenses or other factors adversely affecting profitability despite rising sales.
- Segment Profit Margin
- The segment profit margin was negative in the periods with available data, declining from -31.33% in 2022 to -44.04% in 2023. This downward trend denotes a worsening profitability ratio, highlighting that losses deepened as a proportion of net sales year over year.
- Summary
- In summary, the segment experienced strong sales growth from 2022 to 2023; however, this revenue growth was accompanied by increasing losses and deteriorating profit margins. The imbalance between sales growth and profitability suggests cost or expense issues that outpaced revenue increases, leading to a substantial decline in overall financial performance within the Alcohol Brands segment during this period.
Segment Profit Margin: Other
Monster Beverage Corp.; Other; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Income before tax | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Segment profit margin = 100 × Income before tax ÷ Net sales
= 100 × ÷ =
- Income Before Tax
- The income before tax shows an upward trend from 2019 to 2021, increasing from 3,655 thousand US dollars to a peak of 6,935 thousand US dollars. However, in 2022, there is a significant decline to 3,041 thousand US dollars, followed by a slight recovery in 2023 to 3,610 thousand US dollars. Despite the recovery, the income before tax in 2023 remains substantially lower than the peak in 2021.
- Net Sales
- Net sales increased from 21,865 thousand US dollars in 2019 to 27,038 thousand US dollars in 2020, marking the highest sales in the observed period. In 2021, net sales decreased to 25,917 thousand US dollars and continued to decline in 2022, reaching 22,944 thousand US dollars. In 2023, net sales showed a slight improvement to 23,494 thousand US dollars, although still below the earlier peak years.
- Segment Profit Margin
- The segment profit margin exhibited considerable volatility over the period. Starting at 16.72% in 2019, it improved significantly in 2020 and 2021 to 21.94% and 26.76%, respectively. This indicates an enhancement in profitability efficiency during these years. However, in 2022 the segment profit margin sharply deteriorated to 13.25%, which is nearly half of the 2021 level, followed by a modest increase to 15.37% in 2023. Despite the partial recovery, the profit margin remains well below the peak years.
Net sales
Monster Beverage Corp., net sales by reportable segment
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Monster Energy® Drinks | |||||
| Strategic Brands | |||||
| Alcohol Brands | |||||
| Other | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Monster Energy® Drinks
- There is a consistent and notable upward trend in net sales from 2019 to 2023. Sales increased from approximately $3.9 billion in 2019 to about $6.56 billion in 2023. This represents a strong growth trajectory, with year-over-year increases each period. The most significant absolute increase occurred between 2022 and 2023.
- Strategic Brands
- Net sales in this segment showed fluctuations but generally an increasing trend over the five-year period. Sales slightly declined from around $275 million in 2019 to approximately $266 million in 2020, followed by steady growth through 2023, reaching roughly $377 million. The recovery and growth post-2020 indicate an improving performance in this segment.
- Alcohol Brands
- Data for Alcohol Brands begin in 2022, showing initial sales of approximately $101 million, which increased significantly to about $185 million in 2023. This rapid growth in a new segment suggests a recent expansion strategy that is gaining traction, contributing meaningfully to total net sales.
- Other
- Sales in the Other category have remained relatively stable, with minor fluctuations over the years. Starting from around $22 million in 2019, peaking near $27 million in 2020, and then decreasing slightly in subsequent years to approximately $23 million in 2023, indicating a steady but non-growth focused category.
- Total Net Sales
- Total net sales have shown substantial growth from 2019 through 2023, rising from about $4.2 billion to $7.14 billion. The total increase reflects the combined positive contributions from Monster Energy® Drinks, Strategic Brands, and the introduction and growth of Alcohol Brands. The data indicate a robust overall sales growth performance with diversification into new segments contributing to this upward trend.
Income before tax
Monster Beverage Corp., income before tax by reportable segment
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Monster Energy® Drinks | |||||
| Strategic Brands | |||||
| Alcohol Brands | |||||
| Other | |||||
| Corporate and unallocated | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Monster Energy® Drinks
- The income before tax from Monster Energy® Drinks exhibited an overall upward trend from 2019 to 2023. Starting at approximately 1.57 billion US dollars in 2019, the figure increased steadily through 2020 and 2021, peaking above 1.99 billion US dollars in 2021. In 2022, there was a decline to about 1.85 billion US dollars, followed by a significant rebound to approximately 2.34 billion US dollars in 2023, indicating strong recovery and growth.
- Strategic Brands
- The Strategic Brands segment showed moderate, consistent growth over the five-year period. Income before tax rose from around 164 million US dollars in 2019 to over 207 million US dollars in 2023. The growth was steady with minor year-to-year variations, reflecting stable performance and incremental expansion in this segment.
- Alcohol Brands
- The Alcohol Brands segment only reported income starting in 2022, where a negative figure of approximately -31.7 million US dollars was recorded, worsening to nearly -81.4 million US dollars in 2023. This suggests increasing losses in this segment over the two reported years, indicating challenges or investments that have yet to generate positive returns.
- Other
- The Other category displayed relatively minor fluctuations throughout the period, with values generally below 7 million US dollars. The income peaked in 2021 at nearly 6.9 million US dollars and dropped to about 3 million in 2022, followed by a slight increase in 2023. These modest variations suggest limited but consistent contributions from this category.
- Corporate and Unallocated
- The Corporate and Unallocated line consistently reflected sizable negative income before tax values, indicating substantial costs or expenses allocated at the corporate level. The deficit increased from roughly -319 million US dollars in 2019 to a peak of about -450 million US dollars in 2022, then slightly improved to around -403 million US dollars in 2023, demonstrating relatively stable but significant overhead or non-segment expenses impacting overall results.
- Total
- The total income before tax figure demonstrated general growth from 2019 through 2021, moving from approximately 1.42 billion US dollars to 1.80 billion US dollars. However, 2022 saw a notable dip to just over 1.57 billion US dollars, before rebounding substantially to nearly 2.07 billion US dollars in 2023. This pattern suggests that despite some volatility, overall profitability before tax has increased markedly by the end of the period, with a particularly strong recovery after the 2022 downturn.