<p>The 2018 World Cup is coming to Russia next month on 14 June. We highlight companies that are beneficiaries of this global event:</p><p><b>Anheuser-Busch InBev</b>: Budweiser is the main global sponsor for beer<br /><b>Carlsberg</b>: Carlsberg is the market leader in Russia<br /><b>Heineken</b>: Heineken is the second largest brewery in the world<br /><b>Adidas</b>: Biggest sportswear sponsor with 12 teams on its sponsorship this World Cup<br /><b>Nike</b>: Global leader in the footwear and sports apparel market.</p><p> </p><p><strong><em><span style="text-decoration: underline;">Anheuser-Busch InBev (ABI BB)</span></em></strong></p><p>   Anheuser-Busch InBev is the world largest beer company, with market leadership in the US, Brazil, Canada, Mexico, Argentina and Belgium beer markets. It is estimated that 50% of ABInBev sales are generated in countries that are playing in the World Cup. The company is using its SABMiller merger cost savings to spend on World Cup promotions.</p><p>   Key brands: Budweiser, Bud Light, Stella Artois, Corona, Brahma and Leffe</p><p> </p><p><strong><em><span style="text-decoration: underline;">Carlsberg (CARLB DC)</span></em></strong></p><p>   About 15% of its operating net profit comes from Russia. As a market leader in Russia, it is a beneficiary of the expected surge in beer sales during the World Cup. The company is also in the midst of its “Sail’22” strategy to boost profitability via rationalizing its number of SKUs in Europe and executing its premium-beer brands program.</p><p>   Key brands: Carlsberg, Tuborg, Feldschlösschen, Okocim, Wusu and Baltika.</p><p> </p><p><strong><em><span style="text-decoration: underline;">Heineken (HEIA NA)</span></em></strong></p><p>   Heineken is one of the few family-controlled firm left in the beer industry. Since 1864, the founding Heineken has controlled the company. The company is turning its focus on the cider beer business which is expected to enjoy strong growth opportunities. In soccer, Heineken is the main sponsor for the UEFA Champions League. It is also growing its presence in Asia-Pacific with the region accounting 15% of its sales.</p><p>   Key brands: Heineken, Amstel, Desperados, Dos Equis, Sol, Tiger and Strongbow Cider. </p><p> </p><p><strong><em><span style="text-decoration: underline;">Adidas (ADS GR)</span></em></strong></p><p>   Adidas is growing its profitability via the strengthening of its gross margin. Gross margin is expected to be above 50% as a result of operating leverage and higher contribution from digital segment. The company dominates the soccer market with a longterm partnership with FIFA until 2040. It is the biggest sportswear sponsor with 12 teams on its sponsorship this World Cup. Adidas recently announced a €3.0bn share buyback for the next three years. This is more than 7% of its market cap and will add accretion to its EPS.</p><p> </p><p><strong><em><span style="text-decoration: underline;">Nike (NKE US)</span></em></strong></p><p>   Nike is the global leader with high market share in the footwear and sports apparel market. The company is pushing into digital innovation by engaging in R&amp;D. This has translated into a healthy pipeline of innovative footwear that is appealing to consumers. It is a beneficiary of the US tax reform with reduced tax rate and higher share repurchase program. Consumer spending is also expected to increase in the US as a result of the recently enacted tax reform.</p><p> </p><p><b>Edmund Chan, CFA</b></p>