A valuation of Carlsberg

Olivier Don Cato Meelby Sørensen & Janus Rudolf

Student thesis: Master thesis


The purpose of this thesis is to estimate the value of Carlsberg’s stock. The valuation is founded in a strategic study as well as an analysis of the historical financial performance. In the strategic study we have used well-known theoretical models such as Porters Five Forces and MLC, consequently summarizing findings in a SWOT synthesis. The strategic study shows that Northern & Western Europe is facing a period of stagnation in the market growth, which is related to the financial crisis and the maturity of the market. Eastern Europe and Asia are seen as markets with a considerable growth in the markets and the growth is estimated to continue in the long term. We also conclude that the brewing industry is affected by the M&A’s amongst the biggest companies, which have increased the competitive landscape especially in Northern & Western Europe. Carlsberg has benefited from this particularly in Russia. Further the study concludes that Carlsberg’s main strength is their knowledge in the brewing industry and their ability to promote their different brands. The analysis of Carlsberg’s historical financial performance shows a positive trend in their performance, and the markets in Eastern Europe and Asia, which Carlsberg particularly will benefit from in the years to come. The valuation is conducted through a DCF and an EVA model, which is founded on a budget and forecast based on the combined analysis of the strategic study and financial performance. The estimated value is subject to a sensitivity analysis of the underlying value drivers. The test shows clearly that the estimated value is sensitive in particular to changes in the WACC. A multiple valuation is furthermore conducted, and the conclusion is that our estimate from the DCF and EVA models of 605DKK is a fair value. The market value of Carlsberg is 557DKK making the gap between the derived academic value and what the market expects of Carlsberg 48DKK. The underlying drivers for this as well as a general assessment of the underlying value creation is discussed.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2011
Number of pages151