Strategisk analyse og værdiansættelse af Royal Unibrew A/S

Abstract

After several years with increasing revenue and profit Royal Unibrew realized severe losses and write downs in 2008. These issues were primarily drawn to poor operational results from prior acquisitions in Poland and exacerbated market conditions due to the financial crisis. As a consequence, the company struggled to meet its debt obligations and was seen as a potential bankruptcy candidate. To respond to these problems Royal Unibrew deployed a new management team, which has put the company through a restructuring process with focus on reestablishment of its profitability and solvency. In light of these radical changes the main purpose of the thesis is to asses a fair value of the Royal Unibrew share as of September 30th, 2010. In order to obtain the requisite understanding of the brewing industry and Royal Unibrew’s business model a thorough strategic analysis is conducted. Based on this analysis, the main conclusion is that the company operates in a maturing industry characterized by decreasing profit margins, fierce competition and growing industry consolidation. In order to stay competitive Royal Unibrew follows a differentiation strategy focusing on innovation and development of its products and brands. A following financial analysis shows that the historical ROIC has been declining, primarily due to a decreasing profit margin. However, the financial ratios from 2009 indicate that the new management is getting the company back on track. The financial and strategic analyses serve as a fundament for the budget, and the succeeding EVA-valuation. By employing the EVA-model Royal Unibrew’s share price is estimated to be 468 DKK, which is 73 % above the observed market price. The calculated price is subjected to a great deal of uncertainty since it is based on several subjective assumptions and estimates. Thus, a sanity check is applied by conducting a multiple and sensitivity analysis. The valuation with multiples indicates a price that is 30 % below the EVA-estimate. A Monte Carlo simulation illustrates that the interest rate risk and beta accounts for the largest share of the uncertainty inherent in the EVA-estimate. It further shows that there is a probability of 75 % that the stock price is below the EVA-estimate of 468 DKK. On the other hand the Monte Carlo simulation reveals that there is a probability of only 6 % that the stock price is below the observed market price of 270 DKK.