Valuation of Breweries

Abstract

The brewering industry has seen a recent growth in microbreweries, and the largest breweries have adapted to a changing industry with fierce competition and a turbulent period of external factors. This thesis seeks to investigate the current brewering industry with the purpose of valuation in mind. Through a deductive methodology the valuation methods of Aswath Damodaran and accounting principles of Christian Petersen, Thomas Plenborg and Finn Kinserdal will lay the ground for an analysis of the brewing industry, its competitors, and companies. A comprehensive analysis of the industry and the challenges it faces will be conducted. This will be the fundament for a financial analysis of a brewery, with Carlsberg as an example. The thesis evaluates the brewery Carlsberg using a discounted cash flow analysis in combination with relative multiples. To conclude it is found that there is no exact valuation method for perfect satisfaction. Every treatment of financial data has a bias and an assessment that must be justified. Furthermore, the industry is currently facing an uncertain time, where markets in Russia er closing leading to exist and the energy crisis influences the industry. All of this affects the clarity of the data. This thesis does, however, give an example of how a brewery could be valued and what to consider in doing so.