Valuation of Carlsberg A/S

Mads Birke Reves

Student thesis: Master thesis


The primary purpose of this task was to compile a valuation of Carlsberg, thereby calculating the price for the Carlsberg share 30.12.2016. Based on this, an assessment should be made of whether the Carlsberg share was overestimated or underestimated, and in doing so, make a purchase or sell recommendation. Carlsberg was founded in 1847, and today it is one of the world's largest breweries, as it currently occupies a place as the fourth largest brewery worldwide. The three largest breweries are AB Inbev, SAB Miller and Heineken in the following order. The first part of the assignment consists of a presentation of Carlsberg with a brief review of Carlsberg's history, products, strategy, markets and competitors. The second part of the assignment consists of a strategic analysis of Carlsberg which will give an overview of the factors at the level of society and industry as well as internally in the company that affect Carlsberg's business. For this analysis we will use the PEST analysis and Porters Five Forces. The third part of the assignment consists of an accounting and profitability analysis. Using the Enhanced DuPoint Pyramid we will uncover the relevant conditions for Carlsberg, and calculate key figures for the historical accounting analysis period. The fourth part of the assignment consists of a 5-year budget period followed by the terminal period, which reflects an infinite period of constant growth. Budgeting is based on historical accounting figures and key figures. The fifth part of the assignment consists of a valuation of Carlsberg. Using the DFC and RIDO models, a valuation estimate of DKK 859 was calculated on 30.12.2016. When adjusted for the control premium, the capital-based value estimate was determined at DKK 602, which, compared to the market price of 30 December 2016 at DKK 609.50, is 7.5 DKK below the market price, equivalent to 1%. The multiple analysis also gave an indication that the Carlsberg share was relatively high priced. The result indicates that the market value of the Carlsberg share is overestimated. At the same time, the valuation estimate and the recommendation from the major analysts hold or sell, which substantiate my valuation estimates. Recommendation: Sell!

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2017
Number of pages96