Valuation of Royal Unibrew A/S

Henriette Højlund Nielsen & Patrick Mathias Jørgensen

Student thesis: Master thesis


The purpose of this thesis is to assess the value of Royal Unibrew A/S. Royal Unibrew A/S is a Danish brewery and manufacture of beer, soft drinks and ready-to-drink products. Royal Unibrew A/S is the second largest brewery in Denmark, and its main markets are Denmark, the Baltic sea, Finland and Italy.
The outcome of a strategic analysis consists of an analysis of the internal and external environment of the company. The external environment is an analysis of the macroeconomic environment, which is established through a PEST-analysis and a Porters Five Fores analysis. The internal environment is an analysis of the company’s value chain. The purpose of these analyses is to identify the most important external and internal factors that can influence the enterprise value of Royal Unibrew A/S.
In addition to the strategic analysis a financial analysis is conducted. This part reorganizes the financial statement, which is used throughout the financial statement analysis. This analysis uncovers the financial value drivers of Royal Unibrew A/S by the use of the DuPont-model.
These analyses conclude to forecast the most relevant value drivers of Royal Unibrew as a matter of forecasting five years ahead. The valuation is based on proforma budgets. The valuation of Royal Unibrew A/S is mainly focused on the Discounted Cash Flow model and two multiples, EV/EBITDA and P/E. Initially, these three models present different values of Royal Unibrew A/S. The DCF-model is performed by estimated the company’s weighted average cost of capital (WACC). The WACC is estimated to 5,82%, which results in a final valuation of 45 billion DKK, and an equity value of 41 billion DKK. This is equal to an estimated stock price of 838 DKK. The two multiples return an estimated stock price of 321 DKK by valuing through EV/EBITDA, and 384 DKK by valuing through P/E. The initial differences are caused by different factors. The multiples are based on a market average, whereas the DCF-model is based on future forecasts. Furthermore, it is important to test the underlying assumptions behind the DCF-model. These sensitivity and scenario analyses concludes that minor changes in the underlying assumptions results significant impact on the valuation of Royal Unibrew A/S.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2018
Number of pages202