MBA Investment Analysis and Portfolio Management Project – Financial Analysis of Carlsberg Group A/S (2018)

MBA Investment Analysis and Portfolio Management Project – A global brewery with outposts across the world established in 1847 by J. C. Jacobsen, Carlsberg is a giant of the beverage industry and sells its products across 150 countries in Europe and Asia. Carlsberg has over 140 brands, in different countries, and has changed its strategy to adopt different brands under its portfolio thus enabling Carlsberg to adhere to the demands of consumers. At present, Carlsberg is one of the world’s five largest brewers and from their annual report, it made 86,924 DKK million in total revenue at the end of 2017.

From a financial analytical perspective, the researcher considers the company to be overvalued at this present point in time and advises against purchasing shares as a result. This decision was not arrived at lightly. As the reader will be able to see, the analysis which ensues is quite technical in that the relative merits of valuation techniques are considered and evaluated prior to arriving at an optimal method which is tailor-made to the status and interest of the company itself.

The dynamic and interplay between macroeconomic factors and operational movements which may or may not be beyond the scope of control of the entity is fascinating, including but not limited to political decisions and developments in the industry from a consumer preference and technological standpoint. Each of these mean valuations are inherently subjective and difficult to rely upon over the long term. Consequently, buy or sell recommendations are neither conclusive endorsements or otherwise of the company in question.

In 2017, Carlsberg sold 112.4 million hectolitre beer worldwide. Interestingly, this accounts for 84.32% of the entire sales volume of the entity and Carlsberg continues to grow from strength to strength in different regions. Recently, Carlsberg A/S purchased more shares in Chongqing Brewery to become a majority shareholder by virtue of its 60% interest in the company.

In recent years, Carlsberg have launched many programs designed to create efficient processes and permeate into local brands including Chongqing and Dali, each of which have proceeded to grow at a rate of knots. Carlsberg has shared in the benefits of the growth of the Chinese market and the development of domestic brands.

Carlsberg’s primary market is Western Europe and its sales volume remained flat on a year on year basis. However, negative impact of currency also affected the Western Europe market, with 3% decline the result. In Nordic countries, there was a decline of 1% in beer volume due to the weather. However, growth in other beverages was 2%, meaning the total sales volume remains the same. In the Western Europe market, Carlsberg is placed second and is only surpassed by Heineken.

In some major countries such as the UK, Carlsberg performed well and were the top seller, each of which generates tremendous revenue. The Western European beer market is quite mature such that its market volume tends to be flat or in steady decline. There is an increasing market proportion of non-alcohol drinks.

  • 10,000 words – 60 pages in length
  • Excellent use of literature
  • Good analysis of subject area
  • Well written throughout
  • Ideal for MBA students
  • This is a MBA project not dissertation

1 – Introduction

2 – Sector Review
Price, Commodity and Foreign Exchange
Economic Environment
R&D Spending
Customer Behaviour Trends

3 – Company Assessment
Industry Peers
Liquidity and Solvency

4 – Forecast
Income Statement
Balance Sheet

5 – Valuation
Cost of Equity
Long term Growth Rate
Absolute Valuation Model
DDM Model
RIVM Model
Relative Valuation Model

6 – Literature Review
Brief introduction
Dividend Discount Model
Discount Cash Flow Model
Residual Income Valuation Model
Abnormal Earning Growth Model
Relative Valuation Model
P/E Model
P/B Model
P/S Model
Comparison Between Approaches
Selection of Valuation Methods

7 – Recommendation and Conclusion


MBA Investment Analysis and Portfolio Management Project Carlsberg Group
MBA Investment Analysis and Portfolio Management Project Carlsberg Group

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