Lowering Carlsberg's Valuation Again for Russian Exit

Until recently, Carlsberg had underperformed its close peers. Although it has a very strong competitive positioning in its native Denmark and other Scandanavian markets, in other major developed markets it is a second-tier player and has suffered shelf space loss, including the high profile removal of the flagship brand from Tesco's shelves in 2015. In addition, Carlsberg's second-largest market, Russia, has been undergoing volume declines since 2012 due to a decade-long government clampdown on the availability and affordability of beer, and a shrinking drinking age population. Returns on invested capital were regularly below the cost of capital, and the low-teens operating margin was below that of its largest competitors.