DENMARK: Carlsberg commits to Russia and improved return on capital | Progresiv
Carlsberg's attempt to regain momentum with a new strategy after years in the doldrums failed to convince markets, with shares in the Danish brewer falling as much as 3.2 percent. A central plank of Chief executive Cees 't Hart's new approach is that Carlsberg will remain in Russia, despite the many challenges it has faced there. 
The Dutchman was brought in last year to solve Carlsberg's problems in Russia, which date back to its takeover of Russia's largest beer brand Baltika in 2008.
"We want to transform our business in Russia, and we understand what is required to make this happen," he said.
Overall, he said that Carlsberg would invest more in its key and speciality brands, and in non-alcoholic beer, and that it would focus on growing in big cities, as well as outside its European and Asian core markets.
Carlsberg's new strategy, which comes on top of a restructuring programme launched in November, would deliver organic sales growth and margin improvements, he said, although he would not give any indications as to how much.
Return on invested capital (ROIC) would be improved not only through earnings but also by reducing invested capital, 't Hart said. Carlsberg reported a ROIC of 8.1 percent for 2015, excluding major writedowns made by 't Hart when he took over.
It also pledged to deliver a dividend pay-out ratio of 50 percent, from 30 percent for 2015 as cash flows had been good.
Carlsberg is the smallest of the world's four big brewers which had 47 percent of volumes and three-quarters of profits in 2014. Their number is soon to drop to three, with the planned 100 billion dollars-plus takeover of SAB Miller by AB Inbev. Dutch Heineken is the third-largest. (www.reuters.com)
