Carlsberg commits to Russia and improved return on capital
Carlsberg has decided to remain in Russia despite the problems it faces there. The Danish brewer has also vowed to improve its return on capital under a strategy outlined by its new CEO.
Dutchman Cees ‘t Hart was hired last summer to break the deadlock the world’s fourth largest brewer has been in since taking control of Russia’s largest beer brand Baltika in 2008.
Despite tighter alcohol regulations and a weak economy, the Danish brewer said it is committed to the Russian market.
“Russia remains an important market and we understand what it takes to succeed,” Carlsberg said today.
In a new strategy called SAIL ’22, Carlsberg said it would consistently improve its return on invested capital (ROIC) through improved earnings and cutting invested capital.
However, the company did not say what ROIC it expected, which disappointed some analysts.
Carlsberg reported a ROIC of 8.1% for 2015. That figure excluded major writedowns made by ‘t Hart.
If these were included, Carlsberg’s ROIC was -2.6%, according to Reuters data.
This compares to 9.2% and 8.1% at rivals Anheuser Busch Inbev and Heineken.
SABMiller, the last of the big four, had a return on capital of 9% in its financial year to the end of March 2015, according to Reuters data.