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Carlsberg A/S (CABGY)
OTHER OTC:CABGY
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Carlsberg
(OTC:CABGY)
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Rating:64Neutral
Price Target:
$29.00
▲(10.60% Upside)
Action:DowngradedDate:02/06/26
CABGY scores as moderately attractive: strong cash flow improvement and solid operating profitability are the main positives, but higher leverage and earnings volatility cap the financial profile. Technically the trend is strong, yet overbought readings raise near-term risk. Valuation is reasonable but not compelling, while earnings-call guidance and Britvic synergy execution support a steady (not aggressive) outlook.
Positive Factors
Cash Generation
Material improvement in operating and free cash flow in 2025 strengthens the company's ability to service debt, fund CapEx and dividends, and execute deleveraging. Higher and more predictable cash conversion supports long-term financial flexibility and capacity to fund strategic initiatives.
Operating Profitability
Sustained mid-teens EBITDA margins indicate a resilient core brewing business with pricing and cost levers. Solid operating profitability underpins cash generation and provides room for reinvestment in brands and capability, supporting competitive positioning over the medium term.
Acquisition and Synergy Execution
Faster-than-expected delivery of Britvic synergies demonstrates integration capability and creates structural cost advantages. The acquisition expands non-beer categories and scale, diversifying revenue mix and enabling margin accretion as further synergies are realized and commercial levers are aligned.
Negative Factors
Elevated Leverage
A materially higher leverage profile reduces financial flexibility and raises interest cost sensitivity. With net debt/EBITDA near 3.3x, the company is exposed to weaker cash flow or higher rates until targeted deleveraging is achieved, constraining strategic optionality and raising refinancing risk.
Earnings Volatility
History of sharp profit swings undermines predictability of earnings and cash flow, complicating capital allocation and debt reduction planning. Volatility increases the risk that short-term shocks could derail deleveraging targets or force defensive actions that impair growth investments.
Weak Organic Growth & Regional Exposure
Persistent weak organic growth and region-specific declines (notably Asia and Ukraine) expose the company to demand cyclicality and execution risks. Reliance on acquisition-driven growth reduces visibility into sustainable organic expansion, pressuring long-term margin and volume momentum.
Carlsberg (CABGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.06B
Dividend Yield3.02%
Average Volume (3M)2.05K
Price to Earnings (P/E)18.5
Beta (1Y)0.25
Revenue Growth10.69%
EPS GrowthN/A
CountryUS
Employees32,098
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Alcoholic
Share Statistics
EPS (TTM)0.41
Shares Outstanding494,787,780
10 Day Avg. Volume0
30 Day Avg. Volume2,047
Financial Highlights & Ratios
PEG Ratio-1.14
Price to Book (P/B)3.96
Price to Sales (P/S)1.24
P/FCF Ratio14.10
Enterprise Value/Market Cap10.00
Enterprise Value/Revenue2.03
Enterprise Value/Gross Profit4.49
Enterprise Value/Ebitda10.38
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.05
Revenue Forecast (FY)$14.72B
Carlsberg Business Overview & Revenue Model
Company DescriptionCarlsberg A/S produces and sells beer and other beverage products in Denmark. It offers core, and craft and specialty beers; and alcohol-free brews. The company provides its products primarily under the Carlsberg, Tuborg, Feldschlösschen, Baltika, Chongqing, 1664 Blanc, Grimbergen, Ringnes, and Somersby brand names. Carlsberg A/S also exports its products to approximately 100 countries worldwide. The company was founded in 1847 and is headquartered in Copenhagen, Denmark.
How the Company Makes MoneyCarlsberg makes money mainly by selling alcoholic beverages—predominantly beer—under a portfolio of brands. Revenue is generated from (1) off-trade sales (e.g., supermarkets, convenience stores, and other retail), where Carlsberg sells packaged products such as bottles and cans; and (2) on-trade sales (e.g., bars, restaurants, hotels, and events), where sales often include draught beer and can carry different pricing and margin dynamics due to serving and outlet agreements. The company monetizes its operations through a combination of volume (hectoliters sold) and price/mix (premiumization, brand strength, and product mix), with earnings influenced by input costs (barley, packaging, energy), pricing actions, and product/channel mix.
Carlsberg’s core revenue stream is beer sales, including flagship and local brands, typically sold to wholesalers, distributors, and large retail customers, as well as directly to on-trade outlets in some markets. In addition to mainstream lager, the company also earns revenue from specialty and premium offerings, alcohol-free and low-alcohol variants, and other adjacent beverages depending on market. It also benefits from brand-driven demand and marketing-led differentiation, which can support higher pricing and improved margins.
How cash ultimately flows depends on route-to-market structure by country: in some markets Carlsberg sells through its own distribution network, while in others it relies on third-party distributors or partners. These arrangements can affect recognized revenue, logistics costs, and margins but generally still tie earnings to the same drivers—brand strength, distribution reach, and efficient brewing and supply chain operations. If specific details on particular partnership agreements, licensing terms, or market-by-market contractual structures are not publicly available in the provided context, they are null.
Carlsberg Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 19, 2026
Earnings Call Sentiment Neutral
The call shows a balanced picture: strong acquisition execution (Britvic) with faster-than-expected cost synergies, solid reported top-line and EPS growth, improved cash flow and increased dividends. Offsetting this are persistent organic softness in some markets (notably parts of Asia, Ukraine and Beyond Beer), non-cash PPA amortization and elevated leverage that keep financial costs higher. Management presents a cautious but constructive outlook for 2026 with clear deleveraging targets and ongoing integration and commercial initiatives.Q4-2025 Updates
Positive Updates
Successful Britvic acquisition and fast integration
Britvic closed in mid-Jan 2025; integration started immediately, people changes concluded ahead of plan, procurement integration underway; 2025 reported contribution: 24m hl, DKK 15.6bn revenue, operating profit DKK 2.2bn (GBP 253m).
Cost synergies ahead of plan
Upgraded cost synergy target to GBP 110m; ~30% of the target delivered in 2025 (well ahead of the initial 10–15% expectation). Expect 30–40% delivery in 2026 and 60–70% delivered after two years of ownership.
Strong reported top-line and margin expansion (acquisition-driven)
Reported volumes +17.7%, reported revenue +18.8%, reported operating profit +22.7% (2025 vs 2024), operating margin improvement and solid profit development driven significantly by Britvic consolidation.
Organic profit and sequential improvement
Organic operating profit grew +5% with acceleration in H2 2025 despite soft consumer sentiment in many markets.
Earnings and shareholder returns
Adjusted earnings per share (MPM) +11.1% to DKK 61; proposed dividend +7% to DKK 29 per share (payout ratio ~48%), maintaining dividend policy despite temporary higher leverage.
Cash flow and capital allocation
Free operating cash flow DKK 7.0bn (vs DKK 6.4bn prior year); CapEx 2025 DKK 5.6bn (6.3% of revenue); guidance CapEx DKK 6–7bn for 2026.
Category and brand progress
Growth categories now >50% of group volumes; premium portfolio +5%, soft drinks more than doubled (largely from Britvic), alcohol-free brews +4% (ex-Ukraine +7%); Carlsberg brand volumes +4% and premium volumes +13%.
Commercial and brand wins
Pepsi portfolio award: European Bottler of the Year by PepsiCo; Poretti volumes more than doubled in the U.K.; strong Q4 momentum for U.K. (U.K. volumes +7% in Q4, Pepsi Max gained >2% value share in December).
Financial discipline and leverage plan
Net interest-bearing debt DKK 61.6bn; net debt/EBITDA 3.28x with clear target to reach ≤2.5x by end-2027 and active deleveraging plan (organic cash generation, TWC focus, potential disposals/IPOs).
Negative Updates
Limited organic revenue growth and softer volumes
Group organic revenue development -0.6% on reported basis; excluding loss of San Miguel, organic revenue would have been +1.1%. Volumes declined slightly overall, with Asia being a main drag.
Asia performance challenges
Asia beer volumes -1.5%; soft drinks/other beverages in Asia -8.1% (impacted by energy drinks in Cambodia); Vietnam volumes down double-digit in 2025 due to promotions, route-to-market reorganization and historic floods.
Ukraine and Laos deterioration
Ukraine volumes declined double-digit due to intensified war activities; Laos volumes mid-single-digit decline and hyperinflation ceased July 2025, adding uncertainty.
Beyond Beer and Somersby weakness
Beyond Beer volumes declined -4%; Somersby volumes fell and offset growth from Garage (Garage >1m hl but not enough to offset Somersby).
Lower gross margin on reported MPM basis
Gross margin MPM declined 60 basis points to 45.2% in 2025, primarily because Britvic consolidated with a lower gross margin profile.
Significant non-cash PPA amortization and special items
PPA-related amortization (Britvic intangible assets) ~DKK 640m in 2025 (noncash). Reported special items -DKK 1.9bn; special items MPM including PPA amortization -DKK 2.6bn.
Higher financial costs and FX headwinds
Net financials -DKK 2.4bn (ex-FX -DKK 2.2bn), an increase of DKK 1.1bn driven by significantly higher net interest-bearing debt. Currency translation impact on revenue ~-2.0% (mainly Asia, Ukraine, Kazakhstan).
Trade working capital and Britvic alignment
Improvement in Britvic TWC noted but still below Carlsberg levels; average trade working capital to revenue ended at -15.6% (Carlsberg excluding Britvic -20.1%), indicating work remains to align processes.
Cautious guidance reflecting uncertainty
2026 organic operating profit growth guidance 2%–6% (operating profit MPM) with management noting a relatively stable but subdued consumer environment and continued geopolitical volatility.
Company Guidance
Carlsberg guided 2026 organic operating profit (MPM) growth of 2–6% (on a 2025 operating profit MPM base of DKK 13.996bn), expects to deliver 30–40% of the GBP 110m Britvic cost synergies in 2026 (with up to 60–70% delivered after two years), and sees the Kazakhstan Pepsi license adding ~1.5 percentage points to group organic volume; it assumes a FX translation headwind of ~DKK 100m, financial expenses (ex FX) of ~DKK 2.2bn, an effective tax rate around 23%, CapEx of DKK 6–7bn, and flattish COGS per hectoliter while holding SG&A tight (with a slight rise in marketing and capability investments); the group finished 2025 with NIBD DKK 61.6bn (3.28x EBITDA) and aims to reach ≤2.5x NIBD/EBITDA by end‑2027, having generated DKK 7bn free operating cash flow in 2025, adjusted EPS of DKK 61, and proposing a DKK 29 dividend (≈48% payout).Carlsberg Financial Statement Overview
Summary
Operating profitability is solid and 2025 cash generation improved meaningfully (higher operating and free cash flow), but the balance sheet is a clear constraint with a sharp leverage increase (debt-to-equity ~2.62 in 2025 vs. ~1.37 in 2024) and historically volatile bottom-line results.Income Statement
Revenue shows steady multi-year expansion (2025 up ~4.4% vs. 2024; 2022 was a strong growth year), and operating profitability remains solid with 2025 operating margin ~13% and EBITDA margin ~19%. However, bottom-line results have been volatile: large losses in 2022–2023 followed by strong profit in 2024 and a much lower profit margin in 2025 (~6.7% vs. ~12.2% in 2024). Overall, the core business looks resilient, but earnings consistency is a key watch item.70
Positive
Balance Sheet
Leverage has increased materially, with debt-to-equity rising to ~2.62 in 2025 from ~1.37 in 2024, indicating a meaningfully heavier debt load relative to equity. While 2025 return on equity is healthy (~20.6%), the prior-year volatility (including sharply negative ROE in 2022–2023) underscores sensitivity in shareholder returns. The balance sheet is workable, but the jump in leverage reduces flexibility and raises risk if profits soften.52
Neutral
Cash Flow
Cash generation improved sharply in 2025, with operating cash flow (~12.5B) and free cash flow (~7.8B) materially higher than 2024, and free cash flow up strongly year over year. Free cash flow covers a meaningful portion of earnings (about ~62% in 2025), supporting debt service capacity. The main weakness is the weak 2024 cash flow year, highlighting variability in cash conversion.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 89.09B | 75.01B | 73.58B | 70.27B | 60.10B |
| Gross Profit | 40.24B | 34.38B | 32.83B | 32.07B | 28.57B |
| EBITDA | 17.39B | 15.80B | 15.02B | 13.96B | 13.80B |
| Net Income | 5.96B | 9.12B | -40.79B | -1.06B | 6.85B |
Balance Sheet | |||||
| Total Assets | 153.94B | 113.33B | 111.83B | 115.34B | 126.38B |
| Cash, Cash Equivalents and Short-Term Investments | 9.58B | 11.60B | 15.62B | 8.16B | 8.34B |
| Total Debt | 72.92B | 38.14B | 39.10B | 28.65B | 28.92B |
| Total Liabilities | 123.27B | 82.72B | 86.08B | 80.62B | 77.63B |
| Stockholders Equity | 27.80B | 27.77B | 23.23B | 31.90B | 45.50B |
Cash Flow | |||||
| Free Cash Flow | 7.81B | 1.03B | 7.36B | 8.93B | 9.04B |
| Operating Cash Flow | 12.54B | 1.76B | 11.61B | 12.95B | 13.26B |
| Investing Cash Flow | -34.21B | -1.52B | -6.73B | -4.65B | -4.38B |
| Financing Cash Flow | 20.36B | -13.94B | 1.37B | -9.76B | -8.95B |
Carlsberg Technical Analysis
Negative
26.22
Price Trends
28.49
Negative
26.71
Positive
26.31
Positive
Market Momentum
-0.55
Positive
34.32
Neutral
4.25
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CABGY, the sentiment is Negative. The current price of 26.22 is below the 20-day moving average (MA) of 29.57, below the 50-day MA of 28.49, and below the 200-day MA of 26.31, indicating a neutral trend. The MACD of -0.55 indicates Positive momentum. The RSI at 34.32 is Neutral, neither overbought nor oversold. The STOCH value of 4.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CABGY.
Carlsberg Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $45.45B | 13.63 | 16.90% | 8.22% | -0.68% | 4.29% | |
68 Neutral | $145.14B | 18.53 | 12.35% | 1.83% | -2.06% | 21.03% | |
67 Neutral | $26.19B | 11.96 | 15.12% | 2.92% | -5.57% | 119.49% | |
64 Neutral | $18.06B | 18.49 | 23.31% | 3.02% | 10.69% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
54 Neutral | $8.39B | -4.26 | -18.18% | 4.08% | -4.01% | -339.22% | |
53 Neutral | $2.17B | 19.13 | 7.86% | 2.53% | 16.59% | 1.72% |
* Consumer Defensive Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.