(NEU) Beacon Global - Carlsberg

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(NEU) Beacon Global - Carlsberg

  1. 1. BEACON GLOBALCONSULTINGBEACON GLOBAL CONSULTINGCarlsberg A/SEmerging as Market LeaderCopenhagen, DenmarkJasper M. Stolzenbach | Jordan Wheeler | James Steinberg | Alexis
  2. 2. BEACON GLOBAL 2 AgendaCONSULTING Situation Analysis Beer Industry Carlsberg A/S Decision Rules Implementation Acquisition Spinoff Marketing Supply Chain Integration Summary4/3/2012 Carlsberg A/S
  3. 3. BEACON GLOBAL 3 Problem StatementCONSULTING Competition 1 Missed opportunity in Eastern China Global Market 2 Western countries’ consumption falling Profitability 3 Rising raw materials cost Financial Structure 4 High debt load4/3/2012 Carlsberg A/S
  4. 4. BEACON GLOBAL 4 Beer IndustryCONSULTING Competitors • Top breweries dominate market Mature Markets • Falling demand in developed countries Emerging Markets • Rising demand in emerging countries Materials • Rising costs of hops, aluminum, and glass4/3/2012 Carlsberg A/S
  5. 5. BEACON GLOBAL 5 CarlsbergCONSULTING Rank • Fifth largest producer Market Penetration • Top 3 - Every market you are currently in Main Revenue Source • 61% sales in West Europe Other sources • 1.8 Billion in revenue from Russia4/3/2012 Carlsberg A/S
  6. 6. BEACON GLOBAL 6 Decision RulesCONSULTING• Increasing Market Presence in Emerging Markets – Existing markets stagnant/mature, future growth in Asia, Africa and S. America• Gain Market Leadership – Majority of market captured by market leader and runner-up• Sustainable Growth4/3/2012 Carlsberg A/S
  7. 7. BEACON GLOBAL 7 AlternativesCONSULTING Emerging Market Sustainable Markets Leader Growth Open Breweries in Africa Joint Venture into India Heineken Acquisition, Spinoff Soda, Vertical Integration, Marketing4/3/2012 Carlsberg A/S
  8. 8. BEACON GLOBAL 8 AcquisitionCONSULTING Heineken Cost • €3.7 billion • Purchase a controlling stake in Heineken Funding • Gain market share in Asia, Africa, S. America • LT Debt/Equity/Cash • Finalize integration in 2010 ROI • 41% average4/3/2012 Carlsberg A/S
  9. 9. BEACON GLOBAL 9 SpinoffCONSULTING Soft Drinks Inflow • Spin off Soft Drinks • €420 million segment • Low/negative growth, focus on alcoholic beverages Use • Potential buyers: Existing beverage producers, consumer foods • Debt reduction producers • Finalize sale in early 20094/3/2012 Carlsberg A/S
  10. 10. BEACON GLOBAL 10 MarketingCONSULTING Campaign Cost • New Bottling Format  Budget Bottle: Emerging • € 110 million Countries • Sport Events Funding  World Cup 2010: South Africa • Operating Income • Charities Concerts  LiveEarth: 10 concerts in Europe and Asia ROI • 119%4/3/2012 Carlsberg A/S
  11. 11. BEACON GLOBAL 11 Vertical IntegrationCONSULTING New Facilities Cost • New Factories/Farms • € 275 million  Hops  Aluminum cans  Glass bottles Funding • Location:  Chengdu, PRC • Cash • Reducing COGS by integrating supply chain ROI • 57% average4/3/2012 Carlsberg A/S
  12. 12. BEACON GLOBAL 12 Summary CONSULTING Our Acquisition Proposals• Acquisition 1 • Strong position in emerging markets• Spinoff Spinoff• Marketing• SC Integration 1 • Reduce Debt load Marketing Your 1 • Increased awareness, revenue growth Success SC Integration by 2011 1 • COGS reduced by 4% 4/3/2012 Carlsberg A/S
  13. 13. BEACON GLOBAL 13 QuestionsCONSULTINGAcquisition Marketing Summary Marketing Valuation Timeline Risks Overview Marketing Source/Use ROI ROI Detail of Funds Income Regional Spinoff COGS Statement Segments COGS Valuation Overview COGS ROI4/3/2012 Carlsberg A/S
  14. 14. BEACON GLOBAL 14CONSULTING EXHIBIT: Heineken Valuation Net Income € 488 Multiple 5 Mkt Cap € 2,505 Heineken Earning € 1,127 Heineken Mkt Cap € 5,784 51% € 2,950 Premium 20% Special Dividend € 200 Price € 3,7404/3/2012 Carlsberg A/S
  15. 15. BEACON GLOBAL 15CONSULTING EXHIBIT: Heineken ROI Year 2010 2011 Addl Profit $ 1,346.55 $ 1,749.86 Cumulative Addl Profit $ 1,346.55 $ 3,096.41 ROI 36.0% 46.8% Average ROI 41% Payback Period 2 years and 2 months4/3/2012 Carlsberg A/S
  16. 16. BEACON GLOBAL 16CONSULTING EXHIBIT: Soft Drink Valuation Liters € 2,080.00 Revenues € 624.00 Profit Per Liter € 72.80 Price Per Liter 0.3 Profit Per Liter 0.035 Earnings Multiple 5 Equity Value € 364.00 Good Will 15% Selling Price € 418.604/3/2012 Carlsberg A/S
  17. 17. BEACON GLOBAL 17 CONSULTING EXHIBIT: Marketing OverviewYear 2008 2009 2010 2011 TotalCost € 10,400,000 € 10,400,000 € 50,610,800 € 37,207,200 € 108,618,000Addl Revenues € 124,040,840 € 124,040,840 € 740,716,840 € 535,158,173 € 1,523,956,693Addl Profit € 11,163,676 € 11,163,676 € 66,664,516 € 48,164,236 € 137,156,102ROI 107.34% 107.34% 131.72% 129.45% 126.27% 4/3/2012 Carlsberg A/S
  18. 18. BEACON GLOBAL 18 CONSULTING EXHIBIT: Marketing DetailMarketing World Cup Public Viewing Concerts TraditionalTotal Audience 800,000,000 15,000,000 400,000 38,000,000Drinking Age Percentage 70% 80% 90% 71%Total audience of Drinking Age % 560,000,000 12,000,000 360,000 26,980,000Total Audience to view ads % 80% 95% 100% 98%Total Audience to view ads 448,000,000 11,400,000 360,000 26,440,400Conversion Percentage (emerging markets) 4% 65% 50% 20%Total audience to convert to Carlsberg Brands 17,920,000 7,410,000 180,000 5,288,080Yearly Addl Purchase Rate 50% 60% 35% 60%Average Liter Amount Drank 40 40 20 20 12 Oz 16 13 5 4 7 Oz 4 11 2 8Avg Addl Cvarlsberg Purchased 20 24 7 12Total Additional Purchased 358,400,000 177,840,000 1,260,000 63,456,960.00Price 1.92 1.92 1.92 1.92Total (Per Year) € 686,933,333 € 340,860,000 € 2,415,000 € 121,625,840 4/3/2012 Carlsberg A/S
  19. 19. BEACON GLOBAL 19CONSULTING EXHIBIT: COGS OverviewYear 2007 2008 2009 2010 2011Revenues € 6,018.88 € 6,349.91 € 6,075.16 € 6,409.29 € 6,761.80COGS (New) € 5,116.04 € 5,397.43 € 4,957.33 € 5,229.98 € 5,517.63 COGS (Old) € 5,116.04 € 5,397.43 € 5,163.88 € 5,447.90 € 5,747.53 COGS (Savings) € - € - € 206.56 € 217.92 € 229.90EBIT € 902.83 € 952.49 € 1,117.83 € 1,179.31 € 1,244.17Interest € 414.06 € 414.06 € 414.06 € 414.06 € 414.06EBT € 488.77 € 538.43 € 703.77 € 765.25 € 830.11Taxes € 139.61 € 153.79 € 201.02 € 218.58 € 237.11Net Profit € 349.16 € 384.63 € 502.75 € 546.67 € 593.00 4/3/2012 Carlsberg A/S
  20. 20. BEACON GLOBAL 20CONSULTING EXHIBIT: Vertical IntegrationNew "Factories" on-line 2009Reduction in COGS 4%Cost (€ million) 275 2009 2010 2011Increased Profit € 147.56 € 155.67 € 164.23ROI 54% 57% 60%Average ROI 57%Payback 1 years and 10 months 4/3/2012 Carlsberg A/S
  21. 21. BEACON GLOBAL 21CONSULTING EXHIBIT: Income StatementYear 2007 2008 2009 2010 2011Revenues € 6,018.88 € 6,473.95 € 6,199.20 € 16,175.34 € 18,504.91COGS € 4,853.62 € 5,120.57 € 4,899.01 € 12,207.54 € 14,214.84EBIT € 1,165.25 € 1,353.38 € 1,300.19 € 3,967.79 € 4,290.07Interest € 474.25 € 414.06 € 701.82 € 769.75 € 769.75EBT € 691.01 € 939.33 € 598.37 € 3,198.04 € 3,520.32Taxes € 139.61 € 171.93 € 159.38 € 574.14 € 704.53Net Profit € 349.16 € 430.00 € 398.59 € 1,374.53 € 1,688.34 4/3/2012 Carlsberg A/S
  22. 22. BEACON GLOBAL 22 EXHIBIT:CONSULTING Timeline 2008 2009 2010 2011 Heineken Acquisition SC Integration World Cup M K Budget Bottle T Traditional Advertising G Live Earth Spinoff Soda4/3/2012 Carlsberg A/S
  23. 23. BEACON GLOBAL 23 EXHIBIT:CONSULTING Sources and Use of Funds Source Amount Use Amount Equity € 1,000 Acquisition € 3,700 LT Debt € 2,300 Marketing € 110 Op. Cash € 365 SC Integr. € 275 Spinoff € 420 Total € 4,085 € 4,085 Source Use Acquisition Equity LT Debt Marketing Op. Cash Spinoff SC Integr.4/3/2012 Carlsberg A/S
  24. 24. BEACON GLOBAL 24CONSULTING EXHIBIT: ROI SummaryROI 2007 2008 2009 2010 2011 AvgAcquisition 36.0% 46.8% 41%Marketing 107.34% 107.34% 131.72% 129.45% 119%COGS 53.7% 56.6% 59.7% 57%Interest Coverage (EBIT/Interest Expense) 2.46 3.27 1.85 5.15 5.57 4/3/2012 Carlsberg A/S
  25. 25. BEACON GLOBAL 25CONSULTING EXHIBIT: Regional Segments4/3/2012 Carlsberg A/S
  26. 26. BEACON GLOBAL 26 EXHIBIT:CONSULTING Risks Heineken Acquisition Vertical Integration • Don’t accept offer • Lower than expected • May need regulatory approval savings • Lower than expected synergies • Management strain • Delays in implementation Marketing Soda Spinoff • Bad reaction to budget bottle • Lower than expected price • LiveEarth concerts unpopular • Taking away a revenue source4/3/2012 Carlsberg A/S

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