Carlsberg A/S, the world’s fourth-biggest brewer, pledged to pay more of earnings in the form of dividends as its new chief unveiled his strategy through 2022.
The company will distribute 50 per cent of annual net income to investors, Carlsberg said, exceeding the current payout ratio of 31 per cent. The Danish brewer also reaffirmed its commitment to Russia, where it’s the biggest beermaker and has closed plants in response to falling consumption.
There were few other firm goals in the strategy statement unveiled by chief executive officer Cees ’t Hart. Carlsberg shares fell 2 per cent in Copenhagen. The company said that it will seek to keep debt at less than two times earnings before interest, tax, depreciation and amortisation, and will distribute excess cash through buybacks or extraordinary dividends.
'These actions evidence, in our view, that the new management has full focus on shareholder value rather than growth,' analysts at Nykredit in Copenhagen wrote in a note.
Carlsberg’s new strategy comes as the brewer battles slowing demand for mass-market beer in Europe and North America, and weakening consumption in China. The beermaker has also announced 2,000 job cuts to increase profitability as it faces an enlarged rival from the $106-billion combination of Anheuser-Busch InBev NV and SABMiller Plc.
The new strategy "sounds sensible, but hardly revolutionary", James Edwardes Jones, an analyst at RBC Europe, said. "We believe the new CEO has made a good start building credibility with investors and analysts, and think this is likely to be well received."