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Carlsberg commits to Russia and improved return on capital
[COPENHAGEN] Carlsberg will remain in Russia, despite the problems it faces there, as the Danish brewer vowed to improve its return on capital under a strategy outlined by its new chief executive.
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 on Wednesday.
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, Carlsberg did not say what ROIC it expected, which disappointed some analysts. "There are no tangible financial targets. I had hoped for some concrete ROIC targets, but they didn't give those," analyst Ricky Rasmussen from Nykredit told Reuters.
Carlsberg reported a ROIC of 8.1 per cent for 2015. That figure excluded major writedowns made by 't Hart.
If these were included, Carlsberg's ROIC was negative 2.6 per cent, according to Reuters data, which compares to positive 9.2 per cent and 8.1 per cent at rivals Anheuser Busch Inbev and Heineken.
SABMiller, the last of the big four, had a return on capital of 9.0 in its financial year to end-March 2015, according to Reuters data.