Carlsberg Group

Capital Structure & Financial Policy

Presentation for The Danish Society of Financial Analysts
8
th
April 2014
Lars Cordi, VP & Group Treasurer
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
3
This is Carlsberg Group today
No. 1
in Northern & Eastern
Europe and fourth largest
brewer in the world
500
different beer
brands
40,000
employees on
three continents
36,000,000,000
bottles of beer sold in 2013
150
Markets around
the world
Presentation for The Danish Society of Financial Analysts - 8th April 2014
4
The Carlsberg Group has undergone big changes
in recent years
1990
OPERATIONS IN
Denmark, UK and Malawi. Minority
ownerships in Finland, Italy and Malaysia

Carlsberg is an international beer brand but mainly
through export and licensed brewing
MALAWI
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
MALAWI
5
The journey to becoming an international
company begins few leading positions globally
ACQUISITIONS
Sweden, Finland, Italy, Portugal,
Lithuania, Poland, Croatia, Turkey,
Nepal, Sri Lanka and Vietnam

1999
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
MALAWI
6
Merger with Orkla (Norway) and joint venture in BBH
ACQUISITIONS
Norway, Sweden, Switzerland, Poland,
Turkey
JOINT VENTURES
BBH (Russia, Ukraine, Belarus and Baltic
countries) is a joint venture between
Carlsberg Breweries (owned by
Carlsberg and Orkla) and UK brewer
Scottish & Newcastle
2001
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
7
Further acquisitions in Europe and Asia and increased
shareholdings in BBH through buy-out of Orklas shares
ACQUISITIONS
Norway, Germany, Serbia, Croatia,
Bulgaria, Nepal, Western China, Laos,
South Korea, Malawi

JOINT VENTURES
BBH (Russia, Ukraine, Belarus,
Kazakhstan and Baltic countries) is now
a joint venture between Carlsberg
Breweries and UK brewer Scottish &
Newcastle
2004
MALAWI
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
8
Acquisition of Scottish & Newcastle gives majority
ownership of BBH, France, Greece and more
ACQUISITIONS
BBH (Russia, Ukraine, Belarus,
Kazakhstan, Uzbekistan, Baltic
countries), France, Greece, India,
Western China
DIVESTMENTS
Turkey, South Korea
The biggest acquisition by a Scandinavian company
2008
MALAWI
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
9
Carlsberg Group today the worlds fourth largest
international brewer
ACQUISITIONS
Increased shareholding in Chongqing
Brewery Company in China to 60%

2013
MALAWI
+ 50% ownership
0-50% ownership
Joint ventures
Presentation for The Danish Society of Financial Analysts - 8th April 2014
Our three regions at a glance
Western Europe
% of total
beer volume
% of EBIT
Eastern Europe Asia
2013
2013
Group
Presentation for The Danish Society of Financial Analysts - 8th April 2014 10
41 35 24
47 36 17
(2009: 43%) (2009: 44%) (2009: 13%)
(2009: 41%) (2009: 52%) (2009: 7%)
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
12
We want to be a significant player in the markets
where we choose to compete
We want to balance our presence in both mature and growth markets
Most of the western world is fully consolidated and major local player
are owned by the big four international brewers
Worlds top-4 brewers
Presentation for The Danish Society of Financial Analysts - 8th April 2014
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
Group ownership structure
14
Carlsberg
Foundation
Free
float
Carlsberg A/S
Listed on Nasdaq OMX
Copenhagen
Carlsberg
Breweries A/S
Operating companies
30% of capital
75% of votes
70% of capital
25% of votes
100%
20%
34%
20%
26%
Denmark
USA
UK
Other
Note: Excluding The Carlsberg Foundation
Geographical break-down of shareholders
Presentation for The Danish Society of Financial Analysts - 8th April 2014
Carlsberg Foundation Charter
15
+ New dividend policy
Min. 25% of retained earnings to be phased in over two years
1970
2007
51% of capital
2013
51% of votes
25% of capital
51% of votes
No condition on capital
Presentation for The Danish Society of Financial Analysts - 8th April 2014
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
Financial policy
Centralized funding and risk management at the
level of Carlsberg Breweries A/S
Diversified sources of funding and smooth
maturity profile
Risk perception is to actively manage exposures
Ample capital resources available at all times
Committed to retaining investment grade credit
rating
17 Presentation for The Danish Society of Financial Analysts - 8th April 2014
Funding structure
18
Carlsberg A/S
Listed on Nasdaq OMX
Copenhagen
Carlsberg
Breweries A/S
Operating
companies
72%
18%
4%
5%
1%
Bonds
Non-current bank borrowing
Mortgages
Current bank borrowings
Other, current and non-current
Funding sources
Conservative funding policy

Main funding sources are
bonds and long-term bank
facilities

A new EUR 2,510m multi-
currency facility due February
2019 with options to extend
additional 2 years was signed
December 2013

5 bonds issued under 5bn
EMTN program
Centralized funding at the level of Carlsberg Breweries A/S
Presentation for The Danish Society of Financial Analysts - 8th April 2014
Commitment to Investment Grade
19
Rated by Fitch and Moodys since January 2006


Long Term Issuer Rating: BBB
Outlook: Stable
Date: 21-02-2011 (upgrade from
BBB-, stable outlook)
Carlsberg Breweries A/S' (CB) ratings reflect
its leading positions in core markets, moderate
geographical diversification and increasing
focus on emerging countries. The ratings are
supported by the resilience of CBs operating
profit and cash flow generation to a sequence
of challenges encountered in its core Russian
and western European markets.


Rating: Baa2
Outlook: Stable
Date: 23-02-2011 (upgrade from Baa3,
stable outlook)
Carlsberg Breweries' Baa2 long-term issuer
rating is underpinned by the group's (1) scale as
one of the world's largest brewers, with leading
positions in some of its key European markets,
including Russia; (2) a degree of geographic
diversification ; and (3) solid cash flow
generation supporting net debt reduction, albeit
at a slower pace given ongoing challenging
trading conditions in the European beer sector.
Presentation for The Danish Society of Financial Analysts - 8th April 2014
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
Investment grade issuers have priority access to
financial markets during volatile times
21
The Collapse
of Lehman
Brother
The
Sovereign
Debt Crisis
in Europe
Peripheral
European
Debt
Concerns
Source: Dealogic, Bloomberg, BNP Paribas
Over all supply decreases as investors becomes more picky in volatile times

The IG market is by far more resilient, is open longer and never totally shuts down even
when volatility strike whereas the red Sub-IG (includes Non-rated) areas vanishes or
significantly decrease during the same periods

IG corporates will have greater access to bigger pools of liquidity at all times, but more
specifically (and perhaps importantly) when liquidity freeze up

0
50
100
150
200
250
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Sub-IG Corporate EUR IG Corporate EUR
0
10
20
30
40
50
60
70
80
90 VIX Index (RHS)
Quarterly Issuance Volumes in Relation to the VIX Volatility Index since 2008
Presentation for The Danish Society of Financial Analysts - 8th April 2014
Investment grade issuers benefit from more
stable funding costs during volatile times
Presentation for The Danish Society of Financial Analysts - 8th April 2014 22
Enron Default ,
Dotcom Bubble and
9/11 attack
Lehman
Brother
collapse
and debt
crisis
Peripheral
European
Debt
Concerns 21%
Source: Merrill Lynch Index, BNP Parisbas
0
5
10
15
20
25
1999 2001 2003 2005 2007 2009 2011 2013
European BBB index European HY BB index
The costs differential between European BBB and BB High Yield Corporates since 1999

The historical cost of funding between BBB and BB rated issuers shows that the BBB cost is
much less volatile compared to BB

Even though the funding cost rise for BBB corporates at distressed times, it remains low
compared to the significant spikes BB corporates experience

On a note separate to cost, there is of course other benefits of staying IG such as less
covenants, longer maturities available etc.
1. Group development

2. Ambition

3. Ownership structure

4. Financial policy

5. Importance of investment grade

6. Cash is king
Strong focus on working capital management to
improve financial flexibility
0%
2%
4%
6%
8%
10%
12%
2006 2007 2008 2009 2010 2011 2012 2013
ATWC/net revenue
24 Presentation for The Danish Society of Financial Analysts - 8th April 2014
Group wide initiative to
reduce average trade
working capital
Dedicated work streams
and initiatives for
inventories,
accounts payable
and accounts
receivables