The Point for Europe

Research evidence excerpt

The Point for Europe

and), we think 2Q group EBIT could be MSD below Street

underlying if not for the profits brought forward in International (low-triple-digit

EUR million amount including 100% of likely s232 offsets and a mid-double-digit

IEEPA refund). The IEEPA refund is incremental vs the FY guide but a low PE event

anyway (and other Industrials in our coverage have flagged this as likely). There

was no explicit 2Q comment on the trading in Scania/VWTB; thus, we expect

trading for 2Q here will be broadly in-line with Street. Other takeaways: 1) Move

incentives in Brazil will still boost orders, but benefits should roll over from July; 2)

USCMA annual reviews shouldn't change the s232 25% tariff rate, in-line with our

view.

Klas Bergelind | Siron Ng

Carlsberg (CARLb.CO) - SE Asia JV with Sapporo reduces leverage and increases

prospect of share buybacks. Buy.

Carlsberg and Sapporo Breweries have agreed to form a strategic partnership on a

new joint venture (JV) across Southeast Asia and Hong Kong, while also expanding

their collaboration into the UK (LINK). The new JV will be 75% owned by Carlsberg

and 25% by Sapporo and will include Carlsberg's existing operations in Hong Kong,

Singapore, Malaysia, Laos, Vietnam and Cambodia and the rights to

produce/distribute the Sapporo brand in these markets. We estimate the $643m

(DKK4.2bn) cash Carlsberg will receive from Sapporo for its 25% stake, means the

transaction may be marginally EPS dilutive, (pre growth or SBB's) in year 1.

However, the cash inflow will reduce balance sheet leverage by c.0.2x, (implying

adjusted FY27E leverage of c.1.9x net debt/EBITDA). This raises the prospect of

Carlsberg announcing a new share buyback later this year/with its FY26E results.

We expect the deal to be well received by investors.