Carlsberg A/S Chief Executive Officer Cees ’t Hart will retire after eight years as the Danish brewer struggles to extricate itself from Russia and to raise prices enough to offset surging inflation.
(Bloomberg) — Carlsberg A/S Chief Executive Officer Cees ’t Hart will retire after eight years as the Danish brewer struggles to extricate itself from Russia and to raise prices enough to offset surging inflation.
Hart, 64, will leave the brewer at the end of the third quarter at the latest, Carlsberg said Tuesday, adding that the search for a successor has started. The stock fell as much as 4%.
The Dutch CEO has been in the role since 2015 and the company didn’t name an immediate replacement, suggesting the departure may be happening sooner than expected.
Hart became Carlsberg’s first non-Danish CEO with a mission to restore growth after a period of stagnant earnings. During his tenure, he focused on cutting costs and improving profitability but failed to reignite sales. The company’s stock gained more than 60% under the CEO, outperforming a 44% gain in Heineken NV and a 47% drop in Anheuser-Busch InBev NV over the same period.
The Danish brewer said in February that 2023 will be difficult as consumers start to retrench and consume less beer. It issued a wide-ranging profit forecast, predicting full-year operating profit could rise or fall as much as 5%.
One of Hart’s biggest challenges recently has been trying to divest Carlsberg’s Russian operations, which has attracted criticism from newspapers such as Berlingske Tidende. The brewer has rebutted claims that it had been opaque regarding efforts to divest the Russian business and about a possible buy-back clause that would allow Carlsberg to return eventually to the market.
Carlsberg, which is the biggest brewer in Russia and employs 8,400 people there, said last March it would exit that country completely due to the war in Ukraine. Consumer-goods companies including Philip Morris International Inc. have said that their exits from the country have been delayed because of the government’s role in such divestments. Carlsberg said last month its separation process is close to completion and it had identified fewer than 10 potential buyers.
“Staying on board for another half a year will allow me and the team to continue delivering on our challenging plans for 2023 and accomplishing the sale of the Russian business before the summer,” the CEO said in the statement.
The brewer entered Russia in 2000 and the operations were for years seen as the beermaker’s biggest growth opportunity. The market previously made up almost a third of Carlsberg’s profit, but its share has diminished in recent years.
What Bloomberg Intelligence Says
“Cees ‘T Hart will retire no later than 3Q, having transformed Carlsberg by focusing on its core assets and increasing marketing on its premium brands while restoring its balance sheet to a healthy position. This offers a favorable platform for future growth for the new CEO when hired, with potential to either acquire or build sales from its leadership positions in Europe and Asia.”
—Duncan Fox, senior consumer analyst
Carlsberg’s CEO Cees ‘T Hart Boosted ROIC by Nearly 70%: React
Hart has focused on expanding the 176-year-old beermaker’s range of specialty brews and non-alcoholic beers, segments where profitability has been the highest.
Despite his penchant for staying at inexpensive hotels, Hart was among the highest paid CEOs in Denmark and local media often used him as a symbol of excessive executive pay. Shareholders, including pension fund ATP, also questioned his remuneration level and in 2019 his pay was capped after criticism. Hart made 45.6 million kroner ($6.54 million) in 2022, the second-most among CEOs in the Nordic country, according to a tally by the Berlingske newspaper.
–With assistance from Marthe Fourcade.
(Updates with share gain under Hart in fifth paragraph)
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