Carlsberg Breweries A/S...2016/11/15 · Carlsberg's Baa2 long-term ratings are supported by the company's (1) large scale as the world's third-largest brewer, with leading positions

CORPORATES

CREDIT OPINION16 November 2016

Update

RATINGS

Carlsberg Breweries A/SDomicile Denmark

Long Term Rating Baa2

Type LT Issuer Rating - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Paolo Leschiutta 39-02-9148-1140VP-Sr Credit [email protected]

Sara Santagostino 39-02-9148-1108Associate [email protected]

Marina Albo 44-20-7772-5365Managing [email protected]

Carlsberg Breweries A/SUpdate following the change of outlook to stable on Baa2rating

Summary Rating RationaleCarlsberg's Baa2 long-term ratings are supported by the company's (1) large scale as theworld's third-largest brewer, with leading positions in some of its key European and Asianmarkets, including Russia; (2) increasing geographic diversification; and (3) solid cash flowgeneration supporting gross debt reduction.

The ratings also factor in Carlsberg's (1) significant exposure to Eastern Europe and Russiain particular, where trading conditions remain challenging; (2) weaker margins comparedto rated global peers, reflecting a higher exposure to competitive beer markets in WesternEurope as well as to different local distribution models; and (3) credit metrics that arecurrently weak for the rating but are expected to improve over the next 6 to 12 months (i.e.by mid late 2017).

Exhibit 1

We expect Carlsberg will continue on itsdeleveraging trackMoody's Adjusted Debt/EBITDA

Exhibit 2

Carlsberg will maintain its retained cash flow(RCF)/Net Debt ratio above 20%Moody's Adjusted RCF/Net Debt

Source:Moody's Financial Metrics, Moody's estimates Source: Moody's Financial Metrics, Moody's estimates

Credit Strengths

» Third-largest brewer in the world by volume, with solid market positions in Europe andRussia

» Trading conditions in Russia are expected to improve

» Strong free cash flow generation

http://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1049817

MOODY'S INVESTORS SERVICE CORPORATES

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 16 November 2016 Carlsberg Breweries A/S: Update following the change of outlook to stable on Baa2 rating

Credit Challenges

» Weak credit metrics for the rating, but improvements are expected during 2017

» Exposure to event risk as the company might be interested in small to medium sized acquisitions

Rating OutlookThe stable outlook reflects Moody’s view that the company will be able to improve its credit metrics over time and manage itsexposure to emerging markets, while maintaining a conservative financial policy and healthy margins.

Factors that Could Lead to an UpgradeUpward pressure on the rating is unlikely in the short term as the company will need to demonstrate markedly reduced volatility inits profitability while continuing to improve its operating margins and credit metrics. An upgrade over time is possible if Carlsberg'sfinancial profile improves, such that RCF/net debt approaches 30% and debt/EBITDA reduces towards 2.0x.

Factors that Could Lead to a DowngradeConversely, a downgrade is possible if Carlsberg’s profitability and cash generation deteriorate, leading to an RCF/net debt below 20%,or to a debt to EBITDA above 3.0x.

Key Indicators

Exhibit 3

All figures and ratios are calculated using Moody’s estimates and standard adjustments. Moody's Forecasts (f) or Projections (proj.) are Moody's opinion and do not represent the viewsof the issuer. Periods are Financial Year-End unless indicated. LTM = Last Twelve Months. LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent company of CarlsbergBreweries, as Carlsberg Breweries does not publish quarterly reports. There are only non materials differences between the two companies.Source: Moody's Financial Metrics

Detailed Rating ConsiderationsTHE WORLD'S THIRD-LARGEST BREWER, WITH SOLID MARKET POSITIONS IN EUROPE AND RUSSIA

Following the completion of Anheuser-Busch InBev’s (ABI, A3 stable) of SABMiller Plc (A3 review for downgrade), Carlsberg ranksas the world's third-largest beer company by volumes, behind the now much larger ABI, and Heineken (Baa1 stable) and ahead ofMolson Coors Brewing Company (Baa3 stable). We estimate that following the ABI-SAB merger and the assets exchanges thatfollowed, Carlsberg is number fourth player based on revenues. Although globally Carlsberg remain smaller than ABI and Heineken,its competitive strength is supported by strong foot hold in both Europe and Russia. Across Europe Carlsberg competes head to headagainst Heineken and we do not expect its position to be significantly affected by the ABI-SAB deal as ABI announced the disposal ofmost of SABMiller’s European assets.



Exhibit 4

Carlsberg is #3 player on volumesMillion Hectoliter

Exhibit 5

Carlsberg is #4 player on net revenuesUS$ billion

Note: Ex-SAB Assets for ABI exclude all European assets of SAB, but include all Africanbusiness.Source: Moody's estimates based on companies reports and Euromonitor data

Note: Ex-SAB Assets for ABI exclude all European assets of SAB, but include all Africanbusiness.Source: Moody's estimates based on companies reports

Carlsberg's market leadership in Russia will not change as SABMiller sold all of its Russian operations to Anadolu Efes Biracilik ve MaltSanayii A.S.'s (Efes, Baa3 negative) in 2012 in exchange for a 24% stake in the Turkish beer producer, and Carlsberg is a strong marketleader being larger than the number two, three and four players combined.

At the end of 2015, the company held the number one position in numerous countries, notably the Nordic region, the Baltic states,Switzerland, Russia, where it operates through Baltika Breweries, and some smaller Asian markets such as Laos, Nepal and Cambodia.According to Euromonitor Carlsberg had a 37% market share in 2015 in Russia, far ahead of other big players in the country such asAnheuser-Busch InBev, Heineken and Efes, each of which has an estimated 11%-13% market share.

Exhibit 6

Carlsberg will be third largest players with strong leadership in RussiaEuromonitor market share by volume at the end of 2015: World (Chart 1), Europe (Chart 2) and Russia (Chart 3)

Data represent market share before ABI-SAB acquisition and before the planned disposal of SAB assetsSource: Euromonitor

Carlsberg’s core portfolio of beer brands comprises more than 20 key brands, led by Baltika, Kronenbourg, Carlsberg and Tuborgwith some concentration on Baltika and Carlsberg. These brands have proved instrumental in reinforcing the group's brand equity



internationally and regionally. The Baltika brand is the number one beer brand by volumes in Russia. In addition, Carlsberg Brewerieshas licensing agreements to produce soft drinks, which accounted for approximately 15% of its total sales volumes in 2015.

PROFITABILITY UNDER PRESSURE OWING TO HIGH RELIANCE ON RUSSIA WHERE TRADING CONDITIONS REMAIN DIFFICULT

Carlsberg's operating margins, in line with Heineken, lags other peers operating profitability mainly owing to its higher than averagereliance on Europe where the direct distribution system implies lower operating margins. This is because beer producers book boththe revenues and the low margin contribution of the distribution activity which dilute operating margins. On top of this, Carlsberg’soperating profit has remained under pressure since late 2014 due to the difficult macroeconomic conditions in Russia, Carlsberg’s singlelargest market, which resulted in double digit volumes decline in beer consumption during 2015.

Exhibit 7

Carlsberg profit at low end of peers given exposure to EuropeEBITA margin

Note: LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent company of Carlsberg Breweries, as Carlsberg Breweries does not publish quarterly reports. There are onlynon materials differences between the two companies ratios.Source: Moody's Financial Metrics

Over the years, however, Carlsberg's reliance on Russia has reduced to around 16% of group profit from around 40% four years ago,which is positive. Apart from the reduced contribution of the Russian market, Carlsberg has expanded its activities into developingcountries in Asia (mainly China, India and Vietnam), which represented 31% of group’s profit before non-allocated costs at June 2016.Growth in Asia helped the group to compensate for difficulties in Russia. During 2016 a degree of recovery across Western Europehelped group profit to grow organically by 8% during the first six months. During the period, group profit were down 4% on a reportedbasis due to ongoing adverse foreign exchange movements.



Exhibit 8

Reliance on Russia has reduced (Profit contribution by region (in %)

Note: LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent company of Carlsberg Breweries, as Carlsberg Breweries does not publish quarterly reports. There are onlynon materials differences between the two companies ratios.Source: Moody's Financial metrics

We now expect recovery in the company’s operating profit owning to Carlsberg’s cost restructuring and strategy programmes and adegree of improvement in macroeconomic conditions in Russia (Moody's expects GDP in Russia to grow at 1.5% during 2017).

Through its cost saving programme, Funding the Journey, Carlsberg expects to deliver around DKK1.5-2 billion (€200-270 million) ofcost benefits by 2018, a quarter of which during 2016 and approximately half of savings in 2017. The programme is progressing asexpected and main activities so far have included the closure of 11 Chinese breweries, closure of lines in Russia and the UK, outsourcingthe UK logistics activity and the disposal of Danish Malting Group, Carlsberg Malawi, Vung Tau brewery and Sejet. In March 2016the company also announced its SAIL’22 strategy which will see the company increasing its focus on strengthening its core activities,maintaining its presence in Russia, and focusing on growing segments and regions such as craft beers and Asia.

Going forward we expect Carlsberg profit to grow organically broadly in line with the alcoholic beverage industry, at around 4%to 5% over the next 12 to 18 months. This is also in line with the company’s 2016 outlook to grow its profit by 5%. The companyrevised upwards its outlook in November 2016 when it announced its Q3 2016 trading statement. Our expectation for 2017 takes intoconsideration the fact that the company remains exposed to the PET ban on 1.5 liter beer bottle to be introduced in Russia startingfrom January 2017. This is likely to result in volumes declining by low to mid-single digit, although we expect the company to recoverpart of the lost business with smaller size packages that carries better price and margin contributions. Carlsberg reported results willremain however exposed to foreign exchange movements, although we currently expect lower volatility in the rouble during 2017.

CARLSBERG'S FREE CASH FLOW GENERATION REMAINS STRONG

Despite the difficulties in Russia, Carlsberg's free cash flow generation has remained strong and supportive of its ratings, also thanksto a greater control on its capital expenditure. During the first six months of 2016 Carlsberg free cash flow generation was particularlygood also helped by extraordinary working capital inflow and a number of assets disposals, which will help the company to reduce itsgross debt this year. Absent of exceptional events and assuming constrained amount of capex, we still expect the company to generatearound DKK3-3.5 billion of free cash flow in a normal year. We note, however, that in order to preserve cash generation the companyreduced its annual capex to around DKK4 billion per annum. Although we don’t expect capex to peak again at 2013-14 levels of aroundDKK6 billion, we would expect some increase in investments overtime as the company finance its strategic programme. This, however,is not expected to affect significantly the company’s free cash flow generation.



Exhibit 9

Carlsberg's Free Cash Flow generation remains strongMoody's adjusted Cash Flow statement

Note: LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent company of Carlsberg Breweries, as Carlsberg Breweries does not publish quarterly reports. There are onlynon materials differences between the two companies.Source: Moody's Financial Metrics

FINANCIAL LEVERAGE REMAINS WEEK BUT DELEVERAGING EXPECTED OVER THE NEXT 6-12 MONTHS, DEGREE OF EVENT RISK

Carlsberg’s financial leverage, on a Moody’s adjusted debt to EBITDA basis, is still below our requirements to maintain its current Baa2rating. However we expect this to reduce to below 3.0x over the next 6 to 12 months. Carlsberg’s retained cash flow (RCF) / to netdebt is instead within the boundaries to maintain the rating. Expected improvements in financial leverage will stem both from ourexpectation on growing profit but also from our understanding that the company will reduce its debt. In this context we positively notethe strong free cash flow generation of the company and Carlsberg’s commitment to reduce its leverage.

We also derive some comfort from the company’s stated intention to reduce leverage. As part of the SAIL’22 strategy announcement,Carlsberg committed to a financial leverage target of below 2.0x, measured as the company’s reported net debt to EBITDA ratio. This isbelow the previous target of 2.5x and lower than the 2.2x the company reported at the end of 2015, implying further deleveraging overthe coming months. We note that a company’s reported net debt to EBITDA ratio of 2.0x would translate into a Moody’s-adjustedgross leverage of around 3.0x, which is closer to the requirement to maintain the rating. The company has also announced its intentionto pay out of cash the upcoming £300 million bond maturing in November 2016 which resulting in a reduction in its gross leverage.We understand that the company plans to increase its dividend pay-out ratio to around 50%, up from the current 30%. However, anypay-out increase will be subsequent to achieving the targeted net debt to EBITDA ratio.

Although our rating does not assume any acquisition, we believe the main risk that might delay Carlsberg’s deleveraging is theCompany's potential interest in pursuing small acquisitions to grow in emerging markets. Our rating and outlook, however, aresupported by our expectations that deleveraging will reduce in any case over the next 6 to 12 months, with a small transaction possiblydelaying the deleveraging towards the end of the period. In this context we note that the group raised approximately DKK1.4 billionduring the first six months of 2016 from assets disposals and cashed in additional proceeds in the second half of the year.

Liquidity AnalysisCarlsberg Breweries' liquidity is satisfactory, underpinned by a cash balance of around DKK3.6 billion (€483 million) at end of June 2016and recurring operating cash flows generated by the group's brewing activity, at approximately DKK10.1billion (€1.35 billion) during2015. Carlsberg’s liquidity is further supported by the company's access to a committed bank facility of €2.5 billion, which was partiallydrawn during the year, due in February 2021 and without financial covenants.

Carlsberg’s current liquidity is sufficient to cover the company's (1) capital investments, approximately DKK4billion (€537 million)during 2015; (2) annual dividend payments of around DKK2billion (€268 million) paid in first-half 2016; and (3) short-term debtrepayment of DKK5.7 billion (€766 million) as of June 2016, including the £300 million (DKK2.5 billion) bond due in November 2016that the company intends to repay out of cash.



Peer ComparisonCarlsberg has slightly stronger metrics than Baa1 rated Heineken but rating differential is justified by Heineken stronger business profilein light of its larger size, higher diversification and stronger presence in the premium category. During 2016 Heineken has changedthe reporting of its notional cash pooling arrangements and as a result its gross debt was inflated compared to historical levels byapproximately €1.5 billion as of June 2016. The same amount is also recorded as cash on balance sheet. However, the latter is notreflected in our gross leverage calculation. Financial leverage netting cash pooling balances from overdraft in June 2016 would be 3.3xinstead of 3.6x. Other peers are less representative given expected impact from recent M&A transactions.

Exhibit 10

Carlsberg has slighty lower leverage than HeinekenMoody's Adjusted Debt/EBITDA

Exhibit 11

Carlsberg RCF/Net positions well the company in the ratingcategoryMoody's Adjusted RCF/Net Debt

Note: LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent companyof Carlsberg Breweries, as Carlsberg Breweries does not publish quarterly reports. Thereare only non materials differences between the two companiesSource: Moody's Financial Metrics

Note: LTM data at June 2016 represent ratios of Carlsberg A/S (unrated), parent companyof Carlsberg Breweries, as Carlsberg Breweries does not publish quarterly reports. Thereare only non materials differences between the two companiesSource: Moody's Financial Metrics

ProfileBased in Denmark, Carlsberg Breweries A/S is 100%-owned by Carlsberg A/S (unrated) and is one of the world's largest brewers byvolumes, producing and distributing a wide range of beer brands, including the leading Carlsberg brand, the international premiumbrands Tuborg, Kronenbourg 1664 and Grimbergen, as well as regional premium brands such as Baltika and Beerlao, soft drinks,and bottled water. In 2015, Carlsberg produced 120.8 million hectolitres of beer and posted total net revenues of DKK65.4 billion(approximately EUR8.8 billion). During the first nine months ending September 2016, Carlsberg sold 93.0 million hectolitres of beerand posted total net revenues of DKK48.8 billion (approximately EUR6.6 billion).

Rating Methodology and Scorecard FactorsThe grid indicated rating of Moody's Global Alcoholic Beverage Industry is in line with Carlsberg's rating based on FYE 2015 ratios. Wedo not expect changes to the outcome over the next 12 to 18 months, but a strengthening is possible beyond year-end 2016.



Exhibit 12

Rating Factors

Source:Moody's Financial Metrics

Ratings

Exhibit 13Category Moody's RatingCARLSBERG BREWERIES A/S

Outlook StableIssuer Rating Baa2Senior Unsecured Baa2

Source: Moody's Investors Service



© 2016 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES ("MIS") ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'SPUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKESECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANYESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKETVALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICALFACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHEDBY MOODY'S ANALYTICS, INC. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDITRATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDITRATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGSAND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY ANDEVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FORRETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACTYOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW,AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTEDOR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANYPERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as wellas other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information ituses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody's Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for anyindirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use anysuch information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of aparticular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents,representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCHRATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody's Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion asto the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be recklessand inappropriate for retail investors to use MOODY'S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or otherprofessional adviser.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody'sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it feesranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1049817

Documents

Carlsberg Breweries A/S...2016/11/15 · Carlsberg's Baa2 long-term ratings are supported by the company's (1) large scale as the world's third-largest brewer, with leading positions