Carlsberg Sustains Earnings Growth
Despite continuing tough trading conditions in Europe, Carlsberg has achieved 4% organic growth in operating profit to DKr4.1 billion and increased organic net sales by 2% to DKr32.9 billion (Eur4.4 billion) for the first half of 2013. The operating profit growth was driven by double-digit growth in Asia and Eastern Europe. Reported net profit was lower than in the first half of 2012 due to the DKr1.7 billion gain (pre-tax) last year from the sale of theCopenhagenbrewery site.
Carlsberg’s performance was impacted by challenging market conditions across Europe with Russia being affected by outlet closures and Western Europe reflecting tough comparisons with the previous year, which was boosted by the EURO 2012 soccer tournament.
Although Carlsberg’s market share remained flat in Western Europe during the first half of 2013, the brewer managed solid market share improvements in Eastern Europe (+130bp in Russia to 39.2%) and Asia. Organic beer volumes were flat with growth in Asia and Eastern Europe off setting weaker volumes in Western Europe.
The international brands Tuborg and Somersby performed well with volume growth of 12% and 85%, respectively. The Carlsberg brand declined 10% in premium markets due to tough comparisons with last year’s EURO 2012 activities when the brand grew by 13%.
Following a successful go-live of the supply chain integration and business standardisation project (BSP1) in Sweden, Carlsberg is on track preparing for implementation in Norway and the UK.
Jorgen Buhl Rasmussen, chief executive of Carlsberg, comments: “For the first six months, the group achieved earnings growth despite challenging market conditions in Western and Eastern Europe. Our Asian business again delivered impressive volume and earnings growth. On the back of the Q2 results and the start of Q3, we’re on target to deliver on our 2013 expectations.”
He continues: “The ongoing challenging market conditions underpin the importance of our continued efforts to make our business more efficient and the initial results from the implementation of BSP1 in Sweden give us confidence that we’re on the right track. We will, however, also maintain an ambitious commercial agenda with continued investments in our brands and innovations, while constantly upgrading our sales and execution capabilities. These are delivering satisfying market share improvements.”
Despite challenging markets, Carlsberg’s 2013 earnings expectations remain unchanged – operating profit before special items of around DKr10 billion and adjusted net profit to increase by a mid-single-digit percentage.
The costs associated with the roll-out of the integrated supply chain and business standardisation project in Western Europe will impact group operating profit in 2013 by approximately DKr300- 400 million.
