FDBusiness.com

Carlsberg Group has reported flat net revenue of DKr32.4 billion (€4.34 billion) and 12% drop in operating profit to DKr3.58 million for the first half of 2015, as weak results in Western Europe and Eastern Europe were only partly offset by strong Asian results. Group operating profit margin declined by 160bp to 11.1%, primarily as a result of the weak performance in Western Europe in the second quarter and the market decline in Eastern Europe in the first half of the year. Adjusted net profit (adjusted for special items after tax) declined 23% to DKr1.73 billion.

Group beer volumes fell organically by 5%. However, the Danish brewer managed to increase its market share in the majority of its markets, helped by strong performances of its international premium brands – Tuborg (+16%), Somersby (+26%), Kronenbourg 1664 (+2%) and Grimbergen (+19%). The Carlsberg brand declined by 2% in its premium markets.

Cees ‘t Hart, chief executive of Carlsberg Group, comments: “The first half of 2015 has been challenging for the group with weaker than expected results in Western Europe and market decline in Eastern Europe. In Western Europe, we experienced bad weather in Q2 in Northern Europe and did not achieve the full range of anticipated savings. For the full year, we therefore do not expect that the strong Asian performance will be enough to offset the weaker than expected results in Western Europe and the challenging market conditions in Eastern Europe. Needless to say, we have a heightened sense of urgency to execute the efficiency improvement initiatives we started at the beginning of the year.”

Carlsberg Group has revised its 2015 earnings expectations. It now expects organic operating profit to decline slightly compared to previous predictions of mid- to high-single-digit growth.

Cees ‘t Hart continues: “Joining Carlsberg in mid-June, I’m in the process of getting to know the Group’s opportunities and challenges. While I’m delighted with the enthusiasm and commitment of our employees, I also recognise that we must step up further to achieve the full potential of the Group. To do so, we have initiated a process of revising the Group’s strategy to re-establish and further strengthen our financial flexibility. The results of this process will be announced in the first half of 2016.”