FDBusiness.com

Reflecting a continuing decline in its eastern European beer markets, Carlsberg Group has reported a net loss of DKr2.6 billion, including special items of –DKr8.7 billion (€361 million) chiefly relating to impairment and restructuring charges, for the year ended 31 December 2015. Reported operating profit declined by 8% to DKr8.457 billion, affected by a negative currency impact of DKr130 million, and adjusted net profit fell 17% to DKr4.557 billion. Net revenue rose by 13.2% to DKr65.354 billion.

Group beer volumes for the year declined organically by 4% due to the weak Russian and Ukrainian beer markets. Reported beer volumes declined by 2%, with a positive acquisition impact from China and Greece. Other beverages grew organically by 2%, driven by growth in the Nordic and Asian non-beer businesses.

Operating profit declined organically by 7% as Carlsberg Group delivered strong results of +13% in Asia, a modest decline of 3% in Western Europe and a decline of 19% in Eastern Europe. Group operating profit margin for the year declined by 140bp to 12.9%, primarily as a result of the market decline in Eastern Europe and higher depreciation.

Cees ‘t Hart, chief executive of Carlsberg Group, comments: “2015 was a mixed year for the Carlsberg Group. While our Asian business continues to perform strongly, our businesses in Western and Eastern Europe had a challenging year. As a consequence of the strong Asian results, however, 2015 marked the inflection point when the growth markets of Asia accounted for a larger part of the Group than Eastern Europe.”

Cees ‘t Hart, chief executive of Carlsberg Group.

2015 was a year of significant change for Carlsberg Group as it initiated a two-part, multi-year transition. The first part is Funding the Journey, a programme to improve operational efficiency, announced in November 2015. The programme unifies all existing and new profit improvement initiatives. The second part is SAIL’22, which is the outcome of the strategic review of the business. While Funding the Journey is driving operational effectiveness, SAIL’22 will provide the group with a long-term strategic direction designed to create sustainable value and reverse the more recent top- and bottom-line trends.

Cees ‘t Hart continues: “I’m confident that the strengths of our business in terms of leading market positions, an attractive geographic profile, well-balanced portfolios of strong international and local brands, and committed employees provide us with a strong base upon which to build an organically growing business. The combination of Funding the Journey, which is well on track, and the upcoming evolution of our strategy, which leverages the strengths of our business, will enable us to capture growth opportunities and get into a positive spiral of growing profits and returns.”

In 2016, Carlsberg Group expects to deliver low-single-digit organic operating profit growth and a further reduction in financial leverage.