2/20/2012 7:00 


Solid performance in NW Europe and Asia; changes implemented in Russia

• In 2011, Carlsberg achieved solid results in Northern & Western Europe and continued our strong performance in Asia. In Northern & Western Europe, our performance was driven by efficiency improvements and market share gains, while in Asia it was driven by growth and market share gains. Our performance in Eastern Europe was impacted by the Russian beer market decline and our Russian market share loss, which was caused by a high level of promotions and price activations by competitors. Group results were in line with our expectations announced in August.

• The overall Northern & Western Europe beer market was flat in 2011. The Russian market declined by an estimated 3% and was negatively impacted by high inflation on basic food items and the substantial beer price increases introduced over the last two years. Most Asian markets continued to grow at high single-digit percentages.

• Price/mix was +5% for beer with a particularly strong contribution from Eastern Europe and Asia, reflecting the Group's ambition to drive value in the beer category by balancing our focus on volume and value share growth. The commercial activities included several product launches, a revitalisation of certain existing brands and an ongoing roll-out of value management tools.

• An important commercial project in 2011 was the repositioning of the Carlsberg brand across more than 150 markets. The Carlsberg brand grew in volume by an encouraging 7% in premium markets.

• Group beer volumes grew by 4% to 118.7m hl with 3% organic growth. All regions reported organic volume growth. In Q4, Group beer volumes grew organically by 8%, positively impacted by stock building by Russian distributors.
• Net revenue increased by 6% to DKK 63.6bn with 6% organic growth. Q4 net revenue grew by 11% to DKK 14.9bn with 11% organic growth.
• We are continuing to plan and implement new and more efficient ways of working across the Carlsberg Group such as harmonising SKUs; embedding the Business Standardisation Programme (BSP) into the organisation; and taking the first steps towards establishing a fully integrated supply chain.

• In 2011, higher input costs, higher logistics costs and a higher level of sales and marketing investments, particularly in Eastern Europe and Asia, resulted in an operating profit of DKK 9,816m with a 4% organic decline. Q4 operating profit grew strongly by 67% to DKK 1,834m.

• Net profit was DKK 5,149m.

• Free cash flow was DKK 3.9bn. Trading working capital to net revenue was 1.9% compared to 2.6% in 2010. Net interest-bearing debt was DKK 32.5bn, impacted by acquisitions, share buy-back and currency impact.

• During the year, the Group continued to increase ownership in its companies across the regions, including companies in Vietnam, Laos, and China.

• For 2011, the Company proposes a 10% increase in dividend per share to DKK 5.50. Notwithstanding the slight decline in earnings per share (in reported terms), the Company has demonstrated strong cash flow generation in the past three years and has reduced the leverage and increased the interest cover. Subsequently, the Company's credit rating has improved over the last years and is currently "BBB stable outlook/Baa2 stable outlook".

• Based on an assumed EUR/RUB rate of 43.3 and a negative volume and earnings impact in 2012 from destocking by distributors in Russia in Q1 2012, for 2012 the Carlsberg Group expects:

• Operating profit before special items at the level of 2011 (higher at the 2011 average EUR/RUB rate)
• Slightly growing adjusted net profit 

• The Carlsberg Group intends to make a voluntary offer for the remaining outstanding shares in its Russian subsidiary, Baltika. We will take the necessary steps to arrange for a delisting of Baltika as soon as possible. Full ownership of Baltika will give the Carlsberg Group greater operational flexibility. When completed, the transaction is expected to be immediately earnings-enhancing.

Commenting on the results, CEO Jørgen Buhl Rasmussen says: “While 2011 was a challenging year with headwinds from rising input costs and a challenging Russian market, our Northern & Western European and Asian regions continued to perform well, both commercially and financially. Throughout the year, we maintained our focus on profitable development by balancing volume and value share, which led to share growth in both volume and value in Northern & Western Europe and Asia, but in the case of Russia resulted in market share loss due to a high level of promotional activities from competitors.

In our planning for 2012, we're investing to grow market share and continuing the implementation of efficiency improvements. Strong prioritisation on the most important activities will be a key driver for how we approach businesses in what we expect to be a challenging environment in Northern & Western Europe in 2012. In Russia, the steps we've taken to strengthen the business will begin to bear fruit in 2012. At the same time we'll continue to explore acquisition opportunities in growth markets.”


Carlsberg will present the financial statements at a conference call for analysts and investors today at 9.00 am CET (8.00 am GMT). The conference call will refer to a presentation which is available for download here...


Download the full announcement in the right column. 



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