11/9/2010 7:00 


Strong performance continues

• The Carlsberg Group achieved 18% operating profit growth to DKK 9.1bn for the first nine months of 2010. Group operating margin continued to improve and grew by 270bp to 19.6%. In 2010, the Group has increased its spend behind brands and innovations, resulting in improved market share in large parts of the business.

• The market trends in Northern & Western European improved, compared to 2009, but consumer dynamics remain challenging and the overall beer market declined slightly. The market trends in all Eastern European markets improved, and all markets grew in Q3, driven by improving macroeconomics, improved consumer sentiment, and warm weather. The beer markets in Asia continued the growth trend at mid to high-single-digit percentages on average.

• In Northern & Western Europe, the Group's market share improved after flat market share development in recent years. In Eastern Europe, especially the Ukrainian business continued its strong market share performance. The Russian market share declined by 80bp  for the nine months, but the market share in September was the highest recorded for the year and the same as September 2009. In Asia, market share gains were once again achieved across most markets.

• For the nine months, beer volumes increased by 1% to 89.7m hl with an organic volume development of -1% (-2% for total beverages). Excluding the Russian destocking effect in Q1, beer volumes grew organically by an estimated 1%.

• In Q3, Group organic beer volume grew by 3% with volume growth in all regions.

• Net revenue increased by 2% to DKK 46.7bn (DKK 45.8bn in 2009) with a -2% organic net revenue development. Price/mix was flat. Q3 net revenue increased by 8% to DKK 17.7bn (DKK 16.4bn in 2009) with organic development of 2%.

• Operating profit increased by 18% to DKK 9,149m (DKK 7,747m in 2009) with 8% organic operating profit growth in the beverage activities. Currency movements impacted positively by 9%, mainly related to the recovery of the Russian rouble from 2009. Q3 operating profit was DKK 4,167m (DKK 3,304m in 2009) with a 15% organic growth in the beverage activities. All regions delivered double-digit organic operating profit growth in Q3.

• Net profit was DKK 5,050m (DKK 3,219m in 2009). This includes the non-cash, non-taxable income in special items of DKK 390m, booked in Q1, related to new acquisition accounting regulation. Excluding this one-off item, net profit grew by 45%.

• By the end of September 2010, all DKK 1.3bn synergies from the Scottish & Newcastle acquisition have been delivered.

• Free cash flow was DKK 5,815m (DKK 6,116m in 2009) and net interest bearing debt was DKK 31.8bn (DKK 38.5bn end Q3 2009).

• The Carlsberg Group expects an operating profit for 2010 of more than DKK 10bn compared to previous expectations of operating profit at around DKK 10bn. In Q4, the Eastern Europe region is expected to deliver significantly lower earnings than last year due to comparables (positively impacted last year by stocking in Russia), increased input costs and phasing of sales and marketing expenses this year. Net profit growth expectations for 2010 are kept unchanged at around 40% (excluding the DKK 390m one-off acquisition related special item).

Commenting on the results, CEO Jørgen Buhl Rasmussen says: “We entered the year with clear plans of improving our market positions through increased focus on the top-line while at the same time executing on our efficiency agenda. With the strong performance, the Group is well on track to deliver on these plans for 2010. We are moving towards our medium-term margin target and reducing the profitability gap to other fast-moving-consumer-goods companies. While we see signs of market recovery in the important Eastern Europe region, market conditions remain challenging in several Northern & Western European markets and looking forward, we will be impacted by rising input costs and will therefore have to increase sales prices.”

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 slide deck, which will be available here... 

Download the full announcement in the right column.



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