6/7/2000 10:00 

The First six months in outline:

  • Group sales of beer and soft drinks grew by about 4 per cent.
     
  • The Group's turnover amounted to DKK 16bn, an increase of 10 per cent compared with the same period last year.
     
  • Operating profit totalled DKK 653m against DKK 638m last year (+2%).
     
  • Special items registered a net income of DKK 214m.
     
  • Profit before tax amounted to DKK 757m against DKK 683m last year (+11%).
     
  • The half-year result is better than expected in the annual accounts for 1998/99.
     
  • For 1999/2000 operating profit is expected to be higher than in 1998/99.
     
  • Carlsberg has acquired the minority shareholder's 40 per cent interest in the Finnish brewery Sinebrychoff and the Swedish brewery Falcon and now owns both breweries 100 per cent. The shareholding in the Russian brewery Vena has been increased proportionally through the acquisition of the remaining 40 per cent of Sinebrychoff.
     
  • The increase of the shareholding in Carlsberg Brewery Malaysia Berhad to 50 per cent has now been approved by the authorities.
     
  • Carlsberg A/S continues work on dividing the organisation into three business areas: Carlsberg Breweries (Beer), Carlsberg Soft Drink and Carlsberg Finans.
     
  • Efforts to divest the shareholdings in Royal Scandinavia and Tivoli continue and agreements are still expected to be made within the year.
     
  • The Danish Ministry of Justice has approved the proposal for changes to the charter of the Carlsberg Foundation.
     
  • Carlsberg A/S establishes the company Carlsberg Breweries A/S, which will take over Orkla ASA's beverage activities, cf. the notice to the Copenhagen Stock Exchange of 31 May 2000.

Contact: Phone +45 3327 3327
President and Group Chief Executive
Flemming Lindel©ªv or
Group Managing Director J©ªrn P. Jensen


Highlights and Key Figures
for the period 1 October 1999 - 31 March 2000

- in DKK million

1998/99
6 months

1999/00
6 months 

Changes
in %

1998/99
12 months 

         

Turnover

14,531

16,004

10

31,285

Net turnover

11,257

11,710

4

23,912

Operating profit

638

653

2

1,673

Special items

0

214

-

79

Profit before financials

638

867

36

1,752

Financials

45

-110

-

-119

Profit before tax

683

757

11

1,633

Group profit

395

616

56

1,156

       

Equity

-

11,737

-

11,853

Total assets

-

29,692

-

29,889



Movements in equity:

- in DKK million 

 

Equity at 1 October 1999

11,853 

Group profit

616 

Write-off of Group goodwill, etc.

-1,242 

Write-back of previously written-off Group goodwill in connection with sale of Grupo Cruzcampo

247 

Dividend paid to minority shareholders

  -173 

Currency translation adjustments etc.

 436 

Equity at 31 March 2000

11,737 

Of equity at 31 March 2000, amounting to DKK 11,737m, minority interests constitute DKK 1,154m (DKK 1,462m as at 30 September 1999).

The above highlights and key figures are unaudited.

The accounting policies applied remain unchanged from the annual accounts for 1998/99.

Weighting of earnings in the Carlsberg Group
The attached appendix shows the Carlsberg Group's results for 1998/99 divided into quarters. Structurally, 1998/99 is comparable with the present year.


Comments on developments in the past six months

The turnover of the Carlsberg Group for the first six months amounted to DKK 16.0bn, which is 10 per cent up on the first half-year period last year. The increase is mainly attributable to soft drink sales in Coca-Cola Nordic Beverages (CCNB) following a positive development in sales and the inclusion of Iceland in the figures. Furthermore, exchange rate developments positively influenced turnover.

Operating profit amounted to DKK 653m against DKK 638m last year. Soft drink sales in the CCNB group increased and, consequently, this segment contributed with an improvement in Group profit when start-up and running-in expenses are excluded. The international beer business also recorded improvements in results, arising from small positive and negative changes. The continued decline in Danish beer consumption resulted in lower earnings from the Danish beer business than last year. Sales were also influenced by the fact that Easter fell in April this year and thus after the first half-year period. Total operating profit is in line with expectations in the annual report and accounts for 1998/99.

Special items of DKK 214m consists of profit from the sale of shares in Grupo Cruzcampo (DKK 354m) as well as depreciation of plant and provisions made for severance pay in connection with rationalisation initiatives at the brewery in Valby (DKK -140m). Furthermore, DKK 247m of the total net sales price in connection with Grupo Cruzcampo has been taken directly to equity, writing back previously written-off Group goodwill.

As expected, Financials showed expenditure of DKK 110m, which is the result of considerable investments in acquisitions in companies and production plant in recent years. In addition, the previous years were characterised by significant gains from the sale of shares and bonds.

Profit before tax totalled DKK 757m against DKK 683m last year, which is better than expected.

The effective tax rate was influenced by the fact that gains from the sale of Grupo Cruzcampo shares are tax-exempt.

During the period, the Group's provisions were reduced in keeping with plans. In total, the first six months saw expenditure of DKK 412m against DKK 507m last year.


Supplementary information:

In Denmark, sales of taxed beer declined by about 5 per cent compared with the same period last year, this was, however, mainly caused by Easter sales falling late this year. The Carlsberg Group maintained its market share.

Beer consumption in Denmark shows continued decline although the situation seems to be stabilising. Because of the large differences in excise duties between Denmark and Germany, it is still estimated that about 16 to 18 per cent of Danish beer consumption is purchased south of the border.

The capacity adjustment mentioned in Financial Statement 1 of 22 February 2000 is proceeding according to plan. When the related projects have been fully implemented in about a year, the annual savings will amount to about DKK 90m.

In the United Kingdom, Carlsberg-Tetley achieved satisfactory results in line with expectations. Carlsberg-Tetley continues the increased focus on the main brands Carlsberg and Tetley's as well as the restructuring programme within production, distribution, and administration. In 1995/96 Carlsberg-Tetley was granted a compensation to cover future reductions in income and additional expenses in relation to new supply agreements and pension schemes. Of this compensation, DKK 33m after tax was booked as income in the first half-year period against DKK 48m for the same period last year.

In Finland, earnings were satisfactory and higher than expected. Sinebrychoff increased its market share to about 42 per cent of the Finnish beer market and shows sales progress in other beverage sectors, for example for the energy drink Battery.

In Sweden, the Falcon brewery registered good progress in earnings as the market share for beer increased. An improvement of results is expected compared with last year.

The Asian markets are experiencing a positive trend in earnings. The conditions in the loss-making Chinese market remain difficult however, although results are better than expected.

As announced in the notice to the Copenhagen Stock Exchange on 25 February 2000, the Carlsberg Group wished to increase its shareholding in Carlsberg Brewery Malaysia Berhad to 50 per cent. The Malaysian company is listed on the Kuala Lumpur Stock Exchange and purchase of the shares was subject to approval by the authorities. This approval has now been given. The Malaysian company will be fully consolidated in the accounts as of 1 April 2000.

Coca-Cola Nordic Beverages, which now includes production and sale of Coca-Cola products in Denmark, Sweden, Norway, Finland, and Iceland, registered increases in both sales and market shares compared to last year. CCNB's financial results are still affected by substantial running-in expenses. These are, however, covered in Carlsberg's accounts by the Group provisions made when the company was established, and the group is thus registered in the accounts with a positive contribution. In the first half-year period, DKK 120m after tax of the provisions were spent, against DKK 210m in the same period last year.

Among non-beverage Group companies, Royal Scandinavia achieved a profit before tax of DKK 69m against DKK 58m last year, which is better than expected (see the notice to the Copenhagen Stock Exchange of 24 May 2000). The company expects an improvement of 15 per cent in operating profit for the full year compared to the previous financial year.


New organisation

Carlsberg continues working on a division of results in the three business segments Carlsberg Breweries (Beer), Carlsberg Soft Drink and Carlsberg Finans and expects to use such division in the annual report and accounts.


The Danish Ministry of Justice approved the changes to the Carlsberg Foundation's charter on April 27, 2000

The changes entail that the Carlsberg Foundation shall continue to own 51 per cent of the share capital in Carlsberg A/S.

The Carlsberg Foundation's Board of Directors may, however, decide to waive the controlling interest in subsidiaries owned by Carlsberg A/S. The Foundation must, however, maintain the significant influence necessary to preserve "Carlsberg" as a widely-sold and respected beer brand and ensure that beer production in Denmark continues. In practical terms this means that Carlsberg A/S can raise capital through a subsidiary being listed or entering into partnerships with other breweries.


Carlsberg A/S establishes the company Carlsberg Breweries A/S, which takes over Orkla ASA's beverage activities

As announced in Carlsberg's statement to the Copenhagen Stock Exchange on 31 May 2000, Carlsberg A/S will establish the company Carlsberg Breweries A/S with headquarters in Copenhagen. Carlsberg Breweries A/S will include all the domestic and overseas beer activities of Carlsberg A/S together with Saltum and Neptun Bryggerier A/S. Orkla will contribute all its beer and soft drink activities as payment in kind to Carlsberg Breweries A/S in exchange for shares. Carlsberg A/S will own 60 per cent and Orkla ASA 40 per cent of the company, which will control and operate all activities.

The agreement is subject to approval by the authorities, to the approval by Orkla's corporate assembly and to a due diligence procedure satisfactory to both parties. Once these preconditions have been met, the agreement with Orkla will take effect as of 1 July 2000.

Coca-Cola Nordic Beverages A/S (CCNB) will not be part of Carlsberg Breweries A/S, and Carlsberg A/S is thus negotiating with The Coca-Cola Company Inc. about the future of the jointly owned company CCNB


Expectations for 1999/00

The annual report for 1998/99 expressed expectations for the current year of an operating profit at level with 1998/99 and an increase in profit before tax, subject to the realisation of gains in connection with the sale of the Grupo Cruzcampo shareholding or other non-beverage shareholdings.

Operating profit is now expected to be higher than last year.

The sale of shares in Grupo Cruzcampo was completed at the end of January 2000 and Carlsberg's net profit from the sale of about DKK 354m has been booked as income under special items. The remaining difference compared to book value relates to a write-off of goodwill in previous years and has been written back to equity with approx. DKK 247m. Furthermore, DKK 190m is expected to be registered as expenditure under Special items in connection with the extensive reorganisation in Denmark and project costs for the division of the organisation.

In the aggregate, profit before and after tax is thus expected to be higher than last year.

The effects of the agreement with Orkla have not been taken into consideration when determining expectations to the results for the present, full financial year.


Executive Board composition

On 8 May 2000, J©ªrn P. Jensen took up the position as Group Managing Director, CFO of Carlsberg A/S with responsibility for Finance, Treasury and Risk Management and IT.


Supervisory Board composition

At the company's annual general meeting on December 20 1999, deputy chairman Erik B. Rasmussen resigned from the Supervisory Board because of the age clause. President and Chief Executive Officer Henning Dyremose, Tele Danmark A/S, was elected as new board member and professor, D. Econ Poul Chr. Matthiessen was elected as chairman and Managing Director Palle Marcus as deputy chairman.


Additional information

The financial statement for the first six months is available in Danish and English. In case of doubt, the Danish version shall apply.

Poul Chr. Matthiessen
Professor, D.Econ
Chairman
Flemming Lindel©ªv
President
Group Chief Executive Officer


Appendix

Division into quarters of the Carlsberg Group accounts for 1998/99

- in DKK million

1998/99
3 months

1998/99
6 months

1998/99
9 months

1998/99
12 months

         

Turnover

8,114

14,531

23,134

31,285

Operating profit

564

638

1,231

1,673

Special items

0

0

89

79

Profit before financials

564

638

1,320

1,752

Financials

-12

45

-27

-119

Profit before tax

552

683

1,293

1,633

Group profit

346

395

829

1,156

 

Financial calendar Carlsberg A/S

Week 38/2000

Financial statement for the first nine months of 1999/2000

Week 48/2000

Financial statement for the full year 1999/2000

Week 51/2000

Annual general meeting.