6/2/1998 12:00 

for the period 1 October 1997 - 31 March 1998 unaudited, released June 2, 1998

DKK million1998/991997/98
6 months6 months
Operating profit638756
Special items050
Profit before finacial items638806
Financial items45397
Profit before tax6831,203
Total assets30,32029,278

Accounting policies remain unchanged from last year.

Comments on developments in the past six months

Theturnoverof the Carlsberg Group for the past six months amounted to DKK 14.5bn, which is 1.9 per cent down on last year. The decline is mainly attributable to beer sales in the United Kingdom and Denmark as well as the divestment of companies. In contrast, the turnover of Coca-Cola Nordic Beverages increased, partly as a result of a positive trend in sales and partly because Norway and Finland are now included in the figures.

Operating profitamounted to DKK 638m against DKK 756m last year. The decrease is mainly ascribable to the development in beer sales in Denmark and Germany as well as the development in earnings in China. However, an increase in earnings was registered at the Group breweries in Finland, Poland and Portugal.

Financial itemstotalled DKK 45m. As was the case last year, this amount is exclusively attributable to gains from sales of shares and bonds, but as expected the level is considerably lower than last year.

Profit before taxamounted to DKK 683m compared with DKK 1,203m last year. The decline is in line with the expectations expressed in the annual report 1997/98. Amounting to DKK 10.9bn at 30 September 1998, Group equity at 31 March 1999 was influenced positively by profit for the period and exchange rate gains. Provisions during the first six months were reduced according to plan, among other things for the running-in expenses in connection with CCNB and restructuring measures at Carlsberg-Tetley.

Supplementary information:

The international beer marketas a whole is characterised by continued growth although a slowdown is now visible. A few of Carlsberg's most important Northern European markets witnessed a decline in consumption during the winter months, while a number of the Group's other markets continued to benefit from a positive trend in consumption.

Carlsberg's aggregate global sales rose by 3 per cent and totalled 36m hl for the past 12 months.

InDenmark, total beer consumption was down by approximately 6 per cent compared with the same period last year. The Carlsberg Group brands gained marginal market shares through, among other things, the introduction of new products and new campaigns for Carlsberg Pilsner and Tuborg Green. Carlsberg's total beer sales declined by 5 per cent, however.

Due to substantial excise duty differences, the cross-border trade in beer at the Germany/Denmark border increased considerably during the past year.

Recent years' marked decline in beer consumption in Denmark, as well as intensified competition and the related adverse effect on earnings, have made it necessary to implement extensive organisation and capacity adjustments. The financial benefit of these adjustments is not yet fully reflected in the profit and loss account.

As of 8 June 1999, Carlsberg A/S will take over the entire share capital of the soft drink com-pany A/S Saltum-Houlbjerg Bryggerier, one of Carlsberg's long-standing business partners.

In theUnited Kingdom, Carlsberg-Tetley registered a lower result than last year on account of new distribution contracts. The result was, however, considerably better than expected, mainly due to favourable developments in the sales-mix with increased focus on the main brands Carlsberg and Tetley's, as well as cost savings within production, distribution and administration.

The economic crisis in Asia continues to affectHong Kong, where negative economic growth is reflected in a declining beer market. With a view to obtaining cost-savings, the brewery in Hong Kong was closed down as of 1 May 1999. The positive economic growth continued inChina, which was also reflected in increased beer consumption. The increase is, however, more attributable to local low-priced brands than to the international premium segment where Carlsberg operates. As was the case last year, there are prospects of a negative result for the full year at the expected level. The brewery in Shanghai was officially inaugurated in October last year and is now fully operational.

During the last six months, Carlsberg has continued investments in its core business. Thus, USD 50m was invested in the Korean brewery group Hite, corresponding to approximately 15 per cent of the share capital (cf. the announcement to the Copenhagen Stock Exchange of 22 April 1999). Similarly, the controlling interest in the Lithuanian brewery AB Svyturys was acquired for DKK 315m (cf. the announcement to the Copenhagen Stock Exchange of 28 April 1999).

Coca-Cola Nordic Beverages, which now includes production and sale of Coca-Cola products in Denmark, Sweden, Norway, Finland and, as of the end of March 1999, Iceland, saw an increase in both sales and market shares compared with last year. CCNB's financial results are still affected by considerable running-in expenses which are, however, covered in Carlsberg's accounts by the Group provisions made when the company was established.

Among non-beverage Group companies, Royal Scandinavia recorded a profit before tax in line with last year, cf. the announcement to the Copenhagen Stock Exchange of 21 May 1999, which is also expected for the full year. The results of Vingaarden were at the same level as last year. A 60 per cent stake in the company was sold to the Finnish company Oy Marli Ab as of 6 May 1999, cf. the announcement to the Copenhagen Stock Exchange of 10 March 1999.

The year 2000

The necessary restructuring measures and re-programming of computer equipment for the year 2000 have been implemented for the main part of the Group's programs. The project is expected to be completed before the end of the year.

Accounting principles

Substantial changes in the Danish accounting legislation are currently under preparation with a view to adjusting practices to the international developments. Such changes may have consequences for the Carlsberg Group within a number of areas. Carlsberg is following the development closely.

Future prospects

The annual report for 1997/98 expressed expectations of a small increase in operating profit and of a considerable decline in profit before and after tax compared with the result in 1997/98. However, operating profit is now estimated to be at a level with last year which is due to the development in market trends during the first six months of the financial year.

Supervisory Board composition

At the company's ordinary general meeting on 20 December 1999, Deputy Chairman, Director Erik B. Rasmussen will resign from the Board because of his age. The Supervisory Board will recommend Managing Director Henning Dyremose, Tele Danmark A/S for the position as new Board member.

Five-Year Summary First six months

DKK million












Operating profit






Special items---500
Financial income, net






Profit before tax






Full year

DKK million












Operating profit






Special items----243
Financial income, net






Profit before tax






When evaluating the figures listed for comparison, the acquisition and sale of subsidiaries as well as foreign exchange rate fluctuations should be taken into consideration.