Carlsberg has reported Q2 results for 2012 with positive market share achievements in all regions and strong cash flow, but bad weather impacting volumes in Europe.
Commenting on the results, CEO Jørgen Buhl Rasmussen said:
“Carlsberg achieved positive market share growth in all three regions which shows that the recent years’ significant efforts behind our international premium brands, local power brands, and within sales execution are paying off. It is particularly satisfactory to see a further improvement in our Russian market share which is a clear sign that our efforts initiated during last year are beginning to bear fruit.
“Excellent execution of EURO 2012 delivered very strong visibility of the Carlsberg brand. Sales and marketing investments were more skewed towards the first half of this year which, combined with the very bad weather in Northern & Western Europe, impacted profits for the first six months.”
Financial highlights
- Organic net revenue up by 1% to DKK 32,459m (Q2: +2%). Price/mix of 3% (total beverages).
- As expected, higher input costs and phasing of sales and marketing investments more skewed towards the first six months across all regions.
- Operating profit at DKK 4,045m (DKK 4,698m in 2011) due to decline in Northern & Western Europe and Eastern Europe offset by growth in Asia.
- Net profit up by 47% to DKK 3,279m.
- Free cash flow of DKK 2,617m (DKK 875m in 2011) primarily due to sale of brewery site and strong working capital management.
- 2012 full year outlook of operating profit before special items at the level of 2011 and slightly growing adjusted net profit.
Operational highlights
- For the first half year, the Northern & Western Europe beer market, excluding Poland, declined by an estimated 3-4% while the Russian beer market was up by an estimated 2%.
- Organic beer volume decline of 1% (Q2: +1%). Adjusted for Russian destocking in Q1, beer volume grew organically by 1% in the first six months.
- Volumes in Northern & Western Europe impacted by very bad weather, In Q2 the market declined by around 5%.
- 1% Russian beer volume growth in Q2 (2% decline for six months adjusted for Q1 destocking).
- Strong organic volume growth of 12% in Asia.
- Solid market share improvements in Northern & Western Europe and Asia.
- Russian market share increased to 37.3% in Q2 compared to 37.0% in Q1 with value share increasing twice as much (60bp).
- Successful activation of the EURO 2012 in more than 70 markets supported a 13% growth of the Carlsberg brand across premium markets.
- Positive signs from the roll-out of the rejuvenated Tuborg brand in China, Russia and India.
- Voluntary offer and delisting of Baltika Breweries announced during Q2.
- Consortium established to develop the Valby site resulting in a DKK 1,700m pre-tax gain.