DENMARK: Acquisitions boost Carlsberg sales in Q1
Carlsberg said today that global beer volume showed a 20% increase in the first quarter of the year driven by strong organic growth in BBH as well as a considerable contribution from acquisitions, including Holsten and its Chinese breweries.
Organic growth was 5%, as organic Western Europe volumes fell. Net revenue totalled DKK 7.4bn (US$1.27bn), corresponding to an increase of 9%, while the company turned in an operating loss of DKK22m, including Holsten's anticipated seasonally related negative contribution to profit.
"In general, the brewing industry is affected by significant seasonal fluctuations in consumption and demand. Seen together with the operational and financial gearing of the Carlsberg Group, this means that the profit of the year's first quarter is not indicative of the expected development in consolidated profit for the year," a statement said.
The pro rata calculated beer volume totalled 13.6m hl, corresponding to an increase of 20%, of which organic growth accounted for 5 percentage points. The soft drink and water business reached a total volume of 4.0m hl, corresponding to a 5% decline.
In total, the Western European beer markets are estimated to have experienced a decline in volume of approximately 5% during the first quarter of the year. Carlsberg's Western Europe volumes reached 5.7m hl, corresponding to a 21% increase. When excluding the acquisition of Holsten, beer volumes were 3% down on the corresponding period last year.
Total operating profit in the Nordic region was down on last year. However, the company said it expected the Danish re-launch of the well-known old Carlsberg beer bottle to increase sales. "In Carlsberg Sweden, several important steps have been taken to create a healthy and profitable business, including price increases mainly in the discount segment as well as cost adjustments, i.a. through staff reductions," the company added.
The Swiss market - particularly the on trade segment - was adversely affected by the lowering of the blood alcohol levels allowed when driving.
Eastern Europe showed beer sales of 2.3m hl, corresponding to a 19% rise of which organic growth accounted for 9%. But total operating profit remained "unsatisfactory" due to the difficult conditions for Türk Tuborg.
The Asian activities achieved a 31% increase in volume to 1.9m hl, including a significant contribution from the Chinese brewery acquisitions. Organic growth amounted to 2%. In Asia, operating profit totalled DKK 103m, which is slightly down on last year due to increased sales and marketing investments in China.
Carlsberg said it maintains its profit expectations for 2005.
Assuming the present exchange rates, net revenue is expected to increase to approximately DKK 38bn.
Operating profit (EBIT) is expected to amount to around DKK 3.4bn.
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