Carlsberg has reported nine-month operating profit up 26 per cent at DKK 1.555 billion, compared with DKK 1.231 billion in the same period last year. Turnover net of excise duty rose to DKK 20.872 billion from DKK 17.879 billion.

The figures for the period have been influenced by the full consolidation of Carlsberg Brewery Malaysia and Okocim in Poland in the company’s accounts for the first time. Furthermore, several other Group companies that were previously included in the accounts with a time lag are now included up until June 30. There is however, no change in accounting principles compared with last year.

The Carlsberg Group’s sales for the nine-months rose by around 15 per cent to 27 million hectolitres of beer and 11 million hectolitres of soft drinks. Sales for the period rose by 4 per cent, compared with the same period last year before the changes to the basis of the accounts detailed above.

In the international beer business, Carlsberg-Tetley in the United Kingdom achieved results above expectations, helped by favourable exchange rates, while Falcon in Sweden saw sales and market share progress. Satisfactory progress was also made in Denmark where the effect of restructuring is becoming evident.

Earnings in Finland from the Group’s Sinebrychoff subsidiary were higher than expected. The company increased its share of the country’s beer market to 43 per cent and has shown progress in other beverage sectors, for example its Battery energy drink.

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

The acquisition by China Tsingtao Brewery Co. of 75 per cent of Carlsberg’s brewery in Shanghai has enabled DKK 235 million to be taken off the total book value of the Group’s activities.

Considerable annual savings are expected as a result of the agreement.
The sale of shares in Grupo Cruzcampo in Spain contributed DKK 354 million to earnings, while the disposal of Carlsberg’s 43 per cent share in Tivoli Gardens and other properties raised DKK 223 million.

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 CCNB group is thus registered in the accounts with a positive contribution. In the first nine-month period, DKK 180 million after tax of the provisions was spent, against DKK 315 million in the same period last year.

Among non-beverage Group companies, Royal Scandinavia achieved a profit before tax of DKK 55 million compared with DKK 33 million last year. The company expects a 15 per cent improvement of both turnover and profits for the full year.

Albani

On 18 August 2000, Carlsberg made a cash offer to the shareholders of Albani Bryggerierne A/S. On 11 September 2000, Bryggerigruppen A/S made a higher offer, and Carlsberg consequently extended the original offer until 10 October 2000, the expiry date of Bryggerigruppen's offer.

As stated in the notice to the Copenhagen Stock Exchange of 20 September 2000, Carlsberg Danmark has again analysed its offer and has reached the conclusion that the offer is fair and reflects the value of Albani Bryggerierne.

Against that background and seen in the light of the significant demands that the Danish Competition Authority will make in order to approve the deal, Carlsberg Danmark has decided not to offer a higher price.

Carlsberg A/S would realise a gain of about DKK 24m from the sale of its 14.74 per cent share in Albani Bryggerierne at the price offered by Bryggerigruppen.

Carlsberg Breweries A/S

As previously announced, Carlsberg will establish Carlsberg Breweries A/S with headquarters in Copenhagen with effect from 1 July 2000, once the necessary approvals from various national merger authorities are in place. Carlsberg Breweries A/S will include all the domestic and overseas beer and soft drink activities of Carlsberg A/S. Norwegian group Orkla ASA will contribute all its beer and soft drink activities as payment in kind in exchange for shares in Carlsberg Breweries. Carlsberg A/S will own 60 per cent and Orkla ASA 40 per cent of the company.

Business development

Following the spinning-off of brewing activities into Carlsberg Breweries, which will focus on beer, a new general business development strategy will be established for the parent company, Carlsberg A/S. Possibilities of commercialising the Carlsberg Research Center’s widely respected expertise in biotechnology will also be investigated. One particular project is currently being considered.

Future prospects

Results for the first nine months have been higher than expected. However, summer weather in Europe was not favourable and the fourth quarter results (July-September) are not expected to show the same upward trend as the first three quarters.

Special items for the full year are expected to reach DKK 428 million following the sale of shares in Cruzcampo, Tivoli, the disposal of several properties and the writing down of Chinese activities by DKK 235 million.

When using comparable figures, an increase of about 10 per cent for operating profit and an improvement in results of about 20 per cent before and after tax are expected for the full 12-month period compared to last year.

For the full accounting year (15 months) - and including the effects of the changes in the basis of accounts - operating profit is expected to be approx. 45 per cent higher than last year (12 months). Profit before and after tax are expected to be approx. 55 per cent higher than last year (12 months).

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

HIGHLIGHTS AND KEY FIGURES
for the period 1 October 1999 – 30 June 2000

Changes in the basis of accounts

The accounting figures for the first nine months of the present financial year are influenced by the fact that the companies in Malaysia and Poland are now fully consolidated as a result of Carlsberg increasing its ownership share. Furthermore, a few Group companies which, for practical reasons, were previously included in the Group accounts with a certain time lag are now included up until 30 June, 2000. The full effect of these changes is illustrated with the figures in brackets in the table below, expressing the development had the basis for the accounts not been changed (the comparable development).

DKK million
1998/99
1999/00
Changes
1998/99
9 monthsUnaudited
9 monthsUnaudited
in %
12 monthsAudited
Turnover
23,134
28,410
+23
(+8)
31,285
Net turnover
17,879
20,872
+17
(+4)
23,912
Operating profit
1,231
1,555
+26
(+16)
1,673
Special items
89
428
79
Profit before financials
1,320
1,983
+50
(+40)
1,752
Financials
-27
-123
-119
Profit before tax
1,293
1,860
+44
(+30)
1,633
Group profit
829
1,315
+59
(+45)
1,156
Profit, Carlsberg A/S's share
798
1,323
+66
(+58)
1,164
Equity
11,950
11,853

Total assets

32,539
29,889

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