DENMARK: Russia drains Carlsberg's full-year sales
- Organic sales drop on Russia market slip
- Expects better conditions in 2011
- FY profits soar by 49%
Carlsberg profits soar by 49%, but Russia proves a drag
Tough conditions in Russia pinned back Carlsberg's beer sales in 2010, but the brewer has said that consumer demand should improve in 2011.
Favourable currency rates helped Carlsberg to report a 1% rise in group net sales for the 12 months to the end of December, to DKK60.1bn (US$11bn). However, like-for-like sales excluding currency dropped by 3% in 2010 as the group suffered from a tax hike on beer in Russia, where it is the largest player via its subsidiary, Baltic Beverages Holding.
Consumer demand in much of Western Europe also remained weak last year, as Carlsberg's total volume sales fell by 1% for the year, to 114m hectolitres. Asia was the brightspot for much of the year, but the region still only constitutes 16% of group volumes.
The Denmark-based brewer reported a better performance at the bottom-line. Net profits soared by 49% to DKK5.35bn thanks to a one-time financial gain of DKK598m. In the brewer's first quarter, a one-off gain of DKK390m was posted, related to a "new acquisitions accounting regulation". Operating profits for the full-year increased by 9% to DKK10.25bn.
But, the result was blighted by a 25% slide in net profits in the final quarter of the year, largely due to higher sales costs.
Carlsberg's CEO, Jørgen Buhl Rasmussen, said: “2010 was an extraordinary year for the group due to the substantial excise duty increase in our largest market and we are very pleased with the strong 2010 performance." He highlighted market share gains in several countries.
In its outlook, the brewer said that it expects Russia's beer market to return to growth in 2011, with overall industry volumes expected to rise by up to 4%. The group said that it expects to continue to gaining market share in key countries and that net profits will rise by at least 20%.
For the full announcement, click here.
Carlsberg has halved its guidance for profits growth in 2011, after a weaker-than-expected performance in Russia damaged the brewer in the first half of the year....
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