Analysis

Focus - Carlsberg's H1 Performance by Region

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Earlier today, Carlsberg reported its first-half results, posting a near-12% slide in operating profits and a 4% drop in beer volumes. Here, we look at the company’s performance during the six-month period by region.

Carlsberg remains under pressure in Eastern Europe

Carlsberg remains under pressure in Eastern Europe

  • Western Europe – H1 net sales +2%, operating profits -7%

Bad weather was blamed for a beer industry decline in Western Europe of about 2%. There was also a tough comparison against last year's FIFA World Cup, but Carlsberg said it gained market share "in the majority of our markets", with "particularly" strong performance in Denmark, Finland, France, Norway, Poland, Greece, Lithuania and Bulgaria.
There were volume declines in Switzerland and Germany with the UK down 6%, but French volumes grew by 7% in a market that increased by an estimated 1%.
Carlsberg said its operating profits drop was also affected by increased marketing spend.

  • Eastern Europe – H1 net sales -26%, operating profit -45%

Macroeconomic conditions that led to Carlsberg closing two if its Russian breweries continued to weigh on the region, with the beer market down a further 9% in the first half of the year. Strong pricing, however, saw the value of the beer market increase by a low-single-digit percentage, Carlsberg said. The Ukrainian market worsened even further, according to Carlsberg, and declined by an estimated 17% as a result of the deteriorating macroeconomic climate as well as significant price increases to cover inflation.

  • Asia - H1 net sales +34%, operating profit up 29%

The Asian region performed well for Carlsberg, although it accounts for less than a quarter of the brewer's total sales. The overall beer market grew for the six months and Carlsberg's beer volumes were up organically by 5%, helped by the acquisition of Chongqing Eastern Assets in October 2014. According to the company, the Carlsberg brand grew by 6% in its premium markets in Asia, primarily as a result of strong achievements in India driven by Carlsberg Elephant. The Tuborg brand increased volumes by 66% as it almost doubled its volumes in China and grew 50% in India.


Sectors: Beer & cider, Company results

Companies: Carlsberg

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