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Focus - Carlsberg's Q4 & FY Results by Region

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Earlier today, Carlsberg reported its full-year results, with profits falling by almost 20% on flat sales in 2014. Here, we look at the Danish brewer's performance in the 12-month period by region.

Carlsberg released its full-year results earlier today

Carlsberg released its full-year results earlier today

  • Western Europe - FY net sales +1%, operating profits +5.5%

Improved volume dynamics returned to Western Europe in 2014, with Carlsberg continuing to gain market share in several countries. Beer volumes rose by 2%, while other beverage volumes were up by 6%.

In Poland, the brewer raised its volumes by 3%, thanks mainly to the Kasztelan, Harnas and Okocim local brands. In the Nordics, beer volumes grew in Denmark (+3%), Norway (+4%) and Sweden (+1%), while volumes declined in Finland (-5%) due to a declining beer market in the country.

In France, the company benefitted from weaker comparatives: Volumes jumped by 11% in the country last year. The firm lost market share in the UK in 2014, as "we chose not (to) participate fully in various promotional activities during the year".

  • Eastern Europe - FY net sales -20.4%, operating profits -28.2%

Carlsberg highlighted the "significant changes" in Russia that have hampered its group performance in recent years. "While the region offers long-term growth opportunities," the company said, "the increased uncertainty and volatility have required detailed contingency and scenario planning."

Sales in the region were hit by the "substantial" negative currency impact of -17% as the Ukrainian Hryvnia (UAH) devalued by 31% and the Russian Rouble (RUB) by 16%.

Shipments to Russia tumbled by 14%  due to "the overall market decline (down by an estimated 7%), less stocking by wholesalers in Q4 than in 2013 and market share development". Carlsberg's market share in the country dropped back to 37.8% last year. The company noted it raised its prices in the country four times in 2014.

While the brewer did not give specific figures, Carlsberg described Ukraine as a "highly challenging and uncertain macroeconomic climate". Price increases were introduced to cover inflation as well as a 43% excise tax rise in May. "We have been able to operate our business in Ukraine, albeit with disruptions," the company said.

  • Asia - FY net sales +37.8%, operating profits +16.6%

Away from the bad news in Eastern Europe, Carlsberg boasted of its "attractive footprint in the growing Asian region". The region now accounts for 20% of group operating profit, and recorded a 24% leap in beer volumes last year. The Tuborg brand "more than doubled" its volumes in the region and "has become our key international brand" in Asia, the firm said. 

The 33% leap in volumes in China was skewed by the consolidation of Chongqing Brewery Group in October, with organic volumes in the country falling back by 7%. Poor Summer weather in some Chinese regions and unrest in Xinjiang province contributed to the organic performance. Carlsberg's international brands, particularly Tuborg and Kronenbourg 1664, posted stong volume increases, with brand Carlsberg delivering "high single-digit percentage growth". The Chongqing brand was relaunched in the last quarter of the year.

Beer volumes in Indochina were up by 8%, with local brands leading the way. Beerlao in Laos, Angkor in Cambodia and Huda in Vietnam were all highlighted.

Organic volumes in India soared by 42%, with Carlsberg claiming it accounts for 11% market share in the country. Tuborg and Carlsberg Elephant led the way, with the former claiming the title of India's largest international premium brand, the company claimed.


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