• Full-year net profits down by 3.8% to DKK5.15bn (US$914m)
  • Net sales up by 6% to DKK63.56bn
  • Operating profits slip by 4% to DKK9.82bn
  • Brewer to seek full control of Baltika in Russia turnaround plan

Carlsberg is seeking full ownership of its Russian subsidiary, Baltika Breweries, after a weaker-than-expected performance in the country dragged down the global brewer's full-year profits. 

Carlsberg plans to acquire all outstanding shares in Baltika in 2012, it said today (20 February). It already owns 85% of the group, which is Russia's leading brewer. 

Carlsberg intends to spend a maximum DKK6.5bn (US$1.14bn) to scoop up the rest of Baltika's shares. In reality, though, it said that the final offer price could be "substantially lower". In addition, Carlsberg said its "net" spend on the deal would be a maximum of DKK4.4bn, due to benefits from unspecified "financial arrangements".  

The Denmark-based brewer is seeking greater control over its Russian subsidiary in order to improve its performance amid tough market conditions. Per capita beer consumption in Russia has fallen from 78 litres in 2008 to 64 litres in 2011.

Today, Carlsberg said that Russia's beer market shrank by 3% in volume for the 12 months to the end of December, despite a rally in the fourth quarter as distributors stockpiled beer ahead of a further excise tax increase. 

A poor performance in the country dragged the brewer's global net profits down by almost 4% for the year, to DKK5.15bn. Operating profits also fell by 4%, to DKK9.82bn. After halving its profits growth guidance in August 2011, Carlsberg said that its full-year results were in-line with its lower forecast.  

The brewer enjoyed a better time at the top-line. Net sales rose by 6% versus 2010 to DKK63.56bn, with global volumes up by 4%. Volumes in Western Europe were flat, but the firm gained market share in several markets, it said. 

Asia continued to grow strongly, albeit off a relatively small base, and the brewer will continue to seek acquisitions in order to develop this region as a third pillar of its business. 

Looking ahead, Carlsberg said that it is cautious on 2012. Operating profits before one-off items is expected to be flat, while "adjusted" net profits should rise slightly, it said. 

For the company announcement, click here.