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MarketScreener Homepage  >  Equities  >  NASDAQ OMX COPENHAGEN  >  Carlsberg A/S    CARL B   DK0010181759


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Carlsberg's China growth helps to offset Russian weakness

05/01/2018 | 06:59am EST
FILE PHOTO: Empty beer cups are stacked at the Eiffel Tower fan zone during a EURO 2016 match in Paris

COPENHAGEN (Reuters) - Strong growth in China for Carlsberg helped to dilute the negative effects of currencies and lower volumes in the Russian market, allowing the Danish brewer to stick to its annual profit forecast.

COPENHAGEN (Reuters) - Strong growth in China for Carlsberg helped to dilute the negative effects of currencies and lower volumes in the Russian market, allowing the Danish brewer to stick to its annual profit forecast.

Sales in the first quarter fell 5 percent to 12.70 billion Danish crowns (1.5 billion pounds), below the 12.89 billion crowns forecast in a Reuters poll of analysts.

However, it still expects mid single-digit organic growth in operating profit this year.

Carlsberg, the world's third-largest brewer behind Anheuser Busch InBev and Heineken, continued to lose market share in Russia, where it owns the Baltika brand and which accounts for around a fifth of sales.

Russian initiatives to discourage drinking have included banning the sale of beer in so-called PET bottles, popular plastic bottles larger than 1.5 litres, which has hurt sales in Carlsberg's biggest market.

"Our volumes grew in all markets except for Russia," Chief Executive Cees t'Hart said on a conference call.

The decline in volumes in Russia reflected an overall market decline of around 4-5 percent, Hart said, although Carlsberg is also losing ground to rivals.

"Our market share decline in Russia accelerated during the year," he added.

Graphic: Carlsberg share performance versus peers - https://reut.rs/2jkYJU8


Carlsberg, which did not disclose earnings figures, said revenue was hit by a negative currency impact of 5 percent.

Sales fell in both Western and Eastern Europe, with Asia accounting for the only region with sales growth.

The Chinese market was a positive surprise, with sales up 16 percent and volumes increasing 9 percent, well ahead of analysts expectations. China last year became Carlsberg's largest single market in volume terms.

"We seem to have a momentum in China," Hart said in an interview.

The Chinese market is driven by international premium beer brands, which sell at two to three times the price of mainstream brands.

Closure of 19 breweries in western China and a push into big cities in the east has helped Carlsberg lift operating margins there to 14-15 percent from around 6 percent two years ago, Hart said.

In 2015, the chief executive launched a major cost-cutting programme and a strategy to revive growth which has been subdued since the company took over Baltika in 2008.

Carlsberg shares traded 2 percent higher at opening but pared gains to trade up 0.5 percent by 1030 GMT.

"We are supportive of management and cost cutting delivery, but for the equity story to push on the company now needs to demonstrate improvement in topline," Jefferies analyst Edward Mundy said in a note.

(Reporting by Jacob Gronholt-Pedersen; Editing by Biju Dwarakanath/Keith Weir)

By Jacob Gronholt-Pedersen

© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
ANHEUSER-BUSCH INBEV -0.39% 56.74 Real-time Quote.-0.47%
CARLSBERG A/S 0.20% 922.8 Delayed Quote.-5.37%
HEINEKEN N.V. -0.89% 89.56 Real-time Quote.-1.82%
THE EASTERN COMPANY -2.26% 25.05 Delayed Quote.3.94%
WORLD CO., LTD. -1.33% 1258 End-of-day quote.0.40%
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Sales 2020 59 279 M 9 631 M 9 631 M
Net income 2020 5 709 M 928 M 928 M
Net Debt 2020 22 361 M 3 633 M 3 633 M
P/E ratio 2020 23,9x
Yield 2020 2,24%
Capitalization 136 B 22 189 M 22 166 M
EV / Sales 2020 2,68x
EV / Sales 2021 2,47x
Nbr of Employees 40 000
Free-Float 68,0%
Duration : Period :
Carlsberg A/S Technical Analysis Chart | CARL B | DK0010181759 | MarketScreener
Technical analysis trends CARLSBERG A/S
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 1 069,50 DKK
Last Close Price 922,80 DKK
Spread / Highest target 31,7%
Spread / Average Target 15,9%
Spread / Lowest Target -17,6%
EPS Revisions
Managers and Directors
Cees't C. Hart President & Chief Executive Officer
Flemming Besenbacher Chairman-Supervisory Board
Heine Dalsgaard Chief Financial Officer
Hans S. Andersen Member-Supervisory Board
Richard George William Burrows Member-Supervisory Board
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