6 May 2009
• Strong performance in Q1 in line with management’s expectations. Carlsberg remains focused on reducing costs to offset the impact of the current challenging and uncertain market environment.
• Beer volumes increased by 34% to 22.6m hl for the quarter (16.8m hl in Q1 2008). Organic beer volume declined by 5% while acquisitions contributed 39%. The Asian business delivered high single-digit organic volume growth while organic volumes declined in Eastern Europe and Northern & Western Europe. In Northern & Western Europe Q1 development was negatively affected by Easter falling in Q2 this year.
• Q1 net revenue increased by 25% to DKK 11.8bn (DKK 9.4bn in Q1 2008). Organic net revenue growth was +1% (-6% in DKK). The price increases implemented in 2008 and early 2009 together with a greater focus on value management have driven a positive price effect for beer of +8% year on year ('yoy') in Q1. The mix effect was flat yoy.
• Carlsberg gained market shares in Eastern Europe and Asia and held overall market share in Northern & Western Europe, supported by focused brands and marketing spend.
• Group operating profit increased to DKK 788m (DKK 388m in Q1 2008). In the beverage activities organic operating profit growth was 34% (+23% in DKK). The strong organic profit growth was due to the accelerated efficiency improvements across the whole group. In Northern & Western Europe the accelerated efficiency improvements will be visible in profits in the coming quarters, while the Eastern European business already has delivered visible efficiency improvements in Q1.
• Group operating margin increased to 6.7% for Q1 (4.1% in Q1 2008). The margin improvement was driven by acquisition synergies and efficiency improvements in general.
• Carlsberg has improved cash flow in Q1, in this traditionally small and cash negative quarter, despite the increased scale of the business following the S&N acquisition. This was driven by higher profits, improved working capital efficiency and lower capital expenditure. Free cash flow was DKK -1.1bn (DKK -2.8bn in Q1 2008).
• Net debt at the end of Q1 was DKK 45.8bn compared to DKK 44.2bn at end of 2008.
• The integration of the S&N assets is on track and synergies are coming through as expected.
• Carlsberg confirms its underlying assumptions and the full-year outlook:
• Net revenue of around DKK 63bn.
• Operating profit of at least DKK 9bn.
• Net profit of at least DKK 3.5bn.
• Free cash flow of at least DKK 6bn.
• Operating capital expenditures of less than DKK 3.75bn.
• Net interest-bearing debt to EBITDA ratio of around 3x.
Commenting on the results, CEO Jorgen Buhl Rasmussen said: “In the traditionally small first quarter of the year, we have continued to focus on reducing costs and improving efficiency to protect earnings and improve cash flow. Our Q1 performance was in line with our expectations in a market environment that was as challenging as anticipated, and we remain on track to achieve our full year guidance. We are well prepared for the challenges ahead, and will continue to monitor and manage the business carefully and balance the need for cost reductions while pursuing our long-term growth plans.”