In line with other large companies, Carlsberg is issuing quarterly results for the whole of the Carlsberg Group. The first quarter for the period October-December 1999 showed progress in sales of beer and soft drinks of 5%. Group turnover rose by 11% to DKK9bn, compared with the same period last year. Operating profit rose from DKK564m to DKK571m. The result for the first quarter is a little better than expected, and for the full year 1999-2000 operating profit is expected to be on a level with or a little better than last year.
The growth in turnover is a result of increased soft drink sales, and also reflects the inclusion of Iceland and Finland in the Group's accounts. Added to this is the contribution from Royal Scandinavia, which had a very satisfactory Christmas sales period and has also improved its operations. A rise in the British pound also made a positive contribution.
The global beer market has shown weak growth and Carlsberg's total sale of beer rose by around 1%. Beer consumption in Europe has stagnated and shows a weak downward trend. However, Carlsberg has seen advances on the important Swedish and Finnish markets.
International beer business
With regard to volume and earnings, the international beer business makes up a significant and expanding part of Carlsberg's business. In Finland, Carlsberg now owns all the shares in the Sinebrychoff brewery, which has a market share of 40% and had better than expected earnings in the first quarter.
The same applies in Sweden, where the Group now owns all the shares in the Falcon Brewery. Falcon has also seen a pleasing progress in earnings and market share.
Carlsberg-Tetley achieved a satisfactory result on the British market, and continues to focus on the two main brands - Carlsberg and Tetley.
Despite continuing difficulties on Asian markets, Carlsberg has seen an 8% increase in volume. Malaysia has seen a particularly positive progress in both its earnings and sales volumes.
Carlsberg operates in around 150 countries around the world, partly through wholly-owned breweries, and partly through minority shareholdings and licence agreements with other breweries.
In Denmark, total beer consumption has fallen by 2%, although Carlsberg still has a firm grip on its market share. The large differences in tax on beer between Denmark and Germany has led to a growing number of Danes buying their beer in Germany. It is estimated that between 16-18% of beer consumed in Danish homes is bought on the other side of the border.
The declining sales of Danish beer in recent years, combined with increasing competition, has made it necessary to adjust the organisation and capacity of the Group's Danish division and up to now agreements have been reached with employees in production and sales departments. When the current projects are completed in around one-and-a-half years, an annual saving of around DKK90m is expected. The distribution departments have yet to go through a similar process.
Sale of Royal Scandinavia and Tivoli
Carlsberg has chosen Morgan Stanley Dean Witter as adviser in the sale of the majority stake of Royal Scandinavia. Den Danske Bank will advise on the disposal of the minority stake in Tivoli. Great importance will be attached to finding buyers that will invest in the two companies and develop their core activities. It is expected that both shareholdings will be finalised by the end of the year.
The background for the sale is unchanged in that Carlsberg wishes to concentrate on its own core business - the production and sale of beer and soft drinks.
For further information contact:
Margrethe Skov
Communications manager
Tel: + 45 33 27 14 10