8/5/2009 8:00 


Strong cash flow and organic profit growth

• Carlsberg delivered a strong result for the first six months of 2009 with strong cash flow growth, margin improvement and organic profit growth. Free cash flow increased considerably to DKK 4.1bn, operating margin improved to 15.1% (13.1% in 2008) and for beverage activities organic operating profit growth was 26%. The intensified focus on efficiencies more than off-set the ongoing market challenges.

• Beer volumes increased by 15% to 56.9m hl (49.6m hl in 2008). Organic beer volume declined by 5% while acquisitions contributed 20%. The Asian business delivered high single-digit organic volume growth while organic volumes declined in Eastern Europe and Northern & Western Europe. Q2 beer volumes declined organically by 6%.

• Net revenue increased by 9% to DKK 29.4bn (DKK 27.0bn in 2008). Organic net revenue growth was flat ( 7% 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 of +6% year on year ('yoy'). There was a negative mix effect of 1%. Q2 net revenue was DKK 17.6bn with organic net revenue growth of 0% ( 8% in DKK).

• Carlsberg gained market shares in most markets in Asia and Eastern Europe, with particularly strong gains in Russia, and held overall market share in Northern & Western Europe.

• Operating profit increased to DKK 4,443m (DKK 3,538m in 2008). The beverage activities delivered strong organic operating profit growth of 26% (14% in DKK) due to the accelerated efficiency improvements across the whole group. For Q2, Group operating profit was DKK 3,655m (DKK 3,150m in Q2 2008) with 25% organic growth in the beverage activities. In Northern & Western Europe the accelerated efficiency improvements became visible during the second quarter but the improvements will become even more evident in the second half of the year. The Eastern European and Asian businesses delivered strong improvement throughout all six months.

• Operating margin increased to 15.1% (13.1% in 2008). Q2 Group operating margin was 20.7% (18.0% in Q2 2008).
• Free cash flow improved considerably to DKK 4.1bn driven principally by improved working capital, higher profits and lower capital expenditures.

• Net debt at the end of Q2 was DKK 40.8bn compared to DKK 44.2bn at the end of 2008. At the end of Q1, net debt was DKK 45.8bn. In May, Carlsberg successfully issued two notes of EUR 1bn and GBP 300m under the EMTN programme following which, there is no need for refinancing for a number of years.

• The integration of the S&N assets is on track and synergies are coming through as expected. As at June 30 2009, synergies of approx. DKK 430m have been extracted.

• The Russian market declined by around 9% for H1 and Q2. Carlsberg is reducing 2009 market development expectations for the Russian market to around 5-6% decline (previously assuming a 2% decline). Carlsberg still anticipates Baltika gaining market share in Russia for the year.

• Carlsberg confirms all full year targets on earnings, cash flow and financial leverage (net revenue is revised due to slightly weaker markets than anticipated):

• Net revenue of around DKK 61bn
• 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 expenditure 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: “We entered the year with a strong focus on sustainable efficiency improvements based on expected challenging markets. Numerous actions have been taken and we are pleased with the strong earnings and cash flow performance for the first six months. We are on-track to deliver on our targets without compromising Carlsberg's ambitions of growing our brands and delivering continuous profit growth.”


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Investor Relations:    Peter Kondrup                     +45 3327 1221

Media Relations:        Jens Peter  Skaarup             +45 3327 1417