Carlsberg benefits from sun and soccer in 2018

Denmark | Danish brewer Carlsberg’s revenues rose last year for the first time in three years, helped by the long, hot summer in northern Europe and Russia. Net revenues were DKK 62.5 billion (USD 9.4 billion), up 3.1 percent over 2017, but still short of the DKK 64.5 billion in 2014.

EBITDA stood at DKK 13.4 billion (USD 2.0 billion), which is a slight decline over 2017. All in all, Carlsberg sold 112 million hl beer, which is an increase of 5 million hl over 2017, but a drop from the 122 million hl sold in 2014.

Carlsberg reported full year 2018 results on 6 February 2019. The results underline Carlsberg’s metamorphosis in terms of regional contributions since 2007: then it was a “Russian brewery with European and Asian subsidiaries”, because of the strength of the Russian beer market. Nowadays, and following the decline in Russia, its major markets are in western Europe.

Its western Europe unit contributed 57 percent or DKK 36.1 billion (USD 5.4 billion) to group revenues, followed by Asia (DKK 15.5 billion) and eastern Europe (DKK 10.8 billion). Still, profits margins are higher in Asia (20.4 percent) and in eastern Europe (20.6 percent) than in western Europe (15 percent).   

It must have irked Carlsberg that in the UK its volumes declined 3 percent in 2018, mainly as a result of the shrinking mainstream segment. The trend towards premiumisation has left Carlsberg behind, as its brands are mainly positioned in the mainstream segment. The Danish brewer said it will relaunch its eponymous brand, thus hoping to stem market share loss.

With regard to the share of craft, specialties and non-alcoholic beers, Carlsberg reported that combined they represented 7 percent of its volumes, and 30 percent of its revenues. They have become a significant segment of its total portfolio.

In its guidance for 2019, Carlsberg said that it is difficult to predict what the summer will be like. “In 2019 the top line [growth] will probably be a bit more modest after such a strong year,” Carlsberg’s CEO Cees ‘t Hart said.

The brewer expects operating profit to grow by a mid-single-digit percentage in 2019, well below last year’s 11 percent.

The company also announced a 12-month share buy-back programme of DKK 4.5 billion (USD 680 million).