Carlsberg sees 7% drop in UK volumes
Carlsberg has reported a 7% drop in UK volumes on last year for the six months to 30 June — largely due to the tough comparable with a period that included the World Cup last year.
Carlsberg said it had continued to increase on-trade market share but its overall market share in the UK dipped slightly to 15.7%. It also shut the Tetley brewery in Leeds during the period and expanded its Northanmpton brewery.
Overall, the international brewer said a slowdown in the Russian market following a 30% price hike for consumers in response to duty increases explains a 5% fall in operating profits for the first half of 2011
H1 operating profit before exceptional items was 4,698bn Danish Krone (2010: DKK4,966bn). Overall net revenue increased by 8% to DKK31.3bn. Organic growth was 8%. Q2 net revenue grew by 4% to DKK18.7bn.
Group beer volumes grew by 5% to 58.3m hl, with 4% organic growth and "large variations between regions".
Volumes in Northern and Western Europe increased 1% (Q2: +3%), with Poland, Denmark and the Baltic states being the main contributors.
Operating margin in the region improved by 50bps to 13.6%, with 6% organic operating profit growth (Q2: +6%), The company said this was due to efficiency improvements mitigating higher input costs.
The Russian market declined 1% in the six months (Q2: -2%) after consumer prices were increased by an average of 30% following duty increases.
Volumes increased by 5% in Eastern Europe and 10% in Asia.
"Q2 performance in Russia has been below expectations," said Carlsberg chief executive Jørgen Buhl Rasmussen. "The recovery in the beer category is taking longer than we anticipated as the Russian consumer adapts to the exceptional price increases of around 30% undertaken during the last 18 months.
"This impacts negatively our Russian 2011 profits and is the driver behind our revised 2011 outlook.
"However, with the adjustments we're making to our local portfolio, channel approach and forward pricing strategy, I'm confident that our Russian business will return to growth. At the same time, I'm pleased with the performance of the rest of the Group. In the first six months we have continued our relentless focus on driving efficiencies as well as long-term sales value growth."
