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Carlsberg's shares soared 16 per cent last Monday after it forecast healthy growth and margins in Russia, where it has taken a leading position by acquiring UK brewer Scottish & Newcastle.
In the second quarter, the Danish brewer, which makes Carlsberg, Tuborg, Baltika and Kronenbourg, increased net profit by 36 per cent to Dkr1.42bn ($290m) on sales up 39 per cent to Dkr17.54bn. In volume terms, sales rose by 6 per cent organically in the first half.
The better than expected results were the first to incorporate S&N's assets in France, Greece, China, Vietnam and, most importantly Russia, which Carlsberg bought for Dkr57bn in April.
Carlsberg stood by its 2008 group forecasts and denied the Russian market was weakening by repeating that it expected volumes to rise there by 5 per cent this year in spite of a 2.4 per cent increase in the first half.
In Russia, the Baltika brewery achieved organic volume growth of 6.5 per cent in the second quarter against market growth of 2.8 per cent, raising its market share to 38 per cent.
Jorgen Buhl Rasmussen, the chief executive, said Carlsberg expected to continue to grow faster than the Russian market as brand-conscious consumers traded up to premium beers. "We are taking a significant share of the total growth in the market," he said.
The Danish brewer announced a new operating margin target for eastern Europe of 23-25 per cent in the medium term against 21.3 per cent in the first half.
In western Europe the target is to increase margins - traditionally below its peers - from 9.8 per cent to 14-16 per cent. In the second quarter Carlsberg's overall operating margin increased from 14.7 per cent a year ago to 18 per cent.
In western Europe, organic sales were flat in spite of an unexpectedly sharp market decline in France but it put up prices to more than offset rises in raw material and energy costs. Michael Rasmussen (no relation) of SEB in Copenhagen said: "They are the industry leader in increasing prices, especially without losing volume."
Carlsberg said its strong brands had enabled it to raise prices in western Europe by an average of 5 per cent year on year. "We have to get price increases because we're talking about significant cost increases," Mr Rasmussen said. "We believe with the brand portfolio we have it should be possible." There was no sign, he said, of western European consumers trading down to cheaper beers.
written on 08.08.2008 um 03:44.
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