Carlsberg poorly in Copenhagen, disappointing first half-year and uncertain outlook

(Il Sole 24 Ore Radiocor) - Carlsberg slipped on the Copenhagen Stock Exchange after the release of its first-half financial results, despite an upward revision of full-year ebit estimates. The Danish brewer left more than 7% of its value on the ground. The brewing group, which produces Kronenbourg 1664, Tuborg and Somersby, announced that in the first six months of the year an operating profit of DKK 7.233 billion while the operating margin decreased by 40 basis points to 15.8%. Net profit amounted to DKK 3.562bn (-4.7%) for the period, due to higher net finance costs, taxes and the integration of UK-based Britvic.

Adjusted net profit was up 3.9% to SEK 4.023bn on adjusted earnings per share up 4.7% to SEK 30.4m. At the same time, the group now estimates that ebit will grow in a range between 3% and 5% this year in 2025, compared to a previous estimate of 1%-5% growth. However, according to Edward Mundy, an analyst at Jefferies, the market was already expecting 4% growth, so this change did not significantly affect it.

This is a trend of disappointing first-half results, which, as James Edwardes Jones, analyst at Rbc Capital Markets, points out, has already been traced by Anheuser-Busch InBev (-0.84% in Brussels) and Heineken (-0.23% in Amsterdam). The new forecasts benefit from warmer summer weather in much of Europe, which stimulated sales after a rainy summer last year, and a recovery in demand for premium beer, including in China. Specifically, in China, where Carlsberg and competing breweries have been affected by the decline in consumer confidence, which has led to more customers drinking at home, there has been growth in the premium segment, while traditional beers have declined. Chinese volumes increased by 1%, where Carlsberg is expanding in large cities. Carlsberg's performance in the country, where itmaintained its market share, contrasted with that of its competitors, including for example Anheuser-Busch InBev, which underperformed the market last month.

Overall, organic volumes declined by 1.7 per cent, which was slightly worse than analysts' forecasts, and compounded by the company's warning that it does not see an improvement in the consumption environment in the rest of the year. Carlsberg CEO Jacob Aarup-Andersen said that the brewer's performance was 'strong in a difficult year' and that it expected 'slightly better volume growth in the second half of the year'. However, he was not optimistic about consumer spending, which has been held back by rising prices and uncertainty, adding: 'There are no indications that the situation will change in the second half of the year'. The company, which is integrating British soft drink producer Britvic after its acquisition earlier this year, said the integration 'is progressing well' and has increased market share for brands such as Pepsi Max and 7UP.