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Russia Weakens Carlsberg’s 2011 Performance

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Russia Weakens Carlsberg’s 2011 Performance

Russia Weakens Carlsberg’s 2011 Performance
February 21
15:53 2012

Carlsberg Group’s 2011 financial performance has been adversely impacted by a decline in the Russian beer market. Group operating profit at DKr9.82 billion (Eur1.32 billion) declined organically by 4%, as solid growth in Asia and Northern & Western Europe was not enough to offset the Eastern European decline, and group operating margin declined to 15.4% from 17.1% in 2010.

Group beer volumes grew organically by 3% and including acquisitions by 4% to118.7 million hl, with all three regions reporting organic volume growth for the year. Net revenue grew by 6% to DKr63.56 billion with a solid 6% organic growth (total volume 2% and 4% price/mix).

In Northern & Western Europe, Carlsberg’s performance was driven by efficiency improvements and market share gains, while in Asia it was driven by growth and market share gains. However, its performance in Eastern Europe was impacted by the Russian beer market decline and Russian market share loss, which was caused by a high level of promotions and price activity by competitors. The overall Northern & Western Europe beer market was flat in 2011. The Russian market declined by an estimated 3%.

Jorgen Buhl Rasmussen, chief executive of Carlsberg.

Jorgen Buhl Rasmussen, chief executive of Carlsberg, comments: “While 2011 was a challenging year with headwinds from rising input costs and a challenging Russian market, our Northern & Western European and Asian regions continued to perform well, both commercially and financially. Throughout the year, we maintained our focus on profitable development by balancing volume and value share, which led to share growth in both volume and value in Northern & Western Europe and Asia, but in the case ofRussiaresulted in market share loss due to a high level of promotional activities from competitors.”

An important commercial project in 2011 was the repositioning of the Carlsberg brand across more than 150 markets. The Carlsberg brand grew in volume by an encouraging 7% in premium markets.

He continues: “In our planning for 2012, we’re investing to grow market share and continuing the implementation of efficiency improvements. Strong prioritisation on the most important activities will be a key driver for how we approach businesses in what we expect to be a challenging environment in Northern & Western Europe in 2012. In Russia, the steps we’ve taken to strengthen the business will begin to bear fruit in 2012. At the same time we’ll continue to explore acquisition opportunities in growth markets.”

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