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Strong performance for the Carlsberg Group and full-year earnings upgrade

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Strong performance for the Carlsberg Group and full-year earnings upgrade

Strong performance for the Carlsberg Group and full-year earnings upgrade
August 17
16:03 2010

The Carlsberg Group achieved 12% operating profit growth to DKK 5.0bn for the first six months of 2010 and driven by increased sales and marketing investments the Group gained market share in a large part of the business. The focus on improving profitability continues and Group operating profit margin improved strongly by 210bp to 17.2%.

Beer volumes declined by 2% to 55.8m hl with an organic volume development of -3%. Excluding the Russian de-stocking effect in Q1, the estimated organic volume development was -1% for the first six months. Asia continued the very strong growth at double-digit percentage rates. Northern & Western European volumes grew slightly organically. Eastern Europe, excluding Russia, reported double-digit organic growth. Russian volumes declined mainly due to de-stocking in Russia in Q1 and overall market decline following the 200% excise duty increase. Group organic beer volume development was flat in Q2.

In Northern & Western Europe, the overall market share started to improve after flat market share development in recent years. In Eastern Europe, market shares improved strongly with Russia improving sequentially to 40.1% in Q2 after 39.1% in Q1. In Asia, strong market share gains were once again achieved. This was driven by increased brand investments, product introductions, and continued value management efforts.

The Russian beer market declined by 9% in the first six months driven by significant price increases following the higher excise duty. Due to improving macro economics and slightly better consumer sentiment, Carlsberg now expects a high single-digit percentage decline for the Russian market for 2010 (previously expected low double-digit percentage decline).

Jørgen Buhl Rasmussen

Commenting on the results, CEO Jørgen Buhl Rasmussen says: “The Group’s performance was strong for the first six months in spite of challenging consumer dynamics. We achieved higher margins in all three regions for the first six months showing that we are clearly on-track to meet our medium-term margin targets. We will continue to balance our plans to improve efficiency and margins with our ambitions to drive top-line growth.”

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