Jacob Gronholt Pedersen
Danish brewer Carlsberg has raised its full-year profit outlook after second-quarter sales beat forecasts on growing demand for its expensive beers in China and strong sales in Russia during the World Cup.
Carlsberg, the world’s third-largest brewer behind Anheuser Busch InBev and Heineken, turned more positive on its 2018 outlook after a successful strategy to focus more on premium beers, especially in China, in the first half of the year.
Carlsberg’s sales in the second quarter rose to 18.3bn Danish crowns (€2.45bn), slightly above the 18bn crowns expected by analysts.
The company now expects operating profit to grow by high single-digits in percentage terms this year. It had previously forecast growth in mid-single-digits.
Carlsberg shares which rose 3.25% in Copenhagen have now climbed 18% in the past year, to value the brewer at €15.5bn.
“There’s more than good weather to these results. What lifts the earnings is that they’ve sold more expensive beers. They have really good growth in premium, craft and non-alcoholic beers, which is very positive,” said Sydbank analyst Morten Imsgard.
The group’s price mix, which indicates that the company sold more of its expensive beers, improved by 2% in the first six months of the year and was positive in its major regions: Europe, Russia, and Asia.
In China, which last year became Carlsberg’s largest single market in volume terms, sales grew organically by 17% in a market that grew by an estimated 1%, fuelled by demand for its premium brands like Tuborg, Carlsberg, and 1664 Blanc.
The Chinese market is driven by international premium beer brands, which sell at two to three times the price of mainstream brands.
“We delivered strong results for the first six months of 2018 with healthy top-line growth, margin improvements across the regions, strong cashflow and continued debt reduction,” said chief executive Cees’t Hart.
He said the brewer has had a “good start to the third quarter”. The brewer has been losing ground to rivals in Russia, which accounts for around a fifth of sales. Volumes there rose 10%.