Carlsberg Appoints t’Hart as CEO as Net Profit Falls

18 Feb 2015 --- Carlsberg has named Cees ‘t Hart as its new CEO as the world’s fourth-biggest brewer said currency devaluation in Russia and Ukraine will put significant pressure on the company’s performance this year.

Group beer volumes declined organically by 3pc last year, due to troubles in Eastern Europe, the Copenhagen-based maker of Tuborg beer said in a statement Wednesday as it reported fourth-quarter earnings that missed analysts’ estimates. Dutchman ‘t Hart replaces Jørgen Buhl Rasmussen from June 15, Roelof Joosten in turn succeeding him as CEO of Royal FrieslandCampina.

Carlsberg reported organic net revenue growth of 2% to DKK 64.5bn, with a continued solid price/mix of +3%, with 1% organic operating profit growth driven by strong performance in Western Europe and Asia. Reported operating profit of DKK 9,230m impacted by negative currency impact of DKK 789m. 5% adjusted net profit decline to DKK 5,496m. Free operating cash flow of DKK 1.9bn and free cash flow of DKK 0.7bn. For 2014, Carlsberg A/S proposes a 13% increase in dividend per share to DKK 9.00.

The company’s market share increased in the majority of markets in Western Europe and Asia, and Russian market share improved during the year. Group beer volumes declined organically by 3%, due to Eastern Europe. The implementation of the supply chain integration and business standardisation project (BSP1) continued with four markets going live in 2014. The company’s international premium portfolio continued to deliver strong growth: Tuborg (+24%), Somersby (+43%), Kronenbourg 1664 (+9%) and Grimbergen (+27%). The Carlsberg brand grew 1% in its premium markets.

Commenting on the results, CEO Jørgen Buhl Rasmussen says: “In 2014, we had clear priorities and focus on execution, enabling us to deliver strong organic performance in Western Europe and Asia which more than offset the market challenges in Eastern Europe. For 2015, we’ll continue to support and invest in our brands and markets to capture the long-term opportunities in our regions, but in response to the current situation, we’ve built a strong operating plan, which includes changes to our business model, with the aim to achieve further efficiency improvements faster. These changes will enable us to mitigate the significant negative earnings impact arising from the rouble weakness and Eastern European market challenges, as well as improve cash flow and return on invested capital.“

Carlsberg A/S announced that Rasmussen, is to retire from the Carlsberg Group. Cees ‘t Hart, currently CEO of the Dutch dairy company Royal FrieslandCampina, one of the largest dairy companies in the world, is appointed President and CEO. Jørgen will retire and Cees will start 15 June 2015.

Commenting on the change, Chairman of the Supervisory Board Flemming Besenbacher says: “The Carlsberg Group has good underlying fundamentals, and the Board and Jørgen are in full alignment that now is the right time to make a change and secure progress and continuity at the top executive level for a number of years ahead. I am delighted that Cees ‘t Hart will be joining the Group to do this. He has great international experience and a strong track record, and will propose the next phase strategy for Carlsberg Group’s long-term profitable and sustainable growth.

“On behalf of the Supervisory Board I would like to thank Jørgen for his significant contribution to the Group’s evolution during the past seven years. Performance has been strong across many geographies but of course challenged by macro-economic developments in Russia. Jørgen is handing over a Carlsberg with a transformed geographic footprint, a strong international leadership team and a more commercially capable and efficient organisation.”

Cees ‘t Hart, President and CEO elect, says: “I am very pleased to be taking on the leadership of the Carlsberg Group. It is a company with a distinguished heritage, a strong portfolio of local and international brands and is the leading brewer in the majority of its markets. It will be my pleasure to lead it and propose together with the leadership team the future strategy for sustainable and profitable growth.”

President and CEO Jørgen Buhl Rasmussen says: “Carlsberg is a fantastic company with a great heritage, strong brands and very passionate people. I am very proud to have led such a great company and will work to ensure a smooth transition to Cees. It is the right time for change for the company and for me. When I enjoy many of the excellent Carlsberg Group brands in the future, I will always remember the great team behind them and will continue to follow Carlsberg with interest.”