Carlsberg Cuts Profit Forecast on Weaker Russia Sales

19 Aug 2015 --- The world's fourth-largest brewer Carlsberg has reported second-quarter operating profit below expectations, hit by cold weather in Northern Europe and market decline in Eastern Europe. Operating profit before special items fell 18.9 percent to 2.92 billion Danish crowns ($432 million) in April to June.

The company did not achieve the full range of anticipated savings, and a process of revising its strategy to re-establish and further strengthen financial stability has been initiated, said Cees 't Hart, who took over as chief executive on June 15.

Organic gross profit declined 1%; 4% organic growth in gross profit/hl. Operating profit decline in Eastern Europe and in Q2 also in Western Europe, partly offset by operating profit growth in Asia; organic decline in Group operating profit of 13%.

CEO Cees ‘t Hart says: “The first half of 2015 has been challenging for the Group with weaker than expected results in Western Europe and market decline in Eastern Europe. In Western Europe, we experienced bad weather in Q2 in Northern Europe and did not achieve the full range of anticipated savings. For the full year, we therefore do not expect that the strong Asian performance will be enough to offset the weaker than expected results in Western Europe and the challenging market conditions in Eastern Europe. Needless to say, we have a heightened sense of urgency to execute the efficiency improvement initiatives we started at the beginning of the year.”

He continues: “Joining Carlsberg in mid-June, I’m in the process of getting to know the Group’s opportunities and challenges. While I’m delighted with the enthusiasm and commitment of our employees, I also recognise that we must step up further to achieve the full potential of the Group. To do so, we have initiated a process of revising the Group’s strategy to re-establish and further strengthen our financial flexibility. The results of this process will be announced in the first half of 2016."