Carlsberg Quarterly Result for 2008

Strong brands drive resilient value performance compensating for lower volume growth.

06/11/08 For the first nine months, organic beer volume growth totalled 4% (32% including acquisitions). Volume growth has been driven by double digit growth in Asia and reasonable strong growth in Eastern Europe.

In the first nine months of 2008, Carlsberg achieved progress in underlying operations in all geographic segments. Net revenue was DKK 45,420m, with organic growth of 7% (9% in local currencies) and operating profit before special items was DKK 6,592m with organic growth of 10% (13% in local currencies).

Eastern European full year revenue and earnings continue to be in line with previously provided expectations. Focus on positive pricing and mix, driven by strong brands, continues to benefit the Russian business and compensates for the slowdown in market growth, driven by the very bad weather and the above-average price increases this year. Russian beer market growth for this year is expected to moderate to c. 1-2% following weak volume development in late August and in September. The overall uncertain short-term economic outlook will affect consumer spending going into 2009 but medium term volume growth is still expected to be an average of 3-5% per year.

In the third quarter, market development slowed in Northern and Western Europe to -1.7% and in Eastern Europe to -2%. In addition to the secular decline in mature markets in Northern and Western Europe, deteriorating consumer and customer sentiment has impacted short term performance in this region. In Eastern Europe the performance was impacted by the very bad weather. Strong value growth in Eastern Europe continues, driven by positive pricing and mix which more than compensates for the lower market volume growth.

Deteriorating markets in the United Kingdom and the Baltics have impacted earnings in Northern and Western Europe. Carlsberg announced the proposed closure of the brewery in Leeds. Earlier in October, Carlsberg announced restructuring plans in Estonia to promptly address the challenges in the Baltic area and a further downsizing of the Baltics was announced - all in all a headcount reduction of more than 80.

The integration of acquired business from S&N is on track and Carlsberg remains fully committed to extracting confirmed synergies of approx. DKK 1.3bn. In Northern and Western Europe, the main restructuring programme in France has been announced and the integration plans in Eastern Europe are advancing in line with plans.

Reduction of interest bearing debt has high priority. The sale of the activities in Turkey was completed 23 October and the proceeds have been received. Working capital programmes, scrutiny of capex programmes, etc are well under way. Carlsberg has sufficient funding surplus through major committed credit facilities and can decide – even at the current debt level, i.e. without any further debt reduction – not to refinance in the market until 2011. Only 35% of the net financial debt is on floating interests and an average interest rate ("all in") on financial debt of around 6% is still valid.

Full year earnings expectations are marginally revised, primarily reflecting negative impact from the United Kingdom and the Baltics and the impact from the current consumer and customer sentiment. For Eastern Europe, the earnings expectations follow previous forecast. Operating profit in the brewing activities is expected to grow organically to around DKK 5.4bn (c. +8% vs. previously expected c. +12%). The contribution of approximately DKK 300m from other activities is confirmed. Including the contribution from acquired businesses the total operating profit for the current year is thus c. DKK 7.9bn (previously expected to be c. DKK 8.1bn).