Strong growth in earnings driven by Western Europe and BBH
• Net revenue climbed 8% to DKK 41.1bn (DKK 38.0bn in 2005). The increase was
due to a strong performance at BBH, a good performance in Asia and 4% revenue
growth in Western Europe.
• Operating profit was DKK 4,046m, against DKK 3,518m in 2005. Beverage
activities generated operating profit of DKK 3,997m (3,306m in 2005, excluding
the contribution from the then associate Hite Brewery Co. Ltd.), corresponding
to an increase for continuing operations of 21% relative to 2005. Other
activities, including the sale of real estate, contributed operating profit of
DKK 49m, against DKK 96m in 2005.
• Net profit was DKK 1,884m, against DKK 1,110m in 2005.
• It will be proposed to the Annual General Meeting that a dividend be paid of
DKK 6.00 per share, corresponding to an increase of 20% (DKK 5.00 per share in
2005).
• For 2007 Carlsberg anticipates growth of around 5% in net revenue. Operating
profit is expected to increase to approx. DKK 4.5bn of which approx. DKK 4.3bn
comes from the brewing activities. Net profit is expected to show a small
improvement on the reported figure for 2006.
“The progress made in 2006 is very pleasing - partly because it is based on
broad progress in our key companies,” comments CEO Nils S. Andersen. "This
shows that the many changes made in Carlsberg in recent years are bearing fruit
and that we have created a professional organisation and with it a solid
foundation for continued strengthening of the business in the years ahead."
Contacts:
Investors Mikael Bo Larsen +45 3327 1223
Media Jens Peter Skaarup +45 3327 1417
Carlsberg will present the financial statement at a conference call for
analysts and investors today at 9.30. The conference call will refer to a slide
deck available at www.carlsberggroup.com.
KEY FIGURES AND FINANCIAL RATIOS
DKK million 2002 2003 2004 2004
IFRS 2005
IFRS 2006
IFRS
Sales volume, gross (million hl)
Beer 78.6 81.4 92.0 92.0 101.6 100.7
Other beverages 20.9 21.2 19.4 19.4 19.1 20.2
Income statement
Net revenue 35,544 34,626 35,987 36,284 38,047 41,083
Operating profit before special items 3,779 3,564 3,442 3,401 3,518 4,046
Special items, net -23 -401 -301 -598 -386 -160
Consolidated profit 1,774 1,719 627 1,269 1,371 2,171
Attributable to:
Minority interests 763 763 150 169 261 287
Shareholders in Carlsberg A/S 1,011 956 477 1,100 1,110 1,884
Balance sheet
Total assets 46,523 46,712 56,731 57,698 62,359 58,451
Invested capital 30,971 28,815 42,783 43,466 42,733 43,160
Interest-bearing debt, net 10,923 8,929 21,733 21,733 20,753 19,229
Equity, shareholders in Carlsberg A/S 10,836 11,276 14,410 15,084 17,968 17,597
Cash flow
Cash flow from operating activities 5,550 4,517 3,806 3,875 4,734 4,470
Cash flow from investing activities -3,946 -1,904 -2,294 -2,363 -2,354 65
Free cash flow 1,604 2,613 1,512 1,512 2,380 4,535
Financial ratios
Operating margin % 10.6 10.3 9.6 9.4 9.2 9.8
Return on average invested capital (ROIC) % 12.2 12.4 8.0 8.1 7.8 9.2
Equity ratio % 23.3 24.1 25.4 26.1 28.8 30.1
Debt/equity ratio (financial gearing) x 1.01 0.79 1.51 1.44 1.15 1.09
Debt/operating profit before depreciation and amortisation
x
1.70
1.43
3.51
3.53
3.29
2.73
Interest cover x 4.27 7.50 3.19 2.95 2.84 4.72
Stock market ratios
Earnings per share (EPS) DKK 16.6 15.7 6.7 15.5 14.6 24.7
Cash flow from operating activities per share
(CFPS) DKK 91.2 74.2 53.6 54.6 62.1 58.6
Free cash flow per share (FCFPS) DKK 26.4 42.9 21.3 21.3 31.2 59.5
Dividend per share (proposed) DKK 5.0 5.0 5.0 5.0 5.0 6.0
Share price (B-shares) DKK 295.1 259.5 278.1 278.1 337.5 561.0
Number of shares (period-end) 1,000 63,906 63,906 76,278 76,278 76,278 76,278
Number of shares (average) 1,000 60,862 60,862 71,006 71,006 76,228 76,265
BUSINESS DEVELOPMENT
For Carlsberg, 2006 was partly about building further on the results achieved
through i.a. the Excellence programmes. As expected, it was mainly items on the
operational agenda rather than structural acquisitions or divestments that were
afforded the highest priority and, as a result, Carlsberg has demonstrated
continued progress.
The traditional Carlsberg markets of Western Europe performed well, partly a
reflection of strong consumer confidence and good summer weather. Innovation,
mix adjustments and general price increases also led to higher sales prices.
Carlsberg's growth markets in Eastern Europe and emerging markets in Asia also
put in a good performance. There was fierce and increasing competition in
several markets, including in some of the Asian markets. Carlsberg sold a total
of 72.6m hl of beer (calculated pro rata), equivalent to an increase of 9%
excluding the contribution from Hite Brewery Co. Ltd. Organic growth accounted
for 6.4% of this increase, and the year's acquisitions for 2.3%. The positive
development was due to continued growth in sales volumes in all the regions.
Sales of other beverages grew by 6% to a total of 17.5m hl.
The international brands Carlsberg and Tuborg both performed well, with volume
growth of 7% and 17% respectively, the latter due to very strong growth in
Eastern Europe.
Net revenue climbed 8% to a total of DKK 41,083m. The increase was due to a
strong performance at BBH, a good performance in Asia and 4% revenue growth in
Western Europe.
Operating profit before special items climbed 15% to DKK 4,046m (DKK 3,518m in
2005). Beverage activities generated operating profit of DKK 3,997m (DKK 3,306m
in 2005, excluding the contribution from the then associate Hite Brewery Co.
Ltd.), corresponding to an increase of 21%, a result of a generally positive
performance across the business. Other activities, including the sale of real
estate, contributed operating profit of DKK 49m, against DKK 96m in 2005.
As a result of the positive earnings growth, the return on invested capital
(ROIC) for beverage activities was 12.4%, against 10.2% in 2005.
Net profit grew by DKK 774 million to DKK 1,884 million.
Hence both revenue and earnings were better than anticipated not only at the
beginning of the year, cf. financial statement for 2005, but also during the
course of the year, cf. quarterly financial statements for 2006. The Board of
Directors considers the growth in earnings to be highly satisfactory.
A number of steps were taken in 2006 to continue making the Carlsberg Group
more efficient. At the beginning of the year the decision was taken to end the
brewing activities in Valby at the end of 2008 (with the exception of the
Jacobsen brewhouse). The Landskron brewery in Germany was sold, and production
ceased in Bodø in Norway. Steps were taken towards a new production model in
Finland, including centralised bottling and warehousing facilities, and it was
decided to discontinue the production of soft drinks at the Saltum-Neptun
breweries in Denmark by the end of 2008 at the latest.
Work on the Excellence programmes continued, and efficiency improvements were
made in a wide range of functions in administration, production, procurement
and logistics. On top of the previously introduced Excellence programmes, which
all aim to make working processes more rational and efficient, a Commercial
Excellence programme is being implemented with the aim of growing revenue and
creating value through increased sales.
An Accounting Shared Service Center has been started up in Poznan in Poland.
The new office has initially taken over duties from other sites in Poland and
will in 2007 take over duties from Germany, Switzerland and the UK.
The remaining shares in Hite Brewery Co. Ltd. were sold, drawing a line under
seven years of value-creating minority ownership.
Carlsberg established a joint venture (South Asia Breweries Ltd.) in the Indian
province of Rajasthan, with production expected to start up in the first
quarter of 2008. BBH also announced investments in the Olivaria Brewery in
Belarus and a new brewery in Tashkent in Uzbekistan, expected to start up
production in summer 2007.
Western Europe
DKK million Q4
2006 Q4
2005 Change
(%) 2006 2005 Change (%)
Beer sales (million hl) 7.2 7.1 +2 28.2 27.8 +2
Net revenue 7,108 6,898 +3 27,307 26,306 +4
Operating profit 529 344 +54 2,425 2,027 +20
Operating margin (%) 7.4 5.0 +2.4 8.9 7.7 +1.2
The Western European markets as a whole showed a positive trend, with growth in
a number of Carlsberg's core markets. Rising prices for a number of important
raw materials led to less favourable trading conditions, but Carlsberg improved
its performance in the region overall.
A total of 28.2m hl of beer was sold during the year (27.8m hl in 2005), an
increase of 2%. This positive performance can to some extent be attributed to
good weather during the summer months. Net revenue climbed 4% to DKK 27,307m,
due primarily to a generally positive performance in the Nordic countries and
growing exports. Sales of soft drinks and mineral water also rose as a result
of progress in the Nordic countries. Sales prices for beer were up around 1.0%
overall, with positive contributions from all markets except for Italy.
Operating profit was DKK 2,425m, against DKK 2,027m in 2005. The increase was
due primarily to higher earnings in the Nordic countries and the UK, and to
growth in export revenue. The operating margin rose by 1.2 percentage points to
8.9%, reflecting both the aforementioned factors and the positive effects of
the Excellence programmes.
Nordic countries
There was growth in all of the Nordic countries. This was due to product
launches, price increases and a continued focus on costs, including ensuring
continuous forward-looking adjustments with a view to maintaining and extending
market positions. Market share increased in Denmark and Finland, and operating
profit was up on 2005 in all of the Nordic countries. Sinebrychoff in Finland
announced extensive restructuring, with the centralisation of a number of
functions, and there were better results in Sweden, with growth in brands such
as Carlsberg and Ramlösa. The implementation of the Logistics Excellence
programme in Sweden has already reaped rewards in the form of lower logistics
expenses in 2006.
United Kingdom
There was a positive development in sales in the UK, driven by rising sales to
the off-trade and continuing growth in market share for the Carlsberg brand.
Sales to the independent on-trade also outperformed the market, and new
contracts were secured with major pub amd leisure groups. Operating profit
improved despite a large bad debt from one customer.
Germany, Switzerland, Italy and Portugal
Sales in Germany and Switzerland rose by a small amount compared with 2005,
while sales in Poland and Italy were slightly lower. Total earnings were
unchanged. There was an increase in sales of strategic local and international
brands, such as Feldschlösschen (Switzerland), Super Bock (Portugal), Holsten
(Germany) and Carlsberg and Tuborg, while sales of tactical and regional brands
fell. There was continued focus on cutting costs and making the business less
complex. Unsatisfactory earnings in Italy led to impairment of the remaining
goodwill.
Baltic Beverages Holding (50%)
DKK million Q4
2006 Q4
2005 Change
(%) 2006 2005 Change (%)
Beer sales (million hl) 5.4 4.6 +17 23.4 20.6 +14
Net revenue 1,805 1,462 +23 7,953 6,568 +21
Operating profit 320 247 +30 1,804 1,316 +37
Operating margin (%) 17.7 16.9 +0.8 22.7 20.0 +2.7
The Russian beer market showed growth of 10%, including an estimated 3
percentage points due to extraordinarily strong growth in the third quarter as
a result of increased demand for beer during a period of disruptions in the
supply of wine and spirits to the off-trade. Unseasonably mild weather in the
fourth quarter is also believed to have had a positive effect on sales. The
other BBH markets also showed growth in 2006, with growth rates of 12% in the
Ukraine, 17% in Kazakhstan and 5% in the Baltic States. BBH's total beer
volumes increased by 10.6%, and on a pro rata basis there was growth of 14% to
a total of 23.4m hl, including continued strong growth for the Tuborg brand.
Net revenue climbed DKK 1,385m to DKK 7,953m, an increase of 21%, of which 7.7%
was due to higher average prices. Operating profit grew by 37% to DKK 1,804m
(DKK 1,316m in 2005). This profit
reflects both favourable market conditions in the region and improvements in
the business, including the realisation of synergies of around DKK 230m
(approx. USD 80m for BBH at 100%) arising from the successful merger of the
Baltika, Pikra, Vena and Yarpivo breweries in Russia. Operating profit was also
boosted by special market circumstances in the third quarter, which are
believed to have resulted in one-off benefits of around DKK 110m (50% of
approx. EUR 30m). The operating margin was 22.7%. Excluding the special
circumstances in the Russian market, the operating margin is estimated to have
been just below 22% (20.0% in 2005).
BBH is paying a total dividend to its shareholders of EUR 150m for 2006 (EUR
115m for the 2005 financial year), half of which accrues to Carlsberg.
Russia
The merger of the Russian operations under Baltika Brewery was an important
step towards further strengthening the business's competitiveness. With growth
in beer sales of 11%, market share was 36.4% (36.3% in 2005), with strong
progress in the second half of the year as Baltika built further on its
position as the clear market leader. These results were achieved on the back of
positive growth in the Baltika brand, buoyed by the launch of Baltika Cooler,
and similarly positive growth in beer brands in both the premium and discount
segments. Sales of the Tuborg brand grew by 128% to 1.6m hl.
Baltic States
There was positive growth in all markets and growing market shares, most
notably in Latvia. Although these markets are already mature, average beer
consumption per capita increased, due partly to a number of new product
launches. There was also positive growth in other beverages.
Ukraine and Kazakhstan
There was continued fierce competition in the Ukraine and, as expected, market
share fell, the implementation of a long-term turnaround plan being at an early
stage. Growth in Kazakhstan continued, and BBH built further on its leading
market position. There was particular growth in the premium segment and the
high end of the mainstream segment, with a particularly positive performance
from the local brand Irbis.
BBH is continuing its expansion and decided during the year to increase its
capacity in Russia with a new brewery in Novosibirsk and to invest in new
markets in Uzbekistan and Belarus.
The Russian market is expected to generate growth of 3-5% per annum in the
medium term, but in 2007 growth will be at the low end of this range on account
of the extraordinarily strong performance in 2006 and the resulting high
comparative figures. As before, BBH expects to be able to raise prices by less
than the local rate of inflation in food and beverage prices. The operating
margin is expected to be stable relative to the 2006 figure excluding the
aforementioned one-off benefits, i.e. approx. 22%. This allows for further
synergies of USD 20m from the merger of the Russian breweries, although these
will be countered by rising raw material costs.
Eastern Europe excl. BBH
DKK million Q4
2006 Q4
2005 Change
(%) 2006 2005 Change (%)
Beer sales (million hl) 2.9 2.7 +8 13.3 12.9 +3
Net revenue 827 734 +13 3,509 3,392 +3
Operating profit -44 93 -148 135 302 -55
Operating margin (%) -5.5 12.7 -18.2 3.8 8.9 -5.1
Total sales of beer grew by 3% to 13.3m hl as a result of higher sales in
Bulgaria, Serbia and Croatia, while Poland in particular made a negative
contribution. Net revenue was DKK 3,509m (DKK 3,392m in 2005) and operating
profit was DKK 135m (DKK 302m in 2005). The decrease in operating profit
reflects lower and unsatisfactory earnings in Poland and non-recurring income
of DKK 31m in 2005.
Poland
Despite a rising market, both revenue and earnings were down on 2005. This was
due largely to increased investment in marketing, which did not deliver in line
with expectations in the short term, and to changes in the business model,
including reduced inventories at wholesalers in order to obtain a more
effective and direct correlation with sales in the off-trade. This process was
completed by the end of the year, and performance is expected to normalise in
2007.
Turkey
The Turkish market declined, due in part to a drop-off in tourism. As part of
the steps taken in Turkey to improve earnings and profitability, a number of
cost savings have been made. This has led to a slight improvement in operating
profit, although this remains at an unsatisfactory level.
Balkans
The breweries in Serbia, Bulgaria and Croatia continued to grow their sales
volumes and market share, due partly to good growth in both Tuborg and leading
local brands. A regional organisation under the name of Carlsberg South East
Europe has been set up in Serbia in 2007 to promote further growth and
efficiency improvements through the sharing of knowledge and core skills.
Asia
DKK million Q4
2006* Q4
2005 Change
(%) 2006* 2005 Change (%)
Beer sales (million hl) 1.7 1.6 +6 7.7 7.6 +1
Net revenue 562 415 +35 2,299 1,639 +40
Operating profit 21 95 -78 332 391 -15
Operating margin (%)** 3.7 17.6 -13.9 14.4 16.8 -2.4
* Xinjiang Wusu Beer Group (60.12%) and Cambrew (50%) have been consolidated on
a pro rata basis from 1 January 2006.
** Excluding the one-line consolidated associate (until November 2005) Hite
Brewery Co. Ltd.
Sales of beer in Asia totalled 7.7m hl (7.6m hl in 2005, including 2.0m hl from
the now divested Hite Brewery). Volumes for continuing operations grew by 38%,
of which 14% came from organic growth and the remaining 24% from acquisitions
in Western China, Cambodia and Laos. Net revenue grew by 40% to DKK 2,299m,
against DKK 1,639m in 2005. (The revenue figures do not include revenue from
associates in South Korea and China.) Operating profit was DKK 332m, against
DKK 391m in 2005. Hite Brewery contributed operating profit of DKK 116m in
2005.
Excluding this contribution from Hite Brewery, operating profit grew by DKK 57m
or 21%.
Hong Kong, Singapore and Malaysia
Taken together, the businesses in the mature markets featured stagnating
volumes and stable earnings. Market share increased in Hong Kong despite a
falling market, thanks to strong growth in the Skol brand in particular, while
market share for beer in Malaysia fell.
China and Vietnam - emerging markets
There was continued strong volume growth in the emerging markets, including
significant organic growth in both China and Vietnam. These businesses are in
the development phase, but those in Western China and Vietnam are already
making a positive and growing contribution to earnings. In Eastern China,
Carlsberg is continuing to invest in marketing the Carlsberg brand in the
premium segment, resulting in satisfactory volume growth.
OTHER ACTIVITIES
Other activities include the development and sale of real estate, primarily at
the former Tuborg site in Copenhagen, and the operation of the Carlsberg
Research Center. These activities generated operating profit of DKK 49m in
2006, against DKK 96m in 2005.
The cessation of brewing activities in Valby in Denmark at the end of 2008
means that the development and sale of real estate will remain a significant
activity for Carlsberg for a number of years. It is expected that the
development and sale of parts of the site will generate considerable income for
Carlsberg for many years after its closure.
COMMENTS ON THE FINANCIAL STATEMENTS
ACCOUNTING POLICIES
The 2006 Annual Report of the Carlsberg Group has been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the EU
and additional Danish disclosure requirements for annual reports, cf. the
reporting requirements of the OMX Copenhagen Stock Exchange for listed
companies and the executive order on the adoption of IFRS issued by the Danish
Commerce and Companies Agency pursuant to the Danish Financial Statements Act.
The Annual Report also complies with the IFRS issued by the IASB.
The following IFRS standards and interpretations as endorsed by the EU and of
relevance to the Carlsberg Group were implemented with effect from 1 January
2006:
• Amendments to IAS 39 “Financial Instruments: Recognition and Measurement”
• Amendment to IAS 21 “The Effects of Changes in Foreign Exchange Rates”
• IFRIC 4 “Determining whether an Arrangement contains a Lease”.
The implementation of these IFRS standards and interpretations has not resulted
in changes in the accounting policies applied by the Carlsberg Group.
The EU has also adopted IFRS 7 “Financial Instruments: Disclosures” and
amendment to IAS 1 "Presentation of Financial Statements - Capital
Disclosures", which entered into force on 1 January 2007. In accordance with
the provisions on the effective date of these standards, they were implemented
early with effect from the financial year 2006. The standards have not changed
the accounting policies for recognition and measurement of financial
instruments, only the disclosures in the notes are changed.
IFRS 8 “Operating Segments” and IFRIC 7-12 were also issued in 2006. IFRS 8 and
IFRIC 10-12 have not yet been endorsed by the EU. The implementation of IFRS 8
and IFRIC 7-12 will not result in changes in the Group's accounting policies.
Segment reporting has changed in 2006, such that licensing income from
associates and joint ventures and certain marketing expenses previously
included in “Not distributed” is now included in segment reporting for the
regions. The overall changes are relatively modest. The comparative figures
have been restated. The background to the change being made now is simply that
reporting will be in accordance with these principles in 2007, and over time
the change will have a greater effect.
INCOME STATEMENT
Net revenue climbed 8% to a total of DKK 41,083m (DKK 38,047m in 2005). DKK
522m (1.4%) of this revenue derives from acquisitions, primarily the purchase
of an ownership interest in Wusu Beer Group, China, and the consequent
proportional consolidation. Organic growth was DKK 2,359m (6.2%), driven by
progress in Western Europe and Asia, and a particularly positive development in
BBH. Added to this is a positive effect of DKK 155m from exchange rate
movements. Beer sales represented DKK 29,047m of total revenue (DKK 27,177m in
2005), equivalent to 70.7% (71.4% in 2005).
Cost of sales amounted to DKK 20,151m (DKK 18,879m in 2005), an increase of 7%
(DKK 1,272m) including increased cost of sales related to activities acquired
in Asia of DKK 241m. This development reflects the volume growth (+5% pro rata)
and rising costs in Western Europe as a result of the shift to more expensive
types of packaging. Seen in isolation, the rationalisation programmes plus
realised synergies from the merger of the Russian breweries have reduced costs.
Gross profit rose by 9% to a total of DKK 20,932m (DKK 19,168m in 2005). The
gross margin rose by 0.6 percentage points to 51.0% (50.4% in 2005).
Sales and distribution expenses grew by 6% to DKK 14,173m (DKK 13,332m in
2005). This development follows the increasing scope of business in the
Carlsberg Group, acquisitions made and particularly high impairments for bad
and doubtful debts for customers in the United Kingdom and Sweden. Sales and
distribution expenses also include marketing expenses of DKK 4,178m (DKK 3,718m
in 2005), equivalent to an increase of 12%, partly as a result of increased
market-oriented activities in BBH.
Administrative expenses were DKK 3,065m against DKK 2,961m in 2005, an increase
of 4%.
Other operating income was DKK 660m and other operating expenses DKK -393m, or
DKK 267m net against DKK 411m net in 2005, a fall of DKK 144m, DKK 66m of which
can be attributed to smaller gains on the sale of real estate and other assets.
Profit from associates was DKK 85m (DKK 232m in 2005). This development is due
primarily to the sale of shares in Hite Brewery Co. Ltd. in 2005, as a result
of which the profit from this (DKK +116m in 2005) is no longer included.
Operating profit before special items was DKK 4,046m against DKK 3,518m in
2005. Beverage activities generated a profit of DKK 3,997m against DKK 3,422m
in 2005 (DKK 3,306m in 2005 excluding share of profit from the then associate
Hite Brewery Co. Ltd.), equivalent to an increase of 21% on the previous year
for continuing operations. This increase is the result of broadly based
progress, including growth in earnings in both Western Europe and Asia and
particularly high earnings in BBH, which can partly be attributed to an
extraordinarily high demand for beer in the third quarter due to disruptions in
the supply of wine and spirits in Russia. The profit contribution from other
activities, including sale of real estate, was DKK 49m against DKK 96m in 2005.
The overall operating margin was 9.8% (9.2% in 2005) and 9.7% for beverage
activities in isolation, which is an improvement of 0.7 percentage point on
last year.
Net special items were DKK -160m against DKK -386m in 2005. The major special
items in 2006 were the gain on the sale of shares in Hite Brewery Co. Ltd.,
redundancy costs etc. in connection with the Operational Excellence programmes
and closure of the Valby brewery, and impairment losses etc. in Turkey and
Italy.
Net financial items were DKK -857m against DKK -1,240m in 2005. Net interest
was DKK -1,029m against DKK -1,056m in 2005. Despite a reduction of DKK 2.4bn
in average net interest-bearing debt, the higher interest rate level meant that
this figure was only slightly lower than 2005. Other net financial items were
DKK +172m against DKK -184m in 2005. This change was due in particular to
currency translation adjustments (DKK +222m compared with 2005) on debt in USD.
Tax on profit for the year was DKK -858m against DKK -521m in 2005. The
effective tax rate was thus 28.3% against 27.5% in 2005, and therefore in line
with the current rate of corporation tax in Denmark.
Consolidated profit was DKK 2,171m against DKK 1,371m in 2005, and minority
interests' share of this was DKK 287m (DKK 261m in 2005). In particular the
increase in minority interests reflects the positive trend in BBH.
Carlsberg's share was DKK 1,884m against DKK 1,110m in 2005. This positive
development can be attributed in particular to growth in operating profit from
beverage activities, a reduction in special items, and positive currency
translation adjustments under financial items.
BALANCE SHEET
Carlsberg had total assets of DKK 58,451m at year-end 2006, a fall of DKK
3,908m compared with 2005.
Assets
Intangible assets totalled DKK 21,279m (DKK 20,672m in 2005). The increase of
DKK 607m can primarily be attributed to goodwill.
Goodwill on acquisition of minority interests was DKK 374m (DKK 1,341m in 2005)
and goodwill on acquisition of entities DKK 456m (DKK 417m in 2005).
Property, plant and equipment totalled DKK 20,367m (DKK 20,355m in 2005), which
is on a par with 2005 and i.a. reflects the fact that total capital expenditure
was only on a par with depreciation despite capacity expansion in the growth
markets.
At the closing of the accounts, impairment tests were carried out on
cash-generating units, including goodwill and trademarks with an indefinite
useful life. As a result, the carrying amount of goodwill in Italy has been
impaired by DKK 94m and property, plant and equipment in Turkey have been
impaired by DKK 80m.
Other non-current assets fell from DKK 6,076m to DKK 2,724m at year-end 2006,
mainly as a result of the sale of shares in Hite Brewery Co. Ltd.
Current assets fell by DKK 956m to a total of DKK 13,972m (DKK 14,928m in 2005)
as a result of lower other receivables. At year-end 2005 this figure included a
receivable of DKK 1,928m from the sale of shares in Hite Brewery Co. Ltd.
Equity and liabilities
Total equity was DKK 18,987m, of which DKK 1,390m can be attributed to minority
interests and DKK
17,597m to shareholders in Carlsberg A/S. Compared with 2005, equity was
reduced by DKK 509m and equity attributable to shareholders in Carlsberg A/S by
DKK 371m. Financial gearing was reduced from 1.15 to 1.09 as a result of the
continued reduction in net interest-bearing debt.
Besides the profit for the year (DKK 1,884m), the movement in equity before
minority interests was due to currency translation adjustments (DKK -347m),
value adjustments of securities and hedging instruments (DKK -1,476m) and
adjustment of retirement benefit obligations etc. (DKK -28m). The dividend to
shareholders was DKK 381m, and purchase and sale of treasury shares etc.
reduced equity by DKK 23m.
Total obligations were DKK 39,464m (DKK 42,863m in 2005). The reduction is due
to the repayment of debt, reducing both current and non-current borrowings. The
proportion of non-current borrowings has risen from 68% to 71%.
CASH FLOW AND INTEREST-BEARING DEBT
Cash flow from operating activities was DKK 4,470m against DKK 4,734m in 2005.
Operating profit before depreciation and amortisation, adjusted for other
non-cash items, rose by DKK 857m, while restructuring costs paid were DKK 60m
lower than in 2005. The development in working capital made a positive
contribution of DKK 389m, although this was less than the particularly positive
development in 2005. Interest etc. paid reduced operating profit by DKK 214m
due to the payment of accumulated interest on the debt instrument issued in
connection with the acquisition of the 40% minority holding in Carlsberg
Breweries A/S in 2004. Corporation tax paid rose by DKK 354m.
Cash flow from investing activities was DKK +65m (DKK -2,354m in 2005).
Acquisition and divestment of entities, net, was lower than in 2005, with these
items having a net effect of DKK 18m (DKK -738m in 2005). The sale of the
shareholding in Hite Brewery Co. Ltd. in 2005 and 2006 had a positive effect on
cash flow of approx. DKK 3.3bn in 2006.
Other activities (real estate and assets under construction) contributed DKK
-186m (DKK +1,082m in 2005).
Free cash flow was DKK 4,535 against DKK 2,380m in 2005.
Net interest-bearing debt was DKK 19.2bn at year-end against DKK 20.8bn at
year-end 2005, a reduction of approx. DKK 1.5bn. The development in net
interest-bearing debt reflects, on the one hand, the development in free cash
flow (excluding the shares in Hite Brewery Co. Ltd. sold in 2005, where the
receivable of DKK 1,928m was included in net interest-bearing debt at year-end
2005 but in free cash flow in 2006 after payment was received) and currency
translation adjustment of debt, primarily issued in USD and CHF, totalling
approx. DKK -0.3bn and, on the other hand, payment of dividends to shareholders
in Carlsberg A/S and minority interests totalling approx. DKK 0.5bn and
acquisition of minority interests (primarily in BBH) totalling approx. DKK
0.6bn.
EARNINGS EXPECTATIONS
For 2007 Carlsberg anticipates growth of around 5% in net revenue and operating
profit is expected to increase to approx. DKK 4.5bn.
Beverage activities are expected to contribute operating profit of approx. DKK
4.3bn (DKK 3,997m in 2006), with progress in all four geographical regions.
However, the profit increase in 2007 is expected to be lower than the increase
realised in 2006, due partly to the particularly strong progress in 2006 and
partly to the fact that the profit in 2007 will be reduced by significant
central expenses (in the segment "Not distributed") for marketing and for
standardisation of processes, business processes, IT systems etc. to support
the ongoing productivity improvements necessary within all functional areas.
Agreements have been entered into concerning delivery of properties/flats at
Tuborg Syd in 2007-2008. The current estimate is that this will mean
investments of approx. DKK 490m and DKK 40m and sales proceeds of approx. DKK
700m and DKK 800m in 2007 and 2008 respectively. Selling profits or new rental
income in 2007 and 2008 are expected to be approx. DKK 310m and DKK 230m.
Approx. 70,000 m2 of housing, 20,000 m2 of commercial properties and 10,000 m2
of public buildings remain to be constructed and sold on the Tuborg site.
Other activities (gains on sale of real estate less costs of running the
Carlsberg Research Center etc.) are expected to contribute approx. DKK 0.2bn to
operating profit in 2007.
In 2007 special items are expected to be on a par with the reported figure for
2006.
Financial expenses are expected to be somewhat higher than in 2006, mainly
because other financial items (currency translation adjustments etc.) were DKK
+172m in 2006. At present a small negative figure is expected for other
financial items in 2007. Interest expenses in 2007 are expected to be higher
than in 2006, due to the significant investment programme in 2007, cf. below.
The effective tax rate in 2006 was 28.3%. The overall effective tax rate in
2007 is expected at present to be around 26%.
Minority interests are expected to rise in 2007 as a result of an anticipated
positive development, i.a. in BBH.
Net profit in 2007 is expected to show a small improvement on the reported
figure for 2006.
Investments in development of real estate, continued capacity expansion in BBH
and investments in connection with the establishment of a new production
structure, i.a. in Denmark and Finland, mean that total investments will be
fairly high, which, taking 2007 in isolation, will have a negative impact on
free cash flow. By their very nature, one of the aims of these investments is
to increase free cash flow over time.
The above forward-looking statements, including the forecasts of future
revenue, profit and cash flow etc., reflect management's current expectations
and are subject to risks and uncertainty. Many factors, some of which will be
beyond management's control, may cause actual developments to differ
materially from the expectations expressed. Such factors include - but are not
limited to - matters presented in previously published material from Carlsberg
A/S, most recently in the Annual Report for 2005.
INCENTIVE PROGRAMMES
In 2006 a total of 220,250 share options with an exercise price of DKK 380.18
(2005: 201,250 options with an exercise price of DKK 288.29) were granted to
members of the Executive Board and other senior employees in the Carlsberg
Group, a total of around 150. In 2007 around 230,000 options will be granted
with an exercise price calculated as the average of the share price on the
first five trading days after publication of this financial statement.
ANNUAL GENERAL MEETING
The Annual General Meeting will take place on 13 March 2007 at the Radisson SAS
Falconer Hotel, Copenhagen, Denmark.
BOARD RESOLUTIONS AND PROPOSALS TO THE ANNUAL GENERAL MEETING
The Parent Company recorded a profit of DKK 815m for 2006. The Board of
Directors will propose to the Annual General Meeting that a dividend be paid of
DKK 6.00 per share or a total of DKK 458m. It is proposed that the remainder of
the year's profit, DKK 357m, be taken to reserves.
ANNUAL REPORT
The Annual Report for 2006 is expected to be available no later than 5 March
2007.
FINANCIAL CALENDAR FOR THE FINANCIAL YEAR 2007
The financial year follows the calendar year, and the following schedule has
been set:
13 March 2007 Annual General Meeting
9 May 2007 Q1 Financial Statement
8 August 2007 Q2 Financial Statement
7 November 2007 Q3 Financial Statement
Carlsberg's communication with investors, analysts and the press is subject to
special restrictions during a four-week period prior to the publication of
quarterly and annual financial statements.
MANAGEMENT STATEMENT
The Board of Directors and the Executive Board have today discussed and
approved the Annual Report of the Carlsberg Group and the Parent Company for
2006.
The Annual Report has been prepared in accordance with International Financial
Reporting Standards as adopted by the EU and additional Danish disclosure
requirements for annual reports of listed companies. We consider the accounting
policies used to be appropriate. Accordingly, the Annual Report gives a true
and fair view of the Carlsberg Group's and the Parent Company's assets,
liabilities and financial position at 31 December 2006 and of the results of
the Carlsberg Group's and the Parent Company's operations and cash flows for
the financial year 2006.
We recommend that the Annual General Meeting approve the Annual Report.
Copenhagen, 20 February 2007
Executive Board of Carlsberg A/S
Nils S. Andersen Jørn P. Jensen Jørgen Buhl Rasmussen
Board of Directors of Carlsberg A/S
Povl Krogsgaard-Larsen Jens Bigum Hans Andersen
Chairman Deputy Chairman
Flemming Besenbacher Søren Bjerre-Nielsen Hanne Buch-Larsen
Henning Dyremose Niels Kærgård Axel Michelsen
Erik Dedenroth Olsen Bent Ole Petersen Per Øhrgaard
Appendix 1 Segment reporting by region (beverages)
Appendix 2 Beverages and other activities
Appendix 3 Segment reporting by quarter
Appendix 4 Income statement
Appendix 5 Special items
Appendix 6 Balance sheet
Appendix 7 Statement of recognised income and expenses and changes in equity
Appendix 8 Cash flow statement
Appendix 9 Net interest-bearing debt
This statement is available in Danish and English. In the event of any
discrepancy between the two versions, the Danish version shall prevail.
Carlsberg is one of the leading brewing groups in the world, with a large
portfolio of beer and soft drinks brands. Its flagship brand - Carlsberg - is
one of the fastest-growing and best-known beer brands in the world. More than
30,000 people work for Carlsberg at 92 local production sites in 48 countries,
and its products are sold in more than 150 markets. In 2006 Carlsberg sold more
than 100 million hectolitres of beer, which is about 83 million bottles of beer
a day.
Find out more at www.carlsberggroup.com.
APPENDIX 1 (PAGE 1/2)
Segment reporting by region (beverages)
Q4
2006 Q4
2005 2006 2005
Beer sales (pro rata, million hl)
Western Europe 7.2 7.1 28.2 27.8
Baltic Beverages Holding (BBH) 5.4 4.6 23.4 20.6
Eastern Europe (excl. BBH) 2.9 2.7 13.3 12.9
Asia 1.7 1.6 7.7 7.6
Total 17.2 16.0 72.6 68.9
Net revenue (DKK million)
Western Europe 7,108 6,898 27,307 26,306
Baltic Beverages Holding (BBH) 1,805 1,462 7,953 6,568
Eastern Europe (excl. BBH) 827 734 3,509 3,392
Asia 562 415 2,299 1,639
Not distributed -17 5 15 142
Beverages, total 10,285 9,514 41,083 38,047
Net revenue (% of total)
Western Europe 69.1 72.5 66.5 69.1
Baltic Beverages Holding (BBH) 17.6 15.4 19.4 17.3
Eastern Europe (excl. BBH) 8.0 7.7 8.5 8.9
Asia 5.5 4.3 5.6 4.3
Not distributed -0.2 0.1 0.0 0.4
Beverages, total 100.0 100.0 100.0 100.0
Operating profit before special items (DKK million)
Western Europe 529 344 2,425 2,027
Baltic Beverages Holding (BBH) 320 247 1,804 1,316
Eastern Europe (excl. BBH) -44 93 135 302
Asia 21 95 332 391
Not distributed -297 -237 -699 -614
Beverages, total 529 542 3,997 3,422
Operating margin (%)
Western Europe 7.4 5.0 8.9 7.7
Baltic Beverages Holding (BBH) 17.7 16.9 22.7 20.0
Eastern Europe (excl. BBH) -5.5 12.7 3.8 8.9
Asia 1 3.7 17.6 14.4 16.8
Not distributed … … … …
Beverages, total 5.1 5.7 9.7 9.0
1 Excluding the one-line consolidated associate (until November 2005) Hite
Brewery Co. Ltd. (South Korea).
APPENDIX 1 (PAGE 2/2)
Segment reporting by region (beverages)
2006 2005
Capital expenditure, CAPEX (DKK million)
Western Europe 1,328 1,562
Baltic Beverages Holding (BBH) 1,061 725
Eastern Europe (excl. BBH) 514 464
Asia 140 107
Not distributed 145 152
Beverages, total 3,188 3,010
Depreciation and amortisation (DKK million)
Western Europe 1,667 1,694
Baltic Beverages Holding (BBH) 619 498
Eastern Europe (excl. BBH) 396 348
Asia 120 107
Not distributed 138 126
Beverages, total 2,940 2,773
Capital expenditure / Depreciation and amortisation (%)
Western Europe 80 92
Baltic Beverages Holding (BBH) 171 146
Eastern Europe (excl. BBH) 130 133
Asia 117 100
Not distributed 105 120
Beverages, total 108 109
Invested capital, period-end (DKK million)
Western Europe 16,767 17,740
Baltic Beverages Holding (BBH) 7,346 6,550
Eastern Europe (excl. BBH) 3,972 4,068
Asia 2,580 2,635
Not distributed 632 386
Beverages, total 31,297 31,379
Return on average invested capital, ROIC (%)
Western Europe 13.3 10.5
Baltic Beverages Holding (BBH) 26.5 23.2
Eastern Europe (excl. BBH) 3.3 6.8
Asia 12.2 11.4
Not distributed … …
Beverages, total 12.4 10.2
APPENDIX 2
Beverages and other activities
DKK million Q4
2006 Q4
2005
Beverages Other activities Total Beverages Other activities Total
Net revenue 10,285 - 10,285 9,514 - 9,514
Operating profit 529 -15 514 542 77 619
Special items, net -401 - -401 -136 245 109
Financial items, net -177 -52 -229 -284 -57 -341
Profit before tax -49 -67 -116 122 265 387
Corporation tax 23 37 60 31 -57 -26
Consolidated profit -26 -30 -56 153 208 361
Of which:
Minority interests 20 4 24 46 -2 44
Shareholders in Carlsberg A/S -46 -34 -80 107 210 317
DKK million 2006
2005
Beverages Other activities Total Beverages Other activities Total
Net revenue 41,083 - 41,083 38,047 - 38,047
Operating profit 3,997 49 4,046 3,422 96 3,518
Special items, net -160 - -160 -636 250 -386
Financial items, net -728 -129 -857 -1,014 -226 -1,240
Profit before tax 3,109 -80 3,029 1,772 120 1,892
Corporation tax -920 62 -858 -519 -2 -521
Consolidated profit 2,189 -18 2,171 1,253 118 1,371
Of which:
Minority interests 282 5 287 259 2 261
Shareholders in Carlsberg A/S 1,907 -23 1,884 994 116 1,110
APPENDIX 3
Segment reporting by quarter
DKK million Q1
2005 Q2 2005 Q3 2005 Q4
2005 Q1
2006 Q2 2006 Q3 2006 Q4
2006
Net revenue
Western Europe 5,261 6,988 7,159 6,898 5,364 7,456 7,379 7,108
Baltic Beverages Holding (BBH) 1,086 1,951 2,069 1,462 1,276 2,320 2,552 1,805
Eastern Europe (excl. BBH) 606 1,024 1,028 734 639 1,033 1,010 827
Asia 403 384 437 415 517 630 590 562
Not distributed 39 77 21 5 11 5 16 -17
Beverages, total 7,395 10,424 10,714 9,514 7,807 11,444 11,547 10,285
Other activities - - - - - - - -
Total 7,395 10,424 10,714 9,514 7,807 11,444 11,547 10,285
Operating profit
Western Europe -86 829 940 344 16 894 986 529
Baltic Beverages Holding (BBH) 145 423 501 247 153 598 733 320
Eastern Europe (excl. BBH) -76 161 124 93 -75 111 143 -44
Asia 98 97 101 95 126 94 91 21
Not distributed -77 -200 -100 -237 -116 -134 -152 -297
Beverages, total 4 1,310 1,566 542 104 1,563 1,801 529
Other activities -26 40 5 77 -21 76 9 -15
Total -22 1,350 1,571 619 83 1,639 1,810 514
Special items, net -74 -36 -385 109 -105 498 -152 -401
Financial items, net -294 -324 -281 -341 -228 -200 -200 -229
Profit before tax -390 990 905 387 -250 1,937 1,458 -116
Corporation tax 92 -272 -315 -26 71 -571 -417 60
Consolidated profit -298 718 590 361 -179 1,366 1,041 -56
Of which:
Minority interests 21 85 111 44 40 95 128 24
Shareholders in Carlsberg A/S -319 633 479 317 -219 1,271 913 -80
APPENDIX 4
Income statement
DKK million Q4
2006 Q4
2005 2006 2005
Net revenue 10,285 9,514 41,083 38,047
Cost of sales -5,271 -4,984 -20,151 -18,879
Gross profit 5,014 4,530 20,932 19,168
Sales and distribution expenses -3,711 -3,381 -14,173 -13,332
Administrative expenses -869 -818 -3,065 -2,961
Other operating income, net 55 240 267 411
Share of profit after tax, associates 25 48 85 232
Operating profit before special items 514 619 4,046 3,518
Special items, net -401 109 -160 -386
Financial income 175 212 725 548
Financial expenses -404 -553 -1,582 -1,788
Profit before tax -116 387 3,029 1,892
Corporation tax 60 -26 -858 -521
Consolidated profit -56 361 2,171 1,371
Of which:
Minority interests 24 44 287 261
Shareholders in Carlsberg A/S -80 317 1,884 1,110
Earnings per share 24.7 14.6
Earnings per share, diluted 24.6 14.6
APPENDIX 5
Special items
DKK million 2006 2005
Special items, income:
Gain on sale of shares in Hite Brewery Co. Ltd. 602 1,215
Gain on sale of shares in Danbrew Ltd. A/S - 14
Gain on disposal of rental activities, Tuborg Nord - 250
Total 602 1,479
Special items, costs:
Impairment of goodwill etc., Türk Tuborg -80 -563
Impairment of goodwill, Carlsberg Italia -144 -277
Value adjustment for purchase price of shares in Beer Lao and Hite Brewery in
connection with the settlement of the Carlsberg Asia case
-
-253
Impairment of software at Carlsberg IT A/S - -105
Impairments and expenses relating to withdrawal from the market for discount
soft drinks in Denmark
-55
-
Other impairments of non-current assets -12 -67
Loss on disposal of mineral water bottling plant, Passugger, Switzerland - -35
Loss on sale of Landskron Brauerei, Germany -21 -
Accounting loss from outsourcing of Carlsberg UK's servicing of draught beer
equipment, reversal of provision
18
-81
Redundancy costs and impairment of non-current assets in connection with new
production structure in Denmark
-74
-153
Redundancy costs and impairment of non-current assets in connection with new
production structure at Sinebrychoff, Finland
-59
-
Redundancy costs etc. in connection with Operational Excellence programmes
-188
-184
Redundancy costs and expenses, establishment of Accounting Shared Service
Center in Poland
-60
-
Restructuring, Carlsberg Italia -58 -34
Restructuring, BBH - -44
Costs associated with the outsourcing of IT - -22
Other restructuring costs etc., other entities -29 -47
Total -762 -1,865
Special items, net -160 -386
APPENDIX 6
Balance sheet
DKK million 31 Dec. 2006 31 Dec. 2005
Assets
Intangible assets 21,279 20,672
Property, plant and equipment 20,367 20,355
Financial assets 2,724 6,076
Total non-current assets 44,370 47,103
Inventories and trade receivables 9,328 8,845
Other receivables etc. 2,154 3,843
Cash and cash equivalents 2,490 2,240
Total current assets 13,972 14,928
Assets held for sale 109 328
Total assets 58,451 62,359
Equity and liabilities
Equity, shareholders in Carlsberg A/S 17,597 17,968
Minority interests 1,390 1,528
Total equity 18,987 19,496
Borrowings 16,241 17,765
Deferred tax liabilities, retirement benefit obligations etc. 4,851 4,683
Total non-current liabilities 21,092 22,448
Borrowings 6,556 8,213
Trade payables 5,147 4,513
Other current liabilities 6,668 7,679
Total current liabilities 18,371 20,405
Liabilities associated with assets held for sale 1 10
Total equity and liabilities 58,451 62,359
APPENDIX 7 (PAGE 1/2)
Statement of recognised income and expenses for the year
2006
DKK million Currency translation Fair value
adjustments1 Retained earnings
Share-holders in Carlsberg A/S, total Minority interests Total
Profit for the year - - 1,884 1,884 287 2,171
Currency translation adjustments:
Foreign entities -347 - - -347 -72 -419
Value adjustments:
Hedging instruments 69 170 - 239 - 239
Securities - -1,078 - -1,078 - -1,078
Securities, transferred to income statement on sale
-
-637
-
-637
-
-637
Retirement benefit obligations - - -105 -105 - -105
Other adjustments:
Share-based payment - - 10 10 - 10
Other - - 7 7 -10 -3
Tax on changes in equity -7 4 63 60 - 60
Net amount recognised directly in equity
-285
-1,541
-25
-1,851
-82
-1,933
Total recognised income and expenses
-285
-1,541
1,859
33
205
238
2005
DKK million Currency translation Fair value
adjustments1 Retained earnings
Share-holders in Carlsberg A/S, total Minority interests Total
Profit for the year - - 1,110 1,110 261 1,371
Currency translation adjustments:
Foreign entities 1,096 - - 1,096 132 1,228
Transferred to income statement on sale
-128
-
-
-128
-
-128
Value adjustments:
Hedging instruments -289 -14 - -303 - -303
Hedging instruments, transferred to income statement on sale
-
-6
-
-6
-
-6
Securities -143 1,679 - 1,536 - 1,536
Retirement benefit obligations - - -173 -173 -1 -174
Other adjustments:
Share-based payment - - 4 4 - 4
Other - - -7 -7 50 43
Tax on changes in equity 68 -30 42 80 -11 69
Net amount recognised directly in equity
604
1,629
-134
2,099
170
2,269
Total recognised income and expenses
604
1,629
976
3,209
431
3,640
1 Fair value adjustments comprise a reserve for securities and a reserve for
hedging transactions.
APPENDIX 7 (PAGE 2/2)
Statement of changes in equity
2006
Shareholders in Carlsberg A/S
DKK million Share capital Currency translation Fair value
adjustments1 Retained earnings
Total reserves Total capital
and reserves Minority interests Total equity
Equity at 1 January 2006 1,526 636 1,521 14,285 16,442 17,968 1,528 19,496
Total recognised income and expenses for the
year - -285 -1,541 1,859 33 33 205 238
Capital increase - - - - - - 23 23
Purchase/sale of treasury shares - - - -16 -16 -16 - -16
Other - - - -7 -7 -7 - -7
Dividends paid to shareholders - - - -381 -381 -381 -148 -529
Acquisition of minority interests and entities - - - - - - -218 -218
Total changes in equity - -285 -1,541 1,455 -371 -371 -138 -509
Equity at 31 December 2006 1,526 351 -20 15,740 16,071 17,597 1,390 18,987
2005
Shareholders in Carlsberg A/S
DKK million Share capital Currency translation Fair value
adjustments1 Retained earnings
Total reserves Total capital
and reserves Minority interests Total equity
Equity at 1 January 2005 1,526 32 -108 13,634 13,558 15,084 1,708 16,792
Total recognised income and expenses for the
year - 604 1,629 976 3,209 3,209 431 3,640
Capital increase - - - - - - 8 8
Purchase/sale of treasury shares - - - 55 55 55 - 55
Dividends paid to shareholders - - - -380 -380 -380 -202 -582
Acquisition of minority interests - - - - - - -305 -305
Divestment of entities - - - - - - -112 -112
Total changes in equity - 604 1,629 651 2,884 2,884 -180 2,704
Equity at 31 December 2005 1,526 636 1,521 14,285 16,442 17,968 1,528 19,496
The proposed dividend of DKK 6.00 per share, in total DKK 458m (2005: DKK 5.00
per share, in total DKK 381m), is included in retained earnings at 31 December
2006.
1 Fair value adjustments comprise a reserve for securities and a reserve for
hedging transactions.
APPENDIX 8
Cash flow statement
DKK million Q4
2006 Q4
2005 2006 2005
Operating profit before special items 514 619 4,046 3,518
Adjustment for depreciation, amortisation and impairment
losses 846 732 2,989 2,796
Operating profit before depreciation, amortisation and impairment
losses 1,360 1,351 7,035 6,314
Adjustment for other non-cash items -31 -223 -173 -309
Change in working capital 911 1,564 389 1,002
Restructuring costs paid -123 -183 -477 -537
Interest etc. received 79 39 186 123
Interest etc. paid -366 -110 -1,512 -1,235
Corporation tax paid -95 -69 -978 -624
Cash flow from operating activities 1,735 2,369 4,470 4,734
Acquisition of property, plant and equipment, and intangible
assets -1,007 -940 -3,188 -3,010
Disposal of property, plant and equipment, and intangible assets 80 246 305 427
Change in trade loans -56 63 -200 -32
Total operating investments -983 -631 -3,083 -2,615
Acquisition and divestment of entities, net 153 -316 18 -738
Acquisition of financial assets1 -45 -309 -82 -710
Disposal of financial assets 39 1,829 1,494 2,002
Change in financial receivables 2 -97 -1,956 1,834 -1,620
Dividends received -6 192 70 245
Total financial investments 44 -560 3,334 -821
Other investments in property, plant and equipment -132 -98 -371 -176
Disposal of other property, plant and equipment 33 995 185 1,258
Total other activities 3 -99 897 -186 1,082
Cash flow from investing activities -1,038 -294 65 -2,354
Free cash flow 697 2,075 4,535 2,380
Shareholders in Carlsberg A/S -4 1 -397 -325
Minority interests -77 -290 -701 -1,581
External financing -1,075 -1,930 -3,592 -84
Cash flow from financing activities -1,156 -2,219 -4,690 -1,990
Net cash flow -459 -144 -155 390
Cash and cash equivalents at 1 January 2,188 2,088 1,940 1,500
Currency translation adjustments -21 -4 -77 50
Cash and cash equivalents at 31 December 1,708 1,940 1,708 1,940
1 Includes payment of DKK 253m for value adjustment of shares in connection
with the Asia settlement in 2005.
2 Includes DKK 1,928m received on the sale of shares in Hite Brewery Co. Ltd.
in 2006, and the corresponding receivable in 2005.
3 Other activities cover real estate and assets under construction, separate
from beverage activities, including costs of construction contracts.
APPENDIX 9
Net interest-bearing debt
DKK million Q4
2006 Q4
2005 2006 2005
Net interest-bearing debt is calculated as follows:
Non-current borrowings 16,241 17,765
Current borrowings 6,556 8,213
Gross interest-bearing debt 22,797 25,978
Cash and cash equivalents -2,490 -2,240
Loans to associates -221 -209
On-trade loans -1,711 -1,712
less non-interest-bearing portion 927 977
Other receivables -857 -2,868
less non-interest-bearing portion 784 827
Net interest-bearing debt 19,229 20,753
Changes in net interest-bearing debt:
Net interest-bearing debt at 1 January 19,756 24,303 20,753 21,733
Cash flow from operating activities -1,735 -2,369 -4,470 -4,734
Cash flow from investing activities 1,038 294 -65 2,354
Dividends to shareholders and minority interests -12 14 529 582
Acquisition of minority interests 112 284 576 1,387
Purchase/sale of treasury shares 4 -1 16 -55
Additions due to acquisition of entities, net 5 8 146 238
Change in interest-bearing lending -46 -1,790 1,832 -1,375
Currency translation effects -31 194 -272 734
Other 138 -184 184 -111
Total change -527 -3,550 -1,524 -980
Net interest-bearing debt at 31 December 19,229 20,753 19,229 20,753
