Carlsberg A/S Ny Carlsberg Vej 100 Tel +45 33 27 33 00
1760 København V CVR no: 61056416
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 1 of 31
INTERIM RESULTS AS AT 30 JUNE 2008
Continued healthy organic development of the business
1ST HALF YEAR 2008
• Total organic beer volume growth of 6% was achieved in the first six months of
2008. This was driven by continued growth despite tough comparables in Eastern
Europe, and in Asia, and a flat overall performance in Northern and Western
Europe. Total group beer volume growth of 24% was achieved.
• In second quarter organic beer volumes grew by 13% in Eastern Europe;
including volume growth in Russia of 6.5% vs market growth of 2.8%.
• In the first six months of 2008, Carlsberg achieved progress in underlying
operations in every geographical segment. Total organic growth in net revenue
was 7% (10% in local currencies) and in operating profit it was 22% (in local
currencies 26%).
• Second quarter had organic growth in net revenue of 7% (in local currencies
10%; in Northern and Western Europe +3%, Eastern Europe +30%, and Asia +20%).
Total organic growth in operating profit in the brewing activities in the second
quarter was 16% (in local currencies 19%).
• Significant improvement of product mix, especially in Russia, where consumer
preference for premium beer continues to grow.
• Price increases are compensating for rising raw material prices and leading to
higher gross earnings. Despite higher selling prices Carlsberg increased its
market share in most markets.
• Integration of the activities acquired from S&N is running to plan and
contributing to realisation of the expected synergies of approximately DKK 1.3bn
three years after the acquisition.
EXPECTATIONS
• Organic growth in net revenue of approximately 10% expected for 2008. Combined
with net revenue from acquired activities, this is expected to result in total
net revenue for the current year of DKK 62-63bn. In line with previous
announcements, operating profit is expected to grow organically to around DKK
5.9bn (approximately
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 2 of 31
+12%), including a contribution of approximately DKK 300m from other activities.
Overall, operating profit for the current year is expected to be in excess of
DKK 8.1bn, while net profit is expected to top DKK 3.0bn.
• Our outlook for Russian beer market growth is approximately 5% for the current
year - after first-half development and after our estimates as of today for
development in July.
FINANCIAL TARGET
• Based on the new geographical segmentation, the new financial target is to
increase the operating margins in the medium term for Northern and Western
Europe to 14- 16% and for Eastern Europe to 23-25%.
Contacts:
Investors Mikael Bo Larsen +45 3327 1223
Media Jens Bekke +45 3327 1412
Carlsberg will present the financial statements at a conference call for
analysts and investors today at 9.30 a.m. CET (8.30 a.m. GMT). The conference
call will refer to a slide deck, which will be available beforehand at
www.carlsberggroup.com.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 3 of 31
KEY FIGURES AND FINANCIAL RATIOS
DKK million Q2 Q2 H1 H1 2007
2008 2007 2008 2007
Sales volumes (million hl)
Beer 37.6 33.6 61.3 56.0 115.2
Soft drinks 6.2 5.8 10.8 10.2 20.8
Income statement
Net revenue 17,5- 12,639 26,977 21,502 44,750
1
Operating profit 3,150 1,854 3,538 2,256 5,262
Special items, net -91 -111 -128 -142 -427
Consolidated profit 1,588 1,128 1,501 1,214 2,596
Attributable to:
Minority interests 173 91 215 132 299
Shareholders in Carlsberg A/S 1,415 1,037 1,286 1,082 2,297
Balance sheet
Total assets 152,822 61,922 61,220
Invested capital 124,106 44,941 45,394
Interest-bearing debt, 47,409 20,529 19,726
Equity, shareholders 58,701 18,144 18,621
Cash flow
Cash flow from operating activit ies 2,771 2,052 2,083 1,643 4,837
Cash flow from investing activiti es -52,- -1,314 -54,365 -2,104 -4,927
69
Free cash flow -49,- 738 -52,282 -461 -90
98
Financial ratios
Operating margin 18.0 14.7 13.1 10.5 11.8
Return on average invested capital 11.4 10.3 11.7
Equity ratio % 41.3 29.3 32.6
Debt/equity ratio (financial 0.8 1.1 1.0
Interest cover 2.8 4.6 4.4
Stock market ratios*
Earnings per share (EPS) 13.1 10.9 12.7 11.4 24.1
Cash flow from operating activit ies per 25.7 21.5 20.5 17.2 50.8
share (CFPS) Free cash flow per share
(FCFPS)
- -458- 7.7 -514.3 -4.8 -0.9
- 2
K
Share price (B-shares) 458 538 498
Number of shares (period-end) 152,- 76,278 152,557 76,278 76,246
,000
557
Number of shares (average, excl. 108,- 95,295 101,652 95,295 95,283
treasury ,000
026
shares)
* Adjusted for bonus factor from rights issue in June in accordance wit h IAS
33, excl. number of shares period-end.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 4 of 31
BUSINESS DEVELOPMENT
The acquisition of part of the activities of Scottish & Newcastle plc ("S&N")
and the subsequent share issue were both completed in the second quarter. As of
28 April 2008, Carlsberg acquired the remaining 50% of BBH, the French
activities Brasseries Kronenbourg, the Greek activities Mythos, an ownership
interest in the Chinese brewery Chongqing Brewery Co. Ltd., and a new joint
venture in Vietnam. The capital increase has increased the free float of the
business to 69.7% and provides the Group with a firm, investment grade capital
base.
Notwithstanding these developments, the primary focus of the Group has been the
ongoing operations of the business. Even in these more challenging times of raw
material price increases and consumer uncertainty in some markets around the
world, the growth markets in Eastern Europe and Asia remained strong. Special
mention should be made of the development in Russia, where further volume growth
was achieved in the first half of 2008 despite the very high growth in the first
half of 2007. At the same time, significantly higher growth has been realised in
sales of premium products compared with low-price products (in particular in
Russia), and targeted work has been carried out on value management of the
Group's product portfolio across all markets. Rising raw material prices
continue to have a negative impact on total cost of sales and distribution
expenses, and Carlsberg therefore focuses strongly on implementing price
increases to compensate for this. Notwithstanding these price rises, volumes in
Northern and Western Europe, whilst varying in individual markets, was broadly
stable overall. Moreover, initiatives are continuing to ensure efficiency
improvements within a whole series of processes, and work on integration is
being carried out in accordance with the detailed plans drawn up in connection
with the acquisition at the end of April. This has laid the foundations for the
planned realisation of synergies.
Carlsberg sold a total of 49.6m hl of beer (calculated pro rata), an increase of
24% (39.8m hl in the first half of 2007). Organic growth accounted for 6% of
this increase and acquisitions for approximately 18%. Sales of other beverages
grew by 8% to 9.4m hl (8.7m hl in the first half of 2007).
The international brands Carlsberg, Tuborg and Baltika all continued their well
established positive trends, achieving volume increases of 5%, 11% and 25%
respectively. The positive trend for the Carlsberg brand can be attributed,
among other things, to increased sales in connection with the EURO 2008 football
championships and the fact that Malaysia has gained market shares after the
restructuring programme put in place last year, while the high rate of growth
for the Tuborg brand is the result of continued sales success in Eastern Europe.
Baltika's growth is first of all a result of rising sales in Russia and it
continues to be the leading brand in Russia. On top of impressive volume growth,
the average value of the brand is also increasing due to premiumisation within
the Baltika range. In addition, the Baltika brand continues to grow
significantly across the whole Eastern European region.
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COMPANY ANNOUNCEMENT 32/2008
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Net revenue climbed 25% to DKK 27.0bn (DKK 21.5bn in the first half of 2007),
with organic growth accounting for 7 percentage points of the total increase (10
percentage points in local currencies). Price increases have been implemented in
the period and have had a positive effect on the average selling price per litre
of beer, while changes in relative distribution of sales among the individual
geographical regions had a negative effect. Total net revenue per hl beer
increased by 7%.
Operating profit before special items rose by 57% to DKK 3,538m (DKK 2,256m in
the first half of 2007), with 22 percentage points of this attributable to
organic growth (26% in local currencies). Beverage activities generated DKK
3,257m against DKK 2,213m in the first half of 2007, an increase of 47%, 12% of
which can be attributed to organic growth (16% in local currencies). This
improvement has been driven in particular by positive developments in Eastern
Europe and Asia.
Other activities, including the sale of real estate, contributed DKK 280m
against DKK 43m in the first half of 2007.
Net profit was DKK 1,286m (DKK 1,082m in the first half of 2007). This result
reflects continued progress in the underlying business in all regions during a
six-month period which demonstrated in a number of areas Carlsberg's ability to
navigate in challenging market conditions.
In May and June, Carlsberg successfully implemented a share issue with
pre-emption rights for existing shareholders. The rights issue was fully
subscribed, with 76,278,403 new B-shares offered at a price of DKK 400,
providing Carlsberg with net proceeds of approximately DKK 30bn towards the
financing of the S&N transaction. A wide circle of investors both in Denmark and
abroad invested in the new share, bringing in more than 10,000 new shareholders.
Carlsberg and The Coca-Cola Company (TCCC) have extended their collaboration in
Denmark and Finland, in connection with which, among other things, Carlsberg
assigned the rights to mineral water brands in Denmark (to TCCC) and entered
into a licensing agreement for the Finnish energy drink Battery. The total
selling price was USD 225m (approx. DKK 1.1bn).
After the closing of Q2
Together with Brasseries Internationales Holding (Eastern) Ltd., Baltika
Breweries has acquired the market-leading Baku-Castel brewery in Azerbaijan,
thereby continuing its expansion outside Russia.
Carlsberg has sold its 95.6% stake in the Turkish brewery Türk Tuborg and its
20% stake in Israel Beer Breweries. Total proceeds are expected to be
approximately USD 116m (approximately DKK 550m).
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
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H1 H1Change
2008 2007 (%) 2007
23.5 21.5 9 44.4
17,40915,475 1232,087
1,705 1,473 16 3,383
9.8 9.5 0.3 10.5
As expected, the markets in Northern and Western Europe developed differently in
the first half of 2008 but in total they were stable. For instance, the Danish
market declined partly due to a higher consumer campaign price for Carlsberg
beer, while Switzerland on the other hand experienced market growth of 2%,
driven not least by EURO 2008. The total market in the United Kingdom declined
by approximately 3%, incorporating a significant drop of approximately 9% in the
on-trade and a rise of approximately 6% in the off-trade. In total, Carlsberg's
market share was unchanged in the United Kingdom (less in the on-trade segment
and more in the growing off-trade segment). Market development in France was
significantly more negative than expected, declining by approximately 6%, but
with major month-on-month variations. All other trends in France are all in all
developing as expected, and work is under way on a major strategic alignment of
the brand portfolio in order to reverse the negative development in market share
seen for some years.
Carlsberg's total beer sales were 23.5m hl against 21.5m hl in the first half of
2007. This figure includes a total of 2.0m hl from the activities acquired in
France, Greece and the Baltic States. Across the region, Carlsberg achieved a
stable volume performance organically and its market share was at level with
last year. Other beverages achieved a total volume of 8.0m hl, which was at
level with last year (organic -3%).
Net revenue was DKK 17,409m against DKK 15,476m in the first half of 2007, an
increase of 12%: 2% organic growth and 10% from acquisitions. The positive
organic development has been driven by the Nordic countries, Switzerland,
Germany, Poland and the Balkan countries, and has been achieved despite a
negative currency impact, particularly from GBP. One of the key business
priorities has been to carry out price increases, with average selling prices in
the period approximately 5% higher than last year, compensating for rising raw
material prices. The price development picture from the first quarter has thus
continued through the second quarter, with an overall organic increase in net
revenue of 5% for beer (volume 0%, prices +5%, mix +1%, currency -1%). This
positive position reaffirms the value of our key brands which continue to
attract consumers even at slightly higher price points and in certain markets
despite consumer uncertainty.
Implementation of the Commercial Excellence programmes is under way in the
Baltic Countries and, in the course of the second half of the year, preparations
will be made to launch Logistic Excellence with a view to realising synergies.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
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Operating profit was DKK 1,705m against DKK 1,473m in the first half of 2007, an
increase of 16% which breaks down into -2% organic growth and +18% from the
acquired businesses. However when adjusting for non-recurring income from 2007
and providing a comparison across the business, underlying operating profit in
the region increased by 8-9%. The profitability of the UK and Polish businesses
was less than in 2007 as a result of discontinued legacy payments on the former
Punch Taverns contract in the UK and the DKK 58m gain in 2007 from the sale of
real estate in Poland. In addition in 2008, different phasing of marketing and
other expenses (particularly in the Nordic countries) has occurred in the first
and second halves of the year compared with 2007.
EASTERN EUROPE
DKK million Q2 Q2 Change H1 H1 Change
2008 2007 (%) 2008 2007 (%) 2007
Beer sales (million hl) 14.8 8.2 80 20.4 13.3 52 27.7
Net revenue 5,888 2,830 108 7,860 4,523 74 9,658
Operating profit 1,388 696 99 1,673 983 70 2,134
Operating margin (%) 23.6 24.6 -1.0 21.3 21.7 -0.4 22.1
The Russian economy continues to show a positive development, and therefore
continues to provide favourable growth conditions for the beer market. As
commented previously, the Russian market developed very strongly in the first
half of 2007 with growth of 23%, followed by more moderate development in the
second half of the year with growth of 9%. The starting point for this year's
market development has therefore been more difficult in the first half of the
year than is expected in the second half. Despite this, the Russian market
achieved growth of 2.4% in the first six months of the year. The other countries
in Eastern Europe also experienced positive market developments: +9% in the
Ukraine, +3% in Kazakhstan, +8% in Uzbekistan and +16% in Belarus.
The total Eastern European business achieved 52% growth in beer volume in these
markets, approximately 12% of which was organic growth.
Net revenue totalled DKK 7,860m against DKK 4,523m in the first half of 2007.
DKK 2,454m of the total revenue derived from acquired activities. Organic growth
in local currencies was 28%, which, as well as the volume development, was a
result of improving both price and mix. Price rises contributed approximately
10% and mix a further approximately 6%, whilst exchange rate movements impacted
reported results negatively by 8%. Higher raw material costs are impacting on
total cost of sales, although this was more than offset by the price/mix changes
realised for beer. The consistent focus on achieving a balance between volume
and value is clearly apparent in the growth rates for Russia, where growth in
premium products continues to be significantly higher than in the low-price
segment. Capacity expansion has continued through the first half of 2008,
including investments in the greenfield brewery in Novosibirsk, which started
production in the spring, and investments in sales and logistics.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
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Operating profit was DKK 1,673m against DKK 983m in the first half of 2007. DKK
543m of the profit relates to acquired activities, and the organic increase was
thus 15% (22% in local currencies). An operating margin of 21.3% was achieved
against 21.7% in the first half of 2007. This includes amortisations etc. on
additional value from purchase price allocation of the S&N transaction (with no
impact on cash-flow) amounting to DKK -69m, and excluding this, the profit
margin would have been 22.2% against 21.7% last year (in Q2, 24.8% against 24.6%
in the same period last year).
Continued progress in Russia resulted in a market share of 38.1% (37.6% in the
first half of 2007). This development was driven by continued strong development
for the Baltika brand which, despite moderate market growth, achieved a volume
increase of 25%, and similarly positive development for the Tuborg brand, with
growth of 33%, whilst our smaller, but now wholely owned premium brand
Kronenbourg grew by 55%.
The positive development has continued in the Ukraine, driven by last year's
relaunch of Slavutich and also by the positive development in the Baltika brand,
including the alcohol-free Baltika 0. The total beer volume increased by 39% in
the first half compared with the same period of 2007, which is significantly
above the figure for overall market development. The positive business
development is supported by a high level of investment. Approximately one year
after the start-up of the brewery and the Sarbast brand in Uzbekistan, total
market share had already reached approximately 30%.
ASIA
DKK million Q2 Q2 Change H1 H1 Change
2008 2007 (%) 2008 2007 (%) 2007
Beer sales (million hl) 3.2 2.8 13 5.7 5.0 14 9.9
Net revenue 828 727 14 1,639 1,431 15 2,886
Operating profit 117 94 25 241 183 31 366
Operating margin (%) 14.1 12.9 1.2 14.7 12.8 1.9 12.7
Asia experienced continued positive development on the growth markets and sales
of beer rose by 14% to 5.7m hl, with 13 percentage points of this as a result of
organic growth. First and foremost, this development reflects continued strong
development in China, where organic volumes increased by 14%, but Malaysia also
made a positive contribution after last year's changes to the business model
which have successfully repositioned the business.
Net revenue developed in line with the volume increase, rising by 15% to DKK
1,639m (DKK 1,431m in the first half of 2007). The rise in net revenue
calculated in local currencies was an even stronger 21%.
Operating profit was DKK 241m, an increase of 31% (DKK 183m in the first half of
2007) and on an organic basis, in local currencies, increased 41%. This positive
development is primarily attributed to higher earnings in Malaysia.
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The growth markets continued the positive volume trend and in addition to China,
increasing sales in Cambodia (+30%) and Laos (+10%) should be mentioned. There
is focus on the Indian market and the intention is to create a strong basis and
finalise brewery constructions.
CENTRAL EXPENSES (NOT ALLOCATED)
Central expenses totalled DKK 362m against DKK 425m in the first half of 2007.
These expenses are incurred for ongoing support of the Group's overall
operations and development, including in particular costs of running the
headquarter, costs incurred in connection with business development projects,
and costs for central marketing, including sponsorships. The savings to last
year of DKK 63m are primarily related to phasing of project costs and higher
earnings in some smaller companies, primarily relating to malting businesses.
OTHER ACTIVITIES
In addition to beverage activities, Carlsberg has interests within the
development and sale of real estate, primarily at its former brewery sites, and
the operation of the Carlsberg Research Center. These activities generated
operating profit of DKK 280m in the first half of 2008 against DKK 43m in 2007.
Monetising the value of assets, including brewery sites which are no longer used
in operations, remains an important focus to provide capital to the rest of the
Group and enhance return on invested capital. The planning process for Valby is
well under way and on the Tuborg area we will this year have sales proceeds of
more than 1bn and gain on sales of some 450m.
COMMENTS ON THE FINANCIAL STATEMENTS
ACCOUNTING POLICIES
The present interim report has been prepared in accordance with IAS 34 Interim
Financial Reporting, as adopted by the EU, and additional Danish regulations
governing presentation of interim reports by listed companies.
The interim report has been prepared using the same accounting policies as the
Annual Report for 2007.
No new standards or interpretations have been adopted by the EU in 2008.
As notified previously, a new segmentation format for reporting the Group's
results is being used in connection with preparation of the present interim
report. The new segmentation reflects the structure used for internal control
and monitoring of the Group's strategic and financial targets.
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COMPANY ANNOUNCEMENT 32/2008
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Acquisition of S&N
The total preliminary cash acquisition price (i.e. following deduction of
acquired debt; equity value) of the acquisition of the activities of S&N is DKK
52,095m including costs. Enterprise value is still expected to be approximately
DKK 57bn. The total acquisition price depends on net interest-bearing debt in
S&N on 28 April 2008, which has not yet been finalised and agreed with the
consortium partner. This means the acquisition price will be amended at a later
stage.
Assets, liabilities and contingent liabilities in the acquired entities are to
be measured at fair value on the acquisition date (28 April 2008). Work on this
has begun but has not yet been completed for any of the acquired entities. The
combined opening balance sheet recognised in the interim report at 30 June 2008
is therefore pro forma and, in accordance with IFRS, will be amended in
subsequent accounting periods. Changes to all items are expected, with the most
significant changes relating to intangible assets and property, plant and
equipment.
The impact on the income statement, among other things as a result of increased
amortisation of fair value adjustments, is on a par with the estimates made in
the prospectus (approximately DKK 80m for May and June).
INCOME STATEMENT
Net revenue of DKK 26,977m was generated in the first six months of the year
(DKK 21,502m in the first half of 2007). DKK 4,062m of the total revenue
increase of DKK 5,475m derived from acquired activities. Organic growth in
revenue was 7% compared with the same period of 2007. Calculated in local
currencies, the organic increase was 10%. The development in revenue was driven
by positive developments in all regions. Beer sales represented DKK 20,911m of
total revenue (DKK 15,732m in the first half of 2007), equivalent to 77.5%
(73.2% in the first half of 2007).
Gross profit was DKK 13,143m (DKK 10,758m in the first half of 2007), with
acquired activities representing DKK 1,890m of this. Organic growth in gross
profit was DKK 495m (approximately 5%). Price rises and a more profitable
product mix for beer more than compensated for higher raw material prices,
ensuring an increase in gross profit. The gross margin was 48.7%, which was 1.3
percentage points lower than in the same period of 2007.
Sales and distribution costs rose by DKK 1,184m to DKK 8,258m (DKK 7,074m in the
first half of 2007), with acquired activities representing DKK 904m and organic
development DKK 280m, (approximately 4%), incorporating the effect of higher
fuel costs. Administrative expenses rose by DKK 155m to DKK 1,753m (DKK 1,598m
in the first half of 2007), with acquired activities representing DKK 196m and
organic development DKK -41m (-3%). This development continues to reflect an
increased level
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of activity on the growth markets on the one hand and a focus on adjusting the
cost base on the other.
Other operating income, net, was DKK 370m against DKK 132m in the same period of
2007. This development can primarily be attributed to gains on the sale of real
estate. Share of profit after tax in associated companies totalled DKK 36m
against DKK 38m in 2007.
Operating profit before special items was DKK 3,538m against DKK 2,256m in the
first half of 2007. Beverage activities generated a profit of DKK 3,257m against
DKK 2,213m in the first half of 2007. Acquired activities represented DKK 786m
of the total increase on beverage activities of DKK 1,044m and organic
development DKK 258m (approximately +12% or approximately +16% in local
currencies). This positive development was mainly attributable to higher profits
in Eastern Europe and Asia. Finally, the profit contribution from other
activities, including sale of real estate, was DKK 280m against DKK 43m in the
first half of 2007.
Special items, net, were DKK -128m against DKK -142m in the first half of 2007,
and mainly comprise termination expenses in connection with the Excellence
programmes.
Net financial items were DKK -1,282m against DKK -496m in the first half of
2007. Net interest was DKK -988m against DKK -528m in the same period of 2007,
and is mainly attributable to the higher level of debt due to the acquisition of
the activities of S&N, as well as higher interest rates. Other net financial
items were DKK -294m (DKK +32m in the first half of 2007). This change is
particularly related to one-off costs in connection with the establishment of
the financing of the S&N transaction (approximately DKK 200m) and to the fact
that part of the premium on currency options acquired to hedge exposure to GBP
in connection with the acquisition of part of S&N's activities has been charged
to the income statement (DKK -110m).
Tax totalled DKK 627m against DKK 404m last year. The higher tax rate in the
first half of 2008 is primarily due to the effect of tax withheld on dividends
received.
Consolidated profit was DKK 1,501m against DKK 1,214m in the same period of
2007. Minority interests' share of this was DKK 215m against DKK 132m in the
first half of 2007, reflecting the continued progress in Russia and Malaysia on
the one hand and the fact that minorities in BBH have been recognised at 100%
for the last two months of the first half on the other hand.
Carlsberg's share of profit was DKK 1,286m against DKK 1,082m in the same period
of 2007.
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BALANCE SHEET
At 30 June 2008, Carlsberg had total assets of DKK 152,822m against DKK 61,922m
at 30 June 2007. The increase relates to the acquisition of the activities of
S&N as well as to the revaluation of the originally owned 50% of BBH to market
value.
Assets
Intangible assets totalled DKK 89,382m against DKK 21,343m at 30 June 2007. The
total increase of DKK 68,039m includes an addition of DKK 53,167m from the S&N
transaction and DKK 11,214m from revaluation of the existing ownership share of
the BBH Group. Acquired assets related to brands were DKK 16,746m.
Property, plant and equipment totalled DKK 30,983m (DKK 21,437m at 30 June
2007). The total increase of DKK 9,546m includes an addition of DKK 7,588m from
the S&N transaction. The remainder of the increase primarily reflects
particularly high capital expenditure due to capacity expansions in the growth
markets and investments in connection with capacity efficiency projects in
Denmark and Italy. These investments are in line with previously adopted plans.
Other non-current assets amounted to DKK 5,435m (DKK 3,181m at 30 June 2007),
primarily as a result of investments in Chonqing Brewery (DKK 984m) and an
increase in financial receivables.
Current assets totalled DKK 26,145m against DKK 15,898m at 30 June 2007
corresponding to an increase of DKK 10,247m. Through the S&N transaction,
current assets at the value of DKK 7,322m were acquired.
Liabilities
Total equity was DKK 63,096m, of which DKK 4,395m can be attributed to minority
interests and DKK 58,701m to shareholders in Carlsberg A/S. The increase in
equity is due partly to the share issue, which generated net proceeds of
approximately DKK 30bn for Carlsberg, and partly to equity adjustments of
approximately DKK 11bn regarding value adjustment to fair value of the already
owned net assets in BBH prior to the acquisition. Costs directly set off against
equity at the capital increase amount to DKK 642m.
Equity before minority interests has also been affected by profit for the period
(DKK 1,286m), foreign exchange and value adjustments (DKK -719m), and tax on
changes in equity (DKK 167m). Dividends to shareholders and minority interests
reduced equity by DKK -458m.
Value adjustments mainly concern currency options concluded to hedge the
exposure to GBP related to the S&N transaction. The currency options were
settled in April 2008,
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COMPANY ANNOUNCEMENT 32/2008
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after which forward contracts were concluded for the purchase of GBP 5.5bn at a
total weighted average exchange rate (DKK/GBP) of 945.79, also to hedge the
exposure to GBP related to the S&N transaction. Value adjustment of the
effective part of the hedging element of both currency options and forward
contracts has been recognised in equity.
Total liabilities were DKK 89,726m (DKK 42,359m at 30 June 2007). The total
increase of DKK 47,367m primarily relates to the S&N transaction
Deferred tax rose by DKK 7,828m to DKK 10,362m of which DKK 4.598m is related to
the S&N transaction.
CASH FLOW AND INTEREST-BEARING DEBT
Cash flow from operating activities was DKK 2,083m against DKK 1,643m in the
first half of 2007. Operating profit before depreciation and amortisation was
DKK 5,133m against DKK 3,642m in the same period of 2007. The change in working
capital was DKK -669m (DKK -672m in the first half of 2007). Working capital
includes a significant positive contribution from the contract concluded with
The Coca-Cola Company, whereas a generally higher level of activity including
the activities acquired from S&N are pulling in the opposite direction. Net
interest etc. paid amounted to DKK -1,289m against DKK -459m for the same period
of 2007, which mainly reflects higher financing costs due to the S&N
transaction.
Cash flow from investing activities was DKK -54,365m against DKK -2,104m in the
first half of 2007. This marked increase is essentially attributed to the S&N
transaction, representing DKK 50,828m. Also operational investments have
increased by DKK 862m, which can largely be attributed to capacity expansions
and brewery constructions in Eastern Europe (Russia, the Ukraine and Uzbekistan)
as well as capacity efficiency projects in Denmark and Italy due to brewery
closures. It should be noted that investments in BBH are included at 50% for the
first four months of the year and at 100% for the last two months of the first
half-year.
After this, free cash flow was DKK -52,282m against DKK -461m in the first half
of 2007. Cash flow related to the S&N acquisition is included with the above DKK
-50,828m, whilst free cash flow excluding S&N was DKK -1,454m.
Net interest-bearing debt was DKK 47,409m at 30 June 2008 against DKK 19,726m at
year-end 2007. This development essentially reflects increased borrowing related
to the S&N transaction.
At 30 June, 2008, the debt consists of facilities in DKK and EUR and to a
limited part also other currencies. 85% of the total debt is due later than 1
year after 30 June, 2008 and approximately 47% is fixed interest (fixed-interest
period exceeding one year).
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 14 of 31
EARNINGS EXPECTATIONS
Carlsberg anticipates organic growth of approximately 10% in net revenue for
2008 (unchanged in relation to the expectations published in the Financial
Statement as at 31 December 2007). Combined with net revenue from the acquired
activities, this is expected to result in total net revenue of DKK 62-63bn.
Operating profit is expected to grow organically to around DKK 5.9bn, an
increase of approximately 12% (unchanged in relation to the expectations
published in the Annual Report 2007 including a contribution of DKK 300m from
other activities. Inclusive of acquired activities, operating profit for the
current year is expected to be in excess of DKK 8.1m, while net profit is
expected to top DKK 3.0bn. This expected net profit includes all one-off items
from the S&N transaction, effects of the purchase price allocation to the profit
and loss statement and special items. Average number of shares for 2008 is
expected to be around 118.7 million.
The expectations for profit development for the current year are based on
continuing growth across Northern and Western Europe, Eastern Europe and Asia,
including the implementation of general price increases and a continuing
increase in beer volumes in the growth markets.
Over the medium term Carlsberg expects to see continuing progress and growth in
all the geographical segments. For Northern and Western Europe, increasing
average market shares are expected in generally declining markets, as well as a
continuing positive price development supported by innovation and value
management initiatives, realisation of previously published synergies and
implementation of the next generation of efficiency programmes within
procurement, production, logistics etc. The development in Eastern Europe in the
same period is expected to be driven by continuing volume growth in the markets,
including in the two largest markets Russia and the Ukraine, continuing
increases in market shares, a continuing positive price development, and
realisation of previously published synergies as a result of implementation of
Excellence programmes etc. In Asia, continuing positive volume development is
expected in the growth markets, particularly in China and Vietnam.
Overall, the medium term targets are to raise the operating margin to 14-16% in
Northern and Western Europe and to 23-25% in Eastern Europe.
INCENTIVE PROGRAMMES
The Board of Directors has today granted the Executive Board another 40,000
share options with an exercise price calculated as the average of the share
price on the first five trading days after publication of the present financial
statement.
NEW SEGMENT REPORTING AND PRO FORMA 2007 FINANCIAL RESULTS
The new segment reporting format, cf. Company Announcement of 25 July, 2008, has
been used in connection with the interim results for the first half of 2008. The
new
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 15 of 31
segment reporting reflects the structure that is used for internal reporting and
follow-up on the strategic and financial targets of the Carlsberg Group.
The attached Appendix 1 shows for the 2007 beverage activities the historic
segments vs the new segments as well as illustrative pro forma figures for 2007
for the new segments Northern and Western Europe as well as Eastern Europe. The
segments are affected by the acquisition of activities from S&N as well as the
accounting consequences of the distribution of the illustrative preliminary
purchase price allocation based on Carlsbergs Rights Issue Prospectus dated 15
May 2008, and thus not updated since, and thus with the limitations,
uncertainties, etc. stated in the prospectus. The appendix has been elaborated
with further specifications and restatements in relation to the previously
announced information. Furthermore, a minor change has been made in relation to
Northern and Western Europe.
FINANCIAL CALENDAR FOR THE FINANCIAL YEAR 2008
The financial year follows the calendar year, and the following schedule has
been set:
5 November 2008 Interim results for Q3 2008
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.
RELATED PARTY TRANSACTIONS
The Carlsberg Foundation participated in the rights issue. The Carlsberg
Foundation's ownership interest is now 30.3%. Apart from this, the only
transactions have been with the Carlsberg Foundation concerning grants to the
Carlsberg Laboratory and dividends paid for 2007.
DISCLAIMER
The forward-looking statements, including forecasts on sales and earnings
performance, reflect management's current expectations based on information
available at the date of this document, and are subject to risks and
uncertainty. Such statements are made on the basis of assumptions and
expectations which the Company believes to be reasonable at this time, but which
may prove to be erroneous. 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,
economic and political uncertainty (including developments in interest rates and
exchange rates), financial and regulatory developments, changes in demand for
the Group's products, competition from other breweries, the availability and
pricing of raw materials and packaging materials, price reductions resulting
from market-driven price reductions, market acceptance of new products, launches
of rival products, stipulation of market values in the opening balance of the
acquired companies and other unforeseen factors.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 16 of 31
Should one or more of these risks or uncertainties materialise, or should any
underlying assumptions prove incorrect, actual outcomes may vary materially from
those indicated.
Carlsberg assumes no obligation to update or revise such forward-looking
statements or to update the reasons for which actual results could differ
materially from those anticipated in such forward-looking statements except when
required by law.
MANAGEMENT STATEMENT
The Board of Directors and the Executive Board have today discussed and approved
the interim report of the Carlsberg Group for the period 1 January - 30 June
2008.
The interim report, which has not been audited or reviewed by the Company's
auditor, has been prepared in accordance with IAS 34 Interim Financial
Reporting, as adopted by the EU, and additional Danish interim reporting
requirements for listed companies.
We consider that the interim report gives a true and fair view of the Carlsberg
Group's assets, liabilities and financial position at 30 June 2008, and of the
results of the Carlsberg Group's operations and cash flow for the period 1
January - 30 June 2008.
We further consider that the management's review (p. 1-17) contains a fair
account of the development in the Group's activities and affairs, the profit for
the period and the Group's financial position as a whole, and a description of
the most significant risks and uncertainties to which the Group is subject.
Copenhagen, 5 August 2008
Executive Board of Carlsberg A/S
Jørgen Buhl Rasmussen Jørn P. Jensen
Board of Directors of Carlsberg A/S
Povl Krogsgaard-Larsen Jens Bigum Hans Andersen
Chairman Deputy Chairman
Flemming Besenbacher Hanne Buch-Larsen Henning Dyremose
Niels Kærgård Axel Michelsen Erik Dedenroth Olsen
Bent Ole Petersen Jess Søderberg Per Øhrgaard
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 17 of 31
FINANCIAL STATEMENT
Income statement
Statement of recognised income and expenses
Balance sheet
Changes in equity
Cash flow statement
Note 1 Segment reporting by region (beverages)
Note 2 Segment reporting: Beverages and other activities
Note 3 Segment reporting by quarter
Note 4 Special items
Note 5 Net interest-bearing debt
Note 6 Acquisition of entities
APPENDIX 1 New Segment Reporting and pro forma 2007 financial results
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 brewery 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
40,000 people work for Carlsberg in 48 countries, and its products are sold in
more than 150 markets. In 2007 Carlsberg sold more than 115 million hectolitres
of beer, which is about 95 million bottles of beer a day. Find out more at
www.carlsberggroup.com.
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 18 of 31
INCOME STATEMENT
DKK million Q2 Q2 H1 H1 2007
2008 2007 2008 2007
Net revenue 17.541 12.639 26.977 21.502 44.750
Cost of sales -8.815 -6.147 -13.834 -10.744 -22.423
Gross profit 8.726 6.492 13.143 10.758 22.327
Sales and distribution expenses -4.954 -3.908 -8.258 -7.074 -14.528
Administrative expenses -969 -800 -1.753 -1.598 -3.123
Other operating income, 323 44 370 132 485
Share of profit after tax, 24 26 36 38 101
associates
Operating profit before special 3.150 1.854 3.538 2.256 5.262
Special items, net -91 -111 -128 -142 -427
Operating profit 3.059 1.743 3.410 2.114 4.835
Financial income 945 143 1.103 308 651
Financial expenses -1.757 -386 -2.385 -804 -1.852
Profit before tax 2.247 1.500 2.128 1.618 3.634
Corporation tax -659 -372 -627 -404 -1.038
Consolidated profit 1.588 1.128 1.501 1.214 2.596
Attributable to:
Minority interests 173 91 215 132 299
Shareholders in Carlsberg A/S 1.415 1.037 1.286 1.082 2.297
Earnings per share* 13,1 10,9 12,7 11,4 24,1
Earnings per share, diluted* 13,1 10,9 12,6 11,3 24,0
* Adjusted for bonus factor from rights issue in June in accordance w ith IAS
33, excl. number of shares period-end.
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 19 of 31
STATEMENT OF RECOGNISED INCOME AND EXPENSE
Fair value Fair value Shareho-
H1 2008 H1 2008
ders in
DKK Currency adjust- Retained Minority
Total
million
translation ment earnings
interests
Profit - - 1,286 215
1,501
for the
period
Foreign exchange
adjustments:
Foreign -240 - - -35
-275
entities
Value
adjustme-
ts:
Hedging instruments -101 -378 - -
-479
Securities, transferred to
income
statement on - -19 - -5
-24
disposal
Retirement benefit - - -75 -
-75
obligations
Other
adjustme-
ts:
Revaluation of net
investment in
acquired - - 10,016 1,198
11,214
subsidiaries 1
Share-based payment - 10 -
-
0
Other - 31 1
-
2
Tax on changes in equity 29 116 22 -
167
Net amount directly
recognised in
equity -312 -281 10,004 1,159
10,570
Total recognised and
income
expenses -312 -281 11,290 1,374
12,071
Fair value Fair value Shareho-
H1 2007 H1 2007
ders in
DKK Currency adjust- Retained Minority
Total
million
translation ment earnings
interests
Profit - - 1,082 132
1,214
for the
period
Foreign exchange
adjustments:
Foreign -184 - - -14
-198
entities
Value
adjustme-
ts:
Hedging instruments 107 79 - -
186
Securiti- - 19 -
-1 -
s1
8
Retirement benefit - - -16 -
-16
obligations
Other
adjustme-
ts:
Share-based payment - - 9 -
9
Tax on changes in equity -28 -26 4 2
-48
Net amount directly
recognised in
equity -105 72 -3 -13
-49
Total recognised and
income
expenses -105 72 1,079 119
1,165
1 The acquired identifi- assetsare measured at fair
valueFair value
companies ble net at
acquisiti-
n date.
adjustment of net relating to the of BBH owned by Carlsberg prior to the
recognised as a
assets 50%
Acquisition
is
revaluat- in equity. Based on the preliminary assess ment of fair value
the DKK 11.214 m.
on revaluation is
directly
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 20 of 31
BALANCE SHEET
DKK million 30
June 30 June 31 Dec.
2008
2007 2007
Assets
Intangible assets
89,382 21,343 21,205
Property, plant and equipment
30,983 21,437 22,109
Financial assets
5,435 3,181 2,965
Total non-current
125,800 45,961 46,279
Inventories and trade receivables
17,214 11,310 10,159
Other receivables etc.
4,225 2,278 2,499
Cash and cash equivalents
4,706 2,310 2,249
Total current assets
26,145 15,898 14,907
Assets held for sale
877 63 34
Total assets
152,822 61,922 61,220
Equity and liabilities
Equity, shareholders in Carlsberg A/S
58,701 18,144 18,621
Minority interests
4,395 1,419 1,323
Total equity
63,096 19,563 19,944
Borrowings
45,605 16,899 19,385
Deferred tax, retirement benefit obligations etc.
14,064 4,909 4,680
Total non-current
59,669 21,808 24,065
Borrowings
7,786 6,870 3,869
Trade payables
9,665 5,873 5,833
Other current liabilities
11,777 7,808 7,509
Total current liabilities
29,228 20,551 17,211
Liabilities associated with assets held for sale
829 - -
Total equity and liabilities
152,822 61,922 61,220
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 21 of 31
CHANGES IN EQUITY
H1 2008
Shareholders in Carlsberg A/S
DKK million Share FX Fair Retained Total Total
Minority Total
value
capital Transla- adjustm- earnings reserves
capital interests Equity
ion nts and
reserves
Equity at 1 1,526 -170 67 17,198 17,095 18,621 1,323
19,944
January 2008
Total recognised - -312 -281 11,290 10,697 10,697 1,374
12,071
income and
expenses
for the period
Capital increase 1,525 - - 28,312 28,312 29,837
13 29,850
Acquisition/disp- - - - 8 8
8 - 8
sal of
Dividends paid to - - - -458 -458 -458
-256 -714
shareholders
Acquisition of - - - - - - 1,941
1,937
minority
interests and
entities
Other - - - -4 -4 -4
- -
Total changes in 1,525 -312 -281 39,148 38,555 40,080 3,072
43,152
equity
Equity at 30 June3,051 -482 -214 56,346 55,650 58,701 4,395
63,096
2008
H1 2007
Shareholders in Carlsberg A/S
DKK million Share FX Fair Retained Total Total
Minority Total
value
capital Transl- adjustm- earnings reserves
capital interests Equity
tion nts and
reserves
Equity at 1 January1,526 351 -20 15,740 16,071 17,597 1,390
18,987
2007
Total recognised - -105 72 1,079 1,046 1,046
119 1,165
income and expenses
for the period
Acquisition/dispos- - - - -40
-40 -40 - -40
l of treasury
shares
Dividends paid to - - - -458 -458 -458
-204 -662
shareholders
Acquisition of - - - - - -
114 114
minority interests
Other - - - -1 -1 -1
- -1
Total changes in - -105 72 580 547 547
29 576
equity
Equity at 30 June 1,526 246 52 16,320 16,618 18,144 1,419
19,563
2007
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 22 of 31
CASH FLOW
DKK Q2 Q2 H1
H1 2-
mi-
07
li-
n
2008 2008 2008 2008 2008 2008 2008 2008 20- 20-
2007
7 8
Op- before befo- before befo- before befo- before
3,- 1,8- 3,5- 2,256 5,-
ra- speci- e speci- e speci- e
special 50 4 8 62
ingl spec- l spec- l spec-
pr- al al al
fit
Adjustment for depreciation, 897 6971,5-
1,386 2,-
5
72
i- los-
p- es
i-
m-
nt
Op- before befo- before befo- before befo- before
4,- 2,5- 5,1- 3,642 8,-
ra- depre- e depre- e depre- e
depreciati- 47 1 3 34
ingiatio- depr- iatio- depr- iatio- depr-
n,
pr- , ciat- , ciat- , ciat-
fit on, on, on,
i- los-
p- es
i-
m-
nt
Adjustment for other non-cash items -1- -62 -1-
-144 --
6 5
03
Change 403 403 403 403 403 403 403 115 -6-
-672 --
in 9
30
working
capita-
1
Restru- -125 -125 -125 -125 -125 -125 -125 -70
-1- -180 --
turing 6
79
costs
In- etc. 147 147 147 147 147 147 147 37 201
79 1-
er- rec-
7
st ived
In- -969 -969 -969 -969 -969 -969 -969 -969 -2-
-1,- -538-1-
er- 4 90
507
st
Corpor- -556 -556 -556 -556 -556 -556 -556 -2-
-7- -544 --
tion 5 1
65
tax
paid
Cash flow from operating activities 2,- 2,0-
2,0- 1,643 4,-
71 2 3
37
Ac- prope- proper- propert- proper- propert-
proper- property, -1- -1,- -2,- -2,296-4-
ui- ty, y, , plant y, , plant y, plant and 74203 74
929
it- plant plant and plant and plant equipment and
on and and equipme- and equipme- and
of equip- equipm- t and equipm- t and equipm-
ent nt and nt and nt and
and
intan-
ible
assets
Disposal of property, plant and equipment and 51 80 79
2- 3-
0 1
intan-
ible
assets
Change 12 -19 -92
-- --
in
9 43
trade
loans
Total operational investments -1- -1,-
-2,- -2,095-4-
67942 87
721
Aquisi- of of of of of of of -5-
-90-50- -142 --
ion ande- enti- entit- enti- entit- enti-
entities, ,8- 828 79
dispos- t- ies, es, ies, es, ies, 8
l t-
e-
,
Ac- fin- a- asse- asset- asse- asset-
asse- assets4 -2- -14 -9- -- --
ui- nci- s- s4 4 s4 4 s4 5
8 5 3
it- l t-
on 4
of
Dispos- 1 2
36 47 37
l of
financ-
al
assets
Change r- rece- recei- rece- recei- rece-
receivables-1- 14 -1- 2- --
in c- vabl- ables vabl- ables vabl-
5 9 0 6
financ- i- s s s
al a-
l-
s
Divide- 21 40
23 55 1-
ds
7
receiv-
d
To- inv- -51- -51- -51- -51- -51-
-51- -51,126 -48-51- 1- --
al stm- 126 126 126 126 126 126 836
5 44
fi- nts
an-
ial
Other in in in in in in in -4- -2-
-6- -366 --
invest- p- prop- prope- prop- prope-
prop- property, 4 8 2 67
ents o- rty, ty, rty, ty, rty, plant and
e- plant plant plant plant plant equipment
t- and and and and and
, equi- equip- equi- equip- equi-
p- ment ent ment ent ment
a-
t
a-
d
e-
u-
p-
e-
t
Disposal of other property, plant and equipment 990 2041,0-
2- 6-
0
2 5
Total 536 536 536 536 536 536 536 -24 458
-154 --
other
2
activi-
ies2
Cash flow from investing activities -5- -1,-
-54- -2,104-4-
,2- 14 365
927
9
Fr- -49- -49- -49- -49- -49- -49-
-49- -49,498 738-52- -461 --
e 498 498 498 498 498 498 498 282
0
ca-
h
fl-
w
Shareholders in Carlsberg A/S 29- -8 29,-
-498 --
838 87
08
Mi- -379 -379 -379 -379 -379 -379 -379 -379 -1-
-4- -233 --
or- 0 5
51
ty
in-
er-
sts
Extern- 21,- 21,- 21,- 21,- 21,-
21,- 21,915 -1,- 25,- 7- 7-
l 15 15 15 15 15 15 64 97
2 5
financ-
ng3
Cash flow from financing activities 51- -1,-
54,- -- --
37432 39
9 84
Net1,8- 1,8- 1,8- 1,8- 1,8- 1,8-
1,8- 1,876 -5- 1,8- -490 --
ca- 6 6 6 6 6 6 6 4 7
74
h
fl-
w
Cash at at at at at at at 1,- 1,8-
1,3- 1,708 1,-
and b- begi- begin- begi- begin- begi-
beginning 00 0 1 08
cash g- ning ing of ning ing of ning of period
equiva- n- of period of period of
ents i- peri- peri- peri-
g d d d
of
p-
r-
od
Currency translation adjustment s 23 -33 -9
-- --
5 3
Cash at at at at at at at 3,- 1,1-
3,1- 1,193 1,-
and p- peri- perio- peri- perio- peri-
period-end 99 3 9 51
cash r- d-end -end d-end -end d-end
equiva- o-
ents --
nd
1Includes Includ- Includes Includ- Includes Includ-
Includes DKK 1,065 million
DKK s DKK DKK s DKK DKK s DKK received from the license
1,065 1,065 1,065 1,065 1,065 1,065 agreement with The
Coca-Cola
million million million million million million Company in June 2008. Other
received receiv- received receiv- received receiv-
activities
from the d from from the d from from the d from
license the license the license the
agreeme- license agreeme- license agreeme- license
t with agreem- t with agreem- t with agreem-
The nt with The nt with The nt with
Coca-Co- The Coca-Co- The Coca-Co- The
a Coca-C- a Coca-C- a Coca-C-
Company la Company la Company la
in June Company in June Company in June Company
2008. in June 2008. in June 2008. in June
Other 2008. Other 2008. Other 2008.
activit- Other activit- Other activit- Other
es activi- es activi- es activi-
ies ies ies
2 cover cover cover cover cover cover cover real separate
act- incl-
real real real real real real estate and from
vit- ding
estate esta- estate esta- estate esta- assets
beverage es, costs
and e and and e and and e and
assets asse- assets asse- assets asse-
s s s
of
constr-
ction
contra-
t s.
3 Includes financing of the acquisition of activities from S&N and repayment af
elements hereof following the completion of the capital increase. 4 Includes
hedging
instruments acquired prior to the S&N acquisition.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 23 af 31
NOTE 1
Segment reporting by region (beverages)
DKK million Q2 Q2 H1 H1
2008 2007 2008 2007 2007
Beer sales (pro rata, million
hl)
North- and Western Europe 14.8 12.8 23.5 21.5 44.4
Eastern Europe 14.8 8.2 20.4 13.3 27.7
Asia 3.2 2.8 5.7 5.0 9.9
Total 32.8 23.8 49.6 39.8 82.0
Net revenue (DKK million)
North- and Western Europe 10,7- 9,041 17,409
15,47532,087
6
Eastern Europe- 5,888 2,830 7,860 - 4,5239,658
- -
- -
- -
8 3
Asia 828 727 1,639 - 1,4312,886
-
-
-
1
Not allocated 49 41 69 73 119
Beverages, - 17,5- 12,639 26,977
21,50244,750
total - 1
-
-
-
1
Operating profit before depreciation, amortisation and special
items (EBITDA - DKK million) North- and Western Europe
- 2,114 1,710 2,727 - 2,4315,365
- -
- -
- -
4 1
Eastern Europe- 1,679 837 2,128 - 1,2582,727
- -
- -
- -
9 8
Asia 160 132 323 258 530
Not allocated -175 -177 -337 -356 -765
Beverages, - 3,778 2,502 4,841 - 3,5917,857
total - -
- -
- -
8 1
Operating profit before
special items (EBIT - DKK
million) North- and Western
Europe
- 1,570 1,231 1,705 - 1,4733,383
- -
- -
- -
0 3
Eastern Europe- 1,388 696 1,673 9832,134
-
-
-
8
Asia 117 94 241 183 366
Not allocated -199 -211 -362 -426 -882
Beverages, - 2,876 1,810 3,257 - 2,2135,001
total - -
- -
- -
6 3
Operating -
profit -
-
-
-
n
-
-
)
North- and - 14.6 13.6 9.8 9.5 10.5
Western -
-
-
-
e
Eastern Europe 23.6 24.6 21.3 21.7 22.1
Asia 14.1 12.9 14.7 12.8 12.7
Not allocated……………
Beverages, 16.4 14.3 12.1 10.3 11.2
total
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 24 af 31
NOTE 2
Segment reporting by activity
DKK million Q2 Q2
2008 2007
Beverages Other Total Beverages Other
Total
Q2 activities Q2 Q2 activities
Q2
Net revenue 17,541 - 17,541 12,639 -
12,639
Operating profit 2,876 274 3,150 1,810 44
1,854
Special items, net -91 - -91 -111 -
-111
Financial items, net -816 4 -812 -179 -64
-243
Profit before tax 1,969 278 2,247 1,520 -20
1,500
Corporation tax -607 -52 -659 -351 -21
-372
Consolidated profit 1,362 226 1,588 1,169 -41
1,128
Attributable to:
Minority interests 174 -1 173 90 1
91
Shareholders in Carlsberg A/S 1,188 227 1,415 1,079 -42
1,037
DKK million H1 H1
2008 2007
Beverages Other Total Beverages Other
Total
activities activities
Net revenue 26,977 - 26,977 21,502 -
21,502
Operating profit 3,257 281 3,538 2,213 43
2,256
Special items, net -128 - -128 -142 -
-142
Financial items, net -1,224 -58 -1,282 -372 -124
-496
Profit before tax 1,905 223 2,128 1,699 -81
1,618
Corporation tax -592 -35 -627 -398 -6
-404
Consolidated profit 1,313 188 1,501 1,301 -87
1,214
Attributable to:
Minority interests 215 - 215 130 2
132
Shareholders in Carlsberg A/S 1,098 188 1,286 1,171 -89
1,082
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 25 af 31
NOTE 3
Segment reporting by quarter
DKK million Q3 Q4 Q1 Q2 Q3 Q4 Q1
Q2
2006 2006 2007 2007 2007 2007 2008
2008
Net revenue
North and Western Europe 8,507 7,977 6,434 9,041 8,624 7,988 6,633
10,776
Eastern Europe 2,344 1,662 1,693 2,830 3,069 2,066 1,972
5,888
Asia 673 652 704 727 746 709 811
828
Not allocated 23 -6 32 41 -9 55 20
49
Beverages, total 11,547 10,285 8,863 12,639 12,430 10,818 9,436
17,541
Other activities - - - - - - -
-
Total 11,547 10,285 8,863 12,639 12,430 10,818 9,436
17,541
Operating profit
North and Western Europe 1,194 517 242 1,231 1,179 731 135
1,570
Eastern Europe 657 281 287 696 806 345 285
1,388
Asia 102 27 89 94 107 76 124
117
Not allocated -152 -296 -215 -211 -138 -318 -163
-199
Beverages, total 1,801 529 403 1,810 1,954 834 381
2,876
Other activities 9 -15 -1 44 124 94 7
274
Total 1,810 514 402 1,854 2,078 928 388
3,150
Special items, net -152 -401 -31 -111 -42 -243 -37
-91
Financial items, net -200 -229 -253 -243 -277 -428 -470
-812
Profit before tax 1,458 -116 118 1,500 1,759 257 -119
2,247
Corporation tax -417 60 -32 -372 -461 -173 32
-659
Consolidated profit 1,041 -56 86 1,128 1,298 84 -87
1,588
Attributable to:
Minority interests 128 24 41 91 120 47 42
173
Shareholders in Carlsberg A/S 913 -80 45 1,037 1,178 37 -129
1,415
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 26 af 31
NOTE 4
Special items
DKK million H1 H1 2007
2008 2007
Special items, income
- - -
Special items, costs
Reversal of impairment (loss in 2007), Türk - - -100
Tuborg Impairment losses and expenses relating
to withdrawal from the market for discount soft
drinks in Denmark (2007: reversal of provision)
- - 7
Termination benefits -
-
d
-
-
-
-
-
-
-
-
-
t
-
f
-
-
-
-
-
-
-
-
-
-
t
with new production structure -15 - 14
Termination benefits -
-
d
-
-
-
-
-
-
-
-
-
t
-
f
-
-
-
-
-
-
-
-
-
-
t
with new production structure -30 -2 -3
Termination benefits - -19 -93 -190
-
-
.
-
n
-
-
-
-
-
-
-
-
-
n
-
-
-
h
-
-
-
-
-
-
-
-
-
-
l
Termination benefits -
-
d
-
-
-
-
-
-
-
-
,
-
-
-
-
-
-
-
-
-
n
-
o
-
-
-
-
-
-
-
-
-
g
-
-
-
-
-
d
-
-
r
-
-
-
e
-
-
1
Center in Poland -3 -29
Restructuring, - -22 -18 -67
-
-
-
-
-
-
-
g
-
-
-
-
-
a
Costs in connection with - -23 -26
Restructuring, - -9 - -
-
-
-
-
-
s
Integration cost -10 - -
Other restructuring costs -12 -3 -33
Total -128 -142 -427
Special items, net -128 -142 -427
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 27 af 31
NOTE 5
Net interest bearing debt
DKK million Q2 Q2 H1 H1 2007
2008 2007 2008 2007
Net interest-bearing debt is calculated as follows:
Non-current borrowings 45,605 16,899 19,385
Current borrowings 7,786 6,870 3,869
Gross interest-bearing 53,391 23,769 23,254
debt
Cash and cash -4,706 -2,310 -2,249
equivalents
Loans to associates -3 -63 -28
On-trade loans -2,439 -1,675 -1,627
less non-interest-bearing 1,414 882 821
portion
Other receivables -2,124 -999 -1,391
less non-interest-bearing 1,876 925 946
portion
Net interest-bearingdebt 47,409 20,529 19,726
Changes in net interest-bearing debt:
Net interest-bearing debt at beginning 22,652 21,175 19,726 19,229
19,229
of period
Cash flow from operating activities -2,771 -2,052 -2,083 -1,643
-4,837
Cash flow from investing activities 52,269 1,314 54,365 2,104
4,927
Dividend to shareholders - 261 184 714 661
685
-
d
-
-
-
-
-
-
-
y
interests
Acquisition of minority interests 132 -24 202 29
69
Acquisition/disposal of treasury -1 8 -8 40
74
shares
Acquisition of entities, net 4,418 22 4,419 60
54
Capital increase -29,837 - -29,837 -
-
Change in interest-bearing lending 713 -16 392 141
-209
Effects of currency translation 56 7 -330 -103
-325
Other -483 -89 -151 11
59
Total change 24,757 -646 27,683 1,300
497
Net interest-bearing end of period 47,409 20,529 47,409 20,529
19,726
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 28 af 31
NOTE 6
Acquisition of entities
DKK million
Acquired
ownership Acquisition
Name of acquired entities interest date Main activity Cost
Activities from S&N, including1;
- 28 April 2008 - 52,095
- Baltic Beverages Holding (BBH) 50.0% 28 April 2008 Brewery -
AB
- Kronenbourg 100.0% 28 April 2008 Brewery -
Brasseries
- Mythos Brewery 100.0% 28 April 2008 Brewery -
- Other 18-100% 28 April 2008 Brewery -
52,095
Carrying
Market
amount
prior to
value
at
DKK acquisiti-
acquis-
million n tion
Intang-
450 16,860
bles
Proper-
7,054 7,588
y,
plant
and
equipm-
nt
Financ-
1,217 2,360
al
assets,
Invent-
1,852 1,966
ries
Receiv-
4,315 3,818
bles
Financ-
- 141
al
assets,
Cash 1,331
1,397
and
cash
equiva-
ents
Provisions, excl. deferred tax liabilities -910
-1,332
Deferr-
-293 -4,598
d tax
liabil-
ties,
net
Borrow-
-6,153 -5,618
ngs
Bank -77
-130
overdr-
fts
Trade etc. etc. -4,681
-4,989
payabl-
s and
other
liabil-
ties
Net 4,105
17,462
assets
Minori-
- -1,835
y
intere-
ts
Equity, 4,105
15,627
Carlsb-
rg's
share
Goodwill 36,468
Cash consideration paid 52,095
Cash and cash acquired -1,397
equivalents,
Bank overdrafts,acquired 130
Cash outflow, net 50,828
Elements of cash consideration paid:
Cash 51,948
Directly attributable acquisition costs 147
Total 52,095
1 Allocation of purchase price has not been completed.
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 29 af 31
The calculation of the fair value of the acquired assets, liabilities and
contingent liabilities is still ongoing and has not yet been completed for any
of the companies. Therefore, adjustments to all items in the opening balance
sheet will be made. Furthermore, the cost price will be adjusted as it relates
to the statement of the net interest-bearing debt of S&N at 28 April 2008 which
has not yet been completed and agreed by the consortium. Changes in the opening
balance sheet and in the cost price will be made in accordance with IFRS
standards.
The acquisition of the activities from S&N increases the operating capacity of
the Carlsberg Group and its longterm growth opportunities. The acquisition is a
natural step for Carlsberg and in line with the strategy of obtaining full
control of key operating activities. The acquisition includes the remaining 50%
of BBH, which holds activities in Russia, Ukraine, Baltics, Kazakhstan,
Uzbekistan and Belarus. Furthermore, 100% of Brasseries Kronenbourg and other
French activites as well as Mythos, Greece and 17.5% of the associated company
Chongqing, China, and a 50% share in the joint venture Vinataba in Vietnam have
been acquired.
The acquisition will entail the following key benefits:
• full control of BBH, eliminating uncertainty regarding the long-term control
of the asset and
substantially increasing the Carlsberg Group's long-term growth profile;
• unification of BBH ownership, enabling the Carlsberg Group to maximize the
potential of its
key Carlsberg and Tuborg brands in the BBH markets;
• significant exposure to growth markets;
• the acquisition of the French and Greek businesses complement the Carlsberg
Group's
existing portfolio of leading European market positions, providing increased
capacity and an opportunity to achieve synergies through the implementation of
the Carlsberg Group's Excellence Programmes;
• increased sales volumes will allow the Carlsberg Group to generate significant
synergy
benefits based on reductions in overheads, implementation of best brewing
practices and purchasing savings; and
• the acquisition reinforces the Carlsberg Group's long-standing and growing
Asian presence
through the acquisition of S&N's positions in the attractive Chinese and
Vietnamese markets.
The preliminary calculation of goodwill represents a significant value due to
the substantial synergies expected in the acquired companies, staff competencies
as well as the positive growth expectations for BBH. The synergies can i.a. be
related to cost savings from the Supply and Excellence programmes. Furthermore,
goodwill will reflect synergies from increased sales through the presence in a
larger part of Europe and Asia, the possibility of launching global and/or
regional brands throughout the new Group, sysnergies from research and
development as well as improved utilisation of the work force and its know-how.
The activities acquired contribute positively to operating profit before special
items by approximately DKK 780m and to the period's net profit by approximately
DKK 550m. The estimated results for the period January - June, if the
acquisition had been completed at 1 January 2008, has not been calculated, as
this is not possible due to significant differences in the accounting principles
used by some of the companies acquired, where the effect of this prior to the
acquisition cannot be calculated.
www.carlsberggroup.com
COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 30 af 31
APPENDIX 1: NEW SEGMENT REPORTING AND PRO FORMA 2007 FINANCIAL RESULTS
(PAGE 1/2)
All figures in DKKm unless otherwise stated
New Geographic Segmentation of Actual Figures for 2007 for the Brewing
activities
Pro Rata Beer Net Depreciatio-
Vol /
Reported 2007 (m.hl) revenue EBITDA Margin amortisation EBIT
Margin
Western Europe 28.5 27,499 4,297 15.6% 1,559 2,738
10.0%
BBH 29.1 10,435 2,980 28.6% 642 2,338
22.4%
Eastern Europe 14.8 4,267 883 20.7% 406 477
11.2%
(excl. BBH)
Asia 9.6 2,535 462 18.2% 132 330
13.0%
Not allocated - 14 -765 n.a. 117 -882
n.a.
Brewing activities 82.0 44,750 7,857 17.6% 2,856 5,001
11.2%
Pro Rata Beer Net Depreciatio-
Vol /
New Reporting 2007 (m.hl) revenue EBITDA Margin amortisation EBIT
Margin
Northern & Western 44.4 32,087 5,365 16.7% 1,982 3,383
10.5%
Europe
Eastern Europe 27.7 9,658 2,727 28.2% 593 2,134
22.1%
Asia 9.9 2,886 530 18.4% 164 366
12.7%
Not allocated - 119 -765 n.a. 117 -882
n.a.
Brewing activities 82.0 44,750 7,857 17.6% 2,856 5,001
11.2%
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COMPANY ANNOUNCEMENT 32/2008
5 August 2008
Page 31 af 31
APPENDIX 1: NEW SEGMENT REPORTING AND PRO FORMA 2007 FINANCIAL RESULTS
(PAGE 2/2)
All figures in DKKm unless otherwise stated
Illustrative Proforma Financial Results and Margins for 2007
Pro Rata Net
Deprecia-
Beer Vol
ion/
Proforma 2007 (m.hl) revenue EBITDA
amortisa- EBIT Margin
ion
Northern & Western Europe 53.5 38,380 6,708
2,358 4,350 11.3%
Eastern Europe 51.4 19,316 5,414
1,546 3,868 20.0%
Asia 9.9 2,886 530
164 366 12.7%
Not allocated - 77 -765
117 -882 n.a.
Carlsberg Breweries, total proforma 2007 114.8 60,659 11,887
4,185 7,702 12.7%
Other - 277
16 261 n.a.
Carlsberg A/S, total proforma 2007 114.8 60,659 12,164
4,201 7,963 13.1%
Proforma profit and loss as reported in Offering Net
Deprecia-
Circular May 2008
ion/
revenue EBITDA
amortisa- EBIT Margin
ion
Carlsberg 44,750 8,134
2,872 5,262 11.8%
BBH 10,435 2,980
642 2,338 22.4%
France 5,516 1,100
237 863 15.6%
Elimination -42 -
- - n.a.
Effect form purchase Price allocation - -50
450 -500 n.a.
Carlsberg A/S, total proforma 2007, as reported in
Offering circular
60,659 12,164
4,201 7,963 13.1%
Pro Rata Net
Deprecia-
Beer Vol
ion/
(m.hl) revenue EBITDA-
amortisa- EBIT Margin
-
ion
-
-
-
n
Western Europe (2007 Reported) 28.5 27,499 4,297-
1,559 2,738 10.0%
-
-
-
%
Change in Reporting (Addition of 50% Baltics,
Poland, South Eastern Europe and Licenses) 15.9 4,588 1,068-
423 645 14.1%
-
-
-
%
Northern & Western Europe (2007 New Reporting) 44.4 32,087 5,365-
1,982 3,383 10.5%
-
-
-
%
Acquired S&N Assets (1, 5) 9.1 6,293 1,353-
286 1,067 17.0%
-
-
-
%
PPA Adjustments (2) -10-
90 -100 n.a.
-
-
.
Northern & Western Europe (2007 Proforma) 53.5 38,380 6,708-
2,358 4,350 11.3%
-
-
-
%
Pro Rata Net
Deprecia-
Beer Vol
ion/
(m.hl) revenue EBITDA-
amortisa- EBIT Margin
-
ion
-
-
-
n
BBH (2007 Reported) 29.1 10,435 2,980-
642 2,338 22.4%
-
-
-
%
Change in Reporting (Removing of 50% of
Baltics) -1.4 -777 -253-
-49 -204 26.3%
-
-
-
%
Eastern Europe (2007 Reporting) 27.7 9,658 2,727-
593 2,134 22.1%
-
-
-
%
Acquired S&N Assets (3, 4) 23.7 9,658 2,727-
593 2,134 22.1%
-
-
-
%
PPA Adjustments (2) -
-40n.a. 360 -400 n.a.
Eastern Europe (2007 Proforma) 51.4 19,316 5,414-
1,546 3,868 20.0%
-
-
-
%
Pro Rata Net
Deprecia-
Beer Vol
ion/
(m.hl) revenue EBITDA-
amortisa- EBIT Margin
-
ion
-
-
-
n
Asia 9.6 2,535 462-
132 330 13.0%
-
-
-
%
Change in Reporting 0.3 351 68-
32 36 10.3%
-
-
-
%
Asia (2007 Reporting) 9.9 2,886 530-
164 366 12.7%
-
-
-
%
Acquired S&N Assets - - --
- -n.a.
-
-
.
Asia (2007 Proforma) 9.9 2,886 530-
164 366 12.7%
-
-
-
%
Net
Deprecia-
ion/
revenue EBITDA-
amortisa- EBIT Margin
-
ion
-
-
-
n
Not allocated 14 -765-
117 -882 n.a.
-
-
.
Change in Reporting 105 --
- -n.a.
-
-
.
Not allocated (2007 Reporting) 119 -765-
117 -882 n.a.
-
-
.
Acquired S&N Assets -42 --
- -n.a.
-
-
.
Not allocated (2007 Proforma) 77 -765-
117 -882 n.a.
-
-
.
Pro Rata Net
Deprecia-
Beer Vol
ion/
(m.hl) revenue EBITDA-
amortisa- EBIT Margin
-
ion
-
-
-
n
Carlsberg Breweries, total (2007 Reporting) 82.0 44,750 7,857-
2,856 5,001 11.2%
-
-
-
%
Acquired S&N Assets 32.8 15,909 4,080-
879 3,201 20.1%
-
-
-
%
PPA Adjustments - - -50-
450 -500 n.a.
-
-
.
Carlsberg Breweries, total (2007 Proforma) 114.8 60,659 11,887-
4,185 7,702 12.7%
-
-
-
%
(1) Consists of France (proforma after sale of Elidis as per Offering Circular
dated 15th May 2008), Greece and 50% of Baltic operations for 2007. (2)
Preliminary estimate of Purchase Price Allocation adjustments (as per Offering
Circular dated 15 May 2008) allocated between North & Western Europe and Eastern
Europe. (3) Consists of 50% stake in BBH excluding the Baltic operations for
2007. (4) Acquired volume does not equal 50% of total volume in BBH as volume
from sales of Carlsberg and Tuborg was included 100% in the Pro Rata Beer volume
reported for 2007 (5) Includes minor change compared with Stock Exchange
Announcement 25 July 2008
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