Carlsberg A/S 100 Ny Carlsberg Vej Tel +45 3327 3300
1760 Copenhagen V Fax +45 3327 4701
CVR.no. 61056416 carlsberg@carlsberg.com
Company announcement 10/2010
17 August 2010
Page 1 of 31
Interim results as at 30 June 2010
Strong performance and full-year earnings upgrade
• The Carlsberg Group achieved 12% operating profit growth to DKK 5.0bn for the
first six
months of 2010 and driven by increased sales and marketing investments the
Group gained market share in a large part of the business. The focus on
improving profitability continues and Group operating profit margin improved
strongly by 210bp to 17.2%.
• Beer volumes declined by 2% to 55.8m hl with an organic volume development of
-3%.
Excluding the Russian de-stocking effect in Q1, the estimated organic volume
development was -1% for the first six months. Asia continued the very strong
growth at double-digit percentage rates. Northern & Western European volumes
grew slightly organically. Eastern Europe, excluding Russia, reported
double-digit organic growth. Russian volumes declined mainly due to
de-stocking in Russia in Q1 and overall market decline following the 200%
excise duty increase. Group organic beer volume development was flat in Q2.
• In Northern & Western Europe, the overall market share started to improve
after flat market
share development in recent years. In Eastern Europe, market shares improved
strongly with Russia improving sequentially to 40.1% in Q2 after 39.1% in Q1.
In Asia, strong market share gains were once again achieved. This was driven
by increased brand investments, product introductions, and continued value
management efforts.
• The Russian beer market declined by 9% in the first six months driven by
significant price
increases following the higher excise duty. Due to improving macro economics
and slightly better consumer sentiment, Carlsberg now expects a high
single-digit percentage decline for the Russian market for 2010 (previously
expected low double-digit percentage decline).
• Net revenue declined by 2% to DKK 28.9bn (DKK 29.4bn in 2009) with a -4%
organic net
revenue development. Price/mix was flat. Q2 net revenue increased by 2% to DKK
18.0bn (DKK 17.6bn in 2009) with organic development of -3%.
• Operating profit increased by 12% to DKK 4,982m (DKK 4,443m in 2009) with 3%
organic
operating profit growth in the beverage activities. Currency movements
impacted positively by 8%, mainly related to the ongoing recovery of the
Russian Rouble. Q2 operating profit was DKK 4,247m (DKK 3,655m in 2009) with a
7% organic growth in the beverage activities. The Asian business delivered
high organic operating profit growth throughout all six months and the
Northern & Western European region reported 21% organic operating profit
growth.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 2 of 31
In Eastern Europe, organic operating profit declined for the six months, but
improved in Q2 compared to the weak Q1 that was affected by the Russian
de-stocking.
• Net profit was DKK 3,103m (DKK 1,728m in 2009) including the non-cash,
non-taxable
income in special items amounting to DKK 390m booked in Q1 related to new
acquisition accounting regulation. Excluding this one-off item net profit grew
by 57%.
• Free cash flow was DKK 2,443m (DKK 4,100m in 2009) and net interest bearing
debt was
DKK 35.3bn (DKK 40.8bn end H1 2009). The change in working capital was
according to plan and supports management's focus on reducing average trade
working capital throughout the year.
• Based on a more positive RUB exchange rate and a lower level of market decline
in Russia
than previously expected Carlsberg upgrades its full-year outlook:
• Operating profit is now expected at around DKK 10bn compared to previous
expectations of operating profit being in line with that reported for 2009.
• Net profit growth is now expected to be around 40% compared to previous
expectations
of more than 20% (both excluding the DKK 390m one-off acquisition related
special item).
Commenting on the results, CEO Jørgen Buhl Rasmussen says: “The Group's
performance was strong for the first six months in spite of challenging consumer
dynamics. We achieved higher margins in all three regions for the first six
months showing that we are clearly on-track to meet our medium-term margin
targets. We will continue to balance our plans to improve efficiency and margins
with our ambitions to drive top-line growth. During 2010 we have successfully
undertaken several initiatives that will help us strengthen our market positions
across all three regions.”
Carlsberg will present the financial statements at a conference call for
analysts and investors today at 9.00 am CET (8.00 am GMT). The conference call
will refer to a slide deck, which will be available beforehand at
www.carlsberggroup.com.
Contacts:
Investor Relations: Peter Kondrup, +45 3327 1221
Media Relations: Jens Bekke, +45 3327 1412
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 3 of 31
KEY FIGURES AND FINANCIAL RATIOS
DKK million Q2Q2H1H1
2010 2009 2010 20092009
Total sales
volumes
(million
hl)
Beer
40. 4 37.8 66. 1 62.9137. 0
Othe r be
6.2 6.2 10. 7 10.822. 2
vera ges
Pro ra ta
sales
Beer
3 4.8 34.3 55.8 56.9 116.0
Other
5 .3 5.6 9.2 9 .71 9.8
beverages
In come
Net rev enue
17, 974 1 7,623 28,947 2 9,409 59,382
Operating
4,247 3,655 4,98 2 4,443 9,39 0
profit
before
special
items
Spec ia l
5 -84 354 -191 - 695
item s,
Financial
- 302 -546 - 817 - 1,450- 2,990
items, net
Profit
3,950 3,025 4,51 9 2,802 5,70 5
before tax
Corp orat ion
- 1,06 7 -878 - 1,115 -813 - 1,538
Con soli
2,88 3 2,147 3,40 4 1,989 4,16 7
dat ed
Attributab-
e to:
Non-contro-
251 2 07 301 2 61 565
ling
interests
Shareholde-
2,632 1,940 3,10 3 1,728 3,60 2
s in
Carlsberg
A/S
Statement
of
financial
position
Total assets
- -151, 400 139 ,393134,515
Invested
- -120,945 112,236109,538
capital
Inter est-b
- - 35,29 9 4 0,814 35,679
earing
Equity,
- - 64,95 9 5 1,766 54,829
shareholde-
s in
Carlsberg
A/S
Statement
of cash
flows
Cash flo w
4,85 8 6,201 4, 748 5,968 13,631
fr om op
erat in g
act ivi tie
s Cash flow
from
investing
activities
-1 ,866 -1,0 22 - 2,305 - 1,868- 3,082
Fre cas h
2,99 2 5,179 2,44 3 4,100 10,549
e flow
Fina ncial
Ope rat ing % %
%
% 2 3.6 20.7 17.2 15.1 1 5.8
Return on average % %
% %
- - 8.7 7 .3 8.2
invested capital
(ROIC)
Equity ratio % %
%
% - - 46.5 40.9 4 4.2
Debt/equity x x
x x
- - 0.5 0 .7 0.6
ratio
(financial
gearing)
Interest x x
x x
- - 6.1 3 .1 3.1
cover
Stock
market
ratios
Earnings DKK DKK
DKK DKK
17 .2 12.7 2 0.3 11.3 2 3.6
per share
(EPS)
Cashflo w sh are DKK DKK
DKK
DKK 3 1.8 40.6 31.1 39.1 8 9.3
Free cash DKK DKK
DKK DKK
33.9 16.0 26.9 6 9.1
flow per
share
(FCFPS)
Shar e pri ce DKK DKK
DKK
DKK 467 3 41 384
Number of 1,000 1,000
1,000
1,000 152,553 152 ,554152,553
shares
(period-en-
)
Number of shares 1,000 1,000
1,000
1,000 152,548 152,5 54152,548 152 ,554152,550
(average, excl.
treasury
shares)
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 4 of 31
BUSINESS DEVELOPMENT
Change Change
DKK million 2009 Organic Acq, net FX 2010 Reported
Q2
Be er sale s (mi lli 34. 3 0% 1% 34. 8 1%
on hl) Net revenue
17,623 -3% -1% 6% 17, 974 2%
Ope rat ing prof it 3,65 5 7% 0% 9% 4,24 7 16%
Ope rat ing mar gin 2 0.7 23.6 290bp
H1
Be er sale s (mi lli 56. 9 -3% 1% 55. 8 -2%
on hl) Net revenue
29,409 -4% -2% 4% 28, 947 -2%
Ope rat ing prof it 4,44 3 4% 0% 8% 4,98 2 12%
Ope rat ing mar gin 1 5.1 17.2 210bp
The Group delivered strong performance for the first six months with strong
margin improvements and market share gains in most of the business.
Organic Group beer volumes declined by 3%. Including acquisitions beer volumes
declined by 2% to 55.8m hl (56.9m hl in 2009). While the Asian and Northern &
Western European regions delivered organic volume growth this was more than
off-set by the volume decline in Eastern Europe. The Eastern European volume
decline was mainly due to the price increases implemented to off-set the Russian
excise duty increase in January and the de-stocking in Q1 following the
stock-building by distributors in Q4 2009. Adjusting for the Russian de-stocking
impact of around 1.5m hl, organic beer volumes would have declined by an
estimated 1% in the first six months.
Q2 organic beer volume development was flat as strong Asian growth was off-set
by a minor decline in Eastern Europe. Pro rata Group volumes of other beverages
for the first six months were 9.2m hl (9.7m hl in 2009). As a consequence, total
beverage volume declined organically by 4% (-1% in Q2).
The Group introduced a number of new products and line extensions across its
markets in all regions in the first six months. A few examples are Tuborg Lime
Cut in the Nordics, several new brands within the Baltika umbrella in Russia,
Eve was rolled-out in markets in all three regions and several re-launches and
line extensions took place in Asian markets like Vietnam and China. To support
the Group's key brands and new products, and in line with the ambitions to grow
volume and value market shares, marketing costs grew organically by double-digit
percentages.
Net revenue declined by 2% to DKK 28,947m (DKK 29,409m in 2009) with -4% organic
revenue development (consisting of total volume -4% and flat price/mix),
currency impact 4% and net acquisition impact -2%.
Cost of sales per hl declined in all regions due to production efficiencies and
lower input costs. Consequently, organic gross profit per hl increased by
approximately 5%.
Despite the higher marketing spend, total operating expenses declined
organically by 3%.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 5 of 31
Group operating profit grew by 12% to DKK 4,982m (DKK 4,443m in 2009) with an
organic growth of 4%, currency impact of 8% and no net effect from acquisitions.
As the Russian destocking took place in Q1, profits in the Eastern Europe region
improved in Q2 compared to Q1. Q2 operating profit growth was 16% (7% organic
growth).
Free cash flow was DKK 2,443m (DKK 4,100m in 2009). The reduction was mainly
driven by a very small working capital impact this year compared to the
substantial positive cash in-flow in 2009 and cash payments related to
acquisitions in the Asian region.
In June Carlsberg entered into a conditional agreement to increase its
shareholding in Chongqing Brewery Co. Ltd from 17.46% to 29.71%.
Higher earnings expectations for 2010
As several currencies, especially the Russian Rouble, are now more favourable
than previously assumed and as the Russian market is expected to decline less
than previously anticipated, Carlsberg upgrades its full-year outlook.
The key assumptions for the 2010 outlook are the following:
• A slight decline in Northern & Western European markets
• A high single-digit percentage decline in the Russian market (previously 'low
double-digit
percentage decline')
• Continued market growth in Asia
• Increased investments in brands and channel marketing to grow volume and value
market shares
• Continued implementation of operational and capital efficiency improvements
• An average EUR/RUB exchange rate of 40 (previously 44)
Based on these assumptions Carlsberg expects for 2010:
• Operating profit at around DKK 10bn (previously 'operating profit in line with
that
reported for 2009')
• Net profit growth of around 40% (previously 'more than 20%') excluding the
one-off
acquisition related special item and net income of DKK 390m
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 6 of 31
NORTHERN & WESTERN EUROPE
Change Change
DKK million 2009 Organic Acq, net FX 2010 Reported
Q2
Be er sale s (mi lli on hl) 15. 0 0% -3% 14. 6 -3%
Net revenue
10,705 -4% -3% 2% 10, 199 -5%
Ope rat ing prof it 1,74 0 7% -1% 3% 1,892 9%
Ope rat ing mar gin (%) 1 6.3 18.5 220bp
H1
Be er sale s (mi lli on hl) 24. 7 1% -3% 24. 3 -2%
Net revenue
17,905 -2% -3% 3% 17, 508 -2%
Ope rat ing prof it 1,88 0 21% -2% 3% 2,29 8 22%
Ope rat ing mar gin (%) 1 0.5 13.1 260bp
Consumer dynamics remain challenging in Northern & Western Europe and the
overall beer market declined by estimated 1% which is an improved trend compared
to 2009. There continue to be large variations between markets.
Carlsberg managed to gain volume and value market share in the region as a
whole. Particularly strong market share gains were achieved in the UK, Poland,
South-East Europe and Norway.
Recognising the timing of Easter, organic beer volume was flat for Q2 but
increased by 1% for the first six months. Due to portfolio optimization within
non-beer in a couple of markets, organic total volume (including non-beer
products) development was weaker at -1% (-2% for Q2). Reported beer volume
development was -2% due to the disposal of the Braunschweig brewery in 2009. The
UK and Polish businesses were the main drivers of the organic volume growth.
Volumes in Q2 were negatively impacted by strikes in Denmark and Finland and the
sell-in to Easter that happened in Q1 this year.
Across the region several significant initiatives were taken to support market
share growth and brand positions, including product launches such as the
introduction of Tuborg Lime Cut in Denmark and Norway and Kronenbourg Sélection
des Brasseurs in France. LAV was re-launched in Serbia. Existing brands were
rolled out in new markets like Tuborg in the Baltics, Kronenbourg 1664 in
Finland and Norway, Somersby in Finland and Croatia, and Eve in Croatia. Several
line extensions of Somersby were launched in already established markets in the
Nordics.
In addition to the product launches a number of events and promotions around the
World Cup, music and summer were activated across markets in the region. These
activities were differentiated by channels and applying the Group's value
management principles.
Organic net revenue development was -2% (-4% in Q2) with a reported development
of -2% to DKK 17,508m (DKK 17,905m in 2009). The main reason for the different
trend in organic net revenue and organic beer development is lower non-beer
volumes due to the portfolio optimization. Net revenue for beer was flat (1%
volumes, flat price/mix, 2% currency and -3% from net acquisitions). In most
markets there was a small positive pricing effect. The negative mix was mainly
due to country mix and to a lesser extent the shift from on-trade to off-trade.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 7 of 31
The UK business continues to improve and the market share in the first six
months grew to 16.2% (+180bp) with market share gains in both on and off-trade.
The Group's UK volumes increased by a low double-digit percentage. The market
declined by approximately 1% following a very strong June, a month that was
positively affected by the World Cup.
The French market declined approximately 2% in the first six months. The Group
stabilised market shares on its focus brands (Kronenbourg and Kronenbourg 1664)
while overall market share declined modestly, as planned, due to lower priority
given to our lower priced brand, Kanterbrau. The commercial restructuring plan
of the French business remains on-track.
In addition to the timing of Easter, Q2 was affected by strikes in May in the
Danish and Finnish businesses which were particularly disruptive and negatively
impacted volumes and profits.
Several initiatives, including efficiency improvements and product launches,
were taken by the Polish business in 2009 to strengthen the business. With
widened distribution and strong performance of the Harnas brand, Carlsberg
Poland's volumes grew by double digit in a declining market and delivered strong
profit and margin improvement.
Operating profit grew by 22% to DKK 2,298m (DKK 1,880m in 2009) of which 21%
were organic growth (7% for Q2). Most markets delivered organic operating profit
growth with particularly strong contribution from the UK, Poland, France,
Switzerland and Portugal. Operating margin improved by 260bp to 13.1% (10.5% in
2009). Operating margin improved in all markets with the exception of the Baltic
countries that continue to suffer. The margin improvement was achieved due to a
strong organic gross margin improvement of 230bp from production efficiencies
and lower input costs but operating expenses also declined due to efficiency
improvements despite a significant increase in marketing costs.
The negative profit impact in Q2 from the above mentioned strikes in Denmark and
Finland was off-set by a disposal of a brand owned by the French business.
EASTERN EUROPE
Change Change
DKK million 2009 Organic Acq, net FX 2010 Reported
Q2
Beer sales (million hl) 15.8 -3% 0% 15.3 -3%
Net revenue 5,841 -3% 0% 11% 6,29 4 8%
Ope rat ing prof it 1,95 2 4% 0% 13% 2,276 17%
Ope rat ing mar gin (%) 33. 4 36.2 280bp
H1
Beer sales (million hl) 25.8 -13% 0% 22.6 -13%
Net revenue 9,307 -15% 0% 8% 8,68 0 -7%
Ope rat ing prof it 2,64 7 -13% 0% 11% 2,597 -2%
Ope rat ing mar gin (%) 2 8.4 29.9 150bp
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 8 of 31
Due to the macroeconomic conditions and improving consumer sentiment the Russian
market improved in Q2 vs. Q1 and declined by an estimated 7% for the quarter.
For the first six months, the Russian market declined by an estimated 9%.
The Group's Russian volumes (shipments) declined by 5% in Q2 while
in-market-sales ("off- take") declined by an estimated 8%.
For the six months, the Group's Russian in-market-sales declined by 11% but due
to the de- stocking in Q1, the Group's shipments declined, as expected,
considerably more by around 17%. The stock building at Russian distributors in
Q4 2009 ahead of the 200% excise duty increase at 1 January 2010 amounted to
approximately 1.5m hl and increased 2009 operating profit by an estimated DKK
300m. De-stocking was completed by end Q1 and in Q2 inventories at distributors
were at a normal level (days of inventories).
Market development in the other markets in Eastern Europe also showed signs of
improvement as the first six months progressed. The region, excluding Russia,
delivered strong growth for the quarter with particularly strong double-digit
growth in Kazakhstan and Uzbekistan. The Kazakhstan business is progressing
successfully following the integration of the significant Russian export
business with the local operation. The Group's business in Ukraine continued its
superior performance and delivered mid-single digit organic beer volume growth
in a flat market.
For the first six months, total beer volumes (shipments) in Eastern Europe
declined organically by 13%. Adjusted for the Russian de-stocking, the organic
volume decline was 7%.
As planned, Carlsberg's Russian market share improved sequentially and was 40.1%
in Q2 compared to 39.1% in Q1. In Ukraine, the trend of strong market share
improvements continued.
To drive the continued increase of share into the season, several new products
and innovations were launched ahead of the peak season across the region.
Baltika Draught, Baltika Cooler 1.5 litre PET, Baltika 20, Nevskoe Imperial and
Zatecky Gus Dark were launched in Russia, Derbes Draught and Irbis Ice in
Kazakhstan and Lvivske Live Beer in Ukraine. Other Group brands like Grimbergen
and Eve were introduced in Russia. Eve was also launched in Kazakhstan and
Baltika 7 was rolled out in Ukraine and Uzbekistan. Of non-beer products the
Group launched mineral water and increased distribution of soft drinks in
Russia. Kvass was launched in Uzbekistan and ice tea in Ukraine. The marketing
spend increased in line with plans to support brands and activities and drive
volume and value share gains.
Q2 net revenue grew 8% to DKK 6,294m (DKK 5,841m in 2009). Organic net revenue
development was -3% while recovery of currencies, especially the Russian Rouble,
accounted for 11%. Price/mix was -1%. Due to the phasing of price increases
following the excise duty increase in Russia, the Russian price/mix was slightly
more negative. At the end of Q2, Carlsberg had passed on the full excise duty to
sales prices leading to a total price increase of some 25% since November 2009,
slightly ahead of the market.
Net revenue development in the first six months was -7% to DKK 8,680m (DKK
9,307m in 2009). Organic net revenue development for the region was -15%. As the
Russian price increases
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 9 of 31
were taken in several smaller steps during the half year period, the average net
sales price was negatively impacted and price/mix was -3%. Price/mix in Russia
was -5%.
Organic operating profit grew by 4% in Q2. There were particularly strong
organic profit growth in Ukraine, Kazakhstan and Uzbekistan. Organic operating
profit growth was slightly negative in Russia due to the impact of the higher
excise duties. Gross margins and operating margins improved considerably across
all markets in the region primarily due to lower input costs and efficiency
improvements.
For the first six months organic operating profit development was -13%. Reported
operating profit declined by 2% to DKK 2,597m (DKK 2,647m in 2009). Adjusting
for the DKK 300m negative impact from the de-stocking in Q1, organic operating
profit development would have been -2%.
ASIA
Change Change
DKK million 2009 Organic Acq, net FX 2010 Reported
Q2
Beer sales (million hl) 3.5 17% 24% 4.9 41%
Net revenue 1,049 23% 9% 10% 1,49 2 42%
Operating profit 167 45% 21% 13% 299 79%
Ope rat ing mar gin 15. 9 20.1 420bp
H1
Be er sale s (mi lli on hl) 6.4 17% 23% 8.9 40%
Net revenue
2,123 19% 7% 2% 2,726 28%
Operating profit 321 48% 13% 4% 530 65%
Ope rat ing mar gin 1 5.1 19.5 440bp
The Asian region continued to grow and organic beer volumes were up 17% (17% in
Q2). Including acquisition and consolidation changes, beer volumes grew by 40%.
All markets in the region contributed positively.
In China, organic beer volume growth was approximately 10% driven by continued
growth in both Western China and the international premium category. The
Carlsberg brand performed well and gained market share in the category supported
by marketing campaigns including World Cup activation. In Western China the
growth was driven by several marketing initiatives and re-launches of local
brands in some provinces, for instance the Wusu brand in the Xinjiang province.
Net sales pr hl increased from these premiumisation initiatives as well as price
increases.
Organic beer volume growth in Indochina was 28% and far ahead of market. All
three markets, Vietnam, Laos and Cambodia, grew strongly driven by market growth
and market share gains. The product portfolios in all markets were strengthened,
among others through line extensions in Laos with Beer Lao Gold and in Vietnam
with Huda Extra and Halida Thang Long. These introductions performed well and
contributed positively to price/mix.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 10 of 31
The Malaysian business performed in line with expectations maintaining stable
market share in Q2 in a growing market. World Cup activation and price increases
were positive drivers.
Organic net revenue growth was 19% (23% in Q2). The high volume growth and very
positive price/mix in Indochina were the main drivers supported by the Chinese
volume growth and mid single-digit Chinese price/mix.
All markets in the region delivered strong operating profit growth and operating
profit grew 65% to DKK 530m (DKK 321m in 2009) with organic operating profit
growth of 48% (45% in Q2). The operating profit margin improved by 440bp to
19.5%. Half of the improvement can be attributed to gross profit margin
improvement.
The acquisition of the additional 12.25% stake in Chongqing Brewery Co. Ltd is
awaiting approvals.
CENTRAL COSTS (NOT ALLOCATED)
Central costs were DKK -424m (DKK -352m in 2009). The increase was primarily due
to higher marketing costs. Central costs are incurred for ongoing support of the
Group's overall operations and strategic development and driving efficiency
programmes. In particular, they include the costs of running the headquarters
and central marketing (including sponsorships).
OTHER ACTIVITIES
In addition to beverage activities, Carlsberg has interests in the 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
-19m (DKK -53m in 2009).
Monetising the value of redundant assets which are no longer used in operations,
including the Copenhagen brewery site, remains an important opportunity to
provide additional capital to the Group and enhance return on invested capital.
The process of finding one or more partners for the Valby site is ongoing.
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 Danish regulations governing
presentation of interim reports by listed companies.
Except for the below described changes, the interim report has been prepared
using the same accounting policies as the consolidated financial statements for
2009.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 11 of 31
The consolidated financial statements for 2009, note 40, holds a complete
description of the accounting policies.
Changes in accounting policies for 2010
IFRS 3 "Business combinations", IAS 27 "Consolidated and Separate Financial
Statements", amendments to IAS 39 "Financial Instruments: Recognition and
Measurement " and to IFRS 2 "Share bases payment (Group Cash-settled Share-based
payment Transactions)" and IFRIC 9 have been implemented from 1 January 2010.
Except for IFRS 3 and IAS 27 the new and amended standards and interpretations
has not changed the recognition and measurement.
IFRS 3 has changed the accounting policies for cost of business combinations as
follows:
• Transaction cost directly attributable to a business combination is recognised
in income
statement and included in special items, cost. Such cost was included in the
cost of a business combination in prior years.
• Contingent consideration in a business combination is accounted for at fair
value at the
acquisition date and included in the cost of the acquisition. Subsequent
adjustments to fair value is recognised in income statement and included in
special items. Such adjustments were recognised in cost of the acquisition in
prior years.
• In a business combination achieved in stages (step acquisition) the
shareholdings
acquired before obtaining control is recognised at fair value. The fair value
adjustment is recognised in income statement and included in special items. In
prior years each significant transaction was accounted for separately to
determine the cost and fair value acquired of identifiable assets, liabilities
and contingent liabilities acquired and the fair value adjustment was
recognised directly in equity.
• Goodwill related to the non-controlling interest's share of an acquired
business can be
recognised as part of goodwill. The recognition of such goodwill is optional
and will be chosen for each individual transaction. The choice will be
disclosed in the notes.
IAS 27 has changed the accounting for transactions with non-controlling
interests. Acquisition and disposal of non-controlling interests, without the
loss of control, is recognised directly in equity. Disposal of shareholdings
with the loss of control is recognised in the income statement and the remaining
shareholding is measured at fair valued. The fair value adjustment is recognised
in income statement.
In accordance with IFRS 3 and IAS 27 the comparative figures have not been
restated.
INCOME STATEMENT
Net revenue declined by 2% to DKK 28.9bn (DKK 29.4bn in 2009) with a -4% organic
net revenue development. As described in the business development section,
operating profit increased by 12% to DKK 4,982m (DKK 4,443m in 2009) with 3%
organic operating profit growth in the beverage activities.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 12 of 31
Net special items amounted to DKK 354m against DKK -191m in 2009, and relate to
costs in connection with the restructuring measures implemented across the
Group. Special items were in particular positively affected by a fair value
revaluation of DKK 390m of the shareholding in Xinjiang Wusu Beer Group held
before obtaining control in January 2010 (step acquisition), cf. note 7.
Net financial items amounted to DKK -817m against DKK -1,450m in 2009. Interest
costs accounted for DKK -993m, compared with DKK -1,115m in 2009 and reflect the
lower net debt following the significant deleveraging in 2009. Other net
financial items were DKK 176m (DKK -335m in 2009). The change is primarily due
to currency adjustments and fair value adjustments; in 2010 a net gain versus a
net loss in 2009.
Tax totalled DKK -1,115m against DKK -813m in 2009. Excluding the non-cash,
non-taxable gain under special items of DKK 390m this equals a tax rate of 27%.
Consolidated profit was DKK 3,404m, against DKK 1,989m in 2009.
Carlsberg's share of net profit was DKK 3,103m, against DKK 1,728m in 2009.
STATEMENT OF FINANCIAL POSITION
At 30 June 2010, Carlsberg had total assets of DKK 151.4bn (DKK 134.5bn at 31
December 2009). The increase of DKK 16.9bn primarily relates to currency
adjustments.
Assets
Intangible assets totalled DKK 90.7bn against DKK 81.6bn at 31 December 2009.
The increase is mainly related to currency impact and addition from the
acquisition for Xinjiang Wusu Beer Group (DKK 1,335m at the acquisition date).
Property, plant and equipment increased to DKK 34.0bn (DKK 31.8bn at 31 December
2009) mainly driven by currency impact.
Financial assets amounted to DKK 6.6bn (DKK 5.9bn at 31 December 2009). The
increase is primarily a result of currency adjustments and increased tax assets.
Current assets totalled DKK 20.1bn against DKK 14.8bn at 31 December 2009 due to
the increase of inventory and trade receivables following the normal
seasonality.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 13 of 31
Liabilities
Total equity was DKK 70.5bn, of which DKK 65.0bn can be attributed to
shareholders in Carlsberg A/S and DKK 5.5bn to non-controlling interests.
The increase in equity compared to 1 January 2010 was DKK 11.0bn and is mainly
due to currency adjustments of approximately DKK 9.4bn, profit for the period,
DKK 3.4bn, payment of dividends to shareholders, DKK -1.1bn and value
adjustments of hedging instruments, DKK -1.0bn.
Total liabilities were DKK 80.9bn (DKK 75.0bn at 31 December 2009). Non-current
liabilities were increased by DKK 1.9bn compared with 31 December 2009 while
current liabilities excluding the current portion of borrowings were DKK 27.2bn,
up DKK 5.6bn compared to 31 December 2009.
CASH FLOW
Free cash flow was DKK 2,443m against DKK 4,100m for 2009.
Cash flow from operating activities in the first six months of 2010 was DKK
4,748m against DKK 5,968m for the same period of 2009. Operating profit before
depreciation and amortisation was DKK 6,876m against DKK 6,303m in 2009.
The change in working capital was DKK -6m (DKK +1,868m in 2009). The
insignificant change in working capital was according to plan and supports
management's focus on reducing the average (versus the period end) trade working
capital throughout the year. Trade working capital to net revenue (MAT) was 1.4%
at the end of Q2 2010 compared to 5.6% at the end of Q2 2009.
Paid net interest etc. amounted to DKK -1,362m against DKK -1,366m for the same
period of 2009.
Cash flow from investing activities was DKK -2,305m against DKK -1,868m in the
first six months of 2009. Operational capital expenditure was DKK 109m lower
than in 2009 whereas financial investments were higher by DKK 1.1bn compared to
2009. The increase is primarily due to the acquisition of shares in Xinjiang and
a prepayment/deposit for the acquisition of additional 12.25% in Chongqing.
Finally cash flow from investing activities is positively impacted by disposal
of real estate, DKK 346m (DKK -244m in 2009).
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 14 of 31
FINANCING
At 30 June 2010, the gross interest-bearing debt amounted to DKK 38.7bn and net
interest- bearing debt amounted to DKK 35.3bn. The difference of DKK 3.4bn is
other interest-bearing assets, including DKK 2.5bn in cash and cash equivalents.
Of the gross interest-bearing debt, 96% (DKK 37.0bn) is long term, i.e. with
maturity more than one year from 30 June 2010, and consists primarily of
facilities in EUR.
Committed credit facilities are more than sufficient to refinance maturing
short-term debt.
FINANCIAL CALENDAR FOR THE FINANCIAL YEAR 2010
The financial year follows the calendar year, and the following schedule has
been set for 2010:
9 November 2010 Interim results for Q3 2010
Carlsberg's communication with investors, analysts and the press is subject to
special restrictions during a four-week period prior to the publication of
interim and annual financial statements.
DISCLAIMER
This company announcement contains forward-looking statements, including
statements about the Group's sales, revenues, earnings, spending, margins, cash
flow, inventory, products, actions, plans, strategies, objectives and guidance
with respect to the Group's future operating results. Forward-looking statements
include, without limitation, any statement that may predict, forecast, indicate
or imply future results, performance or achievements, and may contain the words
"believe", "anticipate", "expect", "estimate", "intend", "plan", "project",
"will be", "will continue", "will result", "could", "may", "might", or any
variations of such words or other words with similar meanings. Any such
statements are subject to risks and uncertainties that could cause the Group's
actual results to differ materially from the results discussed in such
forward-looking statements. Prospective information is based on management's
then current expectations or forecasts. Such information is subject to the risk
that such expectations or forecasts, or the assumptions underlying such
expectations or forecasts, may change. The Group assumes no obligation to update
any such forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements. Some important risk factors that could cause the Group's actual
results to differ materially from those expressed in its forward-looking
statements include, but are not limited to: economic and political uncertainty
(including interest rates and exchange rates), financial and regulatory
developments, demand for the Group's products, increasing industry
consolidation, competition from other breweries, the availability and pricing of
raw materials and packaging materials, cost of energy, production- and
distribution-related issues, information technology failures, breach or
unexpected termination of contracts, price reductions resulting from
market-driven price reductions, market acceptance of new products, changes in
consumer preferences, launches of
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 15 of 31
rival products, stipulation of market value in the opening balance sheet of
acquired entities, litigation, environmental issues and other unforeseen
factors. New risk factors can arise, and it may not be possible for management
to predict all such risk factors, nor to assess the impact of all such risk
factors on the Group's business or the extent to which any individual risk
factor, or combination of factors, may cause results to differ materially from
those contained in any forward-looking statement. Accordingly, forward-looking
statements should not be relied on as a prediction of actual results.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 16 of 31
MANAGEMENT STATEMENT
The Board of Directors and the Executive Board have discussed and approved the
interim report of the Carlsberg Group for the period 1 January - 30 June 2010.
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.
In our opinion, the interim report gives a true and fair view of the Carlsberg
Group's assets, liabilities and financial position at 30 June 2010, and of the
results of the Carlsberg Group's operations and cash flow for the period 1
January - 30 June 2010.
Further, in our opinion the management's review (p. 1-14) gives a true and fair
review of the development in the Group's operations and financial matters, the
result of the Carlsberg Group for the period and the financial position as a
whole, and describes the significant risks and uncertainties pertaining to the
Group.
Copenhagen, 17 August 2010
Executive Board of Carlsberg A/S
Jørgen Buhl Rasmussen Jørn P. Jensen
Supervisory Board of Carlsberg A/S
Povl Krogsgaard-Larsen Jess Søderberg Hans Andersen
Chairman Deputy Chairman
Flemming Besenbacher Richard Burrows Kees van der Graaf
Niels Kærgård Ulf Olsson Bent Ole Petersen
Peter Petersen Lars Stemmerik Per Øhrgaard
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 17 of 31
FINANCIAL STATEMENT
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Note 1 Segment reporting by region (beverages)
Note 2 Segment reporting by activity
Note 3 Segment reporting by quarter
Note 4 Special items
Note 5 Debt and credit facilities
Note 6 Net interest-bearing debt
Note 7 Acquisition of entities
This statement is available in Danish and English. In the event of any
discrepancy between the two versions, the Danish version shall prevail.
The Carlsberg Group is one of the leading brewery groups in the world, with a
large portfolio of beer and other beverage brands. The flagship brand -
Carlsberg - is one of the best-known beer brands in the world and the Baltika,
Carlsberg, and Tuborg brands are among the six biggest brands in Europe.. More
than 43,000 people work for the Carlsberg Group, and its products are sold in
more than 150 markets. In 2009 the Carlsberg Group sold more than 135 million
hectolitres of beer, which is about 40 billion bottles of beer annually.
Find out more at www.carlsberggroup.com.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 18 of 31
INCOME STATEMENT
DKK millionQ2Q2H1H1
2010 2009 2010
20092009
Net revenue 17,974 17,62328,947
29,40959,382
Cost of sales -8,222 -8,630-13,936
-15,008-30,197
Gross profit 9,752 8,99315,011
14,40129,185
Sales and distribution expenses -4,640 -4,445-8,2 36 -8,122-15,989
Administrative expenses -1,056 -959-2,0 14 -1,928-3,8 73
Other operating income, net 153 32 167 47 -45
Sh are prof it tax , 38 34 54 45
112
Operating profit before special items 4,247 3,655 4,982 4,44 39,390
Sp eci al it ems, 5 -84 354
-191-695
Financial income 631 244 1,133
654609
Financial expenses -933 -790-1,9 50
-2,104-3,5 99
Profit before tax 3,950 3,025 4,519
2,80 25,705
Corporation tax -1,067 -878-1,1 15
-813-1,5 38
Consolidated profit 2,883 2,147 3,404
1,98 94,167
Profit attributable
to:
Non-controlling interests 251 207 301 261565
Shareholders in Carlsberg A/S 2,632 1,940 3,103 1,72 83,602
Ea rnin gspersha re 17. 2 12 .7 20.3
11.323.6
Ea rnin gspersha re, dil ute d 17. 2 12.7 20.3
11.323.6
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 19 of 31
STATEMENT OF COMPREHENSIVE INCOME
Q2 Q2 H1
H1
DKK million 20 10 200 9 201 0
20 09 2009
Profit for the period 2,883 2,147 3,404
1,989 4,167
Ot her -
o
-
-
r
-
-
e
-
-
-
v
e
-
-
c
-
-
e
Foreign exchange adjustments of foreign entities 3,533 - 571 9,408
-4,332 -3,1 35
Value adjustments of hedging instruments - 397 - 87 -1,03 6
- 149 23
Value adjustments of securities - - -
- 1
Retirement benefit obligations - 247 9 - 263
1 5 -382
Value adjustment of step acquisition of subsidaries - -65 -
- 65 31
Other -2 -2 -5
-2 - 6
Tax - 6 0 -2 202
2 3 39
-
-
e
r
-
o
-
p
-
-
h
-
-
-
i
-
e
Ot her - 2,94 7 -718 8 ,306
-4,510 -3,4 29
o
-
-
r
-
-
e
-
-
-
v
e
-
-
c
-
-
e
Total comprehensive income 5,830 1,429 11,710
- 2,521 7 38
Total comprehensive income attributable to:
Non-controlling interests 535 306 1,008
- 48 171
Shareholders in Carlsberg A/S 5,295 1,123 10,702
- 2,473 5 67
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 20 of 31
STATEMENT OF FINANCIAL POSITION
DKK 30
30 31
million J-
J- D-
ne
ne c
2-
2- 2-
10
09 09
Assets
Intan 9
8- 8-
gible 0-
,- ,-
asse ts 7-
55 11
4
Proper-
3 3- 3-
y, 3-
,- ,-
plant 9-
53 25
and 3
equipm-
nt
Financ-
6 5 5-
al ,-
,- 8-
assets 50
44 0
Tot al 1-
1- 1
1,
8- 1-
2-
95 ,-
7
2 86
Inv ent 1
1- 9-
ori es 3-
,- 4-
61
35 9
8
Other 3
3 2-
receiv-
,- ,- 6-
bles 81
20 8
etc.
Cash 2
3 2-
and ,-
,- 7-
cash 03
71 4
equiva-
ents
Total 2
2- 1-
0-
,- ,-
1-
26 41
2
Assets 7
1 3-
held 1
15 8
for
sale
Tot al 1-
1- 1
1,
9- 3-
4-
39 ,-
0
3 15
Equity
and
liabil-
ties
Eq uity , sh areh olde rs in Ca rlsb erg A/S Non-controlling interests 6
5- 5-
4-
,- ,-
95
66 29
9
5
4 4-
,-
,- 6-
94
22 0
Total 7
5- 5-
equity 0-
,- ,-
4-
88 89
3
Bo rrow 3
4- 3-
ing s 6-
,- ,-
97
28 75
9
Deferred tax, retirement benefit obligations etc. 1
1- 1-
4-
,- ,-
9-
24 40
0
Total 5
5- 5-
non-cu-
1- ,- ,-
rent 9-
52 15
liabil-
9
ties
Borrow-
1 1 3-
ngs ,-
,- 3-
31
82 2
Trade 1
9 7-
payabl-
1- ,- 9-
s 0-
11 9
9
Deposits on returnable bottles and crate 1
1 1-
,-
,- 3-
51
63 1
Ot her 1
1- 1-
4-
,- ,-
69
58 48
6
Total 2
2- 2-
current 8-
,- ,-
liabil-
9- 14 60
ties 7
Liabil- - - held - - held for sale -
h- 4 4 5
ties - - for - - -
ld1 39 1
associ- - - sale - - -
f-
ted d d d d d r
with - - - - -
s-
assets - - - - -
le
r r r r r
- - - - -
- - - - -
- - - - -
e e e e e
Total 15-
1- 1
equity ,4-
9- 3-
and 0
39 ,-
liabil-
3 15
ties
www.carlsberggroup.com
STATEME
DKK m nioill
H1 2010
Equity at 1 January
Total comprehensive i
Profit for the period
Other comprehensive inc mo
Foreign exchange adjus
e
tment
Value adjustments of hedging in
Retirement benefit obligations
Other
Tax on other comprehensive income
Other comprehensive income
Total comprehensive income for the period
Acquisition/disposal of treasury shares
Share-based payment
Dividends paid to shareholders
Acquisition of non-controlling interests and entities
Total changes in equity
Equity at 30 June 2010
H1 2009
Equity at 1 January 2009 3,051
Total comprehensive income for the period
Profit for the period -
Other comprehensive income
Foreign exchange adjustments of foreign entities - -4,033
Value adjustment of step acquisition of subsidaries - -
Other - -
Tax on other comprehensive income - -29
Other comprehensive income - -3,943
Total comprehensive income for the period - -3,943
Share-based payment - -
Dividends paid to shareholders - -
Acquisition of non-
controlling interests and entities - - -
Total changes in equity - -3,943 -212 - 4-,
Equity at 3
hS
0 June 3,051 -11,636 -1,727 145 -13,218
2009
tyequi
latTo
stseretin
ng
illorontc
on-N
-
s
latTo
entsm
-tsevin
S-fA-
sevresre
ng edgiH
onitalanstr
yencrruC
talpiae cra
84856,4,722667,5161,933
233,4-
19059,5,151507,5460,762360,9-145515,1-,6937-
34570,5,494599,6465,931320,4-146476,1-,6932-,0513
94859,4,660298,5463,59468111,-146384,1-10,578-3,0510102
.com pu.carlsberggrowww
Company announcement 10/2010
17 August 2010
Page 22 of 31
STATEMENT OF CASH FLOWS
Q2 Q2
H1 H1
20 10 200 9 201
0 20 09 2009
4,247 3,655
4,982 4,44 3 9,390
and and and and and and and and 970 933 1,894 1,86 0
3,779
Operating profit before 5,217 4,588 6,876 6,30 3 13,1 69
depreciation,
amortisation
2 28 95
329 228 265
1,206 3,121
-6 1,868 3,675
-91 -75 -
208 -295 -507
-10 59
35 109 255
-1 ,019 -919 -1,3
97 -1,475 -1,8 52
-673 -668 -
881 -770 -1,3 74
4,85 8 6,201
4,748 5,96 8 13,6 31
Acquisition of property,
plant and equipment and
-864 -903 -1,4
28 -1,537 -2,7 67
Disposal of property,
plant and equipment and
29 86
49 109 255
-135 -71 -
217 -218 -411
-970 -888 -1,59
6 -1,646 -2,9 23
-284 - 4 -
507 -12 95
-2 -18
-2 -18 -48
-3 -
-3 - - 7
-3 21
-3 5 -11
4 2
4 45 44
-619 -47 -
572 -19 -98
18 16
28 21 56
-889 -30 -1,0
55 2 2 31
Other investments in -12 -118 - 36 -264 -388
property, plant and
equipment
Disposal of other 5 14 382 2 0 198
property, plant and
equipment
-7 -104
346 -244 -190
-1 ,866 -1,0 22
-2,305 -1,868 -3,0 82
2,99 2 5,179
2,443 4,10 0 10,5 49
15 - -
553 -534 -540
-593 -240 -
590 -296 -591
-4,561 -3,8 58
-1,973 -1,872 -8 ,8 6 2
- 5,13 9 -4,0 98
-3,116 -2,702 -9,9 93
-2 ,147 1,081 -
673 1,398 5 5 6
peri peri peri odperi odperi odperi peri odperi od 4,28 6 2,474 2,583
2,06 5 2,065
od od od
1 81 -96
410 - 4 -38
2,32 0 3,459
2,320 3,45 9 2,583
1 Impairment losses excluding those reported in Special items. 2 Other
activities cover real estate and assets under construction, separate from
beverage activities, including costs of construction contracts. 3 Cash and cash
equivalent less bank overdrafts.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 23 of 31
NOTE 1
Segment reporting by region (beverages)
DKK million Q2 Q2 H1 H1
2010 2009 2010 2009
2009
Beer
Northern & Western Europe 14.6 15.0 24.3 24.7 50.2
Eastern Europe 15.3 15.8 22.6 25.8 51.3
Asia 4.9 3.5 8.9 6.4
14.5
Total 34.8 34.3 55.8 56.9
116.0
Net reven ue (DKK
Northern & Western Europe 10,199 10,705 17,508 17,90536,466
Eastern Europe 6,294 5,841 8,68 0 9,30718,545
Asi a - 1,49 2 1,049 2,72 6
2,1234,224
-
-
9
2
Not allocated -11 28 33 74 147
Beverages, total 17,974 17,623 28,947 29,409 59,382
Opera ting amorti -
sation -
d
special items (EBITDA - DKK million)
Northern & Western Europe 2,390 2,260 3,29 5 2,9226,366
Eastern Europe 2,661 2,288 3,32 9 3,3136,638
Asia 365 221 653 428 874
Not allocated -180 -164 -392 -313 -655
Beverages, total 5,236 4,605 6,88 5 6,35013,223
Opera ting (EBIT- DKK millio n)
Northern & Western Europe 1,892 1,740 2,29 8 1,8 804,23 7
Eastern Europe 2,276 1,952 2,59 7 2,6 475,28 9
Asia 299 167 530 321 666
Not allocated -194 -184 -424 -352 -732
Beverages, total 4,273 3,675 5,00 1 4,4 969,46 0
Opera ting
Northern & Western Europe 18.5 16.3 13.1 10.5 11.6
Eastern Europe 36.2 33.4 29.9 28.4 28.5
Asia 20.1 15.9 19.5 15.1
15.8
Not allocated … … … … …
Beverages, total23.820.917.315.31 5.9
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 24 of 31
NOTE 2
Segment reporting by activity
- Q2 Q2
-
K
-
-
-
-
-
-
n
2010 2009
Bever- Other Bever- Other
ages activities Total ages activities
Total
- 17, 974 - 17,974 1 7,62 3 -
17,623
-
t
Operating profit before 4,273 -26 4,247 3 ,675 - 20 3,65
5
special items
- n- n- n- n- n- n- net net 5 - 5 -84
- -84
pt t t t t t
-
-
i
-
l
Financial items, net - 297 -5 -302 - 539 -7
-546
- tax 3,981 -31 3,950 3 ,052 - 27
3,02 5
-
-
-
i
t
-
-
-
-
-
e
- tax -1, 080 13 -1,067 - 882 4
-878
-
r
-
o
-
-
t
-
-
n
Con soli dat ed prof it 2,90 1 -18 2,883 2 ,170 - 23 2,14
7
Attributable to:
Non-controlling interests 251 - 251 207 -
207
- in in in in in in in in 2,65 0 -18 2,632 1 ,963 - 23
1,94 0
hC- C- C- C- C- C- Car Car
- r r r r r r lsb lsb
- l- l- l- l- l- l- erg erg
- b b b b b b A /S A
- e- e- e- e- e- e- /S
og g g g g g
- A A A A A A
- /S /S /S /S /S /S
e
-
s
- H1 H1
-
K
-
-
-
-
-
-
n
2010 2009
Bever- Other Bever- Other
ages activities Total ages activities
Total
- 28, 947 - 28,947 29,409 -
29,409
-
t
Operating profit before 5,001 -19 4,982 4 ,496 - 53 4,44
3
special items
- n- n- n- n- n- n- net net 354 - 354 - 191
- -191
pt t t t t t
-
-
i
-
l
Financial items, net - 804 -13 -817 -1,45 4 4 -1,45
0
- tax 4,551 -32 4,519 2 ,851 - 49
2,80 2
-
-
-
i
t
-
-
-
-
-
e
- tax -1, 128 13 -1,115 - 823 10
-813
-
r
-
o
-
-
t
-
-
n
Con soli dat ed prof it 3,42 3 -19 3,404 2 ,028 - 39 1,98
9
Attributable to:
Non-controlling interests 301 - 301 261 -
261
- in in in in in in in in 3,12 2 -19 3,103 1 ,767 - 39
1,72 8
hC- C- C- C- C- C- Car Car
- r r r r r r lsb lsb
- l- l- l- l- l- l- erg erg
- b b b b b b A /S A
- e- e- e- e- e- e- /S
og g g g g g
- A A A A A A
- /S /S /S /S /S /S
e
-
s
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 25 of 31
NOTE 3
Segment reporting by quarter
DKK
millionQ3Q4Q1Q2Q3Q4Q1Q2
2008 2008 2009 2009 2009 2009
2010 2010
Net revenue
Northern and Western Europe 10 ,804 8,915 7,200 1 0,705 10 ,110 8,451
7,309 1 0,199
Eastern Europe 6,661 4,616 3,466 5,84 1 5,13 5 4,103
2,386 6,29 4
Asia 932 984 1,074 1,04 9 1,06 0 1,041
1,234 1,49 2
Not allocated 46 9 46 28 52 21
44 -11
Beverages, total 1 8,443 1 4,52 411 ,786 1 7,62316 ,357 13 ,61610
,97317 ,974
Other activities - - - - - -
- -
Tot al 1 8,44 3 1 4,52 411 ,786 1 7,62316 ,357 13 ,61610
,97317 ,974
Operating profit before
special items
Northern and Western Europe 1,401 847 140 1,740 1,70 0 657
406 1,89 2
Eastern Europe 1,637 798 695 1,952 1,55 0 1,092
321 2,27 6
Asia 145 125 155 167 197 147
231 299
Not allocated -243 -36 3 -169 -184 -10 8 -271
-230 -194
Beverages, total 2,940 1,407 821 3,675 3,33 9 1,625
728 4,27 3
Other activities 114 -21 -33 -20 -35 18
7 -26
Total 3,054 1,386 788 3,655 3,30 4 1,643
735 4,24 7
Sp ecia l item s, -169 -1,3 44 -107 -84 -18 0 -324
349 5
Financial items, net -893 -1,2 81 -904 -546 -76 7 -773
-515 -302
Profit before tax 1,992 -1,2 39 -223 3,025 2,35 7 546
569 3,95 0
Corp orat ion -583 1,522 65 -878 -68 3 -42
-48 -1,067
Con so lid ated 1,40 9 283 -158 2,147 1,67 4 504
521 2,88 3
Attributable to:
Non-controlling interests 188 172 54 207 183 121
50 251
Shareholders in Carlsberg A/S 1,221 111 -212 1,940 1,49 1 383
471 2,63 2
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 26 of 31
NOTE 4
Special items
DKK million
H1 H1 2009
2010 2009
Special items, income:
Gain from sale of Elidi s
7 4 - -
Value adjustment on step acquisition of subsidiary
3 90 - -
Total
46 4 - -
Special items, cost:
Gai n on sa le of Bra uns chwe ig Brew ery and fig hter bran d act ivit ie s,
Carlsberg Deutschland
- - 49
Impairment of finite trademarks
- - -37
Restructuring of Leeds Brewery, Carlsberg UK
-13 - -67
Relocation costs, termination benefits and impairment of non-current as set s
in conn ect ion wit h new prod uct ion st ruct ure in Den mar k
-22 - 20 - 40
Ter mi nati on be- non -cu rren t
e
fit
s
in co st ruc tur e at
- -17 - 20
nn-
ct
ion
Provision for onerous malt contracts, including reversal of unused provision
from previous year
-7 - -175
Termi nation be- with
ef-
ts
Operational Excellence Programmes
-8 - -31
Ter mi nati on be- wit h rest ruc tur
e ing of
fit
s
logistic andUK
-15 - 31 - 34
ad-
in-
st-
at-
on,
Ca-
ls-
erg
Ter mi nati on be-
-1 3 -17 - 56
e
fit
Ter mi nati on be- with
e
fit
Brasseries Kronenbourg, France
- -49 -95
Ter mi nati on be- wit h rest ruct
uri
e ng,
fit
Carlsberg Deutschland
- - -72
Restructuring, Mythos Greece
-6 - -
Ot her resothe r ent iti es
-26 - 40 -100
tr
uct
ur-
n g
co-
t s
etc
.,
-
Integration costs related to acquisition of part of the activities in S&N
-17 - 17
Total
-1 10 -191 -695
Sp ecia l item s, net
3 54 -191 -695
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 27 of 31
NOTE 5 (PAGE 1 OF 2)
Debt and credit facilities
DKK million 30 June 2009
30 June 2010 DKK million
Non-current borrowings:
Is su ed bon ds 14, 329 7,27 8
Bank borrowings 20,409 12,122
Mortgages 1,986 913
Lease liabilities 14 53
Other non-current borrowings 241 184
Total 36,979 20,551
Current borrowings:
Bank borrowings 1,189 1,66 2
Lease liabilities 14 20
Ot her cur ren tbor row ing s 528 944
Total 1,731 3,03 1
Tot al non -cu rren t and c urr ent- 38, 710 23,582
-
-
r
-
-
i
-
-
s
Cash and cash equivalents -2,503
Net financial debt 36,207
Other interest bearing assets -908
Net interest bearing debt 35,299
All borrowings are measured at amortised cost. However, fixed-rate borrowings
swapped to floating rates are measured at fair value. The carrying amount of
these borrowings is DKK 3,213m
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 28 of 31
NOTE 5 (PAGE 2 OF 2)
Debt and credit facilities
DKK million
Time to maturity for 30 June
2010
non-current
borrowings:
1-2 years 2-3 years 3-4 years 4-5 years > 5 years
Total
Issued bonds 2,252 1,823 7,404 - 2,850
14,329
Ba nk borr owi ngs 715 18,991 405 298 -
20,409
Mortgages* - - - - 1,986
1,986
Other non-current 237 - - 18 -
255
borrowings and leases
Tota l 3,2 04 20,8 14 7,80 9 316 4,83 6 36
,979
DKK million Net finan- Inter est*
Int ere st cial debt Floa tin g Fixe d Flo atin g Fixe
d %
%
EUR 31,806 11,722 20,08 4 37%
63%
DKK 1,927 1,92 7 - 100%
0%
Ot her cu rre nc ies 2,4 74 651 1,823 n/a
n/a
Total 36,207 14,300 2 1,907 39%
61%
* After interest rate
swaps
DKK million
Commited credit facilities* 30 June 2010
Less than 1 year 8,194
1 to 2 years 3,881
2 to 3 years 27,340
3 to 4 years 7,809
4 to 5 years 316
Mor e than 5 ye ars4,8 36
Total 52,376
Short term 8,194
Long term 44,182
* Defined as short term borrowings and long term committed credit facilities
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 29 of 31
NOTE 6
Net interest-bearing debt
DKK million Q2Q2H1H1
2010 2009 2009
Net interest-bearing debt is calculated as follows:
Non-current borrowings 36,979 44,528
36,075
Cu rren t bor rowi ngs 1,7 31 1,48 2
3,32 2
Gr oss int eres t-b eari ng 38,7 10 46,010
39,397
Cash and cash equivalents -2,503 -3,971
-2,734
Loans to associates -13 - 3
-36
On-trade loans -2,147 -2,307
-2,143
les s non- inte res t-b ear - 1,3 07 1,47 7
1,36 8
ing -
r
-
i
-
n
Other receivables -1,613 -1,861
-1,533
les s non- inte res t-b ear - 1,5 58 1,46 9
1,36 0
ing -
r
-
i
-
n
Net interest-bearing debt 35,299 40,814
35,679
Changes in net interest-bearing debt:
Net interest-bearing debt at beginning of period 37,102
45,839 35,6 79 44,156 44,156
Cash flow from operating activities - 4,858 -6,
201 -4,748 -5,968 -13, 631
Cash -
-
-
w
-
-
-
m
-
-
-
-
-
-
-
-
g
-
-
-
-
-
-
-
-
-
-
,
-
-
-
l
-
-
-
-
-
-
-
-
-
-
n
of entities 1,58 2
1,018 1,798 1,85 6 3,17 7
Ca sh 284
4 507 12 -95
Dividend to shareholders and non-controlling interests 521
294 1,068 830 846
Acquisition of non-controlling interests 56
- 56 54 286
Acq uisi tio n/di spos al 1
- 19 - 6
Acquired net interest-bearing debt from acquisition/
disposal of entities -
4 36 4 45
Change in interest-bearing lending - 121
7 67 62 -
Effects of currency translation 682 -24
0 7 23 -262 562
Other 50
89 94 70 327
Total change - 1,803 -5,
025 -380 -3,342 -8,477
Net interest-bearing end of period 35,299
40,814 35,2 99 40,814 35,679
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 30 of 31
NOTE 7
Acquisition of entities
DKK million
Total
Acquired Car ls
ber
g
Acqui red entiti es Acqu isitio n Main acti vity Cost interest inte
re st
date
Xinjiang Wusu 1 January '10 Brewery 228 4.83%
64.95%
Fair value of consideration paid for acquired interest 228
Fair value of previously held interest
660
Fair value of non-controlling interest 385
Fair value of entity acquired in stages, total 1,273
Fair
value at
DKK million acquisition
Intangible assets 167
Property, plant & equipment 335
Inv ent ori es 124
Loans & receivables, current 6
Cash & cash equivalents 13
Provisions, excl. of deferred tax -130
Deferred tax assets & liabilities, net -2
Borrowings -9 2
Tra de pay abl es othe r -316
Total net assets 105
Fair value of entity acquired in stages, total 1,273
Goodwill total
1,168
Goodwill is attributable to:
Carlsberg interest 820
Non-controlling interest 348
Goodwill total 1,168
Elements of cash consideration paid
Cash 228
Cash and cash equivalents, acquired* -5
Total 223
*Acquired cash only comprise the additional consolidated share (approx. 40%) in
the step acquisition due to change from pro-rata consolidation to full
consolidation.
In Q1 2010, Carlsberg gained control of Xinjiang Wusu Beer Group through a
business combination achieved in stages (step acquisition). The shareholdings
held before obtaining control has been recognised at fair value with the fair
value adjustment, DKK 390m, recognised in special items. The purchase price
allocation of the fair value of identified assets, liabilities and contingent
liabilities in the acquisition is still ongoing and has not yet been completed.
Therefore, adjustments to all items in the opening balance sheet may be made.
Accounting for the acquisition will be completed within the 12 month period
required in IFRS 3.
www.carlsberggroup.com
Company announcement 10/2010
17 August 2010
Page 31 of 31
This step acquisition is a natural step for Carlsberg and in line with the
strategy of obtaining full control of key operating activities. The preliminary
calculation of goodwill represents staff competencies as well as the positive
growth expectations. Goodwill related to the non- controlling interest's share
of Xinjiang Wusu Beer Group has been recognised as part of goodwill.
The purchase price on the acquisition of part of the activities in S&N has been
adjusted by DKK 284m as a result of allocation of debt according to agreement.
The adjustment was recognised as goodwill. The purchase price is expected to be
further adjusted depending on the final allocation of debt according to
agreement.
www.carlsberggroup.com
