News_Q3 2012_UK_WEB.pdf - Carlsberg Group

Content3123 Letter from the CEO4 THIRST FOR BEER6 L’art de vivre: Kronenbourg 1664 offers a taste of france8 Carlsberg holiday campaign brings joy and beer9 A Climpse of Carlsberg12 Interim results as at 30 september 201214 Key figures18 Income statement19 Statement of financial position20 overviewThe Carlsberg Group is one of the leadingbrewery groups in the world, with a largeportfolio of beer and other beverage brands.Our flagship brand – Carlsberg – is one ofthe best-known beer brands in the worldand the Baltika, Carlsberg, and Tuborgbrands are among the eight biggest brandsin Europe. More than 41,000 people workfor the Carlsberg Group, and our productsare sold in more than 150 markets. In 2011,the Carlsberg Group sold more than 115million hectolitres of beer, which is about34 billion bottles of beer.NEWS is published quarterly by Carlsberg in Danish and English. In case of any discrepancy between the two versions,the Danish version shall apply. Circulation: 4,400. (incl. Danish circulation). Editorial staff: Anne-Marie Skov (responsible),Iben Steiness, Gitte Sillemann and Jeanett Glenthøj. Layout and production: Kontrapunkt. Carlsberg A/S, CVR-NR. 61056416,Ny Carlsberg Vej 100, DK-1799 Copenhagen V, Tel: +45 33 27 33 00, E-mail: carlsberg@carlsberg.com, www.carlsberggroup.com.

4 NewsThirst for BeerPeople have been enjoying beer for millenniaand to make sure that this great tradition endures,Carlsberg has launched its “Thirst for Beer” initiative.As a key strategic project, Thirst for Beer is drawingon the strengths of the entire Carlsberg Groupto help grow the image of beer.Many factors influence the consumptionand perception of beer. Cultural shifts,new tax laws, societal attitudes andmarketing regulations all have an impacton consumer habits and attitudes. Whencombined, these factors may cultivatea negative image of beer, which may inreturn affect sales volumes, and in fact,the beer category is flat or shrinking inmany mature markets. As a response tothis and in close cooperation with otherglobal brewers and brewers’ associations,Carlsberg is working on promoting thereputation of beer in order to grow thebeer category and sustain the brewers’license to operate. The areas of cooperationinclude efforts to develop and manageself-regulation schemes and increaseawareness about beer and the brewers’contribution to the communities in whichthey operate.But Carlsberg has also launched its owninitiative, namely Thirst for Beer. Aimedat boosting the image and reputationof beer, Thirst for Beer addresses issueswhich affect everyone, from consumersto policymakers. “We want beer to becherished and appreciated by consumersand the wider stakeholder audience,”says Thirst for Beer Director MortenNielsen. “We want them to see it as theright choice for any occasion, such as theperfect accompaniment to a great mealor an evening with friends. We want themto recognise its quality when it’s brewedthe right way.”Targeting the categoryConsumers today are overwhelmed bychoices. In some markets, beer has lostground to wine, and in some markets,there is a misperception that drinking beeris unhealthy or irresponsible. “With theimage of beer eroding, it’s crucial that wealso focus on the category,” says Morten.The wine segment has had great successassociating wine with health benefits.“But it’s all just perception. There are nofacts to justify that wine is healthier thanbeer – and the beer category offers justas much variety.”By focusing on the wider beer categoryand not just on selected brands, Thirst forBeer is about reaching as many peopleas possible. “We need to get the facts outand profile beer as a refreshing, low-alcoholbeverage made from natural ingredientsand with a positive impact on healthwhen consumed in moderation,” saysMorten. “People have been brewing beerfor thousands of years. There are literallyhundreds of varieties, so there’s a perfectbrew for any occasion or meal.”Planting the seeds with a toolkitWhile Carlsberg cannot alter the perceptionof beer overnight, it can plant the rightseeds for change. “We’re trying to build abeer movement,” explains Morten, “andwe need everyone on board – friends,media, policymakers, experts and ofcourse all the employees of the CarlsbergGroup – so we’ve created a toolkit to helpus get there.”The toolkit is available for all Carlsberg’smarkets and is based on best practicesfrom around the world. It contains key factsabout beer, a guide to engaging with stakeholdersthrough both online and offlinemedia and ideas for creative execution.Tracking progressTo measure the advancement of beerconception among stakeholders and theefficiency of the Thirst for Beer initiative,Carlsberg will be assessing the attitudetoward beer on an annual basis. “We surveycustomers, consumers, stakeholdersand even policymakers to find out howCarlsberg is perceived and how we areseen as brewers – and to identify wherewe need to improve and where we aresucceeding in our efforts,” says Morten.Global action to reduce harmfuluse of alcoholIn addition to Thirst for Beer and the cooperationwith brewers and brewers’ associations, Carlsbergalso works in a broader context to promoteresponsible consumption of beer as a uniqueand refreshing drink of moderation. In October,the Group announced that it has teamed up witha group of global beer, wine and spirits producersto commit to joint actions to strengthen andexpand existing efforts and contribute to reducingthe harmful use of alcohol in five areas:• Reducing under-age drinking• Strengthening and expanding marketing codesof practice• Providing consumer information and responsibleproduct innovation• Reducing drinking and driving• Enlisting the support of retailers to reduceharmful drinkingTo emphasise our commitment to the five areas,Carlsberg will from 2013 report on how we areprogressing on the commitments.

Q3 November 2012 17Investments in H1 were higher due toEURO 2012 and marketing activitiesahead of the advertising restrictions inRussia as of 23 July.Apart from phasing of marketing investments,operating profit was negativelyimpacted by higher input costs, destockingin Q1, higher logistics costs and thesuspension of production in Uzbekistan.AsiaOur Asian beer markets continued theirstrong growth momentum with all marketsgrowing.Beer volumes increased organically by10% (Q3: 7%). Including acquisitions,beer volumes grew by 22% to 20.4m hl(Q3: 15%). Our volumes grew particularlystrongly in India, Cambodia, Vietnam,Laos, and Nepal.The positive acquisition impact was a resultof the increased ownership in Hue Brewery(Vietnam) and Lao Brewery (Laos) in 2011;in South Asian Breweries (India) in both2011 and 2012; and the Chongqing XinghuiInvestment joint venture in China in 2011.Other beverages grew significantly by 38%(18% organic) due to a strong performancein Laos and Cambodia.Two important commercial activities inAsia were the activation of EURO 2012and the rejuvenation of the Tuborg brand.The EURO 2012 was well leveragedacross the region and provided importantpromotional opportunities for theCarlsberg brand. The brand grew morethan 7% underpinned by commendableperformances in China, India, andMalaysia. The launch of Tuborg in Chinaand the introduction of the new 3G bottlein India were important milestones for theTuborg brand. The brand grew its volumesby nearly 60% across the Asian regionand accounted for more than 10% of theGroup’s Tuborg volumes.Our Chinese market share grew slightlydriven by the strong performance of ourinternational premium brands as we expandeddistribution of both the Carlsbergand Tuborg brands. Our overall Chinesevolumes grew organically by 5% (8%including acquisitions).Our businesses in Indochina continuedtheir very strong growth trend. Organicbeer volume growth in Indochina wasmore than 20% with all countries –Vietnam, Cambodia and Laos – deliveringstrong growth, mainly as a result ofstrong performances by the local powerbrands, Angkor and Beer Lao.In India, our volumes grew organically byapproximately 45%. The growth was drivenby the Tuborg and Carlsberg brands,with the rejuvenated Tuborg brand beinga particular driver. We now have a 7%market share in India. In early October,the Carlsberg Group expanded its positionin India through the acquisition of abrewery in Dharuhera (Haryana). It is theGroup’s sixth brewery in India, adding toour 5 breweries in Paonta Sahib, Alwar,Aurangabad, Kolkata and Hyderabad.The Asian region continued to deliver verystrong financial performance. Organicnet revenue grew by 19% (Q3: 17%) andreported net revenue (including currencyand acquisitions) grew by 38% (Q3: 32%).Operating profit grew organically by 10%(Q3: 11%) and with reported growth of36% to DKK 1,366m.ASIAQ3 Change ChangeDKK million 2011 Organic Acq., net FX 2012 ReportedBeer (million hl) 6.3 7% 8% 7.2 15%Other beverages (million hl) 0.5 17% 13% 0.7 30%Net revenue 1,805 17% 9% 6% 2,389 32%Operating profit 389 11% 11% 7% 502 29%Operating margin (%) 21.5 21.0 -50bp9 mths Change ChangeDKK million 2011 Organic Acq., net FX 2012 ReportedBeer (million hl) 16.7 10% 12% 20.4 22%Other beverages (million hl) 1.5 18% 20% 2.1 38%Net revenue 5,103 19% 13% 6% 7,029 38%Operating profit 1,003 10% 19% 7% 1,366 36%Operating margin (%) 19.7 19.4 -30bp

Q3 November 2012 19Statement of financial position30 Sept 30 Sept 31 DecDKK million 2012 2011 2011Assets:Intangible assets 91,554 86,451 89,041Property, plant and equipment 32,563 31,406 31,848Financial assets 8,528 8,342 8,039Total non-current assets 132,645 126,199 128,928Inventories and trade receivables 12,640 12,163 12,205Other receivables etc. 4,408 3,469 2,866Cash and cash equivalents 5,932 3,136 3,145Total current assets 22,980 18,768 18,216Assets held for sale 26 102 570Total assets 155,651 145,069 147,714Equity and liabilities:Equity, shareholders in Carlsberg A/S 71,372 64,495 65,866Non-controlling interests 3,447 5,356 5,763Total equity 74,819 69,851 71,629Borrowings 34,612 32,704 34,364Deferred tax, retirement benefit obligations etc. 15,314 14,002 15,178Total non-current liabilities 49,926 46,706 49,542Borrowings 4,928 4,415 1,875Trade payables 11,577 10,150 11,021Deposits on returnable bottles and crates 1,414 1,290 1,291Other current liabilities 12,968 12,623 11,528Total current liabilities 30,887 28,478 25,715Liabilities associated with assets held for sale 19 34 828Total equity and liabilities 155,651 145,069 147,714