Carlsberg has hiked its profit expectations after “an exciting year” of volume growth, despite sales being held back by bad weather in Europe.

The brewer, which is in the midst of a £3.3bn takeover of Britvic that investors initially greeted with scepticism, saw organic volumes increase by 1.4% in the first half of 2024.

Overall volume growth was driven by a 1.9% rise in Asia and a 4.5% jump in central and eastern Europe and India, while western Europe fell back by 1.7%.

Growth was underpinned by the group’s premium brands, which registered a volume increase of 4%. Its ‘Beyond Beer’ strategy also made progress, with the drinks outside its core offering growing by 4% and alcohol-free brews up 6%.

The uplift on headline volumes helped organic revenues grow by 3.9% in the half, with reported sales up 2.6% to DKK 38.8bn.

It also made progress on the bottom line, with reported operating profits increasing 1% to DKK 6.3bn, driven by “solid gross profit improvement” and partly offset by an increase in marketing investments of almost 20%.

However, net profits fell 4.2% to DKK 3.7bn as the group absorbed higher financial costs.

Following the strong performance, Carlsberg upped its organic operating profit growth forecasts from the range of 1%-5% to 4%-6%.

CEO Jacob Aarup-Andersen hailed an “exciting year”, with the launch of a refreshed strategy, higher growth ambitions and agreement for the acquisition of Britvic. “These major events will support the long-term health of our business, our brands and our long-term growth ambitions.”

Bernstein said recent share price weakness, linked to a mixed response to its Britvic bid, has been “exaggerated”. “Even if one is sceptical about the Britvic deal, an almost 20% derating in less than two months seems hard to justify,” the broker stated. “To rework a Carlsberg strapline, probably the best entry point you’re going to get.”

Jefferies agreed the shares remain undervalued, but argued “concerns around delivery of the medium-term growth framework of 4%-6% are weighing on the shares”.

“The weak 2Q in Europe represents one area of investor concern. However, that soft trading in June is not unique to Carlsberg and that performance should be better in the second half.”

Carlsberg shares fell back 4% on the update to DKK 772 and are down 17.5% since news of its approach for Britvic broke in late June.

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