Heineken and Carlsberg have reported mixed fortunes for 2015, with the Dutch brewer increasing profits on the back of a focus on premium brands and its Danish counterpart slumping to a massive loss in the midst of a turnaround attempt.
Carlsberg increased full-year sales by 1% to DKK65.4bn (£6.8bn) on the back of strong growth in Asia offsetting more troubled markets in the UK, Russia and the Ukraine. The performance in Asia led to 5% organic growth for the fourth-quarter to DKK14.7bn (£1.5bn), beating analyst expectations.
However, the business reported a net loss for 2015 of DKK2.6bn (£270m) as it was hit by one-off costs of DKK8.7bn (£902m) as it embarked on its three-year ‘Funding the Journey’ restructuring programme, which included cutting 2,000 jobs from its global workforce.
Beer volumes declined by 7% in the UK, mostly the result of a delisting by Tesco last year, and by 14% in Eastern Europe where it is exposed to economic turbulence and political turmoil, with the Ukrainian hryvnia losing 36% of its value and the Russian rouble down by 25%.
Carlsberg said its price/mix improved in the UK, the revitalisation of the “Probably the best …” tagline had increased brand visibility and the restructuring was “progressing as scheduled”.
CEO Cees ’t Hart, who joined in June, added: “2015 was a mixed year for the Carlsberg Group. While our Asian business continues to perform strongly, our business in Western and Eastern Europe had a challenging year. As a consequence of the strong Asian results, however, 2015 marked the inflection point when the growth markets of Asia accounted for a larger part of the group than Eastern Europe.”
The group said it has “modest” expectations for 2016, which would be a year of consolidation, with the majority of the benefits from the turnaround not starting to come through till 2017 and another DKK1.5bn (£155m) of restructuring charges forecast.
In contrast, Heineken increased organic revenues by 3.5% to €20.5bn (£15.9bn) as its focus on premium brands paid off, with Desperados, Affligem and Sol Premium all recording double-digit growth.
Consolidated beer volume was up 2.3% in 2015, with positive growth in the Americas, Asia Pacific and Europe offsetting weaker volume in Africa, Middle East and Eastern Europe. The premium segment recorded volume growth of 3.5%, with brand’s volume jumping by double digits in Brazil, the UK, South Africa, and Mexico.
Underlying net profits for the year at the brewer rose 16% to €2.12bn (£1.65bn).
CEO and chairman Jean-François van Boxmeer said: “Our strong performance in 2015 reflects the successful execution of our strategy, as well as the relevance of our unique geographic diversity and our portfolio of premium brands, led by Heineken.
“In 2015, top and bottom-line growth was supported by increased investment in our brands, sustained innovation, and cost efficiencies.”
He warned there would be further volatility in emerging markets in 2016, coupled with deflationary pressures, but Heineken was confident of recording growth in sales and profits.
Shares in Carlsberg have jumped more than 4% to DKK568 as investors warmed to the fact growth in Asia was beginning to take pressure off the beleaguered Eastern European business. Heineken’s stock was flat after lunch, following an early rise, at €75.
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