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Carlsberg has upgraded its full-year earnings expectations after posting a 5.1% rise in organic net revenue in the first half of the year,

Organic net revenue growth of 5.1% was boosted by 7.6% organic growth in the second quarter, though reported net revenues were down 0.7% over the six-month period to DKK30.97bn despite 2.9% reported revenue growth in the second quarter.

Organic growth was driven by “solid” price/mix improvement of 2%, which grew across all regions.

Total organic volumes were up 3.4%, with 5% growth coming in the second quarter.

Of Carlsberg’s kery brands, Tuborg volumes growth 8%, Carlsberg was up 4%, Grimbergen up 11% and 1664 Blanc up 55%.

Craft & speciality volumes were up 26%, while alcohol-free brew volumes in Western Europe also grew by 26%.

Its cost efficiency programme Funding the Journey is “progressing well”, and total net benefits now expected to exceed the previously forecast DKK 2.3bn.

Based on the strong H1 performance, the upgrade of the expected Funding the Journey benefits and a good start to Q3, we adjust our earnings expectations upwards to high-single-digit percentage organic growth in operating profit (previously mid-single-digit).

Additionally the currency impact on profits is expected to be around DKK425m, down from the previously forecast DKK550m.

In the first half it reported operating profit growth of 14.2%, which translates to reported growth of 6.0% to DKK4.4bn.

Gross margins improved by 90bp and operating margin also improved by 90bp to 14.1% with margin expansion in all three regions.

Adjusted net profits grew by 9.6% to DKK2.5bn, with reported net profit up 7.2% to DKK2.47bn

CEO Cees ’t Hart commented: “We delivered strong results for the first six months of 2018 with healthy top-line growth, margin improvements across the regions, strong cash flow and continued debt reduction.

“We’re pleased to be able to adjust our earnings outlook upwards. This is a proof point that our SAIL’22 investments support our ambition of sustainable top-line growth.”

Carlsberg shares are up 3% in morning trading to DKK786.40.

Morning update

German consumer goods group Henkel (HEN) has downgraded its full year earnings expectations despite a strong first half performance as the impact of currencies is expected to hit its annual results.

Its sales increased to new high of €5.14bn, representing organic growth of 3.5% in the first half and up 0.9% on a reported basis as currencies dragged back headline results.

The contribution from acquisitions and divestments amounted to 3.5%, though currency effects had a negative impact of 6.1% on sales.

Its Adhesive Technologies business unit reported a very strong organic increase in sales of 5.2%. In the Beauty Care business unit, organic sales were 0.4% above the level of the prior-year quarter. The Laundry & Home Care business unit reported a solid increase in organic sales of 2.9%.

Sales growth was also supported by a double-digit increase in digital sales on group level, driven by particularly strong performance in the consumer business units.

Emerging markets again made an above-average contribution to the organic growth of the group, with a very strong increase in organic sales of 5.4%. Mature markets achieved good organic sales growth of 2.2%, though Western Europe sales were up just 0.1% while North America grew by 4.9%.

Its EBIT reached new high of €926m, growing 1.8%, while EBIT margin improved by 20bp to 18%.

Henkel has updated its full year outlook, reflecting stronger headwinds from currencies and material prices, expecting earnings per share growth of between 3%-6%, which is down from its previous expectation of 5%-8%.

Organic group sales growth remains in the 2%-4% range, which EBIT margin is expected to be 18%, previously “more than 17.5%”.

Henkel CEO Hans Van Bylen commented: “Driven by strong organic growth, Henkel delivered a good development in the second quarter despite significant negative currency effects and higher material prices. We increased quarterly sales to an all-time high, further improved our adjusted EBIT margin and achieved the highest quarterly adjusted earnings to date.”

“We achieved organic sales growth across all regions, with a very strong performance in emerging markets and a good development in mature markets. Our North American consumer businesses returned to growth with service levels back to normal.”

“As in the first quarter, we were confronted with significant currency headwinds and increasing material prices in the second quarter. Currencies negatively impacted our reported sales with 6.1% or about €310m. Our operating profit and earnings per share were also affected by currencies. Excluding the impact of currency effects, we delivered a strong operational EPS increase of 7.7%.”

Henkel shares have dropped 3.4% to €103.85 so far this morning.

In the UK, the FTSE 100 has recovered 0.2% back to 7,515.6pts.

Risers include McColl’s (MCLS), up 3% to 134.9p, British American Tobacco (BATS), up 1.4% to 4,145p, and Majestic Wine (WINE), up 1.3% to 415.4p.

Fallers so far include Reckitt Benckiser (RB), down 0.7% to 6,738p, FeverTree (FEVR), down 0.6% to 3,433p and Hilton Food Group (HFG), down 0.4% to 950p.

Yesterday in the City

The FTSE 100 fell to its lowest level since early May yesterday, plunging 1.5% to 7,497.9pts as concerns over Chinese growth, the Turkey currency crisis and escalating tensions on trade all weighed on UK shares.

There were some big grocery fallers, most notably Greencore (GNC), which continues its tough 2018 by dropping 6.4% yesterday back to 166.8p as fears over the performance of its US business and the structural headwinds facing its UK sandwich sales continue to weigh on the shares.

Greencore shares are now down by 16.6% over the past year.

There were a number of FTSE 100 fallers, including Ocado (OCDO), down 2.9% to 1,016.5p, Tesco (TSCO), down 2.1% to 254.5p, Associated British Foods (ABF), down 2.1% to 2,315p and British America Tobacco (BATS), down 2% to 4,088p.

Also falling were Diageo (DGE), down 1.4% to 2,764.5p and Sainsbury’s (SBRY), down 1.4% to 329.6p.

Outside the FTSE 100, fallers included McBride (MCB), down 2.5% to 135.2p, McColl’s (MCLS), down 2.2% to 131p, Glanbia (GLB), down 1.9% to €14.70, TATE & Lyle (TATE), down 1.7% to 630.6p and WH Smith (SMWH), down 1.7% to 1,952p.

The day’s few risers included C&C Group (CCR), up 1.2% to €3.45, Domino’s Pizza Group, up 0.9% to 284p and Premier Foods (PFD), up 0.8% to 43.4p.

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