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Carlsberg has posted full-year organic operating profit growth of 5% despite a fall in sales volumes as the early benefits from its cost-cutting programme boosted earnings.
For the full-year 2016 Carlsberg posted organic net revenues growth of 2% to DKK62.6bn (£7.2bn).
That growth was driven by a 3% improvement in price/mix as total organic volume declined 2%, primarily driven by fewer volumes of margin-dilutive products.
It reported overall volumes growth in its major brands, with Tuborg up 9%, Carlsberg up 5% and Grimbergen up 11%.
Organic operating profit grew by 5% as DKK0.5bn of its expected DKK1.5-2bn of savings via its “Funding the Journey” efficiency programme boosted the bottom line.
Including currencies and disposals of businesses, operating profit was down 3% to DKK 8.2bn.
Operating margin improved by 30bp to 13.2%.
In 2017 Carlsberg said it expects to “deliver mid-single-digit organic operating profit growth and a further reduction in financial leverage”.
CEO Cees ’t Hart said: “2016 was a good year for the Carlsberg Group. We’re satisfied with our performance and the delivery of 5% organic growth in operating profit, a solid price/mix, strong cash flow and a further reduction in financial leverage.
“During the year, we took significant steps to become a more successful company. We launched our new strategy – SAIL’22 – and its priorities are now well integrated in our plans for 2017. In addition, Funding the Journey delivered benefits faster than anticipated for the year.
“In 2017, we’re determined to achieve a substantial proportion of the remaining Funding the Journey benefits, allowing us to grow earnings organically and invest in SAIL’22-related activities to support the future growth of the company.”
Morning update
Mondelez posted its full-year results last night, with a drop in earnings and revenues amid slowing category growth and “significant economic disruptions”.
Net revenues decreased 12.5% during the period, driven by coffee business transactions during the year, deconsolidation of the company’s Venezuelan operations and currency headwinds. Organic Net Revenue increased 1.3%.
Diluted earnings per share was $1.05, down 76%, due to the prior-year gain related to the coffee business transactions.
Operating income margin was 9.9%, down 20.1 percentage points, though adjusted operating income margin (adjusted for divestments) was 15.3%, up 230 basis points
Irene Rosenfeld, Chairman and CEO, commented: “We continue to make solid progress toward our near-term margin targets, while investing for long-term growth”
“Despite significant economic disruptions, political uncertainties and slower global category growth, we remain confident in and committed to our balanced strategy for both top- and bottom-line growth. Throughout the year, we continued to sharpen the focus of our portfolio, increase Power Brand investments and modernize our supply chain. These actions, together with our excellent cost discipline, position us well to deliver strong operating leverage that will drive sustainable value creation for our shareholders.”
In 2017 the company expects organic net revenue to increase at least 1% and adjusted operating income margin in the mid-16 percent range.
Mondelez shares were up 1.9% in after hours trading to $44.75.
On the markets in the UK this morning, the FTSE 100 is 0.3% down to 7,166.1pts.
Early risers include Majestic Wine (WINE), up 4.4% to 369.75p, Hilton Food Group (HIF), 2.5% up to 697.5p and Real Good Food (RGD), up 2.3% to 33.25p.
Fallers include Applegreen (APGN), down 2.5% to 392.5p, GlaxoSmithKline (GSK), down 0.8% to 1,549.8p and FeverTree Drinks (FEVR), down 0.8% to 1,330.75p.
Yesterday in the City
The FTSE 100 ended the day up 0.2% to 7,186.2pts, but was up to as high as 7,227pts before dropping back at the end of the day.
Sainsbury’s (SBRY) was the City’s winner from the monthly Kantar and Nielsen market share figures yesterday, with the supermarket ending the day up 2.4% at 266.2p.
The other supermarkets were also boosted by the first grocery market figures of 2016, with Morrisons (MRW) up 1.8% to 243.6p and Tesco (TSCO) up 0.3% to 193.7p.
Other risers included Dairy Crest (DCG), up 3.4% to 609p ahead of a scheduled market update tomorrow and TATE & Lyle (TATE), up 1.5% to 692.5p ahead of its own trading update tomorrow morning.
Greggs (GRG) was up 2.6% to 1,021p, Associated British Foods (ABF) was up 2% to 2,448p, Premier Foods (PFD) rose 3.9% to 40.25p and Finsbury Food Group (FIF), was up 3.5% to 118p.
The few fallers included Devro (DVO), down 2.5% to 176p, Science in Sport (SIS), down 2.3% to 85p and Greencore (GNC), down 0.5% to 245p.
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