Carlsberg cuts 2011 outlook on weak Russia

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Danish brewer Carlsberg on Wednesday posted a drop in second-quarter profit and more than halved full-year growth prospects as drinkers in its key Russian market struggled to absorb higher beer prices.

The world’s fourth-largest brewer said it now saw full-year adjusted net profit growth of 5-10 percent, against previous guidance for more than 20 percent growth.

It also cut its outlook for 2011 beer volume growth in Russia, which accounts for about 40 percent of Carlsberg’s total beer sales.

“Second-quarter performance in Russia has been below expectations,” said Chief Executive Jorgen Rasmussen in the statement.

“The recovery in the beer category is taking longer than we anticipated as the Russian consumer adapts to the exceptional price increases of around 30 percent undertaken during the last 18 months,” Rasmussen said.

“This impacts negatively our Russian 2011 profits and is the driver behind our revised 2011 outlook,” Rasmussen said.

Carlsberg said it sees Russian beer volume growth at a low single-digit percentage figure from a previous forecast of between 2 and 4 percent this year. The Russian market declined by about 2 percent in the second quarter, it said.

Unfavorable weather during the second quarter also hit beer consumption, the brewer said.

“I would not have thought that Carlsberg would have to downgrade its outlook due to this,” Nymann said, adding he had expected it would have been easier to get price increases through in Eastern Europe.

“I’m confident that our Russian business will return to growth,” Rasmussen said. “At the same time, I’m pleased with the performance of the rest of the Group.”


Beer markets in Northern and Western Europe grew slightly for the first six months. In Asia most beer markets reflected growth of mid- to high single-digit percentages.

For the Copenhagen-based brewer of Tuborg, Baltika and Carlsberg beers, northern and western Europe account for about 40 percent of total beer sales and Asia about 20 percent.

“It looks good for the business in northern and western Europe, and in Asia which is seeing strong growth in China,” Imsgard said.

Second-quarter operating profit fell to 3.70 billion Danish crowns ($715 million) from 4.24 billion in the same quarter last year, missing analysts’ average estimate of 4.34 billion forecast in a Reuters poll.

Sales rose 4.3 percent to 18.74 billion, in line with a 18.73 billion average forecast.