Carlsberg raises guidance after volumes bounce back in Q3

Carlsberg has raised its full-year earnings guidance after its performance improved in Q3 compared with the pandemic lows of Q2.

The Danish brewer posted a decline of 6.8% in its third-quarter reported revenues to DKK 17.3 billion ($2.73 billion approx.), an improvement on the 16.9% fall seen in Carlsberg’s second quarter.

In the six months ended 30 June, Carlsberg’s volumes declined organically by 7.7%; however, these bounced back in Q3 with 2.4% growth on an organic basis. The company’s beer volumes rose 3.2% in Q3, while non-beer declined by 1.9%.

Carlsberg’s international premium brands, craft & speciality (+12%) and alcohol-free brews (+29%) saw solid growth for Q3. 

Russia – where volumes rose 19% – China, Bulgaria and the UK were among the markets that delivered the strongest growth for Carlsberg in the quarter.

The company now expects 2020 organic operating profit – which excludes the effects of any acquisitions – to decline by a mid-single-digit percentage. This compares with previous guidance of a high-single-digit decline.

The brewer says that the upgrade was due to strong performance in Q3, continued positive volume trends in Russia and China at the beginning of Q4, and the effects of planned cost reductions.

The move came in spite of ‘current uncertainty’ in Western Europe where governments are responding to increasing Covid-19 infection rates by implementing new restrictions.

“We’re satisfied with our Q3 performance and the fact that we were able to deliver more than 2% volume growth, including strong figures for craft & speciality and alcohol-free brews,” said Carlsberg CEO, Cees ’t Hart.

“Our earnings upgrade is the result of solid execution and our ability to adjust our business and costs to changing market conditions.

“The pandemic remains a concern for us, impacting our people, our customers and our businesses in many of our markets.

“…we’re continuing to adapt our organisation, processes and structures to a new market reality, including changed consumer preferences and a temporarily reduced level of on-trade activity.”