Carlsberg Expects Profit To Fall 10%-15% As Lockdowns Impact Sales
Carlsberg expects organic operating profit to decline 10%-15% this year, as lockdowns continue to impact sales in the second half of the year in its key markets of China and Western Europe.
The world's third-biggest brewer after Anheuser Busch InBev and Heineken said the Chinese market, its biggest by volume, started the third quarter well but that sales had been hurt more recently as parts of the country had been subject to renewed lockdowns.
In Western Europe, sales at bars and restaurants were gradually recovering but were not expected to return to return to normal levels this year, it said.
Carlsberg said it decided not to go ahead with the planned second tranche of a share buyback.
Chief Executive Cees 't Hart said in a statement that the company has reinforced its focus on costs, cash and liquidity.
“All our markets have to a greater or lesser extent been impacted by the COVID-19 pandemic, but the organisation and our people have shown tremendous resilience and flexibility, allowing us to stabilise the business, help society and support our customers," he said. "To mitigate the impact of weaker volumes and mix, we’ve reinforced our focus on costs, cash and liquidity.
“Recognising that we’re faced with a new market reality, including changed consumer preferences and a reduced level of on-trade activity, we’re taking measures to adapt our business accordingly.”
Carlsberg suspended guidance in April, after sales at bars and restaurants especially in Western Europe were severely impacted as many countries were in lockdown.
The price/mix, which indicates whether the company sold more or less of its expensive beer, was minus 7% in the second quarter, it said.
Second-quarter sales fell 15% from a year earlier to 15.9 billion Danish crowns ($2.52 billion) on the back a fall in total volumes of 8%, it said.
Carlsberg posted preliminary figures last month for the first six months of the year.