Financial Data and Key Metrics - Organic revenue growth of 1.3% for Q3 and 3% year-to-date, driven by a 2% increase in revenue per hectoliter and a slight volume decline of 0.2% [6] - Year-to-date volumes grew by 0.8%, despite challenging consumer environments and weather impacts in Europe and Asia [7] - Reported revenue grew by 0.9% to DKK 20.5 billion, despite currency headwinds [8] Business Line Performance - Total premium beer portfolio grew by 3% year-to-date, with double-digit growth in most markets excluding China, France, and the UK [9] - Alcohol-free brews grew by 6%, with strong performance in Western Europe and CEE&I [11] - Beyond Beer category grew by 10%, driven by products like Garage and Wind Flower Snow Moon [11] - Soft drinks volumes grew by 4%, supported by Pepsi and Coca-Cola businesses in various markets [12] Regional Performance - Western Europe: Flat organic volume and revenue growth, impacted by challenging conditions in France and the UK [17] - Nordics saw 6% volume growth and 8% revenue growth, driven by premium and alcohol-free brews [19] - France faced a tough year with weak consumer demand and weather impacts [20] - UK performance was impacted by supply chain disruptions, but recovery is underway [21] - Asia: Organic revenue declined by 3.3%, with a 5.2% volume decline, particularly in China and Laos [24] - China volumes declined by 6%, outperforming the market decline of 7% [25] - Vietnam saw low single-digit volume growth and market share improvement [26] - Laos faced mid-single-digit volume decline due to weather and inflation [27] - CEE&I: Organic revenue grew by 9.8%, driven by 5.2% volume growth and 4% revenue per hectoliter increase [29] - India saw low-teens volume growth, with Carlsberg brand growing over 40% [30] - Ukraine delivered mid-teens volume growth across premium and Beyond Beer categories [31] Strategic Direction and Industry Competition - The Britvic acquisition is progressing, with expected closure in Q1 2025 [5][13] - Expansion of the PepsiCo partnership in Kazakhstan and Kyrgyzstan, with a new bottling facility investment of EUR 100 million [14][15] - Increased marketing investments to support long-term growth priorities [12] Management Commentary on Operating Environment and Future Outlook - Management remains cautious about the Chinese market for the second half of the year, with no significant improvement expected in Q4 [25][69] - The company maintains its full-year earnings guidance, expecting organic operating profit growth between 4% and 6% [32][33] - Management does not see structural changes in the European market, attributing current softness to cyclical factors [40][41] Other Important Information - The company expects a currency impact on operating profit of DKK -300 million, based on spot rates [34] - Marketing investments are expected to increase by high single digits, with a focus on cost management [33] Q&A Session Summary Question: Subdued volume growth in Europe and pricing environment [38] - Management believes the softness in Europe is cyclical, driven by high inflation and macroeconomic uncertainty, not structural [39][40] - Pricing actions will continue to cover cost increases, but the magnitude will be lower than in previous years [44][45] Question: China market performance and outlook [50] - China's price mix was flat year-to-date, with a slight decline of 1% in Q3, driven by mix rather than price [51][52] - Management does not expect significant improvement in Q4, with China contributing only 10% of annual business [68][69] Question: Supply chain disruption in the UK [60] - The UK supply chain issue impacted volumes and market share, but recovery is underway, with recent market share gains [64][116] Question: India performance and future changes [90] - India delivered strong growth, with Carlsberg brand growing over 40%, driven by existing team performance and capacity availability [93][94] Question: Vietnam and Laos performance [99] - Vietnam saw low single-digit growth in a stabilizing market, with market share improvements [101][102] - Laos faced mid-single-digit volume decline due to weather and inflation, but premium soft drinks showed growth [105] Question: Ukraine market dynamics [107] - Ukraine delivered strong performance with mid-teens volume growth, driven by premium and Beyond Beer categories [109] Question: UK budget impact [110] - The UK budget changes, including alcohol duty increases, were expected and have a small negative impact on the business [111]
Carlsberg(CABGY) - 2024 Q3 - Earnings Call Transcript