Denmark: Carlsberg Reports Billion-Dollar Loss

Carlsberg Group unveiled its financial results for the fiscal year 2023, revealing a staggering billion-dollar loss following the cessation of operations in Russia, triggered by a decree from Kremlin chief Vladimir Putin.

Despite a notable uptick in revenue compared to the previous year, with figures rising from DKK 70.3 billion to DKK 73.6 billion (EUR 9.9 billion euros), the discontinuation of Carlsberg's Russian business segment left a glaring deficit on the balance sheet. The company reported a net loss of DKK 40.8 billion (EUR 5.5 billion euros), largely attributed to significant write-downs incurred in the process.

Carlsberg faced a tumultuous ordeal beginning in March 2022, shortly after Russia's invasion of Ukraine. The company swiftly announced its intent to fully divest from the Russian market, particularly focusing on offloading its interests in the Baltika breweries. However, the situation took an unexpected turn in the summer of 2023 when Carlsberg found a buyer (, 23.6.2023), only to have their plans thwarted by Putin's decree, effectively nationalizing the breweries without prior consultation with Danish authorities (, 16.7.2023). Baltika, recognized as Russia's premier brewer, fell under state control as a result.

The group witnessed a slight decrease in organic volume development, down by 0.5%. Notable variances were observed across different regions, with Asia showing a robust growth of 3.7%, while Western Europe experienced a decline of 2.3% and Central & Eastern Europe saw a more pronounced decrease of 4.0%.

Premium volume demonstrated a modest growth of 1%. Regarding the total volume growth of international brands, Tuborg and 1664 Blanc exhibited positive trends with increases of 3% each, while Carlsberg's volume remained unchanged. Brooklyn showed an impressive surge of 34%, whereas Somersby experienced a slight decline of 6%.

Furthermore, there was a notable uptick of 3% in alcohol-free brews, indicating a growing consumer interest in this segment.

The company saw a robust organic revenue growth of 9.2%, accompanied by a reported revenue growth of 4.7% amounting to DKK 73,585 million. Notably, organic revenue per hectoliter surged by 10%, with contributions from all regions.

In terms of organic operating profit, there was a commendable growth of 5.2%. This growth in operating profit reflects the substantial revenue growth, albeit partially offset by cost inflation and increased commercial investments. The reported operating profit before special items, however, experienced a decline of -3.2%, reaching DKK 11,105 million, primarily due to currency fluctuations.

Adjusted net profit for continuing operations stood at DKK 7,425 million, reflecting a decrease of 5%, driven by higher finance costs and currency movements. Adjusted earnings per share for continuing operations were reported at DKK 54.6, representing a 2% decrease.

Despite these fluctuations, the company maintained a healthy free operating cash flow of DKK 7,469 million.

Overall, the company recorded a revenue growth of 4.7 percent. Looking ahead, Carlsberg maintains a positive outlook, projecting annual revenue growth of 4 to 6 percent in the long term.

Following the release of its financial results, Carlsberg's stock witnessed a temporary surge of 4.2 percent on the Danish stock exchange, reaching DKK 943.

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