Carlsberg Says It Expects Its Operating Profit To Grow 3%-10% In 2021 After Recording Q4 2020 Sales Slightly Below Expectations

By Dave Simpson
Carlsberg Says It Expects Its Operating Profit To Grow 3%-10% In 2021 After Recording Q4 2020 Sales Slightly Below Expectations

Carlsberg said on Friday February 5 that it expects its operating profit to grow between 3% and 10% in 2021, after recording fourth quarter sales slightly below expectations.

The outlook follows a bruising 2020.

Its "on-trade" business, which covers sales in bars, restaurants and nightclubs, dropped by more than 20% last year due to lockdown curbs. Off-trade sales in stores grew by mid-single digit percentages.

Carlsberg chief executive Cees 't Hart said that the first quarter of this year will continue to be challenging for its on-trade business, but that the company expects a gradual improvement in the second quarter and for most restrictions to be lifted by summer.

"While the pandemic is not yet behind us and we don't know how long it will remain a challenge in 2021, we believe that Carlsberg will emerge even stronger from the crisis," he added.


"The guidance we provide is broader than usual, reflecting these uncertainties," he said, adding that that is partly due to uncertainty over whether the European soccer championship, which has already been pushed back from 2020, will go ahead as planned.

"It's not a secret that championships always help support volume development," he told Reuters.

Sales in the fourth quarter came in at 12.5 billion Danish crowns ($2.01 billion), which is just below the 13.1 billion that was estimated by analysts in a Refinitiv poll.

Overall for 2020, beer sales suffered during the pandemic and Carlsberg saw its annual organic revenue decline by 8.4% to its lowest since 2007, while volumes shed 3.8%.

But annual operating profit declined by just 3.1% to 9.7 billion crowns - above analysts' forecast of 9.42 billion - mainly driven by western Europe, its biggest market, with both Asia and Eastern Europe seeing growth.


Carlsberg said that it will propose a dividend of 22 crowns per share, a 5% increase, and will launch a 750 million share buyback programme running until April 23.

Its shares were up 3% in early morning trade on Friday January 5.

"The sooner [COVID-19] restrictions are lifted, the better it is for Carlsberg," Jyske Bank analyst Henrik Hallengreen Laustsen told Reuters. Laustsen considered the company's guidance "broad and slightly conservative, as expected".

Carlsberg also said that it cut travel, entertainment and marketing costs in 2020. Its operating margin rose to 16.6%, up from 15.9% in 2019. Hart said that advertising costs this year could return "more or less" to the levels of 2019.


Japanese drinks giant Kirin said on Friday January 5 that it will scrap a beer alliance with a conglomerate linked to the Myanmar military after its army staged a coup.


Carlsberg said that its brewery in Myanmar, which is a joint venture with a family with no ties to the military, is running without disruptions, but at slightly lower capacity.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.