Carlsberg raises toast to strong Asian sales

Carlsberg upped its full-year outlook on Wednesday, after strong demand in China helped mitigate the hit from lockdown restrictions elsewhere in the world.

Updating on trading for the three months to 31 March, the Danish brewer reported organic volume growth of 11.5% and organic revenue growth of 3.8%, ahead of analyst expectations.

Within that, revenues in western Europe fell 14.9%, but rocketed 30.4% in Asia thanks to more than 50% organic volume growth in China. In central and eastern Europe, revenues were ahead 3.1%.

As a result, full-year operating profit is now expected grow by between 5% and 10%, compared to the 3%-10% previously forecast, the firm confirmed.

Cees ‘t Hart, chief executive, said: “The group has had a strong start to the year in Asia and central and eastern Europe, while western Europe was significantly impacted by the extensive lockdown and restrictions across the region.

“With Covid-19 continuing to be a challenge in many of our markets, our geographical exposure showed its strength, as strong volume growth in several markets across all three regions more than offset challenging circumstances in other markets.”

As at 1300 GMT, shares in Carlsberg were 1% higher at 1,078.5 DKK. The stock is currently trading at a record high, having breeched 1,000 DKK earlier this month.

Carlsberg also announced on Wednesday it was launching a second quarterly share buyback programme, of 1bn DKK.

Bank of America, which has a ‘buy’ rating on the stock, said: “With an attractive geographic footprint – Asia is almost 40% of earnings before interest and tax – and management’s relentless focus on costs and cash, we think Carlsberg will continue to deliver close to the top of the range (in large-cap staples) earnings per share growth, around 9% CACG in 2020 – 2024. On 8% PE discount to staples we don’t think this is priced in.”