Carlsberg 2017 results hit by struggling Russian beer market | Progresiv
Carlsberg saw its net sales shrink by 1.3% to 10.26 billion dollars in 2017 as it was hit by a struggling Russian beer market. 
The brewer’s operating profit was up by 7.7% on 2016 to 1.47 billlion dollars. It said that during the year group beer volumes declined organically by 3%, mainly impacted by the lower volumes in Russia. However, other beverages grew organically by 2%, driven by sales in the Nordics and Asia.
The Russian government has upped efforts to discourage heavy drinking. The sale of so-called PET bottles (plastic bottles larger than 1.5 litres) have been banned.
It is estimated that the Russian beer market declined by 4-5% in 2017, due to the PET bottle downsizing. However, Carlsberg said that its Russian business “delivered solid organic operating profit growth and a significant margin uplift in spite of the volume decline of 14%”.
In its Western Europe unit, operating profit was up 2.6% in the second half of the year, which was impacted by poor weather during summer. For the year, beer volumes declined by 1%.
In the UK, Carlsberg continued to focus on premiumising its portfolio. During the year it acquired Poretti and London Fields Brewery, as well as rejuvenated Carlsberg Export .
Finally, in its Asia business, net revenue for the year grew by 5%. Its international premium brands – Tuborg, 1664 Blanc and Somersby – all delivered strong growth in the region. It said Tuborg remains the main volume growth engine, supported by continued popularity in markets such as China and India.
For 2018, Carlsberg said it has the following priorities for the year: continued improvement in margins and operating profit in Western Europe; accelerating organic growth in Asia through premiumisation; and rebalancing the focus towards top-line growth in Eastern Europe.
Based on these priorities, the company expects to deliver mid-single-digit percentage growth in operating profit for the year. (www.foodbev.com)
