Carlsberg As Class A · OMXCOP:CARL_A
Carlsberg As Class A — Q3 2002 Earnings Presentation
40 slides from Carlsberg As Class A's earnings presentation, Nov 7, 2002
Slide 1: The Carlsberg Group Q3 2002
The The Carlsberg Group Carlsberg Group Q3:2002 Q1 2002 Udkast af 05-02-2002 7 November 2002 1
Slide 2: Highlights
The Carlsberg Group Highlights • Operating profit amounted to DKK 3,263m against DKK 2,855m last year (+14%) • Growth across most geographic market segments • Carlsberg brand advanced 5% • Margin expansion in Northern and Western Europe • BBH adds to market leader position • Negative currency impact
Slide 3: Key Figures (Excl. one-off items) - P/L
The Carlsberg Group Key Figures (Excl. one-off items) - P/L DKK million Carlsberg Group Carlsberg Breweries 1 Jan - 30 Sept 1 Jan - 30 Sept 2002 2001 2002 2001 9 months 9 months Change % 9 months 9 months Change % Net revenue 26,922 25,699 5 26,922 25,699 5 Operating profit 3,263 2,855 14 3,122 2,65
Slide 4: Key Figures - Balance sheet
The Carlsberg Group Key Figures - Balance sheet DKK million Carlsberg Group Carlsberg Breweries 30.09.2002 31.12.2001 Change % 30.09.2002 31.12.2001 Change % Non-current assets 30,965 31,171 (1) 29,484 29,741 (1) Current assets 16,568 16,284 2 13,628 15,036 (9) Capital and reserves 18,054 19,158 (6)
Slide 5: Key Figures - Cash flow
The Carlsberg Group Key Figures - Cash flow DKK million 1 Jul - 30 Sept 1 Jan - 30 Sept 2002 2002 Cash flow operations 1,045 4,464 Investments (961) (2,797) Free cash flow 84 1,667 Financing 805 (867) Total cash flow 889 800 5
Slide 6: Carlsberg Breweries A/S Q3 2002
The Carlsberg Carlsberg Group Breweries A/S Q1 Q3:2002 2002 2001 Udkast 7afNovember 05-02-2002 2002 6
Slide 7: Highlights
Carlsberg Breweries A/S Highlights z Group EBITA +18% YTD, +6% in Q3 z Profit increase in Northern and Western Europe z Continued volume growth for BBH (+27% YTD, +14% in Q3) z Positive cash flow 7 7
Slide 8: Income Statement
Carlsberg Breweries A/S Income Statement 1 Jul - 30 Sept 1 Jan - 30 Sept in DKK million 2002 2001 Change 2002 2001 Change Net sales 9,399 9,458 -1% 26,922 25,699 +5 % EBITA 1,425 1,350 +6 % 3,122 2,651 +18 % EBITA-margin 15.2 % 14.3 % 0.9%-p 11.6 % 10.3 % 1.3%-p z Improved margins especially in West
Slide 9: Cash flow
Carlsberg Breweries A/S Cash flow DKK million Q3 YTD EBITA 1,425 3,122 Depreciation 656 1,939 Working capital -402 214 Interest, tax and other -804 -1,540 Operational cash flow 875 3,735 Capital expenditure and expansion investments -638 -2,216 Other -8 -551 Cash used in investment activities -646 -
Slide 10: Balance sheet
Carlsberg Breweries A/S Balance sheet DKK million 30 Sept 02 31 Dec 01 Non-current assets 29,484 29,741 Current assets 13,628 15,036 Total assets 43,112 44,777 Equity 14,181 14,839 Net interest-bearing debt 13,458 13,660 Capital Employed 31,058 31,596 ROCE 9,0% 10 10
Slide 11: Change in volume
Carlsberg Breweries A/S Change in volume 1 Jul - 30 Sept 1 Jan - 30 Sept Million HL 2002 2001 Change 2002 2001 Change Beer Northern and Western Europe 7.3 7.1 3% 20.2 19.7 3% Central and Eastern Europe 11.1 9.7 15 % 29.2 22.9 28 % Carlsberg Asia 4.1 2.8 49 % 11.0 8.1 35 % Total 22.6 19.6 15 % 60.5 5
Slide 12: Change in volume (cont.)
Carlsberg Breweries A/S Change in volume (cont.) z Beer volume continued to grow − Total volume +19% YTD − Carlsberg brand +5% YTD − In BBH volume growth ahead of competitors z Soft drink volumes are down in Q3 − Parallel import to Denmark − Increased focus on high-value segment in Sweden 12 12
Slide 13: Northern and Western Europe
Carlsberg Breweries A/S Northern and Western Europe 1 Jul - 30 Sept 1 Jan - 30 Sept DKK million 2002 2001 Change 2002 2001 Change Net sales 7,111 6,861 +4 % 20,128 19,153 +5 % EBITA 891 803 +11 % 1,878 1,647 +14 % EBITA-margin 12.5 % 11.7 % 0.8 %-p 9.3 % 8.6 % 0.7 %-p Volume (mill. hl of beer) 7.3 7
Slide 14: The Nordic area
Carlsberg Breweries A/S The Nordic area z Continued positive development in Norway and Finland − Driven by volume growth and favourable product mix effects z Profit growth in Carlsberg Sweden − Original cost synergy project following the merger has been completed − Further measures have been announc
Slide 15: UK
Carlsberg Breweries A/S UK z Total market development +1.5% − Total market share for Carlsberg-Tetley approx. 12% YTD − Carlsberg Lager volume growth +11% YTD − Carlsberg Export volume growth +20% YTD z Review of brand portfolio and distribution − Focus on core brands − New porterage contracts z Pro
Slide 16: Central and Eastern Europe
Carlsberg Breweries A/S Central and Eastern Europe 1 Jul - 30 Sept 1 Jan - 30 Sept DKK million 2002 2001 Change 2002 2001 Change Net sales 2,211 2,006 +10 % 6,034 4,474 +35 % EBITA 468 547 -14% 1,120 1,039 +8 % EBITA-margin 21.2 % 27.3 % -6.1 %-p 18.6 % 23.2 % -4.7 %-p Volume (mill. hl of beer) 11.1
Slide 17: Turkey (Türk Tuborg)
Carlsberg Breweries A/S Turkey (Türk Tuborg) z Very difficult economic environment z Disappointing performance z Positive sales and market share development driven by high market investments z Change in management 17 17
Slide 18: BBH - Baltic Beverages Holding
Carlsberg Breweries A/S BBH - Baltic Beverages Holding 1 Jul - 30 Sept 1 Jan - 30 Sept DKK million 2002 2001 Change 2002 2001 Change Net sales (50%) 1,354 1,242 9% 3,737 2,788 +34 % EBITA (50%) 401 400 0% 1,036 797 +30 % EBITA-margin 29.6 % 32.2 % -2.6 %-p 27.7 % 28.6 % -0.9 %-p Volume (mill. hl of
Slide 19: BBH - Market trends beer first nine months
Carlsberg Breweries A/S BBH - Market trends beer first nine months Market Volume Market Change Litres per growth growth share from capita 2002 2002-2001 2002 2001 Year 2001 Russia* 11% 32% 33% 5 %-pts 42 Ukraine 14% 27% 20% 2 %-pts 25 Baltic States** 18% 20% 46% 1 %-pts 57 * Russia including Vena an
Slide 20: Beer market in Russia
Carlsberg Breweries A/S Beer market in Russia Market shares in Russia Market growth and BBH volume growth (%) 1 Jan - 30 Sept Brewery 2002 2001 43 BBH 33% 28% 42 40 Sun Interbrew 12% 13% 33 34 Ochakova 9% 8% 27 26 23 25 25 25 21 Krasny Vostok 7% 7% 18 19 14 12 13 Bravo (Heineken) 4% 4% 4 Stepan Razi
Slide 21: Growth trends in Russian beer market
Carlsberg Breweries A/S Growth trends in Russian beer market z BBH’s results and volumes YTD are in line with our expectations as outlined at the start of the year − The growth has however been stronger in H1 than in Q3 − Somewhat lower market growth in Q3 than expected z BBH grew faster than the ma
Slide 22: Carlsberg Asia
Carlsberg Breweries A/S Carlsberg Asia 1 Jul - 30 Sept 1 Jan - 30 Sept DKK million 2002 2001* Change 2002 2001* Change Net sales 241 507 -52% 797 1,490 -47% EBITA 156 123 27% 397 292 36% EBITA-margin excl. Hite and profit gurantee 22.8 % 24.3 % -1.5 %-pts 25.2 % 19.6 % 5.6 %-pts Volume beer mill HL
Slide 23: Carlsberg Asia – key issues
Carlsberg Breweries A/S Carlsberg Asia – key issues z Brand revitalisation in Thailand under new marketing set-up z Strategic considerations regarding future activities in China z Carlsberg brand up-grade − Implementation of new advertising concept regionally − Implementation of new primary and seco
Slide 24: Carlsberg Breweries – going forward
Carlsberg Breweries A/S Carlsberg Breweries – going forward z Maintained expectations for EBITA growth in 2002 - approximately 20% z Strong focus on cash flow and reduction of capital employed z Continue to improve operational performance − Stabilise and improve Swedish operations − Turnaround to co
Slide 25: The Carlsberg Group A/S Q3 2002
The Carlsberg Carlsberg Group A/S Q1 Q3:2002 2002 2001 Udkast 7afNovember 05-02-2002 2002 25
Slide 26: Pension liabilities
Carlsberg Breweries A/S Pension liabilities z Uncovered pension liabilities are mainly related to companies in the UK and Switzerland z Preliminary uncovered liability approx. GBP 60m z A preliminary analysis conducted in Q3 concludes that the effects on the P&L in the coming years will amount to GB
Slide 27: Expectations 2002
The Carlsberg Group Expectations 2002 • Unchanged guidance to full year results • EBITA growth Carlsberg Breweries approx. 20% y/y • EBITA growth Carlsberg A/S approx. 15% y/y • Net profit/EPS growth 10% y/y (excl. effects from one-off items) 27
Slide 28: The Carlsberg Group
The Carlsberg Group Q1 2002 Udkast af 05-02-2002 28
Slide 29: Enclosures
Enclosures 29
Slide 30: Acquisitions in 2002
Carlsberg Breweries A/S Acquisitions in 2002 z Q1 − Carlsberg Asia’s ownership in Hite Brewery (South Korea) increased to 25% − Ownership in Carlsberg Italy increased to 100% − BBH acquisition of 70% of Voronezh − Carlsberg Asia acquisition of 25% of Lao Brewery (Laos) z Q2 − Increased shareholding
Slide 31: Further expansion for BBH in Eastern Europe
Carlsberg Breweries A/S Further expansion for BBH in Eastern Europe z Continuously increasing capacity in existing breweries z Acquisitions − Voronezh, southern Russia acquisition (70%) − Capacity 0.7 million hl − Consolidated as of June 2002 − Acquisition of 50% of Vena approved z New breweries − S
Slide 32: BBH - coverage of main population centres in Russia
Carlsberg Breweries A/S BBH - coverage of main population centres in Russia ~ 8,5 m people ~ 15 m people Baltika Vena St. Petersburg ~ 35 m people Yarpivo N.Novgorod Moscow Perm Rostov-na-Donu Tula ~ 20 m people Kazan Voronezh Samara Ekaterinburg Ufa Zolotoy Ural Baltika- Volgograd Chelyabinsk Don K
Slide 33: BBH aggregate sales volume (mill. L)
Carlsberg Breweries A/S BBH aggregate sales volume (mill. L) 2 500 2 ,3 8 4 2 000 1 ,8 2 9 Russia 1 500 80% 1 ,2 7 8 Ukraine 1 000 B B H w as 913 e s ta b lis h e d Baltics 618 500 318 11% 202 151 75 33 9% 14 0 91 92 93 94 95 96 97 98 99 2000 2001 Year 1996 1997 1998 1999 2000 Increase from previous
Slide 34: BBH - Ownership structure
Carlsberg Breweries A/S BBH - Ownership structure Carlsberg CarlsbergBreweries Breweries Hartwall HartwallPlc Plc/ /S&N S&N 50% 50% BBH BBHAB AB THE THEBALTIC BALTICSTATES STATES RUSSIA RUSSIA UKRAINE UKRAINE Estonia: Saku (75%) Baltika (74%) Slavutich (85%) Latvia: Aldaris (75%) •Baltika-Don Lvivsk
Slide 35: BBH - beer segmentation in Russia
Carlsberg Breweries A/S BBH - beer segmentation in Russia BBH share of segment Segment share of total market 0 70 1% Heineken; 0% ML ML Corona Extra Import Miller; Holsten; Tuborg; Carlsberg 13% 19 140 2% Lowenbrau; ML License ML Efes; Stella Artois Baltika 0, 2, 5, 7, 8 36% 354 981 14% ML Premium M
Slide 36: BBH - malthouses
Carlsberg Breweries A/S BBH - malthouses Country Malthouse Owner Capacity (tonnes/year) Lithuania Litmalt Lahden Polttimo 50% 10,000 Utenos Alus 50% Russia Yarpivo Yarpivo 15,000 Baltika Soufflet 70% 105,000 Baltika 30% Zolotoy Ural Zolotoy Ural 12,000 Ukraine Slavuta Malt BBH 82 % 90,000 House Tota
Slide 37: BBH - success factors
Carlsberg Breweries A/S BBH - success factors z Acquire majority interests in locally dominant breweries through new issues of equity − Local brands, management and ownership − collector of beer tax z Quality improvements − Beer of western quality using modern technology − Extensive personnel develo
Slide 38: Carlsberg Asia – new management structure
Carlsberg Breweries A/S Carlsberg Asia – new management structure z Executive committee − 2 members from Carlsberg Breweries − 2 members from Chang z Management team − 1 Chief Operating Officer North Asia − 1 Chief Operating Officer South Asia − 1 Chief Investment Officer − 1 Chief Administrative Of
Slide 39: Impacts of change to current method at BBH
Carlsberg Breweries A/S Impacts of change to current method at BBH z Figures for Q1 and Q2 are restated from the monetary/non-monetary method to the current method z Effect for Carlsberg − EBIT +8 DKKm − Deferred tax +80 DKKm − Consolidated profit +88 DKKm − Carlsberg Breweries’ share of profit +55
Slide 40: The Carlsberg Group
The Carlsberg Group Q1 2002 Udkast af 05-02-2002 40