Danish brewing giant Carlsberg witnessed a 1.7% decline in sales volumes across the Western European market in the first half of 2024, offsetting growth in Asia and Central and Eastern Europe.
Carlsberg cited “poor weather in most markets in June and difficult comparables because of good weather in June 2023” as key factors for the underwhelming result.
There was a lot of focus on Carlsberg’s margins prior to these interim results, given it jacked up beer prices in 2023 in order to combat the rising cost of brewing its lager.
While gross margins did indeed increase to 46.3% from 44.7% in the first half of 2023, higher sales and marketing costs meant operating margins contracted by 30 basis points to 16.3%.
Carlsberg increased its 2024 earnings expectations, now forecasting organic growth in operating profit of 4-6%, up from the previous 1-5% expectation.
However, this was largely expected by the market and Carslsberg’s Copenhagen-listed shares dipped 4% on Wednesday.
Carlsberg terminated its share buyback in July due to the group’s recommended offer to acquire Britvic plc “and the expected subsequent increase in financial leverage”.