Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Carlsberg AS (CABGY, Financial) launched the Accelerate SAIL strategy, aiming for a 4% to 6% CAGR in long-term top-line growth.
- The company completed a significant acquisition of Britvic for GBP3.3 billion, enhancing its position in the soft drinks market.
- Carlsberg AS (CABGY) returned $5.6 billion to shareholders, demonstrating strong shareholder value commitment.
- The company achieved a gross margin improvement and increased operating margin despite higher commercial investments.
- Carlsberg AS (CABGY) successfully negotiated full ownership of its businesses in India and Nepal, offering attractive growth opportunities.
Negative Points
- The company faced volume declines in key markets such as Western Europe and Asia, impacting overall growth.
- Carlsberg AS (CABGY) experienced market share losses in France due to price increases ahead of the market.
- The acquisition of Britvic increased the company's leverage to a pro forma 3.4 times net interest-bearing debt to EBITDA.
- The company anticipates a negative impact of 2 to 3 percentage points on organic operating profit growth due to the loss of the San Miguel brand in the UK.
- Carlsberg AS (CABGY) is dealing with hyperinflation accounting in Laos, impacting financial reporting and ROIC.
Q & A Highlights
Q: Can you elaborate on the factors influencing your profit guidance range of 1% to 5%?
A: Jacob Aarup-Andersen, CEO: The guidance is influenced by several factors, including consumer sentiment, particularly in China, weather conditions, and the execution of key events like the Chinese New Year. We are not assuming significant changes in consumer sentiment across our main markets, and any improvement or deterioration could affect the guidance range.
Q: What is the outlook for pricing in Western Europe given the favorable COGS environment?
A: Jacob Aarup-Andersen, CEO: We expect a positive pricing impact across our markets in 2025, despite slightly higher total costs. We aim to cover cost increases through continued pricing, although specifics cannot be disclosed due to legal reasons.
Q: Can you discuss the potential synergies in working capital with Britvic?
A: Ulrica Fearn, CFO: While we haven't fully assessed Britvic's working capital, we have a strong track record in cash and working capital management. We will apply our principles to identify opportunities for improvement, although Britvic's geographical footprint may pose challenges in reaching our levels.
Q: How do you plan to address market share underperformance in France?
A: Jacob Aarup-Andersen, CEO: We are aware of the market share loss due to price increases and are focusing on improving performance in 2025. A new Managing Director in France will execute plans to rebalance elements as needed, with a focus on premium and craft segments.
Q: What are the strategic priorities for Carlsberg moving forward, especially with the Britvic acquisition?
A: Jacob Aarup-Andersen, CEO: Our priorities include accelerating long-term revenue growth, restoring gross margins, integrating Britvic to deliver synergies, and reducing financial leverage. We aim to maintain relevance by leveraging both beer and non-alcoholic categories.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
