Carlsberg Group (CARL) Q2 2024 earnings summary

Executive summary

• Achieved 1.4% total volume growth and 3.9% organic revenue growth, with solid operating profit growth despite poor weather and weak consumer sentiment in some markets.

• Upgraded full-year organic operating profit growth outlook to 4%-6% from 1%-5%.

• Strategic moves included the recommended offer for Britvic, full control of India and Nepal businesses, and acquisition of the remaining 40% of Carlsberg Marston's in the UK.

• Marketing investments increased nearly 20% year-over-year.

• Premium, alcohol-free, and international brands outperformed, with Carlsberg and Tuborg showing double-digit growth.

Financial highlights

• Revenue rose 3.9% year-over-year to DKK 38.8bn; reported revenue up 2.6% due to adverse currency impacts.

• Operating profit up 4.7% to DKK 6.3bn; organic operating profit up 5%.

• Adjusted net profit DKK 3.9bn, down 3.4% due to currency and higher financials; adjusted EPS DKK 28.6.

• Free operating cash flow was DKK 3.6bn.

• Gross margin improved by 160bp to 46.3%; operating margin at 16.3% (down 30bp YoY).

Outlook and guidance

• Upgraded 2024 organic operating profit growth guidance to 4%-6% (from 1%-5%).

• Currency impact on operating profit expected at DKK -300m; financial expenses (ex-FX) at DKK 1.2bn; tax rate ~21%; CapEx ~DKK 5.0bn.

• Expect volume dynamics to improve in Western Europe in H2, with continued momentum in CEEI and caution in Asia, especially China.

• Marketing investment to revenue will increase, but absolute growth lower than previously expected due to market conditions.