Carlsberg Group (CARL) Q4 2024 earnings summary

Executive summary

• Launched Accelerate SAIL strategy, targeting 4%-6% CAGR in top-line growth and higher operating profit, with a focus on premium, alcohol-free, and soft drinks categories.

• Achieved organic revenue growth of 2.4% and organic operating profit growth of 6% year-over-year, despite challenging market conditions and modest volume growth.

• Completed major acquisitions, including Britvic (GBP 3.3bn), full control of Indian and Nepalese businesses, and Carlsberg Marston's, while disposing of the Russian business for DKK 2.3bn.

• Expanded exposure to non-alcoholic beverages, with alcohol-free and soft drinks now comprising about 30%-32% of portfolio volume pro forma.

• Strengthened PepsiCo partnership with new license agreements in Kazakhstan and Kyrgyzstan effective 2026.

Financial highlights

• Organic revenue grew 2.4% year-over-year, with reported revenue up 1.9% to DKK 75,011m, impacted by currency headwinds.

• Gross margin improved by 120bp to 45.8%, driven by price/mix and a 1% organic decline in cost of sales per hectoliter.

• Organic operating profit grew 6%; reported operating profit up 2.8% to DKK 11.4bn, with a 10bp margin increase to 15.2%.

• Adjusted EPS for continuing business rose 0.6% to DKK 54.9; reported net profit was DKK 9.1bn, including a DKK 2,258m reversal of impairment from the Russian business divestment.

• Free operating cash flow was DKK 6.4bn, down from DKK 7.5bn, mainly due to higher CapEx and interest.

Outlook and guidance

• 2025 organic operating profit growth expected at 1%-5%, including a 2-3pp negative impact from the loss of the San Miguel brand in the UK.

• Britvic will be consolidated from January 16, 2025, with an initial EBIT estimate of GBP 250m and further details to come.

• CapEx guided at DKK 7-8bn, including investments in Kazakhstan and Britvic.

• Financial expenses (ex-FX) expected to rise to DKK 2.6-2.7bn due to higher debt; effective tax rate to increase to ~23%.