Carlsberg posts higher profits despite dip in core brand

Higher take-up of premium beers helped to boost Carlsberg sales in the first half, but its core brand suffered a decline in the UK.

Net revenue at the Danish brewer was up 6.5% on a reported basis to 32.99 billion kroner (£4.08 billion) in the six months to June 30.

Profit before tax increased 21% to 4.85 billion kroner (£600 million).

The company said it had seen fast growth in the craft and speciality category, with volumes up 17.7%.

Alcohol-free brewing grew 16%.

But while newer drinks showed growth, the main Carlsberg brand fell out of favour in some regions.

Volumes of Tuborg, Grimbergen and 1664 Blanc all grew, but the core Carlsberg brand was down 3%.

The decline was partly attributed to a significant decline in the British market, where a strong comparative period last year – when the World Cup and hot summer boosted sales – meant a dip in volumes in 2019.

Excluding the UK, the Carlsberg core brand was slightly up.

The brewer is fighting back against the decline of its flagship beer in the UK, kicking off a multi-year strategy in April with the launch of its Carlsberg Danish Pilsner.

Growth in Asia was particularly strong with organic volumes up 8.5%, but in Russia, its biggest market, volumes dropped 3% due to the competitive environment.

Some of the volumes announced on Thursday had already been released earlier in the month, when the company raised its guidance for the year.

Chief executive Cees ’t Hart said: “We delivered a strong set of results for the first six months of 2019, with healthy top-line development, strong margin improvement and continued solid cash flow.

“We’re pleased that last week we were able to adjust our earnings outlook upwards due to the performance in the first half and a solid start to Q3, and despite tough comparables.”