Q3 Shareholder Magazine November 2012 Content 3 LetteR FRom THE CEO 4 THIRST FOR BEER 3 6 L’arT DE VIVRE: KRONENboURG 1664 OFFERS A TAste OF FRANCE 8 CARlsbeRG HOLIDAY CAMPAIGN BRINgs JOY AND BEER 9 A CLIMPSE OF CARlsbeRG 12 INTERIM RESUlts AS AT 30 SEPTEMBER 2012 14 KEY FIGURES 12 18 INcome stATEMENT 19 STATEMENT OF FINANCIAL POSITION 20 OVERVIEW The Carlsberg Group is one of the leading brewery groups in the world, with a large portfolio of beer and other beverage brands. Our flagship brand – Carlsberg – is one of the best-known beer brands in the world and the Baltika, Carlsberg, and Tuborg brands are among the eight biggest brands in Europe. More than 41,000 people work for the Carlsberg Group, and our products are sold in more than 150 markets. In 2011, the Carlsberg Group sold more than 115 million hectolitres of beer, which is about 34 billion bottles of beer. NEWS is published quarterly by Carlsberg in Danish and English. In case of any discrepancy between the two versions, the Danish version shall apply. Circulation: 4,400. (incl. Danish circulation). Editorial staff: Anne-Marie Skov (responsible), Iben Steiness, Gitte Sillemann and Jeanett Glenthøj. Layout and production: Kontrapunkt. Carlsberg A/S, CVR-NR. 61056416, Ny Carlsberg Vej 100, DK-1799 Copenhagen V, Tel: +45 33 27 33 00, E-mail: [email protected], www.carlsberggroup.com. Q3 November 2012 3 Dear Carlsberg shareholder Welcome to this edition of News. Our gains were driven by innovations, revi- Q3 performance was in line with our talisation of local brands and roll-out of expectations and I am very pleased that our international premium portfolio. The we continued to gain market share across rejuvenated Tuborg, which we told you our three regions. about in the Q2 edition of News, delivered very strong results and achieved almost Our positive market share performance 60% volume growth in Asia this year. was a result of our sustained support to our international premium brands and For the first three quarters of the year, local power brands. Our international organic net revenue for the Group grew premium brand portfolio encompasses by 2%. Due to destocking in Russia in Q1, the Carlsberg, Tuborg, Kronenbourg 1664, bad weather in Western Europe in Q2 and Grimbergen and Somersby brands which July, and different phasing of sales and all have delivered very positive results this marketing investments this year versus year. On page 6, we have devoted an arti- last year, operating profit declined. In Q3, cle to Kronenbourg 1664 to give you some operating profit was however up by DKK insight into this sophisticated French beer 167m with significant contribution from Market share gains brand and its expansion into new markets. Eastern Europe and Asia. As our results Page 8 tells you about a Christmas for Q3 were in line with our expectations, continued across our campaign that we are launching for the we reiterate our 2012 earnings outlook. three regions in Q3. Carlsberg brand and in which the illustra- From page 12 onwards, you can read tion on the cover of this magazine plays about our nine-month-results. an important part. In a world where we increasingly are Despite a challenging market environment, faced with increasingly tight marketing we managed to grow our Western European regulation, higher taxes in many markets business. With a 1% organic beer volume and health concerns, it is important that growth compared to a 2-3% market decline, we work on promoting the reputation of we outperformed the market and strength- and knowledge about beer in order to ened our market share across the region. grow the beer category and sustain our license to operate. For this purpose, we In Eastern Europe, the large Russian mar- have initiated a series of actions which ket grew slightly in the first nine months. you can read about on page 4. It is with pleasure that I can report that we again in Q3 grew our market share versus I hope you will enjoy reading this edition the previous quarter as well as versus Q3 of News and I would like to take the last year. During 2011 and in the beginning opportunity to wish you a very happy of 2012, we implemented many changes holiday season. and initiatives throughout our commercial organisation in Russia and within the gen- eral management of the Russian business. These changes proved right and are now Cheers showing positive results. All our Asian markets grew for the nine months and our strong market share Jørgen Buhl Rasmussen momentum continued. Our market share President & CEO 4 News Thirst for Beer People have been enjoying beer for millennia and to make sure that this great tradition endures, Carlsberg has launched its “Thirst for Beer” initiative. As a key strategic project, Thirst for Beer is drawing on the strengths of the entire Carlsberg Group to help grow the image of beer. Many factors influence the consumption there is a misperception that drinking beer Tracking progress and perception of beer. Cultural shifts, is unhealthy or irresponsible. “With the new tax laws, societal attitudes and image of beer eroding, it’s crucial that we To measure the advancement of beer marketing regulations all have an impact also focus on the category,” says Morten. conception among stakeholders and the on consumer habits and attitudes. When efficiency of the Thirst for Beer initiative, combined, these factors may cultivate The wine segment has had great success Carlsberg will be assessing the attitude a negative image of beer, which may in associating wine with health benefits. toward beer on an annual basis. “We sur- return affect sales volumes, and in fact, “But it’s all just perception. There are no vey customers, consumers, stakeholders the beer category is flat or shrinking in facts to justify that wine is healthier than and even policymakers to find out how many mature markets. As a response to beer – and the beer category offers just Carlsberg is perceived and how we are this and in close cooperation with other as much variety.” seen as brewers – and to identify where global brewers and brewers’ associations, we need to improve and where we are Carlsberg is working on promoting the By focusing on the wider beer category succeeding in our efforts,” says Morten. reputation of beer in order to grow the and not just on selected brands, Thirst for beer category and sustain the brewers’ Beer is about reaching as many people license to operate. The areas of coopera- as possible. “We need to get the facts out tion include efforts to develop and man- and profile beer as a refreshing, low-alcohol age self-regulation schemes and increase beverage made from natural ingredients awareness about beer and the brewers’ and with a positive impact on health GLOBAL ActION TO REDUCE HARMFUL contribution to the communities in which when consumed in moderation,” says USE OF AlcOHOL they operate. Morten. “People have been brewing beer In addition to Thirst for Beer and the cooperation for thousands of years. There are literally with brewers and brewers’ associations, Carlsberg But Carlsberg has also launched its own hundreds of varieties, so there’s a perfect also works in a broader context to promote initiative, namely Thirst for Beer. Aimed brew for any occasion or meal.” responsible consumption of beer as a unique at boosting the image and reputation and refreshing drink of moderation. In October, of beer, Thirst for Beer addresses issues the Group announced that it has teamed up with Planting the seeds with a toolkit which affect everyone, from consumers a group of global beer, wine and spirits producers to policymakers. “We want beer to be While Carlsberg cannot alter the percep- to commit to joint actions to strengthen and cherished and appreciated by consumers tion of beer overnight, it can plant the right expand existing efforts and contribute to reducing and the wider stakeholder audience,” seeds for change. “We’re trying to build a the harmful use of alcohol in five areas: says Thirst for Beer Director Morten beer movement,” explains Morten, “and • Reducing under-age drinking Nielsen. “We want them to see it as the we need everyone on board – friends, • Strengthening and expanding marketing codes right choice for any occasion, such as the media, policymakers, experts and of of practice perfect accompaniment to a great meal course all the employees of the Carlsberg • Providing consumer information and responsible or an evening with friends. We want them Group – so we’ve created a toolkit to help product innovation to recognise its quality when it’s brewed us get there.” • Reducing drinking and driving the right way.” • Enlisting the support of retailers to reduce The toolkit is available for all Carlsberg’s harmful drinking markets and is based on best practices To emphasise our commitment to the five areas, Targeting the category from around the world. It contains key facts Carlsberg will from 2013 report on how we are Consumers today are overwhelmed by about beer, a guide to engaging with stake- progressing on the commitments. choices. In some markets, beer has lost holders through both online and offline ground to wine, and in some markets, media and ideas for creative execution. Q3 November 2012 5 6 News L’art de vivre: Kronenbourg 1664 offers a taste of France With its French roots, unique flavours, and exceptional ingredients, Kronenbourg 1664 is a longstanding favourite of beer connoisseurs. Being part of the Carlsberg Group since 2008, Kronenbourg 1664 is now available in 65 markets – and one of the world’s fastest expanding beer brands.