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Carlsberg has posted an 8.4% decline in organic revenue in its 2020 results, following significant impact to its on-trade channel amid a "challenging year".
The company posted revenues of DKK 58.54 billion ($9.42 billion) in 2020, but says it delivered a “solid set of results despite Covid-19” and that the group’s financial situation remains strong.
Carlsberg posted a 3.1% decline in organic operating profit to DKK 9.7 billion ($1.56 billion), in line with its expectations announced in Q3 after it witnessed positive volume trends in Russia and China.
Accounting for around 25% of Carlsberg volumes, the brewer said the beer market was significantly impacted by the on-trade due to a range of lockdowns and restrictions on gatherings. Volumes in the on-trade channel declined by more than 20%, however in local markets, the company developed online delivery and takeaway platforms to support its on-trade customers.
The impact of the off-trade varied significantly between Carlsberg’s markets. Overall the sector increased by mid-single-digit percentages, however this was not enough to offset the volume decline in the on-trade.
Total organic volume dropped by 3.8%, representing a 9% decline in Tuborg (despite growing 15% in Russia, this was offset by other large market declines such as India, Nepal and Denmark) and a 10% fall in Carlsberg – impacted by market declines in India and Malaysia and the closure of the night entertainment channel in China. Meanwhile, 1664 Blanc witnessed an 8% volume rise and its Somersby brand a 2% rise.
Nevertheless, the company’s growth priorities of craft and speciality and alcohol-free brews proved resilient. Craft and speciality volumes grew 1% with Russia as a key driver, while alcohol-free brews grew 11%, as more consumers became increasingly aware around health and wellbeing amid the pandemic. Carlsberg particularly saw good results for recent launches in the category including Baltika Zero Grapefruit and Raspberry, Brooklyn Special Effects and Somersby 0.0.
The company witnessed its third-party ecommerce sales go up by approximately 60%, with particular strong growth in Asia.
During 2020, Carlsberg UK completed its merger with Marston’s, while last month the brewer’s acquisition of Wernesgrüner Brewery in Germany was completed.
Carlsberg CEO Cees ’t Hart said: “While the pandemic is not yet behind us and we don’t know how long it will remain a challenge in 2021, we believe that Carlsberg will emerge even stronger from the crisis.
“The group’s financial situation remains strong. Despite Covid-19, we improved our operating margin, delivered strong cash flow, increased dividend per share, carried out a sizeable share buyback programme and strengthened the business through acquisitions.”
The company has also announced a new DKK 750 million share buy-back programme, which will run until 23 April. With the Covid-19 pandemic continuing to impact business performance in 2021, Carlsberg expects organic growth in operating profit within the range of 3-10%.