Carlsberg Profit Forecast Improves As Soft Drinks Offset Weak Beer Sales
Carlsberg's Financial Performance and Strategic Shifts
By Emma Rumney
Profit Forecast and Britvic Acquisition
LONDON, Aug 19 (Reuters) - Danish brewer Carlsberg forecast full-year profit towards the upper end of its previous guidance range even as it missed half-year estimates, saying benefits from its 2025 purchase of Britvic were being delivered faster than expected.
The world's third-largest brewer behind Anheuser-Busch InBev and Heineken, which acquired Britvic as part of a pivot to soft drinks after years of weak beer sales, now expects annual organic operating profit growth of between 4% and 6%. It previously forecast between 2% and 6% growth.
First-Half Results and Market Challenges
The maker of Kronenbourg 1664 and Tuborg missed analyst forecasts across sales volume, revenue and profits in the first half, in part as a result of severe weather in China, it's largest market, where beer demand had already been low.
Carlsberg's shares were down almost 2% in early trade.
Synergies from Britvic Takeover
The company said however it would deliver approximately 50% of the total expected £110 million ($149 million) synergies from its takeover of Britvic in 2026, compared with the previous expectation of 30% to 40%.
Growth Driven by Soft Drinks and Partnerships
Partnerships with Pepsi — now Carlsberg's second-largest brand thanks to production, sales and distribution agreements — also drove growth.
"We do think that soft drinks add a stronger growth impetus than beer," CEO Jacob Aarup-Andersen told reporters on a call, adding however beer would remain a key part of Carlsberg's portfolio and that brewers were in the midst of an effort to rejuvenate the category.
Regional Performance and External Challenges
China as a Key Drag
CHINA A KEY DRAG
Analysts said Carlsberg's performance in Asia was the main disappointment. Aarup-Andersen said severe weather, including typhoons and flooding, had affected its business in China and the impact would likely continue into the third quarter.
Overall, its half-year performance was "underwhelming", RBC Capital analyst James Edwardes Jones said.
Geopolitical and Consumer Trends
Carlsberg and its rivals have also been hit by geopolitical upheaval including the Russian war in Ukraine, U.S. tariffs and, most recently, the Iran war, which is putting more strain on consumer wallets.
This strain and shifts in drinking habits have prompted some consumers to cut back on alcoholic beverages, leaving brewers battling to increase lacklustre sales volumes.
Financial Figures
Carlsberg reported first-half operating profit of 7.45 billion Danish crowns ($1.15 billion), missing analyst expectations for 7.55 billion crowns.
($1 = 6.4515 Danish crowns)
($1 = 0.7383 pounds)
(Reporting by Emma Rumney; Editing by Joe Bavier and Mark Potter)
