Carlsberg Sees 3Q Sales Drop But Lifts Guidance on Efficiency Gains

Carlsberg A/S (CARL-A.KO) posted a 5% drop in third-quarter revenue on Thursday but raised full-year guidance as it expects to deliver efficiency cost savings at the top of its estimated range and faster than previously expected.

The company said that its efficiency program was "progressing well and is now expected to deliver around 2 billion Danish kroner [$301.1 million] in net benefits." It added that as it sees "faster delivery of the benefits than previously expected, we are adjusting the full-year earnings expectations upwards."

The brewer had previously guided for cost savings of between DKK1.5 billion and DKK2 billion.

The company now expects full-year organic operating profit growth of between 7% and 8%, having previously seen mid-single-digit percentage growth, while it expects positive currency effects of around DKK75 million, from an earlier estimate of DKK50 million.

In a quarterly trading update, it said group revenue fell to DKK16.68 billion from DKK17.53 billion in the third quarter, as a ban on plastic bottles in Russia, difficult comparables in Eastern Europe and poor weather in Western Europe all weighed on beverage volumes. Previous disposals also hit volumes, it said.

Analysts polled by FactSet had expected revenue of DKK17.03 billion.

In the challenging Eastern European market, net revenue fell organically by 2% and on a reported basis by 1%, while volumes grew in Kazakhstan and Belarus, were flat in Ukraine but declined in Russia.

Markets such as Bulgaria, Serbia and Italy achieved positive volume growth, while most other markets in Western Europe saw declining volumes due to the poor weather.

In Asia, net revenue grew organically by 7%, but reported net revenue fell 1% due to a negative currency impact and disposals. China saw solid growth on the back of a strong performance in its premium drinks.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

November 02, 2017 03:19 ET (07:19 GMT)