Carlsberg to acquire Cambrew as craft & speciality beers push third quarter revenues up by 5.3%

DENMARK – Carlsberg has signed an agreement to acquire the remaining 25% of Cambodian brewer, Cambrew one of the largest breweries in the country for an undisclosed sum.

The Danish brewer unveiled the deal during its quarter three trading statement. Carlsberg posted 5.3% increase in third-quarter net revenue to DKK 18.5bn (US$2.76 billion) boosted by a 12% growth in volumes of its craft and speciality beers.

The growth was also attributed to strong sales in Asia and Western Europe which helped offset a 4% decline in total sales volumes.

In Western European markets, the alcohol-free brew volume grew by 7% while in its international premium portfolio, the company reported a 30% growth in its 1664 Blanc brand, 5% growth in the Tuborg beer and a 2% decline in the Carlsberg brand.

In Asia, net revenue grew organically by 14.2% with “particularly strong” volume growth in China, Laos, Malaysia, Singapore and Vietnam. In China, volumes grew by 6%, supported by the sustained growth of Tuborg and 1664 Blanc brands.

Carlsberg also reported good revenue and volume growth in markets such as Switzerland, Denmark, Poland, Serbia, Greece, Croatia and Bulgaria despite declining volumes in markets such as UK and France.

Net revenue in Eastern Europe declined organically by 2.3%. Volumes in Russia and Ukraine were impacted by the “intensified competitive environment” in 2019, cool weather and, in the case of Russia, tough comparables due to the World Cup last year.

“We’re pleased that we’ve been able to deliver solid revenue growth for the quarter despite tough comparables from last year. In particular the Asia region continued its very good performance” CEO Cees’t Hart said.

“The top line in Western Europe was solid in spite of challenging comparables from the very warm and dry summer last year, while we had difficult comparables in Russia and faced challenges that negatively impacted our market share year-over-year.

“Our earnings upgrade earlier this week is another proof point of the execution of SAIL’22 and a consequence of our improved geographical footprint, as solid earnings performance in China and Western Europe more than offset the challenges in Russia.”

The company maintained its 2019 earnings expectations, which it upgraded earlier this week, and is forecasting organic growth in operating profit of around 10%.