Carlsberg’s 2020 revenues plunge as Covid-19 takes toll on major revenue streams

DENMARK – Danish multinational brewer, 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 (US$$9.42 billion) in 2020 and further reported a 3.1% decline in organic operating profit to DKK 9.7 billion ($1.56 billion).

Despite of the decline in revenues, Carlsberg says it delivered a “solid set of results despite Covid-19” and that the group’s financial situation remains strong.

Beer sales plummet

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Accounting for around 25% of Carlsberg volumes, the brewer said the beer market was significantly impacted by the on-trade, declining by more than 20% due to a range of lockdowns and restrictions on gatherings.

In local markets, the Carlsberg responded by developing an online delivery and takeaway platforms to support its on-trade customers. This was however not enough to offset the volume decline in the on-trade.

Total organic volume dropped by 3.8%, representing a 9% decline in Tuborg and a 10% fall in Carlsberg – impacted by market declines in India and Malaysia and the closure of the night entertainment channel in China.

Craft and alcohol free brews sales 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 of their health and wellbeing amid the pandemic.

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 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 also witnessed its third-party ecommerce sales go up by approximately 60%, with particular strong growth in Asia.

Investments

During 2020, Carlsberg UK completed its merger with Marston’s, while last month the brewer’s acquisition of  Wernesgrüner Brewery in Germany was completed.

The company has also announced a new DKK 750 million share buy-back programme, which will run until 23 April.

2021 prospects

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%.

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.

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