Profit takes major hit
Danish brewer Carlsberg, which owns Affligem among other brands, only managed a slight turnover increase over the past quarter from 18.12 billion Danish krona to 18.3 billion krona (some 2.43 billion euro). Beer volumes autonomously dropped 3 %, which it blames on a weaker Eastern European performance. Operational profit did grow 2 % to 3.47 billion krona (or 460 million euro).
CEO Cees ‘t Hart, who joined Carlsberg from dairy giant FrieslandCampina in June, called it a “solid” performance. He did add acknowledge “the fact that the profit development of recent years has not been satisfactory, we are taking further steps to prepare the Carlsberg Group for the future”.
That is why the world’s fourth largest brewer will write off 7.7 billion krona (1.03 billion euro) on its Russian and Chinese activities among other things. The company has struggled for several years in Russia and does not see any light at the end of the Russian tunnel. Previous changes in China have also not yielded the expected efficiency.
The result of the write-off is that it now has a 4.5 billion krona (600 million euro) net loss, which is a huge difference with the 2.1 billion krona net profit from the same quarter last year.
Save 1.5 to 2 billion krona per year
Ceest ‘t Hart immediately announced a major restructuring plan, called “Funding the Journey”. It is supposed to save 1.5 to 2 billion krona in costs starting in 2018. Part of the plan includes cutting 2,000 office jobs, 15 % of all jobs not related directly to the process of beer brewing.
The measures will result in 10 billion krona (1.34 billion euro) in write-offs and restructuring costs. The majority of that cost will already feature in this year’s financial results.
