Carlsberg Group has recorded organic net revenue growth of 16% in Asia for the first quarter (Q1) of 2018, compared with a decline of 3% in the company’s two other regions, Eastern Europe and Western Europe. Credit: Carlsberg Group.

Danish brewer Carlsberg Group has recorded organic net revenue growth of 16% in Asia for the first quarter (Q1) of 2018, compared with a decline of 3% in the company’s two other regions, Eastern Europe and Western Europe.

Reported net revenue also only increased in Asia. The region recorded 6% growth, whereas Eastern Europe experienced a decline of 14% and Western European revenues dropped 8%.

Carlsberg Group’s strong performance in Asia is linked to 3% price/mix as a result of price increases and continued premiumisation of brands. The whole region experienced 12% organic volumes supported by the festive season in Asian markets, particularly China and Vietnam.

India led with 30% volume growth helped by good comparisons with 2017 when the government implemented the so-called ‘highway ban’, which prohibited the presence of liquor stores on the side of major roads.

All regions were badly affected by currency translation. Asia’s lower reported net revenue than its organic net revenue was attributed to negative currency movements, especially in China, India and Laos. Currency had a negative 2% impact on reported revenue in Western Europe. The 14% decline in Eastern Europe’s reported net revenue was attributed to negative currency impact.

Eastern Europe also struggled because of a 6% decline in volume. Russia was the only market in the region that saw a volume reduction because the brand suffered a 4%-5% market decline. However, the negative impact of volume decline was partially offset by a 3% growth in price/mix as a result of price increases across the whole market.

Western Europe experienced a 2% decline in volume and 1% drop in price/mix. The former was due to market share losses in the UK, particularly for the Carlsberg brand, and lower volumes shipped to Poland due to increase in prices. The latter was impacted by lower export and licence sales in the Middle East.

The positive impact of early Easter celebrations in Western Europe were offset by the cold weather experienced by the region.

Asia also led the growth rates of the Carlsberg’s Group’s international brands. Turborg’s 11% growth was mainly driven by India, China and Turkey and Carlsberg’s growth was attributed to Asia and Eastern Europe, but neutralised by smaller volumes shipped to the UK

However, Grimbergen and 1664 Blanc’s growth of 12% and 44% respectively occurred across many markets in the three regions.

As a whole, the company recorded organic net revenue growth of 2% driven by 1% organic volume growth and 1% price/mix in the first quarter of 2018. Its reported net revenue declined by 5% to DKK12.7bn ($2.05bn) as result of divestments that contributed 2% to the decline and negative currency impact of 5%. Total volumes across all regions were flat.

Carlsberg Group CEO Cees ’t Hart says: “In the seasonally small first quarter, we delivered 2% organic revenue growth. The Q1 growth in craft & speciality and alcohol-free brews as well as the broadly based growth in Asia serve as proof points for our SAIL’22 agenda. Funding the Journey is delivering according to plan and we’re well on track to deliver on our full-year expectations.”

The company continues to expect mid-single digit organic growth in operating profit, but it forecasts currency translation will have an impact of DKK – 500m (-$80.72m) rather than DKK -450m (-$72.65m) as originally predicted.