The Jacobsen Brewhouse Built on a passion for new taste experiences

Transcription

1 INFORMATION TO SHAREHOLDERS 11 AUGUST 2005 The Jacobsen Brewhouse Built on a passion for new taste experiences In the last decade, the specialty beer market has grown from being a niche market that included a few, expensive beers into being a mainstream trend, with new, exciting brands launched nearly every week. Carlsberg has been a part of this trend in Denmark for many years, and with the opening of the Jacobsen Brewhouse on 31 May, cemented its commitment to brewing specialty beers of the highest quality and gave visitors to Copenhagen an entirely unique sensory experience. The brewhouse, located in a warehouse from 1878 on the grounds of the historic Old Carlsberg, is a state of the art brewery where our brewers ideas can be brought to fruition. It is also the next step in Carlsberg s ambitious plans for the development and marketing of uncompromising speciality beers. Success leads to success Carlsberg has been a frontrunner in the Danish specialty beer market since the launch of the Semper Ardens range in The range was developed to take Danish beer making to the next level and to offer consumers truly unique brews suitable for fine dining. Demand for the beers was overwhelming and sales are constantly rising. The Jacobsen Brewhouse is building on this success and four of the Semper Ardens beers are still being produced at Jacobsen. But the main attraction of the Jacobsen Brewhouse is the special beers that bear the brewery s name: the Jacobsen range. Four new beers were launched at the brewery s opening: Jacobsen Bramley Wit, Brown Ale, Original Dark Lager and Saaz Blonde and new additions will regularly be added to the range. The beers are currently available in Denmark only, but will be launched in Finland, Sweden and Norway in Sales of Jacobsen have so far exceeded all expectations and it has become difficult to keep up with demand. Carlsberg Danmark expected to sell some 600,000 litres of the Jacobsen brand in 2005 but has had to upgrade its expectations significantly. Small but good Jacobsen has a brewing capacity of 17,000 hectolitres per year (about 5 million standard bottles); making it a dwarf in comparison to Carlsberg s other breweries around the world. But when handcrafting specialty beers, small size has many advantages. It allows the master brewers to easily experiment with different malt types and add new ingredients at various stages of the brewing process. Gastronomic considerations also play a major role in the development phase, as suitability for accompanying different dishes is specific to each beer. We want to bring beer and Jacobsen in particular back to the dining-table, says Jacobsen s master brewer Jens Eiken. We want to give people new taste experiences, and we want to challenge and develop beer culture. It s about making the most of what nature has to offer. In connection with the creation of the new brewhouse, the Carlsberg Visitors Centre has undergone a major modernisation programme where the use of sensory stimuli such as sound, lighting and aromas helps to give visitors a real day to remember. Good results in Q2. Annual profi t expectations maintained. Beverage activities showed increased profit in all regions in Q2. Net revenue increased by 5% in H1 to a total of DKK 17.8bn, driven by the positive trend in BBH as well as (in) the other Eastern European activities. Operating profit (EBIT) in H1 amounted to DKK 1,328m of which profit from beverage activities accounted for DKK 1,314m (DKK 1,105m in H1 2004), corresponding to an increase of 19%. Carlsberg's share of profit for H1 increased to DKK 314m in H1 (DKK 104m in H1 2004). Annual profit expectations maintained. Operating profit approximately DKK 3.4bn, Carlsberg's share of profit up by approximately 15%. CARLSBERG A/S H FINANCIAL STATEMENT TO THE COPENHAGEN STOCK EXCHANGE Page 3

2 Baltika St.Petersburg Vena St.Petersburg Yarpivo Vena Chelyabinsk BBH breweries in Russia Russia market overview Population: million Total beer market: 8200 million litres in 2004 Per capita consumption: 56 litres in 2004 BBH s market share: 36.3% Baltika Samara Baltika Tula Yarpivo Voronezh Baltika Rostov Pikra Baltika Khabarovsk Consolidation of BBH in Russia: getting the most out of our businesses Russia is one of the largest and fastest growing beer markets in the world. Baltic Beverages Holding (BBH), a joint venture company owned 50/50 by Carlsberg and Scottish & Newcastle, is the undisputed leading brewery in Russia, with a market share of over 36%. And while BBH posted impressive results in the first half of 2005, there is still room for improvement. The company is the majority shareholder of four brewing groups in Russia: Baltika, Vena, Pikra and Yarpivo, with Baltika being the largest. The companies cover the entire country in their distribution and there is enormous potential to create synergies and save costs within purchasing, production, logistics, etc. Early in 2005, Carlsberg and Scottish & Newcastle started a project to consolidate and reorganise the Russian businesses in order to share best practices and create operational synergies across the businesses. The goal of the project is to create one strong organisation in Russia, with Baltika as the leading company. An important step has been to consolidate Baltika and the Pikra Brewery located in Eastern Siberia. The Pikra deal came to vote at a shareholders meeting on 7 July. The outcome of the voting was that 49.3 % of total eligible votes were in favour of the proposal and approval thus fell less than 1% short of the required 50% level. In the meantime some minority shareholders have accused BBH and especially Carlsberg and Scottish & Newcastle for unethical, if not unlawful, behaviour/tactics. These accusations are entirely groundless. I would like to make it absolutely clear that we have done nothing unethical and that all transactions are in compliance with Russian law and based on extensive legal advice. We are fully aware of the regulations protecting the rights of minority shareholders and we comply fully. Our sole intention with the integration of BBH s Russian subsidiaries is to create value for all shareholders within BBH and its subsidiaries, says Paul Bergqvist, Executive Vice President in Carlsberg and Vice Chairman of the BBH Board. BBH posts strong performance on volumes and profi t growth in H1 Total volume growth of 14% to 1973 ML Russian market share of 36.3% Net sales up 18.6% in EUR, up 24.0% in USD EBIT up 32.6% in EUR, up 38.6% in USD Strong cash flow performance The results for the first half show a continuation of the strong growth in both volumes and net sales shown in the second half of 2004, following the management initiatives within sales and marketing. 2

3 Business development 11 August 2005 Financial Statement for the six months ended 30 June 2005 Good results in Q2. Annual profit expectations maintained. Beverage activities showed increased profit in all regions in Q2. Net revenue increased by 5% in H1 to a total of DKK 17.8bn, driven by the positive trend in BBH and the other Eastern European activities. Operating profit (EBIT) in H1 amounted to DKK 1,328m of which profit from beverage activities accounted for DKK 1,314m (DKK 1,105m in H1 2004), corresponding to an increase of 19%. Carlsberg's share of profit for H1 increased to DKK 314m (DKK 104m in H1 2004). Annual profit expectations maintained. Operating profit approximately DKK 3.4bn, Carlsberg's share of profit up by approximately 15%. Key fi gures and fi nancial ratios (unaudited) Q2 Q2 H1 H1 DKK million Income statement Net revenue 10,424 10,242 17,819 17,047 36,284 Operating profit (EBIT) 1,350 1,389 1,328 1,526 3,401 Special items, net Consolidated profit ,269 Attributable to: Minority interests Carlsberg A/S shareholders ,100 Balance sheet Total assets 62,865 63,210 57,719 Invested capital 46,352 45,258 44,008 Net interest-bearing debt 23,299 23,444 21,733 Equity 17,471 16,391 16,792 Cash flows Cash flows from operating activities 1,568 1,584 1,102 1,493 3,875 Cash flows from investing activities ,030-1,167-2,511-2,363 Free cash flows 851 3, ,018 1,512 Financial ratios Operating profit/net reserve (EBIT-margin) % Return on invested capital (ROIC) % Equity interest (solvency ratio) % Debt/equity (financial gearing) x Stock market ratios Earnings per share (EPS) DKK Cash flow from operating activities per share (CFPS) DKK Share price (B shares) DKK Number of shares (end) 1,000 76,278 76,278 76,278 76,278 76,278 Number of shares (average) 1,000 76,278 71,006 76,178 65,934 71,006 H1 shows a healthy development with progress in activities and profitability. Beer volumes (calculated proportionally) rose by 13%, of which 6% was organic growth, and operating profit from beverage activities was up by 31% in Q2 and 19% in H1. The growth markets in Eastern Europe, including Russia and Poland, have contributed significantly to this development. The Carlsberg brand saw a decline of 5% which should be seen in the light of the fact that last year s figures included significant sales in connection with EURO The Tuborg brand achieved a substantial 15% increase in volumes. Despite continued weak markets, the Western European region experienced a good Q2 driven by Sweden, Germany, and others, but the region is still behind last year s earnings at H1 following the weak start of the year. The Excellence programmes maintain a positive trend in profitability despite weak market trends. The initiatives are implemented in accordance with the plan and are providing the expected efficiency and savings; i.e. in the order of DKK 800m at the end of 2006 compared to the cost base in As a supplement to the Excellence programmes, a number of the Group s other processes and functions are being reviewed in order to identify savings and rationalisation potentials. As part of this process, Carlsberg has entered into an outsourcing agreement regarding ITservices in Europe and has concentrated its European media planning and buying services. During the past quarter, the ownership share in Carlsberg Malaysia Berhad was increased to 51.0% from 49.7%. Carlsberg is also expanding in the important growth markets in Asia, and Western China and Vietnam are the most dynamic markets. During the past quarter, Carlsberg has signed a letter of intent regarding strategic cooperation with the Vietnamese brewery Habeco, Hanoi Beer Company. Carlsberg believes that it is crucial for the company s future strength to be at the leading edge of the changes expected to take place in the markets where the Group is active and systematically look for new market opportunities. Consequently, Carlsberg is making targeted efforts to continuously optimise capital expenditure and operational development of the Group s activities. 3

4 Western Europe Q2 Q2 Change H1 H1 Change DKK million % (%) 2004 Beer sales (million hl) Net revenue 6,987 7, ,247 12, ,564 Operating profit ,269 Profit margin (%-point) In Western Europe, total beer sales amounted to 13.3m hl, corresponding to an increase of 4%. Adjusted for the acquisition of Holsten, beer sales were 5% down on the corresponding period last year, however - when taking into consideration the planned volume reduction in Sweden and last year s sales related to EURO it was actually slightly better than the general market development in the region. Net revenue totalled DKK 12,247m, corresponding to a 3% decrease compared to last year. The organic development in revenue was minus 7% and beer prices showed an average decline of 2%. However, price developments were more favourable in Q2, among other things due to increased prices in the UK and Sweden. Operating profit amounted to DKK 741m (DKK 886m in H1 2004). The profit decline is primarily due to the weak markets at the beginning of the year, whereas the past quarter showed progress resulting in a 1.8%-point increase in the profit margin to 11.9%. Despite the positive development in Q2, market conditions make it necessary continuously to consider costs and capital expenditure. In Q2, the Nordic region realised marginally better results than last year. However, the general market situation is still characterised by tough competition and declining volumes. In Denmark, the re-launch of the old Carlsberg bottle reversed the decline. However, it has not yet lifted sales to previous levels and together with logistics problems, this led to a decline in earnings in Q2 as well. Carlsberg Sverige achieved improved results due to price increases combined with cost savings. Ringnes in Norway showed reduced results for H1 due to a weak market. The Norwegian government has decided to remove the tax on PET non-returnable bottles, which may lead to a need for structural changes in Ringnes. Baltic Beverages Holding (50%) Q2 Q2 Change H1 H1 Change DKK million % (%) 2004 Beer sales (million hl) Net revenue 1,951 1, ,037 2, ,418 Operating profit ,038 Profit margin (%-point) BBH continued its strong progress and at H1 beer sales had risen by 15% to 9.7m hl. Net revenue was DKK 3,037m (up 19%). BBH s markets generally developed favourably in H1. Russia rose by 4%, the Baltic States rose by almost 7%, and the Ukraine and Kazakhstan rose by 19% and 22%, respectively. BBH strengthened its position in the important Russian market and managed to in- crease its market share to 36.3% (up 4.1%) through 17% growth. The growth was driven by sound progress in the premium segment as well as continued strong growth in the low-priced PET-segment, and BBH holds a favourable position in both these market segments. In the premium segment, Tuborg distinguished itself by more than doubling its volume and the brand Baltika no. 7 rose by 29%. Operating profit totalled DKK 568m, corresponding to an increase of 33% and the profit margin thus rose to 18.7% (up 2.0%- point). Earlier in the year, BBH announced the launch of a project aimed at carrying through operational integration of the individual breweries in Russia. The objective is to optimise sales, production, logistics, etc. and ensure that customers are offered outstanding service. In its present phase, the project work is focused on best-practise identification. As a whole, the project is regarded as an offensive, market-orientated initiative to increase profitability in the Russian activities and consequently create value for all shareholders. Eastern Europe excl. BBH Q2 Q2 Change H1 H1 Change DKK million % (%) 2004 Beer sales (million hl) Net revenue 1, ,619 1, ,902 Operating profit Profit margin (%-point) Eastern Europe saw beer sales of 6.1m hl, corresponding to an increase of 22% with organic growth constituting 18%. Total sales rose to DKK 1,619m (up 24%) and operating profit amounted to DKK 94m (minus DKK 39m in H1 2004). The favourable development was particularly driven by Poland where the past years optimisation and simplification efforts are now reflected in the results. The activities in Bulgaria, Serbia and Croatia also show sound developments whereas Türk Tuborg is still loss-making despite progress. 4

5 Asia Q2 Q2 Change H1 H1 Change DKK million % (%) 2004 Beer sales (million hl) Net revenue ,463 Operating profit Profit margin (%-point)* * Excl. the one-line consolidated associated undertaking Hite Brewery Co. Ltd. Beer volumes totalled 3.8m hl, corresponding to an increase of 36% of which 10% is organic while the rest derives from the breweries acquired in Western China. Net revenue rose by 3% to DKK 782m (not including revenue from associated undertakings in South Korea and China), and operating profit was unchanged at DKK 204m. Costs related to the marketing of Carlsberg Chill in China put a strain on earnings in the short term. In Malaysia, the rise in excise duty levels led to increased retail prices and lower sales. Other activities Other activities include the development and sale of properties, primarily at the former Tuborg site in Copenhagen, as well as the management of the Carlsberg Research Center. In H1, the activities contributed with an operating profit of DKK 14m against last year s DKK 421m due to the reduction in property gains and rental income. In accordance with Carlsberg s focus on its core activities, the portfolio is being scaled down. Comments to the accounts As of 1 January 2005, the accounting policies have been changed to comply with the requirements under International Financial Reporting Standards, IFRS. This financial statement has been prepared in accordance with the recognition and measurement provisions of IFRS as well as the Danish information requirements regarding quarterly statements of listed companies. The effect of the transition to IFRS and the accounting policies applied were explained in the announcement to the Copenhagen Stock Exchange dated 20 April Income statement In H1, a net revenue totalling DKK 17,819m was realised, which constitutes an increase of 5% compared to the same period in DKK 557m (3%) of this revenue derived from acquisitions, mainly Holsten. Gross profit amounted to DKK 8,974m, corresponding to a 4% rise. The gross margin was 50.4%, which is at level with last year. Other operating expenses, net, rose by 12% to DKK 6,621m partly due to the acquisitions made in Germany and partly due to significant gains related to property divestments in H Operating profit totalled DKK 1,328m, which is DKK 198m down on last year due to reduced income from the property sales of Carlsberg A/S. Operating profit for the beverage activities was DKK 1,314m, corresponding to an increase of DKK 209m (up 19%) and reflects profit progress in BBH and Eastern Europe in particular. Special items, net, totalled minus DKK 110m (minus DKK 704m last year primarily related to the accounting loss in connection with the outsourcing of Carlsberg UK s service agreement on draught beer equipment and the restructuring provisions made at the acquisition of Holsten) and mainly includes redundancy costs in connection with the Excellence programmes. Financials, net, totalled minus DKK 618m and is at level with last year (minus DKK 617m in H1 2004). Tax on profit for the period was minus DKK 180m, corresponding to an effective tax rate of 30%. Consolidated profit amounted to DKK 420m against DKK 144m in the same period last year. The minority interests share of the profit for the period was DKK 106m against DKK 40m in the same period last year mainly related to the minority interests in BBH. The figures are not directly comparable as Q included the positive contribution of DKK 93m relating to Orkla s minority ownership of Carlsberg Breweries in January and February Carlsberg A/S share of profit was DKK 314m against DKK 104m in the same period last year. Balance sheet Carlsberg s balance sheet amounted to DKK 62.9bn at the end of the period, corresponding to a reduction of approximately DKK 0.3bn compared to the same period last year. Compared to end-2004, the balance sheet saw an increase of approximately DKK 5.1bn, mainly due to the seasonally related development in receivables. As to liabilities, non-current borrowings were reduced from DKK 21.7bn at end-2004 to DKK 18.6bn at end-q and short-term borrowings rose from DKK 3.4bn to DKK 9.2bn - mainly as a result of the fact that the term of the debt to Orkla in connection with the acquisition of the minority shareholding in Carlsberg Breweries is now less than 1 year. Net interest-bearing debt totalled DKK 23.3bn against DKK 21.7bn at end After H1 2004, net interest-bearing debt amounted to DKK 23.4bn. As mentioned above, after H1, the receivables in particular were affected by the level of activities in Q2, which naturally affected the debt. The development in net interest-bearing debt in H1 may furthermore be explained by the payment of dividends to shareholders in Carlsberg A/S as well as minority shareholders and to currency translation adjustments on debt in USD and GBP. Cash flows Cash flows from operating activities totalled DKK 1,102m against DKK 1,493m in H The difference of minus DKK 391m can be explained by the following changes: minus DKK 163m due to increase in restructuring costs paid, minus DKK 410m due to - primarily seasonally - development in working capital and plus DKK 182m due to the underlying operational development before depreciation. Cash flows from investing activities totalled minus DKK 1,167m (minus DKK 2,511m in H1 2004). This includes the Holsten acquisition in 2004 as well as the divestment of property. Capital expenditure amounted to DKK 1,515m against DKK 1,638m last year. Free cash flows totalled minus DKK 65m against minus DKK 1,018m last year. When excluding the divestment of property, the acquisition of Holsten in 2004 and the paid restructuring costs, free cash flows totalled DKK 27m against DKK 3m last year. Profi t expectations Based on the H1 results, the general expectations for the profit development in 2005 are maintained. Based on present exchange rates, net revenue is expected to increase to approx. DKK 38bn (DKK 36.3bn in 2004). Operating profit (EBIT) is expected to amount to approx. DKK 3.4bn (DKK 3,401m in 2004). Beverage activities are expected to show progress due to i.a. favourable profit contributions from the Operational Excellence programme and operational improvements in Sweden, Italy, and BBH. Special items, net, are now expected to amount to approximately minus DKK 300m (previously expected minus DKK 100m to minus DKK 150m) due to the need for further restructuring provisions i.a. in Norway. Financials are now expected to be approximately minus DKK 1.1bn in 2005 (previous expectations were minus DKK bn) and the average effective tax rate for the companies of the Group is now expected to be slightly up on Carlsberg s share of profit is expected to increase by approx. 15% (DKK 1,100m in 2004 calculated in accordance with IFRS). The above forward-looking statements, including in particular the forecasts of future revenue and profit, reflect management s current expectations and are subject to risk and uncertainty. Several factors, some of which will be beyond management s control, may cause actual developments to differ materially from the expectations expressed. Such factors include - but are not limited to - the areas presented in previously published material from Carlsberg A/S, most recently in the Annual Report

6 Management Statement The Board of Directors and the Executive Board have considered and approved this financial statement for the period 1 January - 30 June This financial statement, which is unaudited, has been prepared in accordance with current recognition and measurement provisions of the International Financial Reporting Standards (IFRS) and Danish information requirements to quarterly statements of listed companies. In our opinion, this financial statement gives a true and fair view of the Group s financial position as at 30 June 2005 and of the Group s activities and cash flows during the period 1 January - 30 June Board of Directors Povl Krogsgaard-Larsen Jens Bigum Hans Andersen Flemming Besenbacher Søren Bjerre-Nielsen Henning Dyremose Claes Gjermansen Niels Kærgård Axel Michelsen Erik Dedenroth Olsen Bent Ole Petersen Per Øhrgaard Executive Board Nils S. Andersen Paul Bergqvist Jørn P. Jensen Carlsberg is one of the leading brewing groups in the world, with a large portfolio of beer and soft drink brands. Its flagship brand, Carlsberg, is one of the fastest growing and most well known beer brands in the world. Over 31,000 people work for Carlsberg at its 91 local production sites in 47 countries and its products are sold in over 150 markets. In 2004, Carlsberg sold 92 million hectolitres of beer, which breaks down to 74 million bottles of beer per day. Read more on Sales and operating profi t per region (beverages) 6 Q2 Q2 H1 H Beer sales (million hl) Western Europe Baltic Beverages Holding (BBH) Eastern Europe (excl. BBH) Asia In total Net revenue (DKK million) Western Europe 6,987 7,606 12,247 12,633 26,564 Baltic Beverages Holding (BBH) 1,951 1,610 3,037 2,559 5,418 Eastern Europe (excl. BBH) 1, ,619 1,300 2,902 Asia ,463 Not distributed Beverages, total 10,424 10,242 17,819 17,047 36,284 Net revenue (shares, %) Western Europe Baltic Beverages Holding (BBH) Eastern Europe (excl. BBH) Asia Not distributed Beverages, total Operating profit, EBIT (DKK million) Western Europe ,269 Baltic Beverages Holding (BBH) ,038 Eastern Europe (excl. BBH) Asia Not distributed Beverages, total 1,310 1,002 1,314 1,105 2,970 Profit margin, EBIT (%) Western Europe Baltic Beverages Holding (BBH) Eastern Europe (excl. BBH) Asia * Not distributed... Beverages, total * Excl. the one-line consolidated associated undertaking Hite Brewery Co. Ltd. (South Korea).

7 Beverages and other activities Q2 Q2 DKK million Other Other Beverages activities In total Beverages activities In total Net revenue 10,424-10,424 10,242 10,242 Operating profit (EBIT) 1, ,350 1, ,389 Special items, net Financials, net Profit before tax 1, Corporation tax Consolidated profit Attributable to: Minority interests Shareholders in Carlsberg A/S H1 H1 DKK million Other Other Beverages activities In total Beverages activities In total Net revenue 17,819-17,819 17,047-17,047 Operating profit (EBIT) 1, ,328 1, ,526 Special items, net Financials, net Profit before tax Corporation tax Consolidated profit Attributable to: Minority interests Shareholders in Carlsberg A/S Segment information by quarter Q1 Q2 Q3 Q4 Q1 Q2 DKK million Net revenue Western Europe 5,027 7,606 7,362 6,569 5,260 6,987 Baltic Beverages Holding (BBH) 949 1,610 1,702 1,157 1,086 1,951 Eastern Europe (excl. BBH) ,016 Asia Not distributed Beverages, total 6,805 10,242 10,231 9,006 7,395 10,424 Other activities In total 6,805 10,242 10,231 9,006 7,395 10,424 Operating profit (EBIT) Western Europe Baltic Beverages Holding (BBH) Eastern Europe (excl. BBH) Asia Not distributed Beverages, total 103 1,002 1, ,310 Other activities In total 137 1,389 1, ,350 Special items, net Financials, net Profit before tax , Corporation tax Consolidated profit Attributable to: Minority interests Shareholders in Carlsberg A/S

8 Income statement Q2 Q2 H1 H1 DKK million Net revenue 10,424 10,242 17,819 17,047 36,284 Cost of sales -4,983-4,989-8,845-8,440-18,065 Gross profit 5,441 5,253 8,974 8,607 18,219 Marketing costs ,025-1,192-2,133 Other operating expenses, net -3,497-3,084-6,621-5,889-12,685 Operating profit (EBIT) 1,350 1,389 1,328 1,526 3,401 Special items, net Financials, net ,152 Profit before tax ,651 Corporation tax Consolidated profit ,269 Attributable to: Minority interests Shareholders in Carlsberg A/S ,100 Balance sheet 30 June 30 June 31 Dec DKK million Assets Intangible assets 19,918 19,133 19,489 Property, plant and equipment 20,989 20,987 20,435 Investments 5,093 4,951 4,452 Total non-current assets 46,000 45,071 44,376 Inventories and receivables 13,879 14,630 11,306 Cash and cash equivalents 2,596 3,197 1,758 Total current assets 16,475 17,827 13,064 Assets held for sale Total assets 62,865 63,210 57,719 Equity and liabilities Capital and reserves, shareholders in Carlsberg A/S 15,729 14,513 15,084 Minority interests 1,742 1,878 1,708 Total equity 17,471 16,391 16,792 Deferred tax, retirement benefit obligations, etc. 4,591 4,572 4,433 Borrowings 18,569 23,805 21,726 Total non-current liabilities 23,160 28,377 26,159 Borrowings 9,178 4,873 3,357 Trade payables, etc. 4,631 4,791 4,140 Other current liabilities 8,354 8,778 7,271 Total current liabilities 22,163 18,442 14,768 Liabilities relating to assets held for sale Total equity and liabilities 62,865 63,210 57,719 8

9 Equity Share Retained Minority Equity DKK million capital earnings Dividend Total interests in total Equity at 1 January ,278 9, ,014 6,421 17,435 Currency translation adjustments relating to foreign entities Value adjustment of hedging instruments Value of share option scheme Other adjustments Tax on movements in equity Net income/loss recognised directly in equity Result for the period Total income for the period Dividend paid to shareholders Capital increase 305 3,058 3, ,379 Cancellation of treasury shares Acquisition of minorities, net 0-4,530-4,530 Movements in equity during the period, total 248 3, ,499-4,543-1,044 Equity at 30 June ,526 12, ,513 1,878 16,391 Equity at 1 January ,526 13, ,084 1,708 16,792 Currency translation adjustments relating to foreign entities Value adjustment of hedging instruments, etc Value of share option scheme Tax on movements in equity Net income/loss recognised directly in equity Result for the period Total income for the period ,206 Dividend paid to shareholders Sale of treasury shares Acquisition of minorities, net Movements in equity during the period, total 0 1, Equity at 30 June ,526 14, ,729 1,742 17,471 Cash fl ow statement Q2 Q2 H1 H1 DKK million Operating profit (EBIT) 1,350 1,389 1,328 1,526 3,401 Depreciation ,364 1,324 2,792 Changes i working capital Payments of interest, net, and tax paid, etc ,056-1,233-2,629 Cash flows from operating activities 1,568 1,584 1,102 1,493 3,875 Acquisition and divestment of undertakings, netnet ,336-4,252 Capital expenditure ,515-1,635-3,252 Other 416 3, ,460 5,141 Cash flows from investing activities ,030-1,167-2,511-2,363 Free cash flows 851 3, ,018 1,512 Cash flows from financing activities 15-3, ,376-4,226 Net cash flows ,394-2,714 Cash and cash equivalents, beginning of year 1,286 1,563 1,500 4,246 4,246 Currency translation adjustments Cash and cash equivalents, end of year 2,184 1,897 2,184 1,897 1,500 Free cash flows, see above 851 3, ,018 1,512 Sale of property ,513 Holsten acquisition, net - -1,740-1,840 1,231 Restructuring costs paid Free cash flows, adjusted ,608 9

10 Carlsberg and partners open new brewery in China Carlsberg Pilsner is regaining market share in Denmark After just three months since the return of its old bottle design, Carlsberg Pilsner has regained nearly all of the market share lost after replacing the design in In the months preceding the relaunch, sales of Carlsberg Pilsner only made up 50-55% of the sales compared to the same period in Carlsberg Pilsner has not yet regained all the lost terrain, but total sales in July made up 85% of the sales during the same period last year. The combined sales of Carlsberg in July (including draught, cans and PEN bottles) was up to 95% of last year s sales. In total, Carlsberg Danmark s brands are increasing their market share according to research by A. C. Nielsen. The relaunch of Carlsberg in its old bottle design has boosted sales in Denmark Carlsberg continues to make inroads in China with the opening of a new brewery in Qinghai Carlsberg, together with several partners, has opened a new brewery with a production capacity of one million HL in the Qinghai province in Western China. Carlsberg owns 33% of the brewery, which is the only brewery in the Qinghai province. The province has a population of around five million and an annual beer consumption of approximately 15 litres per capita, which is expected to increase with an improving economy. Carlsberg s partner Lanzhou Huanghe Enterprise Co. already has a strong presence in Qinghai, estimated to have a market share of 70%. Including the new brewery in Qinghai, Carlsberg now runs 13 breweries in China either fully owned or joint ventures. Sale of Danbrew to Birch & Krogboe Danbrew Ltd. A/S has been sold to Birch & Krogboe A/S, with effect from 1 October At the same time, Carlsberg has entered into a long-term agreement on the purchase of brewery-related services from Birch & Krogboe/Danbrew. Danbrew was founded in 1979 as a wholly owned subsidiary of Carlsberg focusing on technical consulting and contracting services for the brewery sector. In recent years, as the international brewery sector has undergone rapid consolidation, Danbrew s ownership has held back sales of services to other brewery groups. It is believed that Danbrew will be better able to develop its services for the sector under the new ownership. Baltika boosts exports Baltika Brewery, Carlsberg s joint venture in Russia, is intending to boost its exports by 20 percent in 2005 compared to Baltika now exports its products to 38 countries, and exports account for 6% of their total sales. In 2004, the company hit several new markets - China, Australia, Tajikistan, New Zealand, Belgium, Poland, Cyprus, Cuba, and Taiwan, and in 2005 will launch in Georgia, Armenia, Norway, Ireland, South Africa and Finland. The company s share in Russia s total beer exports amounted to 80 percent in New strategic cooperation in Vietnam Carlsberg has signed a strategic agreement with the Vietnamese brewery Habeco, Hanoi Beer Company. The intention is to create a future partnership and a joint development programme in cooperation with Habeco s management and the Vietnamese Ministry of Industry. The partnership, which will make Habeco and Carlsberg market leaders in Northern and Central Vietnam, is expected to materialize in a number of areas during Carlsberg already owns 60% of South East Asia Brewery in Hanoi, and 50% of Hué Brewery Ltd. Outsourcing of IT services to IBM Carlsberg has signed an agreement with IBM regarding the outsourcing of Carlsberg s IT infrastructure services in Europe. Carlsberg s current IT infrastructure includes 800 servers placed in five data centres serving 12,000 users located in 200 sites across Europe. Included in the agreement is the creation of a uniform IT platform across Carlsberg s companies in Europe. Carlsberg has grown through several acquisitions in recent years, and the creation of a standard platform will enable it to further consolidate and grow its business, enabling a faster response to consumer demand and changes in the market. Baltika beer is on the move: now sold in 38 countries

11 Carlsberg renews sponsorship with Liverpool FC The partnership between Probably the best beer in the world and the absolute best football team in Europe will continue for at least another two years. Shortly after Liverpool FC emerged victorious in the dramatic Champions League final, Carlsberg announced that they would extend their sponsorship agreement with the team until the end of the 2006/2007 season. Carlsberg has been the main club sponsor of Liverpool since 1992, the longest club partnership in The Premiership. The new agreement will allow the continuation of joint marketing initiatives for the mutual benefit of the club and community, as well as to utilise the continued partnership internationally. As official Club Sponsor, the renewed two year Liverpool FC contract will deliver a significant rights package ensuring a global reach including the Far East, Scandinavia and Eastern Europe markets, as well as the core markets of Western Europe. The Carlsberg and Liverpool relationship is one of the longest and most successful in football and we are delighted to be able to continue this partnership for a further two years. Carlsberg s continued involvement with the club enables us to jointly build on our relationship with the international fan community which is stronger than ever following the amazing win in Istanbul, says Keld Strudahl, Sponsorship Director, Carlsberg. Since 1988 Carlsberg s involvement in football has grown significantly and it is now one of the biggest sponsors in the game. Carlsberg is Official Sponsor of UEFA EURO 2008TM, as well as Official Beer of the England Team, The FA Cup together with many deals with clubs across the Premiership and the Football League. 11

12 Financial calendar for the accounting year 2005 The accounting year follows the calendar year. The publication dates to the fi nancial statements in 2005 are: 8 Nov 2005 Financial Statement for the six months ended 30 September Feb 2006 Preliminary profi t statement 2005 Carlsberg s communication to investors, analysts and the media is subject to certain limitations for a 4-week period prior to the announcement of quarterly fi nancial statements and annual reports. Announcements to the Stock Exchange Announcements to the Copenhagen Stock Exchange A/S 1 January August 2005 People news New Chairman of the Board of Carlsberg Brewery Malaysia Lim Say Chong has been appointed Chairman of the Board of Directors of Carlsberg Brewery Malaysia Berhad (CBMB), following the retirement of Jørgen Bornhøft. In 1991, Jørgen Bornhøft became CEO of CBMB and he subsequently became Chairman of the Board of Directors in Lim Say Chong has worked with the Imperial Chemical Industries Plc s Group of Companies in Malaysia and abroad for 30 years and today holds several positions of trust in Malaysia. 31 Jan 2005 Financial calendar Feb 2005 BBH Results for Feb 2005 Carlsberg Full Year Results Mar 2005 Annual General Meeting of Carlsberg A/S (Agenda) 17 Mar 2005 Annual General Meeting 30 Mar 2005 Carlsberg strengthens its distribution in Germany 20 Apr 2005 Transition to IFRS 10 May 2005 Q1 Financial Statement Aug 2005 BBH results for fi rst half Aug 2005 Financial Statement for the six months ended 30 June 2005 New CEO for Carlsberg UK in 2006 On 1 January 2006, Doug Clydesdale will become the new CEO of Carlsberg UK, succeeding Lars Fellman who will retire at the beginning of Doug Clydesdale is currently Managing Director of Brands and Sales in Carlsberg UK, overseeing the On Trade and Take Home Sales Divisions and Marketing. Development of the Carlsberg B-share compared to Heineken, Scottish & Newcastle, SABMiller, and InBev. Share price index (=100) New Managing Director for Carlsberg in China Michael Fredskov Christiansen has been appointed Managing Director of Carlsberg in China. Prior to the appointment, he was Vice President China for Novozymes and has been responsible for supply chain, logistics, finance, legal and IT both for the Chinese market and the Asia Pacific region. Carlsberg B Heineken S&N SAB Miller InBev Thomas Amstutz appointed new CEO of Feldschlösschen On 1 September 2005, Thomas Amstutz will assume the position of CEO at Carlsberg s Swiss subsidiary, Feldschlösschen Beverages Ltd., succeeding former Feldschlösschen CEO, Erwin Flückiger, who passed away last October. Thomas Amstutz is currently employed at the Hero Group, where he is responsible for Switzerland and for the Group s companies in Italy, France, the Netherlands and Japan. Carlsberg News is published every three months by Carlsberg in Danish and English. Circulation: Editorial staff: Anne-Marie Skov (responsible), Gitte Sillemann, Bill Fryman, and Jeanett W. Glenthøj. Photos: Action Photo Design and production: Boje & Mobeck as. Printed by: PrintDivision A/S. Carlsberg A/S, CVR-NR , 100 Ny Carlsberg Vej, DK-1760 Copenhagen V. Phone: [email protected]. Homepage: This statement is available in Danish and English. In case of any discrepancy between the two versions, the Danish version shall apply. 12