COPENHAGEN (Reuters) - Carlsberg stuck to its 2017 profit forecast on Thursday as the Danish brewer reported a 5 percent rise in first quarter sales, with lower overall volumes offset by an improved price mix as drinkers opted for pricier beers.
First-quarter sales came in at 13.70 billion Danish crowns (1.56 billion pounds), Carlsberg said, above the 13.48 billion forecast in a Reuters poll of analysts.
“Both Eastern Europe and Asia delivered surprisingly strong price-mix-effects in the first quarter, which is a very positive signal to investors. They are already reaping the benefits of their strategy,” said Sydbank analyst Morten Imsgard.
A higher price mix means the company sold more of its more expensive beers, helping its profit margins.
Imsgard said that while Carlsberg might have challenges selling more beer, it was a positive sign that it was “able to guide their customers towards more profitable beer brands”.
Carlsberg launched a seven-year plan in 2015 to deliver organic sales growth and margin improvements by striking a balance between volume growth and more profitable products.
But despite this, Carlsberg saw market volumes in Russia continuing to decline throughout the year.
“The 4 percent (Russian market volume) decline in Q1 is largely in line with expectations ... We feel that around 4-5 percent the market could continue to decline mainly as an impact of the PET,” chief executive Cees’t Hart said.
Russian initiatives to discourage drinking have included banning the sale of beer in so-called PET bottles, popular plastic bottles larger than 1.5 litres, which has further hurt sales in Carlsberg’s biggest market.
Eastern European volumes fell by 2 percent, while overall volumes were down by 1 percent in the quarter. However, Carlsberg’s price-mix effect grew 4 percent.
Carlsberg, which did not disclose earnings figures, said it still expected mid-single-digit organic growth in operating profit this year. It also expects a positive impact from currency exchange of 300 million crowns versus a previously forecast 350 million crowns.
Meanwhile, Anheuser-Busch InBev, the world’s largest brewer, reported results on Thursday, posting a lower than expected increase in profit in the first quarter as earnings slipped in the United States and fell sharply in Brazil, its two largest markets.
Shares in Carlsberg were up 1.9 percent at 0820 GMT.
Editing by Alexander Smith