Carlsberg reports organic revenue growth of 6.4%

Carlsberg (CABGY (OTC:)) released its first-quarter trading update on Tuesday, reporting organic revenue growth of 6.4%.

The company has started the year well, with sales and revenue growing in all three operating regions. Organic sales grew by 0.2% in Western Europe; in Asia, by 3.1%; and in Central and Eastern Europe and India (CEEI) by 2.2%.

Meanwhile, organic revenue growth in Western Europe was 5.1%; in Asia, it was 7.6%; and in CEEI, it was 7.3%. Affected by currency exchange rates, the company's revenue increased by 4.4% to 17.1 billion Danish kroner.

Carlsberg also announced a new quarterly share buyback program of DKK 1 billion. Carlsberg also maintained guidance for organic operating profit growth of 1% to 5%.

Analysts at Bank of America commented on the report that it was a good start to the year. Analysts commented: “Today's results mark a strong start to 2024 with no major surprises. We expect this positive momentum to continue throughout the year, helped by easy summer weather.”

“The benign cost environment supports our organic EBIT forecast of +7.5% (above guidance and consensus), which we see as having upside risks. Carlsberg trades at 16.3x forward P/E of 12m, better than EU Staples has an 11% discount, which we think is very attractive. Given medium-term EPS growth of 10%, we expect EBIT upside in 2024.

UBS analysts said Carlsberg “joined a number of major food companies that beat first-quarter expectations, driven by volume and price/mix.”

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“We believe the upper end of our 1-5% organic EBIT growth guidance looks increasingly conservative, especially with China subsidiary Chongqing Beer reporting Q1 EBIT growth of +18%,” the bank noted. “However, “, we believe first-quarter sales were only in line with buy-side expectations, which have increased in this update, and the FX update implies a 1% consensus EPS revision.”

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