Carlsberg expects ‘challenging 2023’ following Russia exit

Danish brewer Carlsberg warned Tuesday that 2023 would be another "challenging year" as it reported increased revenues but swung to a net loss owing to its exit from Russia.

Carlsberg expects 'challenging 2023' following Russia exit
Danish brewery Carlsberg says it expects 2023 to be challenging despite increased revenues overall last year. File photo: Erik Refner/Ritzau Scanpix

“The development of the war in Ukraine and the impact on our business remain highly uncertain, as is the Covid-19 recovery in China, including consumer off-take during the Chinese New Year celebrations,” the company said in its earnings report.

Revenue for the global beer maker came in at 70.26 billion Danish kroner ($10.1 billion) for 2022, up 16.9 percent from the year before.

The revenue growth was just short of analysts expectations, who had pencilled in 70.43 billion kroner according to a Bloomberg survey and 70.44 billion kroner according to one by Factset.

Carlsberg reported a net loss of 1.06 billion kroner for the year, which was impacted by writedowns of 10.74 billion kroner.

The company earned a net profit of 6.85 billion kroner in 2021.

Russia accounted for nine percent of Carlsberg’s profits in 2021, but the group decided to sell its operations there, joining an exodus of foreign businesses following Moscow’s invasion of Ukraine and Western sanctions against the country.

Meanwhile the company reported an adjusted net profit of 9.69 billion kroner, beating analyst expectations which were 7.73 billion kroner or 7.65 billion kroner, according surveys by Bloomberg and Factset respectively.

The company also warned that rough seas were ahead and said that “2023 will be another challenging year.”

“Due to our and our suppliers’ rolling hedging, last year’s commodity and energy price increases will have a significant impact on our 2023 cost of sales and logistics costs,” Carlsberg said.

The Danish brewery employs around 40,000 people globally and 1,500 in Denmark, according to its website.

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Denmark’s Lego builds around inflation to post profit

Lego, the world's number one toymaker, said Tuesday that its revenue and profits rose last year as demand for its plastic bricks remained strong despite inflationary headwinds.

Denmark's Lego builds around inflation to post profit

For 2022, net profit at the Danish firm rose four percent to 13.8 billion kroner ($1.98 billion) while sales jumped 17 percent to 64.6 billion kroner.

“These results were delivered despite extraordinary inflationary pressures on materials, freight and energy costs,” the company said in a statement.

Excluding currency effects, the sales gain was 11 percent. The privately-held company did not provide unit sales.

The firm, in which the holding company of Denmark’s Kirkbi family owns 75 percent with the rest being held by the Lego Foundation, said sales improved
in all markets and its market share grew globally.

“The company expects single digit revenue growth in 2023, ahead of the global toy market and will continue to accelerate investments in strategic
initiatives,” it said.

The company has seen continued success in the last two years even after no longer enjoying a boost from lockdowns keeping people at home, so far
withstanding pressure from inflation and slowing economies.

It has been buoyed both by sets based on franchises such as Star Wars and Harry Potter as well as home-grown hits like Lego Friends and Lego Technic.

Lego, which has completely withdrawn from Russia following Moscow’s invasion of Ukraine, has continued its strategy of opening more stores, with
155 new shops opened during the year, bringing the number of shops worldwide to 904.

The company, which employs some 27,000 people, has also been making major investments to reduce the climate impact of its products and operations,
including by manufacturing closer to consumers.

The group has just opened a carbon-neutral factory in Vietnam, joining already established ones in Hungary, the Czech Republic, Mexico, China and
Denmark. A new factory is also being constructed in the United States.

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