IR CORPORATE PRESENTATION 2019

Transcription

1 IR CORPORATE PRESENTATION 2019

2 Content 3 Group overview 8 SAIL 22 our strategy 27 Financial results Outlook 37 Our regions 67 Leverage and financial policy 74 Together Towards ZERO Our sustainability ambitions and targets 84 Share data 87 Find out more 89 Forward-looking statements Note: All numbers and data in this presentation are based on FY2018 2

3 GROUP OVERVIEW

4 The Carlsberg Group at a glance 133.1m hl total beverages volumes DKK 62.5bn net revenue DKK 9.3bn operating profit DKK 6.2bn free cash flow DKK 17.3bn net debt 1.29x NIDB/EBITDA c. 40,500 employees 4

5 Well diversified footprint 25 MARKETS With #1 or 2 markets 75% OF VOLUMES Sold in #1 or 2 markets WESTERN EUROPE #1-2 position in 13 markets 22 breweries 2018 organic EBIT growth: 7.0% ASIA #1-2 position in 7 markets 40 breweries 2018 organic EBIT growth: 15.8% EASTERN EUROPE #1-2 position in 5 markets 14 breweries 2018 organic EBIT growth: 11.3% 5

6 A complete and attractive portfolio of brews and brands 6

7 Ownership structure Carlsberg Foundation Free float 30% of capital 75% of votes 70% of capital 25% of votes Carlsberg A/S Listed on Nasdaq Copenhagen Carlsberg Breweries A/S Operating companies 7

8 SAIL 22

9 OUR PURPOSE Some have to dig deep to find their purpose, for us it has always been there We pursue perfection every day. We strive to brew better beers. Beers that stand at the heart of moments that bring people together. We don't settle for immediate gain, when we can create a better tomorrow for all of us BREWING FOR A BETTER TODAY & TOMORROW 9

10 Our ambition guides us SUCCESSFUL PROFESSIONAL ATTRACTIVE WE WILL deliver sustainable organic top- and bottom-line growth be the preferred supplier of our customers deliver value for shareholders, employees and the society BREWER IN OUR MARKETS 10

11 Strategic priorities to deliver shareholder value STRENGTHEN THE CORE Leverage our strongholds Excel in execution Optimising efficiency and cost POSITION FOR GROWTH Win in growing categories Grow in Asia Target big cities DELIVER VALUE FOR SHAREHOLDERS Organic growth in operating profit ROIC improvement Optimal capital allocation CREATE A WINNING CULTURE Team-based performance Together towards ZERO Compass (applying our codes and policies) 11

12 Leverage strongholds & excel in execution Strengthen core local power brands 2. Drive international brands: Tuborg and Carlsberg 3. Improve execution, e.g. driving value management initiatives, implementing demand space model, rolling out DraughtMaster, utilizing digital, etc. +6% (Core beer gross brand contribution in 2018)

13 The power of local identity is evident through our international and local power brands EACH WITH A CLOSE RELATIONSHIP WITH LOCAL CONSUMERS (HERITAGE AND HISTORY) TUBORG IS OUR LARGEST BRAND, ENJOYING STRONG POSITIONS IN CHINA AND INDIA 13

14 DraughtMaster : Key enabler to regain on-trade momentum NUMBER OF INSTALLATIONS IN % 14 Variety in sizes and 31 days shelf life allow for multiple taps / tap rotation enabling premiumisation No added CO 2 enhances freshness and beer experience while being environment friendly One-way kegs and improved cleaning system to decrease costs

15 Optimise efficiency & costs Improve operational performance 1. Supply chain efficiencies Deliver efficiency improvements across the supply chain, reducing material and nonmaterial cost per hl 2. Operating cost efficiencies Reduce sales and admin. costs DKK ~3bn (Total Funding the Journey benefits delivered by 2018) 15

16 Optimise efficiency & costs Improve cash performance 1. Optimise financial costs Ensure a diversified funding structure 2. Reduce tax rate Optimise legal and debt structures 3. Optimise trade working capital Ensure granular optimization by country and category 4. Maintain strict capex policy Keep capex at 6-7% of net revenue -3% -6% -9% -12% -15% -18% TRADE WORKING CAPITAL (% of net revenue)

17 Win in growing categories Craft & speciality 1. Accessible crafty extensions (price index 120+) 2. Imported specalities (price index 150+) 3. Authentic craft champions (price index 200+) +26% (Volume growth in 2018) 17

18 A taste of the Carlsberg world of craft & specialty 18

19 Win in growing categories Alcohol-free brews 1. Line extensions of strong local power brands 2. Stand-alone brands 3. Driving category growth +33% (Volume growth in Western Europe in 2018) 19

20 A selection of Carlsberg s world of alcohol-free brews 20

21 Grow in Asia Annual organic growth rates ASIA 20% 16% 12% 8% 4% 0% Net revenue Operating profit 1. Leverage strong geographic footprint 2. Capture market growth 3. Accelerate premiumisation 21

22 2018: Strong growth of key brands 1664 BLANC +49% GRIMBERGEN +14% TUBORG +10% CARLSBERG +5% 22

23 23

24 Delivering value for shareholders Organic operating profit growth (%) ROIC (%) Pay-out ratio (%) & net debt/ebitda x x x x x x ROIC ROIC excl. goodwill Pay-out ratio Net debt/ebitda (rhs) 24

25 Dividend per share and pay-out ratio Dividend (DKK)/share and pay-out ratio 24 Dividend/share 60% 20 Pay-out ratio (rhs) % % % 8 20% 4 10% % 25

26 Share buy-back programme initiated on 6 February 2019 Recent years healthy development of business Steady organic growth in operating profit and margin expansion Solid and continuous improvement of ROIC Strong cash flow and reduced leverage Share buy-back programme launched 6 February 2019 DKK 4.5bn during the next 12 months Split into two tranches of approx. six months each First tranche of DKK 2.5bn with a maximum of 15m shares Programme to be carried out according to Safe Harbour Regulation The Carlsberg Foundation will participate pro rata For more information, see 2018 Financial Statement Announcement, released on 6 February CAPITAL ALLOCATION PRINCIPLES 1. Invest in to our business to drive long-term value creation 2. NIBD/EBITDA < 2.0x 3. Dividend pay-out ratio of around 50% 4. Excess cash to be redistributed through buy-backs 5. Deviating from the above only if value-enhancing acquisition opportunities arise Cash returns to shareholders for the year (DKKbn) 2015¹ 2016¹ 2017¹ 2018² ¹ Paid dividend ² Paid dividend and announced share buy-back 26

27 FINANCIAL RESULTS

28 2018: A strong set of numbers GROWING TOP- AND BOTTOM-LINE Net revenue +6.5%* Operating profit +11.0%* DELIVERING STRONG CASH FLOW Free cash flow of DKK 6.2bn REDUCING LEVERAGE Net debt/ebitda 1.29x INCREASING CASH RETURNS Dividend +13% Share buy-back of DKK 4.5bn * Organic numbers 28

29 2018: Balancing the Golden Triangle 29

30 Net revenue and operating profit Net revenue (DKKbn) Operating profit (DKKbn)

31 Operating margins Operating margin 25% 20% % 10% 5% 0% Carlsberg Group Western Europe Asia Eastern Europe 31

32 Adjusted EPS DKK Adjusted EPS

33 Streamlining our portfolio of businesses Divestitures of non-core assets in 2016 Our 100% shareholding in Danish Malting Group, Asset swap in China of the 30% ownership in the holding company Xinjiang Hops for full ownership of Xinjiang Wusu Group Our 100% shareholding in the Vung Tau brewery in Southern Vietnam Our 59% shareholding in Carlsberg Malawi Our 25% shareholding in the plant-breeding company Sejet Divestitures of non-core assets in 2017 Our 100% shareholding in Carlsberg Uzbekistan Our 23% shareholding in United Romanian Breweries Our 30% shareholding in Russian malt producer MSSP Our 100% of the German wholesale business Nordic Getränke Acquisitions in % of Cambrew in Cambodia, increasing ownership share to 75% 28.5% of the shares in Viacer, the controlling shareholder of Super Bock Group in Portugal, increasing Carlsberg s direct and indirect ownership of Super Bock Group to 60% 49% of Olympic Brewery in Greece, increasing ownership share to 100% 10.5% of Brewery Alivaria in Belarus, increasing ownership share to 78% 33

34 Average trade working capital and free cash flow ATWC/net revenue Operating cash flow and free cash flow (DKKbn) -4.0% % % % % % % % Operating cash flow Free cash flow 34

35 OUTLOOK

36 2019 outlook Continued focus on driving organic revenue growth while maintaining tight cost control and strict cash discipline Mid-single-digit percentage organic growth in operating profit Assumptions A DKK translation impact on operating profit of around zero, based on the spot rates as at 5 February Net finance costs (excluding FX) of DKK m Effective tax rate below 28% Capital expenditures of around DKK 4.5bn at constant currencies 36

37 OUR REGIONS

38 Our footprint in Western Europe, # 1-2 position in 13 markets NORDICS Denmark, Sweden, Norway, Finland #1 in the market 31-54% national market share 4 breweries SWITZERLAND Feldschlösschen #1 in the market 40% national market share 1 brewery FRANCE Kronenbourg #1 in the market 28% national market share 1 brewery POLAND Carlsberg Polska #3 in the market 18% national market share 3 breweries UK Carlsberg UK #4 in the market 10% national market share 1 brewery OTHER MARKETS Italy, Germany, Portugal, Baltics, South East Europe #1-2 in six markets with 17-47% national market share 12 breweries 38

39 Western Europe profitability and returns 7 Operating profit (DKKbn) and margin (rhs) 16% 42 Invested capital (DKKbn) 28% ROIC 6 15% 36 24% % 30 20% 4 13% 24 16% 3 12% 18 12% 2 11% 12 8% 1 10% 6 4% % % ROIC ROIC excl. goodwill 39

40 Western Europe 2018 key figures Pro rata volumes m.hl / DKKbn Organic growth Beer volume % Other beverage volume % Total beverage volume % Others, incl. export & licence Nordic countries Net revenue % Operating profit % Operating margin 14.4% 15.0% Switzerland South East Europe UK France Poland 40

41 Western Europe 2018 headlines Strong results Good growth of craft & speciality and alcohol-free brews Warm summer in the northern part of the region Positive price/mix in majority of markets Regional price/mix -1% due to country and product mix Operating profit up organically +7.0% Volume growth Value management Premiumisation Funding the Journey benefits Lower depreciation 41

42 Western Europe 2018 market comments THE NORDICS Volume growth of 6% Price/mix impacted by non-beer products Markets positively impacted by warm weather Good growth of craft & speciality and alcohol-free brews FRANCE 5% volume growth in a growing market Positive price/mix Growth of premium, craft & speciality and AFB, while mainstream Kronenbourg brand declined SWITZERLAND Growth of power brand Feldschlösschen, regional brands and alcohol-free brews Positive price/mix UK Strong growth of premium brands Declining mainstream segment Exit of porterage business now completed POLAND Strong recovery during summer Strong price/mix Growth of upper-mainstream and premium brands OTHER MARKETS Strong performance in the Balkans and the Baltics Growth of local power brands in Germany Mixed performance in export & licence markets 42

43 Denmark and Sweden CARLSBERG DANMARK Market position: No. 1 Market share: 54% Key brands: Tuborg, Carlsberg, Jacobsen, Nordic Per capita consumption: 59 litres (excl. border trade) On-trade share of total market, approx.: 26% CARLSBERG SVERIGE (SWEDEN) Market position: No. 1 Market share: 31% Key brands: Falcon, Eriksberg, Pripps, Carlsberg, Nya Carnegie, Brooklyn, 1664 Blanc Per capita consumption: 46 litres (excl. border trade) On-trade share of total market, approx.: 19% 43

44 Norway and Finland RINGNES (NOWAY) Market position: No. 1 Market share: 53% Key brands: Ringnes, Tuborg, Carlsberg, E.C. Dahls, 1664 Blanc, Brooklyn, Munkholm Per capita consumption: 50 litres (excl. border trade) On-trade share of total market, approx.: 20% SINEBRYCHOFF (FINLAND) Market position: No. 1 Market share: 38% Key brands: Karhu, Koff, Nikolai, Carlsberg, Brooklyn Per capita consumption: 78 litres On-trade share of total market, approx.: 14% 44

45 France and Switzerland KRONENBOURG (FRANCE) Market position: No. 1 Market share: 28% Key brands: 1664, 1664 Blanc, Grimbergen, Carlsberg, Kronenbourg, Tuborg Skøll, Tourtel Per capita consumption: 33 litres On-trade share of total market, approx.: 27% FELDSCHLÖSSCHEN (SWITZERLAND) Market position: No. 1 Market share: 40% Key brands: Feldschlösschen, Cardinal, Carlsberg, Brooklyn, Grimbergen, Somersby Per capita consumption: 56 litres On-trade share of total market, approx.: 38% 45

46 Poland and the Baltics CARLSBERG POLSKA (POLAND) Market position: No. 3 Market share: 18% Key brands: Okocim, Kasztelan, Harnas, Carlsberg, Somersby, Grimbergen, Birell Per capita consumption: 98 litres On-trade share of total market, approx.: 9% BALTICS (ESTONIA, LATVIA, LITHUANIA) Market position: No. 1-2 Market share: 29-39% Key brands: Aldaris, Svyturys, Utenos, Saku, Carlsberg, Grimbergen, 1664 Blanc Per capita consumption: litres On-trade share of total market, approx.: 4-9% 46

47 UK and Italy CARLSBERG UK Market position: No. 4 Market share: 10% Key brands: Carlsberg, Tetley, Brooklyn, San Miguel, Grimbergen, Poretti Per capita consumption: 66 litres On-trade share of total market, approx.: 47% CARLSBERG ITALIA Market position: No. 4 Market share: 7% Key brands: Poretti, Bock, Carlsberg, Tuborg, Brooklyn Per capita consumption: 25 litres On-trade share of total market, approx.: 38% 47

48 Germany and South East Europe CARLSBERG DEUTSCHLAND Market position: No. 1 (Northern Germany) Market share: 17% (Northern Germany) Key brands: Holsten, Astra, Duckstein, Carlsberg, Grimbergen, Brooklyn Per capita consumption: 84 litres On-trade share of total market, approx.: 16% SOUTH EAST EUROPE (GREECE, SERBIA, BULGARIA, CROATIA) Market position: No. 1-3 Market share: 13-35% Key brands: Mythos, Fix, Lav, Pan, Pirinsko, Shumensko, Carlsberg, Tuborg, Somersby. Grimbergen, Birell Per capita consumption: litres On-trade share of total market, approx.: 23-58% 48

49 Portugal SUPER BOCK GROUP (PORTUGAL) Market position: No. 1 Market share: 47% Ownership share: 60% (associate company) Key brands: Super Bock, Carlsberg Per capita consumption: 52 litres On-trade share of total market, approx.: 58% 49

50 Our footprint in Asia, # 1-2 position in 7 markets CHINA (Western) #1 in Western China 6% national market share 25 breweries LAOS Lao Brewery #1 in the market 95% market share 2 breweries International premium brands Core local brands INDIA Carlsberg India #3 in the market Market share: n/a 8 breweries VIETNAM Carlsberg Vietnam #4 in the market 8% national market share 1 brewery NEPAL Gorkha Brewery #1 in the market 63% market share 1 brewery MYANMAR Myanmar Carlsberg #2 in the market 8% market share 1 brewery CAMBODIA Cambrew #3 in the market 17% market share 1 brewery SRI LANKA Lion Brewery Ceylon #1 in the market 82% market share 1 brewery Associated company 50 HONG KONG Carlsberg Hong Kong #1 in the market 28% market share MALAYSIA SINGAPORE Carlsberg Malaysia Carlsberg Singapore #2 in the market #2 in the market 40% market share 22% market share 1 brewery

51 Asia profitability and returns Operating profit (DKKbn) and margin (rhs) Invested capital (DKKbn) ROIC % 30 48% % 25 40% % 20 32% % 15 24% % 10 16% % 5 8% % % ROIC ROIC excl. goodwill 51

52 Asia 2018 key figures Pro rata volumes m.hl / DKKbn Organic growth Beer volume % Other beverage volume % Total beverage volume % India Other Malaysia Vietnam Net revenue 13,944 15, % Operating profit 2,905 3, % Operating margin 20.8% 20.4% Laos China 52

53 Asia 2018 headlines Another good year in Asia Price/mix +4% International premium portfolio driving price/mix Volume growth broadly based Sizeable proportion of SAIL 22 investments allocated to further strengthening the Asian business Organic operating profit growth driven by strong net revenue growth Acquisiton of 25% of Cambrew in Cambodia, taking ownership share to 75% and gaining control of business 53

54 Asia 2018 market comments CHINA 15% organic net revenue growth: Price/mix +7% Volume growth +8% Premium portfolio growth of +13% MALAYSIA, SINGAPORE Share gains, especially in premium category Double-digit growth of Carlsberg Smooth Draught INDIA 19% volume growth Price/mix +7%, supported by good growth of the Carlsberg brand and price increases LAOS High-single-digit volume growth Beerlao strengthening its position Price/mix negatively impacted by product mix NEPAL Strong performance 30% excise tax increase at the end of H1, leading to retail price increases of c. 15% OTHER MARKETS Ownership of Cambrew increased to 75%; business being rebuild Volume decline in Vietnam; growth of the Carlsberg brand 54

55 China and Hong Kong CHINA Market position, western China: No. 1 (national: no. 5) Market share, western China: 61% Ownership share: % Key brands: Tuborg, 1664, Carlsberg, Shancheng, Chongqing, Wusu, Dali, Huang He, Xixia Per capita consumption: 27 litres On-trade share of total market: 46% CARLSBERG HONG KONG Market position: No. 1 Market share: 28% Ownership share: 100% Key brands: Carlsberg Per capita consumption: 23 litres On-trade share of total market: 67% 55

56 Malaysia and Singapore CARLSBERG MALAYSIA Market position: No. 2 Market share: 40% Ownership share: 51% Key brands: Carlsberg, Somersby, 1664 Blanc, Brooklyn Per capita consumption: 6 litres On-trade share of total market: 40% CARLSBERG SINGAPORE Market position: No. 2 Market share: 22% Ownership share: 51% Key brands: Carlsberg, Somersby, 1664 Blanc Per capita consumption: 22 litres On-trade share of total market: 55% 56

57 India and Nepal CARLSBERG INDIA Market position: No. 3 Market share: n/a Key brands: Tuborg, Carlsberg Per capita consumption: 2 litres On-trade share of total market: 17% GORKHA BREWERY (NEPAL) Market position: No. 1 Market share: 63% Key brands: Gorkha, Tuborg Per capita consumption: 4 litres On-trade share of total market: 73% Carlsberg holds 67% of the shares in the parent company holding 100% and 90% of the shares in the businesses in India and Nepal respectively. 57

58 Vietnam and Laos VIETNAM Market position: No. 4 Market share: 8% Ownership share: 17% (Habeco) 100% (other business in Vietnam) Key brands: Huda, Halida, Festival, Thang Long, Carlsberg, Tuborg Per capita consumption: 43 litres On-trade share of total market: 41% LAO BREWERY (LAOS) Market position: No. 1 Market share: 95% Ownership share: 61% Key brands: Beer Lao, Carlsberg, Tuborg Per capita consumption: 44 litres On-trade share of total market: 55% 58

59 Cambodia and Myanmar CAMBREW (CAMBODIA) Market position: No. 3 Market share: 17% Ownership share: 75% Key brands: Angkor Beer, Carlsberg, Tuborg Per capita consumption: 59 litres On-trade share of total market: 30% CARLSBERG MYANMAR Market position: No. 2 Market share: 8% Ownership share: 51% (associate) Key brands: Yoma, Tuborg Per capita consumption: 8 litres On-trade share of total market: 45% 59

60 Our footprint in Eastern Europe, # 1-2 position in 5 markets RUSSIA Baltika Breweries #1 in the market 30% market share 8 breweries KAZAKHSTAN Carlsberg Kazakhstan # 2 in the beer market 36% market share 1 brewery UKRAINE Carlsberg Ukraine #1 in the market 33% market share 3 breweries AZERBAIJAN Carlsberg Azerbaijan #1 in the market 75% market share 1 brewery BELARUS Alivaria Brewery #1 in the market 29% market share 1 brewery 60

61 Eastern Europe profitability and returns Operating profit (DKKbn) and margin (rhs) Invested capital (DKKbn) ROIC % 28 21% % 24 18% % 20 15% 16 12% % 12 9% % 8 6% % 4 3% % % ROIC ROIC excl. goodwill 61

62 Eastern Europe 2018 key figures Pro rata volumes m.hl / DKKbn Organic growth Beer volume % Other beverage volume % Total beverage volume % Ukraine Azerbijan Belarus Kazakhstan Net revenue 10,925 10, % Operating profit 2,220 2, % Operating margin 20.3% 20.6% Russia 62

63 Eastern Europe 2018 headlines Price/mix +6% In Russia, mainly due to higher prices In other markets, due to a combination of price and mix improvements Volume growth in all markets Organic operating profit growth driven by volume growth, positive price/mix and tight cost control 63

64 Eastern Europe 2018 market comments RUSSIA Estimated 3% market growth, driven by warm weather and football world cup Volume growth of 2% Price/mix +2% due to improved pricing OTHER MARKETS Solid performance in Belarus, Kazakhstan and Azerbaijan UKRAINE Slight market growth, supported by weather Mid-single-digit volume growth Strong price/mix driven by premium portfolio 64

65 Russia and Ukraine BALTIKA (RUSSIA) Market position: No. 1 Market share: 30% Key brands: Baltika 3, Baltika 7, Bolshaya Kruzhka, Baltika Cooler, Zatecky Gus, Tuborg, Carlsberg, Holsten, Baltika 0 Per capita consumption: 52 litres On-trade share of total market: 19% CARLSBERG UKRAINE Market position: No. 1 Market share: 33% Key brands: Lvivske, Slavutich, Carlsberg, Baltika, Grimbergen, 1664 Blanc Per capita consumption: 42 litres On-trade share of total market: 12% 65

66 Belarus and Kazakhstan OLIVARIA (BELARUS) Market position: No. 1 Market share: 29% Key brands: Alivaria, Carlsberg, Holsten Per capita consumption: 50 litres On-trade share of total market: 5% CARLSBERG KAZAKHSTAN Market position: No. 2 Market share: 36% Key brands: Derbes, Irbis, Carlsberg, Tuborg Per capita consumption: 32 litres On-trade share of total market: 7% 66

67 LEVERAGE & FINANCIAL POLICY

68 Net interest-bearing debt and leverage Net interest-bearing debt (DKKbn) NIBD/EBITDA x x x x x 6 0.5x x

69 Commitment to investment grade Rated by Fitch and Moody s since January 2006 Long Term Issuer Rating: BBB+ Outlook: Stable Date: The upgrade reflects Fitch's expectation that the company will be able to maintain the improved credit metrics it achieved over , thanks to stronger cash generation capability and a conservative financial policy. Strong credit metrics are aligned in our projections for with the 'A' category; however, lower leverage than peers supports the 'BBB+' rating, reflecting Carlsberg's weaker global market position as the fourth-largest international beer company. Our projections incorporate some headroom for bolt-on M&A in the largely consolidated international beer industry. We assume modest organic revenue and profit growth but flexibility to react to industry challenges such as currency movements, input costs and competition in the group s markets of operation. Rating: Baa2 Outlook: Stable Date: Carlsberg's Baa2 long-term rating is supported by the company's (1) large scale as the world's third-largest international brewer by volume, with leading positions in some of its key European and Asian markets, including Russia; (2) increasing geographic diversification; and (3) solid cash flow generation, supporting gross debt reduction and strengthening of key credit metrics. Key credit ratios are trending towards the higher end of our rating range and solidly position Carlsberg in its rating category. The expectation of prudent financial policy (company's net debt/ebitda below 2.0x target; 1.57x as of June 2017) also supports current rating and outlook. The rating also factors in Carlsberg's (1) significant exposure to Eastern Europe and Russia in particular, where trading conditions remain challenging; (2) weaker margins than those of its global peers that we rate, reflecting a higher exposure to the competitive beer markets in Western Europe, as well as to different local distribution models; and (3) exposure to event risk as the company may be interested in small to medium-sized acquisitions to strengthen its position outside of Europe). 69

70 Carlsberg Group financing Committed to maintaining investment grade credit rating Centralised funding and risk management at the level of Carlsberg Breweries A/S Diversified sources of funding and smooth maturity profile Ample capital resources available at all times EUR 750m bond maturing in 2019 EUR 750m bond maturing in 2022 EUR 500m bond maturing in 2023 EUR 1,000m bond maturing in 2024 EUR 2,510m credit facility committed until 2021 DKKbn 10 Time to maturity, non-current borrowings DKKbn 50 Committed credit facilities and net financial debt years 2-3 years 3-4 years 4-5 years > 5 years > 70

71 Focus on cash generation and maintaining optimal capital structure Target net interest bearing debt (SAIL 22) NIBD/EBITDA comfortably below 2.0x NIBD/EBITDA at 31 December 2018: 1.29 NIDB at 31 December 2018: DKK 17.3bn Total borrowings Allocation (%) Total borrowings at 31 December 2018 of DKK 24.0bn 70% of total borrowings is long term Duration 4.2 years Issued bonds Other Bank borrowings 71

72 Funding portfolio to meet Carlsberg s strategy Committed credit facilities Committed credit facilities at 31 December 2018 of DKK 40,523m Credit resources available at 31 December 2018 of DKK 13,365m Credit resources available is defined as unutilised non-current credit facilities and cash & cash equivalent less utilised current credit facilities Utilisation of funding sources Funding portfolio requires rebalancing due to high bond ratio and little flexible debt No immediate refinancing need Committed credit facilities Debt allocation Bonds 55% Bank borrowings 41% Bonds 93% Bank borrowings 2% Other credit facilities 5% Other credit facilities 4% 72

73 Funding strategy Smoothening of maturity profile Looking for maturities in gaps Increase flexibility and ability to match liquidity Keep part of the funding portfolio short-term Expect to launch ECP in 2019 Will be open to PPs and reverse inquiries Looking broadly and opportunistically at markets and funding sources Smaller issues (than previously) DKK bn Bonds Other borrowings Maturity profile

74 TOGETHER TOWARDS ZERO

75 Ambitions and targets towards ZERO 75

76 ZERO carbon footprint % carbon emissions at our breweries 30% reduction in beer-in-hand carbon footprint % reduction in carbon emissions at our breweries 100% electricity from renewable sources at our breweries 0% coal at our breweries 15% reduction in beer-in-hand carbon footprint 100% low-climate-impact cooling 30 partnerships to reduce shared carbon footprint 76

77 Eliminating emissions at our breweries Absolute CO 2 emissions Relative CO 2 emissions kg CO 2 /hl Relative energy consumption kwh/hl Performance Target Performance Performance 77

78 ZERO water waste % reduction in water usage at our breweries Partner to safeguard shared water resources in highrisk areas % reduction in water usage at our breweries Explore going below 2.0 hl/hl at all high-risk breweries 78

79 Cutting our water waste ACTIONS TOWARDS ZERO IN 2018 ZERO water waste roadmaps Relative water consumption hl/hl Supply chain strategy updated to deliver against 2022 targets at our breweries, including investments and action plans Performance improvements Operational standards for water updated to reflect our efficiency efforts and promote best practice 2.5 Carlsberg Young Scientists Community Six postdoctoral students assigned specific research tasks at Carlsberg Research Laboratory within e.g. water purification technology and advanced wastewater treatment Performance Target 79

80 ZERO irresponsible drinking % of our markets improve on responsible drinking year on year % availability of alcohol-free brews (AFB) 100% responsible drinking messaging through packaging and brand activations 100% of our markets run partnerships to support responsible consumption 80

81 Zero irresponsible drinking 100% choice, 100% responsibility ACTIONS TOWARDS ZERO IN 2018 Number of consumers (GBRD) More than 70 million consumers reached during Global Beer Responsibility Day (GBRD) Encouraging responsible consumption 96% of our products carry responsible drinking messages advising consumers not to drink-drive and not to drink when underage or pregnant 86% of packaging in Western Europe include information on ingredients and nutritional values. 81

82 ZERO accidents culture 2030 Zero lost-time accidents 2022 Reduction in accident rate year on year 82

83 Working towards a safer workplace ACTIONS TOWARDS ZERO IN 2018 Leadership Continued the roll out the health & safety leadership training to reach all managers globally by 2020 By end of 2018, over 1,500 people managers were trained Target for 2019 is to reach an additional 1,200 managers Lost-time accidents Life Saving Rules Life Saving Rules initiative launched globally. All relevant employees have received basic training and performance is consistently tracked Performance Target 83

84 SHARE DATA

85 Carlsberg shares and ownership end 2018 Key share data Major shareholders Carlsberg A Carlsberg B No of shares 33,699, ,857,554 Currency DKK DKK Stock market NASDAQ OMX Copenhagen NASDAQ OMX Copenhagen Company The Carlsberg Foundation Massachusetts Financial Services Company Ownership 30% of capital 75% of votes > 5% of capital ISIN DK DK Geographical break-down of shareholders, free float 1 Symbol CARL A CARL B Geography Ownership Reuters CARLa.CO CARLb.CO Bloomberg CARLA DC CARLB DC Votes per share 20 2 Par value USA 38% UK 16% DK 16% Other 30% 1 Excluding The Carlsberg Foundation 85

86 Carlsberg ADR program (Sponsored Level 1) ADR Symbol CABGY CUSIP Exchange Ratio Depositary OTC 5 ADRs: 1 ORD JPMorgan Effective date 26 February 2010 U.S. ISIN US Underlying SEDOL

87 FIND OUT MORE

88 Useful links download our 2018 Annual Report download our 2018 Sustainability Report download quarterly financial data in excel about our heritage about our corporate governance... about our brands about our sustainability efforts about the Carlsberg share and ADRs about the Carlsberg Foundation 88

89 FORWARD-LOOKING STATEMENTS

90 Forward-looking statements Disclaimer This presentation contains forward-looking statements, including statements about the Group s sales, revenues, earnings, spending, margins, cash flow, inventory, products, actions, plans, strategies, objectives and guidance with respect to the Group's future operating results. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe", "anticipate", "expect", "estimate", "intend", "plan", "project", "will be", "will continue", "will result", "could", "may", "might", or any variations of such words or other words with similar meanings. Any such statements are subject to risks and uncertainties that could cause the Group's actual results to differ materially from the results discussed in such forward-looking statements. Prospective information is based on management s then current expectations or forecasts. Such information is subject to the risk that such expectations or forecasts, or the assumptions underlying such expectations or forecasts, may change. The Group assumes no obligation to update any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements. Some important risk factors that could cause the Group's actual results to differ materially from those expressed in its forward-looking statements include, but are not limited to: economic and political uncertainty (including interest rates and exchange rates), financial and regulatory developments, demand for the Group's products, increasing industry consolidation, competition from other breweries, the availability and pricing of raw materials and packaging materials, cost of energy, production and distribution related issues, information technology failures, breach or unexpected termination of contracts, price reductions resulting from market driven price reductions, market acceptance of new products, changes in consumer preferences, launches of rival products, stipulation of market value in the opening balance sheet of acquired entities, litigation, environmental issues and other unforeseen factors. New risk factors can arise, and it may not be possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on the Group's business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Accordingly, forward-looking statements should not be relied on as a prediction of actual results. 90