Carlsberg (CABGY (OTC:CABGY)) posted a first-quarter trading update Tuesday, reporting a 6.4% rise in organic revenue growth.
The company's solid start to the year has seen volume and revenue growth across all three of its operating regions. Organic volume growth in Western Europe was up 0.2%; in Asia, it increased by 3.1%; and in Central & Eastern Europe and India (CEEI), it rose by 2.2%.
Meanwhile, organic revenue growth in Western Europe was 5.1%; in Asia, it was 7.6%, and in CEEI, it increased by 7.3%. The company reported revenue growth of 4.4% to DKK 17.1bn, impacted by currencies.
Carlsberg also announced a new quarterly share buy-back programme, amounting to DKK 1 billion. Carlsberg also maintained its guidance of organic operating profit growth of 1% to 5%.
Reacting to the report, analysts at BofA said it was a good start to the year. "Today's results mark a good start to 2024, with no major surprises. We expect the positive momentum to continue through the year, helped by easy summer weather comps," analysts commented.
"A benign cost environment supports our forecast of +7.5% organic EBIT (above guidance and consensus), to which we see upside risk. Carlsberg trades on 16.3x 12m fwd PE, 11% discount to EU staples, which we believe is very attractive, given c10% EPS growth medium term, and we see upside to 2024 org. EBIT consensus," they added.
Analysts at UBS stated that Carlsberg "joins the list of many staples companies beating Q1 expectations, driven by both volumes and price/mix."
"We think the upper end of the 1-5% organic EBIT growth guidance looks increasingly conservative, particularly with the Chinese subsidiary Chongqing Brewery reporting Q1 EBIT growth +18%," the bank noted. "However, we think Q1 sales are only in line with buyside expectations, which had increased into this update, and the FX update implies a c1% downgrade to consensus EPS."