Investing.com -- Carlsberg’s (CSE:CARLb) stock jumped more than 6% on Thursday, following the release of its FY24 earnings and guidance for FY25.
The brewing company reported organic sales growth of 2.4% and organic EBIT growth of 6%, which were broadly in line with analysts’ expectations, with consensus forecast to increase by 2.6%, and profits forecast to increase by 5.7%.
The adjusted earnings per share (EPS) of DKK54.9 came in ahead of the consensus estimate of DKK52.2, adding to investor optimism.
The brewer held its full-year dividend per share at DKK27, in line with market expectations, given its higher leverage following the acquisition of Britvic (LON:BVIC).
Post-transaction, Carlsberg’s net debt-to-EBITDA ratio is projected at 3.4x for 2024, a notable shift due to the recent deal.
In its FY25 guidance, Carlsberg forecasts organic EBIT growth between 1% and 5%. Morgan Stanley (NYSE:MS) analysts consider the guidance to be slightly better than consensus expectations, despite the wide range reflecting the loss of San Miguel’s UK licence.
Some investors anticipated a growth forecast closer to 0-4% at the lower end of the range. Organic EBIT growth will be reduced by 2-3 percentage points due to the loss of the San Miguel licence.
Analysts are also closely watching the potential synergies from Carlsberg’s acquisition of Britvic. The company detailed the expected phasing of the cost savings, which are set to be modest in the immediate term, with about 10-15% of the synergies anticipated in the first year, 30-40% in the second, and another 30-40% in the third year. These estimates are in line with prior expectations.
Brewery performance varied across regions as well. Carlsberg experienced organic sales growth in Western Europe of 0.9%, marginally outperforming the consensus of 0.6% despite a drop in beer volumes of 1.8%.
Asia managed to increase organic sales by 1.0%, despite a 1.3% decline in beer volumes. In Central and Eastern Europe (CEEI), Carlsberg performed relatively better, with organic sales rising 7.8% due to positive price increases and a strong product mix.
“It is still early but initial assessment of Britvic (having been consolidated 3 weeks ago) seems to be consistent with management’s expectations,” said analysts at RBC Capital Markets.
“As expected, China remains a challenging market, particularly in Western provinces. For FY25, the company expects a relatively stable consumer environment, althought uncertainty in both Asia and Europe remains,” RBC added.