Carlsberg reported better-than-expected results for the first half of the year this morning, but investors were disappointed as the brewer maintained full-year projections.
While the company's core brands either slowed or declined, alcohol-free beer and craft ranges bolstered growth.
Net revenue grew two per cent to 31.7bn kroner (£3.9bn) in the six month period.
Net profit jumped 23 per cent to 2.3bn kroner (£281.5m), largely due to cost savings and the strong growth in emerging sectors.
Volume across the whole group was down two per cent, while the core Carlsberg beer brand slipped one per cent.
But alcohol-free products were up 13 per cent in Western Europe and craft or specialty beer volumes leapt 25 per cent.
The company maintained expectations of moderate growth for the year, despite the better-than-expected results, saying it expected a weaker third quarter. Shares were down more than two per cent.
Why it's interesting
The rise of craft and premium beers has not just affected small independent breweries. Big brewers are now buying into the market to survive. Carlsberg recently took over Hackney-based London Fields Brewery as part of its strategic investment in craft beer.
Carlsberg kickstarted an initiative it calls Sail'22 last year to drive growth of top-line brands, a project which it said today continues to make progress.
What the company said
Chief executive Cees ’t Hart said: “Our strong financial results enable us to accelerate our investments in the SAIL’22 priorities to drive sustainable long-term growth of the Carlsberg Group. The growth of Tuborg in Asia, the expansion of Grimbergen and the further development of our fruitful cooperation with Brooklyn serve as excellent examples of SAIL’22 at this point in time.”
What analysts said
Analysts at Liberum said that the results "demonstrate that the company is on track to deliver guidance and efficiency program savings." They also suggested that a smart move for Carlsberg would be to acquire the remaining 83 per cent of Habeco, a Vietnamese brewery in which it currently has a minority stake.
But Eddy Hargreaves at Investec was more wary, saying that despite the good progress, "the geographic exposure to currently challenged Beer markets (Russia, India, China) makes us cautious about the near term direction of forecasts."