Carlsberg AS - Data Monitor

Carlsberg A/S

Company Profile

Publication Date: 28 Jul 2011

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Carlsberg A/S Page 2 Datamonitor

Carlsberg A/S

TABLE OF CONTENTS

Company Overview..............................................................................................4

Key Facts...............................................................................................................4

Business Description...........................................................................................5

History...................................................................................................................6

Key Employees.....................................................................................................9

Key Employee Biographies................................................................................10

Major Products and Services............................................................................16Revenue Analysis...............................................................................................18

SWOT Analysis...................................................................................................19

Top Competitors.................................................................................................25

Company View.....................................................................................................26

Locations and Subsidiaries...............................................................................31


Carlsberg A/STABLE OF CONTENTS

COMPANY OVERVIEW

Carlsberg A/S (Carlsberg or the company) is the holding company for the Carlsberg Group. Thecompany, through subsidiaries is engaged in the production, marketing and sale of beer. Carlsbergalso produces soft drinks, energy drinks and bottled water. The company operates in Europe andAsia. It is headquartered in Copenhagen, Denmark and employs 41,402 people.

The company recorded revenues of DKK60,054 million ($10,695.6 million) during the financial yearended December 2010 (FY2010), an increase of 1.1% over FY2009. The operating profit of thecompany was DKK10,249 million ($1,825.3 million) in FY2010, an increase of 9.1% over FY2009.The net profit was DKK5,351 million ($953 million) in FY2010, an increase of 48.6% over FY2009.

KEY FACTS

Carlsberg A/SHead Office100 Ny Carslberg Vej1799 Copenhagen VDNK

45 33 27 3300Phone

45 3327 4701Fax

http://www.carlsberggroup.comWeb Address60,054.0Revenue / turnover

(DKK Mn)DecemberFinancial Year End41,402EmployeesCARL BCopenhagen Ticker


Carlsberg A/SCompany Overview

BUSINESS DESCRIPTION

Carlsberg A/S (Carlsberg or the company) is one of the leading brewing companies in the world.It is engaged in the production, marketing and sale of beer. Apart from beer, the company alsoproduces soft drinks, energy drinks and bottled water. Carlsberg sells its 500 different brands inmore than 150 countries across the world.

Carlsberg's beer range comprises pilsner, non-alcoholic beer, seasonal brews, wheat beer, ale,stout, and light pilsner. The company's brand portfolio includes international premium brands suchas Carlsberg, Tuborg, Baltika and Kronenbourg 1664; and local brands such as Ringnes (Norway),Feldschlosschen (Switzerland), Lav (Serbia) and Wusu (Western China).

In accordance with the company's management and reporting structure, beverage activities aresegmented according to the geographical regions where production takes place. The companyoperates though three geographic segments: Northern and Western Europe, Eastern Europe, andAsia.

In Northern and Western Europe segment, Carlsberg is the second largest brewer with market leaderpositions in most of the countries. The segment covers mature markets like the Nordic countries,the UK, France and Switzerland. It also comprises markets like Poland, the Baltic States and countrieson the Balkan Peninsula, where long-term beer consumption is still expected to grow.

The Eastern Europe segment covers the growth markets of Russia and the Ukraine and a numberof emerging beer markets. Carlsberg is the largest brewer in the region holding strong market leaderpositions in Russia and all other markets in the region except for the Ukraine.

The Asia segment comprises old, mature Carlsberg markets, (Hong Kong, Malaysia, Singapore),and new emerging beer markets in China, Vietnam and India. Carlsberg operates its businesses inthese markets through its subsidiaries such as Carlsberg India, Carlsberg Hong Kong, and CarlsbergBrewery Malaysia.


Carlsberg A/SBusiness Description

HISTORY

Carlsberg A/S (Carlsberg or the company) was established by brewer, J.C. Jacobsen, in 1847, toproduce bottom fermented, matured beer in accordance with the Bavarian tradition. The companyexported its first barrel of beer to Edinburgh, Scotland, in 1868. The Carlsberg Foundation wascreated in 1876. In 1882, Jacobsen's son, Carl, opened a brewery under the name Ny (New)Carlsberg. Jacobsen subsequently changed the name of his brewery to Gamle (old) Carlsberg. In1887, after Jacobsen's death, The Carlsberg Foundation took over Gamle Carlsberg.

The Carlsberg pilsner's logo, designed by Thorvald Bindesboll, was introduced in 1904.The companyopened its first overseas brewery in Blantyre, Malawi in 1968. Two years later, in 1970, Carlsbergand rival Danish brewery, Tuborg, merged to form United Breweries.

In 1992, Carlsberg merged with English brewery Tetley. Carlsberg became the sole owner ofCarlsberg-Tetley in 1997. In the same year, the Carlsberg Group acquired 75% of the equity ofPoretti Industries in Italy. In 1998, the company was renamed Carlsberg Italy.

Carlsberg increased its shareholding in the Portuguese brewery, Unicer-Bebidas, to 44% in 2000.Carlsberg Breweries was formed in 2001, owned 60% by Carlsberg and 40% by Orkla. In 2002, thecompany acquired two Bulgarian breweries, Shumensko Pivo and Pirinsko Pivo.

In 2004, Carlsberg bought Orkla's share of Carlsberg Breweries. The company also entered into anagreement with Ongo Investment and various minority shareholders to acquire 34.5% of WusuBrewery, located in the Xinjiang, China. The brewery was operated through a joint venture betweenCarlsberg and the Blue Sword Group, a local company. In the same year, Carlsberg Breweries andLabatt agreed to end their import, distribution and marketing agreement in the US. The companyacquired 91.6% of the share capital of Holsten Brauerei in 2004, with an option of purchasing afurther 6% at a later date. In the same year, Carlsberg acquired 51% of the shares in Serbia's thirdlargest brewery Pivara Celarevo. The company sold its 29% shareholding in Harboes Bryggeri forDKK252 million ($49.7 million).

Later in the year, Carlsberg's subsidiary, Holsten-Brauerei of Hamburg sold its 65.1% stake inHansa-Brunnen of Rellingen.The company's German subsidiary Holsten-Brauerei sold the breweries,Konig-Brauerei, in Duisburg and Licher Privatbrauerei, in Lich to the Bitburger Group for E469 million($690.1million). Later, the company also sold its two business properties at the former premises ofTuborg Breweries in Hellerup north of Copenhagen. Carlsberg entered an agreement in 2004 withOngo Investment, a Singapore registered company, and various minority shareholders to acquire34.5% of Wusu Brewery, located in the Xinjiang Autonomous Region in North West China. Thecompany's Swedish subsidiary, Carlsberg Sweden, signed an agreement in the same year to sellits brewery property in Bromma to the Stockholm Municipality.

Later in the year, Carlsberg's subsidiary, Holsten-Brauerei of Hamburg sold its 65.1% stake inHansa-Brunnen of Rellingen.The company's German subsidiary Holsten-Brauerei sold the breweries,


Carlsberg A/SHistory

Konig-Brauerei, in Duisburg and Licher Privatbrauerei, in Lich to the Bitburger Group for E469 million($690.1million). Later, the company also sold its two business properties at the former premises ofTuborg Breweries in Hellerup north of Copenhagen. Carlsberg entered an agreement in 2004 withOngo Investment, a Singapore registered company, and various minority shareholders to acquire34.5% of Wusu Brewery, located in the Xinjiang Autonomous Region in North West China. Thecompany's Swedish subsidiary, Carlsberg Sweden, signed an agreement in the same year to sellits brewery property in Bromma to the Stockholm Municipality.

Carlsberg launched a new draught beer system for professional and private users under the brand,DraughtMaster, in Denmark, Norway, Portugal and Sweden, in 2006. In the same year, the companysigned a joint venture agreement with Ningxia Nongken Enterprise Group to establish a greenfieldbrewery in the Ningxia Autonomous Region in western China. Further in 2006, the company soldits remaining stake in Hite Brewery in South Korea. The company's German subsidiary, CarlsbergDeutschland sold Landskron Brauerei in Gorlitz. Baltika Breweries, a wholly owned subsidiary ofBaltic Beverages Holding, became the majority shareholder of Pikra, Vena and Yarpivo Breweriesin the same year. Later that year, the company entered into a joint venture in India with the aim ofbuilding a green field brewery in the state of Rajasthan.

In 2007, Carlsberg created a new organizational structure, Carlsberg South East Europe, in Serbia,Croatia and Bulgaria. As part of the continuous optimization of the brewery structure in WesternEurope, Carlsberg decided to concentrate its brewing activities in Italy at the brewery in Varese northof Milan. In the later part of 2007, Carlsberg completed the acquisition of 70% of the shares in LaoSoft Drink, the bottler of Pepsi in Laos.

Carlsberg and The Coca-Cola Company (Coca-Cola) entered into an agreement in 2008, whereinCoca-Cola acquired Carlsberg's mineral water brands Kildeveld and Kurvand in Denmark and alsoentered into a license agreement regarding Ramlosa in Denmark. Further, in Finland, Coca-Colaacquired the soft drink brand Hyvaa Paivaa and entered into a license agreement regarding theenergy drink Battery. Later in 2008, Carlsberg Deutschland launched EVE, a Swiss malt-basedaperitif with a low alcohol content aimed specifically at female consumers.

In 2009, Carlsberg announced to close its Pori brewery in Finland in 2009, due to increaseduncertainty on the Finnish beer market. Carlsberg Deutschland wholesale unit, Goettsche Getraenke,and Nordmann Group decided to start a joint venture company under the name Nordic GmbH fordistribution of beverages in Northern Germany in 2009. Same year, Carlsberg with its local partner,Hanoi Beer-Alcohol-Beverages (Hanoi Beer) announced to open a new brewery in Vietnam.

Carlsberg Deutschland announced in 2009 to sell its brewery in Braunschweig to Oettinger Brauerei.In the same year, Carlsberg China launched Carlsberg Light in China. In 2009, Carlsberg's jointventure South Asia Breweries announced its plans to open its fifth brewery in India in the state ofAndhra Pradesh. The company announced its plan to purchase a significant stake in Hue Breweryin 2009. In the same year, Carlsberg announced its plans to concentrate its beer production inNorthampton brewery which would increase its brewery capacity from 4.5 million to 6 million hectolitersper year.



The company's subsidiary, Carlsberg Bulgaria, announced to acquire Blagoevgrad-based breadand bakery products maker Hlyab I Hlebni Izdeliya in January 2010. In December 2010, the companyincreased its shareholding in Chongqing Brewery from 17.46% to 29.71%.

In January 2011, Baltic Beverages Holding, which belongs to the Carlsberg, increased its ownershipin OJSC Olivaria Brewery to 67.8%.



KEY EMPLOYEES

BoardJob TitleNameExecutive BoardPresident and Chief Executive OfficerJorgen Buhl Rasmussen

Executive BoardDeputy Chief Executive Officer and ChiefFinancial Officer

Jorn P. Jensen

Non Executive BoardChairman, Supervisory BoardPovl Krogsgaard-Larsen

Non Executive BoardDeputy Chairman, Supervisory BoardJess Soderberg

Non Executive BoardMember, Supervisory BoardFlemming Besenbacher

Non Executive BoardMember, Supervisory BoardLars Stemmerik

Non Executive BoardMember, Supervisory BoardRichard Burrows

Non Executive BoardMember, Supervisory BoardKees van der Graaf

Non Executive BoardMember, Supervisory BoardPer Ohrgaard

Non Executive BoardMember, Supervisory BoardNiels Kaergard

Non Executive BoardMember, Supervisory BoardHans Andersen

Non Executive BoardMember, Supervisory BoardBent Ole Petersen

Non Executive BoardMember, Supervisory BoardUlf Olsson

Non Executive BoardMember, Supervisory BoardPeter Petersen

Senior ManagementSenior Vice President, Eastern EuropeAnton Artemiev

Senior ManagementSenior Vice President, Northern EuropeJorn Tolstrup Rohde

Senior ManagementSenior Vice President, Western EuropeJesper Friis

Senior ManagementSenior Vice President, AsiaRoy Bagattini

Senior ManagementSenior Vice President, Group Supply ChainPeter Ernsting

Senior ManagementSenior Vice President, Group Sales, Marketingand Innovation

Khalil Younes

Senior ManagementSenior Vice President, Group Human ResourcesRoger Muys

Senior ManagementSenior Vice President, Group Communicationsand CSR

Anne-Marie Skov


Carlsberg A/SKey Employees

KEY EMPLOYEE BIOGRAPHIES

Jorgen Buhl Rasmussen

Board: Executive BoardJob Title: President and Chief Executive OfficerSince: 2007Age: 56

Mr. Rasmussen has been the President and Chief Executive Officer at Carlsberg since 2007.Previously, he was Executive Vice President for Carlsberg's Denmark region from 200607. Mr.Rasmussen also held various positions of responsibility, including the President, Gillette GroupAMEE; the President, Gillette Group Northern Europe; and Area Director, Duracell, Northern Europe.He started his career as Research Manager and Consultant, IFH Research International (Unilever),Denmark in 1979.

Jorn P. Jensen

Board: Executive BoardJob Title: Deputy Chief Executive Officer and Chief Financial OfficerSince: 2007Age: 47

Mr. Jensen has been the Deputy Chief Executive Officer and Chief Financial Officer at Carlsbergsince 2007. Previously, he was Chief Financial Officer at Carlsberg and Carlsberg Breweries from2004 to 2007. Mr. Jensen has also held various other positions of responsibility, including ExecutiveVice President and Chief Financial Officer at Nilfisk-Advance; the Chief Financial Officer at FossElectric; and Group Controller at Bruel & Kjaer.

Povl Krogsgaard-Larsen

Board: Non Executive BoardJob Title: Chairman, Supervisory BoardAge: 70

Mr. Krogsgaard-Larsenis the Chairman, Supervisory Board at Carlsberg. He also serves as theChairman of the Supervisory Boards at Auriga and Bioneer. Mr. Krogsgaard-Larsenis affiliated tothe Faculty of Pharmaceutical Sciences at the University of Copenhagen. With his background asa researcher and educator, he has expertise in the analysis of issues within the pharmaceuticalsector and the presentation of plans and results. Additionally, Mr. Krogsgaard-Larsenalso hasdirectorship experience at other international companies.


Carlsberg A/SKey Employee Biographies

Jess Soderberg

Board: Non Executive BoardJob Title: Deputy Chairman, Supervisory BoardAge: 67

Mr. Soderberg is the Deputy Chairman, Supervisory Board at Carlsberg. He was the Chief ExecutiveOfficer at the A.P. Moller - Mrsk Group (19932007) and before that, the Chief Financial Officerin the same company from 1981. Mr. Soderberg also serves as a Member of the Supervisory Boardat The Chubb and Danske Bank's Advisory Board.

Flemming Besenbacher

Board: Non Executive BoardJob Title: Member, Supervisory BoardAge: 59

Mr. Besenbacher is a Member, Supervisory Board at Carlsberg. He also serves as a Director of theInterdisciplinary Nanoscience Center, Aarhus University. Mr Besenbacher is the Chairman of theSupervisory Board of the Carlsberg Laboratory and a Member of the Boards of the Tuborg Foundation,Nanoference and MedTech Innovation Center.

Lars Stemmerik

Board: Non Executive BoardJob Title: Member, Supervisory BoardSince: 2010Age: 54

Mr. Stemmerik has been a Member, Supervisory Board at Carlsberg since 2010. He is a Memberof the Executive Board of the Carlsberg Foundation and the Board of Directors at the CarlsbergLaboratory. Mr. Stemmerik also serves as a Member of the Board of Management at GeoCenterDenmark and the Board of GEUS (Geological Survey of Denmark and Greenland).

Richard Burrows




Mr. Burrows has been the Member, Supervisory Board at Carlsberg since 2009. Previously, heserved as joint Chief Executive Officer at Pernod Ricard from 2000 to 2005. Mr. Burrows also servesas Chairman at British American Tobacco and a Non-Executive Director at Rentokil Initial.

Kees van der Graaf


Mr. Graaf has been the Member, Supervisory Board at Carlsberg since 2009. Previously, he heldthe position of President Europe on the Board at Unilever until 2008. Mr. Graaf currently serves asMember of the Supervisory Boards at the Dutch automobile club ANWB, Ben&Jerry's, 3M HoldingsBenelux, and Mylaps.

Per Ohrgaard


Mr. Ohrgaard is a Member, Supervisory Board at Carlsberg. He is also a Member of the ExecutiveBoard at the Carlsberg Foundation and the Supervisory Boards of property companies affiliated tothe Carlsberg Foundation. Mr. Ohrgaard serves as the Chairman at Leonhardt & Hoier LiteraryAgency, and of the folk high school Ostersoen, Abenra, Denmark.

Niels Kaergard


Mr. Kaergard is a Member, Supervisory Board at Carlsberg. He is also a Member of the ExecutiveBoard at the Carlsberg Foundation and Chairman of the Supervisory Board of property companiesaffiliated to the Carlsberg Foundation. Mr. Kaergard has expertise in economics and internationalaffairs, and has served as the Chairman at the Danish Economic Council from 1995 to 2001.

Hans Andersen




Mr. Anderson is a Member, Supervisory Board at Carlsberg. He is an Employee representative onthe Board at Carlsberg Danmark.

Bent Ole Petersen


Mr. Petersen is a Member, Supervisory Board at Carlsberg. He joined Carlsberg as Head of Sectionat Carlsberg Research Center.

Ulf Olsson


Mr. Olsson has been a Member, Supervisory Board at Carlsberg since 2010. He is a Scientist atCarlsberg Research Center.

Peter Petersen


Mr. Petersen has been a Member, Supervisory Board at Carlsberg since 2010. He also serves asthe Deputy Chairman of the Board at Carlsberg Staff, Gifts and Entertainment. Mr. Petersen is anEmployee representative on the Boards at Carlsberg Danmark and Carlsberg Breweries.

Anton Artemiev

Board: Senior ManagementJob Title: Senior Vice President, Eastern EuropeSince: 2008

Mr. Artemiev has been the Senior Vice President, Eastern Europe at Carlsberg since 2008. He hasalso been the President at Baltika Brewery since 2005. Mr. Artemiev serves as Executive VicePresident at Baltic Beverages Holding (BBH). Prior to joining BBH, he headed the Russian operations



department at Bossard Consultants/Gemini Consulting. In 1992, Mr. Artemiev was directly involvedin the recommendations that led to foreign investments in Baltika Brewery.

Jorn Tolstrup Rohde

Board: Senior ManagementJob Title: Senior Vice President, Northern EuropeSince: 2009

Mr. Rohde has been the Senior Vice President, Northern Europe at Carlsberg since 2009. Previously,he was the President and Chief Executive Officer at 3C GROUPS A/S during 200709. Mr. Rohdehas also held senior managerial positions in, amongst others, ORKLA Group and Sara Lee.

Jesper Friis

Board: Senior ManagementJob Title: Senior Vice President, Western EuropeSince: 2009

Mr. Friis has been the Senior Vice President, Western Europe at Carlsberg since 2009. He joinedthe company in 2005. Prior to that, Mr Friis was the Chief Executive Officer at Ringnes, CarlsbergsNorwegian subsidiary. He has also worked for Toms Nordic in Sweden, Bacardi-Martini and Leaf.

Roy Bagattini

Board: Senior ManagementJob Title: Senior Vice President, AsiaSince: 2009

Mr. Bagattini has been the Senior Vice President, Asia at Carlsberg since 2009. He joined thecompany from SABMiller, where he was Regional Managing Director for Eastern Europe. Prior tothat, Mr Bagattini held senior general management positions in South Africa and the US as well asbeing Country Managing Director at SABMiller in India, China and Italy.

Peter Ernsting

Board: Senior ManagementJob Title: Senior Vice President, Group Supply ChainSince: 2011

Mr. Ernsting has been the Senior Vice President, Group Supply Chain at Carlsberg since 2011. Priorto joining Carlsberg, he worked with the Unilever Group most recently as the Chairman at the Unilever



Supply Chain Company. Before this, Mr Ernsting managed Unilever's supply chain organisation inAsia and Russia.

Khalil Younes

Board: Senior ManagementJob Title: Senior Vice President, Group Sales, Marketing and InnovationSince: 2009

Mr.Younes has been the Senior Vice President, Group Sales, Marketing and Innovation at Carlsbergsince 2009. Prior to joining Carlsberg, he worked 15 years for The Coca-Cola Company. Mr.Youneswas responsible for a number of successful brand developments and change processes around theworld. He started his career with Procter & Gamble in France.

Roger Muys

Board: Senior ManagementJob Title: Senior Vice President, Group Human ResourcesSince: 2010

Mr. Muys has been the Senior Vice President, Group Human Resources at Carlsberg since 2010.He joined the company from a position as the Senior Vice President, Human Resources at RoyalPhilips Lighting Sector. Before that, Mr. Muys was Senior Vice President, Human Resources atPhilips Consumer Electronics in Amsterdam. Prior to joining Philips, he was with General Electric,where he held a number of key Human Resources position.

Anne-Marie Skov

Board: Senior ManagementJob Title: Senior Vice President, Group Communications and CSRSince: 2004

Ms. Skov has been the Senior Vice President, Group Communications and CSR at Carlsberg since2004. Prior to joining Carlsberg, she worked with the Novo Group, most recently as the Vice Presidentand Member of the Executive Management of Novozymes. Ms. Skov also serves as a Member ofthe Supervisory Board at WWF Denmark, the Tuborg Foundation, Erik Moller Architects and NorrebroTeater.



MAJOR PRODUCTS AND SERVICES

Carlsberg A/S (Carlsberg or the company) is the holding company for the Carlsberg Group. The company, through subsidiaries is engaged in the production, marketing and sale of beer. Carlsberg also produces soft drinks, energy drinks and bottled water. The company's key products and brands include the following:

Products:

BeerSoft drinksWater

Brands:

Arendals PilsnerArsenalnoeAldarisAlivariaBosman FullBaltikaCarlsbergCarls HvedeCarls PorterCarls AleCarls SpecialCarlsberg Elephant BeerCardinal EveDahls PilsnerDragon & Beer GreenEriksbergEuro BeerFalcon AleFeldschlosschen OriginalGurten LagerGrimbergen BlondeHolstenHurlimann LagerHARD ROCKInstant Pression 1664IrbisJacobsen Vintage No. 1Jacobsen Brown AleJacobsen Original Dark Lager


Carlsberg A/SMajor Products and Services

Jolly ShandyKronenbourgKarmiKvas TarasLight BeerLubzer ExportLvivske PremiumMillenium StarkolMythosNikolai IVANevskoeNutrimaltOkocim MocnePripps BluePan LagerPirinsko PivoRingnes PilsenerRoyal Stout Somersby CiderSemper Ardens Abbey AleSuper BockSaku BlondSvyturys BaltasTuborg ClassicTuborg SpecialTetleys OriginalUralsky MasterUtenosValaisanne LagerWiibroe ArgangsolWind Flower Sun & MoonYarpivoZatecky GusZelta


Carlsberg A/SMajor Products and Services

REVENUE ANALYSIS

Carlsberg A/S (Carlsberg or the company)

Carlsberg recorded revenues of DKK60,054 million ($10,695.6 million) during FY2010, an increaseof 1.1% over FY2009. For FY2010, Northern and Western Europe, the company's largest geographicmarket, accounted for 60.3% of the total revenues.

The company generated 100% of its revenues from sale of beer and other beverages in FY2010.Carlsberg activities comprise the production and sale of beer and other beverages. In accordancewith the company's management and reporting structure, beverage activities are segmented accordingto the geographical regions where production takes place.

Revenues by geography*

Northern and Western Europe, Carlsberg's largest geographical market, accounted for 60.3% of thetotal revenues in FY2010. Revenues from Northern and Western Europe reached DKK36,122 million($6,433.3 million) in FY2010, a decrease of 0.9% compared to FY2009.

Eastern Europe accounted for 30.3% of the total revenues in FY2010. Revenues from EasternEurope reached DKK18,141 million ($3,230.9 million) in FY2010, a decrease of 2.2% compared toFY2009.

Asia accounted for 9.4% of the total revenues in FY2010. Revenues from Asia reached DKK5,613million ($999.7 million) in FY2010, an increase of 32.9% over FY2009.

* The percentage breakdown for geographical segments is calculated out of the sub-total salesexcluding the not-allocated amount.


Carlsberg A/SRevenue Analysis

SWOT ANALYSIS

Carlsberg A/S (Carlsberg or the company) is the holding company for the Carlsberg Group. Thecompany, through subsidiaries is engaged in the production, marketing and sale of beer. Carlsbergalso produces soft drinks, energy drinks and bottled water. Strong regional presence and portfolioof brands offers Carlsberg a distinct competitive advantage in the market place and also enhancesthe bargaining power besides resulting in steady revenues and profits. However, stringent advertisingregulations would limit the brand's future promotional campaigns and its awareness among theconsumers.

WeaknessesStrengths

Lacks scale of operation compared to itscompetitors

Leading regional presence built on strongbrand portfolio

Limited presence in the US beer marketCost-reduction initiatives to improve marginsConstrained capital efficiencyBrand innovation to adjust with the changes

in consumer tastes and preferences

ThreatsOpportunities

Stringent advertising regulationsPositive outlook for beer market in Asiapacific region Negative health attributes associated with

beerNew product development likely to sustaincustomer interest Imposition of 200% Excise duty on beer

products in Russia

Strengths

Leading regional presence built on strong brand portfolio

Carlsberg is the fourth largest brewer in the world and is particularly strong in Northern and WesternEurope. It holds leading positions in European market, where its share is around 56.7% in Denmark,Norway (52.2% share), Finland (46.4% share), France (30.3%), Russia (39.7%) and the UK (15.4%).The company also has substantial market share in Asia. It holds nearly 98% market share in Laos,Nepal (80%), Cambodia (60.1%), Malaysia (41%), and Vietnam (37%).

The company markets and sells more than 500 different beer brands around the world.The company'sflagship brand - Carlsberg - is one of the best-known beer brands in the world. The brand portfolioincludes other well-known international premium brands such as Tuborg, Baltika and 1664; andstrong local brands such as Ringnes (Norway), Feldschlosschen (Switzerland), Lav (Serbia) andWusu (Western China). In western China, Carlsberg holds number one position with a market share


Carlsberg A/SSWOT Analysis

of approximately 60%, mainly through its local brands such as Wusu, Xixia and Dali. In Bulgaria,the company ranked number two in the market with a market share of approximately 28%.

The strength of the company's brand portfolio is highlighted by the fact that Baltika, Carlsberg andTuborg are among the six biggest brands in Europe, with Baltika ranked as number one. In addition,the company's French brand, Kronenbourg, holds tenth position in Europe and brand Ringnes is theNorway's leading pilsner beer. Strong regional presence and portfolio of brands offers Carlsberg adistinct competitive advantage in the market place and also enhances the bargaining power besidesresulting in steady revenues and profits.

Cost-reduction initiatives to improve margins

The company has implemented various cost-reduction initiatives to boost productivity and improveprofitability. Carlsberg is focusing on raising profitability by reforming cost structures, and the shareduse of upgraded distribution bases across company operations, aimed at reducing costs. Thecompany has taken many initiatives to improve efficiency from cash flow management to networkoptimisation. It started globalising and centralising a number of back-office functions, as well asother relevant areas. It includes a shared accounting service centre in Poland, a centralisedprocurement centre in Switzerland, a centralised IT organisation for the Northern and WesternEuropean region, and an integrated Innovation, Research and Development organisation at companylevel.

In addition, in FY2010, Carlsberg announced its portfolio simplification project. This will allow moreproducts to be produced in one place and shipped cross-border, leading to fewer types of bottlesand cans being produced in each brewery and fewer line stoppages. A simplified portfolio providesa wider variety of products for all markets as it allows packages from one country to be used inanother while at the same time reducing production complexity and costs. Tuborg Lime Cut wasbrewed and packaged in Lithuania and then shipped to Denmark and Norway. Similarly, BottledSomersby Cider is produced in Sweden and then shipped across to other Nordic countries. Also,kvas, a traditional Eastern European brewed soft drink, is produced in Ukraine and then transportedto consumers in Estonia, Latvia and Lithuania.

The cost-reduction, thus, will help the company in reducing its operating expenses and henceimproving the margins. While, at the same time, the strategies will result in maximum capacityutilization hence improving productivity or reduced cost-base.

Brand innovation to adjust with the changes in consumer tastes and preferences

Carlsbergs broad brand portfolio caters to each sub-segment of beer category. Besides, the companyis focused on continuous innovation to either introduce new varieties or improve the packaging andmarketing proposition of the existing ones. As a continued focus on innovation, the company startedtargeting a new consumer group, women. Around the world, women account for more than one thirdof all alcohol consumption. Carlsberg launched few drinks aimed at women or a unisex platform,including Somersby, Baltika Cooler, Kronenbourg 1664 and Eve. Eve is packaged in an elegantly



feminine bottle and is targeted at women aged 25-35. It has also a light and crisp fruit flavour (lychee,passion fruit or grapefruit) and a relatively low alcohol percentage.

Further, in order to respond to the demand for increasing volumes while also making premiumproducts available in attractive bigger-size packaging formats suitable for premium products,Carlsbergs Russian business came together with can producer Rexam to develop the worlds firstone-piece 1-litre can. In Russia, the 1-litre can represents a value-for-money option just as multipacksdo in Northern and Western Europe. In 2010, Carlsberg introduced the big-size can in Estonia,Denmark and Finland, where the can is the perfect size for consumer occasions. In line with thecompanys simplification project, the 1-litre cans for the Danish and Finnish markets are producedand filled by Carlsbergs brewery in Estonia.

Innovations like this further helped the company in improving the customer experience, thus increasingthe sense of brand loyalty. Besides, product innovation to cater to ever changing consumer tasteand preferences enables the company to stay ahead of its competitors.

Weaknesses

Lacks scale of operation compared to its competitors

Despite being one of the largest brewer in the world and the largest in Northern and Western Europe,Carlsberg lacks the scale to compete effectively with its competitors in the beverage industry. Scaleis crucial to cost leadership in the beer industry because the brewing process requires heavyinvestment in plant and equipment, and a significant proportion of brewers' costs are fixed. Many ofits competitors, such as Anheuser-Busch InBev, Heineken and SABMiller are much larger in size interms of revenues. In FY2010, Anheuser-Busch InBev recorded revenues of $36,297 million,significantly higher than Carlsberg. Similarly, Heineken recorded revenues of $21,403.7 million(E16,133 million) and SABMiller recorded revenues of $18,020 million during the same period.Carlsberg, in contrast, recorded revenues of DKK60,054 million ($10,695.6 million) in FY2010.

Further, with FY2010 beer volume of around 136.5 million hectoliters, Carlsberg lagged far behindglobal behemoths Anheuser-Busch InBev (399 million hectoliters) and SABMiller (213 millionhectoliters). Although there is some loyalty to beer brands, consumers usually have a choice of lagerin both on-premise and off-premise channels, so switching costs are low. Carlsberg's lack of scalemeans that it is unlikely to generate the excess returns on invested capital enjoyed by the globalleaders in the brewing industry. Thus, lack of scale hinders Carlsberg a competitive advantage andalso reduces its bargaining power in the fiercely competitive market.

Limited presence in the US beer market

Although the company is well established in Europe, it has a limited presence in the US. The USaccounts for 16.5% of the global beer market's value, with consumption in excess of 24,959.8 millionliters. The US beer industry is dominated by three producers namely, Anheuser-Busch InBev,



SABMiller and Molson Coors Brewing Company, who command nearly 80% of the market share.Despite the US market is growing at a slower rate compared with certain Eastern European andAsian markets, lack of presence in this market puts the company at a disadvantage compared withsome of the other large players in the industry.

Constrained capital efficiency

The company's capital management ability has declined in recent past as reflected in its Return onInvested Capital (ROIC) measure, which assess a company's efficiency at allocating the capital toprofitable investments. The ROIC which demonstrates how efficient management is at using itsmoney to generate returns, declined from 11.7% in FY2007 to 8.8% in FY2010. Declining ROAreflects the company's inability to optimally utilize its assets to generate adequate return on capital.The company could feel constrain on its capital management due to poor assets utilization.

Opportunities

Positive outlook for beer market in Asia pacific region

The Asia-Pacific beer market has witnessed a significant growth in the recent periods. As perDatamonitor's report, the Asia-Pacific beer market grew by 2.9% in 2009 to reach a value of $112,221million. In 2014, the market is forecast to have a value of $135,995.6 million, an increase of 21.2%since 2009.

Carlsberg operates in Asia pacific markets through various subsidiaries which provide an opportunityfor the company to tap the growing demand for beer products in this region. Furthermore, many ofthe company's brands including Carlsberg, Black Panther Stout, Holsten, Tetley's Original, Dragon& Beer Green, Dali Beer, Skol, Jolly Shandy, Danish Royal Stout Ginseng, Nutrimalt and TuborgGreen have a strong presence in the Asia pacific markets. Carlsberg is thus well placed to capitalizeon the growing beer market in the Asia-Pacific region which will add to its topline growth.

New product development likely to sustain customer interest

The company seeks to increase sales and market share by introducing new products, and furtherenhancing its existing line of products. Carlsberg incurred DKK109 million ($19.4 million) and DKK101million ($18 million) in research and development during FY2010 and FY2009, respectively.

Such investment has helped the company in developing various new products. For instance, BaltikaDraught, Baltika anniversary limited edition, Baltika Cooler PET extension, Nevskoe Imperial andZatecky Gus Dark, were all launched in Russia. The company also launched Derbes Draught andAlma-Ata, new varieties in Kazakhstan; Lvivske Live Beer, Baltika 7 and Holsten PET extension inUkraine; and Alivaria Live Beer in Belarus. Other brands such as Grimbergen and Eve were introducedin Russia. Eve was also launched in Kazakhstan.



In addition, in non-beer products, the company launched mineral water and increased distributionof soft drinks in Russia. Non-beer development also includes Somersby in Russia and ice tea inUkraine. New and improved products are likely to drive the companys organic sales growth. Byintroducing new products as per the changing market needs, the company can increase its productportfolio and revenues.

Threats

Stringent advertising regulations

Alcohol companies have been criticized for irresponsible portrayal of alcoholic drinks inadvertisements. Especially in Europe and many other countries, advertising regulatory bodies arecoming down heavily on alcohol advertising, claiming that such advertisements fuel binge drinking.European Union (EU) incorporated the Television without Frontiers Directive which requires alladvertisements and sales promotions to comply fully with the legislation. Besides, TV and radiocommercials are required to be cleared by the Broadcast Advertising Clearance Centre and theRadio Advertising Clearance Centre, respectively. Most EU countries impose a legal ban onadvertising of spirits on TV and radio; on broadcast advertisements linking alcohol with children,driving or sport, or promoting alcohol abuse; and on sponsorship of TV and radio program bycompanies primarily concerned in alcohol production. Since Carlsberg majorly operates in Europe,such stringent rules on advertisements in EU would limit the brand's future promotional campaignsand its awareness among the consumers. The limited exposure could curtail the company's growthsince the brand recognition among consumers will get diluted with time due to minimal promotionand advertising.

Negative health attributes associated with beer

Beer has always been associated with negative health attributes. There is a general negativeperception about beer's effect on the body fat and cholesterol. A very common term associated withbeer is 'beer belly', increased fat around the waist. On the other hand, its competitor, wine is perceivedas healthier alternative to other beverages. As there is a general shift in consumer preference towardshealthier substitutes in matured markets like Western Europe and North America, beer is losing itsground to wine. Besides, easy availability of a wider variety of alcohol products and extensivemarketing is also affecting the beer sales. If the beer market continues to lose its share in thebeverage category, Carlsberg will have to compete with other major competitors for dwindling marketshare. Carlsberg efforts to enter these lucrative and matured markets can be hampered if this trendcontinues.

Imposition of 200% Excise duty on beer products in Russia

In order to curb alcohol consumption, the Russian Government imposed a new excise duty on beerproducts in January 2010 which is likely to have an adverse impact on revenues and margins of thebeverage companies in Russia. Russia is one of the biggest beer drinking countries in the world,



consuming 9,278.6 million liters in FY2009 but consumption could plummet in the future due to 200%increase in excise duty.

Carlsberg has a strong leadership position in the Russian beer market through its subsidiary Baltikaand with the new excise duty in Russia is likely to have a negative impact on its beer sales. The risein the excise duty on beer products in Russia will undoubtedly make things tougher for beer companiessuch as Carlsberg, already struggling to maintain sales in a weak economic environment.



TOP COMPETITORS

The following companies are the major competitors of Carlsberg A/S

Asahi Breweries, Ltd.Heineken N.V.Kirin Brewery Company, LimitedSABMillerAsia Pacific Breweries LimitedAnheuser-Busch InBev SA/NV


Carlsberg A/STop Competitors

COMPANY VIEW

A statement by Jorgen Buhl Rasmussen, the President and Chief Executive Officer at Carlsberg isgiven below. The statement has been taken from the companys 2010 annual report.

We are very pleased with the strong performance in 2010 as it was a unique year due to a very largeexcise duty increase in our largest market.

As the year progressed, we started to see improving trends in all regions compared to the verychallenging 2009, when most markets were impacted by the economic crisis. While Northern &Western European beer markets remained challenging with an overall market decline, the trend in2010 improved versus the weaker 2009 market development. The Russian market dynamics weremore difficult to forecast than usual due to the substantial price increases needed to cover the largeexcise duty increase of 200% on 1 January 2010. Driven by an improved macroeconomic environment,a warm summer in Q3 and the phased implementation of price increases, the Russian market trendimproved throughout the year.The other Eastern European markets improved significantly comparedto 2009. The Asian beer markets, which were largely unaffected by the economic crisis in 2009,continued their very strong growth pattern.

Organic beer volumes declined by 2%. Including acquisitions, net, the decline was 1% to 114.2m hl(116.0m hl in 2009). Adjusting for the Russian destocking impact, the Groups organic beer volumegrowth would have been 1%.

Northern & Western European organic beer volume development was fl at despite an estimatedmarket decline of 2-3%. Beer volumes in Eastern Europe declined organically by 9% (-3% excludingdestocking), mainly driven by the destocking in Q1 and the significant price increases in Russiafollowing the excise duty increase in January. The Asian region continued to perform strongly with14% organic beer volume growth.

The Q4 organic beer volume decline was 5%, mainly attributable to the Eastern European region,which faced tough comparables due to strong growth in Q4 2009 from stock-building amongdistributors ahead of the excise duty increase (fl at adjusted for the stock-building).

Pro rata Group volumes of other beverages were 19.3m hl (19.8m hl in 2009). The decline wasmainly driven by the strikes in Denmark and Finland in Q2 and portfolio optimisations in a fewmarkets.

The Group increased marketing investments by double-digit percentages in all three regions in 2010to drive profitable market share growth. This was effected through support of our key brands, newproducts and innovations including major customer and consumer activations. Innovations, newproduct launches and relaunches of existing brands will remain a key focus area for the Group in2011.


Carlsberg A/SCompany View

The introductions and relaunches were carried out across all three regions and were a combinationof innovations, relaunches of existing brands and the roll-out of Group brands in new markets.Examples include new products under the Baltika umbrella in Russia, Zatecky Gus Dark in Russia,Tuborg Lime Cut in the Nordic markets, Kronenbourg Slection in France, relaunches and lineextensions in several Asian markets such as Vietnam, China and Cambodia, and the roll-out ofKronenbourg 1664, Somersby and Eve in new markets across the three regions.

Despite a challenging year in Russia, Group net revenue grew by 1% to DKK 60,054m (DKK 59,382min 2009) with a 3% organic decline (total volume -2% and -1% price/mix), currency impact 5% and-1% net acquisition impact.

To ensure that volume and value market share growth are maximised across channels and customers,the Group continued to apply and develop our value management and channel marketing tools.

In 2010, the Group benefited from favourable hedges, lower input costs and efficiency initiatives.Cost of sales per hl declined with large variations between markets and regions. Hence, gross profitmargin increased by 260bp to 51.7%. The organic gross profit growth was 1%. Gross profit per hlincreased in all regions with particularly strong improvement in Asia.

Group operating profit grew by 9% to DKK 10,249m (DKK 9,390m in 2009). Organic growth was1%, currency impact was 8% and there was no net effect from acquisitions. Q4 operating profitdeclined by 33% (organic decline of 36%). Northern & Western Europe and Asia reported strongorganic growth in Q4, while Eastern European profits declined, as expected, due to the stock-buildingin Russia in Q4 2009 and increasing input costs in the quarter. Adjusted for the Russian stock-buildingin Q4 2009, which added an estimated DKK 300m in operating profit, the organic operating profitgrowth would have been an estimated 8% for 2010.

Although the Group is focusing intensively on driving profitable market share growth, this wasbalanced with the strong focus on improving efficiencies across the Group. This is a continuousprocess and an integrated part of the Carlsberg strategy and business model.

Operating margin improved by 130bp to 17.1% (15.8% in 2009). The Group is well on track to meetthe medium term margin targets for both the Group and our three regions, although margins willfluctuate between years depending on both external and internal factors such as input costs, priceincreases and country mix.

Net profit was DKK 5.4bn (DKK 3.6bn in 2009) and earnings per share was DKK 35.1 (DKK 23.6 in2009), a 49% increase.

Operating cash flow was DKK 11bn, compared to the exceptionally strong operating cash flow ofDKK 13.6bn in 2009.The 2009 operating cash flow benefitted significantly from a substantial workingcapital improvement. In 2010 the Group managed to further reduce working capital, both as anaverage throughout the year and at the end of the financial year. This was a result of the ongoingefforts to optimise working capital management. For 2010 and onwards the Group has shifted focusfrom the end-of-year working capital level to the average level for the year. The positive impact from



reduced working capital was DKK 0.7bn (DKK 3.7bn in 2009). Average trade working capital to netrevenue declined to 2.6% (5.6% in 2009).

Free cash flow was DKK 5.2bn (DKK 10.5bn in 2009). In 2010, a significantly higher level of cashwas spent on acquisitions, and total financial investments in 2010 amounted to DKK 2.7bn (DKK 0in 2009).The acquisitions were primarily in Asia, where the Group increased its holdings in companieswhere it already had ownership.

Driven by the improved profitability, the return on average invested capital in the beverage activitiesgrew to 9.8% (9.3% in 2009), which is the highest level since the Scottish & Newcastle acquisition.Northern & Western Europe reported particularly strong improvement from 13.6% to 17.2%. Forboth Northern & Western Europe and Eastern Europe, capital expenditures were kept belowdepreciation, while the opposite was the case in Asia due to capacity expansions.

Deleveraging has been a high priority in recent years, and in 2010 net debt was further reduced. Atthe end of 2010, net debt amounted to DKK 32.7bn (DKK 35.7bn at the end of 2009). Net debt/EBITDAdeclined to 2.3x (2.7x at the end of 2009). The Group is committed to an investment grade creditquality.

Following the deleveraging that has taken place, it has been decided to propose to the AnnualGeneral Meeting a 43% increase in dividends to DKK 5.00 per share (DKK 3.50 for 2009).

In October 2010 the Group established a new 5-year multi-currency revolving credit facility of EUR1.75bn and issued 7-year EUR notes of EUR 1bn with attractive prices and conditions. The newfacilities were mainly used to refinance the Scottish & Newcastle acquisition facilities. Following therefinancing, the Group has extended the maturity profile of its debt and achieved more balancedfunding sources.

During 2010, several structural changes took place. Most of these changes were in the Asian region.In January, the Group received the final approvals to increase its direct and indirect shareholding inthe Wusu Xinjiang Beer Group in Chinas Xinjiang Province to 65%. In November, the Group increasedthe shareholding in Gorkha Brewery in Nepal to 90%, including put options. In December, the Groupobtained the final approvals to increase the shareholding in the Chinese Chongqing Brewery Co.Ltd. from 17.46% to 29.71%. Lastly, the Group increased the shareholding in Olivaria Brewery inBelarus from 37% to 68%.

Organisationally, several tools continued to be developed and rolled out to drive capability building,improved processes and decision-making.

2011 earnings expectations

2011 will be a year in which profitable market share growth will be driven by innovations, investmentsin key brands combined with The Carlsberg way of doing business initiatives, improvedroute-to-market models and continued value and channel management efforts.



The efforts to drive revenue and market share growth will be carefully balanced with the continuousefforts to improve operational and capital efficiencies.

The key assumptions underpinning the outlook for 2011 are:

Low single-digit decline in Northern & Western European markets

Russian market growth of 2-4%

Continued growth in key markets across Asia

Increasing cost of sales due to higher input costs

Marketing investments as percentage of sales at slightly higher levels than in 2010

Consequently, for 2011 the Carlsberg Group expects:

Market share growth in markets representing 2/3 of our business

High single-digit percentage growth in operating profit

Adjusted net profit growth of more than 20%

The impact from increased input costs will be mitigated by higher sales prices in all regions. InEastern Europe, the impact from increased input costs will be higher than the Group average andconsequently operating profit margin in the region will be impacted negatively for 2011.

The year-over-year profit development by quarter in Eastern Europe in 2011 will show a differentpattern than usual. For instance, it is expected that in Q1 the Eastern European region will deliververy strong year-over-year top-line growth as Q1 2010 was very weak due to destocking and as theexcise duty increase impacted both market development and the net sales prices for the quarter.

The Group confirms the mid-term operating margin targets that were announced in February 2010,both for all regions and for the Group.

Ambition remains intact

On behalf of the Carlsberg Group I would like to thank our many employees around the world fortheir efforts and contribution to making 2010 yet another year of strong performance. I would alsolike to thank our customers, partners and suppliers around the world for their continued support andcooperation. And finally, I would like to thank our shareholders for endorsing our strategy.



Our ambition to be The fastest growing global beer company remains intact and our strategy hasfive key priorities guiding this ambition: our people; our consumers and customers; products andinnovation; structure and society; and efficiency. A core element of our strategy is to ensure thatcorporate social responsibility (CSR) is integrated into everything we do. CSR is our licence tooperate and we view it is an important means to being a preferred brand, employer and partner.



LOCATIONS AND SUBSIDIARIESHead OfficeCarlsberg A/S100 Ny Carslberg Vej1799 Copenhagen VDNKP:45 33 27 3300F:45 3327 4701http://www.carlsberggroup.com

Other Locations and Subsidiaries

Carlsberg Canada Inc.South East Asia Brewery2630 Bristol Circle, Suite 300167B Minh KhaiOakvilleHanoiOntarioVNML6H 6Z7CAN

Baltika BreweriesCarlsberg Brewery Hong Kong Limited3, 6 Verkhny pereulok1/F Delta HouseSt. Petersburg 1942923, Siu Lek Yuen, On Yiu StreetRUSHKG

Israel Beer Breweries Ltd.Carlsberg Deutschland GmbH5 Bar Lev Ave.Holstenstrasse 224Ashkelon 7819122765 HamburgISRDEU

Carlsberg Importers SA.Foster's AustraliaIndustrielaan 16 2077 Southbank Blvd1740 TernatSouthbankBELVictoria 3006

AUS

Carlsberg UKCarlsberg India Private LimitedJacobsen HousePlot 52140 Bridge StreetSector 32Northampton NN1 1PZInstitutional AreaGBRGurgaon 122001

HaryanaIND


Carlsberg A/SLocations and Subsidiaries

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Carlsberg AS - Data Monitor