TO OUR SHAREHOLDERS
CARLSBERG BREWERIES
As approved on the Company's
Annual General Meeting on
14 March 2023
Monica Gregers Smith
Chairman of the Meeting
TO OUR SHAREHOLDERS
TO OUR SHAREHOLDERS
.........
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2022 REVIEW AND 2023 EXPECTATIONS
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OUR STRATEGY
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GOVERNANCE
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CONSOLIDATED FINANCIAL STATEMENTS
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PARENT COMPANY FINANCIAL
STATEMENTS
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REPORTS
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MANAGEMENT
REVIEW
FINANCIAL
STATEMENTS
OUR ANNUAL REPORTING
TO OUR SHAREHOLDERS
2022 was a year of great
contrasts. Despite significant
challenges, Carlsberg delivered
strong results and increased
cash returns to shareholders.
ACTIVITIES OF THE GROUP
FINANCIAL HEALTH
STRATEGIC HEALTH
SOCIETAL HEALTH
LETTER FROM THE CHAIR & THE CEO
STRONG RESULTS
TO OUR SHAREHOLDERS
ORGANISATIONAL HEALTH
CHANGES TO EXECUTIVE
BOARD
LOOKING AHEAD
THANK YOU
Henrik Cees
Poulsen ’t Hart
Chair CEO
TO OUR SHAREHOLDERS
5-YEAR SUMMARY
KEY
Key figures and financial ratios in 2022 are presented for continuing activities unless otherwise stated. 2021 figures have
been restated accordingly
2022
2021
2020
2019
2018¹
Volumes (million hl)
DKK million
Income statement
Attributable to
Statement of financial position
2022
2021
2020
2019
2018¹
Statement of cash flows
Investments
Financial ratios
2022 REVIEW AND 2023 EXPECTATIONS
2022 was a year of immense
challenges as a result of the
war in Ukraine, rising
commodity prices and energy
costs, and COVID-19,
particularly in Asia.
SAFEGUARDING OUR
UKRAINIAN BUSINESS
OUTBREAK OF WAR
BUSINESS CONTINUITY
MANAGING RUSSIA
DIVESTMENT OF THE RUSSIAN
BUSINESS
NAVIGATING 2022
MANAGING A
CARLSBERG UKRAINE
2022 REVIEW AND 2023 EXPECTATIONS
MANAGING INFLATION
WINDFORCE 12
PIIC
COVID-19
OUR GOLDEN
TRIANGLE
2022 REVIEW AND 2023 EXPECTATIONS
The Group delivered a
strong set of results despite
significant challenges posed
by the war in Ukraine, rising
input costs and COVID-19,
particularly in China.
VOLUMES
INCOME STATEMENT
GROUP
STRONG RESULTS IN A
Earnings expectations 2022
Date
Expectation for operating profit
Group
Change
Change
2021
Organic
Acq., net
FX
2022
Reported
Volumes (million hl)
Total volume
119.2
5.7%
-0.5%
-
125.4
5.2%
DKK million
2022 REVIEW AND 2023 EXPECTATIONS
19% CAGR
1664 BLANC VOLUME 2016-2022
STEP UP IN PREMIUM
2022 REVIEW AND 2023 EXPECTATIONS
STATEMENT OF FINANCIAL
POSITION
ASSETS
EQUITY AND LIABILITIES
Equity
Liabilities
CASH FLOW
CASH FLOW FROM OPERATING
ACTIVITIES
2022 REVIEW AND 2023 EXPECTATIONS
CASH FLOW FROM INVESTING
ACTIVITIES
Cash flow from investing activities
was DKK -3,403m (2021: DKK
-3,965m).
Acquisition of property, plant and
equipment and intangible assets
amounted to DKK -4,225m (2021:
DKK -3,897m), while total
operational investments amounted
to DKK -3,813m (2021: DKK -3,495m).
Total financial investments amounted
to DKK +410m (2021: DKK -470m).
The change is mainly attributable to
deferred considerations related to the
activities and the deconsolidation of
the business in Nepal, both in 2021.
RETURN ON INVESTED CAPITAL
FINANCING
2022 REVIEW AND 2023 EXPECTATIONS
SAIL’27 reinforces and
expands our priorities for
delivering shareholder value:
organic growth in revenue and
operating profit, improved
return on invested capital,
optimal capital allocation and
ambitious sustainability
targets.
DRIVING LONG-TERM GROWTH
LEVERAGE
VALUE-ENHANCING M&A
CAPITAL ALLOCATION
DISCPLINED
2022 REVIEW AND 2023 EXPECTATIONS
There are significant
uncertainties for 2023, which
will be will be another
challenging year.
Forward-looking statements
2023 EARNINGS EXPECTATIONS
EARNINGS
OUR STRATEGY
We pursue perfection every
day. We strive to brew better
beers. Beers that stand at the
heart of moments that bring
people together. We do not
settle for immediate gain when
we can create a better
tomorrow for all of us.
Successful
Professional
Attractive
OUR PURPOSE
BREWING FOR A BETTER
14CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 OUR STRATEGY
BUSINESS MODEL
Core beer is a volume business, and strong
market positions are key drivers of protability.
We have particular focus on the 21 markets in
Western Europe, Asia and Central & Eastern
Europe where we are no. 1 or 2.
BREWING FOR A BETTER
TODAY AND TOMORROW
In all our markets, we aim to lead in
sustainability because it is central to our purpose
and because we genuinely believe it is the right
thing to do – delivering tangible benets for our
business and for society as a whole.
The strength of our beer portfolio lies in the
strong local roots of our local power brands,
combined with our local and international
premium brands, alcohol-free brews and
brands beyond beer.
BREWING FOR A BETTER
TODAY AND TOMORROW
Our brands offer us powerful opportunities for
communicating with consumers. We use these
opportunities to encourage moderate, responsible
consumption of our products. We also increase
the availability of alcohol-free brews.
Our customers range from on-trade to
off-trade, from online to ofine. We aim to
become their preferred beer supplier, providing
products and services that deliver value
growth for them and us.
BREWING FOR A BETTER
TODAY AND TOMORROW
We develop digital solutions and services to help
our customers grow their business. We engage in
developing sustainable packaging solutions and
launching initiatives to increase collection and
recycling rates.
The Funding our Journey culture drives
efciencies and reduces costs. The focus of
our integrated supply chain is optimising asset
utilisation while brewing high-quality beer and
enabling our commercial growth agenda.
BREWING FOR A BETTER
TODAY AND TOMORROW
Recognising the need for strong actions in
the face of complex sustainability challenges,
Together Towards ZERO and Beyond sets
ambitious targets for carbon, water, agricultural
raw materials, packaging, and health & safety.
… AND STRIVE TO EXCEL
IN OUR SERVICE TO ON- AND
OFF-TRADE CUSTOMERS...
… WHERE WE DELIVER AN
ATTRACTIVE BEER PORTFOLIO FOR
ALL CONSUMER OCCASIONS...
WE FOCUS ON THE MARKETS
WHERE WE HAVE A NO. 1 OR 2
POSITION...
... BY OPTIMISING OUR
SUPPLY CHAIN AND IMPROVING
PROCESSES AND SYSTEMS.
OUR BUSINESS MODEL
ROOTED IN OUR PURPOSE
Our business model is rooted in our purpose and ambition.
It takes its starting point in our focus on our brands and the
art of brewing, how we excite our consumers with quality
brews, and our continuous striving to do better.
OUR STRATEGY
We launched our new
strategy, SAIL’27, in early
2022. It is built around our
purpose and our ambition of
being the most successful,
professional and attractive
brewer in our markets.
OUR STRATEGY: SAIL’27
DISTINCT STRATEGIC
CREATING VALUE FOR ALL OUR
STAKEHOLDERS
SHAREHOLDERS
EMPLOYEES
SOCIETY
OUR STRATEGY
The beer category continues
to offer attractive long-term
volume and value growth
opportunities. In addition,
we see further growth
opportunities for selected
categories beyond beer.
STEP UP IN PREMIUM
STRENGTHEN MAINSTREAM
CORE BEER
ACCELERATE ALCOHOL-FREE
BREWS
BEYOND BEER
SAIL’27
OUR PORTFOLIO
42%
BROOKLYN BRAND GROWTH
STEP UP IN PREMIUM
OUR STRATEGY
We have an attractive and
widespread geographical
presence, with no. 1 or 2
positions in 21 markets across
Western Europe, Asia and
Central & Eastern Europe.
WESTERN EUROPE
ASIA
CENTRAL & EASTERN EUROPE
SAIL’27
OUR GEOGRAPHICAL
27%
VOLUME GROWTH IN
VIETNAM
ACCELERATE IN CORE MARKETS IN ASIA
OUR STRATEGY
Excel in execution remains a
key priority in SAIL’27, with a
focus on optimising and
improving performance across
our value chain.
EXCEL AT POINT OF PURCHASE
MASTER DIGITAL, DATA AND
PROCESSES
DRIVE SUPPLY CHAIN
EXCELLENCE
SAIL’27
OUR EXECUTION
51%
REVENUE GROWTH ON CARL’S SHOP
MASTER DIGITAL
OUR STRATEGY
To deliver on our ambition to
be the most successful,
professional and attractive
brewer in the markets where
we operate, our company
culture is key. Our winning
culture focuses on our people,
our behaviours and our
contribution to societies at
large.
PURPOSE- AND
PERFORMANCE-DRIVEN
LIVING BY OUR COMPASS
SAIL’27
OUR WINNING
DIVERSITY, EQUITY & INCLUSION
PURPOSE- AND PERFORMANCE-DRIVEN PEOPLE
THE HEART OF OUR
PURPOSE
cornerstone of our
culture
HIGH-PERFORMING
ORGANISATION
harvest from diverse
backgrounds, experiences
and perspectives
EQUITY IS
FUNDAMENTAL
Equity implies
fairness rather than
sameness.
IN OUR DNA
Diversity is part of
who we are!
BUILDS A SENSE OF
BELONGING
the freedom to
bring their best version of
themselves to work
moments that bring
people together for a
better today and
tomorrow
OUR STRATEGY
TOGETHER TOWARDS ZERO
AND BEYOND
TTZAB – AN ENHANCEMENT
THE NEW ZEROS
OUR STRATEGY
Read about our Winning
Culture, including much
more about Together
Towards ZERO and
Beyond, in the ESG Report.
RESPONSIBLE BARLEY IN FRANCE
TOGETHER TOWARDS ZERO AND BEYOND
POWER PURCHASE
AGREEMENT IN DENMARK
TOGETHER TOWARDS ZERO AND BEYOND
GOVERNANCE
Our governance framework
aims to ensure value creation,
safeguard active and
transparent stewardship across
the Group and reduce risk.
DIVERSITY
AUDITING
INTERNAL CONTROL AND RISK
MANAGEMENT RELATED TO
THE FINANCIAL REPORTING
PROCESS
OVERALL CONTROL ENVIRONMENT
RISK ASSESSMENT
CORPORATE GOVERNANCE
FOCUS ON
GOVERNANCE
CONTROL ACTIVITIES AND
MONITORING
GROUP INTERNAL AUDIT
SPEAK UP
GOVERNANCE
In conducting our business and
executing our strategy, we
seek to manage risks in such a
way as to minimise the threats
they present.
GOVERNANCE STRUCTURE
SHORT- AND MID-TERM RISK
ASSESSMENT
LONG-TERM RISK ASSESSMENT
-
RISKS IDENTIFIED FOR 2023
DIVESTMENT OF RUSSIAN BUSINESS
Risk movement
Description
RISK MANAGEMENT
MANAGING
IDENTIFIED
RISKS
FOR 2023
RISKS WITH HIGHEST
POTENTIAL IMPACT AND
LIKELIHOOD
OTHER IDENTIFIED RISKS
GOVERNANCE
Mitigation
CONSUMER PRICE ELASTICITY
Risk movement
Description
Mitigation
ECONOMIC INSTABILITY/RECESSION
Risk movement
Description
Mitigation
PARTNERSHIPS
Risk movement
Description
GOVERNANCE
Mitigation
LEGAL AND REGULATORY
COMPLIANCE
Risk movement
Description
Mitigation
SUPPLY CHAIN-RELATED BUSINESS
INTERRUPTION
Risk movement
Description
Mitigation
CYBER AND IT SECURITY
Risk movement
Description
Mitigation
GOVERNANCE
HENRIK POULSEN
CHAIR (SINCE 2022)
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
Board Chair
Board Deputy Chair
Board Member
MAJKEN SCHULTZ
DEPUTY CHAIR (SINCE 2022)
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
Board Chair
Board Member
EVA VILSTRUP DECKER
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
ULRICA FEARN
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
PRIOR EXPERIENCE
CEES ’T HART
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
Board Chair
Board Member
PRIOR EXPERIENCE
THOMAS PALUDAN-MÜLLER
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
PETER PETERSEN
BOARD FUNCTION
PROFESSION
OTHER BOARD POSITIONS
EXECUTIVE
BOARD
CEES ’T HART
CEO OF CARLSBERG A/S
CARLSBERG BREWERIES A/S
ULRICA FEARN
CFO OF CARLSBERG A/S
CARLSBERG BREWERIES A/S
SUPERVISORY BOARD
SUPERVISORY
The Supervisory Board
members’ full CVs,
including their skills
and competences, are
available online
FORWARD-LOOKING STATEMENTS
FORWARD-LOOKING
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL
STATEMENTS
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PARENT COMPANY FINANCIAL
STATEMENTS
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REPORTS
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SECTION 1
OPERATING
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SECTION 2
ASSET BASE
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SECTION 3
SPECIAL ITEMS, PROVISIONS
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SECTION 4
FINANCING COSTS, CAPITAL
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SECTION 5
DISCONTINUED OPERATIONS,
ACQUISITIONS, DISPOSALS AND
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SECTION 6
TAX
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SECTION 7
STAFF COSTS AND
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SECTION 8
OTHER DISCLOSURE
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SECTION 9
BASIS FOR
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SECTION 10
GROUP
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CONSOLIDATED
FINANCIAL STATEMENTS
INCOME STATEMENT
DKK million Section 2022 2021¹
Revenue 1.2 70,265 60,097
Cost of sales 1.3.1 -38,198 -31,528
Gross profit 32,067 28,569
Sales and distribution expenses 1.3.3 -17,337 -14,872
Administrative expenses -4,189 -3,894
Other operating activities, net 1.3.4 97 75
Share of profit after tax of associates 5.5 675 259
Operating profit before special items 11,313 10,137
Special items, net 3.1 -94 623
Financial income 4.1 358 571
Financial expenses 4.1 -1,072 -956
Profit before tax 10,505 10,375
Income tax 6.1 -1,844 -2,115
Profit from continuing operations 8,661 8,260
Net result from Russian operations held for sale -6,490 -284
Profit for the period 2,171 7,976
Attributable to
Non-controlling interests 1.2 1,171 1,163
Shareholder in Carlsberg Breweries A/S (net profit) 1,000 6,813
¹ Comparative figures for 2021 have been restated, cf. section 5.1.
STATEMENT OF COMPREHENSIVE INCOME
DKK million Section 2022 2021
Profit for the period 2,171 7,976
Other comprehensive income
Retirement benefit obligations 7.4 594 577
Share of other comprehensive income in associates 5.5 - 10
Income tax 6.1 -75 20
Items that will not be reclassified to the income statement 519 607
Foreign exchange adjustments of foreign entities 4.1 -3,926 3,307
Fair value adjustments of hedging instruments 4.1 -759 -323
Income tax 6.1 100 83
Items that will be reclassified to the income statement -4,585 3,067
Other comprehensive income -4,066 3,674
Total comprehensive income -1,895 11,650
Attributable to
Non-controlling interests 603 1,120
Shareholder in Carlsberg Breweries A/S -2,498 10,530
Total comprehensive income for the period arises from
Continuing operations 9,013 10,396
Russian operations held for sale -10,908 1,254
Total comprehensive income -1,895 11,650
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 31
STATEMENT OF FINANCIAL POSITION
DKK million Section 31 Dec. 2022 31 Dec. 2021
ASSETS
Non-current assets
Intangible assets 2.2, 2.3 40,526 57,267
Property, plant and equipment 2.2, 2.3 23,580 26,552
Investments in associates 5.5 4,796 4,671
Receivables 1.6 934 1,073
Tax assets 6.2 1,704 1,905
Total non-current assets 71,540 91,468
Current assets
Inventories 1.3.1 5,718 5,391
Trade receivables 1.6 5,071 5,715
Tax receivables 208 146
Other receivables 1.6 2,516 2,683
Prepayments 964 929
Cash and cash equivalents 4.4.2 8,163 8,344
Current assets 22,640 23,208
Assets in disposal group held for sale 5.1 11,618 62
Total current assets 34,258 23,270
Total assets 105,798 114,738
DKK million Section 31 Dec. 2022 31 Dec. 2021
EQUITY AND LIABILITIES
Equity
Share capital 4.3.2 498 499
Reserves -41,711 -37,691
Retained earnings 63,694 71,271
Equity, shareholder in Carlsberg Breweries A/S 22,481 34,079
Non-controlling interests 2,820 3,259
Total equity 25,301 37,338
Non-current liabilities
Borrowings 4.2, 4.4.1 22,865 22,755
Retirement benefit obligations 7.4 1,525 2,319
Tax liabilities 6.2 4,168 5,663
Provisions 3.2 2,283 2,441
Other liabilities 3.3 305 449
Total non-current liabilities 31,146 33,627
Current liabilities
Borrowings 4.2, 4.4.1 6,172 6,176
Trade payables 21,906 20,668
Deposits on returnable packaging materials 1.3.2 1,627 1,504
Provisions 3.2 782 895
Tax payables 970 1,344
Other liabilities 3.3 13,794 13,186
Current liabilities 45,251 43,773
Liabilities in disposal group held for sale 5.1 4,100 -
Total current liabilities 49,351 43,773
Total liabilities 80,497 77,400
Total equity and liabilities 105,798 114,738
The Russian operations are presented as assets/liabilities in disposal group held for sale in 2022. Comparative figures
have not been restated, meaning the Russian operations are included line by line in the statement of financial position
for 2021. For more information, see section 5.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 32
STATEMENT OF CHANGES IN EQUITY
DKK million Section
Shareholder in Carlsberg Breweries A/S
2022
Share
capital
Currency
translation¹
Hedging
reserves¹
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at 1 January 499 -37,198 -493 -37,691 71,271 34,079 3,259 37,338
Profit for the period - - - - 1,000 1,000 1,171 2,171
Other comprehensive income 4.3.4 - -3,691 -329 -4,020 522 -3,498 -568 -4,066
Total comprehensive income for the period - -3,691 -329 -4,020 1,522 -2,498 603 -1,895
Capital reduction 4.3.2 -1 - - - -4,499 -4,500 - -4,500
Refund to parent company for exercise of share-based payments - - - - -92 -92 - -92
Change in expected future refunds for exercise of share-based payments - - - - 207 207 - 207
Share-based payments 7.3 - - - - 107 107 - 107
Dividend paid to the shareholder 4.3.3 - - - - -3,486 -3,486 -1,042 -4,528
Non-controlling interests - - - - -1,336 -1,336 - -1,336
Total changes in equity -1 -3,691 -329 -4,020 -7,577 -11,598 -439 -12,037
Equity at 31 December 498 -40,889 -822 -41,711 63,694 22,481 2,820 25,301
¹ The currency translation and hedging reserves within equity related to Russian operations held for sale represent losses of DKK 39.7 bn and DKK 0.6 bn respectively (31 December 2021: losses of DKK 37.0 bn and DKK 0.5 bn). Upon completion of
DKK million Section
Shareholder in Carlsberg Breweries A/S
2021
Share
capital
Currency
translation
Hedging
reserves
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at 1 January 500 -40,215 -609 -40,824 70,569 30,245 2,624 32,869
Profit for the period - - - - 6,813 6,813 1,163 7,976
Other comprehensive income 4.3.4 - 3,017 116 3,133 584 3,717 -43 3,674
Total comprehensive income for the period - 3,017 116 3,133 7,397 10,530 1,120 11,650
Capital reduction 4.3.2 -1 - - - -3,999 -4,000 - -4,000
Refund to parent company for exercise of share-based payments - - - - -136 -136 - -136
Change in expected future refunds for exercise of share-based payments - - - - -268 -268 - -268
Share-based payments 7.3 - - - - 68 68 - 68
Dividend paid to the shareholder 4.3.3 - - - - -3,260 -3,260 -499 -3,759
Non-controlling interests - - - - 957 957 -16 941
Acquisition of entities - - - - -57 -57 131 74
Deconsolidation of entities - - - - - - -101 -101
Total changes in equity -1 3,017 116 3,133 702 3,834 635 4,469
Equity at 31 December 499 -37,198 -493 -37,691 71,271 34,079 3,259 37,338
An adjustment was included in the opening balance of equity for 2021 to correct a prior period error in the share of equity attributed to the non-controlling interest. The adjustment reduced the non-controlling interests’ share of equity by DKK
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 33
STATEMENT OF CASH FLOWS
DKK million Section 2022 2021¹
Operating profit before special items 11,313 10,137
Depreciation, amortisation and impairment losses 2.3 4,172 4,221
Operating profit before depreciation, amortisation and impairment losses 15,485 14,358
Other non-cash items -638 -368
Change in trade working capital 1,960 728
Change in other working capital -679 244
Restructuring costs paid -183 -353
Interest etc. received 223 67
Interest etc. paid -1,173 -910
Income tax paid -2,201 -1,948
Cash flow from operating activities 1.5 12,794 11,818
Acquisition of property, plant and equipment and intangible assets 2.3 -4,225 -3,897
Disposal of property, plant and equipment and intangible assets 283 254
Change in on-trade loans 1.6 129 148
Total operational investments -3,813 -3,495
Free operating cash flow 8,981 8,323
Acquisition and disposal of subsidiaries, net 5.3 - -621
Acquisition and disposal of associates, net 5.3 -48 48
Acquisition and disposal of financial investments, net -20 -
Change in financial receivables 196 -188
Dividends received 282 291
Total financial investments 410 -470
Cash flow from investing activities -3,403 -3,965
Free cash flow 9,391 7,853
Shareholder in Carlsberg Breweries A/S 4.3.3 -7,986 -7,260
Non-controlling interests 4.3.3 -1,042 -550
External financing 4.4.1 -438 -777
Cash flow from financing activities -9,466 -8,587
Net cash flow from continuing operations -75 -734
Net cash flow from Russian operations held for sale 5.1 1,771 662
Net cash flow 1,696 -72
Cash and cash equivalents at 1 January 8,344 7,958
Foreign exchange adjustment of cash and cash equivalents -683 458
Cash and cash equivalents included in disposal group held for sale -1,194 -
Cash and cash equivalents at 31 December 4.4.2 8,163 8,344
¹ Comparative figures for 2021 have been restated, cf. section 5.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 34
SECTION 1
OPERATING
ACTIVITIES
70.3bn
REVENUE (DKK)
Revenue grew by 16.9% to DKK 70,265m (2021:
DKK 60,097m). Revenue was positively
impacted by the recovery of the on-trade in
many markets in the first part of the year due
to fewer restrictions. In addition, revenue was
positively impacted by a positive brand mix and
price increases during the year. The negative
net acquisition impact was due to the
deconsolidation of Gorkha Brewery at the end
of 2021.
REVENUE DEVELOPMENT (%)
15.6%
-0.9%
2.2%
2021
Organic
Acq
FX
2022
54
56
58
60
62
64
66
68
70
72
The positive currency impact related to the
Chinese and Swiss currencies, which more than
offset the depreciation of the Laotian kip and
Ukrainian hryvinia.
45.6%
GROSS MARGIN
Although gross profit/hl increased by 7%, the
gross margin declined by 190bp to 45.6% due
to increased cost of sales.
11.3bn
OPERATING PROFIT (DKK)
Operating expenses increased by 15%, mainly
impacted by significantly higher sales and
marketing expenses in support of our brands
and activities, and higher distribution expenses
as a result of the on-trade recovery and higher
energy costs. Operating expenses as a
percentage of revenue declined by 60bp.
Operating profit before depreciation,
amortisation and impairment losses (EBITDA)
increased by 7.8% to DKK 15,485m. The
EBITDA margin declined by 190bp to 22.0%,
impacted by the lower gross margin and higher
operating expenses.
Group operating profit grew by 11.6% to DKK
11,313m, driven by strong growth in Asia and
Western Europe, while operating profit in
Central & Eastern Europe was up by only 1.1%,
impacted by the war in Ukraine.
The operating margin declined by 80bp
to 16.1%, mainly due to the higher commodity
prices and energy costs.
OPERATING PROFIT DEVELOPMENT (DKKbn)
2018
2019
2020
2021
2022
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2018-2020 as reported. 2021-2022 for continuing operations.
1.0bn
NET PROFIT (DKK)
Special items, net, amounted to DKK -94m
(2021: DKK 623m). Special items are detailed in
section 3.1.
Financial items, net, amounted to DKK -714m
(2021: DKK -386m). Excluding currency gains
and losses, financial items, net, amounted to
DKK -491m (2021: DKK -331m). The increase
was mainly due to 2021 being positively
impacted by the reversal of the previous write-
down of the loan to our partner in Carlsberg
South Asia Pte Ltd. (CSAPL). Net interest
expenses decreased slightly due to lower
average funding costs. Financial items are
detailed in section 4.1.
Tax totalled DKK -1,844m (2021: DKK -2,115m).
The effective tax rate declined by -290bp to
17.5%, mainly as a result of a one-off
adjustment related to prior years. Tax is
detailed in section 6.1.
Profit for the period, continuing operations, was
DKK 8,661m (2021: DKK 8,260m).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 35
Net result from Russian operations held for sale
amounted to DKK -6.5bn due to the DKK
-8.4bn write-down of the Russian business as
detailed in section 5.1.
Carlsberg Breweries Group’s share of profit for
the period was DKK 1,000m (2021: DKK 6,813m.
Non-controlling interests’ share of profit for the
period was DKK 1,171m (2021: DKK 1,163m).
12.8bn
OPERATING CASH FLOW (DKK)
Cash flow from operating activities amounted
to DKK 12,794m (2021: DKK 11,818m).
The change in trade working capital was DKK
+1,960m (2021: DKK +728m), mainly due to
strong cash management discipline and higher
trade payables. Average trade working capital
to revenue for the year was -21.4%, roughly on
par with 2021 (-19.4%).
The change in other working capital was DKK
-679m (2021: DKK +244m), mainly impacted by
VAT.
Restructuring costs paid amounted to DKK
-183m (2021: DKK -353m). Net interest etc. paid
amounted to DKK -950m (2021: DKK -843m).
The increase was mainly due to the settlement
of financial instruments. Corporation tax paid
was DKK -2,201m (2021: DKK -1,948m).
9.4bn
FREE CASH FLOW (DKK)
Free cash flow amounted to DKK 9,391m (2021:
DKK 7,853m), while free operating cash flow
amounted to DKK 8,981m (2021: DKK 8,323m).
Operational investments totalled DKK -3,813m
(2021: DKK -3,495m). Acquisition of property,
plant and equipment and intangible assets
(CapEx) including real estate amounted to DKK
-4,225m (2021: DKK -3,897m).
Total financial investments amounted to DKK
+410m (2021: DKK -470m), change is mainly
attributable to deferred considerations related
to the acquisition of Marston’s brewing
activities and the deconsolidation of the
business in Nepal, both in 2021 as detailed in
section 5.3.
FREE CASH FLOW (DKKbn)
2018
2019
2020
2021
2022
0
2
4
6
8
10
12
2018-2020 as reported. 2021-2022 for continuing operations.
Free operating cash flow
Free cash flow
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 36
SECTION 1.1
SIGNIFICANT EVENTS
IN THE PERIOD
On 28 March 2022, the Group announced its
decision to seek a full divestment of the
Russian business. Management considered that
the Russian operations met the criteria to be
classified as held for sale, as the business was
available for immediate sale in its current
condition, and the actions to complete the sale
had been initiated and were expected to be
completed within one year from the date of
reclassification. The Russian business was
classified as a disposal group held for sale and
measured at fair value less cost of disposal.
The fair value assessment is based on
estimations of the net present value of
expected future cash flows, and not on offers or
price indications from potential buyers. The fair
value of the business in Russia is highly
sensitive to changes in the key assumptions
applied.
As of 1 January 2022 and until completion of
the divestment, the Russian business will be
presented separately in the main statements.
Measurement of Group performance and
calculation of key performance indicators are
carried out for the continuing operations only.
Comparative figures for 2021 for the income
statement and the statement of cash flows
have been restated accordingly, along with the
associated disclosures. The statement of
financial position has not been restated.
For more details of discontinued operations and
disposal group held for sale, see section 5.1.
SECTION 1.2
SEGMENTATION OF
OPERATIONS
Segmentation of income statement
DKK million
2022
Western
Europe Asia
Central &
Eastern
Europe
Not
allocated
Carlsberg
Breweries
Group, total
Revenue 34,888 23,682 11,679 16 70,265
Total cost -30,245 -18,553 -9,415 -1,414 -59,627
Share of profit after tax of associates 323 306 18 28 675
Operating profit before special items 4,966 5,435 2,282 -1,370 11,313
Special items, net -94
Financial items, net -714
Profit before tax 10,505
Income tax -1,844
Profit from continuing operations 8,661
Net result from Russian operations held for sale -6,490
Profit for the period 2,171
Operating margin 14.2% 22.9% 19.5% 16.1%
2021
Revenue 30,501 19,459 10,128 9 60,097
Total cost -26,324 -14,653 -7,885 -1,357 -50,219
Share of profit after tax of associates 195 49 14 1 259
Operating profit before special items 4,372 4,855 2,257 -1,347 10,137
Special items, net 623
Financial items, net -385
Profit before tax 10,375
Income tax -2,115
Profit from continuing operations 8,260
Net result from Russian operations held for sale -284
Profit for the period 7,976
Operating margin 14.3% 24.9% 22.3% 16.9%
CHANGE IN CENTRAL & EASTERN EUROPE
Following the announcement on 28 March
2022 that the Group would seek full disposal of
the business in Russia, the Group’s Central &
Eastern Europe segment was changed effective
1 January 2022. Accordingly, the Russian
business was separated out of the Central &
Eastern Europe region and reported as Russian
operations held for sale. There have not been
any other changes to the segment structure.
The disclosure in the Annual Report follows the
new segmentation as used in the internal
reporting to the Executive Committee since the
announcement.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 37
SECTION 1.2 (CONTINUED)
SEGMENTATION OF
OPERATIONS
REVENUE
The Group’s revenue arises primarily from the
sale of beverages to its customers.
In 2022, total revenue was positively impacted
by volume growth and revenue/hl growth
across all regions, partly offset by the
deconsolidation of Gorkha Brewery.
Other revenue by category is sales of products
other than beverages that do not drive any
volume, such as merchandise, services, by-
products etc. In aggregate, other revenue
accounts for around 1% of Group total revenue
and is therefore not considered material.
Not allocated revenue, DKK 16m (2021:
DKK 9m), consisted of DKK 733m (2021: DKK
894m) in revenue and DKK -717m (2021: DKK
-885m) from eliminations of sales between the
geographical segments.
The distribution of revenue between beer and
other beverages relative to volumes is largely
the same across regions.
Revenue by category
DKK million 2022 2021
Beer revenue 53,466 46,720
Other beverages 15,928 12,705
Other revenue 871 672
Total revenue 70,265 60,097
Revenue and excise duties
DKK million 2022 2021
Revenue, including excise
duties 95,147 82,883
Excise duties -24,882 -22,786
Revenue 70,265 60,097
Geographical allocation of revenue
DKK million 2022 2021
Denmark (Carlsberg
Breweries A/S’ domicile) 4,487 3,897
China 13,781 11,946
United Kingdom 7,070 5,965
Other countries 44,927 38,289
Total 70,265 60,097
VOLUMES
The organic growth in total volumes was a
result of growth in Asia and Western Europe,
while Central & Eastern Europe was impacted
by declining volumes in Ukraine. Reported
volume growth was negatively affected by the
deconsolidation of Gorkha Brewery at the end
of 2021.
Group financial performance
Change Change
Volumes (million hl) 2021 Organic Acq., net FX 2022 Reported
Beer 98.8 4.2% -0.6% - 102.4 3.6%
Other beverages 20.4 12.9% -0.1% - 23.0 12.8%
Total volume 119.2 5.7% -0.5% - 125.4 5.2%
DKK million
Revenue 60,097 15.6% -0.9% 2.2% 70,265 16.9%
Operating profit
10,137 10.6% -1.0% 2.0% 11,313 11.6%
Operating margin (%) 16.9 16.1 -80bp
OPERATING PROFIT BEFORE
SPECIAL ITEMS
Not allocated operating profit before special
items, DKK -1,370m (2021: DKK -1,347m),
related to central costs not managed by the
regions, including costs of developing branding
activities to support the strategic initiatives and
general costs of centralised functions as well as
various eliminations of DKK 82m (2021: DKK
62m). Group operating profit grew by 11.6%,
supported by growth in all three regions.
Organic growth in operating profit was 10.6%.
OPERATING MARGIN
The operating margin declined to 16.1%
compared to 16.9% in 2021. The decline was
due to margin pressure from higher commodity
prices.
NON-CONTROLLING INTERESTS
The Group’s non-controlling interests consist of
Lao Brewery, Carlsberg Chongqing Breweries
Group, Carlsberg Malaysia Group and Carlsberg
Marston's Brewing Group, as well as other
minor interests, primarily in the Asia region.
Non-controlling interests are not individually
material to the Group’s total profit.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The Group considers all terms and activities in
contracts with customers in order to determine the
performance obligation, the transaction price and the
allocation of the transaction price.
If the consideration in a contract includes a variable
amount, the Group estimates the consideration to
which it will be entitled in exchange for transferring
goods to the customer. The variable consideration is
estimated at contract inception based on expected
sales volumes using historical and year-to-date sales
data and other information about trading with the
individual customer or with a group of customers.
The Group estimates discounts using either the
expected value method or the most likely amount
method, depending on which method better predicts
the amount of consideration to which it will be
entitled.
The most likely amount method is used for contracts
with a single contract sum, while the expected value
method is used for contracts with more than one
threshold due to the complexity and the activities
agreed with the individual customer.
Certain contracts related to specific major events that
are held within such a short time period that it is not
possible to sell all the goods during the event (e.g.
football matches) give the customer the right to
return the goods within a specified period.
The Group uses the expected value method to
estimate the goods that will not be returned, as this
method best predicts the amount of variable
consideration to which the Group will be entitled. For
goods that are expected to be returned, the Group
recognises a refund liability instead of revenue.
Management makes judgements when deciding
whether supporting activities with a customer should
be classified as a discount or a marketing expense.
Generally, activities with the individual customer are
accounted for as a discount, whereas costs related to
broader marketing activities are classified as
marketing expenses.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 38
SECTION 1.2 (CONTINUED)
SEGMENTATION OF
OPERATIONS
Whether the Group is acting as a principal or an agent
is evaluated by management on a country-by-country
basis. The Group has concluded that it is the principal
in its revenue arrangements because it controls the
goods before transferring them to the customer.
Excise duties, taxes and fees
The classification of duties, taxes and fees paid to
local authorities or brewery organisations etc. requires
judgements on the classification to be made by
management.
Locally imposed duties, taxes and fees are typically
based on product type, alcohol content, consumption
of certain raw materials, such as glue, plastic or metal
in caps, and energy consumption. These are classified
as either sales- or production-related.
Excise duties are generally imposed by the tax
authorities as taxes on consumption and are collected
by the Group on behalf of the authorities when the
goods are transferred to the customers and thereby
ready for consumption.
Taxes and fees related to the input/use of goods in
production, distribution etc. are recognised as part of
the cost of the goods or services purchased. The type
of authority or organisation imposing the duty, tax or
fee and the objective of this are key factors when
determining the classification.
ACCOUNTING
POLICIES
Revenue
Recognition and measurement
Revenue from contracts with customers comprises
sales of goods, royalty income, rental income from
non-stationary equipment, service fees and sales of
by-products.
Revenue from the sale of own-produced finished
goods, goods for resale (third-party products) and by-
products is recognised at the point in time when the
control of goods and products is transferred to the
customer, which is generally upon delivery. For
contracts providing the customer with a right of return
within a specified period, the Group considers the
timing of recognition.
Revenue from sales- or usage-based royalties is
recognised when (a) the customer subsequently sells
or uses the goods, or (b) the performance obligation
to which some or all of the sale- or usage-based
royalty has been allocated is satisfied (or partially
satisfied), whichever is later.
Revenue from contracts with customers is measured
at an amount that reflects the expected consideration
for those goods. Amounts disclosed as revenue
exclude discounts, VAT and excise duties collected on
behalf of authorities.
The Group considers whether contracts include
separate performance obligations to which a portion
of the transaction price needs to be allocated. In
determining the transaction price, the Group considers
the effects of variable consideration. No element of
financing is deemed present, as payment is generally
made on the basis of cash on delivery or up to 30
days of credit.
Variable consideration
The Group offers various discounts depending on the
nature of the customer and business.
Discounts comprise off-invoice discounts, volume- and
activity-related discounts, including specific promotion
prices offered, and other discounts. Furthermore,
discounts include the difference between the present
value and the nominal amount of on-trade loans to
customers, cf. section 1.6.
Off-invoice discounts arise from sales transactions
where the customer immediately receives a reduction
in the sales price. This also includes cash discounts
and incentives for early payments.
Volume- and activity-related discounts is a broad
term covering incentives for customers to sustain
business with the Group over a longer time and may
be related to a current campaign or a sales target
measured in volumes or total value. Examples include
discounts paid as a lump sum, discounts for meeting
certain sales targets or progressive discounts offered
in step with increasing sales to a customer.
Other discounts include listing fees, i.e. fees for certain
listings on shelves, in coolers or in favourable store
locations, as specific promotions of this nature are
closely related to the volumes sold.
Segment information
The Group’s beverage activities are segmented
according to the three geographical regions where
sales take place. These regions make up the Group’s
reportable segments.
The segmentation reflects the geographical and
strategic management, decision and reporting
structure applied by the Executive Committee for
monitoring the Group’s strategic and financial targets.
Segments are managed based on business
performance measured as operating profit before
special items.
Not allocated comprises income and expenses
incurred for ongoing support of the Group’s overall
operations and strategic development. The expenses
include costs of running central functions and
marketing, such as global sponsorships.
The geographical allocation of revenue and non-
current assets is based on the selling entities’ domicile
and comprises countries individually accounting for
more than 10% of the Group’s consolidated revenue
as well as the domicile country.
Decisions on restructuring, acquisition and divestment
of entities included in special items as well as on
financing (financial income and expenses) and tax
planning (income tax) are made based on information
for the Group as a whole and therefore not
segmented.
The segmentation of the Group’s assets and returns is
disclosed in section 2.1.
Reported figures
Reported figures are analysed by looking at the
impact of organic growth, net acquisitions and foreign
exchange effects.
The net acquisition effect is calculated as the effect of
acquisitions and divestments, including any share
obtained from an increase/decrease in ownership of
associates, for a 12-month period from the
acquisition/divestment date.
The foreign exchange effect is calculated as the
difference between the figures for the current
reporting period translated at the current exchange
rates and at the exchange rates applied in the
previous reporting period.
Organic growth is the remaining growth that is not
related to acquisitions, divestments or foreign
exchange effects.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 39
SECTION 1.3
OPERATING
EXPENSES,
INVENTORIES AND
DEPOSIT LIABILITIES
1.3.1 COST OF SALES AND INVENTORIES
Cost of sales increased by 21% compared with
2021, mainly due to higher commodity prices
and energy costs across regions and the
organic increase in volumes in Asia and
Western Europe. Cost of sales per hl increased
by 15% compared with 2021.
Cost of sales
DKK million 2022 2021
Cost of materials 21,655 17,190
Direct staff costs 1,521 1,307
Amortisation and depreciation 2,536 2,749
Indirect production
overheads 4,788 3,902
Purchased finished goods and
other costs 7,698 6,380
Total 38,198 31,528
Inventories increased by 6% compared with
2021, mainly as a result of finished goods being
impacted by the increase in cost of sales per hl.
Inventories
DKK million 2022 2021
Raw materials 2,333 2,311
Work in progress 344 333
Finished goods 3,041 2,747
Total 5,718 5,391
Commodity price risks are, in particular,
associated with externally sourced input
materials, such as malt (barley), cans
(aluminium), paper, sugar and glass & plastic
(PET) bottles. The management of commodity
price risks is coordinated centrally and aimed at
achieving stable and predictable prices in the
medium term.
As the underlying markets for the specified
categories vary, so does the way in which they
are hedged against price increases.
The most common form of hedging is fixed-
price purchase agreements with suppliers in
local currencies.
For barley and aluminium, the two most
significant commodity exposures, Group policy
is to have a minimum of 70% hedged for a
given year no later than at the end of the third
quarter of the previous year, with a target
hedge ratio of 90% at the beginning of the
year in question.
A significant part of the Group’s barley
exposure for 2022 had therefore been hedged
through fixed-price purchase agreements
established in 2021. Likewise, the majority of
the exposure for 2023 was hedged in 2022.
In the Group’s long-term purchase agreements
for cans, the aluminium price is variable and
based on the global market price of aluminium
(London Metal Exchange, LME).
In 2022, the aluminium price risk was hedged
using derivative financial instruments applying
the same target hedge percentages as are
applied for barley. The same has been done for
2023. The fair values of the derivative financial
instruments are specified in section 4.8.
For sugar, rolling forward hedges are used, with
suppliers fixing prices linked to official indices,
for example NY11. As for barley and aluminium,
the majority of the 2022 sugar exposure had
been hedged in 2021. Likewise, the majority of
the exposure for 2023 was hedged in 2022.
Other commodities, such as PET resins, paper,
rice and corn are also hedged directly via
suppliers fixing prices to the extent possible.
For electricity and natural gas, used in
production of the Group’s own products, most
markets in Central & Eastern Europe and Asia
are regulated with no possibility to hedge
prices. In Western Europe, where most markets
allow forward hedging, the majority of the
Group’s exposure is hedged on a rolling basis.
In January 2023 the Group started to hedge
fuel, linked to distribution expenses, via
financial contracts – following a similar set-up
to how aluminium is hedged.
Hedging of raw material price risk
DKK million
Sensitivity assuming 100%
efficiency Time of maturity
Aluminium Change
Effect
on OCI
Tonnes
purchased
Average
price (DKK) 2022 2023 2024
2022 20% 381 116,454 18,304 - 93,608 22,846
2021 20% 313 85,440 15,741 85,440 - -
Sensitivity assuming 100%
efficiency Time of maturity
Energy Change
Effect
on OCI
MWh
purchased
Average
price (DKK) < 1 year 1-5 years > 5 years
2022 20% 34 289,966 420 - 99,123 190,843
ACCOUNTING ESTIMATES
AND JUDGEMENTS
At least once a year, management assesses whether
the standard cost of inventories approximates the
actual cost. During the year, the standard cost is
revised if it deviates by more than 5% from the actual
cost. Indirect production overheads are calculated on
the basis of relevant assumptions as to capacity
utilisation, production time and other factors.
The calculation of the net realisable value of
inventories is relevant to packaging materials, point-
of-sale materials and spare parts. The net realisable
value is normally not calculated for beer and soft
drinks due to their limited shelf-life, which means that
slow-moving goods must be scrapped instead.
ACCOUNTING
POLICIES
Cost of sales comprises cost of materials used in
own-produced finished goods, including malt (barley),
hops, glass, cans, other packaging materials, direct
labour, indirect production overheads and standard
cost variations. Further, it comprises purchased
finished goods that include cost of point-of-sale
materials and third-party products sold to customers.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 40
SECTION 1.3 (CONTINUED)
OPERATING
EXPENSES,
INVENTORIES AND
DEPOSIT LIABILITIES
Indirect production overheads comprise indirect
supplies, wages and salaries, amortisation of brands
and software, as well as maintenance and
depreciation of machinery, plant and equipment used
for production.
The cost of purchased finished goods, raw and
packaging materials and point-of-sale materials
includes the purchase cost and costs directly related
to bringing inventories to the relevant place of sale
and getting them ready for sale, for example
insurance, freight and duties.
Inventories are measured at the lower of standard
cost (own-produced finished goods) and weighted
average cost (other inventories), or net realisable
value. The net realisable value is the estimated selling
price less costs of completion and costs necessary to
make the sale, also taking into account marketability,
obsolescence and developments in expected selling
price.
The cost of scrapped/impaired goods is expensed in
the function (line item) responsible for the loss, i.e.
losses during distribution are included in distribution
expenses, while scrapping of products due to sales not
meeting forecasts is included in sales expenses.
1.3.2 DEPOSITS ON RETURNABLE
PACKAGING MATERIALS
Deposits on returnable packaging materials
amounted to DKK 1,627m (2021: DKK 1,504m).
The capitalised value of returnable packaging
materials was DKK 1,794m (2021: DKK 1,867m).
The capitalised value of returnable packaging
materials exceeds the deposits because each of
the returnable packaging items circulates a
number of times in the market and some
markets have regulations that require the
deposit value to be set lower than the cost of
the returnable packaging materials.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Management assesses the local business model to
determine whether the Group has a legal or
constructive obligation to accept returns of packaging
materials from the market and the level of control.
This entails the Group considering, among other
things, the return rate and the annual circulation in
the individual markets. These factors are assessed
annually. Returnable packaging materials controlled
by the Group are capitalised as property, plant and
equipment and depreciated over the expected useful
life.
The deposit on returnable packaging materials is
estimated based on movements during the year in
recognised liabilities, loss of returnable packaging
materials in the market, planned changes in
packaging types and historical information about
return rates.
ACCOUNTING
POLICIES
Returnable packaging materials that the Group
controls through a legal or constructive obligation are
capitalised as property, plant and equipment.
Returnable packaging materials are depreciated over
3-10 years. The accounting policies for property, plant
and equipment are further described in section 2.3.
The obligation to refund deposits on returnable
packaging materials is measured on the basis of
deposit price, an estimate of the number of bottles,
kegs, cans and crates in circulation, and expected
return rates.
1.3.3 SALES AND DISTRIBUTION
EXPENSES
Marketing expenses increased as marketing
activities were resumed at levels similar to
before COVID-19. Distribution expenses were
impacted by the volume growth and the 9%
increase in cost per hl was driven by higher fuel
costs. Total marketing, sales and distribution
expenses increased by 17%.
Sales and distribution expenses
DKK million 2022 2021
Marketing expenses 5,793 4,757
Sales expenses 5,120 4,542
Distribution expenses 6,424 5,573
Total 17,337 14,872
ACCOUNTING
POLICIES
Marketing expenses consist of expenses for brand
marketing and trade marketing.
Brand marketing is an investment in the Group’s
brands and consists of brand-specific investments in
the development of communication vehicles, the use
of these to drive the sale of branded products, sales
campaigns and sponsorships.
Trade marketing is promotional activities directed
towards customers, such as the supply of point-of-
sale materials, promotional materials and trade
offers.
Sales expenses comprise costs relating to general
sales activities, write-downs for bad debt losses,
wages and salaries as well as depreciation and
impairment of sales equipment. Distribution expenses
comprise costs incurred in distributing goods, wages
and salaries, and depreciation and impairment of
distribution equipment.
1.3.4 OTHER OPERATING
ACTIVITIES, NET
Other operating activities are secondary to the
principal activities of the Group and include
income and expenses relating to rental
properties, restaurants, on-trade loans, research
activities, and gains and losses on disposal of
intangible assets and property, plant and
equipment.
Other operating activities, net
DKK million 2022 2021
Gains and losses on disposal
of property, plant and
equipment and intangible
assets, net 79 77
On-trade loans, net 30 58
Real estate, net 19 17
Research centres, net -80 -106
Other, net 49 29
Total 97 75
ACCOUNTING
POLICIES
Gains and losses on disposal of intangible assets and
property, plant and equipment are determined as the
sales price less selling costs and the carrying amount
at the disposal date.
On-trade loans, net, comprise the effective interest on
the loans measured at amortised cost less
impairment.
Expenses relating to research activities comprise
research in France. Product development costs are
included in cost of sales.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 41
SECTION 1.4
FOREIGN EXCHANGE
RISK RELATED TO
EARNINGS
The majority of the Group’s activities take place
outside Denmark and in currencies other than
DKK. Foreign exchange risk is therefore a
principal financial risk for the Group, and
exchange rate fluctuations can have a
significant impact on the income statement.
The risk from exposure to fluctuations in EUR/
DKK is considered to be limited due to
Denmark’s fixed exchange rate policy towards
EUR and is consequently not hedged.
REVENUE BY CURRENCY (%)
2022 (2021)
CNY 20% (20%) EUR 18% (19%)
GBP 10% (10%) DKK 9% (9%)
NOK 7% (7%) CHF 6% (5%)
SEK 4% (4%) PLN 4% (4%)
LAK 3% (3%) Other 19% (19%)
TRANSACTION RISKS ON PURCHASES
AND SALES
The Group is exposed to transaction risks on
purchases and sales in currencies other than the
local functional currencies. The Group aims to
hedge 70-90% of future cash flows in
currencies other than the local functional
currency on a four-quarter rolling basis.
Western Europe
For the entities in Western Europe, a major part
of the purchases in foreign currencies is in EUR.
This also applies for markets with a functional
currency other than EUR.
Hedging of EUR against the local currencies
will effectively eliminate a significant part of
the currency risk in the entities’ operating profit
in local currency. At Group level, these hedges
are effectively a hedge of (parts of) the revenue
in the relevant currency and are accounted
for as cash flow hedges, cf. section 4.8. The
hedged amounts and the sensitivity analysis
regarding these hedges are shown in
section 4.6.4.
Asia
The transaction risk is considered to be less
significant due to lower sales and purchases in
currencies other than the local functional
currencies as well as the high correlation
between USD and most of the Asian currencies.
Furthermore, the currencies are expensive to
hedge and, in some cases, not possible to
hedge at all. As a consequence, the risk is not
hedged.
Central & Eastern Europe
The largest foreign exchange risk in Central &
Eastern Europe relates to Ukraine and
Kazakhstan and the purchase of raw and
packaging materials denominated in foreign
currencies. For 2022 and 2023, the Group has
chosen to hedge a portion of Carlsberg
Ukraine’s expenses in EUR and USD by
designating bank deposits in these currencies as
hedging instruments. Carlsberg Kazakhstan
holds intercompany deposits in EUR and USD.
The revaluation of these is recognised in
financial items, and they are not designated as
cash flow hedges, but will in economic terms
give the Group some protection from
depreciation of the local currency, KZT.
TRANSLATION RISK
The Group is exposed to risk from translation of
foreign entities into the Group’s presentation
currency, DKK.
The single largest translation impact in respect
of operating profit in 2022 was CNY due to the
9.0% appreciation of the currency compared
with 2021 and the relative share of the Group’s
operating profit generated in China. Looking
into 2023, and following the partial write-down
of the net investment in Russia, the most
significant currency volatility exposure in terms
of operating profit and translation of net
investments in foreign entities is CNY.
The Group has chosen not to hedge the
exposure arising from translation of revenue or
earnings in foreign currencies. To reduce the
risk, the Group has raised debt denominated in
the currencies in which the Group generates
significant earnings and cash flow as further
described in section 4.6.
Impact on operating profit
Developments in exchange rates between
DKK and the functional currencies had a
positive impact of 2.0% on operating profit
measured in DKK.
The development in the RUB exchange rate
does not impact operating profit but had a
positive impact of 28.4% on the net result from
Russian operations held for sale. The modest
impact compared with the 32.7% change in the
average exchange rate for the full year was due
to the timing of the majority of the DKK 8.4bn
write-down of the assets in disposal group held
for sale in March 2022, cf. section 5.1.
Entities in
Functional
currency
Change in average FX
rate 2021 to 2022
The eurozone EUR -
China CNY 9.0%
Norway NOK 0.7%
United
Kingdom GBP 0.5%
Switzerland CHF 7.9%
Sweden SEK -4.5%
Laos LAK -21.0%
Russia RUB 32.7%
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 42
SECTION 1.5
CASH FLOW FROM
OPERATING
ACTIVITIES
Other specifications of cash flow from operating activities
DKK million Section 2022 2021
Other non-cash items
Share of profit after tax of associates 5.5 -675 -259
Gain on disposal of property, plant and equipment and intangible
assets, net 2.3 -79 -77
Share-based payments 107 68
Other items 9 -100
Total -638 -368
Trade working capital
Inventories -1,271 -539
Trade receivables -232 -1,710
Trade payables, duties payable and deposits on returnable packaging
materials 3,463 2,978
Total 1,960 729
Other working capital
Other receivables -572 -563
Other payables -12 939
Retirement benefit obligations and other liabilities related to operating
profit before special items -63 -201
Unrealised foreign exchange gains/losses -32 -4
Total -679 171
The change in trade working capital amounted
to DKK 1,960m (2021: DKK 728m), mainly due
to strong cash management discipline and
higher trade payables.
Average trade working capital to revenue for
the year was -21.4% (2021: -19.4%).
Cash flow from the change in other working
capital declined by DKK 679m (2021: increase
of DKK 171m), impacted by VAT, accruals for
variable pay and provisions.
The change in on-trade loans amounted to
DKK 129m (2021: DKK 148m).
Restructuring costs paid amounted to
DKK -183m (2021: DKK -353m), a large
part of which relates to termination benefits
to employees made redundant due to
optimisations and reorganisations across the
Group.
Net interest etc. paid amounted to DKK -950m
(2021: DKK -843m). The increase was largely
due to settlement of derivative financial
instruments.
Income tax paid amounted to DKK -2,201m
(2021: DKK -1,948m).
Supplier finance arrangements A number of
the Group’s suppliers participate in supplier
finance arrangements, with a supply chain
finance provider and related financial
institutions acting as a funding partner. When
suppliers participate in these programmes, they
have the option of receiving early payment
from the funding partner of invoices sent
to Carlsberg.
The arrangement is exclusively between the
supplier and the supply chain finance provider
and separate from Carlsberg’s relationship with
its suppliers. Carlsberg’s liability to pay invoices
is unaffected by the supplier finance
arrangement and whether or not the suppliers
opt for early payment, and the liability is
recognised in trade payables until the due date
of the invoice, which is in no case more than
180 days from the invoice date. Cessation of
the supplier finance arrangement would not
constitute a significant risk in terms of liquidity
because of the amounts involved and the
number of supply chain finance providers.
Sale of receivables Carlsberg has chosen to sell
some of its trade receivables in selected
Western European markets in non-recourse
factoring agreements to expedite cash
collection from groups of customers. Carlsberg
does not carry any credit risk on these
customers and has no continuing involvement
in these trade receivables, which have therefore
been derecognised.
The impact on average trade working capital
from the use of supplier finance arrangements
and factoring is limited, as the utilisation is
similar to previous years.
ACCOUNTING
POLICIES
Trade payables are recognised initially at fair value
and subsequently measured at cost. Trade payables
comprise purchase of goods and services, including
payables to supplier finance vendors, and
retrospective rebates to customers and are part of the
normal working capital cycle. The cash flow arising
from all trade payables is part of cash flow from
operating activities.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 43
SECTION 1.6
TRADE RECEIVABLES
AND ON-TRADE
LOANS
The Group’s non-current receivables consist
mainly of on-trade loans that fall due more
than one year from the reporting date. Of the
total non-current receivables, DKK 164m (2021:
DKK 159m) falls due more than five years from
the reporting date.
The carrying amount of receivables
approximates their fair value. For on-trade
loans, the fair value is calculated as discounted
cash flows using the interest rate at the
reporting date.
Receivables included in the statement of financial position
DKK million
Non-
current Current Total
2022 Receivables
Trade
receivables
Other
receivables
Receivables from sales of goods and services - 4,829 - 4,829
On-trade loans 644 242 - 886
Other receivables 290 - 2,516 2,806
Total receivables 934 5,071 2,516 8,521
2021
Receivables from sales of goods and services - 5,463 - 5,463
On-trade loans 776 252 - 1,028
Other receivables 297 - 2,683 2,980
Total receivables 1,073 5,715 2,683 9,471
ON-TRADE LOANS
Under certain circumstances, the Group grants
loans to on-trade customers in France, the UK,
Switzerland, Germany and Sweden. On-trade
loans are spread across a large number of
customers/debtors and consist of several types
of loan, including loans repaid in cash or
through reduced discounts and guarantees for
loans provided by third parties, cf. section 3.4..
The operating entities monitor and control
these loans in accordance with Group
guidelines.
The average effective interest rate on loans to
the on-trade was 3.5% (2021: 3.2%). The
interest income is recognised in other operating
activities.
On-trade loans recognised in other operating
activities, net
DKK million 2022 2021
Interest and amortisation of
on-trade loans 47 49
Losses and write-downs on
on-trade loans -17 9
On-trade loans, net 30 58
OTHER RECEIVABLES
Other receivables primarily comprise VAT and
similar government receivables, interest
receivables and other financial receivables,
which are associated with low risk.
RECEIVABLES FROM SALES OF GOODS AND
SERVICES
(BROKEN DOWN BY COUNTRY)
2022 (2021)
UK 16% (21%) Finland 8% (7%)
Sweden 8% (6%) France 8% (6%)
Poland 5% (5%) India 4% (4%)
Ukraine 2% (4%) Other 49% (47%)
The distribution of receivables broken down by
country is affected by market-specific changes
in payment patterns. For receivables from sale
of goods and services, the distribution is
furthermore impacted by the value of
receivables sold. The overall level of receivables
sold in non-recourse factoring schemes was
similar to the level in 2021.
ON-TRADE LOANS
(BROKEN DOWN BY COUNTRY)
2022 (2021)
Germany 30% (26%)
Switzerland 25% (23%)
France 24% (24%)
UK 12% (17%)
Sweden 9% (10%)
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 44
SECTION 1.6 (CONTINUED)
TRADE RECEIVABLES
AND ON-TRADE
LOANS
1.6.1 CREDIT RISK
In 2022, receivables not past due amounted to
78% (2021: 81%) of total gross receivables. The
past-due share of gross loans to on-trade
customers was 34% (2021: 31%).
Credit risk on receivables
DKK million
2022
Gross
receivables
Loss
allowance
Receivables,
net
Weighted
average
loss rate
Receivables from sales of goods and services
Not past due 4,457 -126 4,331 3%
Overdue 1-30 days 483 -133 350 28%
Overdue 31-90 days 191 -62 129 32%
Overdue > 90 days 311 -292 19 94%
Receivables from sales of goods and services 5,442 -613 4,829
On-trade loans
Not past due 873 -104 769 12%
Overdue 1-30 days 11 - 11 -
Overdue 31-90 days 30 -7 23 23%
Overdue > 90 days 410 -327 83 80%
On-trade loans 1,324 -438 886
Other receivables
Not past due 2,181 - 2,181 -
Overdue 1-30 days 107 - 107 -
Overdue 31-90 days 87 - 87 -
Overdue > 90 days 447 -16 431 4%
Other receivables 2,822 -16 2,806
Total 9,588 -1,067 8,521
Total accumulated allowances for impairment
losses on trade loans were DKK 438m (2021:
DKK 464m).
The share of trade receivables that is past-due
increased from 15% to 18%.
The credit risk is being closely managed in the
markets, and assessed in light of rising
instability across markets due to unpredictable
energy prices and rising inflation and interest
rates. The credit risk from the COVID-19
pandemic decreased. Although the virus is still
circulating, the impact on society has lessened
significantly, and governments did not impose
extensive new lockdowns and restrictions
during 2022, except for some areas in Asia. The
impact on the global risk pattern is evaluated at
both local and Group level. Across regions and
markets, customers are being impacted by
unpredictable energy prices and rising inflation
and interest rates. The market volatility and
uncertainty remains high, as customers in many
markets had not fully recovered from the
DKK million
2021
Gross
receivables
Loss
allowance
Receivables,
net
Weighted
average
loss rate
Receivables from sales of goods and services
Not past due 5,160 -143 5,017 3%
Overdue 1-30 days 479 -88 391 18%
Overdue 31-90 days 70 -49 21 70%
Overdue > 90 days 371 -337 34 91%
Receivables from sales of goods and services 6,080 -617 5,463
On-trade loans
Not past due 1,035 -139 896 13%
Overdue 1-30 days 13 - 13 -
Overdue 31-90 days 55 -22 33 40%
Overdue > 90 days 389 -303 86 78%
On-trade loans 1,492 -464 1,028
Other receivables
Not past due 2,398 -2 2,396 0%
Overdue 1-30 days 110 - 110 -
Overdue 31-90 days 98 -5 93 5%
Overdue > 90 days 398 -17 381 4%
Other receivables 3,004 -24 2,980
Total 10,576 -1,105 9,471
COVID-19 impact and are now faced with a
challenging macroeconomic environment.
The estimated impairment losses consider the
expected impact from the increased risk of
default across markets caused by unpredictable
energy prices and rising inflation and interest
rates. The increased credit risk on both trade
receivables and on-trade loans observed across
markets is expected to continue into 2023.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 45
SECTION 1.6 (CONTINUED)
TRADE RECEIVABLES
AND ON-TRADE
LOANS
ACCOUNTING ESTIMATES
AND JUDGEMENTS
On-trade loan agreements are complex, cover several
aspects of the customer relationship and may vary
from agreement to agreement. Management assesses
the recognition and classification of income and
expenses for each agreement, including the allocation
of payments from the customer between revenue,
discounts, interest (other operating activities) and
repayment of the loan.
Management also assesses both individually and on a
portfolio basis whether developments in local
conditions for on-trade customers could impact the
expected credit losses.
Exposure to credit risk on receivables is managed
locally, and credit limits are set as considered
appropriate for the customer, taking into account the
current local market conditions.
Development in impairment losses on receivables
DKK million
2021
2022
Receivables
from sales
of goods
and services
On-trade
loans
Other
receivables Total Total
Impairment at 1 January -617 -464 -24 -1,105 -1,514
Impairment losses recognised -135 -114 -4 -253 -296
Realised impairment losses 31 36 2 69 93
Reversed impairment losses 74 104 1 179 638
Acquisition of entities, net - - - - 13
Foreign exchange adjustments 6 - 9 15 -39
Impairment in disposal group held
for sale 28 - - 28 -
Impairment at 31 December -613 -438 -16 -1,067 -1,105
The local entities assess the credit risk and adhere to
Group guidelines, which include setting credit limits,
encouraging cash payment, purchasing credit
insurance and holding collateral.
In assessing credit risk, management analyses the
need for impairment of trade receivables and on-trade
loans due to customers’ inability to pay. Credit risk
remains high and is expected to continue in 2023.
At year-end 2022, management continued to assess
the lifetime expected credit losses for both trade
receivables and on-trade loans in line with 2021.
Expected credit losses are assessed for portfolios of
receivables based on customer segments, historical
information on payment patterns, terms of payment
and concentration maturity. The expected impact
includes the risk of insolvencies due to lack of
liquidity. The portfolios are based on on-trade and
off-trade customers, and on-trade receivables and
loans.
On-trade loans carry a higher risk than trade
receivables and are concentrated in a few markets.
The local entities manage and control these loans in
accordance with Group guidelines.
The credit risk on on-trade loans can be reduced by
means of collateral and pledges of on-trade movables
(equipment in bars, cafés etc.). The fair value of the
pledged on-trade movables cannot be estimated
reliably but is assessed to be insignificant, as they
cannot readily be reused.
ACCOUNTING
POLICIES
Receivables are recognised initially at fair value and
subsequently measured at amortised cost less loss
allowance or impairment losses. Trade receivables
comprise sale of goods and services as well as short-
term on-trade loans to customers. Other receivables
comprise VAT receivables, loans to partners and
associates, interest receivables and other financial
receivables.
For on-trade loans, any difference between the
present value and the nominal amount at inception is
treated as a prepaid discount to the customer, and the
discount is recognised in the income statement in
accordance with the terms of the agreement.
The market interest rate is used as the discount rate,
corresponding to the money market rate based on the
maturity of the loan with the addition of a risk
premium. The effective interest on these loans is
recognised in other operating activities, net. The
amortisation of the difference between the discount
rate and the effective interest rate is included as a
discount in revenue.
On-trade loans
DKK million 2022 2021
Loans provided -261 -356
Repayments 192 340
Amortisation of on-trade loans 198 164
Total 129 148
The Group applies the simplified approach to measure
expected credit losses. This entails recognising a
lifetime expected loss allowance for all trade
receivables. Loss rates are determined based on
grouping of trade receivables sharing the same credit
risk characteristics and past-due days.
Regarding on-trade loans and loans to associates, a
loss allowance is recognised based on 12-month or
lifetime expected credit losses, depending on whether
a significant increase in credit risk has arisen since
initial recognition.
In certain markets, the Group enters into factoring
agreements on a non-recourse basis, which involves
selling trade receivables to a factor. Trade receivables
subject to factoring agreements are derecognised
once the criteria for derecognition have been met and
all substantial risk and rewards transferred. The Group
does not have any continuing involvement once the
receivables have been derecognised.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 46
SECTION 2
ASSET BASE
AND RETURNS
105.8bn
TOTAL ASSETS (DKK)
Total assets declined by DKK 8.9bn, mainly due
to the decision to seek a full divestment of the
Russian business, which resulted in a write-
down of the Russian business of DKK -8.4bn.
Intangible assets amounted to DKK 40.5bn at
31 December 2022 (2021: DKK 57.3bn), mainly
due to the carve-out of the Russian business.
ASSET BASE (DKKbn)
83.8
4.8
-5.3
-3.9
-0.4
-14.9
64.1
Asset base,
opening
Acquisitions and
disposals, incl.
leases, net
Foreign exchange
adjustments
Amortisation/
depreciation
Impairment losses
etc.
Reclassified to disposal
group held for sale,
cf. section 5.1
Asset base,
closing
Property, plant and equipment totalled
DKK 23.6bn (2021: DKK 26.6bn), mainly
impacted by the reclassification of Russia.
Current assets declined by DKK 0.6bn to DKK
22.6bn, primarily due to a decline in trade
receivables of DKK 0.6bn impacted by the
reclassification of the Russian business to
disposal group held for sale and an increase in
inventories of DKK 0.3bn, impacted by higher
cost of sales, stocking in Asia prior to the
Chinese New Year and the reclassification of
the Russian business. Other receivables mainly
increased due to fair value adjustment linked to
higher aluminium prices. Cash and cash
equivalents amounted to DKK 8.2bn (2021:
DKK 8.3bn).
4.2bn
CAPEX (DKK)
CapEx increased by DKK 328m. Asia and
Central & Eastern Europe were the main
contributors, driven by higher investments in
filling capacity. CapEx to amortisation and
depreciation, excluding right-of-use assets,
increased to 106% (2021: 102%).
CAPEX
1
AND AMORTISATION/
DEPRECIATION
2
(DKKbn)
2018
2019
2020
2021
2022
1.0
2.0
3.0
4.0
5.0
4.0%
5.0%
6.0%
7.0%
8.0%
CapEx
Amortisation and depreciation
CapEx/revenue
1
Excluding the purchase of the Brooklyn brand rights in 2020.
18.0%
ROIC
Return on invested capital (ROIC) increased
by 300bp to 18.0% as a result of higher
operating profit, a lower effective tax rate,
which was impacted by a one-off adjustment,
and improved working capital. ROIC excluding
goodwill improved by 1,000bp to 49.9%.
RETURN ON INVESTED CAPITAL
2
(% 12-MONTH AVERAGE)
ROIC
ROIC excl. goodwill
2018
2019
2020
2021
2022
10
20
30
40
50
2
2018-2020 as reported. 2021-2022 for continuing operations.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 47
SECTION 2.1
SEGMENTATION OF
ASSETS AND
RETURNS
Following the classification of the Russian
operations as held for sale in March 2022, the
segmentation of assets and returns is presented
only for the continuing operations.
Invested capital for 2021 has been restated to
include only the continuing operations so as to
align it with the restatement of operating profit
Invested capital
DKK million 2022 2021
Total assets excluding assets
in disposal group held for sale,
cf. section 5.1 94,180 94,234
Less
Tax assets -1,704 -1,924
Financial receivables, hedging
instruments and receivables
sold 621 601
Cash and cash equivalents -8,163 -8,217
Assets included 84,934 84,694
Trade payables -21,906 -19,083
Deposits on returnable
packaging materials -1,627 -1,504
Provisions, excl. restructurings -2,981 -3,158
Other liabilities, excl. hedging
instruments and contingent
consideration -7,957 -8,103
Liabilities offset -34,471 -31,848
Invested capital 50,463 52,846
Goodwill -32,532 -33,271
Invested capital excl. goodwill 17,931 19,575
Invested capital, average 51,771 52,824
and support the calculation of a meaningful
ROIC for 2021.
At year-end, invested capital was down by
DKK 2.4bn, primarily due to developments in
currencies and goodwill impairment in Central
& Eastern Europe.
Non-current assets comprise intangible assets
and property, plant and equipment owned by
the segment/country, even if the income is
earned outside the segment/country that owns
the asset.
They further include non-current financial
assets other than financial instruments and tax
assets.
DKK million
2022
Western
Europe Asia
Central &
Eastern
Europe
Not
allocated
Carlsberg
Breweries
Group
Invested capital 26,338 18,090 6,284 -249 50,463
Invested capital excl. goodwill 10,857 3,652 3,671 -249 17,931
Investments in associates 2,361 2,402 27 6 4,796
Acquisition of property, plant and equipment and
intangible assets 1,363 1,860 643 357 4,223
Amortisation and depreciation 1,781 1,350 601 106 3,838
Impairment losses, net 56 308 23 43 430
Return on invested capital (ROIC) 14.2% 21.8% 30.8% - 18.0%
ROIC excl. goodwill 32.8% 112.4% 49.7% - 49.9%
2021
Invested capital 27,822 19,424 6,361 -761 52,846
Invested capital excl. goodwill 12,317 4,281 3,738 -761 19,575
Investments in associates 2,271 2,363 30 5 4,669
Acquisition of property, plant and equipment and
intangible assets 1,340 1,800 566 191 3,897
Amortisation and depreciation 1,796 1,488 605 102 3,991
Impairment losses, net 17 460 - - 477
Return on invested capital (ROIC) 11.7% 21.3% 28.1% - 15.0%
ROIC excl. goodwill 24.5% 153.4% 47.0% - 39.9%
Not allocated comprises supporting companies
without brewing activities and eliminations of
investments in subsidiaries, receivables and
loans.
Geographical allocation of non-current assets
DKK million 2022 2021
Denmark
(Carlsberg Breweries A/S'
domicile) 3,918 4,024
China 15,906 15,876
France 11,100 11,121
Other countries 37,978 57,469
Total 68,902 88,490
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The calculation of return on invested capital (ROIC)
uses operating profit before special items adjusted for
tax based on the effective tax rate, and invested
capital excluding assets in disposal group held for
sale, including assets held for sale and trade
receivables sold, and excludes contingent
considerations and income tax.
ACCOUNTING
POLICIES
The Group’s assets and returns are segmented on the
basis of geographical regions in accordance with the
management reporting for the current year, cf. section
1.2.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 48
SECTION 2.2
IMPAIRMENT
2.2.1 RECOGNISED IMPAIRMENTS
Following Russia’s invasion of Ukraine and the
decision to dispose of the Russian operations,
Russia was separated from the Central &
Eastern Europe CGU.
Impairment tests of goodwill and brands with
indefinite useful life were prepared at the
reporting date. The tests did not identify further
impairments.
The Group recognised impairment losses of
DKK 233m on returnable packaging in certain
markets in Asia, DKK 22m on sales equipment
and returnable packaging in Ukraine and DKK
172m on other items of property, plant and
equipment, in total DKK 427m in 2022.
Impairment of non-current assets
DKK million 2022 2021
Intangible assets
Other intangible assets 3 107
Total 3 107
Property, plant and equipment
Plant, machinery and equipment 427 151
Reversal of impairment losses - -25
Total 427 126
Other non-current assets
Investment in associates - 244
Total impairment losses, net 430 477
Of which recognised in special items, cf. section 3.1 96 261
Impairment losses Russian operations, net, cf. section 5.1 8,364 947
In 2021, impairment losses of DKK 107m were
recognised in relation to land use rights in
China, DKK 130m on returnable packaging in
certain markets in Asia, DKK 21m on other
items of property, plant and equipment and
DKK 244m on investments in associates in
China.
Reversals of impairment losses of DKK -25m in
China relating to assets that had been
reclassified as held for sale were also
recognised in 2021.
Impairment of assets in Ukraine
The war in Ukraine resulted in the loss or
destruction of sales equipment and returnable
packaging materials deployed in the market,
leading to a write-down of DKK 22m on
property, plant and equipment.
Other impairments
In certain markets in Asia, the return systems
are not legally required but have been
developed as a result of market practice in the
beverage industry. The collection rates for
returnable packaging have declined significantly
since 2020 compared with previous years as a
result of COVID-19 restrictions. Consequently,
the Group reclassified the returnable packaging
in the relevant markets from being recognised
as property, plant and equipment to being
recognised as inventory, thus ensuring timely
cost recognition. This led to the recognition of
impairment losses of DKK 233m compared to
DKK 130m recognised in 2021 for lost
returnable packaging.
Impairment of the Russian operations held for
sale
Following the reclassification of the Russian
operations as held for sale and separation out
from the Central & Eastern Europe CGU, an
impairment loss of DKK 8,364m was recognised
in net result from Russian operations held for
sale, cf. section 5.1.
In 2021, impairment losses of DKK 950m on
brands were recognised in the Russian
operation.
Significant amounts of goodwill and brands
Goodwill and brands with indefinite useful life
relating to the acquisitions of Kronenbourg and
Chongqing Brewery Group each accounted for
10% or more of the total carrying amount of
goodwill and brands with indefinite useful life
at the reporting date. Goodwill from these
acquisitions has been allocated to CGUs based
on the geographical segmentation.
The Kronenbourg 1664 brand is individually
material and specified in section 2.2.3.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Identification of cash-generating units
The Group’s management structure reflects the
geographical segments, cf. section 1.2, and decisions
are made by the regional managements responsible
for performance, operating investments and growth
initiatives in their respective regions.
There is significant vertical integration of the
production, logistics and sales functions, supporting
and promoting optimisations across the Group or
within regions.
Assets, other than goodwill and brands with regional
and global presence, are allocated to individual cash-
generating units (CGUs), being the level at which the
assets generate largely independent cash inflows. As
the Group operates with local sales and production
organisations, the cash inflows are generated mostly
locally, and the CGUs are therefore usually identified
at country level.
The determination of CGU allocation is made, and
cash inflows are assessed in connection with the
purchase price allocation within 12 months from the
date of acquisition.
Goodwill
Goodwill does not generate largely independent cash
inflows on its own and is therefore allocated to the
Group’s geographical segments, which is the level at
which it is monitored for internal management
purposes.
At the time of acquisition of entities, goodwill is
allocated to a CGU. The structure and groups of CGUs
are reassessed every year. The Group gained control
of Wernesgrüner Brewery in 2021. The goodwill
recognised on this acquisition was allocated to the
Western Europe CGU.
Entities classified as held for sale and measured at
fair value less costs of disposal are removed from the
CGU to which they are allocated at the time of
classification as held for sale.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 49
SECTION 2.2 (CONTINUED)
IMPAIRMENT
Brands
Cash flows for brands are separately identifiable and
brands are therefore tested individually for
impairment. This test is performed in addition to the
test for impairment of goodwill.
The following brands are considered significant when
comparing their carrying amount with the total
carrying amount of brands with indefinite useful life:
• Kronenbourg 1664
Following the classification of the Russian business as
held for sale, the brands recognised in Russia are no
longer tested individually for impairment. Instead any
impairment of the value of the Russian disposal group
held for sale is allocated first to goodwill of the
disposal group and subsequently pro rata to other
assets of the disposal group, including brands.
Corporate assets
The Group has identified capitalised software relating
to the Group’s ERP systems as corporate assets, and
as such these are peripheral to the generation of cash
inflow. The Group’s ERP landscape is closely linked to
the internal management structure, and the identified
assets are therefore tested for impairment at the CGU
level to which goodwill is allocated.
Other non-current assets
Other non-current assets are tested for impairment
when indications of impairment exist.
For property, plant and equipment, management
performs an annual assessment of the assets’ future
application, for example in relation to changes in
production structure, restructurings or brewery
closures.
For investments in associates, examples of indications
of impairment are loss-making activities or significant
changes in the business environment.
Key considerations in impairment tests Goodwill Brands
CGU level of test Geographical segment Individual brand
Method to estimate recoverable amount Value in use Value in use
Method to estimate present value of
future cash flows
Expected value approach: multiple
probability-weighted cash flows
Traditional approach: single most
likely future cash flows
Discount rate Risk-free rate Risk-adjusted rate
ACCOUNTING
POLICIES
Goodwill and brands with indefinite useful life are
subject to an annual impairment test, performed
initially before the end of the year of acquisition. The
test is performed at the level where cash flows are
considered to be generated: either at CGU level or at
the level of a group of CGUs. All assets are tested if
an event or circumstance indicates that the carrying
amount may not be recoverable. If an asset’s carrying
amount exceeds its recoverable amount, an
impairment loss is recognised. The recoverable
amount is the higher of the asset’s fair value less
costs of disposal and its value in use.
For all assets, the value in use is assessed based on
budget and target plan with reference to the expected
future net cash flows. The assessment is based on the
lowest CGU affected by the changes that indicate
impairment. The cash flow is discounted by a rate
adjusted for any risk specific to the asset, if relevant
to the calculation method applied.
Impairment losses on goodwill and brands, significant
losses on property, plant and equipment, investments
in associates, and losses arising on significant
restructurings of processes and structural adjustments
are recognised as special items. Minor losses are
recognised in the income statement in the relevant
line item.
Impairment of goodwill is not reversed. Impairment of
other assets is reversed only to the extent of changes
in the assumptions and estimates underlying the
impairment calculation. Impairment is only reversed
to the extent that the asset’s new carrying amount
does not exceed the carrying amount of the asset
after amortisation/depreciation had the asset not
been impaired.
2.2.2 IMPAIRMENT TEST OF GOODWILL
NEW SEGMENTATION FOR 2022
The Group’s segmentation and regional split of
entities changed following the Group’s decision
to seek full disposal of the Russian business
and exclude it from the Central & Eastern
Europe region. The composition of CGUs
changed accordingly, with goodwill of DKK
7,966m previously allocated to Russia being
transferred to assets in disposal group held for
sale, cf. section 5.1.
The carrying amount of goodwill
allocated to groups of CGUs
DKK million 2022 2021
Western Europe 15,481 15,505
Asia 14,438 15,143
Central & Eastern Europe 2,613 13,630
Total 32,532 44,278
Estimating expected cash flow involves
developing multiple probability-weighted
scenarios to reflect different outcomes in terms
of timing and amount. Measurement of the
forecast period growth rates reflects risk
adjustments made to calculate the expected
cash flows.
Key assumptions
2022
Forecast
cash flow
growth
Terminal
period
growth
Pre-tax
discount
rate
Western
Europe -11.4% 0.5% 3.0%
Asia -12.7% 1.0% 4.5%
Central &
Eastern
Europe -21.4% 2.0% 9.8%
2021
Western
Europe 1.0% 0.0% 1.7%
Asia -10.0% 1.0% 4.5%
Central &
Eastern
Europe -24.0% 3.5% 6.3%
The average cash flow growth in the forecast
period reflects the significant risk adjustments
included in the forecast specifically for the
impairment test.
Potential upsides are not identified and
adjusted in the cash flows used for impairment
testing. Growth is projected in nominal terms
and therefore does not translate into cash flow
at the same growth rate in the Group’s
presentation currency, DKK.
WESTERN EUROPE
The region primarily comprises mature beer
markets, and market volumes tend to be flat. In
recent years the region has seen improving beer
category dynamics through innovations,
increased interest in craft & speciality beers and
alcohol-free brews, and an overall improved
category perception.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 50
SECTION 2.2 (CONTINUED)
IMPAIRMENT
The region is generally characterised by well-
established retail structures and a strong
tradition of beer consumption. Consumption is
generally resilient, although the on-trade
channel tends to be impacted by a weak
macroeconomic environment. In the past two
years, the on-trade suffered as a result of
restrictions and lockdowns across markets due
to COVID-19. The COVID-19 situation remained
uncertain in 2022, but is not expected to have a
significant long-term effect.
In 2023, the focus will be on mitigating the
significant cost inflation, in particular for raw
materials and packaging, but also other costs,
such as logistics and wages. Mitigating actions
include value management, channel and
product mix, price increases and continuous
cost focus as part of the Group’s Funding the
Journey culture.
ASIA
Asia’s importance to the Group has increased
significantly over the past decade, during which
the Group has strengthened its presence in the
region, both organically and through
acquisitions.
The Asian markets are very diverse but offer
prospects for volume and value growth,
underpinned by young populations,
urbanisation, rising disposable income levels,
growing economies and, in some markets,
relatively low per capita beer consumption.
However, as many Asian markets are emerging
markets, development is subject to volatility.
Both the on-trade and off-trade channels are
generally characterised by a strong traditional
outlet segment, but with the modern outlet
segment growing in most markets.
In 2020 and 2021, all markets in the region
were impacted by COVID-19 at different times
and to different extents. The impact from
COVID-19 in China was most profound in the
first quarter of 2020 and again in the second
half of 2022, during which periods volumes
were severely impacted. When the market was
not subject to COVID-19-related lockdowns, our
business performed strongly. The COVID-19
recovery in China, including consumer off-take
during the Chinese New Year celebrations, is
still uncertain.
The general focus in the region remains
profitable revenue growth, driven by
premiumisation and volume growth. Activities
include continued investment in and expansion
of our international premium brands, in
particular Tuborg, 1664 Blanc, Carlsberg and
Somersby, and the strengthening and
premiumisation of our local power brands.
CENTRAL & EASTERN EUROPE
Central & Eastern Europe consists of Ukraine, a
number of smaller markets across southern and
eastern Europe and our export & licence
business.
In 2022, the region was severely impacted by
the war in Ukraine, which meant that the
Russian business, formerly a part of the region,
is now an asset held for sale. In Ukraine, the
breweries were shut down for some time and
volumes declined due to the war. The situation
in Ukraine remains highly uncertain.
In the rest of the region, the competitive
environment is generally characterised by the
presence of large global players. Due to the
larger on-trade exposure, the southern part of
the region was more exposed to COVID-19 in
2020 and 2021 than the eastern part where on-
trade exposure is limited. In 2022, the southern
part of the region benefited from the re-
opening of the on-trade and the return of
tourists.
Management expects the current
macroeconomic situation and developments to
continue in the short term, with further
increases in overall inflation compared with
2022. The Group will seek to mitigate rising
costs through price increases, value
management, channel and product mix and
continuous cost focus. In the medium to long
term, interest rates are expected to decline and
stabilise at a level lower than currently
observed in the market, although still with
some volatility.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Goodwill
The value in use is the discounted value of the
expected future risk-adjusted cash flows. This involves
developing multiple probability-weighted scenarios to
reflect different outcomes in terms of timing and
amount.
Key assumptions
The cash flow is based on the budget and target plans
for the next three years. Cash flows beyond the three-
year period are extrapolated using the terminal period
growth rate. The budget and plans for 2023-2025
represents management’s best estimate of the impact
from the COVID-19 pandemic.
The probability weighting applied is based on past
experience and the uncertainty of the prepared
budget and target plans. Potential upsides and
downsides identified during the budget process and in
the daily business are reflected in the future cash flow
scenarios for each CGU.
The risk-adjusted cash flows are discounted using a
rate that reflects the risk-free interest rate for each
CGU. The interest rates used in the impairment tests
are based on observable market data. Please refer to
the description of discount rates in section 2.2.3.
The key assumptions on which management bases its
cash flow projections are:
• Volumes
• Sales prices
• Input costs
• Operating investments
• Terminal period growth
The assumptions are determined at CGU level and are
based on past experience, external sources of
information and industry-relevant observations for
each CGU. Local conditions, such as expected
developments in macroeconomic and market
conditions specific to the individual CGUs, are
considered. The assumptions are challenged and
verified by management at CGU and Group level.
The budget and target plan processes consider events
or circumstances that are relevant to reliably
projecting the short-term performance of each CGU.
Examples include significant campaign activities,
changes in excise duties etc., which may have a short-
term impact but are non-recurring. Given their short-
term nature, they are not taken into consideration
when estimating the terminal period growth rate.
Volumes
Projections are based on past experience, external
market data, planned commercial initiatives, such as
marketing campaigns and sponsorships, and the
expected impact on consumer demand and the level
of premiumisation. If relevant, the projections are
adjusted for the expected changes in the level of
premiumisation. No changes in market share are
assumed in the medium or long term.
Demographic expectations general to the industry,
such as the development in population, consumption
levels, generation-shift patterns, rate of urbanisation
and macroeconomic trends, are also considered in
medium- and long-term projections.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 51
SECTION 2.2 (CONTINUED)
IMPAIRMENT
Events and circumstances can impact the timing of
volumes entering the market. These include excessive
stocking related to an increase in excise duties,
campaign activities, and the timing of national
holidays and festivals. Such short-term effects are not
material to volume projections and do not impact the
long-term projections.
Sales prices
The level of market premiumisation and the locally
available portfolio are key drivers in identifying price
points. When planning pricing structures, factors
including price elasticity, local competition and
inflation expectations can also impact the projection.
Increases in excise duties are typically passed on to
the customers immediately or with a delay of no
more than a few months. Since the increase is a pass-
through cost and thereby compensated for by price
increases at the time of implementation, it does not
impact the long-term sales price growth and is
therefore not taken into consideration in the
projections unless circumstances specifically indicate
otherwise. No changes to duties in the short or
medium term are taken into consideration unless
there is a firm plan to introduce changes.
Recent significant inflationary pressure has meant
revenue growth compensating for rising input costs,
especially in Europe. The short and medium-term
forecast includes risk of delays in timing of increase of
sales prices to compensate for future rise in input
costs.
Input costs
Input costs in the budget and target plans are based
on past experience and on:
• Contracted raw and packaging materials
• Contracted services within sales, marketing,
production and logistics
• Planned commercial investments
• Cost optimisations not related to restructurings
• Expected inflation
The recent rise in inflation has increased the overall
input cost level, especially in Europe. The short and
medium-term forecast incorporates continued
pressure on input cost.
In the long term, projections follow the level of
inflation unless long-term contracts are in place.
Operating investments
Projections are based on past experience of the level
of necessary maintenance of existing production
capacity, including replacement of parts. This also
includes scheduled production line overhauls and
improvements to existing equipment. Non-contracted
capacity increases and new equipment are not
included.
Terminal period growth
Growth rates are projected to be equal to or below
the expected rate of general inflation and assume no
nominal economic growth. The projected growth rates
and the discount rates applied are compared to
ensure a sensible correlation between the two.
2.2.3 IMPAIRMENT TEST OF BRANDS
The impairment test did not identify
impairments in 2022.
Following the classification of the Russian
business as held for sale, the brands recognised
in Russia, including the Baltika brand, are no
longer tested individually for impairment.
Brands with a carrying amount of DKK 4,532m
were transferred to assets in disposal group
held for sale end of March 2022.
In 2022, significant brands represented 30%
(2021: 54% including the Baltika brand) of the
total carrying amount of brands with indefinite
useful life.
Brands with indefinite useful life
DKK million 2022 2021
Baltika brand N/A 4,410
Kronenbourg 1664 1,948 1,946
Significant brands 1,948 6,356
Western Europe 1,318 1,352
Asia 1,457 1,536
Central & Eastern Europe 846 1,522
Not allocated 941 941
Other brands 4,562 5,351
Total brands 6,510 11,707
Other brands comprise a total of 20 brands
(2021: 21 brands, including other Russian brand)
that are not individually material compared
with the total carrying amount.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Brands
The test for impairment of brands is performed using
the relief from royalty method and is based on the
expected future cash flows generated from the
royalty payments avoided for the individual brand for
the next 10 years and projections for subsequent
years.
The risk-free cash flows are discounted using a rate
reflecting the risk-free interest rate with the addition
of the risk premium associated with the individual
brand.
Key assumptions
2022
Average
revenue
growth
Terminal
period
growth
Pre-tax
discount
rate
Post-tax
discount
rate
Kronenbourg 1664 2.4% 1.6% 6.6% 6.4%
2021
Baltika brand 4.8% 4.0% 12.5% 10.9%
Kronenbourg 1664 1.3% 1.3% 4.4% 4.3%
Key assumptions
The key assumptions on which management bases its
cash flow projection include the expected useful life,
revenue growth, a theoretical tax amortisation
benefit, the royalty rate and the discount rate.
Expected useful life
Management has assessed that the value of brands
with indefinite useful life can be maintained for an
indefinite period, as these are well-established brands
in their markets, having existed for decades or even
centuries. The beer industry is characterised as being
very stable with consistent consumer demand and a
predictable competitive environment, and is expected
to be profitable for the foreseeable future. Control of
the brands is legally established and enforceable
indefinitely.
In management’s opinion, the risk of the useful life of
these brands becoming finite is minimal because of
their individual market positions and because current
and planned marketing initiatives are expected to
sustain their useful life.
Revenue growth
At the time of acquisition of any individual brand, a
revenue growth curve is forecast based on a long-
term strategic view of the risk and opportunities
relevant to the brand. The curve is projected for a 10-
year horizon. This horizon reliably reflects the lengthy
process of implementing brand strategies to support a
brand occupying its intended place in the Group’s
portfolio. The forecast period applied is comparable
with the common term of the majority of licence
agreements to which the Group is party.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 52
SECTION 2.2 (CONTINUED)
IMPAIRMENT
In the local markets, the product portfolio usually
consists of local power brands and international
premium brands. When projecting revenue growth for
local brands, in addition to their commercial strength
– such as market share and segment position – the
forecast takes into consideration the demographics of
the primary markets, including expected
developments in population, consumption levels,
generation-shift patterns, rate of urbanisation, beer
market maturity, level of premiumisation,
circumstances generally limiting the growth
opportunities for alcoholic beverages etc.
For brands with global or regional presence, enhanced
investments in product development and marketing
are expected. The expected growth rate for these
brands is generally higher than for more localised
brands and is usually highest early in the 10-year
period.
Depending on the nominal growth expectations for
the individual brand, the revenue growth in individual
years may be above, equal to or below the forecast
inflation level in the markets where the brand is
present.
When preparing budgets, consideration is given to
events or circumstances that are relevant to reliably
projecting the short-term performance of each brand.
Examples include significant campaign activities,
changes in excise duties etc., which may have a short-
term impact but are non-recurring and quickly
absorbed by the business. Since the impact is not
material to the long-term projections, it is not taken
into consideration when estimating the long-term and
terminal period growth rates. Please refer to the
description of the impact of increases in excise duties
in the description of sales prices in section 2.2.2.
Tax benefit
The theoretical tax benefit applied in the test uses tax
rates and amortisation periods based on current
legislation. The impairment test applies tax rates in
the range of 15-31% and amortisation periods of 5-15
years.
Royalty rate
Royalties generated by a brand are based on the
Group’s total income from the brand and are earned
globally, i.e., the income is also earned outside the
CGU that owns the brand. If external licence
agreements for the brand already exist, the market
terms of such agreements are taken into
consideration when assessing the royalty rate that the
brand is expected to generate in a transaction with
independent parties. The royalty rate is based on the
actual market position of the individual brand in the
global, regional and local markets, and assumes a 10-
year horizon. This term is common to the beverage
industry when licensing brands.
For some brands, the share of the total beer market
profit exceeds the volume share to an extent that
creates significant market entry barriers for competing
brands and justifies a higher royalty rate.
Royalty rates
International, premium and
speciality beers 3.5-7.5%
Strong regional and national brands 3.0-5.0%
Local and mainstream brands 2.0-3.5%
Discount rates
The discount rate is a weighted average cost of
capital (WACC) that reflects the risk-free interest rate
with the addition of a risk premium relevant to each
brand.
The risk-free interest rates used in the impairment
tests are based on observed market data. For
countries where long-term risk-free interest rates are
not observable or valid due to specific national or
macroeconomic conditions, the interest rate is
estimated based on observations from other markets
and/or long-term expectations expressed by
international financial institutions considered reliable
by the Group.
The added credit risk premium (spread) for the risk-
free interest rate is fixed at market price or slightly
higher, reflecting the expected long-term market price.
The aggregate interest rate, including spread, thereby
reflects the long-term interest rate applicable to the
Group’s investments in the individual markets.
2.2.4 SENSITIVITY TESTS
Sensitivity tests have been performed to
determine the lowest forecast and terminal
period growth rates and/or highest discount
rates that can occur in the groups of CGUs and
brands with indefinite useful life without
leading to any impairment loss.
Due to a challenging macroeconomic situation
in some CGUs and groups of CGUs, the Group
performed additional sensitivity tests in 2022 to
ensure that no potential impairment had been
overlooked. These did not identify any potential
impairment.
GOODWILL
The test for impairment of goodwill did not
identify any CGUs or groups of CGUs to which
goodwill is allocated where a reasonably
possible negative change in a key assumption
would cause the carrying amount to exceed the
recoverable amount.
BRANDS
For brands that were previously written down,
a reasonably possible negative change in a key
assumption would cause the carrying amount
of these brands to exceed the recoverable
amount. However, management considers the
risk of a significant write-down on brands to be
low.
Key assumptions
The key assumptions relevant to the
assessment of the recoverable amount are:
• Volume
• Price
• Discount rate
The assumptions for volume and pricing are
closely linked, which, together with the
presence of multiple sub-brands in various
geographies within each brand, makes
individual sensitivity testing on the basis of
these two assumptions highly impractical.
Instead, sensitivity testing is performed for the
overall revenue growth rate, in both the
forecast period and the terminal period.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 53
SECTION 2.3
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
DKK million Intangible assets Property, plant and equipment Asset base
2022 Goodwill Brands
Other
intangible
assets Total
Land and
buildings
Plant and
machinery
Other
equipment,
fixtures and
fittings Total Total
Cost
Cost at 1 January 46,021 23,181 5,040 74,242 19,694 30,179 15,728 65,601 139,843
Additions, including right-of-use assets - - 570 570 611 1,995 1,992 4,598 5,168
Disposals - -32 -165 -197 -370 -573 -1,501 -2,444 -2,641
Transfers - - - - 200 -358 158 - -
Transferred to disposal group held-for-sale -7,966 -12,466 -433 -20,865 -2,089 -3,929 -1,322 -7,340 -28,205
Foreign exchange adjustments etc. -3,831 -1,706 -88 -5,625 -386 -1,182 -596 -2,164 -7,789
Cost at 31 December 34,224 8,977 4,924 48,125 17,660 26,132 14,459 58,251 106,376
Amortisation, depreciation and impairment losses
Amortisation, depreciation and impairment losses at 1 January 1,743 11,231 4,001 16,975 8,424 19,596 11,029 39,049 56,024
Disposals - -32 -163 -195 -139 -521 -1,441 -2,101 -2,296
Amortisation and depreciation - 21 207 228 633 1,347 1,719 3,699 3,927
Impairment losses - - 3 3 2 106 319 427 430
Transferred to disposal group held-for-sale - -7,934 -336 -8,270 -898 -3,204 -957 -5,059 -13,329
Foreign exchange adjustments etc. -51 -1,032 -59 -1,142 -155 -785 -404 -1,344 -2,486
Amortisation, depreciation and impairment losses at 31 December 1,692 2,254 3,653 7,599 7,867 16,539 10,265 34,671 42,270
Carrying amount at 31 December 32,532 6,723 1,271 40,526 9,793 9,593 4,194 23,580 64,106
Right-of-use assets included at 31 December
Amortisation and depreciation - - - - 167 5 214 386 386
Carrying amount at 31 December - - - - 1,089 11 440 1,540 1,540
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 54
SECTION 2.3 (CONTINUED)
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
DKK million Intangible assets Property, plant and equipment Asset base
2021 Goodwill Brands
Other
intangible
assets Total
Land and
buildings
Plant and
machinery
Other
equipment,
fixtures and
fittings Total Total
Cost
Cost at 1 January 43,858 21,056 4,953 69,867 18,858 28,389 15,613 62,860 132,727
Acquisition of entities 214 654 9 877 42 -51 -182 -191 686
Additions, including right-of-use assets - - 341 341 326 1,964 2,021 4,311 4,652
Disposal and deconsolidation of entities -301 - -20 -321 -102 -209 -379 -690 -1,011
Disposals - -2 -386 -388 -288 -673 -1,975 -2,936 -3,324
Transfers - - - - 307 -481 96 -78 -78
Foreign exchange adjustments etc. 2,250 1,473 143 3,866 551 1,240 534 2,325 6,191
Cost at 31 December 46,021 23,181 5,040 74,242 19,694 30,179 15,728 65,601 139,843
Amortisation, depreciation and impairment losses
Amortisation, depreciation and impairment losses at 1 January 1,572 9,427 4,016 15,015 7,907 18,103 10,702 36,712 51,727
Disposal and deconsolidation of entities - - -7 -7 -40 -146 -329 -515 -522
Disposals - -2 -368 -370 -204 -642 -1,847 -2,693 -3,063
Amortisation and depreciation - 19 204 223 664 1,444 2,048 4,156 4,379
Impairment losses - 950 107 1,057 5 22 124 151 1,208
Reversal of impairment losses - - - - - -4 -24 -28 -28
Transfers - - - - -31 -29 - -60 -60
Foreign exchange adjustments etc. 171 837 49 1,057 123 848 355 1,326 2,383
Amortisation, depreciation and impairment losses at 31 December 1,743 11,231 4,001 16,975 8,424 19,596 11,029 39,049 56,024
Carrying amount at 31 December 44,278 11,950 1,039 57,267 11,270 10,583 4,699 26,552 83,819
Right-of-use assets included at 31 December
Amortisation and depreciation - - - - 174 6 205 385 385
Carrying amount at 31 December - - - - 887 11 420 1,318 1,318
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 55
SECTION 2.3 (CONTINUED)
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
Property, plant and equipment under
construction amounted to DKK 1,186m (2021:
DKK 1,187m). Property, plant and equipment
under construction are recognised in plant and
machinery until completion.
Other equipment, fixtures and fittings include
transport, office and draught beer equipment,
coolers and returnable packaging materials.
Other intangible assets include software, land
use rights and beer delivery rights.
RIGHT-OF-USE ASSETS
The Group leases various properties and
warehouses, production equipment, cars and
trucks. Leases are negotiated on an individual
basis and contain a wide range of different
terms and conditions.
Amortisation, depreciation and impairment losses
Intangible assets Property, plant and equipment
DKK million 2022 2021 2022 2021
Cost of sales 47 138 2,489 2,611
Sales and distribution expenses 65 39 1,211 1,124
Administrative expenses 107 96 253 213
Special items - 3 96 14
Continuing operations 219 276 4,049 3,962
Net result from Russian operations held for sale 12 1,004 77 317
Total 231 1,280 4,126 4,279
At 31 December 2022, the carrying amount of
right-of-use assets was DKK 1,540m (2021: DKK
1,318m). During the year, additions amounted to
DKK 706m (2021: DKK 437m) and depreciation
to DKK 386m (2021: DKK 385m).
Lease expenses recognised in the income
statement, relating to short-term leases and
leases of low-value assets, amounted to
DKK 49m (2021: DKK 33m). Such contracts
comprise the lease of copy and printing
machines, coffee machines, small IT devices
and similar equipment.
For disclosures of the interest expenses, cash
flow and lease liabilities, please refer to
sections 4.1, 4.4.1 and 4.7.
Cash flow from disposal of property, plant
and equipment and intangible assets was
DKK 283m (2021: DKK 254m).
CAPITAL COMMITMENTS
The Group has entered into various capital
commitments that will not take effect until
after the reporting date and have therefore not
been recognised in the consolidated financial
statements. Capital commitments in 2022
amounted to DKK 100m (2021: DKK 132m).
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Useful life and residual value of intangible
assets with finite useful life and property,
plant and equipment
Useful life and residual value are initially assessed
both in acquisitions and in business combinations.
Management assesses brands and property, plant and
equipment for changes in useful life. If an indication of
a reduction in the value or useful life exists, such as
changes in production structure, restructuring and
brewery closures, the asset is tested for impairment. If
necessary, the asset is written down or the
amortisation/depreciation period is reassessed and, if
necessary, adjusted in line with the asset’s changed
useful life. When changing the amortisation or
depreciation period due to a change in the useful life,
the effect on amortisation/depreciation is recognised
prospectively as a change in accounting estimates.
Capital expenditure
DKK million 2022 2021
Additions, including right-of-use assets 5,168 4,652
Right-of-use assets -706 -435
Additions 4,462 4,217
Additions payable at the end of the reporting period -145 -
Transferred to disposal group held-for-sale -92 -320
Acquisition of property, plant and equipment and intangible assets 4,225 3,897
Gain/loss on disposal of assets
DKK million 2022 2021
Gain on disposal of property, plant and equipment and intangible assets 110 102
Loss on disposal of property, plant and equipment and intangible assets -31 -26
Continuing operations 79 76
Net result from Russian operations held for sale 4 17
Total 83 93
Lease and service contracts
At inception of a contract, management assesses
whether the contract is or contains a lease.
Management considers the substance of any service
being rendered to classify the arrangement as either a
lease or a service contract. Particular importance is
attached to whether fulfilment of the contract
depends on the use of specific assets. The assessment
involves judgement of whether the Group obtains
substantially all the economic benefits from the use
of the specified asset and whether it has the right to
direct how and for what purpose the asset is used. If
these criteria are satisfied at the commencement date,
a right-of-use asset and a lease liability are
recognised in the statement of financial position.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 56
SECTION 2.3 (CONTINUED)
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
In determining the lease term, management considers
all the facts and circumstances that create an
economic incentive to exercise an extension option or
not to exercise a termination option. Extension or
termination options are only included in the lease
term if the lease is reasonably certain to be extended
or not terminated. The term is reassessed if a
significant change in circumstances occurs. The
assessment of purchase options follows the same
principles as those applied for extension options.
The lease payment for cars and trucks often includes
costs of service and insurance. If these costs are not
objectively assessable, the Group estimates the costs
when separating the service component from the
lease.
ACCOUNTING
POLICIES
Cost
Intangible assets and property, plant and equipment
are initially recognised at cost and subsequently
measured at cost less accumulated amortisation or
depreciation and impairment losses.
Cost comprises the purchase price and costs directly
attributable to the acquisition until the date when the
asset is available for use. The cost of acquired brand
rights is accounted for using the accumulated cost
approach if the total consideration includes an earn-
out dependent on the brands’ future performance.
The cost of self-constructed assets comprises direct
and indirect costs of materials, components, sub-
suppliers, wages and salaries, and capitalised
borrowing costs on specific or general borrowings
attributable to the construction of the asset, and is
included in plant and machinery.
Research and development costs are recognised in the
income statement as incurred. Development costs of
intangible assets, for example software, are
recognised as other intangible assets if the costs are
expected to generate future economic benefits.
For assets acquired in business combinations,
including brands and property, plant and equipment,
cost at initial recognition is determined by estimating
the fair value of the individual assets in the purchase
price allocation.
Goodwill is only acquired in business combinations
and is measured in the purchase price allocation.
Goodwill is not amortised but is subject to an annual
impairment test, cf. section 2.2.
Where individual components of an item of property,
plant and equipment have different useful lives, they
are accounted for as separate items.
Subsequent costs, for example in connection with
replacement of components of property, plant and
equipment, are recognised in the carrying amount of
the asset if it is probable that the costs will result in
future economic benefits for the Group. The replaced
components are derecognised from the statement of
financial position and recognised as an expense in the
income statement. Costs incurred for ordinary repairs
and maintenance are recognised in the income
statement as incurred.
Useful life, amortisation, depreciation and
impairment losses
Useful life and residual value are determined at the
acquisition date and reassessed annually. If the
residual value exceeds the carrying amount,
depreciation is discontinued.
Amortisation and depreciation are recognised on a
straight-line basis over the expected useful life of the
assets, taking into account any residual value. The
expected useful life and residual value are determined
based on past experience and expectations of the
future use of assets.
Depreciation is calculated on the basis of the cost less
the residual value and impairment losses.
Amortisation and depreciation are recognised as
cost of sales, sales and distribution expenses, and
administrative expenses depending on the use of
the asset.
The expected useful life is as follows:
Brands with finite
useful life Normally 20 years
Software Normally 3-5 years. Group-wide
systems developed as an
integrated part of a major
business development
programme: 5-7 years
Delivery rights Depending on contract; if no
contract term has been agreed,
normally not exceeding 5 years
Customer
agreements/
relationships
Depending on contract with the
customer; if no contract exists,
normally not exceeding 20 years
Buildings 20-40 years
Technical installations 15 years
Brewery equipment 15 years
Filling and bottling equipment 8-15 years
Technical installations in
warehouses 8 years
On-trade and distribution
equipment 5 years
Fixtures and fittings, other plant
and equipment 5-8 years
Returnable packaging materials 3-10 years
Hardware 3-5 years
Land
Not
depreciated
Impairment
Impairment losses of a non-recurring nature are
recognised under special items.
Leases
At the commencement date, the Group recognises a
lease liability and a corresponding right-of-use asset
at the same amount, except for short-term leases of
12 months or less and leases of low-value assets.
A right-of-use asset is initially measured at cost,
which consists of the initial lease liability and initial
direct costs less any lease incentives received. The
Group has applied the practical expedient option
allowed under IFRS by using a portfolio approach for
the recognition of lease contracts related to assets of
the same nature and with similar lease terms, i.e. cars
and trucks.
Subsequently, the right-of-use asset is measured at
cost less depreciation and impairment losses and
adjusted for remeasurement of the lease liability. The
right-of-use asset is depreciated over the earlier of the
lease term and the useful life of the asset. The
impairment testing of right-of-use assets follows the
same principles as those applied for property, plant
and equipment, cf. section 2.2.
Right-of-use assets are recognised as property, plant
and equipment.
The Group has elected not to recognise right-of-use
assets and liabilities for leases with a term of 12
months or less and leases of low-value assets. Lease
payments related to such leases are recognised in the
income statement as an expense on a straight-line
basis over the lease term.
Government grants and other funding
Grants and funding received for the acquisition of
assets and development projects are recognised in the
statement of financial position by deducting the grant
from the carrying amount of the asset. The grant is
recognised in the income statement over the life of
the asset as a reduced depreciation charge.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 57
SECTION 3
SPECIAL ITEMS, PROVISIONS
AND OTHER LIABILITIES
254m
SPECIAL ITEMS, INCOME
(DKK)
Impacted by reversal of provisions
made in purchase price allocation in
previous years..
-348m
SPECIAL ITEMS,
EXPENSES
(DKK)
Impacted by write-down of property,
plant and equipment as well as losses
related to the war in Ukraine.
SECTION 3.1
SPECIAL ITEMS
SPECIAL ITEMS, INCOME
In 2022, the Group recognised reversal of
provisions made in purchase price allocations in
prior years, mainly in Asia, of DKK 217m (2021:
1,238m) and reversal of provisions in Western
Europe of DKK 37m (2021: DKK 52m). In 2021,
the Group also recognised a gain on disposal of
entities of DKK 15m and a revaluation gain on
the retained investment in Gorkha Brewery
(DKK 38m).
SPECIAL ITEMS, EXPENSES
A significant number of customers and sales
outlets in Ukraine have been negatively
impacted by the war. Consequently,
impairments of doubtful trade receivables,
obsolete inventories and lost plant and
equipment were recognised at DKK 79m.
During 2021 and 2022, the Group continued to
carry out various restructuring projects as part
of the ongoing focus on cost and efficiency
initiatives, which also included impairment of
property, plant and equipment in Asia of DKK
74m in 2022.
Special items
DKK million 2022 2021
Special items, income
Reversal of provisions made in purchase price allocations in prior years 217 1,238
Reversal of provisions made in prior years 37 52
Reversal of impairment losses - 3
Gain on disposal of entities and assets - 15
Revaluation gain on deconsolidation of Gorkha Brewery - 38
Income 254 1,346
Special items, expenses
Impairment of trade receivables, inventories and commercial assets in Ukraine¹ -79 -
Impairment of property, plant and equipment -74 -
Impairment of investment of associates - -244
Restructuring projects and provisions -76 -270
Costs related to acquisition of entities, etc. -92 -48
Donations -27 -
Adjustment of contingent consideration - -129
COVID-19, personal protective equipment and donations - -32
Expenses -348 -723
Special items, net -94 623
¹ See section 2.2.
The COVID-19 pandemic had less impact in
most markets in 2022 compared with previous
years, as there were fewer COVID-19-related
restrictions.
The Group donated DKK 27m in 2022, DKK
25m of which to the Ukrainian relief effort.
In 2021 the Group recognised an impairment
loss of DKK 244m related to the Tibet Lhasa
Brewery caused by disturbances in the
operation and management of the company.
Fair value adjustments of the contingent
consideration for the acquisition of Marston’s
brewing activities, which was completed in
2020, amounted to DKK -129m.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 58
SECTION 3.1 (CONTINUED)
SPECIAL ITEMS
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The use of special items entails management
judgement in the separation from ordinary items.
Management carefully considers individual items and
projects (including restructurings) in order to ensure
the correct distinction and split between operating
activities and significant income and expenses of a
special nature.
Management initially assesses the entire restructuring
project and recognises all present costs of the project.
The projects are assessed on an ongoing basis, with
additional costs possibly being incurred during the
lifetime of the project.
The estimate includes expenses related to termination
of employees, onerous contracts, break fees and other
obligations arising in connection with restructurings.
Management reassesses the useful life and residual
value of non-current assets used in an entity
undergoing restructuring.
Impact of special items on operating profit
DKK million 2022 2021
If special items had been recognised in operating profit before special items,
they would have been included in the following line items:
Cost of sales -98 -68
Sales and distribution expenses -5 -42
Administrative expenses - -226
Other operating income 23 1,317
Other operating expenses -14 -358
Special items, net -94 623
ACCOUNTING
POLICIES
Special items include significant income and expenses
of a special nature in relation to the Group’s revenue-
generating activities that cannot be attributed directly
to the Group’s ordinary operating activities.
Special items also include significant non-recurring
items, including termination benefits related to
retirement of members of the Executive Committee,
impairment of goodwill and brands, significant
provisions in relation to certain disputes and lawsuits,
gains and losses on the disposal of activities and
associates, revaluation of the shareholding in an
entity held immediately before a step acquisition or
cessation of consolidation of that entity, and
transaction costs in a business combination.
Significant restructuring of processes and structural
adjustments are included in special items.
Special items are shown separately from the Group’s
ordinary operations to facilitate a better
understanding of the Group’s financial performance.
SECTION 3.2
PROVISIONS
Restructuring provisions relate to termination
benefits to employees made redundant,
primarily as a result of a restructuring project
accounted for as special items.
The restructuring provision of DKK 84m in 2022
primarily relates to various restructuring
projects mainly concerning centralised Group
functions.
Provisions for onerous contracts primarily
related to contract brewing in Asia and are
expected to be utilised by 2028.
Other provisions of DKK 2,495m relate to
ongoing disputes and lawsuits of varying
content and scope, employee benefits,
provisions made in connection with purchase
price allocations (PPA provisions) and
employee obligations other than retirement
benefits, among other things.
DKK million
2022 Restructurings
Onerous
contracts
Other Total
Provisions at 1 January 2022 178 456 2,702 3,336
Transfer to disposal group held for sale -18 - - -18
Additional provisions recognised 39 36 209 284
Used during the year -79 - -120 -199
Reversal of unused provisions -31 - -304 -335
Discounting - 4 16 20
Foreign exchange adjustments etc. -5 -10 -8 -23
Provisions at 31 December 2022 84 486 2,495 3,065
Classified as
Non-current provisions 2 475 1,806 2,283
Current provisions 82 11 689 782
Total 84 486 2,495 3,065
Timing of settlement of ongoing disputes,
lawsuits and PPA provisions cannot be
determined, whereas the remaining liabilities
are expected to be settled in one to two years.
Total provisions have been impacted by
reversal of provisions made in purchase price
allocations in previous years in Asia, as
described in section 3.1, and reversal of other
contractual obligations that did not materialise,
in total DKK 335m.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
In connection with restructurings, management
assesses the timing of the costs to be incurred, which
influences the classification as current or non-current
liabilities.
Provision for onerous contracts is based on agreed
terms with the other party and expected fulfilment of
the contract, based on the current estimate of
volumes, use of raw materials etc.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 59
SECTION 3.2 (CONTINUED)
PROVISIONS
Management assesses provisions, contingent assets
and liabilities, and the likely outcome of pending or
probable lawsuits etc. on an ongoing basis. The
outcome depends on future events, which are by
nature uncertain. In assessing the likely outcome of
lawsuits and tax disputes etc., management relies on
external legal advice and established precedents.
ACCOUNTING
POLICIES
Provisions, including profit-sharing provisions, are
recognised when, as a result of events arising before
or at the reporting date, the Group has a legal or a
constructive obligation and it is probable that there
may be an outflow of economic benefits to settle the
obligation.
Provisions are discounted if the effect is material to
the measurement of the liability. The risk-free interest
rate is used as the discount rate.
Restructuring costs are recognised when a detailed,
formal restructuring plan has been announced to
those affected no later than at the reporting date. On
acquisition of entities, restructuring provisions in the
acquiree are only included in the opening balance
when the acquiree has a restructuring liability at the
acquisition date.
A provision for onerous contracts is recognised when
the benefits expected to be derived by the Group from
a contract are lower than the unavoidable costs of
meeting its obligations under the contract.
SECTION 3.3
OTHER LIABILITIES
DKK million 2022 2021
Classified as
Non-current liabilities 305 449
Current liabilities 13,794 13,186
Total 14,099 13,635
Other liabilities by origin
Staff costs payable 2,318 3,096
Excise duties and VAT
payable 2,489 2,935
Other payables 3,251 2,819
Deferred income 464 531
Contingent consideration 5,577 4,254
Total 14,099 13,635
For a detailed description of contingent
considerations, see section 5.4.
ACCOUNTING
POLICIES
Other liabilities include excise duties (specific taxes
imposed on sales of beer and soft drinks), VAT,
withholding tax, accrued interest, payroll, e.g. salaries,
overtime, vacation and bonus.
Other liabilities (current) are initially recognised at fair
value and subsequently at amortised cost.
SECTION 3.4
CONTINGENT
LIABILITIES
The Group operates in very competitive
markets where consolidation is taking place
within the industry and among its customers
and suppliers, all of which in different ways
influences its business.
In the ordinary course of business, the Group is
party to certain lawsuits, disputes etc. of
varying content and scope, some of which are
referred to below. The resolution of these
lawsuits, disputes etc. is associated with
uncertainty, as they depend on relevant
applicable proceedings, such as negotiations
between the parties affected, government
actions and court rulings.
In 2020, the German Supreme Court overruled
the Higher Regional Court of Düsseldorf, which
in 2019 had ruled in favour of Carlsberg
Deutschland in relation to the competition case
from 2014, in which the Federal Cartel Office in
Germany issued a decision and imposed a fine
of EUR 62m for alleged infringement of the
competition rules in 2007. The German
Supreme Court referred the competition case
back to a new Senate for full new proceedings,
which are ongoing and expected to conclude in
the first half of 2023.
In October 2021, the French competition
authority issued a Statement of Objection
against a large number of FMCG companies,
including three entities in the Group –
Kronenbourg SAS, Carlsberg Breweries A/S and
Carlsberg A/S – for alleged participation in an
anticompetitive agreement not to advertise the
non-use of bisphenol A (BPA). Carlsberg did
not agree with the French competition
authority and prepared its defence in the case
during 2021, which was submitted in the first
quarter of 2022. The competition authority held
hearings with the companies named in the case
in January 2023, and a ruling is expected in the
second half of 2023.
In October and November 2021, the Group's
associate Super Bock in Portugal received
decisions on the alleged anticompetitive
practice in two ongoing cases. In the first case
the Court of Portuguese appeal confirmed the
fine of EUR 24m issued by the competition
authority and in the second case the
Portuguese competition authority imposed a
fine of EUR 33m on Super Bock. Both decisions
have been appealed to the Supreme Court by
Super Bock. Since the formal notification by the
court in 2021 about a private enforcement claim
of EUR 400m, filed by a consumer protection
association against Super Bock Group, for
compensation for Portuguese consumers for
alleged harm on account of Super Bock’s
alleged anticompetitive practices, there have
been no significant developments in the case.
For some time, the Group has had serious
disagreements pertaining to the Shareholders’
Agreement between Carlsberg and our partner
CSAPL Holdings Pte Ltd (CSAPLH) in relation
to Carlsberg South Asia Pte Ltd (CSAPL), of
which Carlsberg owns two thirds and CSAPLH
the remaining one third. CSAPL is the holding
company for the businesses in India (100%) and
Nepal (90%). The disagreements concern
CSAPLH’s numerous allegations of breaches by
Carlsberg of the Shareholders’ Agreement and
governance matters. Carlsberg was of the view
that it had not committed any breach, but
rather that CSAPLH had breached the
Shareholders’ Agreement.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 60
SECTION 3.4 (CONTINUED)
CONTINGENT
LIABILITIES
At the request of CSAPLH, the disagreements
were referred to arbitration in Singapore. A
liability award was issued by the arbitration
tribunal on 4 May 2022. Carlsberg considers its
position to be entirely vindicated by the liability
award and is very satisfied with this outcome.
The tribunal did not grant CSAPLH the relief it
had been seeking based on the various
allegations relating to governance and breach
of the Shareholders’ Agreement raised in the
arbitration and publicly. The tribunal found
CSAPLH to be in incurable material breach of
the Shareholders’ Agreement. As remedy for
the material breaches committed by CSAPLH,
the arbitration tribunal awarded Carlsberg the
right to call CSAPLH’s shares in CSAPL.
Carlsberg immediately invoked the right to
begin the call option valuation process, and
CSAPLH subsequently exercised its right under
the Shareholders’ Agreement to begin the put
option valuation process. In accordance with
the Shareholders’ Agreement, the put option
price has been determined as the simple
average of two valuations assessed by two
independent external valuers, which are
internationally recognised accounting firms, one
appointed by each shareholder. The put option
valuation was released by the valuers on 6
February 2023, stating a value for CSAPLH’s
shares in CSAPL of USD 744m (DKK 5,188m).
CSAPLH has on 6 February, issued a formal put
notice to sell its 33% shareholding in CSAPL to
the Group at the put option valuation
amount.The put option liability recognised in
the consolidated financial statements has been
adjusted to reflect the put option valuation
amount received from the valuers as the
acquisition of the shares may be completed at
that price. A transaction could potentially be
completed in 2023, subject to the clarification
of any disputes raised by the shareholders and
timelines for any regulatory approvals. CSAPLH
has previously asked for an amount for its 33%
shareholding in CSAPL that the Group
considered to be unreasonably high and not to
reflect the fair value of the shareholding. From
the put option valuation received, it is the
Group’s assessment that key assumptions,
which the Group considers to be unreasonable,
may have been applied in the valuation
performed by CSAPLH’s appointed valuer. The
put option valuation can be disputed by the
shareholders if the valuations are conducted in
breach of the Shareholders’ Agreement,
including, but not limited to, circumstances
where the valuations are tainted by fraud or
manifest error. The Group will work with its
external advisors to evaluate its position and
assess whether CSAPLH has committed
additional breaches of the Shareholders’
Agreement, which would justify further legal
steps against CSAPLH..
In addition to the disputes with our partner in
CSAPL regarding India and Nepal, there is also
a dispute with the local 10% shareholder in
Gorkha Brewery, a related party to the Group’s
33% partner in CSAPL. The conclusion of the
put or call option process and the increase to
100% ownership of CSAPL do not settle the
dispute with the local shareholder, and Gorkha
Brewery therefore remains not consolidated
until the dispute is settled separately. A
Nepalese High Court judgment was expected in
2022 but has been postponed and is now
expected in H1 2023. A favourable ruling would
not immediately lead to reconsolidation of the
Nepalese business, which would require
demonstration of the consistent ability to
exercise our rights as the majority shareholder.
Please refer to section 5.3.
Management and the general counsel
continuously assess these risks and their likely
outcome. It is the opinion of management and
the general counsel that, apart from items
recognised in the statement of financial
position, the outcome of these lawsuits,
disputes etc. cannot be reliably estimated in
terms of amount or timing. The Group does not
expect the ongoing lawsuits and disputes to
have a material impact on the Group’s financial
position, net profit or cash flow, in excess of
items recognised in the statement of financial
position.
GUARANTEES AND COMMITMENTS
The Group has issued guarantees for loans etc.
raised by third parties (non-consolidated
entities) of DKK 205m (2021: DKK 224m). No
guarantees have been issued for loans raised
by associates. Certain guarantees etc. are
issued in connection with disposal of entities
and activities, and in connection with on-trade
loans. Apart from items recognised in the
statement of financial position or disclosed in
the consolidated financial statements, these
guarantees etc. will not have a material effect
on the Group’s financial position. Capital
commitments, lease liabilities and service
agreements are described in section 2.3.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 61
SECTION 4
FINANCING COSTS, CAPITAL
STRUCTURE AND EQUITY
19.7bn
NET INTEREST-BEARING DEBT
(DKK)
Gross financial debt amounted to DKK 29.0bn
(2021: DKK 28.9bn). Net interest-bearing debt
was DKK 19.7bn, an increase of DKK 0.9bn
compared with year-end 2021. The
classification of Russia as held for sale did not
have have a significant impact on net interest-
bearing debt.
CHANGES IN NET INTEREST-BEARING DEBT
(DKKbn)
18.8
-12.8
3.4
4.5
4.5
0.6
0.7 19.7
NIBD
at 1 January
Cash flow,
operating activities
Investing activities
Dividends, total
Capital reduction
Lease liabilities, net
Other movements
NIBD
at 31 December
The liquidity position remained strong due to
the free cash flow of DKK 9.4bn and access to
a EUR 2bn credit facility, which was unutilised
at 31 December 2022.
The leverage ratio, measured as net interest-
bearing debt to EBITDA, was 1.27x at year-end
(2021: 1.34x). The financial leverage was kept
slightly more conservative than in past years
anticipating the acquisition of our partner’s 33%
shareholding in CSAPL.
25.3bn
EQUITY (DKK)
Equity amounted to DKK 25.3bn (2021: DKK
37.3bn), DKK22.5bn of which was attributable
to shareholder in Carlsberg Breweries A/S and
DKK 2.8bn to non-controlling interests.
The change in equity of DKK -12.0bn was
mainly due to the profit for the period of DKK
2.2bn foreign exchange losses on translation of
DKK 3.9bn, the dividend payout of DKK 4.5bn
and the capital reduction of DKK 4.5bn.
-714m
NET FINANCIAL ITEMS (DKK)
Financial items, net, amounted to DKK -714m
(2021: DKK -386m). Excluding currency losses
and fair value adjustments, financial items, net,
amounted to DKK -491m (2021: DKK -331m).
The increase was mainly due to 2021 being
positively impacted by the reversal of the
previous write-down of the loan to our partner
in CSAPL.
LEVERAGE RATIO (NIBD/EBITDA)
2018 2019 2020 2021 2022
1.0
1.2
1.4
1.6
2018-2020 as reported. 2021-2022 for continuing operations.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 62
SECTION 4.1
FINANCIAL INCOME
AND EXPENSES
Interest income primarily relates to interest on
cash and cash equivalents measured at
amortised cost.
Foreign exchange losses, net, include fair value
adjustments of hedges not designated as
hedging instruments and foreign exchange
losses. The fair value adjustment of hedges not
designated as hedging instruments amounted
to DKK -121m (2021: DKK -23m), cf. section 4.8.
Financial items recognised in the income statement
DKK million 2022 2021
Financial income
Interest income 231 90
Interest on plan assets, defined benefit plans 120 99
Reversal of impairments of financial assets - 363
Other 7 18
Total 358 570
Financial expenses
Interest expenses -519 -499
Capitalised financial expenses 2 4
Foreign exchange losses, net -223 -55
Interest expenses on obligations, defined benefit plans -158 -138
Interest expenses, lease liabilities -23 -13
Other -151 -255
Total -1,072 -956
Financial items, net, recognised in the income statement -714 -386
Financial items excluding foreign exchange, net -491 -331
Financial items in Russian operations held for
sale are not included in the financial items, but
foreign exchange gains and losses on
continuing operations’ RUB-denominated
payables and receivables with respect to
Russian operations held for sale are included.
Foreign exchange losses and fair value
adjustments amounted to DKK -223m (2021:
DKK -55m).
Of the net change in fair value of cash flow
hedges transferred to the income statement,
DKK 69m (2021: DKK 216m) has been included
in revenue and cost of sales, DKK -16m (2021:
DKK 4m) in other financial items, and DKK -2m
in property, plant and equipment (2021: DKK
0m).
Financial items recognised in other comprehensive income
DKK million 2022 2021
Foreign exchange adjustments of foreign entities
Foreign currency translation of foreign entities -3,926 3,124
Recycling of cumulative translation differences of entities
disposed of, deconsolidated or discontinued from use of equity-method - 183
Total -3,926 3,307
Fair value adjustments of hedging instruments
Change in fair value of effective portion of cash flow hedges -313 361
Change in fair value of cash flow hedges transferred to the income statement and property,
plant and equipment -51 -57
Change in fair value of net investment hedges -395 -464
Total -759 -160
Financial items, net, recognised in other comprehensive income -4,685 3,147
FINANCIAL ITEMS, NET (DKKm)
2018
2019
2020
2021
2022
-800
-600
-400
-200
0
2018-2020 as reported. 2021-2022 for continuing
operations.
Financial items, net
Financial items, net, excl. fair value and FX
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 63
SECTION 4.2
NET INTEREST-
BEARING DEBT
Of the gross financial debt at year-end, 79%
(2021: 79%) was non-current, i.e. with maturity
of more than one year.
Gross financial debt amounted to DKK 29.0bn.
(2021: DKK 28.9bn). Non-current borrowings
totalled DKK 22.9bn (2021: DKK 22.8bn) and
current borrowings totalled DKK 6.2bn (2021:
DKK 6.2bn). A EUR 750m EMTN bond matured
in November 2022 and was partly refinanced
by a EUR 500m EMTN bond maturing in
October 2025. The Group continuously assesses
the maturity and repayment profile of its debt.
The difference of DKK 9.3bn between gross
financial debt and net interest-bearing debt
mainly comprised cash and cash equivalents
and on-trade loans.
Net interest-bearing debt
DKK million 2022 2021
Non-current borrowings 22,865 22,755
Current borrowings 6,172 6,176
Gross financial debt 29,037 28,931
Cash and cash equivalents -8,163 -8,344
Net financial debt 20,874 20,587
Loans to associates, interest-
bearing portion -275 -238
On-trade loans, net -492 -578
Other receivables, net -411 -928
Net interest-bearing debt 19,696 18,843
¹ Net interest-bearing debt, excluding disposal group held
for sale, amounted to DKK 18,872m in 2021.
SECTION 4.3
CAPITAL
STRUCTURE
4.3.1 CAPITAL STRUCTURE
Management regularly assesses whether the
Group’s capital structure is in the interests of
the Group and its shareholder.
The overall objective is to ensure a continued
development and strengthening of the Group’s
capital structure that supports long-term
profitable growth and a solid increase in key
earnings and ratios. This includes assessment of
and decisions on the split of financing between
share capital and borrowings, which is a long-
term strategic decision to be made in
connection with significant investments and
other transactions.
Optimisation of share capital is carried out by
managing the listed shares of Carlsberg A/S,
including payment of dividends and share
buybacks.
Share capital
Total share capital
Shares of DKK
1,000
Nominal value,
DKK ’000
1 January 2021 500,000 500,000
Capital reduction -1,000 -1,000
31 December 2021 499,000 499,000
Capital reduction -1,000 -1,000
31 December 2022 498,000 498,000
The share capital amounts to DKK 498m divided into shares in denominations of DKK 1,000 and multiples thereof.
None of the shares confer any special rights. The share capital is fully owned by Carlsberg A/S, Copenhagen, Denmark.
Borrowings are managed in Carlsberg
Breweries A/S, where the majority of the
Group’s debt is denominated in listed bonds.
In November 2022, the share capital was
reduced from DKK 499m to DKK 498m through
a cash distribution of nominally DKK 1m at a
(per 100) price of DKK 450,000, corresponding
to a total cash distribution to Carlsberg A/S of
DKK 4.5bn. This cash distribution reflects the
share buy-backs that were carried out by
Carlsberg A/S over a 12 month period from
4February 2022.
The Group targets a leverage ratio below 2.0x.
At the end of 2022, the leverage ratio was 1.27x
(2021: 1.34x).
The Group is rated by Moody’s Investors
Service and Fitch Ratings. Management
assesses the risk of changes in the Group’s
investment-grade rating as an element in
strategic decisions on capital structure.
Identification and monitoring of risks that could
change the rating were carried out on an
ongoing basis throughout the year.
Transactions with the shareholder
in Carlsberg Breweries A/S
DKK million 2022 2021
Dividend paid to the
shareholder -3,486 -3,260
Capital reduction -4,500 -4,000
Total -7,986 -7,260
Dividends paid to non-controlling interests
amounted to DKK 1,042m (2021: DKK 550m).
ACCOUNTING
POLICIES
Proposed dividends
The proposed dividend is recognised as a liability at
the date when it is adopted at the Annual General
Meeting (declaration date).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 64
SECTION 4.3 (CONTINUED)
CAPITAL STRUCTURE
4.3.3 OTHER COMPREHENSIVE INCOME
Other comprehensive income has mainly been
impacted by the negative foreign exchange
adjustment from translation of Group entities
with a functional currency other than DKK. Of
the DKK 3.9bn foreign exchange loss, around
DKK 3.0bn relates to the timing of the write-
down of RUB-denominated assets classified as
disposal group held for sale. This was
recognised in March 2022, when RUB had
depreciated 10% compared with the end of
2021.
Other comprehensive income as recognised in the statement of changes in equity
DKK million
2022
Currency
translation
Hedging
reserves
Retained
earnings Total
Non-
controlling
interests
Other
comprehen-
sive income
Foreign exchange adjustments of foreign entities -3,384 - 4 -3,380 -546 -3,926
Value adjustments of hedging instruments -395 -344 - -739 -20 -759
Retirement benefit obligations - - 597 597 -3 594
Income tax 88 15 -79 24 1 25
Total -3,691 -329 522 -3,498 -568 -4,066
2021
Foreign exchange adjustments of foreign entities 3,379 - - 3,379 -72 3,307
Value adjustments of hedging instruments -464 134 - -330 7 -323
Retirement benefit obligations - - 579 579 -2 577
Share of other comprehensive income in associates - - 10 10 - 10
Income tax 102 -18 -5 79 24 103
Total 3,017 116 584 3,717 -43 3,674
4.3.4 FINANCIAL RISK MANAGEMENT
The Group’s activities mean it is exposed to a
variety of financial risks, including market risk
(foreign exchange risk, interest rate risk and
commodity risk), credit risk and liquidity risk.
These risks are described in the following
sections:
• Foreign exchange risk: sections 1.4 and 4.6
• Interest rate risk: section 4.5
• Commodity risk: section 1.3.1
• Credit risk: sections 1.6.1 and 4.4.2
• Funding and liquidity risk: section 4.7
The Group’s financial risks are managed by
Group Treasury in accordance with the
Financial Risk Management Policy approved by
the Supervisory Board as an integrated part of
the overall risk management process. The risk
management governance structure is described
in the Management review (pages 25-27).
To reduce exposure to these risks, the Group
enters into a variety of financial instruments
and generally seeks to apply hedge accounting
to reduce volatility in the income statement.
Debt instruments and deposits in foreign
currency reduce the overall risk but will
generally not achieve the objective of reducing
volatility in specific items in the income
statement, unless they are designated as cash
flow hedges.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 65
SECTION 4.4
BORROWINGS
AND CASH
4.4.1 BORROWINGS
Non-current borrowings were unchanged, as
the EUR 500m EMTN bond that matures in
September 2023 was reclassified as current and
a new EUR 500m EMTN bond maturing in
October 2025 was issued. Current borrowings
were impacted by the repayment of a EUR
750m EMTN bond in November, offset by the
aforementioned reclassification of the EUR
500m bond and issuance under the commercial
paper programme.
Gross financial debt
DKK million 2022 2021
Non-current
Issued bonds 21,470 21,452
Bank borrowings 70 78
Lease liabilities 1,203 1,012
Other borrowings 122 213
Total 22,865 22,755
Current
Issued bonds 3,714 5,573
Bank borrowings 271 116
Lease liabilities 390 375
Commercial paper and
other borrowing 1,797 112
Total 6,172 6,176
Total borrowings 29,037 28,931
Fair value 27,085 29,584
¹ Total borrowings, excluding disposal group held for
sale, amounted to DKK 28,902m in 2021.
An overview of issued bonds is provided in section 4.5.
Changes in gross financial debt
DKK million 2022 2021
Gross financial debt at 1 January 28,931 30,259
Proceeds from issue of bonds 3,708 -
Instalments on and proceeds from borrowings, non-current -5,583 -1,001
Instalments on and proceeds from borrowings, current - -216
Instalments on lease liabilities -423 -405
Commercial paper and other borrowing 1,860 845
External financing -438 -777
Change in bank overdrafts - -135
Gross financial debt reclassified to disposal held for sale -29 -
Increase in lease liabilities, net 629 275
Intercompany loans -308 -853
Other, including foreign exchange adjustments and amortisation 252 162
Gross financial debt at 31 December 29,037 28,931
ACCOUNTING
POLICIES
Borrowings
Borrowings are initially recognised at fair value less
transaction costs and subsequently measured at
amortised cost using the effective interest method.
Accordingly, the difference between the fair value less
transaction costs and the nominal value is recognised
under financial expenses over the term of the loan.
Lease liability
The lease liability is measured at the present value of
the remaining lease payments at the reporting date,
discounted using the incremental borrowing rate for
similar assets, taking into account the terms of the
leases. A remeasurement of the lease liability, for
example a change in the assessment of an option to
purchase, results in a corresponding adjustment of the
related right-of-use assets, cf. section 2.3.
Extension or termination options are included in the
lease term if the lease is reasonably certain to be
extended or not terminated. Consequently, all cash
outflows that are reasonably certain to impact the
future cash balances are recognised as lease liabilities
at initial recognition of lease contracts. The Group
reassesses the circumstances leading to it not
recognising extension or termination options on an
ongoing basis.
4.4.2 CASH
Cash and cash equivalents include short-term
marketable securities with a term of three
months or less at the acquisition date that are
subject to an insignificant risk of changes in
value. Short-term bank deposits amounted to
DKK 1,530 at 31 December 2022 (2021: DKK
735). The average interest rate on these
deposits was 6.2% (2021: 3.3%).
Total cash at bank amounted to DKK 8,163m in
2022 (2021: DKK 8,344m).
Additional cash and cash equivalents of DKK
1,194m included in assets in disposal group held
for sale are not available for general use in the
Group due to currency restrictions.
ASSESSMENT OF CREDIT RISK
The Group is exposed to credit risk on cash and
cash equivalents (including fixed deposits),
investments and derivative financial
instruments with a positive fair value due to
uncertainty as to whether the counterparty will
be able to meet its contractual obligations as
they fall due.
The Group has established a credit policy under
which financial transactions may be entered
into only with financial institutions with a solid
credit rating, defined as BBB. Carlsberg only
enters into derivatives with relationship banks,
and the associated credit risk is mitigated to
some extent by entering into ISDA agreements,
partly because it is the same group of banks
extending loans to the Group.
Group Treasury manages and monitors the
Group’s gross credit exposure to banks and
operates with individual limits on banks, based
on rating and access to netting of assets and
liabilities. For some of the markets in which the
Group operates and holds cash, the financial
institutions do not have a BBB rating, in which
case an exemption is approved by Group
Treasury.
EXPOSURE TO CREDIT RISK
The carrying amount of DKK 8,163m (2021:
DKK 8,344m) represents the maximum credit
exposure related to cash and cash equivalents.
The credit risk on receivables is described in
section 1.6.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 66
SECTION 4.5
INTEREST RATE RISK
The Group’s exposure to interest rate risk in the
income statement is considered low due to the
limited amounts of net financial debt at
variable interest rates. Interest rate risk is
monitored on net financial debt, i.e. borrowings,
cash and cash equivalents and derivative
financial instruments. The target is to have a
duration between three and eight years. At 31
December 2022, the duration was 4.1 years
(2021: 4.8 years). Interest rate risk is mainly
managed using fixed-rate bonds, which are all
denominated in EUR. At the reporting date,
104% of the net financial debt consisted of
fixed-rate borrowings with interest rates fixed
for more than one year (2021: 105%).
Net financial debt by currency
DKK million
2022
Gross
financial debt
Net
financial debt Fixed
Gross
financial debt,
fixed %
Net financial
debt, fixed %¹
EUR 27,040 26,083 21,530 80% 83%
CNY 94 -3,560 - - -
USD 345 -35 104 30% -297%
Other 1,558 -1,614 37 2% -2%
Total 29,037 20,874 21,671 75% 104%
2021
EUR 27,598 25,227 21,515 78% 85%
CNY 35 -2,777 - - -
USD 413 42 194 47% 462%
Other 885 -1,905 9 1% -
Total 28,931 20,587 21,718 75% 105%
¹ The percentage of net debt at fixed interests rates is above 100% in some currencies, as the total cash exceeds the
current debt. In some currencies the percentage of net debt at fixed interests is negative, as the total cash exceeds
the total debt.
On a gross debt basis, 76% was at fixed interest
rates (2021: 75%). Most of the Group’s cash and
cash equivalents are held in currencies other
than EUR, whereas EUR accounts for the
predominant part of the fixed-rate borrowings.
As a result, 127% of the Group’s net debt is in
EUR, which is why the interest rate exposure
primarily relates to the development in the
interest rates for EUR.
SENSITIVITY ANALYSIS
Since the Group has more cash and cash
equivalents than borrowings with a floating
interest rate, an increase in interest rates would
result in a decrease in net interest expenses. It is
estimated that a 1 percentage point interest
rate increase would lead to a decrease in net
interest expenses of DKK 12m (2021: DKK 11m).
The impact reflects a relatively high percentage
of the gross debt being at fixed interest rates
and the high portion of cash. The analysis
assumes a parallel shift in the relevant yield
curves.
If the market interest rate had been
1 percentage point higher at the reporting date,
it would have led to a financial gain of DKK
842m (2021: DKK 997m), and a similar loss had
the interest rate been 1 percentage point lower.
However, since all fixed-rate borrowings are
measured at amortised cost, there is no impact
on other comprehensive income or the income
statement. The fair value of total gross
borrowings was DKK 1,952m lower than the
carrying amount (2021: DKK 653m higher).
Interest rate risk
DKK million
2022
Interest
rate
Average
effective
interest
rate Fixed for
Carrying
amount
Interest
rate risk
Issued bonds
EUR 500m maturing 6 September 2023 Fixed 0.7% < 1 year 3,714 Fair value
EUR 1,000m maturing 28 May 2024 Fixed 2.6% 1-2 years 7,421 Fair value
EUR 500m maturing 12 October 2025 Fixed 3.4% 2-3 years 3,705 Fair value
EUR 500m maturing 30 June 2027 Fixed 0.5% 4-5 years 3,699 Fair value
EUR 400m maturing 1 July 2029 Fixed 1.0% > 5 years 2,948 Fair value
EUR 500m maturing 11 March 2030 Fixed 0.7% > 5 years 3,697 Fair value
Total 1.7% 25,184
Total 2021 1.6% 27,025
Bank borrowings and other borrowings
Floating-rate Floating 1.8% < 1 year 3,653 Cash flow
Fixed-rate Fixed 1.7% > 1 year 200 Fair value
Total 3,853
Total 2021 1,906
The change is due to the increase in interest
rates during 2022.
The sensitivity analysis is based on the financial
instruments (borrowing, cash and derivative
financial instruments) recognised at the
reporting date.
The sensitivity analysis assumes a parallel shift
in interest rates and that all other variables
remain constant, in particular foreign exchange
rates and interest rate differentials between the
different currencies. The analysis was
performed on the same basis as for 2021. The
Group did not enter into any new interest rate
swaps in 2022 or 2021.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 67
SECTION 4.6
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
4.6.1 CURRENCY PROFILE OF
BORROWINGS
The Group is exposed to foreign exchange risk
on borrowings denominated in a currency other
than the functional currency of the local entities
reporting the debt, as well as the risk that arises
when net cash inflow is generated in one
currency and borrowings are denominated and
have to be repaid in another currency.
Currency profile of borrowings
Before and after derivative financial instruments
DKK million
2022
Original
principal
Effect
of swap
After
swap
CHF 254 1,180 1,434
NOK 182 696 878
EUR 27,040 -8,173 18,867
USD 345 2,985 3,330
CNY 94 3,632 3,726
Other 1,122 -320 802
Total 29,037 - 29,037
Total 2021 28,931 - 28,931
4.6.2 HEDGING OF NET INVESTMENTS
IN FOREIGN SUBSIDIARIES
The Group holds a number of investments in
foreign subsidiaries where the translation of net
assets to DKK is exposed to foreign exchange
risks. The revaluation of the net investment is
recognised in OCI. The net investment in RUB
continues to constitute a significant risk in
terms of revaluation of the net investment, due
both to the size of the net investment and to
the volatility of RUB. The Group hedges part of
this foreign exchange exposure by selling
foreign currencies via FX forwards and NDFs,
and designates these as net investment hedges.
This mainly applies to net investments in CHF,
CNY, MYR and NOK. The basis for hedging is
reviewed at least once a year, and the two
parameters, risk reduction and cost, are
balanced. At the 2022 review it was decided to
stop hedging the PLN net investment due to
the high cost of hedging and to increase the
hedging of CNY.
Net investment hedges
2022 2021
Hedging of invest-
ment, amount in
local currency
Intra-group loans,
amount in local
currency
Other comprehensive
income (DKK) Average hedged rate
Fair value of
derivatives
Fair value of
derivatives
DKK million 2022 2021 2022 2021 2022 2021 2022 2021 Asset Liability Asset Liability
CNY -3,907 -2,407 - - -12 -323 1.0355 0.9611 83 - - -109
MYR -128 -292 - - -21 -28 1.5560 1.5022 - -3 - -15
HKD - - -2,128 -1,079 -49 -64 - - - - - -
CHF -310 -263 - - -109 -80 7.4334 6.8305 - -58 - -93
NOK -1,300 -1,300 3,000 3,000 -94 62 0.7179 0.7269 16 - - -19
SEK - - 2,217 2,717 -136 -42 - - - - - -
Other - -175 18 67 26 11 - - - - 4 -
Total -395 -464 99 -61 4 -236
The latter reflects the increase in exposure and
the currently relatively low cost of hedging. In
economic terms, having debt in foreign currency
or creating synthetic debt via forward exchange
contracts constitutes hedging of the DKK value
of future cash flows arising from operating
activities or specific transactions. Where the
notional amounts of forward exchange
contracts do not exceed the net investment, the
fair value adjustments are recognised in other
comprehensive income. Two of the most
significant net risks relate to foreign exchange
adjustment of net investments in CNY and CHF,
both of which are partly hedged.
All the forward exchange contracts mature
during 2023. At 31 December 2022, all
adjustments of financial instruments have been
recognised in other comprehensive income. Fair
value adjustments of loans designated as
strategic intra-group loans have also been
recognised in other comprehensive income.
The fair value of derivatives used as
net investment hedges recognised at
31 December 2022 amounted to DKK 38m
(2021: DKK -232m).
The closing balance in the equity reserve for
currency translation of hedges of net
investments for which hedge accounting no
longer applies amounted to DKK -2,282m
(2021: DKK -1,893m), of which -24m (2021:
-24m) relates to hedging of net investments in
RUB. Positive fair values of derivatives are
recognised as other receivables and negative
values as other liabilities.
4.6.3 EXCHANGE RATE RISK ON CASH
AND BORROWINGS
The main principle for funding of subsidiaries is
that cash and borrowings should be
denominated in local currency or hedged to
local currency to avoid foreign exchange risk.
However, in some Group entities, cash and
borrowings are denominated in a currency
other than the functional currency of the local
entity without the foreign exchange risk being
hedged. This applies primarily to a few entities
in Central & Eastern Europe that hold cash and
loans in EUR and USD and in this way obtain
either hedge accounting or proxy hedging of
the foreign exchange risk associated with the
purchase of goods in foreign currency in these
markets.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 68
SECTION 4.6 (CONTINUED)
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
4.6.4 IMPACT ON FINANCIAL
STATEMENTS AND SENSITIVITY
ANALYSIS
IMPACT ON INCOME STATEMENT
For the impact of currency on operating profit
and financial items, please refer to sections 1.4
and 4.1 respectively.
IMPACT ON STATEMENT
OF FINANCIAL POSITION
Fluctuations in foreign exchange rates will
affect the level of debt, as funding is obtained
in a number of currencies. In 2022, net interest-
bearing debt increased by DKK 431m (2021:
decreased by DKK 267m) due to changes in
foreign exchange rates.
SENSITIVITY ANALYSIS
An adverse development in the exchange rates
would, all other things being equal, have had
the hypothetical impact on the income
statement and other comprehensive income
(OCI) for 2022 illustrated in the tables. The
calculations are based on items in the
statement of financial position at
31 December 2022.
Income statement
The hypothetical impact ignores the fact that
the subsidiaries’ initial recognition of revenue,
cost and debt would be similarly exposed to the
exchange rate developments.
Other comprehensive income
Other comprehensive income is affected by
changes in the fair value of currency derivatives
designated as cash flow hedges of future
purchases.
Exchange rate sensitivity - income statement
2022
2021
DKK million
EUR
receivable
EUR
payable
EUR
cash
Gross
exposure
Exposure,
net of hedging Change
Effect
on P/L
Effect
on P/L
EUR/GBP - -32 32 - - 5% - -43
EUR/NOK 94 -459 319 -46 -46 5% -2 -14
EUR/CHF 124 -272 77 -71 -71 5% -4 7
EUR/PLN 684 -638 -15 31 31 5% 2 6
EUR/KZT - -23 149 126 126 10% 13 11
EUR/RUB 20 -242 556 334 334 10% 33 -3
EUR/UAH - -24 - -24 -24 10% -2 13
Total 40 -23
2021
2022
USD
receivable
USD
payable
USD
cash
Gross
exposure
Exposure,
net of hedging Change
Effect
on P/L
Effect
on P/L
USD/LAK 10 -170 257 97 97 10% 10 6
USD/KZT - - 182 182 182 10% 18 10
USD/RUB - - 116 116 116 10% 12 -
USD/UAH - -1 - -1 -1 10% - 9
Total 40 25
Exchange rate sensitivity - other comprehensive income
2022 2021
DKK million
Average
hedged rate
Notional
amount Change
Effect
on OCI
Average
hedged rate
Effect
on OCI
NOK/DKK 0,7208 -975 5% -49 0.7189 -39
SEK/DKK 0,6869 -832 5% -42 0.7284 -30
PLN/DKK 1,4694 -691 5% -35 1.6039 -26
CHF/DKK 7,5080 -523 5% -26 6.9171 -22
USD/DKK 7,5926 383 10% 38 6.3627 33
RUB/DKK 0,1071 -578 20% -116 0.0822 -128
UAH/DKK 0,2212 -311 20% -62 N/A -
Other N/A -342 5-30% -53 N/A -12
Total -345 -224
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 69
SECTION 4.6 (CONTINUED)
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
APPLIED EXCHANGE RATES
The average exchange rate was calculated
using the monthly exchange rates weighted
according to the phasing of the revenue per
currency throughout the year.
Applied exchange rates
Closing rate Average rate
DKK 2022 2021 2022 2021
Swiss franc (CHF) 7.5520 7.1760 7.4190 6.8777
Chinese yuan (CNY) 1.0106 1.0296 1.0569 0.9700
Euro (EUR) 7.4365 7.4365 7.4397 7.4369
Pound sterling (GBP) 8.3845 8.8604 8.7235 8.6837
Indian rupee (INR) 0.0840 0.0878 0.0903 0.0852
Laotian kip (LAK) 0.0004 0.0006 0.0005 0.0006
Norwegian krone (NOK) 0.7073 0.7459 0.7374 0.7323
Polish zloty (PLN) 1.5887 1.6180 1.5859 1.6310
Russian rouble (RUB) 0.0983 0.0894 0.1134 0.0855
Swedish krona (SEK) 0.6686 0.7260 0.7002 0.7330
SECTION 4.7
FUNDING AND
LIQUIDITY RISK
Liquidity risk results from the Group’s potential
inability to meet the obligations associated with
its financial liabilities, for example settlement of
financial debt and paying suppliers.
The Group's overall objective is to ensure
continuous access, at the right price, to the
financial resources needed for operations and
growth.
The aim is to ensure effective liquidity
management, which involves obtaining
sufficient committed credit facilities to ensure
adequate financial resources and, to some
extent, tapping a range of funding sources.
DIVERSIFIED FUNDING SOURCES
The Group is diversifying its access to funding
to avoid relying on one single source of
funding.
The Group still has access to a committed EUR
2bn revolving credit facility (RCF) maturing in
2026, which is currently not being utilised. In
addition, the Group has committed cash pool
bank overdraft facilities to cover the day-to-
day liquidity needs and uncommitted access to
the Euro Commercial Paper (ECP) market,
which provides short-term funding.
At 31 December 2022, bonds accounted for
87% of the gross funding.
FUNDING STRATEGY AND REACTION
TO INCREASED UNCERTAINTY
Since March 2020 and the first COVID-19
lockdowns in Western Europe, the Group has
maintained an increased focus on liquidity, and
Committed credit facilities and credit resources available
DKK million
2022
Total
committed
loans and
credit
facilities
Utilised
portion of
credit
facilities
Unutilised
credit
facilities
2021
Unutilised
credit
facilities
Current
< 1 year 7,321 6,172 1,149 1,149
Total current committed loans and credit
facilities
7,321 6,172 1,149 1,149
Non-current
1-2 years 7,904 7,904 - -
2-3 years 3,823 3,823 - -
3-4 years 14,982 105 14,877 -
4-5 years 3,775 3,775 - 14,874
> 5 years 7,258 7,258 - -
Total non-current committed loans and credit
facilities 37,742 22,865 14,877 14,874
Cash and cash equivalents 8,163 8,344
Current portion of utilised credit facilities - - -6,172 -6,176
Credit resources available (total non-current
committed loans and credit facilities less net
debt) 16,868 17,042
a special effort has been made to improve cash
flow forecasting, including introducing frequent
short-term cash flow updates. As Western
European markets came out of lockdown in
2022, cash generation normalised, but the
geopolitical situation surrounding Ukraine
required continued strong focus on short-term
liquidity. During 2022, the Group obtained a
EUR 500m short-term bank loan to provide an
additional buffer against adverse market
conditions.
The loan was repaid when Carlsberg issued a
EUR 500m EMTN bond in October.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 70
SECTION 4.7 (CONTINUED)
FUNDING AND
LIQUIDITY RISK
CREDIT RESOURCES AVAILABLE
The Group uses the term “credit resources
available” to determine the adequacy of access
to credit facilities.
Credit resources available include cash and
unutilised credit facilities with more than 12
months to maturity less utilised credit facilities
with less than 12 months to maturity and
uncommitted working capital facilities.
Net financial debt is used internally to monitor
the Group’s credit resources available. Net
financial debt is the Group’s net interest-bearing
debt, excluding interest-bearing assets other
than cash, as these assets are not actively
managed in relation to liquidity risk. Net
financial debt is shown in section 4.2.
At 31 December 2022, the Group had total
credit resources available of DKK 16,868m,
consisting of cash and cash equivalents of DKK
8,163m plus committed unutilised non-current
Time to maturity for non-current borrowings
DKK million
2022 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total
Issued bonds 7,421 3,705 - 3,698 6,646 21,470
Bank borrowings 21 23 22 4 - 70
Lease liabilities 356 95 82 72 598 1,203
Other non-current borrowings 106 - 1 1 14 122
Total 7,904 3,823 105 3,775 7,258 22,865
Total 2021 4,198 7,599 82 62 10,814 22,755
credit facilities of DKK 14,877m less utilisation
of current facilities of DKK 6,172m. Including
current credit facilities of DKK 1,149m, total
committed unutilised credit facilities amounted
to DKK 16,026m.
Credit resources available at year-end 2022
were unchanged from year-end 2021, due to
the strong cash flow and ongoing funding
activities.
The credit resources available and access to
unused committed credit facilities are
considered reasonable in light of the Group’s
current needs in terms of financial flexibility.
The Group uses cash pools for day-to-day
liquidity management in most of its entities in
Western Europe, as well as intra-group loans to
subsidiaries. Central & Eastern Europe and Asia
are less integrated in terms of cash pools, and
liquidity is managed via intra-group loans. For
some markets in Asia, intra-group loans are not
possible, and surplus liquidity will be paid out in
the form of dividends, which results in a time
lag between when the cash flow is generated
and when it becomes available for repayment
of Group debts. The most significant cash
balances related to this delay are in China.
MATURITY OF FINANCIAL LIABILITIES
The table lists the contractual maturities of
financial liabilities, including estimated interest
payments and excluding the impact of netting
agreements, and thus summarises the gross
liquidity risk.
The risk implied by the values reflects the one-
sided scenario of cash outflows only. Trade
payables and other financial liabilities originate
from the financing of assets in ongoing
operations, such as property, plant and
equipment, and investments in working capital,
for example inventories and trade receivables.
The nominal amount/contractual cash flow of
gross financial debt totalled DKK 29,148m in
2022 (2021: DKK 29,107m), whereas the total
carrying amount was DKK 29,037m (2021:
DKK28,931m). The difference between these
amounts arises at initial recognition and is
Maturity of financial liabilities
DKK million
2022
Contractual
cash flows
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Carrying
amount
Derivative financial instruments
Derivative financial instruments, payables 372 366 6 - 396
Non-derivative financial instruments
Gross financial debt 29,148 6,177 15,666 7,305 29,037
Interest expenses 1,227 706 430 91 N/A
Trade payables and other liabilities 23,533 23,533 - - 23,533
Contingent liabilities 205 205 - - 205
Contingent considerations 5,596 5,281 315 - 5,596
Non-derivative financial instruments 59,709 35,902 16,411 7,396 -
Financial liabilities 60,081 36,268 16,417 7,396 -
Total 2021 57,319 33,257 13,011 11,051 -
treated as a cost that is capitalised and
amortised over the duration of the borrowings.
The interest expense is the contractual cash
flows expected on the gross financial debt
existing at 31 December 2022.
The cash flow is estimated based on the
notional amount of the above-mentioned
borrowings and expected interest rates at year-
end 2022 and 2021. Interest on debt recognised
at year-end 2022 and 2021 for which no
contractual obligation exists (current borrowing
and cash pools) has been included for a two-
year period. The synthetic interest on lease
liabilities has also been included for a two-year
period. The interest applied to the part of the
debt where no contractual obligation exists is
2.8% (2021: 1.5%). The increase is due to the
increase in interest rates seen for most
currencies during 2022.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 71
SECTION 4.8
DERIVATIVE
FINANCIAL
INSTRUMENTS
The Group enters into various derivative
financial instruments to hedge foreign
exchange and commodity risks, cf. sections 1.3
and 1.4, and seeks to apply hedge accounting
when this is possible. Hedging of future, highly
probable forecast transactions is designated as
cash flow hedges. In 2022, the Group entered
into its first Power Purchase Agreement (PPA)
as part of the Together Towards ZERO and
Beyond (TTZAB) effort to decarbonise the
Group. The PPA is a 10-year agreement and is
designated as a hedge of electricity
consumption at the brewery in Fredericia,
Denmark. The market value at 31 December
2022 was DKK 83m and is presented together
with aluminium hedges in other instruments.
Cash flow hedges
DKK million Expected recognition
2022
Other
comprehen-
sive income
Fair value
receivables
Fair value
payables
Fair value,
net 2023
2024
and later
Exchange rate
instruments -8 62 -19 43 43 -
Other instruments -356 101 -202 -101 -183 82
Total -364 163 -221 -58 -140 82
2021
Other
comprehen
sive income
Fair value
receivables
Fair value
payables
Fair value,
net 2022
Exchange rate
instruments -20 13 -47 -34 -34
Other instruments 161 240 - 240 240
Total 141 253 -47 206 206
The Group monitors the cash flow hedge
relationships twice a year to assess whether the
hedge is still effective.
Positive fair values of derivatives are recognised
as other receivables and negative values as
other liabilities.
The impact on other comprehensive income
and the fair value of derivatives classified as
cash flow hedges is presented in the cash flow
hedge table.
The impact on other comprehensive income
from exchange rate instruments relates to
hedges of Group entities’ purchases and sales in
currencies other than their functional currencies.
At 31 December 2022, hedging reserves
included DKK -843m in relation to cash flow
hedges for which hedge accounting is no longer
applied. Of the total reserve, DKK -595m relates
to hedges of the original acquisition of the
Russian operations currently held for sale. This
amount will be reclassified from equity to the
income statement and included in the net result
from Russian operations held for sale at the
time of disposal.
Fair value adjustments of derivative financial
instruments that are not designated as either
net investment hedges or cash flow hedges are
recognised in financial income and expenses.
Of the DKK -356m reported in OCI regarding
other instruments, DKK -71m is realised gains
on aluminium hedges transferred to Russian
operations held for sale. Of the DKK -8m
reported regarding exchange rate instruments,
DKK 211m is realised losses transferred to
Russian operations held for sale.
Financial derivatives not designated as hedging instruments (economic hedges)
DKK million
2022
Income
statement
Fair value
receivables
Fair value
payables Fair value, net
Exchange rate instruments -105 90 -105 -15
Ineffectiveness -16 - - -
Total -121 90 -105 -15
2021
Exchange rate instruments -27 86 -32 54
Ineffectiveness 4 - - -
Total -23 86 -32 54
ACCOUNTING ESTIMATES
AND JUDGEMENTS
When entering into financial instruments,
management assesses whether the instrument is an
effective hedge of recognised assets and liabilities,
expected future cash flows or financial investments.
The effectiveness of recognised hedging instruments is
assessed at least twice a year.
Fair values of derivative financial instruments are
calculated on the basis of level 2 input consisting of
current market data and generally accepted valuation
methods. Internally calculated values are used, and
these are compared with external market quotes on a
quarterly basis. For currency, aluminium and
electricity derivatives, the calculation is as follows:
a) The forward market rate is compared with the
agreed rate on the derivatives, and the difference in
cash flow at the future point in time is calculated.
b) The amount is discounted to present value.
When entering into a contract, management assesses
whether the contract contains embedded derivatives
and whether they meet the criteria for separate
classification and recognition. The Group currently
does not have any embedded derivatives that meet
the criteria for separate classification and recognition.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 72
SECTION 4.8 (CONTINUED)
DERIVATIVE
FINANCIAL
INSTRUMENTS
ACCOUNTING
POLICIES
Derivative financial instruments are initially
recognised at fair value on the trade date and
subsequently remeasured at their fair value at the
reporting date.
The accounting for subsequent changes in fair value
depends on whether the derivative is designated as
one of:
• Fair value hedges of the fair value of recognised
assets or liabilities
• Cash flow hedges of particular risks associated with
the cash flow from forecast transactions
• Net investment hedges of currency fluctuations in
subsidiaries or associates.
The fair values of derivative financial instruments are
presented in other receivables or payables, and
positive and negative values are offset only when the
Group has the right and the intention to settle several
financial instruments net.
Changes in the fair value of a fair value hedge and of
derivative financial instruments not designated in a
hedge relationship are recognised in financial income
or expenses in the income statement.
Changes in the effective portion of the fair value of
derivative financial instruments that are designated
and qualify as a cash flow hedge are recognised in
the hedging reserve within equity. When the hedged
transaction materialises, amounts previously
recognised in other comprehensive income are
transferred to the same item as the hedged item.
Derivatives designated as and qualifying for
recognition as a cash flow hedge of financial
investments are recognised in other comprehensive
income. On complete or partial disposal of the
financial investment, the portion of the hedging
instrument that is recognised in other comprehensive
income and relates to that financial investment is
recognised in the income statement when the gain or
loss on disposal is recognised.
Hedges of net investments in foreign subsidiaries and
associates are accounted for in the same way as cash
flow hedges.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 73
SECTION 5
DISCONTINUED OPERATIONS, ACQUISITIONS,
DISPOSALS AND ASSOCIATES
Russian
operations
held for
sale
On 28 March, the Group announced its
decision to seek a full divestment of its
Russian business, following Russia’s invasion
of Ukraine.
SECTION 5.1
DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE
In March 2022, the Group announced its
decision to seek a full divestment of its Russian
business, following Russia’s invasion of Ukraine.
The net result from Russian operations held for
sale is presented separately in the income
statement and as net cash flow from
Russian operations held for sale in the
statement of cash flows. The comparative
figures have been restated accordingly.
Until completion of the divestment, the Russian
business will not be part of the Central &
Eastern Europe region and is therefore not
included in the segment disclosures, cf. section
2.
Analysis of net result from Russian operations held for sale
DKK million 2022 2021
Revenue 10,207 6,537
Costs -8,228 -6,755
Profit before tax from Russian operations held for sale 1,979 -218
Income tax -105 -66
Profit from Russian operations held for sale 1,874 -284
Impairment loss recognised on the remeasurement to fair value less costs to sell -8,364 -
Net result from Russian operations held for sale -6,490 -284
In the statement of financial position, the
Russian business is presented as assets and
liabilities in disposal group held for sale. The
comparative figures for 2021 have not been
restated.
Financial performance
Revenue grew by 56% to DKK 10.2bn due to
price increases and the appreciation of RUB
during the year. Despite significant input cost
increases, profit from Russian operations held
for sale increased to DKK 1.9bn, supported by
depreciation being discontinued from March
2022, a positive foreign exchange impact of
around DKK 0.3bn and reversal of a tax
provision of around DKK 0.2bn. The net result
was DKK -6.5bn, due to the impairment charge
of DKK 8.4bn.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 74
SECTION 5.1 (CONTINUED)
DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE
Major classes of assets and liabilities in disposal group held for sale
DKK million 2022 2021
Intangible assets 5,483 16,211
Property, plant and equipment
2,989 2,562
Inventories 1,015 776
Receivables
937 828
Cash and cash equivalents1
1,194 127
Assets in disposal group held for sale 11,618 20,504
Borrowings
101 -
Tax liabilities, retirement benefit obligations etc.
1,144 1,275
Trade payables
1,892 1,585
Other liabilities
963 771
Liabilities in disposal group held for sale 4,100 3,631
Net assets in disposal group held for sale 7,518 16,873
¹ Cash and cash equivalents are not available for general use in the Group because of currency restrictions.
Net cash flow from Russian operations held for sale
DKK million 2022 2021
Cash flow from operating activities 1,952 981
Cash flow from investing activities
-376 -316
Cash flow from financing activities 195 -3
Net cash flow from Russian operations held for sale 1,771 662
Goodwill allocated to Russia of DKK 7,966m
was classified as held for sale as of 28 March
2022. The allocation was made on a historic
basis, which, in the opinion of management,
best reflects the goodwill associated with the
operations held for sale. The goodwill was
originally recognised in several separate
transactions.
ASSETS HELD FOR SALE
It is management’s assessment that the
shareholdings in the legal entities that will be
divested are available for immediate sale
subject to governmental approval in Russia. As
is customary when disposing of businesses, the
Group has elected to conduct a structured
separation process to eliminate the need for
transitional service arrangements to the
greatest extent possible.
Immediately after the intention to dispose of
the Russian operations was announced, a
project plan was initiated outlining the actions
required to complete all stages of transferring
the business, which was estimated to take up to
12 months. Successful completion of the process
of separating the business within 12 months
could be influenced by the political situation in
Russia, as governmental approval is required,
which could potentially prolong the process.
As the Russian operations are an integrated
part of the Group, the separation process is
complex, involving more than 150 separation
workstreams across business functions, which
has extended the divestment process compared
with an immediate sale involving transitional
service arrangements. The Group can at any
time elect to suspend the separation work and
complete an immediate sale of the relevant
shareholdings if required.
The necessary steps for the divestment were
initiated alongside the separation process. Since
the announcement, a process has been running
to clarify the impact of sanctions and the
Russian government’s approval process, select
advisors, identify potential buyers and formalise
the sales process. A buyer-screening process
has been initiated, and specific requirements of
the bidders defined. A careful screening process
is under way to evaluate the bidders’
appropriateness to participate in any
transaction.
An offer process is expected to commence in Q1
2023 with the aim of signing a divestment
agreement by mid-2023.
FAIR VALUE ESTIMATION
On classification of the Russian operations as
held for sale, management estimated the fair
value of the business (the expected sales price
less cost of disposal). The inputs applied in the
estimation of the fair value are categorised as
level 3 in the fair value hierarchy, as they are
not based on observable market data.
The Russian operations are considered to be a
rare asset to be classified as held for sale,
which is reflected in the estimation of the fair
value. The valuation was performed for the
Russian business on a stand-alone basis, which
excludes synergies from the integration into the
Group and the right to produce and sell the
Carlsberg brand, and increases the required
return on investment. This negatively impacted
the valuation compared with the value
attributed to the Russian business in previous
years’ impairment tests. Remeasurement of the
Russian operations classified as held for sale at
fair value resulted in recognition of a write-
down of DKK 8,364m in 2022.
The overall political situation in Russia is
uncertain, impacting the valuation. Presidential
Decrees have been issued setting out
prohibitions and restrictions on the sale of
certain Russian companies, directly or indirectly.
For the time being, it is uncertain how these
Decrees will affect the divestment process
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 75
SECTION 5.1 (CONTINUED)
DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE
in practice. However, they could potentially
impact the timing of the divestment and the
value realised in a sales transaction, as
authorisation from the Special Government
Commission in Russia is required for the
divestment. It is assessed that the legal
requirements for completing the divestment are
fulfilled to the extent these are within the
Group’s control. These uncertainties are
considered to be reflected in the assumptions
applied in the valuation.
The estimated fair value recognised in the
consolidated financial statements reflects the
value expected to be realised in a sales
transaction, factoring in all regulatory
processes and approvals currently known or
indicated by the authorities. However, there is
continuing uncertainty with regard to the
regulatory requirements in Russia, and there
may be further changes, which may impact the
valuation of the business.
Valuation process and model
The valuation is based not on external offers
for the business but on estimations of the net
present value of expected future cash flows in
local currency (RUB), as the cash flow
projections are largely denominated in RUB.
The valuation is based on a 10-year forecast of
free cash flows using budgets and forecasts for
2023-2025 prepared by local management in
the Russian business, with the forecast for the
remaining seven years based on general
projections for the key assumptions. Cash flows
beyond the 10-year period are extrapolated
using a terminal period growth rate.
Assumptions applied in the short to medium
term generally reflect management’s
expectations considering all relevant factors
and are based on experience and external
sources of information, where possible and
relevant.
The valuation excludes potential premiums that
may arise as part of the price discovery process,
such as a synergy premium that some buyers
may be able to access, or any other scarcity
premium.
Key assumptions
Management has estimated the following key
assumptions based on level 3 inputs:
• Post-tax discount rate 21%
• Terminal period growth rate 4%
• Compounded annual growth in unadjusted
free cash flow in the forecast period 5%
In addition, management has assessed the
validity of the official foreign currency
exchange rate (RUB/DKK) applied, published
by the Central Bank of Russia.
Discount rate
The discount rate applied is a post-tax
weighted average cost of capital (WACC). The
assumptions for determining the discount rate
are subject to a very high degree of volatility
and uncertainty due to the current
macroeconomic situation in Russia.
The war has resulted in increased inflation in
Russia. The effect is seen in the higher interest
rate incorporated in the WACC used for
discounting cash flows, as well as the increase
in the inflation rates used to project cash flows.
The estimation of the WACC is based on a
country-specific 10-year swap rate for RUB
debt, with the addition of a credit spread
estimated using an individual credit assessment
of the Russian business. The equity risk
premium and beta have also been estimated
for the Russian business on a stand-alone basis.
In addition to estimation of the discount rate
being performed on a stand-alone basis, the
significant discount rate increase compared
with what was applied in previous years for
impairment testing of Russian assets can be
attributed to the increase in equity risk
premium. The increase in equity risk premium is
linked to the increased uncertainty surrounding
the Russian economy in general and the factors
surrounding the successful completion of the
divestment in particular. This includes, but is not
limited to, any regulatory requirements on or
limitations of any sales price that can be
obtained in a sales transaction.
International financial institutions have updated
Russia’s risk status to the highest level,
reflecting their belief that the political situation
in the country has significantly increased the
risks for foreign investors, which is why the
increased discount rate is considered
appropriate.
Growth rates
The growth rates in the budgets and forecasts
for 2023-2025 are based on expected market
developments in Russia, taking the war and the
general macroeconomic environment into
consideration. The terminal period growth rate
is assumed to be slightly lower than the Central
Bank of Russia’s long-term inflation target of
around 4%.
Profit margins in the forecast period are
assumed to be flat and at levels realised in
previous years with no significant restructurings
included, resulting in steady year-on-year
growth in free cash flow.
Foreign currency exchange rate
The fair value has been recognised in local
currency and translated into the Group’s
presentation currency (DKK) at the official
exchange rate on the reporting date. This is
currently considered to be the best estimate.
Any adjustment to the consolidated value of
the Russian business due to changes in the
exchange rate has been recognised in other
comprehensive income and included in the
currency translation reserve within equity.
It is currently not known whether the disposal
will be settled in RUB or another currency. The
RUB exchange rate is subject to significant
uncertainty, and there is a risk that a disposal
settled in e.g. EUR or USD would be completed
at an exchange rate that is lower than the
official RUB exchange rate. However, given the
uncertainty related to the factors surrounding
completion of the transaction, the valuation is
maintained in RUB and the value is translated
into DKK at the official exchange rate.
Fair value reassessed at 31 December 2022
The fair value of the disposal group held for
sale was reassessed at 31 December 2022. The
enterprise value in local currency remained
largely unchanged compared with the initial
valuation of 28 March. The net asset value in
DKK increased during the year to DKK 7.5bn,
mainly due to the appreciation of the Russian
rouble (DKK/RUB 0.0983 at 31 December
compared to 0.07938 at 31 March) and the
improved net cash position because of the
positive development in the operating result.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 76
SECTION 5.1 (CONTINUED)
DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE
Cash proceeds from the disposal
If the proceeds from the disposal are in RUB,
there is a significant risk that the cash received
will not be immediately available for general
use in the Group because of the currency
restrictions in place and the limited exchange of
RUB in the financial markets.
RECYCLING EQUITY RESERVES ON
COMPLETION OF THE DIVESTMENT
On completion of the divestment, the currency
translation and hedging reserves within equity
related to the Russian business will be
reclassified from equity to the income
statement and included in the net result from
Russian operations held for sale.
At 31 December 2022, the accumulated
currency translation reserve related to the
Russian business represented a loss of around
DKK 39.7bn (2021: loss of DKK 37.0bn), around
half of which was recognised when the RUB
depreciated significantly in December 2014
following the Russian invasion and annexation
of Crimea. This figure includes the fair value of
net investment hedges of DKK -24.0m (2021:
DKK -24.0m); see section 4.6.
The accumulated hedging reserve related to the
Russian business represented a loss of around
DKK 0.6bn (2021: loss of DKK 0.5bn) and
includes both active hedges and hedges for
which hedge accounting is no longer applied;
see section 4.8.
After reclassification of the reserves to the
income statement, the amount will be
recognised in retained earnings and there will
be no change in total equity. The
reclassification will have no effect on the
Group’s cash position.
SENSITIVITY ANALYSIS
A sensitivity analysis of the key assumptions in
the assessment of the fair value has been
performed to determine the sensitivity to
changes in the key assumptions applied in the
valuation.
Key assumptions
The key assumptions relevant to the
assessment of the fair value are:
• Post-tax discount rate
• Terminal period growth rate
• Compounded annual growth in unadjusted
free cash flow
• Foreign currency exchange rate (RUB/DKK)
Sensitivity analysis
DKK million
1%-point
increase
1%-point
decrease
Discount rate ~-300 ~400
Terminal period growth rate ~100 ~-100
Growth in free cash flow ~400 ~-400
Foreign exchange rate ~100 ~-100
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The Group classifies non-current assets and disposal
groups as held for sale when management assesses
that their carrying amounts will be recovered through
a sale rather than continued use. Management’s
assessment is based on an evaluation of whether the
sale is highly probable and the asset or disposal group
is available for immediate sale in its current condition.
Actions required to complete the sale should indicate
that it is unlikely that significant changes to the sale
will be made or that the decision to sell will be
withdrawn. Management must be committed to the
plan to sell the asset and the sale must be expected
to be completed within one year from the date of the
classification.
On classification, management estimates the fair
value. Non-current assets and disposal groups
classified as held for sale are measured at the lower
of their carrying amount and fair value less costs of
disposal. Costs of disposal are the incremental costs
directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income
tax expense.
Depending on the nature of the non-current assets
and the disposal group’s activity, assets and liabilities,
the estimated fair value may be associated with
uncertainty and possibly adjusted subsequently.
Measurement of the fair value of disposal groups is
categorised as level 3 in the fair value hierarchy, as
measurement is not based on observable market
data.
ACCOUNTING
POLICIES
Assets held for sale comprise non-current assets and
disposal groups held for sale. Liabilities held for sale
are those directly associated with the assets that will
be transferred in the transaction. Immediately before
classification as held for sale, the assets or disposal
groups are remeasured in accordance with the Group’s
accounting policies. Thereafter, they are measured at
the lower of their carrying amount and fair value less
costs to sell. Any impairment loss is allocated first to
goodwill, and then to remaining assets on a pro rata
basis, except that no loss is allocated to inventories,
financial assets, deferred tax assets or employee
benefit assets, which continue to be measured in
accordance with the Group’s accounting policies.
Property, plant and equipment and intangible assets
are not depreciated or amortised once classified as
held for sale.
Impairment losses on initial classification as held for
sale, and subsequent gains and losses on
remeasurement are recognised in the income
statement.
Non-current assets and disposal groups held for sale
are presented separately as current lines in the
statement of financial position and the main elements
are specified in this section. Comparative figures are
not restated.
A disposal group is presented as discontinued
operations if it is a group of companies, i.e. part of a
geographical area of operations that has either been
disposed of or is classified as held for sale.
Discontinued operations are excluded from the results
of continuing operations and presented separately as
net result from discontinued operations held for sale
in the income statement. Comparative figures are
restated.
Cash flow from discontinued operations is presented
separately as net cash flow from Russian operations
held for sale in the statement of cash flows and
specified in this section. Comparative figures are
restated.
The disposal group/assets and liabilities classified as
held for sale are presented separately as current
items in the statement of financial position.
Comparative figures are not restated.
Additional disclosures are provided in this section. All
other sections of the financial statements include
amounts for continuing operations, unless indicated
otherwise.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 77
SECTION 5.2
INVESTMENT MODEL
AND RISKS
MARKET ACCESS
In the beer industry, access to local markets is
highly dependent on establishing good
relationships with customers in the on- and off-
trade channels, national distributors, local
suppliers and relevant authorities governing the
beverage industry. Often, the most efficient
way of establishing such relations is by
acquiring a local brewer or engaging with a
local partner that already has the relevant
relationships.
When the Group expands its business to new
geographies, it often therefore does so in
collaboration with a local partner. Such a
partnership can take different legal forms and
impacts the consolidated financial statements
accordingly.
In addition to its activities in the beer industry,
the Group operates in the soft drinks industry,
an industry dominated by large global brand
owners. The Group is engaged in long-term
contractual partnerships to produce, distribute
and sell third-party soft drink brands. In
addition to granting the right to produce, the
brand owners usually provide recipes and/or
raw materials, while the Group has the
necessary production capabilities and
distribution platform.
INVESTMENT MODEL
Entering into a partnership can reduce the
financial exposure and mitigate the business
risks associated with entering new markets or
expanding the activities in an existing market.
The financial exposure, however, varies
depending on the structure of the partnership.
Business and financial success, and the related
risks, depend on the ability of the Group and
the local partner to forge a strong and aligned
cooperation.
In some markets, the Group enters as a non-
controlling shareholder, providing a degree of
financing and contributing knowledge of the
beer industry. The Group thus leaves control
with the partner and recognises the investment
as an associate.
Other investments are structured as joint
ventures, where the Group and the local partner
jointly make the operational decisions and
share strategic and tactical responsibility.
More commonly, the Group structures its
partnerships such that it exercises management
control, usually by way of majority of the
voting rights. These investments are fully
consolidated subsidiaries, which are just as
important as other types of partnership for
success in the local markets, but mean that the
Group has increased financial exposure.
Investments in businesses in which the Group
exercises management control often involve put
and/or call options or a similar structure.
IMPACT ON FINANCIAL STATEMENTS
Investments in associates are consolidated in
the financial statements using the equity
method. The accounting risks associated with
these entities are limited to the investment
made, the proportionate share of the net profit
and any specific additional commitments to
banks or other parties, as well as specific
guarantees or loans the Group provides to the
partnership.
In businesses where the Group exercises
management control, the consolidated
financials are impacted by full exposure to the
earnings and other financial risks. From an
accounting point of view, the Group treats any
put options held by partners in such entities as
if they had already been exercised by the
partner, i.e. anticipating that the acquisition will
occur. The accounting impact is that the non-
controlling interests are not recognised, and no
part of net profits or equity is attributed to
them. Instead, the dividends received by the
partner from the business are classified as
financial expenses for the purpose of
accounting.
Common to all partnerships is the risk of
disagreement and, ultimately, dissolution.
Disagreements with partners on the operational
management and strategic directions of
partnerships may limit our ability to manage
the growth and risk profile of our business. The
Group continuously seeks to promote a fair and
mutually beneficial development of the
partnerships, which is crucial to be successful.
However, in certain partnerships the partners’
pursuit of goals and priorities that are different
from those of the Group might result in
disagreements, affecting operational and
financial performance. Different goals and
priorities of this kind can become more
pronounced in the period when a partner has
the right to exit the partnership.
A dissolution will initially impact the accounting
treatment of an investment. The accounting
treatment will depend on whether the Group or
its partner is exiting the business. In the long
term, however, the impact on the operation of
the local entity and the collaboration with
customers, distributors, authorities etc. can be
significant if the partner was instrumental in
managing these relationships. The risk of a
partnership dissolution may therefore have a
negative impact on the underlying business and
the financial performance recognised in the
consolidated financial statements.
The Group is involved in many partnerships,
one being the 67% shareholding in Carlsberg
South Asia Pte Ltd. (CSAPL), Singapore, which
is the parent company of the Group’s activities
in India (100%) and Nepal (90%). The company
is jointly owned with a partner (33%). In 2022,
the Group invoked its right to begin the call
process, and the partner exercised its put option
under the Shareholders’ Agreement. A put
option valuation certificate was issued on 6
February 2023 after which our partner issued a
formal put notice to sell its 33% shareholding in
CSAPL to the Group, cf. section 5.4. For the
purpose of the consolidated financial
statements, the put option is accounted for as if
it had already been exercised. CSAPL and its
investments in India and Nepal are therefore
included in the consolidated financial
statements, with no profits or equity attributed
to the non-controlling shareholder. Please refer
to section 3.4 for a detailed description of the
dispute with the partner in CSAPL.
Partnerships in the soft drinks industry are
based on long-term contractual agreements
and come to an end when the contract
terminates. The termination of a significant
partnership with a global soft drink brand
owner would have a negative impact on the
Group’s financial performance.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 78
SECTION 5.3
ACQUISITIONS
AND DISPOSALS
ACQUISITION OF ENTITIES
Acquisitions after the reporting date 2022
On 15 December 2022, it was announced that
the Group had entered into an agreement to
acquire Waterloo Brewing Ltd., Canada, for a
cash consideration of approximately CAD 144m
(DKK 742m). The transaction is expected to
close in the first half of 2023, subject to
approval by Waterloo Brewing’s shareholders
and the satisfaction or waiver of other
customary closing conditions.
2021
In January 2021, Carlsberg acquired 100% of
the German Wernesgrüner Brewery for a cash
consideration of DKK 511m. The purchase price
allocation of the fair value of identified assets,
liabilities and contingent liabilities was
completed in 2021, resulting in recognition of
goodwill of DKK 267m.
DECONSOLIDATION OF ENTITIES
The local shareholder owning 10% of the
shares in Gorkha Brewery, Nepal, is a related
party to the Group’s 33% partner in CSAPL. In
addition to the ongoing disputes with our
partner in CSAPL regarding India and Nepal,
there is also a dispute with the local 10%
shareholder in Gorkha Brewery. Contrary to its
legal and contractual rights, the Group’s
influence on the business operations in Nepal
has been restricted since 2021 through actions
that hamper its right of decision-making and
insight into the business. The Group therefore
decided to cease full consolidation of the
Nepalese business with effect from the end of
2021. We contested the actions in Nepal
through the local courts. A Nepalese High Court
judgment was expected in 2022 but has been
postponed and is now expected in H1 2023. A
favourable ruling would not immediately lead
to reconsolidation of the Nepalese business,
which would require demonstration of the
consistent ability to exercise our rights as the
majority shareholder. Until the rights as
majority shareholder are de facto re-
established, the Group continues not to
consolidate the Nepalese business. The inability
to exercise the rights of the majority
shareholder in the Nepalese business has a
negative impact on the value of the business.
This should, in the opinion of the Group, be
reflected in the valuations of the put and call
options, cf. section 5.4.
CASH FLOW
Cash flow to acquire or dispose of
shareholdings in associates and when gaining
control of subsidiaries is included in financial
investments, while the cash flow on acquisition
of an additional shareholding in a subsidiary,
i.e. acquiring non-controlling interests, is
presented in financing activities. In 2022, the
Group made a capital injection of DKK 48m in
an associate.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Assessment of control
The classification of entities where Carlsberg controls
less than 100% of the voting rights is based on an
assessment of the contractual and operational
relationship between the parties. This includes
assessing the conditions in shareholder agreements,
contracts etc. Consideration is also given to the extent
to which each party can govern the financial and
operating policies of the entity, how the operation of
the entity is designed, and which party possesses the
relevant knowledge and competences to operate the
entity.
Elements of cash consideration paid
and received
DKK million 2022 2021
Consideration paid for
acquisition of entities - -214
Consideration received for
disposal of entities - 21
Cash and cash equivalents
acquired/disposed of - -428
Acquisition and disposal of
entities, net - -621
Consideration paid for
acquisition of associates - -48
Consideration paid for increase
of investment in associates -48 -
Acquisition and disposal of
associates, net -48 -48
Cash flow from acquisition of
shareholdings, total -48 -669
Another factor relevant to this assessment is the
extent to which each of the parties can direct the
activities and affect the returns, for example by
means of rights, reserved matters or casting votes.
Purchase price allocation procedures
For acquisitions of entities, the assets, liabilities and
contingent liabilities of the acquiree are recognised
using the acquisition method. The most significant
assets acquired generally comprise goodwill, brands,
property, plant and equipment, receivables and
inventories.
No active market exists for the majority of the
acquired assets and liabilities, in particular in respect
of acquired intangible assets. Accordingly,
management makes estimates of the fair value of
acquired assets, liabilities and contingent liabilities.
Depending on the nature of the item, the determined
fair value of an item may be associated with
uncertainty and possibly adjusted subsequently.
The unallocated purchase price (positive amount) is
recognised in the statement of financial position as
goodwill and allocated to the Group’s cash-generating
units.
Brands
The value of the brands acquired and their expected
useful life are assessed based on the individual
brand’s market position, expected long-term
developments in the relevant markets and
profitability.
The estimated value includes all future cash flows
associated with the brand, including the related value
of customer relations etc.
Management determines the useful life based on the
brand’s relative local, regional and global market
strength, market share, and the current and planned
marketing efforts that are helping to maintain and
increase its value. When the value of a well-
established brand is expected to be maintained for an
indefinite period in the relevant markets, and these
markets are expected to be profitable for a long
period, the useful life of the brand is determined to be
indefinite.
Brands are measured using the relief from royalty
method, under which the expected future cash flows
are based on key assumptions about expected useful
life, royalty rate, growth rate and the theoretical tax
effect. A post-tax discount rate is used that reflects
the risk-free interest rate with the addition of a risk
premium associated with the particular brand. The
model and assumptions applied are consistent with
those used in impairment testing, and are described in
further detail in section 2.2.3.
Customer agreements and portfolios
The value of acquired customer agreements and
customer portfolios is assessed based on the local
market and trading conditions. For most entities, there
is a close relationship between brands and sales.
Consumer demand for beer and other beverages
drives sales, and therefore the value of a brand is
closely linked to consumer demand, while there is no
separate value attached to customers (shops, bars
etc.), as their choice of products is driven by consumer
demand. The relationship between brands and
customers is carefully considered so that brands and
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 79
SECTION 5.3 (CONTINUED)
ACQUISITIONS
AND DISPOSALS
customer agreements are not both recognised on the
basis of the same underlying cash flows.
Property, plant and equipment
The fair value of land and buildings, and standard
production and office equipment is based, as far as
possible, on the fair value of assets of similar type
and condition that may be bought and sold in the
open market.
Property, plant and equipment for which there is no
reliable evidence of the fair value in the market (in
particular breweries, including production equipment)
are valued using the depreciated replacement method.
This method is based on the replacement cost of a
similar asset with similar functionality and capacity.
The calculated replacement cost is then reduced to
reflect functional and physical obsolescence. The
expected synergies and the user-specific intentions for
the expected use of assets are not included in the
determination of the fair value.
Completed purchase price allocations
Management believes that the purchase prices for the
Wernesgrüner Brewery activities, which are accounted
for in the consolidated financial statements, reflect
the best estimate of the total fair value of these
businesses and the proportionate value of identified
assets, liabilities and contingent liabilities of the non-
controlling interests, and accordingly the allocation of
goodwill to controlling interests, but not to non-
controlling interests.
The purchase price allocations of the identified assets,
liabilities and contingent liabilities were completed
within 12 months of the acquisitions. The main
revaluation adjustments related to brands, property,
plant and equipment, and deferred tax liabilities,
which in turn mainly related to brands.
Goodwill
Goodwill was allocated to the Western Europe CGU in
line with the allocation of the Group’s existing German
business. The goodwill is not deductible for tax
purposes.
Wernesgrüner Brewery
Brands
The value of brands was estimated using the Group’s
principles described above. A brand with a fair value
of DKK 113m was recognised and classified as an
intangible asset with an indefinite useful life.
Property, plant and equipment
The fair value and expected useful life of the brewery
equipment and related buildings of the acquired
brewery were determined with assistance from
external engineering experts in the brewery industry
and resulted in a positive revaluation adjustment of
DKK 53m.
Financial impact of acquisition
Revenue and net profit included in the consolidated
financial statements since the acquisition at
1 January 2021 were DKK 156m and DKK 7m
respectively.
ACCOUNTING
POLICIES
Acquisitions
The acquisition date is the date when the Group
effectively obtains control of an acquired subsidiary or
significant influence over an associate.
The cost of a business combination comprises the fair
value of the consideration agreed upon, including the
fair value of any consideration contingent on future
events.
Goodwill and fair value adjustments in connection
with the acquisition of an entity are treated as assets
and liabilities belonging to the foreign entity and
translated into the foreign entity’s functional currency
at the exchange rate at the transaction date.
The acquired entities’ identifiable assets, liabilities and
contingent liabilities are measured at fair value at the
acquisition date.
Identifiable intangible assets are recognised if they
are separable or arise from a contractual right.
Deferred tax on revaluations is recognised.
The identifiable assets, liabilities and contingent
liabilities on initial recognition at the acquisition date
are subsequently adjusted up until 12 months after the
acquisition. The effect of the adjustments is
recognised in the opening balance of equity, and the
comparative figures are restated accordingly if the
amount is material.
Changes in estimates of contingent purchase
considerations are recognised in the income
statement under special items, unless they qualify for
recognition directly in equity.
Disposals and loss of control
Gains or losses on the disposal or liquidation of
subsidiaries and associates are recognised as the
difference between the sales price and the carrying
amount of net assets (including goodwill) at the date
of disposal or liquidation, and net of foreign exchange
adjustments recognised in other comprehensive
income, and costs to sell or liquidation expenses.
The shareholding retained after the loss of control of
subsidiaries is remeasured at fair value and accounted
for as the fair value on initial recognition of a financial
asset or the cost of an investment in an associate.
Gains or losses on the loss of control of subsidiaries
are recognised as the difference between the fair
value of the retained shareholding and the carrying
amount of the derecognised net assets (including
goodwill) at the date of loss of control, and net of
foreign exchange adjustments recognised in other
comprehensive income.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 80
SECTION 5.4
CONTINGENT
CONSIDERATIONS
Contingent considerations relate to options held
by non-controlling interests in subsidiaries to
sell their shares to the Group and to deferred
payments in the acquisition of entities
contingent on market conditions.
At the end of the reporting period, the
contingent considerations related to put options
on the shares in CSAPL, Brewery Alivaria,
Belarus, and in a minor craft brewery in
Western Europe.
In accordance with the Group’s accounting
policy, shares subject to put options are
consolidated as if the shares had already been
acquired. The ownership percentage at which
these subsidiaries are consolidated therefore
differs from the legal ownership interest
retained by the Group. Both the legal and the
consolidated ownership are stated in section 10.
The carrying amount of contingent
considerations is determined in accordance with
the terms and conditions agreed with the
holders of the options.
Contingent considerations
DKK million 2022 2021
Contingent considerations at 1 January 4,254 5,290
Additions - 16
Payments - -247
Transfer to disposal group held for sale -13 -
Fair value adjustments 1,336 -805
Contingent considerations at 31 December 5,577 4,254
Of the contingent considerations, DKK 0.3bn
(2021: DKK 0.4bn) is expected to fall due after
more than 12 months.
PUT OPTION FOR SHARES IN CARLSBERG
SOUTH ASIA PTE LTD (CSAPL)
A liability award was issued by the arbitration
tribunal in May 2022. The arbitration tribunal
awarded Carlsberg the right to call our partner
CSAPL Holdings Pte Ltd’s (CSAPLH) shares in
CSAPL. Carlsberg immediately invoked its right
to begin the call option valuation process, and
CSAPLH subsequently exercised its right under
the Shareholders’ Agreement to begin the put
option valuation process.
The put option price has been determined as
the simple average of two valuations assessed
by two independent external valuers, which are
internationally recognised accounting firms, one
appointed by each shareholder. The put option
valuation was released by the valuers on 6
February 2023, stating a value for CSAPLH’s
shares in CSAPL of USD 744m (DKK 5,188m).
CSAPLH has on 6 February, issued a formal put
notice to sell its 33% shareholding in CSAPL to
the Group at the put option valuation amount.
The put option liability recognised in the
consolidated financial statements has been
adjusted to reflect the put option valuation
amount received from the valuers as the
acquisition of the shares may be completed at
that price. A transaction could potentially be
completed in 2023, subject to the clarification
of any disputes raised by the shareholders and
timelines for any regulatory approvals. CSAPLH
has previously asked for an amount for its 33%
shareholding in CSAPL that the Group
considered to be unreasonably high and not to
reflect the fair value of the shareholding. From
the put option valuation received, it is the
Group’s assessment that key assumptions,
which the Group considers to be unreasonable,
may have been applied in the valuation
performed by CSAPLH’s appointed valuator.
The put option valuation can be disputed by the
shareholders if the valuations are conducted in
breach of the Shareholders’ Agreement,
including, but not limited to, circumstances
where the valuations are tainted by fraud or
manifest error. The Group will work with its
external advisors to evaluate its position and
assess whether CSAPLH has committed
additional breaches of the Shareholders’
Agreement, which would justify further legal
steps against CSAPLH.
The fair value of the put option increased by
DKK 1.4bn in 2022.
The Group previously called in a loan made to
CSAPLH, the loan having become due and
payable in full. In January 2022, the Singapore
court of appeal finally confirmed that the loan
with interest was repayable to Carlsberg in full,
totalling DKK 338m. The loan had not been
repaid as of 31 December 2022.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The fair value of contingent considerations linked to
put options is calculated on the basis of level 3 input
consisting of non-observable data, such as entity-
specific discount rates and industry-specific
expectations of price developments, and generally
accepted valuation methods, including discounted
cash flows and multiples.
Estimates are based on updated information since
initial recognition of the contingent consideration,
including new budgets and sales forecasts, discount
rates etc. The assumptions applied are in line with
those used in the impairment tests as described in
section 2.2 but reflecting the different models and
valuation techniques required. The fair values of other
contingent considerations are measured at the
expected future price of selected shares.
ACCOUNTING
POLICIES
On acquisition of non-controlling interests, i.e.
subsequent to the Group obtaining control, acquired
net assets are not measured at fair value. The
difference between the cost and the non-controlling
interests’ share of the total carrying amount, including
goodwill, is transferred from the non-controlling
interests’ share of equity to equity attributable to the
shareholder in Carlsberg Breweries A/S. The amount
deducted cannot exceed the non-controlling interests’
share of equity immediately before the transaction.
On disposal of shareholdings to non-controlling
interests, the difference between the sales price and
the share of the total carrying amount, including
goodwill acquired by the non-controlling interests, is
transferred from equity attributable to the
shareholder in Carlsberg Breweries A/S to the non-
controlling interests’ share of equity.
Fair value adjustments of put options granted to non-
controlling interests are recognised directly in the
statement of changes in equity.
Other contingent considerations (earn-outs) that are
not linked to a future transfer of additional
shareholdings are measured in accordance with the
terms of the contract with the seller. The revaluation
of such contingent considerations is recognised in
special items.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 81
SECTION 5.5
ASSOCIATES
Investments in associates include the
businesses in Portugal (60%), Myanmar (61%)
and four associates in China (50%). The total
investment in these associates amounted to
DKK 3,579m at 31 December 2022 (2021: DKK
3,404m).
The Group’s ownership of Super Bock, Portugal,
is 60%. Nevertheless, Super Bock remains an
associate of the Group due to the ownership
structure. Please refer to section 10 for further
details.
In 2021, disputes with the local non-controlling
shareholder prevented the Group from
exercising its rights as a controlling shareholder
in Gorkha Brewery, Nepal. The Group decided
to cease full consolidation of the company
from 31 December 2021 and it was therefore
reclassified as an associate and recognised at
fair value, DKK 1,188m, cf. section 5.3.
Key figures for associates
DKK million
Carlsberg Breweries Group share
2022
Profit
after tax
Other
comprehensive
income
Total
comprehensive
income
Investments in
associates
Total 675 - 675 4,796
2021
Total 259 10 269 4,671
Despite the 61% legal ownership share in
Myanmar Carlsberg, the entity is classified as
an associate due to the structure of the
agreement with the partner and the
environment in the country.
In 2021, disputes with the partner regarding the
management of Tibet Lhasa Brewery meant
that the Group lost its significant influence in
the company. The investment was therefore
reclassified from associates to other financial
investments. The disputes resulted in significant
disruptions to the operation of the company,
which negatively impacted the financial
performance. The investment was therefore
written down to its recoverable amount, cf.
section 2.2.
For associates in which the Group holds an
ownership interest of less than 20% and
participates in the management of the
associate the Group is considered to be
exercising significant influence. None of the
associates are material to the Group.
Fair value of investment in listed associates
DKK million 2022 2021
The Lion Brewery Ceylon,
Sri Lanka 214 355
ACCOUNTING
POLICIES
Investments in associates are recognised according to
the equity method, which entails measurement at cost
and adjustment for the Group’s share of the profit or
loss and other comprehensive income of the associate
after the date of acquisition. The share of the result
must be calculated in accordance with the Group’s
accounting policies. The proportionate share of
unrealised intra-group profits and losses is eliminated.
Investments in associates with negative net asset
values are measured at DKK 0.
If the Group has a legal or constructive obligation to
cover a deficit in the associate, the deficit is
recognised under provisions. Any amounts owed by
associates are written down to the extent that the
amount owed is deemed irrecoverable.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 82
SECTION 6
TAX
17.5%
TAX RATE
Tax rate is down from 20.4% in 2021,
mainly as a result of adjustments to
tax for prior years.
1.6bn
Deferred tax liability transferred to
disposal group held for sale (DKK).
SECTION 6.1
INCOME TAX
The nominal weighted tax rate for the Group is
calculated as domestic tax rates applicable to
profits in the entities as a proportion of each
entity’s share of the Group’s profit before tax.
The Group’s total tax cost was DKK -385m
(2021: DKK -79m) lower than the Group’s
nominal weighted tax expense. Compared with
the nominal weighted tax expense, the total tax
expense was negatively impacted by the effect
on deferred tax assets of changes in tax rates
and non-deductible expenses (particularly
marketing expenses and intercompany charges)
and positively impacted by prior-year
adjustments and tax incentives, resulting in an
effective tax rate of 17.5% (2021: 20.4%).
The negative impact from special items
comprised primarily non-deductible
impairments. Excluding special items and tax
thereon, the effective tax rate would be 17.6%
(2021: 22.2%).
It is not possible to deduct all interest and fair
value adjustments due to various interest
deductibility restriction rules. Therefore, tax on
such adjustments fluctuates from year to year.
ACCOUNTING
POLICIES
Income tax comprises current tax and changes in
deferred tax for the year, including changes as a
result of a change in the tax rate. The tax expense
relating to the profit/loss for the year is recognised in
the income statement, while the tax expense relating
to items recognised in other comprehensive income is
recognised in the statement of comprehensive income.
Reconciliation of the effective tax rate for the year
2022 2021
% DKK million % DKK million
Nominal weighted tax rate 21.2 2,229 21.2 2,196
Change in tax rate 2.0 206 -0.1 -14
Adjustments to tax for prior years -2.7 -288 -0.7 -70
Non-capitalised tax assets and liabilities -1.7 -182 -0.5 -57
Non-taxable income -0.5 -56 -0.4 -42
Non-deductible expenses 2.0 215 2.9 297
Tax incentives etc. -2.2 -229 - 1
Special items -0.1 -5 -2.3 -239
Withholding taxes 0.8 83 1.3 131
Other, including tax in associates -1.2 -129 -0.8 -86
Effective tax rate for the year 17.5 1,844 20.4 2,117
Effective tax rate for the year, excluding the
effect of non-taxable and non-deductible
transactions in special items 17.6 - 22.2
If the Group obtains a tax deduction on computation
of the taxable income in Denmark or in foreign
jurisdictions as a result of share-based payment
programmes, this tax effect of the programmes is
recognised in tax on profit/loss for the year.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 83
SECTION 6.1 (CONTINUED)
INCOME TAX
Income tax expenses
2022 2021
DKK million
Income
statement
Other
comprehensive
income
Total
comprehensive
income
Income
statement
Other
comprehensive
income
Total
comprehensive
income
Tax for the year can be specified as follows
Current tax 2,163 -25 2,138 2,399 -83 2,316
Change in deferred tax and non-current tax payables during the
year -237 - -237 -198 -20 -218
Change in deferred tax as a result of change in tax rate 206 - 206 -14 - -14
Adjustments to tax for prior years -288 - -288 -70 - -70
Total 1,844 -25 1,819 2,117 -103 2,014
Tax recognised in other comprehensive income
2022 2021
DKK million
Recognised
item before tax
Tax income /
expense After tax
Recognised
item before tax
Tax income /
expense After tax
Foreign exchange adjustments 3,926 - 3,926 -3,307 - -3,307
Hedging instruments 759 -100 659 323 -83 240
Retirement benefit obligation -594 75 -519 -577 -20 -597
Share of other comprehensive income in associates - - - -10 - -10
Total 4,091 -25 4,066 -3,571 -103 -3,674
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 84
SECTION 6.2
TAX ASSETS AND
LIABILITIES
Of the total deferred tax assets recognised,
DKK 269m (2021: DKK 26m) relates to tax
losses carried forward, the utilisation of which
depends on future positive taxable income
exceeding the realised deferred tax liabilities.It
is management’s opinion that these tax losses
carried forward can be utilised within a
foreseeable future.
Tax assets not recognised of DKK 1,014m (2021:
DKK 1,334m) primarily relates to tax losses that
are not expected to be utilised in a foreseeable
future. Of these, tax losses that will not expire
amounted to DKK 823m (2021: DKK 1,042m).
Tax losses of DKK 326m (2021: DKK 331m) can
only be carried forward for a limited number of
years.
Changes to non-current tax assets and liabilities
DKK million 2022 2021
Tax assets and liabilities at 1 January, net 3,758 3,944
Tax assets and liabilities, net reclassified to disposal group held for sale -1,645 -
Adjustments to prior years 309 -22
Acquisition of entities - 172
Recognised in other comprehensive income - -20
Recognised in the income statement, net continuing operations -237 -198
Recognised in the income statement, net discontinuing operations - 42
Change in tax rate 206 -14
Foreign exchange adjustments 73 -146
Tax assets and liabilities at 31 December, net 2,464 3,758
Recognised as follows
Tax liabilities 4,168 5,663
Tax assets -1,704 -1,905
Tax assets and liabilities at 31 December, net 2,464 3,758
Deferred tax of DKK 23m (2021: DKK 39m) has
been recognised in respect of future dividend
distributions.
Distribution of reserves for other subsidiaries
will not trigger a significant tax liability based
on current tax legislation.
Changes in deferred tax and non-current tax
payables for the year amounted to DKK 237m
(2021: DKK 198m), in addition to Russian tax
liabilities being reclassified to disposal group
held for sale.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The Group recognises deferred tax assets, including
the expected tax value of tax loss carried forward, if
management assesses it can be offset against positive
taxable income in the foreseeable future. This
assessment is made annually and based on budgets
and business plans for the coming years, including
planned commercial initiatives under our control.
Carlsberg operates in a large number of tax
jurisdictions where tax legislation is highly complex
and subject to interpretation. Management makes
assessments on uncertain tax positions to ensure
recognition and measurement of tax assets and
liabilities.
ACCOUNTING
POLICIES
Current tax payable and receivable are recognised in
the statement of financial position as tax computed
on the taxable income for the year, adjusted for tax
on the taxable income of prior years and for tax paid
on account respectively.
Deferred tax on all temporary differences between
the carrying amount and the tax base of assets and
liabilities is measured using the balance sheet liability
method. However, deferred tax is not recognised on
temporary differences relating to goodwill that is not
deductible for tax purposes or on office premises and
other items where temporary differences, apart from
business combinations, arise at the acquisition date
without affecting either profit/loss for the year or
taxable income.
Specification of deferred tax
Deferred tax assets Deferred tax liabilities
DKK million 2022 2021 2022 2021
Intangible assets 253 519 1,296 2,790
Property, plant and equipment 138 218 1,021 1,628
Current assets 1,000 453 46 19
Provisions and retirement benefit obligations 501 2,382 2,509 2,936
Fair value adjustments 39 34 17 17
Tax losses 269 26 - -
Other 250 - 25 -
Total before offset 2,450 3,632 4,914 7,390
Offset -746 -1,727 -746 -1,727
Deferred tax assets and liabilities at 31 December 1,704 1,905 4,168 5,663
Expected to be used as follows
Within one year 890 1,097 515 814
After more than one year 814 808 3,653 4,849
Total 1,704 1,905 4,168 5,663
Where alternative tax rules can be applied to
determine the tax base, deferred tax is measured
based on the planned use of the asset or settlement
of the liability. Deferred tax is recognised on expected
dividend payments from subsidiaries and associates in
countries levying withholding tax on distributions.
Deferred tax assets related to tax loss carried forward
are recognised under other non-current assets at the
expected value of their utilisation, or as a set-off
against deferred tax liabilities in the same legal tax
entity and jurisdiction.
Deferred tax assets and tax liabilities are offset if the
entity has a legally enforceable right to offset current
tax liabilities and tax assets or intends either to settle
current tax liabilities and tax assets or to realise the
assets and settle the liabilities simultaneously.
Deferred tax assets are recognised only to the extent
that it is probable that the assets will be utilised.
Deferred tax is measured according to the tax rules at
the reporting date and at the tax rates applicable
when the deferred tax is expected to materialise as
current tax. The change in deferred tax as a result of
changes in tax rates is recognised in the income
statement. Changes to deferred tax on items
recognised in other comprehensive income are,
however, recognised in other comprehensive income.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 85
SECTION 7
STAFF COSTS AND
REMUNERATION
Russian
operations
held for
sale
More than 8,000 employees will leave the
Group when the divestment completes as
expected in 2023.
Pensions
Defined benefit obligations were affected by
higher discount rates across markets.
EMPLOYEES BY SEGMENT (%)
2022 (2021)
Western Europe 26% (26%)
Asia 36% (36%)
Central & Eastern Europe 15% (15%)
Russian operations held for sale 21% (21%)
Other 2% (2%)
EMPLOYEES BY FUNCTION (%)
2022 (2021)
Production 28% (28%)
Sales & Distribution 44% (43%)
Administration 7% (8%)
Russian operations held for sale 21% (21%)
SECTION 7.1
STAFF COSTS
Staff costs increased in 2022, impacted by
currencies and merit increases.
Staff costs
DKK million 2022 2021
Salaries and other remuneration 9,367 8,448
Severance payments 57 81
Social security costs 1,452 1,286
Retirement benefit costs – defined contribution plans 385 329
Retirement benefit costs – defined benefit plans 181 188
Share-based payments 107 68
Other employee benefits 113 92
Total 11,662 10,492
Of which:
Continuing operations 10,328 9,488
Discontinued operations 1,334 1,004
Total 11,662 10,492
Staff costs are included in the following line items in the income statement
Cost of sales 2,916 2,651
Sales and distribution expenses 5,150 4,859
Administrative expenses 2,130 1,859
Other operating activities, net 32 59
Financial expenses (pensions) 38 39
Special items (restructurings) 62 21
Net result from Russian operations held for sale 1,334 1,004
Total 11,662 10,492
Average number of employees, continuing operations 30,745 30,961
Average number of employees, discontinued operations 8,072 8,317
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 86
SECTION 7.2
REMUNERATION
The remuneration of the Supervisory Board, the
executive directors and key management
personnel is described in detail in the
Remuneration Report for Carlsberg Group.
The remuneration of key management
personnel increased in 2022, primarily because
of the impact of better performance on the
KPIs measured in long-term incentive
programmes and changes to the composition
of the Executive Committee.
The Supervisory Board of Carlsberg Breweries
A/S is not remunerated.
All elements except for share-based payments
are classified as short-term employee benefits.
Share-based payments are classified as long-
term employee benefits.
Remuneration
Executive directors¹
Key management
personnel
DKK million 2022 2021² 2022 2021
Fixed salary 21.0 20.7 28.8 29.1
Cash bonus 19.4 20.7 28.7 30.1
Other benefits 1.1 1.1 7.9 6.0
Severance payments - - 7.5 3.4
Remuneration settled in cash 41.5 42.5 72.9 68.6
Non-monetary benefits 0.4 0.4 0.2 3.1
Share-based payments 28.0 31.1 9.5 3.5
Remuneration, non-monetary and share-based 28.4 31.5 9.7 6.6
Total cash and non-cash 69.9 74.0 82.6 75.2
¹ Executive directors consist of Cees 't Hart and Heine Dalsgaard. Heine Dalsgaard resigned as CFO on 31 December
2022. ² In 2021 the remuneration of Heine Dalsgaard was recognised in Carlsberg A/S and was therefore not included in
the staff cost disclosed in section 7.1.
ACCOUNTING
POLICIES
Staff costs are recognised in the financial year in
which the employee renders the related service.
The cost of share-based payments, which is expensed
over the vesting period of the programme according
to the service conditions, is recognised in staff costs
and provisions or equity, depending on how the
programme is settled with the employees.
Key management personnel comprise the Executive
Committee, excluding the executive directors. Other
management personnel included in the share-based
payment schemes comprise vice presidents and other
key employees in central functions as well as the
management of significant subsidiaries.
SECTION 7.3
SHARE-BASED
PAYMENTS
The Group has set up share-based incentive
programmes to attract, retain and motivate the
Group’s executive directors and other levels of
management personnel, and to align their
interests with those of the shareholders. There
is no share-based remuneration of the
Supervisory Board.
The Group has two types of share-based
payment: share options and performance
shares. Share options entitle the holder to
purchase class B shares in Carlsberg A/S at a
predetermined price after completing three
years of service. Share options are exercisable
for five years.
Entitlement to performance shares also
requires fulfilment of service in the vesting
period (3 years) but does not have any exercise
price. Instead, the shares are transferred to the
recipients based on achievement of the KPIs
attached to the shares.
PERFORMANCE SHARES
The number of performance shares granted is
the maximum number of performance shares
that can vest. The number of shares
outstanding at the end of the period is the
number expected to vest, based on the extent
to which the vesting conditions are expected to
be met. The number of shares expected to vest
is revised on a regular basis.
In 2022, 159 employees (2021: 177 employees)
across the Group were awarded performance
shares.
Vesting is subject to achievement of four KPIs:
total shareholder return, adjusted EPS growth,
organic revenue growth and growth in ROIC.
The average share price at vesting was DKK
1,084 (2021: DKK 989). The average contractual
life at the end of 2022 was 1.2 years (2021: 1.2
years).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 87
SECTION 7.3 (CONTINUED)
SHARE-BASED
PAYMENTS
Share options
No share options have been granted since 2016.
All outstanding options at 1 January were
exercised during the year. The average share
price at exercise was DKK 1,063.
Performance shares
Executive
directors
Key
management
personnel
Other
management
personnel Total
31 December 2020 142,612 54,551 277,296 474,459
Granted 50,805 15,800 125,356 191,961
Forfeited/adjusted/transferred -13,027 -13,202 -84,177 -110,406
Exercised/settled -44,212 -17,022 -84,567 -145,801
31 December 2021 136,178 40,127 233,908 410,213
Granted 33,753 20,071 108,813 162,637
Forfeited/adjusted/transferred -7,263 -1,028 -16,580 -24,871
Exercised/settled -45,999 -11,743 -83,298 -141,040
31 December 2022 116,669 47,427 242,843 406,939
Performance share disclosures
DKK million 2022 2021
Fair value at grant date 87 107
Cost of shares granted in the year 29 31
Total cost of performance shares 101 68
Cost not yet recognised 154 139
Fair value at 31 December 297 422
Share option disclosures
DKK million 2022 2021
Fair value at 31 December - 70
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The volatility of performance shares is based on the
historical volatility of the price of Carlsberg A/S’ class
B shares over the previous three years. For share
options, the volatility is based on similar data over the
previous eight years.
The share price and the exercise price of share options
are calculated as the average price of Carlsberg A/S’
class B shares on Nasdaq Copenhagen during the first
five trading days after publication of Carlsberg A/S’
financial statements.
The risk-free interest rate is based on Danish
government bonds of the relevant maturity. The
expected life is based on exercise at the end of the
exercise period.
Key information
Performance shares
2022 2021
Assumptions
Expected volatility 24.0% 23.3%/23.7%
Risk-free interest rate 0.0% 0.0%
Expected dividend yield 0.0/2.4% 0.0/2.2%
Expected life, years 3.0 3.0
Fair value at measurement date DKK 404-987 DKK 512-961
Share options
Exercise price Number
Fixed,
weighted
average
Executive
directors
Other
management
personnel
Total
31 December 2020 518 114,984 - 114,984
31 December 2021 518 114,984 - 114,984
Exercised 518 -114,984 - -114,984
31 December 2022 - - - -
ACCOUNTING
POLICIES
The fair value of granted performance shares is
estimated using a stochastic (quasi-Monte Carlo)
valuation model of market conditions and a Black-
Scholes call option-pricing model of other conditions,
taking into account the terms and conditions upon
which the performance shares were granted.
On initial recognition of performance shares, an
estimate is made of the number of awards expected
to vest and subsequently revised for any changes.
Accordingly, recognition is based on the number of
awards that ultimately vest.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 88
SECTION 7.4
RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS
A number of employees are covered by
retirement benefit plans. The nature of the
plans varies depending on labour market
conditions in the individual countries. Benefits
are generally based on wages and salaries and
length of employment.
Retirement benefit obligations cover both
present and future retirees’ entitlement to
retirement benefits.
DEFINED CONTRIBUTION PLANS
A defined contribution plan is a post-
employment benefit plan under which the
Group pays contributions to a separate
independent company. The Group’s legal or
constructive obligation is limited to the
contributions.
In 2022, 68% (2021: 64%) of the Group’s
retirement benefit costs related to defined
contribution plans. The expense recognised in
relation to these contributions was DKK 385m
(2021: DKK 329m).
DEFINED BENEFIT PLANS
A defined benefit plan guarantees employees a
certain level of pension benefits for life. The
pension is based on seniority and salary at the
time of retirement. The Group assumes the risk
associated with future developments in interest
rates, inflation, mortality and disability etc.
The most significant plans are in the UK and
Switzerland, representing 42% and 45%
respectively (2021: 51% and 38%), while the
eurozone countries represented 5% (2021: 5%)
of the gross obligation at 31 December 2022.
The majority of the obligations are funded, with
assets placed in independent pension funds,
mainly in Switzerland and the UK. Most of the
plan assets are based on a quoted market price.
In some countries, primarily Germany, Sweden
and China, the obligation is unfunded. The
retirement benefit obligations for these
unfunded plans amounted to DKK 1,148m (2021:
DKK 1,538m) or 12% (2021: 11%) of the gross
obligation.
In 2022, the Group’s obligation, net, on defined
benefit plans decreased by DKK 794m
compared with 2021. The change was primarily
driven by changes in the actuarial assumptions
in the UK, Sweden and Germany, partly offset
by the effect of the asset ceiling in Switzerland,
DKK 569m.
Obligation, net
2022 2021
DKK million
Present
value of
obligation
Fair value
of plan
assets
Obligation,
net
Present
value of
obligation
Fair value
of plan
assets
Obligation,
net
Obligation at 1 January 13,825 11,506 2,319 13,557 10,654 2,903
Recognised in the income
statement¹
Current service cost 192 - 192 183 - 183
Past service cost -11 - -11 5 - 5
Net interest on the net
defined benefit obligation
(asset)
158 120 38 138 99 39
Total 339 120 219 326 99 227
Remeasurements
Gain/loss from changes in
demographic assumptions -97 - -97 -28 - -28
Gain/loss from changes in
financial assumptions -3,823 -2,757 -1,066 -114 564 -678
Asset ceiling - -569 569 - -129 129
Total -3,920 -3,326 -594 -142 435 -577
Other changes
Contributions to plans - 242 -242 - 253 -253
Benefits paid -758 -681 -77 -681 -596 -85
Acquisition and disposal of
entities, net - - - -5 - -5
Transferred to disposal group
held-for-sale -6 - -6 - - -
Foreign exchange
adjustments etc. 15 109 -94 770 661 109
Total -749 -330 -419 84 318 -234
Obligation at 31 December 9,495 7,970 1,525 13,825 11,506 2,319
¹ The total return on plan assets for the year amounted to DKK -2,637m (2021: DKK 663m).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 89
SECTION 7.4 (CONTINUED)
RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS
The Group has a triennial valuation process to
agree on any future funding arrangements. The
most recent one was completed in 2020. The
Group expects to contribute DKK 109m (2022:
DKK 80m) to the plan assets in 2023, which is
in line with the agreed funding arrangement,
under which the Group will contribute DKK
402m up to 2026. Plan assets do not include
shares in the Group or properties used by Group
companies.
The actuarial gain and foreign exchange
adjustment recognised in other comprehensive
income amounted to DKK 551m (2021: DKK
420m), comprising a foreign exchange
adjustment of DKK -43m and a net actuarial
gain of DKK 594m.
The accumulated actuarial loss and foreign
exchange adjustment recognised at 31
December 2022 was DKK 2,249 (2021:
DKK2,800m), with actuarial net losses of
DKK2,493 (2021: DKK 3,087m).
Assumptions applied
In 2022, the discount rate used for the defined
benefit plans in Western Europe was
determined by reference to market yields on
corporate bonds. In the Asian countries, where
no deep market in high-quality corporate bonds
exists, the discount rate was determined by
reference to market yields on government
bonds.
The mortality tables used in Carlsberg UK are
S3PMA/S3PFA_Middle tables for post-
retirement, while the Swiss entities use BVG
2020 for valuation of their retirement benefit
obligations.
Sensitivity analysis
The sensitivity analysis is based on a change in
one of the assumptions, while all other
assumptions remain constant. This is highly
unlikely, however, as a change in one
assumption would probably affect other
assumptions as well. When calculating the
obligation on the basis of a changed
assumption, the same method has been applied
as when calculating the defined benefit
obligation.
Expected maturity and duration
Defined benefit obligations are primarily
expected to mature after five years. The
expected duration of the obligations at year-
end 2022 was 12 years. The duration is
calculated using a weighted average of the
duration divided by the obligation.
Breakdown of plan assets
2022 2021
DKK
million %
DKK
million %
Shares 970 12 1,345 12
Bonds and other securities 4,685 59 7,485 65
Real estate 2,122 27 2,088 18
Cash and cash equivalents 193 2 588 5
Total 7,970 100 11,506 100
Assumptions applied
2022 CHF UK EUR Other
Weighted
average
Discount rate 2.3% 5.0% 1.5 - 3.8% 3.9% 3.7%
Growth in wages and salaries 1.2% 3.6% 0.2 - 4.5% 2.6% 2.5%
2021
Discount rate 0.3% 1.8% 0.3 - 0.9% 2.2% 1.2%
Growth in wages and salaries 1.0% 2.5% 0.2 - 2.8% 2.6% 1.9%
Sensitivity analysis
2022 2021
DKK million +0.5% -0.5 % +0.5% -0.5 %
Discount rate -541 597 -1,097 1,251
Growth in wages and salaries 23 -19 81 -73
+1 year -1 year +1 year -1 year
Mortality 265 -282 522 -520
Maturity of retirement benefit obligations
DKK million < 1 year 1-5 years > 5 years Total
2022 581 2,554 6,360 9,495
2021 727 2,908 10,190 13,825
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 90
SECTION 7.4 (CONTINUED)
RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The value of the Group’s defined benefit plans is
based on valuations from external actuaries. The
valuation is based on a number of actuarial
assumptions, including discount rates, expected
growth in wages and salaries, mortality and
retirement benefits.
The present value of the net obligation is calculated
by using the projected unit credit method and
discounting the defined benefit plan by a discount
rate for each country. The discount rate is determined
by reference to market yields on high-quality
corporate bonds. Where high-quality corporate bonds
are not available, the market yields on government
bonds are used instead.
Mortality assumptions are based on the Group
entity’s best estimate of the mortality of plan
members during and after employment and include
expected changes in mortality. Due to the broad
range of entities comprising the retirement benefit
obligation, several different mortality tables are used
to calculate the future retirement benefit obligation.
ACCOUNTING
POLICIES
Contributions paid to a defined contribution plan are
recognised in the income statement in the period
during which services are rendered by employees. Any
contributions outstanding are recognised in the
statement of financial position as other liabilities.
The Group’s net obligation recognised in the
statement of financial position in respect of defined
benefit plans is the present value of the defined
benefit obligation at the reporting date less the fair
value of plan assets calculated by a qualified actuary.
The present value is determined separately for each
plan by discounting the estimated future benefits that
employees have earned in return for their service in
the current and prior years.
The costs of a defined benefit plan are recognised in
the income statement and include service costs, net
interest based on actuarial estimates and financial
expectations.
Service costs comprise current service cost and past
service cost. Current service cost is the increase in the
present value of the defined benefit obligation
resulting from employee services in the current period.
Past service cost is the change in the present value of
the obligation regarding employee services in prior
years that arises from a plan amendment or a
curtailment. Past service costs are recognised
immediately, provided employees have already
earned the changed benefits.
Realised gains and losses on curtailment or
settlement are recognised under staff costs.
Interest on retirement benefit obligations and the
interest on return on plan assets are recognised as
financial income or financial expenses.
Differences between the development in retirement
benefit assets and liabilities and realised amounts at
year-end are designated as actuarial gains or losses
and recognised in other comprehensive income. As
they will never be reclassified to the income
statement, they are included in retained earnings.
If a retirement benefit plan constitutes a net asset, the
asset is recognised only if it offsets future refunds
from the plan or will lead to reduced future payments
to the plan.
Realised gains and losses on the adjustment of
retirement benefit obligations as a result of
termination of a significant number of positions in
connection with restructurings are recognised under
special items.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 91
SECTION 8
OTHER DISCLOSURE
REQUIREMENTS
SECTION 8.1
FEES TO AUDITORS
Fees to auditors appointed by the
Annual General Meeting
DKK million 2022 2021
PwC, including network firms
Statutory audit 25 23
Assurance engagements 1 1
Tax advisory 8 2
Other services 1 2
Total 35 28
Fees for services other than the statutory audit
of the financial statements provided by
PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab, Denmark, amounted
to DKK 1m (2021: DKK 1m). This includes other
assurance opinions and agreed-upon
procedures as well as accounting advice.
SECTION 8.2
RELATED PARTIES
RELATED PARTIES EXERCISING CONTROL
Carlsberg A/S, J.C. Jacobsens Gade 1, 1799
Copenhagen V, Denmark, holds all the shares in
Carlsberg Breweries A/S.
The following transactions took place with the
parent and ultimate parent company (the
Carlsberg Foundation) in 2022:
Carlsberg Breweries A/S paid a dividend of DKK
6,986 per share amounting to DKK 3,486m,
received interest of DKK 9m, net and has a loan
facility of DKK 391m at 31 December 2022 to
Carlsberg A/S.
In 2022, the Carlsberg Foundation contributed
an additional amount of DKK 30m to support
the rebuilding of the Carlsberg Visitor Centre
initiated in 2021. The purpose of the rebuild is to
better showcase Carlsberg’s rich history and
value creation.
OTHER ACTIVITIES
Visit Carlsberg A/S, 100% owned by Carlsberg
Breweries A/S, hosted and administered events
at the Carlsberg Academy, which is owned by
the Carlsberg Foundation, at a value of DKK
1m.
The Group’s delivery of beer and soft drinks to
the Carlsberg Foundation is charged at ordinary
listing price minus a discount. In 2022, the
deliveries amounted to DKK 0.3m (total sales
of goods) (2021: DKK 0.2m).
Carlsberg Breweries A/S leases storage facilities
in the researcher apartments. These lease
agreements are with subsidiaries of the
Foundation. The two annual lease payments
amount to DKK 0.2m and the leases are on
market terms.
It is estimated that the benefit for the Carlsberg
Group corresponds to the value of the other
activities provided to the Carlsberg Foundation,
which in turn corresponds to what each party
would have had to pay to have the same
deliverables provided by external parties.
OTHER RELATED PARTIES
Related parties also comprise Carlsberg
Breweries A/S’ Supervisory Board and
Executive Board, their close family members
and companies in which these persons have
significant influence. During the year, there
were no transactions between these parties and
the Group, except for remuneration as disclosed
in section 7 of the consolidated financial
statements.
The income statement and the statement of
financial position include the following
transactions
DKK million 2022 2021
Carlsberg A/S
Other operating activities, net -44 -50
Interest income 10 1
Dividends paid -3,486 -3,260
Capital reduction -4,500 -4,000
Recharge of share-based
payments -92 -136
Intangible assets 225 -
Loans - 310
Receivables 14 13
Borrowings 391 -
Trade payables 31 -52
Associates
Revenue 19 76
Cost of sales -712 -817
Sales expenses -9 -11
Interest income 27 14
Loans 277 242
Receivables 390 224
Trade payables and other
liabilities -49 -36
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 92
SECTION 8.3
EVENTS AFTER THE
REPORTING PERIOD
On 6 February 2023, the valuers appointed to
perform the put option valuation for the 33%
shareholding in CSAPL released a put option
valuation certificate stating a value of USD
744m (DKK 5,188m), cf. section 5.4. CSAPLH
has on 6 February, issued a formal put notice
to sell its 33% shareholding in CSAPL to the
Group at the put option valuation amount.
Apart from the events recognised or disclosed
in the consolidated financial statements, no
events have occurred after the reporting period
of importance to the consolidated financial
statements.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 93
SECTION 9
BASIS FOR
PREPARATION
SECTION 9.1
SIGNIFICANT
ACCOUNTING
ESTIMATES AND
JUDGEMENTS
The consolidated financial statements cover the
period 1 January to 31 December. In preparing
the consolidated financial statements,
management makes various accounting
estimates and judgements that form the basis
of presentation, recognition and measurement
of the Group’s assets, liabilities, income and
expenses.
Other estimates and judgements made are
based on historical experience and other factors
that management assesses to be reliable, but
that, by nature, are associated with uncertainty
and unpredictability and may therefore prove
incomplete or incorrect.
Areas involving significant estimates and judgements:
Receivables Section 1
Impairment testing, useful life and
residual value
Section 2
Restructurings, provisions and
contingencies
Section 3
Discontinued operations and
disposal group held for sale
Section 5
Acquisitions and disposals, including
contingent considerations
Section 5
Tax assets and liabilities Section 6
Defined benefit obligations Section 7
Other
In 2022, the Group adjusted an error in the
share of equity attributable to non-controlling
interests. The error related to elimination of
investments in subsidiaries. The adjustment
reduced non-controlling interests’ share of
equity by DKK 1.4bn with a corresponding
increase in the share of equity attributed to the
shareholders in Carlsberg Breweries A/S. The
adjustment was included in the opening
balance of equity for 2021, and the comparative
figures have been restated accordingly.
SECTION 9.2
GENERAL
ACCOUNTING
POLICIES
The Group’s consolidated financial statements
for 2022 have been prepared in accordance
with International Financial Reporting
Standards (IFRS) as issued by the International
Accounting Standards Board and in accordance
with IFRS as adopted by the EU and further
requirements in the Danish Financial
Statements Act.
The consolidated financial statements are
presented in Danish kroner (DKK), which is the
Parent Company’s functional currency, and all
values are rounded to the nearest DKK million,
except when otherwise stated.
The accounting policies set out below have
been used consistently in respect of the
financial year and the comparative figures.
DEFINING MATERIALITY
Significant items are presented individually in
the financial statements as required by IAS 1.
Other items that are considered relevant to
stakeholders and necessary for an
understanding of the Group’s business model,
including research, real estate and geographical
diversity, are also presented individually in the
financial statements.
The consolidated financial statements are
prepared as a consolidation of the financial
statements of the Parent Company, Carlsberg
Breweries A/S, and its subsidiaries according to
the Group’s accounting policies.
Subsidiaries are all the entities over which the
Group has control. The Group controls an entity
when the Group is exposed to, or has rights to,
variable returns from its involvement with the
entity and has the ability to affect those returns
through its power to direct the activities of the
entity.
Entities over which the Group exercises
significant influence, but which it does not
control, are considered associates. Significant
influence is generally obtained by direct or
indirect ownership or control of less than 50%
of the voting rights or participation in the
management of the company. The assessment
of whether Carlsberg Breweries A/S exercises
control or significant influence includes
potential voting rights exercisable at the
reporting date. Entities that by agreement are
managed jointly with one or more other parties
are considered joint ventures.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 94
SECTION 9.2 (CONTINUED)
GENERAL
ACCOUNTING
POLICIES
On consolidation, intra-group income and
expenses, shareholdings, balances and
dividends, and realised and unrealised gains are
eliminated. Unrealised gains on transactions
with associates are eliminated in proportion to
the Group’s ownership share of the entity.
Unrealised losses are eliminated in the same
way as unrealised gains to the extent that
impairment has not taken place.
The accounting items of subsidiaries are
included in full in the consolidated financial
statements. Non-controlling interests’ share of
subsidiaries’ profit/loss for the year and of
equity is included in the Group’s profit/loss and
equity but is disclosed separately. Entities
acquired or established during the year are
recognised in the consolidated financial
statements from the date of acquisition or
formation. Entities disposed of or discontinued
are recognised in the consolidated income
statement until the date of disposal or
discontinuation. The comparative figures are
not restated.
FOREIGN CURRENCY TRANSLATION
A functional currency is determined for each of
the reporting entities in the Group. The
functional currency is the primary currency used
for the reporting entity’s operations.
Transactions denominated in currencies other
than the functional currency are considered
transactions denominated in foreign currencies.
On initial recognition, transactions denominated
in foreign currencies are translated to the
functional currency at the exchange rates at the
transaction date. Foreign exchange differences
arising between the exchange rates at the
transaction date and at the date of payment
are recognised as financial income or expenses.
Receivables, payables and other monetary
items denominated in foreign currencies are
translated at the exchange rates at the
reporting date. The difference between the
exchange rates at the reporting date and at the
date at which the receivable or payable arose
or the exchange rate in the latest consolidated
financial statements is recognised as financial
income or expenses.
On recognition of entities with a functional
currency other than the presentation currency,
the income statement and statement of cash
flows are translated at the exchange rates at
the transaction date, and the statement of
financial position items are translated at the
exchange rates at the reporting date. Foreign
exchange differences arising on translation of
the opening balance of equity, and of the
income statement on the reporting date, are
recognised in other comprehensive income and
attributed to a separate translation reserve in
equity. Foreign exchange differences arising on
the translation of the proportionate share of
associates are likewise recognised in other
comprehensive income.
Foreign exchange adjustment of balances with
entities that are considered part of the
investment in the entity is recognised in other
comprehensive income. Correspondingly,
foreign exchange gains and losses on the part
of loans and derivative financial instruments
that are designated as hedges of investments in
foreign entities, and that effectively hedge
against corresponding foreign exchange gains
and losses on the investment in the entity, are
also recognised in other comprehensive income
and attributed to a separate translation reserve
in equity.
When the gain or loss from a complete or
partial disposal of an entity is recognised, the
share of the cumulative exchange differences
recognised in other comprehensive income is
recognised in the income statement. The same
approach is adopted on repayment of balances
that constitute part of the net investment in the
entity.
INCOME STATEMENT
The presentation of the Group’s income
statement is based on the internal reporting
structure, as IFRS does not provide a specific
disclosure requirement.
Special items are not directly attributable to
ordinary operating activities and are shown
separately in order to facilitate a better
understanding of the Group’s financial
performance.
CASH FLOW
Cash flow is calculated using the indirect
method and is based on operating profit before
special items adjusted for depreciation,
amortisation and impairment losses. Cash flow
cannot be derived directly from the statement
of financial position and income statement.
FINANCIAL RATIOS AND NON-IFRS
FINANCIAL MEASURES
The Group uses certain additional financial
measures to provide management, investors
and investment analysts with additional
measures to evaluate and analyse the
Company’s results. These non-IFRS financial
measures are defined and calculated by the
Group and therefore may not be comparable
with other companies’ measures.
The non-IFRS financial measures disclosed in
the Annual Report are:
• Organic development
The Danish Finance Society does not
acknowledge use of special items and states
that adjustments of tax should be based on the
marginal tax rate. When calculating financial
measures, the Group uses operating profit
before special items as well as the effective tax
rate for measures adjusted for tax.
Other financial ratios are calculated in
accordance with the Danish Finance Society’s
online guidelines on the calculation of financial
ratios, “Recommendations and Financial
Ratios”, unless specifically stated.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 95
SECTION 9.2 (CONTINUED)
GENERAL
ACCOUNTING
POLICIES
Glossary and calculation of key figures and financial ratios disclosed in the Annual Report
FINANCIAL RATIOS
Gross margin Gross profit as a percentage of revenue.
EBITDA margin
1
Operating profit before depreciation, amortisation and impairment losses as a
percentage of revenue.
Operating margin Operating profit before special items
1
as a percentage of revenue.
Return on invested capital (ROIC) Operating profit before special items
1
adjusted for tax as a percentage of
average invested capital
2
calculated as a 12-month rolling average (MAT).
Return on invested capital excluding
goodwill (ROIC excl. goodwill)
Operating profit before special items
1
adjusted for tax as a percentage of
average invested capital
2
excluding goodwill calculated as a 12-month rolling
average (MAT).
Effective tax rate
1
Income tax as a percentage of profit before tax.
NIBD/EBITDA
1
Net interest-bearing debt
3
divided by operating profit before depreciation,
amortisation and impairment losses.
GLOSSARY
EBITDA
1
Expression used for operating profit before depreciation, amortisation and
impairment losses.
Leverage ratio
1
Expression used for NIBD/EBITDA.
NCI Abbreviation for non-controlling interests.
OCI Abbreviation for other comprehensive income.
Off-trade Expression used for sale of beverages for consumption off the premises (e.g.
retailers).
On-trade Expression used for sale of beverages for consumption on the premises (e.g.
restaurants, hotels and bars).
Operating profit Expression used for operating profit before special items
1
.
Organic development
1
Measure of growth excluding the impact of acquisitions, divestments and
foreign exchange from year-on-year comparisons.
Volumes
1
The Group’s sale of beverages in consolidated entities and sale of the Group’s
products under licence agreements.
1
This key figure, ratio or elements thereof are not defined or deviate from the definitions of the Danish Finance Society.
² The calculation of invested capital is specified in section 2.1.
³ The calculation of net interest-bearing debt is specified in section 4.2.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 96
SECTION 9.3
CHANGES IN
ACCOUNTING
POLICIES
CHANGED ACCOUNTING POLICIES
AND CLASSIFICATION IN THE ANNUAL
REPORT 2022
The Annual Report 2022 has been prepared
using the same accounting policies for
recognition and measurement as those applied
to the consolidated financial statements for
2021, except for the following Amendments
that were adopted as of 1 January 2022:
• Amendments to IFRS 3 “Business
Combinations”
• Amendments to IAS 16 “Property, Plant and
Equipment”
• Amendments to IAS 37 “Provisions,
Contingent Liabilities and Contingent Assets”
• Annual Improvements to IFRS Standards
2018-2020 (IFRS 1, IFRS 9, IFRS 16 and IAS 41)
These Amendments had no impact on the
Group’s accounting policies, as they cover areas
that are not material and/or relevant for the
Group or do not change the accounting policies
applied in 2022.
SECTION 9.4
NEW LEGISLATION
NEW AND AMENDED IFRS STANDARDS
The following Amendments to IFRS became
effective as of 1 January 2023:
• Amendment to IAS 1 “Presentation of
Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting
Policies”
• Amendment to IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates”
• Amendments to IAS 12 “Income Taxes:
Deferred Tax related to Assets and Liabilities
arising from a Single Transaction”
• Amendments to IFRS 17 “Insurance Contracts”
and “Initial application of IFRS 17" and IFRS 9
“Comparative Information”
The implemented Amendments are not
expected to have any significant impact on the
financials or the Group’s accounting policies, as
they cover areas that are not material and/or
relevant for the Group or do not change the
accounting policies applied in 2022.
NEW AND AMENDED IFRS STANDARDS
AND INTERPRETATIONS NOT YET
ADOPTED BY THE EU
The following Amendments, which will become
effective in future years, have been issued but
not yet adopted by the EU:
• Amendments to IAS 1 “Presentation of
Financial Statements: Classification of
Liabilities as Current or Non-current –
Deferral of Effective Date and Non-current
Liabilities with Covenants”
• Amendment to IFRS 16 “Leases: Lease
Liability in a Sale and Leaseback”
The amendments are not mandatory for the
financial reporting for 2022. The Group expects
to adopt the amendments when they become
mandatory.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 97
SECTION 10
GROUP
COMPANIES
This section lists the subsidiaries and associates in the Group. Parent direct ownership shows the legal
ownership held by the immediate holding company in the Group. Cross-holdings held by fully owned
companies in the Group are aggregated. Consolidated ownership shows the share of the result of the
entity that is attributed to the shareholders of Carlsberg Breweries A/S in the consolidated financial
statements.
Western Europe
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Carlsberg Danmark A/S Denmark 100% 100%
Carlsberg Supply Company Danmark A/S Denmark 100% 100%
Carlsberg Sweden Holding 2 AB Sweden 100% 100%
Carlsberg Sverige AB Sweden 100% 100%
Carlsberg Supply Company Sverige AB Sweden 100% 100%
Ringnes Norge AS Norway 1 100% 100%
Ringnes AS Norway 100% 100%
Ringnes Brygghus AS Norway 100% 100%
Solo AS Norway 91% 91%
Ringnes Supply Company AS Norway 100% 100%
Ringnes Farris Eiendom AS Norway 100% 100%
Ringnes Imsdal Eiendom AS Norway 100% 100%
Ringnes Administrasjon Eiendom AS Norway 100% 100%
Ringnes Gjelleråsen Eiendom AS Norway 100% 100%
Oy Sinebrychoff Ab Finland 100% 100%
Sinebrychoff Supply Company Oy Finland 100% 100%
Carlsberg Deutschland Holding GmbH Germany 100% 100%
Holzmarkt Brewing Company GmbH Germany 100% 100%
Carlsberg Deutschland Logistik GmbH Germany 100% 100%
Tuborg Deutschland GmbH Germany 100% 100%
Carlsberg Deutschland GmbH Germany 6 100% 100%
Duckstein GmbH Germany 100% 100%
Western Europe
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Holzmarkt Beteiligungsgesellschaft mbH Germany 100% 100%
Holsten-Brauerei AG Germany 100% 100%
Carlsberg Supply Company Deutschland GmbH Germany 100% 100%
Carlsberg Supply Company Polska SA Poland 100% 100%
Carlsberg Polska Sp. z o.o. Poland 100% 100%
Carlsberg UK Holdings Limited UK 3 100% 100%
Carlsberg Marston's Limited UK 1 60% 60%
Carlsberg Marston's Brewing Company Ltd. UK 100% 60%
Marston's Beer Company Limited UK 100% 60%
CMBC Supply Limited UK 100% 60%
LF Brewery Holdings Limited UK 1 100% 60%
Emeraude S.A.S. France 7 100% 100%
Kronenbourg S.A.S. France 1 100% 100%
Kronenbourg Supply Company S.A.S. France 100% 100%
Kronenbourg Breweries Canada Inc. Canada 100% 100%
Fondation Kronenbourg France 100% 100%
S.A.S. Onyx France 100% 100%
Feldschlösschen Getränke Holding AG Switzerland 3 100% 100%
Feldschlösschen Getränke AG Switzerland 100% 100%
Schlossgarten Gastronomie AG Switzerland 100% 100%
SB Swiss Beverage AG Switzerland 100% 100%
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 98
Western Europe
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Feldschlösschen Supply Company AG Switzerland 100% 100%
Carlsberg Supply Company AG Switzerland 100% 100%
Nya Carnegiebryggeriet AB Sweden 100% 100%
E.C. Dahls Bryggeri AS Norway 100% 100%
Monster the Cat GmbH Switzerland 100% 100%
Grimbergen Abbey Brewery Belgium 100% 100%
Zatecky Pivovar spol. S.r.o. Czechia 100% 100%
Asia
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Carlsberg Supply Company Asia Ltd Hong Kong 100% 100%
Carlsberg Asia Pte Ltd Singapore 100% 100%
Carlsberg Brewery Hong Kong Ltd Hong Kong 100% 100%
Guangzhou Carlsberg Consultancy and
Management Services Co. Ltd China 100% 100%
Chongqing Brewery Co., Ltd China A 60% 60%
Carlsberg Chongqing Breweries Company
Limited China B 8 51% 79%
Kunming Huashi Brewery Company
Limited China 100% 79%
Carlsberg (China) Breweries and
Trading Company Limited China 100% 79%
Carlsberg Brewery (Guangdong) Ltd China 99% 79%
Xinjiang Wusu Breweries Co., Ltd China 5 100% 79%
Ningxia Xixia Jianiang Brewery Limited China 70% 56%
Carlsberg Beer Enterprise Management
(Chongqing) Company Limited China 100% 79%
Carlsberg Brewery (Anhui)
Company Ltd China 75% 60%
Carlsberg Tianmuhu Brewery
(Jiangsu) Company Ltd China 100% 79%
Lao Brewery Co. Ltd Laos 61% 61%
Carlsberg Korea Ltd. South Korea 100% 100%
Asia
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Carlsberg Brewery Malaysia Berhad Malaysia A 51% 51%
Carlsberg Marketing Sdn BHD Malaysia 100% 51%
Euro Distributors Sdn BHD Malaysia 100% 51%
Carlsberg Singapore Pte Ltd Singapore 100% 51%
Maybev Pte Ltd Singapore C 51% 26%
Carlsberg South Asia Pte Ltd Singapore D 67% 100%
South Asian Breweries Pte. Ltd Singapore D 100% 100%
Carlsberg India Pvt. Ltd India D 100% 100%
Gorkha Brewery Pvt. Ltd Nepal D, E, F 90% 90%
G.B. Marketing Pvt Ltd Nepal D, F 100% 90%
Carlsberg Vietnam Trading Co. Ltd Vietnam 100% 100%
Carlsberg Vietnam Breweries Ltd Vietnam 100% 100%
Paduak Holding Pte. Ltd Singapore 100% 100%
Caretech Limited Hong Kong 100% 100%
Cambrew Limited Cambodia 2 100% 100%
Cambrew Properties Ltd Cambodia 100% 100%
Angkor Beverage Co Ltd Cambodia 100% 100%
CB Distribution Co., Ltd Thailand 100% 100%
A Listed company.
B Carlsberg Chongqing Breweries Company Limited is owned by Chongqing Brewery Co., Ltd (51%) and Guangzhou
Carlsberg Consultancy and Management Services Co Ltd (49%), resulting in a consolidated ownership of 79%
C Maybev Pte Ltd is owned by Carlsberg Singapore Pte Ltd (51%), which is owned by Carlsberg Brewery Malaysia
Berhad (51%), resulting in a consolidated ownership of 26%.
D The Group owns 67% of Carlsberg South Asia Pte Ltd, which is the holding company of South Asian Breweries
Pte. Ltd, Carlsberg India Pvt. Ltd and Gorkha Brewery Pvt. Ltd (Nepal). The consolidation percentage of Carlsberg
South Asia Pte Ltd is 100% due to a written put option.
E The Group has the legal and contractual rights of a majority shareholder in Gorkha Brewery Pvt. Ltd, but does not
consolidate the company and its subsidiary for accounting purposes, cf. section 5.2.
F Company not audited by PwC.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 99
Central & Eastern Europe
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Baltika Breweries LLC Russia F, G, H 3 100% 100%
Carlsberg Azerbaijan LLC Azerbaijan 100% 100%
Baku Piva JSC Azerbaijan 91% 91%
Hoppy Union LLC Russia F, G, H 100% 100%
Konix Brewery LLC Russia F, G, I 75% 100%
Carlsberg Kazakhstan Ltd Kazakhstan K 90% 100%
Baltic Beverages Invest AB Sweden H 100% 100%
PJSC Carlsberg Ukraine Ukraine 1 100% 100%
Baltic Beverages Holding AB Sweden 100% 100%
Carlsberg Serbia Ltd Serbia 100% 100%
Carlsberg BH d.o.o.
Bosnia and
Herzegovina 100% 100%
Carlsberg Montenegro d.o.o. Montenegro 100% 100%
Carlsberg Croatia d.o.o. Croatia 100% 100%
Carlsberg Bulgaria AD Bulgaria 100% 100%
OJSC Brewery Alivaria Belarus F, I 78% 89%
Carlsberg Italia S.p.A. Italy 100% 100%
Carlsberg Horeca Srl Italy 100% 100%
T&C Italia Srl Italy 100% 100%
Olympic Brewery SA Greece 100% 100%
Hellenic Beverage Company SA Greece 100% 100%
Carlsberg Hungary Kft. Hungary 100% 100%
Saku Ölletehase AS Estonia 100% 100%
Aldaris JSC Latvia 100% 100%
Svyturys-Utenos Alus UAB Lithuania H 99% 99%
CTDD Beer Imports Ltd Canada 100% 100%
Carlsberg Canada Inc. Canada 100% 100%
Carlsberg USA Inc. USA 100% 100%
Not allocated
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Carlsberg Finans A/S Denmark L 36% 100%
Carlsberg International A/S Denmark 100% 100%
Visit Carlsberg A/S Denmark 100% 100%
Carlsberg Invest A/S Denmark 100% 100%
Carlsberg Integrated Information Technology A/S Denmark 100% 100%
Carlsberg Insurance A/S Denmark 100% 100%
Carlsberg Central Office A/S Denmark 100% 100%
Traitomic A/S Denmark 100% 100%
Carlsberg Shared Services Sp. z o.o. Poland 100% 100%
Associates
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Sinergie Proattive Srl Italy 36% 36%
Viacer S.G.P.S., Lda Portugal M 29% 29%
Super Bock Group, S.G.P.S., S.A. Portugal M 11 56% 60%
Serviced Dispense Equipment (Holdings) Limited UK 2 33% 20%
Nuuk Imeq A/S Greenland F 32% 32%
Chongqing Jiawei Beer Co. Ltd China 33% 26%
Lanzhou Huanghe Jianiang Brewery Company
Limited China 50% 50%
Qinghai Huanghe Jianiang Brewery Company Ltd China 50% 50%
Jiuquan West Brewery Company Limited China 50% 50%
Tianshui Huanghe Jianiang Brewery Company Ltd China 50% 50%
Capital Brewing Company Ltd Hong Kong 4 49% 49%
Lion Brewery (Ceylon) PLC Sri Lanka A, F, N 25% 13%
Hanoi Beer Alcohol and Beverage Joint Stock
Corporation Vietnam F 17% 17%
Carlsberg Distributors Taiwan Limited Taiwan 1 50% 50%
NCC Crowns Private Limited India 33% 33%
Bottlers Nepal Limited Nepal 1 22% 20%
Myanmar Carlsberg Co. Ltd Myanmar F 1 61% 61%
G Part of disposal group held for sale
H Company owned by Carlsberg Sverige AB.
I Consolidated ownership is higher than the legal ownership due to written put options.
J A separate annual report is not prepared.
K Carlsberg Kazakhstan Ltd is owned by Carlsberg Sverige AB (90%) and Baltika Brewery LLC (10%), resulting in a
consolidated ownership of 100%
L Carlsberg Finans A/S is owned by Carlsberg Breweries A/S (36%) and Baltika Brewery LLC (64%), resulting in a
consolidated ownership of 100%
M Viacer S.G.P.S (Viacer) is the controlling shareholder of Super Bock Group, S.G.P.S. (Super Bock) with a 56%
shareholding, with Carlsberg Breweries A/S owning the remaining 44%. In addition, Carlsberg Breweries A/S has a direct
ownership in Viacer of 29% without exercising control. Therefore, both Viacer and Super Bock are considered associates
of the Group. The Group's direct and indirect ownership of Super Bock totals 60%.
N Lion Brewery (Ceylon) PLC is owned by Carlsberg Brewery Malaysia Berhad (25%). Carlsberg owns 51% of Carlsberg
Brewery Malaysia Berhad, resulting in 13% of the result being attributed to the shareholders in Carlsberg Breweries A/S.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS 100
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL
STATEMENTS
................................
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.....
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SECTION 1
SUBSIDIARIES AND RELATED PARTIES
.......................
.................................................
.............................................
SECTION 2
CAPITAL STRUCTURE
.................................................
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.........................
..................................
.......................................................
..........................................................
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SECTION 3
OPERATING ACTIVITIES
....................................
..........................................................
....................................................
SECTION 4
STAFF COST AND REMUNERATION
..................
............................
SECTION 5
OTHER DISCLOSURE REQUIREMENTS
.......................................................
...........................................
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...................................................................
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SECTION 6
GENERAL ACCOUNTING POLICIES
.....................
PARENT COMPANY FINANCIAL STATEMENTS
INCOME STATEMENT
DKK million Section 2022 2021
Revenue 2,736 2,387
Cost of sales 3.1 -915 -870
Gross profit 1,821 1,517
Sales and distribution expenses 3.1 -806 -730
Administrative expenses -777 -904
Other operating activities, net 3.1 352 146
Operating profit before special items 590 29
Special items, net 1.2 -9,884 -173
Financial income 2.2 3,710 6,375
Financial expenses 2.2 -1,174 -978
Profit before tax -6,758 5,253
Income tax 5.4 -137 62
Profit for the period -6,895 5,315
Attributable to
Dividend to shareholder 3,695 3,486
Reserves -10,590 1,829
Profit for the period -6,895 5,315
STATEMENT OF COMPREHENSIVE INCOME
DKK million Section 2022 2021
Profit for the period -6,895 5,315
Other comprehensive income
Value adjustments of hedging instruments 7 -19
Income tax 5.4 -2 4
Items that may be reclassified to the income statement 5 -15
Other comprehensive income 5 -15
Total comprehensive income -6,890 5,300
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 102
STATEMENT OF FINANCIAL POSITION
DKK million Section 31 Dec. 2022 31 Dec. 2021
ASSETS
Non-current assets
Intangible assets 5.3 1,493 1,544
Property, plant and equipment 5.3 268 282
Investments in subsidiaries 1.1 69,014 78,734
Investments in associates 1.1 2,910 2,910
Receivables 3.3 531 318
Total non-current assets 74,216 83,788
Current assets
Trade receivables 3.3 1,185 872
Tax receivables 51 79
Other receivables 3.3 20,469 20,533
Prepayments 29 30
Cash and cash equivalents 2.4 1,368 3,291
Total current assets 23,102 24,805
Total assets 97,318 108,593
DKK million Section 31 Dec. 2022 31 Dec. 2021
EQUITY AND LIABILITIES
Equity
Share capital 2.1 498 499
Hedging reserves -281 -286
Retained earnings 37,898 52,699
Total equity 38,115 52,912
Non-current liabilities
Borrowings 2.4 25,706 21,886
Deferred tax liabilities 5.4 342 258
Provisions 5.1 409 460
Total non-current liabilities 26,457 22,604
Current liabilities
Borrowings 2.4 30,479 31,151
Trade payables 1,093 879
Deposits on returnable packaging materials 53 51
Provisions 5.1 86 34
Other liabilities, etc. 1,035 962
Total current liabilities 32,746 33,077
Total liabilities 59,203 55,681
Total equity and liabilities 97,318 108,593
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 103
STATEMENT OF CHANGES IN EQUITY
DKK million Shareholder in Carlsberg Breweries A/S
2022
Share
capital
Hedging
reserves
Retained
earnings
Total
equity
Equity at 1 January 499 -286 52,699 52,912
Profit for the period - - -6,895 -6,895
Other comprehensive income - 5 - 5
Total comprehensive income for the period - 5 -6,895 -6,890
Capital reduction -1 - -4,499 -4,500
Settlement of share-based payments - - 22 22
Share-based payments - - 57 57
Dividend paid to shareholder - - -3,486 -3,486
Total changes in equity -1 5 -14,801 -14,797
Equity at 31 December 498 -281 37,898 38,115
2021
Equity at 1 January 500 -271 54,808 55,037
Profit for the period - - 5,315 5,315
Other comprehensive income - -15 - -15
Total comprehensive income for the period - -15 5,315 5,300
Capital reduction -1 - -3,999 -4,000
Settlement of share-based payments - - -207 -207
Share-based payments - - 42 42
Dividend paid to shareholder - - -3,260 -3,260
Total changes in equity -1 -15 -2,109 -2,125
Equity at 31 December 499 -286 52,699 52,912
STATEMENT OF CASH FLOWS
DKK million Section 2022 2021
Operating profit before special items 590 29
Depreciation and amortisation 85 75
Operating profit before depreciation, amortisation and impairment losses 675 104
Other non-cash items 3.2 59 36
Change in working capital 3.2 -593 -139
Restructuring costs paid -43 -60
Interest etc. received 492 354
Interest etc. paid -1,446 -713
Income tax paid -27 -54
Cash flow from operating activities -883 -472
Acquisition of property, plant and equipment and intangible assets -17 -1
Disposal of property, plant and equipment and intangible assets - 1
Total operational investments -17 -
Capital injection in subsidiaries -51 -46
Acquisition and disposal of associates, net - -2
Change in financial receivables 2 -2
Dividends received 3,196 5,681
Total financial investments 3,147 5,631
Cash flow from investing activities 3,130 5,631
Free cash flow 2,247 5,159
Shareholder in Carlsberg Breweries A/S 2.1 -7,986 -7,260
External financing 2.4 3,758 1,483
Cash flow from financing activities -4,228 -5,777
Net cash flow -1,981 -618
Cash and cash equivalents at 1 January 3,291 3,903
Foreign exchange adjustment of cash and cash equivalents 58 6
Cash and cash equivalents at 31 December 2.4 1,368 3,291
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 104
SECTION 1
SUBSIDIARIES AND
RELATED PARTIES
SECTION 1.1
INVESTMENTS IN
SUBSIDIARIES
In 2022, impairment losses of DKK 9,772m,
were recognised on investments in subsidiaries.
The losses mainly relate to the investment in
Carlsberg Sweden Holding 2 AB, which through
intermediate companies is the owner of the
Group’s investments in Russia and Ukraine. The
impairment reflects the Group’s decision to seek
a full divestment of the Russian business. This
led to the classification of the business as held
for sale and remeasurement at fair value.
Russia’s invasion of Ukraine also led to the
reassessment of the recoverable amount of the
business in Ukraine. The reassessed value of
the two businesses was applied in the
impairment test of the investment in Carlsberg
Sweden Holding 2 AB, resulting in a write-down
of DKK 9,700m. For further information on the
reassessment of the values of the Ukrainian
and Russian businesses, see sections 2.2 and 5.1
in the consolidated financial statements.
Impairment losses of DKK 72m relate to a
minor investment in Western Europe being loss-
making and the liquidation of a minor entity in
Asia.
In 2021, impairment losses of DKK 123m were
the result of deteriorating business conditions in
a minor investment in Western Europe.
Investments in subsidiaries
DKK million 2022 2021
Cost
Cost at 1 January 85,956 85,977
Additions 51 46
Disposals -34 -67
Cost at 31 December 85,973 85,956
Value adjustments
Value adjustments at 1
January 7,222 7,165
Disposal -35 -66
Impairment losses 9,772 123
Value adjustments at
31 December 16,959 7,222
Carrying amount at
31 December 69,014 78,734
Please see section 10 in the consolidated financial
statements for a list of companies in the Carlsberg
Breweries Group.
An adjustment has been made to the opening
balance of investments in subsidiaries and
investments in associates for 2021 to correct a
prior-period error in the classification of
investments. The correction did not change the
value of the investment. The adjustment
reduced investments in associates by DKK
1,189m with a corresponding increase in
investments in subsidiaries.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Indications of impairment of investments in
subsidiaries are assessed annually by management.
Impairment tests are performed by applying the same
principles as the tests for impairment of goodwill in
the Group, cf. section 2.2 in the consolidated financial
statements.
It is management’s assessment that no further
indications of impairment existed at year-end 2022.
Impairment tests have therefore not been carried out
for investments in other subsidiaries.
Investments in associates
DKK million 2022 2021
Cost
Cost at 1 January 2,910 2,908
Additions - 2
Cost at 31 December 2,910 2,910
Value adjustments
Value adjustments at
1 January - -
Value adjustments at
31 December - -
Carrying amount at
31 December 2,910 2,910
ACCOUNTING
POLICIES
Dividends on investments in subsidiaries are
recognised in the income statement of the Parent
Company in the financial year in which the dividend is
declared.
Investments in subsidiaries are measured at the lower
of cost and recoverable amount.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 105
SECTION 1.2
SPECIAL ITEMS
Special items
DKK million 2022 2021
Various restructuring projects
and provisions -25 -50
Donations -25 -
Cost related to acquisition of
subsidiaries -62 -
Impairment of investments in
subsidiaries -9,772 -123
Cost at 31 December -9,884 -173
Impact of special items on operating profit
DKK million 2022 2021
If special items had been recognised in operating profit
before special items, they would have been included in
the following items:
Administrative expenses -112 -50
Financial expenses -9,772 -123
Special items, net -9,884 -173
Impairment of investments in subsidiaries
mainly relates to the investment in Carlsberg
Sweden Holding 2 AB, cf. section 1.1.
Restructuring costs of DKK 25m relate to
various restructuring projects as part of the
ongoing focus on cost and efficiency initiatives.
The Company donated DKK 25m to the
Ukrainian relief effort. Please refer to section 3.1
in the consolidated financial statements.
SECTION 1.3
RELATED PARTIES
Carlsberg A/S, J.C. Jacobsens Gade 1, 1799
Copenhagen V, Denmark, holds all the shares in
Carlsberg Breweries A/S.
The following transactions took place between
Carlsberg Breweries A/S and the parent in
2022:
• Carlsberg Breweries leases storage facilities in
the researcher apartments.
The dividend paid to Carlsberg A/S is described
in further detail in section 4.3 in the
consolidated financial statements.
It is estimated that the benefit for the Carlsberg
Breweries Group corresponds to the value of
the services provided to the Carlsberg
Foundation, which in turn corresponds to what
each party would have had to pay to have the
same deliverables provided by external parties.
Related party disclosures
DKK million 2022 2021
Carlsberg A/S
Other operating activities, net -21 -26
Interest income 10 1
Loans - 310
Dividend paid -3,486 -3,260
Capital reduction -4,500 -4,000
Receivables from the sale of
goods and services 10 5
Recharge of share-based
payments 60 44
Borrowings -391 -
Trade payables -4 -4
Associates
Revenue - 60
Interest income 24 -
Receivables from the sale of
goods and services 109 95
Loans -5 -
Subsidiaries
Revenue 1,053 816
Cost of sales -960 -786
Sales and distribution
expenses -28 -32
Administrative expenses -123 -13
Other operating activities, net 344 145
Interest income 609 342
Interest expenses -283 -94
Loans 19,207 19,675
Receivables 1,868 937
Borrowings -28,851 -25,463
Trade payables and other
liabilities etc. -542 -341
OTHER RELATED PARTIES
Related parties also comprise Carlsberg
Breweries A/S’ Supervisory Board and
Executive Board, their close family members
and companies in which these persons have
significant influence.
During the year, there were no transactions
between these parties and the Group, except
for remuneration as disclosed in section 4.
Dividends of DKK 251m (2021: DKK 250m) were
received from associates. No losses on loans to
or receivables from subsidiaries or associates
were recognised or provided for in either 2022
or 2021.
Dividends of DKK 2,945m (2021: DKK 5,431m)
were received from subsidiaries.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 106
SECTION 2
CAPITAL
STRUCTURE
SECTION 2.1
SHARE CAPITAL
Share capital
DKK million
Shares of
DKK 1,000
Nomial
value, DKK
'000
1 January 2021 500,000 500,000
Capital reduction -1,000 -1,000
31 December 2021 499,000 499,000
Capital reduction -1,000 -1,000
31 December 2022 498,000 498,000
The share capital amounts to DKK 498m
divided into shares in denominations of DKK
1,000 and multiples thereof. None of the shares
confer any special rights. The share capital is
owned by Carlsberg A/S, Copenhagen,
Denmark.
In November 2022, the share capital was
reduced from DKK 499m to DKK 498m through
a cash distribution of nominally DKK 1m at a
(per 100) price of DKK 400,000, corresponding
to a total cash distribution to Carlsberg A/S of
DKK 4.5bn. This cash distribution corresponds
to the share buy-backs that were carried out by
Carlsberg A/S over a 12-month period from 5
February 2022.
The dividend paid out to the shareholder in
2022 relating to 2021 amounted to DKK
3,486m (paid out in 2021 for 2020: DKK
3,260m).
Carlsberg Breweries A/S proposes a dividend of
DKK 7,420 per share, in total DKK 3,695m
(2021: DKK 6,986 per share, in total DKK
3,486m). The proposed dividend is included in
retained earnings at 31 December 2022.
The dividend paid out to the shareholder in
Carlsberg Breweries A/S does not impact
taxable income in Carlsberg Breweries A/S.
SECTION 2.2
FINANCIAL INCOME
AND EXPENSES
Interest income relates to interest from cash
and cash equivalents and loans to subsidiaries,
whereas interest expenses relate to interest on
borrowings.
Foreign exchange adjustments of balances with
foreign entities that are considered part of the
total net investment in the entity are recognised
in the income statement.
DKK million 2022 2021
Financial income
Interest income 519 340
Dividends from subsidiaries
and associates 3,196 5,681
Reversal of impairments of
financial assets -18 345
Other 13 9
Total 3,710 6,375
Financial expenses
Interest expenses -888 -560
Foreign exchange losses, net -253 -395
Bank and commitment fees -33 -23
Total -1,174 -978
Financial items, net 2,536 5,397
SECTION 2.3
NET INTEREST-
BEARING DEBT
Net interest-bearing debt
DKK million 2022 2021
Non-current borrowings 25,706 21,886
Current borrowings 30,479 31,151
Gross financial debt 56,185 53,037
Cash and cash equivalents -1,368 -3,291
Net financial debt 54,817 49,746
Loans to Group companies
and partners -19,552 -20,022
Net interest-bearing debt 35,265 29,724
Changes in net interest-bearing debt
Net interest-bearing debt at 1
January 29,724 27,794
Cash flow from operating
activities 883 472
Cash flow from investing
activities, excl. acquisition of
subsidiaries, net -3,130 -5,631
Dividend to shareholder 3,486 3,260
Change in interest-bearing
lending -15 -347
Capital reduction 4,500 4,000
Lease liabilities 17 2
Effect of currency translation -200 174
Total change 5,541 1,930
Net interest-bearing debt at
31 December 35,265 29,724
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 107
SECTION 2.4
BORROWINGS AND
CASH
Gross financial debt
DKK million 2022 2021
Non-current borrowings
Issued bonds 21,470 21,452
Bank borrowings - -17
Lease liabilities 242 257
Borrowings from Group
companies 3,900 -
Other borrowings 94 194
Total 25,706 21,886
Current borrowings
Issued bonds 3,714 5,573
Lease liabilities 17 17
Other borrowings 26,748 25,561
Total 30,479 31,151
Total non-current and
current borrowings 56,185 53,037
Fair value 54,233 53,690
Other borrowings mainly comprise borrowings
from Group companies.
The fair value of borrowings in subsidiaries
corresponds to the carrying amount in all
material respects.
Borrowings are measured at amortised cost.
Changes in gross financial debt
DKK million 2022 2021
Gross financial debt at 1
January 53,037 50,307
Proceeds from issue of
bonds 3,708 -
Instalments on and
proceeds from borrowings,
non-current -5,583 -118
Instalments on and
proceeds from European
Commercial paper 1,302 1
Change in current
borrowings from Group
companies 4,463 2,779
Change in current loans to
Group companies 470 -1,166
Instalments on lease
liabilities -17 -17
Other -585 4
Financing 3,758 1,483
Intercompany loans -470 1,166
Other, including foreign
exchange adjustments and
amortisation -140 81
Gross financial debt at 31
December 56,185 53,037
Cash and cash equivalents amounted to DKK
1,368m (2021: DKK 3,291m). Cash and cash
equivalents are not associated with any
significant credit risks.
SECTION 2.5
CREDIT RISK
Credit risk is the risk of a counterparty failing to
meet its contractual obligations and so inflicting
a loss on the Carlsberg Breweries Group. Group
policy is that financial transactions may be
entered into only with financial institutions with
a solid credit rating, defined as BBB.
SECTION 2.6
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
Carlsberg Breweries A/S’ main activity is
owning a number of subsidiaries and funding
the capital required for both net investment and
loans to subsidiaries. As a consequence,
Carlsberg Breweries A/S is exposed to foreign
exchange risk from its lending to and borrowing
from external parties, Group companies and
financial instruments. Carlsberg Breweries A/S
manages these exposures within limits, which
Exchange rate sensitivity - other comprehensive income
2022 2021
DKK million
Average
hedged rate
Notional
amount % change Effect on OCI
Average
hedged rate Effect on OCI
USD/DKK 6.8618 -238 10% -24 6,2054 -18
Other N/A -189 10-30% -42 - -6
Total -66 -24
on a net basis leads to only insignificant foreign
exchange exposure. The exceptions are semi-
equity loans and derivatives designated as net
investment hedges, which are recognised in
other comprehensive income in the
consolidated financial statements and
accounted for in the Parent Company income
statement. For more details on semi-equity
loans and net investment hedges, see section
4.6 in the consolidated financial statements.
Currency profile of borrowings
Before and after derivative financial instruments
DKK million
2022
Original
principal
Effect of
swap
After
swap
CHF 1,803 1,180 2,983
NOK 1,747 696 2,443
EUR 33,159 -8,172 24,987
USD 152 2,985 3,137
DKK 7,970 - 7,970
SEK 4,185 629 4,814
Other 7,169 2,682 9,851
Total 56,185 - 56,185
Total 2021 53,037 - 53,037
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 108
SECTION 2.7
INTEREST RATE RISK
Carlsberg Breweries A/S fills the role of internal
bank in the Group. Part of this role is to
implement the Group’s interest rate risk target,
which is to have a duration of three to eight
years.
The Company’s loan portfolio consists of
bilateral loan agreements, syndicated credit
facilities and loans from the shareholder and
subsidiaries.
Interest rate risks are mainly managed using
bonds with fixed interest.
Interest rate risk
DKK million
2022
Interest
rate
Average
effective
interest
rate Fixed for
Carrying
amount
Interest
rate risk
Issued bonds
EUR 500m maturing 6 September 2023 Fixed 0.7% < 1 year 3,714
Fair value
EUR 1,000m maturing 28 May 2024 Fixed 2.6% 1-2 years 7,421
Fair value
EUR 500m maturing 12 October 2025 Fixed 3.4% 2-3 years 3,705
Fair value
EUR 500m maturing 30 June 2027 Fixed 0.5% 4-5 years 3,699
Fair value
EUR 400m maturing 1 July 2029 Fixed 1.0% > 5 years 2,948
Fair value
EUR 500m maturing 11 March 2030 Fixed 0.7% > 5 years 3,697
Fair value
Total issued bonds 1.7% 25,184
Total issued bonds 2021 1.6% 27,025
Bank borrowings and other borrowings
Floating-rate Floating 1.6% < 1 year 269
Cash flow
Fixed-rate Fixed 0.7% > 1 year 104
Fair value
Total bank borrowings and other borrowings 373
Total bank borrowings and other borrowings 2021 275
At the reporting date, 38% of the gross loan
portfolio consisted of fixed-rate borrowings
with interest rates fixed for more than one year
(2021: 40%). At 31 December 2022, Carlsberg
Breweries A/S had borrowed DKK 25,342m
from subsidiaries and associates (2021: DKK
25,463m), and provided interest-bearing loans
to subsidiaries, associates and partners of DKK
19,552m (2021: DKK 20,022m).
All lending to and borrowings from subsidiaries
and associates are at floating interest rates.
SECTION 2.8
LIQUIDITY RISK
Liquidity risk results from the Group’s potential
inability to meet the obligations associated with
its financial liabilities, for example settlement of
financial debt and paying suppliers.
The Group’s liquidity is managed by Group
Treasury. The aim is to ensure effective
Time to maturity for non-current borrowings
DKK million
2022 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total
Issued bonds 7,421 3,705 - 3,698 6,646 21,470
Lease liabilities 17 15 15 15 180 242
Other 94 - - 3,900 - 3,994
Total 7,532 3,720 15 7,613 6,826 25,706
Total 2021 3,822 7,505 15 15 10,529 21,886
Maturity of financial liabilities
DKK million
2022
Contractual
cash flows
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Carrying
amount
Derivative financial instruments
Derivative financial instruments, payables 360 354 6 - 380
Non-derivative financial instruments
Financial debt, gross 56,296 30,484 18,939 6,873 56,185
Interest expenses 2,195 1,216 939 40 N/A
Trade payables and other liabilities 1,146 1,146 - - 1,146
Contingent liabilities 1,117 1,117 - - -
Non-derivative financial instruments 60,754 33,963 19,878 6,913 -
Financial liabilities 61,114 34,317 19,884 6,913 -
Financial liabilities 2021 57,312 34,405 12,223 10,684 -
liquidity management, which involves obtaining
sufficient committed credit facilities to ensure
adequate financial resources and, to some
extent, tapping a range of funding sources.
Carlsberg Breweries A/S is the main funding
vehicle in the Carlsberg Breweries Group.
Accordingly, reference is made to the section on
financial risk in Carlsberg Breweries Group
regarding the liquidity risk.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 109
SECTION 2.9
DERIVATIVE
FINANCIAL
INSTRUMENTS
The Company enters into various derivative
financial instruments to hedge foreign
exchange, interest rate and commodity
risks, and seeks to apply hedge accounting
when this is possible. Hedging of future,
highly probable forecast transactions is
designated as other cash flow hedges. Fair
value adjustments of derivative financial
instruments that are not designated as
cash flow hedges are recognised in
financial income and expenses. This also
applies to commodity hedges that are
designated as cash flow hedges in the
consolidated financial statements but not
designated in the Parents financial
statements.
Financial derivatives not designated as hedging instruments (economic hedges)
DKK million
2022
Income
statement
Fair value
receivables
Fair value
payables
Fair value,
net
Exchange rate instruments -343 230 -197 33
Other instruments -67 211 -183 28
Total -410 441 -380 61
2021
Exchange rate instruments -476 93 -271 -178
Other instruments 42 240 -163 77
Total -434 333 -434 -101
The Company monitors the cash flow
hedge relationships twice a year to assess
whether the hedge is still effective. Positive
fair values of derivatives are recognised as
other receivables and negative values as
other liabilities.
The fair value of derivatives designated as
cash flow hedges is presented in the cash
flow hedges section below.
Cash flow hedges comprise currency
forwards entered into to cover the foreign
exchange risk on transactions expected to
take place in 2023 and 2024.
The impact on other comprehensive
income from exchange rate instruments
relates to hedges of the Company’s
purchases and sales in currencies other
than their functional currencies.
The closing balance in the equity reserve
for hedging of cash flow hedges for which
hedge accounting is no longer applied was
DKK -843m (2021: DKK -843m).
Hedging of raw material price risk
DKK million
Sensitivity assuming
100% efficiency Time of maturity
Aluminium Change
Effect
in P/L
Tonnes
purchased
Average
price (DKK) 2022 2023 2024
2022 20% 132 40,209 18,014 32,820 7,389
2021 20% 98 33,586 16,158 33,586
Sensitivity assuming
100% efficiency Time of maturity
Energy Change
Effect
in P/L
MWh
purchased
Average
price (DKK) < 1 year 1-5 years > 5 years
2022 20% 34 289,966 420 - 99,123 190,843
The Company’s process for hedging of raw
material price risk is the same as the
Carlsberg Breweries Group’s. Accordingly,
reference is made to section 1.3 on
operating activities in Carlsberg Breweries
Group with regarding to the commodity
risk.
Cash flow hedges
DKK million
Expected
recognition
2022
Other
comprehen-
sive income
Fair value
receivables
Fair value
payables
Fair value,
net 2023
Exchange rate instruments 7 3 -3 - -
Total 7 3 -3 - -
2021 2022
Exchange rate instruments -19 - -7 -7 -7
Total -19 - -7 -7 -7
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 110
SECTION 3
OPERATING
ACTIVITIES
SECTION 3.1
OPERATING
EXPENSES
Cost of sales
DKK million 2022 2021
Purchased finished goods
and other costs 915 870
Total 915 870
Sales and distribution expenses
DKK million 2022 2021
Marketing expenses 623 594
Sales expenses 149 68
Distribution expenses 34 68
Total 806 730
Other operating activities, net
DKK million 2022 2021
Management fee
from Group companies 427 217
Other, net -75 -71
Total 352 146
SECTION 3.2
CASH FLOW FROM
OPERATING
ACTIVITIES
Cash flows
DKK million 2022 2021
Other non-cash items
Share-based payments 57 42
Other items 2 -6
Total 59 36
Change in working capital
Receivables -793 -12
Trade payables and other
liabilities 181 -256
Other provisions -6 82
Unrealised foreign
exchange gains/losses 25 47
Total -593 -139
SECTION 3.3
RECEIVABLES
Trade receivables comprise invoiced goods and
services.
Receivables included in the statement of
financial position
DKK million 2022 2021
Trade receivables 1,185 872
Other receivables 20,469 20,533
Total current receivables 21,654 21,405
Non-current receivables 531 318
Total 22,185 21,723
Receivables by origin
DKK million 2022 2021
Receivables from sale of
goods and services 217 191
Receivables from Group
companies 1,685 934
Loans to Group companies 19,207 19,675
Loans, fair value of hedging
instruments and other
receivables 1,076 923
Total 22,185 21,723
Other receivables comprise VAT receivables,
loans to Group companies, associates, interest
receivables and other financial receivables.
The fair value of receivables in subsidiaries
corresponds to the carrying amount in all
material respects.
Our customers were faced with a challenging
macroeconomic environment, and impacted by
unpredictable energy prices and rising inflation
and interest rates affecting credit risk for trade
receivables. Please see section 1.5 in the
consolidated financial statements for more
details.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 111
SECTION 4
STAFF COSTS AND
REMUNERATION
SECTION 4.1
STAFF COSTS AND
REMUNERATION
The remuneration of the Supervisory Board, the
executive directors and key management
personnel is described in detail in section 7.2 in
the consolidated financial statements.
The Supervisory Board of Carlsberg Breweries
A/S is not remunerated.
Remuneration of executive directors is based on
a fixed salary, cash bonus payments and non-
monetary benefits, such as company car,
telephone etc. Furthermore, performance share
programmes and incentive schemes have been
established for executive directors. These
programmes and schemes cover a number of
years.
Employment contracts for executive directors
contain terms and conditions that are
considered common to executive board
members in Danish listed companies, including
terms of notice and non-competition clauses.
Staff costs and remuneration also cover costs
and remuneration regarding executive directors
of the Company who are contractually
employed by other Group companies where the
related cost is recognised and payment is made
in those companies.
Remuneration of executive directors and the
Supervisory Board is specified in section 7 in the
consolidated financial statements.
ACCOUNTING
POLICIES
Staff costs are recognised in the financial year in
which the employee renders the related service. The
fair value of share-based incentives, which is
expensed over the vesting period of the programme
according to the service conditions, is recognised in
staff costs and offset directly against equity.
Staff costs and remuneration
DKK million 2022 2021
Salaries and other remuneration 621 599
Severance payments 3 3
Social security costs 5 5
Retirement benefit costs - defined contribution plans 34 37
Share-based payments 44 53
Other employee benefits 6 8
Total 713 705
Staff costs are included in the following items in the income statement
Sales and distribution expenses 188 205
Administrative expenses 529 473
Total staff costs recognised by the Parent Company 717 678
Remuneration of executive director recognised by Carlsberg A/S -4 27
Total 713 705
The Company had an average of 413 (2021: 392) full-time employees during the year.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 112
SECTION 4.2
SHARE-BASED
PAYMENTS
Share-based incentive programmes have been
set up for management personnel at Carlsberg
Breweries A/S. Please refer to section 7.3 in the
consolidated financial statements for general
descriptions of the programmes.
PERFORMANCE SHARES
The number of performance shares granted is
the maximum number of performance shares
that can vest. The number of shares
outstanding at the end of the period is the
estimated number of shares expected to vest,
based on an assessment of the extent to which
the vesting conditions are expected to be met.
The number of shares expected to vest is
revised on a regular basis.
Regular performance shares
In 2022, 40 employees (2021: 38 employees) in
Carlsberg Breweries A/S were awarded
performance shares.
Vesting is subject to achievement of the four
KPIs: total shareholder return, adjusted EPS
growth, organic revenue growth and growth in
ROIC. The average share price at transfer was
DKK 1,084 (2021: DKK 989). The average
contractual life at the end of 2022 was 1.2 years
(2021: 1.2 years).
SHARE OPTIONS
No share options have been granted since 2016.
All outstanding options at 1 January were
exercised during the year. The average share
price at exercise was DKK 1,063.
Share-based payments
Exercise price Number
Performance shares
Fixed,
weighted
average
Executive
directors
Other
management
personnel Total
Performance shares outstanding at 31 December 2020 142,612 97,870 240,482
Granted 50,805 36,467 87,272
Forfeited/expired/adjusted -13,027 -26,218 -39,245
Exercised -44,212 -31,389 -75,601
Performance shares outstanding at 31 December 2021 136,178 76,730 212,908
Granted 33,753 45,579 79,332
Forfeited/expired/adjusted -7,263 1,887 -5,376
Exercised -45,999 -29,096 -75,095
Performance shares outstanding at 31 December 2022 116,669 95,100 211,769
Shares options
31 December 2020 518 114,984 - 114,984
31 December 2021 518 114,984 - 114,984
31 December 2022 - - - -
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 113
SECTION 5
OTHER DISCLOSURE
REQUIREMENTS
SECTION 5.1
PROVISIONS
Provisions primarily relate to ongoing disputes,
lawsuits, restructurings etc.
Provisions
DKK million Total
Provisions at 1 January 2022 494
Additional provisions recognised 15
Used during the year -14
Provisions at 31 December 2022 495
DKK 86m of total provisions (2021: DKK 34m)
fall due within one year and DKK 2m (2021:
DKK 2m) after more than five years from the
end of the reporting period.
SECTION 5.2
FEES TO AUDITORS
Fees to the auditors appointed by the Annual
General Meeting are specified as follows.
DKK million 2022 2021
Statutory audit 3 2
Other assurance
engagements - -
Tax advisory - -
Other services - -
Total 3 2
SECTION 5.3
ASSET BASE AND
LEASES
The carrying amount of intangible assets was
DKK 1,493m (2021: DKK 1,544m), and the
carrying amount of property, plant and
equipment was DKK 268m (2021: DKK 282m).
Intangible assets mainly comprised brands of
DKK 1,493m (2021: DKK 1,499m).
Of the depreciation and amortisation of DKK
85m (2021: DKK 75m), DKK 6m (2021: DKK
6m) was included in cost of sales whereas
DKK 79m (2021: DKK 69m) was included in
sales and distribution expenses.
Carlsberg Breweries A/S leases various
properties and equipment. At 31 December
2022, the carrying amount of right-of-use
assets was DKK 259m (2021: DKK 275m).
During the year, additions amounted to DKK
2m (2021: DKK 2m) and depreciation to DKK
17m (2021: DKK 17m). The lease expenses
recognised in the income statement related to
short-term leases and leases of low-value
assets were insignificant. Such contracts
comprise the lease of copy and printing
machines, coffee machines, small IT devices
and similar equipment.
SECTION 5.4
TAX
The domestic tax rate in Denmark in 2022 was
22% (2021: 22%). The effective tax rate was
-2.0% (2021: -1.2%), and is mainly impacted by
non-deductible impairments in special items
and non-taxable dividends with a net effect of
-24.0 percentage points (2021: -24.6 percentage
points, related solely to non-taxable dividends).
Hedging instruments recognised in other
comprehensive income before tax amounted to
DKK 7m (2021: DKK -19m) with a tax expense
of DKK 2m (2021: tax income of DKK 4m).
Deferred tax assets amounted to DKK 40m and
comprised fair value adjustments of DKK 24m
and property, plant and equipment of DKK 16m.
In 2021, deferred tax assets amounted to DKK
247m and comprised provisions of DKK 146m,
fair value adjustments of DKK 21m and tax loss
carried forward of DKK 79m. The utilisation of
tax loss carryforwards depends on future
positive taxable income exceeding the realised
deferred tax liabilities.
Deferred tax liabilities amounted to DKK 382m
(2021: DKK 505m) and mainly comprised
intangible assets of DKK 77m (2021: DKK 106m)
and provisions of DKK 304m (2021: DKK
399m). Deferred tax, net, at 31 December was a
deferred tax liability of DKK 342m (2021: DKK
258m).
The net changes in deferred tax of DKK 84m
(2021: DKK 106m) mainly comprised
impairment on tax assets of DKK -317m and
change in other liabilities of DKK -47m offset
by movements in provisions of DKK 450m
(2021: DKK 15m in joint taxation contribution
and DKK -4m in tax recognised in other
comprehensive income).
Not recognised tax assets amounted to DKK
236m (2021: DKK 650m), related to tax losses
that are not expected to be utilised in the
foreseeable future. Tax losses that will not
expire amounted to DKK 236m (2021: DKK
251m). Tax losses relating to interest
deductibility restrictions are considered expired.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 114
SECTION 5.4 (CONTINUED)
TAX
The administration company, Carlsberg A/S,
has unlimited and joint legal responsibility with
the other companies under the joint taxation
scheme for withholding taxes on dividends,
interest and royalties.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Carlsberg Breweries A/S recognises deferred tax
assets, including the tax base of tax loss
carryforwards, if management assesses that these tax
assets can be offset against positive taxable income in
the foreseeable future. This judgement is made
annually and based on budgets and business plans for
the coming years.
Income tax expenses
2022 2021
DKK million
Income
statement
Other
comprehensive
income
Total
comprehensive
income
Income
statement
Other
comprehensive
income
Total
comprehensive
income
Tax for the year can be specified as follows
Current tax 122 – 122 22 – 22
Change in deferred tax during the year -75 2 -73 -60 -4 -64
Adjustments to tax for prior years 90 – 90 -24 – -24
Total 137 2 139 -62 -4 -66
ACCOUNTING
POLICIES
Carlsberg A/S is the administration company and is
subject to the Danish rules on mandatory joint
taxation of the Carlsberg Group’s Danish companies.
Carlsberg A/S accordingly pays all income taxes to
the tax authorities under the joint taxation scheme.
Danish subsidiaries are included in the joint taxation
from the date when they are included in the
consolidated financial statements and until the date
when they are excluded from the consolidation. The
jointly taxed Danish companies are taxed under the
on-account tax scheme.
On payment of joint taxation contributions, the
current Danish income tax is allocated between the
Danish jointly taxed companies in proportion to their
taxable income. Companies with tax losses receive
joint taxation contributions from other companies that
have used the tax losses to reduce their own taxable
profit (full absorption).
SECTION 5.5
CONTINGENT
LIABILITIES AND
OTHER
COMMITMENTS
Carlsberg Breweries A/S has issued guarantees
for loans etc. raised by subsidiaries and
associates (non-consolidated share of loan) of
DKK 1,117m (2021: DKK 1,672m).
Carlsberg Breweries A/S is jointly registered for
Danish VAT and excise duties with
Carlsberg A/S, Carlsberg Danmark A/S and
various other minor Danish subsidiaries, and
Carlsberg Breweries A/S is jointly and severally
liable for payment of VAT and excise duties.
Carlsberg Breweries A/S is party to certain
lawsuits, disputes etc. of various scopes.
In management’s opinion, apart from items
recognised in the statement of financial position
or disclosed in the financial statements, the
outcome of these lawsuits, disputes etc. will not
have a material negative effect on the
Company’s financial position.
SECTION 5.6
EVENTS AFTER THE
REPORTING PERIOD
On 6 February 2023, the valuers appointed to
perform the put option valuation for the 33%
shareholding in CSAPL released a put option
valuation certificate stating a value of USD
744m (DKK 5,188m), cf. section 5.4 in the
consolidated financial statements. CSAPLH has
on 6 February, issued a formal put notice to sell
its 33% shareholding in CSAPL to the company
at the put option valuation amount.
Apart from the events recognised or disclosed
in the financial statements, no events have
occurred after the reporting date of importance
to the financial statements.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 115
SECTION 6
GENERAL
ACCOUNTING POLICIES
The financial statements of Carlsberg Breweries
A/S for 2022 have been prepared in accordance
with International Financial Reporting
Standards (IFRS) as issued by the International
Accounting Standards Board, and in accordance
with IFRS as endorsed by the EU and further
requirements in the Danish Financial
Statements Act.
The financial statements are presented in
Danish kroner (DKK), which is the presentation
currency.
The accounting policies for the Parent
Company are the same as for the Group, cf.
section 9 in the consolidated financial
statements and the individual sections.
SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGEMENTS
In preparing Carlsberg Breweries A/S’ financial
statements, management makes various
accounting estimates and judgements that
form the basis of presentation, recognition and
measurement of the Company’s assets and
liabilities.
The estimates and judgements made are based
on historical experience and other factors that
management assesses to be reliable, but that
by their very nature are associated with
uncertainty and unpredictability. These
estimates and judgements may therefore prove
incomplete or incorrect, and unexpected events
or circumstances may arise.
The significant accounting estimates and
judgements made and accounting policies
specific to the Parent Company are presented
in the explanatory notes.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS 116
REPORTS
Executive Board of Carlsberg Breweries A/S
Supervisory Board of Carlsberg Breweries A/S
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 117
REPORTS
INDEPENDENT
AUDITOR’S REPORT
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 118
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 119
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 120
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 121
CVR No 3377 1231
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS 122
FINANCIAL STATEMENTS