CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 INTRODUCTION 1
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Carlsberg Breweries Group
Annual Report 2023
CARLSBERG BREWERIES
ANNUAL REPORT 2023
As approved on the Company's Annual
General Meeting on 14 March 2024
Monica Gregers Smith
Chair of the Meeting
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 INTRODUCTION 2
INTRODUCTION
Letter from the Chair & the CEO ......... 3
5-year summary ........................................ 5
2023 REVIEW AND 2024 EXPECTATIONS
Group .............................................................. 6
Russia ........................................................... 10
Capital allocation .................................... 11
2024 earnings expectations ................ 12
CREATING VALUE
Our purpose ............................................... 13
Business model ........................................ 14
Our brand portfolio ................................. 15
Our strategy .............................................. 17
Our ESG programme ............................. 22
GOVERNANCE
Corporate governance ........................... 26
Risk management ................................... 29
Supervisory Board................................... 32
Forward-looking statements ............. 33
CONSOLIDATED FINANCIAL STATEMENTS
Statements ...........................................35
Notes ......................................................39
PARENT COMPANY FINANCIAL
STATEMENTS
Statements ........................................ 107
Notes ................................................... 110
REPORTS
Management statement ................ 122
Auditor’s report ................................ 123
MANAGEMENT
REVIEW
FINANCIAL
STATEMENTS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 INTRODUCTION 3
We delivered solid results
in a year impacted by a
challenging trading
environment across our
regions.
ACTIVITIES OF THE GROUP
The Carlsberg Breweries Group
comprise the beverage activities in
the Carlsberg Group. Carlsberg
Breweries’ activities are focused on
the markets where the Group has the
expertise and the right products to
secure a leading position. Due to the
variation of the markets, the
contribution to growth, earnings and
development within the Group
differs, both at present and in the
longer-term projections.
The Parent Company’s main
activities are investments in national
and international breweries as well
as license and export business. The
Parent Company has retail bonds
listed at the Luxembourg Stock
Exchange.
FINANCIAL DELIVERY
Organic revenue growth was 9.2%,
driven by a strong 10% revenue/hl
improvement. Operating profit grew
organically by 6.9% despite our cost
base being subject to continued
inflation throughout the year and
increased commercial investments.
The reported operating profit of DKK
11.1bn was impacted by the
strengthening of the DKK against a
number of key currencies, resulting in
reported development of -1.5%. Free
operating cash flow was DKK 7.5bn
and ROIC was 17.3%.
Despite the weakening consumer
sentiment in Europe and Asia during
the year, and bad weather in many
markets during the important
summer months, we were able to
upgrade our earnings expectations
twice – in May and August.
Thanks to the strong financial health
of the Group, we were also able to
step up our commercial investments
in the latter part of the year in
support of our long-term growth
opportunities.
The Group’s financial results are
presented in full on pages 6-9.
UKRAINE AND RUSSIA
The war in Ukraine continued to
impact our business. The health and
safety of our Ukrainian colleagues
remain our first priority. We are
deeply saddened by the continued
hardship and challenges endured by
our people and the population in
Ukraine.
Because of the war, we announced
the sale of Baltika Breweries – our
Russian business – in June. Shortly
afterwards, a presidential decree
temporarily transferred the
management of the business to a
Russian federal agency. This step by
the Russian authorities had several
implications, including the full
impairment of the Russian business
in the Carlsberg Breweries Group’s
accounts. Read more on page 10.
CHANGING OF THE GUARDS
2023 saw a changing of the guards.
After eight years at the helm of the
Carlsberg Group, Cees ’t Hart retired
at the end of August. Cees leaves
behind an impressive legacy, having
delivered outstanding results during
his tenure.
We want to thank Cees for his
significant contribution to Carlsberg,
and to wish him all the best for the
next chapter of his life.
Jacob Aarup-Andersen joined
Carlsberg as new CEO in September,
and Ulrica Fearn joined the Group as
new CFO in January 2023. The
Supervisory Board is convinced that
we have the right team on board for
the next stage of Carlsberg’s value-
creating growth journey.
ACCELERATE SAIL
Our strategy, SAIL’27, was developed
by a broad group of leaders and
colleagues from across the Group in
late 2021 and early 2022 – before
the war in Ukraine and subsequently
high inflation. Because of these
significant events, in addition to
COVID-19, our focus in the past few
years has been on managing these
shorter-term challenges.
With the impact from these major
disruptions decreasing, it is now time
to sharpen the longer-term focus on,
and ensure sufficient investments in,
our future growth. Consequently, the
Executive Committee and extended
leadership team conducted a review
of the SAIL’27 priorities in late 2023
and early 2024, leading to the
refreshed Accelerate SAIL strategy.
We have increased our ambition for
top-line growth to 4-6% (previously
3-5%) to be achieved by accelerating
support for the most important
LETTER FROM THE CHAIR & THE CEO
EMBARKING ON
OUR GROWTH JOURNEY
Introduction
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 INTRODUCTION 4
strategic growth levers, including our
premium beer brands, Beyond Beer
products and specific geographies.
We will also further strengthen our
capabilities, including digital, to build
an even more efficient, competitive
and scalable company.
Read more about Accelerate SAIL on
pages 17-18.
CONTINUED COMMITMENT TO
DOING BETTER
Our ESG programme, Together
Towards ZERO and Beyond (TTZAB),
is an integral part of Accelerate SAIL.
TTZAB focuses on 11 areas, which
were identified through an
assessment of the most material
environmental, social and governance
(ESG) topics for our business. This
year, we reconfirmed the relevance
of these topics through our first
double materiality assessment.
As part of TTZAB, we have ambitious
targets and commitments. These
enable us to tackle global social and
environmental challenges while
supporting our licence to operate and
our ability to brew better beers now
and in the future. We recognise that
the hardest work is ahead of us, and
we will need to challenge ourselves
to be able to succeed in our TTZAB
ambitions.
In September, we published the
results of the 2022 assessment of
our full value chain emissions,
confirming that we have achieved a
16% reduction in the relative value
chain emissions per hectolitre of beer
produced compared with 2015.
Read more about our ESG
programme and how we will achieve
our targets on pages 22-25, and in
detail in the ESG Report.
OUR PEOPLE
We are a purpose- and value-driven
organisation where respect,
responsibility, integrity and caring
about each other lead the way, and
where we win as a team.
We believe that the foundation for
sustained success rests upon fostering
a high organisational heartbeat and a
strong organisational culture that
integrates diversity, equity &
inclusion (DE&I).
We are committed to nurturing our
inclusive culture, to treating our
people with fairness, honesty and
kindness, and to making Carlsberg a
workplace where everyone belongs
and can be at their best.
In 2023 – one year ahead of schedule
– we reached our target of 30%
women in senior leadership roles. We
will continue to drive the DE&I
agenda and encourage you to read
more about it in our ESG Report.
THANK YOU
This past year, we were again
impressed by the high level of
engagement and commitment from
the Group’s employees, and we
would like to say thank you to each
and every one of them. In particular,
we want to acknowledge our long-
suffering colleagues in Ukraine.
We also extend our thanks to all
suppliers and customers for their
cooperation during 2023, and
express our gratitude to our
consumers around the world.
Henrik Jacob
Poulsen Aarup-
Andersen
Chair Group CEO
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 INTRODUCTION 5
5-YEAR SUMMARY
KEY
FIGURES
Key figures and financial ratios in 2022 and 2023 are presented for continuing activities unless otherwise stated. 2021
figures have been restated accordingly
2023
2022
2021
2020¹
2019¹
Volumes (million hl)
Beer
101.0
101.0
98.8
110.1
113.0
Other beverages
24.1
24.4
20.4
20.0
21.9
DKK million
Income statement
Revenue
73,585
70,265
60,097
58,541
65,902
Gross profit
32,832
32,067
28,569
28,361
32,638
EBITDA
15,219
15,485
14,367
14,094
15,058
Operating profit before special items
11,147
11,313
10,137
9,718
10,524
Special items, net
-416
-94
623
-244
568
Financial items, net
-803
-714
-385
-403
-728
Profit before tax
9,928
10,505
10,375
9,071
10,364
Income tax
-1,983
-1,844
-2,115
-2,240
-2,766
Profit for the period, continuing operations
7,945
8,661
8,260
6,831
7,598
Loss from discontinued operations
-47,748
-6,490
-284
-
-
Profit for the period
-39,803
2,171
7,976
6,831
7,598
Attributable to
Non-controlling interests
1,011
1,171
1,163
778
908
Shareholder in Carlsberg Breweries A/S (net
profit)
-40,814
1,000
6,813
6,053
6,690
Statement of financial position
Total assets
102,183
105,798
114,738
108,100
112,092
Invested capital
51,431
50,463
52,846
69,555
73,403
Invested capital excl. goodwill
19,037
17,931
19,575
27,269
28,479
Net interest-bearing debt (NIBD)
2
22,491
19,696
18,843
20,092
17,840
Equity, shareholder in Carlsberg Breweries A/S
14,021
22,481
34,079
28,815
32,124
¹ Comparative figures for 2019-2020 include profit from the discontinued operation in Russia.
2
Comparative figures
for 2021 have not been restated.
2023
2022
2021
2020¹
2019¹
Statement of cash flows
Cash flow from operating activities
11,615
12,794
11,818
10,866
12,285
Cash flow from investing activities
-6,657
-3,403
-3,965
-5,867
-2,462
Free cash flow
4,958
9,391
7,853
4,999
9,823
Investments
Acquisition of property, plant and
equipment and intangible assets
-4,233
-4,225
-3,897
-4,386
-4,571
Acquisition of property, plant and
equipment, including right-of-use
assets
-4,977
-4,598
-4,311
-3,813
-4,991
Acquisition and disposal of subsidiaries,
net
-822
-
-621
-2,409
-9
Financial ratios
Gross margin
%
44.6
45.6
47.5
48.4
49.5
EBITDA margin
%
20.7
22.0
23.9
24.1
22.8
Operating margin
%
15.1
16.1
16.9
16.6
16.0
Effective tax rate
%
20.0
17.5
20.4
24.7
26.7
Return on invested capital (ROIC)
%
17.3
18.0
15.0
10.5
10.3
ROIC excl. goodwill
%
45.7
49.9
39.9
27.1
25.4
NIBD/EBITDA
x
1.47
1.27
1.34
1.43
1.18
Dividend per share (proposed)
DKK
7,240
7,420
6,986
6,520
6,395
Payout ratio
%
n.m.
370
51
54
48
Please refer to section 9.2 General Accounting Policies in the consolidated financial statements for a definition and
calculation of key figures and financial ratios.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 6
The Group delivered a
solid set of results in a
challenging environment.
VOLUMES
Total Group volumes were 125.1m
hl, corresponding to a reported
growth rate of -0.3%. Beer volumes
declined organically by 0.4%, as
volume growth in Asia was offset by
lower volumes in Western Europe
and Central & Eastern Europe. Other
beverage volumes grew in Western
Europe, Central & Eastern Europe
and Laos, but total volume
development was -0.9%, impacted
by lower volumes in Cambodia.
INCOME STATEMENT
Revenue was DKK 73,585m.
Revenue/hl increased organically by
10%, resulting in strong organic
revenue growth of 9.2%. The
revenue/hl improvement was
primarily driven by price increases
across markets to offset the
significant cost increases and
supported by a positive product mix.
Reported revenue grew by 4.7%. The
negative currency impact related to
the strengthening of the Danish
currency against, in particular, the
Chinese, Laotian, Indian, Ukrainian,
Norwegian and Swedish currencies.
The small acquisition impact related
to the acquisition of Waterloo
Brewing in Canada.
Gross profit increased organically by
7.4% and by 2.4% in reported terms.
Gross profit was positively impacted
by the increase in revenue/hl and
negatively by the increase in cost of
sales of 6.7%. The reported gross
margin was 44.6%, a decline of
100bp.
We maintained our focus on costs,
supporting our efforts to offset
inflation and increase investments in
brands and activities. Consequently,
marketing investments were up
organically by 10% and by 7% in
reported terms. As a percentage of
revenue, reported marketing
investments increased slightly to
8.4% with a larger increase in H2
following the Q3 decision to
accelerate commercial investments.
Total reported operating expenses
increased by 4.0%, supported by
lower administrative costs. As a
percentage of revenue, reported
operating expenses excluding
marketing improved by 30bp to
22.1%.
Other operating activities increased
by DKK 38m, while profit from
associates declined by DKK 98m,
mainly due to certain one-off
expenses in associates in Asia.
Operating profit before depreciation,
amortisation and impairment losses
(EBITDA) grew organically by 5.2%
GROUP
2023 review and 2024 expectations
SOLID RESULTS IN A
CHALLENGING ENVIRONMENT
Earnings expectations 2023
Date
Expectation for operating profit
7 February 2023
Organic growth in operating profit of -5% to +5%.
27 April 2023
Organic growth in operating profit of -2% to +5%.
15 August 2023
Organic growth in operating profit of +4% to +7%.
7 February 2024
Organic growth in operating profit of 6.9% (reported).
Group
Change
Change
2022
Organic
Acq., net
FX
2023
Reported
Volumes (million hl)
Beer
101.0
-0.4%
0.3%
-
101.0
-0.1%
Other beverages
24.4
-0.9%
0.0%
-
24.1
-0.9%
Total volume
125.4
-0.5%
0.2%
-
125.1
-0.3%
DKK million
Revenue
70,265
9.2 %
0.6 %
-5.1%
73,585
4.7 %
Operating profit
11,313
6.9 %
-0.2%
-8.2%
11,147
-1.5%
Operating margin (%)
16.1
15.1
-100bp
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 7
but declined by 1.7% in reported
terms due to adverse currencies.
The reported operating profit before
special items development of -1.5%
was impacted by strengthening of
the Danish krone against, in
particular, the Chinese, Laotian,
Ukrainian and Norwegian currencies.
The small acquisition impact related
to the acquisition of Waterloo
Brewing in Canada. The reported
operating margin decreased by
100bp to 15.1%, mainly due to the
lower gross margin and increased
marketing investments.
Section 1 of the consolidated
financial statements contains more
details on operating activities.
Net special items (pre-tax) amounted
to DKK -416m (2022: DKK -94m).
Special items were positively impacted
by reversal of brand impairment in
China and the derecognition of a loan
to Baltika Breweries, and negatively
impacted by impairment of certain
brands, impairment related to the
business in Cambodia, the cost of
terminating the Kronenbourg 1664
licensee agreement in the UK,
restructuring costs, costs related to
acquisitions and impairment of
receivables from Baltika Breweries.
HOME OF CARLSBERG
SEE, HEAR AND TASTE THE STORY OF
CARLSBERG
It all began in 1847, when Carlsberg’s founder, J.C. Jacobsen, established his brewery on
a small hilltop just outside Copenhagen. Since 1982, the original brewery with its unique
narrative and its historic and well-preserved buildings has become an increasingly
popular tourist attraction. After extensive restoration in recent years, we reopened the
doors to Home of Carlsberg in 2023. The new exhibition showcases Carlsberg’s pivotal
role in modern beer brewing, the essential ingredients of beer, the stables housing the
majestic brewery horses, a bottle collection that will amaze, architectural buildings, a
great restaurant, beer tastings, and engaging storytelling about family feuds, scientific
breakthroughs and much more.
OUR WINNING CULTURE
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 8
Read more about net special items in
section 3.1 of the consolidated
financial statements.
Financial items, net, amounted to
DKK -803m (2022: DKK -714m).
Excluding currency gains and losses,
financial items, net, amounted to
DKK -654m (2022: DKK -491m).
The increase was mainly a result of
higher average funding costs due to
refinancing and higher short- and
long-term interest rates and higher
net interest-bearing debt. Net
currency losses amounted to DKK
-149m, mainly related to the
strengthening of the EUR/DKK and
conversion costs for the Laotian kip.
Read more about net financial items
in section 4.1 of the consolidated
financial statements.
Tax totalled DKK -1,983m (2022:
DKK -1,844m). The normalised tax
rate was 20.9%, while the effective tax
rate was 20.0% due to non-recurring
items, including adjustments related
to prior years and the deconsolidation
of the Russian business.
Section 6.1 of the consolidated
financial statements contains more
details on income tax.
The Carlsberg Breweries Group’s
share of profit from continuing
operations amounted to DKK
6,934m (2022: DKK 7,490m).
The Group’s share of consolidated
profit (net profit) for the period was
DKK -40,814m (2022: DKK
1,000m), impacted by the
deconsolidation of the Russian
business, which led to the recognition
of accumulated currency translation
and hedge losses of DKK -41,504m
and impairment losses of DKK
-7,002m, giving a net result from
the Russian operation of DKK
-47,748m.
Read about the accounting
treatment and impact of the
deconsolidation of the Russian
business in section 5.1 of the
consolidated financial statements.
Non-controlling interests’ share of
profit for the period was DKK
1,011m (2022: DKK 1,171m). The
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.
STATEMENT OF FINANCIAL
POSITION
ASSETS
Total assets amounted to DKK
102,183m at 31 December 2023 (31
December 2022: DKK 105,798m).
The main reason for the decrease
was the deconsolidation of the
Russian business, the assets of which
amounted to DKK 11,618m in 2022,
partly offset by higher current assets.
Total non-current assets amounted
to DKK 71,978m (31 December
2022: DKK 71,540m).
Intangible assets totalled DKK
40,390m (31 December 2022: DKK
40,526m). Intangible assets were
impacted by currencies, in particular
the Chinese and Laotian, and
impairment of brands, offset by the
acquisition of Waterloo Brewing and
reversal of brand impairment in
China.
Property, plant and equipment
totalled DKK 24,248m (2022: DKK
23,580m). The increase was mainly
impacted by additions and the
acquisition of Waterloo Brewing in
March 2023. Financial assets of DKK
7,340m were on a par with 31
December 2022 (DKK 7,434m).
Total current assets amounted to
DKK 30,205m (31 December 2022:
DKK 22,640m). The increase was
mainly due to higher cash and cash
equivalents and deposits, following
the net issuance of EMTN bonds of
EUR 1.55bn.
Inventories amounted to DKK
5,811m (31 December 2022: DKK
5,718m), trade receivables to DKK
5,171m (31 December 2022: DKK
5,071m) and other receivables to
DKK 3,605m (31 December 2022:
DKK 3,688m).
Deposits and securities amounted to
DKK 2,236m (31 December 2022:
DKK 0) and were deposits not
meeting the definition of cash and
cash equivalents but co-managed
with cash and cash equivalents. Cash
and cash equivalents amounted to
DKK 13,382m (31 December 2022:
DKK 8,163m).
Section 2 of the consolidated
financial statements contains more
details on assets and section 4.5.2
on cash and cash equivalents.
Assets in discontinued operations
totalled DKK 0m (31 December
2022: DKK 11,618m) following the
deconsolidation of the Russian
business.
EQUITY AND LIABILITIES
Equity
Equity amounted to DKK 16,536m at
31 December 2023 (31 December
2022: DKK 25,301m), DKK 14,021m
of which was attributable to the
shareholder in Carlsberg Breweries
A/S and DKK 2,515m to non-
controlling interests.
The change in equity of DKK
-8,765m mainly related to the profit
for the period of DKK -39,803m
other comprehensive income DKK
38,557m, dividends paid to the
shareholder and non-controlling
interests of DKK -4,844m and capital
reduction of DKK -3,000m.
Liabilities
Total liabilities were DKK 85,647m
(31 December 2022: DKK 80,497m).
At 31 December 2023, non-current
and current borrowings amounted to
DKK 39,266m (31 December 2022:
DKK 29,037m): non-current
borrowings of DKK 30,763m (31
December 2022: DKK 22,865m) and
current borrowings of DKK 8,503m
(31 December 2022: DKK 6,172m).
The increase in non-current
borrowings of DKK 7,898m was
impacted by the issuance of three
EUR bonds under the company’s
Euro Medium Term Notes (EMTN)
programme during the year: a 3.5-
year EUR 750m bond in May, and in
September a 5-year EUR 700m and
a 10-year EUR 600m bond.
This was partly offset by the
reclassification of a EUR 1bn bond
maturing in May 2024 to current
borrowings. Current borrowings were
reduced by a EUR 500m bond,
which matured in September 2023.
Non-current tax liabilities, retirement
benefit obligations etc. amounted to
DKK 7,385m (31 December 2022:
DKK 8,281m). The decline was
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 9
mainly the result of a decline in the
Group’s obligation, net, on defined
benefit plans, the settlement of a
fine related to a competition case in
Germany, and the reversal of other
legal and contractual obligations
that did not materialise.
Current liabilities excluding current
borrowings were DKK 38,996m (31
December 2022: DKK 39,079m).
Liabilities in discontinued operations
totalled DKK 0m (2022: DKK
4,100m) following the
deconsolidation of the Russian
business.
CASH FLOW
Free operating cash flow amounted
to DKK 7,549m (2022: DKK
8,981m), impacted by the lower
EBITDA and net contribution from
the change in working capital, higher
capital expenditure (CapEx). Free
cash flow amounted to DKK 4,958m
(2022: DKK 9,391m), impacted by
an increase in financial investments.
Net cash flow amounted to DKK
5,254m (2022: DKK 1,696m),
positively impacted by the issuance
of three bonds during the year, in
total amounting to EUR 2,050m,
more than offsetting the pay-out of
dividends amounting to DKK 6,695m
(2022: DKK 7,986m).
CASH FLOW FROM OPERATING
ACTIVITIES
Cash flow from operating activities
amounted to DKK 11,615m (2022:
DKK 12,794m).
EBITDA amounted to DKK 15,219m
(2022: DKK 15,485m), negatively
impacted by currencies.
The change in trade working capital
was DKK +713m (2022: DKK
+1,960m), mainly impacted by an
increase in trade payables. Average
trade working capital to revenue for
the year remained strong -20.3%
(2022: -21.5%).
The change in other working capital
was DKK -976m (2022: DKK
-679m), impacted by the payment
of a competition fine in Germany.
Restructuring costs and other special
items amounted to DKK -530m
(2022: DKK -183m), impacted by
the termination of the Kronenbourg
1664 licensee agreement in the UK.
Net interest etc. paid amounted to
DKK -236m (2022: DKK -950m).
The improvement was mainly due to
the settlement of financial
instruments. Corporation tax paid
was DKK -2,079m (2022: DKK
-2,201m).
CASH FLOW FROM INVESTING
ACTIVITIES
Cash flow from investing activities
was DKK -6,657m (2022: DKK
-3,403m).
Acquisition of property, plant and
equipment and intangible assets
(CapEx) amounted to DKK -4,233m
(2022: DKK -4,225m), while total
operational investments amounted
to DKK -4,066m (2022: DKK
-3,813m), also impacted by a small
negative contribution from the
change in on-trade loans compared
with a positive contribution in 2022.
Total financial investments
amounted to DKK -2,591m (2022:
DKK +410m), mainly attributable to
the placement of cash in deposits not
meeting the definition of cash and
cash equivalents. In the cash flow
statement, this is presented as
acquisition of financial investments.
RETURN ON INVESTED CAPITAL
ROIC was 17.3% (2022: 18.0%),
mainly impacted by the lower
reported operating profit before
special items due to currencies. ROIC
excluding goodwill was 45.7% (2022:
49.9%).
FINANCING
At 31 December 2023, gross
financial debt amounted to DKK
39,266m (2022: DKK 29,037m) and
net interest-bearing debt to DKK
22,491m (2022: DKK 19,696m).
The increase in net interest-bearing
debt of DKK 2,795m was mainly the
result of the dividend payout, share
buy-back, CapEx and the acquisition
of Waterloo Brewing, partly offset
by cash flow from operating
activities.
The difference of DKK 16,775m
between gross financial debt and net
interest-bearing debt mainly
comprised cash and cash equivalents
of DKK 13,382m and deposits and
securities of DKK 2,236m.
At 31 December 2023, the average
debt duration was 5.7 years (2022:
4.1 years). Of the gross financial
debt, 78% (DKK 30,763m) was long
term, i.e. with maturity of more than
one year from 31 December 2023.
Net interest-bearing debt/EBITDA
was 1.47x (2022: 1.27x).
Read more about net-interest
bearing debt, capital structure and
borrowings in sections 4.3, 4.4 and
4.5 of the consolidated financial
statements.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 10
On 28 March 2022, we
announced the decision to
seek a full divestment of our
Russian business following
Russia’s invasion of Ukraine.
On 23 June, Carlsberg announced
the conditional sale of Baltika
Breweries in Russia.
On 16 July, the Russian government
issued a presidential decree
temporarily transferring the
management of our Russian business
– Baltika Breweries – to the Russian
Federal Agency for State Property
Management. According to the
presidential decree, Carlsberg retains
title to the shares in Baltika
Breweries, but otherwise no longer
has any control or influence over the
management of the business.
As a result of the loss of control, the
investment was fully written down
and previous years’ accumulated
currency translation and hedging
losses were reclassified to the
income statement. The loss from the
discontinued operation in 2023
amounted to DKK 47,748m (2022:
loss of DKK 6,490m).
In October, we announced that we
had informed Baltika Breweries of
our termination of all licence
agreements enabling Baltika
Breweries to produce, market and
sell the Carlsberg Group’s products,
including international and regional
brands. There will be a limited run-
off period until 1 April 2024, during
which Baltika Breweries may use up
existing stock and materials.
We continue to take all possible
actions, including legal, to protect
assets and operations.
Read about the accounting
treatment and impact of the
deconsolidation of the Russian
business in section 5.1 of the
consolidated financial statements.
RUSSIA
RUSSIA
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 11
We maintain our commitment
to these principles and will
ensure the right balance of
investing in compounding,
profitable, long-term growth
and delivering continued cash
returns to our shareholder.
Our capital allocation principles,
which we announced in 2016,
remain unchanged in Accelerated
SAIL:
1. Investing in our business to drive
long-term sustainable growth.
2. Targeting NIBD/EBITDA of
below 2.0x.
3. Targeting an adjusted payout
ratio of around 50% (adjusted
for special items after tax).
4. Distributing excess cash to our
shareholder through share buy-
backs and/or extraordinary
dividends.
5. Deviating from the above if
value-enhancing acquisition
opportunities arise.
DRIVING LONG-TERM GROWTH
We continued to invest in our business
in support of our SAIL’27 priorities. In
Q4, we accelerated our commercial
investments in support of our growth
categories, including premium beer,
Beyond Beer and growth in Asia. For
the year, marketing investments grew
organically by 10%.
We will continue to ensure sufficient
support of and investments in our
brands, markets and capabilities to
drive sustainable, compounding
growth.
LEVERAGE
The net interest-bearing debt to
EBITDA ratio was 1.47x, well below
our target of below 2.0x.
VALUE-ENHANCING M&A
We completed the acquisition of
Waterloo Brewing Ltd. in Canada.
In the UK, Carlsberg Marston’s
Brewing Company took over
the Kronenbourg 1664 brand,
terminating a licensee agreement.
CAPITAL ALLOCATION
GOOD DELIVERY AGAINST
CAPITAL ALLOCATION PRINCIPLES
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 2023 REVIEW AND 2024 EXPECTATIONS 12
2024 is the first year of
Accelerate SAIL, and we will
be stepping up investments in
support of our growth
priorities and enablers.
While the macroeconomic
environment and impact on
consumer behaviour remain
uncertain, inflationary pressure is
moderating. Consequently, we
expect a more moderate increase in
our total cost base than in previous
years. We intend to offset the higher
total costs/hl in absolute terms
through higher revenue/hl and
continued tight cost control.
To position the Group for successful
delivery of our increased long-term
growth ambitions, we will step up
commercial investments in 2024 in
alignment with Accelerate SAIL.
While keeping the ratio of SG&A to
revenue flat, we intend to increase
absolute sales and marketing
investments, the latter by more than
10%. The majority of the incremental
sales and marketing investments will
be allocated to brand and route-to-
market investments in China and
Vietnam, premium brands in markets
across our regions, digital capability
projects and B2B e-commerce
(eB2B).
Consequently, our earnings
expectations for 2024 are:
• Organic operating profit growth of
1-5%.
Based on the spot rates at 6
February, we assume a translation
impact on operating profit of around
DKK -100m for 2024.
Other relevant assumptions are:
• Financial expenses, excluding
foreign exchange losses or gains, of
DKK 1.1bn.
• Reported effective tax rate of
around 21%.
• Capital expenditure of around DKK
5bn, impacted by capacity
expansion in Asia, commercial
investments across the Group,
sustainability and digital
investments.
Forward-looking statements
Forward-looking statements are
subject to risks and uncertainties that
could cause the Group’s actual
results to differ materially from
those expressed in the forward-
looking statements. Accordingly,
forward-looking statements should
not be relied on as a prediction of
actual results. See page 33 for the
full forward-looking statements
notice.
2024 EARNINGS EXPECTATIONS
EARNINGS
EXPECTATIONS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE 13
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.
Our purpose stated above is rooted
in our heritage and in the mentality
of our founders, who left a rich
legacy that still greatly influences
how we run our business today.
Their pioneering spirit, passion for
brewing and proactive contribution to
society are what make us who we
are.
We are proud of our purpose of
“Brewing for a better today and
tomorrow”. Current and prospective
employees look for companies with a
clear purpose, a keen sense of social
responsibility, and work that has
meaning and gives them a sense of
belonging.
We live our purpose every day by
focusing on our brands and the art of
brewing, exciting our consumers with
quality brews that strengthen our
identity and pride as brewers, and by
continuously aiming to do better.
We will continue to live our purpose,
as it is key for the successful
execution of our strategy and for
achieving our ambition of being
successful, professional and
attractive in our markets:
Successful in ensuring the
financial health of our company
by outperforming our competitors
through improved market share,
revenue, margins and earnings.
Professional in ensuring the strategic
health of our company by delivering
the highest standards in everything
we do, including brands, brews and
service.
Attractive in ensuring the
organisational and societal health
of our company by being purpose-
led and performance-driven for our
shareholder, employees and society.
OUR PURPOSE
Creating value
BREWING FOR A BETTER
TODAY AND TOMORROW
BEERS THAT
STAND AT THE
HEART OF
MOMENTS THAT
BRING PEOPLE
TOGETHER
WE PURSUE
PERFECTION
EVERY DAY
WE STRIVE
TO BREW
BETTER BEERS
WE DO NOT SETTLE
FOR IMMEDIATE
GAIN, WHEN WE CAN
CREATE A BETTER
TOMORROW FOR ALL
OF US
14
C
ARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
OUR 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 low- and alcohol-free brews.
Our customers range from on-trade to off-
trade, from online to ofine, and from small to
large. We aim to become their preferred beer
supplier, offering 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.
We optimise systems and processes
to deliver the right data at the right time
in support of our growth agenda, and
optimise asset utilisation while brewing
high-quality beer.
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
3%
volume
growth
34%
volume
growth
0%
volume
growth
OUR BEER
PORTFOLIO
OUR BRAND PORTFOLIO
PREMIUM
BEER
MAINSTREAM
CORE BEER
15
20%
58%
+1%
SHARE OF
TOTAL VOLUMES
SHARE OF
TOTAL VOLUMES
VOLUME
GROWTH
3%
volume
growth
C
ARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
APPEALING BRANDS
IN AFB AND BEYOND BEER
ALCOHOL-FREE
BREWS (AFB)
BEYOND
BEER
SOFT
DRINKS
16
3% +3%
SHARE OF
TOTAL VOLUMES
VOLUME
GROWTH
6%
volume
decline
C
ARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE 17
Launched in early February
2022, SAIL’27 remains our
strategic frame, but with
Accelerate SAIL we will
sharpen our focus on long-
term compounding growth.
The Group’s strategy, SAIL’27, was
developed by a broad group of
leaders and employees in late 2021
and early 2022 – before the war in
Ukraine and subsequent high
inflation. These significant events, in
addition to COVID-19, meant that the
focus in the past few years has been
on successfully navigating through
these shorter-term challenges.
With the impact from these major
disruptions decreasing, it is now time
to sharpen the longer-term focus on,
and ensure sufficient investments in,
our future growth. Consequently, the
Executive Committee and extended
leadership team conducted a review
of the SAIL’27 priorities in late 2023
and early 2024, leading to the
refreshed Accelerate SAIL strategy.
SAIL’27 set the strategic frame for
Carlsberg. Accelerate SAIL builds on
this foundation, setting higher growth
ambitions by increasing investments
in and support for selected growth
drivers within portfolio, geographies
and capabilities, improving supply
OUR STRATEGY
ACCELERATE
SAIL
CREATING VALUE FOR ALL OUR
STAKEHOLDERS
SHAREHOLDER
• Organic revenue growth of 4-6% CAGR.
• Organic operating profit growth above revenue
growth.
• Continued ROIC focus.
• Disciplined capital allocation.
• Ambitious sustainability targets.
EMPLOYEES
• A purpose-led and growth-driven company with
strong development opportunities and
engagement.
• An attractive, diverse and inclusive workplace.
• Strong brands, quality products and ambitious
sustainability efforts to be proud of.
SOCIETY
• Championing sustainability in our journey Together
Towards ZERO and Beyond.
• Partnering with communities and contributing to
prosperity in the markets in which we operate.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE 18
chain efficiency, developing a growth
culture and continuing the well-
embedded cost focus.
The key elements of Accelerate SAIL
are explained in the following.
STEP UP PREMIUM GROWTH
The premium category remains
attractive across our markets, where
we see appealing growth and margin
opportunities. Premium accounts for
20% of the Group’s total volumes and
is a key revenue growth driver.
In recent years, our strong portfolio
of international and local premium
brands has outperformed our
mainstream portfolio despite the
significant external headwinds. By
increasing investments in marketing
and brand building and further
developing our execution capabilities,
we believe that we can accelerate
growth of our premium portfolio and
significantly increase the premium
exposure.
ACCELERATE BEYOND BEER
Our opportunities in Beyond Beer
will initially be captured through the
Somersby and Garage brands, which
are well established in many
markets. The category currently
accounts for 2% of our total volumes.
We aim to grow the Beyond Beer
category in our business through
increased investments in brand
building, innovation, footprint
expansion and execution. We will
also explore opportunities to expand
our Beyond Beer portfolio through
partnerships and local brand
extensions, leveraging our strong
route-to-market.
ACCELERATE GROWTH IN ASIA
Asia has been and remains a key
volume and value growth driver for
the Group.
As part of Accelerate SAIL, we remain
committed to growing in China, which
is our largest market. We still see
attractive volume and value growth
opportunities in this market in the
coming years for our strong premium
portfolio of local and international
beer and Beyond Beer brands, both in
our strongholds in the western part of
the country and in the big cities. We
will strengthen our presence and
market share in existing big cities by
developing and advancing our route-
to-market, while continuing to seed
for the future in recently entered and
new cities.
In Vietnam, we will continue the
execution of our multi-year
transformation strategy with its clear
ambition to accelerate momentum by
increasing investments and achieve
growth through focus on key brands,
regions and capabilities. In India, we
will investigate an acceleration plan
when possible.
DRIVE PROFITABLE GROWTH IN
STRONGHOLDS
We will maintain our focus on driving
profitable growth in our stronghold
markets, such as the Nordics,
Switzerland, France and Laos by
leveraging our strong portfolios, our
scale and leading route-to-market
set-up.
DRIVE DIGITAL
TRANSFORMATION
We have identified the key
capabilities and enablers for the
delivery of our Accelerate SAIL
ambitions. These require improved
tools, processes and digitisation in
areas such as value management,
sales execution and B2B e-
commerce (eB2B) to drive revenue
growth, and in the areas of supply
chain management end to end and
transactional processes to drive
productivity. We will ensure the right
investments behind these capabilities
and enablers.
FUNDING OUR JOURNEY
Over the coming years, we intend to
restore gross margins to pre-COVID
levels to enable the step-up in
investment levels required to capture
the growth opportunities. The
opportunities lie in supply chain
areas such as procurement, value
engineering and standardisation of
raw and packaging materials across
markets.
The Group already has a very strong
and well-embedded cost focus
across the business, centred in
particular around SG&A costs and
enabled by the operating cost
management (OCM) framework,
which will be maintained.
BUILD A GROWTH CULTURE
Carlsberg has a strong performance-
and cost-focused culture. Building
on this strong foundation, we will
develop our corporate culture to
become more growth-oriented and
reward calculated risk-taking.
We will do that by developing our
Leadership Charter to show how our
values translate into behaviours,
ways of working and leadership
profiles, and design employee
incentive programmes to support a
growth culture. Our growth culture
will also encompass a systematic
approach to talent development
across the Group and increase global
mobility to ensure the right
capabilities at the right time in the
right place.
TOGETHER TOWARDS ZERO
AND BEYOND
We remain committed to our ESG
programme - Together Towards
ZERO and Beyond - and our
ambitious targets for carbon
emissions, regenerative farming,
packaging, water, irresponsible
drinking, accidents and diversity.
RAISING OUR AMBITIONS
As a result of Accelerate SAIL, we
are raising our long-term growth
ambitions (with 2024 as baseline):
• Organic revenue growth of 4-6%
CAGR (previously 3-5%).
• Organic operating profit growth
ahead of revenue growth.
The financial health of the business
is strong and provides a good
foundation for Accelerate SAIL. In
the coming years, we will increase
our commercial investments to
support our growth ambitions.
Consequently, we expect
marketing/revenue to reach around
9%. We will increase sales expenses,
but aim to keep SG&A/revenue flat
through continued tight G&A cost
control. The higher commercial
investments will be financed by
gradually restoring the gross margin
to pre-COVID levels through supply
chain productivity improvements.
Our capital allocation priorities –
in place since 2016 – remain
unchanged (see page 11).
In the following pages, we highlight
examples of how SAIL’27 came
alive during 2023.
19
Step up in
premium
BROOK LY N
BEER DELIGHTS
FESTIVAL-GOERS
Recognised globally as an iconic
craft beer brand, Brooklyn is a
craft beer for the many, bringing
the welcoming spirit of Brooklyn to
the world. Embracing this essence
of diverse communities, common
values and self-expression, Brooklyn
Pilsner was the official beer of the
Glastonbury Festival in the UK – the
world’s largest greenfield music and
performing arts event. As a festival
that encourages and stimulates
Step up in
premium
1664 – A LIFE-
STYLE BRAND
In 2023, we unveiled a refreshed
identity for 1664 to elevate the
brand image and build on its global
success. While the iconic blue bottle
is unchanged, the primary packaging
now features a more contemporary
iteration of the brand’s cockade,
variant styling, and a bold yet
elegant new bespoke typeface, all
printed on premium matte label
Strengthen mainstream
core beer
LEVERAGING
OUR CORE BRANDS
IN CHINA
Around 60% of our beer volumes
in China comprises local core beer
brands, which are well established
and enjoy strong market positions in
their home regions. Brands include
Dali, Xixia, Wusu and Chongqing.
While the local brands have slightly
different brand identities, they
share many similarities, including
an image of being trustworthy and
modern. To reinforce the strength
of the local power brands, in 2023
we successfully enhanced the
local bonding and consolidated
the brand equity of these brands,
sharpening their position in the local
regions. While acknowledging the
strong mainstream position, we
also strive for continued relevance
by driving bold innovation and
offering premium line extensions,
such as extra malt, white beer and
pure draft, applying a repeatable
commercial model across brands.
In 2023, our local mainstream core
beer portfolio in China grew by 7%.
culture around the world, there
were clear synergies with Brooklyn’s
values. Bars located across the
expansive site served Brooklyn
Pilsner throughout the five-day
event, delighting festival-goers with
the ultimate summer refreshment.
We also engaged with a wide range
of other amazing music festivals
across Europe, including Roskilde
Festival, Copenhell and Queer
Distortion in Denmark, Sideway
Festival in Finland and 12 different
festivals in Poland, all serving up our
vibrant portfolio of beers. In 2023, we
reached close to one million happy
festival-goers, supporting the total
Brooklyn volume growth of 34%.
paper. Still undeniably French,
the refreshed brand identity was
designed to feel modern, be easily
recognisable and continue to build
premium perceptions. 1664 became
our key international super-premium
brand in 2016, and its continued
success builds upon well-executed
strategies for brand assets, portfolio
offerings, distribution and execution.
In 2023, 1664 grew by 3%, supported
by strong growth in both existing
and new markets, such as Norway,
Finland, Switzerland, Serbia, Ukraine
and Vietnam.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
20
Step up in premium
and Accelerate Beyond Beer
TAKE A BREAK
AND CHILL
Wind Flower Snow Moon (WFSM)
is one of our local premium brands
in China. It comes from the beautiful
Yunnan province and was first
launched in 1996. The name, bottle
and labelling elegantly encapsulate
the spirit and nature of Yunnan,
encouraging consumers to take a
break to chill and enjoy life. Thanks
to continual updates to drive a
modern and young image, and
activations in both the off- and
on-trade and online, the brand has
delivered strong growth despite
the challenges of COVID, almost
tripling volumes since 2016. In 2023,
we expanded the reach of WFSM
through the launch of the low-alcohol
WFSM in the Beyond Beer space.
The low-alcohol WFSM will play
in the premium-plus segment and
be a vehicle for further expansion
outside the home region of Yunnan.
At the same time as attracting new
consumers, the low-alcohol WFSM
leverages the young adult, chill and
joyful positioning of the premium
WFSM beer. In 2023, total WFSM
volumes increased by more than 60%.
Strengthen mainstream
core beer
MYTHOS
– THE BEER
OF CHOICE
Mythos, our local power brand in
Greece, was initially introduced in
Thessaloniki in 1997. It is a modern
and dynamic brand that encourages
consumers to live life to the fullest.
Thanks to a series of updates, such
as the launch of Mythos Radler in
2014, implementation of the pull-off
cap in 2016 and the introduction of
Mythos Ice in 2020, Mythos has
cemented its place as one of the
most popular beer brands in Greece.
Despite the difficulties faced during
the COVID-19 pandemic, we took
the initiative to revamp Mythos
in 2022, positioning it as the beer
of choice for an inclusive society
where entertainment and fun are
considered fundamental rights. The
2023 campaign featured TV and
online commercials accessible to
hearing- and sight-impaired people,
showcasing Mythos’ support of
real people’s fight for an inclusive
society. Strengthened market share
and volume growth of 3% in 2023
are testimony to Mythos’ success.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
21
Execution
excellence
TECH-ENABLED
SALES
EXECUTION
Faced with an increasingly
competitive environment, the need
to digitise, analyse and optimise
sales in stores has never been
greater. Image recognition powered
by artificial intelligence (AI) enables
us to turn images into insights to
unlock the potential of every shelf
across all outlet channels and fuel
our data-driven approach in sales
execution. More specifically, AI-
Accelerate growth
in Asia
STRENGHTENING
OUR BUSINESS
IN VIETNAM
Vietnam is one of the largest
beer markets in the world with a
very strong beer culture among
consumers – more than 90% of
alcohol consumed is beer. We have
been present in this core Asian
market since 1993, and now hold a
strong position in the central part of
the country with the Huda brand. The
market posted a good post-COVID
recovery in 2022 but came under
significant pressure in 2023 because
of the country’s economic downturn.
Despite this, we still believe Vietnam
holds exciting growth opportunities
for us, and expanding our business
and building a winning portfolio in
this market remain an important
priority within Accelerate SAIL. Our
winning portfolio includes Carlsberg,
1664 Blanc, Tuborg, Somersby and
the core mainstream brand Huda. In
2022 and 2023, we step-changed our
execution capabilities and expanded
our business, resulting in volume
growth of 8%.
Manage supply
chain end to end
TRANSFORMING
SUPPLY CHAIN
CAPABILITIES
We are transforming our end-to-end
supply chain planning capability to
enhance our agility and improve our
supply chain resilience. In 2023, we
went live in the first market with
OnePlan, which is a programme
that will transform our supply
chain planning capabilities and be
a key growth enabler. OnePlan is
a new-generation planning tool,
bringing together all aspects of
supply chain planning, including
demand, supply, inventory,
production and materials planning.
It enables a fully connected sales
and operations planning (S&OP)
process and near-real-time “what if”
scenario planning, as well as faster
identification of capacity constraints
and faster response time to changes
in demand. The significant benefits
of OnePlan will not only be seen in
the supply chain, but will also be
tangible in the commercial area by
improving demand visibility across
customers and products, and in
finance by increasing the speed of
data availability and analysis.
powered image recognition allows
our sales teams to identify in-store
performance gaps and delivers real-
time actionable insights to increase
revenue opportunities at all points
of sale; provides instant visibility
in channels, brands, products and
competitors to improve compliance
and drive sales; reduces audit
time; and enables cost efficiencies.
Additionally, implementing image
recognition supports our culture
of continuous improvement and
innovation. During the year, we
began the roll-out of AI-powered
image recognition across Western
Europe and Asia.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE 22
Our ESG programme, Together
Towards ZERO and Beyond
(TTZAB), is an integral part of
Accelerate SAIL and our
response to global challenges
such as climate change, water
scarcity and inequality.
The programme focuses on 11 areas
identified through an assessment of
the most material ESG impacts of our
business. In 2023, we reconfirmed the
relevance of these topics through our
first double materiality assessment.
Our targets and commitments enable
us to tackle global social and
environmental challenges, and our
actions help us mitigate risks and
capture opportunities, including the
generation of new business.
TTZAB also bolsters our licence to
operate, boosts our reputation and
strengthens our relationships with
stakeholders – including our people,
consumers, customers, suppliers and
investors – by demonstrating our
commitment to acting responsibly
and taking positive action on ESG.
Our targets and commitments
demand transformative change –
across our operations and value
chain – that we cannot achieve
alone. Partnering with suppliers,
customers, consumers and
communities remains central to our
approach as we drive progress
Together Towards ZERO and Beyond.
See how we exceeded our 2022
target for reducing carbon emissions
across the full value chain and
examples of how we are working
with partners to deliver on our
TTZAB ambitions and targets on
pages 24-25.
OUR ESG REPORTING
Our ESG Report, available at
www.carlsberggroup.com/reports-
downloads/carlsberg-group-2023-
esg-report, provides comprehensive
information on the TTZAB
programme, ambitions, targets,
governance, performance and
partnerships.
OUR ESG PROGRAMME
TOGETHER TOWARDS
ZERO AND BEYOND
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE 23
The ESG Report serves as our
statutory statement on corporate
social responsibility in accordance
with sections 99a, 99d and 107d of
the Danish Financial Statements Act.
Next year, we will align our ESG
reporting approach and format with
the forthcoming EU Corporate
Sustainability Reporting Directive and
the corresponding European
Sustainability Reporting Standards.
Our ESG actions also contribute
to the UN’s global ambitions on
sustainability. Our ESG Report
forms the basis for our 2023
Communication on Progress to the
UN Global Compact, which will be
submitted in 2024 in line with new
requirements.
We have also issued our first stand-
alone Human Rights Report, which
provides more detail on our due
diligence approach and the actions
we are taking to uphold human
rights throughout our value chain.
Our Human Rights Report is
available at
www.carlsberggroup.com/reports-
downloads/carlsberg-group-2023-
human-rights-report/.
30%
REACHING OUR 2024 TARGET FOR WOMEN IN
LEADERSHIP ROLES
We are actively working to attract, retain and develop more women in the brewing
industry and our own business, driven by ambitious targets to increase the number of
women in leadership. We partner with groups such as Brewers of Europe and the Pink
Boots Society to attract more women into brewing careers, and we encourage women
to join our graduate and apprenticeship programmes. In 2023, we launched a global
sponsorship programme to help develop women leaders identified as having potential to
take on executive roles. Each of the first 12 women to participate – chosen from across
our regions and functions – was paired with a senior sponsor for six months of coaching,
support and access to networks of internal influencers, which will better prepare them
for later success at the top of the company.
TOGETHER TOWARDS ZERO & BEYOND
24
Together Towards ZERO
and Beyond
REDUCING VALUE
CHAIN CARBON
EMISSIONS PER
HL BY 16% FROM
2015 TO 2022
More details on our value chain
carbon emissions reductions can
be found in the ESG Report.
In 2023, we completed our latest
three-year analysis of our value
chain carbon emissions, based on
2022 data. The analysis confirmed
that we have slightly exceeded our
target to cut value chain emissions
per hl of beer produced by 15% by
2022 from the 2015 baseline. To
reach our target of a net ZERO value
chain by 2040, we will continue to
work closely with our suppliers as
they play a critical role in helping us
reduce our carbon footprint at every
stage of the value chain.
HOW DID WE ACHIEVE
OUR TARGET?
Cooling
Reduction in emissions from
fridges and beer dispense
equipment through the use of
energy management devices,
decarbonisation of national
electricity grids and other
initiatives.
Packaging
Carbon intensity reduced
across all packaging types, and
recycling rates for PET bottles
and aluminium cans improved.
Progress was counteracted by
an increased share of cans and
fewer refillable glass bottles in
the overall packaging mix.
Transportation
& distribution
Reduction primarily achieved
by efficiency improvements,
supported by marginal
improvements from
electrification and reduced
business travel.
Breweries
Reductions supported by the
elimination of coal, increased
energy efficiency and use
of renewable electricity and
innovative solutions, such as
the extraction of biogas at
on-site wastewater treatment
plants.
Agriculture
& processing
Lower-carbon solutions in
malting processes were a
major progress driver, while
increased usage of rice
and sugars added carbon
intensity.
% OF TOTAL VALUE CHAIN
EMISSIONS IN 2022
EMISSIONS REDUCTIONS
2015-2022
24% 45% 10%10%11%
CoolingPackagingBreweries
Transportation
& distribution
Agriculture
& processing
-18% -41% -3% -10% -26%
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
25
Together Towards ZERO
and Beyond
PUTTING
WATER ON TAP
IN CAMBODIA
Around one in five people lack
essential access to clean water in
Cambodia. Our new partnership
with the social enterprise TapEffect
will establish water supply and
associated infrastructure, providing
Together Towards ZERO
and Beyond
TEAMING UP
WITH THE TOUR
DE FRANCE
Tourtel Twist offers alcohol-free beer
mixes combined with fruit juices free
of colouring, sweeteners and artificial
flavours. This tasty and healthy
combination has made it France’s
most popular alcohol-free beer and
our biggest-selling alcohol-free brand
in Western Europe. For Tourtel Twist,
2023 was the second of three years
as an official supplier of the Tour
de France. The partnership with the
Tour de France generated around
340 million contacts through TV and
social media advertising, supporting
our efforts to raise awareness of
responsible drinking. In 2024, Tourtel
will not only be an official supplier
of the Tour de France but also
an official supporter of the Paris
Olympics.
Together Towards ZERO
and Beyond
A NEW
REGENERATIVE
BREW FOR THE UK
Our journey towards 100%
regenerative barley in the UK has
begun. Carlsberg Marston’s Brewing
Company and the Archer-Daniels-
Midland Company contracted 23
farmers to grow an estimated 686
tonnes of regeneratively grown
barley in 2023 using techniques such
as no- or low-tillage, planting cover
crops and restricting chemical use to
the minimum required. The harvest
will be used to brew Carlsberg
Danish Pilsner from 2024. We aim to
expand this pilot to source enough
regenerative barley to brew all
Carlsberg beer in the UK by 2027,
and we are committed to making
our brews in the UK with 100%
regenerative barley by 2031.
access to clean water for more than
6,800 people in a remote rural area
in Pursat province. The project will
include a treatment plant, clean
storage, a pumping system and
over 50 km of pipework. Within
two years, it is expected to deliver
7 million litres of water per month.
By 2025, it is projected to yield
around 25% of the water needed
to replenish consumption at our
brewery in Sihanoukville.
Read more about these and other
case stories in the ESG Report.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CREATING VALUE
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 26
Our governance framework
aims to ensure value creation,
safeguard active and
transparent stewardship across
the Group and reduce risk.
The Carlsberg Breweries Group
operates on the same governance
framework as the Carlsberg Group
where Board committees, including
the Audit Committee, are preparing
and facilitating Supervisory Board
decisions.
A comprehensive description of the
Carlsberg Group’s corporate
governance position is available on
www.carlsberggroup.com/who-we-
are/corporate-governance.
The Group has policies for a number
of key areas, including, but not
limited to, anti-bribery & corruption,
labour & human rights, diversity,
equity & inclusion, competition law,
information security & acceptable
use, trade sanctions, data protection,
data ethics, risk management,
finance, marketing, corporate
communication, responsible drinking
and public & government affairs.
The Supervisory Board is responsible
for overseeing that the Executive
Committee has an adequate system
and resources in place to ensure
compliance with these policies.
DIVERSITY
CORPORATE GOVERNANCE
Governance
FOCUS ON
CORPORATE GOVERNANCE
Management and share of women, Carlsberg Breweries A/S
Target
2023
2024
Supervisory Board
Total members¹
Share of women
40%
Other management levels²
Total members
Share of women
30%
¹ Elected by the Annual General Meeting ² Other management levels employed
by Carlsberg Breweries A/S in Denmark, as defined by the Danish Companies Act.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 27
AUDITING
To safeguard the interests of the
shareholder and the general public,
an independent auditor is appointed
at the Annual General Meeting
following a proposal from the
Supervisory Board, which is based on
a recommendation from the Audit
Committee of Carlsberg A/S.
INTERNAL CONTROL AND RISK
MANAGEMENT RELATED TO
THE FINANCIAL REPORTING
PROCESS
OVERALL CONTROL ENVIRONMENT
The Supervisory Board and ExCom
have overall responsibility for the
Group’s internal control environment.
The Audit Committee is responsible
for monitoring the effectiveness of
the overall internal control
environment and risk management
systems, in particular related to the
financial reporting process.
The Group has a number of policies
and procedures in key areas of
financial reporting, including the
Finance Policy, the Accounting
Manual, the Controller Manual, the
Use of Auditors Policy, the Chart of
Authority, the Risk Management
Policy, the Financial Risk
Management Policy, the Corporate
Governance Policy, the Information
Security & Acceptable Use Policy,
the Records Management &
Personal Data Protection Policy, the
Stock Exchange Compliance Policy,
the Tax Policy and the Code of
Ethics & Conduct.
The policies and procedures apply to
all subsidiaries, and similar
requirements are set out in
collaboration with the partners in
joint ventures.
The Group’s internal control
framework for financial reporting is
designed to reduce and mitigate
financial risks identified and ensure
reliable internal and external
financial reporting. It defines roles
and responsibilities and provides
assurance that key risks are covered
by internal control activities.
While systems and processes are not
standardised across all entities, all
entities are subject to the same set
of internal key controls.
The Group continuously seeks to
strengthen the internal control
environment through further
standardisation, increased
automation, strong analytics and
transparent governance.
The internal financial control
framework is monitored through
entities’ self-assessment of the
effectiveness of the implemented
controls and continuous testing of
performance by the Group’s Internal
Control function. The monitoring of
the performance of the controls
focuses on the adequacy of the
controls, their effectiveness and the
efficiency of the overall controlling
processes.
RISK ASSESSMENT
In the internal control framework for
financial reporting, the Group has
identified the risks that could have a
direct or indirect material impact on
the financial statements. Group
entities are required to carry out and
document the internal controls
defined by the Group to cover the
key risks identified.
All entities are required to reassess
the coverage and effectiveness of
their controls biannually and must
update changes to the control
framework for financial reporting,
including new risks and controls.
Furthermore, Group entities are
required to maintain mapping of risks
related to the segregation of duties
and implement necessary
compensating controls, thereby
continuously strengthening the
internal control environment and
enforcing optimal segregation of
duties in the ERP systems.
The segregation of duties within the
main ERP systems is continuously
monitored by the Group’s Internal
Control function.
CONTROL ACTIVITIES AND
MONITORING
The Group has implemented a
formalised financial reporting
process, budget process, estimates
and monthly reporting on actual
performance. The accounting
information reported by all Group
companies is reviewed by controllers
with regional or functional in-depth
knowledge of the individual
companies/functions and by
technical accounting specialists.
Controllers are continuously updated
on best practice relating to internal
financial controls, and trained in new
accounting and reporting
requirements.
The entities in the Group are
dependent on IT systems. Any
weaknesses in the system controls or
IT environment are compensated for
by manual controls to mitigate any
significant risk relating to the
financial reporting.
The quality of processes and
associated internal controls is subject
to continuous monitoring and testing
by the Group’s Internal Control
function as well as to regular internal
audits.
The Audit Committee’s monitoring
covers both the internal control
environment and business risk.
Monitoring of the internal control
environment is covered by the
Group’s control framework for
financial reporting.
The financial risks are assessed and
reviewed at multiple levels in the
Group, including monthly
performance review meetings at
ExCom level, periodic review of
control documentation, and audits
performed by Group Internal Audit.
GROUP INTERNAL AUDIT
Group Internal Audit provides
objective and independent
assessment of the adequacy,
effectiveness and quality of the
Group’s internal controls. Group
Internal Audit works in accordance
with a charter, which is reviewed
periodically and approved by the
Audit Committee.
Taking into account the annual
review of business risks (see pages
29-31), an internal audit plan is
drawn up for the year. The plan is
reviewed and approved by the Audit
Committee. In 2023, Group Internal
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 28
Audit conducted audits mainly in the
areas of key operational processes,
financial reporting controls, brewery
operations, compliance (internal and
external regulation) and information
technology.
In addition, Group Internal Audit
continuously assesses the adequacy
of actions implemented by
management to address previously
raised risks and control issues.
SPEAK UP
The Group has a Speak Up system
that enables employees to report
misconduct. Reports typically relate
to suspected violations of the
Carlsberg Code of Ethics & Conduct.
The Speak Up system is operated
by an external provider and allows
concerns to be brought to the
attention of the Group Speak
Up Review team anonymously,
confidentially and via multiple
channels. The EU Whistleblowing
Directive is currently under adoption
in relevant jurisdictions and our
system and process are being
adapted to it for full compliance.
The Speak Up Review team is
responsible for reviewing and
overseeing all reported Speak Up
matters. Furthermore, an Integrity
Committee, chaired by the CFO,
oversees the follow-up of major
Speak Up investigations and provides
a report to ExCom and the Audit
Committee at least quarterly.
The Speak Up Summary report
contains an overview of all open and
closed investigations during the
quarter and the time taken to resolve
cases.
The Speak Up Review Manual, which
clarifies how investigations should be
undertaken, is regularly updated to
reflect the most recent changes in
legislation and new tools used in
investigations.
In 2023, there was a relaunch of a
communication campaign to raise
awareness of the various Speak Up
channels available and the
importance of speaking up. In Q4
2022, a specific sexual harassment
awareness and prevention campaign
was launched. Similar campaigns will
be repeated every year.
Since the establishment of the Speak
Up system, some reports and their
subsequent investigation have led to
disciplinary sanctions, including
dismissal on the basis of violation of
the Code of Ethics & Conduct and/or
Group policies. The incidents have
not had any material impact on the
financial results of the Group.
More information regarding the
Speak Up system, including reported
concerns and disciplinary actions,
can be found in the ESG Report.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 29
In conducting our business and
executing our strategy, we
seek to manage risks in such a
way as to minimise the threats
they present.
Our business is subject to a number
of risks and uncertainties that could
have both short-term and long-term
implications for the Group.
The aim of our risk management
approach is to address these risks
and uncertainties in due time.
GOVERNANCE STRUCTURE
The Supervisory Board is ultimately
responsible for the risk management
framework and its effectiveness.
At least once a year, the Board
reviews the overall risk matrix. The
identified risks, including risk
development, are subsequently
monitored by the Supervisory
Board, ensuring that plans are in
place for managing the individual
risks, such as strategic, operational,
financial and compliance risks.
The Supervisory Board may choose
to delegate the monitoring of one
or more specific risks to a board
committee, which then reports back
to the Supervisory Board on
progress.
The Executive Committee (ExCom)
is responsible for reviewing the
overall risk exposure associated with
the Group’s activities and ensuring
that appropriate actions are taken.
RISK MANAGEMENT PROCESS
In 2023, we updated the Group’s risk
management process to ensure timely
identification and proactive
management of risks and
uncertainties throughout the year.
Risks are assessed according to a
two-dimensional heat map that
estimates the impact of the risk on
operating profit or brand/image and
the likelihood of the risk materialising.
The risks identified in the heat map
represent the most significant current
and emerging risks to the company
over the next 3-5 years.
The identification of current and
emerging risks is founded on a
systematic bottom-up/top-down
approach involving markets, regions
and functions. This is complemented
with external views, including
publicly available whitepapers from
leading organisations and
enterprises.
Local and functional risk assessment
workshops follow the same principles
and methodology as Group-level risk
assessment, and are held at
appropriate intervals, or as a
minimum on an annual basis.
Based on the risk assessment, risks
are assessed holistically by ExCom,
generally applying a time horizon of
up to five years, although some risks
may have a longer time horizon.
ExCom assigns risk owners, who are
responsible for mitigating the risks
through a programme of risk
management activities. Each key risk
is assigned to an ExCom member,
who assumes ultimate responsibility
for risk mitigation.
ExCom conducts half-yearly reviews
of the risk heat map and mitigation
plans, and also conducts a deep dive
into each risk at least once a year.
Top risks are presented to and
discussed with the Supervisory Board
at least once a year.
IDENTIFIED RISKS
The most significant current risks
identified are listed in the box below
and elaborated on in the following,
including in each case a description
of the risk and associated mitigation
efforts.
RISK MANAGEMENT
MANAGING
BUSINESS RISKS
MOST SIGNIFICANT
CURRENT RISKS
• Economic instability/geopolitical tension
impacting our trading and operating
environment.
• Cybercriminal attack with severe financial,
regulatory and reputational consequences for
our business.
• Ability to take price increases being impacted
by political sensitivity and retailer resistance.
• Breach of or other non-compliance with laws
on competition, anti-bribery and corruption,
trade sanctions and data protection resulting in
significant fines or settlements as well as
reputational loss.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 30
The risk movement paragraph
indicates whether the likelihood of
risk has increased, decreased or is
unchanged versus last year.
In addition to the risks described in
the following, other significant risks
identified included consumer boycott
following inappropriate advertising,
unfavourable changes in third-party
brand licence agreements, business
interruption in the supply chain
caused by health and safety issues,
breach of standards or lack of
processes, and stakeholder actions
against the Group due to lack of
progress on ESG matters negatively
impacting corporate and brand
reputation.
OTHER EMERGING AND LONG-
TERM RISKS
Significant potential long-term risks
with a time horizon over five years
are mostly associated with climate
change impact.
They include the introduction of a
cost of carbon initiative and other
regulatory initiatives, potentially
impacting profitability through
increased costs; physical operational
interruptions due to climate change
in the value chain, such as water
scarcity and/or water quality issues,
leading to production interruptions
and loss of sales; and storms or
flooding causing disruptions at the
breweries or in the supply chain,
resulting in loss of sales and
customer dissatisfaction.
ECONOMIC INSTABILITY/
GEOPOLITICAL TENSION
Risk movement
Unchanged versus last year.
Description
Across our regions, the
macroeconomic environment
is challenged by wars and an
increased level of global geopolitical
tensions. The wider impact of these
challenges may be economic
instability, inflation and recession,
which all pose a real risk to
consumer sentiment and disposable
incomes, possibly impacting beer
markets negatively. Geopolitical
tensions may also ultimately force
Carlsberg to exit, restructure or
change approach in certain markets.
Mitigation
Our strategic priorities are well
defined, and we will continue to
invest in and drive growth for our
premium brands, alcohol-free brews
and beverages in the Beyond Beer
category. As part of Accelerate SAIL,
we have defined the specific priorities
that we believe will generate volume
and value growth in the next 3-5
years.
Investing in these priorities will
strengthen our market positions in
growth markets, such as Vietnam
and India, and in mature markets in
Western Europe, supporting a more
balanced geographical exposure.
Our mainstream core beer accounts
for 59% of total volume, and this
portfolio of strong local power
brands acts as an attractive offering
in an environment where some
consumers may become more price-
sensitive.
We will also continue to leverage our
value management capabilities to
support the positive development in
revenue/hl.
In addition, our well-embedded and
rigorous Funding the Journey and
performance management culture
and transparency on costs through
our Operating Cost Management
(OCM) tool allow us to quickly
adapt to changes in the trading
environment, while our low financial
leverage and access to short-term
financing serve as protection during
financial uncertainty.
We monitor the global geopolitical
situation on an ongoing basis and
develop scenarios for intervention in
the event that tensions emerge or
further evolve. In our scenario
analyses, we apply lessons learned
from various geographies, including
the impact and consequences of the
situation in Russia since the outbreak
of the war.
CYBER AND IT SECURITY
Risk movement
Unchanged versus last year.
Description
Like all other businesses, the Group
relies heavily on technology and IT
infrastructure for its day-to-day
business. A cyber attack or non-
availability of IT systems could have
severe financial, regulatory and
reputational consequences for our
business.
Mitigation
Our Chief Information Security
Officer (CISO) leads an independent
cyber security function within our IT
organisation. The CISO coordinates
risk mitigation plans and activities
with ExCom and the Supervisory
Board.
As the cyber security threat
assessment has intensified in recent
years, we have strengthened our
protective work to counter the risk.
Furthermore, we deploy a wide array
of advanced defensive technologies,
as well as continuing to embed our
risk management framework in all
layers of the organisation. We
undertake regular testing of our
security controls via an ongoing
series of technological audits and
breach simulations.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 31
While the threat landscape remains
difficult, especially with the latest
geopolitical challenges, we continue
to invest in improving our security
and mitigation activities.
ABILITY TO TAKE PRICE INCREASES
Risk movement
Decreased versus last year.
Description
Although at a lower rate than in
2023, we are expecting further
inflation in our cost base in 2024.
Political sensitivity and retailer
resistance to accepting price
increases on consumer goods pose a
risk for our ability to take price
increases to offset the cost inflation.
Mitigation
We will assess the need for price
increases market by market, taking
into consideration all internal cost
mitigation actions, the economic
situation in the given market, and
customers’ and consumers’ ability to
cope with price increases.
As part of this, we will leverage value
management to seek the right
promotional and packaging mix,
while also utilising the strength of
our brand portfolio, particularly our
strong local power brands in markets
where consumers are less resilient to
the inflationary pressure.
We will also be transparent in our
negotiations with retailers, providing
them with an understanding of the
total cost inflation impacting our
business. As price increases taken in
recent years have been insufficient
for maintaining our gross margins,
we need to restore these in the
coming years to ensure sufficient
funds to invest in future profitable
growth.
LEGAL AND REGULATORY
COMPLIANCE
Risk movement
Unchanged versus last year.
Description
Legal and regulatory compliance
risks include competition law and
data protection compliance (GDPR),
as well as non-compliance with
trade sanctions and anti-bribery &
corruption regulations. Failure to
comply with regulations and Group
policies may lead to fines, claims,
and brand and reputation damage.
In recent years, the Group has
experienced competition-law dawn
raids in a few jurisdictions. Non-
compliance with competition law
is a growing risk due to increased
regulatory enforcement and the
availability of leniency or a reduction
in fines for those who proactively
report breaches to the authorities.
The Group is party to certain ongoing
lawsuits and disputes. These and
their significance are described in
section 3.4 of the consolidated
financial statements.
The risk related to trade sanctions is
likely to persist, as sanctions
imposed on Russia are expected to
continue. The Group has continued
its enhanced screening requirements
to ensure that our counterparties,
banks and logistics operators are not
sanctioned entities and that
transactions are legal.
Mitigation
We continuously review and
strengthen the Group-wide control
framework covering legal compliance
areas, including, but not limited to,
competition law, anti-bribery &
corruption, trade sanctions and data
protection, to reflect areas of
increased regulatory focus.
We regularly review and, where
necessary, update relevant Group
legal and compliance policies, and
conduct compulsory training of all
relevant employees. In addition, we
have embedded the enhanced third-
party screening process, launched in
Q3 2022, to reduce bribery and
sanctions risks.
We actively set a strong tone from
the top and work with our managing
directors to communicate the
importance of compliance and how
to mitigate the areas of highest risk
in each market.
Read more about our compliance
efforts in the Living by our Compass
section of the ESG Report.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 GOVERNANCE 32
HENRIK POULSEN
CHAIR (SINCE 2022)
Nationality: Danish
Year of birth: 1967
Appointed (until): 2021 (2024)
Non-executive, independent director.
Henrik Poulsen is Senior Advisor to
A.P. Moller Holding. He is Chair of
the Supervisory Board of Carlsberg
A/S, and Deputy Chair of the Board
of Directors, a member of the Audit
Committee and Chair of the
Remuneration Committees of Novo
Nordisk. He is Chair of the Board of
Directors and Chair of the
Nomination and Remuneration
Committee at Faerch, and a member
of the boards of Directors of Novo
Holdings and Bertelsmann SE & Co.
Henrik Poulsen has extensive
executive and board experience in
large international companies,
significant financial knowledge and
in-depth knowledge of mergers and
acquisitions, strategy, risk
management, ESG, transformation
and innovation.
MAJKEN SCHULTZ
DEPUTY CHAIR (SINCE 2022)
Nationality: Danish
Year of birth: 1958
Appointed (until): 2019 (2024)
Non-executive, non-independent
director.
Majken Schultz, PhD, is a Professor
at Copenhagen Business School and
Chair of the Board of Directors of the
Carlsberg Foundation. She is Deputy
Chair of the Supervisory Board of
Carlsberg A/S. Majken Schultz is
actively involved in the Danish
business community in a variety of
networks and is a founder partner in
the CBS board education
programme. She is a member of the
Danish Committee on Foundation
Governance. Majken Schultz has
substantial experience and is
consulted within the areas of
organisational culture, identity and
corporate branding. She also has
extensive board experience. In
addition to her analytical and
strategic capabilities, she has a
broad international network and
expertise.
JACOB AARUP-ANDERSEN
Nationality: Danish
Year of birth: 1977
Appointed (until): 2023 (2024)
Executive director.
Jacob joined Carlsberg on 1
September 2023. Prior to joining
Carlsberg, Jacob served as CEO of
ISS, a global leader in facility
management with 350,000
employees operating in 60 countries
globally. Prior to ISS, he had
executive leadership roles at Danske
Bank and Danica Pension. Before
that, Jacob worked as an investment
professional in firms including TPG-
Axon Capital and Goldman Sachs.
Jacob is a member of the Board of
Directors and a member of the Risk
and Capital Committee of SEB Group.
EVA VILSTRUP DECKER
Nationality: Danish
Year of birth: 1964
Appointed (until): 2014 (2026)
Employee representative.
Eva Vilstrup Decker is Senior Director
Customer Service & Sourcing,
Carlsberg Breweries A/S. She is an
employee representative on the
Supervisory Board of Carlsberg A/S.
ULRICA FEARN
Nationality: Swedish
Year of birth: 1973
Appointed (until): 2023 (2024)
Executive director.
Ulrica joined the Carlsberg Group on
1 January 2023. Before joining
Carlsberg, Ulrica was CFO of
Equinor, Norway. Prior to Equinor,
she was Director, Group Finance at
BT Group. She began her career at
Diageo, where she spent almost 20
years in various senior finance and
other management roles across
Europe, APAC and the USA. Ulrica is
a member of the Board of Directors
of Capgemini.
THOMAS PALUDAN-MÜLLER
Nationality: Danish
Year of birth: 1972
Appointed (until): 2020 (2026)
Employee representative.
Thomas Paluda-Müller is Director
Liquid & Packaging Implementation,
Carlsberg Breweries A/S.
PETER PETERSEN
Nationality: Danish
Year of birth: 1969
Appointed (until): 2022 (2026)
Employee representative.
Peter Petersen is President of the
Staff Association. Process Lead,
Carlsberg Supply Company Danmark.
The Supervisory Board members’ full
CVs, including their skills and
competencies, are available online at
www.carlsberggroup.com/who-we-
are/about-the-carlsberg-
group/supervisory-board/
EXECUTIVE
BOARD
JACOB AARUP-ANDERSEN
CEO OF CARLSBERG A/S and
CARLSBERG BREWERIES A/S
ULRICA FEARN
CFO OF CARLSBERG A/S and
CARLSBERG BREWERIES A/S
SUPERVISORY BOARD
SUPERVISORY
BOARD
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 FORWARD-LOOKING STATEMENTS 33
This Annual Report contains
forward-looking statements,
including statements about the
Group’s sales, revenues, earnings,
spending, margins, cash flow,
inventory, products, actions, plans,
strategies, objectives and guidance
with respect to the Group's future
operating results.
Forward-looking statements include,
without limitation, any statement
that may predict, forecast, indicate
or imply future results, performance
or achievements, and may contain
the words “believe, anticipate,
expect, estimate, intend, plan,
project, will be, will continue, will
result, could, may, might”, or any
variations of such words or other
words with similar meanings.
Any such statements are subject to
risks and uncertainties that could
cause the Group’s actual results to
differ materially from the results
discussed in such forward-looking
statements.
Prospective information is based on
management’s then current
expectations or forecasts. Such
information is subject to the risk that
such expectations or forecasts, or the
assumptions underlying such
expectations or forecasts, may
change.
The Group assumes no obligation to
update any such forward-looking
statements to reflect actual results,
changes in assumptions or changes in
other factors affecting such forward-
looking statements.
Some important risk factors that
could cause the Group’s actual results
to differ materially from those
expressed in its forward-looking
statements include, but are not
limited to: economic and geopolitical
uncertainty (including interest rates
and exchange rates), financial and
regulatory developments, demand
for the Group’s products, increasing
industry consolidation, competition
from other breweries, the availability
and pricing of raw materials and
packaging materials, cost of energy,
production- and distribution-related
issues, information technology
failures, breach or unexpected
termination of contracts, market-
driven price reductions, market
acceptance of new products, changes
in consumer preferences, launches of
rival products, stipulation of fair
value in the opening balance sheet of
acquired entities, litigation,
environmental issues and other
unforeseen factors.
New risk factors can arise, and it
may not be possible for management
to predict all such risk factors, nor to
assess the impact of all such risk
factors on the Group’s business or
the extent to which any individual
risk factor, or combination of factors,
may cause results to differ materially
from those contained in any forward-
looking statement.
Accordingly, forward-looking
statements should not be relied on
as a prediction of actual results.
Forward-looking statements
FORWARD-LOOKING
STATEMENTS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 34
CONSOLIDATED FINANCIAL
STATEMENTS
Income statement ................................... 35
Statement of comprehensive
income ......................................................... 35
Statement of financial position ......... 36
Statement of changes in equity ........ 37
Statement of cash flows ...................... 38
Notes ............................................................ 39
PARENT COMPANY FINANCIAL
STATEMENTS
Statements .............................................. 107
Notes ......................................................... 110
REPORTS
Management statement ................... 122
Auditor’s report ..................................... 123
SECTION 1
OPERATING ACTIVITIES
1.1 Segmentation of operations ..................41
1.2 Operating expenses and
inventories....................................................44
1.3 Foreign exchange risk related to
earnings ........................................................46
1.4 Cash flow from operating
activities ........................................................47
1.5 Trade and other receivables ..................48
SECTION 2
ASSET BASE AND RETURNS
2.1 Segmentation of assets and
returns ...........................................................52
2.2 Impairment ..................................................53
2.3 Intangible assets and property,
plant and equipment ................................58
SECTION 3
SPECIAL ITEMS, PROVISIONS AND
OTHER LIABILITIES
3.1 Special items ...............................................62
3.2 Provisions .....................................................63
3.3 Other liabilities ...........................................64
3.4 Contingent liabilities .................................64
SECTION 4
FINANCING COSTS, CAPITAL
STRUCTURE AND EQUITY
4.1 Financial income and expenses ............67
4.2 Financial assets and liabilities ...............68
4.3 Net interest-bearing debt .......................68
4.4 Capital structure ........................................68
4.5 Borrowings and cash................................70
4.6 Interest rate risk .........................................71
4.7 Foreign exchange risk related to
net investments and financing
activities ........................................................72
4.8 Funding and liquidity risk ........................74
4.9 Derivative financial instruments............76
SECTION 5
DISCONTINUED OPERATIONS,
ACQUISITIONS, DISPOSALS AND
ASSOCIATES
5.1 Discontinued operations ..........................78
5.2 Investment model and risks ...................81
5.3 Acquisitions and disposals ......................82
5.4 Contingent considerations ......................84
5.5 Associates ....................................................85
SECTION 6
TAX
6.1 Income tax ...................................................86
6.2 Tax assets and liabilities .........................88
SECTION 7
STAFF COSTS AND REMUNERATION
7.1 Staff costs ....................................................89
7.2 Remuneration .............................................90
7.3 Share-based payments ...........................90
7.4 Retirement benefit obligations
and similar obligations ............................92
SECTION 8
OTHER DISCLOSURE REQUIREMENTS
8.1 Fees to auditors .........................................95
8.2 Related parties ...........................................95
8.3 Events after the reporting period .........96
SECTION 9
BASIS FOR PREPARATION
9.1 Significant accounting estimates
and judgements .........................................97
9.2 General accounting policies ...................97
9.3 Changes in accounting policies .......... 100
9.4 New legislation ....................................... 100
9.5 New segmentation 2024 ..................... 101
SECTION 10
GROUP COMPANIES
10 Group companies.................................... 103
CONSOLIDATED
FINANCIAL STATEMENTS
Consolidated financial statements
.
¹ The segmented quarterly information on page 101 is
part of the Management review.
INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 35
DKK million Section 2023 2022
Revenue 1.1 73,585 70,265
Cost of sales 1.2.1 -40,753 -38,198
Gross profit 32,832 32,067
Sales and distribution expenses 1.2.2 -18,355 -17,337
Administrative expenses -4,042 -4,189
Other operating activities, net 1.2.3 135 97
Share of profit after tax of associates 5.5 577 675
Operating profit before special items 11,147 11,313
Special items, net 3.1 -416 -94
Financial income 4.1 732 358
Financial expenses 4.1 -1,535 -1,072
Profit before tax 9,928 10,505
Income tax 6.1 -1,983 -1,844
Profit from continuing operations 7,945 8,661
Loss from discontinued operations¹ 5.1 -47,748 -6,490
Profit for the period -39,803 2,171
Attributable to
Non-controlling interests 1.1 1,011 1,171
Shareholder in Carlsberg Breweries A/S (net profit) -40,814 1,000
¹ The discontinued operation in Russia was deconsolidated as of July 2023, cf. section 5.1.
DKK million Section 2023 2022
Profit for the period -39,803 2,171
Other comprehensive income
Retirement benefit obligations 7.4 -71 594
Income tax 6.1 -29 -75
Items that will not be reclassified to the income statement -100 519
Foreign exchange adjustments of foreign entities 4.1 37,781 -3,926
Fair value adjustments of hedging instruments 4.1 920 -759
Income tax 6.1 -44 100
Items that will be reclassified to the income statement 38,657 -4,585
Other comprehensive income 38,557 -4,066
Total comprehensive income -1,246 -1,895
Attributable to
Non-controlling interests 753 603
Shareholder in Carlsberg Breweries A/S -1,999 -2,498
Total comprehensive income for the period arises from
Continuing operations 6,272 7,428
Discontinued operations -7,518 -9,323
Total comprehensive income -1,246 -1,895
STATEMENT OF FINANCIAL POSITION
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 36
DKK million Section 31 Dec. 2023 31 Dec. 2022
ASSETS
Non-current assets
Intangible assets 2.2, 2.3 40,390 40,526
Property, plant and equipment 2.2, 2.3 24,248 23,580
Investments in associates 5.5 4,706 4,796
Receivables 1.5 879 934
Tax assets 6.2 1,755 1,704
Total non-current assets 71,978 71,540
Current assets
Inventories 1.2.1 5,811 5,718
Trade receivables 1.5 5,171 5,071
Tax receivables 219 208
Other receivables 1.5 2,551 2,516
Prepayments 835 964
Deposits and securities 4.5.2 2,236 -
Cash and cash equivalents 4.5.2 13,382 8,163
Current assets 30,205 22,640
Assets in discontinued operations¹ 5.1 - 11,618
Total current assets 30,205 34,258
Total assets 102,183 105,798
DKK million Section 31 Dec. 2023 31 Dec. 2022
EQUITY AND LIABILITIES
Equity
Share capital 4.4.1 497 498
Reserves -2,819 -41,711
Retained earnings 16,343 63,694
Equity, shareholder in Carlsberg Breweries A/S 14,021 22,481
Non-controlling interests 2,515 2,820
Total equity 16,536 25,301
Non-current liabilities
Borrowings 4.3, 4.5.1 30,763 22,865
Retirement benefit obligations 7.4 1,357 1,525
Tax liabilities 6.2 4,160 4,168
Provisions 3.2 1,554 2,283
Other liabilities 3.3 314 305
Total non-current liabilities 38,148 31,146
Current liabilities
Borrowings 4.3, 4.5.1 8,503 6,172
Trade payables 22,172 21,906
Deposits on returnable packaging materials 1,717 1,627
Provisions 3.2 921 782
Tax payables 1,052 970
Other liabilities 3.3 13,134 13,794
Current liabilities 47,499 45,251
Liabilities in discontinued operations¹ 5.1 - 4,100
Total current liabilities 47,499 49,351
Total liabilities 85,647 80,497
Total equity and liabilities 102,183 105,798
¹ The discontinued operation in Russia was deconsolidated as of July 2023, cf. section 5.1.
STATEMENT OF CHANGES IN EQUITY
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 37
DKK million Section
Shareholder in Carlsberg Breweries A/S
2023
Share
capital
Currency
translation¹
Hedging
reserves¹
Total
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Equity at 1 January 498 -40,889 -822 -41,711 63,694 22,481 2,820 25,301
Profit for the period - - - - -40,814 -40,814 1,011 -39,803
Other comprehensive income 4.4.3 - 38,250 642 38,892 -77 38,815 -258 38,557
Total comprehensive income for the period - 38,250 642 38,892 -40,891 -1,999 753 -1,246
Capital reduction 4.4.2 -1 - - - -2,999 -3,000 - -3,000
Refund to parent company for exercise of share-based payments - - - - -126 -126 - -126
Change in expected future refunds for exercise of share-based payments - - - - 162 162 - 162
Share-based payments 7.3 - - - - 126 126 1 127
Dividend paid to the shareholder 4.4.2 - - - - -3,695 -3,695 -1,149 -4,844
Non-controlling interests - - - - 72 72 90 162
Total changes in equity -1 38,250 642 38,892 -47,351 -8,460 -305 -8,765
Equity at 31 December 497 -2,639 -180 -2,819 16,343 14,021 2,515 16,536
¹ Prior to the deconsolidation of the discontinued operation in Russia, the related accumulated currency translation and hedging reserves within equity represented losses of DKK 40.9 bn and DKK 0.5 bn respectively (31 December 2022: losses of
DKK million Section
Shareholder in Carlsberg Breweries A/S
2022
Share
capital
Currency
translation
Hedging
reserves
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 4.4.3 - -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 4.4.2 -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 4.4.2 - - - - -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
STATEMENT OF CASH FLOWS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 38
DKK million Section 2023 2022
Operating profit before special items 11,147 11,313
Depreciation, amortisation and impairment losses 2.3 4,072 4,172
Operating profit before depreciation, amortisation and impairment losses 15,219 15,485
Other non-cash items -496 -638
Change in trade working capital 713 1,960
Change in other working capital -976 -679
Restructuring costs and other special items paid -530 -183
Interest etc. received 328 223
Interest etc. paid -564 -1,173
Income tax paid -2,079 -2,201
Cash flow from operating activities 1.4 11,615 12,794
Acquisition of property, plant and equipment and intangible assets 2.3 -4,233 -4,225
Disposal of property, plant and equipment and intangible assets 177 283
Change in on-trade loans 1.5 -10 129
Total operational investments -4,066 -3,813
Free operating cash flow 7,549 8,981
Acquisition and disposal of subsidiaries, net 5.3 -822 -
Acquisition and disposal of associates, net 5.3 -7 -48
Acquisition and disposal of financial investments, net 4.5.2 -2,248 -20
Change in financial receivables -26 196
Dividends received 512 282
Total financial investments -2,591 410
Cash flow from investing activities -6,657 -3,403
Free cash flow 4,958 9,391
Shareholder in Carlsberg Breweries A/S 4.4.2 -6,695 -7,986
Non-controlling interests 4.4.2 -1,106 -1,042
External financing 4.5.1 9,091 -438
Cash flow from financing activities 1,290 -9,466
Net cash flow from continuing operations 6,248 -75
Net cash flow from discontinued operations¹ 5.1 -994 1,771
Net cash flow 5,254 1,696
Cash and cash equivalents at 1 January 8,163 8,344
Cash and cash equivalents included in discontinued operations at 1 January 1,194 -
Foreign exchange adjustment of cash and cash equivalents -1,229 -683
Cash and cash equivalents included in discontinued operations - -1,194
Cash and cash equivalents at 31 December 4.5.2 13,382 8,163
¹ The discontinued operation in Russia was deconsolidated as of July 2023, cf. section 5.1.
SECTION 1
OPERATING
ACTIVITIES
73.6bn
REVENUE (DKK)
Revenue grew by 4.7% to DKK 73,585m (2022:
DKK 70,265m). Revenue growth was primarily
driven by price increases across markets, taken
in order to offset the significant cost increases,
and supported by a positive product mix.
The negative currency impact related in
particular to the Chinese, Laotian, Indian,
Ukrainian, Norwegian and Swedish currencies.
The acquisition impact related to the acquisition
of Waterloo Brewing in Canada.
REVENUE DEVELOPMENT (%)
44.6%
GROSS MARGIN
Although gross profit/hl increased by 3%, the
gross margin declined by 100bp to 44.6% due
to increased cost of sales from higher input and
energy costs and higher salaries.
11.1bn
OPERATING PROFIT (DKK)
Operating expenses increased by 4% due to
increased marketing and sales investments,
while administrative expenses declined. Total
operating expenses as a percentage of revenue
declined by 20bp.
The share of profit after tax of associates
declined by DKK98m, mainly due to certain
one-off expenses in associates in Asia.
Operating profit before depreciation,
amortisation and impairment losses (EBITDA)
declined by 1.7% to DKK 15,219m. The EBITDA
margin declined by 130bp to 20.7%, impacted
by the lower gross margin, higher operating
expenses and currencies.
Group operating profit declined by 1.5% to DKK
DKK 11,147m again due to the negative currency
impact, which offset the organic growth of
6.9%. The currency impact primarily related to
the Chinese, Laotian, Ukrainian and Norwegian
currencies.
The operating margin declined by 100bp
to 15.1%, mainly due to the lower gross margin
and increased marketing investments.
OPERATING PROFIT DEVELOPMENT (DKKbn)
2019-2020 including Russia. 2021-2023 excluding Russia.
7.9bn
PROFIT FROM CONTINUING
OPERATIONS (DKK)
Special items, net, amounted to DKK -416m
(2022: DKK -94m). Special items are detailed in
section 3.1.
Financial items, net, amounted to DKK -803m
(2022: DKK -714m). Excluding currency gains
and losses, financial items, net, amounted to
DKK -654m (2022: DKK -491m). The increase
was mainly due to higher average funding
costs, higher net interest-bearing debt and
factoring fees. Net currency losses mainly
related to the strengthening of the EUR/DKK
and conversion costs for the Laotian kip.
Financial items are detailed in section 4.1.
Tax totalled DKK -1,983m (2022: DKK -1,844m).
The effective tax rate was impacted by certain
non-recurring items, including adjustments
related to prior years and the deconsolidation
of the Russian business. Tax is detailed in
section 6.1.
Profit for the period, continuing operations, was
DKK 7,945m (2022: DKK 8,661m).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 39
9.2%
0.6%
-5.1%
2022
Organic
Acq.
FX
2023
56
60
64
68
72
76
80
2019
2020
2021
2022
2023
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Carlsberg Breweries Group’s share of profit for
the period was DKK -40,814m (2022: DKK
1,000m, impacted by the deconsolidation of the
Russian business. See section 5.1 for further
details. Non-controlling interests’ share of profit
for the period was DKK 1,011m (2022: DKK
1,171m).
11.6bn
OPERATING CASH FLOW (DKK)
Cash flow from operating activities amounted
to DKK 11,615m (2022: DKK 12,794m).
The change in trade working capital was DKK
+713m (2022: DKK +1,960m), mainly impacted
by the increase in trade payables. Average
trade working capital to revenue for the year
was -20.4% (2022: -21.5%).
The change in other working capital was DKK
-976m (2022: DKK -679m), impacted by the
payment of a competition fine in Germany.
Restructuring costs and other special items paid
of DKK -530m (2022: DKK -183m) were
impacted by the termination of the
Kronenbourg 1664 licensee agreement in the
UK. Net interest etc. paid amounted to DKK
-236m (2022: DKK -950m). The improvement
was mainly due to gains on the settlement of
financial instruments. Corporation tax paid was
DKK -2,079m (2022: DKK -2,201m).
5.0bn
FREE CASH FLOW (DKK)
Free cash flow amounted to DKK 4,958m
(2022: DKK 9,391m), while free operating cash
flow amounted to DKK 7,549m (2022: DKK
8,981m). Free cash flow was negatively
impacted in 2023 by the placement of cash in
deposits not meeting the definition of cash and
cash equivalents.
Operational investments totalled DKK -4,066m
(2022: DKK -3,813m. Acquisition of property,
plant and equipment and intangible assets
(CapEx) amounted to DKK -4,233m (2022: DKK
-4,225m).
Total financial investments amounted to DKK
-2,591 (2022: DKK +410m, mainly attributable
to the considerations related to the acquisition
of Waterloo Brewing in Canada and the
placement of cash in deposits.
FREE CASH FLOW (DKKbn)
2019-2020 including Russia. 2021-2023 excluding Russia.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 40
2019
2020
2021
2022
2023
0
2
4
6
8
10
12
Free operating cash flow
Free cash flow
SECTION 1.1
SEGMENTATION OF
OPERATIONS
The segmentation used in the Annual Report
2023 is unchanged from 2022.
Since the acquisition, Waterloo Brewing in
Canada has been included in Central & Eastern
Europe, and Jing-A Group in China has been
included in Asia, cf. section 5.3.
REVENUE
The Group’s revenue arises primarily from the
sale of beverages to its customers.
In 2023, total revenue was positively impacted
by improved revenue/hl growth driven by price
increases across all markets in order to offset
the significant cost increases. This was
supported by a positive product mix. Reported
revenue growth was partly offset by a negative
currency impact.
Other revenue by category is sales of products
other than beverages that do not drive any
volume, such as merchandise, services and by-
products. In aggregate, other revenue accounts
for around 1% of Group total revenue and is
therefore not considered material.
Not allocated revenue, DKK 21m (2022:
DKK 16m), consisted of DKK 750m (2022: DKK
733m) in revenue and DKK -729m (2022: DKK
-717m) 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 41
Segmentation of income statement
DKK million
2023
Western
Europe Asia
Central &
Eastern
Europe
Not
allocated
Carlsberg
Breweries
Group, total
Revenue 37,317 23,288 12,959 21 73,585
Total cost -32,643 -18,329 -10,756 -1,287 -63,015
Share of profit after tax of associates 307 249 21 - 577
Operating profit before special items 4,981 5,208 2,224 -1,266 11,147
Special items, net -416
Financial items, net -803
Profit before tax 9,928
Income tax -1,983
Profit from continuing operations 7,945
Loss from discontinued operations -47,748
Profit for the period -39,803
Operating margin 13.3% 22.4% 17.2% 15.1%
2022
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
Loss from discontinued operations -6,490
Profit for the period 2,171
Operating margin 14.2% 22.9% 19.5% 16.1%
Revenue and excise duties
DKK million 2023 2022
Revenue, including excise
duties 97,740 95,147
Excise duties -24,155 -24,882
Revenue 73,585 70,265
Revenue by category
DKK million 2023 2022
Beer revenue 54,312 51,825
Other beverages 18,277 17,569
Other revenue 996 871
Total 73,585 70,265
SECTION 1.1
SEGMENTATION OF
OPERATIONS
Geographical allocation of revenue
DKK million 2023 2022
Denmark (Carlsberg
Breweries A/S’ domicile) 4,919 4,487
China 13,354 13,781
United Kingdom 7,902 7,070
Other countries 47,410 44,927
Total 73,585 70,265
VOLUMES
The organic decline in total volumes was the
result of lower volumes in Western Europe and
Central & Eastern Europe while Asia continued
the volume growth from last year. Reported
volume was positively affected by the
acquisition of Waterloo Brewing.
OPERATING PROFIT BEFORE
SPECIAL ITEMS
Not allocated operating profit before special
items, DKK -1,266m (2022: DKK -1,370m),
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. Group
operating profit declined by 1.5%, negatively
affected by currency impact. Organic growth in
operating profit was 6.9%.
OPERATING MARGIN
The operating margin declined to 15.1%
compared to 16.1% in 2022. The decline was
due to lower gross margin and increased
marketing investments.
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 non-
controlling interests, primarily in the Asia
region. Non-controlling interests are not
individually material to the Group’s total profit.
CHANGES TO THE SEGMENTATION IN 2024
The Group’s regional structure was changed
effective 1 January 2024, with the aim of
rebalancing the size of the regions after our exit
from Russia. As a result of this change, the
operation in Carlsberg India and the investment
in Gorkha Brewery in Nepal will move from the
Asia region to the renamed Central & Eastern
Europe and India (CEEI) region. At the same
time, Carlsberg Shared Services will move from
Not allocated to Western Europe as it mainly
provides services to the markets in this region.
Please refer to section 9.5 for further
disclosures.
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 because of 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 42
Group financial performance
Change Change
Volumes (million hl) 2022 Organic Acq., net FX 2023 Reported
Beer 101.0 -0.4% 0.3% - 101.0 -0.1%
Other beverages 24.4 -0.9% 0.0% - 24.1 -0.9%
Total volume 125.4 -0.5% 0.2% - 125.1 -0.3%
DKK million
Revenue 70,265 9.2% 0.6% -5.1% 73,585 4.7%
Operating profit
11,313 6.9% -0.2% -8.2% 11,147 -1.5%
Operating margin (%) 16.1 15.1 -100bp
SECTION 1.1 (CONTINUED)
SEGMENTATION OF
OPERATIONS
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 customers should
be classified as a discount or a marketing expense.
Generally, activities with an individual customer are
accounted for as a discount, whereas costs related to
broader marketing activities are classified as
marketing expenses.
Whether the Group is acting as a principal or an agent
is assessed by management on a country-by-country
basis. The Group has concluded that it acts as 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 1.5.
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) are made
based on information for the Group as a whole and
therefore not segmented. A similar approach is taken
regarding tax associated with these transactions.
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 disposals, including any share
obtained from an increase/decrease in ownership of
associates, for a 12-month period from the
acquisition/disposal 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, disposals or foreign exchange
effects.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 43
SECTION 1.2
OPERATING
EXPENSES AND
INVENTORIES
1.2.1 COST OF SALES AND INVENTORIES
Cost of sales increased by 7% compared with
2022, due to higher input and energy costs and
higher salaries. Cost of sales per hl increased by
7% compared with 2022.
Inventories increased by 2% compared with
2022 impacted by cost increases across
markets and the acquisition of Waterloo
Brewing.
Commodity price risk is associated with
externally sourced input materials, such as malt
(barley), cans (aluminium), paper, sugar and
glass & plastic (PET) bottles. Commodity risk
management is coordinated centrally and
aimed at achieving predictable prices in the
medium term.
As the underlying markets for the commodity
categories are different, so is the way in which
they are hedged.
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 by the end of the third quarter of the
previous year, with a target hedge ratio of 90%
at the beginning of the year.
A significant part of the Group’s barley
exposure for 2023 had therefore been hedged
through fixed-price purchase agreements
entered into in 2022. Likewise, the majority of
the exposure for 2024 was hedged in 2023.
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) and in some
contracts the can price is also variable with
respect to the aluminium spot premium.
The aluminium price risk was hedged for both
2023 and 2024, and for 2024 the aluminium
spot premium has been hedged using derivative
financial instruments applying hedge
percentages in line with the policy. The fair
values of the derivative financial instruments
are specified in section 4.9.
For sugar we enter into rolling forward hedges
with suppliers fixing prices linked to official
indices, for example NY11. As with barley and
aluminium, the majority of the 2023 sugar
exposure had been hedged in 2022. Likewise,
the majority of the exposure for 2024 was
hedged in 2023.
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 up to a 15-month
rolling basis. For the electricity used at the
Fredericia site in Denmark, a 10-year PPA
starting mid-2024 has been entered into.
The fair value of derivative financial
instruments is specified in section 4.9.
In January 2023, the Group hedged fuel, linked
to distribution expenses, via financial contracts
for 2023 using a similar set-up to how
aluminium is hedged. At 31 December there
were no fuel hedges for 2024.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 44
Inventories
DKK million 2023 2022
Raw materials 2,359 2,333
Work in progress 399 344
Finished goods 3,053 3,041
Total 5,811 5,718
Cost of sales
DKK million 2023 2022
Cost of materials 23,618 21,655
Direct staff costs 1,528 1,521
Amortisation and depreciation 2,411 2,536
Indirect production
overheads 5,067 4,788
Purchased finished goods and
other costs 8,129 7,698
Total 40,753 38,198
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) 2023 2024 2025
2023 20% 371 116,529 16,238 - 93,582 22,947
2022 20% 381 116,454 18,304 93,608 22,846 -
Aluminium
premium Change
Effect
on OCI
Tonnes
purchased
Average
price (DKK) 2023 2024 2025
2023 30% 28 60,415 1,343 - 60,415 -
Energy Change
Effect
on OCI
MWh
purchased
Average
price (DKK) < 1 year 1-5 years > 5 years
2023 20% 29 289,966 420 12,123 116,000 161,843
2022 20% 34 289,966 420 - 99,123 190,843
SECTION 1.2 (CONTINUED)
OPERATING
EXPENSES AND
INVENTORIES
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, which include cost of point-of-sale
materials and third-party products sold to customers.
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.
1.2.2 SALES AND DISTRIBUTION
EXPENSES
Marketing expenses increased due to
accelerated investments in brands and
activities. Distribution expenses increased by
6% per hl as a result of increased energy prices.
Total marketing, sales and distribution
expenses increased by 6%
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 is 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.
1.2.3 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.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 45
Sales and distribution expenses
DKK million 2023 2022
Marketing expenses 6,169 5,793
Sales expenses 5,371 5,120
Distribution expenses 6,815 6,424
Total 18,355 17,337
Other operating activities, net
DKK million 2023 2022
Gains and losses on disposal
of property, plant and
equipment and intangible
assets, net 47 79
On-trade loans, net 95 30
Real estate, net 13 19
Research centres, net -71 -80
Other, net 51 49
Total 135 97
SECTION 1.3
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
both in the form of transactional and
translational risk.
REVENUE BY CURRENCY (%)
2023 (2022)
EUR and DKK are in a fixed exchange rate relationship
and consequently EUR is not hedged.
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 to markets with a functional
currency other than EUR.
Hedging of EUR against the non-EUR 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 4.9. The hedged amounts and the
sensitivity analysis regarding these hedges are
shown in section 4.7.4.
Asia
The transaction risk is considered to be less
significant due to lower purchases of raw and
packaging materials in currencies other than
the local functional currencies as well as the
high correlation between USD and most of the
Asian currencies. An exception is Laos, which
has a significant spend in USD that is not
possible to hedge.
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 2023 and 2024, 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 against
depreciation of the local currencies.
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 2023 was CNY due to the
7.7% depreciation of the currency compared
with 2022 and the relative share of the Group’s
operating profit generated in China. Moving
into 2024, the most significant currency
volatility exposure in terms of operating profit
and translation of net investments in foreign
entities is CNY.
The foreign exchange risk on translation of
revenue or earnings in foreign currencies can
not be hedged accounting-wise. To reduce the
economic risk, the Group has entered into
financial instruments designated as net
investment hedges, cf. section 4.7.1.
Impact on operating profit
Developments in exchange rates between
DKK and the functional currencies had a
negative impact of 8.4% on operating profit
measured in DKK.
Impact on net finance
Developments in exchange rates between
functional currencies of entities and the
currency of cash, borrowings and ordinary
trade receivables and payables will impact net
finance. The main currencies impacting net
finance during 2023 have been RUB, KZT and
LAK (receivables and payables) and EUR
(borrowings). The combined foreign exchange
and fair value adjustment loss in 2023 was DKK
151m net. As at 31 December 2023 there is no
RUB exposure.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 46
Entities in
Functional
currency
Change in average FX
rate 2022 to 2023
The eurozone EUR 0.2%
China CNY -7.7%
Norway NOK -11.7%
UK GBP -1.6%
Switzerland CHF 3.4%
Sweden SEK -7.3%
Laos LAK -26.5%
Ukraine UAH -15.3%
CNY 18% (20%) EUR 19% (18%)
GBP 11% (10%) DKK 9% (9%)
NOK 6% (7%) CHF 6% (6%)
SEK 4% (4%) PLN 4% (4%)
LAK 3% (3%) Other 20% (19%)
SECTION 1.4
CASH FLOW FROM
OPERATING
ACTIVITIES
The change in trade working capital amounted
to DKK 713m (2022: DKK 1,960m), driven by
continued cash management discipline and
higher trade payables.
Average trade working capital to revenue for
the year was -20.4% (2022: -21.5%).
Cash flow from the change in other working
capital declined by DKK 976m (2022: decrease
of DKK 679m), impacted by the payment of a
competition fine in Germany, cf. section 3.2.
The change in on-trade loans amounted to
DKK -10m (2022: DKK 129m).
Restructuring costs and other special items paid
amounted to DKK -530m (2022: DKK -183m),
mainly due to the termination of a licensee
agreement in the UK, as well as various
restructuring and optimisation projects across
the Group.
Net interest etc. paid amounted to DKK -236m
(2022: DKK -950m). The improvement was
largely due to settlement of financial
instruments.
Income tax paid amounted to DKK -2,079m
(2022: DKK -2,201m).
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. 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 ESTIMATES
AND JUDGEMENTS
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
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.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 47
Other specifications of cash flow from operating activities
DKK million Section 2023 2022
Other non-cash items
Share of profit after tax of associates 5.5 -577 -675
Gain on disposal of property, plant and equipment and intangible
assets, net 2.3 -47 -79
Share-based payments 127 107
Other items 1 9
Total -496 -638
Trade working capital
Inventories -143 -1,271
Trade receivables 224 -232
Trade payables, duties payable and deposits on returnable packaging
materials 632 3,463
Total 713 1,960
Other working capital
Other receivables -24 -572
Other payables -167 -12
Retirement benefit obligations and provisions -782 -63
Unrealised foreign exchange gains/losses -3 -32
Total -976 -679
SECTION 1.5
TRADE AND OTHER
RECEIVABLES
The Group’s trade receivables consist of
receivables from sales of goods and services
and on-trade loans. 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 124m
(2022: DKK 164m) 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.
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 4.7% (2022: 3.5%). The
interest income is recognised in other operating
activities.
RECEIVABLES FROM SALES OF GOODS AND
SERVICES
(BROKEN DOWN BY COUNTRY)
2023 (2022)
OTHER RECEIVABLES
Other receivables primarily comprise VAT and
similar government receivables, interest
receivables and other financial receivables.
These are associated with low risk.
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 2022.
ON-TRADE LOANS
(BROKEN DOWN BY COUNTRY)
2023 (2022)
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 48
Receivables included in the statement of financial position
DKK million
Non-
current Current Total
2023 Receivables
Trade
receivables
Other
receivables
Receivables from sales of goods and services - 4,935 - 4,935
On-trade loans 657 236 - 893
Other receivables 222 - 2,551 2,773
Total receivables 879 5,171 2,551 8,601
2022
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
On-trade loans recognised in other operating
activities, net
DKK million 2023 2022
Interest and amortisation of
on-trade loans 60 47
Losses and write-downs on
on-trade loans 35 -17
On-trade loans, net 95 30
UK 18% (16%) Sweden 9% (8%)
Poland 9% (5%) France 6% (8%)
India 4% (4%) Ukraine 3% (2%)
Finland 1% (8%) Other 50% (49%)
Germany 32% (29%)
France 28% (25%)
Switzerland 26% (25%)
Sweden 10% (9%)
UK 4% (12%)
Change in on-trade loans
DKK million 2023 2022
Loans provided -448 -261
Repayments 218 192
Amortisation of on-trade loans 220 198
Total -10 129
SECTION 1.5 (CONTINUED)
TRADE AND OTHER
RECEIVABLES
1.5.1 CREDIT RISK
In 2023, receivables not past due amounted to
85% (2022: 78%) of total gross receivables.
The past-due share of gross loans to on-trade
customers was 34% (2022: 34%).
Total accumulated allowances for impairment
losses on on-trade loans were DKK 426m
(2022: DKK 438m).
The share of receivables from sales of goods
and services that are past due decreased from
18% to 14%.
The credit risk on trade receivables is assessed
locally and monitored at Group level. The on-
trade channel, especially, has experienced
instability across markets, influenced by
unpredictable energy prices, inflation and
interest rates. As a result, the credit risk for on-
trade loans has on a collective basis increased
significantly since initial recognition, which is
why loss allowances are measured at an
amount equal to the lifetime expected credit
losses. This is the same as for receivables from
sales of goods and services.
The increased risk of credit losses is expected to
continue in 2024.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 49
Credit risk on receivables
DKK million
2023
Gross
receivables
Loss
allowance
Receivables,
net
Weighted
average
loss rate
Receivables from sales of goods and services
Not past due 4,809 -186 4,623 4%
Overdue 1-30 days 362 -97 265 27%
Overdue 31-90 days 87 -46 41 53%
Overdue > 90 days 343 -337 6 98%
Receivables from sales of goods and services 5,601 -666 4,935
On-trade loans
Not past due 864 -102 762 12%
Overdue 1-30 days 15 -2 13 13%
Overdue 31-90 days 25 -4 21 16%
Overdue > 90 days 415 -318 97 77%
On-trade loans 1,319 -426 893
Other receivables
Not past due 2,553 -1 2,552 -
Overdue 1-30 days 23 - 23 -
Overdue 31-90 days 66 - 66 -
Overdue > 90 days 146 -14 132 10%
Other receivables 2,788 -15 2,773
Total 9,708 -1,107 8,601
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
SECTION 1.5 (CONTINUED)
TRADE AND OTHER
RECEIVABLES
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.
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 2024.
At year-end 2023, management continued to assess
the lifetime expected credit losses for both receivables
from goods and services and on-trade loans in line
with 2022.
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 receivables from
sales of goods and services 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 the transaction
price 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.
The Group applies the simplified approach to measure
expected credit losses. This entails recognising a
lifetime expected loss allowance for all receivables
from sales of goods and services. Loss rates are
determined based on grouping of 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 receivables from sales of goods and services to
a factor. Receivables subject to factoring agreements
are derecognised once the criteria for derecognition
have been met and all substantial risks and rewards
transferred. The Group does not have any continuing
involvement once the receivables have been
derecognised.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 50
Development in impairment losses on receivables
DKK million
2022
2023
Receivables
from sales
of goods
and services
On-trade
loans
Other
receivables Total Total
Impairment at 1 January -613 -438 -16 -1,067 -1,105
Additional impairment losses
recognised -86 -65 - -151 -253
Realised during the year 20 7 - 27 69
Reversal of impairment losses 39 76 - 115 179
Acquisition of entities -24 - - -24 -
Foreign exchange adjustments -2 -6 1 -7 15
Transferred to discontinued
operations - - - - 28
Impairment at 31 December -666 -426 -15 -1,107 -1,067
SECTION 2
ASSET BASE
AND RETURNS
102.2bn
TOTAL ASSETS (DKK)
Total assets declined by DKK 3.6bn. The main
reason for the decrease was the
deconsolidation of the Russian business, partly
offset by higher current assets.
Intangible assets amounted to DKK 40.4bn at
31 December 2023 (2022: DKK 40.5bn).
ASSET BASE, CONTINUING OPERATIONS
(DKKbn)
Property, plant and equipment totalled
DKK 24.2bn (2022: DKK 23.6bn), mainly
impacted by additions and the acquisition of
Waterloo Brewing in March 2023.
Current assets increased by DKK 7.6bn to DKK
30.2bn. The increase was mainly due to higher
cash and cash equivalents and deposits
following the net issuance of EMTN bonds of
EUR 1.55bn.
4.2bn
CAPEX (DKK)
CapEx increased slightly by DKK 8m, driven by
brewery investments in China and Vietnam, as
well as various capacity and capability
upgrades across the Group. CapEx to
amortisation and depreciation, excluding right-
of-use assets, increased to 117% (2022: 106%).
CAPEX
1
AND AMORTISATION/
DEPRECIATION
2
(DKKbn)
CapEx
Amortisation and depreciation
CapEx/revenue
1
Excluding the purchase of the Brooklyn brand rights in 2020.
17.3%
ROIC
Return on invested capital (ROIC) decreased
by 70bp to 17.3% as a result of the lower
operating profit due to currencies, partly offset
by the lower effective tax rate, which was
impacted by non-recurring items. ROIC
excluding goodwill declined by 420bp to 45.7%.
RETURN ON INVESTED CAPITAL
2
(% 12-MONTH AVERAGE)
2
2019-2020 including Russia. 2021-2023 excluding Russia
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 51
64.1
6.3
-1.4
-4.0
-0.3
64.6
Asset base,
opening
Acquisitions and
disposals, incl.
leases, net
Foreign exchange
adjustments
Amortisation/
depreciation
Impairment losses
etc.
Asset base,
closing
2019
2020
2021
2022
2023
1.0
2.0
3.0
4.0
5.0
4.0%
5.0%
6.0%
7.0%
8.0%
ROIC
ROIC excl. goodwill
2019
2020
2021
2022
2023
0
10
20
30
40
50
60
SECTION 2.1
SEGMENTATION OF
ASSETS AND
RETURNS
At year-end, invested capital was up by
DKK 1.0bn primarily due to the acquisition of
Waterloo Brewing and the reduction of
provisions related to legal claims, and partially
offset by developments in currencies.
Waterloo Brewing was acquired in March 2023
and therefore did not have a full-year impact
on average invested capital.
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.
Non-current assets included in invested capital
further comprise financial assets other than
financial instruments and tax assets.
Not allocated comprises supporting companies
without brewing activities, and eliminations of
investments in subsidiaries, receivables and
loans.
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 discontinued operations,
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
1.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 52
Invested capital
DKK million 2023 2022
Total assets excluding assets
in discontinued operations 102,183 94,180
Less
Tax assets -1,755 -1,704
Financial receivables, hedging
instruments and receivables
sold 205 621
Deposits and securities -2,236 -
Cash and cash equivalents -13,382 -8,163
Assets included 85,015 84,934
Trade payables -22,172 -21,906
Deposits on returnable
packaging materials -1,717 -1,627
Provisions, excl. restructurings -2,390 -2,981
Other liabilities, excl. hedging
instruments and contingent
consideration -7,305 -7,957
Liabilities offset -33,584 -34,471
Invested capital 51,431 50,463
Goodwill -32,394 -32,532
Invested capital excl. goodwill 19,037 17,931
Invested capital, average 52,387 51,771
DKK million
2023
Western
Europe Asia
Central &
Eastern
Europe
Not
allocated
Carlsberg
Breweries
Group
Invested capital 26,952 17,473 7,334 -328 51,431
Invested capital excl. goodwill 11,232 3,897 4,236 -328 19,037
Investments in associates 2,439 2,225 36 6 4,706
Acquisition of property, plant and equipment and
intangible assets 1,533 1,841 682 177 4,233
Amortisation and depreciation 1,859 1,363 669 88 3,979
Impairment losses, net 338 -100 127 40 405
Return on invested capital (ROIC) 14.6% 22.9% 24.2% - 17.3%
ROIC excl. goodwill 33.9% 110.2% 40.9% - 45.7%
2022
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 1,860 645 357 4,225
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%
Geographical allocation of non-current assets
DKK million 2023 2022
Denmark (Carlsberg Breweries
A/S’ domicile) 4,130 3,918
China 15,612 15,906
France 11,125 11,100
Other countries 38,477 37,978
Total 69,344 68,902
SECTION 2.2
IMPAIRMENT
2.2.1 RECOGNISED IMPAIRMENTS
The impairment tests of goodwill and brands
with indefinite useful life were prepared at the
reporting date.
Impairment test 2023
The impairment tests prepared at 31 December
2023 did not identify any indication of
impairment of goodwill.
The Group recognised impairment losses of
DKK 305m on brands with indefinite useful life
in Western Europe, DKK 70m in Central &
Eastern Europe and DKK 97m in Asia. In
addition, impairment losses of DKK 53m were
recognised on brand rights in Central & Eastern
Europe for the use of brands from the
discontinued operation in Russia. In total,
impairment losses on brands amounted to DKK
525m.
Impairment losses of DKK 400m previously
recognised on brands in Asia were reversed.
Impairment losses and reversal of impairment
losses on brands were recognised in special
items, cf. section 3.1.
Impairment losses of DKK 171m primarily
related to Asia were recognised on property,
plant and equipment, of which DKK 122m was
recognised as special items. Impairment losses
on other non-current assets totalled DKK 63m
and were recognised in special items.
Impairment test 2022
In 2022, 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 any impairments.
In addition, 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.
Impairment of discontinued operation in Russia
Following the issuance of the presidential
decree in July 2023, temporarily transferring
the management of our Russian business to the
Russian Federal Agency for State Property
Management, the business was deconsolidated.
In September 2023, the Group terminated its
licence agreements with Baltika Breweries for
all the international brands sold in Russia and
wrote down its interest in the business to zero.
Total impairment losses in 2023 amounted to
DKK 7,002m (2022: DKK 8,364m).
2.2.2 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 and Chongqing brands
are individually material and specified in section
2.2.4.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 53
Impairment of non-current assets
DKK million Section 2023 2022
Intangible assets
Brands 2.2.4 525 -
Other intangible assets 2.2.5 46 3
Reversal of impairment losses 2.2.4 -400 -
Total 171 3
Property, plant and equipment
Plant, machinery and equipment 2.2.5 171 427
Total 171 427
Other non-current assets
Assets held for sale 2.2.5 14 -
Investment in associates 2.2.5 49 -
Total impairment losses, net 405 430
Of which recognised in special items 3.1 310 96
Impairment losses, discontinued operation in Russia, net 5.1 7,002 8,364
SECTION 2.2 (CONTINUED)
IMPAIRMENT
ACCOUNTING ESTIMATES
AND JUDGEMENTS
Identification of cash-generating units
The Group’s management structure reflects the
geographical segments, cf. section 1.1, 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 Waterloo Brewing Ltd. and Jing-A Group in 2023.
The goodwill recognised on the acquisition of
Waterloo Brewing Ltd. was allocated to the Central &
Eastern Europe CGU, and the goodwill recognised on
the Jing-A Group acquisition was allocated to the Asia
CGU.
Entities classified as held for sale and measured at
the lower of carrying amount and 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.
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
• Chongqing
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.
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 recoverable amount 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.
2.2.3 IMPAIRMENT TEST OF GOODWILL
The impairment tests prepared at year-end
2023 did not identify any indication of
impairment of goodwill.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 54
Key considerations in impairment tests Goodwill Brands
CGU level of test Geographical segment Individual brand
Method to estimate recoverable amount Value in use Fair value less cost of disposal
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
The carrying amount of goodwill
allocated to groups of CGUs
DKK million 2023 2022
Western Europe 15,720 15,481
Asia 13,576 14,438
Central & Eastern Europe 3,098 2,613
Total 32,394 32,532
SECTION 2.2 (CONTINUED)
IMPAIRMENT
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.
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 2024-2026
represent management’s best estimate of the impact
from the significant inflation in our cost base and
increased interest rates.
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 2.2.4.
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.
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 the risk of delays in increasing sales
prices to compensate for future rises 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 years’ elevated level of inflation has
increased the overall input cost level, especially in
Europe. The short- and medium-term forecast
incorporates continued pressure on input costs.
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. 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 55
Key assumptions
2023
Forecast
cash flow
growth
Terminal
period
growth
Pre-tax
discount
rate
Western
Europe -17.0% 0.5% 3.4%
Asia -16.2% 1.0% 4.3%
Central &
Eastern
Europe -0.9% 2.0% 8.2%
2022
Western
Europe -11.4% 0.5% 3.0%
Asia -12.7% 1.0% 4.5%
Central &
Eastern
Europe -21.4% 2.0% 9.8%
Key assumptions
2023
Average
revenue
growth
Terminal
period
growth
Pre-tax
discount
rate
Post-tax
discount
rate
Kronenbourg 1664 2.8% 1.6% 7.2% 6.7%
Chongqing 2.0% 1.5% 7.8% 7.4%
2022
Kronenbourg 1664 2.4% 1.6% 6.6% 6.4%
Chongqing 0.1% 1.0% 6.7% 6.4%
SECTION 2.2 (CONTINUED)
IMPAIRMENT
2.2.4 IMPAIRMENT TEST OF BRANDS
In 2023, significant brands represented 50%
(2022: 45%) of the total carrying amount of
brands with indefinite useful life.
Other brands comprise a total of 20 brands
(2022: 19 brands) that are not individually
material compared with the total carrying
amount.
Impairment of brands in Western Europe
In the UK, the ale category has been severely
impacted by the COVID-19 pandemic and
secular trends, and the long-term expectations
for the ale brands was therefore updated,
leading to the recognition of impairment losses
of DKK 305m.
Impairment of brands in Central & Eastern
Europe
A local Lithuanian mainstream brand has
experienced a decline in exports, resulting in
impairment losses of DKK 70m.
Brand rights in Central & Eastern Europe for
the use of brands from the discontinued
operation in Russia were unilaterally
terminated by Carlsberg, resulting in
recognition of impairment losses of DKK 53m.
Impairment of brands in Asia
In Cambodia our business operates in a very
challenging environment both in terms of
competitive conditions and consumer
sentiment. In 2020, this led to the recognition
of an impairment loss of DKK 200m on the
local Angkor brand.
The beer market has remained weak and is still
far from having fully recovered to its 2019 level
before COVID-19. In addition, a change in
consumer preference has resulted in a decline in
volumes and margins, in particular for the beer
category.
This led to a reassessment of the recoverable
amount of the assets in the operation, including
the brand, and resulted in the full write-down of
the remaining carrying amount of the brand of
DKK 97m.
The Chinese mainstream brand Chongqing was
last impaired in 2016, following sales declines
due to premiumisation in the Chinese market.
Since then, brand volumes have recovered
significantly, and expectations for the
mainstream category in China have improved.
As a result, impairments of DKK 400m were
reversed.
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
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 to
the common term of the majority of licence
agreements to which the Group is party.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 56
Brands with indefinite useful life
DKK million 2023 2022
Kronenbourg 1664 1,950 1,948
Chongqing 1,293 954
Significant brands 3,243 2,902
Western Europe 1,028 1,318
Asia 363 503
Central & Eastern Europe 920 846
Not allocated 945 941
Other brands 3,256 3,608
Total brands 6,499 6,510
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%
SECTION 2.2 (CONTINUED)
IMPAIRMENT
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 2.2.3.
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 5-20
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.
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.
2.2.5 IMPAIRMENT OF OTHER ASSETS
In 2023, impairment losses were recognised on
intangible assets, DKK 46m, property, plant and
equipment, DKK 171m, and other non-current
assets, DKK 63m, totalling DKK 280m.
Impairment of non-current assets in Cambodia,
DKK 152m
As mentioned above in section 2.2.4, our
business in Cambodia is facing challenges,
which led to a reassessment of the recoverable
amount of the assets in the operation.
The reassessment showed that DKK 103m of
property, plant and equipment was lying idle
and this has therefore been impaired.
Consequently, a local investment of DKK 49m
in a joint venture manufacturing can bodies has
also been impaired.
Other impairments, DKK 128m
Impairment losses of DKK 46m on other
intangible assets primarily relate to centrally
owned IT assets. Other impairment losses of
DKK 68m on property, plant and equipment
related partly to flooding in China. The decision
to close Ringwood Brewery in the UK resulted
in a write-down of assets held for sale of DKK
14m.
2.2.6 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 2023 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 these brands
to be low.
Key assumptions
• Useful lifetime
• Volume and price
• Royalty rate
• Discount rate
The assumptions for volume and price 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 2023 CONSOLIDATED FINANCIAL STATEMENTS 57
SECTION 2.3
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 58
DKK million Intangible assets Property, plant and equipment Asset base
2023 Goodwill Brands
Other
intangible
assets Total
Land and
buildings
Plant and
machinery
Other
equipment,
fixtures and
fittings Total Total
Cost
Cost at 1 January 34,224 8,977 4,924 48,125 17,660 26,132 14,459 58,251 106,376
Acquisition of entities 645 147 15 807 151 269 11 431 1,238
Additions, including right-of-use assets - 75 275 350 503 2,265 2,209 4,977 5,327
Disposals - -2 -87 -89 -313 -308 -1,821 -2,442 -2,531
Transfers - - 4 4 377 -531 121 -33 -29
Foreign exchange adjustments etc. -869 -214 -70 -1,153 -141 -340 -339 -820 -1,973
Cost at 31 December 34,000 8,983 5,061 48,044 18,237 27,487 14,640 60,364 108,408
Amortisation, depreciation and impairment losses
Amortisation, depreciation and impairment losses at 1 January 1,692 2,254 3,653 7,599 7,867 16,539 10,265 34,671 42,270
Disposals - - -86 -86 -170 -286 -1,734 -2,190 -2,276
Amortisation and depreciation - 16 185 201 660 1,316 1,802 3,778 3,979
Impairment losses - 525 46 571 40 85 46 171 742
Reversal of impairment losses - -400 - -400 - - - - -400
Transfers - - - - -1 6 -1 4 4
Foreign exchange adjustments etc. -86 -115 -30 -231 -3 -121 -194 -318 -549
Amortisation, depreciation and impairment losses at 31 December 1,606 2,280 3,768 7,654 8,393 17,539 10,184 36,116 43,770
Carrying amount at 31 December 32,394 6,703 1,293 40,390 9,844 9,948 4,456 24,248 64,638
Right-of-use assets included at 31 December
Amortisation and depreciation - - - - 184 14 251 449 449
Carrying amount at 31 December - - - - 1,156 79 513 1,748 1,748
SECTION 2.3 (CONTINUED)
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 59
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 assets in discontinued operations -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 assets in discontinued operations - -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
SECTION 2.3 (CONTINUED)
INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT
Property, plant and equipment under
construction amounted to DKK 1,719m (2022:
DKK 1,186m). 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,
fridges 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.
At 31 December 2023, the carrying amount of
right-of-use assets was DKK 1,748m (2022:
DKK 1,540m). During the year, additions
amounted to DKK 721m (2022: DKK 706m) and
depreciation to DKK 449m (2022: DKK 386m).
Lease expenses recognised in the income
statement, relating to short-term leases and
leases of low-value assets, amounted to
DKK 48m (2022: DKK 49m). Such contracts
usually 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, 4.5.1 and 4.8.
Cash flow from disposal of property, plant
and equipment and intangible assets was
DKK 177m (2022: DKK 283m).
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 2023
amounted to DKK 144m (2022: DKK 100m).
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.
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.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 60
Amortisation, depreciation and impairment losses
Intangible assets Property, plant and equipment
DKK million 2023 2022¹ 2023 2022¹
Cost of sales 49 47 2,362 2,489
Sales and distribution expenses 117 65 1,190 1,211
Administrative expenses 81 107 275 253
Special items 125 - 122 96
Total 372 219 3,949 4,049
¹ Loss from the discontinued operation: intangible assets DKK 12m, and property, plant and equipment DKK 77m.
Capital expenditure
DKK million 2023 2022
Additions, including right-of-use assets 5,327 5,168
Less right-of-use assets -721 -706
Additions 4,606 4,462
Additions payable at the end of the reporting period -363 -145
Capitalised depreciations -2 -
Capitalised interest expenses -8 -
Transferred to assets in discontinued operations - -92
Acquisition of property, plant and equipment and intangible assets 4,233 4,225
Gain/loss on disposal of assets
DKK million 2023¹ 2022¹
Gain on disposal of property, plant and equipment and intangible assets 74 110
Loss on disposal of property, plant and equipment and intangible assets -27 -31
Total 47 79
¹ Loss from the discontinued operation DKK 12m (2022: DKK 4m).
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.
Returnable packaging materials that the Group
controls through a legal or constructive obligation are
capitalised as property, plant and equipment.
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:
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 Accounting Standards 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 2023 CONSOLIDATED FINANCIAL STATEMENTS 61
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
Special items
DKK million Section 2023 2022
Special items, income
Derecognition of loan and payables to the discontinued operation in Russia 5.1 350 -
Revaluation gain on acquisition of Jing-A Group 5.3 20 -
Gain on disposal of entities 11 -
Reversal of provisions made in purchase price allocations in prior years - 217
Income 381 217
Special items, expenses
Impairment of brands 2.2.4 -525 -
Reversal of impairment losses 2.2.4 400 -
Impairment of non-current assets in Cambodia 2.2.5 -152 -
Impairment of property, plant and equipment -33 -74
Impairment of receivables from the discontinued operation in Russia 5.1 -76 -
Reversal of provisions made in prior years 3.2 100 37
Cost of termination of a licensee agreement -196 -
Restructuring projects and provisions -141 -76
Costs related to acquisition and disposal of entities etc. -117 -92
Impairment of assets and other war-related costs in Ukraine -28 -79
Donations -2 -27
Other expenses -27 -
Expenses -797 -311
Special items, net -416 -94
SECTION 3
SPECIAL ITEMS, PROVISIONS
AND OTHER LIABILITIES
381m
SPECIAL ITEMS, INCOME
(DKK)
Impacted by derecognition of loan
from and payables to the discontinued
operation in Russia.
-797m
SPECIAL ITEMS,
EXPENSES
(DKK)
Impacted by impairment losses and
reversal on impairment losses,
termination of the Kronenbourg 1664
licensee agreement in the UK and
restructuring costs across the Group.
SECTION 3.1
SPECIAL ITEMS
SPECIAL ITEMS, INCOME
In 2023, a loan of DKK 297m and payables for
brand rights of DKK 53m, totalling DKK 350m,
were derecognised. Both the loan and the
payables were owed to the discontinued
operation in Russia prior to the issuance of the
presidential decree on 16 July 2023.
In 2022, the Group recognised reversal of
provisions made in purchase price allocations in
prior years, mainly in Asia, of DKK 217m.
SPECIAL ITEMS, EXPENSES
These comprise impairment losses of DKK
305m on brands in Western Europe, DKK 123m
in Central & Eastern Europe and DKK 97m in
Asia, in total DKK 525m. Impairment losses of
DKK 400m previously recognised on brands in
Asia were reversed.
In Cambodia our business was negatively
impacted by the challenging environment,
resulting in the recognition of impairment
losses of DKK 152m on non-current assets..
Impairment losses of DKK 76m were recognised
on receivables from the discontinued operation
in Russia that are no longer expected to be
received.
Provisions of DKK 100m recognised in prior
years for legal claims that did not materialise
(2022: DKK 37m) were reversed.
The Group terminated the licensee agreement
for Kronenbourg 1664 in the UK, resulting in a
cost of DKK 196m.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 62
SECTION 3.1 (CONTINUED)
SPECIAL ITEMS
The Group continued to carry out various
restructuring projects as part of the ongoing
focus on cost and efficiency initiatives, resulting
in a cost of DKK 141m (2022: DKK 76m. Other
impairment losses of DKK 33m on property,
plant and equipment, partly related to flooding
in China and the decision to close Ringwood
Brewery in the UK. In 2022, the impairment
losses included DKK 74m on property, plant
and equipment in Asia.
In 2022, as a consequence of the war in
Ukraine, impairment of trade receivables,
inventories and plant and equipment was
recognised at DKK 79m.
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.
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 85m in 2023
primarily relates to various projects mainly
concerning centralised Group functions.
Provisions for onerous contracts primarily relate
to contract brewing in Asia and are expected to
be utilised by 2028.
Other provisions of DKK 2,024m include
ongoing disputes and lawsuits of varying
content and scope, provisions made in
connection with purchase price allocations (PPA
provisions) and employee obligations other
than retirement benefits.
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 were impacted by settlement
of the fine of DKK 372m received in the
competition case in Germany, cf. section 3.4,
and reversal of other legal and contractual
obligations that did not materialise, in total
DKK 618m.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 63
Impact of special items on operating profit
DKK million 2023 2022
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 -501 -98
Sales and distribution expenses -6 -5
Administrative expenses 58 -
Other operating activites, net 33 9
Special items, net -416 -94
DKK million
2023 Restructurings
Onerous
contracts
Other Total
Provisions at 1 January 2023 84 486 2,495 3,065
Additional provisions recognised 104 75 483 662
Used during the year -103 -20 -546 -669
Reversal of unused provisions - -156 -462 -618
Transfers - - 63 63
Discounting - 5 17 22
Foreign exchange adjustments etc. - -24 -26 -50
Provisions at 31 December 2023 85 366 2,024 2,475
Classified as
Non-current provisions 1 326 1,227 1,554
Current provisions 84 40 797 921
Total 85 366 2,024 2,475
ACCOUNTING ESTIMATES
AND JUDGEMENTS
ACCOUNTING
POLICIES
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
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 and 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 our customers
and suppliers, all of which influence our
business in different ways.
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 May 2023, Carlsberg Deutschland was
ordered to pay a fine of EUR 50m (DKK 372m)
for alleged infringement of the competition
rules in 2007. It was decided not to appeal the
decision and the fine was paid in July.
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. A decision was issued on 10
January 2024. None of the companies in the
Group were fined by the French competition
authority as the allegations were time-barred.
In October and November 2021, the Group’s
associate in Portugal, Super Bock Group,
received decisions on the alleged
anticompetitive practice in two ongoing cases.
In the first case the Portuguese Court of 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. Subsequently, on account
of Super Bock’s alleged anticompetitive
practices, a separate private enforcement claim
of EUR 400m was filed by a consumer
protection association against Super Bock for
compensation of Portuguese consumers for
alleged harm. There have been no significant
developments in this case since.
In December 2023, Chongqing Jiawei Beer Co.
Ltd., in which the Group holds a 33%
shareholding, raised a claim for damages of
RMB 631m against Chongqing Brewery Co. Ltd.
for alleged breach of contract in relation to a
contract brewing agreement between the
parties. In June 2022, Chongqing Jiawei Beer
Co. Ltd. had withdrawn previous claims based
on substantially similar allegations. Based on
the facts and evidence currently put forward, it
is not considered likely that the claim will lead
to a negative outcome for the Group.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 64
DKK million 2023 2022
Classified as
Non-current liabilities 314 305
Current liabilities 13,134 13,794
Total 13,448 14,099
Other liabilities by origin
Staff costs payable 2,284 2,318
Excise duties and VAT
payable 2,404 2,489
Other payables 2,946 3,251
Deferred income 369 464
Contingent consideration 5,445 5,577
Total 13,448 14,099
SECTION 3.4 (CONTINUED)
CONTINGENT
LIABILITIES
For some time, the Group has had serious
disagreements with 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%). Several issues have previously
been referred to arbitration, including various
allegations relating to governance and breach
of the Shareholders’ Agreement and
governance matters, in all of which Carlsberg
has been completely vindicated. As a result, the
arbitration tribunal in May 2022 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 was 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 in February 2023,
stating a value for CSAPLH’s shares in CSAPL
of USD 744m. CSAPLH subsequently issued a
formal put notice to sell its 33% shareholding in
CSAPL to the Group at the put option valuation
amount. The put option valuation was referred
to arbitration by the Group, as the valuation is
considered to have been conducted in breach of
the Shareholders’ Agreement. An arbitration
award is expected to be issued in Q4 2024. In
accordance with the Shareholders’ Agreement,
the call option awarded to Carlsberg by the
arbitration panel must be settled at an amount
determined by a valuer appointed by the
International Chamber of Commerce. The
valuer released the call valuation in July 2023.
Carlsberg is satisfied with the valuation
outcome and subsequently exercised its call
option. The call option will come into effect if
the put valuation is invalidated by the
arbitration tribunal.
In addition to the disputes with our partner in
CSAPL regarding India and Nepal, there is 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 does not include the
10% held locally and would not settle the
dispute with the local shareholder, and Gorkha
Brewery therefore remains not consolidated
until the dispute has been settled separately.
Management and the Group General Councel
continuously assess these risks and their likely
outcome. It is the opinion of management and
the Group General Councel 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 or the risk of a
negative outcome is considered to be remote.
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 third-
party obligations (non-consolidated entities) of
DKK 201m (2022: DKK 205m). 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 2023 CONSOLIDATED FINANCIAL STATEMENTS 65
SECTION 4
FINANCING COSTS, CAPITAL
STRUCTURE AND EQUITY
22.5bn
NET INTEREST-BEARING DEBT
(DKK)
Gross financial debt amounted to DKK 39.3bn
(2022: DKK 29.0bn). Net interest-bearing debt
was DKK 22.5bn, an increase of DKK 2.8bn
compared with year-end 2022.
CHANGES IN NET INTEREST-BEARING DEBT
(DKKbn)
The liquidity position remained solid due to the
free cash flow of DKK 5.0bn (free operating
cash flow of 7.5bn) and access to a EUR 2bn
credit facility, which was unutilised at 31
December 2023.
The leverage ratio, measured as net interest-
bearing debt to EBITDA, was 1.47x at year-end
(2022: 1.27x), well below our target of below
2.0x.
16.5bn
EQUITY (DKK)
Equity amounted to DKK 16.5bn (2022: DKK
25.3bn), DKK14.0bn of which was attributable
to the shareholder in Carlsberg Breweries A/S
and DKK 2.5bn to non-controlling interests.
The change in equity of DKK -8.8bn was
mainly due to foreign exchange losses on
translation of foreign entities for the period of
DKK 3bn, the dividend payout of DKK 4.8bn
and the capital reduction of DKK 3.0bn.
Profit for the period from continuing activities
was DKK 7.9bn, partly offset by the loss from
discontinued operations, excluding
reclassification of the accumulated currency
translation and hedge losses of DKK 6.3bn.
The reclassification of the currency translation
and hedge losses relating to Russia did not
impact net equity.
-803m
NET FINANCIAL ITEMS (DKK)
Financial items, net, amounted to DKK -803m
(2022: DKK -714m). Excluding currency losses
and fair value adjustments, financial items, net,
amounted to DKK -654m (2022: DKK -491m).
The increase was mainly due to the increase in
interest rates and average net debt.
LEVERAGE RATIO (NIBD/EBITDA)
2019-2020 including Russia. 2021-2023 excluding Russia.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 66
19.7
-11.6
5.8
0.8
4.8
3.0
0.7
-0.7
22.5
NIBD
at 1 January
Cash flow,
operating activities
Investing activities,
excl. acquisition of entities, net
Acquisition of
shareholdings
Dividends, total
Capital reduction
Lease liabilities, net
Other movements
NIBD
at 31 December
2019 2020 2021 2022 2023
1.0
1.2
1.4
1.6
1.8
2.0
SECTION 4.1
FINANCIAL INCOME
AND EXPENSES
Interest income primarily relates to interest on
cash and cash equivalents and deposits
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 60m (2022: DKK -121m), cf. section 4.9.
Foreign exchange losses and fair value
adjustments amounted to DKK 149m (2022:
DKK 223m).
Of the net change in fair value of cash flow
hedges transferred or reclassified to the income
statement, DKK -280m (2022: DKK 69m) has
been included in revenue and cost of sales, DKK
-22m in special items (2022: DKK 0m), DKK 0m
(2022: DKK -16m) in financial items, DKK
-545m (2022: DKK 0m) in loss from
discontinued operations, and DKK -18m (2022:
DKK -2m) in intangible assets and property,
plant and equipment.
Foreign exchange adjustments of foreign
entities recognised in other comprehensive
income amounts to DKK 37,781m, cf. section
4.4.3.
FINANCIAL ITEMS, NET (DKKm)
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 67
Financial items recognised in the income statement
DKK million 2023 2022
Financial income
Interest income 418 231
Interest on plan assets, defined benefit plans 309 120
Other 5 7
Total 732 358
Financial expenses
Interest expenses -752 -519
Capitalised financial expenses 8 2
Foreign exchange losses, net -149 -223
Interest expenses on obligations, defined benefit plans -339 -158
Interest expenses, lease liabilities -32 -23
Bank fees -142 -78
Other -129 -73
Total -1,535 -1,072
Financial items, net, recognised in the income statement -803 -714
Financial items excluding foreign exchange, net -654 -491
Financial items recognised in other comprehensive income
DKK million 2023 2022
Foreign exchange adjustments of foreign entities
Foreign currency translation of foreign entities -3,143 -3,926
Reclassification of cumulative translation differences of deconsolidated entities 40,924 -
Total 37,781 -3,926
Fair value adjustments of hedging instruments
Change in fair value of effective portion of cash flow hedges -174 -313
Change in fair value of cash flow hedges transferred or reclassified to the income statement,
intangible assets and property, plant and equipment 882 -51
Change in fair value of net investment hedges 212 -395
Total 920 -759
Financial items, net, recognised in other comprehensive income 38,701 -4,685
2019
2020
2021
2022
2023
-800
-600
-400
-200
0
2019-2020 including Russia. 2021-2023 excluding
Russia.
Financial items, net
Financial items, net, excl. fair value and FX
SECTION 4.2
FINANCIAL ASSETS
AND LIABILITIES
SECTION 4.3
NET INTEREST-
BEARING DEBT
Of the gross financial debt at year-end, 78%
(2022: 79%) was non-current, i.e. with maturity
of more than one year.
Gross financial debt amounted to DKK 39.3bn.
(2022: DKK 29.0bn). Non-current borrowings
totalled DKK 30.8bn (2022: DKK 22.9bn) and
current borrowings totalled DKK 8.5bn (2022:
DKK 6.2bn). A EUR 500m EMTN bond matured
in September 2023, and during the year a total
of EUR 2.05bn of EMTN bonds was issued with
maturities in 2026, 2028 and 2033, cf. section
4.5. The Group continuously assesses the
maturity and repayment profile of its debt, and
the high level of refinancing in 2023 should be
seen in the light of the EUR 1bn EMTN bond
maturing in May 2024.
The difference of DKK 16.8bn between gross
financial debt and net interest-bearing debt
mainly comprised cash and cash equivalents,
deposits and securities and on-trade loans.
SECTION 4.4
CAPITAL
STRUCTURE
4.4.1 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.
Share capital is optimised by managing the
listed shares of Carlsberg A/S, including
payment of dividends and share buybacks.
Borrowings are managed in Carlsberg
Breweries A/S, where the majority of the
Group’s debt is denominated in listed bonds.
In November 2023, the share capital was
reduced from DKK 498m to DKK 497m through
a cash distribution of nominally DKK 1m at a
(per 100) price of DKK 300,000, corresponding
to a total cash distribution to Carlsberg A/S of
DKK 3.0bn. This cash distribution reflects the
share buy-backs that were carried out by
Carlsberg A/S over a 12-month period from
7February 2023.
The Group targets a leverage ratio below 2.0x.
At the end of 2023, the leverage ratio was 1.47x
(2022: 1.27x).
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 68
Net interest-bearing debt
DKK million 2023 2022
Non-current borrowings 30,763 22,865
Current borrowings 8,503 6,172
Gross financial debt 39,266 29,037
Deposits and securities -2,236 -
Cash and cash equivalents -13,382 -8,163
Net financial debt 23,648 20,874
Loans to associates, interest-
bearing portion -276 -275
On-trade loans, net -460 -492
Other receivables, net -421 -411
Net interest-bearing debt 22,491 19,696
DKK million 2023 2022
Financial assets at fair value
Derivatives not designated as
hedging instruments 101 90
Derivatives designated as
hedging instruments 200 262
Financial assets at amortised
cost
Trade receivables 4,935 4,829
Trade loans 893 886
Other receivables 2,773 2,806
Deposits and securities 2,236 -
Cash and cash equivalent 13,382 8,163
Total financial assets 24,520 17,036
Financial liabilities at fair
value
Derivatives not designated as
hedging instruments 53 105
Derivatives designated as
hedging instruments 269 282
Contingent considerations 5,445 5,577
Borrowings and other
financial liabilities at
amortised cost
Non-current and current
borrowings 39,266 29,037
Trade payables 22,172 21,906
Deposit liabilities 1,717 1,627
Other payables 7,299 7,660
Total financial liabilities 76,221 66,194
Share capital
Total share capital
Shares of DKK
1,000
Nominal value,
DKK ’000
1 January 2022 499,000 499,000
Capital reduction -1,000 -1,000
31 December 2022 498,000 498,000
Capital reduction -1,000 -1,000
31 December 2023 497,000 497,000
The share capital amounts to DKK 497m 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.
SECTION 4.4 (CONTINUED)
CAPITAL
STRUCTURE
4.4.2 EQUITY
DIVIDENDS
The Group proposes a dividend of DKK 7,240
per share (2022: DKK 7,420 per share),
amounting to DKK 3,598m (2022: DKK
3,695m). The proposed dividend has been
included in retained earnings at 31 December
2023. Dividends paid out to the shareholder in
Carlsberg Breweries A/S do not impact taxable
income in Carlsberg Breweries A/S.
At 31 December 2023, dividends to non-
controlling interests of DKK 43m were payable.
Dividends paid to non-controlling interests
amounted to DKK 1,106m (2022: DKK 1,042m).
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).
4.4.3 OTHER COMPREHENSIVE INCOME
Other comprehensive income has mainly been
impacted by the reclassification adjustments to
the income statement of accumulated currency
translation losses of DKK 40.9bn and hedge
losses of DKK 0.5bn following the
deconsolidation of the Russian operation in
July 2023. This was partly offset by negative
foreign exchange adjustments of DKK 3.1bn
from translation of Group entities with a
functional currency other than DKK.
4.4.4 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 1.3 and 4.7
• Interest rate risk: section 4.6
• Commodity risk: section 1.2.1
• Credit risk: sections 1.5.1 and 4.5.2
• Funding and liquidity risk: section 4.8
• Fair value and fair value adjustments of
derivatives used for hedging: sections 4.7.2
and 4.9.
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 29-31).
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 69
Transactions with the shareholder
in Carlsberg Breweries A/S
DKK million 2023 2022
Dividend paid to the
shareholder -3,695 -3,486
Capital reduction -3,000 -4,500
Total -6,695 -7,986
Other comprehensive income as recognised in the statement of changes in equity
DKK million
2023
Currency
translation
Hedging
reserves
Retained
earnings Total
Non-
controlling
interests
Other
comprehen-
sive income
Foreign exchange adjustments of foreign entities 38,025 - 14 38,039 -258 37,781
Value adjustments of hedging instruments 212 698 - 910 10 920
Retirement benefit obligations - - -62 -62 -9 -71
Income tax 13 -56 -29 -72 -1 -73
Total 38,250 642 -77 38,815 -258 38,557
2022
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
SECTION 4.5
BORROWINGS
AND CASH
4.5.1 BORROWINGS
Non-current borrowings increased by DKK
7.9bn, as a EUR 1.0bn EMTN bond that
matures in May 2024 was reclassified to short-
term and EUR 2.05bn of non-current EMTN
bonds were issued. Current borrowings were
impacted by the repayment of a EUR 500m
EMTN bond in September, the aforementioned
reclassification of the EUR 1bn bond and no
issuance under the commercial paper
programme at year-end 2023.
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.
4.5.2 CASH AND DEPOSITS
Cash and cash equivalents include short-term
marketable securities with an original term of
less than three months that are subject to an
insignificant risk of changes in fair value and
form part of the short-term cash planning.
Short-term bank deposits amounted to DKK
6,896m at 31 December 2023 (2022: DKK
1,530m). Carlsberg has placed surplus liquidity
of DKK 2,236m from the issuance of bonds in
bank deposits that do not meet the definition of
cash and cash equivalents. These are classified
as deposits and are co-managed with cash and
cash equivalents. The average interest rate on
deposits was 4.5% (2022: 6.2%). Total cash
including deposits amounted to DKK 15,618m in
2023 (2022: DKK 8,163m).
ASSESSMENT OF CREDIT RISK
The Group is exposed to credit risk on cash and
cash equivalents (including deposits), and
derivative financial instruments with a positive
fair value depending on the creditworthiness of
the counterparty.
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 FX and aluminium 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.
Carlsberg operates with individual limits on
banks, based on rating and other factors. 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 15,618m (2022:
DKK 8,163m) represents the maximum credit
exposure related to cash and cash equivalents
and deposits.The credit risk on receivables is
described in section 1.5.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 70
Gross financial debt
DKK million 2023 2022
Non-current
Issued bonds 29,270 21,470
Bank borrowings 136 70
Lease liabilities 1,335 1,203
Other borrowings 22 122
Total 30,763 22,865
Current
Issued bonds 7,448 3,714
Bank borrowings 323 271
Lease liabilities 466 390
Commercial paper and
other borrowing 266 1,797
Total 8,503 6,172
Total borrowings 39,266 29,037
Fair value 38,614 27,085
An overview of issued bonds is provided in section 4.6.
Changes in gross financial debt
DKK million 2023 2022
Gross financial debt at 1 January 29,037 28,931
Proceeds from issue of bonds 15,272 3,708
Instalments on and proceeds from borrowings, non-current -3,725 -5,583
Instalments on lease liabilities -466 -423
Commercial paper and other borrowings -1,990 1,860
External financing 9,091 -438
Gross financial debt reclassified to liabilities in discontinued operations¹ - -29
Increase in lease liabilities¹ 674 629
Intercompany loans 54 -308
Debt acquired 412 -
Other, including foreign exchange adjustments and amortisation¹ -2 252
Gross financial debt at 31 December 39,266 29,037
1
Non-cash item.
Cash and deposits
DKK million 2023 2022
Cash and deposits
Derivative financial
instruments Cash and deposits
Derivative financial
instruments
AA range 5,743 3 1,571 33
A range 8,476 245 5,580 177
BBB range 756 4 546 6
Not rated or below BBB range 643 48 466 83
Total 15,618 300 8,163 299
SECTION 4.6
INTEREST RATE RISK
Interest rate risk is monitored on net financial
debt, i.e. borrowings, cash and cash equivalents,
deposits and securities and derivative financial
instruments. The target is to have a duration
between three and eight years. At 31 December
2023, the duration was 5.7 years (2022: 4.1
years). Interest rate risk is mainly managed
using fixed-rate bonds, which are all
denominated in EUR. At the reporting date,
125% of the net financial debt consisted of
fixed-rate borrowings with interest rates fixed
for more than one year (2022: 104%). The
increase is due to the increase in both issued
bonds and cash and cash equivalents.
On a gross debt basis, 75% was at fixed interest
rates (2022: 75%). Significant parts 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, 123% of the
Group’s net debt is in EUR, which is why the
interest rate exposure primarily relates to
interest rate developments for EUR.
SENSITIVITY ANALYSIS
Total cash and cash equivalents including
deposits exceeds borrowings with a floating
interest rate, hence 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 across currencies
would lead to a decrease in net interest
expenses of DKK 61m (2022: DKK 12m).
All debts are carried at amortised cost and
changes in the interest rate will not impact the
carrying amount of debt but will impact the fair
value of debt, cf. section 4.5.1. The fair value of
total gross borrowings was DKK 652m lower
than the carrying amount (2022: DKK 1,952m
lower).
If all interest rates across tenor and currencies
had been 1 percentage point higher at the
reporting date, it would have led to a gain of
DKK 1,326m (2022: DKK 842m), and a similar
loss had the interest rate been 1 percentage
point lower.
The sensitivity analysis is based on the financial
instruments (borrowing, cash and cash
equivalents, deposits and securities and
derivative financial instruments) recognised at
the reporting date.
The analysis was performed on the same basis
as for 2022.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 71
Net financial debt by currency
DKK million
2023
Gross
financial debt
Net
financial debt Fixed
Gross
financial debt,
fixed %
Net financial
debt, fixed %¹
EUR 37,355 29,166 29,291 78% 100%
CNY 146 -2,801 - - -
USD 214 -273 - - -
Other 1,551 -2,444 261 17% -11%
Total 39,266 23,648 29,552 75% 125%
2022
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%
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.
Interest rate risk
DKK million
2023
Interest
rate
Average
effective
interest
rate Fixed for
Carrying
amount
Interest
rate risk
Issued bonds
EUR 1,000m maturing 28 May 2024 Fixed 2.6% < 1 year 7,448 Fair value
EUR 500m maturing 13 October 2025 Fixed 3.4% 1-2 years 3,718 Fair value
EUR 750m maturing 26 November 2026 Fixed 3.6% 2-3 years 5,578 Fair value
EUR 500m maturing 30 June 2027 Fixed 0.5% 3-4 years 3,711 Fair value
EUR 700m maturing 5 October 2028 Fixed 4.2% 4-5 years 5,179 Fair value
EUR 400m maturing 1 July 2029 Fixed 1.0% > 5 years 2,959 Fair value
EUR 500m maturing 11 March 2030 Fixed 0.7% > 5 years 3,708 Fair value
EUR 600m maturing 5 October 2033 Fixed 4.4% > 5 years 4,417 Fair value
Total 2.7% 36,718
Total 2022 1.7% 25,184
Bank borrowings and other borrowings
Floating-rate Floating 4.0% < 1 year 2,267 Cash flow
Fixed-rate Fixed 4.5% > 1 year 281 Fair value
Total 2,548
Total 2022 3,853
SECTION 4.7
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
4.7.1 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.
4.7.2 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 other comprehensive income. The
Group hedges part of this foreign exchange
exposure by selling foreign currencies via FX
forwards and non-deliverable forwards (NDF),
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 2023 review it was decided to
increase the hedging of CNY and to temporarily
decrease the hedging of NOK.
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 2024. At 31 December 2023, 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
2023 amounted to DKK -13m (2022: DKK 38m).
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 -1,962m
(2022: DKK -2,282m) on a pre-tax basis.
Positive fair values of derivatives are recognised
as other receivables and negative values as
other liabilities. During 2023 losses of DKK 24m
regarding hedges of the net investment in RUB
were reclassified from equity to the income
statement and included in the loss from
discontinued operations.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 72
Currency profile of borrowings
Before and after derivative financial instruments
DKK million
2023
Original
principal
Effect
of swap
After
swap
CHF 285 1,219 1,504
NOK 163 383 546
EUR 37,355 -9,014 28,341
USD 214 2,827 3,041
CNY 146 4,170 4,316
Other 1,103 415 1,518
Total 39,266 - 39,266
Total 2022 29,037 - 29,037
Net investment hedges
2023 2022
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 2023 2022 2023 2022 2023 2022 2023 2022 Asset Liability Asset Liability
CNY -4,707 -3,907 - - 253 -12 0.9713 1.0355 71 -5 83 -
MYR -128 -128 - - 16 -21 1.5616 1.5560 12 - - -3
HKD - - -3,609 -2,128 84 -49 - - - - - -
CHF -294 -310 - - -100 -109 7.8708 7.4334 - -79 - -58
NOK -450 -1,300 3,000 3,000 -53 -94 0.6300 0.7179 - -12 16 -
SEK - - 2,245 2,217 7 -136 - - - - - -
GBP - - 44 -19 -11 6 - - - - - -
SGD - - 72 37 -2 20 - - - - - -
CAD - - 104 - -6 - - - - - - -
Reclassified to the
income statement - - - - 24 - - - - - - -
Total 212 -395 83 -96 99 -61
SECTION 4.7 (CONTINUED)
FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES
4.7.3 EXCHANGE RATE RISK ON CASH
AND BORROWINGS
The main principle for funding 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.
4.7.4 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 1.3
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
and cash held in a number of currencies. In
2023, net interest-bearing debt increased by
DKK 614m (2022: DKK 431m) because of
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 other
comprehensive income (OCI) for 2023 as
illustrated in the table. The calculation is based
on hedges existing as at 31 December 2023.
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.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 73
Exchange rate sensitivity - other comprehensive income
2023 2022
DKK million
Average
hedged rate
Notional
amount Change
Effect
on OCI
Average
hedged rate
Effect
on OCI
NOK/DKK 0.6412 -722 5% -36 0.7208 -49
SEK/DKK 0.6453 -807 5% -40 0.6869 -42
PLN/DKK 1.5994 -710 5% -36 1.4694 -35
CHF/DKK 7.8496 -628 5% -31 7.5080 -26
USD/DKK 6.7677 -162 10% -16 7.5926 38
RUB/DKK - - - - 0.1071 -116
UAH/DKK 0.1875 -273 20% -55 0.2212 -62
Other N/A - 5-30% -28 N/A -53
Total -242 -345
Applied exchange rates
Closing rate Average rate
DKK 2023 2022 2023 2022
Swiss franc (CHF) 8.0485 7.5520 7.6744 7.4190
Chinese yuan (CNY) 0.9493 1.0106 0.9752 1.0569
Euro (EUR) 7.4529 7.4365 7.4510 7.4397
Pound sterling (GBP) 8.5759 8.3845 8.5829 8.7235
Indian rupee (INR) 0.0812 0.0840 0.0834 0.0903
Laotian kip (LAK) 0.0003 0.0004 0.0004 0.0005
Norwegian krone (NOK) 0.6630 0.7073 0.6510 0.7374
Polish zloty (PLN) 1.7175 1.5887 1.6467 1.5859
Ukrainian hryvnia (UAH) 0.1766 0.1909 0.1882 0.2223
Swedish krona (SEK) 0.6717 0.6686 0.6491 0.7002
SECTION 4.8
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 payment of 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 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 2023, bonds accounted for
94% of the gross funding.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 74
Committed credit facilities and credit resources available
DKK million
2023
Total
committed
loans and
credit
facilities
Utilised
portion of
credit
facilities
Unutilised
credit
facilities
2022
Unutilised
credit
facilities
Current
< 1 year 9,652 8,503 1,149 1,149
Total current committed loans and credit
facilities
9,652 8,503 1,149 1,149
Non-current
1-2 years 4,210 4,210 - -
2-3 years 20,664 5,752 14,912 -
3-4 years 3,838 3,838 - 14,877
4-5 years 5,261 5,261 - -
> 5 years 11,702 11,702 - -
Total non-current committed loans and credit
facilities 45,675 30,763 14,912 14,877
Cash and cash equivalents and deposits 15,618 8,163
Current portion of utilised credit facilities - - -8,503 -6,172
Credit resources available (total non-current
committed loans and credit facilities less net
debt) 22,027 16,868
SECTION 4.8 (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, deposits
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 and deposits, as these assets are not
actively managed in relation to liquidity risk.
Net financial debt is shown in section 4.3.
At 31 December 2023, the Group had total
credit resources available of DKK 22,027m,
consisting of cash and cash equivalents and
deposits of DKK 15,618m plus committed
unutilised non-current credit facilities of
DKK 14,912m less utilisation of current facilities
of DKK 8,503m. Including current credit
facilities of DKK 1,149m, total committed
unutilised credit facilities amounted to DKK
16,061m.
Credit resources available at year-end 2023
were DKK 5bn higher than at year-end 2022, as
a result of the 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
and from 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. Cash balances held in
Ukraine of DKK 922m are temporarily
unavailable for Group purposes due to the
ongoing war.
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 39,443m in
2023 (2022: DKK 29,148m), whereas the total
carrying amount was DKK 39,266m (2022:
DKK29,037m). The difference between these
amounts arises at initial recognition and is
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 2023.
The cash flow is estimated based on the
notional amount of the above-mentioned
borrowings and expected interest rates at year-
end 2023 and 2022. Interest on debt recognised
at year-end 2023 and 2022 for which no
contractual obligation exists (current borrowing
and other debts) 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
4.0% for 2024 and 2.5% for 2025 (2022: 2.8%).
The increase is due to the increase in interest
rates seen for most currencies during 2023.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 75
Time to maturity for non-current borrowings
DKK million
2023 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total
Issued bonds 3,718 5,578 3,711 5,179 11,084 29,270
Bank borrowings 67 40 24 5 - 136
Lease liabilities 423 134 102 75 601 1,335
Other non-current borrowings 2 - 1 2 17 22
Total 4,210 5,752 3,838 5,261 11,702 30,763
Total 2022 7,904 3,823 105 3,775 7,258 22,865
Maturity of financial liabilities
DKK million
2023
Contractual
cash flows
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Carrying
amount
Derivative financial instruments
Derivative financial instruments, payables 295 295 - - 322
Non-derivative financial instruments
Gross financial debt 39,443 8,511 19,135 11,797 39,266
Interest expenses 4,204 960 2,285 959 N/A
Trade payables and other liabilities 23,889 23,889 - - 23,889
Contingent liabilities 201 201 - - N/A
Contingent considerations 5,445 5,141 304 - 5,445
Non-derivative financial instruments 73,182 38,702 21,724 12,756 -
Financial liabilities 73,477 38,997 21,724 12,756 -
Total 2022 60,286 36,473 16,417 7,396 -
SECTION 4.9
DERIVATIVE
FINANCIAL
INSTRUMENTS
The Group enters into derivative financial
instruments to hedge foreign exchange and
commodity risks, cf. sections 1.2 and 1.3, and
seeks to apply hedge accounting when this is
possible. Hedging of future, highly probable
forecast transactions is designated as cash flow
hedges.
Total net gain on active cash flow hedges
recognised in OCI was DKK 123m with gains on
aluminium and losses on exchange rate
instruments and energy. The energy hedge is a
power purchase agreement which secures fixed
price electricity for 10 years commencing 2024.
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.
Following the deconsolidation of the Russian
operation, the value of hedges relating to the
original acquisition of the Russian operation
and the value of aluminium and FX hedges in
the Russian operation have been reclassified
from equity to the income statement and
included in the loss from discontinued
operations at the time of deconsolidation. The
total amount of the reclassification was DKK
545m. Additional losses of DKK 40m regarding
hedges of financial investment were
reclassified from the cash flow hedge reserve:
DKK 22m to the income statement and DKK
18m to intangible assets. At 31 December 2023,
hedging reserves -215m in relation to cash flow
hedges for which hedge accounting is no longer
applied.
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.
The fair value adjustment of derivatives which
have become ineffective is recognised in the
income statement. In 2023 the ineffective
portion amounted to DKK -9m and relates to
exchange rate instruments and aluminium.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
When entering into financial instruments,
management assesses whether the instrument is an
effective hedge of 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 to 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. Where
relevant the discounting rate includes a credit risk
adjustment.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 76
Cash flow hedges
DKK million Expected recognition
2023
Other
comprehen-
sive income
Fair value
receivables
Fair value
payables
Fair value,
net 2024
2025
and later
Exchange rate
instruments -73 7 -116 -109 -109 -
Aluminium 231 62 -57 5 -10 15
Energy -35 48 - 48 2 46
Reclassification
from OCI 585 - - - - -
Total 708 117 -173 -56 -117 61
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 -
Aluminium -439 18 -202 -184 -183 -1
Energy 83 83 - 83 - 83
Total -364 163 -221 -58 -140 82
Financial derivatives not designated as hedging instruments (economic hedges)
DKK million
2023
Income
statement
Fair value
receivables
Fair value
payables Fair value, net
Exchange rate instruments 69 101 -53 48
Ineffectiveness -9 - - -
Total 60 101 -53 48
2022
Exchange rate instruments -105 90 -105 -15
Ineffectiveness -16 - - -
Total -121 90 -105 -15
SECTION 4.9 (CONTINUED)
DERIVATIVE
FINANCIAL
INSTRUMENTS
ACCOUNTING
POLICIES
Derivative financial instruments are initially
recognised at fair value on the trade date and
subsequently remeasured at fair value at the
reporting date.
The accounting for subsequent changes in fair value
depends on whether the derivative is designated as
one of:
• 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 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. Notional amounts, average hedge rates
and the fair values and disclosed in section 4.7.2.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 77
SECTION 5
DISCONTINUED OPERATIONS, ACQUISITIONS,
DISPOSALS AND ASSOCIATES
Deconsoli-
dation of
the Russian
operation
Deconsolidation of the operation in Russia
following the presidential decree issued on 16
July 2023 temporarily transferring
management of the business to a government
agency.
Waterloo
Brewing
Acquired Waterloo Brewing and expanded the
production network needed for our business in
Canada.
SECTION 5.1
DISCONTINUED
OPERATIONS
On 16 July 2023, the Russian Government
issued a presidential decree, temporarily
transferring the management of the Group’s
Russian subsidiary Baltika Breweries to the
Russian Federal Agency for State Property
Management. According to the presidential
decree, Carlsberg retains title to the shares in
Baltika Breweries, but otherwise no longer has
any control or influence over the management
of the business.
The decree was issued shortly after the Group
announced it had signed an agreement for the
conditional sale of Baltika Breweries. The sales
agreement was subsequently terminated.
In June 2023, following the signing of the sales
agreement and prior to the issuance of the
presidential decree, the Russian operation was
revalued at fair value less expected cost to sell,
resulting in recognition of impairment losses of
DKK 1,686m.
Following the loss of control over Baltika
Breweries, the Russian business was
deconsolidated from July 2023. The business
had been accounted for as held for sale and
presented as discontinued operations since
March 2022. Upon deconsolidation, the
currency translation and hedging reserves
within equity related to the Russian business
were reclassified from equity to the income
statement and included in the loss from
discontinued operations.
The accumulated currency translation reserve
reclassified to the income statement
represented a loss of DKK 40.9bn, around half
of which was recognised in December 2014
when the RUB depreciated significantly
following the Russian invasion and annexation
of Crimea. This figure included the accumulated
fair value of net investment hedges of DKK
24m, cf. section 4.7.
The accumulated hedging reserve reclassified to
the income statement represented a loss of
around DKK 0.5bn and included both active
hedges and hedges for which hedge accounting
was no longer applied, cf. section 4.9.
In addition, following the issuance of the
decree, the interest retained in Baltika
Breweries no longer met the accounting
definition of an equity investment and was
reclassified as consideration receivable from the
Russian Federation for its illegitimate takeover
of the Group’s business in Russia. Following
reclassification as a receivable, it was written
down in full and derecognised, bringing
impairment losses recognised in the year to
DKK 7,002m (2022: DKK 8,364m).
As a consequence of the Group being prevented
from disposing of its Russian business on
acceptable terms, all licence agreements
enabling Baltika Breweries to produce, market
and sell the Carlsberg Group’s products,
including international and regional brands,
were terminated in September 2023. There will
be a limited run-off period until 1 April 2024.
during which Baltika Breweries may use up
existing stock and materials.
The issuance of the presidential decree
extinguished the Group’s obligation to repay a
loan provided by Baltika Breweries. This
resulted in a gain of DKK 297m. The Group’s
trade receivables of DKK 76m for providing
goods and services to the Russian business
were considered to be unrecoverable and have
therefore been fully impaired. These amounts
have been recognised in special items, cf.
section 3.1.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 78
SECTION 5.1 (CONTINUED)
DISCONTINUED
OPERATIONS
Financial performance
The loss from discontinued operations for 2023
only includes the six months of operation until
the time of loss of control. Reported revenue in
Russia amounted to DKK 4,305m (2022: DKK
10,207m) and profit to DKK 758m (2022: DKK
1,874m). The net result was DKK -47,748m
(2022: DKK -6,490m), impacted by the
reclassification from equity of accumulated
losses on currency translation and hedges of
DKK 41,504m and the write-down of the
investment by DKK 7,002m (2022: DKK
8,364m).
The cash flow from investing activities in the
discontinued operations amounted to DKK
-2,588m (2022: DKK -376m), of which DKK
-2,495m was the impact from deconsolidating
cash and cash equivalents in the Russian
operation.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 79
Major classes of assets and liabilities in the discontinued operation in Russia
DKK million 2023 2022
Intangible assets - 5,483
Property, plant and equipment - 2,989
Inventories - 1,015
Receivables - 937
Cash and cash equivalents¹ - 1,194
Assets in discontinued operations - 11,618
Borrowings - 101
Tax liabilities, retirement benefit obligations etc. - 1,144
Trade payables - 1,892
Other liabilities - 963
Liabilities in discontinued operations - 4,100
Net assets in discontinued operations - 7,518
¹ Cash and cash equivalents are not available for general use in the Group because of currency restrictions.
Net cash flow from the discontinued operation in Russia
DKK million 2023 2022
Cash flow from operating activities 1,531 1,952
Cash flow from investing activities -2,588 -376
Cash flow from financing activities 63 195
Net cash flow from discontinued operations -994 1,771
Analysis of loss from the discontinued operation in Russia
DKK million 2023 2022
Revenue 4,305 10,207
Costs -3,337 -8,228
Profit before tax from discontinued operations 968 1,979
Income tax -210 -105
Profit after tax from discontinued operations 758 1,874
Impairment losses -7,002 -8,364
Accumulated currency translation and hedging reserves reclassified from equity to the
income statement -41,504 -
Loss from discontinued operations -47,748 -6,490
ACCOUNTING ESTIMATES
AND JUDGEMENTS
SECTION 5.1 (CONTINUED)
DISCONTINUED
OPERATIONS
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. After derecognition,
the classification is changed to assets and liabilities in
discontinued operations respectively. 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
profit/loss from discontinued operations in the income
statement. Comparative figures are restated.
Cash flow from discontinued operation is presented
separately as net cash flow from discontinued
operation 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 80
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. One 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 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 owner usually provides the recipe and/or
raw material, 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.
More often, 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 to acquire additional shares.
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 paid to the
partner are reported as financial expenses.
Common to all partnerships is the risk of
disagreement and ultimately dissolution.
Disagreements with partners on the operational
management and strategic direction 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 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 Carlsberg South Asia Pte Ltd
(CSAPL), of which Carlsberg owns two thirds
and CSAPL Holdings Pte Ltd (CSAPLH) the
remaining one third. CSAPL is the holding
company for the businesses in India (100%) and
Nepal (90%). 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 in February 2023, 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.
The issuance of the presidential decree in
Russia, temporarily transferring the
management of the Group’s subsidiary Baltika
Breweries to the Russian Federal Agency for
State Property Management, effectively
prevents the Group from acting as shareholder
in Baltika Breweries. In an attempt to prevent
the Group from exercising its rights as the
lawful owner of certain assets and intellectual
property rights of which Baltika Breweries
previously enjoyed the benefit or possessed as
part of the Carlsberg Group, various claims
have been filed in Russia against the Group by
Baltika Breweries. The claims are considered to
be baseless and without merit. The Group
continues to defend, uphold and protect its
assets, legal and intellectual property rights.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 81
Elements of cash consideration paid
and received
DKK million 2023 2022
Consideration paid for
acquisition of entities -760 -
Consideration received for
disposal of entities 4 -
Cash and cash equivalents and
bank overdrafts acquired/
disposed of -66 -
Acquisition and disposal of
entities, net -822 -
Consideration paid for
acquisition of associates -7 -
Consideration paid for increase
of investment in associates - -48
Acquisition and disposal of
associates, net -7 -48
Cash flow from acquisition of
shareholdings, total -829 -48
Acquisitions
DKK million 2023
Consideration paid 760
Fair value of contingent consideration 24
Fair value of previously held investment 47
Total cost of acquisition 831
Acquired assets and liabilities
Intangible assets 807
Property, plant and equipment 270
Right-of-use assets 161
Inventories 91
Trade and other receivables 109
Cash and cash equivalents 5
Borrowings and lease liabilities -417
Deferred tax liabilities -43
Trade payables -104
Other payables -48
Acquired assets and liabilities 831
SECTION 5.3
ACQUISITIONS
AND DISPOSALS
ACQUISITION OF ENTITIES IN 2023
The Group gained control of two businesses
during the year. The purchase price allocation
of the fair value of the identified assets,
liabilities and contingent liabilities for both
businesses was completed in 2023.
Waterloo Brewing
On 7 March 2023, the Group acquired 100% of
the Canadian Waterloo Brewing company for a
cash consideration of CAD 144m (DKK 734m).
The company was fully consolidated as of the
acquisition date.
The purpose of the acquisition was to
strengthen the Group’s market position and to
deliver supply chain and other synergies. The
calculated goodwill represents staff
competences and synergies from expected
optimisations of sales and distribution, supply
chain and procurement, possible product
innovations, increase in market share and
access to new customers.
Jing-A Group
In September 2023, Carlsberg gained control of
Jing-A Group through the acquisition of an
additional 26.5% of the shares, giving Carlsberg
a 75.5% ownership interest, cf. section 5.5. The
non-controlling interest holds an option to sell
its remaining shareholding to Carlsberg and, in
accordance with the Group’s accounting
policies, the non-controlling interest has not
been recognised. Instead the contingent
consideration payable has been recognised at
fair value, cf. section 5.4.
The step acquisition of Jing-A Group was
completed to further strengthen the Group’s
presence in the growing craft beer segment in
China. The shareholdings held before obtaining
control were remeasured at a fair value of DKK
47m with the revaluation adjustment, DKK
20m, recognised in special items.
ACQUISITION OF ENTITIES IN 2022
The Group did not complete any acquisitions of
entities in 2022.
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.
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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 82
SECTION 5.3 (CONTINUED)
ACQUISITIONS
AND DISPOSALS
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 2.2.4.
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
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
Waterloo Brewing and Jing-A Group’s activities, which
are accounted for in the consolidated financial
statements, reflect the best estimate of the total fair
value of these businesses.
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 related to Waterloo Brewing, DKK 533m,
was allocated to the Central & Eastern Europe CGU in
line with the allocation of the Group’s existing
Canadian business. Goodwill related to Jing-A Group,
DKK 110m, was allocated to the Asia CGU. The
goodwill is not deductible for tax purposes.
Brands
The value of brands was estimated using the Group’s
principles described above. Brands with a fair value of
DKK 164m were 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 27m.
Financial impact of acquisitions
In 2023, revenue includes DKK 431m from Waterloo
Brewing and Jing-A Group. Had the acquisitions been
completed at the beginning of the reporting period,
revenue would have included DKK 577m. Profit for the
period includes DKK -29m from Waterloo Brewing
and Jing-A Group. Had the acquisitions been
completed at the beginning of the reporting period,
profit for the period would have included DKK -31m.
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.
In a step acquisition, the Group gains control of an
entity in which it already held a shareholding before
gaining control. The shareholding held before the step
acquisition is remeasured at fair value at the
acquisition date and added to the fair value of the
consideration paid for the shareholding acquired in
the step acquisition and is accounted for as the total
cost of the shareholding in the acquired entity. The
gain or loss on the remeasurement is recognised in
the income statement under special items.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 83
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 in
Belarus, Jing-A Group in China and 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 held
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.
Of the contingent considerations, DKK 0.3bn
(2022: DKK 0.3bn) 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 was 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 in
February 2023, stating a value for CSAPLH’s
shares in CSAPL of USD 744m. CSAPLH
subsequently 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 was adjusted to reflect the
put option valuation amount received from the
valuers, as the acquisition of the shares may be
completed at that price.
The put option valuation was referred to
arbitration by the Group, as the valuation is
considered to have been conducted in breach of
the Shareholders’ Agreement. An arbitration
award is expected to be issued in Q4 2024.
In accordance with the Shareholders’
Agreement, the call option awarded to
Carlsberg by the arbitration panel must be
settled at an amount determined by a valuer
appointed by the International Chamber of
Commerce. The valuer released the call
valuation in July 2023. Carlsberg is satisfied
with the valuation outcome and subsequently
exercised its call option. The call option will
come into effect if the put valuation is
invalidated by the arbitration tribunal.
The recognised value of the put option
decreased by DKK 169m in 2023 because of
changes in the USD exchange rate.
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 354m. The loan had not been
repaid as of 31 December 2023.
ACCOUNTING ESTIMATES
AND JUDGEMENTS
The fair value of contingent considerations linked to
put options is measured 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.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 84
Contingent considerations
DKK million 2023 2022
Contingent considerations at 1 January 5,577 4,254
Additions 23 -
Transfer to discontinued operations - -13
Fair value adjustments -155 1,336
Contingent considerations at 31 December 5,445 5,577
SECTION 5.5
ASSOCIATES
Investments in associates mainly include the
businesses in Portugal (60%), Myanmar (61%),
Gorkha Brewery in Nepal (90%) and four
associates in China (50%). The total investment
in these associates amounted to DKK 3,866m
at 31 December 2023 (2022: DKK 3,579m).
The Group’s ownership of Super Bock Group,
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.
Disputes with the local non-controlling
shareholder of Gorkha Brewery, Nepal, prevent
the Group from exercising its rights as a
controlling shareholder despite the legal
ownership of 90%. Therefore, it was reclassified
as an associate and recognised at fair value in
December 2021.
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 business
environment in the country.
In Q4 2023, Carlsberg gained control of the
associate Jing-A Group through a step
acquisition, cf. section 5.3.
In 2023, the Group recognised a write-down of
a minor associate in Cambodia of DKK 49m, 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.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 85
Key figures for associates
DKK million
Carlsberg Breweries Group share
2023
Profit
after tax
Other
comprehensive
income
Total
comprehensive
income
Investments in
associates
Total 577 - 577 4,706
2022
Total 675 - 675 4,796
Fair value of investment in listed associates
DKK million 2023 2022
The Lion Brewery
Ceylon, Sri Lanka 384 214
SECTION 6
TAX
20.0%
TAX RATE
Total tax is impacted by non-
recurring items. Excluding non-
recurring tax impacts the effective tax
rate would have been 20.9% (2022:
20.1%).
SECTION 6.1
INCOME TAX
The nominal weighted tax rate for the Group is
calculated as the 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 8m less
than the nominal weighted tax (2022: DKK
385m). Compared with the nominal weighted
tax expense, the total tax expense was
impacted by tax incentives related to e.g. R&D
incentives, non-deductible expenses and
increased withholding tax expenses, resulting in
an effective tax rate of 20.0% (2022: 17.5%).
The impact from non-recurring items primarily
comprised movement in tax on special items,
change in recognised tax assets and liabilities
and the deconsolidation of the Russian
Business. Excluding non-recurring items and tax
thereon, the effective tax rate would have been
20.9% (2022: 20.1%).
The Carlsberg Breweries Group is not expected
to be materially impacted by the OECD/EU
Pillar Two Model Rules and their local
implementation. Most countries where the
Group has operations impose taxation in excess
of 15%, and the remainder are expected to
increase the tax rate such that all markets not
covered by the transitional safe harbour rules
are still expected to show an effective tax rate
in excess of 15%.
As such, these rules are not expected to result
in either materially increased tax payments or a
change to the Group’s effective tax rate.
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.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 86
Reconciliation of the effective tax rate for the year
2023 2022
% DKK million % DKK million
Nominal weighted tax rate 20.0 1,991 21.2 2,229
Change in tax rate - -5 2.0 206
Adjustments to tax for prior years 0.1 6 -2.7 -288
Non-capitalised tax assets and liabilities -3.2 -319 -1.7 -182
Non-taxable income -0.3 -28 -0.5 -56
Non-deductible expenses 2.5 250 2.0 215
Tax incentives etc. -1.7 -168 -2.2 -229
Special items 2.2 219 -0.1 -5
Withholding taxes 1.4 141 0.8 83
Other, including tax in associates -1.0 -104 -1.2 -129
Effective tax rate for the year 20.0 1,983 17.5 1,844
Effective tax rate for the year, excluding the
tax effect of transactions in special items and
other non-recurring tax impacts 20.9 - 20.1 -
SECTION 6.1 (CONTINUED)
INCOME TAX
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 87
Income tax expenses
2023 2022
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 2,142 -8 2,134 2,163 -25 2,138
Change in deferred tax and non-current tax payables during the
year -160 81 -79 -237 - -237
Change in deferred tax as a result of change in tax rate -5 - -5 206 - 206
Adjustments to tax for prior years 6 - 6 -288 - -288
Total 1,983 73 2,056 1,844 -25 1,819
Tax recognised in other comprehensive income
2023 2022
DKK million
Recognised
item before tax
Tax income /
expense After tax
Recognised
item before tax
Tax income /
expense After tax
Foreign exchange adjustments -37,781 - -37,781 3,926 - 3,926
Hedging instruments -920 44 -876 759 -100 659
Retirement benefit obligation 71 29 100 -594 75 -519
Total -38,630 73 -38,557 4,091 -25 4,066
Specification of deferred tax
Deferred tax assets
Deferred tax liabilities
DKK million 2023 2022 2023 2022
Intangible assets 114 253 1,371 1,296
Property, plant and equipment 459 138 938 1,021
Current assets 918 1,000 126 46
Provisions and retirement benefit obligations 441 501 2,350 2,509
Fair value adjustments 133 39 97 17
Tax losses 231 269 - -
Other 213 250 32 25
Total before offset 2,509 2,450 4,914 4,914
Offset -754 -746 -754 -746
Deferred tax assets and liabilities at 31 December 1,755 1,704 4,160 4,168
Expected to be used as follows
Within one year 899 890 387 515
After more than one year 856 814 3,773 3,653
Total 1,755 1,704 4,160 4,168
SECTION 6.2
TAX ASSETS AND
LIABILITIES
Of the total deferred tax assets recognised,
DKK 231m (2022: DKK 269m) 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 the
foreseeable future.
Tax assets not recognised of DKK 1,163m (2022:
DKK 1,014m) primarily relate to tax losses that
are not expected to be utilised in the
foreseeable future. Of these, tax losses that will
not expire amounted to DKK 890m (2022: DKK
823m). Tax losses of DKK 271m (2022: DKK
326m) can only be carried forward for a limited
number of years.
No deferred tax (2022: DKK 23m) has been
recognised in respect of future dividend
distributions. No deferred tax liability was
recognised from the loss of control and de-
consolidation of the discontinued operation in
Russia.
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 recognised in the income statement
for the year amounted to DKK 160m (2022:
DKK 237m).
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 assesses
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 for the year,
adjusted for tax related to prior years and tax paid.
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.
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 assets, related to tax loss carried
forward, are recognised 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 has applied the exception to recognise and
disclose information about deferred tax in the OECD/
EU Pillar Two Model Rules and their local
implementation.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 88
Changes to non-current tax assets and liabilities
DKK million 2023 2022
Tax assets and liabilities at 1 January, net 2,464 3,758
Tax assets and liabilities, net, reclassified to discontinued operations - -1,645
Adjustments to prior years 67 309
Acquisition of entities 43 -
Recognised in other comprehensive income 81 -
Recognised in the income statement, net, continuing operations -160 -237
Change in tax rate -5 206
Foreign exchange adjustments -85 73
Tax assets and liabilities at 31 December, net 2,405 2,464
Recognised as follows
Tax liabilities 4,160 4,168
Tax assets -1,755 -1,704
Tax assets and liabilities at 31 December, net 2,405 2,464
SECTION 7
STAFF COSTS AND
REMUNERATION
Pensions
Defined benefit obligations were affected by
lower discount rates across markets.
EMPLOYEES BY SEGMENT
1
(%)
2023 (2022)
EMPLOYEES BY FUNCTION
1
(%)
2023 (2022)
1
Continuing operations only.
SECTION 7.1
STAFF COSTS
Staff costs, continuing operations, increased in
2023, due to salary increases, partly offset by
lower accruals for bonuses and currencies.
The average number of employees in the
continuing operations increased, partly driven
by the acquisition of Waterloo Brewing, cf.
section 5.3.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 89
Staff costs
DKK million 2023 2022
Salaries and other remuneration 9,139 9,367
Severance payments 43 57
Social security costs 1,339 1,452
Retirement benefit costs – defined contribution plans 412 385
Retirement benefit costs – defined benefit plans 167 181
Share-based payments 127 107
Other employee benefits 151 113
Total 11,378 11,662
Of which:
Continuing operations 10,772 10,328
Discontinued operation¹ 606 1,334
Total 11,378 11,662
Staff costs are included in the following line items in the income statement
Cost of sales 3,075 2,916
Sales and distribution expenses 5,428 5,150
Administrative expenses 2,145 2,130
Other operating activities, net 46 32
Financial expenses (pensions) 30 38
Special items (restructurings) 48 62
Loss from discontinued operations 606 1,334
Total 11,378 11,662
Average number of employees, continuing operations 30,956 30,745
Average number of employees, discontinued operation¹ 3,938 8,072
Average number of employees 34,894 38,817
¹ Discontinued operation comprise only six months of data in 2023.
Western Europe 32% (33%)
Asia 44% (45%)
Central & Eastern Europe 20% (19%)
Other 4% (3%)
Production 36% (36%)
Sales & Distribution 54% (55%)
Administration 10% (9%)
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 the Carlsberg Group.
The remuneration of the executive directors
increased, driven by compensation paid to
Jacob Aarup-Andersen and Ulrica Fearn for
forfeited long-term incentive awards from their
previous employers. The remuneration of key
management personnel declined in 2023,
mainly due to lower accruals for the annual
cash bonus.
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.
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 shareholder. There is
no share-based remuneration of the
Supervisory Board.
The Group has one type of share-based
payment known as performance shares.
Entitlement to performance shares 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 2023, 156 employees (2022: 159 employees)
across the Group were awarded performance
shares.
For the 2023 grant, vesting is subject to
achievement of five KPIs: total shareholder
return, adjusted EPS growth, organic revenue
growth, growth in ROIC and achievement of
ESG targets. For prior grants yet to vest, vesting
is subject to four KPIs: total shareholder return,
adjusted EPS growth, organic revenue growth
and growth in ROIC. The average share price at
vesting was DKK 965 (2022: DKK 1,084). The
average contractual life at the end of 2023 was
1.3 years (2022: 1.2 years).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 90
Remuneration
Executive directors¹
Key management
personnel
DKK million 2023 2022 2023 2022
Current Former Former
Fixed salary 11.4 11.2 21.0 27.5 28.8
Cash bonus 10.6 11.2 19.4 21.7 28.7
Other benefits 0.2 0.5 1.1 4.2 7.9
Cash compensation for forfeited LTI² 12.9 - - - -
Severance payments - - - 4.8 7.5
Remuneration settled in cash 35.1 22.9 41.5 58.2 72.9
Non-monetary benefits 1.3 0.1 0.4 2.5 0.2
Share-based payments 16.0 35.3 28.0 13.9 9.5
Remuneration, non-monetary and share-
based 17.3 35.4 28.4 16.4 9.7
Total cash and non-cash 52.4 58.3 69.9 74.6 82.6
¹ Executive directors consist of Jacob Aarup-Andersen and Ulrica Fearn. Cees 't Hart resigned as CEO on 31 August
2023, but was remunerated for an additional two months where he supported the company in an advisory capacity.
² As compensation for long-term incentive awards forfeited from their previous employers, Jacob Aarup-Andersen and
Ulrica Fearn were paid DKK 12m and DKK 0.9m respectively, amounts that were used for the purchase of Carlsberg
shares. Jacob Aarup-Andersen was also added to the running 2022-2024 and 2023-2025 long-term incentive schemes.
Further information can be found in the Remuneration Report.
SECTION 7.3 (CONTINUED)
SHARE-BASED
PAYMENTS
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.
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 non-market and
service conditions, taking into account the terms and
conditions upon which the performance shares were
granted. The market condition is based on a ranking
of the total shareholder return of Carlsberg A/S’ class
B shares versus a peer group of publicly traded
companies in the alcoholic beverage sector.
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 91
Performance shares
Executive
directors
Key
management
personnel
Other
management
personnel¹ Total
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
Granted 85,487 21,826 99,185 206,498
Forfeited/adjusted/transferred -127,722 -17,388 21,832 -123,278
Exercised/settled -24,536 -10,758 -75,819 -111,113
31 December 2023 49,898 41,107 288,041 379,046
¹ Including retired employees.
Performance share disclosures
DKK million 2023 2022
Fair value at grant date 120 87
Cost of shares granted in the year 44 29
Total cost of performance shares 127 101
Cost not yet recognised 147 154
Fair value at 31 December 253 297
Key information
Performance shares
2023 2022
Assumptions
Expected volatility 23.0% 24.0%
Risk-free interest rate 2.8% 1.3%
Expected dividend yield 0.0/2.7% 0.0/2.4%
Expected life, years 3.0 3.0
Fair value at measurement date DKK 570-989 DKK 404-987
ACCOUNTING
POLICIES
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/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 2023, 71% (2022: 68%) of the Group’s
retirement benefit costs related to defined
contribution plans. The expense recognised in
relation to these contributions was DKK 412m
(2022: DKK 385m).
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 46%
respectively (2022: 42% and 45%), while the
eurozone countries represented 5% (2022: 5%)
of the gross obligation at 31 December 2023.
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 quoted investments. In some
countries, primarily Germany, Sweden and
China, the obligation is unfunded. The
retirement benefit obligations for these
unfunded plans amounted to DKK 1,104m
(2022: DKK 1,148m) or 11% (2022: 12%) of the
gross obligation.
In 2023, the Group’s obligation, net, on defined
benefit plans decreased by DKK 168m
compared with 2022. Changes in financial
assumptions impacted the obligation; in
particular in the UK (DKK 86m) and in
Switzerland (DKK 250m). The increase in
obligation in Switzerland was partly offset by
the effect of the asset ceiling of DKK -204m.
Moreover, foreign exchange adjustments
affected the net obligation by DKK -68m.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 92
Obligation, net
2023 2022
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 9,495 7,970 1,525 13,825 11,506 2,319
Recognised in the income
statement¹
Current service cost 169 - 169 192 - 192
Past service cost -2 - -2 -11 - -11
Net interest on the net defined
benefit obligation (asset) 339 309 30 158 120 38
Total 506 309 197 339 120 219
Remeasurements
Gain/loss from changes in
demographic assumptions -59 - -59 -97 - -97
Gain/loss from changes in
financial assumptions 392 58 334 -3,823 -2,757 -1,066
Asset ceiling - 204 -204 - -569 569
Total 333 262 71 -3,920 -3,326 -594
Other changes
Contributions to plans - 295 -295 - 242 -242
Benefits paid -563 -490 -73 -758 -681 -77
Transferred to liabilities in
discontinued operations - - - -6 - -6
Foreign exchange adjustments
etc. 260 328 -68 15 109 -94
Total -303 133 -436 -749 -330 -419
Obligation at 31 December 10,031 8,674 1,357 9,495 7,970 1,525
¹ The total return on plan assets for the year amounted to DKK 367m (2022: DKK -2,637m).
SECTION 7.4 (CONTINUED)
RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS
The Group has a three-yearly valuation process
to agree on any future funding arrangements in
the UK. The most recent one was completed in
2022. The Group expects to contribute DKK
104m (2022: DKK 109m) to the plan assets in
2024, which is in line with the agreed funding
arrangement, under which the Group will
contribute DKK 311m 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 25m (2022: DKK
551m), comprising a foreign exchange
adjustment of DKK 48m and a net actuarial
gain of DKK 71m.
The accumulated actuarial loss and foreign
exchange adjustment recognised at 31
December 2023 was DKK 2,272m (2022:
DKK2,249m), with actuarial net losses of
DKK2,564m (2022: DKK 2,493m).
Assumptions applied
In 2023, the discount rate used for the defined
benefit plans in Western Europe was
determined by reference to market yields on
high-quality 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_M 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 2023 was 12 years. The duration is
calculated using a weighted average of the
duration divided by the obligation.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 93
Breakdown of plan assets
2023 2022
DKK
million %
DKK
million %
Shares¹ 1,098 12 970 11
Bonds and other securities 6,197 67 5,390 62
Real estate 1,643 18 2,122 24
Cash and cash equivalents 284 3 193 2
Total 9,222 100 8,675 100
¹ The breakdown of plan assets excludes the asset ceiling of DKK -548m in 2023 (2022: DKK -705m).
Assumptions applied
2023 CHF UK EUR Other
Weighted
average
Discount rate 1.9% 4.8% 2.1-4% 3.6% 3.3%
Growth in wages and salaries 1.2% 3.6% 2.5-4.5% 4.9% 2.4%
2022
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%
Sensitivity analysis
2023 2022
DKK million +0.5% -0.5 % +0.5% -0.5 %
Discount rate -573 639 -541 597
Growth in wages and salaries 25 -22 23 -19
+1 year -1 year +1 year -1 year
Mortality 302 -306 265 -282
Maturity of retirement benefit obligations
DKK million < 1 year 1-5 years > 5 years Total
2023 602 2,748 6,681 10,031
2022 581 2,554 6,360 9,495
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 94
SECTION 8
OTHER DISCLOSURE
REQUIREMENTS
SECTION 8.1
FEES TO AUDITORS
Fees for services other than the statutory audit
of the financial statements provided by
PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab, Denmark, amounted
to DKK 2m (2022: DKK 1m). This includes other
assurance opinions, agreed-upon procedures as
well as tax, accounting, and compliance related
services.
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 (the Carlsberg
Foundation) in 2023:
Carlsberg Breweries A/S paid a dividend of DKK
7,420 per share amounting to DKK 3,695m,
received interest of DKK 32m net, and has
provided a loan facility of DKK 165m at 31
December 2023 to Carlsberg A/S.
In 2023, the Carlsberg Foundation contributed
an additional amount of DKK 13m to Home of
Carlsberg A/S to support the rebuilding of the
Carlsberg Visitor Centre.
OTHER ACTIVITIES
Home of 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 2023, the
deliveries amounted to DKK 0.1m (total sales of
goods) (2022: DKK 0.3m).
Carlsberg Breweries A/S leases storage facilities
in the researcher apartments in Carlsberg Byen.
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 to the 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 95
Fees to auditors appointed by the
Annual General Meeting
DKK million 2023 2022
PwC, including network firms
Statutory audit 28 25
Assurance engagements 2 1
Tax advisory 3 8
Other services 1 1
Total 34 35
The income statement and the statement of
financial position include the following
transactions
DKK million 2023 2022
Carlsberg A/S
Other operating activities, net -40 -44
Interest income 36 10
Interest expenses -4 -
Dividends paid -3,695 -3,486
Capital reduction -3,000 -4,500
Recharge of share-based
payments -126 -92
Intangible assets - 225
Receivables 75 14
Borrowings -165 -391
Trade payables -39 -31
Associates
Revenue 22 19
Cost of sales -733 -712
Sales expenses -9 -9
Interest income 22 27
Loans 273 277
Receivables 444 390
Trade payables and other
liabilities -70 -49
SECTION 8.3
EVENTS AFTER THE
REPORTING PERIOD
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 2023 CONSOLIDATED FINANCIAL STATEMENTS 96
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 their nature, are associated with
uncertainty and unpredictability and may
therefore prove incomplete or incorrect.
SECTION 9.2
GENERAL
ACCOUNTING
POLICIES
The Group’s consolidated financial statements
for 2023 have been prepared in accordance
with IFRS Accounting Standards as issued by
the International Accounting Standards Board
and in accordance with IFRS Accounting
Standards 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.
On consolidation, intra-group income and
expenses, shareholdings, balances and
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 97
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 Section 5
Acquisitions and disposals, including
contingent considerations
Section 5
Tax assets and liabilities Section 6
Defined benefit obligations Section 7
SECTION 9.2 (CONTINUED)
GENERAL
ACCOUNTING
POLICIES
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 Accounting Standards do 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 for the calculation of financial
ratios, “Recommendations and Financial
Ratios”, unless specifically stated.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 98
SECTION 9.2 (CONTINUED)
GENERAL
ACCOUNTING
POLICIES
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 99
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
Operating profit before depreciation, amortisation and impairment losses.
Free cash flow
4
Cash flow from operating activities less cash flow from investing activities.
Leverage ratio
1
NIBD/EBITDA.
NCI Non-controlling interests.
OCI Other comprehensive income.
Off-trade Sale of beverages for consumption off the premises (e.g. retailers).
On-trade Sale of beverages for consumption on the premises (e.g. restaurants, hotels
and bars).
Operating profit Operating profit before special items
1
.
Organic development
1
Measure of growth excluding the impact of acquisitions, disposals 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 4.3.
4
The calculation of free cash flow is specified in the statement of cash flows.
SECTION 9.3
CHANGES IN
ACCOUNTING
POLICIES
CHANGED ACCOUNTING POLICIES
AND CLASSIFICATION IN THE ANNUAL
REPORT 2023
The Annual Report 2023 has been prepared
using the same accounting policies for
recognition and measurement as those applied
to the consolidated financial statements for
2022, except for the following Amendments
that were adopted 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 IAS 12 “Income Taxes:
International Tax Reform - Pillar Two Model
Rules”
• Amendments to IFRS 17 “Insurance Contracts”
and “Initial application of IFRS 17" and IFRS 9
“Comparative Information”
These Amendments cover areas that are not
material and/or relevant for the Group.
SECTION 9.4
NEW LEGISLATION
NEW AND AMENDED IFRS ACCOUNTING
STANDARDS
The following Amendments to IFRS Accounting
Standards became effective as of 1 January
2024:
• Amendments to IAS 1 “Presentation of
Financial Statements: Classification of
Liabilities as Current or Non-current” and
“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”
These 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.
NEW AND AMENDED IFRS ACCOUNTING
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:
• Amendment to IAS 21 “The Effects of Changes
in Foreign Exchange Rates: Lack of
Exchangeability”
• Supplier Finance Arrangements: Amendment
to IAS 7 “Statement of Cash Flows” and IFRS
7 “Financial Instruments: Disclosures”.
The Amendments are not mandatory for the
financial reporting for 2023. The Group expects
to adopt the Amendments when they become
mandatory.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 100
SECTION 9.5
NEW SEGMENTATION
2024
The regional structure of the Group changed as
of 1 January 2024, with the aim of rebalancing
the regions in terms of size and number of
business units.
IFRS 8 requires that an entity discloses
information about its operating segments,
including profit and loss for each reportable
segment. These segment disclosures should
follow the “management approach”, meaning
they should be the same segments as are
regularly reported to management.
The disclosure in the Annual Report follows the
same regional segmentation as was used in the
internal reporting to the Executive Committee
throughout 2023.
As the management structure was unchanged
during 2023, the segmentation used in the
Annual Report 2023 continues without any
changes compared with 2022.
The segmentation changed as of 1 January
2024, when the new management structure
took effect. To provide transparency, it has
been decided to disclose the effect of the new
segmentation had it become effective at 1
January 2023 and as it will be disclosed in the
comparative figures for 2023 in the Annual
Report 2024.
Effect of the new segmentation
As a result of the new segmentation, the
entities in India and Nepal will move from the
Asia region to Central & Eastern Europe. At the
same time, Carlsberg Shared Services will move
from Not allocated to Western Europe.
Central & Eastern Europe will then be renamed
Central & Eastern Europe and India to better
reflect its new composition.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 101
New segmentation
2023
Reported Restated
DKK Million
Western
Europe Asia
Central &
Eastern
Europe
Not
allocated
Western
Europe Asia
Central &
Eastern
Europe and
India
Not
allocated
Revenue 37,317 23,288 12,959 21 37,317 20,780 15,467 21
Total cost -32,643 -18,329 -10,756 -1,287 -32,649 -16,243 -12,842 -1,281
Share of profit after tax of associates 307 249 21 - 307 49 221 -
Operating profit before special items 4,981 5,208 2,224 -1,266 4,975 4,586 2,846 -1,260
Operating margin 13.3% 22.4% 17.2% - 13.3% 22.1% 18.4% -
Invested capital 26,952 17,473 7,334 -328 26,910 15,156 9,651 -286
Invested capital excl. goodwill 11,232 3,897 4,236 -328 11,190 1,776 6,357 -286
Acquisition of property, plant and equipment and
intangible assets 1,533 1,841 682 177 1,534 1,803 720 176
Amortisation and depreciation 1,859 1,363 669 88 1,860 1,288 744 87
Impairments losses 338 -100 127 40 338 -100 127 40
Return on invested capital (ROIC) 14.6% 22.9% 24.2% - 14.6% 23.1% 23.7% -
ROIC excl. goodwill 33.9% 110.2% 40.9% - 33.9% 228.1% 35.4% -
SECTION 9.5 (CONTINUED)
NEW SEGMENTATION
2024
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PART OF MANAGEMENT REVIEW - NOT AUDITED 102
Restated 2023
New segmentation
Q1 Q2 Q3 Q4 H1 H2 FY
Beer (million hl)
Western Europe 5.9 8.4 7.8 6.6 14.3 14.4 28.7
Asia 10.7 11.3 11.3 5.8 22.0 17.1 39.1
Central & Eastern Europe and India 6.5 9.6 9.9 7.2 16.1 17.1 33.2
Total 23.1 29.3 29.0 19.6 52.4 48.6 101.0
Other beverages (million hl)
Western Europe 3.2 4.1 3.7 3.7 7.3 7.4 14.7
Asia 1.6 1.8 1.2 1.3 3.4 2.5 5.9
Central & Eastern Europe and India 0.7 1.0 1.1 0.7 1.7 1.8 3.5
Total 5.5 6.9 6.0 5.7 12.4 11.7 24.1
Total beverages (million hl)
Western Europe 9.1 12.5 11.5 10.3 21.6 21.8 43.4
Asia 12.3 13.1 12.5 7.1 25.4 19.6 45.0
Central & Eastern Europe and India 7.2 10.6 11.0 7.9 17.8 18.9 36.7
Total 28.6 36.2 35.0 25.3 64.8 60.3 125.1
Revenue (DKK million)
Western Europe 7,551 10,831 10,113 8,822 18,382 18,935 37,317
Asia 5,791 5,993 5,572 3,424 11,784 8,996 20,780
Central & Eastern Europe and India 3,059 4,557 4,603 3,248 7,616 7,851 15,467
Not allocated 4 2 6 9 6 15 21
Total 16,405 21,383 20,294 15,503 37,788 35,797 73,585
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 shareholder in Carlsberg Breweries A/S in the
consolidated financial statements.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 103
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%
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 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%
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.
F Company not audited by PwC.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 104
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 Asia Pte Ltd Singapore 100% 100%
Carlsberg Brewery Hong Kong Ltd Hong Kong SAR 3 100% 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%
Beijing Capital Brewing Jinmai Trading
Company Limited
China
100% 79%
G-Shell Asia Pacific (Beijing) Food
Company Limited
China
100% 79%
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%
Carlsberg Supply Company Asia Ltd Hong Kong SAR 100% 100%
Caretech Limited Hong Kong SAR 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%
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 CONSOLIDATED FINANCIAL STATEMENTS 105
Central & Eastern Europe
Place of
incorporation Note
Number of
subsidiaries
Parent
direct
ownership
Consolidated
ownership
Carlsberg Azerbaijan LLC Azerbaijan 100% 100%
Baku Piva JSC Azerbaijan 91% 91%
Carlsberg Kazakhstan Ltd Kazakhstan 90% 90%
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, G 78% 89%
Vista BY Co LLC Belarus 100% 100%
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%
Waterloo Brewing Ltd. Canada I 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 100% 100%
Carlsberg International A/S Denmark 100% 100%
Home of Carlsberg A/S Denmark 100% 100%
Carlsberg Invest A/S Denmark 100% 100%
Carlsberg Integrated Information Technology A/S Denmark 100% 100%
Carlsberg Captive Insurance Company 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%
Knopp Oy Finland 50% 50%
Viacer S.G.P.S., Lda Portugal J 29% 29%
Super Bock Group, S.G.P.S., S.A. Portugal J 10 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%
Lion Brewery (Ceylon) PLC Sri Lanka A, F, K 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%
Not consolidated companies
Place of
incorporation Note
Number of
subsidiaries
Parent
ownership
Consolidated
ownership
Baltika Breweries LLC Russia F, H, L 3 100% 0%
Hoppy Union LLC Russia F, H, L 100% 0%
G Consolidated ownership is higher than the legal ownership due to written put options.
H Company owned by Carlsberg Sverige AB.
I In January 2024 Waterloo Breweries Ltd. was merged into Carlsberg Canada Inc.
J 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 share of 29% in Viacer 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%.
K 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 A/S.
L Deconsolidated as of July 2023
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 106
PARENT COMPANY FINANCIAL
STATEMENTS
Income statement ................................ 107
Statement of comprehensive
income ...................................................... 107
Statement of financial position ...... 108
Statement of changes in equity ..... 109
Statement of cash flows ................... 109
Notes ......................................................... 110
SECTION 1
SUBSIDIARIES AND RELATED PARTIES
1.1 Investments in subsidiaries ....................... 110
1.2 Special items ................................................. 111
1.3 Related parties ............................................. 111
SECTION 2
CAPITAL STRUCTURE
2.1 Share capital ................................................. 112
2.2 Financial income and expenses .............. 112
2.3 Net interest-bearing debt ......................... 112
2.4 Borrowings and cash .................................. 113
2.5 Credit risk ....................................................... 113
2.6 Foreign exchange risk related to
net investments and financing
activities .......................................................... 113
2.7 Interest rate risk ........................................... 114
2.8 Liquidity risk .................................................. 114
2.9 Derivative financial instruments.............. 115
SECTION 3
OPERATING ACTIVITIES
3.1 Operating expenses .................................... 116
3.2 Cash flow from operating
activities .......................................................... 116
3.3 Receivables .................................................... 116
SECTION 4
STAFF COST AND REMUNERATION
4.1 Staff costs and remuneration.................. 117
4.2 Share-based payments ............................ 118
SECTION 5
OTHER DISCLOSURE REQUIREMENTS
5.1 Provisions ....................................................... 119
5.2 Fees to auditors ........................................... 119
5.3 Asset base and leases ............................... 119
5.4 Tax ................................................................... 119
5.5 Contingent liabilities and other
commitments ............................................... 120
5.6 Events after the reporting period ........... 120
SECTION 6
GENERAL ACCOUNTING POLICIES
6 General accounting policies ..................... 121
PARENT COMPANY FINANCIAL STATEMENTS
Parent Company financial statements
INCOME STATEMENT STATEMENT OF COMPREHENSIVE INCOME
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 107
DKK million Section 2023 2022
Revenue 2,765 2,736
Cost of sales 3.1 -1,082 -915
Gross profit 1,683 1,821
Sales and distribution expenses 3.1 -799 -806
Administrative expenses -492 -777
Other operating activities, net 3.1 257 352
Operating profit before special items 649 590
Special items, net 1.2 -14,035 -9,884
Financial income 2.2 12,253 3,710
Financial expenses 2.2 -1,903 -1,174
Profit before tax -3,036 -6,758
Income tax 5.4 -102 -137
Profit for the period -3,138 -6,895
Attributable to
Dividend to shareholder 3,598 3,695
Reserves -6,736 -10,590
Profit for the period -3,138 -6,895
DKK million Section 2023 2022
Profit for the period -3,138 -6,895
Other comprehensive income
Value adjustments of hedging instruments 605 7
Income tax 5.4 - -2
Items that may be reclassified to the income statement 605 5
Other comprehensive income 605 5
Total comprehensive income -2,533 -6,890
STATEMENT OF FINANCIAL POSITION
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 108
DKK million Section 31 Dec. 2023 31 Dec. 2022
ASSETS
Non-current assets
Intangible assets 5.3 1,490 1,493
Property, plant and equipment 5.3 394 268
Investments in subsidiaries 1.1 62,304 69,014
Investments in associates 1.1 2,910 2,910
Receivables 3.3 750 531
Tax assets 5.4 119 -
Total non-current assets 67,967 74,216
Current assets
Trade receivables 3.3 980 1,185
Tax receivables 21 51
Other receivables 3.3 21,016 20,469
Prepayments 29 29
Deposits and securities 2,236 -
Cash and cash equivalents 2.4 6,478 1,368
Total current assets 30,760 23,102
Total assets 98,727 97,318
DKK million Section 31 Dec. 2023 31 Dec. 2022
EQUITY AND LIABILITIES
Equity
Share capital 2.1 497 498
Hedging reserves 324 -281
Retained earnings 28,151 37,898
Total equity 28,972 38,115
Non-current liabilities
Borrowings 2.4 33,528 25,706
Tax liabilities 5.4 576 342
Provisions 5.1 7 409
Other liabilities, etc. 501 -
Total non-current liabilities 34,612 26,457
Current liabilities
Borrowings 2.4 32,730 30,479
Trade payables 1,134 1,093
Deposits on returnable packaging materials 46 53
Provisions 5.1 67 86
Tax payables 3 -
Other liabilities, etc. 1,163 1,035
Total current liabilities 35,143 32,746
Total liabilities 69,755 59,203
Total equity and liabilities 98,727 97,318
STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 109
DKK million Shareholder in Carlsberg Breweries A/S
2023
Share
capital
Hedging
reserves
Retained
earnings
Total
equity
Equity at 1 January 498 -281 37,898 38,115
Profit for the period - - -3,138 -3,138
Other comprehensive income - 605 - 605
Total comprehensive income for the period - 605 -3,138 -2,533
Capital reduction -1 - -2,999 -3,000
Settlement of share-based payments - - 7 7
Share-based payments - - 78 78
Dividend paid to shareholder - - -3,695 -3,695
Total changes in equity -1 605 -9,747 -9,143
Equity at 31 December 497 324 28,151 28,972
2022
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
DKK million Section 2023 2022
Operating profit before special items 649 590
Depreciation and amortisation 39 85
Operating profit before depreciation and amortisation 688 675
Other non-cash items 3.2 78 59
Change in working capital 3.2 659 -593
Restructuring costs paid -88 -43
Interest etc. received 1,261 492
Interest etc. paid -1,562 -1,446
Income tax paid 48 -27
Cash flow from operating activities 1,084 -883
Acquisition of property, plant and equipment and intangible assets -13 -17
Total operational investments -13 -17
Capital injection in subsidiaries -111 -51
Acquisition and disposal of financial investments, net -2,236 -
Change in financial receivables -13 2
Dividends received 4,349 3,196
Total financial investments 1,989 3,147
Cash flow from investing activities 1,976 3,130
Free cash flow 3,060 2,247
Shareholder in Carlsberg Breweries A/S 2.1 -6,695 -7,986
External financing 2.4 8,762 3,758
Cash flow from financing activities 2,067 -4,228
Net cash flow 5,127 -1,981
Cash and cash equivalents at 1 January 1,368 3,291
Foreign exchange adjustment of cash and cash equivalents -17 58
Cash and cash equivalents at 31 December 2.4 6,478 1,368
SECTION 1
SUBSIDIARIES AND
RELATED PARTIES
SECTION 1.1
INVESTMENTS IN
SUBSIDIARIES
Additions primarily include shares in a
subsidiary of the Carlsberg Breweries Group
that were received as a non-cash dividend
distribution of DKK 6,329m from Carlsberg
Sweden Holding 2 AB.
In 2023, impairment losses of DKK 13,500m,
were recognised on investments in subsidiaries.
Of the total impairment, DKK 12,168m relates to
the investment in Carlsberg Sweden Holding 2
AB, which through intermediate companies is
the owner of the Group’s investments in Russia.
The impairment is because of the loss of
control of the Russian operations following the
presidential decree of 16 July 2023.
Impairment losses of DKK 1,313m relate to the
investment in Caretech Ltd., the holding
company for the Group’s operations in
Cambodia, which has been affected by a
significant decline in volumes.
Reversal of impairment of DKK 124m relates to
a minor European entity.
In 2022, impairment losses of DKK 9,700m
were also recognised on the investment in
Carlsberg Sweden Holding 2 AB following the
Russian invasion of Ukraine, while DKK
-9,700m related to minor investments in
Western Europe and Asia.
Please see section 10 in the consolidated financial
statements for a list of companies in the Carlsberg
Breweries Group.
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 2023.
Impairment tests have therefore not been carried out
for investments in other subsidiaries.
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 2023 PARENT COMPANY FINANCIAL STATEMENTS 110
Investments in subsidiaries
DKK million 2023 2022
Cost
Cost at 1 January 85,973 85,956
Additions 6,673 51
Disposals -7 -34
Cost at 31 December 92,639 85,973
Value adjustments
Value adjustments at 1
January 16,959 7,222
Disposal - -35
Impairment losses 13,500 9,772
Reversal of impairment -124 -
Value adjustments at
31 December 30,335 16,959
Carrying amount at
31 December 62,304 69,014
Investments in associates
DKK million 2023 2022
Cost
Cost at 1 January 2,910 2,910
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
SECTION 1.2
SPECIAL ITEMS
In 2023, a loan of DKK 297m provided by
Baltika Breweries to Carlsberg Breweries was
dererecognised as the loan is no longer payable
following the unlawful seizure of Baltika
Breweries.
In 2023, Carlsberg Breweries recognised a cost
of DKK 173m when the company terminated
the licensee agreement for Kronenbourg 1664 in
the UK.
Following the deconsolidation of the Russian
operations, the value of hedges relating to the
original acquisition of the Russian operations
has been reclassified from equity to special
items. The total amount of the reclassification
was DKK 596m. Additional losses of DKK 10m
regarding hedges of financial investment were
reclassified from the cash flow hedge reserve to
special items.
Impairment of investments in subsidiaries
mainly relates to the investment in Carlsberg
Sweden Holding 2 AB, cf. section 1.1.
Restructuring costs of DKK 23m relate to
various restructuring projects as part of the
ongoing focus on cost and efficiency initiatives.
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
2023:
• Carlsberg Breweries leased storage facilities in
the researcher apartments.
The dividend paid to Carlsberg A/S is described
in further detail in section 4.4 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.
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 274m (2022: DKK 251m) were
received from associates. No losses on loans to
or receivables from subsidiaries or associates
were recognised or provided for in either 2023
or 2022.
Dividends of DKK 10,418m (2022: DKK 2,945m)
were received from subsidiaries.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 111
Special items
DKK million 2023 2022
Special items, income
Derecognition of loan from
Baltika Breweries 297 -
Income 297 -
Impairment of investments in
subsidiaries -13,500 -9,772
Reversal of impairment of
investments in subsidiaries 124
Reclassification of cash flow
hedges -606 -
Cost of termination of a
licensee agreement -173 -
Restructuring projects and
provisions -23 -25
Donations -2 -25
Costs related to acquisition of
entities etc. -77 -62
Impairment of receivables
from Baltika Breweries -76 -
Reversal of provisions made
in prior years 15 -
Other expenses -14 -
Expenses -14,332 -9,884
Special items, net -14,035 -9,884
Impact of special items on operating profit
DKK million 2023 2022
If special items had been recognised in operating profit
before special items, they would have been included in
the following items:
Cost of sales -173 -
Administrative expenses 104 -112
Other operating activites, net 15 -
Financial expenses -13,981 -9,772
Special items, net -14,035 -9,884
Related party disclosures
DKK million 2023 2022
Carlsberg A/S
Other operating activities, net -18 -21
Interest income 36 10
Interest expenses -4 -
Dividend paid -3,695 -3,486
Capital reduction -3,000 -4,500
Receivables from the sale of
goods and services 2 10
Recharge of share-based
payments 82 60
Borrowings -165 -391
Trade payables -4 -4
Associates
Interest income 19 24
Receivables from the sale of
goods and services 122 109
Borrowings -8 -5
Subsidiaries
Revenue 890 1,053
Cost of sales -994 -960
Sales and distribution
expenses -44 -28
Administrative expenses -162 -123
Other operating activities, net 275 344
Interest income 1,146 609
Interest expenses -1,119 -283
Loans 20,306 19,207
Dividend 20 -
Receivables 1,370 1,868
Borrowings -28,894 -28,851
Trade payables and other
liabilities etc. -719 -542
SECTION 2
CAPITAL
STRUCTURE
SECTION 2.1
SHARE CAPITAL
The share capital amounts to DKK 497m
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 2023, the share capital was
reduced from DKK 498m to DKK 497m 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 3.0bn. This cash distribution corresponds
to the share buy-backs that were carried out by
Carlsberg A/S over a 12-month period from
7February 2023.
The dividend paid out to the shareholder in
2023 relating to 2022 amounted to DKK
3,695m (paid out in 2022 for 2021: DKK
3,486m).
Carlsberg Breweries A/S proposes a dividend of
DKK 7,240 per share, in total DKK 3,598m
(2022: DKK 7,420 per share, in total DKK
3,695m). The proposed dividend is included in
retained earnings at 31 December 2023.
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.
SECTION 2.3
NET INTEREST-
BEARING DEBT
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 112
Share capital
DKK million
Shares of
DKK 1,000
Nominal
value, DKK
'000
1 January 2022 499,000 499,000
Capital reduction -1,000 -1,000
31 December 2022 498,000 498,000
Capital reduction -1,000 -1,000
31 December 2023 497,000 497,000
DKK million 2023 2022
Financial income
Interest income 1,355 519
Dividends from subsidiaries
and associates 10,692 3,196
Foreign exchange gains, net 206 -
Reversal of impairments of
financial assets - -18
Other - 13
Total 12,253 3,710
Financial expenses
Interest expenses -1,857 -888
Foreign exchange losses, net - -253
Bank and commitment fees -22 -33
Other -24 -
Total -1,903 -1,174
Financial items, net 10,350 2,536
Net interest-bearing debt
DKK million 2023 2022
Non-current borrowings 33,528 25,706
Current borrowings 32,730 30,479
Gross financial debt 66,258 56,185
Deposits and securities -2,236 -
Cash and cash equivalents -6,478 -1,368
Net financial debt 57,544 54,817
Loans to Group companies
and partners -20,651 -19,552
Net interest-bearing debt 36,893 35,265
Changes in net interest-bearing debt
Net interest-bearing debt at 1
January 35,265 29,724
Cash flow from operating
activities -1,084 883
Cash flow from investing
activities, excl. acquisition of
subsidiaries, net -1,976 -3,130
Dividend to shareholder 3,695 3,486
Change in interest-bearing
lending -2,296 -15
Capital reduction 3,000 4,500
Lease liabilities 26 17
Effect of currency translation 264 -200
Total change 1,629 5,541
Net interest-bearing debt at
31 December 36,894 35,265
SECTION 2.4
BORROWINGS AND
CASH
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.
Cash and cash equivalents including deposits
amounted to DKK 8,714m (2022: DKK 1,368m).
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 investments
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
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 income statement in the
Parent Company. For more details on semi-
equity loans and net investment hedges, see
section 4.7 in the consolidated financial
statements.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 113
Gross financial debt
DKK million 2023 2022
Non-current borrowings
Issued bonds 29,270 21,470
Lease liabilities 358 242
Borrowings from Group
companies 3,900 3,900
Other borrowings - 94
Total 33,528 25,706
Current borrowings
Issued bonds 7,448 3,714
Lease liabilities 26 17
Other borrowings 25,256 26,748
Total 32,730 30,479
Total non-current and
current borrowings 66,258 56,185
Fair value 65,606 54,233
Changes in gross financial debt
DKK million 2023 2022
Gross financial debt at 1
January 56,185 53,037
Proceeds from issue of
bonds 15,272 3,708
Instalments on and
proceeds from borrowings,
non-current -3,725 -5,583
Instalments on and
proceeds from European
commercial paper -1,302 1,302
Change in current
borrowings from Group
companies -745 4,463
Change in current loans to
Group companies -1,099 470
Instalments on lease
liabilities -26 -17
Other 387 -585
Financing 8,762 3,758
Intercompany loans 1,099 -470
Other, including foreign
exchange adjustments and
amortisation 212 -140
Gross financial debt at 31
December 66,258 56,185
Currency profile of borrowings
Before and after derivative financial instruments
DKK million
2023
Original
principal
Effect of
swap
After
swap
CHF 1,785 1,219 3,004
NOK 1,387 383 1,770
EUR 42,685 -9,014 33,671
USD 33 2,828 2,861
DKK 9,210 650 9,860
SEK 3,802 804 4,606
Other 7,356 3,130 10,486
Total 66,258 - 66,258
Total 2022 56,185 - 56,185
Exchange rate sensitivity - other comprehensive income
2023 2022
DKK million
Average
hedged rate
Notional
amount % change Effect on OCI
Average
hedged rate Effect on OCI
USD/DKK 6.7737 -236 5% -12 6.8618 -24
Other N/A -131 5-30% -23 N/A -42
Total -35 -66
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 issued
bonds, bilateral loan agreements, syndicated
credit facilities and loans from the shareholder
and subsidiaries.
Interest rate risks are mainly managed using
bonds with fixed interest.
At the reporting date, 44% of the gross loan
portfolio consisted of fixed-rate borrowings
with interest rates fixed for more than one year
(2022: 38%). At 31 December 2023, Carlsberg
Breweries A/S had borrowed DKK 29,059m
from subsidiaries and associates (2022: DKK
25,342m), and provided interest-bearing loans
to subsidiaries, associates and partners of DKK
20,651m (2022: DKK 19,552m).
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
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 section 4.8 in
the Carlsberg Breweries Group financial
statements regarding the liquidity risk.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 114
Interest rate risk
DKK million
2023
Interest
rate
Average
effective
interest
rate Fixed for
Carrying
amount
Interest
rate risk
Issued bonds
EUR 1,000m maturing 28 May 2024 Fixed 2.6% < 1 year 7,448
Fair value
EUR 500m maturing 13 October 2025 Fixed 3.4% 1-2 years 3,718
Fair value
EUR 750m maturing 26 November 2026 Fixed 3.6% 2-3 years 5,578
Fair value
EUR 500m maturing 30 June 2027 Fixed 0.5% 3-4 years 3,711
Fair value
EUR 700m maturing 5 October 2028 Fixed 4.2% 4-5 years 5,179
Fair value
EUR 400m maturing 1 July 2029 Fixed 1.0% > 5 years 2,959
Fair value
EUR 500m maturing 11 March 2030 Fixed 0.7% > 5 years 3,708
Fair value
EUR 600m maturing 5 October 2033 Fixed 4.4% > 5 years 4,417
Fair value
Total issued bonds 2.7% 36,718
Total issued bonds 2022 1.7% 25,184
Bank borrowings and other borrowings
Floating-rate Floating 1.4% < 1 year 123
Cash flow
Fixed-rate Fixed 4.2% > 1 year 358
Fair value
Total bank borrowings and other borrowings 481
Total bank borrowings and other borrowings 2022 373
Time to maturity for non-current borrowings
DKK million
2023 1-2 years 2-3 years 3-4 years 4-5 years > 5 years Total
Issued bonds 3,718 5,578 3,711 5,179 11,084 29,270
Lease liabilities 26 23 23 23 263 358
Other - - 3,900 - - 3,900
Total 3,744 5,601 7,634 5,202 11,347 33,528
Total 2022 7,532 3,720 15 7,613 6,826 25,706
Maturity of financial liabilities
DKK million
2023
Contractual
cash flows
Maturity
< 1 year
Maturity
> 1 year
< 5 years
Maturity
> 5 years
Carrying
amount
Derivative financial instruments
Derivative financial instruments, payables 282 282 - - 309
Non-derivative financial instruments
Financial debt, gross 66,435 32,738 22,255 11,442 66,258
Interest expenses 6,173 2,025 3,217 931 N/A
Trade payables and other liabilities 1,180 1,180 - - 1,180
Contingent liabilities 1,150 1,150 - - -
Non-derivative financial instruments 74,938 37,093 25,472 12,373 -
Financial liabilities 75,220 37,375 25,472 12,373 -
Financial liabilities 2022 61,114 34,317 19,884 6,913 -
SECTION 2.9
DERIVATIVE
FINANCIAL
INSTRUMENTS
The Company enters into various derivative
financial instruments to hedge foreign
exchange and commodity risks, and seeks to
apply hedge accounting when this is possible.
Hedging of future, highly probable forecast
transactions is designated as 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 Parent Company’s
financial statements.
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
-244m (2022: DKK -843m) on a pre-tax basis.
In 2023, the portion of the loss on the S&N
hedging transaction relating to Russia (DKK
-596m) has been reclassified to the income
statement.
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 1.2 on operating activities in the
Carlsberg Breweries Group financial statements
regarding the commodity risk.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 115
Financial derivatives not designated as hedging instruments (economic hedges)
DKK million
2023
Income
statement
Fair value
receivables
Fair value
payables
Fair value,
net
Exchange rate instruments 354 274 -241 33
Other instruments 43 118 -68 50
Total 397 392 -309 83
2022
Exchange rate instruments -343 230 -197 33
Other instruments -67 211 -183 28
Total -410 441 -380 61
Cash flow hedges
DKK million
Expected
recognition
2023
Other
comprehen-
sive income
Fair value
receivables
Fair value
payables
Fair value,
net 2024
Exchange rate instruments - 7 - 7 7
Reclassification from OCI 605 - - - -
Total 605 7 - 7 7
2022 2023
Exchange rate instruments 7 3 -3 - -
Total 7 3 -3 - -
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) 2023 2024 2025
2023 20% 86 27,018 16,155 - 22,047 4,971
2022 20% 132 40,209 18,014 32,820 7,389 -
Aluminium
premium Change
Effect
in P/L
Tonnes
purchased
Average
price (DKK) 2023 2024 2025
2023 30% 5 11,243 1,257 - 11,243 -
Energy Change
Effect
in P/L
MWh
purchased
Average
price (DKK) < 1 year 1-5 years > 5 years
2023 20% 29 289,966 420 12,123 116,000 161,843
2022 20% 34 289,966 420 - 99,123 190,843
SECTION 3
OPERATING
ACTIVITIES
SECTION 3.1
OPERATING
EXPENSES
SECTION 3.2
CASH FLOW FROM
OPERATING
ACTIVITIES
SECTION 3.3
RECEIVABLES
Trade receivables comprise invoiced goods and
services.
Other receivables comprise VAT receivables,
loans to subsidiaries and 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 1.4 in the
consolidated financial statements for more
details.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 116
Cost of sales
DKK million 2023 2022
Purchased finished goods
and other costs 1,082 915
Total 1,082 915
Sales and distribution expenses
DKK million 2023 2022
Marketing expenses 559 623
Sales expenses 186 149
Distribution expenses 54 34
Total 799 806
Other operating activities, net
DKK million 2023 2022
Management fee
from Group companies 337 427
Other, net -80 -75
Total 257 352
Cash flows
DKK million 2023 2022
Other non-cash items
Share-based payments 78 57
Other items - 2
Total 78 59
Change in working capital
Receivables 594 -793
Trade payables and other
liabilities 476 181
Other provisions -418 -6
Unrealised foreign
exchange gains/losses 7 25
Total 659 -593
Receivables included in the statement of
financial position
DKK million 2023 2022
Trade receivables 980 1,185
Other receivables 21,016 20,469
Total current receivables 21,996 21,654
Non-current receivables 750 531
Total 22,746 22,185
Receivables by origin
DKK million 2023 2022
Receivables from sale of
goods and services 117 217
Receivables from Group
companies 1,372 1,685
Dividend income 20 -
Loans to Group companies 20,306 19,207
Loans, fair value of hedging
instruments and other
receivables 931 1,076
Total 22,746 22,185
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 7.2 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.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 117
Staff costs and remuneration
DKK million 2023 2022
Salaries and other remuneration 612 621
Severance payments -1 3
Social security costs 6 5
Retirement benefit costs - defined contribution plans 39 34
Share-based payments 78 44
Other employee benefits 6 6
Total 740 713
Staff costs are included in the following items in the income statement
Sales and distribution expenses 186 188
Administrative expenses 554 529
Total staff costs recognised by the Parent Company 740 717
Remuneration of executive director recognised by Carlsberg A/S - -4
Total 740 713
The Company had an average of 431 (2022: 413) full-time employees during the year.
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 2023, 43 employees (2022: 40 employees) in
Carlsberg Breweries A/S were awarded
performance shares.
Vesting is subject to achievement of five KPIs:
total shareholder return, adjusted EPS growth,
organic revenue growth, growth in ROIC and
achievement of ESG goals. The average share
price at transfer was DKK 965 (2022: DKK
1,084). The average contractual life at the end
of 2023 was 1.4 years (2022: 1.2 years).
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 118
Share-based payments
Number
Performance shares
Executive
directors
Other
management
personnel¹ Total
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
Granted 85,487 41,645 127,132
Forfeited/expired/adjusted -127,722 45,475 -82,247
Exercised -24,536 -32,510 -57,046
Performance shares outstanding at 31 December 2023 49,898 149,710 199,608
¹ Including retired employees.
SECTION 5
OTHER DISCLOSURE
REQUIREMENTS
SECTION 5.1
PROVISIONS
Provisions primarily relate to ongoing disputes,
lawsuits, restructurings etc.
Total provisions were primarily impacted by
reversal of other contractual obligations and
legal claims that did not materialise, in total
DKK -400m.
DKK 67m of total provisions (2022: DKK 86m)
falls due within one year and DKK 7m (2022:
DKK 2m) after more than five years from the
end of the reporting period.
SECTION 5.2
FEES TO AUDITORS
SECTION 5.3
ASSET BASE AND
LEASES
The carrying amount of intangible assets was
DKK 1,490m (2022: DKK 1,493m), and the
carrying amount of property, plant and
equipment was DKK 394m (2022: DKK 268m).
Intangible assets mainly comprised brands of
DKK 1,490m (2022: DKK 1,493m).
Of the depreciation and amortisation of DKK
39m (2022: DKK 85m), DKK 6m (2022: DKK
6m) was included in cost of sales, whereas
DKK 33m (2022: DKK 79m) was included in
sales and distribution expenses.
Carlsberg Breweries A/S leases various
properties and equipment. At 31 December
2023, the carrying amount of right-of-use
assets was DKK 384m (2022: DKK 259m).
During the year, additions amounted to DKK
175m, relating to commencement of a lease
contract for extension of the existing premises
(2022: DKK 2m), and depreciation to DKK 26m
(2022: DKK 17m). The lease expenses
recognised in the income statement relate 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 2023 was
22% (2022: 22%). The effective tax rate was
-3.4% (2022: -2.0%), mainly impacted by non-
deductible impairments in special items and
non-taxable dividends with a net effect of -30.3
percentage points (2022: -24.0 percentage
points).
Hedging instruments recognised in other
comprehensive income before tax amounted to
DKK 0.4m (2022: DKK 7m) with a tax expense
of DKK 0m (2022: DKK 2m).
Deferred tax assets amounted to DKK 119m and
comprised current assets and liabilities of DKK
35m, property, plant and equipment of DKK
30m, and provisions of DKK 14m. In 2022,
deferred tax assets amounted to DKK 40m and
comprised fair value adjustments of DKK 24m
and property, plant and equipment of DKK 16m.
Deferred tax liabilities amounted to DKK 576m
(2022: DKK 382m) and mainly comprised
intangible assets of DKK 75m (2022: DKK 77m),
provisions of DKK 400m (2022: DKK 304m)
and current liabilities of DKK 65m (2022: 0m).
Deferred tax, net, at 31 December was a
deferred tax liability of DKK 457m (2022: DKK
342m).
The net change in deferred tax of DKK 120m
(2022: DKK 84m) mainly comprised
movements in provisions of DKK 81m,
movement in financials of DKK 65m and other
movements of DKK -26m (2022: impairment on
tax assets of DKK -317m and change in other
liabilities of DKK -47m, offset by movements in
provisions of DKK 450m).
Not recognised tax assets amounted to DKK
42m (2022: DKK 236m), related to tax losses
that are not expected to be utilised in the
foreseeable future. Tax losses that will not
expire amounted to DKK 42m (2022: DKK
236m). Tax balances relating to interest
deductibility restrictions are not recognised.
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 PARENT COMPANY FINANCIAL STATEMENTS 119
Provisions
DKK million Total
Provisions at 1 January 2023 495
Additional provisions recognised 46
Used during the year -67
Reversal of unused provisions -400
Provisions at 31 December 2023 74
Fees to the auditors appointed by the Annual
General Meeting are specified as follows.
DKK million 2023 2022
Statutory audit 3 3
Other assurance
engagements 1 -
Tax advisory 1 -
Other services - -
Total 5 3
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.
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). The Parent Company has
applied the exception to recognise and disclose
information about deferred tax in the OECD/EU Pillar
Two Model Rules and their local implementation.
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 1,150m (2022: DKK 1,117m).
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
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 2023 PARENT COMPANY FINANCIAL STATEMENTS 120
Income tax expenses
2023 2022
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 75 – 75 122 – 122
Change in deferred tax during the year 115 – 115 -75 2 -73
Adjustments to tax for prior years -88 – -88 90 – 90
Total 102 – 102 137 2 139
SECTION 6
GENERAL
ACCOUNTING POLICIES
The financial statements of Carlsberg Breweries
A/S for 2023 have been prepared in accordance
with IFRS Accounting Standards as issued by
the International Accounting Standards Board,
and in accordance with IFRS Accounting
Standards 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 2023 PARENT COMPANY FINANCIAL STATEMENTS 121
REPORTS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 122
Executive Board of Carlsberg Breweries A/S
Supervisory Board of Carlsberg Breweries A/S
REPORTS
INDEPENDENT
AUDITOR’S REPORT
OUR OPINION
BASIS FOR OPINION
KEY AUDIT MATTERS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 123
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 124
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 125
STATEMENT ON MANAGEMENT’S REVIEW
MANAGEMENT’S RESPONSIBILITIES FOR THE
FINANCIAL STATEMENTS
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 126
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 127
CVR No 3377 1231
CARLSBERG BREWERIES GROUP ANNUAL REPORT 2023 REPORTS 128
Phone +45 3327 3300
CVR No. 25508343