Report and Accounts 1999 / 2000 - Carlsberg Group

Financial Review of the Carlsberg Group
59
Carlsberg is planning to implement changes in the
accounting policies with effect from the financial
year 2002 at the latest, which will harmonise them
with the new Danish Company Accounts Act and
consequently international accounting guidelines.
The profit and loss account
The operating profit of the Carlsberg Group
amounted to DKK 2,934 million (DKK 2,087
million) against DKK 1,673 million last year. The
comparable increase of DKK 414 million - or 25%
- is the result of growth in the major Group
companies. CCNB experienced a positive development
in sales as well as improved results.
Within the international beer business, the most
substantial progress was achieved by Carlsberg-
Tetley in the United Kingdom – among other things
because of favourable exchange-rate developments
– and in Falcon in Sweden, Carlsberg
Brewery Malaysia Berhad and Svyturys in Lithuania.
Satisfactory developments in earnings were
also achieved in Denmark, and the effects of the
restructuring projects are evident.
Significant events for the Group
In the spring of 2000, Carlsberg A/S increased its
shareholding in Carlsberg Brewery Malaysia
Berhad from 28% to 50%. As of 1 April 2000, the
company is included as a subsidiary and consolidated
100%.
On 31 May 2000, an agreement was concluded
with Orkla ASA regarding the inclusion of Orkla’s
beverage activities in Carlsberg Breweries. In
accordance with the agreement, the company
Carlsberg Breweries A/S was established on 1
July 2000 with headquarters in Copenhagen. With
effect from 1 July 2000, Carlsberg A/S has contributed
all national and international beer activities
as well as Saltum og Neptun Bryggerier A/S to
Carlsberg Breweries A/S.
Final approval from the competition authorities
regarding Orkla’s beverage activities was received
on 2 January 2001. This means that Orkla will
contribute all beverage activities to Carlsberg
Breweries A/S with effect in the accounts from 1
January 2001. As regards the year 2000,
Carlsberg Breweries A/S is thus a 100%-owned
subsidiary of Carlsberg A/S and Orkla’s beverage
activities are not included in the present annual
accounts. When Orkla’s beverage activities have
been included in Carlsberg Breweries A/S,
Carlsberg will own 60% of the company and Orkla
ASA the remaining 40%. As Carlsberg Breweries
A/S is of substantial importance to Carlsberg A/S,
the present annual accounts include unaudited,
pro forma financial highlights of Carlsberg Breweries
A/S, indicating the situation had the company
existed throughout the calendar year 2000. For
further details please see the relevant, separate
section below.
On 19 June 2000, the shareholding in Tivoli
was sold to Skandinavisk Tobakskompagni A/S
and Chr. Augustinus Fabrikker Aktieselskab for the
amount of DKK 308 million. The profit from the
sale, totalling DKK 182 million, is included in the
profit and loss account under special items.
On 9 August 2000, the 51%-owned Carlsberg
Hong Kong Ltd. (CBHK) entered into a co-operation
agreement with the Chinese brewery China
Tsingtao Brewery Co. Ltd. (Tsingtao). The agreement
entails, among other things, that Tsingtao
has taken over a 75% shareholding in the brewery
Carlsberg Brewery (Shanghai) Limited (CBS),
which was previously 95%-owned by CBHK and
5% by a local partner. The sales price is approx.
DKK 154 million. On 31 December 2000, the remaining
25% of the shares in CBS are held by
CBHK, but they are expected to be transferred to
Carlsberg Asia Ltd. as from 1 January 2001, cf.
below. The agreement was approved by the Chinese
authorities at the end of December 2000. As
a consequence, the operations of the Shanghai
brewery are included in the accounts up until 31
December 2000. The agreement entails that tangible
fixed assets have been written down and provisions
have been made for severance payments,
etc. totalling DKK 241 million, which is registered
in the profit and loss account under special items.
On 3 November 2000, Carlsberg announced its
acquisition of the largest brewery in Switzerland,
Feldschlösschen Getränke Holding AG, for the
amount of approx. CHF 870 million (approx. DKK
4.3 billion inclusive of external debt). The operations
of the company are included in the Group