Business
The Copenhagen Post cphpost.dk
22 - 28 February 2013
15
Christian Wenande Stock value has shot up by ten percent since the bank announced it would be charging customers fees for having an account
A The Carlsberg Group reported nine percent organic volume growth in Asia and pointed to countries like Laos (pictured) as areas where the Danish company is making inroads
Bjarke Smith-Meyer Annual report for 2012 won’t impress investors, but Jørgen Buhl Ramussen insists that positives can be drawn from performance in Russia and Asia
O
n Monday, following the release of Carlsberg’s 2012 financial report, which revealed a net profit of 5.6 billion kroner, the Danish beer giant saw its stock drop by six percent due to the report’s indication of stagnant growth. But Carlsberg CEO Jørgen Buhl Rasmussen insists there are positives to be taken from 2012 despite company cutbacks, a production decrease and a set-back in sales. “The economy has been at a low point, which obviously affects consumer purchases,” Rasmussen told Børsen financial daily. “But we’re expecting good things from our Asian markets, where we’re always looking for new investments.” According to the company’s annual report, bad summer weather and a change in consumer habits were the main reasons for poor sales in western Europe. However, growth in Asia and a steady performance in Russia indicates that Carlsberg is gaining ground in the East – an ambition Rasmussen set out to achieve in 2012.
“On a whole, I would say there’s a positive trend in our market share since the end of 2011,” Rasmussen said. “And that is a reflection of the business we managed to achieve in Russia at the end of 2011 and the beginning of 2012.” The company reported that it improved its market share across Asia, pointing particulary to strong performances in countries such as India, Cambodia and Vietnam. The setbacks closer to home in western Europe, however, have meant that Rasmussen has been forced to change strategy after Carlsberg’s operating profit fell from 5.4 billion kroner in 2011 to 5.1 billion in 2012. Poland is the only European country in which Carlsberg saw a strong growth in sales. Carlsberg as a result has reevaluated its targets, changing them to what the annual report described as “softer and less tangible objectives”. And while Rasmussen has argued that these new “clear and simple ambitions will result in better long-term company value”, it has already started to attract criticism from analysts in Denmark. “The results are disappointing,” Morten Imsgard, an analyst from Sydbank, told Ritzau Finans. “This news is only proving the company’s critics right.” In 2010, Carlsberg set shortterm goals of achieving pre-tax
The Carlsberg Group
Carlsberg CEO looks east after slow year
staggering 35 percent of Danske Bank customers are considering leaving the bank, according to a survey that Megafon compiled for Politiken newspaper and TV2. Economist Kim Valentin from financial advisors Finanshuset i Fredensborg said it was remarkable that such a large and established company is so unpopular with its own customers. “It’s completely unbelievable that such a comprehensive bank can blunder to the point that it has here,” Valentin told Politiken. “But the whole mess is magnified by the apathetic response it has had to the customers who are leaving the bank. It doesn’t just mean lost customers, but a dwindling loyalty amongst the ones that remain.” Danske Bank’s troubles began in November of last year when it launched its now-infamous advertising campaign, ‘New Standards’, which featured a number of issues that didn’t reflect the bank’s image, including
an image that referred to Occupy Wall Street, a movement that has been very critical of large banks and the role they played in the global economic downturn. “That must go down as one of the worst campaigns in history in regards to their target group,” John Norden, the head of banking price comparer, Mybanker, told Politiken. “That advert should have been sent as a DVD with a bottle of champagne to 500 of the biggest stockholders, because that’s who it appealed to. To normal people, it proved that the bank hadn’t understood that the public’s trust in financial institutions had been eroded.” Danske Bank has also ostracised many of its customers by discontinuing face-to-face transactions at 131 of its branches. But, although Danske Bank continues to receive negative press attention and angry customers continue to flock to its rivals, the bank recently announced that it ended 2012 with a nearly five billion kroner profit – its best in years. And since the bank announced late last year that it would begin charging many of its customers fees of up to 480 kroner a year just for having a standard account, share prices have risen by ten percent. The share price was at 97
Scanpix / Søren Bidstrup
The Carlsberg Group
Danske Bank’s customers might not be happy, but its shareholders are
Eivind Kolding: Unpopular amongst most, loved by some
kroner when CEO Eivind Kolding indicated that the bank would charge its customers more on 20 December 2012. Last week, the share price ranged between 107 and 110 kroner. Stock analyst Jakob Brink, who keeps tabs on Danske Bank stock for ABG Sundal Collier investment bank, argued that even though Danske Bank may be taking a beating in the public forum, investors see the customer fees as a sign that the bank is working hard at shedding weak customers and generating more money. “To investors, it is obviously positive that customers who Danske Bank loses money on move to other banks,” Brink told Politiken. “Every day there have been debates on how bad the bank is. That may result in fewer customers, but I don’t think the negative press will affect the bank’s business in the long run.”
BRITISH CHAMBER OF COMMERCE IN DENMARK Jørgen Buhl Rasmussen was optimistic despite the slow year
earning margins of 15-17 percent in western Europe, 26-29 percent in eastern Europe and 15-20 percent in Asia. The annual report, however, showed that the operating margin achieved in western Europe in 2012 was 13.6 percent, a decrease from 14.7 percent in 2011. Carlsberg also saw a drop in Asia from 18.8 percent in 2011 to 18.5 percent in 2012. Eastern Europe, on the other hand, saw some growth, from 21.3 percent in 2011 to 21.7 percent at the end of 2012. While Rasmussen said that Carlsberg is out-competing its rivals in Asia, Børsen reported that the three biggest global breweries – AB-Inbev, SAB Miller and Heineken – continue to pull ahead of Carlsberg on the world stage.
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It’s about daring... Stine Bosse, has a Master of Law from the University of Copenhagen and before being appointed to Group CEO of TrygVesta A/S in 2001, she held various positions in Tryg which provided her with a unique, thorough and hands-on understanding of the day-to-day operations. She is widely known in the public for her direct and no-nonsense communication and is enthusiastically engaged in the societal debate for a better and safer world. She is a role model for many aspiring young people as the highest ranking female CEO in Denmark and was appointed the 22nd most influential business woman in the world in 2009 and 2010 by the Financial Times. Stine Bosse serves as chairman of Flügger Denmark, The Royal Danish Theatre, CONCITO, Børnefonden, and Copenhagen Art Festival. She is Danish member of ChildFund Alliance, and sits on the board of among others Nordea Bank A/S, TDC, Allianz and Aker ASA. Additionally, Stine Bosse is the former chairman of the supervisory board of the Danish Insurance Association (Forsikring & Pension), and former board member of Grundfos and Amlin plc. In the Spring 2010, Stine Bosse was appointed Advocate for the Millenium Development Goals by the UN Secretary General, Ban Kimoon, to fight world hunger and poverty. Stine will talk about the essence of her book “Det handler om at turde”. Programme: • 11.45: Registration and welcome drinks • 12.00: Welcome and introduction by Mariano A. Davies, President, BCCD • 12.10: Guest speaker - Stine Bosse • 12.40: Questions and discussion • 12.55: Announcements by Penny Schmith, Executive Director, BCCD • 13.00: Buffet lunch and networking
Date: Friday, 22 March 2013 Venue: Conference Suite on 1st floor Radisson Blu Royal Hotel Hammerichsgade 1 Copenhagen K
Non-members are very welcome. Please contact BCCD or go to www.bccd.dk for further information.
Price in kroner for one unit of foreign currency
If you would like to attend then please send us an email (event@bccd.dk) or call +45 31 18 75 58
Date: 20 February 2013
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