E-Malt.com News article: 2349

The Danish Brewery Group A/S announced on 17 March 2004 the assumptions of and expectations for results for 2004, based on the results achieved in 2003. The closure of the Randers brewery – which in 2003 had a negative effect of DKK 40 million on the profit before tax – is expected to affect operating profit positively by some DKK 15 million in 2004. The full-year effect of the resource optimisation initiatives taken in 2003 - storage effectiveness, streamlining of product range and centralisation of purchasing - is estimated at DKK 20 million. Taking into account the savings achieved in 2003, the additional effect for 2004 is estimated to be an increase of some DKK 12 million in profit before tax.

The acquisition of the shares of Impec Holding SAS (the Caribbean), Vitamalt (West Africa) Ltd. and Peva Poland Sp. z o.o. will in 2004 - in addition to strengthening strategic development opportunities - affect revenue and profit before tax positively. There has been made an agreement with Coop in Denmark for the production of beer brands, which is expected to increase net revenue by some 2% over 2003.

In the summer of 2004 The Danish Brewery Group is expected to start brewing Heineken in Denmark, which will increase earnings potential for the product. New product launches in Denmark, such as Royal Pilsner, Royal Classic and Faxe Kondi 2, will mean increased market shares and increased sales and earnings. The same applies to the relaunch of Kalnapilis in Lithuania. It is planned that investments in property, plant and equipment will amount to approx. DKK 150 million in 2004.

The implementation of the V8 Next Strategic and Action Plan will support the above-mentioned expectations for 2004. This will be effected through cost reductions by means of the resource and proc- ess optimisation activities and through strengthening of marketing efforts in the key markets of The Danish Brewery Group. Similarly, the continued work of developing the Group’s employees, which is also an important element of V8 Next, will reinforce the basis of realising the action plans made. It is anticipated that the initiatives launched will as of 2005 have a positive net profit effect of DKK 15 million before tax on an annual basis.

On an overall basis, the Group’s net revenue for 2004 is expected to show an increase of some 5-10% from 2004, whereas the profit margin for 2004 is expected to remain at the 2003 level, i.e. some 10.5- 11%. Return on invested capital has been targeted at 10.5% as a minimum. Free cash flow (before any acquisitions) is also in 2004 expected to amount to at least DKK 200 million. Profit before tax is expected to be in the range from DKK 280 to 320 million. The tax rate of the Group is expected to be 31% in 2004.


18 March, 2004