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New CEO for Carlsberg as beer sales drop

Carlsberg has announced Cees ‘t Hart, currently CEO of the Dutch dairy company Royal Friesland Campina, as its new CEO, as the company releases its 2014 full year results.

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Cees ‘t Hart, Carlsberg’s new CEO

The appointment follows the retirement of the group’s current CEO, Jørgen Buhl Rasmussen, who is set to step down from his role in June.

In a statement Flemming Besenbacher, chairman of Carlsberg’s supervisory board said: “I would like to thank Jørgen for his significant contribution to the group’s evolution during the past seven years. Performance has been strong across many geographies but of course challenged by macro-economic developments in Russia. Jørgen is handing over a Carlsberg with a transformed geographic footprint, a strong international leadership team and a more commercially capable and efficient organisation.”

Cees ‘t Hart has been CEO of Royal Friesland Campina since 2008, now one of the most successful dairies in the world with operations in 32 countries across Europe, Middle East, Asia and Africa selling products in over 100 markets.

The change was announced as the group announced its 2014 full year performance results which were described as “solid” by the group.

The group reported organic net revenue growth of 2% to DKK 64.5bn and a 1% organic operating profit growth, driven by strong performance in Western Europe and Asia. However group’s beer volumes declined organically by 3% due to challenges faced in the Eastern European market.

The group reported a 22% fall in fourth-quarter operating profit, due to 32% lower sales in Eastern Europe. Carlsberg said in January it would be closing two of its 10 breweries in Russia – a market that has declined more than 30% since 2008.

Elsewhere, the group’s share increased in the majority of its markets in Western Europe, Asia and Russia, while the group’s international premium portfolio continued to deliver strong growth as follows: Tuborg (+24%), Somersby (+43%), Kronenbourg 1664 (+9%) and Grimbergen (+27%), contributing to the Carlsberg  brand growing by 1% in its premium markets.

Commenting on the results, outgoing CEO Jørgen Buhl Rasmussen said: “In 2014, we had clear priorities and focus on execution, enabling us to deliver strong organic performance in Western Europe and Asia which more than offset the market challenges in Eastern Europe. For 2015, we’ll continue to support and invest in our brands and markets to capture the long-term opportunities in our regions, but in response to the current situation, we’ve built a strong operating plan, which includes changes to our business model, with the aim to achieve further efficiency improvements faster. These changes will enable us to mitigate the significant negative earnings impact arising from the rouble weakness and Eastern European market challenges, as well as improve cash flow and return on invested capital.“

For 2015, the Group expects operating profit to grow organically by “mid- to high-single-digit percentages”.

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