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Carlsberg CEO Discusses Q2 2010 Results - Earnings Call Transcript

I'll now give you a summary of the group performance for the first six months, and then briefly go to the regions. And then as always, Jørn will then after walk you through the numbers and comment on our upgraded 2010 outlook. And thereafter, we will be happy to take your questions.

Please go to slide three. Going into 2010, we had clear ambitions of improving market shares in both volume and value. And after the first half of the year, we are on track. In Northern and Western Europe, our overall market share has started to improve after flat market share development in recent years. An important objective has been and will remain to grow share in both value and volume terms in the region.

We saw strong market share performance in Eastern Europe. There were particularly strong gains in Ukraine, continuing the very positive trends. Our market share in Russia improved sequentially during the first six months to 40.1% in Q2. And in Asia, we have once again obtained strong gains in market share across the region. And our business in Indo-China was particularly strong.

One of the drivers of the market share improvement was the successful activation of the Carlsberg brand across many markets in connection with the World Cup. And volumes of the Carlsberg brand increased globally by 8%. The performance in all regions is also a result of the acceleration of new product introductions, line extensions, and events and promotions successfully executed. We increased investments behind our brands and activities. And we increased spend behind innovations as well. That's been and will continue to be an important driver. Our brand marketing spend has increased by double-digit percentages. Nevertheless, our total operating expenses are still declining as efficiency improvements more than offset the higher marketing expense.

And now to slide four, the financial performance for the group was strong for the first six months as margins and net results improved substantially. Operating margin improved strongly by 210 basis points to 17.2%. In Q2, the improvement was even stronger with 290 basis points improvement to 23.6%. And we did see operating margin improvement in all regions.

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