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Danish brewing giant Carlsberg has posted a 3.1% rise in third quarter like for like sales, driven by rising price/mix as volumes declined.

The 3.1% third quarter organic revenue growth was a marginal decline on the 3.8% organic growth in the first nine months of the year.

Reported net revenues grew 5.3% to DKK18.5bn, a slowdown on the 6.1% growth to DKK51.5bn in the first nine months of the year.

The quarterly performance was boosted by price/mix growth of 4% in the quarter, while total organic volumes dropped 0.5% in the period. Volumes so far in 2019 were up 0.7%.

Carlsberg international premium portfolio had a mixed performance, with Tuborg up 5%, Carlsberg down 2%, 1664 Blanc up 30% and Grimbergen down 1%.

Its craft & speciality division had volume growth of 12%, while alcohol-free brew volume grew 7% in Western European markets.

Carlsberg said it expects full year organic operating profit growth of around 10%, having upgraded its earnings expectations earlier this week.

The beneficial currency impact on operating profit is expected to be DKK150m, based on the spot rates at 30 October, up from the previously expected DKK100m.

CEO Cees ’t Hart said: “We’re pleased that we’ve been able to deliver solid revenue growth for the quarter despite tough comparables from last year. In particular the Asia region continued its very good performance. The top line in Western Europe was solid in spite of challenging comparables from the very warm and dry summer last year, while we had difficult comparables in Russia and faced challenges that negatively impacted our market share year-over-year.

“Our earnings upgrade earlier this week is another proof point of the execution of SAIL’22 and a consequence of our improved geographical footprint, as solid earnings performance in China and Western Europe more than offset the challenges in Russia.”

Morning update

UK consumer confidence has taken a further hit as the UK heads into another general election amid continue Brexit uncertainty.

GfK’s Consumer Confidence Index published this morning decreased two points to -14 in October, with all five measures decreasing this month.

The measure for the general economic situation of the country during the last 12 months has decreased one point this month to -33; now five points lower than in October 2018.

Expectations for the general economic situation over the next 12 months also decreased two points to -37, which is now nine points lower than October 2018.

The index measuring changes in personal finances during the last 12 months and the next 12 months decreased by one point to +1 and by three points to +1 respectively.

Joe Staton, Client Strategy Director at GfK, commented: “Importantly, the ongoing machinations in Westminster appear to be impacting how we view our personal financial situation for the coming year with a notable fall of -3 in this measure in October. Is this an early sign of long-running weak economic confidence spreading to the way we view money matters?

“This deterioration in sentiment regarding our personal financial affairs is worrying as strong consumer spending has been the main driver of economic growth since the Referendum in 2016 against a backdrop of low inflation, low interest rates, low wage growth and high employment. Does reduced confidence in personal finances for the year ahead pose a risk to the wider economy?

“Nobody wants to see consumer spending reduce and let’s hope it doesn’t happen. But Brexit’s continuing uncertainty and the spectre of a general election is not helpful. People can only feel confident if they believe the external environment is stable, yet consumers are witnessing too many Brexit shifts and surprises, too many Brexit timelines and counter proposals to justify any longer-term confidence. The big black Brexit cloud is refusing to shift.”

Hilton Food Group (HFG) has updated the market on trading from 15 July to date, which has been in line with expectations as the business continues to grow through additional volumes and increased business with key customer Tesco.

Hilton said it has made “good progress” in western Europe, with “significant strategic progress” made in the UK with an agreement to pack 100% of Tesco’s red meat.

Turnover in the UK has therefore continued to grow driven predominantly by higher Tesco red meat volumes as well as increased Seachill volumes, where we have benefitted this year from the new business wins.

It said volumes remain relatively flat in both Sweden and Denmark, where we have recently started to sell pizzas. In Holland, although red meat volumes were lower than last year, it has benefitted from vegetarian and vegan products produced by Dalco. The joint venture in Portugal is continuing to show “good progress”.

In Central Europe, volumes remained challenged as reported at the half year.

In Australia, it delivered double-digit volume growth from its business, including the joint venture in Bunbury and Victoria, as well as the new Queensland site which has commenced production in line with the revised accelerated plan.

Hilton said: “The group’s financial position remains strong and we continue to explore opportunities to invest in and to grow the business in both domestic and overseas markets.”

It will publish its results for the 52 weeks ending 29 December 2019 on 26 March 2020.

German food delivery service Delivery Hero has increased increased its full-year 2019 revenue guidance after a strong third quarter.

The new guidance for annual revenues is between €1.44bn and €1.48bn, up from previous guidance of €1.3bn to €1.4bn due to “outperformance during Q3 2019 and continued strong growth expected in Q4 2019”.

The group said it significantly accelerated its revenue growth in Q3 2019 to 117% year on year on a constant currency basis, driven by improved service offering and targeted investments into customer acquisitions.

Active restaurants increased by 82% YoY to 390,000 in over 4,000 cities globally, while new customer acquisitions are up by 100% YoY with slightly lower customer acquisition costs.

Its Asia business segment exhibited attractive returns with lower than expected customer acquisition costs driving superior order growth rates

Delivery Hero said it is “strengthening its customer offering through significantly expanding restaurant coverage, enhanced technology, and product innovation as well as improved delivery time.”

“Given stronger cohorts and superior returns, the company expects to reinvest gains from outperformance and achieve above-guidance growth in the short-term, whilst the growing market size and higher frequencies are expected to drive above-guidance sustainable growth in mid to long-term.”

CEO Niklas Östberg commented: “The group achieved excellent results in the third quarter. A significant ramp-up in order volumes and own delivery capabilities underpins the incredible revenue growth of 117% YoY.

“We accomplished this through focus on innovation and creating better customer experience, with our investments further accelerating top-line growth. We continue to allocate resources to the markets with the most compelling long-term opportunities. An encouraging start to the fourth quarter gives us confidence that we can reach our increased full-year revenue guidance.”

On the markets this morning, the FTSE 100 has opened down 0.2% at 7,317.5pts.

Early risers include Compass Group (CPG), up 1.4% to 2,076.2p, Greggs (GRG), up 1% to 1,788p and Diageo (DGE), up 0.9% to 3,207.5p.

Fallers so far include Glanbia (GLB), down 9.1% to €10.00, Hotel Chocolat (HOTC), down 2.2% to 44.8p and C&C Group (CCR), down 2% to 369.5p.

Yesterday in the City

The FTSE 100 ended the day up 0.3% to 7,330.8pts.

A number of consumer FTSE 100 groups were amongst the market’s strong risers, including Reckitt Benckiser (RB), up 3.2% to 6,024p, Diageo (DGE), up 2.3% to 3,178p, Unilever (ULVR), up 1.2% to 4,652p, Coca-Cola HBC (CCH), up 1.2% to 2,347p, British American Tobacco (BATS), up 1.1% to 2,746p and Compass Group (CPG), up 1% to 2,047p.

Other risers included Naked Wines (WINE), up 2.7% to 263p and Kerry Group (KYGA), up 1.5% to 108.5p.

Some more UK-focussed grocery stocks were amongst the fallers, including Marks & Spencer (MKS), down 3.7% to 180.3p, Premier Foods (PFD), down 3% to 32p, WH Smith (SMWH), down 2.4% to 2,176p, Sainsbury’s (SBRY), down 2.4% to 205.7p and McBride (MCB), down 2.3% to 67p.

Other fallers included FeverTree (FEVR), down 4.1% back to 1,900p and Ocado (OCDO), down 2.7% to 1,322.5p.

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