Beer market in Azerbaijan continued growth in 2018

Beer market in Azerbaijan continued growth in 2018

Baku, Azerbaijan, Feb. 18

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In 2018, Carlsberg Azerbaijan continued to grow in all sales channels, which became possible due to the growth of the beer market in the country.

Currently Carlsberg Azerbaijan keeps leading positions in the beer market of Azerbaijan.

In 2018, the company's shipments increased compared to last year, which was due to the stabilization of the macroeconomic environment in the country, favorable weather conditions and key projects aimed at improving efficiency and increasing sales volumes. It is worth noting the positive impact of the increase in tourist flow to the country in 2018.

The company showed growth in volumes and market share in all sales channels. Thus, the growth of market share in the traditional trade channel (small shops) was +1.1%, in the modern trade channel (large chain supermarkets) +2%, and in the on-trade channel (pubs, restaurants) +7%.

In 2018, the company continued to improve brand portfolio. Thus, in 2018, for the first time in Azerbaijan, a large-scale national promotion campaign from the flagship brand Xırdalan was held, as a result of which 3 consumers of Xırdalan won apartments in the Kristal Absheron Complex in Khirdalan city. The Carlsberg, Krounenbourg Blanc 1664, Seth&Riley's Garage, Somersby brands, that relished the Azerbaijani consumer, have settled successfully in the premium portfolio of the company.

Within the framework of sustainable development program of Carlsberg Group "Together Towards ZERO", the company continued to work according to the priorities of ZERO Carbon Footprint, ZERO Water Waste, ZERO Irresponsible Drinking and ZERO Accidents. Thus, within three years, the consumption of natural gas was reduced by 34%, water consumption by 43%, and electricity by 33%.

In addition, last year the company traditionally organized event, dedicated to sober driving in the framework of the Global Beer Responsibility Day, which is celebrated by the largest breweries in the world since 2015. Prior to the Global Beer Responsibility Day within the month in social networks, as well as on major information resources and bloggers' pages, a video dedicated to sober driving was distributed.

Viacheslav Maltsev, Carlsberg Azerbaijan Managing Director: "I am very glad that in 2018 we managed to consolidate the growth dynamics, the basis of which was laid in 2017. I would like to emphasize that we highly appreciate the business atmosphere in the country in recent years, and the steps taken by the government in terms of "whitewashing" the shadow market of alcoholic beverages in the country, the presence of which has a negative impact on the health of the population, and on contributions to the state budget. Carlsberg Group believes in the success of its business in Azerbaijan and has long-term plans for the development of the company. I can proudly say that we, in turn, being a transparent company, are trying to contribute to the development of the economy of Azerbaijan. Thus, in 2018, our tax deductions amounted to more than 18 million AZN, which is 2 million AZN more than in 2017. The predictable legislative environment and stable dialogue with the business regarding any changes in the market are our main expectations for 2019".

It should be noted that in 2019 the brewery will turn 50, in connection with it Carlsberg Azerbaijan plans to conduct a number of large-scale projects aimed at consumers, employees and partners.

Results of Carlsberg Group in Eastern Europe:

Our Eastern European business, to which Azerbaijan belongs within the corporate governance structure, delivered 9.3% organic net revenue growth, driven by 3.1% volume growth and +6% price/mix. Reported net revenue declined by 1.3% due to currency fluctuations in all markets in the region.

Organic operating profit grew by 11.3%, driven by volume growth, the positive price/mix and tight cost control. The operating margin improved to 20.6%. Volumes increased in all markets of region.

Sustainable development results:

For 2018, the Carlsberg Group reports steady progress on its sustainability ambitions, during a year in which the Group also presented strong financial results − accelerating top-line growth and improving margins. Since its 2015 baseline, Carlsberg has reduced relative carbon emissions by 20% and water consumption by 9%, showing the Group’s determination to decouple growth from environmental impacts. In 2018, Carlsberg launched a series of consumer-facing sustainable innovations, including Snap Pack, which reduces both plastic waste and carbon emissions.

Carlsberg Azerbaijan brewery is located in Khirdalan, 10 kilometers from the capital of Azerbaijan. The production capacity of the plant is 8 million decaliters per year, the company employs about 250 people and about 400 indirectly (distributors, agencies, contractors). Annual payments of Carlsberg Azerbaijan to the budget are about 15 million AZN, the company has the status of tax partner of the Ministry of Taxes of the Republic of Azerbaijan. The total investment of the company in the development of the plant is about 50 million AZN. The company's portfolio includes such popular brands as Xirdalan, Tuborg, Baltika 7, Baltika 0, Baltika 9, Baltika 4, Baltika KULER, Efsane, Zhigulevskoe Firmennoe, Carlsberg, Holsten, Kronenbourg Blanc, Seth&Riley's Garage.

Carlsberg Group was founded in 1847 and is currently one of the world's largest beer producers. The company is headquartered in Copenhagen, the capital of Denmark. Carlsberg Group has factories in many countries of the world's three major regions - Western Europe, Eastern Europe and Asia and its products are represented in 150 countries. The company's portfolio includes more than 140 brands of beer. The total number of employees of the Group is more than 42000.

Carlsberg Azerbaijan Contacts

Senior Corporate Affairs Manager of the Carlsberg Azerbaijan LLC

Nadejda Ovsiannikova

Cell phone: +994 50 245 27 41

[email protected]

or

Senior Corporate Affairs Specialist of Carlsberg Azerbaijan LLC

Lala Afandi

Cell phone: +994 50 286 76 64

[email protected]

www.carlsbergazerbaijan.az

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