Carlsberg Group Annual Report 2022

FY2022 Annual Report · Carlsberg Group

Loading PDF…

ANNUAL

REPORT
2022

MANAGEMENT
REVIEW

FINANCIAL
STATEMENTS

TO OUR SHAREHOLDERS
Letter from the Chair & the CEO ......... 3

THE YEAR AT A GLANCE
Highlights ...................................................... 5
Strategic priorities ...................................... 7
Financial results .......................................... 9
5-year summary ..................................... 10
Our regions ................................................ 11

STRATEGIC REVIEW
Our brand portfolio ................................. 14
Our purpose ............................................... 17
Business model ........................................ 18
Our strategy: SAIL’27 ............................ 19
Addressing climate risks ....................... 26

2022 REVIEW AND 2023 EXPECTATIONS
Navigating 2022 ...................................... 27
Group ........................................................... 29
Western Europe ....................................... 33
Asia ............................................................... 35
Central & Eastern Europe .................... 37
Russian operations held for sale ....... 39
Capital allocation .................................... 40
2023 earnings expectations ................ 41
Taxonomy reporting .............................. 42

GOVERNANCE
Corporate governance ........................... 44
Risk management ................................... 50
Supervisory Board................................... 53
Executive Committee ............................. 56
Share information ................................... 58

Forward-looking statements ............. 59

CONSOLIDATED FINANCIAL STATEMENTS
Statements ...........................................61
Notes ......................................................65

PARENT COMPANY FINANCIAL
STATEMENTS
Statements ........................................ 135
Notes ................................................... 138

REPORTS
Management statement ................ 145
Auditor’s reports .............................. 146

OUR ANNUAL REPORTING
Our annual reporting suite comprises our Annual
Report, our Environmental, Social & Governance
Report and our Remuneration Report. Each
includes content tailored to its specific audience,
and cross-references to the other reports where
relevant. The Environmental, Social &
Governance Report serves as our statutory
statement on corporate social responsibility in
accordance with sections 99a, 99b and 99d of
the Danish Financial Statements Act. It also
forms the basis for our 2022 Communication on
Progress to the UN Global Compact, which will
be submitted in March 2023 in line with new
requirements. It can be downloaded at:
www.carlsberggroup.com/reports-
downloads/carlsberg-group-2022-esg-report/

Front page: In 2022, we celebrated the 175th
anniversary of the first Carlsberg lager beer,
paying tribute to probably the best beer in the
world.

CARLSBERG GROUP ANNUAL REPORT 2022 TO OUR SHAREHOLDERS

ENVIRONMENTAL, SOCIAL &
GOVERNANCE REPORT
Our Environmental, Social &
Governance (ESG) Report
provides detailed information and
data on sustainability and our
responsible business behaviour.

ANNUAL REPORT
Our Annual Report is our detailed
annual dislosure relating to
company performance, strategy,
corporate governance and
financial results.

REMUNERATION REPORT
Our Remuneration Report
includes full disclosure of
Supervisory Board and Executive
Management remuneration.

Unless otherwise stated, comments and figures in this report
refer to the continuing operations. From 1 January 2022, the
Russian business is presented as held for sale. 2021 figures have
been restated according to IFRS.

To our shareholders

LETTER FROM THE CHAIR & THE CEO

STRONG RESULTS
IN A CHALLENGING YEAR

CARLSBERG GROUP ANNUAL REPORT 2022 TO OUR SHAREHOLDERS

The strength and resilience of Carlsberg, and particularly
our many colleagues across the Group, led the business to
deliver strong results despite significant challenges during
the year.

Cees ’t Hart
CEO

2022 was a year of great
contrasts. Despite significant
challenges, Carlsberg delivered
strong results and increased
cash returns to shareholders.

FINANCIAL HEALTH
Despite the immense challenges
faced by our business in the past
three years, the financial health of
the Group remains very strong.

During the year, our business was
impacted by the horrible war in
Ukraine. We remain deeply disturbed
by the human tragedy unfolding
there. Throughout the year, our first
priority was the safety and wellbeing
of our Ukrainian colleagues, whose
resilience, courage and strength
continue to make a profound
impression on everyone at Carlsberg.

The war led us to take the very
difficult decision to seek a full
disposal of our business in Russia.
We deeply regret the consequences
of this decision for our more than
8,000 employees in Russia, many of
whom have been loyal and valued
members of the Carlsberg family for
many years.

Organic revenue growth in 2022
was 15.6%. This was supported by a
diminishing impact of COVID-19 in
most markets, and subsequently
very good recovery of the on-trade
and price increases during the year.

Operating profit grew organically
by 12.2% despite the increase in
commodity prices and energy costs,
and our decision to increase
marketing investments. Reported
operating profit amounted to DKK
11.5bn. Free cash flow was DKK
9.9bn and ROIC improved by 270bp
to 15.2%. Read more about the
Group’s financial results on pages
29-32.

Continuous uncertainty and volatility
were a fact of life for our business in

2022. In early March, we had to
suspend our earnings guidance for
the year due to the considerable
uncertainty posed by the war in
Ukraine. Six weeks later, we
reinstated guidance and, thanks to
early reopening of breweries in
Ukraine and better-than-expected
performance in many markets across
our regions, we were able to increase
our earnings guidance twice – in
August and October.

As a result of the strong business
performance and financial position,
the Group increased cash returns to
shareholders. In March, we paid a
total dividend of DKK 3.4bn, and
during the year we bought back
shares amounting to DKK 4.4bn.

More information on cash returns to
shareholders can be found on page
40.

CARLSBERG GROUP ANNUAL REPORT 2022 TO OUR SHAREHOLDERS

STRATEGIC HEALTH
2022 marked the year when our
SAIL’22 strategy came to an end,
having successfully guided our
journey since 2016. Setting sail for
the next five years, we launched our
new strategy, SAIL’27, in early
February.

As its name suggests, SAIL’27 builds
on the very strong foundation of
SAIL’22. Going forward towards
2027, we are sharpening our focus,
making distinct choices for our
portfolio, markets, execution and
winning culture, and raising our
financial ambitions.

Within a month of the launch of
SAIL’27, the world and our business
changed dramatically due to the
Russian invasion of Ukraine. Despite
the consequences of this, our
business fundamentals remain
strong, and our ambitions and
priorities for SAIL’27 are unchanged.
We also remain confident in our
ability to deliver on our top- and
bottom-line growth ambitions.

Read more about SAIL’27 on pages
19-25.

SOCIETAL HEALTH
In August, we launched our enhanced
ESG programme, Together Towards
ZERO and Beyond (TTZAB),
addressing the environmental, social
and governance (ESG) topics that

impact our stakeholders and our
business most significantly, with
milestones set for 2030 and 2040.

With TTZAB, we aspire to achieve
net zero carbon emissions across
the entire value chain by 2040 –
supported by new ambitions and
targets within agriculture and
packaging – and we also raise our
ambition levels and sharpen our
targets for other topics, such as
water, responsible drinking, diversity,
equity & inclusion (DE&I), human
rights and community engagement.

TTZAB is embedded in SAIL'27 as a
key mechanism for mitigating risks,
accomplishing strategic objectives
and demonstrating our company's
purpose through concrete targets,
actions and results.

Read more about TTZAB on pages
24-25, and in detail in the ESG
Report.

ORGANISATIONAL HEALTH
On 10 November, we celebrated
Carlsberg’s 175th anniversary,
which symbolically coincided with
International Quality Day. We can
reflect on 175 years of pursuing
better – with a pioneering spirit,
curiosity and a quenchless thirst for
progress.

We have always looked to brew
beers that exceed consumer

expectations each time – and we will
continue to do so. This can only be
achieved by excellent people, and we
are proud to pay tribute to our
excellent colleagues in all markets
and functions for their great work
and outstanding efforts in living the
spirit of our founder and our purpose
of brewing for a better today and
tomorrow every day.

In 2022, we further intensified our
DE&I efforts. Diversity is in our DNA.
Our employees cover demographics
far and wide – across nationalities,
cultures, religions, sexuality, ability
and beliefs.

We believe that nurturing a diverse,
equitable and inclusive workforce will
support our company performance
and help us achieve our financial
ambitions. We have therefore set
time-bound targets for 2024 and
2027, which will be included in
the variable remuneration for
management. Long term, our
ambition is to have at least 40%
of the under-represented gender
– currently women – in senior
leadership roles.

Read more about our DE&I efforts
on page 23 and in detail in the ESG
Report.

CHANGES TO EXCOM
At the end of 2022, we said farewell
to our CFO, Heine Dalsgaard. We

want to thank Heine for his
significant contribution to the
Carlsberg Group during his time with
us, not least his relentless efforts to
embed our Funding the Journey
culture with its focus on cost and
cash.

We were very pleased to welcome
Ulrica Fearn as our new CFO from 1
January 2023. Ulrica brings strong
international financial experience
from multiple senior positions in
global companies and industries,
most recently as CFO of Equinor in
Norway. Prior to that, she had 19
years of experience in the beverage
industry.

During the year, Leo Evers, who was
EVP, Asia, left the Group. He was
succeeded by João Abecasis, then
Chief Commercial Officer. The role of
Chief Commercial Officer is currently
being filled by Søren Brinck, EVP,
Strategy and Digital.

LOOKING AHEAD
2023 will be another challenging
year. We will need to increase our
prices to offset continued increases in
our costs. While beer historically has
been a resilient consumer category,
the higher prices in combination with
the general high inflation may have a
negative impact on beer consumption
in some of our markets, particularly in
Europe.

In addition, the development of the
war in Ukraine and the impact on our
business and the COVID-19 recovery
in China remain highly uncertain.

We will address these challenges by
leveraging our strong commercial
programmes and well-embedded
performance management systems,
tools and capabilities, while
maintaining investments in our
SAIL’27 priorities and ambitions to
drive long-term profitable growth. In
addition, we will benefit from our
diversified geographical footprint,
including our exposure to growth
markets in Asia.

THANK YOU
Once again this past year, we were
impressed by the high level of
engagement and commitment from
the Group’s employees, and we
would like to say thank you to each
and every one of them. In particular,
we want to acknowledge our long-
suffering colleagues in Ukraine.

We greatly appreciate the continued
support and trust shown to us by our
shareholders. We also extend our
thanks to all suppliers and customers
for their cooperation during 2022,
and express our gratitude to our
consumers around the world.

Henrik
Poulsen

Chair

Cees
’t Hart

CEO

2022 HIGHLIGHTS

KEY EVENTS
DURING 2022

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

2022 was an extraordinary year, with the terrible
war in Ukraine forming the backdrop for the business
environment. Nevertheless, many activities and
actions were carried out during the year.

FEBRUARY

MARCH

SAIL’27
Our new five-year strategy,
SAIL’27, was built around
our purpose of brewing for a
better today and tomorrow,
and our ambition of being
the most successful,
professional and attractive
brewer in our markets.
Read more on pages 19-25.

WAR IN
UKRAINE
We strongly condemned
the Russian invasion of
Ukraine, which has led
to so much loss of life,
devastation and human
tragedy. Read more
about the impact of
the war on page 27.

NEW BOARD
CHAIR
Henrik Poulsen
became Chair of the
Supervisory Board.
Find Henrik’s CV on
page 53.

LEAVING
RUSSIA
Following a strategic
review of the Carlsberg
Group’s presence in Russia,
we took the difficult
decision to seek a full
disposal of our Russian
business in Russia. Read
more on pages 27-28.

JUNE

PAPER BOTTLE

In the largest pilot
to date, we trialled
our new Fibre Bottle,
putting the bio-based
and fully recyclable beer
bottle into the hands of
consumers for the first
time. Read more in our
ESG Report.

1664 BLANC
The global 1664 Blanc
campaign “Good Taste
With a Twist” depicted
life on “Rue 1664”, a
world of French luxury
and elegance. Read
more about the iconic
premium 1664 Blanc
on page 30.

TUBORG OPEN
2022 was the sixth year of
Tuborg Open, a campaign that
uses the power of music to
create unique experiences for
artists and fans around the
world. This year, Tuborg gave
six aspiring artists from around
the world the opportunity to
be mentored by Jason Derulo.

APRIL

MAY

SOMERSBY
Somersby launched a
new global campaign,
set in the charming
Somersby garden,
highlighting the
playfulness, optimism
and welcoming attitude
of Somersby. Read
more on page 36.

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

AUGUST

TOGETHER TOWARDS
ZERO & BEYOND
We launched our new and enhanced ESG
programme, Together Towards ZERO and
Beyond, with updated targets and new
focus areas. Read more on pages 24-25
and in our ESG Report.

SPONSORING LIVERPOOL
Carlsberg and Liverpool Football Club
celebrated 30 years of partnership. Our
partnership is an iconic collaboration,
deeply rooted in our shared set of values.

SEPTEMBER

CAPITAL
MARKETS DAY
We hosted a well-attended
capital markets day in Copenhagen,
outlining our strategic choices
and regional priorities. Watch
the presentations online: www.
carlsberggroup.com/newsroom/
capital-markets-day-2022/

CLEAN ELECTRICITY
Carlsberg Danmark signed a power
purchase agreement, securing new green
power generation in the form of a solar
farm of more than 70 hectares, equivalent
to approximately 105 football pitches, which
is expected to be completed and operational
in 2024. Read more in our ESG Report.

CHANGE OF CFO
We announced that Ulrica Fearn
would join Carlsberg as Chief
Financial Officer and member
of the Executive Board on 1
January 2023. She brings strong
international financial experience
from multiple senior positions in
global companies and industries.
See Ulrica’s CV on page 56.

175TH
ANNIVERSARY
We celebrated the 175th anniversary of
the first Carlsberg lager beer. Our founder’s
journey from home brewer to successful beer
visionary put J.C. Jacobsen and Carlsberg
on the map in the fields of brewing, research
and innovation. His pioneering spirit has
ever since been a true inspiration for our
brewmasters, who continue to develop
probably the best beer in the world.

DOUBLE A
CDP RATING
The Carlsberg Group was again recognised
by the global environmental non-profit
organisation CDP for leadership in
corporate transparency and performance
on climate change and water security.
We retained our place on CDP’s annual
A List, and out of nearly 15,000 reviewed
companies we were among a small group
to achieve a double A rating.

SEPTEMBER

NOVEMBER

DECEMBER

STRATEGIC PRIORITIES

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

A GOOD START FOR
OUR SAIL’27 PRIORITIES

We announced our new strategy, SAIL’27, in early February.
Our portfolio and regional growth priorities delivered good
results, and we remain confident in our strategic choices.

Read more about SAIL’27 on pages 19-25.

OUR PORTFOLIO

CHOICES

16%

DRIVING
PREMIUM GROWTH
Growing our premium brands is a key
priority in SAIL’27. Premium brands include
both our international super premium
brands and premium lager brands as
well as local premium brands. In 2022,
our premium portfolio accounted for
approximately 16% of total volumes.

OUR GEOGRAPHICAL

PRIORITIES

+10%

CONTINUED
MOMENTUM IN ASIA
Our regional growth engine, Asia,
continued the growth trajectory in 2022.
Volumes grew organically by 10.3%,
despite headwinds in China due to
COVID-19 restrictions. Read more about
our results in Asia on pages 35-36.

OUR PORTFOLIO

CHOICES

+7%

AFB GROWTH
IN WESTERN EUROPE
Alcohol-free brews (AFB) remain an important
growth driver. While total AFB volumes fell
by 6% due to market decline in Ukraine, AFB
volumes in Western Europe grew by 7%,
supported by brands such as Tourtel Twist in
France and Okocim 0.0 in Poland.

OUR EXECUTION

EXCELLENCE

+51%

REVENUE GROWTH
ON CARL’S SHOP
Carl’s Shop is our online B2B platform,
now available in 11 markets, serving 45,000
customers. In 2022, revenue on Carl's Shop
grew by 51%. Read more on page 22.

STRATEGIC PRIORITIES

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

TOGETHER TOWARDS
ZERO & BEYOND

Together Towards ZERO and Beyond (TTZAB) is our enhanced
ESG programme. It is our response to global challenges such as
climate change and water scarcity, as well as society’s increasing
focus on health and wellbeing. Anchored in our purpose, TTZAB
is an integral part of SAIL’27.

ZERO
Carbon
Footprint

ZERO
Farming
Footprint

ZERO
Packaging
Waste

We have cut brewery emissions by 57% since 2015 on our way
to ZERO by 2030. Together with partners, we are working
towards a 30% value chain reduction by 2030 and now we are
going beyond by targeting a net ZERO value chain by 2040.

In this new focus area, we have set bold ambitions for 2030
and 2040 to foster regenerative and sustainable agriculture.
Two of our brands are already sourcing barley that is grown
with regenerative practices that support biodiversity.

This new focus area aims to accelerate adoption of circular
packaging solutions, with 2030 targets to boost recycling
and increase use of recycled or renewable content. In 2022,
consumers in eight markets tested our prototype Fibre Bottle.

ZERO
Water
Waste

ZERO
Irresponsible
Drinking

ZERO
Accidents
Culture

We have improved water efficiency by 31% since 2015 to
2.5 hl per hl of beer. By 2030, we are targeting 2.0 hl/hl
globally – and 1.7 hl/hl at breweries in high-risk areas,
where we also aim to replenish 100% of the water we use.

We have set a new target for 35% of our brews to be low-
or no-alcohol by 2030. We offer alcohol-free brews in 90% of
our markets and will extend this to 100% by 2030, as well as
promoting responsible drinking messaging and partnerships.

Our lost-time accident rate has decreased by 37% since 2015
and we are targeting ZERO accidents by 2030. In 2022, we
increased focus on our Life Saving Rules and behaviour-
based safety as we work to embed a ZERO Accidents Culture.

Read more about Together Towards ZERO and Beyond
on page 24-25 and in the ESG Report, available online on
www.carlsberggroup.com

FINANCIAL RESULTS

A STRONG SET
OF RESULTS

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

We delivered a strong set of results for 2022, despite significant
headwinds from the war in Ukraine, rising commodity and energy
costs, overall inflation and the pandemic, particularly in China. Thanks
to the strong earnings, balance sheet and liquidity position, total cash
returns to shareholders increased by DKK 1bn.

REVENUE

OPERATING PROFIT

ADJUSTED EPS

+15.6%

+12.2%

ORGANIC
GROWTH

DKK 70.3bn

2
0
2
2

2
0
2
1

DKK 60.1bn

DKK 10.1bn

ORGANIC
GROWTH

DKK 11.5bn

DKK 69.3

2
0
2
2

2
0
2
1

DKK 69.3

DKK 55.7

DKK 48.3

DKK 44.9

Adj. EPS

Adj. EPS, continuing business

NET INTEREST-BEARING
DEBT/EBITDA

CASH RETURNS
TO SHAREHOLDERS

1.23x

DKK 7.8bn

1.23x

1.37x

2
0
2
2

2
0
2
1

DKK 3.4bn

DKK 4.4bn

DKK 3.2bn

DKK 3.6bn

2
0
2
2

2
0
2
1

15.2%

12.5%

41.6%

33.6%

2
0
2
2

2
0
2
1

ROIC excl. goodwill

ROIC

Dividends

Share buy-back

Read more about our 2022 results on pages 29-32.

2
0
2
2

2
0
2
1

RETURN ON INVESTED
CAPITAL (ROIC)

15.2%

5-YEAR SUMMARY

KEY
FIGURES

Key figures and financial ratios for 2022 are presented for continuing activities unless otherwise stated. 2021 figures
have been restated accordingly.

2022

2021

2020

2019

2018 ¹

2022

2021

2020

2019

2018 ¹

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

[Text]
Volumes (million hl)
Beer

Other beverages

DKK million

Income statement

Revenue

Gross profit

EBITDA

Operating profit before special items

Special items, net

Financial items, net

Profit before tax

Income tax

Profit for the period, continuing operations²

Net result from Russian operations held for sale

Profit for the period

Attributable to

Non-controlling interests

Shareholders in Carlsberg A/S (net profit)

Shareholders in Carlsberg A/S, adjusted³

Statement of financial position

Total assets

Invested capital

Invested capital excl. goodwill

Net interest-bearing debt (NIBD)4

Equity, shareholders in Carlsberg A/S

Statement of cash flows

Cash flow from operating activities

Cash flow from investing activities

Free cash flow

102.4

23.0

98.8

20.4

110.1

20.0

113

21.9

112.3

20.8

Acquisition of property, plant and
equipment and intangible assets, net

Investments

70,265

32,067

15,657

11,470

-784

-725

9,961

-1,778

8,183

-8,075

108

1,171

-1,063

9,694

60,097

28,569

14,367

10,129

703

-385

10,447

-2,154

8,293

-284

8,009

1,163

6,846

6,943

58,541

28,361

14,085

9,699

-247

-411

9,041

-2,233

6,808

65,902

32,638

15,007

10,465

501

-738

10,228

-2,751

7,477

62,503

31,220

13,420

9,329

-88

-722

8,519

-2,386

6,133

6,808

7,477

6,133

778

6,030

6,363

908

6,569

6,160

824

5,309

5,359

115,341

126,383

118,816

123,063

117,700

60,211

21,758

19,326

31,902

63,635

23,743

19,162

45,497

81,541

31,049

21,263

39,308

86,162

33,032

18,776

43,449

12,949

-3,065

9,884

12,278

-4,067

8,211

10,928

-5,871

5,057

12,239

-2,277

9,962

82,721

31,792

17,313

45,302

12,047

-5,891

6,156

Acquisition and disposal of subsidiaries,
net

Financial ratios

Gross margin

EBITDA margin

Operating margin

Effective tax rate

Return on invested capital (ROIC)

ROIC excl. goodwill

NIBD/EBITDA

Stock market ratios

Earnings per share (EPS)

Earnings per share, adjusted (EPS-A)3

EPS-A, continuing operations

Free cash flow per share (FCFPS)

Dividend per share (proposed)

Payout ratio

Payout ratio, adjusted5

Share price (B shares)

Market capitalisation

-4,016

-3,905

-4,396

-4,592

-4,027

-621

-2,409

-974

DKK

45.6

22.3

16.3

17.9

15.2

41.6

1.23

-7.6

69.3

55.7

70.5

27.0

n.m.

47.5

23.9

16.9

20.6

12.5

33.6

1.37

47.6

48.3

44.9

61.5

24.0

48.4

24.1

16.6

24.7

8.9

23.2

1.51

41.3

43.6

36.9

34.5

22.0

49.5

22.8

15.9

26.9

8.8

22.4

1.25

43.7

41.0

33.8

65.9

21.0

50.0

21.5

14.9

28.0

8.1

20.9

1.29

34.8

35.2

25.7

40.2

18.0

DKK

923.2

1,129.5

975.2

993.8

692.6

DKKm

133,594

163,149

142,676

145,805

104,830

Number of issued shares at year-end

1,000

141,857

145,257

148,157

152,557

Number of shares at year-end, excl.
treasury shares

Weighted average number of shares, excl.
treasury shares

1,000

137,341

141,892

145,102

147,996

152,457

1,000

139,835

143,848

146,104

150,411

152,428

5 Proposed dividend on number of shares at year-end as a percentage of net profit adjusted for special items after tax,
and in 2022 also adjusted for net result from Russian operations held for sale.

¹ Comparative figures for 2018 have not been restated to reflect IFRS 16. 2 Comparative figures for 2018-2020
include profit from the Russian operations. 3 Adjusted for special items after tax and special items after tax in the
Russian operations held for sale. 4 Comparative figures for 2021 have not been restated.

Please refer to section 9.2 General accounting policies in the consolidated financial statements for a definition and
calculation of key figures and ratios.

OUR REGIONS

WESTERN
EUROPE

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

It was a volatile year in Western Europe. The first half was
positively impacted by the lack of on-trade restrictions, while
results in the second half were impacted by tough comparables
and the continued increase in commodity and energy costs.

VOLUME BY MARKET

REGIONAL RESULTS

France & Swizerland

Nordics

VOLUME1

REVENUE1

OPERATING PROFIT1

20%

+5.4% +13.8% +12.6%

40%

2
0
2
2

2
0
2
1

1 Organic growth

44.4m hl

42.1m hl

2
0
2
2

2
0
2
1

DKK 34.9bn

DKK 30.5bn

2
0
2
2

2
0
2
1

DKK 5.0bn

DKK 4.4bn

UK, Poland
& Germany

40%

SHARE OF REGIONS

35%
50%
39%

VOLUME

REVENUE

OPERATING
PROFIT

OUR REGIONS

ASIA

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

Asia delivered another set of strong results, with many markets
recovering from COVID-19 restrictions in 2021, although our
business in China was impacted by restrictions and lockdowns,
particularly at the end of the year.

VOLUME BY MARKET

REGIONAL RESULTS

China & Hong Kong SAR

VOLUME1

REVENUE1

OPERATING PROFIT1

10.3% 18.8% 11.2%

2
0
2
2

2
0
2
1

1 Organic growth

48.3m hl

44.4m hl

2
0
2
2

2
0
2
1

DKK 23.7bn

DKK 19.5bn

2
0
2
2

2
0
2
1

DKK 5.4bn

DKK 4.9bn

Malaysia & Singapore

India & Vietnam

16%

Cambodia
& Laos

21%

60%

SHARE OF REGIONS

39%
34%
43%

VOLUME

REVENUE

OPERATING
PROFIT

OUR REGIONS

CARLSBERG GROUP ANNUAL REPORT 2022 THE YEAR AT A GLANCE

CENTRAL & EASTERN
EUROPE

Our Central & Eastern Europe business was impacted
significantly by the war in Ukraine. However, good volume
growth in the other markets, supported by the recovery
of the on-trade, offset the decline in Ukraine.

VOLUME BY MARKET

REGIONAL RESULTS

Baltics

Export & Licence

VOLUME1

REVENUE1

OPERATING PROFIT1

CIS markets

14%

-0.1% +14.7% +0.1%

23%

Balkan markets,
Italy & Greece

40%

2
0
2
2

2
0
2
1

1 Organic growth

16%

Ukraine

32.7m hl

2
0
2
2

2
0
2
1

DKK 11.7bn

DKK 10.1bn

2
0
2
2

2
0
2
1

DKK 2.3bn

SHARE OF REGIONS

26%
16%
18%

VOLUME

REVENUE

OPERATING
PROFIT

OUR BRAND PORTFOLIO

OUR PREMIUM
BEER PORTFOLIO

SHARE OF
TOTAL VOLUME

16%

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

Our premium beer portfolio spans both international and local
premium brands. Strengthening our position in premium is a key
strategic priority across our markets, with our strong premium
portfolio offering opportunities for volume and value growth.

+11%
volume
growth

-4%
volume
growth

+14%
volume
growth

+9%
volume
growth

+42%
volume
growth

OUR BRAND PORTFOLIO

MAINSTREAM
CORE BEER

SHARE OF
TOTAL VOLUME

62%

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

Our mainstream local power brands have strong local roots and
histories, and remain an important category in our beer portfolio,
providing scale and a solid backbone for our local businesses.

OUR BRAND PORTFOLIO

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

APPEALING BRANDS
IN AFB AND BEYOND BEER

Our brand portfolio also includes strong alcohol-free brews
and brands beyond beer. As part of SAIL’27, we are increasing
our focus on these categories, as we believe they represent
attractive long-term growth opportunities.

AFB SHARE OF
TOTAL VOLUME

ALCOHOL-FREE BREWS (AFB)

BEYOND BEER

+1%
volume
growth

OUR PURPOSE

BREWING FOR A BETTER
TODAY AND TOMORROW

We pursue perfection every
day. We strive to brew better
beers. Beers that stand at the
heart of moments that bring
people together. We do not
settle for immediate gain when
we can create a better
tomorrow for all of us.

Our purpose stated above is rooted
in our heritage and in the mentality
of our founders, who left a rich
legacy that still greatly influences
how we run our business today.
Their pioneering spirit, passion for
brewing and proactive contribution to
society are what make us who we
are.

We are proud of our purpose of
“Brewing for a better today and
tomorrow”. Current and prospective
employees look for companies with a
clear purpose, a keen sense of social
responsibility, and work that has
meaning and gives them a sense of
belonging.

We live our purpose every day by
focusing on our brands and the art of

brewing, exciting our consumers with
quality brews that strengthen our
identity and pride as brewers, and by
continuously aiming to do better.

We will continue to live our purpose,
as it is key for the successful
execution of our strategy and for
achieving our ambition of being
successful, professional and
attractive in our markets:

Successful in ensuring the
financial health of our company
by outperforming our competitors
through improved market share,
revenue, margins and earnings.

Professional in ensuring the strategic
health of our company by delivering
the highest standards in everything
we do, including brands, brews and
service.

Attractive in ensuring the
organisational and societal health
of our company by being purpose-
led and performance-driven for
shareholders, employees and
society.

BEERS THAT
STAND AT THE
HEART OF
MOMENTS THAT
BRING PEOPLE
TOGETHER

WE PURSUE
PERFECTION
EVERY DAY

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

WE DO NOT SETTLE
FOR IMMEDIATE
GAIN, WHEN WE CAN
CREATE A BETTER
TOMORROW FOR ALL
OF US

WE STRIVE
TO BREW
BETTER BEERS

BUSINESS MODEL

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

OUR BUSINESS MODEL
ROOTED IN OUR PURPOSE

Our business model is rooted in our purpose and ambition.
It takes its starting point in our focus on our brands and the
art of brewing, how we excite our consumers with quality
brews, and our continuous striving to do better.

WE FOCUS ON THE MARKETS
WHERE WE HAVE A NO. 1 OR 2
POSITION...

… WHERE WE DELIVER AN
ATTRACTIVE BEER PORTFOLIO FOR
ALL CONSUMER OCCASIONS...

… AND STRIVE TO EXCEL
IN OUR SERVICE TO ON- AND
OFF-TRADE CUSTOMERS...

... BY OPTIMISING OUR
SUPPLY CHAIN AND IMPROVING
PROCESSES AND SYSTEMS.

Core beer is a volume business, and strong
market positions are key drivers of profitability.
We have particular focus on the 21 markets in
Western Europe, Asia and Central & Eastern
Europe where we are no. 1 or 2.

The strength of our beer portfolio lies in the
strong local roots of our local power brands,
combined with our local and international
premium brands, alcohol-free brews and
brands beyond beer.

Our customers range from on-trade to
off-trade, from online to offline. We aim to
become their preferred beer supplier, providing
products and services that deliver value
growth for them and us.

The Funding our Journey culture drives
efficiencies and reduces costs. The focus of
our integrated supply chain is optimising asset
utilisation while brewing high-quality beer and
enabling our commercial growth agenda.

BREWING FOR A BETTER
TODAY AND TOMORROW
In all our markets, we aim to lead in
sustainability because it is central to our purpose
and because we genuinely believe it is the right
thing to do – delivering tangible benefits for our
business and for society as a whole.

BREWING FOR A BETTER
TODAY AND TOMORROW
Our brands offer us powerful opportunities for
communicating with consumers. We use these
opportunities to encourage moderate, responsible
consumption of our products. We also increase
the availability of alcohol-free brews.

BREWING FOR A BETTER
TODAY AND TOMORROW
We develop digital solutions and services to help
our customers grow their business. We engage in
developing sustainable packaging solutions and
launching initiatives to increase collection and
recycling rates.

BREWING FOR A BETTER
TODAY AND TOMORROW
Recognising the need for strong actions in
the face of complex sustainability challenges,
Together Towards ZERO and Beyond sets
ambitious targets for carbon, water, agricultural
raw materials, packaging, and health & safety.

OUR STRATEGY: SAIL’27

DISTINCT STRATEGIC
LEVERS AND CHOICES

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

We launched our new
strategy, SAIL’27, in early
2022. It is built around our
purpose and our ambition of
being the most successful,
professional and attractive
brewer in our markets.

SAIL’27 focuses on five strategic
levers – portfolio, geographies,
execution, culture and funding the
journey – for which we have made
distinct strategic choices, defining the
focus of our efforts and resource
allocation.

Our strategic levers and choices are
elaborated on in the following pages.
They should be viewed as an
integrated set of activities that
together will create value for
shareholders, employees and the
societies in which we operate.

Notwithstanding the current
challenging business environment,
we remain firm in our belief that we
can capture long-term growth
opportunities, which is reflected in
our financial and sustainability
ambitions for the SAIL’27 period:

• Organic revenue growth of

3-5% CAGR.

• Organic operating profit growth

above revenue growth.
• Continued ROIC focus.
• Disciplined capital allocation.
• Ambitious sustainability targets.

CREATING VALUE FOR ALL OUR
STAKEHOLDERS

SHAREHOLDERS
• Organic revenue growth of 3-5% CAGR
• Organic operating growth above revenue growth
• Continued ROIC focus
• Disciplined capital allocation
• Ambitious sustainability targets

EMPLOYEES
• A purpose-led and performance-driven

company with strong development opportunities
and engagement

• An attractive, diverse and inclusive workplace
• Strong brands, quality products and ambitious

sustainability efforts to be proud of

SOCIETY
• Championing sustainability in our journey
Together Towards ZERO and Beyond

• Enabling the Carlsberg Foundation to invest in

science, art and culture

• Partnering with communities and contributing to
prosperity in the markets in which we operate

SAIL’27

OUR PORTFOLIO
CHOICES

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

The beer category continues
to offer attractive long-term
volume and value growth
opportunities. In addition,
we see further growth
opportunities for selected
categories beyond beer.

STEP UP IN PREMIUM
Across our regions, the premium
category is growing three to four
times faster than mainstream beer.

In most markets, we underindex in
the premium category. We will
therefore pursue value growth by
more forcefully expanding into the
premium category with our existing
brand portfolio, pursuing three
distinct growth opportunities:
super premium, international
premium lagers and premium local
brands.

STRENGTHEN MAINSTREAM
CORE BEER
Our mainstream local power brands
will remain an important category in
our beer portfolio. These brands
have strong local roots and histories,

meeting the continued consumer
demand for local and authentic
brands.

We will safeguard the healthy
foundation of our core mainstream
brands to provide scale and a
solid backbone for our local
businesses.

ACCELERATE ALCOHOL-FREE
BREWS
We will maintain our focus on
alcohol-free brews (AFB), where we
have seen good growth in the past
years.

Our ambition is to significantly grow
our AFB volumes by leveraging our
strong local power brands, our

international premium brands and
stand-alone alcohol-free brands.

While we will seek to drive AFB
growth in all three regions, Europe
remains key for the category, and in
many markets across Western
Europe and Central & Eastern
Europe we hold a strong no. 1
market position in the category.

BEYOND BEER
As part of SAIL’27, we are extending
our focus to other beverages beyond
beer, such as cider, hard lemonade,
hard seltzers and RTD cocktails.
In selected markets, we see
attractive volume and value growth
opportunities in these categories,
leveraging our existing brands
Somersby and Garage.

42%

BROOKLYN BRAND GROWTH

We acquired the rights to the Brooklyn brand for all our
markets in 2020. Since then, we have strengthened the
brand equity in order to scale the brand and make it
successful across our markets. The work included
developing a clear brand architecture, a new brand
platform and an invigorated visual identity with a full
suite of global assets to ensure a consistent premium
brand experience for consumers. Today, our broad
Brooklyn portfolio includes premium lager, our signature
IPAs and award-winning alcohol-free variants. In 2022,
Brooklyn grew by 42%

STEP UP IN PREMIUM

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

SAIL’27

OUR GEOGRAPHICAL
PRIORITIES

We have an attractive and
widespread geographical
presence, with no. 1 or 2
positions in 21 markets across
Western Europe, Asia and
Central & Eastern Europe.

While market dynamics differ
between our regions, our strategic
levers are the same, albeit with local
adaptations. We believe all three
regions offer appealing long-term
revenue and earnings growth
opportunities.

WESTERN EUROPE
Across all markets in Western
Europe, we will rigorously pursue our
portfolio choices and strengthen our
execution capabilities. We will
continue to implement further
operational improvements in order to
improve flexibility, increase efficiency
and reduce costs. All markets are
expected to grow revenue and profits.

expanding our premium portfolio and
capturing growth opportunities in
adjacent categories, mainly utilising
the Somersby brand.

We see particularly attractive
opportunities for growth in China,
India and Vietnam through the
leveraging of our attractive portfolios
of international premium and super
premium brands and strong local
brands. In China specifically, we will
continue our successful big city
approach and strengthen our
position in new and growing retail
channels such as e-commerce and
modern off-trade.

CENTRAL & EASTERN EUROPE
This region includes a large number
of diverse markets with very different
market dynamics. As of 1 January
2022, Russia is not a part of the
region due to our decision to divest
our business in Russia.

ASIA
Our ambition is to continue to
strengthen our position in key Asian
markets, supported by further

Across markets, we will strengthen
our premium portfolios and in-store
execution capabilities, and pursue
growth opportunities in categories

beyond beer, particularly leveraging
Somersby, Garage and local brands.

In our sizeable Export & License
business, we aim to accelerate
growth in key markets and pursue
selected growth opportunities in
markets with attractive large profit
pools.

27%

VOLUME GROWTH IN
VIETNAM

Vietnam is among the ten largest beer markets in
the world. The Group has been present in this
attractive beer market since 1993. In 2013, we
acquired the remaining 50% of Hue Brewery, and
today we hold a very strong market position in the
central part of the country, with a market share of
around 40%. As part of SAIL’27, our ambition is to
further strengthen our position in Vietnam by
growing our local power brand, Huda, and our
international premium portfolio, selectively
expanding our footprint and strengthening our
execution capabilities.

ACCELERATE IN CORE MARKETS IN ASIA

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

SAIL’27

OUR EXECUTION
EXCELLENCE

Excel in execution remains a
key priority in SAIL’27, with a
focus on optimising and
improving performance across
our value chain.

We will support our portfolio and
geographical priorities by stepping
up and continuously improving our
execution capabilities, aiming in
particular to excel at point of
purchase, to master digital, data
and processes, and to drive supply
chain excellence.

EXCEL AT POINT OF PURCHASE
We will enhance our point of
purchase execution by more deeply
embedding our proven sales
execution and value management
tools and technologies, and by
offering winning portfolios.

MASTER DIGITAL, DATA AND
PROCESSES
We will ensure our competitiveness
in rapidly developing areas, such as
digital marketing, e-commerce and
data & analytics. In addition, we will
develop processes and leverage

existing technologies to improve
efficiencies and effectiveness in our
ways of working.

by developing common tools,
processes and capabilities across
markets.

DRIVE SUPPLY CHAIN
EXCELLENCE
We see further opportunities for
improving our supply chain. We will
achieve efficiencies and enhance
effectiveness in our ways of working

There will be particular focus on
further improving our end-to-end
demand, material and supply
planning expertise.

51%

REVENUE GROWTH ON CARL’S SHOP

Carl’s Shop is our online business-to-business platform, serving our on-trade
customers. It was first launched in 2018 in Western Europe. Since then, we
have expanded into markets in Asia and Central & Eastern Europe, with Carl’s
Shop now available in 11 markets serving 45,000 customers. Our focus is on
improving the success of our customers by providing access to a range of
options, such as product and sales insights, support and services, e-learning
and, in some markets, assortment beyond our own portfolio. By also
leveraging the use of smart data-driven product recommendations, sales on
the platform are highly supportive of our premiumisation efforts. In 2022,
revenue on Carl’s Shop grew by 51%.

MASTER DIGITAL

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

team-based performance culture is
instrumental in enabling us to be the
most successful, professional and
attractive brewer in our markets.

leadership expectations, strengthening
our talent pipeline and management,
and accelerating our diversity, equity
& inclusion journey.

In SAIL’27, we are building on our
strong foundation, maintaining our
triple-A behaviours, sharpening

LIVING BY OUR COMPASS
Our success is also rooted in doing
business responsibly. We have clear

standards for ethical behaviour for
employees to follow in their daily
decision-making. Living by our
ethical values – our Compass –
mitigates risks and protects our
reputation as a responsible brewer.

DE&I SITS AT
THE HEART OF OUR
PURPOSE

DE&I ENABLES A
HIGH-PERFORMING
ORGANISATION

A cornerstone of our
culture is our commitment
to diversity, equity &
inclusion (DE&I), which
sits at the heart of our
purpose.

We want to build an
inclusive culture that is
truly understanding of
others, fair and unafraid
of differences, and where
we harvest from diverse
backgrounds, experiences
and perspectives that
bring the innovation and
ideas needed to succeed
as a high-performing
organisation.

EQUITY IS
FUNDAMENTAL
TO DIVERSITY AND
INCLUSION

Equity means the
acknowledgement that
everyone has different
needs, experiences and
opportunities by
recognising and taking
action to address any
barriers that exist for
them. Equity implies
fairness rather than
sameness.

DIVERSITY IS
IN OUR DNA

Our 140 brands are as
diverse as our people, our
markets, our consumers
and our customers.

Diversity is part of
who we are!

AN INCLUSIVE CULTURE
BUILDS A SENSE OF
BELONGING IN OUR
EMPLOYEES

We want our employees
to have the freedom to
bring their best version of
themselves to work. After
all, we are a business all
about moments that bring
people together for a
better today and
tomorrow.

SAIL’27

OUR WINNING
CULTURE

To deliver on our ambition to
be the most successful,
professional and attractive
brewer in the markets where
we operate, our company
culture is key. Our winning
culture focuses on our people,
our behaviours and our
contribution to societies at
large.

PURPOSE- AND
PERFORMANCE-DRIVEN
We are a purpose-driven company
with high ambitions and clear
priorities. We have integrated
these into our culture through our
triple-A behaviours (alignment,
accountability, action).

Our people are critical to delivering
on our strategy, and fostering a

DIVERSITY, EQUITY & INCLUSION

Diversity, equity & inclusion (DE&I) is a business priority that will help us
achieve our ambitions, drive our strategy, deliver on our ESG targets and live
our purpose. We strive to create and sustain a working environment that
actively embraces diversity and fosters inclusion, ensuring that people are
completely at ease to be their true selves when they come to work at
Carlsberg. Our DE&I agenda is leader owned and part of our leadership
expectations. We are committed to further improving diversity in our
workforce, and in 2022 we defined time bound targets: we want the share of
the underrepresented gender – currently women – in senior leadership positions
to be at least 30% by 2024 and at least 35% by 2027. Our long-term target is
a share of at least 40%.

PURPOSE- AND PERFORMANCE-DRIVEN PEOPLE

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

We are committed to continuous
improvement and ensuring a culture
of compliance and integrity to drive
consistent ethical behaviour in the
way we do business within Carlsberg
and beyond. Read more about our
Compass on page 44.

TOGETHER TOWARDS ZERO
AND BEYOND
We were among the first companies
to introduce science-based climate

targets, aligned with the 1.5°C
target in the Paris Agreement on
Climate Change, and we set
ambitious targets for carbon, water,
health & safety and responsible
drinking.

This was an integral part of our
previous environmental, social and
governance (ESG) programme,
Together Towards ZERO, launched
in 2017.

We have made strong progress
towards these targets, including a
57% reduction in carbon emissions
and a 31% reduction in water use per
hectolitre of beer since 2015.

In August 2022, we launched our
enhanced ESG programme, Together
Towards ZERO and Beyond (TTZAB),
as an integrated part of SAIL’27.

TTZAB – AN ENHANCEMENT
TTZAB is an enhancement of our
previous ESG programme that keeps
the focus on the areas in which the
Group has the most material impact.
But we are also moving Beyond
that, reinforcing our actions towards
ZERO as well as our actions to
source responsibly, promote
diversity, equity & inclusion, respect
human rights, live by our Compass
and engage communities responsibly.

Through our continued efforts within
Together Towards ZERO and our
additional efforts to go Beyond that,
we are working to responsibly
manage our most material business
impacts, while taking actions that
contribute positively to society.

Some of the most notable target
evolutions pertain to achieving net
zero carbon emissions across the
value chain by 2040 and replenishing
100% of water consumed at breweries
located in areas of high water risk by
2030.

THE NEW ZEROS
With the new programme, we are
broadening our focus areas to
include new ambitions, targets and
activities within agriculture and
packaging, enabling us to address a
wider range of our most material
topics.

Carbon impacts associated with
agriculture and the processing of raw
materials, as well as the production
and disposal of packaging, together
amount to more than 65% of our
total value chain carbon emissions
(Scope 1, 2 and 3 emissions).

The implementation of regenerative
agricultural practices – which enhance
biodiversity, soil health and natural
carbon sequestration on farmlands –
alongside the implementation of
circular packaging solutions will

enable critical carbon reductions
from growing barley to recycling
bottles and cans.

By addressing and managing our
impacts within agriculture and
packaging, we will accelerate our
progress towards a net zero value
chain by 2040.

Read about our Winning
Culture, including much
more about Together
Towards ZERO and
Beyond, in our ESG Report.

www.carlsberggroup.com/reports-
downloads/carlsberg-group-2022-esg-
report/

POWER PURCHASE
AGREEMENT IN DENMARK

In 2022, we signed a ten-year contract to power the
Fredericia brewery in Denmark with electricity from a new
solar farm, expected to be operational from 2024. The
agreement with Better Energy – our first off-site power
purchase agreement (PPA) – will support development of
a new 70-hectare solar park, covering the equivalent of
105 football pitches. Carlsberg will be offtaking a
substantial part of the energy produced by the solar farm,
specifically 29 GWh per year over a ten-year period.
Photo: © Better Energy

TOGETHER TOWARDS ZERO AND BEYOND

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

RESPONSIBLE BARLEY IN FRANCE

In order to create the first sustainable and traceable responsible barley supply chain in France,
we partnered with malt producer Malteries Soufflet and grain buyer Soufflet Agriculture of
InVivo Group. Together with our partners, we brought together 45 farmers, who are
implementing a set of regenerative practices to promote biodiversity and reduce carbon
emissions. More specifically, these techniques include diversified crop rotations, sowing cover
crops during fallow periods, and optimising fertiliser input based on regular soil analyses.
Leveraging blockchain technology, we have traceability and can verify responsible production
from the field to our brewery. From 2023, 20% of the malt used to brew Kronenbourg 1664
Blonde beer will be sourced from this barley, and we aim to reach 100% by 2026.

TOGETHER TOWARDS ZERO AND BEYOND

ADDRESSING CLIMATE RISKS

CLIMATE RISKS
IMPACTING OUR BUSINESS

CARLSBERG GROUP ANNUAL REPORT 2022 STRATEGIC REVIEW

Climate change is already
affecting our operations and
value chain. Across our regions,
we see its impact through land
degradation and more frequent
extreme weather events.

We are working to understand the
related risks and opportunities, and to
mitigate impact on our business.

Our annual ESG Report details our
Together Towards ZERO and
Beyond approach, progress on our
ambitious ZERO Carbon Footprint
targets, and the action we are taking
to support the Paris Agreement on
Climate Change to limit the increase
in global average temperature to a
maximum of 1.5°C. The report also
addresses our exposure to climate
change risk and the impact on our
value chain.

In the table, we outline the relevant
sections for TCFD reporting in
this Annual Report and in our ESG
and Remuneration Reports.

Task Force on Climate-related Financial Disclosures (TCFD) reporting recommendations

Recommendation

Our disclosure in brief

Governance

Disclose the organisation's
governance around climate-
related risks and opportunities.

Strategy
Disclose the actual and
potential impacts of climate-
related risks and opportunities
on the organisation’s
businesses, strategy and
financial planning, where such
information is material.

Risks
Disclose how the organisation
identifies, assesses and
manages climate-related risks.

The Supervisory Board has ultimate responsibility for risk management framework, including climate-related risks.
In 2022, the Supervisory Board reviewed and approved our enhanced ESG programme, Together Towards ZERO and
Beyond (TTZAB), including revised and new targets related to carbon, packaging, water and agriculture.
The Executive Committee (ExCom) is responsible for sustainability, including climate change, with the CEO assuming
ultimate responsibility. ExCom approves policies and targets for the entire organisation and monitors performance on
a quarterly basis.
Sustainability measures, including the reduction of carbon and water use, have been included in the short-term
incentive scheme for the CEO, the CFO and other ExCom members. From 2023, they will be added to the long-term
incentive scheme.

TTZAB is an integrated part of our SAIL’27 strategy. It continues and expands on the work done during the previous
strategy period, and includes science-based targets, approved by the Science Based Targets initiative, to reduce
emissions in line with the goal of the Paris Agreement to limit global warming to a maximum of 1.5°C.
TTZAB’s focus areas and targets are based on an assessment of material ESG issues to ensure we focus on the
sustainability risks and opportunities that are most relevant to our stakeholders, including those related to climate
change, packaging, water and sustainable agriculture. Together with other members of the Alliance of CEO Climate
Leaders, we advocate for all business leaders to set science-based targets and reach net zero by 2050 at the latest
to avoid the worst effects of climate change. TTZAB includes our own bold new target to achieve a net ZERO value
chain by 2040 – ahead of the global 2050 timeline demanded by science – to guide our long-term carbon reduction
agenda.

Mid- and long-term risks, including climate-related risks and opportunities, are reviewed annually at Group level.
We use a materiality assessment to identify the most important sustainability management topics, risks and impacts.
Our most recent materiality assessment, in 2020, confirmed that climate change was among the highest-ranking
issues for us to address. We analyse our total value chain carbon emissions (Scope 1, 2 and 3 emissions) to measure
progress towards our reduction targets and identify where to focus our efforts to reduce emissions and mitigate risk.
The last assessment was based on 2019 data, and we intend to carry out annual updates starting in 2023 (based on
2022 data).
We used WWF’s Water Risk Filter to identify which of our breweries are in areas of high water risk. We were the first
multinational to test WWF’s ground-breaking scenario analysis tool to examine the potential impacts of climatic and
socioeconomic changes on water and subsequent implications for our business by 2030 and 2050, and to help us
identify priority sites for investments and community partnerships. The analysis included water risk assessment of
two key commodities, rice and barley.

Learn more

• Risk management framework, page

50.

• Overview of Supervisory Board work
and responsibilities, pages 46-48.

• ESG Report, TTZAB governance,

pages 76-80.

• Remuneration Report, pages 3 and

7-8.

• SAIL’27, Together Towards ZERO
and Beyond, pages 8 and 24-25.

• ESG Report, ZERO Carbon

Footprint, ZERO Farming Footprint
and ZERO Water Waste, pages 10-
21, 22-28 and 36-42.

• ESG Report, materiality assessment,

page 83.

• Risk management framework, page

50.

• ESG Report, managing risk, page 79
• ESG Report, ZERO Carbon Footprint
and ZERO Water Waste, pages 10-
21 and 36-42.

• ESG Report, materiality assessment,

page 83.

Metrics and targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks
and opportunities, where such
information is material.

Our annual ESG Report discloses our approach, our TTZAB targets and progress to date, key performance indicators
and actions to support the UN Sustainable Development Goals and the UN Global Compact. The report includes
detailed data on Scope 1, 2 and 3 carbon emissions, energy and water. Our Scope 3 analysis, previously carried out
every three years, will be performed annually from 2023. We have also disclosed detailed information to CDP on our
greenhouse gas emissions and approach to climate change management annually since 2007.

• ESG Report, data summary table,

pages 93-98.

• ESG Report, SDG actions, pages

85-90.

2022 review and 2023 expectations

NAVIGATING 2022

MANAGING A
TURBULENT YEAR

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

2022 was a year of immense
challenges as a result of the
war in Ukraine, rising
commodity prices and energy
costs, and COVID-19,
particularly in Asia.

In this environment, the Group aimed
to seek the right balance between
mitigating the short-term challenges
and investing in the long-term
opportunities behind our SAIL’27
priorities to deliver on our ambitions
for top- and bottom-line growth.

SAFEGUARDING OUR
UKRAINIAN BUSINESS
We stand alongside the Ukrainian
people and condemn the Russian
invasion of Ukraine in the strongest
possible terms.

OUTBREAK OF WAR
The war in Ukraine has deeply
affected us all. We have been
humbled by the strength and
resilience of our Ukrainian
colleagues, who have been
navigating the continuous difficult

humanitarian situation and the
enormous business challenges.

operations in the country very soon
after the outbreak of the war.

into Russia as well as exports from
other Carlsberg Group companies to
Baltika Breweries in Russia.

Furthermore, we announced that we
would carry out a strategic review of
the Group’s presence in Russia.

From the outbreak of the war, our
first priority has been the safety,
health and wellbeing of our more
than 1,300 local colleagues.

Early on, we established emergency
shelters to accommodate those of
our employees and their families
who had to leave their homes. We
actively used our facilities and skills
in Ukraine and neighbouring
countries to provide humanitarian
support to both our employees and
other Ukrainian people, including
providing shelter, transport, food and
fresh water.

In early March, the Group, together
with the Carlsberg foundations,
made a EUR 10m donation to
support humanitarian efforts in
Ukraine.

At the recommendation of our
Ukrainian colleagues, production at
two of the three breweries restarted
during April and May, and by the
end of June production was restarted
at the third brewery. However,
following intensified fighting later in
the year, we suspended production
at our brewery in Zaporizhzhia for a
few weeks in October.

When resuming business in April, the
Ukrainian team converted and
delisted the previously important
Russian Baltika brand portfolio and
converted the popular variants into
other brands, including Carlsberg,
Lvivske and Garage (examples
shown in the text box).

Read about our performance in
Ukraine on page 37-38.

BUSINESS CONTINUITY
To secure the safety of our people in
Ukraine, we suspended production at
our three breweries and stopped

MANAGING RUSSIA
Just after the invasion, we
announced our decision to
immediately stop new investments

On 9 March, we took additional
measures, ceasing all advertising by
both the Carlsberg Group and Baltika
Breweries in Russia and the
production and sale of the Carlsberg
brand in the Russian market.

DIVESTMENT OF THE RUSSIAN
BUSINESS
On 28 March, we made public the
difficult decision to seek a full
disposal of the Group’s business in
Russia.

CARLSBERG UKRAINE

The Group holds a no. 2
position in Ukraine, operating
three breweries – in Kyiv, Lviv
and Zaporizhzhia – and
employing more than 1,300
people.

The brand portfolio includes the
international premium brands
Carlsberg, 1664 Blanc,
Grimbergen, Somersby and
Garage, and the local power
brand Lvivske.

The separation of the Russian
business from the rest of the Group
is complicated. The Russian
operations have been an integrated
part of our company, and the
separation process has involved
more than 150 separation
workstreams across business
functions.

The necessary steps for the
divestment were initiated alongside
the separation process, including a
process to clarify the impact of
sanctions and the Russian
government’s approval process,
select advisors, identify potential
buyers and formalise the sales
process.

A buyer-screening process has been
initiated, and specific requirements of
the bidders defined. A careful
screening process is under way to
evaluate the bidders’ appropriateness
to participate in any transaction.

We will take the needed time to
execute the separation and the
divestment to seek the best possible
solution for all stakeholders, in
particular our more than 8,000
employees and our shareholders.

Read more about the separation and
divestment of the Russian business in
section 5 of the consolidated
financial statements.

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

MANAGING INFLATION
The Group faced significant inflation
in its cost base in 2022. Despite
benefiting from the hedges made in
2021, cost of sales/hl increased
organically by 13% due to higher
commodity prices and energy costs.

Our hedging policy sets out the
principles by which we hedge our
commodity exposure. Section 1.4 of
the consolidated financial statements
describes our hedging of commodities.

WINDFORCE 12

Increase Inflation Coverage (PIIC)
model.

including cost of sales, SG&A and
marketing investments.

By having this information available
in real time, our local operators are
able to develop an appropriate
basket of mitigating actions while
ensuring the right balance of the
“Golden Triangle” (see text, bottom
right). In an environment of high
inflation, our ambition will always be
to offset higher cost of sales through
higher revenue per hl in order to
safeguard the absolute gross profit
per hl.

The PIIC price increase factor
includes list price increases,
promotions and various discounts to
determine the net price increase. We
aim to offset any deviance between
net price increase and the PIIC
inflation factor through mix,
innovations and other measures.

PIIC has been integrated in the
monthly reporting process for all
markets and regions.

The transparency and mitigating
actions allow our people to respond
with agility and a flexible mindset,
adapting to changes in the
environment on an ongoing basis.

COVID-19
The overall impact of the pandemic
was less severe in 2022, with the
most significant impact seen in
China.

Across Europe, our markets saw only
limited restrictions at the beginning
of the year. During Q1, the on-trade
began to recover. Our volumes
benefited from easy comparables,
particularly in the first half of the
year, as restrictions and lockdowns
were widespread in H1 2021.

Our Asian markets outside China
also saw good recovery following the
gradual removal of restrictions
during H1. In China, we had a strong
start to the year, while volumes,
particularly in Q2 and Q4, were
impacted by COVID-19 restrictions
and lockdowns in our strongholds
and big cities.

Read about our regional performance
on pages 33-38.

The WINDFORCE 12 programme will
continue to be deployed in 2023.

PIIC
The purpose of our PIIC model is
two-fold: to increase the
transparency of total inflation in our
markets and to track how much price
increases are expected to offset the
inflationary pressure. In doing so, the
PIIC coverage also shows the
residual inflation pressure not
covered by price increases.

The PIIC inflation factor covers all
cost items in the income statement,

OUR GOLDEN
TRIANGLE

In applying our Golden Triangle, we
continuously seek to optimise the
balance between market share/
volumes, gross profit after logistics
(GPaL) margin, operating profit and
cash generation. We review the
balance of the Golden Triangle at
market, regional and Group level on a
monthly basis.

To ensure the right and necessary
mitigating actions in the
unprecedented inflationary
environment, we launched the
WINDFORCE 12 programme, which
is a comprehensive and dynamic
approach to managing cost inflation.

WINDFORCE 12 is about creating
forward-looking transparency on the
inflationary impact by market on a
monthly basis using our Price

GROUP

STRONG RESULTS IN A
CHALLENGING ENVIRONMENT

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

INCOME STATEMENT
Revenue was DKK 70,265m. Organic
revenue growth was 15.6%, while
reported revenue growth was 16.9%.

hedges made in 2021, cost of
sales/hl increased organically by
13% due to higher commodity prices
and energy costs. While the reported
gross margin declined by 190bp to

45.6%, gross profit/hl increased
organically by 5%.

We maintained our focus on costs,
supporting our efforts to offset
inflation and increase investments in

brands and activities. Total operating
expenses increased organically by
13%, due to higher marketing
expenses, which were up organically
by 19%, and higher logistics costs as
a result of the on-trade recovery and

The Group delivered a
strong set of results despite
significant challenges posed
by the war in Ukraine, rising
input costs and COVID-19,
particularly in China.

As a result of the high level of
uncertainty in 2022, we issued broad
guidance for organic operating profit
growth at the beginning of the year.
The Russian invasion of Ukraine led
us to suspend the earnings guidance
in early March. Following the
reinstatement of the full-year
guidance in April, we were able to
upgrade our earnings expectations
twice due to strong performance.
See the table on the right.

VOLUMES
Beer volumes grew organically by
4.2%, driven by Asia and Western
Europe, while Central & Eastern
Europe was impacted by declining
volumes in Ukraine.

Other beverage volumes grew
organically by 12.9%, and total
volumes by 5.7%.

Revenue/hl was +9%, resulting in
strong organic revenue growth of
15.6%. The revenue/hl improvement
was primarily driven by the on-trade
recovery in H1 across many markets
due to markedly fewer COVID-
19-related restrictions. In addition,
revenue/hl was supported by a
positive brand mix, which also
benefited from the on-trade
recovery, and price increases during
the year to offset the higher input
costs.

The negative net acquisition impact
was due to the deconsolidation of
Gorkha Brewery in Nepal, while the
positive currency impact related to
the Chinese and Swiss currencies,
which more than offset the
depreciation of the Laotian kip and
Ukrainian hryvnia.

Gross profit increased organically by
11.3%. Despite benefiting from the

Earnings expectations 2022

Date

4 February 2022

9 March 2022

21 April 2022

8 August 2022

26 October 2022

7 February 2023

Group

Expectation for operating profit

Organic operating profit growth of 0-7%.

Suspension of 2022 guidance.

Organic operating profit development of around -5% to +2%.

High single-digit-percentage organic growth in operating profit.

Organic growth in operating profit of 10-12%.

Organic growth in operating profit of 12.2% (reported).

2021

Organic

Acq., net

2022

Reported

Change

Volumes (million hl)

Beer

Other beverages

Total volume

DKK million

Revenue

Operating profit

Operating margin (%)

98.8

20.4

119.2

60,097

10,129

16.9

4.2%

12.9%

5.7%

15.6%

12.2%

-0.6%

-0.1%

-0.5%

-0.9%

-1.0%

2.2%

2.0%

102.4

23.0

125.4

70,265

11,470

16.3

3.6%

12.8%

5.2%

16.9%

13.2%

-60bp

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

higher energy prices. Marketing
investments were approximately
10% above pre-pandemic 2019
levels. As a percentage of revenue,
reported operating expenses
improved by 70bp to 30.7%
(excluding marketing investments,
the improvement was 100bp).

The increase in income from
associates was due to the
deconsolidation of Gorkha Brewery
in Nepal (now reported as an
associate), strong performance of
Super Bock in Portugal and property
disposals in Carlsberg Byen (non-
beverage activities).

Operating profit before depreciation,
amortisation and impairment losses
(EBITDA) grew by 9.0% in reported
terms.

While operating profit in H1 was
supported by the on-trade recovery,
organic operating profit development
in H2 of -5.1% was impacted by the
time lag between the increases in
commodity and energy costs and
our price increases, particularly in
Western Europe, the increase in
marketing investments in Asia and
the softening of the on-trade in
some Western European markets in
Q4, notably the UK.

19% CAGR

1664 BLANC VOLUME 2016-2022

Our super premium brand 1664 Blanc has been on an impressive growth journey since
it became part of our SAIL’22 priorities. During the period 2016-2022, the brand more
than quadrupled volumes. Many markets across our regions contributed to this
growth, with China becoming a particularly important market. In SAIL’27, we will
continue to drive growth for 1664 Blanc, as it remains a strong premiumisation driver
for our markets. Reinforcing the brand's elegantly playful and premium positioning, we
launched the global, socially led “Good taste with a twist” 2.0 campaign in April.

STEP UP IN PREMIUM

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

Operating profit grew organically
by 12.2%, with Asia and Western
Europe the main contributors. The
reported operating profit growth of
13.2% was positively impacted by
currencies, mainly the Chinese
renminbi and the Swiss franc, which
more than offset the deconsolidation
of Gorkha Brewery. The reported
operating margin decreased by 60bp
to 16.3%, mainly due to the higher
commodity prices and energy costs.
Operating profit/hl increased
organically by 6%.

Section 1 of the consolidated
financial statements contains more
details on operating activities.

Net special items (pre-tax)
amounted to DKK -784m (2021:
DKK +703m). Special items were
positively impacted by reversal of
provisions made in purchase price
allocations in prior years of DKK
217m, mainly in Asia. This was
more than offset by impairment
charges in Central & Eastern Europe
and Ukraine and restructuring costs.
Read more about net special items
in section 3.1 of the consolidated
financial statements.

Financial items, net, amounted to
DKK -725m (2021: DKK -385m).
Excluding currency gains and losses,
financial items, net, amounted to
DKK -506m (2021: DKK -333m).
The increase was mainly due to

2021 being positively impacted by
the reversal of the previous write-
down of the loan to our partner in
Carlsberg South Asia Pte Ltd. Net
interest expenses decreased slightly
due to lower average funding costs.
Net currency losses amounted to
DKK 219m, mainly related to
conversion costs for the Laotian kip
and losses on intra-company
deposits. Read more about net
financial items in section 4.1 of the
consolidated financial statements.

Adjusted net profit (adjusted for
special items after tax and special
items after tax in the Russian
operations held for sale) grew by
39.6% to DKK 9,694m, and adjusted
earnings per share (excluding
treasury shares) grew by 43.5% to
DKK 69.3.

Adjusted earnings per share from
continuing operations (excluding
Russian operations held for sale)
grew by 23.9% to DKK 55.7.

Tax totalled DKK -1,778m (2021:
DKK -2,154m). The effective
reported tax rate was 17.9% (2021:
20.6%), impacted by one-off
adjustments. Excluding special items,
the effective tax rate was 16.6%
(2021: 22.6%).

STATEMENT OF FINANCIAL
POSITION
In the statement of financial position,
the Russian business is presented
separately as disposal group held for
sale. Comparative figures have not
been restated.

The Carlsberg Group’s share of
consolidated profit (net profit) was
DKK -1,063m (2021: DKK 6,846m).
The strong increase in operating
profit and lower tax rate were offset
by special items and the impairment
in Russia.

Non-controlling interests’ share of
consolidated profit was DKK 1,171m
(2021: DKK 1,163m). Non-
controlling interests mainly consist of
Lao Brewery, Carlsberg Chongqing
Breweries Group and Carlsberg
Malaysia Group in Asia and
Carlsberg Marston's Brewing Group
in Western Europe.

ASSETS
Total assets amounted to DKK
115,341m at 31 December 2022 (31
December 2021: DKK 126,383m).

The main driver for the decrease was
the decision to seek a full divestment
of the Russian business, which
resulted in a write-down of the
Russian business of DKK 9,949m. In
addition, an impairment of goodwill
(DKK 700m) was made in Central &
Eastern Europe.

assets totalled DKK 49,223m (31
December 2021: DKK 68,475m).
The decline was mainly due to the
above-mentioned goodwill
impairment and reclassification of
the Russian business as assets in
disposal group held for sale,
including the write-down of the
Russian business.

Property, plant and equipment
totalled DKK 23,679m (31
December 2021: DKK 26,648m),
mainly impacted by the
reclassification of the Russian
business. Other non-current assets
totalled DKK 8,190m (31 December
2021: DKK 8,169m), mainly
consisting of the investments in
associates and deferred tax assets,
which declined slightly year on year.

Total current assets amounted to
DKK 22,631m (31 December 2021:
DKK 22,900m). Excluding Russia,
current assets increased by DKK
1,462m.

Inventories amounted to DKK
5,718m. Compared with 31
December 2021 and excluding
Russia, inventories increased by
DKK 1,103m, impacted by higher
cost of sales and stocking in Asia
prior to the Chinese New Year.

business, while other receivables
excluding Russia increased by DKK
354m. Cash and cash equivalents
amounted to DKK 8,163m (31
December 2021: DKK 8,344m).

Assets in disposal group held for sale
totalled DKK 11,618m and related
to the Russian business.

Section 2 of the consolidated
financial statements contains more
details on assets.

EQUITY AND LIABILITIES
Equity
Equity amounted to DKK 34,722m
at 31 December 2022 (31 December
2021: DKK 48,756m), DKK
31,902m of which was attributed to
shareholders in Carlsberg A/S and
DKK 2,820m to non-controlling
interests.

The net change in equity of DKK -
14,034m was mainly explained by
the profit for the period of DKK
108m, other comprehensive income
of DKK -4,072m, the dividend
payout of DKK -4,431m, the share
buy-backs of DKK -4,400m and
non-controlling interests of DKK -
1,336m.

Liabilities
Total liabilities were DKK 80,619m
(31 December 2021: DKK 77,627m).

Total non-current assets amounted
to DKK 81,092m (31 December
2021: DKK 103,292m). Intangible

The decline in trade receivables of
DKK 643m was mainly due to the
reclassification of the Russian

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

settlement of financial instruments.
Corporation tax paid was DKK
-2,103m (2021: DKK -1,883m).

28,646m (2021: DKK 28,922m) and
net interest-bearing debt to DKK
19,326m (2021: DKK 19,162m).

At 31 December 2022, non-current
and current borrowings amounted to
DKK 28,646m (31 December 2021:
DKK 28,922m): non-current
borrowings of DKK 22,865m (31
December 2021: DKK 22,755m) and
current borrowings of DKK 5,781m
(31 December 2021: DKK 6,167m).

Non-current tax liabilities, retirement
benefit obligations etc. were DKK
9,007m (31 December 2021: DKK
11,590m). The decline was mainly
due to a decline in retirement benefit
obligations and reclassification of the
Russian business.

Current liabilities excluding current
borrowings were DKK 38,866m (31
December 2021: DKK 37,115m).
Trade payables increased by DKK
1,275m. Excluding Russia, the
increase was DKK 2,860m, impacted
by the general inflation. Other
current liabilities, excluding deposits
on returnable packaging, increased
by DKK 353m, primarily impacted
by the reclassification of Russia.

Liabilities in disposal group held for
sale totalled DKK 4,100m and
related to the Russian business.

CASH FLOW
Free cash flow amounted to DKK
9,884m (2021: DKK 8,211m). The
increase was mainly impacted by the
higher EBITDA and higher net

contribution from the change in
working capital.

Net cash flow amounted to DKK
1,696m (2021: DKK -72m),
impacted by higher free cash flow,
partly offset by higher cash returns
to shareholders in the form of
dividends and share buy-backs, in
total amounting to DKK 7,789m
compared to DKK 6,787m in 2021.

CASH FLOW FROM OPERATING
ACTIVITIES
Cash flow from operating activities
amounted to DKK 12,949m (2021:
DKK 12,278m).

CASH FLOW FROM INVESTING
ACTIVITIES
Cash flow from investing activities
was DKK -3,065m (2021: DKK
-4,067m).

Acquisition of property, plant
and equipment and intangible
assets amounted to DKK -4,018m
(2021: DKK -3,903m), while total
operational investments amounted
to DKK -3,477m (2021: DKK
-3,498m).

EBITDA was strong at DKK 15,657m
(2021: DKK 14,367m).

The change in trade working capital
was DKK +1,908m (2021: DKK
+733m), positively impacted by the
higher trade payables and the
continued cash management
discipline. Average trade working
capital to revenue for the year was
-21.5% (2021: -19.4%).

The change in other working capital
was DKK -465m (2021: DKK
+616m), mainly impacted by VAT.

Restructuring costs paid amounted
to DKK -171m (2021: DKK -353m).
Net interest etc. paid amounted to
DKK -1,010m (2021: DKK -848m).
The increase was mainly due to the

Total financial investments
amounted to DKK +410m (2021:
DKK -567m). The change is
mainly attributable to deferred
considerations related to the
acquisition of Marston’s brewing
activities and the deconsolidation of
the business in Nepal, both in 2021.

RETURN ON INVESTED CAPITAL
ROIC improved strongly, by 270bp
to 15.2%, as a result of higher
operating profit, a lower effective
tax rate, impacted by one-off
adjustments, and improved
working capital. ROIC excluding
goodwill was 41.6% (2021: 33.6%).

FINANCING
At 31 December 2022, gross
financial debt amounted to DKK

SHARE BUY-BACK
2022 PROGRAMME
In 2022, the Group executed its
share buy-back programme on a
quarterly basis due to the continued
business uncertainty related to the
COVID-19 pandemic, increasing
input costs and general consumer
sentiment. The total buy-back
programme was DKK 4.5bn, with
shares worth DKK 4.0bn bought
back in 2022 and the remaining DKK
0.5bn in January 2023. A total of
4,913,102 shares were bought at an
average price per share of DKK 916.

In fiscal 2022, 4,751,576 B shares
were repurchased at a total purchase
price of DKK 4.4bn, equal to an
average price per share of DKK 926.

2023 PROGRAMME
The Supervisory Board has decided
not to initiate a new share buy-back
programme for Q1 2023 despite the
strong cash flow delivery for 2022
and very healthy financial situation
overall for the Group. However, the
Group will keep financial leverage
lower than usual as the partner in
the Indian and Nepalese businesses
has issued a formal put notice to sell
his 33% shareholding at the put
option valuation amount of USD
744m (see section 5.4 of the
consolidated financial statements).
There is no change to our capital
allocation principles., see page 40.

The strong free cash flow was offset
by the cash outflow from the share
buy-back programme (DKK 4,400m)
and dividends to shareholders and
non-controlling interests (DKK
4,431m). The difference of DKK
9,320m between gross financial debt
and net interest-bearing debt mainly
comprised cash and cash equivalents
of DKK 8,163m.

At 31 December 2022, the average
debt duration was 4.1 years (2021:
4.8 years). Of the gross financial
debt, 80% (DKK 22,865m) was long
term, i.e. with maturity of more than
one year from 31 December 2022.

Net interest-bearing debt/EBITDA
was 1.23x (2021: 1.37x). The
financial leverage was kept slightly
more conservative than in past years
due to the put option related to our
partner’s 33% holding in the Indian
and Nepalese holding company
Carlsberg South Asia Pte Ltd (see
section 5.4 of the consolidated
financial statements).

Read more about net-interest
bearing debt, capital structure and
borrowings in sections 4.2, 4.3 and
4.4 of the consolidated financial
statements.

WESTERN EUROPE

GOOD RESULTS IN A
VOLATILE YEAR

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

Results in Western Europe
were impacted by lifting of
COVID-19 restrictions in H1
and tough comparables and
cost increases in H2.

REGIONAL RESULTS
It was a volatile year in Western
Europe. Performance in H1 was
positively impacted by the lifting
of COVID-19-related on-trade
restrictions in all markets, while
performance in H2 was impacted
by the continued increases in

commodity and energy costs and
on-trade softness in some markets
in Q4, notably the UK.

Beer volumes grew organically by
2.5% and total volumes by 5.4%.
Other beverage volumes grew by
12.1%, thanks to strong growth of
the soft drinks and energy drinks
businesses in the Nordics and
Switzerland.

Revenue/hl improved organically by
8%, impacted in all markets by a

positive channel mix in H1 and price
increases in Q1 and Q4. In H2,
revenue/hl increased from around
3% in Q3 to around 7% in Q4 as a
result of price increases and a
positive country mix. On-trade
volumes grew by 34% year on year,
but remained approximately 10%
below the pre-pandemic 2019 level
(excluding acquisitions).

Organic revenue growth was 13.8%,
with reported revenue growth of

14.4% due to a positive currency
impact.

Driven by the strong earnings
improvement in H1, organic
operating profit in Western Europe
grew by 12.6%. As expected, profits
in H2 were impacted by higher
commodity and energy costs due to
the expiration of favourable hedges
made in 2021 and the time lag
between our price increases to
customers and the increase in costs.

MARKETS
THE NORDICS
Volumes in the Nordics grew by
mid-single-digit percentages,
mainly driven by high-single-digit
percentage growth in Denmark and
Sweden.

In Denmark, our business benefited
from strong on-trade recovery,
especially in H1, while the off-trade
channel declined. We saw good
progress for all beverage categories,
with particularly strong growth for

2021

Organic

Acq., net

2022

Reported

Change

Volumes (million hl)

Beer

Other beverages

Total volume

DKK million

Revenue

Operating profit

Operating margin (%)

29.7

12.4

42.1

30,501

4,372

14.3

2.5%

12.1%

5.4 %

13.8%

12.6%

0.0%

0.6%

1.0%

30.5

13.9

44.4

34,888

4,966

14.2

2.5%

12.1%

5.4%

14.4%

13.6%

-10bp

Markets

Denmark

Sweden

Norway

Finland

France

Switzerland

Poland

Germany

Portugal

Our position

Market
position (no.)

Market
share¹ (%)

Our
operations

Breweries²

103

¹ Sept. 2022 MAT. ² Breweries with capacity above 100,000 hl. ³ North-eastern
Germany. Source: Carlsberg estimates.

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

brands such as 1664 Blanc,
Somersby, Brooklyn and the local
premium brand Jacobsen.

After two very strong years in 2020
and 2021, our Norwegian business
saw volume decline of mid-single-
digit percentages, as borders
reopened and cross-border trade
and travel restarted. Carlsberg,
Brooklyn and Somersby grew, while
the local Ringnes brand and Tuborg
declined.

Our Swedish business delivered good
volume and revenue/hl development,
mainly due to recovery of the on-
trade channel and the Norwegian
border trade. All categories, including
soft drinks, delivered good growth,
with particularly strong growth for
our premium beer and the Pepsi
portfolio.

In Finland, volumes were slightly up,
supported by the on-trade recovery,
and further boosted by alcohol-free
brews, and soft drinks and energy
drinks in the off-trade.

FRANCE
In France, our volumes grew by
double-digit percentages in a slightly
declining market. Revenue/hl was up
by a mid-single-digit percentage.
Our premium beer portfolio and
alcohol-free brews delivered solid
growth. We saw particularly strong
growth for brands such as

Grimbergen, Brooklyn and Tourtel
Twist.

SWITZERLAND
Our volumes in Switzerland grew by
high-teen percentages, driven by the
recovery of the on-trade channel,
which is particularly important for
our business. Key growth drivers
were the Feldschlösschen and
Valaisanne brands, Feldschlösschen
0.0 and the Pepsi portfolio, for which
we entered into a strategic bottling
partnership at the beginning of 2022.

POLAND
We delivered slight volume growth
in Poland. Revenue/hl improved
significantly, as we took several price
increases due to significant cost price
inflation. We saw good growth of
our local mainstream brands and
Garage, while the flavoured
category, including Somersby,
declined. We launched Brooklyn
Pilsner with initial positive signs.

THE UK
Our UK business had a good
H1, supported by the significant
rebound of the on-trade. During
H2, we experienced an increasingly
challenging trading environment,
with consumer behaviour impacted
by high inflation. Volumes for the
year grew by mid-single-digit
percentages, but declined in H2.
Our international premium lagers
were the main drivers of the

growth, with good results for
Carlsberg and Poretti. We also
saw a positive development for
the Brooklyn brand following the
launch of Brooklyn Pilsner.

GERMANY
Our German business had a
challenging year due to input cost
increases and subsequent price
increases in a very competitive
market. Volumes were flat.
Carlsberg and Somersby delivered
solid growth, while some of our
local power brands declined.

+7%

AFB VOLUME GROWTH
IN WESTERN EUROPE

Growing alcohol-free brews (AFB) in Western Europe has
been a key priority since the launch of SAIL’22 and will
remain so in SAIL’27. In many markets across the region,
we hold a strong no. 1 market position. Many of our
alcohol-free brews leverage the strength of the local
power brands, such as Feldschlösschen. Alcohol-free beer
mixes are becoming increasingly popular with consumers,
supporting AFB volume growth in Western Europe of 7%.

ACCELERATE AFB

ASIA

STRONG RECOVERY
AFTER COVID-19

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

Our Asia region delivered
another set of strong results,
with many markets recovering
from COVID-19 restrictions in
2021.

REGIONAL RESULTS
All markets but Hong Kong SAR
delivered solid volume growth, and
beer volumes grew organically by
9.2%. Other beverage volumes grew
by 19.0% due to good performance

for soft drinks and energy drinks in
Cambodia and Laos.

and the deconsolidation of Gorkha
Brewery in Nepal.

Organic revenue growth was 18.8%.
Revenue/hl grew organically by 8%,
supported by a positive channel and
brand mix and price increases.

Reported revenue grew by 21.7%, as
a positive currency impact from the
Chinese renminbi more than offset
the devaluation of the Laotian kip

Operating profit increased
organically by 11.2%. Organic
operating profit growth in H2 was
modest, mainly due to the planned
significant increase in sales and
marketing investments in Vietnam
and China.

MARKETS
CHINA
The Chinese beer market was
slightly down, impacted by local
COVID-19 restrictions and
lockdowns, particularly in H2. In our
business, the disruptions from
COVID-19 restrictions were more
severe in H2 than in H1.

Nevertheless, our performance was
good. We improved our market
share slightly thanks to continued

good execution of our key commercial
priorities, such as the big city
expansion and international premium
brand growth.

VIETNAM
In Vietnam, the market recovered
strongly after COVID-19, growing by
more than 20% (YTD November),
albeit with large regional differences
due to the different implementation
of COVID-19 restrictions during
2021.

2021

Organic

Acq., net

2022

Reported

Change

Volumes (million hl)

Beer

Other beverages

Total volume

DKK million

Revenue

Operating profit

Operating margin (%)

39.1

5.3

44.4

19,459

4,855

24.9

9.2%

19.0%

10.3 %

18.8%

11.2%

-1.6%

-0.2%

-1.4%

-2.7%

-2.2%

5.6%

2.9%

42.0

6.3

48.3

7.6%

18.8%

8.9%

23,682

5,435

22.9

21.7%

11.9%

-200bp

Markets

China

Laos

India

Vietnam

Cambodia

Malaysia

Nepal

Myanmar

Singapore

Hong Kong SAR

Our position

Market
share¹ (%)

8/663

Our
operations

Breweries²

Market
position (no.)

5/13

24/3

¹ Sept. 2022 MAT. ² Breweries with capacity above 100,000 hl. ³ Total China/
western China. 4 In the states where we operate. Source: Carlsberg estimates.

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

We achieved strong volume growth
of more than 25%, driven by the
local Huda brand and our
international premium brands. In
addition, we strengthened our route-
to-market, expanding the coverage
and number of outlets selling our
products, and increased our
marketing investments.

INDIA
Supported by warm and dry weather
and easy comparables, our Indian
business continued the progress from

2021 and delivered more than 30%
volume growth in 2022. Revenue/hl
was up by a mid-single-digit
percentage, benefiting from strong
growth of the premium Carlsberg
and packaging mix. Tuborg also
grew strongly.

LAOS
Despite the challenging
macroeconomic environment, our
business in Laos delivered a strong
set of results. Volume growth was
around 20%, with broadly based

growth for beer, soft drinks and
water. Revenue/hl improved
considerably due to significant price
increases as a result of the high
inflation in the country.

CAMBODIA
Our business in Cambodia delivered
strong volume growth of almost
30%. The growth was mainly driven
by the energy brand Sting, but we
also saw improvement for our beer
business, driven by the international

premium brands, Carlsberg and 1664
Blanc, and the local Angkor brand.

MALAYSIA AND SINGAPORE
Our Malaysian business delivered a
very good year as COVID-19
restrictions were removed. Revenue/
hl improved strongly due to the on-
trade recovery, positive brand mix
and price increases. We launched
Somersby 0.0 and saw initial positive
results.

Our business in Singapore performed
well, being less impacted by
restrictions compared with the year
before.

+70%

SOMERSBY GROWTH IN ASIA

Somersby is a key brand in our “Grow beyond beer” strategic priority. First
launched in Denmark in 2008, this cider brand has since expanded globally, and
is now available in more than 70 markets worldwide. The Somersby portfolio
and its repeatable model are powerful drivers for the brand’s strong global
growth, including in Asia. In 2021, we launched Somersby in China. Consumer
reaction has been very positive, with volume performance exceeding our
expectations. Strong growth for Somersby in other Asian markets, such as Laos
and Malaysia, serves as a proof point for the successful expansion of the brand
in this region.

GROW BEYOND BEER & ACCELERATE IN CORE MARKETS IN ASIA

CENTRAL & EASTERN EUROPE

A DIFFICULT YEAR
AFFECTED BY THE WAR

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

It was a difficult year in
Central & Eastern Europe due
to the war in Ukraine. Good
volume growth in the other
markets in the region almost
offset the decline in Ukraine.

REGIONAL RESULTS
Although our Central & Eastern
Europe business was impacted
significantly by the war in Ukraine,
total volumes were flat.

Beer volume development was
-0.5%, mainly impacted by the
situation in Ukraine. Other beverage
volume growth was strong at 4.3%,
mainly due to growth of energy

drinks in the eastern part of the
region.

Organic revenue growth was
significant at 14.7%, and revenue/hl
increased by 15% thanks to price
increases in all markets, a positive
product mix and improved channel
mix in south-eastern Europe because
of only limited on-trade restrictions
at the beginning of the year.

The higher revenue/hl was offset
by higher costs, including for
commodities and energy, and
operating profit/hl was flat.

Organic operating profit was flat.
While the higher costs were thus
compensated for in absolute terms,
the operating margin contracted by
280bp to 19.5%. In H2, operating
profit was impacted by the time lag
between the increases in commodity

and energy costs and our price
increases.

MARKETS
UKRAINE
2022 was a terrible year for our
Ukrainian employees and a highly
challenging year for our business in
the country. The safety, health and
wellbeing of our employees will
always come first. Therefore,
following Russia’s invasion of

2021

Organic

Acq., net

2022

Reported

Change

Volumes (million hl)

Beer

Other beverages

Total volume

DKK million

Revenue

Operating profit

Operating margin (%)

30.0

2.7

32.7

10,128

2,257

22.3

-0.5%

4.3%

-0.1%

14.7%

0.1%

0.0%

0.6%

1.0%

29.9

2.8

32.7

-0.5%

4.3%

-0.1%

11,679

2,282

19.5

15.3%

1.1%

-280bp

Markets

Ukraine

Belarus

Kazakhstan

Azerbaijan

The Baltics

Italy

Greece

Bulgaria

Croatia

Serbia

Our position

Market
position (no.)

Market
share¹ (%)

Our
operations

Breweries²

n.a.

1-2

27-39

¹ Sept. 2021 MAT. ² Breweries with capacity above 100,000 hl.
Source: Carlsberg estimates.

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

Ukraine, we suspended production at
our three breweries and stopped
operations in the country in late
February and early March.

Our Ukrainian colleagues have
shown incredible strength and
resilience, delivering an outstanding
result while navigating both the
humanitarian crisis and the enormous
business challenges since the
outbreak of the war. At their
recommendation, we restarted
production during Q2.

Due to the market decline of around
25%, our volumes declined by 20%.
Revenue/hl benefited from fewer
promotional activities, a positive
channel mix and pricing, while cost
of sales was up significantly.

SOUTH-EASTERN EUROPE
Our volumes in south-eastern
Europe grew by double-digit
percentages, driven by double-
digit growth in Italy, Greece,
Croatia and Serbia.

Growth in all markets was supported
by fewer COVID-19 restrictions than
in 2021 and increased tourism.
Revenue/hl improved in all markets
due to price increases, a positive
channel mix from an improved on-
trade channel and a positive brand
mix.

EASTERN EUROPE
In Kazakhstan and Belarus, volumes
grew by low-single-digit percentages.
Revenue/hl increased significantly,
due to very high price increases in

the inflationary environments and a
positive brand mix.

EXPORT & LICENSE
Volumes in the export & licence
business delivered solid growth,
mainly driven by good performance
of Tuborg and Carlsberg in markets
such as Turkey and Ireland.

Our alcohol-free brews declined,
impacted by lower sales in the
Middle East.

In December, we announced our
intention to acquire Waterloo
Brewing in Canada. We intend to
integrate our sales subsidiary in
Canada with the Waterloo business,
thereby strengthening our market
position and reducing logistics costs.

+4%

EXPORT & LICENCE VOLUME GROWTH

Around 40% of total volumes in Central & Eastern Europe is sold through our Export & License
business unit, which includes a large number of markets across the world. Our export & licence
markets include attractive positions in markets such as Australia, South Korea, Turkey, Saudi Arabia,
Ireland, Canada and also the travel retail business. A key priority in SAIL’27 is to accelerate growth
in key export & licence markets with attractive large profit pools. We will build scale in specific
segments across markets in Europe, the Middle East and Asia Pacific, leveraging our international
premium brands, including Somersby, 1664 Blanc, Carlsberg and Tuborg, and alcohol-free brews.
As part of this strategy, in 2022 we announced our agreement with Waterloo Brewing in Ontario,
Canada, to acquire all shares in the company. This acquisition is expected to strengthen our market
position in Canada with local production and Waterloo Brewing’s brands, and to deliver significant
supply chain and revenue synergies.

DRIVE VALUE AND BUILD SCALE IN EXPORT & LICENCE MARKETS

RUSSIAN OPERATIONS HELD FOR SALE

EXECUTING
DISPOSAL

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

business but on a wide range of
internal assumptions and is highly
sensitive to changes in those
assumptions.

The accounting treatment of the
Russian business is set out in section
5.1 of the consolidated financial
statements.

The disposal of the Russian business
is considered a high risk for 2023.
Read about this on page 50.

On 28 March, we announced
the decision to seek a full
divestment of our Russian
business following Russia’s
invasion of Ukraine.

sanctions and the Russian
government’s approval process,
select advisors, identify potential
buyers and formalise the sales
process.

The task of preparing the Russian
business for divestment continues to
progress well.

SEPARATION OF THE BUSINESS
The separation of the Russian
business from the rest of the Group
is complicated.

The Russian operations have been an
integrated part of our company, and
the separation process has involved
more than 150 workstreams across
business functions. This has extended
the divestment process compared
with an immediate sale involving
transitional service arrangements.

A buyer screening process has been
initiated, and specific requirements of
the bidders defined. A careful
screening process is under way to
evaluate the bidders’ appropriateness
to participate in any transaction.

We will take the necessary time to
execute the separation and
divestment to seek the best possible
solution for all stakeholders, in
particular our more than 8,000
employees and our shareholders. An
offer process is expected to
commence in Q1 2023, and we are
aiming to sign a divestment
agreement by mid-2023.

DISPOSAL OF THE BUSINESS
The necessary steps for the
divestment were initiated alongside
the separation process. Since the
announcement, a process has been
running to clarify the impact of

The overall political situation in
Russia is uncertain. Presidential
Decrees have been issued setting out
prohibitions and restrictions on the
sale of certain Russian companies,
directly or indirectly.

For the time being, it is uncertain
how the requirements will affect the
divestment process in practice.
However, they could potentially
impact the timing of the divestment,
as authorisation from the Special
Government Commission in Russia is
required.

VOLUMES AND INCOME
STATEMENT
Volumes in Russia declined by 2.6%.
Reported revenue grew by 56% to
DKK 10,207m due to significant
price increases and the appreciation
of the RUB. The net result was DKK
-8,075m, impacted by the write-
down of DKK 9,949m.

STATEMENT OF FINANCIAL
POSITION
Net assets in Russia (disposal group
held for sale) at 31 December 2022
amounted to DKK 7,518m compared
to DKK 9,620m at 30 June 2022.
The difference was mainly due to the
depreciation of the RUB in H2.

The fair value estimate is not based
on any external offers for the

CAPITAL ALLOCATION

DISCIPLINED
CAPITAL ALLOCATION

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

SAIL’27 reinforces and
expands our priorities for
delivering shareholder value:
organic growth in revenue and
operating profit, improved
return on invested capital,
disciplined capital allocation
and ambitious sustainability
targets.

Our capital allocation principles,
which we announced in 2016,
remain unchanged in SAIL’27:
1.

Investing in our business to drive
long-term sustainable growth.

2. Targeting NIBD/EBITDA of

below 2.0x.

3. Targeting an adjusted payout
ratio of around 50% (adjusted
for special items after tax).
4. Distributing excess cash to
shareholders through share
buy-backs and/or extraordinary
dividends.

5. Deviating from the above if
value-enhancing acquisition
opportunities arise.

DRIVING LONG-TERM GROWTH
Notwithstanding the challenges posed
by the war in Ukraine, significantly
rising costs and COVID-19 in 2022,
we increased our marketing
investments during the year in
support of our SAIL’27 priorities.

For the year, marketing investments
grew organically by 19%. Reported
marketing investments amounted to
8.2% of revenue. Thanks to the strong
performance in 2022, we accelerated
some SAIL’27 investments, including
marketing investments across the
Group and sales investments,
particularly in Vietnam and China.

LEVERAGE
Despite increased cash returns to
shareholders, the net interest-bearing
debt to EBITDA ratio (excluding
Russia) at the end of the year was
1.23x, well below our target of below
2.0x.

DIVIDEND PAYOUT
In March, we paid out a dividend of
DKK 24 per share, equal to an
increase of 9% on the previous year.

In line with our dividend policy, the
dividend amounted to DKK 3.4bn,
corresponding to an adjusted payout
ratio of approximately 50%.

At the Annual General Meeting on
13 March 2022, the Supervisory
Board will propose an increase in the
dividend of 13% to DKK 27 per share.
This corresponds to an adjusted
payout ratio of 48% of adjusted net
profit for continuing operations.

SHARE BUY-BACK
In 2019, the Supervisory Board
decided, for the time being, to
return excess cash to shareholders
by means of share buy-back.
Consequently, up to 27 January
2023 the Group had bought back
16,438,402 shares – equal to 10.8%
of the number of shares at the end
of 2018 – in total amounting to
DKK 15.5bn.

2022
In 2022, the Group executed its
share buy-back programmes on a
quarterly basis due to the continued
business uncertainty related COVID-

19, rising input costs and general
consumer sentiment.

Accordingly, in February the Group
announced four share buy-back
programmes, in total amounting to
DKK 4.5bn. The last quarterly
programme was initiated on 27
October 2022 and ran until 27
January 2023.

and very healthy financial situation
overall for the Group. However, the
Group will keep financial leverage
lower than usual as the partner in
the Indian and Nepalese businesses
has issued a formal put notice to sell
his 33% shareholding at the put
option valuation amount of USD
744m. See section 5.4 of the
consolidated financial statements for
more information.

In 2022, including the share buy-
back carried out in January,
4,751,576 B shares were repurchased
at an average price per share of DKK
926, equal to at total purchase price
of DKK 4.4bn.

VALUE-ENHANCING M&A
The Group remains committed to
value-enhancing M&A and will
continue to explore relevant
opportunities.

At the Annual General Meeting on
13 March 2023, the Supervisory
Board will recommend that 4.5m
treasury shares not used for hedging
of incentive programmes be
cancelled, equalling a decrease of
3.2% in the total number of shares.

2023
The Supervisory Board has decided
not to initiate a new share buy-back
programme for Q1 2023 despite the
strong cash flow delivery for 2022

In December, we entered into an
agreement with Waterloo Brewing
Ltd. in Ontario, Canada, to acquire all
its common shares for a total equity
value of approximately CAD 144m.
The transaction is expected to close in
the first half of 2023. This acquisition
is in line with our SAIL’27 strategy to
grow in key export and licence
markets, see pages 21 and 38.

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

2023 EARNINGS EXPECTATIONS

EARNINGS
EXPECTATIONS

There are significant
uncertainties for 2023,
which will be another
challenging year.

The wide guidance range reflects
these significant uncertainties for
2023. Consequently, 2023 guidance
is:

Due to our and our suppliers’ rolling
hedging, last year’s commodity and
energy price increases will have a
significant impact on our 2023 cost
of sales and logistics costs.

We intend to offset the higher costs
in absolute terms through pricing,
mix and continued tight focus on
costs.

While beer historically has been a
resilient consumer category, the
higher prices in combination with
generally high inflation may have a
negative impact on beer consumption
in some of our markets, particularly
in Europe.

The development of the war in
Ukraine and the impact on our
business remain highly uncertain, as
is the COVID-19 recovery in China,
including consumer off-take during
the Chinese New Year celebrations.

• Organic operating profit

development of -5% to +5%.

We are assuming an organic increase
in cost of sales per hl of low-teen
percentages for the Group, with large
variations between markets and
regions. The cost pressure is
expected to be more pronounced in
H1.

Based on the spot rates at 6
February, we assume a translation
impact on operating profit of around
DKK -550m for 2023.

Other relevant assumptions are:
• Financial expenses, excluding

foreign exchange losses or gains,
of around DKK 600m.

• Reported effective tax rate of

around 21%.

• Capital expenditure at constant

currencies at around DKK 5.0bn.

Forward-looking statements
Forward-looking statements are
subject to risks and uncertainties that
could cause the Group’s actual
results to differ materially from
those expressed in the forward-
looking statements. Accordingly,
forward-looking statements should
not be relied on as a prediction of
actual results. See page 59 for the
full forward-looking statements
notice.

TAXONOMY REPORTING

REPORTING AGAINST
THE EU TAXONOMY

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

The EU Taxonomy Regulation
is a new legislative act that
aims to provide a framework
for sustainable investment by
classifying economic activities
based on their environmental
impact.

alignment across a large number of
economic activities.

Furthermore, the Regulation
establishes technical screening
criteria for sustainability relative to
six environmental objectives.

The Regulation establishes a
common language for sustainable
finance and a basis for the EU to
achieve its climate and environmental
objectives, as outlined in the Paris
Agreement and elsewhere. The
Regulation helps investors identify
environmentally sustainable
economic activities, and promotes
the transition to a low-carbon and
climate-resilient economy.

As such, the Regulation is designed
to encourage investment in an
environmentally sustainable
economy.

THE TAXONOMY FRAMEWORK
The Regulation establishes a
framework for disclosure of
information on eligibility and

So far, technical screening criteria
have been adopted for two of the six
objectives, namely “climate change
mitigation” and “climate change
adaptation”. These two climate
objectives do not apply to
Carlsberg's activities. Consequently,
we report 0% eligibility on revenue,
capital expenditure (CapEx) and
operational expenditure (OpEx).

Criteria for the remaining four
objectives (“sustainable use and
protection of water and marine
resources”, “pollution prevention and
control”, “transition to a circular
economy” and “protection and
restoration of biodiversity and
ecosystems”) are expected to be
adopted by the EU in 2023.

An economic activity is considered
eligible if it is described in the
delegated acts, irrespective of
whether the activity meets any of
the technical screening criteria.

In turn, an economic activity is
considered aligned if it substantially
contributes to one or more of the
environmental objectives, does no
significant harm to any of the other
objectives, and is carried out in
compliance with minimum social
safeguards, all based on the
screening criteria.

SCOPE OF ECONOMIC ACTIVITIES FOR
CARLSBERG

Activity

Manufacture of
beverages
(NACE code 11)

Substantial
contribution to

1. Protection and
restoration of
biodiversity and
ecosystems
2. Transition to a

circular economy

Carlsberg’s main economic activity,
“Manufacture of beverages”, is
assumed to contribute to both the
biodiversity and circular economy
objectives. As the screening criteria

TAXONOMY ELIGIBILITY

DKKbn

Eligible

Non-eligible

Total

Eligible %

Non-eligible %

Revenue

OpEx

63.3

7.0

70.3

2.5

0.1

2.6

2022

CapEx¹

4.5

0.5

5.0

¹ See section 2.3 of the consolidated financial statements.

for these have not yet been adopted,
there is no requirement for Carlsberg
to report eligibility for the financial
year 2022.

In terms of measurement, the EU
Taxonomy provides KPIs and related
definitions that assess environmental
performance for the economic
activities. These KPIs are measured
in relation to reported revenue, OpEx
and CapEx.

At Carlsberg, we are committed to
sustainable finance, recognise the
importance of the EU Taxonomy for
promoting sustainable investment,
and continue to align our business
activities with the environmental

objectives as part of our Together
Towards ZERO and Beyond (TTZAB)
programme.

Carlsberg has decided to voluntarily
disclose eligibility for 2022.

ELIGIBILITY AT CARLSBERG
As the guidance and interpretation of
the Taxonomy are still evolving,
figures in the following are subject to
some level of uncertainty. The
definitions used to derive eligibility
data may in time be revised as we
continue to develop our
understanding of the Taxonomy.

REVENUE
In 2022, Carlsberg’s eligible revenue
equalled DKK 63.3bn, or 90% of our

CARLSBERG GROUP ANNUAL REPORT 2022 2022 REVIEW AND 2023 EXPECTATIONS

The Taxonomy’s OpEx definition is
narrow and includes only direct non-
capitalised costs related to R&D,
maintenance, short-term leases and
building renovation measures. It also
includes other direct expenditure
relating to the day-to-day servicing
of assets of property, plant and
equipment, but not cost of goods
sold.

reported revenue of DKK 70.3bn.
Eligibility is high, as a large portion
of the revenue in our (export)
markets is supported by own
manufacturing of beers, energy
drinks and other carbonated soft
drinks. The non-eligible part
primarily relates to revenue from
beverages purchased from third
parties and royalty income from
production licensed to third parties.

CAPEX
In 2022, our eligible CapEx equalled
DKK 4.5bn, or 90% of our capital
expenditure and lease additions in
2022. Most of our eligible CapEx
relates to:
• Investments in assets related to

production.

• Purchases of returnable glass

bottles.

• Investments in support of

customer acquisitions, including
coolers and draught equipment.

The non-eligible part of our CapEx
relates to capitalised investments in
technology not directly related to
production.

OPEX
Our current assessment indicates
that less than 5% of the OpEx follows
the OpEx definition of the
Taxonomy, of which 97% is eligible.
We consider the overall amount to
be immaterial.

TOWARDS TAXONOMY
ALIGNMENT
The framework defines a three-
layered assessment of the screening
criteria for alignment:
1. The activity must substantially

contribute to one of the
environmental objectives, of
which “biodiversity” and “circular
economy” are in scope for
Carlsberg.

2. The activity must do no

significant harm to the other
environmental objectives.
3. The activity must comply with
the minimum safeguards
covering social and governance
standards.

In 2022, we conducted an initial
comprehensive assessment of the
level of, and requirements for,
alignment at Carlsberg. From this
assessment, it is clear that the
various screening criteria intersect at
multiple levels of our organisation,
whether country, brewery, supply
base, product family or even
individual SKU (i.e. recipe) level.

To address such complexity and
ensure that we work towards a
systematic approach, we have
defined a dedicated programme for
EU Taxonomy reporting with the
aim, in time, of putting in place
comprehensive processes,
procedures, internal controls and
systems to measure alignment.

To ensure the accuracy and reliability
of our EU Taxonomy disclosures, we
have adopted a robust governance
framework.

TOGETHER TOWARDS ZERO AND
BEYOND AND THE EU TAXONOMY
The Taxonomy’s environmental
objectives in scope for Carlsberg are
largely aligned with our ESG
programme TTZAB, with its
ambitious targets for sustainable
agriculture, reducing packaging
waste, eliminating carbon emissions
and reducing water consumption, as
described in the ESG Report.

Consequently, TTZAB is anticipated
to positively impact on our
Taxonomy reporting, increasing our
aligned activities over time. Read
about TTZAB on pages 24-25.

ACCOUNTING PRACTICE
The Taxonomy is still evolving and
remains subject to interpretation.
The EU has indicated that further
guidance will be issued on the
application of the reporting
requirement. Carlsberg has consulted
externally in developing our
framework, and we will update the
approach as and when appropriate.

For 2022, Carlsberg’s voluntary
Taxonomy reporting method follows
a systematic process to identify
economic activities in scope for

reporting and calculating eligible
revenue, OpEx and CapEx.

Taxonomy eligibility is expressed as
a share of these KPIs. The scope of
each of these measures is defined by
the Regulation. The reporting scope
covers Carlsberg’s global business.

The revenue measure comprises the
revenue line from the consolidated
income statement. Carlsberg’s
revenue-related activities are eligible
under the Taxonomy if Carlsberg has
control over most of the raw
materials and manufacturing of the
final product.

To determine the share of the
Group’s revenue eligible for
Taxonomy reporting, we categorised
our full brand portfolio based on
whether we produce the beverage
and/or bottle the beverage, i.e.
licensed production. Beers and
beverages produced and/or bottled
by Carlsberg are included as
Taxonomy-aligned revenue.

The CapEx measure comprises
intangible assets and property, plant
and equipment additions, including
right-of-use assets; see section 2.3
of the consolidated financial
statements. Part of the commercial
activities, e.g. coolers, is included in
eligible CapEx, as these investments
are considered part of “Manufacture
of beverages” activity.

Governance

CORPORATE GOVERNANCE

FOCUS ON
CORPORATE GOVERNANCE

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

Our governance framework
aims to ensure value creation,
safeguard active and
transparent stewardship across
the Group and reduce risk.

The governing bodies of the
Carlsberg Group are the Supervisory
Board and the Executive Board.
None of the members of the
Supervisory Board are or have been
involved in the executive
management of the Group.

The Supervisory Board hires and
supervises the Executive Board,
which consists of the CEO and the
CFO, who are not members of the
Supervisory Board. The division of
responsibilities is described in the
Rules of Procedure of the
Supervisory Board.

Download our ESG Report

www.carlsberggroup.com/reports-
downloads/carlsberg-group-2022-esg-
report/

The Group also has an Executive
Committee (ExCom), which, in
addition to the CEO and the CFO,
consists of a wider group of Executive
Vice Presidents, portrayed on pages
56-57. While the Executive Board
members are formally registered as
executive directors of the Company,
the Executive Committee collectively
prepares and implements the
Company’s strategic plans.

RECOMMENDATIONS ON
CORPORATE GOVERNANCE
The Supervisory Board is responsible
for the Company’s corporate
governance framework and
compliance with the corporate
governance recommendations and
statutory requirements.

The Supervisory Board applies the
Recommendations on Corporate
Governance issued by the Danish
Committee on Corporate Governance.

The Company complies with
all but three of the current
recommendations:

• With respect to the recommendation

to publish quarterly reports, the
Group has chosen to only publish
full- and half-year reports.

• With respect to the recommendation
that a majority of the members of a
board committee should be
independent, in 2022 two of the five
members of the Nomination
Committee and two of the four
members of the Remuneration
Committee were independent.

• With respect to the recommendation
to include external assistance in the
board evaluation at least every
three years, the Supervisory Board
evaluation in 2022 was not
facilitated by an external advisor.

The Company’s statutory report on
corporate governance includes the
full list of recommendations, with

comments on the Group’s position on
each recommendation.

OUR COMPASS
The Supervisory Board is responsible
for overseeing that the Executive
Committee has an adequate system
and resources in place to ensure
compliance with the Company’s
codes and policies in relation to its
business activities.

The Group’s ethical values are to be
honest and compliant, to have a
sense of responsibility and to show
people respect. Living by these
values – our Compass – is an
integrated part of our strategy,
SAIL’27, mitigates risks and protects
our reputation as a responsible
brewer.

Our Compass consists of a Code of
Ethics & Conduct and our Group

Download our statutory
report on corporate
governance

Download our policies

www.carlsberggroup.com/who-we-are/
corporate-governance/#statutoryreports

www.carlsberggroup.com/sustainability/
download/download-our-policies

policies, which guide everyone in the
Group on how to act every day,
setting out the ethical standards for
our behaviour both within the
company and towards external
business partners such as customers
and suppliers.

Group policies include, but are not
limited to, anti-bribery & corruption,
labour & human rights, diversity,
equity & inclusion, competition law,
information security & acceptable
use, trade sanctions, data protection,
data ethics, risk management,
finance, marketing, corporate
communication, responsible drinking
and public & government affairs.

The ESG Report includes a thorough
description of how we implement
and live by our Compass in our day-
to-day actions, including areas such
as anti-bribery & corruption,
compliance and our Speak Up
system, as well as how we work with
and seek to ensure high standards
for data ethics as described in our
Data Ethics Policy.

THE ANNUAL GENERAL
MEETING
The 2022 Annual General Meeting
(AGM) took place on 14 March. The
minutes of the meeting are available
on www.carlsberggroup.com.
Rules and deadlines applying to the
AGM and other general meetings are
stipulated in the Company’s Articles
of Association, available on
www.carlsberggroup.com along with
other AGM-related information.

COMPOSITION OF THE
SUPERVISORY BOARD
The members of the Supervisory
Board and their board meeting
attendance are shown in the table
below.

The Supervisory Board currently has
nine members elected by the General
Meeting and, in accordance with the
Danish Companies Act, five members
elected by the employees.

Six of the nine members elected
by the General Meeting have an
international business background
and, in addition, competencies
related to FMCG, finance, ESG,
supply chain, procurement, mergers
& acquisitions, Carlsberg’s three key
regions and emerging markets.

The other three members are
affiliated to the Carlsberg Foundation,
the Company’s largest shareholder,
in their capacity as members of the

Carlsberg Foundation Board,
and they all have an academic
background. These members are
bearers of the Carlsberg Group
culture and heritage and the values
stemming from founder J.C.
Jacobsen, and the Supervisory Board
sees these members as patrons of
the same.

The Carlsberg Foundation Board is
keen to elect from its midst members
with the most relevant competencies
to represent it on the Carlsberg A/S
Supervisory Board. In 2021, the
Carlsberg Foundation decided to
gradually reduce the number of its
representatives on the Carlsberg A/S
Supervisory Board from five to two
in 2023 and onwards.

The employee representatives are
elected for a term of four years.
They hold the same rights and
obligations as the members elected
by the General Meeting. The current
employee representatives were
elected in 2022 and the next election
will take place in 2026.

Information on the Supervisory
Board members is available on
pages 53-55. Detailed CVs can be
found on www.carlsberggroup.com.

DIVERSITY AND COMPETENCIES
The Supervisory Board recognises
the benefits of diversity in respect of

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

experience, culture, international
experience and gender.

Diversity is of high priority for the
Supervisory Board, and it has laid
down the following specific objectives
in relation to international experience
and gender:

• With regard to international

experience, the objective is that
50% or more of the Supervisory
Board members elected by the
General Meeting should have
substantial international experience
from managing large corporations
or institutions. The Supervisory

Board fulfils the objective regarding
international experience.

• In terms of gender, women have

historically been under-represented
on the Carlsberg Supervisory
Board. As per the Annual General
Meeting 2022, three of the nine
members elected by the General

Chairship
meetings attended

Board
meetings attended

Supervisory Board meetings

Board member

Henrik Poulsen1,2 (Chair)

Majken Schultz1 (Deputy Chair)

Hans Andersen3

Mikael Aro1,2

Carl Bache1

Magdi Batato1,2

Flemming Besenbacher1

Lilian Fossum Biner1,2

Richard Burrows1

Eva Vilstrup Decker3

Lars Fruergaard Jørgensen1,2

Punita Lal1,2

Finn Lok3

Erik Lund3

Olayide Oladokun3

Søren-Peter Fuchs Olesen1

Peter Petersen3

Lars Stemmerik1

Tenna Skov Thorsted

1 Elected by the General Meeting. 2 Independent. 3 Employee-elected.

Attended meeting.
Not a Board/Chairship member at the time.

Did not attend meeting (position of hop leaf does not represent actual meeting).

Meeting are women. This
represents an equal distribution
of gender according to the
Danish rules on diversity in top
management. At the Annual
General Meeting in 2023, Carl
Bache will, as previously announced,
not stand for re-election. This will
bring the under-represented gender
to three women out of eight
members elected by the General
Meeting. The Supervisory Board
constantly considers how to best
achieve as diverse a representation
as possible in terms of views,
culture, experience, background,
gender etc. and wishes to maintain
a target of 40% of the under-
represented gender but without a
timeframe since the target is met
for the time being.

At Carlsberg Breweries A/S, one
of four elected members of our
governing Supervisory Board is a
woman. At Carlsberg Danmark A/S
one of three Supervisory Board
members is a woman and at
Carlsberg Supply Company Danmark
A/S, two of three Supervisory Board
members are women. At Carlsberg
Integrated Information Technology
A/S, two of four Supervisory Board
members are women.

The 2022 ESG Report contains
information on our work with
diversity, equity & inclusion in the
Carlsberg Group.

The Supervisory Board continuously
assesses, including as part of its
annual board evaluation, whether
the board members possess the
required skills and competencies to
best support the Carlsberg Group
and its strategy, and whether the
composition can be further optimised
for this purpose.

The skills and competencies that
should be represented on the
Supervisory Board are described in
the Specification of Competencies,
available on
www.carlsberggroup.com. On the
basis of a recommendation from the
Nomination Committee, the
Supervisory Board reviews the
Specification of Competencies
annually.

The Supervisory Board believes that
the current composition of the Board
ensures an appropriate level of skills,
breadth and diversity in the members’
approach to their duties, thereby
helping to ensure that decisions are
well considered and that both short-
and long-term perspectives are
taken into account.

SUPERVISORY BOARD
EVALUATION PROCESS
Each year, the Chair of the
Supervisory Board heads a structured
evaluation of the Board’s work,
accomplishments and competencies.

In 2022, the evaluation process was
headed by the Chair and led to a list
of improvement ideas for the
Supervisory Board work. Together
with management, the ideas will be
considered and, where relevant,
implemented.

During the evaluation process in
2022, the Supervisory Board
members generally expressed that
meeting material is of a high quality,
that agendas cover relevant topics,
that meetings are well planned, and
that the time and discussions are well
prioritised.

The members also appreciated the
discussions with the Executive Board
and other management members,
and the mutual trust and cooperation
with the Executive Board.

THE WORK OF THE
SUPERVISORY BOARD
The main topics of discussion at the
Supervisory Board meetings in 2022
are presented in the box on page 47.
The Executive Board always attends
the Supervisory Board meetings and,
in order to ensure transparency, the
members of ExCom are also invited
and attend when relevant. This gives
the Supervisory Board better insight
into the business.

In connection with most Supervisory
Board meetings, key people from the

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

THE CARLSBERG
FOUNDATION

The Carlsberg Foundation is the
Company’s largest shareholder.
According to its Charter, the
Foundation must own shares
equivalent to at least 51% of the votes
in Carlsberg A/S. At 31 December, the
Carlsberg Foundation held 29% of the
capital and 76% of the votes in
Carlsberg A/S.

The Foundation is a long-term, value-
oriented shareholder, supporting the
Group in creating sustainable value
growth through the execution of its
strategy and adherence to the
Company’s capital allocation priorities.

The Foundation participates pro rata in
the share buy-back programmes (see
page 40).

The dividends from Carlsberg A/S are
given back to society by granting funds
to foster and support academic
research within natural sciences,
humanities and social sciences, and
funds for cultural and socially
beneficial purposes. The Foundation
also grants funds to the Carlsberg
Research Laboratory. In 2022,
dividends received by the Foundation
amounted to DKK 1.0bn.

In 2022, the Committee had
particular focus on:
• Planning the Board's evaluation

process.

• Reviewing the Specification of

Competencies for board members
to ensure that they reflect the skills
and experiences needed to best
support the execution of SAIL'27.

• Succession planning at

management and Supervisory
Board level, including nomination
of Ulrica Fearn as new Chief
Financial Officer to replace Heine
Dalsgaard.

• Evaluating the composition of
ExCom and the composition,
structure and size of the
Supervisory Board.

Committee meetings attended

Group present a market, a function
or other relevant topics.

BOARD COMMITTEES
The Supervisory Board has
established three board committees:
the Audit, Nomination and
Remuneration Committees. Each
year, the Supervisory Board
considers whether the number and
scope of the committees are
appropriate.

Committee members are appointed
for one year at a time. The members
of the respective committees and
their meeting attendance are shown
in the tables below and on page 48.

THE NOMINATION COMMITTEE
The Terms of Reference for the
Nomination Committee are available
on www.carlsberggroup.com.

Nomination Committee meetings

Committee member

Henrik Poulsen1 (Chair)

Carl Bache

Flemming Besenbacher

Richard Burrows

Lars Fruergaard Jørgensen1

Punita Lal1

Majken Schultz

1 Independent.

Attended meeting.

Did not attend meeting (position of hop leaf does not represent

actual meeting).

Not a Committee member at the time.

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

SUPERVISORY
BOARD 2022

MAIN TOPICS OF DISCUSSION

Strategy
• Review and discussion of the impact of

the war in Ukraine on the Group’s
employees and business, and the Group’s
exit from Russia, including consequences
for employees and the business.

• Follow up on SAIL'22.
• Continuous review and discussion of and
feedback on the development of SAIL’27.
• Continuous review and discussion of and

feedback on the development of Together
Towards ZERO and Beyond and progress
of the previous ESG programme, Together
Towards ZERO.

• Review of and debate on R&D,

innovation, branding, quality and other
strategic initiatives.

• Monitoring of the Funding the Journey
culture in the Group's ways of working,
including application of the Operating
Cost Management toolkit.

• Review and approval of the Group's

capital structure, funding, dividend and
share buy-backs.

• Review and discussion of organic

opportunities, including commercial
priorities and three-year plans.

• Review of various markets and functions,
and discussions with the heads of the
same.

Organisation, people, succession planning
and talent management
• Review of the Supervisory Board

composition.

• Succession planning for the executive
management, including the hiring of
Ulrica Fearn as new CFO to replace
Heine Dalsgaard.

• Review and endorsement of the

Group’s people agenda.

• Review and endorsement of the

Group’s strategic diversity, equity &
inclusion agenda.

• Discussion and approval of the bonus
structures in the Group’s incentive
programme, ensuring support of and
alignment with SAIL’27.

Compliance
• Review of Carlsberg’s compliance risks
and set-up, including discussion of
compliance-enhancing efforts.

Governance and risk management
• Review of the outcome of the

Supervisory Board evaluation process,
including follow-up on all
suggestions.

• Review and discussion of the internal

audit & control reports, working
processes and continued
improvement.

• Review and discussion of the Group’s

IT & cyber security strategy.

• Review of the Group’s approach to the

task of compliance with the EU
Taxonomy Regulation for sustainable
activities.

• Discussion of relevant issues and

ways of working with the external
auditor.

• Approval of the external auditor for

election at the 2022 AGM.

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

incentive scheme to reflect the
Group's growth strategy.
• Reviewing overall incentive

arrangements to ensure continued
fit with the Group’s strategy in light
of the SAIL’27 ambitions.

• Reviewing ESG in the incentive
arrangements with a view to
moving ESG targets into the long-
term incentive scheme.

• Closely monitoring incentive plans

for impact of the announced
divestment of the Russian business.

Committee meetings attended

THE REMUNERATION COMMITTEE
The Terms of Reference for the
Remuneration Committee are
available on
www.carlsberggroup.com.

In 2022, the main activities of the
Remuneration Committee were:
• Finalising terms and conditions for

Ulrica Fearn as the new Chief
Financial Officer, effective from 1
January 2023.

• Increasing the weighting of the

revenue target in the short-term

Remuneration Committee meetings

Committee member

Richard Burrows (Chair)

Magdi Batato1

Søren-Peter Fuchs Olesen

Henrik Poulsen1

1 Independent.

Attended meeting.

Did not attend meeting (position of hop leaf does not represent

actual meeting).

Not a Committee member at the time.

Audit Committee meetings

Committee member

Lilian Fossum Biner1 (Chair)

Mikael Aro1

Magdi Batato1

Richard Burrows

Henrik Poulsen1

1 Independent.

Committee meetings attended

Attended meeting.

Did not attend meeting (position of hop leaf does not represent

actual meeting).

Not a Committee member at the time.

This included delaying the grant of
the 2022-2024 LTI award.

• Reviewing the work regarding

Speak Up matters.

The work of the Committee is
described in more detail in the
Remuneration Report, available on
www.carlsberggroup.com.

THE AUDIT COMMITTEE
The Terms of Reference for the Audit
Committee are available on
www.carlsberggroup.com.

The Committee members have the
relevant financial expertise and
necessary experience of the
Company’s sector.

The Audit Committee works according
to the Terms of Reference and a
detailed annual meeting plan.

In 2022, the Audit Committee had
particular focus on a number of
areas, including:
• Monitoring the effectiveness of the
control environment and overseeing
the progress on improving and
further developing the effectiveness
of the controls over financial
reporting.

• Monitoring the external financial
reporting and the work of the
external auditors.

• Reviewing the progress of the work
of the Group Internal Audit function.

• Reviewing the external financial
reporting, including the annual
reporting.

• Managing financial risk.
• Reviewing the risk management

process.

• Reviewing Global Shared Services.
• Receiving updates on Group tax.
• Reviewing succession planning for

financial personnel.

• Reviewing the Company's

preparation for reporting against
the EU Taxonomy Regulation for
sustainable activities.

INTERNAL CONTROL AND RISK
MANAGEMENT RELATED TO
THE FINANCIAL REPORTING
PROCESS

OVERALL CONTROL ENVIRONMENT
The Supervisory Board and ExCom
have overall responsibility for the
Carlsberg Group’s internal control
environment.

The Audit Committee is responsible
for monitoring the effectiveness of
the overall internal control
environment and risk management
systems, in particular related to the
financial reporting process.
The Group has a number of policies
and procedures in key areas of
financial reporting, including the
Finance Policy, the Accounting
Manual, the Controller Manual, the
Use of Auditors Policy, the Chart of
Authority, the Risk Management
Policy, the Financial Risk

Management Policy, the Corporate
Governance Policy, the Information
Security & Acceptable Use Policy,
the Records Management &
Personal Data Protection Policy, the
Stock Exchange Compliance Policy,
the Tax Policy and the Code of
Ethics & Conduct.

The policies and procedures apply
to all subsidiaries, and similar
requirements are set out in
collaboration with the partners in
joint ventures.

The Group’s internal control
framework for financial reporting is
designed to reduce and mitigate
financial risks identified and ensure
reliable internal and external
financial reporting. It defines roles
and responsibilities, and provides
assurance that key risks are covered
by internal control activities.

As a consequence of the Group’s
growth due to acquisitions, systems
and processes are not standardised
across all entities.

The Group continuously seeks to
strengthen the internal control
environment through further
standardisation, increased
automation, strong analytics and
transparent governance.

The financial reporting control
framework is monitored through

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

entities’ self-assessment of the
effectiveness of the implemented
controls and continuous testing of
performance by the Group’s Risk &
Internal Control function. The
monitoring of the performance of the
controls focuses on the adequacy of
the controls, their effectiveness and
the efficiency of the overall
controlling processes.

RISK ASSESSMENT
In the internal control framework for
financial reporting, the Group has
identified the risks that could have a
direct or indirect material impact on
the financial statements. Group
entities are required to carry out and
document the internal controls
defined by the Group to cover the
key risks identified.

Group entities are required to
reassess their controls biannually
and must update changes to the
control framework for financial
reporting, including new risks and
controls.

The Group has established
information and communication
systems to ensure accounting and
internal control compliance. During
the risk assessment process, Group
entities are required to report on
missing or inadequate controls.

Each entity assesses any need for
compensating controls or for design
and implementation of new controls.
Furthermore, Group entities are
required to maintain mapping of
risks related to the segregation of
duties and implement necessary
compensating controls, thereby
continuously strengthening the
internal control environment and
enforcing optimal segregation of
duties in the ERP systems.

CONTROL ACTIVITIES AND
MONITORING
The Group has implemented a
formalised financial reporting
process, budget process, estimates
and monthly reporting on actual
performance. The accounting
information reported by all Group
companies is reviewed by controllers
with regional or functional in-depth
knowledge of the individual
companies/functions and by
technical accounting specialists.

Controllers are continuously updated
on best practice relating to internal
financial controls, and trained in
new accounting and reporting
requirements.

The entities in the Group are
dependent on IT systems. Any
weaknesses in the system controls
or IT environment are compensated
for by manual controls in order to

mitigate any significant risk relating
to the financial reporting.

The quality of processes and
associated internal controls are
subject to continuous monitoring and
testing by the Group’s Risk & Internal
Control function as well as to regular
internal audits.

50-52), an internal audit plan is
drawn up for the year. The plan is
reviewed and approved by the Audit
Committee. In 2022, Group Internal
Audit conducted audits mainly in the
areas of financial reporting controls,
brewery operations, compliance
(internal and external regulation) and
information technology.

The Audit Committee’s monitoring
covers both the internal control
environment and business risk.
Monitoring of the internal control
environment is covered by the
Group’s control framework for
financial reporting.

The financial risks are assessed
and reviewed at multiple levels
in the Group, including monthly
performance review meetings at
ExCom level, periodic review of
control documentation, and audits
performed by Group Internal Audit.

GROUP INTERNAL AUDIT
Group Internal Audit provides
objective and independent
assessment of the adequacy,
effectiveness and quality of the
Group’s internal controls. Group
Internal Audit works in accordance
with a charter, which is reviewed
periodically and approved by the
Audit Committee.

Taking into account the annual
review of business risks (see pages

In addition, Group Internal Audit
continuously assesses the adequacy
of actions implemented by
management to address previously
raised risks and control issues.

SPEAK UP
The Carlsberg Group has a Speak Up
system that enables employees to
report misconduct. Reports typically
relate to suspected violations of the
Carlsberg Code of Ethics & Conduct.

The Speak Up system is operated
by an external provider and allows
concerns to be brought to the
attention of the Group Speak
Up Review team anonymously,
confidentially and via multiple
channels.

The Speak Up Review team is
responsible for reviewing and
overseeing all reported Speak Up
matters. Furthermore, an Integrity
Committee, chaired by the CFO,
oversees the follow-up of major
Speak Up investigations and provides

a report to ExCom and the Audit
Committee at least quarterly.
The Speak Up Summary report
contains an overview of all open and
closed investigations during the
quarter and the time taken to resolve
cases.

The Speak Up Review Manual, which
clarifies how investigations should be
undertaken, is regularly updated to
reflect the most recent changes in
legislation and new tools used in
investigations.

In 2022, there was a relaunch of a
communication campaign to raise
awareness of the various Speak Up
channels available and the
importance of speaking up. In Q4
2022, a specific sexual harassment
awareness and prevention campaign
was launched. Similar campaigns will
be repeated every year.

Since the establishment of the Speak
Up system, some reports and their
subsequent investigation have led to
disciplinary sanctions, including
dismissal on the basis of violation of
the Code of Ethics & Conduct and/or
Group policies. The incidents have
not had any material impact on the
financial results of the Group.

More information regarding the
Speak Up system, including reported
concerns and disciplinary actions,
can be found in the ESG Report.

RISK MANAGEMENT

MANAGING
BUSINESS RISKS

In conducting our business and
executing our strategy, we
seek to manage risks in such a
way as to minimise the threats
they present.

The Executive Committee (ExCom)
is responsible for reviewing the
overall risk exposure associated with
the Group’s activities and ensuring
that appropriate actions are taken.

Our business is subject to a number
of risks and uncertainties that could
have both short-term and long-term
implications for the Group.

The aim of our risk management
approach is to address these risks
and uncertainties in due time.

GOVERNANCE STRUCTURE
The Supervisory Board is ultimately
responsible for the risk management
framework and has appointed the
Audit Committee to act on its
behalf in monitoring the
effectiveness of the Group’s risk
management.

The Audit Committee monitors
developments and ensures that plans
are in place for managing individual
risks, including strategic, operational,
financial and compliance risks.

SHORT- AND MID-TERM RISK
ASSESSMENT
Risks are assessed according to a
two-dimensional heat map that
estimates the impact of the risk on
operating profit or brand/image and
the likelihood of the risk materialising.

Based on this assessment, ExCom
identifies the high-risk issues for the
coming year. ExCom assigns risk
owners, who are responsible for
mitigating the risks through a
programme of risk management
activities.

Local and functional risk assessment
follows the same principles and
methodology as Group-level risk
assessment. Risk reporting is
incorporated in business reviews.

facilitating and following up on risk
action plans for the most significant
risks in connection with business
reviews.

LONG-TERM RISK ASSESSMENT
Based on input from various central
functions, including finance, legal,
sustainability, human resources and
investor relations, and regional
teams, the Group strategy team
identifies risks within the areas
of commercial & competition,
governance, consumer, macro-
economic and geopolitical
environment, reputation, supply
chain and climate.

For climate-related risks, see our
TCFD reporting on page 26.

Based on this risk identification,
ExCom evaluates and assesses
the Group’s risk exposure, applying
our two-dimensional heat map
methodology, and determines
appropriate actions.

Group Risk Management is
responsible for the Risk Management
Policy and Group Finance for

RISKS IDENTIFIED FOR 2023
The identified risks for 2023 are
shown in the box on the right. Based

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

on the heat map assessment, the
highest ranked risks are elaborated
on in the following, including in each
case a description of the risk and
associated mitigation efforts.

The risk movement paragraph
indicates whether the likelihood of
risk has increased, decreased or is
unchanged versus last year.

DIVESTMENT OF RUSSIAN BUSINESS
Risk movement
New.

Description
In March 2022, following Russia’s
invasion of Ukraine, the Group
announced its decision to seek a full
divestment of the Russian business.

As the Russian operations are an
integrated part of the Group, the
separation process is complex.
Successful completion of the process
of separating the business could be
influenced by the political situation in
Russia, as governmental approval is
required and that could potentially
prolong the process.

IDENTIFIED
RISKS
FOR 2023

RISKS WITH HIGHEST
POTENTIAL IMPACT AND
LIKELIHOOD
• Divestment of Russian

business

• Consumer price elasticity
• Economic instability/

recession
• Partnerships
• Legal and regulatory

compliance

• Supply chain-related
business interruption
• Cyber and IT security

OTHER IDENTIFIED RISKS
• Regulatory changes, incl.

duties

• Financial flexibility
• Consumer action in the

event of non-performance
on ESG matters

• Talent and workforce

shortage

• Corporate tax
• Ageing IT infrastructure

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

While the necessary steps for the
divestment were initiated alongside
the separation process, the overall
political situation in Russia is
uncertain. Presidential Decrees have
been issued, setting out prohibitions
and restrictions on the sale of certain
Russian companies, directly or
indirectly.

Mitigation
As is customary when disposing of
businesses, the Group has elected to
conduct a structured separation
process to eliminate the need for
transitional service arrangements to
the greatest extent possible.

Immediately after the announcement
of the intention to dispose of the
Russian operations, a project plan
was initiated, outlining the actions
required to complete all stages of
transferring the business. This
involved more than 150 separation
workstreams across business
functions.

The necessary steps for the
divestment were initiated alongside

the separation process. Since the
announcement, a process has been
running to clarify the impact of
sanctions and the Russian
government’s approval process,
select advisors, identify potential
buyers and formalise the sales
process. A buyer-screening process
has been initiated, and specific
requirements of the bidders defined.
A careful screening process is under
way to evaluate the bidders’
appropriateness to participate in any
transaction.

An offer process is expected to
commence in Q1 2023 with the aim
of signing a divestment agreement
by mid-2023.

Read more about the divestment of
the Russian business in section 5.1 of
the consolidated financial statements.

CONSUMER PRICE ELASTICITY
Risk movement
New.

Description
We are expecting continued inflation
in our cost base and will therefore
have to increase prices to offset this
inflation. Because of consumer price
elasticity, higher prices can
negatively impact volumes and
consequently profits due to under-
absorption of fixed costs.

Mitigation
The impact of higher prices will differ
between markets. We will continue
to apply our WINDFORCE 12
programme, including PIIC (see page
28), to ensure that we take sufficient
price increases. However, we will
balance the need for price increases
with consumers’ ability to pay.

As part of this, we will leverage value
management to seek the right
promotional and packaging mix,
while also utilising the strength of
our brand portfolio, particularly our
strong local power brands in markets
where consumers are less resilient to
the inflationary pressure.

ECONOMIC INSTABILITY/RECESSION
Risk movement
Unchanged versus last year.

Description
Across our regions, growing inflation,
interest rate increases, currency
movements and geopolitical tensions
are exacerbating the macroeconomic
risk.

Economic instability and a possible
recession pose a real risk to
disposable incomes, possibly
impacting beer markets negatively.

Mitigation
As a consequence of the COVID-19
pandemic, in the past couple of
years our planning has become

flexible and, when necessary, more
short term, to allow appropriate
actions and adjustments, also within
a short time horizon.

Our strategic priorities are well
founded in the business, enabling us
to leverage our value management
capabilities, continue our portfolio
optimisation efforts, including
premiumisation and continued
support of our core mainstream beer
portfolio, focus on alcohol-free
brews, and increasingly also on other
beverage categories, and leverage
our Funding the Journey culture.

Our exposure to exchange rate
fluctuations and our related actions,
including the impact on the income
statement and borrowings and our
hedging arrangements, are described
in sections 4.5, 4.6 and 4.7 of the
consolidated financial statements.

In addition, our low financial
leverage and our access to short-
term financing serve as protection
during financial uncertainty.

PARTNERSHIPS
Risk movement
Unchanged versus last year.

Description
We cooperate with partners in some
markets in Western Europe and Asia,
and we also have local joint venture

partners in some Asian and European
markets.

Cooperation with most of our partners
is positive. However, disagreements
with partners on the operational
management and strategic direction
of partnerships may limit our ability to
manage the growth and risk profile of
our business.

Over a period of time, we have had
serious disagreements with our
partner in Carlsberg South Asia Pte
Ltd (CSAPL), of which the Group
owns 67% and our partner 33%.
CSAPL owns 100% of our business in
India and 90% of our business in
Nepal. Several of the disagreements
pertaining to the Shareholders’
Agreement between Carlsberg and
our partner were referred to
arbitration in Singapore. See section
3.4 in the consolidated financial
statements for more information.

In Nepal, the local shareholder
owning the remaining 10% of the
shares in the business is a related
party to the Group’s partner in CSAPL.
Contrary to the Group’s legal and
contractual rights, the Group’s
influence on the business operations
in Nepal continues to be restricted
through actions that hamper its right
of decision making and insight into
the business. We have contested
these actions in Nepal through the
local courts. The outcome and the

timing of the process is very
unpredictable.

policies may lead to fines, claims,
and brand and reputation damage.

See sections 3.4, 5.4 and 5.5 of the
consolidated financial statements for
more information on our partnerships.

Mitigation
The Group continuously seeks to
promote a fair and mutually
beneficial development of its
partnerships in order to safeguard
their success.

We seek to have an ongoing
dialogue with our partners to identify
issues at an early stage. The relevant
members of ExCom are actively
involved in partner relationships,
participating in the ongoing
dialogues to ensure constructive
negotiations, and fast and effective
resolution of potential issues.

LEGAL AND REGULATORY
COMPLIANCE
Risk movement
Unchanged versus last year.

Description
Legal and regulatory compliance
risks include competition law and
data protection compliance (GDPR),
as well as non-compliance with
trade sanctions and anti-bribery &
corruption regulations. Failure to
comply with regulations and Group

The risk related to trade sanctions
is likely to persist, as sanctions
imposed on Russia are not expected
to be revoked anytime soon. The
Group has introduced screening
requirements to ensure that our
counterparties, banks and logistics
operators are not sanctioned entities
and that transactions are legal.

In recent years, the Group has
experienced competition-law dawn
raids in a few jurisdictions. Non-
compliance with competition law
is a real and growing risk, and the
Group is party to certain lawsuits and
disputes. These and their significance
are described in section 3.4 of the
consolidated financial statements.

Mitigation
We continuously strengthen the
Group-wide control framework
covering legal compliance areas,
including, but not limited to,
competition law, anti-bribery &
corruption, trade sanctions and data
protection.
We regularly review and, where
necessary, update relevant Group
legal and compliance policies, and
conduct compulsory training of all
relevant employees. In addition, we
are rolling out an enhanced third-
party screening process to reduce
bribery and sanction risks.

We actively set a strong tone from
the top and work with our Managing
Directors to communicate the
importance of compliance and how
to mitigate the highest areas of risk
in each market.

Read more about our compliance
efforts in the “Living by our Compass”
section of the ESG Report.

SUPPLY CHAIN-RELATED BUSINESS
INTERRUPTION
Risk movement
New.

Description
Risks associated with ensuring
sufficient supply of energy and
energy-intensive raw and packaging
materials, including CO2, increased
during 2022, particularly in Europe.
In Asia, supply constraints may
emerge due to fast growth.

Mitigation
To offset the risk of energy shortage,
during 2022 we launched several
initiatives in Western Europe,
including boiler conversion to
alternative fuels, installation of CO2
recovery at critical sites and track
tankers for redistribution of excess
CO2.

We also built up stocks of critical
materials, including glass bottles.
Ensuring the right capacity in all
markets is a key focus area for the

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

supply chain, and additional capacity
is being added in certain Asian
markets.

series of technological audits and
breach simulations.

While the threat landscape remains
difficult, especially with the latest
geopolitical challenges, we continue
to invest in improving our security
and mitigation activities.

CYBER AND IT SECURITY
Risk movement
Unchanged versus last year.

Description
Like all other businesses, the
Carlsberg Group relies heavily on
technology and IT infrastructure for
its day-to-day business. A cyber
attack or non-availability of IT
systems could have severe financial,
regulatory and reputational
consequences for our business.

Mitigation
Our Chief Information Security
Officer (CISO) leads an independent
cyber security function within our IT
organisation. The CISO coordinates
risk mitigation plans and activities
with ExCom and the Supervisory
Board.

As the cyber security threat
assessment has intensified in recent
years, we have strengthened our
protective work to counter the risk.

Furthermore, we deploy a wide array
of advanced defensive technologies,
as well as continuing to embed our
risk management framework in all
layers of the organisation. We
undertake regular testing of our
security controls via an ongoing

SUPERVISORY BOARD

SUPERVISORY
BOARD

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

The Supervisory Board members’ full CVs, including their skills and competencies, are available online at www.carlsberggroup.com/who-we-are/about-the-carlsberg-group/supervisory-board/

HENRIK POULSEN
CHAIR (SINCE 2022)

Nationality: Danish
Year of birth: 1967
Appointed (until): 2021 (2023)

MAJKEN SCHULTZ
DEPUTY CHAIR (SINCE 2022)

Nationality: Danish
Year of birth: 1958
Appointed (until): 2019 (2022)

HANS ANDERSEN

MIKAEL ARO

CARL BACHE

Nationality: Danish
Year of birth: 1955
Appointed (until): 1998 (2026)

Nationality:
Year of birth:
Elected (since): 2022 (2023)

Finnish
1965

Nationality: Danish
Year of birth: 1953
Appointed (until): 2014 (2023)

BOARD FUNCTION
Non-executive, independent director.

BOARD COMMITTEES
Nomination Committee (Chair),
Remuneration Committee.

PROFESSION
Non-executive board director,
Senior Advisor to A.P. Moller
Holding.

OTHER BOARD POSITIONS
Board Chair Faerch Group.
Board Deputy Chair Novo Nordisk.
Board Member Ørsted, Novo
Holdings, Bertelsmann SE & Co.

BOARD FUNCTION
Non-executive, non-independent
director.

BOARD COMMITTEES
Nomination Committee.

PROFESSION
Professor, Ph.D., Copenhagen
Business School.

OTHER BOARD POSITIONS
Board Chair Carlsberg Foundation.
Board Member Realdania.

BOARD FUNCTION
Employee representative.

BOARD COMMITTEES
None.

PROFESSION
Brewery worker, Carlsberg Supply
Company Danmark.

OTHER BOARD POSITIONS
None.

BOARD FUNCTION
Non-executive, independent
director.

BOARD COMMITTEES
Audit Committee.

PROFESSION
Senior Industry Adviser, Triton.

OTHER BOARD POSITIONS
Board Chair Kojamo, Glamox, Geia
Foods, Flokk, Esperi Care.
Board Member Habeo Group.

BOARD FUNCTION
Non-executive, non-independent
director.

BOARD COMMITTEES
Nomination Committee.

PROFESSION
Professor Emeritus, Ph.D., Dr.Phil.
University of Southern Denmark.

OTHER BOARD POSITIONS
Board Member Carlsberg Foundation.

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

The Supervisory Board members’ full CVs, including their skills and competencies, are available online at www.carlsberggroup.com/who-we-are/about-the-carlsberg-group/supervisory-board/

MAGDI BATATO

LILIAN FOSSUM BINER

RICHARD BURROWS

EVA VILSTRUP DECKER

PUNITA LAL

Nationality: Swiss
Year of birth: 1959
Appointed (until): 2018 (2023)

Nationality: Swedish
Year of birth: 1962
Appointed (until): 2019 (2023)

Nationality: Irish
Year of birth: 1946
Appointed (until): 2009 (2023)

Nationality: Danish
Year of birth: 1964
Appointed (until): 2014 (2026)

Nationality:
Year of birth:
Elected (since): 2022 (2023)

Indian
1962

BOARD FUNCTION
Non-executive, independent director.

BOARD FUNCTION
Employee representative.

BOARD FUNCTION
Non-executive, independent director.

BOARD COMMITTEES
Audit Committee, Remuneration
Committee.

PROFESSION
Executive Vice President and Head of
Operations, Nestlé.

OTHER BOARD POSITIONS
None.

BOARD COMMITTEES
Audit Committee (Chair).

PROFESSION
Non-executive board director.

BOARD COMMITTEES
Remuneration Committee (Chair),
Audit Committee, Nomination
Committee.

OTHER BOARD POSITIONS
Board Member Givaudan, Scania,
L.E. Lundbergföretagen, Alfa Laval,
a-connect.

PROFESSION
Non-executive board director.

OTHER BOARD POSITIONS
None.

BOARD COMMITTEES
None.

PROFESSION
Senior Director, Carlsberg
Breweries.

OTHER BOARD POSITIONS
None.

BOARD COMMITTEES
Nomination Committee.

PROFESSION
Non-executive board director.

OTHER BOARD POSITIONS
Board Member DBS Group Bank,
Cipla.

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

The Supervisory Board members’ full CVs, including their skills and competencies, are available online at www.carlsberggroup.com/who-we-are/about-the-carlsberg-group/supervisory-board/

ERIK LUND

OLAYIDE OLADOKUN

SØREN-PETER FUCHS OLESEN

TENNA SKOV THORSTED

Nationality: Danish
Year of birth: 1964
Appointed (until): 2015 (2026)

Nationality: British
Year of birth: 1986
Appointed (until): 2022 (2026)

Nationality: Danish
Year of birth: 1955
Appointed (until): 2012 (2023)

Nationality: Danish
Year of birth: 1993
Appointed (until): 2022 (2026)

BOARD FUNCTION
Employee representative.

BOARD COMMITTEES
None.

BOARD FUNCTION
Employee representative.

BOARD COMMITTEES
None.

PROFESSION
Head Brewer, Carlsberg Research
Laboratory.

PROFESSION
Project Leader, Carlsberg Research
Laboratory.

OTHER BOARD POSITIONS
None.

BOARD FUNCTION
Non-executive, non-independent
director.

BOARD COMMITTEES
Remuneration Committee.

PROFESSION
Professor, D.M.Sc. CEO of the
Danish National Research
Foundation.

OTHER BOARD POSITIONS
Board Member Carlsberg Foundation.

BOARD FUNCTION
Employee representative.

BOARD COMMITTEES
None.

PROFESSION
Sustainability Manager, Carlsberg
Danmark.

OTHER BOARD POSITIONS
None.

EXECUTIVE COMMITTEE

OUR SENIOR
MANAGEMENT TEAM

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

CEES ’T HART
CEO

Nationality: Dutch
Year of birth: 1958
Appointed: 2015

ULRICA FEARN
CFO

Nationality: Swedish
Year of birth: 1973
Appointed: 2023

JOÃO ABECASIS
EXECUTIVE VICE PRESIDENT,
ASIA
Nationality: Portuguese
Year of birth: 1972
Appointed: 2019

SØREN BRINCK
EXECUTIVE VICE PRESIDENT,
STRATEGY AND DIGITAL
Nationality: Danish
Year of birth: 1974
Appointed: 2021

GRAHAM FEWKES
EXECUTIVE VICE PRESIDENT,
WESTERN EUROPE
Nationality: British
Year of birth: 1968
Appointed: 2014

Prior to joining the Carlsberg Group,
Cees was CEO of the Dutch dairy
company Royal FrieslandCampina, a
position he had held since 2008.
Prior to FrieslandCampina, Cees
spent 25 years with Unilever, holding
management positions across
Eastern Europe, Western Europe and
Asia, with the last position being
member of the Europe Executive
Board. Cees is Chair of the
Supervisory Board of KLM and a
member of the Board of AFKLM.

Ulrica joined the Carlsberg Group on
1 January 2023. Before joining
Carlsberg, Ulrica was CFO of
Equinor, Norway. Prior to Equinor,
she was Director, Group Finance at
BT Group. She began her career at
Diageo, where she spent almost 20
years in various senior finance and
other management roles across
Europe, APAC and the USA.

João joined the Carlsberg Group in
2011 as CCO and later CEO of Super
Bock, our associate in Portugal. In
2016, he became Vice President for
smaller markets in the Western
Europe region. He has also served as
interim Managing Director of
Carlsberg Danmark. In 2017, he
became Managing Director of our
French business, Kronenbourg. He
became CCO and a member of
ExCom in 2019. Earlier in his career,
João held a range of sales and
marketing roles at Unilever.

Søren joined Carlsberg’s commercial
team in 2005. During his career at
Carlsberg, he has held various
management positions at Group,
regional and market level. From
2009 to 2019, he was Managing
Director in Denmark, Norway and
Greece, while most recently he was
SVP, Asia.
Søren is currently also acting EVP,
Group Commercial.

Graham joined the Carlsberg Group
as Vice President Commercial, Asia
in 2008, before becoming SVP of
Group Sales, Marketing & Innovation
in 2014. Prior to his current role, he
served as EVP, Asia from 2015 to
2021. Graham has strong experience
in the global drinks business, having
served in a wide range of
international sales and marketing
roles for Grand Metropolitan plc,
Foster’s Brewing Group and S&N plc.

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

JORIS HUIJSMANS
CHIEF HUMAN RESOURCES OFFICER

Nationality: Dutch
Year of birth: 1975
Appointed: 1 January 2022

LARS LEHMANN
EXECUTIVE VICE PRESIDENT,
CENTRAL & EASTERN EUROPE
Nationality: Danish
Year of birth: 1966
Appointed: 2019

VICTOR SHEVTSOV
EXECUTIVE VICE PRESIDENT,
SUPPLY CHAIN
Nationality: Russian
Year of birth: 1970
Appointed: 2021

Joris joined Carlsberg in 2016. Prior
to becoming CHRO in 2021, he
headed up Carlsberg Export &
License. Before that, he was
Managing Director, Urban
Development and New Business, and
VP, Group Strategy. Joris joined
Carlsberg with over 20 years of
FMCG industry and emerging
markets experience, including from
various international leadership roles
at Heineken.

Lars joined the Carlsberg Group in
2003 as Commercial Development
Director. Since then, he has held
several management positions,
including VP, Commercial for Eastern
Europe & BBH and head of Export,
License & Duty Free. In 2016, he
became Managing Director of
Carlsberg Malaysia. Prior to joining
Carlsberg, Lars was with Action
Nordic and Unilever Denmark.

Victor joined Carlsberg from PepsiCo
in 2015 as Vice President for our
supply chain in Asia. Victor’s solid
end-to-end supply chain expertise
has been accrued through various
supply chain roles, including several
operative and strategy roles within
supply chain across Europe and Sub-
Saharan Africa during his 20 years
with PepsiCo. Prior to PepsiCo, Victor
worked for Siemens.

SHARE INFORMATION

INFORMATION
FOR SHAREHOLDERS

CARLSBERG GROUP ANNUAL REPORT 2022 GOVERNANCE

Carlsberg A/S is listed on
Nasdaq Copenhagen. The
Company has around 57,000
registered shareholders.

The Company has two share classes:
Carlsberg A and Carlsberg B. An A
share carries 20 votes, while a B
share carries two votes and is
entitled to a preferential dividend.
The B share is included in the
Nasdaq OMX Nordic Large Cap and
OMXC20 blue-chip indices.

As a supplement to its Copenhagen
listing, the Company has established
a sponsored level 1 ADR (American
Depository Receipt) programme with
J.P. Morgan. The ADRs trade over-
the-counter in the USA under the
symbol CABGY. More information on
the ADR programme is available on
our investor website.

MAJOR SHAREHOLDERS
At 31 December 2022, the
Company’s largest shareholder was

CARLSBERG B SHARE 2022
(DKK)

SHAREHOLDER GEOGRAPHIC SPLIT
(excluding the Carlsberg Foundation
and treasury shares)

the Carlsberg Foundation with 29%
of the capital and 76% of the votes.
In accordance with section 29 of the
Danish Securities Trading Act,
Massachusetts Financial Services
Company (Boston, USA) has notified
Carlsberg that it too owns more than
5% of the share capital.

SHAREHOLDER RETURN
The Carlsberg Group’s dividend policy
stipulates an adjusted payout ratio of
around 50%. In addition, the Company
conducted four share buy-back
programmes in 2022. For more
information, see page 40.

INVESTOR RELATIONS
The Carlsberg Group aims to give
shareholders and the market the
best possible insight into factors
considered relevant for ensuring
market-efficient and fair pricing of
the Company’s shares. This is
achieved through the quality,
consistency and continuity of the
information provided to the market,
which is handled by the Group’s
Investor Relations department.

We observe a four-week silent
period prior to the publication of the
annual and half-year reports, and a
two-week silent period prior to the
Q1 and Q3 trading statements.

GROUP WEBSITE
www.carlsberggroup.com provides
comprehensive information about
the Group and its shares and bonds,
including Company announcements,
annual and half-year financial
statements and quarterly trading
statements, share prices and
financial data, investor presentations,
webcasts and transcripts, and a
financial and event calendar.

At the end of 2022, a total of
30 brokers had coverage of the
Company. The analysts’ names
and consensus estimates can be
found on the website.

1,200
1,000
800
600
400
200

Other 20%

Share information

n
a
J

b
e
F

r
a
M

r
p
A

y
a
M

n
u
J

u
J

g
u
A

p
e
S

t
c
O

v
o
N

c
e
D

DK
17%

UK
15%

US
48%

Number of issued shares¹

Number of issued shares,
excl. treasury shares¹

Carlsberg Foundation

Votes per share

Par value

Share class

Total

33,699,252

108,157,554

141,856,806

33,699,252

103,642,169

137,341,421

33,073,534

8,362,943

41,436,477

DKK 20

Share price, year-end

DKK 1,125.0

DKK 923.2

Proposed dividend per share

DKK 27.0

¹ At 31 December 2022.

Financial calendar 2023

Event
Annual General Meeting

Q1 trading statement

H1 interim financial
statement

Q3 trading statement

Date
13 March

27 April

16 August

31 October

CARLSBERG GROUP ANNUAL REPORT 2022 FORWARD-LOOKING STATEMENTS

Forward-looking statements

FORWARD-LOOKING
STATEMENTS

This Annual Report contains
forward-looking statements,
including statements about the
Group’s sales, revenues, earnings,
spending, margins, cash flow,
inventory, products, actions, plans,
strategies, objectives and guidance
with respect to the Group's future
operating results.

Forward-looking statements include,
without limitation, any statement
that may predict, forecast, indicate
or imply future results, performance
or achievements, and may contain
the words “believe, anticipate,
expect, estimate, intend, plan,
project, will be, will continue, will
result, could, may, might”, or any
variations of such words or other
words with similar meanings.

Any such statements are subject to
risks and uncertainties that could
cause the Group’s actual results to
differ materially from the results
discussed in such forward-looking
statements.

Prospective information is based on
management’s then current
expectations or forecasts. Such
information is subject to the risk that
such expectations or forecasts, or the
assumptions underlying such
expectations or forecasts, may
change.

The Group assumes no obligation to
update any such forward-looking
statements to reflect actual results,
changes in assumptions or changes in
other factors affecting such forward-
looking statements.

Some important risk factors that
could cause the Group’s actual results
to differ materially from those
expressed in its forward-looking
statements include, but are not
limited to: economic and geopolitical
uncertainty (including interest rates
and exchange rates), financial and
regulatory developments, demand
for the Group’s products, increasing
industry consolidation, competition
from other breweries, the availability
and pricing of raw materials and
packaging materials, cost of energy,

production- and distribution-related
issues, information technology
failures, breach or unexpected
termination of contracts, market-
driven price reductions, market
acceptance of new products, changes
in consumer preferences, launches of
rival products, stipulation of fair
value in the opening balance sheet of
acquired entities, litigation,
environmental issues and other
unforeseen factors.

New risk factors can arise, and it
may not be possible for management
to predict all such risk factors, nor to
assess the impact of all such risk
factors on the Group’s business or
the extent to which any individual
risk factor, or combination of factors,
may cause results to differ materially
from those contained in any forward-
looking statement.

Accordingly, forward-looking
statements should not be relied on
as a prediction of actual results.

Consolidated financial statements

CONSOLIDATED
FINANCIAL STATEMENTS

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL
STATEMENTS

Income statement ................................... 61

Statement of comprehensive
income ......................................................... 61

Statement of financial position ......... 62

Statement of changes in equity ........ 63

Statement of cash flows ...................... 64

Notes ............................................................ 65

PARENT COMPANY FINANCIAL
STATEMENTS

Statements .............................................. 135

Notes ......................................................... 138

REPORTS

Management statement ................... 145

Auditor’s reports ................................... 146

SECTION 1
OPERATING ACTIVITIES
1.1 Significant events in the period .............67
1.2 Segmentation of operations ..................67
1.3 Operating expenses, inventories

and deposit liabilities ................................70

1.4 Foreign exchange risk related

to earnings ...................................................72

1.5 Cash flow from operating

activities ........................................................73

1.6 Trade receivables and on-trade

loans ..............................................................74

SECTION 2
ASSET BASE AND RETURNS
2.1 Segmentation of assets and

returns ...........................................................78
Impairment ..................................................79

2.2
2.3 Intangible assets and property,

plant and equipment ................................85

SECTION 3
SPECIAL ITEMS, PROVISIONS AND
OTHER LIABILITIES
3.1 Special items ...............................................89
3.2 Provisions .....................................................90
3.3 Other liabilities ...........................................91
3.4 Contingent liabilities .................................91

SECTION 4
FINANCING COSTS, CAPITAL
STRUCTURE AND EQUITY
4.1 Financial income and expenses ............94
4.2 Net interest-bearing debt .......................95
4.3 Capital structure ........................................95
4.4 Borrowings and cash................................98
Interest rate risk .........................................99
4.5
4.6 Foreign exchange risk related to

net investments and financing
activities ..................................................... 100
4.7 Funding and liquidity risk ..................... 102
4.8 Derivative financial instruments......... 104

SECTION 5
ACQUISITIONS, DISPOSALS,
ASSOCIATES AND JOINT VENTURES
5.1 Discontinued operations and

Disposal group held for sale ............... 106
Investment model and risks ................ 110
5.2
5.3 Acquisitions and disposals ................... 111
5.4 Contingent considerations ................... 113
5.5 Associates ................................................. 114

SECTION 6
TAX
6.1
Income tax ................................................ 115
6.2 Tax assets and liabilities ...................... 117

SECTION 7
STAFF COSTS AND REMUNERATION
7.1 Staff costs ................................................. 118
7.2 Remuneration .......................................... 119
7.3 Share-based payments ........................ 119
7.4 Retirement benefit obligations

and similar obligations ......................... 121

SECTION 8
OTHER DISCLOSURE REQUIREMENTS
8.1 Earnings per share ................................. 124
8.2 Fees to auditors ...................................... 125
8.3 Related parties ........................................ 125
8.4 Events after the reporting period ...... 125

SECTION 9
BASIS FOR PREPARATION
9.1 Significant accounting estimates

and judgements ...................................... 126
9.2 General accounting policies ................ 126
9.3 Changes in accounting policies .......... 130
9.4 New legislation ....................................... 130

SECTION 10
GROUP COMPANIES
10 Group companies.................................... 131

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

INCOME STATEMENT

STATEMENT OF COMPREHENSIVE INCOME

DKK million

Revenue

Cost of sales

Gross profit

Sales and distribution expenses

Administrative expenses

Other operating activities, net

Share of profit after tax of associates

Operating profit before special items

Special items, net

Financial income

Financial expenses

Profit before tax

Income tax

Profit from continuing operations

Net result from Russian operations held for sale

Profit for the period

Attributable to

Non-controlling interests

Shareholders in Carlsberg A/S (net profit)

DKK

Earnings per share

Earnings per share of DKK 20 (EPS)

Continuing operations

Russian operations held for sale

Diluted earnings per share of DKK 20 (EPS-D)

Continuing operations

Russian operations held for sale

¹ Comparative figures for 2021 have been restated, cf. section 5.1.

2022

70,265

-38,198

32,067

-17,337

-4,229

901

11,470

-784

347

-1,072

9,961

-1,778

8,183

-8,075

108

2021¹

DKK million

Section

60,097

-31,528

28,569

-14,872

-3,979

336

10,129

703

571

-956

10,447

-2,154

8,293

-284

8,009

Profit for the period

Other comprehensive income

Retirement benefit obligations

Share of other comprehensive income in associates

Income tax

Items that will not be reclassified to the income statement

Foreign exchange adjustments of foreign entities

Fair value adjustments of hedging instruments

Income tax

Items that will be reclassified to the income statement

Other comprehensive income

Total comprehensive income

Attributable to

Non-controlling interests

Shareholders in Carlsberg A/S

7.4

5.5

6.1

4.1

6.1

1,171

-1,063

1,163

6,846

Total comprehensive income for the period arises from

Continuing operations

Russian operations held for sale

Total comprehensive income

2022

108

586

-73

513

-3,926

-759

100

-4,585

-4,072

-3,964

603

-4,567

6,944

-10,908

-3,964

2021

8,009

578

608

3,307

-323

3,067

3,675

11,684

1,120

10,564

10,430

1,254

11,684

Section

1.2

1.3.1

1.3.3

1.3.4

5.5

3.1

4.1

6.1

5.1

1.2

8.1

-7.6

50.1

-57.7

-7.6

50.0

-57.6

47.6

49.6

-2.0

47.4

49.4

-2.0

STATEMENT OF FINANCIAL POSITION

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

DKK million

ASSETS

Non-current assets

Intangible assets

Property, plant and equipment

Investments in associates

Receivables

Tax assets

Total non-current assets

Current assets

Inventories

Trade receivables

Tax receivables

Other receivables

Prepayments

Cash and cash equivalents

Current assets

Assets in disposal group held for sale

Total current assets

Total assets

Section

31 Dec. 2022

31 Dec. 2021

DKK million

Section

31 Dec. 2022

31 Dec. 2021

2.2, 2.3

5.5

1.6

6.2

1.3.1

1.6

4.4.2

5.1

EQUITY AND LIABILITIES

Equity

Share capital

Reserves

Retained earnings

Equity, shareholders in Carlsberg A/S

Non-controlling interests

49,223

23,679

5,523

936

1,731

68,475

26,648

5,172

1,075

1,922

81,092

103,292

Total equity

5,718

5,067

214

2,505

964

8,163

22,631

11,618

34,249

115,341

Non-current liabilities

Borrowings

Retirement benefit obligations

Tax liabilities

Provisions

Other liabilities

Total non-current liabilities

5,391

5,710

171

2,355

929

8,344

22,900

191

Current liabilities

23,091

Borrowings

126,383

Trade payables

Deposits on returnable packaging materials

Provisions

Tax payables

Other liabilities

Current liabilities

Liabilities in disposal group held for sale

Total current liabilities

Total liabilities

Total equity and liabilities

4.3.2

4.2, 4.4.1

7.4

6.2

3.2

3.3

4.2, 4.4.1

1.3.2

3.2

3.3

5.1

2,837

-41,711

70,776

31,902

2,820

34,722

22,865

1,557

4,841

2,304

305

31,872

5,781

21,917

1,627

807

1,012

13,503

44,647

4,100

48,747

80,619

115,341

2,905

-37,691

80,283

45,497

3,259

48,756

22,755

2,345

6,350

2,446

449

34,345

6,167

20,642

1,504

942

1,350

12,677

43,282

77,627

126,383

The Russian operations are presented as assets/liabilities in disposal group held for sale in 2022. Comparative figures
have not been restated, meaning the Russian operations are included line by line in the statement of financial position
for 2021. For more information, see section 5.1.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF CHANGES IN EQUITY

DKK million

2022

Equity at 1 January

Profit for the period

Other comprehensive income

Total comprehensive income for the period

Cancellation of treasury shares

Share-based payments

Dividends paid to shareholders

Share buy-back

Non-controlling interests

Total changes in equity

Equity at 31 December

Section

Shareholders in Carlsberg A/S

4.3.4

4.3.2

7.3

4.3.3

Share
capital

Currency
translation¹

Hedging
reserves¹

2,905

-37,198

-68

-3,691

-493

-329

Total
reserves

-37,691

-4,020

-68

2,837

-3,691

-40,889

-329

-822

-4,020

-41,711

Retained
earnings

80,283

-1,063

516

-547

-3,389

-4,400

-1,336

-9,507

70,776

Non-
controlling
interests

3,259

1,171

-568

603

-1,042

-439

2,820

Total

45,497

-1,063

-3,504

-4,567

-3,389

-4,400

-1,336

-13,595

31,902

Total
equity

48,756

108

-4,072

-3,964

-4,431

-4,400

-1,336

-14,034

34,722

¹ The currency translation and hedging reserves within equity related to Russian operations held for sale represent losses of DKK 39.7bn and DKK 0.6bn respectively (31 December 2021: losses of DKK 37.0bn and DKK 0.5bn). Upon completion of
the disposal, the accumulated currency translation reserve within equity related to the Russian operations will be reclassified from equity to the income statement and included in the net result from the Russian operations.

DKK million

2021

Equity at 1 January

Profit for the period

Other comprehensive income

Total comprehensive income for the period

Cancellation of treasury shares

Share-based payments

Dividends paid to shareholders

Share buy-back

Non-controlling interests

Acquisition of entities

Deconsolidation of entities

Total changes in equity

Equity at 31 December

Section

Shareholders in Carlsberg A/S

4.3.4

4.3.2

7.3

4.3.3

Share
capital

Currency
translation

Hedging
reserves

Total
reserves

Retained
earnings

2,963

-40,215

-609

-40,824

-58

3,017

116

3,133

-58

2,905

3,017

-37,198

116

-493

3,133

-37,691

78,599

6,846

585

7,431

-3,187

-3,600

957

-57

1,684

80,283

Non-
controlling
interests

2,624

1,163

-43

1,120

-499

-16

131

-101

635

3,259

Total

40,738

6,846

3,718

10,564

-3,187

-3,600

957

-57

4,759

45,497

Total
equity

43,362

8,009

3,675

11,684

-3,686

-3,600

941

-101

5,394

48,756

An adjustment has been made to the opening balance of equity for 2021 to correct a prior-period error in the share of equity attributed to non-controlling interests. The adjustment reduced the non-controlling interests’ share of equity by DKK
1.4bn with a corresponding increase in the share of equity attributed to the shareholders in Carlsberg A/S, cf. section 9.1.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF CASH FLOWS

DKK million

Operating profit before special items

Depreciation, amortisation and impairment losses

Operating profit before depreciation, amortisation and impairment losses

Section

2.3

Other non-cash items

Change in trade working capital

Change in other working capital

Restructuring costs paid

Interest etc. received

Interest etc. paid

Income tax paid

Cash flow from operating activities

Acquisition of property, plant and equipment and intangible assets

Disposal of property, plant and equipment and intangible assets

Change in on-trade loans

Total operational investments

Free operating cash flow

Acquisition and disposal of subsidiaries, net

Acquisition and disposal of associates, net

Acquisition and disposal of financial investments, net

Change in financial receivables

Dividends received

Total financial investments

Other investments in real estate

Total other activities

Cash flow from investing activities

Free cash flow

Shareholders in Carlsberg A/S

Share buy-back

Non-controlling interests

External financing

Cash flow from financing activities

Net cash flow from continuing operations

Net cash flow from Russian operations held for sale

Net cash flow

Cash and cash equivalents at 1 January

Foreign exchange adjustment of cash and cash equivalents

Cash and cash equivalents included in disposal group held for sale

Cash and cash equivalents at 31 December

¹ Comparative figures for 2021 have been restated, cf. section 5.1.

1.5

2.3

1.6

5.3

4.3.3

4.4.1

5.1

4.4.2

2022

11,470

4,187

15,657

-867

1,908

-465

-171

213

-1,223

-2,103

12,949

-4,018

412

129

-3,477

9,472

-48

-20

196

282

410

-3,065

9,884

-3,389

-4,400

-1,042

-1,128

-9,959

-75

1,771

1,696

8,344

-683

-1,194

8,163

2021¹

10,129

4,238

14,367

-354

733

616

-353

-916

-1,883

12,278

-3,903

257

148

-3,498

8,780

-621

-48

-189

291

-567

-2

-4,067

8,211

-3,187

-3,600

-550

-1,608

-8,945

-734

662

-72

7,958

458

8,344

SECTION 1

OPERATING
ACTIVITIES

70.3bn

REVENUE (DKK)
Revenue grew by 16.9% to DKK 70,265m (2021:
DKK 60,097m). Revenue was positively
impacted by the recovery of the on-trade in
many markets in the first part of the year due
to fewer restrictions. In addition, revenue was
positively impacted by a positive brand mix and
price increases during the year. The negative
net acquisition impact was due to the
deconsolidation of Gorkha Brewery at the end
of 2021.

REVENUE DEVELOPMENT (%)

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Operating profit before depreciation,
amortisation and impairment losses (EBITDA)
increased by 9.0% to DKK 15,657m. The
EBITDA margin declined by 160bp to 22.3%,
impacted by the lower gross margin and higher
operating expenses.

Group operating profit grew by 13.2% to DKK
11,470m, driven by strong growth in Asia and
Western Europe, while operating profit in
Central & Eastern Europe was up by only 1.1%,
impacted by the war in Ukraine.

The operating margin declined by 60bp
to 16.3%, mainly due to the higher commodity
prices and energy costs.

OPERATING PROFIT DEVELOPMENT (DKKbn)

The positive currency impact related to the
Chinese and Swiss currencies, which more than
offset the depreciation of the Laotian kip and
Ukrainian hryvinia.

45.6%

GROSS MARGIN
Although gross profit/hl increased by 7%, the
gross margin declined by 190bp to 45.6% due
to increased cost of sales.

11.5bn

OPERATING PROFIT (DKK)
Operating expenses increased by 14%, mainly
impacted by significantly higher sales and
marketing expenses in support of our brands
and activities, and higher distribution expenses
as a result of the on-trade recovery and higher
energy costs. Operating expenses as a
percentage of revenue declined by 70bp.

-1.1bn

NET PROFIT (DKK)
Special items, net, amounted to DKK -784m
(2021: DKK 703m), primarily due to goodwill
impairment in Central & Eastern Europe.
Special items are detailed in section 3.1.

Financial items, net, amounted to DKK -725m
(2021: DKK -385m). Excluding currency gains
and losses, financial items, net, amounted to
DKK -506m (2021: DKK -333m). The increase
was mainly due to 2021 being positively
impacted by the reversal of the previous write-
down of the loan to our partner in Carlsberg
South Asia Pte Ltd. (CSAPL). Net interest
expenses decreased slightly due to lower
average funding costs. Financial items are
detailed in section 4.1.

Tax totalled DKK -1,778m (2021: DKK -2,154m).
The effective tax rate declined by 270bp to
17.9%, mainly as a result of a one-off
adjustment related to prior years. Tax is
detailed in section 6.1.

Profit for the period, continuing operations, was
DKK 8,183m (2021: DKK 8,293m).

2018-2020 as reported. 2021-2022 for continuing operations.

15.6%-0.9%2.2%2021OrganicAcqFX202254565860626466687072201820192020202120220.02.04.06.08.010.012.0CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

plant and equipment and intangible assets
(CapEx) including real estate amounted to DKK
-4,016m (2021: DKK -3,905m).

Total financial investments amounted to DKK
+410m (2021: DKK -567m), change is mainly
attributable to deferred considerations related
to the acquisition of Marston’s brewing
activities and the deconsolidation of the
business in Nepal, both in 2021 as detailed in
section 5.3.

FREE CASH FLOW (DKKbn)

2018-2020 as reported. 2021-2022 for continuing operations.

Free operating cash flow

Free cash flow

Net result from Russian operations held for sale
amounted to DKK -8.1bn due to the DKK -9.9bn
write-down of the Russian business as detailed
in section 5.1.

The Carlsberg Group’s share of profit for the
period was DKK -1,063m (2021: DKK 6,846m).
Non-controlling interests’ share of profit for the
period was DKK 1,171m (2021: DKK 1,163m).

69.3

EARNINGS PER SHARE,
ADJUSTED (DKK)
Adjusted earnings per share increased by 43.6%
to DKK 69.3 (2021: DKK 48.3), driven by the
higher operating profit and a lower tax rate,
and supported by the share buy-back, which
more than offset higher financial costs.

Earnings per share decreased by 116.0% to DKK
-7.6 (2021: DKK 47.6) due to the write-down in
Russia.

EARNINGS PER SHARE (DKK)

12.9bn

OPERATING CASH FLOW (DKK)
Cash flow from operating activities amounted
to DKK 12,949m (2021: DKK 12,278m).

The change in trade working capital was DKK
+1,908m (2021: DKK +733m), mainly due to
strong cash management discipline and higher
trade payables. Average trade working capital
to revenue for the year was -21.5%, roughly on
par with 2021 (-19.4%).

The change in other working capital was DKK
-465m (2021: DKK +616m), mainly impacted by
VAT.

Restructuring costs paid amounted to DKK
-171m (2021: DKK -353m). Net interest etc. paid
amounted to DKK -1,010m (2021: DKK -848m).
The increase was mainly due to the settlement
of financial instruments. Corporation tax paid
was DKK -2,103m (2021: DKK -1,883m).

9.9bn

FREE CASH FLOW (DKK)
Free cash flow amounted to DKK 9,884m
(2021: DKK 8,211m), while free operating cash
flow amounted to DKK 9,472m (2021: DKK
8,780m).

Operational investments totalled DKK -3,477m
(2021: DKK -3,498m). Acquisition of property,

EPS

EPS-A

20182019202020212022-20-1001020304050607020182019202020212022024681012SECTION 1.1

SECTION 1.2

SIGNIFICANT EVENTS
IN THE PERIOD

SEGMENTATION OF
OPERATIONS

On 28 March 2022, the Group announced its
decision to seek a full divestment of the
Russian business. Management considered that
the Russian operations met the criteria to be
classified as held for sale, as the business was
available for immediate sale in its current
condition, and the actions to complete the sale
had been initiated and were expected to be
completed within one year from the date of
reclassification. The Russian business was
classified as a disposal group held for sale and
measured at fair value less cost of disposal.

The fair value assessment is based on
estimations of the net present value of
expected future cash flows, and not on offers or
price indications from potential buyers. The fair
value of the business in Russia is highly
sensitive to changes in the key assumptions
applied.

As of 1 January 2022 and until completion of
the divestment, the Russian business will be
presented separately in the main statements.
Measurement of Group performance and
calculation of key performance indicators are
carried out for the continuing operations only.
Comparative figures for 2021 for the income
statement and the statement of cash flows
have been restated accordingly, along with the
associated disclosures. The statement of
financial position has not been restated.

For more details of discontinued operations and
disposal group held for sale, see section 5.1.

Segmentation of income statement

DKK million

2022

Revenue

Total cost

Share of profit after tax of associates

Operating profit before special items

Special items, net

Financial items, net

Profit before tax

Income tax

Profit from continuing operations

Net result from Russian operations held for sale

Profit for the period

Operating margin

2021

Revenue

Total cost

Share of profit after tax of associates

Operating profit before special items

Special items, net

Financial items, net

Profit before tax
Income tax

Profit from continuing operations

Net result from Russian operations held for sale

Profit for the period

Operating margin

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

CHANGE IN CENTRAL & EASTERN EUROPE
Following the announcement on 28 March
2022 that the Group would seek full disposal of
the business in Russia, the Group’s Central &
Eastern Europe segment was changed effective
1 January 2022. Accordingly, the Russian
business was separated out of the Central &

Eastern Europe region and reported as Russian
operations held for sale. There have not been
any other changes to the segment structure.
The disclosure in the Annual Report follows the
new segmentation as used in the internal
reporting to the Executive Committee since the
announcement.

Western
Europe

34,888

-30,245

323

4,966

Asia

23,682

-18,553

306

5,435

Central &
Eastern
Europe

11,679

-9,415

2,282

-1,414

-1,370

Not
allocated

Beverages,
total

Non-
beverage

Carlsberg
Group, total

70,265

-59,627

675

11,313

-794

-714

9,805

-1,844

7,961

-8,075

-114

16.1%

60,097

-50,219

259

10,137

623

-385

10,375
-2,115

8,260

-284

7,976

16.9%

-69

226

157

-11

156

222

-85

-8

72
-39

70,265

-59,696

901

11,470

-784

-725

9,961

-1,778

8,183

-8,075

108

16.3%

60,097

-50,304

336

10,129

703

-385

10,447
-2,154

8,293

-284

8,009

16.9%

14.2%

22.9%

19.5%

30,501

-26,324

195

4,372

19,459

-14,653

4,855

10,128

-7,885

2,257

-1,357

-1,347

14.3%

24.9%

22.3%

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 1.2 (CONTINUED)

SEGMENTATION OF
OPERATIONS

REVENUE
The Group’s revenue arises primarily from the
sale of beverages to its customers.

In 2022, total revenue was positively impacted
by volume growth and revenue/hl growth
across all regions, partly offset by the
deconsolidation of Gorkha Brewery.

Other revenue by category is sales of products
other than beverages that do not drive any
volume, such as merchandise, services, by-
products etc. In aggregate, other revenue
accounts for around 1% of Group total revenue
and is therefore not considered material.

Not allocated revenue, DKK 16m (2021:
DKK 9m), consisted of DKK 733m (2021: DKK
894m) in revenue and DKK -717m (2021: DKK
-885m) from eliminations of sales between the
geographical segments.

The distribution of revenue between beer and
other beverages relative to volumes is largely
the same across regions.

Revenue and excise duties

DKK million

2022

2021

Revenue, including excise
duties

Excise duties

Revenue

95,147

-24,882

70,265

82,883

-22,786

60,097

Geographical allocation of revenue

DKK million

2022

2021

OPERATING PROFIT BEFORE
SPECIAL ITEMS
Not allocated operating profit before special
items, DKK -1,370m (2021: DKK -1,347m),
related to central costs not managed by the
regions, including costs of developing branding
activities to support the strategic initiatives and
general costs of centralised functions as well as
various eliminations of DKK 21m (2021: DKK
67m). Group operating profit grew by 13.2%,
supported by growth in all three regions.
Organic growth in operating profit was 12.2%.

Denmark (Carlsberg A/S’
domicile)

China

United Kingdom

Other countries

Total

4,487

13,781

7,070

44,927

70,265

3,897

11,946

5,965

38,289

60,097

OPERATING MARGIN
The operating margin declined to 16.3%
compared to 16.9% in 2021. The decline was
due to margin pressure from higher commodity
prices.

VOLUMES
The organic growth in total volumes was a
result of growth in Asia and Western Europe,
while Central & Eastern Europe was impacted
by declining volumes in Ukraine. Reported
volume growth was negatively affected by the
deconsolidation of Gorkha Brewery at the end
of 2021.

NON-CONTROLLING INTERESTS
The Group’s non-controlling interests consist of
Lao Brewery, Carlsberg Chongqing Breweries
Group, Carlsberg Malaysia Group and Carlsberg
Marston's Brewing Group, as well as other
minor interests, primarily in the Asia region.
Non-controlling interests are not individually
material to the Group’s total profit.

Group financial performance

Revenue by category

DKK million

Beer revenue
Other beverages

Other revenue

Total revenue

Volumes (million hl)

Beer

Other beverages

Total volume

DKK million
Revenue

Operating profit

2022

53,466
15,928

871

2021

46,720
12,705

672

70,265

60,097

Operating margin (%)

Organic

Acq., net

4.2%

12.9%

5.7%

-0.6%

-0.1%

-0.5%

Change

15.6%

12.2%

-0.9%

-1.0%

2.2%

2.0%

Change

Reported

3.6%

12.8%

5.2%

16.9%

13.2%

-60bp

2022

102.4

23.0

125.4

70,265

11,470

16.3

2021

98.8

20.4

119.2

60,097

10,129

16.9

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The Group considers all terms and activities in
contracts with customers in order to determine the
performance obligation, the transaction price and the
allocation of the transaction price.

If the consideration in a contract includes a variable
amount, the Group estimates the consideration to
which it will be entitled in exchange for transferring
goods to the customer. The variable consideration is
estimated at contract inception based on expected
sales volumes using historical and year-to-date sales
data and other information about trading with the
individual customer or with a group of customers.

The Group estimates discounts using either the
expected value method or the most likely amount
method, depending on which method better predicts
the amount of consideration to which it will be
entitled.

The most likely amount method is used for contracts
with a single contract sum, while the expected value
method is used for contracts with more than one
threshold due to the complexity and the activities
agreed with the individual customer.

Certain contracts related to specific major events that
are held within such a short time period that it is not
possible to sell all the goods during the event (e.g.
football matches) give the customer the right to
return the goods within a specified period.

The Group uses the expected value method to
estimate the goods that will not be returned, as this
method best predicts the amount of variable
consideration to which the Group will be entitled. For
goods that are expected to be returned, the Group
recognises a refund liability instead of revenue.

Management makes judgements when deciding
whether supporting activities with a customer should
be classified as a discount or a marketing expense.
Generally, activities with the individual customer are
accounted for as a discount, whereas costs related to
broader marketing activities are classified as
marketing expenses.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Reported figures
Reported figures are analysed by looking at the
impact of organic growth, net acquisitions and foreign
exchange effects.

The net acquisition effect is calculated as the effect of
acquisitions and divestments, including any share
obtained from an increase/decrease in ownership of
associates, for a 12-month period from the
acquisition/divestment date.

The foreign exchange effect is calculated as the
difference between the figures for the current
reporting period translated at the current exchange
rates and at the exchange rates applied in the
previous reporting period.

Organic growth is the remaining growth that is not
related to acquisitions, divestments or foreign
exchange effects.

SECTION 1.2 (CONTINUED)

SEGMENTATION OF
OPERATIONS

Whether the Group is acting as a principal or an agent
is evaluated by management on a country-by-country
basis. The Group has concluded that it is the principal
in its revenue arrangements because it controls the
goods before transferring them to the customer.

Excise duties, taxes and fees
The classification of duties, taxes and fees paid to
local authorities or brewery organisations etc. requires
judgements on the classification to be made by
management.

Locally imposed duties, taxes and fees are typically
based on product type, alcohol content, consumption
of certain raw materials, such as glue, plastic or metal
in caps, and energy consumption. These are classified
as either sales- or production-related.

Excise duties are generally imposed by the tax
authorities as taxes on consumption and are collected
by the Group on behalf of the authorities when the
goods are transferred to the customers and thereby
ready for consumption.

Taxes and fees related to the input/use of goods in
production, distribution etc. are recognised as part of
the cost of the goods or services purchased. The type
of authority or organisation imposing the duty, tax or
fee and the objective of this are key factors when
determining the classification.

ACCOUNTING
POLICIES

Revenue
Recognition and measurement
Revenue from contracts with customers comprises
sales of goods, royalty income, rental income from
non-stationary equipment, service fees and sales of
by-products.

Revenue from the sale of own-produced finished
goods, goods for resale (third-party products) and by-

products is recognised at the point in time when the
control of goods and products is transferred to the
customer, which is generally upon delivery. For
contracts providing the customer with a right of return
within a specified period, the Group considers the
timing of recognition.

Revenue from sales- or usage-based royalties is
recognised when (a) the customer subsequently sells
or uses the goods, or (b) the performance obligation
to which some or all of the sale- or usage-based
royalty has been allocated is satisfied (or partially
satisfied), whichever is later.

Revenue from contracts with customers is measured
at an amount that reflects the expected consideration
for those goods. Amounts disclosed as revenue
exclude discounts, VAT and excise duties collected on
behalf of authorities.

The Group considers whether contracts include
separate performance obligations to which a portion
of the transaction price needs to be allocated. In
determining the transaction price, the Group considers
the effects of variable consideration. No element of
financing is deemed present, as payment is generally
made on the basis of cash on delivery or up to 30
days of credit.

Variable consideration
The Group offers various discounts depending on the
nature of the customer and business.

Discounts comprise off-invoice discounts, volume- and
activity-related discounts, including specific promotion
prices offered, and other discounts. Furthermore,
discounts include the difference between the present
value and the nominal amount of on-trade loans to
customers, cf. section 1.6.

Off-invoice discounts arise from sales transactions
where the customer immediately receives a reduction
in the sales price. This also includes cash discounts
and incentives for early payments.

Volume- and activity-related discounts is a broad
term covering incentives for customers to sustain
business with the Group over a longer time and may
be related to a current campaign or a sales target
measured in volumes or total value. Examples include

discounts paid as a lump sum, discounts for meeting
certain sales targets or progressive discounts offered
in step with increasing sales to a customer.

Other discounts include listing fees, i.e. fees for certain
listings on shelves, in coolers or in favourable store
locations, as specific promotions of this nature are
closely related to the volumes sold.

Segment information
The Group’s beverage activities are segmented
according to the three geographical regions where
sales take place. These regions make up the Group’s
reportable segments.

The segmentation reflects the geographical and
strategic management, decision and reporting
structure applied by the Executive Committee for
monitoring the Group’s strategic and financial targets.
Segments are managed based on business
performance measured as operating profit before
special items.

Not allocated comprises income and expenses
incurred for ongoing support of the Group’s overall
operations and strategic development. The expenses
include costs of running central functions and
marketing, such as global sponsorships.

The non-beverage segment, comprising research and
real estate activities, is managed separately and
therefore shown separately instead of geographically
segmented.

The geographical allocation of revenue and non-
current assets is based on the selling entities’ domicile
and comprises countries individually accounting for
more than 10% of the Group’s consolidated revenue
as well as the domicile country.

Decisions on restructuring, acquisition and divestment
of entities included in special items as well as on
financing (financial income and expenses) and tax
planning (income tax) are made based on information
for the Group as a whole and therefore not
segmented.

The segmentation of the Group’s assets and returns is
disclosed in section 2.1.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 1.3

OPERATING
EXPENSES,
INVENTORIES AND
DEPOSIT LIABILITIES

1.3.1 COST OF SALES AND INVENTORIES
Cost of sales increased by 21% compared with
2021, mainly due to higher commodity prices
and energy costs across regions and the
organic increase in volumes in Asia and
Western Europe. Cost of sales per hl increased
by 15% compared with 2021.

Cost of sales

DKK million

Cost of materials

Direct staff costs

Amortisation and depreciation
Indirect production
overheads

Purchased finished goods and
other costs

Total

2022

21,655

1,521

2,536

2021

17,190

1,307

2,749

4,788

3,902

7,698

38,198

6,380

31,528

Inventories increased by 6% compared with
2021, mainly as a result of finished goods being
impacted by the increase in cost of sales per hl.

Commodity price risks are, in particular,
associated with externally sourced input
materials, such as malt (barley), cans
(aluminium), paper, sugar and glass & plastic
(PET) bottles. The management of commodity
price risks is coordinated centrally and aimed at
achieving stable and predictable prices in the
medium term.

As the underlying markets for the specified
categories vary, so does the way in which they
are hedged against price increases.

The most common form of hedging is fixed-
price purchase agreements with suppliers in
local currencies.

For barley and aluminium, the two most
significant commodity exposures, Group policy
is to have a minimum of 70% hedged for a
given year no later than at the end of the third
quarter of the previous year, with a target
hedge ratio of 90% at the beginning of the
year in question.

A significant part of the Group’s barley
exposure for 2022 had therefore been hedged
through fixed-price purchase agreements
established in 2021. Likewise, the majority of
the exposure for 2023 was hedged in 2022.

In the Group’s long-term purchase agreements
for cans, the aluminium price is variable and
based on the global market price of aluminium
(London Metal Exchange, LME).

Inventories

DKK million

Raw materials
Work in progress

Finished goods

Total

2022

2,333
344

3,041

5,718

2021

2,311
333

2,747

5,391

In 2022, the aluminium price risk was hedged
using derivative financial instruments applying
the same target hedge percentages as are
applied for barley. The same has been done for
2023. The fair values of the derivative financial
instruments are specified in section 4.8.

For sugar, rolling forward hedges are used, with
suppliers fixing prices linked to official indices,
for example NY11. As for barley and aluminium,
the majority of the 2022 sugar exposure had
been hedged in 2021. Likewise, the majority of
the exposure for 2023 was hedged in 2022.

Other commodities, such as PET resins, paper,
rice and corn are also hedged directly via
suppliers fixing prices to the extent possible.

For electricity and natural gas, used in
production of the Group’s own products, most
markets in Central & Eastern Europe and Asia
are regulated with no possibility to hedge
prices. In Western Europe, where most markets
allow forward hedging, the majority of the
Group’s exposure is hedged on a rolling basis.

In January 2023 the Group started to hedge
fuel, linked to distribution expenses, via
financial contracts – following a similar set-up
to how aluminium is hedged.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

At least once a year, management assesses whether
the standard cost of inventories approximates the
actual cost. During the year, the standard cost is
revised if it deviates by more than 5% from the actual
cost. Indirect production overheads are calculated on
the basis of relevant assumptions as to capacity
utilisation, production time and other factors.

The calculation of the net realisable value of
inventories is relevant to packaging materials, point-
of-sale materials and spare parts. The net realisable
value is normally not calculated for beer and soft
drinks due to their limited shelf-life, which means that
slow-moving goods must be scrapped instead.

ACCOUNTING
POLICIES

Cost of sales comprises cost of materials used in
own-produced finished goods, including malt (barley),
hops, glass, cans, other packaging materials, direct
labour, indirect production overheads and standard
cost variations. Further, it comprises purchased
finished goods that include cost of point-of-sale
materials and third-party products sold to customers.

Hedging of raw material price risk

DKK million

Sensitivity assuming
100% efficiency

Aluminium

Change

Effect
on OCI

Tonnes
purchased

Average
price (DKK)

2022

2021

20%

381

313

116,454

85,440

18,304

15,741

Sensitivity assuming
100% efficiency

Time of maturity

2022

85,440

2023

93,608

2024

22,846

Time of maturity

Energy

2022

Change

20%

Effect
on OCI

MWh
purchased

Average
price (DKK)

< 1 year

1-5 years

> 5 years

289,966

420

99,123

190,843

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 1.3 (CONTINUED)

OPERATING
EXPENSES,
INVENTORIES AND
DEPOSIT LIABILITIES

Indirect production overheads comprise indirect
supplies, wages and salaries, amortisation of brands
and software, as well as maintenance and
depreciation of machinery, plant and equipment used
for production.

The cost of purchased finished goods, raw and
packaging materials and point-of-sale materials
includes the purchase cost and costs directly related
to bringing inventories to the relevant place of sale
and getting them ready for sale, for example
insurance, freight and duties.

Inventories are measured at the lower of standard
cost (own-produced finished goods) and weighted
average cost (other inventories), or net realisable
value. The net realisable value is the estimated selling
price less costs of completion and costs necessary to
make the sale, also taking into account marketability,
obsolescence and developments in expected selling
price.

The cost of scrapped/impaired goods is expensed in
the function (line item) responsible for the loss, i.e.
losses during distribution are included in distribution
expenses, while scrapping of products due to sales not
meeting forecasts is included in sales expenses.

1.3.2 DEPOSITS ON RETURNABLE
PACKAGING MATERIALS
Deposits on returnable packaging materials
amounted to DKK 1,627m (2021: DKK 1,504m).
The capitalised value of returnable packaging
materials was DKK 1,794m (2021: DKK 1,867m).

The capitalised value of returnable packaging
materials exceeds the deposits because each of
the returnable packaging items circulates a
number of times in the market and some
markets have regulations that require the
deposit value to be set lower than the cost of
the returnable packaging materials.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Management assesses the local business model to
determine whether the Group has a legal or
constructive obligation to accept returns of packaging
materials from the market and the level of control.
This entails the Group considering, among other
things, the return rate and the annual circulation in
the individual markets. These factors are assessed
annually. Returnable packaging materials controlled
by the Group are capitalised as property, plant and
equipment and depreciated over the expected useful
life.

The deposit on returnable packaging materials is
estimated based on movements during the year in
recognised liabilities, loss of returnable packaging
materials in the market, planned changes in
packaging types and historical information about
return rates.

ACCOUNTING
POLICIES

Returnable packaging materials that the Group
controls through a legal or constructive obligation are
capitalised as property, plant and equipment.

Returnable packaging materials are depreciated over
3-10 years. The accounting policies for property, plant
and equipment are further described in section 2.3.

The obligation to refund deposits on returnable
packaging materials is measured on the basis of
deposit price, an estimate of the number of bottles,
kegs, cans and crates in circulation, and expected
return rates.

1.3.3 SALES AND DISTRIBUTION
EXPENSES
Marketing expenses increased as marketing
activities were resumed at levels similar to
before COVID-19. Distribution expenses were
impacted by the volume growth and the 9%
increase in cost per hl was driven by higher fuel
costs. Total marketing, sales and distribution
expenses increased by 17%.

1.3.4 OTHER OPERATING
ACTIVITIES, NET
Other operating activities are secondary to the
principal activities of the Group and include
income and expenses relating to rental
properties, restaurants, on-trade loans, research
activities, and gains and losses on disposal of
intangible assets and property, plant and
equipment.

Sales and distribution expenses

Other operating activities, net

2022

5,793

5,120

6,424

2021

4,757

4,542

5,573

17,337

14,872

DKK million

Marketing expenses

Sales expenses

Distribution expenses

Total

ACCOUNTING
POLICIES

Marketing expenses consist of expenses for brand
marketing and trade marketing.

Brand marketing is an investment in the Group’s
brands and consists of brand-specific investments in
the development of communication vehicles, the use
of these to drive the sale of branded products, sales
campaigns and sponsorships.

Trade marketing is promotional activities directed
towards customers, such as the supply of point-of-
sale materials, promotional materials and trade
offers.

Sales expenses comprise costs relating to general
sales activities, write-downs for bad debt losses,
wages and salaries as well as depreciation and
impairment of sales equipment. Distribution expenses
comprise costs incurred in distributing goods, wages
and salaries, and depreciation and impairment of
distribution equipment.

DKK million

2022

2021

Gains and losses on disposal
of property, plant and
equipment and intangible
assets, net

On-trade loans, net

Real estate, net

Research centres, net

Other, net

Total

ACCOUNTING
POLICIES

-107

-95

Gains and losses on disposal of intangible assets and
property, plant and equipment are determined as the
sales price less selling costs and the carrying amount
at the disposal date.

On-trade loans, net, comprise the effective interest on
the loans measured at amortised cost less
impairment.

Expenses relating to research activities comprise
research in Denmark and France less funding received
from the Carlsberg Foundation for the operation of
the Carlsberg Research Laboratory and grants
received to fund research. The funding and grants are
recognised in the income statement in the same
period as the activities to which they relate. Product
development costs are included in cost of sales.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

chosen to hedge a portion of Carlsberg
Ukraine’s expenses in EUR and USD by
designating bank deposits in these currencies as
hedging instruments. Carlsberg Kazakhstan
holds intercompany deposits in EUR and USD.
The revaluation of these is recognised in
financial items, and they are not designated as
cash flow hedges, but will in economic terms
give the Group some protection from
depreciation of the local currency, KZT.

TRANSLATION RISK
The Group is exposed to risk from translation of
foreign entities into the Group’s presentation
currency, DKK.

The single largest translation impact in respect
of operating profit in 2022 was CNY due to the
9.0% appreciation of the currency compared
with 2021 and the relative share of the Group’s
operating profit generated in China. Looking
into 2023, and following the partial write-down
of the net investment in Russia, the most
significant currency volatility exposure in terms
of operating profit and translation of net
investments in foreign entities is CNY.

The Group has chosen not to hedge the
exposure arising from translation of revenue or
earnings in foreign currencies. To reduce the
risk, the Group has raised debt denominated in
the currencies in which the Group generates

significant earnings and cash flow as further
described in section 4.6.

Impact on operating profit
Developments in exchange rates between
DKK and the functional currencies had a
positive impact of 2.0% on operating profit
measured in DKK.

The development in the RUB exchange rate
does not impact operating profit but had a
positive impact of 24.2% on the net result from
Russian operations held for sale. The modest
impact compared with the 32.7% change in the
average exchange rate for the full year was due
to the timing of the majority of the DKK 9.9bn
write-down of the assets in disposal group held
for sale in March 2022, cf. section 5.1.

Entities in

The eurozone

China

Norway
United
Kingdom

Switzerland

Sweden

Laos

Russia

Functional
currency

Change in average FX
rate 2021 to 2022

EUR

CNY

NOK

GBP

CHF

SEK

LAK

RUB

9.0 %

0.7 %

0.5 %

7.9 %

-4.5 %

-21.0 %

32.7 %

SECTION 1.4

FOREIGN EXCHANGE
RISK RELATED TO
EARNINGS

The majority of the Group’s activities take place
outside Denmark and in currencies other than
DKK. Foreign exchange risk is therefore a
principal financial risk for the Group, and
exchange rate fluctuations can have a
significant impact on the income statement.

The risk from exposure to fluctuations in EUR/
DKK is considered to be limited due to
Denmark’s fixed exchange rate policy towards
EUR and is consequently not hedged.

REVENUE BY CURRENCY (%)

2022 (2021)

TRANSACTION RISKS ON PURCHASES
AND SALES
The Group is exposed to transaction risks on
purchases and sales in currencies other than the
local functional currencies. The Group aims to
hedge 70-90% of future cash flows in
currencies other than the local functional
currency on a four-quarter rolling basis.

Western Europe
For the entities in Western Europe, a major part
of the purchases in foreign currencies is in EUR.
This also applies for markets with a functional
currency other than EUR.

Hedging of EUR against the local currencies
will effectively eliminate a significant part of
the currency risk in the entities’ operating profit
in local currency. At Group level, these hedges
are effectively a hedge of (parts of) the revenue
in the relevant currency and are accounted
for as cash flow hedges, cf. section 4.8. The
hedged amounts and the sensitivity analysis
regarding these hedges are shown in
section 4.6.4.

Asia
The transaction risk is considered to be less
significant due to lower sales and purchases in
currencies other than the local functional
currencies as well as the high correlation
between USD and most of the Asian currencies.
Furthermore, the currencies are expensive to
hedge and, in some cases, not possible to
hedge at all. As a consequence, the risk is not
hedged.

Central & Eastern Europe
The largest foreign exchange risk in Central &
Eastern Europe relates to Ukraine and
Kazakhstan and the purchase of raw and
packaging materials denominated in foreign
currencies. For 2022 and 2023, the Group has

CNY 20% (20%)EUR 18% (19%)GBP 10% (10%)DKK 9% (9%)NOK 7% (7%)CHF 6% (5%)SEK 4% (4%)PLN 4% (4%)LAK 3% (3%)Other 19% (19%)CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 1.5

CASH FLOW FROM
OPERATING
ACTIVITIES

The change in trade working capital amounted
to DKK 1,908m (2021: DKK 733m), mainly due
to strong cash management discipline and
higher trade payables.

Cash flow from the change in other working
capital declined by DKK 465m (2021: increase
of DKK 616m), impacted by VAT, accruals for
variable pay and provisions.

Average trade working capital to revenue for
the year was -21.5% (2021: -19.4%).

The change in on-trade loans amounted to
DKK 129m (2021: DKK 148m).

Other specifications of cash flow from operating activities

DKK million

Section

2022

2021

Other non-cash items

Share of profit after tax of associates

Gain on disposal of property, plant and equipment and intangible
assets, net

5.5

2.3

Share-based payments

Other items

Total

Trade working capital

Inventories

Trade receivables

Trade payables, duties payable and deposits on returnable packaging
materials

Total

Other working capital

Other receivables

Other payables

Retirement benefit obligations and other liabilities related to operating
profit before special items

Unrealised foreign exchange gains/losses

Total

-901

-79

-867

-1,271

-232

3,411

1,908

-495

134

-72

-32

-465

-336

-77

-23

-354

-539

-1,710

2,982

733

-272

1,096

-204

-4

616

Restructuring costs paid amounted to
DKK -171m (2021: DKK -353m), a large
part of which relates to termination benefits
to employees made redundant due to
optimisations and reorganisations across the
Group.

Net interest etc. paid amounted to DKK -1,010m
(2021: DKK -848m). The increase was largely
due to settlement of derivative financial
instruments.

Income tax paid amounted to DKK -2,103m
(2021: DKK -1,883m).

Supplier finance arrangements A number of
the Group’s suppliers participate in supplier
finance arrangements, with a supply chain
finance provider and related financial
institutions acting as a funding partner. When
suppliers participate in these programmes, they
have the option of receiving early payment
from the funding partner of invoices sent
to Carlsberg.

The arrangement is exclusively between the
supplier and the supply chain finance provider

and separate from Carlsberg’s relationship with
its suppliers. Carlsberg’s liability to pay invoices
is unaffected by the supplier finance
arrangement and whether or not the suppliers
opt for early payment, and the liability is
recognised in trade payables until the due date
of the invoice, which is in no case more than
180 days from the invoice date. Cessation of
the supplier finance arrangement would not
constitute a significant risk in terms of liquidity
because of the amounts involved and the
number of supply chain finance providers.

Sale of receivables Carlsberg has chosen to sell
some of its trade receivables in selected
Western European markets in non-recourse
factoring agreements to expedite cash
collection from groups of customers. Carlsberg
does not carry any credit risk on these
customers and has no continuing involvement
in these trade receivables, which have therefore
been derecognised.

The impact on average trade working capital
from the use of supplier finance arrangements
and factoring is limited, as the utilisation is
similar to previous years.

ACCOUNTING
POLICIES

Trade payables are recognised initially at fair value
and subsequently measured at cost. Trade payables
comprise purchase of goods and services, including
payables to supplier finance vendors, and
retrospective rebates to customers and are part of the
normal working capital cycle. The cash flow arising
from all trade payables is part of cash flow from
operating activities.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

The distribution of receivables broken down by
country is affected by market-specific changes
in payment patterns. For receivables from sale
of goods and services, the distribution is
furthermore impacted by the value of
receivables sold. The overall level of receivables
sold in non-recourse factoring schemes was
similar to the level in 2021.

On-trade loans recognised in other operating
activities, net

DKK million

2022

2021

Interest and amortisation of
on-trade loans
Losses and write-downs on
on-trade loans

On-trade loans, net

-17

OTHER RECEIVABLES
Other receivables primarily comprise VAT and
similar government receivables, interest
receivables and other financial receivables,
which are associated with low risk.

RECEIVABLES FROM SALES OF GOODS AND
SERVICES
(BROKEN DOWN BY COUNTRY)

ON-TRADE LOANS
(BROKEN DOWN BY COUNTRY)

2022 (2021)

SECTION 1.6

TRADE RECEIVABLES
AND ON-TRADE
LOANS

The Group’s non-current receivables consist
mainly of on-trade loans that fall due more
than one year from the reporting date. Of the
total non-current receivables, DKK 166m (2021:
DKK 160m) falls due more than five years from
the reporting date.

The carrying amount of receivables
approximates their fair value. For on-trade
loans, the fair value is calculated as discounted
cash flows using the interest rate at the
reporting date.

ON-TRADE LOANS
Under certain circumstances, the Group grants
loans to on-trade customers in France, the UK,
Switzerland, Germany and Sweden. On-trade
loans are spread across a large number of
customers/debtors and consist of several types
of loan, including loans repaid in cash or
through reduced discounts and guarantees for
loans provided by third parties, cf. section 3.4.
The operating entities monitor and control
these loans in accordance with Group
guidelines.

The average effective interest rate on loans to
the on-trade was 3.5% (2021: 3.2%). The
interest income is recognised in other operating
activities.

Receivables included in the statement of financial position

DKK million

2022

Receivables from sales of goods and services

On-trade loans

Other receivables

Total receivables

2021

Receivables from sales of goods and services

On-trade loans

Other receivables

Total receivables

Non-
current

Current

Total

Receivables

Trade
receivables

Other
receivables

644

292

936

776

299

1,075

4,825

242

5,067

5,458

252

5,710

2,505

2,355

4,825

886

2,797

8,508

5,458

1,028

2,654

9,140

UK 16% (21%)Finland 8% (7%)Sweden 8% (6%)France 8% (6%)Poland 5% (5%)India 4% (4%)Ukraine 2% (4%)Other 49% (47%)Germany 30% (26%)Switzerland 25% (23%)France 24% (24%)UK 12% (17%)Sweden 9% (10%)

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 1.6 (CONTINUED)

TRADE RECEIVABLES
AND ON-TRADE
LOANS

Total accumulated allowances for impairment
losses on trade loans were DKK 438m (2021:
DKK 464m).

The share of trade receivables that is past-due
increased from 15% to 18%.

1.6.1 CREDIT RISK
In 2022, receivables not past due amounted to
78% (2021: 81%) of total gross receivables. The
past-due share of gross loans to on-trade
customers was 34% (2021: 31%).

The credit risk is being closely managed in the
markets, and assessed in light of rising
instability across markets due to unpredictable
energy prices and rising inflation and interest
rates. The credit risk from the COVID-19

pandemic decreased. Although the virus is still
circulating, the impact on society has lessened
significantly, and governments did not impose
extensive new lockdowns and restrictions
during 2022, except for some areas in Asia. The
impact on the global risk pattern is evaluated at
both local and Group level. Across regions and
markets, customers are being impacted by
unpredictable energy prices and rising inflation
and interest rates. The market volatility and
uncertainty remains high, as customers in many
markets had not fully recovered from the

COVID-19 impact and are now faced with a
challenging macroeconomic environment.

The estimated impairment losses consider the
expected impact from the increased risk of
default across markets caused by unpredictable
energy prices and rising inflation and interest
rates. The increased credit risk on both trade
receivables and on-trade loans observed across
markets is expected to continue into 2023.

Credit risk on receivables

DKK million

2022

Gross
receivables

Loss
allowance

Receivables,
net

DKK million

Weighted
average
loss rate

2021

Gross
receivables

Loss
allowance

Receivables,
net

Weighted
average
loss rate

Receivables from sales of goods and services

Not past due

Overdue 1-30 days

Overdue 31-90 days

Overdue > 90 days

Receivables from sales of goods and services

On-trade loans

Not past due

Overdue 1-30 days

Overdue 31-90 days

Overdue > 90 days

On-trade loans

Other receivables

Not past due

Overdue 1-30 days

Overdue 31-90 days

Overdue > 90 days

Other receivables

Total

4,453

483

191

311

5,438

873

410

1,324

2,168

107

449

2,813

9,575

-126

-133

-62

-292

-613

-104

-7

-327

-438

-16

-1,067

4,327

350

129

4,825

769

886

2,168

107

433

2,797

8,508

Not past due

28%

32%

94%

Overdue 1-30 days

Overdue 31-90 days

Overdue > 90 days

Receivables from sales of goods and services

On-trade loans

12%

Not past due

Overdue 1-30 days

23%

80%

Overdue 31-90 days

Overdue > 90 days

On-trade loans

Other receivables

Not past due

Overdue 1-30 days

Overdue 31-90 days

Overdue > 90 days

Other receivables

Total

5,155

479

371

6,075

1,035

389

1,492

2,073

110

398

2,679

10,246

-143

-88

-49

-337

-617

-139

-22

-303

-464

-3

-5

-17

-25

-1,106

5,012

391

5,458

896

1,028

2,070

110

381

2,654

9,140

18%

70%

91%

13%

40%

78%

SECTION 1.6 (CONTINUED)

TRADE RECEIVABLES
AND ON-TRADE
LOANS

ACCOUNTING ESTIMATES
AND JUDGEMENTS

On-trade loan agreements are complex, cover several
aspects of the customer relationship and may vary
from agreement to agreement. Management assesses
the recognition and classification of income and
expenses for each agreement, including the allocation
of payments from the customer between revenue,
discounts, interest (other operating activities) and
repayment of the loan.

Management also assesses both individually and on a
portfolio basis whether developments in local
conditions for on-trade customers could impact the
expected credit losses.

Exposure to credit risk on receivables is managed
locally, and credit limits are set as considered
appropriate for the customer, taking into account the
current local market conditions.

Development in impairment losses on receivables

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

The local entities assess the credit risk and adhere to
Group guidelines, which include setting credit limits,
encouraging cash payment, purchasing credit
insurance and holding collateral.

In assessing credit risk, management analyses the
need for impairment of trade receivables and on-trade
loans due to customers’ inability to pay. Credit risk
remains high and is expected to continue in 2023.

The local entities manage and control these loans in
accordance with Group guidelines.

The credit risk on on-trade loans can be reduced by
means of collateral and pledges of on-trade movables
(equipment in bars, cafés etc.). The fair value of the
pledged on-trade movables cannot be estimated
reliably but is assessed to be insignificant, as they
cannot readily be reused.

At year-end 2022, management continued to assess
the lifetime expected credit losses for both trade
receivables and on-trade loans in line with 2021.

ACCOUNTING
POLICIES

The Group applies the simplified approach to measure
expected credit losses. This entails recognising a
lifetime expected loss allowance for all trade
receivables. Loss rates are determined based on
grouping of trade receivables sharing the same credit
risk characteristics and past-due days.

Regarding on-trade loans and loans to associates, a
loss allowance is recognised based on 12-month or
lifetime expected credit losses, depending on whether
a significant increase in credit risk has arisen since
initial recognition.

Receivables are recognised initially at fair value and
subsequently measured at amortised cost less loss
allowance or impairment losses. Trade receivables
comprise sale of goods and services as well as short-
term on-trade loans to customers. Other receivables
comprise VAT receivables, loans to partners and
associates, interest receivables and other financial
receivables.

In certain markets, the Group enters into factoring
agreements on a non-recourse basis, which involves
selling trade receivables to a factor. Trade receivables
subject to factoring agreements are derecognised
once the criteria for derecognition have been met and
all substantial risk and rewards transferred. The Group
does not have any continuing involvement once the
receivables have been derecognised.

Expected credit losses are assessed for portfolios of
receivables based on customer segments, historical
information on payment patterns, terms of payment
and concentration maturity. The expected impact
includes the risk of insolvencies due to lack of
liquidity. The portfolios are based on on-trade and
off-trade customers, and on-trade receivables and
loans.

On-trade loans carry a higher risk than trade
receivables and are concentrated in a few markets.

DKK million

2022

Impairment at 1 January

Impairment losses recognised

Realised impairment losses

Reversed impairment losses

Acquisition of entities, net

Foreign exchange adjustments

Transferred to disposal group held
for sale

Impairment at 31 December

Receivables
from sales
of goods
and services

On-trade
loans

Other
receivables

-617

-135

-613

-464

-114

104

-438

-25

-4

-16

2021

Total

-1,514

-296

638

-40

Total

-1,106

-253

179

-1,067

-1,106

Total

For on-trade loans, any difference between the
present value and the nominal amount at inception is
treated as a prepaid discount to the customer, and the
discount is recognised in the income statement in
accordance with the terms of the agreement.

The market interest rate is used as the discount rate,
corresponding to the money market rate based on the
maturity of the loan with the addition of a risk
premium. The effective interest on these loans is
recognised in other operating activities, net. The
amortisation of the difference between the discount
rate and the effective interest rate is included as a
discount in revenue.

On-trade loans

DKK million

Loans provided

Repayments

Amortisation of on-trade loans

2022

-261

192

198

129

2021

-356

340

164

148

SECTION 2

ASSET BASE
AND RETURNS

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

115.3bn

TOTAL ASSETS (DKK)
Total assets declined by DKK 11.0bn, mainly
due to the decision to seek a full divestment of
the Russian business, which resulted in a write-
down of the Russian business of DKK 9.9bn.

Intangible assets amounted to DKK 49.2bn at
31 December 2022 (2021: DKK 68.5bn), mainly
due to the carve-out of the Russian business
and the impairment of goodwill in Central &
Eastern Europe.

ASSET BASE (DKKbn)

Property, plant and equipment totalled
DKK 23.7bn (2021: DKK 26.6bn), mainly
impacted by the reclassification of Russia.

Current assets declined by DKK 0.3bn to DKK
22.6bn, primarily due to a decline in trade
receivables of DKK 0.6bn, impacted by the
reclassification of the Russian business to
disposal group held for sale and an increase in
inventories of DKK 0.3bn, impacted by higher
cost of sales, stocking in Asia prior to the
Chinese New Year and the reclassification of
the Russian business. Other receivables mainly
increased due to fair value adjustment linked to
higher aluminium prices. Cash and cash
equivalents amounted to DKK 8.2bn (2021:
DKK 8.3bn).

4.0bn

CAPEX (DKK)
CapEx increased by DKK 115m. Asia and Central
& Eastern Europe were the main contributors,
driven by higher investments in filling capacity.
CapEx to amortisation and depreciation,
excluding right-of-use assets, increased to
106% (2021: 101%).

15.2%

ROIC
Return on invested capital (ROIC) increased
by 270bp to 15.2% as a result of higher
operating profit, a lower effective tax rate,
which was impacted by a one-off adjustment,
and improved working capital. ROIC excluding
goodwill improved by 800bp to 41.6%.

CAPEX1 AND AMORTISATION/
DEPRECIATION2 (DKKbn)

RETURN ON INVESTED CAPITAL2
(% 12-MONTH AVERAGE)

CapEx

Amortisation and depreciation

CapEx/revenue

1 Excluding the purchase of the Brooklyn brand rights in 2020.

2 2018-2020 as reported. 2021-2022 for continuing operations.

95.14.6-5.3-3.9-1.1-16.572.9Asset base, openingAcquisitions and disposals, incl. leases, netForeign exchange adjustmentsAmortisation/depreciationImpairment losses etc.Reclassified to disposalgroup held for sale, cf. section 5.1Asset base, closing201820192020202120221.02.03.04.05.04.0%5.0%6.0%7.0%8.0%ROICROIC excl. goodwill201820192020202120226121824303642CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.1

SEGMENTATION OF
ASSETS AND
RETURNS

Following the classification of the Russian
operations as held for sale in March 2022, the
segmentation of assets and returns is presented
only for the continuing operations.

Invested capital for 2021 has been restated to
include only the continuing operations so as to
align it with the restatement of operating profit

and support the calculation of a meaningful
ROIC for 2021.

At year-end, invested capital was down by
DKK 3.4bn, primarily due to developments in
currencies and goodwill impairment in Central
& Eastern Europe.

Non-current assets comprise intangible assets
and property, plant and equipment owned by
the segment/country, even if the income is
earned outside the segment/country that owns
the asset.

They further include non-current financial
assets other than financial instruments and tax
assets.

Not allocated comprises supporting companies
without brewing activities and eliminations of
investments in subsidiaries, receivables and
loans.

Geographical allocation of non-current assets

DKK million

Denmark
(Carlsberg A/S'
domicile)

China

France

Other countries

Total

2022

2021

4,017

15,906

11,100

47,402

78,425

4,122

15,876

11,121

69,176

100,295

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The calculation of return on invested capital (ROIC)
uses operating profit before special items adjusted for
tax based on the effective tax rate, and invested
capital excluding assets in disposal group held for
sale, including assets held for sale and trade
receivables sold, and excludes contingent
considerations and income tax.

ACCOUNTING
POLICIES

The Group’s assets and returns are segmented on the
basis of geographical regions in accordance with the
management reporting for the current year, cf. section
1.2.

Invested capital

DKK million

2022

2021

Total assets excluding assets
in disposal group held for sale,
cf. section 5.1

Less

Tax assets

Financial receivables, hedging
instruments and receivables
sold

Cash and cash equivalents

Assets included

Trade payables

Deposits on returnable
packaging materials

Provisions, excl. restructurings

Other liabilities, excl. hedging
instruments and contingent
consideration

Liabilities offset

Invested capital

Goodwill

Invested capital excl. goodwill

Invested capital, average

103,723

104,294

2022

Invested capital

-1,731

-1,940

Invested capital excl. goodwill

Investments in associates

Acquisition of property, plant and equipment and
intangible assets

615

-8,163

94,444

-21,917

-1,627

-3,027

-7,662

-34,233

60,211

-38,453

21,758

62,053

926

-8,217

95,063

-19,060

-1,504

-3,209

-7,655

-31,428

63,635

-39,892

23,743

63,206

Amortisation and depreciation

Impairment losses, net

Return on invested capital (ROIC)

ROIC excl. goodwill

2021

Invested capital

Invested capital excl. goodwill

Investments in associates

Acquisition of property, plant and equipment and
intangible assets

Amortisation and depreciation

Impairment losses, net

Return on invested capital (ROIC)

ROIC excl. goodwill

Western
Europe

34,098

13,857

2,361

1,363

1,781

11.1%

26.2%

35,582

15,317

2,271

1,340

1,796

9.1%

19.9%

Asia

18,910

3,652

2,402

1,860

1,350

308

20.9%

112.4%

20,244

4,281

2,363

1,800

1,488

460

20.3%

153.4%

Central &
Eastern
Europe

Not
allocated

Beverages,
total

Non-
beverage

Carlsberg
Group,
total

6,625

3,671

643

601

723

27.7%

49.7%

7,402

3,738

566

605

23.6%

47.0%

-474

132

106

-761

191

102

59,159

20,706

4,796

3,998

3,838

1,130

15.2%

43.0%

62,467

22,575

4,669

3,897

3,991

477

12.8%

35.4%

1,052

727

-10

1,168

501

-86

60,211

21,758

5,523

4,016

3,853

1,120

15.2%

41.6%

63,635

23,743

5,170

3,905

4,008

391

12.5%

33.6%

SECTION 2.2

IMPAIRMENT

2.2.1 RECOGNISED IMPAIRMENTS
Following Russia’s invasion of Ukraine and the
decision to dispose of the Russian operations,
Russia was separated from the Central &
Eastern Europe CGU. The CGU was
subsequently tested for impairment, leading to
a write-down of goodwill of DKK 700m in
March 2022.

Impairment tests of goodwill and brands with
indefinite useful life were prepared at the
reporting date , including an update of the
impairment test of the Central & Eastern
Europe CGU. The tests did not identify further
impairments.

In addition to the goodwill impairment write-
down, the Group recognised impairment losses
of DKK 233m on returnable packaging in
certain markets in Asia, DKK 22m on sales
equipment and returnable packaging in Ukraine
and DKK 172m on other items of property, plant
and equipment, in total DKK 427m in 2022.

In 2021, impairment losses of DKK 107m were
recognised in relation to land use rights in
China, DKK 130m on returnable packaging in
certain markets in Asia, DKK 21m on other
items of property, plant and equipment and
DKK 244m on investments in associates in
China.

Reversals of impairment losses of DKK 111m in
Denmark and China relating to assets that had
been reclassified as held for sale were also
recognised in 2021.

Impairment of non-current assets

DKK million

Intangible assets

Goodwill

Other intangible assets

Total

Property, plant and equipment

Plant, machinery and equipment

Reversal of impairment losses

Total

Other non-current assets

Assets held for sale

Investment in associates

Total impairment losses, net

Of which recognised in special items, cf. section 3.1

Impairment losses, Russian operations, net, cf. section 5.1

2022

2021

700

703

427

-10

1,120

786

9,949

107

151

-111

244

391

175

947

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Impairment of goodwill and other assets in
Central & Eastern Europe
The long-term outlook for operations and cash
flows for the Central & Eastern Europe CGU
has been negatively impacted by the war in
Ukraine and an increasingly challenging
macroeconomic environment. This indicated a
decrease in the recoverable amount, for which
reason management performed an impairment
test for the Central & Eastern Europe region,
leading to a write-down of goodwill of DKK
700m in March 2022.

The impairment test was performed again at
the reporting date with updated forecasts and
assumptions. The reassessment of the expected
future growth in the Central & Eastern Europe
CGU and of the recoverable amount did not
result in further impairment write-downs. Our
business in Ukraine outperformed the full-year
expectations for 2022 that were applied in the
impairment test in March 2022, resulting in an
increase in the recoverable amount calculated
at the reporting date. The economic challenges
in Ukraine are, however, expected to continue,
affecting the long-term assumptions applied in
the impairment test. The economic situation in
Ukraine remains very uncertain, and the indirect
impact of the war on the Central & Eastern
Europe CGU in the form of rising commodity
prices and energy costs coupled with higher
interest and inflation rates has been and is
expected to remain significant.

The war in Ukraine resulted in the loss or
destruction of sales equipment and returnable
packaging materials deployed in the market,
leading to a write-down of DKK 22m on
property, plant and equipment.

Other impairments
In certain markets in Asia, the return systems
are not legally required but have been

developed as a result of market practice in the
beverage industry. The collection rates for
returnable packaging have declined significantly
since 2020 compared with previous years as a
result of COVID-19 restrictions. Consequently,
the Group reclassified the returnable packaging
in the relevant markets from being recognised
as property, plant and equipment to being
recognised as inventory, thus ensuring timely
cost recognition. This led to the recognition of
impairment losses of DKK 233m compared to
DKK 130m recognised in 2021 for lost
returnable packaging.

Impairment of the Russian operations held for
sale
Following the reclassification of the Russian
operations as held for sale and separation out
from the Central & Eastern Europe CGU, an
impairment loss of DKK 9,949m was recognised
in net result from Russian operations held for
sale, cf. section 5.1.

In 2021, impairment losses of DKK 950m on
brands were recognised in the Russian
operation.

Significant amounts of goodwill and brands
Goodwill and brands with indefinite useful life
relating to the acquisitions of Kronenbourg,
Chongqing Brewery Group and the 40% non-
controlling interest in Carlsberg Breweries A/S
each accounted for 10% or more of the total
carrying amount of goodwill and brands with
indefinite useful life at the reporting date.
Goodwill from these acquisitions has been
allocated to CGUs based on the geographical
segmentation.

The international brands acquired with the 40%
non-controlling interest in Carlsberg Breweries
A/S and Kronenbourg 1664 are individually
material and specified in section 2.2.3.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.2 (CONTINUED)

IMPAIRMENT

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Identification of cash-generating units
The Group’s management structure reflects the
geographical segments, cf. section 1.2, and decisions
are made by the regional managements responsible
for performance, operating investments and growth
initiatives in their respective regions.

There is significant vertical integration of the
production, logistics and sales functions, supporting
and promoting optimisations across the Group or
within regions.

Assets, other than goodwill and brands with regional
and global presence, are allocated to individual cash-
generating units (CGUs), being the level at which the
assets generate largely independent cash inflows. As
the Group operates with local sales and production
organisations, the cash inflows are generated mostly
locally, and the CGUs are therefore usually identified
at country level.

The determination of CGU allocation is made, and
cash inflows are assessed in connection with the
purchase price allocation within 12 months from the
date of acquisition.

Goodwill
Goodwill does not generate largely independent cash
inflows on its own and is therefore allocated to the
Group’s geographical segments, which is the level at
which it is monitored for internal management
purposes.

At the time of acquisition of entities, goodwill is
allocated to a CGU. The structure and groups of CGUs
are reassessed every year. The Group gained control
of Wernesgrüner Brewery in 2021. The goodwill
recognised on this acquisition was allocated to the
Western Europe CGU.

Entities classified as held for sale and measured at
fair value less costs of disposal are removed from the
CGU to which they are allocated at the time of
classification as held for sale.

Brands
Cash flows for brands are separately identifiable and
brands are therefore tested individually for
impairment. This test is performed in addition to the
test for impairment of goodwill.

The following brands are considered significant when
comparing their carrying amount with the total
carrying amount of brands with indefinite useful life:
• International brands
• Kronenbourg 1664

International brands is a group of brands recognised
in connection with the acquisition of the 40% non-
controlling interest in Carlsberg Breweries A/S and
allocated to Western Europe. The carrying amount is
not allocated to individual brands.

Following the classification of the Russian business as
held for sale, the brands recognised in Russia are no
longer tested individually for impairment. Instead any
impairment of the value of the Russian disposal group
held for sale is allocated first to goodwill of the
disposal group and subsequently pro rata to other
assets of the disposal group, including brands.

Corporate assets
The Group has identified capitalised software relating
to the Group’s ERP systems as corporate assets, and
as such these are peripheral to the generation of cash
inflow. The Group’s ERP landscape is closely linked to
the internal management structure, and the identified
assets are therefore tested for impairment at the CGU
level to which goodwill is allocated.

Other non-current assets
Other non-current assets are tested for impairment
when indications of impairment exist.

For property, plant and equipment, management
performs an annual assessment of the assets’ future
application, for example in relation to changes in
production structure, restructurings or brewery
closures.

For investments in associates, examples of indications
of impairment are loss-making activities or significant
changes in the business environment.

Key considerations in impairment tests

Goodwill

CGU level of test

Geographical segment

Method to estimate recoverable amount

Value in use

Brands

Individual brand

Value in use

Method to estimate present value of
future cash flows

Expected value approach: multiple
probability-weighted cash flows

Traditional approach: single most
likely future cash flows

Discount rate

Risk-free rate

Risk-adjusted rate

ACCOUNTING
POLICIES

Goodwill and brands with indefinite useful life are
subject to an annual impairment test, performed
initially before the end of the year of acquisition. The
test is performed at the level where cash flows are
considered to be generated: either at CGU level or at
the level of a group of CGUs. All assets are tested if
an event or circumstance indicates that the carrying
amount may not be recoverable. If an asset’s carrying
amount exceeds its recoverable amount, an
impairment loss is recognised. The recoverable
amount is the higher of the asset’s fair value less
costs of disposal and its value in use.

For all assets, the value in use is assessed based on
budget and target plan with reference to the expected
future net cash flows. The assessment is based on the
lowest CGU affected by the changes that indicate
impairment. The cash flow is discounted by a rate
adjusted for any risk specific to the asset, if relevant
to the calculation method applied.

Impairment losses on goodwill and brands, significant
losses on property, plant and equipment, investments
in associates, and losses arising on significant
restructurings of processes and structural adjustments
are recognised as special items. Minor losses are
recognised in the income statement in the relevant
line item.

Impairment of goodwill is not reversed. Impairment of
other assets is reversed only to the extent of changes
in the assumptions and estimates underlying the
impairment calculation. Impairment is only reversed
to the extent that the asset’s new carrying amount
does not exceed the carrying amount of the asset
after amortisation/depreciation had the asset not
been impaired.

2.2.2 IMPAIRMENT TEST OF GOODWILL

NEW SEGMENTATION FOR 2022
The Group’s segmentation and regional split of
entities changed following the Group’s decision
to seek full disposal of the Russian business
and exclude it from the Central & Eastern
Europe region. The composition of CGUs
changed accordingly, with goodwill of DKK
9,551m previously allocated to Russia being
transferred to assets in disposal group held for
sale, cf. section 5.1.

The carrying amount of goodwill
allocated to groups of CGUs

DKK million

Western Europe

Asia

Central & Eastern Europe

Total

2022

20,241

15,258

2,954

38,453

2021

20,265

15,963

16,256

52,484

Estimating expected cash flow involves
developing multiple probability-weighted
scenarios to reflect different outcomes in terms
of timing and amount. Measurement of the
forecast period growth rates reflects risk
adjustments made to calculate the expected
cash flows.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.2 (CONTINUED)

IMPAIRMENT

Key assumptions

2022

Western
Europe

Asia
Central &
Eastern
Europe

2021

Western
Europe

Asia

Central &
Eastern
Europe

Forecast
cash flow
growth

Terminal
period
growth

Pre-tax
discount
rate

-11.4%

-12.7%

0.5%

1.0%

3.0%

4.5%

-21.4%

2.0%

9.8%

1.0%

-10.0%

0.0%

1.0%

1.7%

4.5%

-24.0%

3.5%

6.3%

The average cash flow growth in the forecast
period reflects the significant risk adjustments
included in the forecast specifically for the
impairment test.

Potential upsides are not identified and
adjusted in the cash flows used for impairment
testing. Growth is projected in nominal terms
and therefore does not translate into cash flow
at the same growth rate in the Group’s
presentation currency, DKK.

WESTERN EUROPE
The region primarily comprises mature beer
markets, and market volumes tend to be flat. In
recent years the region has seen improving beer
category dynamics through innovations,
increased interest in craft & speciality beers and
alcohol-free brews, and an overall improved
category perception.

The region is generally characterised by well-
established retail structures and a strong
tradition of beer consumption. Consumption is
generally resilient, although the on-trade
channel tends to be impacted by a weak
macroeconomic environment. In the past two
years, the on-trade suffered as a result of
restrictions and lockdowns across markets due
to COVID-19. The COVID-19 situation remained
uncertain in 2022, but is not expected to have a
significant long-term effect.

In 2023, the focus will be on mitigating the
significant cost inflation, in particular for raw
materials and packaging, but also other costs,
such as logistics and wages. Mitigating actions
include value management, channel and
product mix, price increases and continuous
cost focus as part of the Group’s Funding the
Journey culture.

ASIA
Asia’s importance to the Group has increased
significantly over the past decade, during which
the Group has strengthened its presence in the
region, both organically and through
acquisitions.

The Asian markets are very diverse but offer
prospects for volume and value growth,
underpinned by young populations,
urbanisation, rising disposable income levels,
growing economies and, in some markets,
relatively low per capita beer consumption.
However, as many Asian markets are emerging
markets, development is subject to volatility.
Both the on-trade and off-trade channels are
generally characterised by a strong traditional
outlet segment, but with the modern outlet
segment growing in most markets.

In 2020 and 2021, all markets in the region
were impacted by COVID-19 at different times
and to different extents. The impact from
COVID-19 in China was most profound in the
first quarter of 2020 and again in the second
half of 2022, during which periods volumes
were severely impacted. When the market was
not subject to COVID-19-related lockdowns, our
business performed strongly. The COVID-19
recovery in China, including consumer off-take
during the Chinese New Year celebrations, is
still uncertain.

The general focus in the region remains
profitable revenue growth, driven by
premiumisation and volume growth. Activities
include continued investment in and expansion
of our international premium brands, in
particular Tuborg, 1664 Blanc, Carlsberg and
Somersby, and the strengthening and
premiumisation of our local power brands.

CENTRAL & EASTERN EUROPE
Central & Eastern Europe consists of Ukraine, a
number of smaller markets across southern and
eastern Europe and our export & licence
business.

In 2022, the region was severely impacted by
the war in Ukraine, which meant that the
Russian business, formerly a part of the region,
is now an asset held for sale. In Ukraine, the
breweries were shut down for some time and
volumes declined due to the war. The situation
in Ukraine remains highly uncertain.

In the rest of the region, the competitive
environment is generally characterised by the
presence of large global players. Due to the
larger on-trade exposure, the southern part of
the region was more exposed to COVID-19 in
2020 and 2021 than the eastern part where on-

trade exposure is limited. In 2022, the southern
part of the region benefited from the re-
opening of the on-trade and the return of
tourists.

Management expects the current
macroeconomic situation and developments to
continue in the short term, with further
increases in overall inflation compared with
2022. The Group will seek to mitigate rising
costs through price increases, value
management, channel and product mix and
continuous cost focus. In the medium to long
term, interest rates are expected to decline and
stabilise at a level lower than currently
observed in the market, although still with
some volatility.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Goodwill
The value in use is the discounted value of the
expected future risk-adjusted cash flows. This involves
developing multiple probability-weighted scenarios to
reflect different outcomes in terms of timing and
amount.

Key assumptions
The cash flow is based on the budget and target plans
for the next three years. Cash flows beyond the three-
year period are extrapolated using the terminal period
growth rate. The budget and plans for 2023-2025
represents management’s best estimate of the impact
from the COVID-19 pandemic.

The probability weighting applied is based on past
experience and the uncertainty of the prepared
budget and target plans. Potential upsides and
downsides identified during the budget process and in
the daily business are reflected in the future cash flow
scenarios for each CGU.

The risk-adjusted cash flows are discounted using a
rate that reflects the risk-free interest rate for each
CGU. The interest rates used in the impairment tests

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.2 (CONTINUED)

IMPAIRMENT

are based on observable market data. Please refer to
the description of discount rates in section 2.2.3.

The key assumptions on which management bases its
cash flow projections are:
• Volumes
• Sales prices
• Input costs
• Operating investments
• Terminal period growth

The assumptions are determined at CGU level and are
based on past experience, external sources of
information and industry-relevant observations for
each CGU. Local conditions, such as expected
developments in macroeconomic and market
conditions specific to the individual CGUs, are
considered. The assumptions are challenged and
verified by management at CGU and Group level.

The budget and target plan processes consider events
or circumstances that are relevant to reliably
projecting the short-term performance of each CGU.
Examples include significant campaign activities,
changes in excise duties etc., which may have a short-
term impact but are non-recurring. Given their short-
term nature, they are not taken into consideration
when estimating the terminal period growth rate.

Volumes
Projections are based on past experience, external
market data, planned commercial initiatives, such as
marketing campaigns and sponsorships, and the
expected impact on consumer demand and the level
of premiumisation. If relevant, the projections are
adjusted for the expected changes in the level of
premiumisation. No changes in market share are
assumed in the medium or long term.

Demographic expectations general to the industry,
such as the development in population, consumption
levels, generation-shift patterns, rate of urbanisation
and macroeconomic trends, are also considered in
medium- and long-term projections.

Events and circumstances can impact the timing of
volumes entering the market. These include excessive
stocking related to an increase in excise duties,
campaign activities, and the timing of national
holidays and festivals. Such short-term effects are not
material to volume projections and do not impact the
long-term projections.

Sales prices
The level of market premiumisation and the locally
available portfolio are key drivers in identifying price
points. When planning pricing structures, factors
including price elasticity, local competition and
inflation expectations can also impact the projection.
Increases in excise duties are typically passed on to
the customers immediately or with a delay of no
more than a few months. Since the increase is a pass-
through cost and thereby compensated for by price
increases at the time of implementation, it does not
impact the long-term sales price growth and is
therefore not taken into consideration in the
projections unless circumstances specifically indicate
otherwise. No changes to duties in the short or
medium term are taken into consideration unless
there is a firm plan to introduce changes.

Recent significant inflationary pressure has meant
revenue growth compensating for rising input costs,
especially in Europe. The short and medium-term
forecast includes risk of delays in timing of increase of
sales prices to compensate for future rise in input
costs.

Input costs
Input costs in the budget and target plans are based
on past experience and on:
• Contracted raw and packaging materials
• Contracted services within sales, marketing,

production and logistics

• Planned commercial investments
• Cost optimisations not related to restructurings
• Expected inflation

The recent rise in inflation has increased the overall
input cost level, especially in Europe. The short and
medium-term forecast incorporates continued
pressure on input cost.

In the long term, projections follow the level of
inflation unless long-term contracts are in place.

Operating investments
Projections are based on past experience of the level
of necessary maintenance of existing production
capacity, including replacement of parts. This also
includes scheduled production line overhauls and
improvements to existing equipment. Non-contracted
capacity increases and new equipment are not
included.

Terminal period growth
Growth rates are projected to be equal to or below
the expected rate of general inflation and assume no
nominal economic growth. The projected growth rates
and the discount rates applied are compared to
ensure a sensible correlation between the two.

2.2.3 IMPAIRMENT TEST OF BRANDS
The impairment test did not identify
impairments in 2022.

Following the classification of the Russian
business as held for sale, the brands recognised
in Russia, including the Baltika brand, are no
longer tested individually for impairment.
Brands with a carrying amount of DKK 4,532m
were transferred to assets in disposal group
held for sale end of March 2022.

In 2022, significant brands represented 52%
(2021: 64% including the Baltika brand) of the
total carrying amount of brands with indefinite
useful life.

Key assumptions

2022

International brands

Kronenbourg 1664

2021

Baltika brand

International brands

Kronenbourg 1664

Brands with indefinite useful life

DKK million

Baltika brand

International brands

Kronenbourg 1664

Significant brands

Western Europe

Asia

Central & Eastern Europe

Not allocated

Other brands

Total brands

2022

N/A

3,000

1,948

4,948

1,318

1,457

846

941

4,562

9,510

2021

4,410

3,000

1,946

9,356

1,352

1,536

1,522

941

5,351

14,707

Other brands comprise a total of 20 brands
(2021: 21 brands, including other Russian brand)
that are not individually material compared
with the total carrying amount.

Average
revenue
growth

2.4%

Terminal
period
growth

1.9%

1.6%

Pre-tax
discount
rate

6.7%

6.6%

Post-tax
discount
rate

6.5%

6.4%

4.8%

1.5%

1.3%

4.0%

1.7%

1.3%

12.5%

4.9%

4.4%

10.9%

4.8%

4.3%

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.2 (CONTINUED)

IMPAIRMENT

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Brands
The test for impairment of brands is performed using
the relief from royalty method and is based on the
expected future cash flows generated from the
royalty payments avoided for the individual brand for
the next 10 years and projections for subsequent
years.

The risk-free cash flows are discounted using a rate
reflecting the risk-free interest rate with the addition
of the risk premium associated with the individual
brand.

Key assumptions
The key assumptions on which management bases its
cash flow projection include the expected useful life,
revenue growth, a theoretical tax amortisation
benefit, the royalty rate and the discount rate.

Expected useful life
Management has assessed that the value of brands
with indefinite useful life can be maintained for an
indefinite period, as these are well-established brands
in their markets, having existed for decades or even
centuries. The beer industry is characterised as being
very stable with consistent consumer demand and a
predictable competitive environment, and is expected
to be profitable for the foreseeable future. Control of
the brands is legally established and enforceable
indefinitely.

In management’s opinion, the risk of the useful life of
these brands becoming finite is minimal because of
their individual market positions and because current
and planned marketing initiatives are expected to
sustain their useful life.

Revenue growth
At the time of acquisition of any individual brand, a
revenue growth curve is forecast based on a long-
term strategic view of the risk and opportunities
relevant to the brand. The curve is projected for a 10-

year horizon. This horizon reliably reflects the lengthy
process of implementing brand strategies to support a
brand occupying its intended place in the Group’s
portfolio. The forecast period applied is comparable
with the common term of the majority of licence
agreements to which the Group is party.

In the local markets, the product portfolio usually
consists of local power brands and international
premium brands. When projecting revenue growth for
local brands, in addition to their commercial strength
– such as market share and segment position – the
forecast takes into consideration the demographics of
the primary markets, including expected
developments in population, consumption levels,
generation-shift patterns, rate of urbanisation, beer
market maturity, level of premiumisation,
circumstances generally limiting the growth
opportunities for alcoholic beverages etc.

For brands with global or regional presence, enhanced
investments in product development and marketing
are expected. The expected growth rate for these
brands is generally higher than for more localised
brands and is usually highest early in the 10-year
period.

Depending on the nominal growth expectations for
the individual brand, the revenue growth in individual
years may be above, equal to or below the forecast
inflation level in the markets where the brand is
present.

When preparing budgets, consideration is given to
events or circumstances that are relevant to reliably
projecting the short-term performance of each brand.
Examples include significant campaign activities,
changes in excise duties etc., which may have a short-
term impact but are non-recurring and quickly
absorbed by the business. Since the impact is not
material to the long-term projections, it is not taken
into consideration when estimating the long-term and
terminal period growth rates. Please refer to the
description of the impact of increases in excise duties
in the description of sales prices in section 2.2.2.

the range of 15-31% and amortisation periods of 5-15
years.

Royalty rate
Royalties generated by a brand are based on the
Group’s total income from the brand and are earned
globally, i.e., the income is also earned outside the
CGU that owns the brand. If external licence
agreements for the brand already exist, the market
terms of such agreements are taken into
consideration when assessing the royalty rate that the
brand is expected to generate in a transaction with
independent parties. The royalty rate is based on the
actual market position of the individual brand in the
global, regional and local markets, and assumes a 10-
year horizon. This term is common to the beverage
industry when licensing brands.

For some brands, the share of the total beer market
profit exceeds the volume share to an extent that
creates significant market entry barriers for competing
brands and justifies a higher royalty rate.

Royalty rates

International, premium and
speciality beers
Strong regional and national brands

Local and mainstream brands

3.5-7.5%
3.0-5.0%

2.0-3.5%

Discount rates
The discount rate is a weighted average cost of
capital (WACC) that reflects the risk-free interest rate
with the addition of a risk premium relevant to each
brand.

The risk-free interest rates used in the impairment
tests are based on observed market data. For
countries where long-term risk-free interest rates are
not observable or valid due to specific national or
macroeconomic conditions, the interest rate is
estimated based on observations from other markets
and/or long-term expectations expressed by
international financial institutions considered reliable
by the Group.

Tax benefit
The theoretical tax benefit applied in the test uses tax
rates and amortisation periods based on current
legislation. The impairment test applies tax rates in

The added credit risk premium (spread) for the risk-
free interest rate is fixed at market price or slightly
higher, reflecting the expected long-term market price.

The aggregate interest rate, including spread, thereby
reflects the long-term interest rate applicable to the
Group’s investments in the individual markets.

2.2.4 SENSITIVITY TESTS
Sensitivity tests have been performed to
determine the lowest forecast and terminal
period growth rates and/or highest discount
rates that can occur in the groups of CGUs and
brands with indefinite useful life without
leading to any impairment loss.

Due to a challenging macroeconomic situation
in some CGUs and groups of CGUs, the Group
performed additional sensitivity tests in 2022 to
ensure that no potential impairment had been
overlooked. These did not identify any potential
impairment.

GOODWILL
Following the impairment loss on goodwill
recognised in Central & Eastern Europe in 2022,
the CGU is sensitive to changes in the key
assumptions applied in the impairment test.
Management assesses that a reasonably
possible negative change in a key assumption
would cause the carrying amount of the CGU to
exceed the recoverable amount.

The test for impairment of goodwill did not
identify any other CGUs or groups of CGUs to
which goodwill is allocated where a reasonably
possible negative change in a key assumption
would cause the carrying amount to exceed the
recoverable amount.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.2 (CONTINUED)

IMPAIRMENT

Key assumptions
The key assumptions relevant to the
assessment of the recoverable amount are:
• Discount rate
• Volumes
• Sales prices
• Input costs
• Operating investments
• Terminal period growth

The assumptions for volume and pricing are
closely linked, as are the assumptions for input
costs and operating investments, which makes
individual sensitivity testing on the basis of
these four assumptions highly impractical.
Instead, sensitivity testing is performed for the
overall free cash flow growth rate, in both the
forecast period and the terminal period.

The sensitivity test for the maximum decline in
growth rate in the forecast period assumes a
year-on-year decline in the nominal growth
rate, thereby estimating the accumulated effect
of a negative change for the full forecast
period.

The sensitivity tests are performed with all
other assumptions unchanged, as it is relevant
to assess the sensitivity to, for example, a
decline in the growth rate independently of
changes in the discount rate. This is because
the growth rate in itself might be impacted by
changes in other market factors.

The sensitivity calculated also assumes a
straight-line impact despite the fact that
changes in market dynamics and adjustments
to these will in practice have different impacts
in the individual years and might not apply in
the long term.

An increase in interest rates without a
corresponding change in inflation would result
in a lower recoverable amount and could
potentially lead to impairment.

The recoverable amount of the Central &
Eastern Europe CGU exceeds the carrying
amount by DKK 1.2bn. A change of either a 1.4
percentage point increase in the risk-free
interest rate, a 1.7 percentage point decrease in
the terminal period growth rate or a 25.5%
decline in the forecast period average growth
rate for free cash flow would result in the
recoverable amount being equal to the carrying
amount of the CGU.

BRANDS
For brands that were previously written down,
a reasonably possible negative change in a key
assumption would cause the carrying amount
of these brands to exceed the recoverable
amount. However, management considers the
risk of a significant write-down on brands to be
low.

Key assumptions
The key assumptions relevant to the
assessment of the recoverable amount are:
• Volume
• Price
• Discount rate

The assumptions for volume and pricing are
closely linked, which, together with the
presence of multiple sub-brands in various
geographies within each brand, makes
individual sensitivity testing on the basis of
these two assumptions highly impractical.
Instead, sensitivity testing is performed for the
overall revenue growth rate, in both the
forecast period and the terminal period.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 2.3

INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT

DKK million

2022

Cost

Cost at 1 January

Additions, including right-of-use assets

Disposals

Transfers

Transferred to disposal group held for sale

Foreign exchange adjustments etc.

Cost at 31 December

Amortisation, depreciation and impairment losses
Amortisation, depreciation and impairment losses at 1 January

Disposals

Amortisation and depreciation

Impairment losses

Transferred to disposal group held for sale

Foreign exchange adjustments etc.

Amortisation, depreciation and impairment losses at 31 December

Carrying amount at 31 December

Right-of-use assets included at 31 December

Amortisation and depreciation

Carrying amount at 31 December

Goodwill

Brands

Other
intangible
assets

54,227

-9,551

-3,831

40,845

1,743

700

-51

2,392

38,453

26,181

-32

-12,466

-1,706

11,977

11,231

-32

-7,934

-1,032

2,254

9,723

5,054

345

-165

-433

-88

4,713

4,013

-163

208

-336

-59

3,666

1,047

Intangible assets

Property, plant and equipment

Asset base

Land and
buildings

Plant and
machinery

Other
equipment,
fixtures and
fittings

Total

19,839

611

-373

201

-2,089

-386

17,803

8,509

-142

638

-898

-155

7,954

9,849

167

1,089

30,272

2,013

-582

-360

-3,929

-1,182

26,232

19,653

-529

1,356

106

-3,204

-785

16,597

9,635

15,729

1,992

-1,502

159

-1,322

-596

14,460

11,030

-1,442

1,719

319

-957

-404

10,265

4,195

214

440

65,840

4,616

-2,457

-7,340

-2,164

58,495

39,192

-2,113

3,713

427

-5,059

-1,344

34,816

23,679

386

1,540

151,302

4,961

-2,654

-29,790

-7,789

116,030

56,179

-2,308

3,942

1,130

-13,329

-2,486

43,128

72,902

386

1,540

Total

85,462

345

-197

-22,450

-5,625

57,535

16,987

-195

229

703

-8,270

-1,142

8,312

49,223

Goodwill

Brands

Other
intangible
assets

Total

Land and
buildings

Plant and
machinery

Other
equipment,
fixtures and
fittings

SECTION 2.3 (CONTINUED)

INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT

DKK million

2021

Cost

Cost at 1 January

Acquisition of entities

Additions, including right-of-use assets

Disposal and deconsolidation of entities

Disposals

Transfers

Foreign exchange adjustments etc.

Cost at 31 December

52,064

214

-301

2,250

54,227

24,056

654

-2

1,473

26,181

Amortisation, depreciation and impairment losses

Amortisation, depreciation and impairment losses at 1 January

1,572

9,427

Disposal and deconsolidation of entities

Disposals

Amortisation and depreciation

Impairment losses

Reversal of impairment losses

Transfers

Foreign exchange adjustments etc.

Amortisation, depreciation and impairment losses at 31 December

Carrying amount at 31 December

Right-of-use assets included at 31 December

Amortisation and depreciation

Carrying amount at 31 December

171

1,743

52,484

-2

950

837

11,231

14,950

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets

Property, plant and equipment

Asset base

4,967

341

-20

-386

143

5,054

4,027

-7

-369

206

107

4,013

1,041

81,087

19,228

28,479

877

341

-321

-388

3,866

85,462

15,026

-7

-371

225

1,057

16,987

68,475

328

-102

-273

551

-51

1,970

-209

-674

-483

1,240

19,839

30,272

8,165

-40

-186

673

-86

-145

123

8,509

11,330

174

887

18,155

-147

-642

1,450

-4

-29

848

19,653

10,619

15,614

-182

2,021

-379

-1,975

534

15,729

10,702

-329

-1,846

2,048

124

-24

355

11,030

4,699

205

420

Total

63,321

-191

4,319

-690

-2,922

-322

2,325

144,408

686

4,660

-1,011

-3,310

-322

6,191

65,840

151,302

37,022

-516

-2,674

4,171

151

-114

-174

1,326

39,192

26,648

385

1,318

52,048

-523

-3,045

4,396

1,208

-114

-174

2,383

56,179

95,123

385

1,318

SECTION 2.3 (CONTINUED)

INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT

Property, plant and equipment under
construction amounted to DKK 1,197m (2021:
DKK 1,193m). Property, plant and equipment
under construction are recognised in plant and
machinery until completion.

Other equipment, fixtures and fittings include
transport, office and draught beer equipment,
coolers and returnable packaging materials.

Other intangible assets include software, land
use rights and beer delivery rights.

RIGHT-OF-USE ASSETS
The Group leases various properties and
warehouses, production equipment, cars and
trucks. Leases are negotiated on an individual
basis and contain a wide range of different
terms and conditions.

At 31 December 2022, the carrying amount of
right-of-use assets was DKK 1,540m (2021: DKK
1,318m). During the year, additions amounted to
DKK 706m (2021: DKK 437m) and depreciation
to DKK 386m (2021: DKK 385m).

Lease expenses recognised in the income
statement, relating to short-term leases and
leases of low-value assets, amounted to
DKK 49m (2021: DKK 33m). Such contracts
comprise the lease of copy and printing
machines, coffee machines, small IT devices
and similar equipment.

For disclosures of the interest expenses, cash
flow and lease liabilities, please refer to
sections 4.1, 4.4.1 and 4.7.

Cash flow from disposal of property, plant
and equipment and intangible assets was
DKK 412m (2021: DKK 257m).

CAPITAL COMMITMENTS
The Group has entered into various capital
commitments that will not take effect until
after the reporting date and have therefore not
been recognised in the consolidated financial
statements. Capital commitments in 2022
amounted to DKK 100m (2021: DKK 132m).

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Useful life and residual value of intangible
assets with finite useful life and property,
plant and equipment
Useful life and residual value are initially assessed
both in acquisitions and in business combinations.

Management assesses brands and property, plant and
equipment for changes in useful life. If an indication of
a reduction in the value or useful life exists, such as
changes in production structure, restructuring and
brewery closures, the asset is tested for impairment. If
necessary, the asset is written down or the
amortisation/depreciation period is reassessed and, if
necessary, adjusted in line with the asset’s changed
useful life. When changing the amortisation or
depreciation period due to a change in the useful life,
the effect on amortisation/depreciation is recognised
prospectively as a change in accounting estimates.

Lease and service contracts
At inception of a contract, management assesses
whether the contract is or contains a lease.
Management considers the substance of any service
being rendered to classify the arrangement as either a
lease or a service contract. Particular importance is
attached to whether fulfilment of the contract
depends on the use of specific assets. The assessment
involves judgement of whether the Group obtains
substantially all the economic benefits from the use
of the specified asset and whether it has the right to
direct how and for what purpose the asset is used. If
these criteria are satisfied at the commencement date,
a right-of-use asset and a lease liability are
recognised in the statement of financial position.

Capital expenditure

DKK million

Additions, including right-of-use assets

Right-of-use assets

Additions

Additions payable at the end of the reporting period

Transferred to assets in disposal group held for sale

Acquisition of property, plant and equipment and intangible assets

Amortisation, depreciation and impairment losses

DKK million

Cost of sales

Sales and distribution expenses
Administrative expenses

Special items

Continuing operations

Net result from Russian operations held for sale

Total

Intangible assets

Property, plant and equipment

2022

65
108

700

920

932

2021

138

39
98

278

1,004

1,282

2022

2,489

1,211
267

4,063

4,140

2021

2,611

1,124
228

-72

3,891

317

4,208

Gain/loss on disposal of assets

DKK million

Gain on disposal of property, plant and equipment and intangible assets

Loss on disposal of property, plant and equipment and intangible assets

Continuing operations

Net result from Russian operations held for sale

Total

2022

4,961

-706

4,255

-145

-92

4,018

2022

110

-31

2021

4,660

-437

4,223

-320

3,903

2021

102

-26

SECTION 2.3 (CONTINUED)

INTANGIBLE ASSETS
AND PROPERTY,
PLANT AND
EQUIPMENT

In determining the lease term, management considers
all the facts and circumstances that create an
economic incentive to exercise an extension option or
not to exercise a termination option. Extension or
termination options are only included in the lease
term if the lease is reasonably certain to be extended
or not terminated. The term is reassessed if a
significant change in circumstances occurs. The
assessment of purchase options follows the same
principles as those applied for extension options.

The lease payment for cars and trucks often includes
costs of service and insurance. If these costs are not
objectively assessable, the Group estimates the costs
when separating the service component from the
lease.

ACCOUNTING
POLICIES

Cost
Intangible assets and property, plant and equipment
are initially recognised at cost and subsequently
measured at cost less accumulated amortisation or
depreciation and impairment losses.

Cost comprises the purchase price and costs directly
attributable to the acquisition until the date when the
asset is available for use. The cost of acquired brand
rights is accounted for using the accumulated cost
approach if the total consideration includes an earn-
out dependent on the brands’ future performance.

The cost of self-constructed assets comprises direct
and indirect costs of materials, components, sub-
suppliers, wages and salaries, and capitalised
borrowing costs on specific or general borrowings
attributable to the construction of the asset, and is
included in plant and machinery.

Research and development costs are recognised in the
income statement as incurred. Development costs of
intangible assets, for example software, are
recognised as other intangible assets if the costs are
expected to generate future economic benefits.

Amortisation and depreciation are recognised as
cost of sales, sales and distribution expenses, and
administrative expenses depending on the use of
the asset.

The expected useful life is as follows:

For assets acquired in business combinations,
including brands and property, plant and equipment,
cost at initial recognition is determined by estimating
the fair value of the individual assets in the purchase
price allocation.

Goodwill is only acquired in business combinations
and is measured in the purchase price allocation.

Brands with finite
useful life

Software

Goodwill is not amortised but is subject to an annual
impairment test, cf. section 2.2.

Delivery rights

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Normally 20 years

Normally 3-5 years. Group-wide
systems developed as an
integrated part of a major
business development
programme: 5-7 years

Depending on contract; if no
contract term has been agreed,
normally not exceeding 5 years

Customer
agreements/
relationships

Depending on contract with the
customer; if no contract exists,
normally not exceeding 20 years

Buildings
Technical installations
Brewery equipment

Filling and bottling equipment
Technical installations in
warehouses
On-trade and distribution
equipment
Fixtures and fittings, other plant
and equipment

Returnable packaging materials

Hardware

Land

20-40 years
15 years
15 years

8-15 years

8 years

5 years

5-8 years

3-10 years

3-5 years
Not
depreciated

Impairment
Impairment losses of a non-recurring nature are
recognised under special items.

Leases
At the commencement date, the Group recognises a
lease liability and a corresponding right-of-use asset
at the same amount, except for short-term leases of
12 months or less and leases of low-value assets.

A right-of-use asset is initially measured at cost,
which consists of the initial lease liability and initial
direct costs less any lease incentives received. The
Group has applied the practical expedient option
allowed under IFRS by using a portfolio approach for
the recognition of lease contracts related to assets of
the same nature and with similar lease terms, i.e. cars
and trucks.

Subsequently, the right-of-use asset is measured at
cost less depreciation and impairment losses and
adjusted for remeasurement of the lease liability. The
right-of-use asset is depreciated over the earlier of the
lease term and the useful life of the asset. The
impairment testing of right-of-use assets follows the
same principles as those applied for property, plant
and equipment, cf. section 2.2.

Right-of-use assets are recognised as property, plant
and equipment.

The Group has elected not to recognise right-of-use
assets and liabilities for leases with a term of 12
months or less and leases of low-value assets. Lease
payments related to such leases are recognised in the
income statement as an expense on a straight-line
basis over the lease term.

Government grants and other funding
Grants and funding received for the acquisition of
assets and development projects are recognised in the
statement of financial position by deducting the grant
from the carrying amount of the asset. The grant is
recognised in the income statement over the life of
the asset as a reduced depreciation charge.

Where individual components of an item of property,
plant and equipment have different useful lives, they
are accounted for as separate items.

Subsequent costs, for example in connection with
replacement of components of property, plant and
equipment, are recognised in the carrying amount of
the asset if it is probable that the costs will result in
future economic benefits for the Group. The replaced
components are derecognised from the statement of
financial position and recognised as an expense in the
income statement. Costs incurred for ordinary repairs
and maintenance are recognised in the income
statement as incurred.

Useful life, amortisation, depreciation and
impairment losses
Useful life and residual value are determined at the
acquisition date and reassessed annually. If the
residual value exceeds the carrying amount,
depreciation is discontinued.

Amortisation and depreciation are recognised on a
straight-line basis over the expected useful life of the
assets, taking into account any residual value. The
expected useful life and residual value are determined
based on past experience and expectations of the
future use of assets.

Depreciation is calculated on the basis of the cost less
the residual value and impairment losses.

SECTION 3

SPECIAL ITEMS, PROVISIONS
AND OTHER LIABILITIES

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

264m

SPECIAL ITEMS, INCOME
(DKK)
Impacted by reversal of provisions
made in purchase price allocations in
previous years.

-1,048m

SPECIAL ITEMS,
EXPENSES
(DKK)
Impacted by write-down of goodwill
and property, plant and equipment as
well as losses related to the war in
Ukraine.

SECTION 3.1
SPECIAL ITEMS

SPECIAL ITEMS, INCOME
In 2022, the Group recognised reversal of
provisions made in purchase price allocations in
prior years, mainly in Asia, of DKK 217m (2021:
1,238m), reversal of provisions in Western
Europe of DKK 37m (2021: DKK 52m) and
reversal of impairment losses in Denmark of
DKK 10m (2021: DKK 83m). In 2021, the Group
also recognised a gain on disposal of entities of
DKK 15m and a revaluation gain on the
retained investment in Gorkha Brewery (DKK
38m).

SPECIAL ITEMS, EXPENSES
In 2022, write-down of goodwill allocated to
the Central & Eastern Europe region, including
the goodwill related to our business in Ukraine,
was recognised at DKK 700m.

A significant number of customers and sales
outlets in Ukraine have been negatively
impacted by the war. Consequently,
impairments of doubtful trade receivables,
obsolete inventories and lost plant and
equipment were recognised at DKK 79m.

Special items

DKK million

Special items, income

Reversal of provisions made in purchase price allocations in prior years

Reversal of provisions made in prior years

Reversal of impairment losses

Gain on disposal of entities

Revaluation gain on deconsolidation of Gorkha Brewery

Income

Special items, expenses
Goodwill impairment¹
Impairment of trade receivables, inventories and commercial assets in Ukraine¹

Impairment of property, plant and equipment

Impairment of investment in associates

Restructuring projects and provisions

Costs related to acquisition of entities etc.

Donations

Adjustment of contingent consideration

COVID-19, personal protective equipment and donations

Expenses

Special items, net

¹ See section 2.2.

2022

2021

217

264

-700
-79

-74

-76

-92

-27

-1,048

-784

1,238

1,426

-
-

-244

-270

-48

-129

-32

-723

703

During 2021 and 2022, the Group continued to
carry out various restructuring projects as part
of the ongoing focus on cost and efficiency
initiatives, which also included impairment of
property, plant and equipment in Asia of DKK
74m in 2022.

The COVID-19 pandemic had less impact in
most markets in 2022 compared with previous
years, as there were fewer COVID-19-related
restrictions.

The Group donated DKK 27m in 2022, DKK
25m of which to the Ukrainian relief effort.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 3.1 (CONTINUED)

SPECIAL ITEMS

In 2021 the Group recognised an impairment
loss of DKK 244m related to the Tibet Lhasa
Brewery caused by disturbances in the
operation and management of the company.
Fair value adjustments of the contingent
consideration for the acquisition of Marston’s
brewing activities, which was completed in
2020, amounted to DKK -129m.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The use of special items entails management
judgement in the separation from ordinary items.
Management carefully considers individual items and
projects (including restructurings) in order to ensure
the correct distinction and split between operating
activities and significant income and expenses of a
special nature.

Management initially assesses the entire restructuring
project and recognises all present costs of the project.
The projects are assessed on an ongoing basis, with
additional costs possibly being incurred during the
lifetime of the project.

The estimate includes expenses related to termination
of employees, onerous contracts, break fees and other
obligations arising in connection with restructurings.
Management reassesses the useful life and residual
value of non-current assets used in an entity
undergoing restructuring.

ACCOUNTING
POLICIES

SECTION 3.2
PROVISIONS

Restructuring provisions relate to termination
benefits to employees made redundant,
primarily as a result of a restructuring project
accounted for as special items.

Special items include significant income and expenses
of a special nature in relation to the Group’s revenue-
generating activities that cannot be attributed directly
to the Group’s ordinary operating activities.

The restructuring provision of DKK 84m in 2022
primarily relates to various restructuring
projects mainly concerning centralised Group
functions.

Special items also include significant non-recurring
items, including termination benefits related to
retirement of members of the Executive Committee,
impairment of goodwill and brands, significant
provisions in relation to certain disputes and lawsuits,
gains and losses on the disposal of activities and
associates, revaluation of the shareholding in an
entity held immediately before a step acquisition or
cessation of consolidation of that entity, and
transaction costs in a business combination.

Significant restructuring of processes and structural
adjustments are included in special items.

Special items are shown separately from the Group’s
ordinary operations to facilitate a better
understanding of the Group’s financial performance.

Provisions for onerous contracts primarily
related to contract brewing in Asia and are
expected to be utilised by 2028.

Other provisions of DKK 2,541m relate to
ongoing disputes and lawsuits of varying
content and scope, employee benefits,
provisions made in connection with purchase
price allocations (PPA provisions) and
employee obligations other than retirement
benefits, among other things.

Timing of settlement of ongoing disputes,
lawsuits and PPA provisions cannot be
determined, whereas the remaining liabilities
are expected to be settled in one to two years.

Total provisions have been impacted by
reversal of provisions made in purchase price
allocations in previous years in Asia, as
described in section 3.1, and reversal of other
contractual obligations that did not materialise,
in total DKK 335m.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

In connection with restructurings, management
assesses the timing of the costs to be incurred, which
influences the classification as current or non-current
liabilities.

Provision for onerous contracts is based on agreed
terms with the other party and expected fulfilment of
the contract, based on the current estimate of
volumes, use of raw materials etc.

Impact of special items on operating profit

DKK million

2022

2021

If special items had been recognised in operating profit before special items,
they would have been included in the following line items:

Cost of sales

Sales and distribution expenses

Administrative expenses

Other operating income

Other operating expenses

Impairment of goodwill

Special items, net

-98

-5

-15

-700

-784

-68

-42

-226

1,397

-358

703

DKK million

2022

Provisions at 1 January 2022

Transfer to disposal group held for sale

Additional provisions recognised

Used during the year

Reversal of unused provisions

Discounting

Foreign exchange adjustments etc.

Provisions at 31 December 2022

Classified as

Non-current provisions

Current provisions

Total

Restructurings

Onerous
contracts

178

-18

-79

-31

-5

456

-10

486

475

486

Other

2,754

209

-126

-304

-8

2,541

1,827

714

2,541

Total

3,388

-18

284

-205

-335

-23

3,111

2,304

807

3,111

SECTION 3.2 (CONTINUED)

PROVISIONS

SECTION 3.3

OTHER LIABILITIES

Management assesses provisions, contingent assets
and liabilities, and the likely outcome of pending or
probable lawsuits etc. on an ongoing basis. The
outcome depends on future events, which are by
nature uncertain. In assessing the likely outcome of
lawsuits and tax disputes etc., management relies on
external legal advice and established precedents.

ACCOUNTING
POLICIES

Provisions, including profit-sharing provisions, are
recognised when, as a result of events arising before
or at the reporting date, the Group has a legal or a
constructive obligation and it is probable that there
may be an outflow of economic benefits to settle the
obligation.

DKK million

2022

2021

Classified as

Non-current liabilities

Current liabilities

Total

Other liabilities by origin

Staff costs payable
Excise duties and VAT
payable

Other payables

Deferred income

Contingent consideration

Total

305

13,503

13,808

2,335

2,487

2,835

574

5,577

13,808

449

12,677

13,126

3,118

2,933

2,200

621

4,254

13,126

Provisions are discounted if the effect is material to
the measurement of the liability. The risk-free interest
rate is used as the discount rate.

For a detailed description of contingent
considerations, see section 5.4.

Restructuring costs are recognised when a detailed,
formal restructuring plan has been announced to
those affected no later than at the reporting date. On
acquisition of entities, restructuring provisions in the
acquiree are only included in the opening balance
when the acquiree has a restructuring liability at the
acquisition date.

A provision for onerous contracts is recognised when
the benefits expected to be derived by the Group from
a contract are lower than the unavoidable costs of
meeting its obligations under the contract.

ACCOUNTING
POLICIES

Other liabilities include excise duties (specific taxes
imposed on sales of beer and soft drinks), VAT,
withholding tax, accrued interest, payroll, e.g. salaries,
overtime, vacation and bonus.

Other liabilities (current) are initially recognised at fair
value and subsequently at amortised cost.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 3.4

CONTINGENT
LIABILITIES

The Group operates in very competitive
markets where consolidation is taking place
within the industry and among its customers
and suppliers, all of which in different ways
influences its business.

In the ordinary course of business, the Group is
party to certain lawsuits, disputes etc. of
varying content and scope, some of which are
referred to below. The resolution of these
lawsuits, disputes etc. is associated with
uncertainty, as they depend on relevant
applicable proceedings, such as negotiations
between the parties affected, government
actions and court rulings.

In 2020, the German Supreme Court overruled
the Higher Regional Court of Düsseldorf, which
in 2019 had ruled in favour of Carlsberg
Deutschland in relation to the competition case
from 2014, in which the Federal Cartel Office in
Germany issued a decision and imposed a fine
of EUR 62m for alleged infringement of the
competition rules in 2007. The German
Supreme Court referred the competition case
back to a new Senate for full new proceedings,
which are ongoing and expected to conclude in
the first half of 2023.

In October 2021, the French competition
authority issued a Statement of Objection
against a large number of FMCG companies,
including three entities in the Group –
Kronenbourg SAS, Carlsberg Breweries A/S and
Carlsberg A/S – for alleged participation in an
anticompetitive agreement not to advertise the
non-use of bisphenol A (BPA). Carlsberg did
not agree with the French competition

authority and prepared its defence in the case
during 2021, which was submitted in the first
quarter of 2022. The competition authority held
hearings with the companies named in the case
in January 2023, and a ruling is expected in the
second half of 2023.

In October and November 2021, the Group's
associate Super Bock in Portugal received
decisions on the alleged anticompetitive
practice in two ongoing cases. In the first case
the Court of Portuguese appeal confirmed the
fine of EUR 24m issued by the competition
authority and in the second case the
Portuguese competition authority imposed a
fine of EUR 33m on Super Bock. Both decisions
have been appealed to the Supreme Court by
Super Bock. Since the formal notification by the
court in 2021 about a private enforcement claim
of EUR 400m, filed by a consumer protection
association against Super Bock Group, for
compensation for Portuguese consumers for
alleged harm on account of Super Bock’s
alleged anticompetitive practices, there have
been no significant developments in the case.

For some time, the Group has had serious
disagreements pertaining to the Shareholders’
Agreement between Carlsberg and our partner
CSAPL Holdings Pte Ltd (CSAPLH) in relation
to Carlsberg South Asia Pte Ltd (CSAPL), of
which Carlsberg owns two thirds and CSAPLH
the remaining one third. CSAPL is the holding
company for the businesses in India (100%) and
Nepal (90%). The disagreements concern
CSAPLH’s numerous allegations of breaches by
Carlsberg of the Shareholders’ Agreement and
governance matters. Carlsberg was of the view
that it had not committed any breach, but
rather that CSAPLH had breached the
Shareholders’ Agreement.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Management and the general counsel
continuously assess these risks and their likely
outcome. It is the opinion of management and
the general counsel that, apart from items
recognised in the statement of financial
position, the outcome of these lawsuits,
disputes etc. cannot be reliably estimated in
terms of amount or timing. The Group does not
expect the ongoing lawsuits and disputes to
have a material impact on the Group’s financial
position, net profit or cash flow, in excess of
items recognised in the statement of financial
position.

GUARANTEES AND COMMITMENTS
The Group has issued guarantees for loans etc.
raised by third parties (non-consolidated
entities) of DKK 205m (2021: DKK 224m). No
guarantees have been issued for loans raised
by associates. Certain guarantees etc. are
issued in connection with disposal of entities
and activities, and in connection with on-trade
loans. Apart from items recognised in the
statement of financial position or disclosed in
the consolidated financial statements, these
guarantees etc. will not have a material effect
on the Group’s financial position. Capital
commitments, lease liabilities and service
agreements are described in section 2.3.

SECTION 3.4 (CONTINUED)

CONTINGENT
LIABILITIES

At the request of CSAPLH, the disagreements
were referred to arbitration in Singapore. A
liability award was issued by the arbitration
tribunal on 4 May 2022. Carlsberg considers its
position to be entirely vindicated by the liability
award and is very satisfied with this outcome.
The tribunal did not grant CSAPLH the relief it
had been seeking based on the various
allegations relating to governance and breach
of the Shareholders’ Agreement raised in the
arbitration and publicly. The tribunal found
CSAPLH to be in incurable material breach of
the Shareholders’ Agreement. As remedy for
the material breaches committed by CSAPLH,
the arbitration tribunal awarded Carlsberg the
right to call CSAPLH’s shares in CSAPL.
Carlsberg immediately invoked the right to
begin the call option valuation process, and
CSAPLH subsequently exercised its right under
the Shareholders’ Agreement to begin the put
option valuation process. In accordance with
the Shareholders’ Agreement, the put option
price has been determined as the simple
average of two valuations assessed by two
independent external valuers, which are
internationally recognised accounting firms, one
appointed by each shareholder. The put option
valuation was released by the valuers on 6
February 2023, stating a value for CSAPLH’s
shares in CSAPL of USD 744m (DKK 5,188m).
CSAPLH has on 6 February, issued a formal put
notice to sell its 33% shareholding in CSAPL to
the Group at the put option valuation amount.
The put option liability recognised in the
consolidated financial statements has been
adjusted to reflect the put option valuation
amount received from the valuers as the
acquisition of the shares may be completed at

that price. A transaction could potentially be
completed in 2023, subject to the clarification
of any disputes raised by the shareholders and
timelines for any regulatory approvals. CSAPLH
has previously asked for an amount for its 33%
shareholding in CSAPL that the Group
considered to be unreasonably high and not to
reflect the fair value of the shareholding. From
the put option valuation received, it is the
Group’s assessment that key assumptions,
which the Group considers to be unreasonable,
may have been applied in the valuation
performed by CSAPLH’s appointed valuer. The
put option valuation can be disputed by the
shareholders if the valuations are conducted in
breach of the Shareholders’ Agreement,
including, but not limited to, circumstances
where the valuations are tainted by fraud or
manifest error. The Group will work with its
external advisors to evaluate its position and
assess whether CSAPLH has committed
additional breaches of the Shareholders’
Agreement, which would justify further legal
steps against CSAPLH.

In addition to the disputes with our partner in
CSAPL regarding India and Nepal, there is also
a dispute with the local 10% shareholder in
Gorkha Brewery, a related party to the Group’s
33% partner in CSAPL. The conclusion of the
put or call option process and the increase to
100% ownership of CSAPL do not settle the
dispute with the local shareholder, and Gorkha
Brewery therefore remains not consolidated
until the dispute is settled separately. A
Nepalese High Court judgment was expected in
2022 but has been postponed and is now
expected in H1 2023. A favourable ruling would
not immediately lead to reconsolidation of the
Nepalese business, which would require
demonstration of the consistent ability to
exercise our rights as the majority shareholder.
Please refer to section 5.3.

SECTION 4

FINANCING COSTS, CAPITAL
STRUCTURE AND EQUITY

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

19.3bn

NET INTEREST-BEARING DEBT
(DKK)
Gross financial debt amounted to DKK 28.6bn
(2021: DKK 28.9bn). Net interest-bearing debt
was DKK 19.3bn, an increase of DKK 0.2bn
compared with year-end 2021. The
classification of Russia as held for sale did not
have have a significant impact on net interest-
bearing debt.

CHANGES IN NET INTEREST-BEARING DEBT
(DKKbn)

The liquidity position remained strong due to
the free cash flow of DKK 9.9bn and access to
a EUR 2bn credit facility, which was unutilised
at 31 December 2022.

The leverage ratio, measured as net interest-
bearing debt to EBITDA, was 1.23x at year-end
(2021: 1.37x). The financial leverage was kept
slightly more conservative than in past years
anticipating the acquisition of our partner’s 33%
shareholding in CSAPL.

4.4bn

SHARE BUY-BACK (DKK)
During 2022, the Company repurchased shares
worth DKK 4.4bn under the quarterly share
buy-back programmes initiated in 2021 and
2022.

34.7bn

EQUITY (DKK)
Equity amounted to DKK 34.7bn (2021: DKK
48.8bn), DKK 31.9bn of which was attributable
to shareholders in Carlsberg A/S and DKK
2.8bn to non-controlling interests.

The change in equity of DKK -14.0bn was
mainly foreign exchange losses on translation
of DKK 3.9bn, the dividend payout of DKK
4.4bn and the share buy-back of DKK 4.4bn.

-725m

NET FINANCIAL ITEMS (DKK)
Financial items, net, amounted to DKK -725m
(2021: DKK -385m). Excluding currency losses
and fair value adjustments, financial items, net,
amounted to DKK -506m (2021: DKK -333m).
The increase was mainly due to 2021 being
positively impacted by the reversal of the
previous write-down of the loan to our partner
in CSAPL.

LEVERAGE RATIO (NIBD/EBITDA)

2018-2020 as reported. 2021-2022 for continuing operations.

19.2-12.93.04.44.40.60.619.3NIBD at 1 JanuaryCash flow, operating activitiesInvesting activitiesDividends, totalShare buy-backLease liabilities, netOther movementsNIBD at 31 December201820192020202120221.01.21.41.6SECTION 4.1

FINANCIAL INCOME
AND EXPENSES

Interest income primarily relates to interest on
cash and cash equivalents measured at
amortised cost.

Foreign exchange losses, net, include fair value
adjustments of hedges not designated as
hedging instruments and foreign exchange
losses. The fair value adjustment of hedges not
designated as hedging instruments amounted
to DKK -121m (2021: DKK -23m), cf. section 4.8.

Financial items recognised in the income statement

DKK million

Financial income

Interest income

Interest on plan assets, defined benefit plans

Reversal of impairments of financial assets

Other

Total

Financial expenses

Interest expenses

Capitalised financial expenses

Foreign exchange losses, net

Interest expenses on obligations, defined benefit plans

Interest expenses, lease liabilities

Other

Total

Financial items, net, recognised in the income statement

Financial items excluding foreign exchange, net

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Financial items in Russian operations held for
sale are not included in the financial items, but
foreign exchange gains and losses on
continuing operations’ RUB-denominated
payables and receivables with respect to
Russian operations held for sale are included.

Foreign exchange losses and fair value
adjustments amounted to DKK -219m (2021:
DKK -52m).

Of the net change in fair value of cash flow
hedges transferred to the income statement,
DKK 69m (2021: DKK 216m) has been included
in revenue and cost of sales, DKK -16m (2021:
DKK 4m) in other financial items, and DKK -2m
in property, plant and equipment (2021: DKK
0m).

FINANCIAL ITEMS, NET (DKKm)

2018-2020 as reported. 2021-2022 for continuing
operations.

Financial items, net
Financial items, net, excl. fair value and FX

2022

2021

220

120

347

-519

-219

-158

-23

-155

-1,072

-725

-506

363

571

-499

-52

-138

-13

-258

-956

-385

-333

Financial items recognised in other comprehensive income

DKK million

Foreign exchange adjustments of foreign entities

Foreign currency translation of foreign entities

Recycling of cumulative translation differences of entities
disposed of, deconsolidated or discontinued from use of equity method

Total

Fair value adjustments of hedging instruments

Change in fair value of effective portion of cash flow hedges

Change in fair value of cash flow hedges transferred to the income statement and property,
plant and equipment

Change in fair value of net investment hedges

Total

Financial items, net, recognised in other comprehensive income

2022

2021

-3,926

3,124

-3,926

183

3,307

-313

361

-51

-395

-759

-4,685

-57

-464

-160

3,147

20182019202020212022-800-600-400-2000

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Carlsberg A/S’ share capital is divided into two
classes (A shares and B shares). Combined with
the Carlsberg Foundation’s position as majority
shareholder (in terms of control), management
considers that this structure will remain
advantageous for all of the shareholders,
enabling and supporting the long-term
development of the Group.

The Group targets a leverage ratio below 2.0x.
At the end of 2022, the leverage ratio was 1.23x
(2021: 1.37x). The Group currently uses share
buy-back programmes to return excess cash to
shareholders.

The share buy-back programmes are initiated
based on a cautious evaluation of the Group’s
funding flexibility and credit resources available.
The size and duration of each programme
depend on the expected organic and inorganic
investments needed to grow the business and
the Group’s intention to maintain a leverage
ratio below 2.0x.

The Group generally intends to cancel treasury
shares that are not used for hedging of
incentive programmes.

The Group is rated by Moody’s Investors
Service and Fitch Ratings. Management
assesses the risk of changes in the Group’s
investment-grade rating as an element in
strategic decisions on capital structure.
Identification and monitoring of risks that could
change the rating were carried out on an
ongoing basis throughout the year.

4.3.2 SHARE CAPITAL
At the Annual General Meeting on 14 March
2022, it was decided to reduce the share capital
of Carlsberg A/S by a nominal amount of DKK
68,000,000 to a nominal amount of DKK
2,837,136,120 by cancelling 3,400,000 of the B
shares held by the Company, each with a
nominal value of DKK 20. The cancellation was
completed on 12 April 2022. These shares had
been repurchased as part of the Company’s
share buy-back programme.

At the Annual General Meeting on 13 March
2023, the Supervisory Board will recommend
that 4,500,000 treasury shares not used for the
hedging of the incentive programme be
cancelled.

SECTION 4.2

NET INTEREST-
BEARING DEBT

SECTION 4.3

CAPITAL
STRUCTURE

4.3.1 CAPITAL STRUCTURE
Management regularly assesses whether the
Group’s capital structure is in the interests of
the Group and its shareholders.

The overall objective is to ensure a continued
development and strengthening of the Group’s
capital structure that supports long-term
profitable growth and a solid increase in key
earnings and ratios. This includes assessment of
and decisions on the split of financing between
share capital and borrowings, which is a long-
term strategic decision to be made in
connection with significant investments and
other transactions.

Of the gross financial debt at year-end, 80%
(2021: 79%) was non-current, i.e. with maturity
of more than one year.

Gross financial debt amounted to DKK 28.6bn
(2021: DKK 28.9bn). Non-current borrowings
totalled DKK 22.9bn (2021: DKK 22.8bn) and
current borrowings totalled DKK 5.8bn (2021:
DKK 6.2bn). A EUR 750m EMTN bond matured
in November 2022 and was partly refinanced
by a EUR 500m EMTN bond maturing in
October 2025. The Group continuously assesses
the maturity and repayment profile of its debt.

The difference of DKK 9.3bn between gross
financial debt and net interest-bearing debt
mainly comprised cash and cash equivalents
and on-trade loans.

Net interest-bearing debt

DKK million

Non-current borrowings

Current borrowings

Gross financial debt

Cash and cash equivalents

Net financial debt
Loans to associates, interest-
bearing portion

On-trade loans, net

Other receivables, net

2022

22,865

5,781

28,646

-8,163

20,483

-275

-492

-390

Net interest-bearing debt¹

19,326

2021

22,755

6,167

28,922

-8,344

20,578

-238

-578

-600

19,162

Share capital

1 January 2021

Cancellation of
treasury shares

Class A shares

Class B shares

Total share capital

Shares of
DKK 20

Nominal
value,
DKK ’000

Shares of
DKK 20

Nominal
value,
DKK ’000

Shares of
DKK 20

33,699,252

673,985

114,457,554

2,289,151

148,156,806

Nominal
value,
DKK ’000

2,963,136

-2,900,000

-58,000

-2,900,000

-58,000

31 December 2021

33,699,252

673,985

111,557,554

2,231,151

145,256,806

2,905,136

Cancellation of
treasury shares

-3,400,000

-68,000

-3,400,000

31 December 2022

33,699,252

673,985

108,157,554

2,163,151

141,856,806

-68,000

2,837,136

¹ Net interest-bearing debt, excluding disposal group held
for sale, amounted to DKK 19,191m in 2021.

A shares carry 20 votes per DKK 20 share. B shares carry two votes per DKK 20 share. A preferential right to an 8%
non-cumulative dividend is attached to B shares. Apart from votes and dividends, all shares rank equally.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 4.3 (CONTINUED)

CAPITAL STRUCTURE

4.3.3 EQUITY
DIVIDENDS
The Group proposes a dividend of DKK 27.00
per share (2021: DKK 24.00 per share),
amounting to DKK 3,830m (2021: DKK
3,486m). The proposed dividend has been
included in retained earnings at 31 December
2022.

Dividends to be paid out in 2023 for 2022, net
of dividends on treasury shares held at 31
December 2022, will amount to DKK 3,708m
(paid out in 2022 for 2021: DKK 3,405m).

SHARE BUY-BACK AND TREASURY SHARES
On 4 February 2022, the Company announced
its intention to continue the share buy-back
programme. The 2022 programme has been
executed as quarterly programmes, and
4,751,576 B shares worth DKK 4.4bn have been
repurchased in 2022. Ending with the fourth
quarterly programme, which was finalised on
27 January 2023, the Company has
repurchased a total of 4,913,102 B shares at a
total purchase price of DKK 4.5bn over a 12-
month period.

capital at a price quoted on Nasdaq
Copenhagen at the time of acquisition with a
deviation of up to 10%. The permitted holding
of treasury shares covers those acquired in
share buy-back programmes. The Company
holds no class A shares.

Transactions with shareholders
in Carlsberg A/S

DKK million

Dividends paid to
shareholders

Share buy-back

Total

2022

2021

-3,389

-4,400

-7,789

-3,187

-3,600

-6,787

Dividends paid to non-controlling interests
amounted to DKK 1,042m (2021: DKK 550m).

ACCOUNTING
POLICIES

Proposed dividends
The proposed dividend is recognised as a liability at
the date when it is adopted at the Annual General
Meeting (declaration date).

Treasury shares
Cost of acquisition, consideration received and
treasury share dividends received are recognised
directly in equity as retained earnings. Capital
reductions from the cancellation of treasury shares
are deducted from the share capital at an amount
corresponding to the nominal value of the shares and
added to retained earnings.

Proceeds from the sale of treasury shares in
connection with the settlement of share-based
payments are recognised directly in equity.

EQUITY (DKKbn)

Treasury shares

1 January 2021

Acquisition of treasury shares

Cancellation of treasury shares

Used to settle share-based payments

31 December 2021

Acquisition of treasury shares

Cancellation of treasury shares

Used to settle share-based payments

31 December 2022

Fair value,
DKKm

2,979

3,800

4,169

Shares of
DKK 20

3,055,175

3,355,625

-2,900,000

-146,282

3,364,518

4,751,576

-3,400,000

-200,709

4,515,385

Nominal
value, DKKm

Percentage
of share
capital

61.1

67.1

-58.0

-2.9

67.3

95.0

-68.0

-4.0

90.3

2.1 %

2.3 %

-2.0 %

-0.1 %

2.3 %

3.3 %

-2.3 %

-0.1 %

3.2 %

48.80.10.5-3.9-4.4-4.4-1.3-0.634.7Equityat 1 JanuaryProfit for the periodRetirement benefit obligationsForeign exchange adjustmentsDividends paidShare buy-backNon-controllinginterestsHedgingEquity at31 December

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 4.3 (CONTINUED)

CAPITAL STRUCTURE

4.3.4 OTHER COMPREHENSIVE INCOME
Other comprehensive income has mainly been
impacted by the negative foreign exchange
adjustment from translation of Group entities
with a functional currency other than DKK. Of
the DKK 3.9bn foreign exchange loss, around
DKK 3.0bn relates to the timing of the write-
down of RUB-denominated assets classified as
disposal group held for sale. This was
recognised in March 2022, when RUB had
depreciated 10% compared with the end of
2021.

4.3.5 FINANCIAL RISK MANAGEMENT
The Group’s activities mean it is exposed to a
variety of financial risks, including market risk
(foreign exchange risk, interest rate risk and
commodity risk), credit risk and liquidity risk.
These risks are described in the following
sections:

• Foreign exchange risk: sections 1.4 and 4.6
• Interest rate risk: section 4.5
• Commodity risk: section 1.3.1
• Credit risk: sections 1.6.1 and 4.4.2
• Funding and liquidity risk: section 4.7

The Group’s financial risks are managed by
Group Treasury in accordance with the

Financial Risk Management Policy approved by
the Supervisory Board as an integrated part of
the overall risk management process. The risk
management governance structure is described
in the Management review (pages 50-52).

To reduce exposure to these risks, the Group
enters into a variety of financial instruments
and generally seeks to apply hedge accounting
to reduce volatility in the income statement.

Debt instruments and deposits in foreign
currency reduce the overall risk but will
generally not achieve the objective of reducing
volatility in specific items in the income
statement, unless they are designated as cash
flow hedges.

Other comprehensive income as recognised in the statement of changes in equity

DKK million

2022

Foreign exchange adjustments of foreign entities

Value adjustments of hedging instruments

Retirement benefit obligations

Income tax

Total

2021

Foreign exchange adjustments of foreign entities

Value adjustments of hedging instruments

Retirement benefit obligations

Share of other comprehensive income in associates

Income tax

Total

Currency
translation

Hedging
reserves

Retained
earnings

-3,384

-395

-3,691

3,379

-464

102

3,017

-344

-329

134

-18

116

589

-77

516

580

-5

585

Non-
controlling
interests

Other
comprehen-
sive income

-546

-20

-3

-568

-72

-2

-43

-3,926

-759

586

-4,072

3,307

-323

578

103

3,675

Total

-3,380

-739

589

-3,504

3,379

-330

580

3,718

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 4.4

BORROWINGS
AND CASH
4.4.1 BORROWINGS
Total borrowings decreased by DKK 0.3bn.
Non-current borrowings were unchanged, as
the EUR 500m EMTN bond that matures in
September 2023 was reclassified as current and
a new EUR 500m EMTN bond maturing in
October 2025 was issued. Current borrowings
decreased by DKK 0.4bn due to the repayment
of a EUR 750m EMTN bond in November,
partly offset by the aforementioned
reclassification of the EUR 500m bond and
issuance under the commercial paper
programme.

Gross financial debt

DKK million

2022

2021

Non-current

Issued bonds

Bank borrowings

Lease liabilities

Other borrowings

Total

Current

Issued bonds

Bank borrowings

Lease liabilities

Commercial paper and
other borrowings

Total
Total borrowings1

Fair value

21,470

1,203

122

22,865

3,714

271

390

1,406

5,781

28,646

26,694

21,452

1,012

213

22,755

5,573

116

375

103

6,167

28,922

29,575

¹ Total borrowings, excluding disposal group held for
sale, amounted to DKK 28,893m in 2021.

An overview of issued bonds is provided in section 4.5.

Changes in gross financial debt

DKK million

Gross financial debt at 1 January

Proceeds from issue of bonds

Instalments on and proceeds from borrowings, non-current

Instalments on and proceeds from borrowings, current

Instalments on lease liabilities

Commercial paper and other borrowings

External financing

Change in bank overdrafts

Gross financial debt reclassified to disposal group held for sale

Increase in lease liabilities

Other, including foreign exchange adjustments and amortisation

Gross financial debt at 31 December

2022

28,922

3,708

-5,583

-423

1,170

2021

30,250

-1,001

-216

-405

-1,128

-1,608

-29

629

252

-135

275

140

28,646

28,922

ASSESSMENT OF CREDIT RISK
The Group is exposed to credit risk on cash and
cash equivalents (including fixed deposits),
investments and derivative financial
instruments with a positive fair value due to
uncertainty as to whether the counterparty will
be able to meet its contractual obligations as
they fall due.

The Group has established a credit policy under
which financial transactions may be entered
into only with financial institutions with a solid
credit rating, defined as BBB. Carlsberg only
enters into derivatives with relationship banks,
and the associated credit risk is mitigated to
some extent by entering into ISDA agreements,
partly because it is the same group of banks
extending loans to the Group.

Group Treasury manages and monitors the
Group’s gross credit exposure to banks and
operates with individual limits on banks, based
on rating and access to netting of assets and
liabilities. For some of the markets in which the
Group operates and holds cash, the financial
institutions do not have a BBB rating, in which
case an exemption is approved by Group
Treasury.

4.4.2 CASH
Cash and cash equivalents include short-term
marketable securities with a term of three
months or less at the acquisition date that are
subject to an insignificant risk of changes in
value. Short-term bank deposits amounted to
DKK 1,530m at 31 December 2022 (2021: DKK
735m). The average interest rate on these
deposits was 6.2% (2021: 3.3%).

Total cash at bank amounted to DKK 8,163m in
2022 (2021: DKK 8,344m).

Additional cash and cash equivalents of DKK
1,194m included in assets in disposal group held
for sale are not available for general use in the
Group due to currency restrictions.

EXPOSURE TO CREDIT RISK
The carrying amount of DKK 8,163m (2021:
DKK 8,344m) represents the maximum credit
exposure related to cash and cash equivalents.

The credit risk on receivables is described in
section 1.6.1.

ACCOUNTING
POLICIES

Borrowings
Borrowings are initially recognised at fair value less
transaction costs and subsequently measured at
amortised cost using the effective interest method.
Accordingly, the difference between the fair value less
transaction costs and the nominal value is recognised
under financial expenses over the term of the loan.

Lease liability
The lease liability is measured at the present value of
the remaining lease payments at the reporting date,
discounted using the incremental borrowing rate for
similar assets, taking into account the terms of the
leases. A remeasurement of the lease liability, for
example a change in the assessment of an option to
purchase, results in a corresponding adjustment of the
related right-of-use assets, cf. section 2.3.

Extension or termination options are included in the
lease term if the lease is reasonably certain to be
extended or not terminated. Consequently, all cash
outflows that are reasonably certain to impact the
future cash balances are recognised as lease liabilities
at initial recognition of lease contracts. The Group
reassesses the circumstances leading to it not
recognising extension or termination options on an
ongoing basis.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

SECTION 4.5

INTEREST RATE RISK

The Group’s exposure to interest rate risk in the
income statement is considered low due to the
limited amounts of net financial debt at
variable interest rates. Interest rate risk is
monitored on net financial debt, i.e. borrowings,
cash and cash equivalents and derivative
financial instruments. The target is to have a
duration between three and eight years. At 31
December 2022, the duration was 4.1 years
(2021: 4.8 years). Interest rate risk is mainly
managed using fixed-rate bonds, which are all
denominated in EUR. At the reporting date,
106% of the net financial debt consisted of
fixed-rate borrowings with interest rates fixed
for more than one year (2021: 106%).

On a gross debt basis, 76% was at fixed interest
rates (2021: 75%). Most of the Group’s cash and
cash equivalents are held in currencies other
than EUR, whereas EUR accounts for the
predominant part of the fixed-rate borrowings.
As a result, 127% of the Group’s net debt is in
EUR, which is why the interest rate exposure
primarily relates to the development in the
interest rates for EUR.

SENSITIVITY ANALYSIS
Since the Group has more cash and cash
equivalents than borrowings with a floating
interest rate, an increase in interest rates would
result in a decrease in net interest expenses. It is
estimated that a 1 percentage point interest
rate increase would lead to a decrease in net
interest expenses of DKK 12m (2021: DKK 11m).

The impact reflects a relatively high percentage
of the gross debt being at fixed interest rates
and the high portion of cash. The analysis
assumes a parallel shift in the relevant yield
curves.

If the market interest rate had been
1 percentage point higher at the reporting date,
it would have led to a financial gain of DKK
842m (2021: DKK 997m), and a similar loss had
the interest rate been 1 percentage point lower.
However, since all fixed-rate borrowings are
measured at amortised cost, there is no impact
on other comprehensive income or the income
statement. The fair value of total gross
borrowings was DKK 1,952m lower than the
carrying amount (2021: DKK 653m higher).

The change is due to the increase in interest
rates during 2022.

The sensitivity analysis is based on the financial
instruments (borrowing, cash and derivative
financial instruments) recognised at the
reporting date.

The sensitivity analysis assumes a parallel shift
in interest rates and that all other variables
remain constant, in particular foreign exchange
rates and interest rate differentials between the
different currencies. The analysis was
performed on the same basis as for 2021. The
Group did not enter into any new interest rate
swaps in 2022 or 2021.

Net financial debt by currency

DKK million

2022

EUR

CNY

USD

Other

Total

2021

EUR

CNY

USD

Other

Total

Gross
financial debt

Net
financial debt

27,040

345

1,167

28,646

27,598

413

876

28,922

26,083

-3,560

-35

-2,005

20,483

25,227

-2,777

-1,914

20,578

Fixed

21,530

104

21,671

21,515

194

21,718

Interest rate risk

DKK million

Gross
financial debt,
fixed %

Net financial
debt, fixed %¹

2022

80%

30%

76%

78%

47%

75%

83%

-297%

-2%

106%

85%

462%

106%

Issued bonds

EUR 500m maturing 6 September 2023

EUR 1,000m maturing 28 May 2024

EUR 500m maturing 12 October 2025

EUR 500m maturing 30 June 2027

EUR 400m maturing 1 July 2029

EUR 500m maturing 11 March 2030

Total

Total 2021

Bank borrowings and other borrowings

Floating-rate

Fixed-rate

Total

Total 2021

¹ The percentage of net debt at fixed interest rates is above 100% in some currencies, as the total cash exceeds the
current debt. In some currencies the percentage of net debt at fixed interest rates is negative, as the total cash exceeds
the total debt.

Average
effective
interest
rate

Interest
rate

Fixed for

Carrying
amount

Interest
rate risk

Fixed

< 1 year

1-2 years

2-3 years

4-5 years

> 5 years

0.7%

2.6%

3.4%

0.5%

1.0%

0.7%

1.7%

1.6%

Floating

Fixed

1.8%

1.7%

< 1 year

> 1 year

Fair value

Cash flow

Fair value

3,714

7,421

3,705

3,699

2,948

3,697

25,184

27,025

3,262

200

3,462

1,897

SECTION 4.6

FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES

4.6.1 CURRENCY PROFILE OF
BORROWINGS
The Group is exposed to foreign exchange risk
on borrowings denominated in a currency other
than the functional currency of the local entities
reporting the debt, as well as the risk that arises
when net cash inflow is generated in one
currency and borrowings are denominated and
have to be repaid in another currency.

4.6.2 HEDGING OF NET INVESTMENTS
IN FOREIGN SUBSIDIARIES
The Group holds a number of investments in
foreign subsidiaries where the translation of net
assets to DKK is exposed to foreign exchange
risks. The revaluation of the net investment is
recognised in OCI. The net investment in RUB
continues to constitute a significant risk in
terms of revaluation of the net investment, due
both to the size of the net investment and to
the volatility of RUB. The Group hedges part of
this foreign exchange exposure by selling
foreign currencies via FX forwards and NDFs,
and designates these as net investment hedges.
This mainly applies to net investments in CHF,
CNY, MYR and NOK. The basis for hedging is
reviewed at least once a year, and the two
parameters, risk reduction and cost, are
balanced. At the 2022 review it was decided to
stop hedging the PLN net investment due to
the high cost of hedging and to increase the
hedging of CNY.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

100

The latter reflects the increase in exposure and
the currently relatively low cost of hedging. In
economic terms, having debt in foreign currency
or creating synthetic debt via forward exchange
contracts constitutes hedging of the DKK value
of future cash flows arising from operating
activities or specific transactions. Where the
notional amounts of forward exchange
contracts do not exceed the net investment, the
fair value adjustments are recognised in other
comprehensive income. Two of the most
significant net risks relate to foreign exchange
adjustment of net investments in CNY and CHF,
both of which are partly hedged.

All the forward exchange contracts mature
during 2023. At 31 December 2022, all
adjustments of financial instruments have been
recognised in other comprehensive income. Fair
value adjustments of loans designated as
strategic intra-group loans have also been
recognised in other comprehensive income.

The fair value of derivatives used as
net investment hedges recognised at
31 December 2022 amounted to DKK 38m
(2021: DKK -232m).

The closing balance in the equity reserve for
currency translation of hedges of net
investments for which hedge accounting no
longer applies amounted to DKK -2,282m
(2021: DKK -1,893m), of which -24m (2021:
-24m) relates to hedging of net investments in
RUB. Positive fair values of derivatives are
recognised as other receivables and negative
values as other liabilities.

4.6.3 EXCHANGE RATE RISK ON CASH
AND BORROWINGS
The main principle for funding of subsidiaries is
that cash and borrowings should be
denominated in local currency or hedged to
local currency to avoid foreign exchange risk.
However, in some Group entities, cash and
borrowings are denominated in a currency
other than the functional currency of the local
entity without the foreign exchange risk being
hedged. This applies primarily to a few entities
in Central & Eastern Europe that hold cash and
loans in EUR and USD and in this way obtain
either hedge accounting or proxy hedging of
the foreign exchange risk associated with the
purchase of goods in foreign currency in these
markets.

Currency profile of borrowings

Before and after derivative financial instruments

Net investment hedges

DKK million

2022

CHF

NOK

EUR

USD

CNY

Other

Total

Total 2021

Original
principal

Effect
of swap

254

182

27,040

345

731

28,646

28,922

1,180

696

-8,173

2,985

3,632

-320

After
swap

1,434

878

18,867

3,330

3,726

411

28,646

28,922

DKK million

CNY

MYR

HKD

CHF

NOK

SEK

Other

Total

Hedging of invest-
ment, amount in
local currency

Intra-group loans,
amount in local
currency

Other comprehensive
income (DKK)

Average hedged rate

Fair value of
derivatives

2022

2021

2022

-3,907

-128

-310

-1,300

2021

-2,407

-292

2022

2021

2022

-2,128

-1,079

-263

-1,300

-175

3,000

2,217

3,000

2,717

-12

-21

-49

-109

-94

-136

-395

2021

-323

-28

-64

-80

-42

-464

2022

1.0355

1.5560

7.4334

0.7179

2021

0.9611

1.5022

6.8305

0.7269

Asset

Liability

Asset

Liability

-3

-58

-61

-109

-15

-93

-19

-236

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

101

SECTION 4.6 (CONTINUED)

FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES

4.6.4 IMPACT ON FINANCIAL
STATEMENTS AND SENSITIVITY
ANALYSIS

IMPACT ON INCOME STATEMENT
For the impact of currency on operating profit
and financial items, please refer to sections 1.4
and 4.1 respectively.

IMPACT ON STATEMENT
OF FINANCIAL POSITION
Fluctuations in foreign exchange rates will
affect the level of debt, as funding is obtained
in a number of currencies. In 2022, net interest-
bearing debt increased by DKK 431m (2021:
decreased by DKK 267m) due to changes in
foreign exchange rates.

SENSITIVITY ANALYSIS
An adverse development in the exchange rates
would, all other things being equal, have had
the hypothetical impact on the income
statement and other comprehensive income
(OCI) for 2022 illustrated in the tables. The
calculations are based on items in the
statement of financial position at
31 December 2022.

Income statement
The hypothetical impact ignores the fact that
the subsidiaries’ initial recognition of revenue,
cost and debt would be similarly exposed to the
exchange rate developments.

Other comprehensive income
Other comprehensive income is affected by
changes in the fair value of currency derivatives
designated as cash flow hedges of future
purchases.

Exchange rate sensitivity - other comprehensive income

2022

DKK million

NOK/DKK

SEK/DKK

PLN/DKK

CHF/DKK

USD/DKK

RUB/DKK

UAH/DKK

Other

Total

Average
hedged rate

Notional
amount

0,7208

0,6869

1,4694

7,5080

7,5926

0,1071

0,2212

N/A

-975

-832

-691

-523

383

-578

-311

-342

Change

10%

20%

5-30%

Effect
on OCI

Average
hedged rate

-49

-42

-35

-26

-116

-62

-53

-345

0.7189

0.7284

1.6039

6.9171

6.3627

0.0822

N/A

Exchange rate sensitivity - income statement

2022

DKK million

EUR/GBP

EUR/NOK

EUR/CHF

EUR/PLN

EUR/KZT

EUR/RUB

EUR/UAH

Total

2022

USD/LAK

USD/KZT

USD/RUB

USD/UAH

Total

EUR
receivable

EUR
payable

124

684

USD
receivable

-32

-459

-272

-638

-23

-242

-24

USD
payable

-170

-1

EUR
cash

319

-15

149

556

USD
cash

257

182

116

Gross
exposure

Exposure,
net of hedging

Change

Effect
on P/L

-46

-71

126

334

-24

-46

-71

126

334

-24

Gross
exposure

Exposure,
net of hedging

182

116

-1

182

116

-1

10%

Change

10%

-2

-4

-2

Effect
on P/L

2021

Effect
on OCI

-39

-30

-26

-22

-128

-12

-224

2021

Effect
on P/L

-43

-14

-3

-23

2021

Effect
on P/L

SECTION 4.6 (CONTINUED)

SECTION 4.7

FOREIGN EXCHANGE
RISK RELATED TO
NET INVESTMENTS
AND FINANCING
ACTIVITIES

APPLIED EXCHANGE RATES
The average exchange rate was calculated
using the monthly exchange rates weighted
according to the phasing of the revenue per
currency throughout the year.

FUNDING AND
LIQUIDITY RISK

Liquidity risk results from the Group’s potential
inability to meet the obligations associated with
its financial liabilities, for example settlement of
financial debt and paying suppliers.

The Group's overall objective is to ensure
continuous access, at the right price, to the
financial resources needed for operations and
growth.

The aim is to ensure effective liquidity
management, which involves obtaining
sufficient committed credit facilities to ensure
adequate financial resources and, to some
extent, tapping a range of funding sources.

DIVERSIFIED FUNDING SOURCES
The Group is diversifying its access to funding
to avoid relying on one single source of
funding.

The Group still has access to a committed EUR
2bn revolving credit facility (RCF) maturing in

Applied exchange rates

DKK

Swiss franc (CHF)

Chinese yuan (CNY)

Euro (EUR)

Pound sterling (GBP)

Indian rupee (INR)

Laotian kip (LAK)

Norwegian krone (NOK)

Polish zloty (PLN)

Russian rouble (RUB)

Swedish krona (SEK)

Closing rate

Average rate

Non-current

2022

7.5520

1.0106

7.4365

8.3845

0.0840

0.0004

0.7073

1.5887

0.0983

0.6686

2021

7.1760

1.0296

7.4365

8.8604

0.0878

0.0006

0.7459

1.6180

0.0894

0.7260

2022

7.4190

1.0569

7.4397

8.7235

0.0903

0.0005

0.7374

1.5859

0.1134

0.7002

2021

6.8777

0.9700

7.4369

8.6837

0.0852

0.0006

0.7323

1.6310

0.0855

0.7330

1-2 years

2-3 years

3-4 years

4-5 years

> 5 years
Total non-current committed loans and credit
facilities

Cash and cash equivalents

Current portion of utilised credit facilities
Credit resources available (total non-current
committed loans and credit facilities less net
debt)

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

102

2026, which is currently not being utilised. In
addition, the Group has committed cash pool
bank overdraft facilities to cover the day-to-
day liquidity needs and uncommitted access to
the Euro Commercial Paper (ECP) market,
which provides short-term funding.

At 31 December 2022, bonds accounted for
88% of the gross funding.

FUNDING STRATEGY AND REACTION
TO INCREASED UNCERTAINTY
Since March 2020 and the first COVID-19
lockdowns in Western Europe, the Group has
maintained an increased focus on liquidity, and

a special effort has been made to improve cash
flow forecasting, including introducing frequent
short-term cash flow updates. As Western
European markets came out of lockdown in
2022, cash generation normalised, but the
geopolitical situation surrounding Ukraine
required continued strong focus on short-term
liquidity. During 2022, the Group obtained a
EUR 500m short-term bank loan to provide an
additional buffer against adverse market
conditions.

The loan was repaid when Carlsberg issued a
EUR 500m EMTN bond in October.

Committed credit facilities and credit resources available

DKK million

2022

Current

< 1 year

Total current committed loans and credit
facilities

Total
committed
loans and
credit
facilities

Utilised
portion of
credit
facilities

Unutilised
credit
facilities

2021
Unutilised
credit
facilities

6,930

7,904

3,823

14,982

3,775

7,258

5,781

7,904

3,823

105

3,775

7,258

37,742

22,865

1,149

14,877

8,163

-5,781

1,149

14,874

8,344

-6,167

17,259

17,051

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

103

SECTION 4.7 (CONTINUED)

FUNDING AND
LIQUIDITY RISK

CREDIT RESOURCES AVAILABLE
The Group uses the term “credit resources
available” to determine the adequacy of access
to credit facilities.

Credit resources available include cash and
unutilised credit facilities with more than 12
months to maturity less utilised credit facilities
with less than 12 months to maturity and
uncommitted working capital facilities.

Net financial debt is used internally to monitor
the Group’s credit resources available. Net
financial debt is the Group’s net interest-bearing
debt, excluding interest-bearing assets other
than cash, as these assets are not actively
managed in relation to liquidity risk. Net
financial debt is shown in section 4.2.

At 31 December 2022, the Group had total
credit resources available of DKK 17,259m,
consisting of cash and cash equivalents of DKK
8,163m plus committed unutilised non-current

Time to maturity for non-current borrowings

credit facilities of DKK 14,877m less utilisation
of current facilities of DKK 5,781m. Including
current credit facilities of DKK 1,149m, total
committed unutilised credit facilities amounted
to DKK 16,026m.

Credit resources available at year-end 2022
were unchanged from year-end 2021, due to
the strong cash flow and ongoing funding
activities.

The credit resources available and access to
unused committed credit facilities are
considered reasonable in light of the Group’s
current needs in terms of financial flexibility.

The Group uses cash pools for day-to-day
liquidity management in most of its entities in
Western Europe, as well as intra-group loans to
subsidiaries. Central & Eastern Europe and Asia
are less integrated in terms of cash pools, and
liquidity is managed via intra-group loans. For
some markets in Asia, intra-group loans are not
possible, and surplus liquidity will be paid out in
the form of dividends, which results in a time
lag between when the cash flow is generated
and when it becomes available for repayment
of Group debts. The most significant cash
balances related to this delay are in China.

DKK million

2022

Issued bonds

Bank borrowings

Lease liabilities

Other non-current borrowings

Total

Total 2021

1-2 years

2-3 years

3-4 years

4-5 years

> 5 years

7,421

356

106

7,904

4,198

3,705

3,823

7,599

105

3,698

6,646

3,775

598

7,258

10,814

Total

21,470

1,203

122

22,865

22,755

MATURITY OF FINANCIAL LIABILITIES
The table lists the contractual maturities of
financial liabilities, including estimated interest
payments and excluding the impact of netting
agreements, and thus summarises the gross
liquidity risk.

The risk implied by the values reflects the one-
sided scenario of cash outflows only. Trade
payables and other financial liabilities originate
from the financing of assets in ongoing
operations, such as property, plant and
equipment, and investments in working capital,
for example inventories and trade receivables.

The nominal amount/contractual cash flow of
gross financial debt totalled DKK 28,757m in
2022 (2021: DKK 29,098m), whereas the total
carrying amount was DKK 28,646m (2021:
DKK 28,922m). The difference between these
amounts arises at initial recognition and is

treated as a cost that is capitalised and
amortised over the duration of the borrowings.

The interest expense is the contractual cash
flows expected on the gross financial debt
existing at 31 December 2022.

The cash flow is estimated based on the
notional amount of the above-mentioned
borrowings and expected interest rates at year-
end 2022 and 2021. Interest on debt recognised
at year-end 2022 and 2021 for which no
contractual obligation exists (current borrowing
and cash pools) has been included for a two-
year period. The synthetic interest on lease
liabilities has also been included for a two-year
period. The interest applied to the part of the
debt where no contractual obligation exists is
2.8% (2021: 1.5%). The increase is due to the
increase in interest rates seen for most
currencies during 2022.

Maturity of financial liabilities

DKK million

2022

Contractual
cash flows

Maturity
< 1 year

Maturity
> 1 year
< 5 years

Maturity
> 5 years

Carrying
amount

Derivative financial instruments

Derivative financial instruments, payables

372

366

396

Non-derivative financial instruments

Gross financial debt

Interest expenses

Trade payables and other liabilities

Contingent liabilities

Contingent considerations

Non-derivative financial instruments

Financial liabilities

Total 2021

28,757

1,205

23,544

205

5,596

59,307

59,679

57,284

5,786

695

23,544

205

5,281

35,511

35,877

33,222

15,666

419

315

16,400

16,406

13,011

7,305

7,396

11,051

28,646

N/A

23,544

205

5,596

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

104

SECTION 4.8

DERIVATIVE
FINANCIAL
INSTRUMENTS

The Group enters into various derivative
financial instruments to hedge foreign
exchange and commodity risks, cf. sections 1.3
and 1.4, and seeks to apply hedge accounting
when this is possible. Hedging of future, highly
probable forecast transactions is designated as
cash flow hedges. In 2022, the Group entered
into its first Power Purchase Agreement (PPA)
as part of the Together Towards ZERO and
Beyond (TTZAB) effort to decarbonise the
Group. The PPA is a 10-year agreement and is
designated as a hedge of electricity
consumption at the brewery in Fredericia,
Denmark. The market value at 31 December
2022 was DKK 83m and is presented together
with aluminium hedges in other instruments.

The Group monitors the cash flow hedge
relationships twice a year to assess whether the
hedge is still effective.

Positive fair values of derivatives are recognised
as other receivables and negative values as
other liabilities.

The impact on other comprehensive income
and the fair value of derivatives classified as
cash flow hedges is presented in the cash flow
hedge table.

The impact on other comprehensive income
from exchange rate instruments relates to
hedges of Group entities’ purchases and sales in
currencies other than their functional currencies.
At 31 December 2022, hedging reserves

included DKK -843m in relation to cash flow
hedges for which hedge accounting is no longer
applied. Of the total reserve, DKK -595m relates
to hedges of the original acquisition of the
Russian operations currently held for sale. This
amount will be reclassified from equity to the
income statement and included in the net result
from Russian operations held for sale at the
time of disposal.

Fair value adjustments of derivative financial
instruments that are not designated as either
net investment hedges or cash flow hedges are
recognised in financial income and expenses.

Of the DKK -356m reported in OCI regarding
other instruments, DKK -71m is realised gains
on aluminium hedges transferred to Russian
operations held for sale. Of the DKK -8m
reported regarding exchange rate instruments,
DKK 211m is realised losses transferred to
Russian operations held for sale.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

When entering into financial instruments,
management assesses whether the instrument is an
effective hedge of recognised assets and liabilities,
expected future cash flows or financial investments.
The effectiveness of recognised hedging instruments is
assessed at least twice a year.

Fair values of derivative financial instruments are
calculated on the basis of level 2 input consisting of
current market data and generally accepted valuation
methods. Internally calculated values are used, and
these are compared with external market quotes on a
quarterly basis. For currency, aluminium and
electricity derivatives, the calculation is as follows:
a) The forward market rate is compared with the

agreed rate on the derivatives, and the difference in
cash flow at the future point in time is calculated.

b) The amount is discounted to present value.

When entering into a contract, management assesses
whether the contract contains embedded derivatives
and whether they meet the criteria for separate
classification and recognition. The Group currently
does not have any embedded derivatives that meet
the criteria for separate classification and recognition.

Cash flow hedges

DKK million

2022

Exchange rate
instruments

Other instruments

Total

2021

Exchange rate
instruments

Other instruments

Total

Expected recognition

Other
comprehen-
sive income

-8

-356

-364

Other
comprehen-
sive income

Fair value
receivables

Fair value
payables

Fair value,
net

101

163

-19

-202

-221

-101

-58

Fair value
receivables

Fair value
payables

Fair value,
net

-20

161

141

240

253

-47

-34

240

206

2023

-183

-140

2022

-34

240

206

2024
and later

Financial derivatives not designated as hedging instruments (economic hedges)

DKK million

2022

Exchange rate instruments

Ineffectiveness

Total

2021

Exchange rate instruments

Ineffectiveness

Total

Income
statement

Fair value
receivables

Fair value
payables

Fair value, net

-105

-16

-121

-27

-23

-105

-32

-15

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

105

Derivatives designated as and qualifying for
recognition as a cash flow hedge of financial
investments are recognised in other comprehensive
income. On complete or partial disposal of the
financial investment, the portion of the hedging
instrument that is recognised in other comprehensive
income and relates to that financial investment is
recognised in the income statement when the gain or
loss on disposal is recognised.

Hedges of net investments in foreign subsidiaries and
associates are accounted for in the same way as cash
flow hedges.

SECTION 4.8 (CONTINUED)

DERIVATIVE
FINANCIAL
INSTRUMENTS

ACCOUNTING
POLICIES

Derivative financial instruments are initially
recognised at fair value on the trade date and
subsequently remeasured at their fair value at the
reporting date.

The accounting for subsequent changes in fair value
depends on whether the derivative is designated as
one of:
• Fair value hedges of the fair value of recognised

assets or liabilities

• Cash flow hedges of particular risks associated with

the cash flow from forecast transactions

• Net investment hedges of currency fluctuations in

subsidiaries or associates.

The fair values of derivative financial instruments are
presented in other receivables or payables, and
positive and negative values are offset only when the
Group has the right and the intention to settle several
financial instruments net.

Changes in the fair value of a fair value hedge and of
derivative financial instruments not designated in a
hedge relationship are recognised in financial income
or expenses in the income statement.

Changes in the effective portion of the fair value of
derivative financial instruments that are designated
and qualify as a cash flow hedge are recognised in
the hedging reserve within equity. When the hedged
transaction materialises, amounts previously
recognised in other comprehensive income are
transferred to the same item as the hedged item.

SECTION 5

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

106

DISCONTINUED OPERATIONS, ACQUISITIONS,
DISPOSALS AND ASSOCIATES

Russian
operations
held for
sale

On 28 March, the Group announced its
decision to seek a full divestment of its
Russian business, following Russia’s invasion
of Ukraine.

SECTION 5.1
DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE

In March 2022, the Group announced its
decision to seek a full divestment of its Russian
business, following Russia’s invasion of Ukraine.

The net result from Russian operations held for
sale is presented separately in the income
statement and as net cash flow from
Russian operations held for sale in the
statement of cash flows. The comparative
figures have been restated accordingly.

Until completion of the divestment, the Russian
business will not be part of the Central &
Eastern Europe region and is therefore not
included in the segment disclosures, cf. section
2.

Analysis of net result from Russian operations held for sale

DKK million

Revenue

Costs

Profit before tax from Russian operations held for sale

Income tax

Profit from Russian operations held for sale

Impairment loss recognised on the remeasurement to fair value less costs to sell

Net result from Russian operations held for sale

2022

10,207

-8,228

1,979

-105

1,874

-9,949

-8,075

2021

6,537

-6,755

-218

-66

-284

In the statement of financial position, the
Russian business is presented as assets and
liabilities in disposal group held for sale. The
comparative figures for 2021 have not been
restated.

Financial performance
Revenue grew by 56% to DKK 10.2bn due to
price increases and the appreciation of RUB
during the year. Despite significant input cost
increases, profit from Russian operations held
for sale increased to DKK 1.9bn, supported by
depreciation being discontinued from March
2022, a positive foreign exchange impact of
around DKK 0.3bn and reversal of a tax
provision of around DKK 0.2bn. The net result
was DKK -8.1bn, due to the impairment charge
of DKK 9.9bn.

SECTION 5.1 (CONTINUED)

DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE

Goodwill allocated to Russia of DKK 9,551m
was classified as held for sale as of 28 March
2022. The allocation was made on a historic
basis, which, in the opinion of management,
best reflects the goodwill associated with the
operations held for sale. The goodwill was
originally recognised in several separate
transactions.

Major classes of assets and liabilities in disposal group held for sale

DKK million

Intangible assets

Property, plant and equipment

Inventories

Receivables

Cash and cash equivalents¹

Assets in disposal group held for sale

Borrowings

Tax liabilities, retirement benefit obligations etc.

Trade payables

Other liabilities

Liabilities in disposal group held for sale

Net assets in disposal group held for sale

2022

5,483

2,989

1,015

937

1,194
11,618

101

1,144

1,892

963
4,100

7,518

2021

17,796

2,562

776

828

127
22,089

1,275

1,585

771
3,631

18,458

¹ Cash and cash equivalents are not available for general use in the Group because of currency restrictions.

Net cash flow from Russian operations held for sale

DKK million

Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activities

Net cash flow from Russian operations held for sale

2022

1,952

-376

195

1,771

2021

981

-316

-3

662

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

107

ASSETS HELD FOR SALE
It is management’s assessment that the
shareholdings in the legal entities that will be
divested are available for immediate sale
subject to governmental approval in Russia. As
is customary when disposing of businesses, the
Group has elected to conduct a structured
separation process to eliminate the need for
transitional service arrangements to the
greatest extent possible.

Immediately after the intention to dispose of
the Russian operations was announced, a
project plan was initiated outlining the actions
required to complete all stages of transferring
the business, which was estimated to take up to
12 months. Successful completion of the process
of separating the business within 12 months
could be influenced by the political situation in
Russia, as governmental approval is required,
which could potentially prolong the process.

As the Russian operations are an integrated
part of the Group, the separation process is
complex, involving more than 150 separation
workstreams across business functions, which
has extended the divestment process compared
with an immediate sale involving transitional
service arrangements. The Group can at any
time elect to suspend the separation work and
complete an immediate sale of the relevant
shareholdings if required.

The necessary steps for the divestment were
initiated alongside the separation process. Since
the announcement, a process has been running
to clarify the impact of sanctions and the
Russian government’s approval process, select
advisors, identify potential buyers and formalise
the sales process. A buyer-screening process
has been initiated, and specific requirements of
the bidders defined. A careful screening process

is under way to evaluate the bidders’
appropriateness to participate in any
transaction.

An offer process is expected to commence in Q1
2023 with the aim of signing a divestment
agreement by mid-2023.

FAIR VALUE ESTIMATION
On classification of the Russian operations as
held for sale, management estimated the fair
value of the business (the expected sales price
less cost of disposal). The inputs applied in the
estimation of the fair value are categorised as
level 3 in the fair value hierarchy, as they are
not based on observable market data.

The Russian operations are considered to be a
rare asset to be classified as held for sale,
which is reflected in the estimation of the fair
value. The valuation was performed for the
Russian business on a stand-alone basis, which
excludes synergies from the integration into the
Group and the right to produce and sell the
Carlsberg brand, and increases the required
return on investment. This negatively impacted
the valuation compared with the value
attributed to the Russian business in previous
years’ impairment tests. Remeasurement of the
Russian operations classified as held for sale at
fair value resulted in recognition of a write-
down of DKK 9,949m in 2022.

The overall political situation in Russia is
uncertain, impacting the valuation. Presidential
Decrees have been issued setting out
prohibitions and restrictions on the sale of
certain Russian companies, directly or indirectly.
For the time being, it is uncertain how these
Decrees will affect the divestment process

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

108

SECTION 5.1 (CONTINUED)

DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE

in practice. However, they could potentially
impact the timing of the divestment and the
value realised in a sales transaction, as
authorisation from the Special Government
Commission in Russia is required for the
divestment. It is assessed that the legal
requirements for completing the divestment are
fulfilled to the extent these are within the
Group’s control. These uncertainties are
considered to be reflected in the assumptions
applied in the valuation.

The estimated fair value recognised in the
consolidated financial statements reflects the
value expected to be realised in a sales
transaction, factoring in all regulatory
processes and approvals currently known or
indicated by the authorities. However, there is
continuing uncertainty with regard to the
regulatory requirements in Russia, and there
may be further changes, which may impact the
valuation of the business.

Valuation process and model
The valuation is based not on external offers
for the business but on estimations of the net
present value of expected future cash flows in
local currency (RUB), as the cash flow
projections are largely denominated in RUB.

The valuation is based on a 10-year forecast of
free cash flows using budgets and forecasts for
2023-2025 prepared by local management in
the Russian business, with the forecast for the

remaining seven years based on general
projections for the key assumptions. Cash flows
beyond the 10-year period are extrapolated
using a terminal period growth rate.

Assumptions applied in the short to medium
term generally reflect management’s
expectations considering all relevant factors
and are based on experience and external
sources of information, where possible and
relevant.

The valuation excludes potential premiums that
may arise as part of the price discovery process,
such as a synergy premium that some buyers
may be able to access, or any other scarcity
premium.

Key assumptions
Management has estimated the following key
assumptions based on level 3 inputs:
• Post-tax discount rate 21%
• Terminal period growth rate 4%
• Compounded annual growth in unadjusted
free cash flow in the forecast period 5%

In addition, management has assessed the
validity of the official foreign currency
exchange rate (RUB/DKK) applied, published
by the Central Bank of Russia.

Discount rate
The discount rate applied is a post-tax
weighted average cost of capital (WACC). The
assumptions for determining the discount rate
are subject to a very high degree of volatility
and uncertainty due to the current
macroeconomic situation in Russia.

The war has resulted in increased inflation in
Russia. The effect is seen in the higher interest
rate incorporated in the WACC used for

discounting cash flows, as well as the increase
in the inflation rates used to project cash flows.
The estimation of the WACC is based on a
country-specific 10-year swap rate for RUB
debt, with the addition of a credit spread
estimated using an individual credit assessment
of the Russian business. The equity risk
premium and beta have also been estimated
for the Russian business on a stand-alone basis.

In addition to estimation of the discount rate
being performed on a stand-alone basis, the
significant discount rate increase compared
with what was applied in previous years for
impairment testing of Russian assets can be
attributed to the increase in equity risk
premium. The increase in equity risk premium is
linked to the increased uncertainty surrounding
the Russian economy in general and the factors
surrounding the successful completion of the
divestment in particular. This includes, but is not
limited to, any regulatory requirements on or
limitations of any sales price that can be
obtained in a sales transaction.

International financial institutions have updated
Russia’s risk status to the highest level,
reflecting their belief that the political situation
in the country has significantly increased the
risks for foreign investors, which is why the
increased discount rate is considered
appropriate.

Growth rates
The growth rates in the budgets and forecasts
for 2023-2025 are based on expected market
developments in Russia, taking the war and the
general macroeconomic environment into
consideration. The terminal period growth rate
is assumed to be slightly lower than the Central
Bank of Russia’s long-term inflation target of
around 4%.

Profit margins in the forecast period are
assumed to be flat and at levels realised in
previous years with no significant restructurings
included, resulting in steady year-on-year
growth in free cash flow.

Foreign currency exchange rate
The fair value has been recognised in local
currency and translated into the Group’s
presentation currency (DKK) at the official
exchange rate on the reporting date. This is
currently considered to be the best estimate.
Any adjustment to the consolidated value of
the Russian business due to changes in the
exchange rate has been recognised in other
comprehensive income and included in the
currency translation reserve within equity.

It is currently not known whether the disposal
will be settled in RUB or another currency. The
RUB exchange rate is subject to significant
uncertainty, and there is a risk that a disposal
settled in e.g. EUR or USD would be completed
at an exchange rate that is lower than the
official RUB exchange rate. However, given the
uncertainty related to the factors surrounding
completion of the transaction, the valuation is
maintained in RUB and the value is translated
into DKK at the official exchange rate.

Fair value reassessed at 31 December 2022
The fair value of the disposal group held for
sale was reassessed at 31 December 2022. The
enterprise value in local currency remained
largely unchanged compared with the initial
valuation of 28 March. The net asset value in
DKK increased during the year to DKK 7.5bn,
mainly due to the appreciation of the Russian
rouble (DKK/RUB 0.0983 at 31 December
compared to 0.0794 at 31 March) and the
improved net cash position because of the
positive development in the operating result.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

109

SECTION 5.1 (CONTINUED)

DISCONTINUED
OPERATIONS AND
DISPOSAL GROUP
HELD FOR SALE

Cash proceeds from the disposal
If the proceeds from the disposal are in RUB,
there is a significant risk that the cash received
will not be immediately available for general
use in the Group because of the currency
restrictions in place and the limited exchange of
RUB in the financial markets.

RECYCLING EQUITY RESERVES ON
COMPLETION OF THE DIVESTMENT
On completion of the divestment, the currency
translation and hedging reserves within equity
related to the Russian business will be
reclassified from equity to the income
statement and included in the net result from
Russian operations held for sale.

At 31 December 2022, the accumulated
currency translation reserve related to the
Russian business represented a loss of around
DKK 39.7bn (2021: loss of DKK 37.0bn), around
half of which was recognised when the RUB
depreciated significantly in December 2014
following the Russian invasion and annexation
of Crimea. This figure includes the fair value of
net investment hedges of DKK -24.0m (2021:
DKK -24.0m); see section 4.6.

After reclassification of the reserves to the
income statement, the amount will be
recognised in retained earnings and there will
be no change in total equity. The
reclassification will have no effect on the
Group’s cash position.

SENSITIVITY ANALYSIS
A sensitivity analysis of the key assumptions in
the assessment of the fair value has been
performed to determine the sensitivity to
changes in the key assumptions applied in the
valuation.

Key assumptions
The key assumptions relevant to the
assessment of the fair value are:

• Post-tax discount rate
• Terminal period growth rate
• Compounded annual growth in unadjusted

free cash flow

• Foreign currency exchange rate (RUB/DKK)

Sensitivity analysis

DKK million

Discount rate

Terminal period growth rate

Growth in free cash flow

Foreign exchange rate

1%-point
increase

1%-point
decrease

~-300
~100
~400
~100

~400
~-100
~-400
~-100

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The accumulated hedging reserve related to the
Russian business represented a loss of around
DKK 0.6bn (2021: loss of DKK 0.5bn) and
includes both active hedges and hedges for
which hedge accounting is no longer applied;
see section 4.8.

The Group classifies non-current assets and disposal
groups as held for sale when management assesses
that their carrying amounts will be recovered through
a sale rather than continued use. Management’s
assessment is based on an evaluation of whether the
sale is highly probable and the asset or disposal group
is available for immediate sale in its current condition.
Actions required to complete the sale should indicate

that it is unlikely that significant changes to the sale
will be made or that the decision to sell will be
withdrawn. Management must be committed to the
plan to sell the asset and the sale must be expected
to be completed within one year from the date of the
classification.

On classification, management estimates the fair
value. Non-current assets and disposal groups
classified as held for sale are measured at the lower
of their carrying amount and fair value less costs of
disposal. Costs of disposal are the incremental costs
directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income
tax expense.

Depending on the nature of the non-current assets
and the disposal group’s activity, assets and liabilities,
the estimated fair value may be associated with
uncertainty and possibly adjusted subsequently.
Measurement of the fair value of disposal groups is
categorised as level 3 in the fair value hierarchy, as
measurement is not based on observable market
data.

ACCOUNTING
POLICIES

Assets held for sale comprise non-current assets and
disposal groups held for sale. Liabilities held for sale
are those directly associated with the assets that will
be transferred in the transaction. Immediately before
classification as held for sale, the assets or disposal
groups are remeasured in accordance with the Group’s
accounting policies. Thereafter, they are measured at
the lower of their carrying amount and fair value less
costs to sell. Any impairment loss is allocated first to
goodwill, and then to remaining assets on a pro rata
basis, except that no loss is allocated to inventories,
financial assets, deferred tax assets or employee
benefit assets, which continue to be measured in
accordance with the Group’s accounting policies.
Property, plant and equipment and intangible assets
are not depreciated or amortised once classified as
held for sale.

Impairment losses on initial classification as held for
sale, and subsequent gains and losses on
remeasurement are recognised in the income
statement.

Non-current assets and disposal groups held for sale
are presented separately as current lines in the
statement of financial position and the main elements
are specified in this section. Comparative figures are
not restated.

A disposal group is presented as discontinued
operations if it is a group of companies, i.e. part of a
geographical area of operations that has either been
disposed of or is classified as held for sale.

Discontinued operations are excluded from the results
of continuing operations and presented separately as
net result from discontinued operations held for sale
in the income statement. Comparative figures are
restated.

Cash flow from discontinued operations is presented
separately as net cash flow from Russian operations
held for sale in the statement of cash flows and
specified in this section. Comparative figures are
restated.

The disposal group/assets and liabilities classified as
held for sale are presented separately as current
items in the statement of financial position.
Comparative figures are not restated.

Additional disclosures are provided in this section. All
other sections of the financial statements include
amounts for continuing operations, unless indicated
otherwise.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

110

SECTION 5.2

INVESTMENT MODEL
AND RISKS

depending on the structure of the partnership.
Business and financial success, and the related
risks, depend on the ability of the Group and
the local partner to forge a strong and aligned
cooperation.

MARKET ACCESS
In the beer industry, access to local markets is
highly dependent on establishing good
relationships with customers in the on- and off-
trade channels, national distributors, local
suppliers and relevant authorities governing the
beverage industry. Often, the most efficient
way of establishing such relations is by
acquiring a local brewer or engaging with a
local partner that already has the relevant
relationships.

When the Group expands its business to new
geographies, it often therefore does so in
collaboration with a local partner. Such a
partnership can take different legal forms and
impacts the consolidated financial statements
accordingly.

In addition to its activities in the beer industry,
the Group operates in the soft drinks industry,
an industry dominated by large global brand
owners. The Group is engaged in long-term
contractual partnerships to produce, distribute
and sell third-party soft drink brands. In
addition to granting the right to produce, the
brand owners usually provide recipes and/or
raw materials, while the Group has the
necessary production capabilities and
distribution platform.

INVESTMENT MODEL
Entering into a partnership can reduce the
financial exposure and mitigate the business
risks associated with entering new markets or
expanding the activities in an existing market.
The financial exposure, however, varies

In some markets, the Group enters as a non-
controlling shareholder, providing a degree of
financing and contributing knowledge of the
beer industry. The Group thus leaves control
with the partner and recognises the investment
as an associate.

Other investments are structured as joint
ventures, where the Group and the local partner
jointly make the operational decisions and
share strategic and tactical responsibility.

More commonly, the Group structures its
partnerships such that it exercises management
control, usually by way of majority of the
voting rights. These investments are fully
consolidated subsidiaries, which are just as
important as other types of partnership for
success in the local markets, but mean that the
Group has increased financial exposure.
Investments in businesses in which the Group
exercises management control often involve put
and/or call options or a similar structure.

IMPACT ON FINANCIAL STATEMENTS
Investments in associates are consolidated in
the financial statements using the equity
method. The accounting risks associated with
these entities are limited to the investment
made, the proportionate share of the net profit
and any specific additional commitments to
banks or other parties, as well as specific
guarantees or loans the Group provides to the
partnership.

In businesses where the Group exercises
management control, the consolidated
financials are impacted by full exposure to the
earnings and other financial risks. From an
accounting point of view, the Group treats any
put options held by partners in such entities as
if they had already been exercised by the
partner, i.e. anticipating that the acquisition will
occur. The accounting impact is that the non-
controlling interests are not recognised, and no
part of net profits or equity is attributed to
them. Instead, the dividends received by the
partner from the business are classified as
financial expenses for the purpose of
accounting.

Common to all partnerships is the risk of
disagreement and, ultimately, dissolution.
Disagreements with partners on the operational
management and strategic directions of
partnerships may limit our ability to manage
the growth and risk profile of our business. The
Group continuously seeks to promote a fair and
mutually beneficial development of the
partnerships, which is crucial to be successful.
However, in certain partnerships the partners’
pursuit of goals and priorities that are different
from those of the Group might result in
disagreements, affecting operational and
financial performance. Different goals and
priorities of this kind can become more
pronounced in the period when a partner has
the right to exit the partnership.

A dissolution will initially impact the accounting
treatment of an investment. The accounting
treatment will depend on whether the Group or
its partner is exiting the business. In the long
term, however, the impact on the operation of
the local entity and the collaboration with
customers, distributors, authorities etc. can be
significant if the partner was instrumental in

managing these relationships. The risk of a
partnership dissolution may therefore have a
negative impact on the underlying business and
the financial performance recognised in the
consolidated financial statements.

The Group is involved in many partnerships,
one being the 67% shareholding in Carlsberg
South Asia Pte Ltd. (CSAPL), Singapore, which
is the parent company of the Group’s activities
in India (100%) and Nepal (90%). The company
is jointly owned with a partner (33%). In 2022,
the Group invoked its right to begin the call
process, and the partner exercised its put option
under the Shareholders’ Agreement. A put
option valuation certificate was issued on 6
February 2023 after which our partner issued a
formal put notice to sell its 33% shareholding in
CSAPL to the Group, cf. section 5.4. For the
purpose of the consolidated financial
statements, the put option is accounted for as if
it had already been exercised. CSAPL and its
investments in India and Nepal are therefore
included in the consolidated financial
statements, with no profits or equity attributed
to the non-controlling shareholder. Please refer
to section 3.4 for a detailed description of the
dispute with the partner in CSAPL.

Partnerships in the soft drinks industry are
based on long-term contractual agreements
and come to an end when the contract
terminates. The termination of a significant
partnership with a global soft drink brand
owner would have a negative impact on the
Group’s financial performance.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

111

SECTION 5.3

ACQUISITIONS
AND DISPOSALS

ACQUISITION OF ENTITIES
Acquisitions after the reporting date 2022
On 15 December 2022, it was announced that
the Group had entered into an agreement to
acquire Waterloo Brewing Ltd., Canada, for a
cash consideration of approximately CAD 144m
(DKK 742m). The transaction is expected to
close in the first half of 2023, subject to
approval by Waterloo Brewing’s shareholders
and the satisfaction or waiver of other
customary closing conditions.

2021
In January 2021, Carlsberg acquired 100% of
the German Wernesgrüner Brewery for a cash
consideration of DKK 511m. The purchase price
allocation of the fair value of identified assets,
liabilities and contingent liabilities was
completed in 2021, resulting in recognition of
goodwill of DKK 267m.

DECONSOLIDATION OF ENTITIES
The local shareholder owning 10% of the
shares in Gorkha Brewery, Nepal, is a related
party to the Group’s 33% partner in CSAPL. In
addition to the ongoing disputes with our
partner in CSAPL regarding India and Nepal,
there is also a dispute with the local 10%
shareholder in Gorkha Brewery. Contrary to its
legal and contractual rights, the Group’s
influence on the business operations in Nepal
has been restricted since 2021 through actions
that hamper its right of decision-making and
insight into the business. The Group therefore
decided to cease full consolidation of the
Nepalese business with effect from the end of
2021. We contested the actions in Nepal

through the local courts. A Nepalese High Court
judgment was expected in 2022 but has been
postponed and is now expected in H1 2023. A
favourable ruling would not immediately lead
to reconsolidation of the Nepalese business,
which would require demonstration of the
consistent ability to exercise our rights as the
majority shareholder. Until the rights as
majority shareholder are de facto re-
established, the Group continues not to
consolidate the Nepalese business. The inability
to exercise the rights of the majority
shareholder in the Nepalese business has a
negative impact on the value of the business.
This should, in the opinion of the Group, be
reflected in the valuations of the put and call
options, cf. section 5.4.

CASH FLOW
Cash flow to acquire or dispose of
shareholdings in associates and when gaining
control of subsidiaries is included in financial
investments, while the cash flow on acquisition
of an additional shareholding in a subsidiary,
i.e. acquiring non-controlling interests, is
presented in financing activities. In 2022, the
Group made a capital injection of DKK 48m in
an associate.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Assessment of control
The classification of entities where Carlsberg controls
less than 100% of the voting rights is based on an
assessment of the contractual and operational
relationship between the parties. This includes
assessing the conditions in shareholder agreements,
contracts etc. Consideration is also given to the extent
to which each party can govern the financial and
operating policies of the entity, how the operation of
the entity is designed, and which party possesses the
relevant knowledge and competences to operate the
entity.

Elements of cash consideration paid
and received

DKK million

2022

2021

Consideration paid for
acquisition of entities
Consideration received for
disposal of entities

Cash and cash equivalents
acquired/disposed of

Acquisition and disposal of
entities, net
Consideration paid for
acquisition of associates
Consideration paid for increase
of investment in associates

Acquisition and disposal of
associates, net

Cash flow from acquisition of
shareholdings, total

-48

-214

-428

-621

-48

-669

Another factor relevant to this assessment is the
extent to which each of the parties can direct the
activities and affect the returns, for example by
means of rights, reserved matters or casting votes.

Purchase price allocation procedures
For acquisitions of entities, the assets, liabilities and
contingent liabilities of the acquiree are recognised
using the acquisition method. The most significant
assets acquired generally comprise goodwill, brands,
property, plant and equipment, receivables and
inventories.

No active market exists for the majority of the
acquired assets and liabilities, in particular in respect
of acquired intangible assets. Accordingly,
management makes estimates of the fair value of
acquired assets, liabilities and contingent liabilities.
Depending on the nature of the item, the determined
fair value of an item may be associated with
uncertainty and possibly adjusted subsequently.

The unallocated purchase price (positive amount) is
recognised in the statement of financial position as
goodwill and allocated to the Group’s cash-generating
units.

Brands
The value of the brands acquired and their expected
useful life are assessed based on the individual
brand’s market position, expected long-term
developments in the relevant markets and
profitability.

The estimated value includes all future cash flows
associated with the brand, including the related value
of customer relations etc.

Management determines the useful life based on the
brand’s relative local, regional and global market
strength, market share, and the current and planned
marketing efforts that are helping to maintain and
increase its value. When the value of a well-
established brand is expected to be maintained for an
indefinite period in the relevant markets, and these
markets are expected to be profitable for a long
period, the useful life of the brand is determined to be
indefinite.

Brands are measured using the relief from royalty
method, under which the expected future cash flows
are based on key assumptions about expected useful
life, royalty rate, growth rate and the theoretical tax
effect. A post-tax discount rate is used that reflects
the risk-free interest rate with the addition of a risk
premium associated with the particular brand. The
model and assumptions applied are consistent with
those used in impairment testing, and are described in
further detail in section 2.2.3.

Customer agreements and portfolios
The value of acquired customer agreements and
customer portfolios is assessed based on the local
market and trading conditions. For most entities, there
is a close relationship between brands and sales.
Consumer demand for beer and other beverages
drives sales, and therefore the value of a brand is
closely linked to consumer demand, while there is no
separate value attached to customers (shops, bars
etc.), as their choice of products is driven by consumer
demand. The relationship between brands and
customers is carefully considered so that brands and

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

112

SECTION 5.3 (CONTINUED)

ACQUISITIONS
AND DISPOSALS

customer agreements are not both recognised on the
basis of the same underlying cash flows.

Property, plant and equipment
The fair value of land and buildings, and standard
production and office equipment is based, as far as
possible, on the fair value of assets of similar type
and condition that may be bought and sold in the
open market.

Property, plant and equipment for which there is no
reliable evidence of the fair value in the market (in
particular breweries, including production equipment)
are valued using the depreciated replacement method.

This method is based on the replacement cost of a
similar asset with similar functionality and capacity.
The calculated replacement cost is then reduced to
reflect functional and physical obsolescence. The
expected synergies and the user-specific intentions for
the expected use of assets are not included in the
determination of the fair value.

Completed purchase price allocations
Management believes that the purchase prices for the
Wernesgrüner Brewery activities, which are accounted
for in the consolidated financial statements, reflect
the best estimate of the total fair value of these
businesses and the proportionate value of identified
assets, liabilities and contingent liabilities of the non-
controlling interests, and accordingly the allocation of
goodwill to controlling interests, but not to non-
controlling interests.

The purchase price allocations of the identified assets,
liabilities and contingent liabilities were completed
within 12 months of the acquisitions. The main
revaluation adjustments related to brands, property,
plant and equipment, and deferred tax liabilities,
which in turn mainly related to brands.

Goodwill
Goodwill was allocated to the Western Europe CGU in
line with the allocation of the Group’s existing German
business. The goodwill is not deductible for tax
purposes.

Wernesgrüner Brewery
Brands
The value of brands was estimated using the Group’s
principles described above. A brand with a fair value
of DKK 113m was recognised and classified as an
intangible asset with an indefinite useful life.

Property, plant and equipment
The fair value and expected useful life of the brewery
equipment and related buildings of the acquired
brewery were determined with assistance from
external engineering experts in the brewery industry
and resulted in a positive revaluation adjustment of
DKK 53m.

Financial impact of acquisition
Revenue and net profit included in the consolidated
financial statements since the acquisition at
1 January 2021 were DKK 156m and DKK 7m
respectively.

ACCOUNTING
POLICIES

Acquisitions
The acquisition date is the date when the Group
effectively obtains control of an acquired subsidiary or
significant influence over an associate.

The cost of a business combination comprises the fair
value of the consideration agreed upon, including the
fair value of any consideration contingent on future
events.

Goodwill and fair value adjustments in connection
with the acquisition of an entity are treated as assets
and liabilities belonging to the foreign entity and
translated into the foreign entity’s functional currency
at the exchange rate at the transaction date.

The acquired entities’ identifiable assets, liabilities and
contingent liabilities are measured at fair value at the
acquisition date.

Identifiable intangible assets are recognised if they
are separable or arise from a contractual right.
Deferred tax on revaluations is recognised.

The identifiable assets, liabilities and contingent
liabilities on initial recognition at the acquisition date
are subsequently adjusted up until 12 months after the
acquisition. The effect of the adjustments is
recognised in the opening balance of equity, and the
comparative figures are restated accordingly if the
amount is material.

Changes in estimates of contingent purchase
considerations are recognised in the income
statement under special items, unless they qualify for
recognition directly in equity.

Disposals and loss of control
Gains or losses on the disposal or liquidation of
subsidiaries and associates are recognised as the
difference between the sales price and the carrying
amount of net assets (including goodwill) at the date
of disposal or liquidation, and net of foreign exchange
adjustments recognised in other comprehensive
income, and costs to sell or liquidation expenses.

The shareholding retained after the loss of control of
subsidiaries is remeasured at fair value and accounted
for as the fair value on initial recognition of a financial
asset or the cost of an investment in an associate.
Gains or losses on the loss of control of subsidiaries
are recognised as the difference between the fair
value of the retained shareholding and the carrying
amount of the derecognised net assets (including
goodwill) at the date of loss of control, and net of
foreign exchange adjustments recognised in other
comprehensive income.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

113

SECTION 5.4

CONTINGENT
CONSIDERATIONS

Contingent considerations relate to options held
by non-controlling interests in subsidiaries to
sell their shares to the Group and to deferred
payments in the acquisition of entities
contingent on market conditions.

At the end of the reporting period, the
contingent considerations related to put options
on the shares in CSAPL, Brewery Alivaria,
Belarus, and in a minor craft brewery in
Western Europe.

In accordance with the Group’s accounting
policy, shares subject to put options are
consolidated as if the shares had already been
acquired. The ownership percentage at which
these subsidiaries are consolidated therefore
differs from the legal ownership interest
retained by the Group. Both the legal and the
consolidated ownership are stated in section 10.

The carrying amount of contingent
considerations is determined in accordance with
the terms and conditions agreed with the
holders of the options.

Of the contingent considerations, DKK 0.3bn
(2021: DKK 0.4bn) is expected to fall due after
more than 12 months.

PUT OPTION FOR SHARES IN CARLSBERG
SOUTH ASIA PTE LTD (CSAPL)
A liability award was issued by the arbitration
tribunal in May 2022. The arbitration tribunal
awarded Carlsberg the right to call our partner
CSAPL Holdings Pte Ltd’s (CSAPLH) shares in
CSAPL. Carlsberg immediately invoked its right
to begin the call option valuation process, and
CSAPLH subsequently exercised its right under
the Shareholders’ Agreement to begin the put
option valuation process.

The put option price has been determined as
the simple average of two valuations assessed
by two independent external valuers, which are
internationally recognised accounting firms, one
appointed by each shareholder. The put option
valuation was released by the valuers on 6
February 2023, stating a value for CSAPLH’s
shares in CSAPL of USD 744m (DKK 5,188m).
CSAPLH has on 6 February, issued a formal put
notice to sell its 33% shareholding in CSAPL to
the Group at the put option valuation amount.
The put option liability recognised in the
consolidated financial statements has been
adjusted to reflect the put option valuation
amount received from the valuers as the
acquisition of the shares may be completed at

Contingent considerations

DKK million

Contingent considerations at 1 January

Additions

Payments

Transfer to disposal group held for sale

Fair value adjustments

Contingent considerations at 31 December

2022

4,254

-13

1,336

5,577

2021

5,290

-247

-805

4,254

that price. A transaction could potentially be
completed in 2023, subject to the clarification
of any disputes raised by the shareholders and
timelines for any regulatory approvals. CSAPLH
has previously asked for an amount for its 33%
shareholding in CSAPL that the Group
considered to be unreasonably high and not to
reflect the fair value of the shareholding. From
the put option valuation received, it is the
Group’s assessment that key assumptions,
which the Group considers to be unreasonable,
may have been applied in the valuation
performed by CSAPLH’s appointed valuator.
The put option valuation can be disputed by the
shareholders if the valuations are conducted in
breach of the Shareholders’ Agreement,
including, but not limited to, circumstances
where the valuations are tainted by fraud or
manifest error. The Group will work with its
external advisors to evaluate its position and
assess whether CSAPLH has committed
additional breaches of the Shareholders’
Agreement, which would justify further legal
steps against CSAPLH.

The fair value of the put option increased by
DKK 1.4bn in 2022.

The Group previously called in a loan made to
CSAPLH, the loan having become due and
payable in full. In January 2022, the Singapore
court of appeal finally confirmed that the loan
with interest was repayable to Carlsberg in full,
totalling DKK 338m. The loan had not been
repaid as of 31 December 2022.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The fair value of contingent considerations linked to
put options is calculated on the basis of level 3 input
consisting of non-observable data, such as entity-

specific discount rates and industry-specific
expectations of price developments, and generally
accepted valuation methods, including discounted
cash flows and multiples.

Estimates are based on updated information since
initial recognition of the contingent consideration,
including new budgets and sales forecasts, discount
rates etc. The assumptions applied are in line with
those used in the impairment tests as described in
section 2.2 but reflecting the different models and
valuation techniques required. The fair values of other
contingent considerations are measured at the
expected future price of selected shares.

ACCOUNTING
POLICIES

On acquisition of non-controlling interests, i.e.
subsequent to the Group obtaining control, acquired
net assets are not measured at fair value. The
difference between the cost and the non-controlling
interests’ share of the total carrying amount, including
goodwill, is transferred from the non-controlling
interests’ share of equity to equity attributable to
shareholders in Carlsberg A/S. The amount deducted
cannot exceed the non-controlling interests’ share of
equity immediately before the transaction.

On disposal of shareholdings to non-controlling
interests, the difference between the sales price and
the share of the total carrying amount, including
goodwill acquired by the non-controlling interests, is
transferred from equity attributable to shareholders in
Carlsberg A/S to the non-controlling interests’ share
of equity.

Fair value adjustments of put options granted to non-
controlling interests are recognised directly in the
statement of changes in equity.

Other contingent considerations (earn-outs) that are
not linked to a future transfer of additional
shareholdings are measured in accordance with the
terms of the contract with the seller. The revaluation
of such contingent considerations is recognised in
special items.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

114

SECTION 5.5

ASSOCIATES

Investments in associates include the
businesses in Portugal (60%), Myanmar (61%),
Gorkha Brewery (90%), Carlsberg Byen in
Denmark (25%) and four associates in China
(50%). The total investment in these associates
amounted to DKK 4,307m at 31 December 2022
(2021: DKK 3,908m).

The Group’s ownership of Super Bock, Portugal,
is 60%. Nevertheless, Super Bock remains an
associate of the Group due to the ownership
structure. Please refer to section 10 for further
details.

In 2021, disputes with the local non-controlling
shareholder prevented the Group from
exercising its rights as a controlling shareholder
in Gorkha Brewery, Nepal. The Group decided
to cease full consolidation of the company
from 31 December 2021 and it was therefore
reclassified as an associate and recognised at
fair value, DKK 1,188m, cf. section 5.3.

Despite the 61% legal ownership share in
Myanmar Carlsberg, the entity is classified as
an associate due to the structure of the
agreement with the partner and the
environment in the country.

Fair value of investment in listed associates

DKK million

2022

2021

The Lion Brewery Ceylon,
Sri Lanka

214

355

In 2021, disputes with the partner regarding the
management of Tibet Lhasa Brewery meant
that the Group lost its significant influence in
the company. The investment was therefore
reclassified from associates to other financial
investments. The disputes resulted in significant
disruptions to the operation of the company,
which negatively impacted the financial
performance. The investment was therefore
written down to its recoverable amount, cf.
section 2.2.

For associates in which the Group holds an
ownership interest of less than 20% and
participates in the management of the
associate the Group is considered to be
exercising significant influence. None of the
associates are material to the Group.

ACCOUNTING
POLICIES

Investments in associates are recognised according to
the equity method, which entails measurement at cost
and adjustment for the Group’s share of the profit or
loss and other comprehensive income of the associate
after the date of acquisition. The share of the result
must be calculated in accordance with the Group’s
accounting policies. The proportionate share of
unrealised intra-group profits and losses is eliminated.
Investments in associates with negative net asset
values are measured at DKK 0.

If the Group has a legal or constructive obligation to
cover a deficit in the associate, the deficit is
recognised under provisions. Any amounts owed by
associates are written down to the extent that the
amount owed is deemed irrecoverable.

Key figures for associates

DKK million

Carlsberg Group share

2022

Total

2021

Total

Profit
after tax

901

336

Other
comprehensive
income

Total
comprehensive
income

Investments in
associates

901

5,523

346

5,172

SECTION 6

TAX

17.9%

TAX RATE
Tax rate is down from 20.6% in 2021,
mainly as a result of adjustments to
prior years.

1.6bn

Deferred tax liability transferred to
disposal group held for sale (DKK).

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

115

SECTION 6.1
INCOME TAX

ACCOUNTING
POLICIES

Income tax comprises current tax and changes in
deferred tax for the year, including changes as a
result of a change in the tax rate. The tax expense
relating to the profit/loss for the year is recognised in
the income statement, while the tax expense relating
to items recognised in other comprehensive income is
recognised in the statement of comprehensive income.

If the Group obtains a tax deduction on computation
of the taxable income in Denmark or in foreign
jurisdictions as a result of share-based payment
programmes, this tax effect of the programmes is
recognised in tax on profit/loss for the year.

Reconciliation of the effective tax rate for the year

The nominal weighted tax rate for the Group is
calculated as domestic tax rates applicable to
profits in the entities as a proportion of each
entity’s share of the Group’s profit before tax.

The Group’s total tax cost was DKK -389m
(2021: DKK -58m) lower than the Group’s
nominal weighted tax expense. Compared with
the nominal weighted tax expense, the total tax
expense was negatively impacted by the effect
on deferred tax assets of changes in tax rates
and non-deductible expenses (particularly
marketing expenses and intercompany charges)
and positively impacted by prior-year
adjustments and tax incentives, resulting in an
effective tax rate of 17.9% (2021: 20.6%).

Nominal weighted tax rate

Change in tax rate

Adjustments to tax for prior years

Non-capitalised tax assets and liabilities

The negative impact from special items
comprised primarily non-deductible
impairments. Excluding special items and tax
thereon, the effective tax rate would be 16.6%
(2021: 22.6%).

Non-taxable income

Non-deductible expenses

Tax incentives etc.

Special items

Withholding taxes

It is not possible to deduct all interest and fair
value adjustments due to various interest
deductibility restriction rules. Therefore, tax on
such adjustments fluctuates from year to year.

Other, including tax in associates

Effective tax rate for the year

Effective tax rate for the year, excluding the
effect of non-taxable and non-deductible
transactions in special items

2022

DKK million

2,167

206

-393

-216

-22

214

-229

126

-158

1,778

2021

DKK million

2,212

-14

-41

-81

-43

333

-1

-239

131

-103

2,154

21.2

-0.1

-0.4

-0.8

-0.4

3.2

-2.3

1.3

-1.1

20.6

22.6

21.7

2.1

-3.8

-2.2

-0.2

2.1

-2.3

1.3

0.8

-1.6

17.9

16.6

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

116

SECTION 6.1 (CONTINUED)

INCOME TAX

Income tax expenses

DKK million

Income
statement

Other
comprehensive
income

Total
comprehensive
income

Income
statement

Other
comprehensive
income

Total
comprehensive
income

2022

2021

Tax for the year can be specified as follows

Current tax

Change in deferred tax and non-current tax payables during the
year

Change in deferred tax as a result of change in tax rate

Adjustments to tax for prior years

Total

2,205

-240

206

-393

1,778

-25

-2

-27

Tax recognised in other comprehensive income

DKK million

Foreign exchange adjustments

Hedging instruments

Retirement benefit obligations

Share of other comprehensive income in associates

Total

Recognised
item before tax

Tax income/
expense

3,926

759

-586

4,099

-100

-27

2,180

-242

206

-393

1,751

2022

After tax

3,926

659

-513

4,072

2,402

-193

-14

-41

2,154

-83

-20

-103

Recognised
item before tax

Tax income/
expense

-3,307

323

-578

-10

-3,572

-83

-20

-103

2,319

-213

-14

-41

2,051

2021

After tax

-3,307

240

-598

-10

-3,675

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

117

Carlsberg operates in a large number of tax
jurisdictions where tax legislation is highly complex
and subject to interpretation. Management makes
assessments on uncertain tax positions to ensure
recognition and measurement of tax assets and
liabilities.

Where alternative tax rules can be applied to
determine the tax base, deferred tax is measured
based on the planned use of the asset or settlement
of the liability. Deferred tax is recognised on expected
dividend payments from subsidiaries and associates in
countries levying withholding tax on distributions.

SECTION 6.2

TAX ASSETS AND
LIABILITIES

Of the total deferred tax assets recognised,
DKK 285m (2021: DKK 43m) relates to tax
losses carried forward, the utilisation of which
depends on future positive taxable income
exceeding the realised deferred tax liabilities.It
is management’s opinion that these tax losses
carried forward can be utilised within a
foreseeable future.

Tax assets not recognised of DKK 1,123m (2021:
DKK 1,373m) primarily relates to tax losses that
are not expected to be utilised in a foreseeable
future. Of these, tax losses that will not expire
amounted to DKK 932m (2021: DKK 1,042m).
Tax losses of DKK 342m (2021: DKK 331m) can
only be carried forward for a limited number of
years.

Deferred tax of DKK 23m (2021: DKK 39m) has
been recognised in respect of future dividend
distributions.

Distribution of reserves for other subsidiaries
will not trigger a significant tax liability based
on current tax legislation.

Changes in deferred tax and non-current tax
payables for the year amounted to DKK 240m
(2021: DKK 193m), in addition to Russian tax
liabilities being reclassified to disposal group
held for sale.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The Group recognises deferred tax assets, including
the expected tax value of tax loss carried forward, if
management assesses it can be offset against positive
taxable income in the foreseeable future. This
assessment is made annually and based on budgets
and business plans for the coming years, including
planned commercial initiatives under our control.

ACCOUNTING
POLICIES

Current tax payable and receivable are recognised in
the statement of financial position as tax computed
on the taxable income for the year, adjusted for tax
on the taxable income of prior years and for tax paid
on account respectively.

Deferred tax on all temporary differences between
the carrying amount and the tax base of assets and
liabilities is measured using the balance sheet liability
method. However, deferred tax is not recognised on
temporary differences relating to goodwill that is not
deductible for tax purposes or on office premises and
other items where temporary differences, apart from
business combinations, arise at the acquisition date
without affecting either profit/loss for the year or
taxable income.

Changes to non-current tax assets and liabilities

Specification of deferred tax

DKK million

Tax assets and liabilities at 1 January, net

Tax assets and liabilities, net reclassified to disposal group held for sale

Adjustments to prior years

Acquisition of entities

Recognised in other comprehensive income

Recognised in the income statement, net continuing operations

Recognised in the income statement, net discontinuing operations

Change in tax rate

Foreign exchange adjustments

Tax assets and liabilities at 31 December, net

Recognised as follows

Tax liabilities

Tax assets

Tax assets and liabilities at 31 December, net

2022

4,428

-1,645

290

-2

-240

206

3,110

4,841

-1,731

3,110

2021

4,498

DKK million

Intangible assets

-34

172

-20

-193

-14

-23

Property, plant and equipment

Current assets

Provisions and retirement benefit obligations

Fair value adjustments

Tax losses

Other

Total before offset

Offset

4,428

Deferred tax assets and liabilities at 31 December

Expected to be used as follows

Within one year

After more than one year

Total

6,350

-1,922

4,428

Deferred tax assets related to tax loss carried forward
are recognised under other non-current assets at the
expected value of their utilisation, or as a set-off
against deferred tax liabilities in the same legal tax
entity and jurisdiction.

Deferred tax assets and tax liabilities are offset if the
entity has a legally enforceable right to offset current
tax liabilities and tax assets or intends either to settle
current tax liabilities and tax assets or to realise the
assets and settle the liabilities simultaneously.
Deferred tax assets are recognised only to the extent
that it is probable that the assets will be utilised.

Deferred tax is measured according to the tax rules at
the reporting date and at the tax rates applicable
when the deferred tax is expected to materialise as
current tax. The change in deferred tax as a result of
changes in tax rates is recognised in the income
statement. Changes to deferred tax on items
recognised in other comprehensive income are,
however, recognised in other comprehensive income.

Deferred tax assets

Deferred tax liabilities

2022

253

139

1,000

518

285

250

2,484

-753

1,731

890

841

1,731

2021

519

220

453

2,395

3,664

-1,742

1,922

1,097

825

1,922

2022

1,956

1,041

2,509

5,594

-753

4,841

515

4,326

4,841

2021

3,451

1,635

2,942

8,092

-1,742

6,350

835

5,515

6,350

SECTION 7

STAFF COSTS AND
REMUNERATION

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

118

Russian
operations
held for
sale

More than 8,000 employees will leave the
Group when the divestment completes as
expected in 2023.

Pensions

Defined benefit obligations were affected by
higher discount rates across markets.

EMPLOYEES BY SEGMENT (%)

2022 (2021)

SECTION 7.1
STAFF COSTS

EMPLOYEES BY FUNCTION (%)

2022 (2021)

Staff costs increased in 2022, impacted by
currencies and merit increases.

Staff costs

DKK million

Salaries and other remuneration

Severance payments

Social security costs

Retirement benefit costs – defined contribution plans

Retirement benefit costs – defined benefit plans

Share-based payments

Other employee benefits

Total

Of which:

Continuing operations

Discontinued operations

Total

Staff costs are included in the following line items in the income statement

Cost of sales

Sales and distribution expenses

Administrative expenses

Other operating activities, net

Financial expenses (pensions)

Special items (restructurings)

Net result from Russian operations held for sale

Total

Average number of employees, continuing operations

Average number of employees, discontinued operations

Average number of employees

2022

9,430

1,453

391

181

113

2021

8,531

1,287

335

188

11,722

10,597

10,388

1,334

11,722

2,911

5,150

2,132

1,334

11,722

30,834

8,072

38,906

9,593

1,004

10,597

2,651

4,859

1,905

118

1,004

10,597

31,058

8,317

39,375

Western Europe 26% (26%)Asia 36% (36%)Central & Eastern Europe 15% (15%)Russian operations held for sale 21% (21%)Other 2% (2%)Production 28% (28%)Sales & Distribution 44% (43%)Administration 7% (8%)Russian operations held for sale 21% (21%)CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

119

SECTION 7.3
SHARE-BASED
PAYMENTS

The Group has set up share-based incentive
programmes to attract, retain and motivate the
Group’s executive directors and other levels of
management personnel, and to align their
interests with those of the shareholders. There
is no share-based remuneration of the
Supervisory Board.

The Group has two types of share-based
payment: share options and performance
shares. Share options entitle the holder to
purchase class B shares in Carlsberg A/S at a
predetermined price after completing three
years of service. Share options are exercisable
for five years.

PERFORMANCE SHARES
The number of performance shares granted is
the maximum number of performance shares
that can vest. The number of shares
outstanding at the end of the period is the
number expected to vest, based on the extent
to which the vesting conditions are expected to
be met. The number of shares expected to vest
is revised on a regular basis.

In 2022, 160 employees (2021: 178 employees)
across the Group were awarded performance
shares.

Vesting is subject to achievement of four KPIs:
total shareholder return, adjusted EPS growth,
organic revenue growth and growth in ROIC.
The average share price at vesting was DKK
1,086 (2021: DKK 976). The average contractual
life at the end of 2022 was 1.2 years (2021: 1.2
years).

SECTION 7.2
REMUNERATION

ACCOUNTING
POLICIES

Staff costs are recognised in the financial year in
which the employee renders the related service.

The cost of share-based payments, which is expensed
over the vesting period of the programme according
to the service conditions, is recognised in staff costs
and provisions or equity, depending on how the
programme is settled with the employees.

Key management personnel comprise the Executive
Committee, excluding the executive directors. Other
management personnel included in the share-based
payment schemes comprise vice presidents and other
key employees in central functions as well as the
management of significant subsidiaries.

The remuneration of the Supervisory Board, the
executive directors and key management
personnel is described in detail in the
Remuneration Report.

The remuneration of key management
personnel increased in 2022, primarily because
of the impact of better performance on the
KPIs measured in long-term incentive
programmes and changes to the composition
of the Executive Committee.

In 2022, the Supervisory Board received total
remuneration of DKK 10.36m (2021: DKK
10.05m), comprising fixed salary only.

All elements except for share-based payments
are classified as short-term employee benefits.
Share-based payments are classified as long-
term employee benefits.

Remuneration

DKK million

Fixed salary

Cash bonus

Other benefits

Severance payments

Remuneration settled in cash

Non-monetary benefits

Share-based payments

Remuneration, non-monetary and share-based

Total cash and non-cash

¹ Executive directors consist of Cees 't Hart and Heine Dalsgaard. Heine Dalsgaard resigned as CFO on 31 December
2022.

Entitlement to performance shares also
requires fulfilment of service in the vesting
period (3 years) but does not have any exercise
price. Instead, the shares are transferred to the
recipients based on achievement of the KPIs
attached to the shares.

Key management
personnel

Executive directors¹

2022

21.0

19.4

1.1

41.5

0.4

28.0

28.4

69.9

2021

20.7

1.1

42.5

0.4

31.1

31.5

74.0

2022

28.8

28.7

7.9

7.5

72.9

0.2

9.5

9.7

82.6

2021

29.1

30.1

6.0

3.4

68.6

3.1

3.5

6.6

75.2

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

120

SECTION 7.3 (CONTINUED)

SHARE-BASED
PAYMENTS

Share options
No share options have been granted since 2016.
All outstanding options at 1 January were
exercised during the year. The average share
price at exercise was DKK 1,063.

Share option disclosures

ACCOUNTING ESTIMATES
AND JUDGEMENTS

ACCOUNTING
POLICIES

DKK million

Fair value at 31 December

2022

2021

The volatility of performance shares is based on the
historical volatility of the price of Carlsberg A/S’ class
B shares over the previous three years. For share
options, the volatility is based on similar data over the
previous eight years.

The share price and the exercise price of share options
are calculated as the average price of Carlsberg A/S’
class B shares on Nasdaq Copenhagen during the first
five trading days after publication of Carlsberg A/S’
financial statements.

The risk-free interest rate is based on Danish
government bonds of the relevant maturity. The
expected life is based on exercise at the end of the
exercise period.

The fair value of granted performance shares is
estimated using a stochastic (quasi-Monte Carlo)
valuation model of market conditions and a Black-
Scholes call option-pricing model of other conditions,
taking into account the terms and conditions upon
which the performance shares were granted.

On initial recognition of performance shares, an
estimate is made of the number of awards expected
to vest and subsequently revised for any changes.
Accordingly, recognition is based on the number of
awards that ultimately vest.

Performance shares

31 December 2020

Granted

Forfeited/adjusted/transferred

Exercised/settled

31 December 2021

Granted

Forfeited/adjusted/transferred

Exercised/settled

31 December 2022

Performance share disclosures

DKK million

Fair value at grant date

Cost of shares granted in the year

Total cost of performance shares

Cost not yet recognised

Fair value at 31 December

Executive
directors

Key
management
personnel

Other
management
personnel

142,612

50,805

-13,027

-44,212

136,178

33,753

-7,263

-45,999

116,669

54,551

15,800

-13,202

-17,022

40,127

20,071

-1,028

-11,743

47,427

279,341

126,068

-84,575

-85,048

235,786

109,528

-16,460

-83,898

244,956

2022

150

306

Total

476,504

192,673

-110,804

-146,282

412,091

163,352

-24,751

-141,640

409,052

Key information

Assumptions

Expected volatility

Risk-free interest rate

Expected dividend yield

Expected life, years

Fair value at measurement date

Share options

31 December 2020

31 December 2021

Exercised

31 December 2022

2021

110

147

454

Performance shares

2022

2021

24.0%

23.3%/23.7%

0.0%

0.0/2.4%

0.0/2.2%

3.0

DKK 404-987

DKK 512-961

Exercise price

Fixed,
weighted
average

518

Executive
directors

114,984

-114,984

Other
management
personnel

Number

Total

114,984

-114,984

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

121

The most significant plans are in the UK and
Switzerland, representing 42% and 44%
respectively (2021: 50% and 38%), while the
eurozone countries represented 5% (2021: 5%)
of the gross obligation at 31 December 2022.

Obligation, net

DKK million

2022

2021

Present
value of
obligation

Fair value
of plan
assets

Obligation,
net

Present
value of
obligation

Fair value
of plan
assets

Obligation,
net

Obligation at 1 January

13,851

11,506

2,345

13,588

10,654

2,934

The majority of the obligations are funded, with
assets placed in independent pension funds,
mainly in Switzerland and the UK. Most of the
plan assets are based on a quoted market price.
In some countries, primarily Germany, Sweden
and China, the obligation is unfunded. The
retirement benefit obligations for these
unfunded plans amounted to DKK 1,180m
(2021: DKK 1,562m) or 12% (2021: 11%) of the
gross obligation.

In 2022, the Group’s obligation, net, on defined
benefit plans decreased by DKK 788m
compared with 2021. The change was primarily
driven by changes in the actuarial assumptions
in the UK, Sweden and Germany, partly offset
by the effect of the asset ceiling in Switzerland,
DKK 569m.

Recognised in the income
statement¹

Current service cost

Past service cost

Net interest on the net defined
benefit obligation (asset)

Total

Remeasurements

Gain/loss from changes in
demographic assumptions

Gain/loss from changes in
financial assumptions

Asset ceiling

Total

Other changes

Contributions to plans

Benefits paid

Acquisition and disposal of
entities, net

Transferred to disposal group
held for sale

Foreign exchange adjustments
etc.

Total

Obligation at 31 December

192

-11

158

339

120

192

-11

219

-89

-3,823

-3,912

-2,757

-569

-3,326

-1,066

569

-586

-760

-6

-751

9,527

242

-681

109

-330

7,970

-242

-79

-6

-94

-421

1,557

183

138

326

-29

-114

-143

-685

-5

770

564

-129

435

253

-596

661

318

13,851

11,506

183

227

-29

-678

129

-578

-253

-89

-5

109

-238

2,345

¹ The total return on plan assets for the year amounted to DKK -2,637m (2021: DKK 663m).

SECTION 7.4

RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS

A number of employees are covered by
retirement benefit plans. The nature of the
plans varies depending on labour market
conditions in the individual countries. Benefits
are generally based on wages and salaries and
length of employment.

Retirement benefit obligations cover both
present and future retirees’ entitlement to
retirement benefits.

DEFINED CONTRIBUTION PLANS
A defined contribution plan is a post-
employment benefit plan under which the
Group pays contributions to a separate
independent company. The Group’s legal or
constructive obligation is limited to the
contributions.

In 2022, 68% (2021: 64%) of the Group’s
retirement benefit costs related to defined
contribution plans. The expense recognised in
relation to these contributions was DKK 391m
(2021: DKK 335m).

DEFINED BENEFIT PLANS
A defined benefit plan guarantees employees a
certain level of pension benefits for life. The
pension is based on seniority and salary at the
time of retirement. The Group assumes the risk
associated with future developments in interest
rates, inflation, mortality and disability etc.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

122

SECTION 7.4 (CONTINUED)

RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS

The Group has a triennial valuation process to
agree on any future funding arrangements. The
most recent one was completed in 2020. The
Group expects to contribute DKK 109m (2021:
DKK 80m) to the plan assets in 2023, which is
in line with the agreed funding arrangement,
under which the Group will contribute DKK
402m up to 2026. Plan assets do not include
shares in the Group or properties used by Group
companies.

The actuarial gain and foreign exchange
adjustment recognised in other comprehensive
income amounted to DKK 543m (2021: DKK
421m), comprising a foreign exchange
adjustment of DKK -43m and a net actuarial
gain of DKK 586m.

The accumulated actuarial loss and foreign
exchange adjustment recognised at 31
December 2022 was DKK 2,322m (2021:
DKK 2,865m), with actuarial net losses of
DKK 2,566m (2021: DKK 3,152m).

Assumptions applied
In 2022, the discount rate used for the defined
benefit plans in Western Europe was
determined by reference to market yields on
corporate bonds. In the Asian countries, where
no deep market in high-quality corporate bonds
exists, the discount rate was determined by
reference to market yields on government
bonds.

The mortality tables used in Carlsberg UK are
S3PMA/S3PFA_Middle tables for post-
retirement, while the Swiss entities use BVG
2020 for valuation of their retirement benefit
obligations.

Sensitivity analysis
The sensitivity analysis is based on a change in
one of the assumptions, while all other
assumptions remain constant. This is highly
unlikely, however, as a change in one
assumption would probably affect other
assumptions as well. When calculating the
obligation on the basis of a changed
assumption, the same method has been applied
as when calculating the defined benefit
obligation.

Expected maturity and duration
Defined benefit obligations are primarily
expected to mature after five years. The
expected duration of the obligations at year-
end 2022 was 13 years. The duration is
calculated using a weighted average of the
duration divided by the obligation.

Breakdown of plan assets

Bonds and other securities

Real estate

Cash and cash equivalents

Total

Assumptions applied

2022

Discount rate

Growth in wages and salaries

2021

Discount rate

Growth in wages and salaries

Sensitivity analysis

DKK million

Discount rate

Growth in wages and salaries

Mortality

DKK
million

970

4,685

2,122

193

7,970

2022

100

CHF

2.3%

1.2%

0.3%

1.0%

5.0%

3.6%

EUR

1.5 - 3.8%

0.2 - 4.5%

1.8%

2.5%

0.3 - 0.9%

0.2 - 2.8%

+0.5%

-541

+1 year

265

2022

-0.5 %

597

-19

-1 year

-282

DKK
million

1,345

7,485

2,088

588

11,506

Other

3.8%

2.5%

2.1%

2.6%

+0.5%

-1,097

+1 year

522

2021

100

Weighted
average

3.7%

2.5%

1.2%

1.9%

2021

-0.5 %

1,251

-73

-1 year

-520

Maturity of retirement benefit obligations
DKK million

2022

2021

< 1 year

1-5 years

> 5 years

585

731

2,570

2,921

6,372

10,199

Total

9,527

13,851

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

123

SECTION 7.4 (CONTINUED)

RETIREMENT
BENEFIT
OBLIGATIONS
AND SIMILAR
OBLIGATIONS

ACCOUNTING ESTIMATES
AND JUDGEMENTS

The value of the Group’s defined benefit plans is
based on valuations from external actuaries. The
valuation is based on a number of actuarial
assumptions, including discount rates, expected
growth in wages and salaries, mortality and
retirement benefits.

The present value of the net obligation is calculated
by using the projected unit credit method and
discounting the defined benefit plan by a discount
rate for each country. The discount rate is determined
by reference to market yields on high-quality
corporate bonds. Where high-quality corporate bonds
are not available, the market yields on government
bonds are used instead.

Mortality assumptions are based on the Group
entity’s best estimate of the mortality of plan
members during and after employment and include
expected changes in mortality. Due to the broad
range of entities comprising the retirement benefit
obligation, several different mortality tables are used
to calculate the future retirement benefit obligation.

ACCOUNTING
POLICIES

Contributions paid to a defined contribution plan are
recognised in the income statement in the period
during which services are rendered by employees. Any
contributions outstanding are recognised in the
statement of financial position as other liabilities.

The Group’s net obligation recognised in the
statement of financial position in respect of defined
benefit plans is the present value of the defined
benefit obligation at the reporting date less the fair
value of plan assets calculated by a qualified actuary.

The present value is determined separately for each
plan by discounting the estimated future benefits that
employees have earned in return for their service in
the current and prior years.

The costs of a defined benefit plan are recognised in
the income statement and include service costs, net
interest based on actuarial estimates and financial
expectations.

Service costs comprise current service cost and past
service cost. Current service cost is the increase in the
present value of the defined benefit obligation
resulting from employee services in the current period.
Past service cost is the change in the present value of
the obligation regarding employee services in prior
years that arises from a plan amendment or a
curtailment. Past service costs are recognised
immediately, provided employees have already
earned the changed benefits.

Realised gains and losses on curtailment or
settlement are recognised under staff costs.

Interest on retirement benefit obligations and the
interest on return on plan assets are recognised as
financial income or financial expenses.

Differences between the development in retirement
benefit assets and liabilities and realised amounts at
year-end are designated as actuarial gains or losses
and recognised in other comprehensive income. As
they will never be reclassified to the income
statement, they are included in retained earnings.

If a retirement benefit plan constitutes a net asset, the
asset is recognised only if it offsets future refunds
from the plan or will lead to reduced future payments
to the plan.

Realised gains and losses on the adjustment of
retirement benefit obligations as a result of
termination of a significant number of positions in
connection with restructurings are recognised under
special items.

SECTION 8

OTHER DISCLOSURE
REQUIREMENTS

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

124

7,785m

Profit attributable to shareholders in
Carlsberg A/S, adjusted for special items
after tax and net result from Russian
operations held for sale (DKK).

69.3

Earnings per share, adjusted for special
items after tax (DKK).

SECTION 8.1
EARNINGS PER
SHARE

During 2022, the Group repurchased a total
of 4.8m B shares under the share buy-back
programme. The share buy-back
programme decreased the average number
of shares by 4.0m, which in turn increased
adjusted earnings per share by DKK 1.4.
The adjustment for special items after tax
increased adjusted earnings per share by
DKK 5.5.

For all share-based incentive instruments,
the average market price of Carlsberg B
shares exceeded the exercise price and the
fair value at the grant date. As a result,
diluted earnings per share included all
share-based incentive instruments that
could potentially dilute earnings in the
future.

Earnings per share

DKK

Earnings per share of DKK 20 (EPS)

Continuing operations

Russian operations held for sale

Diluted earnings per share of DKK 20 (EPS-D)

Continuing operations

Russian operations held for sale

Earnings per share, adjusted (EPS-A)

Continuing operations

Russian operations held for sale

Average number of shares

1,000 shares

Average number of issued shares

Average number of treasury shares

Average number of shares

Average dilutive effect of share-based incentives

Diluted average number of shares

Profit attributable to shareholders

DKK million
Profit for the period

Non-controlling interests

Profit attributable to shareholders in Carlsberg A/S (net profit)

Special items after tax in continuing operations and Russian operations held for sale

Profit attributable to shareholders in Carlsberg A/S, adjusted

Net result from Russian operations held for sale adjusted for special items after tax

Profit attributable to shareholders in Carlsberg A/S, adjusted, continuing operations

2022

-7.6

50.1

-57.7

-7.6

50.0

-57.6

69.3

55.7

13.6

2021

47.6

49.6

-2.0

47.4

49.4

-2.0

48.3

44.9

3.4

142,527

-2,692

139,835

368

140,203

146,067

-2,219

143,848

451

144,299

108

-1,171

-1,063

10,757

9,694

-1,909

7,785

8,009

-1,163

6,846

6,943

-481

6,462

SECTION 8.2

SECTION 8.3

FEES TO AUDITORS

RELATED PARTIES

initiated in 2021. The purpose of the rebuild is to
better showcase Carlsberg’s rich history and
value creation.

remuneration as disclosed in section 7 of the
consolidated financial statements.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

125

Fees to auditors appointed by the
Annual General Meeting

DKK million

2022

2021

PwC, including network
firms

Statutory audit

Assurance engagements

Tax advisory

Other services

Total

Fees for services other than the statutory audit
of the financial statements provided by
PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab, Denmark, amounted
to DKK 1m (2021: DKK 1m). This includes other
assurance opinions and agreed-upon
procedures as well as accounting advice.

RELATED PARTIES EXERCISING CONTROL
The Carlsberg Foundation, H.C. Andersens
Boulevard 35, 1553 Copenhagen V, Denmark,
exercises control over Carlsberg A/S. The
Foundation holds 29.2% of the shares and
76.2% of the voting power in Carlsberg A/S,
excluding treasury shares.

The following transactions took place between
the Carlsberg Foundation and the Group
in 2022:

The Carlsberg Foundation received a dividend
of DKK 24.00 per share from Carlsberg A/S, the
same as every other shareholder. The dividend
received amounted to DKK 1,023m.

Through its pro-rata participation in the share
buy-back programme, the Carlsberg
Foundation sold B shares to Carlsberg A/S at a
fair value of DKK 1,334m. The Foundation
thereby reduced its shareholding to 29.2% at 31
December 2022 (2021: 29.5%). The shares were
sold at the average weekly share buy-back
market prices.

FUNDING AND GRANTS
Carlsberg A/S received statutory grants and
further funding from the Carlsberg Foundation,
DKK 69m, for the basic research and
development activities at the Carlsberg
Research Laboratory (2021: DKK 56m). Of the
total grants, DKK 22m (2021: DKK 18m) was
deferred to be used for research projects in the
future.

In 2022, the Carlsberg Foundation contributed
an additional amount of DKK 30m to support
the rebuilding of the Carlsberg Visitor Centre

OTHER ACTIVITIES
Visit Carlsberg A/S, a 100% owned subsidiary
of the Carlsberg Group, hosted and
administered events at the Carlsberg Academy,
which is owned by the Carlsberg Foundation, at
a value of DKK 1m.

The Group’s delivery of beer and soft drinks to
the Carlsberg Foundation is charged at ordinary
listing price minus a discount. In 2022, the
deliveries amounted to DKK 0.3m (total sales
of goods) (2021: DKK 0.2m).

Carlsberg A/S leases parking spaces from the
Carlsberg Foundation to provide parking for
employees at the Carlsberg Research
Laboratory and Visit Carlsberg. Furthermore,
Carlsberg Breweries A/S leases storage facilities
in the researcher apartments. These lease
agreements are with subsidiaries of the
Foundation. The two annual lease payments
amount to DKK 0.2m and the leases are on
market terms.

It is estimated that the benefit for the Carlsberg
Group corresponds to the value of the other
activities provided to the Carlsberg Foundation,
which in turn corresponds to what each party
would have had to pay to have the same
deliverables provided by external parties.

OTHER RELATED PARTIES
Related parties also comprise Carlsberg A/S’
Supervisory Board and Executive Board, their
close family members and companies in which
these persons have significant influence. During
the year, there were no transactions between
these parties and the Group, except for

The income statement and the statement of
financial position include the following
transactions

DKK million

2022

2021

Associates

Revenue

Cost of sales

Sales expenses

Interest income

Loans

Receivables

Trade payables and other
liabilities

-712

-9

277

394

-49

-817

-11

242

226

-36

SECTION 8.4
EVENTS AFTER THE
REPORTING PERIOD

On 6 February 2023, the valuers appointed to
perform the put option valuation for the 33%
shareholding in CSAPL released a put option
valuation certificate stating a value of USD
744m (DKK 5,188m), cf. section 5.4. CSAPLH
has on 6 February, issued a formal put notice
to sell its 33% shareholding in CSAPL to the
Group at the put option valuation amount.

Apart from the events recognised or disclosed
in the consolidated financial statements, no
events have occurred after the reporting period
of importance to the consolidated financial
statements.

SECTION 9

BASIS FOR
PREPARATION

SECTION 9.1
SIGNIFICANT
ACCOUNTING
ESTIMATES AND
JUDGEMENTS

The consolidated financial statements cover the
period 1 January to 31 December. In preparing
the consolidated financial statements,
management makes various accounting
estimates and judgements that form the basis
of presentation, recognition and measurement
of the Group’s assets, liabilities, income and
expenses.

Other estimates and judgements made are
based on historical experience and other factors
that management assesses to be reliable, but
that, by nature, are associated with uncertainty
and unpredictability and may therefore prove
incomplete or incorrect.

Areas involving significant estimates and judgements:

Receivables

Impairment testing, useful life and
residual value

Restructurings, provisions and
contingencies

Discontinued operations and
disposal group held for sale
Acquisitions and disposals, including
contingent considerations

Tax assets and liabilities

Defined benefit obligations

Section 1

Section 2

Section 3

Section 5

Section 6

Section 7

Other
In 2022, the Group adjusted an error in the
share of equity attributable to non-controlling
interests. The error related to elimination of
investments in subsidiaries. The adjustment
reduced non-controlling interests’ share of
equity by DKK 1.4bn with a corresponding
increase in the share of equity attributed to the
shareholders in Carlsberg A/S. The adjustment
was included in the opening balance of equity
for 2021, and the comparative figures have
been restated accordingly.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

126

SECTION 9.2
GENERAL
ACCOUNTING
POLICIES

The Group’s consolidated financial statements
for 2022 have been prepared in accordance
with IFRS as adopted by the EU and further
requirements in the Danish Financial
Statements Act.

The consolidated financial statements are
presented in Danish kroner (DKK), which is the
Parent Company’s functional currency, and all
values are rounded to the nearest DKK million,
except when otherwise stated.

The accounting policies set out below have
been used consistently in respect of the
financial year and the comparative figures.

DEFINING MATERIALITY
Significant items are presented individually in
the financial statements as required by IAS 1.
Other items that are considered relevant to
stakeholders and necessary for an
understanding of the Group’s business model,
including research, real estate and geographical
diversity, are also presented individually in the
financial statements.

The consolidated financial statements are
prepared as a consolidation of the financial
statements of the Parent Company, Carlsberg
A/S, and its subsidiaries according to the
Group’s accounting policies.

Subsidiaries are all the entities over which the
Group has control. The Group controls an entity
when the Group is exposed to, or has rights to,
variable returns from its involvement with the
entity and has the ability to affect those returns
through its power to direct the activities of the
entity.

Entities over which the Group exercises
significant influence, but which it does not
control, are considered associates. Significant
influence is generally obtained by direct or
indirect ownership or control of less than 50%
of the voting rights or participation in the
management of the company. The assessment
of whether Carlsberg A/S exercises control or
significant influence includes potential voting
rights exercisable at the reporting date. Entities
that by agreement are managed jointly with
one or more other parties are considered joint
ventures.

On consolidation, intra-group income and
expenses, shareholdings, balances and
dividends, and realised and unrealised gains are
eliminated. Unrealised gains on transactions

SECTION 9.2 (CONTINUED)

GENERAL
ACCOUNTING
POLICIES

with associates are eliminated in proportion to
the Group’s ownership share of the entity.

Unrealised losses are eliminated in the same
way as unrealised gains to the extent that
impairment has not taken place.

The accounting items of subsidiaries are
included in full in the consolidated financial
statements. Non-controlling interests’ share of
subsidiaries’ profit/loss for the year and of
equity is included in the Group’s profit/loss and
equity but is disclosed separately. Entities
acquired or established during the year are
recognised in the consolidated financial
statements from the date of acquisition or
formation. Entities disposed of or discontinued
are recognised in the consolidated income
statement until the date of disposal or
discontinuation. The comparative figures are
not restated.

FOREIGN CURRENCY TRANSLATION
A functional currency is determined for each of
the reporting entities in the Group. The
functional currency is the primary currency used
for the reporting entity’s operations.
Transactions denominated in currencies other
than the functional currency are considered
transactions denominated in foreign currencies.

On initial recognition, transactions denominated
in foreign currencies are translated to the
functional currency at the exchange rates at the
transaction date. Foreign exchange differences
arising between the exchange rates at the
transaction date and at the date of payment
are recognised as financial income or expenses.

Receivables, payables and other monetary
items denominated in foreign currencies are
translated at the exchange rates at the
reporting date. The difference between the
exchange rates at the reporting date and at the
date at which the receivable or payable arose
or the exchange rate in the latest consolidated
financial statements is recognised as financial
income or expenses.

On recognition of entities with a functional
currency other than the presentation currency,
the income statement and statement of cash
flows are translated at the exchange rates at
the transaction date, and the statement of
financial position items are translated at the
exchange rates at the reporting date. Foreign
exchange differences arising on translation of
the opening balance of equity, and of the
income statement on the reporting date, are
recognised in other comprehensive income and
attributed to a separate translation reserve in
equity. Foreign exchange differences arising on
the translation of the proportionate share of
associates are likewise recognised in other
comprehensive income.

Foreign exchange adjustment of balances with
entities that are considered part of the
investment in the entity is recognised in other
comprehensive income. Correspondingly,
foreign exchange gains and losses on the part
of loans and derivative financial instruments
that are designated as hedges of investments in

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

127

foreign entities, and that effectively hedge
against corresponding foreign exchange gains
and losses on the investment in the entity, are
also recognised in other comprehensive income
and attributed to a separate translation reserve
in equity.

measures are defined and calculated by the
Group and therefore may not be comparable
with other companies’ measures.

The non-IFRS financial measures disclosed in
the Annual Report are:

• Earnings per share, adjusted, and payout

ratio, adjusted

• Organic development

The Danish Finance Society does not
acknowledge use of special items and states
that adjustments of tax should be based on the
marginal tax rate. When calculating financial
measures, the Group uses operating profit
before special items as well as the effective tax
rate for measures adjusted for tax.

Other financial ratios are calculated in
accordance with the Danish Finance Society’s
online guidelines on the calculation of financial
ratios, “Recommendations and Financial
Ratios”, unless specifically stated.

When the gain or loss from a complete or
partial disposal of an entity is recognised, the
share of the cumulative exchange differences
recognised in other comprehensive income is
recognised in the income statement. The same
approach is adopted on repayment of balances
that constitute part of the net investment in the
entity.

INCOME STATEMENT
The presentation of the Group’s income
statement is based on the internal reporting
structure, as IFRS does not provide a specific
disclosure requirement.

Special items are not directly attributable to
ordinary operating activities and are shown
separately in order to facilitate a better
understanding of the Group’s financial
performance.

CASH FLOW
Cash flow is calculated using the indirect
method and is based on operating profit before
special items adjusted for depreciation,
amortisation and impairment losses. Cash flow
cannot be derived directly from the statement
of financial position and income statement.

FINANCIAL RATIOS AND NON-IFRS
FINANCIAL MEASURES
The Group uses certain additional financial
measures to provide management, investors
and investment analysts with additional
measures to evaluate and analyse the
Company’s results. These non-IFRS financial

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

128

The annual report submitted to the Danish
Financial Supervisory Authority (the Officially
Appointed Mechanism) consists of the XHTML
document together with the technical files, all
of which are included in the ZIP file
Carlsberg-2022-12-31-en.zip.

Key definitions
XHTML (eXtensible HyperText Markup
Language) is a text-based language used to
structure and mark up content such as text,
images and hyperlinks in documents that are
displayed in a web browser.

iXBRL tags (or Inline XBRL tags) are hidden
metainformation embedded in the source code
of an XHTML document that enables the
conversion of XHTML-formatted information
into a machine-readable XBRL data record
using appropriate software.

A financial reporting taxonomy is an electronic
dictionary of business reporting elements used
to report business data. A taxonomy element is
an element defined in a taxonomy that is used
for the machine-readable labelling of
information in an XBRL data record.

SECTION 9.2 (CONTINUED)

GENERAL
ACCOUNTING
POLICIES

9.2.1 REPORTING UNDER THE ESEF
REGULATION
The Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic
Format (ESEF Regulation) has introduced a
single electronic reporting format for the
annual financial reports of issuers with
securities listed on the EU-regulated markets.

The combination of XHTML format and iXBRL
tags enables the annual financial reports to be
read by both humans and machines, thus
enhancing accessibility, analysis and
comparability of the information included in the
annual financial reports.

The Group’s iXBRL tags have been prepared in
accordance with the ESEF taxonomy, which is
included in the ESEF Regulation and has been
developed based on the IFRS taxonomy
published by the IFRS Foundation.

The line items in the consolidated financial
statements are tagged to elements in the ESEF
taxonomy. For financial line items that are not
directly defined in the ESEF taxonomy, an
extension to the taxonomy has been created.
Extensions are anchored to elements in the
ESEF taxonomy, except for extensions that are
subtotals.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

129

SECTION 9.2 (CONTINUED)

GENERAL
ACCOUNTING
POLICIES

Glossary and calculation of key figures and financial ratios disclosed in the Annual Report

STOCK MARKET RATIOS (CONTINUED)

FINANCIAL RATIOS

Gross margin

EBITDA margin1

Gross profit as a percentage of revenue.

Operating profit before depreciation, amortisation and impairment losses as a
percentage of revenue.

Payout ratio

Payout ratio, adjusted

Proposed dividend for the year as a percentage of consolidated profit,
excluding non-controlling interests.

Proposed dividend for the year on number of shares at year-end as a
percentage of consolidated profit, adjusted for special items after tax1,
excluding non-controlling interests.

Operating margin

Operating profit before special items1 as a percentage of revenue.

Market capitalisation

Number of shares at year-end multiplied by the share price.

Return on invested capital (ROIC)

Operating profit before special items1 adjusted for tax as a percentage of
average invested capital2 calculated as a 12-month rolling average (MAT).

Return on invested capital excluding
goodwill (ROIC excl. goodwill)

Operating profit before special items1 adjusted for tax as a percentage of
average invested capital2 excluding goodwill calculated as a 12-month rolling
average (MAT).

Average number of issued shares

Number of issued shares as an average for the year.

Average number of shares

Number of issued shares, excluding treasury shares, as an average for the year.

Number of shares at year-end

Total number of issued shares, excluding treasury shares, at year-end.

Income tax as a percentage of profit before tax.

Net interest-bearing debt3 divided by operating profit before depreciation,
amortisation and impairment losses.

GLOSSARY

EBITDA1

Expression used for operating profit before depreciation, amortisation and
impairment losses.

Effective tax rate1

NIBD/EBITDA1

STOCK MARKET RATIOS

Earnings per share (EPS)

Profit for the period, excluding non-controlling interests, divided by the average
number of shares.

Earnings per share, diluted (EPS-D)

Profit for the period, excluding non-controlling interests, divided by the average
number of shares, fully diluted for share options and performance shares in the
money.

Earnings per share, adjusted (EPS-A)

EPS-A, continuing operations

Profit for the period adjusted for special items after tax1, excluding non-
controlling interests and special items after tax in the Russian operations held
for sale, divided by the average number of shares.

Profit for the period adjusted for special items after tax1, excluding non-
controlling interests and net result from Russian operations held for sale,
divided by the average number of shares.

Free cash flow per share (FCFPS)1

Free cash flow⁴ divided by the average number of shares, fully diluted for share
options and performance shares in the money.

Leverage ratio1

Expression used for NIBD/EBITDA.

NCI

OCI

Off-trade

On-trade

Operating profit

Organic development1

Volumes1

Abbreviation for non-controlling interests.

Abbreviation for other comprehensive income.

Expression used for sale of beverages for consumption off the premises (e.g.
retailers).

Expression used for sale of beverages for consumption on the premises (e.g.
restaurants, hotels and bars).

Expression used for operating profit before special items1.

Measure of growth excluding the impact of acquisitions, divestments and
foreign exchange from year-on-year comparisons.

The Group’s sale of beverages in consolidated entities and sale of the Group’s
products under licence agreements.

1 This key figure, ratio or elements thereof are not defined or deviate from the definitions of the Danish Finance Society.
² The calculation of invested capital is specified in section 2.1.
³ The calculation of net interest-bearing debt is specified in section 4.2.
4 The calculation of free cash flow is specified in the statement of cash flows.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

130

SECTION 9.3

CHANGES IN
ACCOUNTING
POLICIES

SECTION 9.4

NEW LEGISLATION

NEW AND AMENDED IFRS STANDARDS
The following Amendments to IFRS became
effective as of 1 January 2023:

NEW AND AMENDED IFRS STANDARDS
AND INTERPRETATIONS NOT YET
ADOPTED BY THE EU
The following Amendments, which will become
effective in future years, have been issued but
not yet adopted by the EU:

• Amendments to IAS 1 “Presentation of
Financial Statements: Classification of
Liabilities as Current or Non-current –
Deferral of Effective Date and Non-current
Liabilities with Covenants”

• Amendment to IFRS 16 “Leases: Lease

Liability in a Sale and Leaseback”

The amendments are not mandatory for the
financial reporting for 2022. The Group expects
to adopt the amendments when they become
mandatory.

CHANGED ACCOUNTING POLICIES
AND CLASSIFICATION IN THE ANNUAL
REPORT 2022
The Annual Report 2022 has been prepared
using the same accounting policies for
recognition and measurement as those applied
to the consolidated financial statements for
2021, except for the following Amendments
that were adopted as of 1 January 2022:

• Amendments to IFRS 3 “Business

Combinations”

• Amendments to IAS 16 “Property, Plant and

Equipment”

• Amendments to IAS 37 “Provisions,

Contingent Liabilities and Contingent Assets”

• Annual Improvements to IFRS Standards

2018-2020 (IFRS 1, IFRS 9, IFRS 16 and IAS 41)

These Amendments had no impact on the
Group’s accounting policies, as they cover areas
that are not material and/or relevant for the
Group or do not change the accounting policies
applied in 2022.

• Amendment to IAS 1 “Presentation of

Financial Statements and IFRS Practice
Statement 2: Disclosure of Accounting
Policies”

• Amendment to IAS 8 “Accounting Policies,

Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates”
• Amendments to IAS 12 “Income Taxes:

Deferred Tax related to Assets and Liabilities
arising from a Single Transaction”

• Amendments to IFRS 17 “Insurance Contracts”
and “Initial application of IFRS 17" and IFRS 9
“Comparative Information”

The implemented Amendments are not
expected to have any significant impact on the
financials or the Group’s accounting policies, as
they cover areas that are not material and/or
relevant for the Group or do not change the
accounting policies applied in 2022.

SECTION 10

GROUP
COMPANIES

This section lists the subsidiaries and associates in the Group. Parent direct ownership shows the
legal ownership held by the immediate holding company in the Group. Cross-holdings held by fully
owned companies in the Group are aggregated. Consolidated ownership shows the share of the
result of the entity that is attributed to the shareholders of Carlsberg A/S in the consolidated
financial statements.

Carlsberg Breweries A/S

Place of
incorporation

Denmark

Number of
subsidiaries

Note

Parent
direct
ownership

Consolidated
ownership

100%

Western Europe

Carlsberg Danmark A/S

Carlsberg Supply Company Danmark A/S

Carlsberg Sweden Holding 2 AB

Carlsberg Sverige AB

Carlsberg Supply Company Sverige AB

Ringnes Norge AS

Ringnes AS

Ringnes Brygghus AS

Solo AS

Ringnes Supply Company AS

Ringnes Farris Eiendom AS

Ringnes Imsdal Eiendom AS

Ringnes Administrasjon Eiendom AS

Ringnes Gjelleråsen Eiendom AS

Oy Sinebrychoff Ab

Sinebrychoff Supply Company Oy

Carlsberg Deutschland Holding GmbH

Holzmarkt Brewing Company GmbH

Carlsberg Deutschland Logistik GmbH

Tuborg Deutschland GmbH

Denmark

Sweden

Norway

Finland

Germany

100%

91%

100%

91%

100%

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

131

Place of
incorporation

Number of
subsidiaries

Note

Parent
direct
ownership

Consolidated
ownership

Western Europe

Carlsberg Deutschland GmbH

Duckstein GmbH

Holzmarkt Beteiligungsgesellschaft mbH

Holsten-Brauerei AG

Germany

Carlsberg Supply Company Deutschland GmbH

Germany

Carlsberg Supply Company Polska SA

Carlsberg Polska Sp. z o.o.

Carlsberg UK Holdings Limited

Carlsberg Marston's Limited

Carlsberg Marston's Brewing Company Ltd.

Marston's Beer Company Limited

CMBC Supply Limited

LF Brewery Holdings Limited

Emeraude S.A.S.

Kronenbourg S.A.S.

Kronenbourg Supply Company S.A.S.

Kronenbourg Breweries Canada Inc.

Fondation Kronenbourg

S.A.S. Onyx

Feldschlösschen Getränke Holding AG

Feldschlösschen Getränke AG

Schlossgarten Gastronomie AG

Poland

France

Canada

France

Switzerland

100%

60%

100%

60%

100%

Western Europe

SB Swiss Beverage AG

Feldschlösschen Supply Company AG

Carlsberg Supply Company AG

Nya Carnegiebryggeriet AB

E.C. Dahls Bryggeri AS

Monster the Cat GmbH

Grimbergen Abbey Brewery

Zatecky Pivovar spol. S.r.o.

Asia

Carlsberg Supply Company Asia Ltd

Carlsberg Asia Pte Ltd

Carlsberg Brewery Hong Kong Ltd

Guangzhou Carlsberg Consultancy and
Management Services Co. Ltd

Chongqing Brewery Co., Ltd

Carlsberg Chongqing Breweries Company
Limited

Kunming Huashi Brewery Company
Limited

Carlsberg (China) Breweries and
Trading Company Limited

Carlsberg Brewery (Guangdong) Ltd

Xinjiang Wusu Breweries Co., Ltd

Ningxia Xixia Jianiang Brewery Limited

Carlsberg Beer Enterprise Management
(Chongqing) Company Limited
Carlsberg Brewery (Anhui)
Company Ltd
Carlsberg Tianmuhu Brewery
(Jiangsu) Company Ltd

Lao Brewery Co. Ltd

Carlsberg Korea Ltd.

Place of
incorporation

Number of
subsidiaries

Note

Parent
direct
ownership

Consolidated
ownership

Asia

Switzerland

Sweden

Norway

Switzerland

Belgium

Czechia

Place of
incorporation

Number of
subsidiaries

Note

Hong Kong

Singapore

Hong Kong

China

China
Laos

South Korea

100%

Parent
direct
ownership

100%

60%

51%

100%

99%

100%

70%

100%

75%

100%
61%

100%

Carlsberg Brewery Malaysia Berhad

Carlsberg Marketing Sdn BHD

Euro Distributors Sdn BHD

Carlsberg Singapore Pte Ltd

Maybev Pte Ltd

Carlsberg South Asia Pte Ltd

South Asian Breweries Pte. Ltd

Carlsberg India Pvt. Ltd

Gorkha Brewery Pvt. Ltd

G.B. Marketing Pvt Ltd

Consolidated
ownership

Carlsberg Vietnam Trading Co. Ltd

Carlsberg Vietnam Breweries Ltd

Paduak Holding Pte. Ltd

Caretech Limited

Cambrew Limited

Cambrew Properties Ltd

Angkor Beverage Co Ltd

CB Distribution Co., Ltd

A Listed company.

100%

60%

79%

56%

79%

F Company not audited by PwC.

60%

79%
61%

100%

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

132

Note

D, E, F

D, F

Place of
incorporation

Malaysia

Singapore

India

Nepal

Vietnam

Singapore

Hong Kong

Cambodia

Thailand

Number of
subsidiaries

Parent
direct
ownership

Consolidated
ownership

51%

100%

51%

67%

100%

90%

100%

51%

26%

100%

90%

100%

B Carlsberg Chongqing Breweries Company Limited is owned by Chongqing Brewery Co., Ltd (51%) and Guangzhou
Carlsberg Consultancy and Management Services Co Ltd (49%), resulting in a consolidated ownership of 79%.

C Maybev Pte Ltd is owned by Carlsberg Singapore Pte Ltd (51%), which is owned by Carlsberg Brewery Malaysia
Berhad (51%), resulting in a consolidated ownership of 26%.

D The Group owns 67% of Carlsberg South Asia Pte Ltd, which is the holding company of South Asian Breweries
Pte. Ltd, Carlsberg India Pvt. Ltd and Gorkha Brewery Pvt. Ltd (Nepal). The consolidation percentage of Carlsberg
South Asia Pte Ltd is 100% due to a written put option.

E The Group has the legal and contractual rights of a majority shareholder in Gorkha Brewery Pvt. Ltd, but does not
consolidate the company and its subsidiary for accounting purposes, cf. section 5.3.

CARLSBERG GROUP ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

133

Central & Eastern Europe

Baltika Breweries LLC

Carlsberg Azerbaijan LLC

Baku Piva JSC

Hoppy Union LLC

Konix Brewery LLC

Carlsberg Kazakhstan Ltd

Baltic Beverages Invest AB

PJSC Carlsberg Ukraine

Baltic Beverages Holding AB

Carlsberg Serbia Ltd

Carlsberg BH d.o.o.

Carlsberg Montenegro d.o.o.

Carlsberg Croatia d.o.o.

Carlsberg Bulgaria AD

OJSC Brewery Alivaria

Carlsberg Italia S.p.A.

Carlsberg Horeca Srl

T&C Italia Srl

Olympic Brewery SA

Hellenic Beverage Company SA

Carlsberg Hungary Kft.

Saku Ölletehase AS

Aldaris JSC

Svyturys-Utenos Alus UAB

CTDD Beer Imports Ltd

Carlsberg Canada Inc.

Carlsberg USA Inc.

Not allocated

Carlsberg Finans A/S

Carlsberg International A/S
Visit Carlsberg A/S

Carlsberg Invest A/S

Carlsberg Integrated Information Technology A/S

Carlsberg Insurance A/S

Carlsberg Central Office A/S

Traitomic A/S

Carlsberg Shared Services Sp. z o.o.

Note

F, G, H

F, G, I

F, I

Note

Place of
incorporation

Russia

Azerbaijan

Russia

Kazakhstan

Sweden

Ukraine

Sweden

Serbia
Bosnia and
Herzegovina

Montenegro

Croatia

Bulgaria

Belarus

Italy

Greece

Hungary

Estonia

Latvia

Lithuania

Canada

USA

Place of
incorporation

Denmark

Denmark
Denmark

Denmark

Poland

Number of
subsidiaries

Parent
direct
ownership

Consolidated
ownership

100%

91%

100%

75%

90%

100%

78%

100%

99%

100%

91%

100%

89%

100%

99%

100%

Non-beverage

Barley 1 A/S

Carlsberg Ejendomme Holding A/S

Associates

Udviklingsselskabet Carlsberg Byen P/S

Sinergie Proattive Srl

Viacer S.G.P.S., Lda

Super Bock Group, S.G.P.S., S.A.

Serviced Dispense Equipment (Holdings) Limited

Nuuk Imeq A/S

Chongqing Jiawei Beer Co. Ltd
Lanzhou Huanghe Jianiang Brewery Company
Limited

Qinghai Huanghe Jianiang Brewery Company Ltd

Jiuquan West Brewery Company Limited

Tianshui Huanghe Jianiang Brewery Company Ltd

Capital Brewing Company Ltd

Lion Brewery (Ceylon) PLC
Hanoi Beer Alcohol and Beverage Joint Stock
Corporation

Carlsberg Distributors Taiwan Limited

NCC Crowns Private Limited

Bottlers Nepal Limited

Myanmar Carlsberg Co. Ltd

G Part of disposal group held for sale.

H Company owned by Carlsberg Sverige AB.

Place of
incorporation

Note

Number of
subsidiaries

Denmark

Place of
incorporation

Note

Number of
subsidiaries

Parent
direct
ownership

100%

Parent
direct
ownership

Consolidated
ownership

100%

Consolidated
ownership

Denmark

Italy

Portugal

Greenland

China

Hong Kong

Sri Lanka

A, F, N

Vietnam

Taiwan

India

Nepal

Myanmar

25%

36%

29%

56%

33%

32%

33%

50%

49%

25%

17%

50%

33%

22%

61%

25%

36%

29%

60%

20%

32%

26%

50%

49%

13%

17%

50%

33%

20%

61%

Number of
subsidiaries

Parent
direct
ownership

Consolidated
ownership

36%

100%
100%

100%

100%
100%

100%

I Consolidated ownership is higher than the legal ownership due to written put options.

J A separate annual report is not prepared.

K Carlsberg Kazakhstan Ltd is owned by Carlsberg Sverige AB (90%) and Baltika Brewery LLC (10%), resulting in a
consolidated ownership of 100%.

L Carlsberg Finans A/S is owned by Carlsberg Breweries A/S (36%) and Baltika Brewery LLC (64%), resulting in a
consolidated ownership of 100%.

M Viacer S.G.P.S (Viacer) is the controlling shareholder of Super Bock Group, S.G.P.S. (Super Bock) with a 56%
shareholding, with Carlsberg Breweries A/S owning the remaining 44%. In addition, Carlsberg Breweries A/S has a direct
ownership share of 29% in Viacer without exercising control. Therefore, both Viacer and Super Bock are considered
associates of the Group. The Group's direct and indirect ownership of Super Bock totals 60%.

N Lion Brewery (Ceylon) PLC is owned by Carlsberg Brewery Malaysia Berhad (25%). Carlsberg owns 51% of Carlsberg
Brewery Malaysia Berhad, resulting in 13% of the result being attributed to the shareholders in Carlsberg A/S.

Parent Company financial statements

PARENT COMPANY FINANCIAL STATEMENTS

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

134

PARENT COMPANY FINANCIAL
STATEMENTS

Income statement ................................ 135

Statement of comprehensive
income ...................................................... 135

Statement of financial position ...... 136

Statement of changes in equity ..... 137

Statement of cash flows ................... 137

Notes ......................................................... 138

SECTION 1
SUBSIDIARIES AND RELATED PARTIES
1.1 Investments in subsidiaries ....................... 138
1.2 Related parties ............................................. 138

SECTION 2
CAPITAL STRUCTURE
2.1 Financial items ............................................. 139
2.2 Net interest-bearing debt ......................... 139
2.3 Share capital ................................................. 140

SECTION 3
STAFF COSTS AND REMUNERATION
3.1 Staff costs and remuneration .................. 141
3.2 Retirement benefit obligations ................ 141

SECTION 4
OTHER DISCLOSURE REQUIREMENTS
4.1 Other operating activities, net ................. 142
4.2 Cash flow ....................................................... 142
4.3 Provisions ....................................................... 142
4.4 Special items ................................................. 142
4.5 Asset base and leases ............................... 142
4.6 Fees to auditors ........................................... 142
4.7 Tax ................................................................... 143
4.8 Contingent liabilities and other

commitments ............................................... 144
4.9 Events after the reporting period ........... 144

SECTION 5
GENERAL ACCOUNTING POLICIES
5

General accounting policies ..................... 144

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

135

INCOME STATEMENT

STATEMENT OF COMPREHENSIVE INCOME

DKK million

Administrative expenses

Other operating activities, net

Operating profit before special items

Special items

Financial income

Financial expenses

Profit before tax

Income tax

Profit for the period

Attributable to

Dividend to shareholders

Reserves

Profit for the period

Section

2022

4.1

4.4

2.1

4.7

-41

195

154

-15

3,592

-17

3,714

109

3,823

3,830

-7

3,823

2021

-86

-85

DKK million

Profit for the period

Other comprehensive income

Retirement benefit obligations

3,264

Income tax

-6

Items that will not be reclassified to the income statement

3,253

Other comprehensive income

-30

Total comprehensive income

Section

2022

3,823

2021

3,223

3.2

4.7

-8

-6

3,817

3,224

3,223

3,486

-263

3,223

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

136

STATEMENT OF FINANCIAL POSITION

DKK million

ASSETS

Non-current assets

Intangible assets

Property, plant and equipment

Investments in subsidiaries

Receivables

Tax assets

Total non-current assets

Current assets

Receivables

Tax receivables

Other receivables

Current assets

Assets held for sale

Total current assets

Total assets

Section

31 Dec. 2022

31 Dec. 2021

DKK million

Section

31 Dec. 2022

31 Dec. 2021

4.5

1.1

4.7

1.2

4.5

EQUITY AND LIABILITIES

166

163

Equity

Share capital

Retained earnings

30,080

34,426

Total equity

327

324

Non-current liabilities

30,584

34,915

Retirement benefit obligations

426

431

863

630

710

129

839

31,447

35,754

Deferred tax liabilities

Provisions

Total non-current liabilities

Current liabilities

Borrowings

Trade payables

Provisions

Other liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

2.3

3.2

4.7

4.3

1.2

4.3

2,837

28,351

31,188

2,905

32,189

35,094

131

206

259

31,447

407

120

608

660

35,754

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

137

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

DKK million

2022

Equity at 1 January

Profit for the year

Other comprehensive income

Total comprehensive income for the period

Cancellation of treasury shares

Share-based payments

Share-based payments to employees in subsidiaries

Share buy-back

Dividends paid to shareholders

Total changes in equity

Equity at 31 December

2021

Equity at 1 January

Profit for the period

Other comprehensive income

Total comprehensive income for the year

Cancellation of treasury shares

Share-based payments

Share-based payments to employees in subsidiaries

Share buy-back

Dividends paid to shareholders

Total changes in equity

Equity at 31 December

Section

Shareholders in Carlsberg A/S

DKK million

Section

2022

2021

Share capital

2,905

-68

2,837

2,963

-58

2,905

3.1

2.3

3.1

2.3

Retained
earnings

Total equity

Operating profit before special items
Depreciation and amortisation

32,189

3,823

-6

3,817

-4

-4,400

-3,389

-3,838

28,351

35,589

3,223

3,224

-3,600

-3,187

-3,400

32,189

35,094

Operating profit before depreciation and amortisation

3,823

-6

3,817

-4

-4,400

-3,389

-3,906

31,188

Other non-cash items

Change in working capital

Interest etc. received

Interest etc. paid

Income tax paid

Cash flow from operating activities

Acquisition of property, plant and equipment and intangible assets

Disposal of property, plant and equipment and intangible assets

Total operational investments

Acquisition and disposal of subsidiaries, net

Dividends from subsidiaries

Capital reductions in subsidiaries

38,552

3,223

Total financial investments

Other investments in real estate

Total other activities

3,224

Cash flow from investing activities

-3,600

-3,187

-3,458

35,094

Free cash flow

Shareholders in Carlsberg A/S

External financing

Cash flow from financing activities

Net cash flow

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

4.4

1.2

2.3

2.2

154
17

171

-219

119

-16

158

-18

354

336

-25

3,582

4,535

8,092

8,428

8,586

-7,789

-797

-8,586

-85
18

-67

376

-6

386

-6

-3

3,260

4,000

7,260

-2

7,255

7,641

-6,787

-854

-7,641

SECTION 1

SUBSIDIARIES AND
RELATED PARTIES

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

138

SECTION 1.1
INVESTMENTS IN
SUBSIDIARIES

Share-based payments to employees in
subsidiaries comprise exercised as well as
outstanding share-based incentive instruments.

Investments in subsidiaries

DKK million

2022

2021

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Indications of impairment of investments in
subsidiaries are assessed annually by management.
Impairment tests are performed by applying the same
principles as the tests for impairment of goodwill in
the Group, cf. section 2.2 in the consolidated financial
statements.

It is management’s assessment that no indications of
impairment existed at year-end 2022. Impairment
tests have therefore not been carried out for
subsidiaries.

Cost
Cost at 1 January

Capital reductions

Share-based payments
to employees, net

Cost at 31 December

Carrying amount at
31 December

ACCOUNTING
POLICIES

34,426

-4,535

189

30,080

38,733

-4,000

-307

34,426

Dividends on investments in subsidiaries are
recognised in the income statement of the Parent
Company in the financial year in which the dividend is
declared.

30,080

34,426

Investments in subsidiaries are measured at the lower
of cost and recoverable amount.

Please see section 10 in the consolidated financial
statements for a list of companies in the Carlsberg Group.

Share-based payments granted to employees of the
Company’s subsidiaries and the recharge of expenses
to the subsidiaries in connection with the employees’
exercise of share-based awards are recognised as
contributions to and reductions of the investment in
the subsidiaries respectively.

SECTION 1.2
RELATED PARTIES

The Carlsberg Foundation, H.C. Andersens
Boulevard 35, 1553 Copenhagen V, Denmark,
exercises control over Carlsberg A/S. The
Foundation holds 29.2% of the shares and
76.2% of the voting power in Carlsberg A/S,
excluding treasury shares.

The following transactions took place between
the Carlsberg Foundation and the Carlsberg
Group in 2022:
• The Carlsberg Foundation received a dividend
from Carlsberg A/S and participated pro rata
in the Carlsberg A/S share buy-back.

• Carlsberg A/S received statutory funding and

grants for research and development.

• Visit Carlsberg A/S, a 100% owned subsidiary

of the Carlsberg Group, hosted and
administered events at the Carlsberg
Academy, which is owned by the Carlsberg
Foundation.

• Carlsberg A/S leased parking spaces from the

Carlsberg Foundation.

• Carlsberg Breweries A/S leased storage
facilities in the researcher apartments.

• The Group delivered beer and soft drinks to

the Carlsberg Foundation.

These transactions are described in further
detail in sections 4.3 and 8.3 of the
consolidated financial statements.

It is estimated that the benefit for the Carlsberg
Group corresponds to the value of the services
provided to the Carlsberg Foundation, which in
turn corresponds to what each party would
have had to pay to have the same deliverables
provided by external parties.

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

139

SECTION 2

CAPITAL
STRUCTURE

SECTION 1.2 (CONTINUED)
RELATED PARTIES

SECTION 2.1
FINANCIAL ITEMS

No losses on loans to or receivables from
subsidiaries and associates were recognised or
provided for in either 2022 or 2021.

Interest income relates to interest from loans to
subsidiaries, whereas interest expenses relate to
interest on borrowings.

Transactions with subsidiaries

Financial items recognised
in the income statement

SECTION 2.2
NET INTEREST-
BEARING DEBT

Net interest-bearing debt

DKK million

Borrowings

Gross interest-bearing debt

DKK million

2022

2021

Other operating activities,
net

Interest income

Interest expenses

Dividends received
Capital reductions

Recharge of share-based
payments

Loans

Receivables

Borrowings

Trade payables

Other payables

273

-11

3,582
4,535

716

-1

-8

-6

-1

3,260
4,000

136

321

-407

-7

-6

The fair value of receivables and borrowings in
subsidiaries corresponds to the carrying amount
in all material respects.

DKK million

2022

2021

Loans to subsidiaries

Net interest-bearing debt

Financial income

Interest income

Dividends from
subsidiaries

Other

Total

Financial expenses

Interest expenses

Other

Total

3,582

3,592

-11

-6

-17

Changes in net interest-bearing debt

Net interest-bearing debt at 1 January

3,260

Cash flow from operating activities, excluding interest-bearing part

Cash flow from investing activities

3,264

Share buy-back

Dividends to shareholders

Other

Total change

Net interest-bearing debt at 31 December

-1

-5

-6

Financial items, net

3,575

3,258

No financial items were recognised in other
comprehensive income. The average effective
interest rate on loans to subsidiaries was 0.61%
(2021: 0.01%) and on loans from subsidiaries
0.68% (2021: 0.03%).

2022

-716

-715

-158

-8,428

4,400

3,389

-4

-801

-715

2021

407

-321

940

-386

-7,255

3,600

3,187

-854

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

140

According to the authorisation of the Annual
General Meeting, the Supervisory Board may,
in the period until 13 March 2027, allow the
Company to acquire treasury shares up to a
total holding of 10% of the nominal share
capital at a price quoted on Nasdaq
Copenhagen at the time of acquisition with a
deviation of up to 10%. The permitted holding
of treasury shares covers those acquired in
share buy-back programmes. The Company
holds no class A shares.

Transactions with shareholders
in Carlsberg A/S

Dividends to shareholders
Acquisition of treasury
shares

Total

2022

2021

-3,389

-3,187

-4,400

-7,789

-3,600

-6,787

In the 2022 financial year, the Company
acquired class B treasury shares of a nominal
amount of DKK 95m (2021: DKK 67m) at an
average price per share of DKK 926 (2021: DKK
1,073). Class B treasury shares are acquired and
disposed of as part of the share buy-back
programme and to facilitate settlement of the
share-based incentive programmes.

At 31 December 2022, the fair value of treasury
shares amounted to DKK 4,169m (2021: DKK
3,800m). The holdings of treasury shares are
specified in section 4.3 in the consolidated
financial statements.

SECTION 2.3

SHARE CAPITAL
SHARE CAPITAL
At the Annual General Meeting on 14 March
2022, it was decided to reduce the share capital
of Carlsberg A/S by a nominal amount of DKK
68,000,000 to a nominal amount of DKK
2,837,136,120 by cancelling 3,400,000 of the B
shares held by the Company, each with a
nominal value of DKK 20. The cancellation was
completed on 12 April 2022. These shares had
been repurchased as part of the Company’s
share buy-back programme.

At the Annual General Meeting on 13 March
2023, the Supervisory Board will recommend
that 4,500,000 treasury shares not used for the
hedging of the incentive programme be
cancelled.

DIVIDENDS
The proposed dividend of DKK 27.00 per share
(2021: DKK 24.00 per share), amounting to
DKK 3,830m (2021: DKK 3,486m), has
been included in retained earnings at
31 December 2022.

Dividends to be paid out in 2023 for 2022, net
of dividends on treasury shares held at 31
December 2022, will amount to DKK 3,708m
(paid out in 2022 for 2021: DKK 3,405m).
Dividends paid out in 2022 for 2021, net of
dividends on treasury shares, amounted to DKK
3,389m (paid out in 2021 for 2020: DKK
3,187m). Dividends paid out to shareholders in
Carlsberg A/S do not impact taxable income in
Carlsberg A/S.

Share capital

1 January 2021
Cancellation of
treasury shares

31 December 2021
Cancellation of
treasury shares

Class A shares

Class B shares

Total share capital

Shares of
DKK 20

33,699,252

Nominal
value,
DKK ’000

Shares of
DKK 20

Nominal
value,
DKK ’000

Shares of
DKK 20

673,985

114,457,554

2,289,151

148,156,806

Nominal
value,
DKK ’000

2,963,136

-2,900,000

-58,000

-2,900,000

-58,000

33,699,252

673,985

111,557,554

2,231,151

145,256,806

2,905,136

-3,400,000

-68,000

-3,400,000

-68,000

31 December 2022

33,699,252

673,985

108,157,554

2,163,151

141,856,806

2,837,136

A shares carry 20 votes per DKK 20 share. B shares carry two votes per DKK 20 share. A preferential right to an 8% non-
cumulative dividend is attached to B shares. Apart from votes and dividends, all shares rank equally.

SECTION 3

STAFF COSTS AND
REMUNERATION

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

141

SECTION 3.1
STAFF COSTS AND
REMUNERATION

The remuneration of the Supervisory Board, the
executive directors and key management
personnel is described in detail in the
Remuneration Report.

In 2022, the Supervisory Board received
total remuneration of DKK 10.36m (2021:
DKK 10.05m), comprising fixed salary only.

SHARE-BASED INCENTIVE PROGRAMMES
The executive directors in the Parent Company
are the same as for the Carlsberg Group.

Staff costs and remuneration

DKK million

Salaries and other remuneration

Retirement benefit costs - defined contribution plans

Share-based payments

Total

Please refer to section 7.3 in the consolidated
financial statements for share-based incentive
programmes for the executive directors.

fair value of share-based incentives, which is expensed
over the vesting period of the programme according
to the service conditions, is recognised in staff costs
and offset directly against equity.

PERFORMANCE SHARES
Besides the executive directors, one employee
in the Parent Company participates in the
Group’s performance share programmes as
described in section 7.3 in the consolidated
financial statements. Refunds etc. between
Carlsberg A/S and its subsidiaries are
recognised directly in equity.

ACCOUNTING
POLICIES

Staff costs are recognised in the financial year in
which the employee renders the related service. The

The fair value of share-based incentives granted to
employees in subsidiaries is recognised as investments
in subsidiaries and offset directly against equity.

The difference between the purchase price and the
selling price for the exercise of share-based incentives
is settled between Carlsberg A/S and the individual
subsidiary and offset directly against investments in
subsidiaries.

The difference between the fair value of the Parent
Company’s equity instruments and the exercise price
of outstanding share-based incentives is recognised as
a receivable and offset directly against investments in
subsidiaries.

Share-based incentives granted to the Parent
Company’s own employees are recognised and
measured in accordance with the accounting policies
used by the Group.

Staff costs are included in the following items in the income statement

Administrative expenses

Other operating activities, net

Total staff costs recognised by the Parent Company

Staff costs recognised by other Group companies

Total

The Company had an average of 89 (2021: 97) full-time employees during the year.

2022

2021

106

141

110

157

105

157

SECTION 3.2
RETIREMENT
BENEFIT
OBLIGATIONS

Retirement benefit obligations and similar
obligations comprise payments to retired
directors that are not covered by an insurance
company. The plan is unfunded.

Total obligations amounted to DKK 32m (2021:
DKK 26m) and include actuarial losses of DKK
-8m (2021: DKK 1m) and benefits paid in the
year of DKK 3m (2021: DKK 3m).

Of the expected payment obligation, DKK 4m is
due within one year, DKK 16m between one
and five years and DKK 12m after more than
five years from the reporting date.

The underlying actuarial assumptions are based
on local economic and labour market
conditions. The discount rate was 0.5% (2021:
0.5%). The rate of increase in future retirement
benefit obligations was 0% (2021: 0%).

During the year, DKK 0m (2021: DKK 0m)
was recognised in the income statement and
DKK -8m (2021: DKK 1m) in other
comprehensive income.

SECTION 4

OTHER DISCLOSURE
REQUIREMENTS

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

142

SECTION 4.1
OTHER OPERATING
ACTIVITIES, NET

Other operating activities are secondary to the
principal activities of the Group and include
income and expenses relating to rental
properties and research activities.

Other operating activities, net

DKK million

Gain on disposal of
intangible asset

Real estate, net
Research activities,
including the Carlsberg
Research Laboratory, net

Other, net

Total

2022

2021

225

-1

-27

-2

195

-9

-1

Gain on disposal of intangible asset comprises
an internal sale of a licence to a subsidiary in
the Carlsberg Group.

Research expenses are partially financed
through funding received from the Carlsberg
Foundation for the operation of the Carlsberg
Research Laboratory and other grants.

ACCOUNTING
POLICIES

The funding and grants are recognised in the income
statement in the same period as the activities to
which they relate.

SECTION 4.2
CASH FLOW

Change in working capital of DKK 119m (2021:
DKK 376m) consists of trade payables and
other liabilities of DKK 127m (2021: DKK 379m)
and retirement benefit obligations and other
provisions of DKK -8m (2021: DKK -3m).

At 31 December 2022, total provisions
amounted to DKK 46m (2021: DKK 52m).
Provisions amounting to DKK 6m (2021: DKK
3m) were utilised in 2022. In 2022, unutilised
provisions of DKK 0m (2021: DKK 1m) were
reversed.

Of total provisions, DKK 25m (2021: DKK 47m)
falls due within one year, DKK 21m (2021: DKK
4m) between one and five years and DKK 0m
(2021: DKK 1m) falls due after more than five
years from the end of the reporting period.

SECTION 4.4
SPECIAL ITEMS

Cash flow from operational investments of DKK
336m mainly comprises an internal sale of a
licence (DKK 225m) and disposal of land and
buildings (DKK 129m) classified as assets held
for sale in 2021 (DKK 129m).

Special items of DKK -15m (2021: DKK 80m)
relates to the closing of a dormant subsidiary
and an adjustment related to gain on disposal
of land and buildings in 2021.

Other activities cover real estate activities.

SECTION 4.3
PROVISIONS

Provisions primarily comprise warranty
provisions regarding real estate disposed of
and provisions for ongoing disputes.

SECTION 4.5
ASSET BASE AND
LEASES

Property, plant and equipment totalled DKK
166m (2021: DKK 163m) and comprised land
and buildings of DKK 122m (2021: DKK 127m)
and plant and machinery of DKK 44m (2021:
DKK 36m).

Depreciation and amortisation of DKK 17m
(2021: DKK 18m) were included in
administrative expenses.

All lease contracts in Carlsberg A/S at 31
December 2022 were related to short-term
leases and leases of low-value assets. The
lease expenses recognised in the income
statement amounted to DKK 1m (2021: DKK
1m). Such contracts comprise the lease of copy
and printing machines, coffee machines,
parking spaces, small IT devices and similar
equipment.

SECTION 4.6
FEES TO AUDITORS

Fees to auditors appointed by the Annual
General Meeting

DKK million

Statutory audit

Assurance engagements

Tax advisory

Other services

Total

2022

0.3

0.1

0.4

0.8

2021

0.3

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

143

SECTION 4.7

TAX

Deferred tax assets amounted to DKK 18m
(2021: DKK 13m) and comprised provisions and
retirement benefit obligations of DKK 17m
(2021: DKK 13m), and land and buildings of
DKK 1m (2021: tax losses etc. DKK 0m).

The utilisation of tax loss carried forward
depends on future positive taxable income
exceeding the realised deferred tax liabilities.
Unrecognised, non-expiring tax losses
amounted to DKK 493m (2021: DKK 210m).

Deferred tax liabilities amounted to DKK 7m
(2021: DKK 34m) and comprised tax on
property, plant and equipment.

Deferred tax, net, amounted to an asset of DKK
11m (2021: liability of DKK 21m). Of the deferred
tax assets, DKK 0m (2021: DKK 13m) is
expected to be used within one year.

The net change in deferred taxes of
DKK 32m primarily comprised a prior-year
adjustment of DKK 26m compared with a
change in tax provision of DKK -10m and a joint
taxation contribution of DKK -93m in 2021.

Reconciliation of tax for the year

DKK million

Calculated tax on profit
Adjustments to tax for prior
years

The total tax for the year recognised in the
income statement comprised an income of DKK
109m (2021: expense of DKK 30m), significantly
affected by prior-year adjustments.

Non-deductible expenses

Tax-free dividend and tax-
exempt items

Tax for the year

2022

817

-140

-792

-109

2021

716

-718

The administration company, Carlsberg A/S,
has unlimited and joint legal responsibility with
the other Danish companies under the joint
taxation scheme for withholding taxes on
dividends, interest and royalties.

ACCOUNTING ESTIMATES
AND JUDGEMENTS

Carlsberg A/S recognises deferred tax assets,
including the tax base of tax loss carryforwards, if
management assesses that these tax assets can be
offset against positive taxable income in the
foreseeable future. This judgement is made annually
and based on budgets and business plans for the
coming years.

ACCOUNTING
POLICIES

Carlsberg A/S is the administration company and
subject to the Danish rules on mandatory joint
taxation of the Carlsberg Group’s Danish companies.
Carlsberg A/S accordingly pays all income taxes to
the tax authorities under the joint taxation scheme.

Danish subsidiaries are included in the joint taxation
from the date when they are included in the
consolidated financial statements and up to the date
when they are excluded from the consolidation. The
jointly taxed Danish companies are taxed under the
on-account tax scheme.

On payment of joint taxation contributions, the
current Danish income tax is allocated between the
Danish jointly taxed companies in proportion to their
taxable income. Companies with tax losses receive
joint taxation contributions from other companies that
have used the tax losses to reduce their own taxable
profit (full absorption).

CARLSBERG GROUP ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

144

SECTION 5

GENERAL
ACCOUNTING POLICIES

SECTION 4.8
CONTINGENT
LIABILITIES AND
OTHER
COMMITMENTS

Carlsberg A/S has issued guarantees to
subsidiaries for pension obligations of DKK
357m (2021: DKK 342m).

Carlsberg A/S is jointly registered for Danish
VAT and excise duties with Carlsberg Breweries,
Carlsberg Danmark, Carlsberg Supply Company
Danmark and various other Danish subsidiaries,
and is jointly and severally liable for payment
of VAT and excise duties.

Carlsberg A/S is party to certain lawsuits,
disputes etc. of various scopes. In
management’s opinion, apart from items
recognised in the statement of financial
position or disclosed in the financial statements,
the outcome of these lawsuits, disputes etc. will
not have a material negative effect on the
Company’s financial position.

SECTION 4.9
EVENTS AFTER THE
REPORTING PERIOD

Apart from the events recognised or disclosed
in the financial statements, no events have
occurred after the reporting date of importance
to the financial statements.

The financial statements of Carlsberg A/S for
2022 have been prepared in accordance with
International Financial Reporting Standards
(IFRS) as adopted by the EU and further
requirements in the Danish Financial
Statements Act.

The financial statements are presented in
Danish kroner (DKK), which is the presentation
currency.

The accounting policies for the Parent
Company are the same as for the Group, cf.
section 9 in the consolidated financial
statements and the individual sections.

SIGNIFICANT ACCOUNTING ESTIMATES
AND JUDGEMENTS
In preparing Carlsberg A/S’ financial
statements, management makes various
accounting estimates and judgements that
form the basis of presentation, recognition and
measurement of the Company’s assets and
liabilities.

The estimates and judgements made are based
on historical experience and other factors that
management assesses to be reliable, but that
by their very nature are associated with
uncertainty and unpredictability. These
estimates and judgements may therefore prove
incomplete or incorrect, and unexpected events
or circumstances may arise.

The significant accounting estimates and
judgements made and accounting policies
specific to the Parent Company are presented
in the explanatory notes.

REPORTS

MANAGEMENT
STATEMENT

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

145

The Supervisory Board and the Executive
Board have today discussed and approved the
Annual Report of the Carlsberg Group and the
Parent Company for 2022.

The Annual Report has been prepared in
accordance with International Financial
Reporting Standards as adopted by the EU
and further requirements in the Danish
Financial Statements Act.

In our opinion, the consolidated financial
statements and the Parent Company’s
financial statements give a true and fair view
of the Carlsberg Group’s and the Parent
Company’s assets, liabilities and financial
position at 31 December 2022 and of the
results of the Carlsberg Group’s and the Parent
Company’s operations and cash flows for the
financial year 2022.

Further, in our opinion the Management review
includes a fair review of the development in
the Carlsberg Group’s and the Parent
Company’s operations and financial matters,
of the result for the year, and of the Carlsberg
Group’s and the Parent Company’s financial
position, as well as describing the significant
risks and uncertainties affecting the Carlsberg
Group and the Parent Company.

Executive Board of Carlsberg A/S

Cees 't Hart

President & CEO

Ulrica Fearn

CFO

Supervisory Board of Carlsberg A/S

In our opinion, the Annual Report of the
Carlsberg Group and the Parent Company for
the financial year 1 January to 31 December
2022, identified as Carlsberg-2022-12-31-en.zip,
has been prepared, in all material respects, in
compliance with the ESEF Regulation.

Henrik Poulsen
Chair

Hans Andersen

Carl Bache

Majken Schultz
Deputy Chair

Mikael Aro

Magdi Batato

We recommend that the Annual General
Meeting approve the Annual Report.

Copenhagen, 7 February 2023

Lilian Fossum Biner

Richard Burrows

Eva Vilstrup Decker

Punita Lal

Erik Lund

Olayide Oladokun

Søren-Peter Fuchs Olesen

Tenna Skov Thorsted

REPORTS

INDEPENDENT
AUDITOR’S REPORTS

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

146

What we have audited
The Consolidated Financial Statements and
Parent Company Financial Statements of
Carlsberg A/S for the financial year 1 January
to 31 December 2022 comprise income
statement and statement of comprehensive
income, statement of financial position,
statement of changes in equity, statement of
cash flows and notes, including summary of
significant accounting policies for the Group as
well as for the Parent Company. Collectively
referred to as the “Financial Statements”.

TO THE SHAREHOLDERS OF
CARLSBERG A/S

REPORT ON THE AUDIT OF THE
FINANCIAL STATEMENTS

OUR OPINION
In our opinion, the Consolidated Financial
Statements and the Parent Company Financial
Statements (pp 61 - 145) give a true and fair
view of the Group’s and the Parent Company’s
financial position at 31 December 2022 and of
the results of the Group’s and the Parent
Company’s operations and cash flows for the
financial year 1 January to 31 December 2022 in
accordance with International Financial
Reporting Standards as adopted by the EU and
further requirements in the Danish Financial
Statements Act.

Our opinion is consistent with our Auditor’s
Long-form Report to the Audit Committee and
the Board of Directors.

BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (ISAs) and
the additional requirements applicable in
Denmark. Our responsibilities under those
standards and requirements are further
described in the Auditor’s responsibilities for
the audit of the Financial Statements section
of our report.

We believe that the audit evidence we have
obtained is sufficient and appropriate to provide
a basis for our opinion.

Independence
We are independent of the Group in accordance
with the International Ethics Standards Board
for Accountants’ International Code of Ethics
for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable in
Denmark. We have also fulfilled our other
ethical responsibilities in accordance with these
requirements and the IESBA Code.

To the best of our knowledge and belief,
prohibited non-audit services referred to in
Article 5(1) of Regulation (EU) No 537/2014
were not provided.

Appointment
We were first appointed auditors of Carlsberg
A/S on 30 March 2017 for the financial year
2017. We have been reappointed annually by
shareholder resolution for a total period of
uninterrupted engagement of six years
including the financial year 2022.

KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgement, were of most
significance in our audit of the Financial
Statements for 2022. These matters were
addressed in the context of our audit of the
Financial Statements as a whole, and in
forming our opinion thereon, and we do not
provide a separate opinion on these matters.

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

147

Key audit matter

How our audit addressed the key audit matter

Key audit matter

How our audit addressed the key audit matter

Revenue recognition

Recoverability of the carrying amount of goodwill and brands

Our audit procedures included considering the appropriateness of the
revenue recognition accounting policies and assessing compliance with the
accounting standards.

We performed risk assessment procedures to obtain an understanding of
IT systems, business processes and relevant controls related to revenue
recognition. For the controls we assessed if these had been designed and
implemented in a way that effectively addresses the risk of material
misstatement.

We tested selected controls considered relevant to our audit, including
applicable information systems, and Management’s monitoring of controls
used to ensure the completeness, accuracy and timing of revenue
recognised, were performed consistently throughout the year.

We discussed the judgements related to the recognition, and classification
of revenue with Management. Further, we performed substantive
procedures regarding invoicing, significant contracts, significant transaction
streams (including discounts), locally imposed duties and fees and cut-off
at year-end in order to assess the accounting treatment and principles
applied.

We applied data analysis in our testing of revenue transactions in order to
identify transactions outside the ordinary transaction flow, including
journal entry testing.

Recognition of revenue is complex
due to the variety of different
revenue streams, ranging from
sales of goods, royalty income and
sales of by-products recognised
when all significant risks and
rewards have been transferred to
the customer or in terms of the
license agreement.

Furthermore, the various discounts
and locally imposed duties and
fees in regard to revenue
recognition are complex and hold
an inherent risk to the revenue
recognition process.

We focused on this area, as there
is a risk of non-compliance with
accounting standards due to
complexity originating from
different customer behaviours,
structures, market conditions and
terms in the various countries.

Revenue recognition and
accounting treatment are
described in section 1.2
“Segmentation of operations –
Accounting estimates and
judgements” in the Consolidated
Financial Statements.

We performed risk assessment procedures to obtain an understanding of
IT systems, business processes and relevant controls related to the
assessment of the carrying amount of goodwill and brands.

In addressing the risks, we walked through and tested that controls
relevant to our audit were performed consistently throughout the year.

We considered the appropriateness of Management’s defined CGUs within
the business. We evaluated whether there were factors requiring
Management to change their definition. We examined the methodology
used by Management to assess the carrying amount of goodwill and
brands assigned to CGUs, and the process for identifying CGUs that
require impairment testing to determine compliance with IFRS.

We performed detailed testing for the assets where an impairment review
was required or indications of impairment were identified. For those assets,
we analysed the reasonableness of significant assumptions in relation to
the ongoing operation of the assets.

We corroborated estimates of future cash flows and challenged whether
they are reasonable and supported by the most recently approved
Management budgets, including expected future performance of the CGUs,
and challenged whether these are appropriate in light of future
macroeconomic expectations in the markets.

We evaluated the assumptions used by Management, including
assessment of price and volume forecasts, discount rates and long-term
growth rates, and tested the mathematical accuracy of the relevant value-
in-use models prepared by Management. We made use of our internal
valuation specialists in the audit. Further, we assessed the appropriateness
of disclosures, including sensitivity analyses prepared for the significant
assumptions.

The principal risks are in relation to
Management’s assessment of the
future timing and amount of cash
flows that are used to project the
recoverability of the carrying
amount of goodwill and brands.
There are specific risks related to
macroeconomic conditions and
volatile earnings caused by volume
decline, intensified competition and
changed regulations in key
markets – conditions that could
also result in Management
deciding to change brand strategy
to drive business performance.

Bearing in mind the generally
long-lived nature of the assets, the
significant assumptions are
Management’s view of prices,
volumes, discount rates, growth
rates, royalty rates, expected
useful life and costs, and future
free cash flows as well as the
judgement in defining cash-
generating units (CGUs).

We focused on this, as there is a
high level of subjectivity exercised
by Management in estimating
future cash flows and the models
used are complex.

The key assumptions and
accounting treatment are
described in section 2.2
“Impairment” in the Consolidated
Financial Statements.

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

148

Key audit matter

How our audit addressed the key audit matter

Discontinued operations and disposal group held for sale

We performed risk assessment procedures to obtain an understanding of
the financial reporting process, including the classification as held for sale
and discontinued operations, the applied model including significant
assumptions and relevant controls.

In addressing the risks, we walked through and tested the relevant
controls.

We based our assessment of the classification as held for sale and
discontinued operations based on the criteria mandated by IFRS. We have
further based our assessment on the actions taken by Management in
ensuring the business is available for sale.

We considered the appropriateness of Management’s valuation model. We
examined the methodology used by Management to assess the fair value
less cost to sell to determine compliance with IFRS.

We performed detailed testing on the valuation of the Russian business,
and analysed the reasonableness of significant assumptions in relation to
the operation of the business.

We corroborated estimates of future cash flows and challenged whether
they are reasonable and supported by the most recently approved
Management budgets, including expected future performance of the
stand-alone Russian business, and challenged whether these are
appropriate in light of current macroeconomic expectations in the market.

We evaluated the assumptions used by Management, including
assessment of the Russian ruble conversion rate, free cash flow forecasts,
long-term growth rates and the applied WACC, and tested the
mathematical accuracy of the discounted cash flow model prepared by
Management. We made use of our internal valuation specialists in the
audit.

Further, we assessed the appropriateness of presentation and disclosures,
including sensitivity analyses prepared for the significant assumptions.

In March 2022, Management
announced their decision to seek a
full divestment of the Russian
business and classified it, as held
for sale.

The principal risks relate to
Management’s assessment of the
Russian business classification as
held for sale, the presentation as
discontinued operations, and the
fair value assessment of the
business.

The classification is based on
objective criteria representing the
availability of the business for
immediate sale in its current
condition, and the sale being
highly probable.

The Russian business is held at its
fair value less cost to sell, which is
subject to Management’s
estimation of the future cash
flows. There are specific risks
related to macroeconomic
conditions and volatile earnings
caused by volume decline, cost
increases and changing
regulations.

The significant assumptions are
Management’s view on the
Russian ruble conversion rate, free
cash flow forecasts, long-term
growth rates as well as the applied
WACC.

We focused on this, as there is a
high level of subjectivity exercised
by Management in estimating
future cash flows and the model
used is complex.

The key assumptions and
accounting treatment are
described in section 5.1
“Discontinued operations and
disposal group held for sale” in the
Consolidated Financial Statements.

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

149

STATEMENT ON THE MANAGEMENT REVIEW
Management is responsible for Management’s
Review, pages 3-59.

Our opinion on the Financial Statements does
not cover Management’s Review, and we do
not express any form of assurance conclusion
thereon.

In connection with our audit of the Financial
Statements, our responsibility is to read
Management’s Review and, in doing so,
consider whether Management’s Review is
materially inconsistent with the Financial
Statements or our knowledge obtained in the
audit, or otherwise appears to be materially
misstated.

Moreover, we considered whether
Management’s Review includes the disclosures
required by the Danish Financial Statements
Act.

Based on the work we have performed, in our
view, Management’s Review is in accordance
with the Consolidated Financial Statements and
the Parent Company Financial Statements and
has been prepared in accordance with the
requirements of the Danish Financial
Statements Act. We did not identify any
material misstatement in Management’s
Review.

MANAGEMENT’S RESPONSIBILITIES FOR THE
FINANCIAL STATEMENTS
Management is responsible for the preparation
of consolidated financial statements and parent
company financial statements that give a true
and fair view in accordance with International
Financial Reporting Standards as adopted by
the EU and further requirements in the Danish
Financial Statements Act, and for such internal
control as Management determines is
necessary to enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud or error.

In preparing the Financial Statements,
Management is responsible for assessing the
Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going concern
and using the going concern basis of
accounting unless Management either intends
to liquidate the Group or the Parent Company
or to cease operations, or has no realistic
alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the Financial
Statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs and
the additional requirements applicable in
Denmark will always detect a material
misstatement when it exists. Misstatements can
arise from fraud or error and are

considered material if, individually or in the
aggregate, they could reasonably be expected
to influence the economic decisions of users
taken on the basis of these Financial
Statements.

As part of an audit in accordance with ISAs and
the additional requirements applicable in
Denmark, we exercise professional judgement
and maintain professional scepticism
throughout the audit. We also:

• Identify and assess the risks of material

misstatement of the Financial Statements,
whether due to fraud or error, design and
perform audit procedures responsive to those
risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a
material misstatement resulting from fraud is
higher than for one resulting from error, as
fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of
the Group’s and the Parent Company’s
internal control.

• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by Management.

• Conclude on the appropriateness of

Management’s use of the going concern basis
of accounting and based on the audit
evidence obtained, whether a material
uncertainty exists related to events or
conditions that may cast significant doubt on
the Group’s and the Parent Company’s ability
to continue as a going concern. If we conclude
that a material uncertainty exists, we are
required to draw attention in our auditor’s
report to the related disclosures in the
Financial Statements or, if such disclosures
are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence
obtained up to the date of our auditor’s
report. However, future events or conditions
may cause the Group or the Parent Company
to cease to continue as a going concern.

• Evaluate the overall presentation, structure
and content of the Financial Statements,
including the disclosures, and whether the
Financial Statements represent the underlying
transactions and events in a manner that
gives a true and fair view.

• Obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the Group
to express an opinion on the Consolidated
Financial Statements. We are responsible for
the direction, supervision and performance of
the group audit. We remain solely responsible
for our audit opinion.

We communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit and
significant audit findings, including any
significant deficiencies in internal control that
we identify during our audit.

We also provide those charged with governance
with a statement that we have complied with
relevant ethical requirements regarding
independence, and to communicate with them
all relationships and other matters that may
reasonably be thought to bear on our
independence and, where applicable, actions
taken to eliminate threats or safeguards
applied.

From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the Financial Statements of the current
period and are therefore the key audit matters.
We describe these matters in our auditor’s
report unless law or regulation precludes public
disclosure about the matter.

REPORT ON COMPLIANCE WITH
THE ESEF REGULATION

As part of our audit of the Financial Statements
we performed procedures to express an opinion
on whether the annual report of Carlsberg A/S
for the financial year 1 January to 31 December
2022 with the filename Carlsberg-2022-12-31-
en.zip is prepared, in all material respects, in
compliance with the Commission Delegated
Regulation (EU) 2019/815 on the European
Single Electronic Format (ESEF Regulation)
which includes requirements related to the
preparation of the annual report in XHTML
format and iXBRL tagging of the Consolidated
Financial Statements including notes.

Management is responsible for preparing an
annual report that complies with the ESEF
Regulation. This responsibility includes:
• The preparing of the annual report in XHTML

format;

• The selection and application of appropriate
iXBRL tags, including extensions to the ESEF
taxonomy and the anchoring thereof to
elements in the taxonomy, for all financial
information required to be tagged using
judgement where necessary;

CARLSBERG GROUP ANNUAL REPORT 2022 FINANCIAL STATEMENTS

150

• Ensuring consistency between iXBRL tagged

data and the Consolidated Financial
Statements presented in human-readable
format; and

• For such internal control as Management

determines necessary to enable the
preparation of an annual report that is
compliant with the ESEF Regulation.

Our responsibility is to obtain reasonable
assurance on whether the annual report is
prepared, in all material respects, in compliance
with the ESEF Regulation based on the
evidence we have obtained, and to issue a
report that includes our opinion. The nature,
timing and extent of procedures selected
depend on the auditor’s judgement, including
the assessment of the risks of material
departures from the requirements set out in the
ESEF Regulation, whether due to fraud or error.
The procedures include:
• Testing whether the annual report is prepared

in XHTML format;

• Obtaining an understanding of the company’s
iXBRL tagging process and of internal control
over the tagging process;

• Evaluating the completeness of the iXBRL

tagging of the Consolidated Financial
Statements including notes;

• Evaluating the appropriateness of the

company’s use of iXBRL elements selected
from the ESEF taxonomy and the creation of
extension elements where no suitable element
in the ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension
elements to elements in the ESEF taxonomy;
and

• Reconciling the iXBRL tagged data with the
audited Consolidated Financial Statements.

In our opinion, the annual report of Carlsberg
A/S for the financial year 1 January to 31
December 2022 with the file name
Carlsberg-2022-12-31-en.zip is prepared, in all
material respects, in compliance with the ESEF
Regulation.

Hellerup, 7 February 2023

PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 3377 1231

Mogens Nørgaard Mogensen
State Authorised Public Accountant
mne21404

Michael Groth Hansen
State Authorised Public Accountant
mne33228

Carlsberg A/S
1 J.C. Jacobsens Gade
1799 Copenhagen V
Denmark
Phone +45 3327 3300
www.carlsberggroup.com
CVR No. 61056416

ESEF data

Domicile of entity

Description of nature of entity’s operations and principal
activities

Country of incorporation

Principal place of business

Legal form of entity

Denmark

Brewing company

Denmark

Global

A/S

Name of reporting entity or other means of identification

Carlsberg A/S

Address of entity's registered office

1 J. C. Jacobsens Gade 1799
Copenhagen V

Editor: Carlsberg Group Investor Relations
Design & layout: Operate & Omnidocs
Proofreading: Borella projects