We delivered strong operational performance and underlying earnings growth while investing in growth and efficiency opportunities. 

JØRGEN BUHL RASMUSSEN President & CEO 

materials and become more resilient to poten- tial resource scarcity and increased costs in the future, we have joined forces with key global partners to rethink the design and produc- tion of packaging material. The cooperation was formalised in 2013 through the Carlsberg Circular Community (CCC), where Carlsberg, together with our partners, will develop the next generation of packaging solutions opti- mised for reuse or recycling. CCC was officially launched during the annual World Economic Forum meeting in Davos in January 2014. 

## THE SUPPLY CHAIN INTEGRATION AND BUSINESS STANDARDISATION PROJECT 

2013 marked the beginning of the roll-out of the supply chain integration and business standardisation project (BSP1) in Western Europe. The purpose of BSP1 is to improve capabilities, customer service and efficiency, and increase speed and asset utilisation. 

The first markets to go live were Sweden in April, followed by Norway in November. The next market to go live will be the UK in 2014. The implementation process is running according to schedule and with no major disruption to our daily business. 

## EARNINGS EXPECTATIONS 

2014 is expected to be a year when the Carlsberg Group will continue to build on the strengths of our company to ensure that we capture both the short- and longer- term opportunities that are present in our markets. To do so, we will: 

• Further develop and invest in our Asian business to ensure that we continuously position it to capture the growth oppor- tunities in the region. 

• Drive the ongoing efficiency improve- ments in Western Europe and maintain a focused commercial agenda that will further strengthen our business and the region’s profitability. 

• Utilise the strength of our Russian brand portfolio, route-to-market, innovation capabilities and execution skills to further strengthen our market position and improve profitability. 

We will continue our tight cost agenda across all markets and functions to ensure that the Group delivers earnings growth. In 2014, the focus on strong execution, both internally and externally, will be even more important as we assume significant head- wind from currencies. 

## IMPLEMENTATION OF CHANGE IN ACCOUNTING POLICIES 

New accounting standards coming into ef- fect as of 1 January 2014 mean that it will no longer be possible to proportionately consolidate jointly controlled entities such as Unicer in Portugal and Cambrew in Cam- bodia 1 . Proportionately consolidated entities will hereafter be recognised as associates. 

Restated income statement and segment reporting by region (beverages) for 2013 are included in section 9.3 in the consolidated fi- nancial statements. Following the change in accounting policies, the restated net interest- bearing debt was DKK 34,634m (reported DKK 35,022m). 

## 2014 EARNINGS EXPECTATIONS 

Based on restated figures for 2013 1 , for 2014 the Group expects: 

• Operating profit to grow organically by high-single-digit percentages (reported mid-single-digit percentage growth). 

• Reported adjusted net profit 2  to grow by mid-single-digit percentages. 

The major assumptions behind the outlook are listed below. 

The outlook, in reported terms, is based on an assumed 2014 average for our major currencies calculated on forward rates, including an average EUR/RUB exchange rate of around 49 (an EUR/RUB change of +/- 1 impacts Group operating profit by slightly less than +/- DKK 100m). 

For 2014, the Group assumes the following market development in our major markets/ regions: 

• The Western European beer markets will decline slightly as consumers in many markets remain under pressure, in spite of the macroeconomic situation in some markets having improved slightly in the second half of 2013. 

• The Russian market will decline low- single-digit in volume terms, while continuing healthy value growth. The Russian beer market will be impacted by the macroeconomic slowdown and weaker consumer sentiment. The outlook assumes that no new regulations will be implemented following the significant regulatory changes which have been introduced in recent years. 

• The Asian markets will continue to grow in line with 2013. 

Based on restated figures 1 , reported cost of goods sold per hl is expected to be lower than in 2013. In organic terms, cost of goods sold per hl is expected to be similar to last year. 

Based on restated figures 1 , sales and market- ing investments to net revenue is expected to remain at a similar level to last year. 

Costs related to the integrated supply chain and business standardisation project in West- ern Europe are expected to impact Group operating profit in 2014 by DKK 450-500m. 

Average all-in cost of debt is assumed to be similar to 2013. 

The tax rate is expected to be 24-25%. 

Capital expenditures are expected to be at the level of 2013 with continued capacity investments in Asia. In 2014, the DKK 1.4bn acquisition of Chongqing Beer Group Assets Management is expected to be completed. 

