Royal Unibrew A S

Good morning, everybody. My name is Lars Jensen, and I'm the CEO of Roy Unibrew. And with me today, I have our CFO, Lars Vestergaard. And we would like to welcome you to this webcast where we will cover the release of our fourth quarter and annual results for 2024. And afterwards, we'll take your questions. Now, please turn to slide number three. We will walk you through the business highlights of 24 and our growth drivers as well as our financial performance and outlook for 25. Now please turn to slide number four. We will start by looking at the most important highlights from the annual report. Over the past four years, we have almost doubled in size. We have expanded our multi-beverage platform in Northern Europe, and we have now full coverage of all countries in the Nordics and the Baltic countries. Also, we now have significant footprint in Western Europe and with multi-niche positions in Italy, France, Benelux, So effectively, we have step-changed the business and unlocked additional growth opportunities through our multi-beverage and multi-need strategies in an industry where growth is otherwise limited. We delivered a revenue above 15 billion Danish kroner and a total EBIT growth of 20% in 2024. We have made considerable investments in capacity and capabilities, and we have made several acquisitions underpinning our strategy. Integrations of acquired businesses are on track, and in the coming year we will focus more on harvesting scale benefits and reducing complexity to increase our operational efficiency. In 2024, we have revised our sustainability goals to ensure they remain relevant in relation to our material impacts, risk and opportunities and support our sustainability aspiration. We continue to make good progress within sustainability and with the approval of ScienceBank's target, we have in fact increased our ambitions on ESG and in particular around the CO2 reduction. As a result of the strong free cash flow generated in 2024 and our solidified financial positions, we are now relaunching a share buyback program of up to 250 million Danish kroner. And the program will run from now and until mid-August this year. Finally, we have published our new guidance for 2025, where we expect revenue growth to be 5-7% and EBIT to grow 7-13%. These are ambitious targets and a testament to the strength of the company. As 2025 is above our objective of 6-8%, you should count the 6-8% growth as from 2026 and beyond. We believe we are well positioned with a substantial part of our business in categories with growth potential and with investments both commercially and in CapEx that will facilitate strong performance in both top and bottom line in the coming years. Now please turn to slide number five. If you look at the development in our individual business segments, Northern Europe is by far our biggest segment, accounting for more than two-thirds of net revenue and EBIT. We performed well in a difficult market and consolidated the strong performance from 2023. We achieved 2% and 3% growth in volume and revenue, respectively. And more importantly, we were able to protect our margins through efficiency improvements, which offset promotional pressure and adverse channel mix. In Northern Europe, we have a nearly 50-50% split between alcoholic and non-alcoholic beverages. In Denmark, we had a volume record year and we are gaining market share in most of the categories, notably in carbonated soft drink led by Foxy Condi and Pepsi Max, but also strong performance in energy drinks. In Western Europe and international, we saw strong developments and solid execution with no capacity constraints. Both delivered record results on both top line and bottom line. In Western Europe, volumes increased by 122% in total and by 7% organically, while organic revenue increased by 14% and by 91% in total. This is predominantly due to strong performance in Italy and France, led by our strong brands, Cheddars and Lemon Soda in Italy, and Lorena and Crazy Tiger in France. Non-alcoholic beverages account for roughly two-thirds of our revenue in Western Europe. In international, we saw a strong rebound in volume, revenue, and profitability, with organic growth above 20% in both volume and revenue, while EBIT margin improved by 8.1 percentage points to 14.5%. Our performance was positively impacted by East's supply chain constraints on group level and improved pricing in general. Like in Northern Europe, the split between alcoholic and non-alcoholic beverages is close to 50-50, with a slight overweight to alcoholic beverages in the international segment. We saw especially strong demand from Africa, the dark countries plus Albania, as well as from our malt beverages business in Americas and Caribbean. Now please turn to slide number six. Even though the European beverage market is not really growing by volume, we are focusing on and are playing in categories that are growing. Let me just highlight a few examples to this. In enhanced beverages, we saw organic growth of 14%. This development reflects a general trend towards healthier products with higher quality and better functionality. As an example, we have seen the volume of Saucy vitamin water in the Netherlands growing strongly and the launch of Foxy Condi Pro taking almost 30% of the sports drink market in Denmark. In no low sugar, organic growth was 11% in 24, and overall, we have more than doubled in size in this category since 2019. Success is driven by strong execution and combination of strong own brands, like Faxi Condi Zero Calories, and strong performance with Pepsi Max, and we do a lot of innovation in this category. In the premium category, organic growth was 9% in 2024. As an example, we have grown our malt business and the cheddar strong ale in easily significantly. This is supported by strong in-market execution and marketing campaigns. In no low alcove, our volume has only grown slightly as the market growth in this category is also low in the Nordics, where the demand is the highest for this category. We still expect the category to grow, however, at a slower pace than what was our previous thinking. On the back of our analysis of further trends, we have slightly updated our growth category framework. Now, please turn to slide number seven to illustrate the update. Our strategy remains the same, but from 25, we have fine-tuned our growth categories, and now we have taken the six categories down to four. Energy enhanced is now one big category as these two categories are getting closer together or closer to each other in terms of content of the liquids. For now, we do not see a strong enough growth in no low alcohol to qualify for the framework. These products remain an important part of our portfolio, but with lower expected growth rates from now on. Hence, it doesn't qualify to get overinvestment, so to speak. To summarize, we intend to play an important role in our defined growth categories through a mix of own brands and partner brands. We will drive a fair amount of resources towards these categories in the form of sales, marketing, innovation, manpower, based on an assessment on where we get the highest return on the invested capital. And now I would like to hand over to Lars, who will go through the details with the financial numbers.

Thank you, Lars, and good morning to all of you. Please turn to slide number eight. I'll walk you through the main highlights of our financial results in Q3 and the full year of 2024. On this slide, we show the key financial highlights for 2024. We delivered 5% organic volume growth, while organic net revenue grew slightly more as a result of positive price mix. We also highlight our absolute growth of 23% in volume and 16% in revenue, which include the effect of previous year's acquisitions. Organic EBIT growth was 15%, with efficiency being a strong contributor to the EBIT growth. As a result, the EBIT margin increased to 13.1. This includes a dilution of 60 basis points from acquisitions, as the acquired companies operate with a lower margin than the group average. Free cash flow increased to 1.4 billion Danish, leading to a reduction of our financial gearing to 2.2, which is below our long-term target of a maximum of 2.5. This is the reason why we're now relaunching share buybacks. Please turn to slide number 9. The strong momentum seen in previous quarters continued into the fourth quarter. However, with differences between markets. In Northern Europe, we still see a challenged consumer sentiment. While our multi-barrierage platform provides a certain level of stability, it also limits our ability to grow simply because we already have a strong position in the market. In Western Europe and internationally, we are still a relatively small player, which allows us to grow even in a soft market. Overall, we saw solid organic growth in both volume and revenue in the fourth quarter of 5% and 4% respectively, while EBIT growth was 2% compared to a strong Q4 in 2023, with a positive impact from a one-off income of 30 million from a sale of a building in Norway. Additionally, we increased our marketing spend and invested 14 million more in marketing in the fourth quarter and incurred costs of 10 million kroner related to the start-up of Belgium in connection with the takeover of the PepsiCo beverage and snacks portfolio in Belgium and Luxembourg. All in all, this explains a delta of 18 million at an EBIT level compared to the same quarter last year. Adjusted for one-off income in Q3 2023, organic EBIT growth was 9% in Q4 of 24. But with a higher level of marketing investments, so the performance is stronger than the headline numbers indicate. If we look at the full year numbers, we delivered significant growth in volumes, net revenue and earnings because of both organic and acquisitive growth. Revenue reached 15 billion kroner as guided, and organic EBIT growth was 15% in line with the low end of the guided interval, impacted by the performance in Q4 as described. Net financial expenses for the full year of 2024 was positively impacted by 201 million kronor of tax regained from the sale of the Polish shareholdings. Adjusted for this, net financial expenses were at the level of 300 million for the full year of 2024, reflecting higher debts and interest rates. Tax came out higher than what we guided at Q3 due to some tax losses in Sweden that we have, for prudence reasons, decided not to capitalize and permanent differences. Net profit and earnings per share increased by around 34%. Adjusted earnings per share, excluding the one-off gain on the sale of the shares in Poland, increased by 15%. Please turn to slide number 10. On this slide, we show the impact of M&A on revenue and EBIT. Net revenue increased by 16% in total, of which acquisitions accounted for 10%. In the middle, we show the EBIT bridge acquisitions contributed with 84 million to EBIT in 2024, equivalent to 5%, while organic growth in EBIT amounted to 246 million kroner, equivalent to 15%. On top of the acquired net revenue and EBIT, we have also acquired access to extra capacity on a group-leveling connection with both acquisitions, which have contributed to the organic growth as well. The two new production sites in Netherlands and Italy have delivered volume to the group and have freed up capacity in Northern Europe, which has supported the global supply chain and mainly the international markets. The EBIT margin expanded by 40 basis points to 13.1. Acquisitions have diluted the margin impact by 60 basis points. Adjusting for this, the EBIT margin expanded by 100 basis points in 2024. Please turn to slide number 11. Free cash flow amounted to 1.4 billion in 2024. This was an increase of 25% versus last year. The cash flow was positively impacted by positive development in the operating result and a decrease in working capital of 216 million kroner. As percent of net revenue, net working capital was unchanged at 6%. In total, cash flow from operating activities was 412 million higher in 2024 compared to last year or the previous year. Cash from investing activities and lease payments came to 956 million and included the gain from the sale of shares in Poland. This resulted in a free cash flow of 1.435 million Danish. One of the key focus areas in 2024 has been to re-establish our financial flexibility, which we have now achieved, primarily driven by the strong operating results and cash management. Net interest-bearing debt decreased to 5.7 billion at the end of 2024 from 6.4 the year before. Consequently, our net interest-bearing debts to EBITDA improved to 2.2 at the end of 2024 and is now well below our financial target of a maximum of 2.5 times EBITDA. And as announced yesterday, we have launched a new share buyback program of 250 million kroner. On this side, we have also included ROIC, which increased to 12%, including Goodwill. Please turn to slide number 12. Our priorities for capital allocation remains unchanged. Our first priority remains to maintain our financial flexibility and to have a financial gearing measured at a net debt to EBITDA below 2.5. Secondly, we prioritize investments in organic growth with high return on invested capital. We are still interested in value-accretive acquisitions in the form of bold-on brand platforms or asset acquisitions. remain committed to paying out 40 to 60 percent dividend and the board of directors have proposed a dividend of 15 kroner per share to be distributed for 2024 equivalent to a payout ratio of 51 percent lastly we have now launched a share program of 250 million kroner i will now hand over the word to lars who will dive into the sustainability growth and value creation framework

Thank you, Lars. And now please turn to slide number 13. In 24, we have revised our sustainability goals to ensure they remain relevant in relation to material impacts, risk and opportunities and support our sustainability aspiration. We have added goals for water, which is our most important raw material, and we are targeting regenerative agricultural practices for 50% of our major ingredients, barley, sugar, and hops, by 2030. We have also raised the bar for packaging material and are now targeting 100% circularity for packaging materials by 2030. 95% of our packaging materials were either recyclable or reusable in 2024. We have also raised our ambitions with respect to marketing spend on products with a sustainability position to 60%, as we have opted for more demanding goals on consumer engagement and sustainability, transitioning from being a perception-driven preferred supplier to implementing concrete sustainability plans and actions. All in all, and due to the science-based target approval, we have increased our ambitions. Now, please turn to slide number 14. If we take a closer look at how we intend to grow and create value, you have probably seen this model before. We remain committed to delivering profitable earnings growth, and we drive the business to maximize long-term returns on invested capital and earnings per share. Organic EBIT growth is our most important short-term value driver in that formula. In 2025, We believe that most of our earnings growth will come from value growth and operating efficiency in Northern Europe, while in Western Europe, volume growth will be the main contributor to grow the profitability. International is assumed to be a mix of both volume and value, but likely more volume than value. Finally, share buybacks will also increase earnings per share in 2025, and we believe from our flexible strategy that we can adopt through the market conditions, whatever they may be. Two years doesn't look the same, and there's very different parameters between what is happening in the markets. And I'll now hand the word back to Lars, who will dive into the outlook and financial targets.