Royal Unibrew A S

Good morning, everyone. My name is Lars Jensen and I'm the CEO of Roy Unibrew. And with me today is our CFO, Lars Vestergaard. I would like to welcome you to this webcast covering our trading statement for the first quarter of 2025. And after the presentation, we'll be open on the line for your questions. First, we will walk you through the business highlights of the quarter, our financial performance and our outlook for the rest of the year. Now, please turn to slide number three. We are pleased to report that our volume and net revenue for the first quarter were in par with Q1 2024, despite a full week of strike in Finland and the later timing of Easter, which shifted sales into the second quarter. Our Western Europe and international segments continue to perform strongly, maintaining the positive trends and momentum we saw in 2024. On the financial side, we delivered an EBIT growth of 4% and an earnings per share increase of 25%, with an EBIT margin expansion of 0.2 percentage points. Given this good start to the year, we are reiterating our financial outlook for the full year of 2025. That said, the macroeconomic environment has become more uncertain since we published our annual report just two months ago. Geopolitical tensions, evolving trade policies and changes in consumer sentiments are adding a new layer of complexity. But we are well prepared due to our focus on cost and efficiencies. While Unibrew has limited direct exposure to the U.S. in terms of imports and exports, we continue to monitor this closely and remain focused on maintaining flexibility and operational resilience. Now, please turn to slide number four. Let's now take a closer look at the performance across our geographical business segments. If we start with Northern Europe, volume were down by 8%, which is mainly due to the later Easter and the sector-wide strike in Finland. Net revenue declined by 6%, to 2 billion and 41 million, and overall consumer sentiment remained quite soft, and particularly in the on-trade channel, which you have heard us talking about for at least one and a half years. A clear assessment is that we are gaining slightly market share in northern European segment as a whole, and that is measured on sales out. So not our sales in, but measured on sales out in Q1. And if we look at March and April together to neutralize the Easter shifts between the quarters and shipping difference in Finland from the strike, we are right where we should be. with growth on both top line and gross margin. In percentage, we grow more on gross margin than we do on revenue, which is due to the efficiency agenda and our price mix management. If we dive a bit more into the performance in some of the countries, the strike in Finland meant that production and logistics operation at our brewery were stopped during the last week of March. The sectorial strike was pre-announced, but still had a significant impact both on sales and production in Q1. We see that sales has recovered in April, but there has been an extra cost related to the production stop in Q1. which is always the case when we have strikes that last as long as a full week. The consumer sentiment in Finland remains quite challenged, impacting both on and off trade. On the positive side, we took over the local portfolio of alcohol brands from Panorika, which is mainly the Minto brand at the beginning of March. It is still very early days, but I would say so far the integration is going as planned. and really well done, both by the receiving organization and the Finnish organization. Results in Denmark were impacted by Easter timing and somewhat lower consumer sentiment. We continue to perform well on market shares in Denmark, which in the first quarter is driven by a soft drink with both Pepsi and Faxe Condi. It's driven by beer with Royal and energy drinks with Faxe Condi Booster. In Norway, the activity levels were as expected. We finalized the SAP integration in the first quarter and we are now operating as planned. As you may have noticed, we announced the closure of the Borg brewery in Sarfsborg by the end of 2025. This is not expected to impact the P&L for 2025 and is a part of the optimization of our production setup in Norway that was initiated with the closure of Kristiansand a couple of years ago. In Western Europe, volumes grew by 15%, driven by the new activities in Bilux and continued strong growth in Italy and France. Net revenue increased by 14% to 828 million. The Netherlands was flat compared to last year as the timing of Easter also in the Netherlands had a negative impact. In the Netherlands, we start to see the positive effects of our commercial agenda that was set after the summer last year on the back of the excise increase, which came in on the 1st of January 2024. The field sales force organization we have built in OffTrade is lifting sales and the quality of in-store execution. We have also acquired GIK, a brand that was born as a hard seltzer, but by now is also in more traditional ready-to-drink variants. This is our first entry into the alcohol categories in the Netherlands. The integration of Belux is progressing as planned and sales the same, also in accordance with our expectations. In Italy, we see a shift towards branded business. So we have less private label and we have more cheddar strong ale and faxe. And the Le Monsola range is also performing very well in an otherwise flat market. France is continuously delivering an overall share gain in a total soft drink market as we are well positioned in growth categories with both Rowena and Crazy Tiger. And we are within that focusing on managing the SKU assortment towards a higher net revenue on a per liter basis, which supports the profitability enhancement in Western Europe. Finally, in our international segment, we saw the strong trends from 2024 continue into 2025. International delivered a 10% volume growth and a 9% revenue growth, with Africa continuing to outperform in the segment with a very strong growth. Overall, our sales outgrowth continues to be high single digit, and sales out is a number which is counted from our customers and out into the market, so our partners in the individual markets and out into the market. And now I will hand over to Lars, who will get into the details around the financial numbers.

Thank you, Lars, and good morning to all of you. Please turn to slide number five. I will walk you through the financial highlights for the quarter. First, as a reminder, Q1 is seasonally a small quarter for us, usually contributing around 10% of our full year earnings, and Easter moving into Q2 this year makes growth rates slightly difficult to interpret. We are in line with our internal plans. if we look at gross profit it increased by 42 million to one point one billion two hundred and eighty forty sorry 84 million in q1 2025 driven by better margin management country mix and efficiency improvements the gross profit margin increased by 1.2 percentage points to 40 percentage EBIT came out at 219 million, corresponding to a growth of 4%, and the EBIT margin expanded by 0.2 percentage points to 6.8. As we said when we released the annual report, operational efficiency is higher on our agenda for this year, and we continue to optimize and manage our cost base tightly. This said, we continue to invest in sales and marketing to support our future growth. Net financial expenses for Q1 declined to 55 million due to lower net interest-bearing debt and lower interest rates. Tax expenses were 37 million with an effective tax rate at the expected level of around 22%. As expected, Q1 was cash flow negative. This is normal in our industry as we build inventory for the peak season in the next quarters. Free cash flow was minus 543 million compared to minus 480 million last year. The higher outflow reflects both higher investments and higher inventory levels ahead of the Easter sales, which, as you know, falls into Q2 this year. Overall, a good and disciplined start to the year in line with our expectations. I will also mention that yesterday we had our ordinary AGM and it was decided to pay out a dividend of 15 kroner per share. This means a cash outflow of around 750 million in Q2. Please turn to slide number six. The financial outlook for 2025, as stated in the annual report for 2024, is reiterated. We expect net revenue growth in the range of 5-7%, including the contributions from the new activities in Benelux and the Mintu transaction in Finland. EBIT growth is expected in the range of 7-13%, meaning that the reported EBIT is expected to be in the range of 2.1-2.225 million. I would like to emphasize that our financial guidance is based on absolute EBIT in Danish kroner, which means that any impact from currency in translation is included in the guidance, and we do not have a separate special items line in our report. Net financial expenses are anticipated to be around 250 million, excluding currency-related losses or gains. The effective tax rate is expected to be around 22%. CapEx for 2025 is projected to be around 7% of net revenue. Please note that in our definition of CapEx includes repayment on leasing facility, which represents around 1% of net revenue. Our main assumption includes stable demand in our markets and no major channel mix changes. As already mentioned, the level of uncertainty around macroeconomic developments is higher than only a couple of months ago, and we monitor activity levels closely across our markets, and the focus on efficiency remains very high on the agenda so we can adjust when necessary. And with that, I'll turn the word back to you, Lars.

Thank you, Lars. And now please turn to slide number seven. To summarize, 2025 has started as expected, despite facing some short-term headwinds from the sectorial strike in Finland and the later Easter timing. We continue to see positive developments in our EBIT margin, underpinned by operational improvements, and we maintain committed to invest in our strong brands, the strong brand portfolio that we have, and in the growth categories in particular. We reiterate our full-year outlook for 2025, despite an increasing uncertain macroeconomic environment. Our financial performance across the group has been strong, and we are well positioned to deliver on our ambitious target for the year. We are now ready to answer your questions. Operator, please go ahead.