Royal Unibrew A S

Before we dive into the numbers, I would like to briefly draw your attention to the standard disclaimer on slide number two. As always, it contains important information about forward-looking statements, assumptions, and uncertainties that may impact our outlook and performance. With that said, let's move on to the business strategy highlights on slide number three. Let's start with a look at our strategic progress in the first half of 25. We delivered strong revenue and EBIT growth, outperforming our European peers, a clear sign that our growth framework is working. We are executing with precision across our markets where we are fueling momentum in our growth markets, which is international, Italy and France, and we are building traction in the new markets like Norway, the Netherlands and Belux. In the developed markets or the Old Roy Unibrew multi-beverage markets, so that would be Denmark, Finland and the Baltics, we are focused on identifying pockets of growth, improving efficiency and exiting low margin segments. Importantly, our long-term financial ambitions remain unchanged. We continue to target 6-8% organic EBIT growth, double-digit earnings per share growth and improving our return on invested capital. This consistent delivery is a testament to the strength of our strategy and the dedication of our teams. And now please move to slide number four. We're pleased to report a solid first half performance, which follows our internal plans. Reported EBIT was up 11%, and the organic growth was 9%, and we delivered a margin expansion of 80 basis points. Organic volume growth came in at 4%, and organic net revenue growth was 3%. This was achieved despite headwind in one of our main markets, Finland, where cold weather during May and June impacted performance negatively. On a positive note, a warmer July in Finland closed part of the volume shortfall in Q2. Our international and Western Europe segments continue to outperform, and especially Italy and France. This demonstrates the strength of our geographical diversification in the recent years. Our cash flow and balance sheets are robust, and today we are launching a 300 million Danish kroner share buyback program to be completed before the end of 2025. And then we adjust or fine tune our full year guidance range. We are now expecting net revenue growth of 5% to 6% and an EBIT growth of 8% to 12%. First, let's move to our business segments on the next slide, which is number five. Starting in Northern Europe, which is our largest segment, In the first half, volume in the segment declined organically by 3% and revenue was down by 1%. EBIT in Northern Europe totaled 632 million and was on the level with last year. We estimate that we have maintained or gained market share across most categories and geographies. The main driver behind the first half decline in volume and revenue was Finland, where both May and June were significantly colder than average, impacting the entire beverage market and especially weather-sensitive categories like water, long drinks and ready-to-drinks. The total beverage market in Finland was down mid-single-digit measured on volume in the first half of 2025, and our performance was in line with that. As already mentioned, better weather in Finland in July helped recover part of the lost volume in Q2, and in July, the market is down low single digits. The Mintu acquisition in Finland was formally integrated in Q1. We're seeing good traction with the brands, and the business is already contributing positively. In Denmark, we saw good momentum in carbonated soft drinks, in particular with Faxicondi, while Pepsi is still gaining share in colas, but cola is declining as a category. Our beer brands, especially Royal, are gaining momentum, and we continue to perform well in energy drinks, with Faxicondi Booster leading the growth in the category. In Norway, we completed the SAP integration, and we are now in the optimization phase, streamlining workflows and processes. Commercially, we make good progress in the broader RTD space with Greons, Hansa and Smirnoff Ice. We have also announced the closure of the Sarpsberg Brewery by the end of the year. This is part of our long-term optimization strategy. And while it led to one-off costs in H1, we are on track to deliver 10% cash work in Norway by 2026. In the Baltics, we achieved market share gains in Latvia and Estonia while we maintained our shares in Lithuania. We see solid growth in energy drinks and ready-to-drink in the Baltics, which is newer categories with higher profit per litre than, as an example, the carbonated soft drink space or the mainstream beer. In total, we achieved growth in both revenue and EBIT in the Baltics in the first half. Now please move to slide number six. Western Europe delivered a strong performance in the first half. Organic volume growth was 15% and revenue growth was 16% organically, with the new activities in big looks as the main growth driver. EBIT increased by 34% to 218 million, with a margin improvement of 150 basis points. Italy delivered a very strong performance in the first half of the year, both on the top line and on the EBIT level. Our branded portfolio, particularly the Cheddar Strong Ale and the Croto range, achieved double-digit growth and captured market shares. To prioritize capacity for our own brands, we deliberately scaled down private label production on the beer. This strategic shift supported a more favorable price mix in the first half. However, it also meant that total reported volume growth in Italy was flat for the period. France continued to gain market share in soft drinks, with both Lorena and Crazy Tiger performing well. We have focused on SKU optimization and price pack architecture, which is supporting the margin expansion. In the Netherlands, we are seeing encouraging progress as the commercial agenda that we set in 2024 begins to deliver tangible results. With a strengthened off-trade sales force and a solid brand portfolio, Ramona achieved growth in both volume and revenue during the first half. We are also expanding our category reach as we have entered the RTD segment through the acquisition of GEEK, making our first steps into alcohol-based beverages in the Dutch market. The new PepsiCo activities in Belux that we took over 1st of October last year accounted for most of the growth in Western Europe in the first half, 13% of the volume growth and 12% of revenue growth. We have maintained market share in Belux and are progressing in line with the plans. Still, Belux is in the early stage of the turnaround, and as a consequence of that, it is a loss-making business in the first half of the year. For Benelux as a whole, we are on track to deliver 10% cash rock by 2026. Now, please move to slide number seven. Our international segment maintained strong momentum with 16% organic volume growth and 9% revenue growth in the first half. EBIT in international rose 55% to 122 million and the margin improved to 15.5%. That is reflecting both cost discipline and the operational leverage embedded in our business model. Volume growth in Q2 was notably strong at 20%, and as highlighted before, quarterly growth in this segment can be volatile and influenced by timing effect and particular changes in consumer inventories. While current sales outtrend among our customers have accelerated to low double-digit growth, the remaining volume uplift in Q2 particularly reflects the inventory build-up in Americas and a slight increase in the inventories in Africa due to the growth levels. This was a proactive move by our partners in Americas to reduce the short-term impact of the increased tariffs. The price mix in international was negatively impacted by the unfavorable currency developments and by country mix effects. It is important to understand that our business in international is based on different go-to-market models. As an example, in Africa, we sell to distributors that manage the selling and logistics in the market. This means that revenue per liter is lower than in the markets where we are responsible for these costs, like in Canada. It does not mean that we make less money on a per liter basis, but price mix effects can be impacted by this. And therefore, this business should be evaluated on an EBIT per liter as that takes the go-to-market model into account. And now I will hand over to Lars, who will go into the details with the financial numbers and our full year outlook.

Thank you, Lars. Please go to slide number eight. Let's take a closer look at the P&L in the first half of 2025. Volume and revenue growth were higher in Q2 than in Q1. This is primarily due to the timing of Easter, which fell in Q2 this year. Furthermore, a strike in Finland shifted some revenue from Q1 to Q2. This had no effect on the half-year numbers. Net revenue grew 4% to 7,644,000,000 in the first half, with 3% organic growth. The new business activities in Belgium and Luxembourg are treated as organic. If you exclude these, the organic growth rate in the first half was just below 1%. Gross profit increased 5% to 3,275,000,000. and the gross margin improved to 42.8%, despite some country-mixed changes in Q2. EBIT rose 11% to 959 million, and the EBIT margin expanded to 12.5%. In the first half, the cost base increased by 2%, which includes the impact from our new activities in Belgium and Luxembourg and recent M&As. This development reflects our continued focus on operational efficiencies and disciplined cost control. And a quick note on terminology. Cost base in this overview refers to the combined sales, distribution and admin expenses. The team has gotten a great job in the first half improving the business, despite cold weather in one of our larger markets and the ongoing integration work related to both B-Logs and Minto. Earnings per share increased 18% to 12.2% in the first half, reflecting stronger profitability. Tax and net financial costs are at the expected level in the first half. It should be noted that in the first half of 2025, we benefited from a one-off income of 18 million under income from associates related to the liquidation of a subsidiary in Greenland. Please move to slide number nine. Cash flow in the first half tracked our plans, which this is reflected in the new share buyback program of 300 million that we launched yesterday evening. Operating cash flow was DKK 933 million, supported by higher net profit. Free cash flow came in at 458 million, down from 560 million last year, primarily due to higher CapEx. CapEx is at the expected level, and we expect the full year to be around 7% of net revenue, reflecting our current investment program. Net interest-bearing debt increased to 6,374,000,000 by the end of the first half. This increase was primarily due to the share buyback program and dividend payment. You may recall that in 2024 the dividend was postponed to Q4. Our net interest-bearing debt to EBITDA ratio is around 2.3% in line with our target. The 250 million share buyback program started in February, was completed in August. Lastly, ROIC was at the level with last year, and we have a clear target of delivering higher ROIC going forward. We remain on track to deliver 10% cash ROIC in Norway and BLOX by the end of 2026. And just to make definitions clear, cash rog is calculated as the net operating results before amortization and after tax, expressed as a percentage of the net cash paid for the acquired companies. Please move to slide number 10. Turning to our updated outlook for 2025, we've narrowed our guidance ranges to reflect greater visibility by the end of August. Net revenue is now expected to be 5-6% versus 5-7% previously, and EBIT is expected to grow by 8-12% versus 7-13% previously. These adjustments reflect a few key factors. First, summer weather across our markets have been broadly normal. without additional impact on activity levels. Finland weather had a slight negative impact on the full year, even though it improved after the first half. But in general, the weather impact will be small for the full year. Secondly, revenue is impacted by a reduction in private label production and negative FX impact compared to our original assumptions. The consumer environment remains challenging, but we have not seen a material versioning compared to that we set by the end of 2024. So our assumptions on that front remain unchanged. We continue to expect net financial expenses around 250 million, a tax rate of 22% and capex of around 7% of net revenue. And with that, the word is back to you, Lars.

Thank you, Lars. And now please move to the next slide, slide 11. A few words on what we in the management team have on our agenda. We will continue executing our growth strategy with tailored efforts across growth markets, new markets and developed markets. We aim to ensure that we maximize our opportunities across the markets. Efficiency and cost control remain top priorities. We are optimizing resource use and driving operational excellence across the business. We have not talked too much about ESG today, but I can rest assured that this remains high on our agenda. We are making good progress in several areas, and let me just mention improved CO2 intensity in our production and improved safety performance with fewer incidents. You can read more about that in the first half report. And finally, we remain fully committed to deliver on our long-term financial targets, including EBIT growth, EPS expansion, and improved return on invested capital. When we move to the next slide, which is slide number 12, I'd like to wrap things a bit up. We delivered a solid performance in our first half with EBIT growth and margin expansion in line with our plans. Our geographical diversification pays off with particularly strong contribution from Western Europe and our international segment. In Finland, performance was impacted by unusual cold weather in Q2, but a better July helped recover parts of the shortfall. Our balance sheet remains robust, giving us the flexibility to return value to shareholders while continuing to invest in strategic initiatives. And we remain firmly on track to deliver on a fine-tuned full-year guidance. And with that, please go to questions. Operator, please go ahead.