Royal Unibrew A S

Good morning, everyone, and welcome to Royal Unibrew's presentation of our first-half result for 2026. My name is Lars Jensen, CEO of Royal Unibrew, and joining me today is CFO Lars Vestergaard and Flemming Nielsen from Investor Relations. We will take you through the highlights of our first-half performance, review developments across our segments, discuss the financial results and outlook, and then open the line for questions. Now, please turn to slide number two. Before we begin, please note the usual disclaimer regarding forward-looking statements, assumptions and risk factors that may cause actual results to differ from expectations. And with that, please turn to slide number three. Before turning to our first half performance, I would like to briefly revisit our strategy and how it continues to evolve. The headline on this slide is simple. Our core strategy remains unchanged, but some components are now being prioritized even higher. The first area is partnerships. As you know, we announced changes to our PepsiCo partnership in Northern Europe earlier this year. While we do not comment on specific partnership opportunities, discussions or potential partners, value creating partnerships remain an important part of our multi-purpose strategy. We continue to keep all options open and will pursue partnerships where they strengthen our portfolio and create value for both parties. The second priority is our continued focus on growth categories. Consumer preferences continue to evolve, and our growth category framework remains at the center of how we allocate investments and commercial resources. In the first half of 26, our growth categories accounted for approximately 62% of group net revenue and delivered growth of more than 6%, once again growing ahead of the group average and supporting our overall growth. The third priority is to accelerate the development of our own brands. In recent years, our strongest growth has increasingly been driven by our own brands. We continue to invest behind brands such as Faxe Condi, Faxe Condi Buser, Jaffa, Croto, Cheddars, Faxe and Original to support, or supported by innovation, focused marketing and strong commercial execution. As fourth and fifth priorities, we continue to see significant opportunity in international and Italy, which remain two of our most attractive growth platforms. Both markets delivered strong performance in the first half and continue to benefit from favorable category exposure, strong brands and attractive long-term growth opportunities. Growth in Italy and international is developing ahead of the assumptions made when we established our long-term financial target and is expected to contribute more to our long-term EBIT growth ambitions than originally anticipated. And finally, while growth remains important, we maintain a strong focus on operational efficiency. Across procurement, production, logistics and administration, we continue to identify opportunities to improve productivity and strengthen profitability. This remains a key contributor to our ability to deliver profitable growth. Taken together, these priorities do not represent a change in the strategy. Rather, they reflect the areas where we see the greatest opportunities to create value and accelerate growth in the coming years. And with that, let's turn to our first half performance on slide number four. First half was characterized by solid commercial execution and continued progress against our strategic priorities. Organic volume growth was 1.6%, while underlying net revenue growth was approximately 4%. The planned exit from lower margin activities reduced reported net revenue growth to 1.2% and organic growth to 0.7%. Growth was primarily driven by our own brands and supported by innovation, focused brand investments and strong commercial focus across markets. We delivered organic EBIT growth of 6.7% and expanded the EBIT margin by 80 basis points to 13.3%. Importantly, this was achieved while continuing to invest behind our brands and despite increasing inflation across energy, raw materials, consumables and transportation costs. Earnings per share increased by more than 10%, and ROIC for the last 12 months improved by 80 basis points to 12.8%. Our cash flow and balance sheet developed according to plan, and today we launched a new share buyback program of 300 million Danish kroner. And last but not least on this slide, we reiterate our full-year outlook and EBIT growth in the range of 6% to 10%, and we are on track to deliver earnings per share growth above 10% for the year. Now let's look at the individual segments, and starting with the Northern Europe business on slide number 5. When we turn to Northern Europe, our largest segment, which is accounting for 64% of group net revenue and 60% of group volumes in the first half of 2016, Before discussing the individual markets, let me highlight the impact from Easter timing. Easter fell in Q1 this year compared to Q2 last year, which makes the quarterly comparisons less meaningful. As a result, we believe the first half development provides the most representative view of the underlying business performance. A S, Claus Kaersgaard, Flemming Ole Nielsen, Lars Vestergaard EBIT increased to 646 million from 632 million last year and the EBIT margin improved from 12.7% to 13% and was impacted by the exit from lower margin business. Ibbitt for the first half of 26 included an additional amortization charge of 6 million as we accelerated amortization of intangible assets relating to the PepsiCo partnership through to the end of 2028. And now looking at the individual markets. In Denmark, we gained market shares across most categories during the first half. Growth was driven by strong performance in carbonated soft drink, beer, enhanced beverages, and the broader RTD category. Within the carbonated soft drink space, growth was led by Faxe Condi, supported by strong brand investments, focused commercial execution, and innovation. In beer, both Royal and Heineken delivered growth despite a declining overall beer market. Faxikondi Booster continued to gain market share within energy drinks, while both Shager and our recent launch Royal Club delivered double-digit growth in RTD and gained close to 6% market share when we are talking about Royal Club. In Finland, volume and net revenue both increased during the first half, supported by a strong commercial execution. Weather conditions in May and June was broadly in line with season norms compared to a colder-than-normal period in the same month last year, so slightly easy comparison. Market shares were flat to slightly up across categories, with the strongest development within water and RCD, supported by innovation and new product launches. Within RCD, growth was driven by hard seltzers and cocktails via the long-dring category. Where we hold a leading position declined. While we are winning share in the total RTD category in Finland, this shift waited on price mix as growth moves to more mainstream, more affordability in the RTD category. In Norway, we continued the positive commercial momentum from 2025 and delivered strong growth in both RTD and beer. We also saw improving momentum in spirits and wine despite a challenging market as higher alcohol beverages is in decline. While we continue to gain share across several alcoholic beverage categories, the overall market remains in decline. This reinforces the importance of building a stronger position in non-alcoholic beverages where we see attractive long-term growth opportunities. During the first half, we continued the rollout of Faxe Condi in Norway. It was supported by the UNUX Mobility Cycling Team Partnership, but we also announced a long-term license agreement for Dr. Pepper, which from 27 will be locally produced, distributed, and marketed and sold in Norway. In the Baltics, the market continued to be affected by geopolitical uncertainty, soft consumer sentiment, higher beer tax duties, and the introduction of sugar tax on carbonated soft drink. Despite this backdrop, we achieved growth across most categories and sales channels. Beer, RTD and enhanced beverages were the strongest growth drivers, while we maintained our CSD market share despite a competitive pricing environment. Original long drink together with our beer and cider brands performed particularly well during this period. Overall, Northern Europe delivered good underlying growth, continued market share gains across key categories, and improved profitability in the first half. Now please turn to slide number six and focus on Western Europe. Western Europe delivered another strong contribution to group earnings in the first half of 26. Organic net revenue increased by 1.1%, while organic EBIT growth reached 19.6%. S, Claus Kaersgaard, Flemming Ole Nielsen, Lars Vestergaard Italy remained the segment's main growth driver and continued to gain market share across categories, partly offset by lower volume and net revenue in the Netherlands following the deliberate reduction of selected low and no margin promotional activities. In Italy, we continued to deliver high single growth in a relatively flat market. Our beer brands, Cheddars and Faxe, performed strongly, while the Crota portfolio also continued to gain market share within carbonated soft drinks. The strength of our brands combined with focused innovation, new pack formats, and strong execution across both off- and on-trade channels continue to support growth and profitability. In France, we continue to expand Crazy Tiger and Lorena through focused brand activation, optimization of our price pack architecture, and expansion into new consumption locations. In the Netherlands, performance developed in line with our plans. The revised commercial strategy implemented during the second half of 2025 continued to weight on volume and net revenue development in the first half, but supporting improved profitability, revenue quality, and a more attractive sales mix. In Belux, we continued to make progress through market share gains, commercial optimization, and improved in-store execution. Growth was driven by the PepsiCo portfolio and supported by our own brands and in particular Croto. While Belux remained broadly earnings neutral in the first half, the business continues to develop according to plan. And overall, Western Europe continues to demonstrate the attractive growth and profitability opportunities within our portfolio and remains an important contributor to the group's earnings growth. Now please turn to slide number seven. where we focus on the international business area. International remained a key growth engine for the group in the first half. Organic volume growth reached 11%, while net revenue increased by almost 9%. Growth was driven by the Faxi beer, Croto within soft drinks, and our malt beverage portfolio, which includes brands such as Vitamalt and Supermalt. We continue to see strong consumer demand across our key markets, and Lars Vestergaard. Profitability remains strong with EBIT growth of more than 13% and margin expansion despite increasing logistic costs driven by geopolitical development and inflationary pressure. Overall, we remain very satisfied with the development in international and can continue to see significant long-term potential across the sector overall. And with that, I will hand over to Lars Vestergaard for the financial review. Now, please turn to slide number eight.

Thank you, Lars. Let me walk you through the financial development for the first half of 2026. Before reviewing the financial, let me again remind you that the quarterly development is impacted by Easter timing and the H1 growth rates provide the best indication of the underlying business performance. As already highlighted, organic volume growth was 1.6%, while reported organic revenue growth came to 0.7%. Adjusted for the planned exit from lower margin activities, underlying net revenue growth for the group was approximately 4%. Gross profit increased by 3.4% to 3 billion and 400 million, while gross margin improved from 43.8% to 42.8% last year. The improvements reflect a continued focus on profitable growth, operational efficiencies, and the exit from lower margin activities. The first half was characterized by volatility and inflationary pressure across energy, raw materials, consumables and transportation. Through hedging, fixed price agreements with suppliers, efficiency initiatives and price increases, we managed to largely offset this impact. Sales and distribution expenses increased by 3.9% in the first half. The increase reflects continued investment in sales and marketing to sort our brands and growth ambitions. The first half of 2026 was also impacted by higher costs for transportation and distribution as a result of higher fuel prices. Admin expenses declined by 5.5% compared to last year. This reflects our continued focus on efficiency and disciplined cost management across the organization. EBIT increased by 7% to 1,026,000,000 and the EBIT margin improved 80 basis points to 13.3%. The financial expenses amount to 119 million in the first half compared to 133 million last year, while the effective tax rate was 22.1, both in line with the expectations. Net profit increased 7.7% to 707 million, while diluted earnings per share increased by 10.7% to 14.5%, benefit from both higher earnings and lower number of outstanding shares. Overall, we are pleased with the first half performance, which demonstrates our ability to deliver profitable growth and margin expansion while continuing to invest in our brands and commercial capabilities and managing the impact of increased cost inflation. Please turn to slide number nine. Cash flow and balance sheet developments remains fully in line with our plans. Operating cash flow amounted to 908 million. Working capital developments was less favorable than last year, reflecting normal seasonal developments and business growth. But overall, cash generations remain solid. CapEx amounts to 450 million, corresponding to a 5.8% of net revenue. Investment activity is expected to increase during the second half, and we continue to expect full-year capex of around 7% of net revenue. Flea cash flow amounted to 458 million at the same level as last year. Net debt increased compared to the end of 2025, primarily due to higher share buybacks, while leverage remains well within our targeted range at 2.2 times EBITDA. Rolling 20 points OIC improved by 80 basis points to 12.8, reflecting our continued focus on value-gracing earnings growth and capital efficiency across our business. Please turn to slide number 10. and Lars Vestergaard. The consumer environment remains challenging across our markets and geopolitical developments continue to create volatility across energy, commodity and logistics costs. While cost inflation has increased compared to our assumptions at the beginning of the year, we continue to expect the impact to be mitigated through pricing initiatives, operational efficiencies and ongoing cost management. A portion of our raw material and energy requirements remain protected through hedging instruments and price agreements, which further supports visibility for the remainder of the year. Based on our current assumptions, the midpoint of the EBIT guided range remains the most likely outcome. However, given the continued uncertainty around consumer demand, commodity markets and geopolitical developments, the full guidance range remains achievable. All other assumptions behind the outlook remain unchanged. With that, please turn to slide number 11, and I will hand back the word to Lars.

Thank you, Lars, and let me briefly touch upon our management agenda for the reminder of the year. First, we remain fully focused on executing our growth strategy. The first half result demonstrates that our focus on strong local brands, innovation and attractive beverage categories continue to deliver profitable growth and we'll continue to invest behind these priorities. At the same time, we are preparing for the previously announced PepsiCo partnership changes that will take effect from 29. While continuing to support, invest in and develop our broad multi-beverage portfolio. Innovation remains a key priority across markets. We continue to expand and strengthen our beverage portfolio through new flavors, formats and propositions aligned with evolving consumer preferences. And as Lars just outlined, we continue to actively manage inflationary pressure across key cost categories through pricing, mix improvements, disciplined commercial execution and operational efficiencies. Thank you very much. Thank you. Let me conclude with a few key messages. The first half of 26 demonstrated the strength of our strategy and operational model. We continue to gain market shares, deliver profitable growth and expanded margins despite increasing cost inflation. S, Claus Kaersgaard Thank you for your attention. Now we are ready to take your questions, and I will hand back to the operator.