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.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. One moment for our first question. And this question comes from the line of Matt Ford from BNP Paribas. Please go ahead.

Morning all, thanks for the questions. Just three quick ones from me, please. The first one is just on the guidance you touched on at the end there. You know, you've reiterated the six to ten range at this stage. Clearly, we're already kind of well into Q3 at this point, and you have reasonably good visibility on how the kind of the summer has gone so far. So just, yeah, it'd be good to get your sense of, you know, what is really driving that range at this point, clearly, Clearly costs are an element of that, but it would be just good to get your sense of what's embedded within the top and bottom of that kind of four-year expectation. And then linked to that is just on COGS, I suppose. I mean, you're kind of flagging potentially incremental COGS impact in the second half. It'd be good to get your sense, potentially your early thoughts on 27 at this point based on your current hedges and and I suppose your expectations into next year at this point at least. And then the final question is just on volumes in Northern Europe actually. Q2 was clearly in decline, granted that perhaps H1 is a better indication of the go-forward level of growth. But as we move into the second half and potentially into 27 as we cycle slightly tougher comps, how do you think about volume growth in Northern Europe? It doesn't feel like Many of the issues around consumer affordability are going to materially improve, but clearly weather was a bit of a benefit in Q2. So it would just be good to get your sense of what is your kind of run rate of volume growth in Northern Europe into the second half and potentially into next year. Thank you.

If I take the last one first, if you take Easter out of the equation, as we're trying to do by focusing on the first half, if you're taking the summer swings that naturally is there, we have a slight growth on volume underlying in the total northern European business. And that is, when you're talking about the consumer sentiment, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard Lars Jensen, Lars Vestergaard On your guidance question, I would say that it's the three Cs that we're always looking at. It's competition. You never know what competition will do. And of course, that has an impact. Consumer. and Lars Vestergaard. Although we have a fairly high level of hedging for the remainder of the year, there's always a part of the cost that you cannot hedge. So cost is eventually something that needs to be taken into the equation that can be both positive and negative, depending on what plays out. And then to the results, we see ourselves in the middle of the guided interval. You need to adjust, I think that's fair to say, for the 6 million in amortization. S, Claus Kaersgaard, Lars Vestergaard And then for the further details on the cost, I'll hand over to Lars.

So in 2026, we are, of course, benefiting from the hedges we have in place, in particular on aluminium and on energy. And when you look into 2027, we do not have hedges from the past. So here you will see a step up in cost, in particular on packaging material. So there is an unhedged element for next year, and we need to go out and make certain that we mitigate that with price mix initiatives for next year. There's nothing that's unique to Royal Unibrew, so I think our cost will move very much in line with the whole industry. So that needs to be managed through pricing and mix initiatives for next year.

Okay, great. Thank you very much.

Thank you. We are now going to take our next question. And this question comes from Thomas Lynn Peterson from Nordea. Please go ahead.

Hi, good morning. Lars Flemming. Thanks for taking my questions. One question regarding your sales and distribution expenses and I guess marketing costs also here. Wondering if you can help us quantify the fuel surcharges. I think at least we were hoping for some lower distribution costs owing to the new warehouse in Faxe, but now it seems like fuel surcharges are offsetting this. So can you help us please quantify the amount of fuel surcharges and how we should think about this going forward? And then also in terms of sales and marketing costs, The new cycling sponsorship or the Faxe Conti rollout. Anything here you can help us quantify? And are these costs temporary or are these more structural costs? So that would be the first question. And then the second question is regarding, Lars, what you said regarding Italy and international, which has evolved ahead of your plans from the long-term growth of 6% to 8% CAGR. So I was just wondering what that means for the long-term EBIT growth CAGR here. Are we trending towards the high end? Thank you.

Yeah, on the second question, if I take that first, on the sales and marketing costs, so we do believe in building brands. This is the core of how we think about our business, and we do put more money behind them. Lars Jensen, Lars Vestergaard And then we are spending more in Northern Europe. And yes, the essence of that is the extra money that we are spending on building Faxe Kondiv further in Denmark, but also outside of the Danish borders. And that is a weight on the costs in the first half. And it will also continue into second half, given that these are multi-year contracts. Lars Jensen, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard Lars Jensen, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard that a part of the makeup of continuously delivering a growth organically of between 6% and 8%, when we looked at that two years ago, built the spreadsheets, we thought that Italy and international would be a smaller part than what we believe today because the growth rates are higher. But on the other hand, we also reckon that the massaging of the northern European business then will take the expectation for that region down until that we have a full strategy in place from the first that will be active on the 1st of January 2019. A S, Claus Kaersgaard, Flemming Ole Nielsen, Lars Vestergaard We are mentioning Italy and internationally, obviously, but we're also finding a brand like Faxicondi. So how do we move more resources to a brand like that so that that becomes a bigger part of the growth engine? So that's the reason why we are mentioning it.

and on the savings coming from the investments in warehousing the warehousing was taken into use during the first quarter we are seeing all the benefits coming through so less outside storage less shuttling to and from outside storage etc so that is coming in according to plan of course we have higher depreciation from that the intention was never to reduce the amount of distribution fuel we use So we do see some extra cost related to higher diesel prices in our network. So there is some inflation on that, but we are seeing all the benefits from the warehouse investments.

Thank you.

Thank you. We are now going to take our next question. And this question comes from Richard Wittagen from Kepler Chevrolet. Please go ahead.

Yeah, good morning, Lars and Flemming. Three questions from me, please. First of all, on the Northern Europe EBIT and the margin, we're a bit below consensus despite around 5% underlying revenue growth. So what specifically explains the weaker than expected operating leverage that we see in the region in the first half of the year? Second question is on, second or third question is perhaps on the Pepsi contract. Following the announcement of the loss of that contract in the Nordics by the end of 28, you're set to double down on your own brand's growth. So how has execution or resource allocation changed since April, since you announced that Pepsi contract loss? So how has that changed to accelerate growth of your own brands? And finally, have you changed how you look at the geographic profile of the company after the announcement of the Pepsi contract loss?

Yeah, so again, following up on the same as Thomas asked on international and Italy, yes, we do see, because we have been able to create a growth rate in those territories, which is higher than what we originally anticipated, Lars Jensen, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard Lars Jensen, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard But of course, when it comes to priorities, we have been over-prioritizing the PepsiCo portfolio in the Nordic countries because what we have done has been very successful. We are over time going to bring that down to a normal prioritization. And that then indirectly, of course, gives our own brands more space and more focus. Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard So building business cases on developing new things on the PepsiCo portfolio in the Northern Europe is going to be very difficult. and we are not going to deliver less innovation, less engagement, less marketing to the market. So over time, that will, of course, put our own brands, I would say, higher on winning the resources because of the simple math on the payback on the initiatives that we do. But to say that you have seen... A significant change now? No. That's, I would say, the clear answer. And then on Northern Europe, you know, we actually, we do not see a weakness in Northern Europe. We see a strength. And when you look at it mathematically, it's small money that makes a difference between, I would say, what is in the consensus numbers and what we are delivering. And I think the two things that I would mention is the amortization. Lars Jensen, Lars Vestergaard Thanks, Lars.

Thank you. We are now going to take our next question. And this question comes from Aaron Adamski from Goldman Sachs. Please go ahead.

Thank you. And good morning, Lars, Lars and Flemming. Thanks for the presentation. I have three questions. First on Finland. Could you please quantify your second quarter performance there, including the contribution from carbonates and beer? and how is your market share evolving in these categories in Finland? And I guess looking ahead, given a relatively tough third quarter comparison, how should we think about volume trends and the broader market, the broader outlook for Finland for the remainder of 2026? Then my second question is on international. Can you please share with us where do you see the largest opportunities to accelerate growth there over the next few years? In particular, which markets appear the most attractive to you and are there any new geographies where you would expect to establish or meaningfully expand your presence? And then lastly, a bit of a housekeeping question, the amortization impact you've seen in H1, is there going to be a repeat of it in the second half or is this one that we've seen in H1? Thank you.

If we start with the housekeeping question, then we took some amortization in the first half and that's going to repeat in the second half. So that is a shortening of the amortization period for some of the intangibles that relates to the PepsiCo distribution agreement. S, Claus Kaersgaard, Flemming Ole Nielsen, Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard S, Claus Kaersgaard, Flemming Ole Nielsen, Lars Vestergaard That has a slight negative margin impact, but we are taking shares in this segment, and so there we are doing well. Pricing in CSD is extremely competitive. We are keeping our shares in that, and then there is a good development in our water business in Finland. In terms of beer, it's important to note that in Finland there are segments that are very unprofitable so you can get some positions where you make absolutely zero margin. But in the segments that we play, we have a decent development. But for us, beer in Finland is not about market share. It's about making certain that the things we have in the market is profitable so that we don't just use our capacity for empty calories. So I think that's the status on Finland.

And then on international, so it's a repeat of what you have seen over a fairly long period of time. Our Fax beer is growing mostly in Africa, West Africa. The Croto portfolio is growing very nicely. It's mostly in Europe. And then we have the mall business, which is also growing nicely centered around Africa and a few selected markets in the greater Caribbean area. Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard Although we are scouting for what could be new markets that can drive the growth in 3 to 5 to 10 years, but if you look at it over the next 2 to 3 to 4 years, I would say that it's the current markets that we have opened, some even 20 years ago, that's where most of the growth is expected.

Great, thank you very much.

Thank you. We are now going to take our next question. And this one comes from Nadine Sarwat from Bernstein. Please go ahead.

Yes, good morning, everybody. Two questions for me, please, both related to your guidance. So earlier in the call, you said that you still believe you will be most likely in the middle of your guidance range for organic EBIT growth. That would be around 8%. Could you just confirm, does that comment on the midpoint being likely include the incremental amortization in H1 that you said would continue into H2 or exclude it? And then my second question, you're reiterating your guidance point again on the midpoint, organic EBIT growth came in at 6.7 from the lower end for H1. That would imply an acceleration in H2. What would be driving that, if so? Thank you.

Yeah, so the guidance includes the amortization, so that's baked into the full-year guidance. So, of course, that is, what can I say, effectively, what can I say, an underlying pressure on our earnings, but that is included in the guidance, so the midpoint is still the guidance. We make more money in the second half than we do in the first half. There are many moving parts. I would say we have seen some initiatives that we couldn't offset in the first half so we've been doing some pricing initiatives in the middle of the year to offset the commodity price inflation. So there are a number of moving parts. What will the mix be in the second half? What will competition do? So when we look at our plans for the rest of the year, an acceleration in the second half is absolutely part of that equation. But it could also be that some of the geopolitical headwinds will lead to more headwinds. So we think that With the world as it is today, we can see both headwind and tailwind in the second half of the year.

And then I'll repeat the first question that we got. And you have the three Cs. You have competition, you have consumer sentiment, and you have cost. Those are the three. So that's the answer. Perfect.

Thank you.

Thank you. We are now going to take our next question. And this question comes from Edward Mundy from Jefferies. Please go ahead.

Morning, Lars and Lars. Thanks for taking the question. I'd love to Dig into Italy a little bit more. Are we seeing very strong growth relative to the market on trade, off trade? And I think you highlighted some of the things that are driving that in the release. But could you talk about the sustainability of this momentum and whether you're seeing any competitive response on either the beer or soft drinks side of things? And then my second question is around your opening comments around the importance of partnerships. Value Creating Partnerships. Without going into too much detail, given it's commercially sensitive, could you perhaps give a bit of a steer as to sort of which categories you're looking at? Is it beers? Is it softies? Is it wine? Is it spirits? Where are the biggest opportunities for you to make the most of your strong distribution network?

Yeah, I think the last question, I think the clear answer is that, of course, after 28, the biggest opportunity that sits in the cola segment. So there's other areas where we can see that we can enhance our portfolios, but cola is obviously the big one. In the meantime, for us, it's about making sure that we enhance everything else but cola. and that is literally what the consumers want in most of the geographies where we do business on the non-alcoholic side so that is a transition in all of that but it's not only cola it's in multiple areas where we do see that we can enhance our portfolio and we also look at it from a geographical point of view that partnership is not just about what we are losing we could potentially in other geographies new geographies Lars Jensen, Lars Vestergaard We see growth in both on and off trade, but on trade is under pressure from a consumer point of view, which you should have seen in most other markets as well. So the majority of our growth is deriving from off trade. and it's a combination of better distribution, better price pack, architecture, more consumers into the brand and a higher frequency when you buy at Shaders. So it is kind of like we have been able to create a multiplicator effect by not just expanding by one parameter but at multiple parameters at the same time. When it comes to competition, yes, we do see competition trying to get a piece of the pie because strong lagers is where the growth sits initially. Heineken has launched a new brand in the category and Karsberg has done the same. Two early days to conclude anything as they are three, four, five months into their launches. But their launches have not yet made any significance. I would then say on that one, you know, we believe that it is important that you have strong competitors in the categories because that drives the growth even further. And that means that the more consumers that will move into strong lagers, the more it's going to help us. So we consider this as being very sustainable, and it's about the same story. When it comes to the soft drink portfolio, we are very focused on the single serve consumption occasion to a lesser extent on the last pack sizes. And that is enhancing our value. It's enhancing our volumes. And then we are adding new flavors to the game. And they are working really, really well. So when we bought the business, it was a lemon soda business. Orange Soda is growing quite nicely, and we have a very strong growth on some of the side products as well, like the mojitos and the spritz. So we are driving, I would say, the non-cola segment in Italy, which is very strong. So yes, we believe that this is sustainable.

And last, just a follow-up on the first question around the desire to fill in the gap on cola. And I should know this, but is Dr. Pepper, is that a cola or is that something a bit different? And then just while we're on that, could you talk about sort of the benefits that you bring, you know, Dr. Pepper in-house? I know you already have it as a trading product, but as you bring it in-house, you know, clearly there's probably benefits on margins and ROIC and probably a bit more attention, but I'd love to get your views on both of those two parts of that question.

We bring it in-house in Norway. We do not consider it as a cola. It has different flavor characteristics. What we are looking more at is locations. And if you look at Norway, we do believe that Dr. Pepper... Great, thank you.

Thank you. We are now going to take our next question. And this one comes from Andre Thorman from Danske Bank. Please go ahead.

Yes, thanks for taking my questions. Just a few from me as well. So first of all, to be sure, do you have any comments around how the third quarter have started for you guys? Second, in terms of EBIT in Norway, just to be sure, did it grow in the second quarter? And then third of all, or third, is it correct to assume that the cost pressure will all else equal be higher in the second half for you guys? Thanks.

Yeah, so if we start with Norway, then we have a number of strong building blocks in place for improving the profitability in Norway. So we have closed one site, we have launched new categories, so we are very happy with the development in Norway. We're not giving EBIT data on specific markets, but I would say Norway is a place where there's a lot of good building blocks for 26 and beyond. So we are on track in Norway. And I would say the weather in Q2, early days, was good in some markets. Yeah. Sorry, QC was pretty good in Denmark, dreadful in Finland, okay-ish in parts of Norway, so probably across countries the weather was neutral, so not a lot to read into the beginning of Q3.

Then you asked about the cost pressure. I think Lars tried a couple of times to mention it. Yes, cost is going up in the second half compared to the first half. But on the other hand, improvement in price and mix should compensate for that. So that's how we see it.

And can you compensate that fully already in the second half? Doesn't it usually take longer to... Thank you very much.

Lars Jensen, Lars Vestergaard far better positioned to cope with that for the second half of the year than we were capable of in the second quarter.

All right. Thank you.

Thank you. We are now going to take our next question. And this one is from Soren Samso from SAB. Please go ahead.

Thanks. Good morning, guys. So first question is on Northern Europe, where you have a negative price mix. Maybe I've expected that the exit from the low margin businesses would have a positive impact. So is this Finland that gives this a negative development in price mix? And is it more price or is it more mix?

I think overall, it's very difficult just to judge it on the basis of the net revenue per volume, because it doesn't necessarily translate into profitability per volume. And some categories, they are just low on price, but they are also cheaper to produce and so on and so forth. Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard S, Claus Kaersgaard, Lars Vestergaard

And then Finland, more specifically, is there anything sort of more you're planning to improve, or is it more a matter of the consumer improving in Finland?

In Finland, we bring a lot of innovation to the market, and we have recently launched a new lineup of original long drink, which is catering more for the same consumers as on hard seltzers and similar products, so slightly lower on calories, slightly lower on alcohol. and Lars Vestergaard. as we speak to that. So a fairly high rate of innovation to fill the gap, so to speak.

Okay. And then finally on Italy, you already talked a bit about it, but do you believe that Italy could be as big as Denmark or Finland in value? Yes.

From a revenue standpoint, no, I don't think so, unless something structurally really happens, and that's not the strategy that we are pursuing. We are pursuing a multi-nese strategy where we are very targeted on what we do. But it's a business that is building up both from top line and bottom line very nicely. So I don't want to put up that competition between markets.

Okay, that's fair. Thank you very much.

Thank you. We are now going to take our next question. And this one comes from Andrea Pistacchi from Bank of America. Please go ahead.

Yes, good morning and thank you. Two from me, please. Firstly, you've started to implement pricing to offset the cost pressures and you're saying you're planning to take more as we approach next year. Can you give us a bit more color, please, on where and in what channels You're implementing this pricing, what you've done so far, what comes next, as much as you can share. And the second question is a bit similar to this. It's on international, where historically you find it difficult to pass on higher transportation costs because in some of the markets you're competing with local players who are not sort of subject to the transportation costs. I appreciate you've localized your business to a certain degree. But is the situation different on the ability to pass on or not the transportation costs?

No, it's the same, André. So international will always be subject to a slightly different measurement because competition is different than it is in the local market, so to speak. So if we would not have had the increase in transportation costs, you would have seen the profitability in international would have been bigger in the quarter. That's our assessment. Lars Vestergaard, Flemming Ole Nielsen, Lars Vestergaard Lars Jensen, Lars Vestergaard and of course we are talking these through and giving the best advice to our customers so that we create a situation where we get the cost covered, where our customers get the cost covered because they also see cost increases and where the consumers still see that they get a good price for the buy that they do. So we work very professionally with this and getting better at that every single day. Okay, thank you.

Thank you. We are now going to take our next question. And this one comes from Aaron Adamski from Goldman Sachs. Please go ahead.

Yep, thank you for giving my follow ups. I wanted to quickly follow up on pricing actually. How are retailers responding to the increases you've announced and are you seeing your competitors follow through with similar announcements or are you relatively quicker to announce price increases than your peers are? And second, to quickly follow up again on amortization, I wanted to clarify whether the impact in the second half could be bigger than the 6 million we've seen in the first half given that the Pepsi license loss was announced sometime in the midway through the first half. Thank you.

So take the last one first. It'll be the same charts in the second half that we had in the first half.

And on pricing, we are, as Lars said earlier on, you know, we're all in the same boat. You know, everybody is going to see the same amount of price increases on cogs. There might be different timing, and you also could have different underlying needs, depending on how your business is performing. Yes, we do see competition is also... Great, thank you very much.

Thank you. There are no further questions for today. I will now hand the call back to the speakers for closing remarks.

Thank you and thanks for good questions. And as I would always say, you know where we are. If you need us, give us a call if there's anything you need to know. Thank you and enjoy the day.