Carlsberg Stock

Ladies and gentlemen, welcome to Carlsberg's Q3 2026 Trading Statement Conference Call. I am Yili, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jacob Aarup-Andersen, CEO. Please go ahead.

Thank you very much, operator, and good morning, everyone, and welcome to Carlsberg's Q3 2026 Conference Call. As said, my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrica Fearn; and our Vice President, Investor Relations, Peter Kondrup.

As always, let me just start with a couple of headlines for the quarter. First and foremost, we delivered robust revenue growth. Our growth categories continued to outperform, and we expanded our partnership with PepsiCo into additional markets. And we confirm our earnings guidance for the year. I'm going to provide the key group headlines for the quarter and then Ulrica will take you through the regions and the full year outlook.

So let's turn to Slide #3 and look at the Q3 figures for the group. Volumes increased slightly in the quarter, driven by a 5% increase for our growth categories, in particular, soft drinks in the U.K., soft drinks in Kazakhstan and strong growth South Asia and Lars, partly offset by lower beer volumes in China and the U.K. The continued progress in the growth categories led to their share of total volumes increasing to 52% year-to-date September compared with 51% for full year '25. Mainstream beer in Western Europe, where the category faces particular pressure, now only accounts for 12% of our total volumes.

In line with our commitment to drive sustainable, profitable growth, revenue per hectoliter increased by 3%. All 3 regions contributed to this positive value-driven development balancing volume and value in all markets. Together, this resulted in organic revenue growth of 3%. Currency movements had a positive impact in all 3 regions, contributing 1.8% overall and that means our reported revenue grew by 4.9%.

Turning to Slide 4. Let me give you a few more details on our growth categories and our international brands. Soft drinks grew strongly. Volumes were up 9%. Growth came from the U.K., the Nordics and Lars as well as the continued ramp-up of the Pepsi business in Kazakhstan. Premium beer saw broad-based growth in Western Europe and C&I, while volumes in Asia were impacted by bad weather and continued subdued consumer sentiment in China. Excluding China, premium volumes grew by mid-single digits compared with a 3% decline overall.

Total alcohol-free brews grew strongly by 11% with volumes in Western Europe, up 15% and mid-single digits in C&I. We're very pleased to see the resilience of AFP. The category is becoming firmly established in more markets, and we saw volume growth in almost all markets in the 2 regions. Beyond Beer grew by 3%, driven by another quarter of double-digit growth for Garage in Poland and Kazakhstan.

Now then turning to our international brands. Pepsi volumes grew by 18%. Alongside the ramp-up in Kazakhstan, we saw very good growth in the U.K., Ireland, Sweden and Lars. Carlsberg volumes grew by 3%. Premium and Carlsberg volumes increased by 20%, thanks to the very strong growth in South Asia and in China, while mainstream Carlsberg volumes were impacted by tough competition in the low ABV mainstream segment in the U.K. Tuborg volumes were flat overall. Excluding China, volumes increased by 4%, with very strong growth in South Asia. 1664 Blanc volumes grew in many markets across Western and Central and Eastern Europe. However, lower volumes in China and certain export and license markets weighed on the total volumes.

Please turn to Slide #5. We continue to expand our PepsiCo partnership, strengthening our soft drinks exposure and multi-beverage portfolio. With the agreement signed over the past 2 years-or-so, our PepsiCo bottling footprint will expand to 17 markets by 1st of Jan '29 compared with 5 markets in 2024. That's a significant expansion, creating a multi-beverage resilience and consistent growth in our total portfolio.

Let me give you more color on Kazakhstan and the agreements which we've entered into this year. In Kazakhstan, the new soft drinks facility is now up and running. We expect to complete the in-sourcing of all the Pepsi volumes by the end of the year. And as a result, we expect a solid profit improvement in 2027. In the Nordics and Baltics, we will create a full Nordic Hub from 1st of Jan '29 when we add Denmark, Finland and the 3 Baltic states to our existing Pepsi businesses in Norway and Sweden.

We're also creating a south coccus hub, taking over the Pepsi license in Azerbaijan from 1st of Jan '27 and acquiring the bottling businesses in Georgia and Those 2 markets will join our footprint upon deal completion.

And now over to Ulrika for the regional performance and earnings guidance.

Thank you, Jacob, and good morning, everyone. So please turn to Slide 6 and Western Europe, where total volumes grew organically and in reported terms by 0.3%. And while we had good weather, there was a limited year-on-year impact from this as weather was also good last year. We saw good progress on growth categories, which were up 4%, and all growth categories contributed to this increase, which more than offset lower beer volumes.

The mainstream beer decline reflected soft development and particularly in the U.K., Poland and Germany. Revenue per hectoliter increased by 2%, supported by a positive category and country mix. And organic revenue grew by 2.5% and reported revenue growth was 3.7%, and this was due to positive currency impact of 1.2%, mainly related to the British and Norwegian currencies.

Now looking at the markets and the U.K. delivered solid volume growth, supported by mid-single-digit growth in soft drinks and market share gains in both volume and value. And the Pepsi franchise performed very well, particularly Pepsi Max and 7Up, and we're extremely satisfied that Pepsi Max is now the largest cola variant in the U.K. market. The launch has exceeded our expectations and landing very well in the market. And in World beer, saw good growth, particularly for Peretti and successful launches of and Sapporo while the Carlsberg brand decline in the mainstream category, and that remains under pressure.

Total volumes in Nordics grew. We saw particularly good growth for the growth categories in Sweden and Denmark. Volumes in France was slightly up, and that was driven by high-teens growth for AFP and growth for brands such as 1664, Brooklyn and Anastacia. The volume decline in Poland moderated in Q3 and that was supported by easy comparables. And in line with our value strategy in Poland, we saw strong growth in the AFP and Beyond Beer portfolios as well as growth in premium beer.

So now turning to Asia on Slide 7. Total volumes and our growth categories were impacted by the weak Chinese market and destocking following severe rainfalls during the peak season. Excluding China, regional volumes grew by 1%. Revenue per hectoliter was up 2%, benefiting from price increases, category and country mix. And consequently, organic revenue declined by 4.6%. And thanks to the positive currency impact, mainly from China, reported revenue grew by 1%.

So a few words on China. Year-to-date, our volumes were down by 5%, in line with the market. As already said, volumes in Q3 were weak and declined almost 10%, reflecting a continued subdued consumer sentiment, bad weather in July and August and subsequent destocking. And the on-trade remains soft while we continue to see growth in other channels such as e-commerce, modern off-trade and with particularly strong growth in our 1 liter counts. And the key growth drivers, big cities and premium beer, continued to outperform Stronghold and mainstream.

And we saw particularly good performance of the Carlsberg brand, which grew by 15%. In Laos, our volumes grew by high single digits. Growth was particularly strong for soft drinks being in the low-teens, while beer volume growth was low single digits. And our business in Vietnam delivered mid-single-digit growth, supported by an increase in export volume, and we estimate that our market share was flat.

So now Slide 8 and CE&I, which delivered another strong set of figures in Q3. Volumes grew organically by 7.5% with our growth categories up 22%. Revenue per hectoliter increased by 4%, bringing organic revenue growth to 11.7%, and reported revenue grew by 12%. Revenue per hectoliter was positively impacted by price increases and the positive mix in beer and then partly offset by category mix due to the strong growth of soft drinks in Kazakhstan. And then in South Asia, volumes grew strongly in the mid-20s driven by very strong progress for Carlsberg and Tuborg and the local power brand in Napo.

And revenue per hectoliter increased due to premium growth and a positive geographical mix. In Kazakhstan, volumes almost doubled, supported by the addition of the Pepsi business, and we opened a new soft drink facility in early October and are now ramping up our production. And this is the group's first greenfield CSD facility built in record time just 15 months from project start to completion. So we expect to produce all Pepsi volumes in-house by the end of the year.

And we also saw good growth for alcohol-free brews led by and Carlsberg and for Garage in the Beyond Beer segment. Our business in Ukraine delivered only modest decline in Q3 on the back of easy comps. And our colleagues there are operating in an extremely difficult environment and their safety, of course, remains our first priority.

Now please go to Slide 9 and the earnings outlook for the year. Overall, the development in Q3 was largely in line with our expectations. And for the remainder of the year, we are not assuming any material changes to the external environment or consumer sentiment. And in August, we updated our full year earnings expectations to the upper end of the previous range. And based on the Q3 performance, we maintained the outlook of organic growth in operating profit CPM of 4% to 6%. And based on yesterday's spot rates, we now assume a positive FX impact on operating profit of DKK 100 million. And this compares with the previous expectation in August of no impact.

All other assumptions are unchanged. Net financial expenses, excluding FX, are expected at DKK 1.8 billion, reported tax rate at 23% and CapEx of DKK 6 billion to DKK 7 billion. Before handing back to Jakob, let me provide some color on our leverage reduction and our refinancing needs. As said at the time of the Britvic acquisition, we target a net debt-to-EBITDA below 2.5x before the end of 2027. And also as reported in half 1, we took significant steps towards this in the first 6 months.

We expect the Sapura transaction to close in Q4 and along with solid cash flow delivery in half 2, we will be close to our leverage target already by the end of '26. And this is excluding any proceeds from other larger changes such as the potential India IPO. And an updated draft hearing prospectus was filed with the Securities and Exchange Board of India on October 28, and it is available on their website and on Carlsberg's India website. And this is, of course, part of the ongoing IPO process. At this point, we are though unable to comment further on the outcome or timing on such a potential IPO, and this is due to regulatory requirements. However, as it is customary in such a process, we are now engaging follow-on activities, including setting up interactions with potential investors.

So turning to our refinancing needs, which were very modest until 2029, following the issuance of the hybrid bonds in May and the subsequent bond repurchases. The hybrid bonds have not only supported our deleveraging, the timing was also good. And given the recent increase in interest rates, refinancing with senior bonds today would come at almost at the same price.

So with that, over to you, Jacob.

Thank you very much. And let's turn to Slide #10. It's now time for Q&A, but before opening up with that, let me just summarize the key messages from this call. First and foremost, we delivered robust revenue growth. Our growth categories continue to outperform, and we expanded our partnership with PepsiCo into additional markets. And then as Ulrica just said, we confirm our earnings firmly for the year.

Now over to Q&A. [Operator Instructions] With that, we are ready to take questions. Over to you, operator.

[Operator Instructions] The first question comes from the line of Edward Mundy from Jefferies.

My first question is, Ulrica, are you able to give us any early steer on the commodity picture for next year, given some of the recent spot moves? And as part of that same question, maybe for Jacob. Could you perhaps comment on your confidence in the ability to take price, given both the benefits of multi-beverage and the broader health of the portfolio, in particular, are there any further best practice sharing on revenue growth management you're getting from the Soft Drinks business coming into beer? So that's my first question.

And then my second question is on China. Obviously, close to minus 10% in the quarter. Can you perhaps talk about the exit rate in September and also the inventory position?

Thank you, Ed. Ulrica will start on the cost. You even handed out the questions to different people here.

Yes. Maybe looking at COGS and maybe a comment on logistics as well for 2027. So starting on COGS. As you know, we're hedged 12 to 18 months forward, and we are already hedged for the majority of the raw and pack material for 2027. But because of the Middle East impact and the impact on -- particularly on energy and commodities, we do, when we look into that, see COGS inflation for 2027. We've mentioned this before, but the inflation will basically impact us for aluminum and energy. And it will be both our own energy and impact from energy of, of course, indirectly in packaging like glass bottles.

Other inputs have, and I've mentioned this before as well, still a little bit favorable, so barley and sugar as a little bit of a sort of offset there. But we do still see an increase into 2027. It will be higher than 2026. It will be lower than it was in -- back in the covered years 2022-2023. And I will also mention that we do still have some unhedged positions, of course. And back to your comment there, the current volatility, we can't really -- that can still make a change as to our underlying assumptions given the big and extreme risk around the volatility there.

Maybe a comment on logs as well. They will also increase in 2027, and this is mainly, of course, due to higher fuel prices. And -- but again, we are doing as much hedging and we have been doing as we can there. So the diesel spot price for this year is, and where we are right now, is probably a little bit misleading as we have already hedged some for 2027 earlier. But there is also unhedged exposure. And with the fuel prices moving as they do, it's very hard to put a number on it, but it will be increasing versus 2026.

Thanks, Ulrica. Let me then answer on price. So as you can hear from Ulrica, yes, we do see some higher costs next year. I think that's not rocket science. Everyone is seeing it from what's going on. It's not as dramatic as what we saw back in '22-'23, but there is cost increases coming through. And of course, we need to handle that. The way we -- and you asked about price, but if we just take 1 step back. So the way we always at Carlsberg handle this is we start by delivering on our well-known muscle, which is performance management and efficiencies. So that is, as you would also expect fully in play right now.

We're driving good efficiencies going into '27 and that's, of course, always a key focus. When you look at it post efficiencies, we will always drive value management. And of course, part of value management is we drive price. We have a very firm view. You know that. You know us very well. And that is that when we see cost inflation coming through the base, we will cover that with price. We need to maintain our margins and our profitability. That's very simple.

So we are value driven, as always. When you look at the portfolio today versus some years back, there's no doubt we have a stronger portfolio. The multi-beverage structure gives us much more resilience, gives us much more relevance with major retailers, and it gives us an opportunity because this is not a battle. This is a shared journey with retailers to create more value for everyone for the consumer, for the retailer, for us. And we can do that with a bigger multi-beverage portfolio. And of course, also the quite sophisticated value management skills that comes out of the RGM frameworks, both from soft drinks, but also, as you know, we've invested quite heavily in GenAI, value management, GenAI, RGM tools, and they also come into play.

So we are confident that we, as always, will deliver around covering the cost in a mix of efficiencies and value management initiatives. As you look across our entire portfolio, of course, we cannot talk about specific markets. But generally, I think we are very constructive around how we will deal with it. We made that very clear to you that we will continue to drive the earnings growth that our investors would expect.

Then you asked about China. And little bit sneaky there, Ed, because it is technically 3 questions here, but we'll do it anyway. So on the China side, you asked about exit rate, so -- and you asked about stock levels. If you start with -- or inventory, we start with inventory. So -- at the end of Q3, we were approximately where we were a year ago at the end of Q3 last year. And I think that's a very clear statement. So that's one.

Then you asked about exit rates. Of course, it makes it a little bit hard to talk about exit rates in China given whether timing of promotions, inventory being brought down through the distribution change, et cetera, et cetera. So what is an underlying exit rate is a good question. But as you know, volumes -- so the sell-in volumes in Q3 were soft in all the months due to the bad weather and destocking. But of course, as you would also expect, September was better than July and August, which sellout estimated to be better than sell-in, of course.

We don't give an exit rate. But clearly, things improved towards the end of the quarter, as you would expect. We do remind you that Q4 is a small quarter in China. And therefore, it becomes less relevant from a group perspective, and therefore, smaller moves can, of course, move the needle. But exit rate, of course, improved at the end of the quarter, and our inventory was down to last year's level at the end of the quarter. So I'll leave it at that. Thank you so much.

We now have a question from the line of Simon Hales from Citi.

So my first question is just on the U.K. business and particularly the soft drinks performance in the quarter. Clearly, very strong momentum there. I know, Ulrica, you mentioned there wasn't really much weather benefits in Europe overall. But I wonder whether in the Soft Drinks business, certainly, you saw some benefit of weather in Q3, particularly in the U.K. I wonder if you could just maybe talk to that when we think about comping that next year.

And also perhaps flag a little bit more detail on the real drivers of that strong performance in Q3. You called out Pepsi Max and the poppi launch, were there other brands within the soft drinks business in the U.K. that really saw good momentum. And then the second question is just on Kazakhstan. Jacob said, obviously, expect to move to profitability in 2027. New plants opened at the beginning of October. Could we see any move towards profitability at the back end of the year? o are you really just in a transition phase in Q4 of shifting that volume production in-house?

Thanks, Simon. Why don't I do U.K. and then Ulrica can do Kazakhstan. So first of all, if you look at our Soft Drinks business in the U.K., specifically strong growth, but as you've also seen quarter after quarter, we've had strong growth. So it's not a one-off quarter. The team continues to perform very well. We've taken good market share across a number of the key categories within soft drinks. So the team keeps on performing. Of course, there is -- there was a positive tailwind from weather, but but let's not overdo it. We also had good weather a year ago in the U.K. by where the one -- the brand that benefits the most from good weather in our U.K. Soft Drinks portfolio is Robinsons.

And we did see good growth in Robinsons, which we attribute partly to the weather. Across the rest, you can say Pepsi, of course, is the biggest brand in that portfolio and Pepsi took share again in this quarter. And we saw -- what is important for us is we saw value growth well ahead of volume growth in Pepsi. So that says something around the strength of the brand. Pepsi Max is now the biggest stand-alone cola brand in the U.K. It took that position at the end of Q2, and it continued that in Q3 as we continue to grow share.

So there is a continued strong performance of the brands there. So we don't attribute this -- we don't have a significant weather impact when we look at our numbers. There is a slightly positive one, especially around brands like Robinsons, but it's not, of course, a big brand for us. That's also why you look at comp next year. We're not going to use that as an excuse when you come into next year. We think the Soft Drinks business will continue to show healthy growth also in 2027.

A lot of the brands have good momentum, and we're seeing also, you can say, early -- the early success of brands like poppi you mentioned, it's -- we're only scratching the surface in terms of the distribution of poppi.So it's had a great, great start. So poppi, Pepsi, J2O all the brands, 7Up also showing strong performance. And Tango after a weak start is starting to strengthen over the summer, so also seeing Tango coming back. So -- very pleased with the soft drinks portfolio and the strength and resilience of that portfolio. So I'll leave it at that.

Ulrica, on Kazakhstan.

Yes. So I think you had 2 questions in the sense that what's happening by the end of the year. We are still in a transition period, and there will be a very, very small help towards the end of the year, but clearly, the full year is still where we said we won't add any profit in the full 2026. But what it will do is it will set us up for strong growth into 2027 when we then have fully in-sourced and consequently have much better set up, and we expect to operate smoothly and flexibly and really driving forward in the way that it was meant to be and expect a step up in the profits when that production is fully insourced by the end of the year.

The next question comes from the line of Andrea Pistacchi from Bank of America.

I also have 2, please. So you've just talked about soft drinks in Western Europe. I wanted to touch these on beer, which had another difficult quarter. So maybe you could recap on the 3 sort of main headwinds, which I think are U.K. mainstream, Poland and Germany? What's the situation in each? How do you expect performance to hold here over the quarters, particularly as you probably begin to lap some of the headwinds like the fosters and Carling price rebasing in the U.K.?

My second question is on the balance sheet. Your -- you said earlier that you're progressing faster than expected on deleverage, likely getting close to 2.5 even without the potential in the IPO. So maybe you could frame how you're thinking of timing of potential cash returns going forward as we enter '27?

Thanks, Andrea. I will do Western Europe and Ulrica will do the balance sheet. Yes, so thanks for highlighting those 3 beer markets as we also call them out in the release. If we just take them in reverse order. So Germany, do remember, Germany is a small market for us. So the mainstream beer in Germany is quite insignificant in the grand scheme of things for the group, that don't mean we don't want to perform, but overall, when you look at the German market, the market is down mid-single digit.

We're seeing some mainstream brands in line with the markets and then better growth from our alcohol-free beer and Beyond Beer, especially the brand. But overall, the German market has been quite subdued. It is, as you know, a small component of our overall portfolio. We are not going to call Germany to certainly improve from here, but we don't see any deterioration as such. Then when you look at the 2 others on Poland, it's been a tough year for everyone in the Polish market on mainstream. We saw the volume decline moderate in Q3, just to be clear, versus Q1 and Q2.

What we have been doing is from the beginning as we pursue a value strategy in Poland, we stay away from deep discounting in a market that is heavily impacted by deep promotions from competition. We clearly have another perspective on value versus volume than the rest of the market has had so far. When you look at it, we've had strong growth in alcohol-free beer. We've had strong growth in our Beyond Beer portfolios, and we also have strong growth in our premium beer portfolio. And that means we've been transforming our portfolio towards more of a premium alcohol-free beer, flavored beer portfolio.

And that means our revenue per hectoliter improved again in Q3, and it remains significantly above our competitors. So Poland, it's very much a lower mainstream problem for the market. We've seen an improvement in Q3, as I say. And as you say, we will start lapping easier comps as a market and also as Carlsberg. So I guess, we can be cautiously optimistic that we may have seen the worst of the Polish decline.

When you then look at the U.K., of course, everyone has an opinion on the U.K. beer market. If you take -- you asked specifically about the standard lager and Carlsberg, if you take the other brands, we are holding or taking share beyond the Carlsberg discussion. If you look at the 1664 and Poretti, good growth here in our -- in the 2 great brands. We're seeing Sapporo coming in now, which will definitely support growth. We saw a great launch of our Greek beer in the summer, which we will build out distribution on and we are super excited about what can do in the World Beer segment.

So all of that is great. The decline we've seen is in standard lager, where, as you know, there's been a -- the whole category has been declining for a while now. And then we saw some quite aggressive price competition from Heineken-owned fosters, lowering APV and prices. And we, at the same time, as we saw that price action, we shipped it towards more value versus volume on the Carlsberg brand. So the combination of that did lead to some volume loss in standard lager.

But as always, we are here to drive value for our shareholders and not drive empty volume, and we will continue to do that, of course. So I think this is a specific subcategory issue in the U.K., and we will, of course, assess what our response will be on that. But we are not fundamentally we think the overall U.K. portfolio is very strong for us.

Oh, sorry, there was a deleveraging question, sorry. I call our Ulrica. Over to you.

Important point. Thank you, Andrea. I mean, I guess I should start by stating our financial policy is the same as it's been for many, many years, which basically means that once we are below the leverage and we have made the necessary investments handing back capital to the shareholders share buybacks is part of the policy. And as you heard, we are targeting to be below the 2.5x as fast as possible. And I will pay that assuming we close Sapporo, which is expected in Q4, we will be close to that by the end of 2026, and that's almost a year ahead of schedule in that case.

And then any other structural [indiscernible] if that has come on top of that. So when we get there, we will, of course, start considering share buybacks, but we won't automatically as we hit 2.5x, the we hit that start handing back cash because that will then increase the leverage above 2.5x again. So we need to then consider carefully the timing of share buybacks, and we will, of course, then look at leverage. We would look at the expected operational cash flow, any other structural changes, as I mentioned, and if there's any cash needed for expansions, CapEx, Pepsi investments, any other opportunities.

And then seasonality, and that's quite important because we usually have quite high cash flows into end of half 1 and half 2. And dividend payments, which we pay in March. So due to this seasonality and dividend payments in March, we are, of course, and we are therefore unlikely to announce something already in the full year announcement, but it is something we're looking very closely into during the year and is likely to be a topic in half 2.

Next question comes from the line of [ Lawrence Wyatt ] from Barclays.

Also 2 for me, please. Firstly, Jacob, it's been a while since you acquired Britvic and now we've got some more Pepsi contracts coming in. I was wondering if you could give us an update on where you see top line synergies coming in, where you have both a beer business and a soft drinks business of large size in the market together? I mean when you bought Britvic, it was still sort of a big question as to whether those top line synergies would come through, but now you've owned the business for a while. I was wondering if you could just give us an update on what you'd normally expect when you start putting those sort of businesses together?

And then secondly, to Ulrica, on the leverage target of 2.5x. Of course, when you change the target, I think it was 2x before, it was moved up to 2.5x. I think it's reasonable to suggest that the EBITDA that's now coming in to Carlsberg, especially once you close the Sapura deal, is now offset by a bit more of a higher minorities line. And of course, that could also increase further once you've done the Indian business and the hybrid deal also has -- whilst it's only treated as half debt, it still has commitments on your side on the equity component of that. So in light of sort of changes to the EBITDA that's coming in and whether it's entirely consolidated EBITDA, albeit with high minorities, does that change your view at all of whether on that sort of 2.5x target?

Thanks, [ Lawrence ]. I'll start on your question on subline synergies. So yes, so we are seeing it starting to come through and which is, of course, not a massive surprise given that, as you know, when we had conversations around it when we did Britvic, it was not a theoretical exercise for us. We've been running fully integrated multi-bev businesses in the 4 Nordic countries for almost 30 years. And therefore, we have quite a distinct model around how we drive revenue synergies in our value management work in those markets. And that's the playbook that we're utilizing and now as we move from 5 to 17 markets.

If you look at the U.K., which, of course, is a big point given the size of this acquisition and the breadth of the business is being combined, we spent the first year making sure we didn't disturb the underlying momentum. We invested more into our sales force. We built the right incentives, and we built, of course, also structured integrated business plans for our people, but also with the major retailers. What we are is we're seeing a different type of strength of our beer business. So for the U.K., it's clear that, one, we have seen an accelerated momentum of our soft drinks business. If you look at the former Britvic business versus how the Britvic business is performing now as part of the integrated business, it is taking share faster.

So we're growing share faster. So the soft drinks business is clearly benefiting from the increased scale and distribution. And we're seeing a beer business that have been struggling to hold share for a while. We're seeing that now much be much better able to hold share and grow share. Of course, we just talked to Andrea around the specific issue around Carlsberg the brand in the U.K. But beyond that, we're really seeing our brands get better traction, more shelf space and also more promos based than we saw in the past. So we are clearly seeing revenue synergies coming through.

The way we measure it is if you look at an underlying what would be the underlying fair development versus how we grow. And we can see there's a clear positive delta in the U.K. We expect that to come through in the other markets as well, no doubt about it. It's -- in the U.K. was very much a soft wins business that was 3x bigger than the beer business. In most markets, it's the beer business being bigger than the soft drinks business, and there, the revenue synergies come more on the soft drink side. As an example, 1st of January '27, we will be taking over Pepsi in Azerbaijan. We have 70%, 7-0, market share in Azerbaijan on beer. Pepsi is the low teens and therefore, we would expect the revenue synergies here to pertain more to the soft drinks portfolio in the coming years. Hopefully, that adds a little bit of color.

Ulrica, over to you on the leverage.

Yes, good question. And the short answer is that we do believe that 2.5x is also fit for the future business even after these changes that you're outlining and why I say that? I say that because the reason we moved to 2.5x is because if we look at the total portfolio now geographically, with the mix we got between Europe and Asia, it's a lot more geographically diverse when it comes to hard and soft currency, and that will remain as we go through into the future.

We also have since we went to 2.5x as a policy, we have also moved and diversified our categories further, which also brings resilience and less volatility to our portfolio. So those 2 things were the main drivers, and we have increased on ever since. And so even these structural changes going forward will basically be just taking into account and still 2.5x will be the right place to be. I will say as well that the 2x where we were with all is probably quite low. So this is more moving in line with our competitors who sit at the 2.5x and a little bit higher. So we'll stay there.

The next question comes from the line of Trevor Stirling from Bernstein.

Sorry to dwell on the U.K., but I wonder maybe just a little bit more color, Jacob, in terms of what percentage of volumes is Carlsberg in the U.K.? And I suppose, given where it's declining, is there a natural point when this business tips into growth because of strong growth on the premium portfolio outweighs the decline, the likely -- continued decline, I would say, in that segment of the market?

Thank you, Trevor. And you actually kept yourself to 1 question, which your colleagues could, of course, be inspired by as well. So when we look at the U.K., so we're not -- we don't give the specific number. But of course, the Carlsberg from a volume perspective is still a significant proportion of our beer volumes. It's come down as for obvious reasons, as we just discussed in terms of the share of the overall mix. And as we move, it's probably around -- I would guess, around 40% right now what the total volume in the U.K. is coming down quite significantly, as you said.

And the -- on the beer side, of course, sorry, someone is looking at me like I just said that 40% of our U.K. business is Carlsberg not is the beer business we're talking about. And of course, given the decline we've seen and how that category is developing, it's going to lose its relative share of our beer portfolio for obvious reasons as we see good growth in 1664 for you name it. That also means that yes, you are getting closer to that tipping point where it matters less in terms of the overall portfolio mix and where the rest of the portfolio will pull the combined portfolio into a positive growth.

We also do think that what we've just seen in the last couple of quarters is not a reflection of how we expect Carlsberg Pilsner to perform. You can say we just had a quarter, as I said to Andrea where you both had 1 competitor going quite aggressive on price one way and us being focused on value and the combination of that, of course, gave a bit of an outsized move. We don't expect that to continue in the same way. So I think as the decline of Carlsberg within that category improves, at the same time as we continue the good growth of the rest of our World Beer portfolio, then you will get to that inflection point quite soon, as you say.

We now have a question from Soren Samsoe from SEB.

Yes. Just 2 questions, 1 on Vietnam, where you had flat market shares in a market growing mid-single digit. But you have done quite a lot of investments in sales and distribution over the last few years. Just your thoughts on how you develop going forward? I also understand you are looking into doing some CapEx investments in the coming years there? And the second question is on the Nordic markets, just if you can comment on your market share development and soft drink and beer in each of the Nordic markets?

Thanks, Soren. So on Vietnam, if you look at that market. So yes, we saw -- we had another quarter of good growth and as you say, we see market shares relatively stable. It's been a good year for the Vietnamese business returning to good growth after a year where we spent being quite internally focused in terms of rechecking our distribution, both the breadth and the scale of our distribution network, fewer partners, but a higher share of those partners. And then also refocusing some of our resources more to more central versus south.

That is basically there now in terms of how we want to be structured here for the next while. And then we're seeing that play out quite nicely. We've seen increased market shares in key strongholds like the region and Central Vietnam. And after the, say, rebalance growth in the South as well. So a good combination, and we also expect Q4 to be strong in Vietnam for our business. So when you look at that, the investments in the has played out the way we wanted to, we will end this year with quite a solid growth, double-digit growth.

And when we look at next year, we see the momentum continue. Yes, we have announced some investments. It's part of our ongoing investment program in CapEx and supply chain. It's not a significant step-up as such. So I wouldn't make a big thing out of it, but it's a discontinued focus on Vietnam as a key growth market for the coming years. We see market that is growing, and we see the relevance and strength of our brands, especially Huda, which is very much especially in Central Vietnam viewed as the local power brand that Vietnamese consumers are increasingly turning to. So very pleased with that.

I think you asked about the Nordic markets as well. So if you look at the Nordic markets, a little bit of tail of 2, if I can use that term. So you had Denmark and Sweden, where we saw strong growth. Denmark, good mid-single-digit volume growth driven by good growth in all of our growth categories, slightly lower mainstream beer volumes there. Overall, quite pleased with how we performed on market shares across the key categories. We saw soft drinks and premium beer high single-digit growth. We saw alcohol-free mid-single-digit growth and Beyond Beer and double-digit growth.

So pleased with that. So taking share in a number of the key categories, mainstream beer losing a little bit, but that's more to economy brands than anything else. On Sweden, another strong quarter, mid-single-digit total volume growth in all portfolio categories. So both the growth categories and mainstream beer. Market share gains especially in beer. I have to say the brands that really grew there was Beer Tuborg Pepsi. So just continued strong performance from the Swedish business.

Norway and Finland more subdued. I think Norway, good growth for our own beer brands such as mainstream full premium and also the AFP propositions, especially and And also our own energy brand did well. Otherwise, a bit of a difficult quarter, impacted by bad weather in July that came just after World Cup fever, if I can call it that, in Norway. And then you know we've also been adjusting our new distribution model. So we lost some share in Norway on the back of that adjustment to the distribution model. We expect Norway to come back strongly, of course. But for the quarter, they lost a bit of share.

Finland overall market and volumes, they were impacted by bad weather and weak consumer confidence. So of the 4 Nordic markets, Finland is the one that had a subdued market in the quarter. We also saw the overall soft drinks market being negatively impacted by sugar taxes from 1st of April. So I'll say Finland overall market subdued, we're holding share. Norway is the one where we lost a bit of share in Denmark and Sweden, very, very pleased with the performance. So overall, that the Nordic region was, as a region delivered very well again in the quarter. But with the nuances, I just gave you there.

We now have a question from the line of Sanjeet Aujla from UBS.

My first question is just coming back to China. The minus 10% volume you saw in Q3, would you point all of that to weather and destocking or do you think there's also been a deterioration in the consumer in Q3? And I guess, I'm just trying to understand the extent to which China might be an easy basis of comparison looking into next year, if it's just all weather and destocking.

My second question is just on CE&I. I think you've called out Kazakhstan accelerating. India looks like it's accelerated as well. Ukraine is weak, but doesn't feel like it's worse than Q2. So I'm just trying to understand why we haven't seen more of an acceleration in C&I in Q3 versus Q2, what are the headwinds there holding the segment back from improving further?

All right. Thank you, Sanjeet. So yes, let's go back to China. So you're asking us to separate hot and cold water in the bathtub here, which is a little bit difficult. And so we will not try to split the minus 10% to weather destocking and underlying consumer. But to your question, as you also said yourself is basically, is there a further deterioration in the consumer in China? The answer is no. We don't see a step-change in the consumer in China. We have seen a weak consumer now for -- I'm getting into years now, we've seen several years of a weak consumer.

You couple that with the weather over the summer and therefore, the new destocking was, of course, was a negative cocktail, which just all had to deal with, and you've seen the numbers from our competitors as well. So unfortunately, we have to do that. The consumer is -- we don't see a further deterioration in the consumer. And in terms of -- and then your math around that, meaning that could be easier comps for next year. Well, of course, it is correct that this will provide an easier comparable for next year.

When we look into 2027, our expectation is that the whole industry will be destocked to the right level. As I said before in one of the earlier questions, we are basically back at the levels we were last year. But I think we will start -- as an industry, start quite cleanly into '27. We don't expect anyone to go and and do premature sell-in for Chinese New Year either here in Q4. So I think we started the right inventory levels as an industry. And then '27 will be a new baseline. We don't see the kind of drop we've seen this year. We don't foresee that in '27. We expect more of a normalization back to what is that subdued environment, and you hear that from all consumer goods.

We we're not suddenly calling the Chinese consumer up. But your question was whether we were calling them further down? And we're not doing that. Then your question on CE&I. So very strong performing first on performing region. So that was probably not expectation I have -- not expected that question. But listen, if you look at it, yes, good growth in Kazakhstan, good growth in South Asia. And -- but we also -- as you know, we had some -- if I look at the overall CE&I in total. So the growth rates are basically the same in Q2 and Q3. What we are seeing is -- of course, you mentioned yourself Ukraine, Ukraine continues to be difficult, and I don't think I have to explain anyone on the call why.

I just have to give a direct shoutout to our Ukrainian teams 1,400 colleagues who, on a daily basis, do an absolutely phenomenal job at delivering first and foremost, the health and safety of themselves and their colleagues and the greater society. They keep on delivering [indiscernible] make that statement. Ukraine, of course, is a negative driver and continues to be a negative driver as we see a declining top line on the back of everything that's going on.

And then we've seen in Eastern Europe and Eastern Europe, we've seen some markets being under pressure from a mix of mixed weather, but also weaker consumer driven by affordability. I think you can call out a classic market for this would be something like Bulgaria, where we've seen quite a tough consumer environment. So some of our Eastern European countries, classic Eastern European countries, Bulgaria, being an example and then Ukraine are elements that are pulling down.

But we have to say it's a very strong performance from the CE&I region, and it's always swings and roundabouts when you look at a broader region, but overall, a very strong performance from the region. And we don't see that changing in the coming quarters.

We now have a question from the line of Chris Pitcher from Rothschild & Co.

I'm mind for the number of the questions are now to ask. The first one is a clarification. The fact that you haven't given any specific comments on India. Did I miss it, if that's because the IPO process is live? And if not, could you give a bit more color on the growth rates in India? And then on another question, on the PepsiCo synergies, you've talked about the synergies between beer and soft drinks. Are there synergies to be going from being an even bigger bottler by being big in Europe, being big in Central Asia or those 2 very separate business units? The reason I ask that is there's other aspects around there potentially. I mean, with and I don't know if you can talk about whether you've got the right to buy back your beer business there other. But I'm just wondering whether just by being a bigger bottler, you can extract synergies.

Thanks, Chris. The first one, I can be very fast, unfortunately for you because I -- as you know, we are looking at a prospective IPO in India, and that also constrains us in terms of how we can comment on the business. Ulrika, the comments in the opening speech is basically what we can say. We cannot comment specifically on India's performance. That's from -- that's a regulatory requirement. So I think as Ulrica also said, we -- the IPO is progressing. Ulrica also mentioned that we are now calling meetings with the potential investors, et cetera.

And that's the best color we can give you on it. We cannot comment on or draw comparisons with competitors on performance in India, but you can -- of course, you can look at our competitors' public statements to get a view on how the Indian market is doing. But that's the closest I can get to our performance. And as I don't want to end in jail, and I don't want to disrupt a potential prospective IPO process. So that's what we can say.

Then on the synergies, I Chris, you, of course, spot on. We are getting now to the point where it gets quite interesting. Beyond the revenue and traditional cost synergies because we're now getting to the point where we have -- we're creating some major clusters. And we will soon have a Nordic and Baltic cluster of 7 markets that are geographically very close, very similar consumers, et cetera, et cetera, which [indiscernible] is in terms of our supply chain. So both our logistics, but especially our brewing networks across 7 markets, we can utilize that much more efficiently.

Also around innovation, given consumer cohorts in those 7 markets are very similar. So we can launch innovations at the same time in all of those markets. And of course, so both on the innovation side, on the supply chain side, we see significant opportunities. It's the same -- there's a reason why we are not just doing Azerbaijan, which is our biggest market in soft but we are also doing Georgia again, we're creating a South cluster. And you will see that -- that is part of the mindset of the build-out we're doing here. It gives us significant resilience, of course, also in the supply chain, but it also gives us a next leg of efficiency.

You can speculate that some of our markets, as you can see, are growing very fast on volumes with soft drinks. A good example is Sweden that has been taking market share for years and growing their Pepsi portfolio very strongly. Instead of them expanding more capacity in a couple of years, we can now utilize a broader Nordic cluster brewery network. So as an example there, it gives us a significant CapEx saving. So there is real synergies coming out of these clusters now.

And I am being told that we will have the last question now.

And the last question comes from the line of Olivier Nicolai from GS.

It's Olivier Nicolai from Goldman Sachs. Two questions, please, to finish this call. First, in Kazakhstan, once you have in-sourced production, how will it compare in terms of profitability to the rest of the region? And secondly, a bit more short term, but may I just ask if you expect any negative impact in Q4 in Western Europe from the various protests we've seen in France or in Italy?

Thanks, Olivier. So on Kazakhstan. So as Ulrica said earlier, we will see a significant profit delta from '26 into '27. That's clear. We have said that over time and usually when we take something on like this, that's a 3-year period is to be at a profitability level that is -- that matches the rest of the region, and that is exactly what we expect to see here as well. We see a significant delta next year. I think there is another leg up in '28 because in '27, we will still be only 1 year into the entire logistics and distribution, and we still have a lot of optimization to do.

And we also expect in '27 significant growth in the Pepsi portfolio. The teams have done incredibly well. We're basically close to 100% up in Q3 on that portfolio, and we expect in '27, it's a significant cost -- during '27, you're going to see even better capacity utilization as the year goes on, which means 28, you're going to see again a margin and profitability uplift from that capacity utilization. So that it will continue to improve also in '28 on '27, but there is a significant step up in 2027.

Then it's a very simple answer on the other question. No, we don't expect any impact from these unfortunate events in some of the major capitals. It is -- it can look dramatic on TV and on media. But overall, it has a very, very limited impact. So no, it's also happening at the time of the season where on-trade is very more then subdued. So no, we're not seeing any impact. And as we said on this call, we are firmly, firmly committing to our guidance for this year and feel very comfortable to deliver the guidance for you.

And on that note, thanks, Olivier. That was the final question for today. So as always, thank you for listening in, and thank you for your questions. We look forward to meeting some of you during the coming days and weeks and until then, have a good day.

Ladies and gentlemen, welcome to the Carlsberg's H1 2026 Interim Financial Statement. I'm Moritz, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Jacob Aarup-Andersen, CEO. Please go ahead.

Thank you very much, operator. So good morning, everyone, and welcome to Carlsberg's Half Year 2026 Conference Call. As said, my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrica Fearn; and Vice President, Investor Relations, Peter Kondrup.

Before we get into it, let me just begin by summarizing the key headlines for the half-year. First of all, we delivered solid top-line and solid earnings growth. We are delivering the Britvic synergies faster than expected. We're making strong progress on leverage reduction, and we're expanding our Pepsi partnership to many more markets. And we're narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range.

Before I cover the key headlines for the Group and regions and before Ulrica takes you through the financials and the full-year outlook, I will let her explain the exciting reporting changes following the implementation of IFRS 18. So over to you, Ulrica.

Thank you very much, Jacob. And please, everyone turn to Slide 3 for that. So as we told you in February, we have implemented IFRS 18 this year, and this is ahead of the mandatory adoption in 2027. And this is a highly complex change, but we have been able to do this, thanks to the robustness and the quality and the depth of our data and systems. And for those of you who are not aware, IFRS 18 concerns the presentation of figures in the income and cash flow statement and to a much lesser extent, the balance sheet.

And it is important to note upfront that it's at the bottom line, i.e., net profit, net cash flow and total asset is unchanged. And for us and for most other companies, IFRS 18 does not correspond with our internally defined financial performance measures and KPIs. And therefore, we're introducing Carlsberg performance measures or CPMs, which reflect our internal reporting and performance management. And this is in line with the requirements of the IFRS 18. But I do want to emphasize that the CPMs basically with a few exceptions, reflects the way we've always looked at the business.

So we took the first step at this already in our full-year 2025 reporting in February when we provided restated management-defined performance measures or MPMs. However, under IFRS 18, MPMs can only be used for P&L subtotals and totals and not for line items such as cost of sales or marketing or ratios such as return on invested capital. And therefore, we've chosen to call our adjusted figures, CPM. Last week, we sent out restated 2025 figures under IFRS 18 for full-year and half-year, and we also included the corresponding CPM figures for both periods.

So we hope that, that helped you preparing for our half 1 announcement now. So going forward, all P&L commentary on Group and regional performance in announcements and presentations will be on CPM where these differ from IFRS 18 figures. And likewise, organic growth figures will be presented for CPMs only. In today's announcement, CPM bridges are presented in Note 1, and those bridges will be included in all half and full-year announcements going forward as per IFRS 18. And details on the restatement of the 2025 figures reported in February to IFRS 18 are shown in Note 8.

So let me first briefly explain the major changes following the adoption of IFRS 18, illustrated in the second and third column in the table on this slide, which show 2025 reported in February and the IFRS 18 restated figures. First of all, the structures and subtotals in the P&L have changed as the P&L is now split into operating, investing and financing sections. Secondly, there are some significant movements between the lines in the P&L with the main ones being share of profit of associates, which has moved from above operating profit to below operating profit.

And special items and other operating activities net, they no longer exist, but are instead recognized in the relevant cost lines mainly above operating profit. And trade loans have moved from other operating activities to other investing income and expenses, which is below operating profit. And FX gains and losses on operating assets, liabilities and transactions, bank fees and other financial fees have moved from net financial items to admin costs.

And as a result of the IFRS 18 mandatory reclassifications, 2025 operating profits have been restated from DKK 13.36 billion to DKK 10.23 billion. And the reclassifications have no impact on net results, which is unchanged at DKK 7 billion, as you can see here in the table. We've also included a few lines from the cash flow statement.

As with the P&L, there are a number of movements between the lines, but the most significant one is the change of interest paid on external financing. This used to be included in cash flow from operating activities, but it's now presented in the cash flow from financing activities. And this means that free cash flow under IFRS 18 improved by DKK 1.7 billion, but this amount is offset in cash flow from financing activities and net cash flow is therefore unchanged.

Now zooming in on the CPM adjustments, and these are shown in the last 2 columns in the table and the main adjustments relates to share of profit in associates, which has moved back into operating profit. Integration, restructuring costs and impairment losses, which used to be accounted for in special items are eliminated in CPM as is the amortization of intangible assets recognized in the Britvic PPA.

The CPM operating profit and net financial items differ slightly from the MPMs reported in February. And the reason for this is that we have decided to align our internal reporting regarding trade loans, bank fees and other financial fees with IFRS 18 to avoid unnecessary complexity between our internal reporting and external reporting. And the net impact of these are approximately DKK 250 million, but have no impact on net results or EPS.

Then the small difference between 2025 adjusted net result and adjusted EPS MPM reported in February and the restated net profit and EPS CPM is due to certain special items such as war-related costs in Ukraine and donations, which has been reclassified to operating costs and some smaller tax adjustments related to one-offs.

So now on Slide 4, where we've included the detailed bridge for half 1 2026 from Note 1 in today's announcement, explaining the movements from IFRS 18 to CPM. Hopefully, this bridge will enable you to understand the moving parts. And if not, IR will be more than happy to help after this call. As I've emphasized a couple of times already, the CPM figures are in accordance with our internally defined management performance measures and KPIs. And with all of that, back to you, Jacob.

Thank you very much, Ulrica. And I know a lot of people will regret this, but let's move away from the exciting world of accounting rules. And let's talk about our CPM headline figures for the first 6 months. So let's go to Slide #5. Now total volumes were up organically by 1.7%, driven by the very solid 6% growth for our growth categories. Revenue per hectoliter developed positively in all 3 regions, resulting in revenue per hectoliter growth for the Group of 1%.

The organic volume and the revenue per hectoliter growth led to revenue being up organically by 2.7% and us delivering revenue growth in all 3 regions. Operating profit was up organically by 5.9% and the operating margin expanded by 30 basis points to 15.8%, positively impacted by the synergies in Britvic. Slide 6 and a quick reminder on the composition of our portfolio following the Britvic acquisition. Carlsberg is today a multi-beverage company with about 2/3 of volume coming from beer products and 1/3 from soft drinks and other non-beer beverages.

Looking at it from an alcohol versus alcohol-free perspective, the ratio is 1/3 non-alcohol, 2/3 with alcohol. Not surprisingly, Western Europe has the largest share of soft drinks with 54% of total volumes coming from this category. Including AFB, the alcohol-free portfolio accounts for almost 60% of volumes in Western Europe and mainstream beer in Western Europe only accounts for 30%. The split is a little different in the other 2 regions where beer still accounts for the majority of volumes.

Slide 7 and an update on growth categories and international brands, all of which delivered positive growth in the first half, except for one brand, 1664 Blanc. Soft drinks delivered strong organic growth of 9% and 13% in reported terms, with growth in Western Europe and Asia being supported by the Pepsi portfolio. Very strong growth in CEEI was also positively impacted by Pepsi and the volumes coming on board in Kazakhstan since we taking over the license back in Q4 last year. Excluding Kazakhstan, organic soft drinks volume growth was 4%.

Our premium beer portfolio grew by 1% as mid-single-digit growth in Western Europe and CEEI was partly offset by lower volumes of local premium brands in China in Q2. We saw particularly strong growth for local premium brands such as Poretti in the U.K., Axback in Sweden and Prevensco in Bulgaria. Premium Carlsberg volumes grew by 16%, with strong growth seen in many markets, including China and India. And premium Tuborg volumes grew by 2%, supported by growth in China.

Alcohol-free brews grew by 11%, thanks to strong growth in Western Europe of 15% and 6% in CEEI. It's really encouraging to see the AFB volumes grow in almost all markets in these 2 regions. Albeit still a small category in Asia, we also saw strong growth in them. Calling out a few brands that did particularly well was Okocim in Poland, Tourtel in France and Fix in Greece. The growth was supported by a high level of innovations, broadening consumer choice on occasions, like, for instance, the Okocim Triple Zero in Poland, the Somersby Triple Zero in Germany and Bilz Chill & Relax, our first functional AFB in the Swiss market.

Beyond Beer volumes grew by 1%, mainly due to strong growth for Garage, particularly in Poland. Innovations have been a key driver behind the growth of the Garage brand with new flavor types for Garage Hardcore in Poland and Kazakhstan. Looking at the international brands. Pepsi volumes grew organically by 17%, supported by very good results in the U.K., where the brand outperformed the market and in markets such as Ireland, Sweden, Norway and Cambodia. The strong volume growth was also supported by the volume ramp-up in Kazakhstan.

Carlsberg volumes grew by 6%, thanks to the aforementioned mid-teens premium volume growth. Mainstream volumes were flat. Tuborg volumes grew by 3% with positive contribution from both the premium and mainstream portfolio. The latter was primarily due to double-digit growth in India. 1664 Blanc volumes grew in CEEI and were flat in Western Europe, but this was offset by a decline in Asia and the total brand volumes were minus 1%.

So please turn to Slide #8. We're expanding our business, strengthening our portfolio in growth categories and growth markets. Before going into details of the new Pepsi agreements, I want to highlight the strong performance of Britvic. In line with our expectations, Britvic is positively adding to the Group's revenue and profit growth. And thanks to top-line growth and synergy delivery, margins and ROIC are improving. Britvic has truly been a brilliant addition to the Carlsberg Group. And we advanced our PepsiCo partnership further.

In April, we announced the takeover of the Pepsi license in Denmark, including the German border trade, Finland and the 3 Baltic states from the 1st of Jan 2029. We're very excited about the long-term benefits of having the Pepsi business across all Nordic and Baltic markets, where we have a very strong route to market and we can create a Nordic Pepsi cluster. In July, we announced the takeover of the Pepsi license in Azerbaijan from the 1st of Jan 2027, so in only 4.5 months when the agreement with the current bottler expires.

The takeover is expected to double our volumes in the market, and we're seeing appealing growth opportunities for the Pepsi portfolio when combining the beer and soft drinks portfolio. Also in July, we announced a new strategic joint venture with Sapporo in Southeast Asia and Hong Kong. The partnership builds on our successful cooperation with Sapporo since 2024 in Malaysia, Singapore and Hong Kong, where this premium brand has been growing very fast, supported by the strong provenance of Japanese brands in Asia, combined with our very strong route to market.

With the agreement, we extend the partnership to Vietnam, Laos and Cambodia, securing the Sapporo brand in perpetuity in all of these markets covered by the JV. We've also been granted a long-term brand license for Sapporo in the U.K., strengthening our portfolio in the growing premium world beer segment. Gross cash proceeds to Carlsberg will be USD 643 million that we will use for debt and leverage reduction.

Now Slide 9 and Western Europe, where we saw 4% organic growth for our growth categories. Soft drinks and other beverages were up organically by 3.2%, while beer volumes declined by 3.9%, mainly due to lower mainstream beer volumes in Poland and Germany. Excluding these 2 markets, beer volumes grew slightly and total volumes were flat organically. Revenue per hectoliter improved organically by 1%, supported by price increases and positive mix within beer from the continued growth of premium and alcohol-free brews.

Channel mix was negative due to the continued soft on-trade. Organic revenue growth was 0.9%, while total revenue growth was 2.7% due to the impact in January from the Britvic acquisition. Organic operating profit growth was a solid 8.7%, supported by the synergies from Britvic, tight cost control and good results in Super Bock, our associate in Portugal. The operating profit contribution from acquisitions was flat as this impact related to the first 2 weeks of January prior to Britvic being consolidated from January 16, 2025.

We're very pleased with the 80 bps of margin progression, supported by strong synergy delivery in Britvic, which has driven a significant improvement in our U.K. margins. So let me give a bit of color on the markets. And starting with the U.K., we saw mid-single-digit volume growth for soft drinks. The Pepsi portfolio did very well, particularly Pepsi and Pepsi Max, which outperformed the market, both in off-trade and in on-trade and in volume and in value.

We also saw exciting first results for poppi, which was launched in March. Beer volumes grew by low-single-digit, driven by Poretti, 1664 and the introduction of the Greek brand, Mythos. Carlsberg brand volumes declined due to the competitors reformulating their recipes to enable their products to enter the lower ABV mainstream segment.

Our Nordic businesses delivered a solid set of numbers with growth in all markets except Finland. Very positively, the growth categories delivered good progress. Total volumes in the Nordics grew by low-single-digit as the positive development for the growth categories offset lower mainstream volumes. The Pepsi portfolio grew in Norway and Sweden. Total beer volumes in France and Switzerland were up, driven by premium and alcohol-free brews, partly offset by slightly lower mainstream volumes. In Poland, alcohol-free brews continued to grow. We saw strong growth for Garage in Beyond Beer and flat premium volumes. Total volumes in Poland were impacted by the soft market and some market share loss in the lower mainstream segment.

Please go to Slide #10 in Asia, where our volumes were flat for the first half, reflecting beer volume development of minus 0.9% and soft drinks and other beverages growth of 6.8%. The latter positively impacted by the growth -- that impacted the growth for our growth categories of 1%. Beer volumes were impacted by a soft beer market and severe weather conditions in China specifically. Revenue per hectoliter increased organically by 2% and consequently, organic revenue development was 1.7% positive.

The positive revenue per hectoliter development was supported by brand mix and by price increases. The depreciation of the Chinese currency, in particular, meant that the total revenue growth was flat. Operating profit grew organically by 3%, thanks to flat cost of sales, supported by Funding our Journey savings and prudent SG&A management. Adverse currency movements meant that operating profit CPM growth was 1.7%. Our operating margin in Asia improved by 40 basis points to 26.3%.

Let's look at a couple of the markets here. In China, the beer market remained soft. In addition, our volumes in Q2, particularly in June, were severely impacted by very bad weather, including heavy rainfalls and floodings across the central and southern parts of the country. This naturally affected consumer uptake in our strongholds, especially Chongqing and several of our big cities.

We continue to see very strong growth for Carlsberg, which grew by more than 20%, and we also saw increasing Tuborg volumes. Due to lower volumes for the Chongqing brand, our local mainstream volumes declined. In Laos, our volumes increased by mid-single-digit, benefiting from improved macroeconomic conditions and the beverage market returning to growth. Our business in Vietnam continued the positive trajectory from Q1 and delivered volume growth of more than 20% for the half-year. The strong growth was on the back of easy comps, market growth and an increase in export volumes. Our market share stabilized, driven by Huda, which is our large mainstream brand in the central part of the country.

Slide 11 and Central & Eastern Europe and India, where we continue to see very good performance and even an acceleration of volume growth in Q2 compared with Q1. The region delivered organic volume growth of 6.2%, mainly driven by soft drinks, which grew strongly by 34%, positively impacted by the ramp-up of the Pepsi business in Kazakhstan. Beer volumes grew by 1.1%, thanks to strong growth in India and Nepal, partly offset by weak volumes in Ukraine. Revenue per hectoliter grew organically by 3%, thanks to price increases and a positive product mix, resulting in organic revenue growth of 9.2%. Total revenue was up by 5.7% due to adverse currency movements, mainly in India and Ukraine.

The region delivered good organic operating profit growth of 7.8%, thanks to the strong top-line and easy comps as the first half of '25 was impacted by certain one-off events. Operating margin declined by 40 basis points due to the margin dilution from the large Pepsi business in Kazakhstan, which, as you know, is not profitable in 2026. Let's also here look at a couple of the markets. In India, the very positive trajectory continued. Our business delivered mid-teens percentage volume growth in the first half with an acceleration in Q2 compared to Q1. Growth was driven by both Carlsberg and Tuborg. 1664 Blanc grew strongly from a low base as we continue to expand distribution.

The work on the IPO continues. And as you may have seen, Carlsberg India in July filed a so-called pre-filed draft red herring prospectus with the Indian authorities. And before you ask additional questions, we cannot provide further comments to the India performance or the process following the filing. We also saw good growth in Nepal, where volumes were up in the mid-teens. This was due to good progress for both the local Gorkha brand and for Tuborg and Carlsberg. We're very excited by the Pepsi expansion in Kazakhstan. The construction of the new soft drinks plant is on track, and we expect to start up production by the end of Q3.

Total volume growth in the first half was 70%, that is 7-0 percent driven by soft drinks as beer volumes were flattish. In Ukraine, the market remains severely impacted by the war and our volumes were down mid-single digits as growth for premium and AFB were offset by lower mainstream volumes. Volumes in our export and license business returned to growth in Q2, led by solid growth for Carlsberg in licensed markets.

And with that, over to you, Ulrica.

Thank you, Jacob. And now please go to Slide 12 for some more details on the P&L. And for the sake of good order, please do note that my comments will be on CPM figures. So revenue amounted to DKK 47.1 billion, which was up 2.7% organically, driven by both volume and revenue per hectoliter. And the impact from acquisitions was plus 1.2% and related to Britvic, which was consolidated from January 16, 2025. And the acquisition impact was offset by FX, which was minus 1.3% and mainly driven by the Polish, Chinese and Ukrainian currencies.

Cost of sales increased slightly. Gross profit grew organically by 1.8% and gross margin was 45.7% and was impacted by the Pepsi business in Kazakhstan and acquisition of Britvic. Operating profit grew organically by 5.9% and operating margin increased by 30 basis points to 15.8%. And as part of IFRS 18, net financials are now presented as investing income and expenses and financing income and expenses, respectively.

And in Note 5 in the half-year statements, we provide a reconciliation of these 2 lines and the net amount, excluding FX, which was minus DKK 990 million. The effective tax rate was 22.7%, while the IFRS reported tax rate was 23%. And net profit was up 6% to DKK 4.3 billion and earnings per share were up 6% to DKK 32.4.

Now to Slide 13, please. So here, you see free operating cash flow amounted to DKK 3.7 billion, and this was an increase of DKK 776 million, positively impacted by the higher EBITDA and a smaller working capital outflow than in H1 2025, partly offset by higher CapEx. And the change in total working capital was minus DKK 859 million, which was almost DKK 900 million better than in 2025. And looking at the 12-month average trade working capital to revenue, this was minus 15.6%, which was at the same level as the end of year 2025.

CapEx amounted to DKK 3.6 billion and included capacity expansion and sales investment linked to the Pepsi business in Kazakhstan and also capacity expansions in India and Laos. Net interest-bearing debt to EBITDA was reduced significantly from 3.9x to 3x, supported by solid operating free cash flow and the issuance of EUR 1.8 billion of hybrid bonds in early May. And the proceeds were used to repurchase outstanding bonds under our EMTN program maturing in October 2026 and February and June in 2027.

And accounting-wise, the hybrid bonds are accounted for as equity and presented in a separate line above non-controlling interest in the statement of financial position. However, the credit rating agencies treat only 50% as equity and the remainder as interest-bearing debt. And consequently, we use the same methodology when calculating net interest-bearing debt and financial leverage. So lastly, the 12-month rolling return on invested capital improved by 20 basis points versus year-end 2025 to 10.8%. And compared with H1 2025, the development was impacted by Britvic and capacity expansion in Kazakhstan.

So now please go to Slide 14 and the earnings outlook for the year, which we are narrowing towards the upper end of the previous expectation. In half 1, we delivered solid top-line and earnings growth despite the challenging and volatile environment. And for the remainder of the year, we're not assuming any material changes to the external environment or consumer sentiment. But despite this, we expect to continue our earnings growth trajectory in H2.

So let me provide some color on what we have seen so far in Q3 and our assumptions per region for half 2. In Western Europe, we are lapping a good July last year, but the warm weather in multiple markets again this year supported volumes during the summer. In Asia, we don't expect the soft beer -- we do not expect the soft beer market, particularly in China to improve and the bad weather at the end of Q2 continued in the first part of Q3.

In CEEI, the positive trends from half 1 has continued into the beginning of Q3. So we're not assuming any major changes in COGS per hectoliter outlook for the year despite the higher spot prices on some inputs, including aluminum and energy. And as always, there will be significant variations between markets. The Britvic integration is progressing well, and we are very pleased that we now expect to achieve approximately 80% of total synergies by the end of this year. And this is well ahead of our initial expectations and even at the higher speed than anticipated at the beginning of the year.

And based on this, we're updating our earnings guidance range for 2026 and now expecting organic growth in operating profit CPM of 4% to 6% compared to the previous guidance of 2% to 6%. Please note that the 2025 operating profit CPM differs slightly from the MPM figure that was used in our guidance in late April. And the difference relates to the reclassification of bank fees and trade loans that reduced operating profit but improved net financials, resulting in 0 impact on net profit. Based on yesterday's spot rates, we assume no currency impacts on operating profit, and this is the same as our previous assumption.

And we are lowering our expectation on net finance costs, excluding FX, to around DKK 1.8 billion. And the reduction compared to our previous expectation of DKK 2.2 billion is due to the redemption of EMTN bonds following the hybrid bond issuance in Q2 and the reclassification of bank fees and trade loans. And note that interest on the hybrid bonds do not show up in the P&L, but are presented separately in the allocation of net profit in the line called interest payments to hybrid bondholders.

Interest on hybrid bonds are not accrued, but recognized at the time of payment, and there is only one payment on one of the hybrid bonds in 2026, and that's in August. Our assumption for CapEx remains at DKK 6 billion to DKK 7 billion, and our assumption for tax rate is unchanged at 23%. And with that, back to you, Jacob.

Thank you very much, Ulrica, and it's time for Q&A. But just before opening up for that, let me summarize the key messages. First and foremost, we delivered solid top-line and solid earnings growth. We are, as Ulrica just said, delivering the Britvic synergies faster than expected. And we're making strong progress on leverage reduction. We've also been expanding our Pepsi partnerships to more markets, and we're narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range.

And now to Q&A. As always, please note that we will limit the number of questions to 2 per person to ensure that as many of you get a chance to get through. You're always welcome to rejoin the queue.

With that, over to you, operator, and the Q&A.

[Operator Instructions] And today's first question comes from Andrea Pistacchi from Bank of America.

So my 2 questions are the following. So I'll start with China. I was hoping that you could unpack a bit more the Q2 performance in China. Do you have possibly a sense of what the severe weather impact may have been? Could you give us -- you normally give us a split big cities versus stronghold performance? And then the inventory situation given the likely poor sell-out in China, how has this left sort of distributor stock levels? And you already told us how sort of trading has started for Q3, which sounds still a bit soft.

And my second question probably for Ulrica is on the guidance. So you delivered close to 6% organic EBIT in H1, and you narrowed the guidance, which implies, I think, around 2% to 6% for the second half. Could you talk please through some of the key drivers that are likely to shape the H2 relative to H1? I'm thinking on the positive side, you'll be annualizing the higher marketing spend in China. Kazakhstan profitability probably should start to improve once you go live with the factory. I think you said that the COGS inflation won't be higher in H2 versus H1. So all of this would seem to support another solid EBIT delivery in H2. But against this, are there any meaningful headwinds we should be aware of that could explain why profit growth would moderate in the second half?

Thank you, Andrea. Let me start on China and then Ulrica can speak to the guidance element. Yes, I can give you a bit more color, of course. And it's -- unfortunately, it's impossible to separate hot and cold water in terms of what's weather impact and what's weak consumer, et cetera. But no doubt, if we look at the Q2 -- when we look at the already-soft consumer, which we've seen for quite a while, as you know, we did then have that significant impact from weather. And I have to say it's pretty dramatic also if you've been following the pictures of the events as they unfolded in June in China and into early July. And of course, that has an impact.

You can say we're seeing a hit too with some of our strongholds, but it's also very clear that this is not a Carlsberg thing. This is -- quite clearly, it's a market thing. We're seeing everyone being hit by this. We can't separate it. But if you look at our strongholds versus big cities, which is also where you were asking around, so strongholds are down a bit less than mid-single-digit, while the big cities are flat. And it tells you something around the fact that some of our strongholds were hit harder which is also what we were pointing to.

Big cities in general, we have an underlying good growth rate. So the weather impact takes that underlying good growth rate down. And therefore, overall, you end up with the number you ended up with. We're not seeing this as any sort of step change. It's, of course, unfortunate that we have significant adverse weather across China going into a summer season where people have been building up stock for a strong summer season.

This also happened a couple of years ago, and it's -- this is life. We deal with it. We don't see that as creating any longer-term structural drama. But of course, it's a short-term headwind we have to deal with, just like the rest of the players in the industry we have. It's also why I have to say I'm very pleased to see the performance of the overall Group because it also shows despite this weak impact in China, we still deliver good results across the Group, and it says something around the resilience and diversification we built up over the recent years.

You asked about the start to Q3. Yes, there's no doubt that, of course, on your question on inventories with distributors, et cetera, of course, it's a given that distributors will have more inventory than initially expected because of the lack of demand, especially in on-trade because especially on-trade was hit very hard. So that will have an impact in Q3 for the whole industry. So you have to expect that Q3 will be soft in China. I think that's given. I think that's also expected by now. So -- and then the system will have worked through those inventories and then we can get back to a more normal environment again, of course, assuming no other weather impacts.

Just to underline, listen, strategically and financially, our Chinese business is in a great shape. We're delivering very good profitability, very good cash flow, and we have the highest EBIT margins in the market, strong brands, and you know the commercial track record. So a setback on 1 or 2 quarters due to heavy weather hitting us, I think that's, for us, no drama, and we think that we will return to the previous structural position post these impacts. But of course, we'll have a softish Q3 as this has worked through the system. Ulrica, over to you on the guidance side.

Yes. Thank you, Andrea. So on the guidance, as you said, yes, there are some -- we now have visibility into the big summer months and the start of Q3, and that's allowed us to increase the guidance range up to 4% to 6%. And it is the good start in Q3 in Western Europe. It is the good start in the rest of Asia in Laos and Vietnam and then CNA continuing -- CEEI continuing the similar trends as in half 1 that's allowed us to do that, but also the visibility into half 2, which does not include anything that you probably have missed, which was your question.

I will say commenting on the 2 factors you brought forward. One was Kazakhstan. Yes, we will start ramping up production in second half in Kazakhstan, but it will just be ramped up from the end of Q3. So I wouldn't expect any big profitability coming from that in this year. And you mentioned also COGS, they will be pretty much in line with half 1. So flattish, but there is a little bit up. So we won't get a big support from that in half 2.

We have, however, there are some -- you said half 1 and half 2, there are some movements between the 2 halves, which might be worthwhile pointing out. We do have a couple of insurance payments in half 2 that we need to lap, which made it a little bit more difficult. And Western Europe and CEEI actually had easy comps in half 1 because they had some supply chain disruptions last year, like the Italy flooding that we talked about. And then, of course, Jacob talked about the China softness as well. So those are the big moving parts in why we're moving forward to the 4% to 6%.

Then the next question comes from Celine Pannuti from JPMorgan.

My 2 questions. So first on Europe. Thank you for giving us a bit of a steer on the beginning of the quarter. Could you go into a bit more details in terms of the underlying demand on beer in the key regions as well as the overall competitive performance in your key markets? And my second question, maybe following on what you just said on COGS inflation. Obviously, for this year, you have been hedged. How do you see the COGS inflation into 2027 and the ability to pass this on? And given the consumer environment, I'm thinking about Europe, the pricing ability.

Celine, thanks so much. You said underlying demand of beer in different regions, but your question was specifically on Europe. Is that correct just to clarify?

On Europe. On Europe, yes.

Yes. Okay. Fine. So yes, like if you look at Western Europe, the region for us, we've had, as you also alluded to, a good start to Q3, supported by favorable weather in several markets. We -- it's very much the similar trends we've seen in the first half across Western Europe. So there are some markets that remain tough, especially Poland remains tough, which is not a surprise. On the other hand, we continue to see good strength in the Nordic region and good strength in the U.K. And you're asking Europe and beer markets, I would just underline that 55% of our Western European business is now soft drinks. And there, we're seeing continued good growth. So we're very happy with that.

On the beer side of things, which is now, as you know, the minority of the business in Western Europe, Poland remains challenged, no doubt about it. Nordic region remains constructive, especially premium beer, alcohol-free beer continues. Well, mainstream beer, I think we're constructive around that being stable. I think the market where you're seeing or the beer market continuing to be highly competitive is especially the U.K. Here, we see the mainstream market is highly competitive while we're seeing good growth in the world beer segment with some of the launches we've had recently.

So I think it's a mixed picture. And also, you have -- the French beer market is growing. The Portuguese beer market is growing as well. So we have 2 beer markets there, 2 important beer markets for us that are growing and where we're also happy with the overall performance. You also asked about competitive and, i.e., therefore, you can say, relative market share, et cetera. We're quite happy with the performance. The markets where we have slipped a bit on market share, if you look at the statistics like Poland, that's a market where we have decided not to fully participate in everything that goes on in lower mainstream.

Our focus has been on driving a significant mix improvement, and we now have the highest net revenue per hectoliter of any player in the Polish market, which has been a strong development by the team. So where we -- there are certain markets where we decide to do that. Overall, very happy with the performance of the teams. We're not losing any share that we're not deliberately doing. And I think it's a constructive outlook for beer. Overall, of course, the mainstream beer segment and especially lower mainstream beer segment is the segment where we see the least growth.

That's not a surprise as some of those consumers are moving more towards premium or alcohol-free beer or even moving into non-alcoholic categories like soft drinks. So I think we have a constructive perspective on beer in Europe, but especially within the growth categories of premium and alcohol-free. Ulrica, do you want to answer on the COGS side of things?

Yes, sure. Celine, you talked about COGS for 2027 specifically. And here, we do, of course, have some hedges in place already for 2027. But as you also can well see, volatility in many of the commodities are very high. And so it's very hard to say anything directly about 2027 at this point in time. We do, however, I can say, try to pick up when price weakness is out there to increase those hedges for 2027. And I can also say that it continues to be aluminum and energy. They are the ones that we see the biggest cost push on. And there are still some tailwinds on commodities like barley and sugar.

So -- and there are, of course, commodities that we're not hedging as well. So we're clearly monitoring the situation closely, and we take the necessary action. We'll continue to do that into 2027, whether that's efficiencies to offset this or supply chain actions and commercial initiatives. And as per company policy, we will also have to take price increases to cover any of those cost increases should they arise. But I cannot say specifically where we are for 2027 now, but I will say that it will be an increase on 2026. But I can also say that the cost push will be significantly less than it was back in 2022, 2023.

Then the next question comes from Edward Mundy from Jefferies.

So 2 questions, please. The first is on Britvic, where you've brought forward your -- the pace of synergy realization from 30% -- 40% to 50% this year. The question is, is there potentially more? I know you've already upgraded once, but as you do the work, is there potentially more to go for on Britvic? And then the second is really around the fact the business shape has changed quite a bit over the last couple of years. You've had obviously Britvic, Kazakhstan, Azerbaijan, Sapporo, and we've got 5 new markets coming in 2029. When we think about the end game here, especially on that Slide 6, are we largely done, Jacob? Or if there are further opportunities, can you reshape this business without putting a lot more capital to work [indiscernible] taking on new Pepsi franchises or your rather smart deal with Sapporo?

Thank you so much, Ed. Quickly, we'll start with Britvic. So you're greedy man. We've just upgraded the synergy realization today, and you already want more. It's amazing. But listen, of course, last year, as you know, we took the overall guidance from DKK 100 million to DKK 110 million. This year, we are increasing the realization rate of that DKK 110 million. So there's no doubt that you're pointing to the right topic, which is the synergy realization momentum is, of course, very strong. And therefore, the momentum is also on the upside and not on the downside.

I'm not going to sit here and speculate whether we're going to increase synergies further. If we were going to do that, we would have said that today. But it's, of course, more likely that we do that compared to downgrading it. So the momentum is good. It's very strong. And we have to say that the teams are doing a phenomenal job. The Britvic acquisition has been a strong success, not just in terms of the impact it's having specifically on our overall new combined U.K. business, but also the ripple effects it's having throughout the business in terms of capabilities, innovation power and in terms of, you can say, the momentum it's giving us in terms of our overall Pepsi relationship.

So I think it's having significant ripple effects that go way beyond just the cost synergies. But on the question of cost synergies, of course, we're very pleased with the upgrade today of that. And of course, the momentum is on the upside. Then on the end game, I think you can see from the level of activity coming out of us, we're not standing still. We are with high intensity, constantly driving forward to create value for our shareholders. And we're super excited about the opportunities in front of us. We're super excited about the portfolio we have today.

We think we have a great mix of amazing beer portfolios, amazing soft drinks portfolios and a lot of emerging innovations and within other categories such as Beyond Beer. When you look at that, we don't sit here with an end goal of a certain mix. I think that will be naive. What we are looking at is we see continued opportunities to expand within our growth categories. Part of that opportunity is potentially to do more Pepsi partnerships. And we're not going to rule that out because we think that there -- I have to say, I would probably be disappointed if we, over the next couple of years, do not add further Pepsi franchises.

But it is, for us, always the key litmus test is, are we creating value for our shareholders or not. We're not doing this because we think it's nice to do. We do this because we are here to create value for our shareholders, both in the short term and the long term. You can already today see when you look at this first half, you can see the positive power of the changes we've done over the last couple of years. It has improved the shape of our business, the shape of our P&L, the shape of our portfolio. So as long as we can do that, we will continue to do it. We don't have a fixed target around what the portfolio should look like. But the key for us is to have a strong diversified portfolio mix, a multi-beverage mix where we create value for shareholders.

And don't forget that this is not just about adding soft drinks. This is around creating a portfolio mix that benefits all of our categories. As we add soft drinks into our beer markets, we see an immediate uplift of the performance of our beer portfolio as well, as you have seen in U.K. Last comment, I know it's a long answer, but it's an important topic. You said capital allocation and capital usage. We are very disciplined around how we use capital. And so if we are deploying any capital in these partnerships, we do that with a strong return in mind.

But we've also said very clearly that we do not have anything on the horizon, the size of Britvic or anything like that. We're very disciplined around the use of capital. If any of these partnerships with, as an example, Pepsi, if they involve capital, it's purely as a replacement for the organic CapEx we would have to do anyway ourselves. So we look at that in a very disciplined fashion around creating returns for our shareholders. Thanks, Ed.

Then the next question comes from Simon Hales from Citi.

My first one. Can I just come back to China and just sort of help me understand exactly what you're building into the guidance for the second half of the year. I think, Ulrica, on your closing comments, you said you didn't expect to see any improvement in the second half. And Jacob, you've talked about the heavy destock we should see in Q3. Is the assumption that we continue to see a sort of minus 6% volume for the second half, obviously skewed to H2? Or is it a minus 3% volume for the second half, i.e., in line with the H1 performance you saw? So just a bit of color on how we think about modeling that.

And then my second question was going back to the Western European performance. Could you talk a little bit about sort of the volume momentum as we exited the quarter and came into July? I'm just trying to understand how much of a weather benefit we've perhaps seen in both the soft drinks and the beer business, given that the whole of Q2 was also impacted by things like Poland and the Easter unwind effect? And just associated with that, can you actually quantify -- I may have missed this, but can you quantify how big the Britvic synergies were in H1 itself? You've given us a full-year guide, but I'm not sure you've given us what you actually delivered in H1.

Simon, I think you actually sneaked in 3 questions. But due to the long relationship with Peter Kondrup, we're going to be allowing it, but no one else should get any good ideas. On China second half, we're not going to give you a specific number in terms of what to put into your model. Well, first of all, as you know, Chongqing is a listed company, and we're not going to sit here and give specific guidance for the second half. We're not even allowed to do that. But we are making it very clear that Ulrica has told you that we are increasing our confidence in our guidance and going to the high end of the previous range. And we're doing that with full open eyes around the fact that the second half will also be soft in China.

And that should give you significant confidence that -- of the strength of the business and the earnings power right now of Carlsberg. So we're very pleased with that. But we are not -- we don't have any heroic assumptions around China in the second half. As you know, Q3 is a big quarter, but Q4 is actually quite a small quarter. And given what we said and what we're seeing also in the competitive landscape and what we're seeing from all of our peers, we think it's going to be a soft second half, which would be a negative number, but we're not going to speculate on the exact size of that number.

But that is already in the guidance, and we do not lift the guidance range randomly. We do that when we have a lot of confidence that we deliver. So as I said earlier, this is a temporary impact. That cyclicality will be out of the numbers again in a couple of quarters and then we move on. So we're not particularly seeing any drama here.

You asked about July and then Western Europe and how much is weather impact. I would love to be able to separate weather impacts from underlying businesses. So weather is an element. Do remember, we're saying that we had a good start to Q3 in Western Europe, and this is despite actually having tough comps from last year. Weather in Western Europe in July last year was also strong. So from that perspective, I think that's the best indication that the portfolio itself is doing well because we're not lapping an easy July, we're actually lapping a tough July.

And despite that, we're quite pleased with what we're seeing. Of course, then you have all the specifics of different markets, that's fine. As I indicated before to -- I think it was Celine, we're not seeing, as an example, Poland suddenly recovering, et cetera. So you have the same trends continuing. But overall, we're quite constructive on the Western European performance. And part of that is also that we see our soft drinks portfolio, which is now the majority of our portfolio. We're seeing that continuing to power ahead.

On the Britvic synergies, we're not going to quantify H1 versus H2 we haven't done that in the guidance, and we're not going to start doing it here. But as you would expect, a lot of the realization happens for it to be in the full-year numbers, a lot of the realization will have had to happen in the beginning of the first half. So therefore, you would expect a bit more in the second half versus first half. That's given the annualization impact of that. So a bit more in the second half than first half, which would be the mathematical conclusion, but we're not going to give you an exact split. It's not a dramatic difference between the 2 halves.

And the next question comes from Sanjeet Aujla from UBS.

I'll stick to 2. Firstly, on -- coming back to Britvic, 18 months into the transaction now, can you just speak a little bit more about the revenue synergy side of things between beer and soft drinks? And I say that in the context of what seems to be your U.K. beer volumes probably slightly declining in Q2? And then just coming back to China. Again, you've spoken about weather weak consumer. Can you touch upon the competitive landscape? And I say that in the context of the largest brewer China Resources, I think, reporting volume growth in H1 of around 2%.

Thanks, Sanjeet. Just starting on the U.K. So if you look at the overall synergies in the U.K. on the revenue side, we're quite happy with what we're seeing. You are right that we saw a bit more pressure on the beer portfolio towards the end of the first half. And I think that's specifically driven by one thing that's happening around, say, the mainstream brands of Carlsberg, which I also alluded to in my initial comments, which is driven by the fact that we've seen the other players go now also reformulating the recipes to a lower ABV and therefore, getting a different excise regime. That has upped the pressure, the competitive pressure around this.

And I think we're just being very careful that we are not just blindly following other people, but making sure that we're also running a profitable business. I shouldn't comment on the behaviors of other competitors, but we are focusing on at least driving a sensible business within that category. If you look at -- outside of that, we're seeing very nice growth in our other beer -- in the other categories within beer and also within the brands. Very nice growth in both 1664, Poretti. Mythos is off to a great start with the sole launch we did with one banner. So very, very pleased with that. We're now going to expand that further to other banners.

And overall, part of that, what we're seeing is that we're seeing the positive impact in off-trade of having the strength of the combined portfolio, which also gives a significant -- a stronger impetus in terms of being able to launch new brands, in terms of getting more shelf space for existing world beer brands, et cetera, et cetera. So no, we're very happy with what we're seeing. I don't think, as an example, we could have done the very successful launch of Mythos pre-summer and into the summer, if it wasn't for the sheer size we now have as a combined multi-beverage company. So happy with that.

And you're also seeing the combination of that leading on the soft drink side to continued growth, taking significant share in a summer where there was a lot of competition around World Cup, et cetera, et cetera. Pepsi Max took more than 1%, both value and volume share. So very pleased with that. So no, I'm not -- I would not say that because there is a significant shift from a couple of players around the lower mainstream segment that, that means that we're not suddenly seeing revenue synergies. We are seeing revenue synergies. We're very pleased with that.

And you can say the off-trade volumes and the overall growth of Britvic is -- Carlsberg Britvic in the U.K. is a testament to that. We're growing faster than our peers in the U.K. in total. Then on China, yes, we're aware of China Resources performance. We could also highlight other players that have worse growth than us in China. But China Resources have done well in recent quarters. No doubt about that. I think they're both there if you look at their exposure where they have their strongholds, but also that portfolio has catered a little bit better to some of the consumer trends recently. So well played to them.

We don't see this as a structural difference as such. We are being hit weather-wise significantly in a couple of our strongholds. And given that we are a smaller player than China Resources, it will just have a more disproportional impact on us. We are not in the same way a full national player like they are. And therefore, we cannot just -- we don't have that diversification. So if a couple of our big strongholds get hit hard by weather, it will, of course, impact our portfolio disproportionately more than it would for someone who is in all cities, in all regions across the market.

So nothing there. Listen, China Resources sees strong growth with the Heineken brand in premium, I think 20% plus, as I recall it. We are with Carlsberg. In China, we are seeing more than 20% growth. So I think we're seeing the same growth in these premium segments. So this is a weather impact that we are quite relaxed around, I have to say.

Then the next question comes from Richard Withagen from Kepler Cheuvreux.

Two questions from me. First of all, yes, a bit more on the U.K. soft drinks side. You still have a very strong performance again for the Pepsi portfolio. So what drivers remain really in 2026? Is it driven more by distribution expansion? Or is it increasing velocity? Or do innovations play a specific role for the portfolio? So that's my first question.

And then the second question is, if you look at group level, the operating expenses declined organically by about 1%. Now we obviously have the Britvic synergies, but how much -- besides this, how much further structural cost opportunity remains, particularly after Britvic, but also some efficiency initiatives that you took in the last couple of years?

Thanks, Richard. Let me talk to soft drinks in the U.K. and then Ulrica can talk to the OpEx. Listen, the growth we're seeing is very broad-based. And it's also driven by the fact that the market is growing, especially off-trade is growing. So soft drinks is a growing category. So that's the starting point. So we don't have to take significant share to grow the soft drinks. It's a growing category. We have been taking share, especially in the important cola segment. Looking at the numbers, if I look at the first half, the Pepsi Max took value share of 1.9% and volume share of 1.1%, which also is a testament to the fact that we are not -- this is not price-led growth. It's actually the contrary.

So we are managing to drive strong value growth as well. If you look across our CSD growth in the U.K., of course, we talked about Pepsi, but we're also seeing a flavored CSD, a good performance for 7UP. We're not super happy with the Tango performance, but we have recently relaunched with the new visual identity and strong ads, and we're quite excited about how that will play out in the second half. And then we had a very successful launch of poppi, and that is now going to be listed at new customers, both on-trade and off-trade. So there, you're going to see distribution expansion.

So there's -- and we're still winning new customers. Recently, we gained Starbucks, which is an important win as well. So there's a lot of good momentum around distribution expansion still within soft drinks and then innovation. So if you look across our major brands within soft drinks, there's innovation going into all of them. Also Pepsi, yes, Pepsi Treats keeps on also innovating. And I think that's a key element as well of the soft drinks portfolio. There is so much innovation going into it, also limited launches, limited editions all the time within brands like Tango, J2O, Robinsons, et cetera. So it's distribution expansion and innovation and then underlying market growth. Ulrica, on the OpEx?

On the OpEx, yes, good observation. And yes, it is absolutely partly driven by the Britvic synergies. But I will also say that it is, as you also mentioned, driven by -- we took some restructuring and some cost programs through in 2023, and they're starting to pay off. The question was, do you -- do we continue? Yes, we do. We will continue to drive that OpEx ratio to stay the same or go down going forward, and that comes from more synergies, as Jacob was mentioning, positive momentum behind the Britvic synergies, more synergies in our multi-beverage markets in general. We continue to drive that there. But also when we look at systems, processes, AI, there's big opportunities to go after as well. So we will continue that delivery and pressure on the OpEx to go down as a percentage of the net revenue.

I would just correct. Ulrica, one thing. I think the cost programs '25 and not '23. Otherwise, it's very long synergies.

Then the next question comes from Gen Cross from BNP Paribas.

A couple of questions from me. The first one is actually on Brazil. I think you commented a return to growth and profitability and cash generation improving there. If I'm not mistaken, I think the CMD a bit less than a year ago, you talked about that business being reviewed. So I just wonder if that review is still ongoing and what the latest is?

And then the second question is on Vietnam. Obviously, volume growth very strong in the first half on the back of easy comps. So I think you commented on market share stabilization. So I just wondered if you could give us a bit more color on that market share development and then also just looking longer term, the potential of adding the Sapporo brand?

Thank you so much. Again, let me speak to Vietnam. I think Ulrica will speak to Brazil. Yes, so a bit of color on Vietnam. So first of all, if you look at it, we have a market that if you look at the official statistics, it's growing mid-single-digit. We have in the first half delivered more than 20% growth. Of course, we had some easier comps from last year where we had a soft start to the year. And then the growth has mainly been driven by Huda and Halida in our stronghold in Central. And then some good growth in the South [indiscernible] in the South from Blanc and Somersby. Our market share has stabilized now.

As you know, we did a significant restructuring of our route to market, where we reorganized our distribution network, our outlet universe because we felt we needed to have a more high-quality and resilient route to market for the future. That work has been done. It's basically done. There is some places where we're still doing some changes, but it's very nice to see that the underlying growth is back. The team is doing very well in terms of also seeing a good growth in number of products sold per outlet, good momentum around the core brands and good brand equity strength, especially around the Huda brand, which is the anchor of our performance in Vietnam.

We're then selectively building out the international premium brands, both Blanc and -- especially Blanc -- 1664 Blanc and Tuborg. But we're making sure that we're doing this in an accretive and responsible way. So the focus of the team is to continue the good momentum they've built over the last now 9 to 12 months. As you know, it was -- the momentum improved already from the middle of last year, but we then had a setback in Q4 due to the significant typhoons in the center of Vietnam. But good growth. I'm very happy to see the team performing there.

Overall, the market itself is constructive. You will have seen that also from a certain major competitor that they're also talking constructively around the underlying market, so the consumer is back in the beer market and that structural growth rate also, of course, helps for all of us. So we're constructive around Vietnam. We expect the second half to also be positive growth in Vietnam. So we'll be capping a good year '26 in Vietnam and are very constructive on the coming years there. Ulrica, do you want to talk to Brazil?

Yes. Gen, I -- you're absolutely right. We did take some steps to improve the financial performance of the business. And we mentioned that as we did it, we exited some of the non-profitable contracts and SKUs and had a big push on cost reductions. So yes, we've gotten to a place where we are now getting a much more profitable entity and cash generating. And we're seeing now a good H1 with mid-single volume growth in H1 with that better profitability and cash flow coming through. At the same time, we are continuing to review the strategic journey and way forward for the business, and we're in the middle of that as we speak.

And I'm being alerted that we have time for one more question.

And the next question comes from Mitch Collett from Deutsche Bank.

I'll stick to 2. Firstly, I know this is probably linked in part to Britvic, but sales and marketing expenses were down 60 basis points as a percentage of sales. Can you give a bit of color on how that's divided between sales expense and also marketing expense? And I guess, are you investing in your brands appropriately? And then can you just give a bit more color on the Sapporo JV and how you think that's going to benefit your businesses in Laos, Vietnam, Cambodia and also the U.K.?

Thanks, Mitch. So let me talk to Sapporo and then Ulrica can talk to the SG&A. So yes, that is -- first of all, we're super excited about it. It's -- as you know, we're now 2 years -- we have 2 years of experience of working with Sapporo in Malaysia, Singapore and Hong Kong, where we have been very positively surprised by the strength of that brand, the ease of which it's been taking share in the combination with what is a very strong route to market from our side. So there's definitely -- it's a premium to super premium brand that has very strong consumer attraction and not just the Japanese provenance, but Sapporo in itself really has some very strong brand equity cues that resonates very well with consumers.

So very happy with that. And that's also what then led to the further conversation because, of course, we -- both parties could see that there was something very longer term significant here in the way that we were operating together. So it's a natural extension for us to increase this partnership to more markets. We do expect over the coming years that we will both be able to introduce through our distribution channels the Sapporo brand in a meaningful way. And it will be a nice growth driver in the premium segment for us in those markets.

We're going to build it in the right way. We are not in a hurry in terms of seeing significant millions of hectoliters of sales over the short term, but it's really around building the brand equity correctly because this is such a strong premium brand. And if you build it correctly, you're going to have a significant growth journey in front of you. So we don't have any reason to believe that we shouldn't be able to do the same journey as we've done in the Malaysia, Singapore, Hong Kong and the other Asian markets based on all the consumer work we've done. And then bringing into the U.K. as well, we think Sapporo in Europe can have quite a -- can play a significant impact longer term for the premium portfolio.

Japanese provenance is also really something that has strong traction. It's had a level of traction for a while, but we're seeing an accelerating traction for that. And the Sapporo brand, we think there is so much more potential in the U.K. than what has been realized so far. We will now be exclusive long term, and therefore, we can also build it in the right way in the U.K. in a market where the consumer is also very focused on world beer brands. We think now with the combined strength of the new Carlsberg business, we also have a much stronger machine behind building that brand.

And of course, it's no secret that if we see that success in the U.K., you should not be surprised to start seeing Sapporo in more European markets. But for now, let's see -- let's get U.K. off to a good start. So a strong addition to the premium portfolio, especially driving net revenue per hectoliter and then volume growth will come gradually, which is something we're looking forward to. Ulrica, do you want to talk to Mitch's question on SG&A?

Yes. I think, Mitch, it was sales and marketing you referred to. And yes, you're absolutely right. There are some of the effectiveness coming through from Britvic into those lines. So you will see some improvements in terms of how we spend on those 2 lines within that. But I will also say that there is a bit of phasing here between half 1 and half 2. So it's not all the trend we have still not spent July and August when you look at the half 1 numbers. So there is a little bit of phasing in it as well and I think that's as far as we go on that.

All right. I think that basically concludes the final question of today. Thanks for listening in, and thank you for all of your questions. We're going to see a lot of you over the coming days and weeks. So looking forward to that, of course. And until then, have a nice day.

Thank you.

Ladies and gentlemen, welcome to the Carlsberg Q1 2026 Trading Statement Conference Call. I am Hilly, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jacob Aarup-Andersen, CEO. Please go ahead.

Thank you very much, operator, and good morning, everyone, and welcome to Carlsberg's Q1 2026 Conference Call. As said, my name is Jacob Aarup-Andersen, and I have with me, as always, our CFO, Ulrica Fearn; and Vice President, Investor Relations, Peter Kondrup. Let me begin by summarizing the key headlines for the quarter. First of all, we delivered a good start to the year. Our growth categories delivered strong results. Our Asia region returned to solid growth, and we confirm our earnings guidance for the year.

Finally, last week, we reached another milestone with PepsiCo when we announced the takeover of the Pepsi franchises in Denmark, Finland and the Baltics from 1st of January 2029. Now let's turn to Slide 3 and the key Q1 figures for the group. As said, we had a good start to the year. We delivered 2.8% organic volume growth, and we delivered growth in all 3 regions, and that was supported by an aggregate growth of 7% for our growth categories.

All 3 regions contributed to the 1% improvement in revenue per hectoliter. Organic revenue grew by 3.6%. Reported growth was 3%, as the positive acquisition impact related to Britvic, which was 2.7%, was offset by currencies, in particular, the Chinese, Indian and British currencies. Let's go to Slide 4 and an update on our growth categories and, of course, our international brands. Premium beer volumes grew organically by 3% with Premium Carlsberg and Tuborg being particularly strong contributors.

We saw good growth in all 3 regions with particularly strong growth in the Nordics, U.K., the Baltics and India. Our soft drinks portfolio grew strongly by 10%, driven by really good growth across most markets, including the U.K., Nordics, Switzerland, Laos and of course, Kazakhstan, where we are ramping up the Pepsi business. Excluding Kazakhstan, soft drinks still grew by an impressive 6%.

Volume growth in the quarter was impacted by the SKU rationalization and exit of unprofitable contracts in France and Brazil in the latter part of Q1 and Q2 last year when we took over the Britvic business. Alcohol-free brews grew by double digit in Western Europe. Growth was broad-based across markets with Poland standing out, delivering very strong performance. We also saw good growth in most markets in Central and Eastern Europe, including in Ukraine.

Total alcohol-free brew volumes grew by 7%. In Beyond Beer, we saw solid growth for Garage, but that was offset by Somersby, which declined in markets such as Poland, Laos and certain export and licensed markets. The Carlsberg brand saw volume growth of 10%, driven by very good growth in premium markets such as China and India and the mainstream U.K. market. Tuborg grew by 4%, and this was supported by strong growth in markets such as China, India and Nepal. 1664 Blanc grew by 2%. That was driven by good growth across many markets, including for the alcohol-free version of the brand, partly offset by lower volumes in China.

Let's take Slide 5 and a few words on the expanded partnership with Pepsi, which we announced last week. From the 1st of Jan 2029, we're going to take over the bottling rights in Denmark, including the German border trade, Finland and the 3 Baltic states. We're very excited about the agreement. It makes sense on so many levels when you look at our partnership and how it has evolved over the years.

Carlsberg is already PepsiCo's largest bottler in Europe. This long-standing strategic partnership spans more than 25 years of successful bottling partnerships in markets across Europe, Central Asia and Southeast Asia. The new agreement makes Carlsberg the sole Pepsi bottler in the Nordics and Baltics, and it further solidifies the partnership with PepsiCo. As part of the agreement, we've also extended the contracts in Norway and Sweden, giving us very long contracts in all 4 Nordic and the 3 Baltic markets.

Expanding our partnership with PepsiCo allows us to further benefit from its strong portfolio and the robust performance of the Pepsi brand, not least Pepsi Max within the no Sugar segment. We believe we can further accelerate the growth of the Pepsi portfolio via our strong route to market, especially in the on-trade channel. We also see long-term growth prospects and value creation opportunities from launching more products and future innovations from the Pepsi portfolio.

Moreover, having one Nordic-Baltic Pepsi cluster will allow us to explore opportunities for cross-border synergies and scale benefits within areas such as production, new product launches, et cetera. Before moving on, I want to make it very clear that we've had a very good partnership with Coca-Cola, and we will remain a committed Coca-Cola bottler until expiration of the contract at the end of 2028. And now Slide 6 and our new ESG program, which we launched in early March.

The new program is called Brewing Tomorrow, and it strengthens our commitment to sustainability. Built around 4 pillars, which is cutting carbon, protecting nature, empowering people and inspiring choice, Brewing Tomorrow provides a simple and actionable road map. We raised our climate ambition by introducing updated absolute Scope 3 carbon reduction targets in line with the requirements of the science-based targets initiative.

We're also deepening our commitments to regenerative agriculture and recycled materials. And because of our increased exposure to soft drinks, we've added new sugar reduction targets. The program also introduces a new target focused on employees' experience of inclusion, while maintaining the target on women in senior leadership position. Brewing Tomorrow builds on our learnings from the past and decades of reducing our impacts, while updating our focus for the future and supporting business growth.

As with the previous ESG program, it's embedded in how we run our operations, how we engage across our value chain and how we develop our people and create more choice across our expanding portfolio. Let's go to Slide 7. Coinciding with the launch of Brewing Tomorrow, we launched our first ever consolidated climate transition plan. This marks a milestone in our journey towards a low-carbon future. Building on nearly a decade of progress, the plan lays out our decarbonization road map towards 2032, describing the key levers for reducing emissions across agriculture, processing, own operations, packaging, transportation and distribution and cooling.

Our emission reduction targets are approved by the science-based targets initiative, and it raises our climate ambition by introducing updated absolute Scope 3 reduction targets. While we recognize that global macroeconomic conditions and the pace of supplier decarbonization, which is often outside of our direct influence that may affect how we quickly progress towards our goals, our focus remains clear. We want to deliver on our climate commitment to secure a sustainable future for our business, our people, our consumers and for society as a whole.

If you want to know more, the full plan is available on carlsberggroup.com. And now over to Ulrica, who will go through the regions and the outlook.

Thank you, Jacob, and good morning, everyone. Please go to Slide 8 and for Western Europe. Before we go into details here, remember that Q1 is the smallest quarter in this region. But nonetheless, we had a solid start to the year and delivered 1.2% organic volume growth, driven by 5% aggregate organic growth for our growth categories.

And in Western Europe, these account for around 70% of total volumes. And the growth was supported by the earlier sell-in to the Easter than last year. Reported total volume growth was 6.6%, and this was due to the positive acquisition impact from Britvic of 5.4%. Organic revenue growth was 1.5% and reported revenue growth was 5.6%, and this as the Britvic acquisition contributed by 4.6% and partly offset by small currency impact by minus 0.5%.

Revenue per hectoliter grew slightly, positively impacted by price increases and mix in beer, partly countered by category mix, and this is due to mid-single-digit growth in soft drinks. Looking at the markets in the region. Our U.K. business continued the good momentum from last year, delivering strong growth ahead of the market in both beer and soft drinks. And the latter was supported by good results for the Pepsi portfolio, while the growth in beer was driven by very positive figures for Carlsberg, 1664 and Poretti.

Total volumes grew by mid-single digits, also supported by the sell-in to Easter, which was earlier than last year. The Nordics saw high single-digit volume growth, which was supported by the sell-in to Easter. Our growth categories, including soft drinks, premium beer and alcohol-free brews, saw very good growth rates and mainstream beer also saw positive growth rates in all markets except Finland. So in a slightly growing beer market in France, we strengthened our beer market share, driven by our premium brands.

Volume in Teisseire, the former Britvic business in France, were down significantly due to last year's portfolio optimization actions and exits from unprofitable customer contracts. Our business in Switzerland was, in the beginning of Q1, impacted by the customer conflict in Q4 last year. On-trade remained under pressure, but our business caught up and total volumes for the quarter grew by low single digits, mainly driven by the local Feldschlosschen and Valaisanne brand. And we also saw continued positive momentum for Pepsi.

The Polish beer market was weak in Q1, and that was impacted by cold weather. In addition, our volumes were impacted by price increases ahead of the market and stocking prior to the implementation of a deposit return system in December. We were encouraged to see good results for our growth categories, albeit this was not enough to offset lower volumes for mainstream beer.

So now let's go to Slide 9 and Asia. And here, we saw solid organic volume growth of 3.4%, driven by 6% growth for our growth categories, which account for more than 40% of volumes, but also positive development of mainstream volumes. Revenue per hectoliter improved by 1%, resulting in organic revenue growth of 4.4%. And due to a negative currency impact of minus 6.3%, reported revenue development was minus 1.9%. The revenue per hectoliter improvement was driven by positive category mix and price increases and partly offset by country mix. And we did not see any impact from the conflict in the Middle East in the quarter.

In China, we continue to grow in the big cities, driven by the premium brands such as Carlsberg, Tuborg and Wind Flower Snow Moon and also Jing A, while mainstream volumes in some of our Western strongholds were under pressure, impacted by the soft macro economy and tough competition. Our premium volumes grew 3%, and we also saw good initial traction of a local soft drinks launch. Total volumes and revenue per hectoliter were up slightly, the latter mainly due to a positive product mix.

In Laos, our volumes grew by high single digits, supported by market growth and stabilization of the economy in January and February and sell-in in March ahead of the Pi Mai celebrations in April despite the increasing fuel shortage. Growth was particularly strong for soft drinks being in the mid-teens and volume growth for beer was low single digits. Our business in Vietnam delivered very strong growth on the back of easy comps and good momentum during the festive season.

The growth was, in particular, supported by very strong growth of the local Huda brand on the back of strong market demand in its stronghold in the central part of the country. And we saw very good growth for 1664 Blanc, supported by good performance in the modern channel during the festive season. And now Slide 10 and CEEI, which delivered a set of strong figures for the first quarter. Volumes grew officially -- organically by 4.6% with 14% aggregate growth posted for our growth categories.

Revenue per hectoliter improved by 3%, leading to organic revenue growth of 8.1%. Reported revenue growth was 3.1% due to the depreciation of the currencies in India, Ukraine and Nepal. Revenue per hectoliter was positively impacted by price increases and solid growth of premium beer and alcohol-free brews, partly offset by category mix due to the strong growth of soft drinks in Kazakhstan. And we continued our strong performance in India, seeing double-digit volume growth, supported by strong growth for Tuborg Strong and Carlsberg Elephant.

And the business delivered solid revenue per hectoliter growth due to premium growth and a positive state mix. And in February, we said that we are exploring different options for increasing shareholder value, which may potentially include an IPO of our business in India, but no final decision has been made, and this remains the situation. Our business in Nepal also saw strong volume growth with the local Gorkha brand and Tuborg being the main drivers.

We did not see any impact from the conflict in the Middle East in India and Nepal in Q1. Our business in Ukraine continued to be impacted by the war, leading to double-digit volume decline and the volume decline decreased towards the end of the quarter, as the intensity of large-scale attacks decreased. In Kazakhstan, the growth was around 70% due to the ramp-up of the Pepsi business in Kazakhstan and Kyrgyzstan. The team in Kazakhstan is doing a fantastic job building our Pepsi business, and we have achieved incredible results in just 6 months. And we're looking forward to the peak season in Q2 and Q3 and also finalizing the construction of our facility later this year.

Our volumes in Brazil declined due to last year's SKU rationalization and business optimization. And volume in export and license businesses declined slightly, and this was mainly due to lower Tuborg volumes in licensed markets. And we continue to build new businesses and added a number of new license markets, both in Central Europe and Africa.

Now please go to Slide 11 and a few comments on the current situation in the Middle East. To date, we have not seen any significant impact from the conflict on consumer sentiment or on our business. That said, we are monitoring the situation closely. So let me provide some context on how we're managing the situation and preparing the business, should the conflict be prolonged and begin to impact consumers and/or our operations. So we have considerable experience in successfully mitigating negative impacts from uncertainty and substantial changes in the operating environment in a fast and disciplined manner. Examples include COVID-19 and the war in Ukraine and the subsequent inflationary and commodity shocks.

And these experience have strengthened our processes and our preparedness for managing unforeseen large-scale disruptions. Our focus is centered around 3 areas: consumer behavior, commodity development and potential supply chain disruptions. And with respect to consumer behavior, we have prepared a range of commercial initiatives that can be deployed should we see meaningful changes in the consumer dynamics across our markets.

And those initiatives are centered around price and pack initiatives as well as certain brand initiatives. On commodities, the situation remains highly volatile, and we follow our usual practices for hedging with hedges in place for 2026 and into 2027 for key commodities, such as aluminum, barley, sugar and energy. We are a bit more opportunistic in hedging than usual and try to take advantages when the market prices dip. And as you know, our policy is to offset cost increases through increasing our revenue per hectoliter by utilizing the full value management toolbox, including levers such as prices, promo and pack sizes, et cetera.

On supply chain disruption, we have mapped our key risk exposures, including the availability of critical raw and packaging materials and energy, and we have mitigation plans in place such as alternative supplier and energy sources, which can be activated, if required. So overall, we're in a good place and believe that we are well prepared. However, if the conflict were to continue for an extended period, it would inevitably make mitigation increasingly challenging over time.

Now please go to Slide 12 and the earnings outlook for the year. We had a good start of the year, but of course, we still have the important summer months ahead of us. We maintain our full year expectation of flattish cost of sales per hectoliter for the group, albeit with variations between regions and markets. We confirm our earnings expectations for 2026 of an organic operating profit MPM growth of 2% to 6%, and we started the year with good momentum across most markets, having good commercial plans in place. We maintain tight cost discipline and the Britvic synergies are coming through.

Based on yesterday's FX rate, we assume a translation impact on operating profit of around 0 for 2026 compared to the previous expectations of minus DKK 100 million. Other relevant assumptions are unchanged. We expect financial expenses, excluding FX, of around DKK 2.2 billion, reported effective tax rate of around 23% and CapEx of around DKK 6 billion to DKK 7 billion. And with that, back to you, Jacob.

Thank you, Ulrica, and let's turn to Slide 13. Before opening up for Q&A, let me just summarize the first quarter. First of all, as Ulrica also evidenced here, we delivered a good start to the year. Our growth categories delivered strong results across the board, and our Asia region returned to solid growth. That also means we can firmly confirm our earnings guidance for the year.

Finally, last week, we reached another milestone with PepsiCo when we announced the takeover of the Pepsi franchises in Denmark, Finland and the Baltic states from the 1st of Jan 2029. On that happy note, let's now begin the Q&A session. As usual, we will limit the number of questions to 2 per person to ensure that as many as possible get a chance to get through. After your questions, you are, of course, very welcome to join the queue again. With that, handing over to you, operator.

[Operator Instructions] The first question comes from the line of Andrea Pistacchi from Bank of America.

So I have 2 questions. The first one is this. I mean, there's been a lot of discussion in recent weeks about potential higher COGS inflation next year and the uncertain environment in Europe. Now you commented a bit on this in your last slide. I just wanted to ask you how you feel about your ability to take enough price, particularly in Europe? How do you assess pricing power, say, in soft drinks versus beer and differences in your ability to take price across different markets in Europe, potentially, I don't know, easier in Scandinavia, for example.

The second question is a bit about the phasing and technical effects impacting Q1. Some were positive like the Easter timing, first-time inclusion of Pepsi Kazakhstan, but also, I think, some negatives like the phasing you alluded to in Poland or discontinuation of some of Britvic's businesses. Where do you reckon all of this nets out? What do you think is the sort of underlying volume or sales growth for Q1? And how should we think about phasing effects impacting Q2?

Andrea, thank you so much. So on your detailed question here around higher COGS inflation in next year. So of course, I think it's a given, I think, for all companies that if you extrapolate the current spot prices and you expect those to continue throughout '27 as well, it's, of course, higher prices than what everyone has on their current hedges. That's a mathematically given result.

So you are right that if that continues, it will have a cost impact on a business like ours. So Ulrica just laid out very nicely how we're fully hedged in 2026 and of course, monitoring the situation. If this continues in '27, there will be extra cost to cover. I think I would refer back to what Ulrica said, which is very clearly that we have a very, very well-drilled value management playbook that we have utilized again and again, and you've seen that year in, year out, how we manage these types of external shocks, and we deliver earnings growth to our shareholders every single year.

We are confident that, that playbook is very well drilled for this situation as well. It involves everything around price, pack, promo, as you would expect. You asked specifically in that context around price increases. And you are fully aware, I know that we cannot be specific around price increases on a call like this. And unfortunately, I cannot go into the details you asked around different countries versus each other and different categories versus each other.

What I can say with confidence is that the Carlsberg way has always been that if we see additional costs coming through, we will ensure that we utilize value management to cover that cost and protect our earnings. One of those tools is, of course, price increases. That has been the case all along, and it continues to be the case. We also expect that there will be a clear understanding, if we see that scenario you referred to, if that continues to play out. There will also be a clear understanding by everyone, all participants in the value chain that these costs are coming through and they need to be addressed.

So that's our expectation. We -- let's see, we are sitting here end of April. So I think it's too early to have a firm view on where commodity prices are in a year's time. But of course, I can guarantee you that we are monitoring on a daily basis, and we have all the tools in the toolbox to ensure we protect our profitability. Ulrica, over to you.

Yes. So the question around phasing in many ups and downs, and you referred to Easter in Poland and also the couple of comments I made around Brazil and our French business from Britvic. There are many ups and downs. And all I can say is that, of course, Easter is a movement between March and April. And I can also comment on the Britvic businesses in Brazil and France. They did have an impact in Q1, and that impact will be less in Q2, as we took the action of taking away unprofitable volume growth -- volumes in both Brazil and Teisseire in Q1.

That -- those volumes were still there in Q1. So we saw a negative year-on-year growth from them, and that will not be there in Q2, when the actions were already taken. But all in all, I can say that it was good results this quarter, and we're looking into Q2 where we're seeing growth as well.

The next question comes from the line of Olivier Nicolai from GS.

Two questions, please. First of all, can you give a bit more details on the current trends you see in Asia? I mean China was back to growth in Q1. Do you expect sustainable growth for the market this year? And then on Vietnam, Laos and India, I know it's not in Asia for you, but do you see any impact on packaging supply due to the Middle East conflict?

And then obviously, going back to last week's announcement on the expansion of your presence for Pepsi in the Nordics and Baltics. Could you perhaps go through a little bit more details on the synergies you will get from being the main Pepsi bottler for the whole region? And would you effectively expect the EBIT contribution from the new Pepsi license to be higher than what you get from Coca-Cola today, once you take into account the synergies?

Thank you, Olivier. Let me take both of those. Well, you're starting in Asia, so let's start there. And thanks for the recognition that India is not in Carlsberg Asia. We do recognize it's probably in Asia in real world. If we look at it, it's been a good start for all the countries you mentioned. So it's great to see a broad-based growth in Q1 across our Asian markets, including India and Nepal, in the CEEI region.

And if we take them -- you asked about China. So China, yes, China started in growth -- not significant growth, but slight growth in the first quarter. When we look at the year, we do expect low single-digit growth in China. We expect a relatively stable market. We're not seeing the consumer behavior change significantly in China, but what we saw a relatively stable Q1 from a market perspective. And our current forecast is that, that continues for the rest of the year, which also means that we should be up low single-digit growth in China.

On Vietnam, strong recovery. You know we worked incredibly hard in the second half of last year on our distribution and route to market and refocused also some of our brand strategies there. We're seeing a good result of that, especially the Huda brand doing incredibly well in the Central region. We're growing in Q1 by more than 30%. And when we look at the rest of the year, we expect continued growth in Vietnam, not those types of growth rates, but we expect positive growth for the year to go in Vietnam as well.

On Laos, the same. I think we sat here a quarter ago and told you that we expected Vietnam and Laos to return to growth in '26. You saw it in Q1. We also expect Laos to be delivering growth for the rest of the year. Both of them recovering after a tougher '25 for different reasons, but both of them are clearly executing on their plans. And also Laos, we're also seeing a stabilizing consumer helping out.

So generally, good developments across these key Asian markets. And you asked about India. Listen, India and Nepal, those 2 markets are both delivering double-digit growth in the quarter. And as we look at the rest of the year, we are, of course, restricted on how we talk about India, given the potential IPO we are considering. But generally, we see good developments in these markets.

The question specifically was then on packaging, you said in India. We have -- on supply chain, I think the only place where we have had to do extra work around suppliers, et cetera, has been in India and Nepal, where some suppliers have been under pressure in the short term. We have swiftly operated around that given our global supply chain organization. So we do not have a concern around supply chain constraints in India and Nepal, as we have secured alternative suppliers and are also working very well with our local Indian and Nepalese supply chain, who have also worked up different ways of securing their energy supplies.

So overall, supply chain constraints are not -- that's not a limiting factor for our growth in these markets. Then your other question was on the Pepsi announcement last week. So listen, we're super excited about that. And if you look at it, what it gives us is that -- we believe that the combined business will drive higher growth rates, as we kick off from '29 and onwards. We believe we can drive higher growth. We can do that because we have a stronger route to market and especially in on-trade.

It's clearly more synergistic for us and for Pepsi. So we will create one system across the Nordic region and the Baltics. That one system has significant synergies over time, both in terms of production, distribution, sales, et cetera. And it gives us a different level of flexibility around how we manage and build scale. So we see some clear synergies and also an ability to now be one system around product innovation across markets.

So I'm not going to comment on EBIT. I think that would be sitting here commenting on EBIT 3, 4 years out, that would be a little bit too aggressive. But overall, we're not doing this because we want to do something that's dilutive to us, of course. This is something that truly creates value for our shareholders. It also really consolidates and increases the partnership with Pepsi, which we also think will deliver more value-enhancing partnerships in other markets over the next couple of years.

We now have a question from the line of Simon Hales from Citi.

So a couple then. So can I just start on Kazakhstan and the 70% growth you saw in Q1 there? Clearly, it contributed about 4 percentage points to your group soft drinks volumes in the quarter. How do we think about the performance of that business, as we head into Q2 and Q3? I think, obviously, seasonality-wise, they are more important quarters. So should we expect a step-up in the contribution of growth from Kazakhstan going forward? And are we still on track to open the plant on the ground in Q3? That was my first sort of question.

And then going back to China, I mean, could you sort of just provide a bit more color on what gives you the confidence in that move up towards low single-digit growth, as we look forward over the next few quarters and think about the full year trend given the difference in performance you're seeing between premium and mainstream on the ground there?

Yes. Ulrica, do you want to start on Kazakhstan?

Yes. I will start with Kazakhstan. Yes, as you said, we saw clearly good momentum in Kazakhstan in Q1 and a lot of it was, of course, the sell-in also of the soft drinks portfolio. Your question around how that will phase into the next quarter, we are, of course, standing in front of the two big quarters for Kazakhstan, Q2 and Q3. So the volumes will be a little bit bigger in those 2 quarters. So overall, I think, it will be a little bit bigger overall as the impact. However, I will also say that those are also 2 quarters that are bigger for the rest of the portfolio. So along the lines of what we've been seeing now, but maybe a little bit higher.

And in terms of the production facilities and where we are, we are still, as I said before, very much up and pushing to get our facility up and running by the end of Q3 2026 and then start ramping up throughout the rest of the year. And that's what we are still planning to do and are pushing to do and see the main scenarios absolutely that, that will happen.

Simon, let me then talk to China. Thanks, Ulrica. So a little bit more color on China, of course. So you're right, when we've seen over the first quarter -- and which is a continuation of what we've seen for a number of quarters is that premium -- we continue to see good premium growth for the business. You, of course, know fully the fabric of our business, this bifurcation between big cities and strongholds. And as we look at the performance again this quarter, we're seeing big cities do well. We see 4% growth in big cities. So basically mid-single digit.

And then we see strongholds being down a little bit, so single digit, a little bit more than 1%. And that mix is along the lines of what we've seen over the last couple of quarters. What we're seeing is -- for the rest of the year, we see a continuation of strong growth in e-commerce, in O2O and in convenience and off-trade, which is where we have continued growth vectors given our -- the positioning of our portfolio.

At the same time, we're also seeing that the new formats continue to drive significant growth. I look at the 1-liter cans in our numbers, they continue to grow very, very fast. We're adding more lines to the business. And if you look at the -- our premium brands, I look at a Carlsberg growing by more than 20%. I look at a Tuborg with strong growth and WuSu with good growth. So all of that continuing good growth in the market.

So there is growth to be had in this market, despite a relatively constrained consumer. What we expect for the rest of the year is the big cities will continue to deliver this type of growth, mid-single digit, probably a little bit better than at the moment. And then it's our strongholds, which have been under pressure for a little while because of broader macro economy, but also some tough competition in some of the big cities in our strongholds. And of course, we're not sitting on our hands.

So we're also looking at very hard and working very hard with our route to market, our distribution and also our more tactical initiatives around some of these stronghold cities to make sure that we regain momentum. So overall, I would expect as we look through the year that our strongholds pick up the performance a bit, while the big cities continue their good growth.

The next question comes from Soren Samsoe from SEB.

Yes. So just to -- if you zoom in a little bit on the soft drink business in Q1, maybe you can just break down how much of the growth is coming from your Pepsi franchise and how much is coming from Coca-Cola? And also maybe sort of give an indication of how much the non-sugar part of the portfolio is growing and the part with sugar, how much is that growing?

Soren, thanks for the question. If you -- unfortunately we cannot comment on the difference between Pepsi and Coke performance because for contractual reasons, but we are growing in both -- with both. So when you look at the numbers here, there is growth in both the Coke portfolio and the Pepsi portfolio in Q1. Of course, as you know, at this stage, the Pepsi portfolio is significantly bigger than the Coke portfolio after the addition of Britvic, so U.K. and Ireland and Kazakhstan, et cetera.

But the Coke portfolio in the Danish and Finnish market is also providing growth in Q1. But I can't give you the specific numbers. When you look at sugar, non-sugar, it's going to be somewhat the same answer. We don't give the split for competitive reasons. But what we -- it's very clear is that the nonsugar portfolio is growing significantly faster than the sugar portfolio. So we're seeing significant growth in non-sugar versus sugar and of course, on a like-for-like basis.

And of course, that's also one of the reasons why we continue to expand our market presence with especially Pepsi Max, which is a very strong winning formula in markets. And that's also -- when you look at the conversations we're having around potential additional markets in the coming years, it's especially that Pepsi Max proposition that is one of the key value drivers as well.

Adding in Kazakhstan -- the reason why I said like-for-like, adding in Kazakhstan, Kazakhstan is compared to the Western markets we have. Kazakhstan is higher -- has a higher starting point on sugar, and they are earlier in the journey on moving towards nonsugar. And that, by the way, we see as a great growth opportunity in Kazakhstan as well. So sorry about not being able to give you concrete numbers because we would breach contract, but I can -- hopefully, the direction helps you a little bit.

Yes. Maybe I can just throw in one more question, which is if you can talk a little bit about the opportunities it will give you to have the Pepsi products in the portfolio in these 5 new countries.

Yes, yes, happy to. Peter is allowing another question because the other one was sort of one question. So we will go with it. No, but if you look at it, first of all, of course, we are in no way diminishing the Coke portfolio we have in Denmark and Finland. So it's a good portfolio. So we're not saying that the Pepsi portfolio introduces many new categories or anything like that. But we do believe that we have a very strong proven model around how we work with the Pepsi brands across markets.

And we also have a very strong innovation model with Pepsi, which is especially one of the key advantages when we look at product portfolio going forward. First of all, we think Pepsi Max has a very strong momentum also in the 2 markets you're talking about. It's an underlying structural momentum, which is less driven by -- which is more driven by consumer preference on longer term. But the other element is that we see the partnership we have with Pepsi in a number of markets, and of course, especially post the U.K. entering our portfolio.

We see a lot of innovation -- collaborations, a lot of innovations around future portfolio that we can then extend to these markets as well, which can give us a competitive advantage. I think the Pepsi portfolio is moving in very exciting ways at the moment. There's a lot of exciting innovations coming through in the coming years. And part of them are also innovations that we are working with Pepsi on and that makes us excited.

Much more focus also on adding categories -- into categories of -- especially in the functional area where we see a lot of growth. You saw us adding for the first market outside of the U.S. We were the first ones to add poppi in the U.K., which has so far been off to a great start in the U.K. The poppi, of course, is truly functional with prebiotic soft drinks. And I think poppi is a great example of some of the innovation that will be coming through in the coming years.

The next question comes from the line of Edward Mundy from Jefferies.

So 2 questions, please. The first is coming back to the Middle East. I appreciate that you haven't seen a change of behavior in Q1 in any of your markets. But since the end of the quarter, which markets are you monitoring most closely? And has there been any evolution in that? I mean as part of that same question, I appreciate your key guidance, 2% to 6%, is unchanged. But as part of that, you're looking at flattish cost of sales per hectoliter. I appreciate you're well hedged, but clearly, there are some conversion costs within your COGS. Is that sort of still broadly achievable to get to flattish COGS per hectoliter, given your hedging and supply chain efficiencies? That's my first question.

And then my second question is just philosophically, I'd love to sort of pick your brains on sort of how you're thinking about the 4% to 6% medium-term revenue. And it's pretty clear that your growth categories, premium soft drinks, AFBs and beyond are flying, growing plus 7%, and that's roughly half your business. But the other sort of nongrowth categories. Is there an opportunity to crank those up a little bit, innovation, I mean, multi-bev? How are you thinking philosophically about sort of the balance of getting to that 4% to 6% either through doing more with your growth or bringing up the nongrowth?

Thank you so much, Ed. I think Ulrica will start, and then I will be philosophical with you afterwards.

We will start with the Middle East conflict. Yes, as you heard, Ed, we have -- and as you mentioned as well, we have not seen any material impact on consumer behavior in the regions. Jacob mentioned a little bit of action we took around India and Nepal around supply chain scenarios, which we've now got under control. And in terms of areas that we're looking at, we're, of course, continuing across the whole world, understanding what happens as this goes on.

But of course, Asia is one that we're looking very closely at making sure that, that is also continuing to run. But we have mapped the different scenarios. We've understood where the risks lie. We have strong processes in place to ensure that we do have the transparency to see when things happen and then we can take action quickly, the same way as we did with COVID and the war in Ukraine, as both of those have unfortunately set us up in a good way in this scenario to make sure that we act quickly, should something come up. But that's how we're addressing it.

And maybe then linked back to your flattish cost of sales hectoliter comment. As I said, we have seen minimal supply chain disruption and -- so far. But of course, looking at our commodities are being very volatile at the moment and moving -- specifically aluminum and energy are moving up, but we are well hedged in 2026. And we do, of course, also, as we always do, take a lot of action to make sure that the impact remains as low as it can be.

And by taking all the actions we do around supply chain efficiencies, driving efficiencies through the breweries. But overall, there is a pressure on the way up, but we're confident we can hit our flattish cost of sales per hectoliter when we talk about that specifically. I should say, though as well that generally, overall costs are going up, and we will also make sure that we use our full armory around, also Jacob mentioned it earlier on our value management actions as well when it comes to making sure we've got the right net revenue per hectoliter in this environment. So we'll use the full range of pack, price, et cetera, to make sure that we mitigate on that line as well.

Thanks, Ulrica. Just echoing what Ulrica says, you're hearing a confident team because we know exactly what the playbook is. And we've unfortunately had to play this playbook a number of years in a row now, given the external environment. Just on your philosophical question of the 4% to 6%, I think you're spot on, Ed, around the fact that we are really seeing the growth categories powering ahead.

As you also know, it's now more than half of our business. And seeing these growth rates, it's very nice to see. And we do expect them to continue to grow nicely we -- for the coming years. We don't see any reason why they shouldn't. Of course, quarters can be quarters, and you're probably not going to deliver 10% soft drinks growth every quarter, but we do expect continued good growth. And that leaves the philosophical question around the other part of the business being the more mainstream beer business.

And actually, just a data point because I think the depth of -- the news of the depth of Western European beer is sometimes a little bit exaggerated. We look at Western Europe and we take out Poland, which for all players has been a very, very tough market, of course, for all the reasons we all know. If you take out Poland, our Western European beer business grows by 2.5% in the quarter, and that's the mainstream beer business.

And of course, we are fully aware there's an Easter impact in there. But it's just to say that Western European beer is a category that still has real potential in it. What we're doing at the moment is -- and we talked about that at the Capital Markets Day as well, we have a significant amount of work going into what we call reimagine beer in Carlsberg. I know our competitors have similar types of programs because we're all working incredibly hard on innovations around the core beer category. We think there's a lot of value to be had, and we also believe that we can bring beer back to -- core beer back to growth.

Some of it will be beer being -- mainstream beer volumes being converted into premium and alcohol-free and functional types of alcohol products, et cetera, but that's completely fine. But we don't buy into the notion that the beer -- the mainstream beer category is just a category in some type of terminal decline. It's definitely not and you saw it also here in Q1. So I think there's a lot of innovation happening in the industry, and there's a lot of innovation coming out of us as well.

And combine that with all the work on the growth categories, I think that all supports quite a healthy growth picture for the coming years. You saw a good Q1. And when we look across the rest of the year, we expect that we can continue to grow volumes even in an environment with the uncertainty from the Middle East.

And just to follow up on mainstream beer. Do you feel that the multi-bev model, given your multi-bev in lots of markets, does that give you a bit of an edge to sort of provide a boost to that mainstream beer -- a bit more ballast to mainstream beer as you try and kickstart that?

Yes. So -- and before I answer, Peter is signaling you owe him a beer now because this is your third question. But the question is very, very spot on because what we do see is every market where we have a full multi-bev platform, we are not just driving good growth in those new multi-bev categories, we are also enhancing the value of our beer business. This creates true moats around our beer business, and it improves the beer performance.

Why? Because our portfolio becomes significantly more relevant to our customers, and in the end, that means it becomes more relevant to the consumer. So we get better listings. We have a stronger and more important scale, when we discuss listings with our major retail customers, et cetera, et cetera. So it is -- multi-bev is not just around adding growth categories, it's also around enhancing the value of our beer business.

We now have a question from the line of Richard Withagen from Kepler Cheuvreux.

Two questions from me as well, please. First of all, on Vietnam, I mean, it's good to see you back to growth and the growth outlook you gave for the rest of the year, Jacob. But it's been volatile in the last few years. So what are your -- what are the main strategic initiatives you're deploying to make the growth less volatile in Vietnam?

And then the other question is on PepsiCo. On the new contracts, what are the implications for the multi-beverage business model in the Nordics markets -- in the new Nordic markets for you, as you need to convince your customers to swap the Coke portfolio for the Pepsi portfolio. And the Pepsi portfolio is probably a little bit less diversified than the Coke portfolio. So your thoughts on this, please?

Thanks, Richard. Happy to. So let me just talk to the 2. So on Vietnam, you're spot on. It's been -- it's definitely been a volatile both market, but also performance over the last 9 to 12 months from our business. And when you look at it, first of all, of course, the overall market first went through strong growth for a decade, then a couple of very tough years also as new legislation came in at the same time, as you saw an economic downturn. So you had both the drink driving legislation at the same time as you had the macroeconomic downturn. And then we've seen growth return to the market now as things have stabilized.

In that period, we've grown a lot. And then last year, we had a significant setback, especially in the first half of the year. The work we've done, especially starting in Q2 and then work through the second half, and we are continuing to work on that is that we could see that we had simply grown too fast with too many distributors and being too dispersed, not having critical mass in a proper way with -- throughout our value chain. So we have scaled back on distributors.

We've been more focused on the value management of a distributor. And at the same time, we've also adjusted our go-to-market around our main brands. We focused more on Huda, our Vietnamese power brand and a little bit less on the international power brands, as we've been rechecking the go-to-market.

Overall, we see that play out. We see good growth in Central Vietnam, which is our stronghold for Huda. And we actually see the brand strategies around south of Vietnam play out a little bit better than expected so far around the rechecked approach to Tuborg and 1664 Blanc in the South. So this is a continuous improvement journey for the team. We've had new leadership in for a bit more than a year, and we see the team performing quite well in this. We're not saying that the Vietnamese business will now grow at the growth rates of Q1, but we're confident that we have a more solid and well-developed growth model from here. So I think we have a quiet confidence around the continued growth for Vietnam.

Then on PepsiCo. So yes, listen, of course, every time you change a brand like we do here, there's a conversion and there's a lot of customer conversations. Of course, we have a ton of respect for the power of the Coke portfolio, just like we see a lot of opportunities in the Pepsi portfolio. In many of the -- your reference, of course, goes mainly towards the on-trade environment because, of course, in off-trade, both Pepsi and Coke are on the shelf. So it's not a major debate as to whether one should be there or one should not be there.

But in the on-trade environment, and of course, there's a lot of conversations to be had, we believe there's a great power to that portfolio and especially in on-trade. There are fewer SKUs that are important so than the broader portfolio. Of course, with the very strong go-to-market and -- sorry, route to market and market share we have in general in Denmark and Finland, we believe that we can leverage that into creating a strong position.

But more on that later for now, it's 2.5 years out. But now we will -- as we said many times, we'll stay committed to delivering on our commitments towards what has been a good partner in Coca-Cola. And then we will, of course, in a respectful way, gradually make our plans for how we address '29. But we are, of course, doing this from a position of strength and a very strong knowledge around how we deploy the Pepsi portfolio.

The next question comes from the line of Gen Cross from BNP Paribas.

Poland, Jacob, I think you kind of called out that Western European beer volumes would have been positive in the quarter were not for the significant decline in Poland. Could you give us a bit more color on just what's going on -- kind of on an underlying basis in the market? And whether you think that potentially the sellout should improve through the course of the year, as consumers get a bit more used to the DRS scheme?

And then the second question, just on France. I mean, you comment on market share gain in Q1. Just a bit more color on what's driving that positive share trend and whether you think you can sustain this as retailer shelves are reset.

Thank you so much again. Just on Poland, because you cut out just in the beginning of your question, but I assume the question was specifically on Poland, right?

Yes, specifically on Poland.

Yes. Okay. Good. And then the other one was on France. On Poland, this -- last year was a tough year. The beginning of this year has been a tough year. It is -- of course, there is the DRS. There's been also been some pre-stocking ahead of those changes, et cetera. We then also look at a quarter, which had quite cold weather and snow in January. But underlying, it also has quite an intense price competition. So we have a combination of a market where the consumer is under pressure.

The starting point is a high consumption per hectoliter and competition is quite tough on the price side. And it is tough on the price side because we have been through a period of -- we've been through a period of overall market decline, which, of course, hurts everyone's fixed cost absorption. And therefore, you then -- the response is often that you see even tougher price competition because people want to drive volume growth.

So overall, it's been a little bit of a perfect storm. We should also remember it's a small quarter. We do expect Poland to see gradually improving trends during the year. We are not calling Poland going back to growth in the near future, but we can have a slight -- well, we can have a mild expectation that the worst negative growth rates are behind us in Poland, but it's going to be a tough year in the Polish market overall.

The effects, year-on-year effect, et cetera, will gradually ease during the year. So of course, we can hope that the year-on-year effect was the worst in Q1. But it's -- I'm not going to be the one [ BSCO ] that calls the turnaround of the Polish market in the short term. I think we're all watching a tough market for the rest of the year. I think you asked for more color on France as well. You are right. We had some market share growth in -- slight market share gain in the first quarter. We're basically seeing all of our focused brands growing share, which is great to see.

So the 3 key stronghold brands being 1664, Grimbergen and Tourtel, they're all gaining a bit of share in the quarter. So that's good to see. We have quite a focused strategy under the new leadership of France. We have quite a focused strategy around developing the 3 stronghold brands and then opportunistically driving our scale-up brands. And the one brand that we are seeing continuing under pressure is Kronenbourg Red & White, our economy brand, which has been in structural decline for -- as you know, for a very long time because the category -- the economy category is in decline and is under -- is a very price-sensitive category as well due to the economy segment being very often small glass bottles, which have a high sensitivity to energy prices, et cetera.

So overall, the focus brands for us are all developing well. When we look at France as an overall market, of course, we've just gone through customer negotiations. They've all been concluded, and they've concluded without any major disruptions, which we are, of course, pleased with. They were tough as you would expect them to be. So listen, we are constructive around France for this year. It's been an improved first quarter, and we think the market will be relatively benign for the rest of the year. We're not seeing any disruption from the Middle East as well. Hopefully, that was a little bit of color on France for you. And at the same time, I'm being asked -- thank you so much.

Operator, I'm being asked that the next one is the last question.

We now have a question from Sanjeet Aujla from UBS.

Just a quick couple from me. Can we just dig into the Britvic U.K. performance, please, a year in now. What's working? What's not working? Where is there room for improvement? How would you assess the execution of the off-trade versus the on-trade? And then just a technical one on the revenue per hectoliter in Europe. I appreciate there was a big negative category impact from the strong growth in soft drinks. Can you just help us understand the magnitude of that? And just how pricing has landed now with all of the retailer negotiations in Western Europe?

Sanjeet, thanks for those. So just starting on Britvic U.K. So of course, as you're fully aware, we're now running one business. But let me comment on -- especially on the Britvic part of the business. So the soft drinks part of the business. So overall, very pleased. We're more than a year in. First of all, we had a first year of 2025, where I think a lot of people had expected commercial momentum to suffer from the fact that we were doing a lot of integration work.

The team did phenomenally well and continued very strong commercial momentum through '25. And that momentum has continued in Q1, which is great to see. When we look at CSD, overall, we have mid-single-digit growth in the quarter. It's driven by solid market share improvement, strong off-trade development with volume and value share growth and quite a strong Pepsi performance, again, with value growth -- well ahead of volume growth. So it's not a price-driven performance.

In flavored CSDs, we see a strong 7UP. We saw a soft Tango in the quarter, but a strong 7UP. On the Pepsi performance, I should mention that we see Pepsi Max taking share again in Q1. So that's great. And then a strong performance from J2O as well. On top of that, we had a very successful initial launch of poppi, which I referenced earlier as well, which is, of course, so far only out with a couple of banners, key banners and will gradually be expanded to more customers over time, but it's had a very, very strong launch.

So overall, I think the team has done very well commercially across a number of categories and key brands. So of course, are there things we could -- so the overall assessment is definitely a very well approved quarter again from the team. Pluses and minuses, of course, there are always things that we want to do faster or want to do more of. I think one brand that we -- where we have more potential to go, it's Tango. Tango has had a little bit of a weakness in the last couple of quarters. And we have a lot of great plans on the Tango brand. So I have no doubt that you're going to see Tango bounce back, but that's definitely more than compensated by such a strong performance from many of the other brands.

I know you asked about Britvic. What I would say for the U.K., it's also great to see that the beer business delivers high single-digit growth. We again take market share in off-trade, and we see continued good growth in both Carlsberg, 1664 and Poretti. And then we have launched Mythos, our Greek power brand with quite a strong launch, we have to say, in the market as well. So if you're missing a summer beer on your terrace and deeper, then you should try Mythos. It's a great alternative to so many other great beers.

So good performance from the U.K. all around. You asked specifically around net revenue per hectoliter. Of course, you're spot on. There is a category mix effect here when you can say overall beer is down. We talked about the nuances of that beer performance in Western Europe. But overall beer in Western Europe is down and CSD is growing strongly. So that does impact net revenue per hectoliter. That's a given, given the lower revenue per hectoliter for CSD. That's a given.

And then we're also seeing, of course, on-trade being soft versus off-trade, and that also has an impact on net revenue per hectoliter. You asked specifically around price. No, we don't see any step change in price as such. This is not driven by a weakness in price in certain markets or anything like that. So I think the pricing environment remains roughly the same, as it's been for the last couple of years. So this is a category mix in a quarter where we saw really strong growth in soft drinks and overall beer being a bit weak.

All right. And on that note, as that was the last question, thank you for listening in, and thank you for your questions, as always. Looking forward to meeting some of you during the coming days and weeks. And until then, have a nice day. Thank you so much.

Dear shareholders, welcome to Carlsberg's Annual General Meeting to those of you who are present here today as well as to those of you following the proceedings via webcast. According to Article 23 in the Articles of Association, the AGM is led by a Chairman appointed by the Supervisory Board. And we have asked attorney at law, Anders Stubbe Arndal, to be the Chairman of the AGM. But before passing the floor to Anders, I would like to introduce the people with me on the podium. Next to me, we have the Chairman of the AGM, Anders Stubbe Arndal, then our Group CEO, Jacob Aarup-Andersen; with CFO, Ulrica Fearn and the Vice Chairman of the Board, Majken Schultz.

My name is Henrik Poulsen, and I'm the Chairman of the Board. The other members of the Board are all present here today, and they are Magdi Batato, Lilian Fossum Biner, Jens Hjorth, Bob Kunze-Concewitz, Punita Lal and Winnie Ma. They have all been elected by the AGM in 2025. Furthermore, the employees have elected 4 members: Søren Knudsen, [indiscernible], Eva Vilstrup Decker and Ivan Nielsen. And with these introductory remarks, I give the floor to the Chairman of the AGM.

Thank you. Before we start on the actual agenda for today, I'd like to give you a bit of information concerning safety and security. In the case of fire, the alarm will be activated and you will hear a bill. and all the guards will be informed via the museums radio system. Obviously, we haven't planned any exercises today. So if the alarm does sound, we must all get out of the building via the marked escape roads and follow the instructions of the guards. In that case, there will be a gathering point in front of the Glyptotek at Dantes Square, and we'll wait for the fire brigade to permit us to get back into the building. We have a defibrillator in the building and the staff have first aid training. If you want to wash your hands, it's downstairs at the wardrobe and the ticket sales at the entrance to the French paintings, the Henning Larsen building. If you want to leave the AGM, please bring your access card if you want to get back later on.

If you don't plan to get back or you want to leave the AGM, please tell [indiscernible]. [indiscernible], would you please stand up? You're down there at the back of the room. She is from Euronext, and she is helping us here with the AGM. Carlsberg live streams the AGM on the company's website simultaneously with the holding of the AGM. And we record the AGM for the purpose of preparing minutes. Participants who wish to speak when we open the floor for a discussion concerning an item on the agenda, please come up and sit on the seats reserved up here on the first row on the right to my left here, the first row. And bring your access card, please, with your voting slip and show it to Sophie from Carlsberg. Sophie, you're over there. Thank you. And Sophie will then get the names of the speakers on the list and give the list to me so that I introduce the speakers. And the speakers will then be invited to give their intervention up here from the rostrum.

If you do not wish to be filmed for the live streaming, please tell Sophie that you can stay on the front row and speak via a microphone from your seat. The press can take pictures and do recordings after the AGM, but not during the actual AGM. And if you see a photographer in the room who is taking pictures, it is Carlsberg's internal photographer. So that was a bit of practical info. My first formal task as the Chairman is to ascertain whether the AGM has been lawfully convened and is quorate. The convening notice stating the agenda and the complete proposals has been available on the company's website since the 18th of February 2026. Furthermore, the convening notice has been sent in writing by e-mail to all shareholders who have asked for it and who have registered in the register of shareholders for that purpose. So the AGM has been convened with at least 3 weeks' notice in accordance with the Danish Companies Act and the articles. And on the 14th of January 26, the company published on its website at least minimum 8 weeks' notice.

They gave the date for holding the AGM and the date -- the last date for making proposals to be put on the agenda, all in accordance with the Companies Act. The following material has been available on the company's website since the 18th of February and this is the convening notice, including information concerning the number of shares and voting rights on the date of the convening notice, the documents submitted at the AGM, the agenda and the complete proposals and forms for giving proxies and postal votes. The annual report, including the CSRD report for '25 and the remuneration report for '25 have been available on the company's website since the 4th of February. The agenda in accordance with the Article 24 of the articles concerns no items that require a specific share of the share capital to be represented.

That leads me to the conclusion that the AGM has been lawfully convened and is quorate on all items on the agenda. If anyone disagrees with that conclusion, now is the time to say so. Nobody seems to think that. So I hereby conclude that the AGM has been lawfully convened and is quorate. Now before we start with the actual agenda, I have to inform you how many people are represented here at the AGM today, 815 million, just under 815 million votes, that's 93% of the votes and 2.175 billion, just over 2.175 billion, that's 82% of the votes are represented. The agenda, as I said, in accordance with Article 24 concerns the activities of the company in the past year, presentation of the annual report for approval and resolution to grant discharge to the Supervisory Board, the Executive Board, proposal for distribution of profit.

Item 4, there's a presentation an advisory vote on the remuneration report 5a. This is a change to the remuneration policy. 5b. This concerns approval of the Supervisory Board's remuneration for '26. 6, a election of members for the Board, 7 election of auditor and 8 is authorization to the Chair of the meeting. And as I said, all motions can be carried with a simple majority. So let us now start on the actual agenda. What we will do, as we have done before, items 1 to 4, we will deal with under one. So first, I give the floor to the Chairman of the Supervisory Board, Henrik Poulsen. You have the floor.

Thank you very much, Anders. Dear shareholders, once again, welcome to Carlsberg's Annual General Meeting. And once again, the AGM is held here in the beautiful setting of the Glyptotek. However, this year, we do have fewer seats than usual in the central hall due to the temporary artwork, the sculpture Palm Orchard created by the Kuwaiti-Puerto Rican artist, Alia Farid. It constitutes part of the exhibition a sounding of the earth here at the Glyptotek because the Glyptotek is, first and foremost, an art museum. And as you may know, it's based on Carl Jacobsen's extraordinary collection of art and artifacts. On the 4th of February, the Carlsberg Group published its annual report. Again, this year, it was an integrated report with financial as well as sustainability reporting. Furthermore, Carlsberg published the company's remuneration report for 2025 and a separate report on its activities within the field of human rights. 2025 was a year characterized by continuity as well as change for Carlsberg.

Continuity when it comes to our continued focus on executing our strategic priorities, including driving growth within clearly defined categories and markets, digitization and capacity building, all the while we have a continuous focus on efficiencies and tight cost management. The change for Carlsberg was the increased exposure for the combination of beer and soft drinks after the acquisition of Britvic in January and the takeover of the Pepsi licenses in Kazakhstan and Kyrgyzstan in the beginning of the year. In his report, our Group CEO, Aarup-Andersen, will tell you more about Britvic as well as the expanded Pepsi partnership that the Board is convinced will strengthen Carlsberg's strategic platform and contribute positively to value creation for our shareholders. 2025 was also a year in which Carlsberg had to navigate in a world with a great deal of uncertainty and a world where consumer confidence continues to be under pressure in all of our markets.

And therefore, it is with great satisfaction that the Supervisory Board could note that Carlsberg delivered very strong reported results, a solid organic development in earnings and solid cash flows. Revenue and earnings in 2025 were the highest in company history, and the Supervisory Board is very satisfied to see that the company is constantly moving towards becoming bigger, stronger and more profitable and thus creating more value for our shareholders. Our revenue was DKK 89.1 billion. That was almost 19% more than the year before due to the acquisition of Britvic. Reported operating profits were DKK 13.4 billion. Adjusted for the Britvic-related amortizations of intangible assets, operating profits were DKK 14 billion, which is 22.7% more than the year before of which the organic development constituted 5%. On behalf of the Supervisory Board, I would like to express our great recognition to Carlsberg's management and not least to the many employees who were involved in the acquisition and the integration of Britvic in the Carlsberg Group.

This effort meant that in October, the company could raise the expected synergies from GBP 100 million to GBP 110 million. Net profits for the year were DKK 6 billion. Adjusted for special items and the aforementioned amortizations on intangible assets, net profits were DKK 8 billion. That was an increase of 11% on the year before due to Britvic and the growth in earnings in the underlying business. Earnings per share adjusted for special items and the aforementioned amortizations constituted DKK 61, up from DKK 54.9 the year before. Jacob Aarup-Andersen will, in his report, take you through the details of the annual results, including the individual regional markets. Carlsberg's dividend policy stipulates a dividend payment of around 50% of annual net profit adjusted for special items. The Board would like to maintain this dividend policy in spite of the fact that our interest-bearing debt currently and quite as expected is higher than the level of a maximum of 2.5x the operating profits before amortizations, which is the target.

That means that the Supervisory Board has decided to propose to the AGM to pay out a dividend of DKK 29 per share, corresponding to 48% of the adjusted net profits. This dividend constitutes an increase of 7% and is the highest dividend ever in this company. That leaves the total dividend at DKK 3.8 billion to be drawn from the company reserve. As per the December 31, 2025, the company reserve was DKK 23.7 billion. For many years, Carlsberg has worked decisively on improving the company's sustainability in a number of areas, including CO2 emissions, water consumption, packaging and recycling. In 2022, Carlsberg's total CO2 emissions were reduced by a further 8% compared to the year before. For the breweries located in so-called high-risk areas when it comes to water, we have a clear target of reestablishing water resources corresponding to the consumption of the local brewery. In 2025, we achieved a reestablishment rate of 32%, which was a doubling compared to 2024.

When it comes to the recycling of materials, reused and recycled material in bottles and cans came in at 51%, which meant that our 2030 target in this respect was achieved already in 2025. A lot has happened in Carlsberg in recent years, not least with the acquisition of Britvic. And therefore, it was only appropriate that we evaluate the approach and our priorities within sustainability. And on that basis, on the 5th of March, Carlsberg launched an updated sustainability program called Brewing Tomorrow. This new program is built on 4 pillars. And as you can see on the screen in front of us, we have some very catchy English titles on these 4 pillars that are a bit tricky to translate into Danish, but I will venture an attempt. This program is focused on the continued reduction of CO2 emissions, the protection of nature, the possibility and inspiration to make sensible choices when it comes to beverages as well as an inclusive organizational culture to give our employees the opportunity to develop and grow. The foundation for these 4 pillars is for Carlsberg to continue to do business in an ethical and responsible way.

Just like in previous years, we have set a number of ambitious targets that the company will report on, on an annual basis. This is too technical to go into in detail right now. But for those of you who are curious, I can only recommend that you read more about it on the company website. Now let me change tack and get into our work with corporate governance and the remuneration policy for the Supervisory Board and the Executive Committee. In Carlsberg, we work actively with corporate governance, and we've published our mandatory report on governance and compliance with the recommendations from the committee on corporate governance. And this report is available on our website. It appears from the report that Carlsberg complies with all of the recommendations of the committee apart from one. This regards the recommendation about quarterly report, where Carlsberg since 2016, instead has published a so-called trading statement for the first and the third quarter with a focus on the development in sales across regions and markets.

Each year, the Supervisory Board carries out an evaluation of its work and composition. In 2025, this evaluation was conducted on the basis of interviews between each Board member and myself, complemented by a report made by an external consultancy on the basis of an anonymous survey among the members of the Board. The members of the Supervisory Board expressed a great deal of satisfaction with the work and the cooperation in the Supervisory Board and with the work and results of the Executive Committee. That said, we can, of course, always do better. And based on this evaluation, we have elaborated a list of initiatives for improvement as well as an action plan with specific initiatives to be carried out in the present year. The Supervisory Board has set a number of targets for diversity when it comes to international experience and gender.

As regards to international experience, the target is that at least half of the AGM elected members should have considerable international managerial experience, not least due to the fact that about 95% of Carlsberg's business takes place outside of Denmark, and the Board lives up to this target. When it comes to gender, it is very satisfactory to see that the Board has an equal share of women and men as regards to the AGM elected members. After the AGM last year elected 4 women and 4 men for the Supervisory Board. Furthermore, the Supervisory Board also has a high degree of diversity when it comes to competencies and skills within areas such as finance, sustainability, production, sales and marketing, managerial experience, regional and cultural knowledge as well as knowledge of consumer goods. Later today, the AGM will be asked to approve the specific remuneration for the Supervisory Board for 2026. The members of the Supervisory Board receive a fixed fee and do not participate in any form of incentive pay.

Based on the recommendation from the Remuneration Committee, the Board has decided to propose to the AGM that the base fee to the members of the Board be increased by 3% to DKK 502,000. This increase is to be seen in the light of the expected general pay increase in Denmark as well as a wish to ensure a fee that is on par with comparable companies. The detailed composition of the remuneration can be seen in the convening notice. The elements comprised in the remuneration for the Executive Committee were unchanged in 2025, and they were in accordance with the remuneration policy approved by the AGM in 2024. The remuneration takes into account the tasks of the Executive Committee as well as the value creation for shareholders and conditions in other comparable peer companies. The remuneration consists of 3 components: firstly, the fixed salary; secondly, an annual cash incentive program based on the achievement of a number of specific targets. And thirdly, a share-based remuneration based on the achievement of 5 specific targets for a 3-year period.

That means that 2 of the 3 components in the remuneration for the executive are variable, and that means that they are closely aligned with shareholders' interests, and they will only be paid out if Carlsberg delivers on these targets. The composition of the remuneration for 2025 can be seen on Page 7 in the remuneration report and the total paid out remuneration for the executive can be seen on Page 8. It is the conclusion of the Supervisory Board that the remuneration policy was complied with in 2025 and the remuneration report on the agenda today under Item 4 is, of course, elaborated in accordance with this policy. In 2025, the Remuneration Committee compared the remuneration to the Executive Committee and the Supervisory Board with a view to ensuring conformity with the external market and shareholder interests. And on that basis, the Board proposes an amendment of the remuneration policy under agenda Item 5a. The remuneration policy is largely unchanged compared to the previous one, except from the following.

Firstly, the Supervisory Board wants to make it possible for the group CEO to earn an annual bonus of up to 150% of the fixed annual salary instead of 100% as it was before, with a typical level when achieving the target of 90% of the fixed salary where it used to be 60%. Secondly, the revised remuneration policy includes minor increases in the remuneration for the Board committees. Apart from these 2 amendments, further details have been added as to how individual contributions should be assessed in the short-term incentive schemes for the executive. This can be seen in Section 4C. In Section 5, we have added some examples of situations in which you might consider deviating from the policy. And finally, in Section 7, there are some remarks on how to deal with conflicts of interest. This marks the end of my report. But before I pass the floor to Jacob Aarup-Andersen, who will add to my report and take you through the key figures in the accounts for 2025, let me take this opportunity to thank the many millions of consumers all over the world who enjoy our products.

The purpose of Carlsberg's products is to be part of the good times and moments of happiness for our consumers, whether it be a beer with your friends, a soft drink on a summer's day at the beach, an alcohol-free beer after your bike ride or a soda with your popcorn at the cinema. In a turbulent world where there's a lot to worry about, the need for such moments and togetherness is as great as ever. I would also like to extend a thank you to you, our shareholders, for your support for Carlsberg. Your support is highly appreciated. And last but not least, on behalf of the Supervisory Board, I would like to extend a thank you to our Group Executive Committee, the extended management as well as Carlsberg's capable and dedicated employees for their great efforts in 2025.

Thank you, Henrik. Good afternoon. I'd also like to welcome you very much to this year's AGM. I always look forward to the AGM. It is the day of the year when I'm able to talk directly to you, Carlsberg's shareholders about the year under review, our plans for the future. And afterwards, I can answer any queries you may have. As the Chairman said in his report, '25 was characterized by our continued work to deliver on the strategy that we launched in February '24 and the successful integration of Britvic. Let me say something about the interesting strategic initiatives we launched in the year under review. Britvic, of course, was the most important strategic milestone in '25. The acquisition was finally approved by the British authorities on the 16th of January '25. And just after we started the integration of this amazing new company in the Carlsberg Group. At this rostrum, I was talking last year about Britvic.

But for those of you who are not here and maybe you can't remember everything, let me explain briefly why this acquisition really is a perfect fit for Carlsberg. Britvic was and still is, but now it's an integral part of Carlsberg, the second largest soft drink producer in the U.K. and Ireland. In both countries, we produce and sell Pepsi's soft drink products. In addition to Pepsi, we have a number of our own iconic trademarks, the orange soda tango. You may call it the U.K.'s reply to Tuborg Squash. So half of Britvic is Pepsi products. So the other half is own brands in categories such as sodas, tonic waters, functional beverages, iced coffee and fruit drinks. With Britvic, we got 2 minor businesses in Brazil and France. We knew there were going to be challenges, particularly with the French business, so we launched a major reorganization of this business at the end of the year. As regards to Brazil, we are optimizing the business there with a skillful local management team at the helm.

Despite the situation in France, we just after a year after we got the keys for Britvic, we are very pleased with the results achieved in '25 and with a very effective and smooth integration of Britvic into Carlsberg. We had also prepared well. That's what we had. So we were able to start the integration of ready on day 1. We have made a good ambitious plan, but thanks to an impressive piece of work and a high level of commitment from all those involved, we are actually ahead of our plans. As the Chairman just mentioned, in October, we're able to adjust the cost synergies upwards from GBP 100 million to GBP 110 million. As a CEO, obviously, I'm very pleased with that. We're very enthusiastic also for the opportunities that the Britvic acquisition gives us, both for Carlsberg's business in the U.K. and for the Carlsberg Group as a whole. One of the options was the takeover of the Pepsi license in Kazakhstan and Kyrgyzstan. We launched that a bit early at the end of '25.

This is going to double our business in Kazakhstan. In the U.K., from the 1st of January '25, we lost our license agreement with the Spanish beer brand, San Miguel. It was quite a considerable volume, but we were well prepared, and we had made plans for which of our own beer brands that would replace the lost volume. We did not expect to reach our goal in the first year, but it's been very encouraging to see how strong our premium brands are and the results we're able to achieve if we make sure to give them the right support. Our Italian beer, Poretti is a case in point. It's one of the brands that we've chosen to focus on in the U.K., and we're able to more than double the volume of this brand. This is really an impressive achievement in this very mature competitive British market. In China, the on-trade segment, that's restaurants, bars and karaoke clubs, et cetera. That segment has been under pressure in recent years. Sales in retail and online have been increasing.

So we have launched a very, very almost artistic 1-liter beer can intended to be placed on the table and shared by friends on social occasions. This has been a great success, and we saw strong growth for this entire format in '25. Two other interesting initiatives were announced in '25. They're going to strengthen our brands in the coming years is our new UEFA sponsorship agreement and the agreement with actor Robert Pattinson that makes him a global ambassador for 1664 Blanc. After the acquisition of Britvic, the growth categories are just over half of Carlsberg's portfolio. These are premium and nonalcoholic beers and soft drinks as what we call beyond beer, that is cider and hard lemonade. Apart from the last mentioned, we -- they all delivered good volume growth in '25.

Now if we disregard the lost San Miguel volume in the U.K., our premium portfolio grew by 5%, thanks to good results in all 3 regions. The Carlsberg brand delivered very good growth rates, and we're able to note good growth for local brands such as Jacobsen here in Denmark. Well, as you saw on the slide before me just before, soft drinks are now 30% of the total volume of the Carlsberg Group. We saw very good growth in Western Europe, where the organic growth, excluding Britvic, was 5%. For the group as a whole, the growth was a bit lower, 3%, especially because of difficult conditions in Cambodia. Our nonalcoholic beer grew by 4%. This growth was affected by the war in Ukraine because Ukraine is a big market for nonalcoholic beer.

Excluding Ukraine, the growth was 7%, not least thanks to good growth for the nonalcoholic versions of Tuborg, 1664 Black and Somersby and a number of local brands. Now let me review our results for '25, and let me start with the 3 regions. Our Western European business is clearly the one that has been changed the most because of Britvic. That's obvious. In addition to the Nordic countries and Switzerland, we now also have a big soft drink business in the U.K. and Ireland. So soft drinks are now more than half, actually 54% to be precise, of our total volume in Western Europe. It's not surprising, I think that Western Europe delivered very high reported growth rates.

The volume went up by 46.7% revenue, 35.6% up. And the result of primary operations adjusted for the Britvic-related amortization of intangible assets increased by 40%. Let me dwell a bit on that adjustment. We made the adjustment this '25 reporting for the Britvic related amortization of intangible assets. We've chosen to call it management defined performance measures, abbreviated MPM, let's call it MPM. I'm not going to talk much about accounting rules. There are people in the room that can do that better than me, including our auditors, I hope. But it's important to me to explain why we make this adjustment when we compare earnings with the year before. When you acquire a company, you have to split the purchase sum based on market value on all the assets you've acquired, machines, cars, lands, et cetera, but also on intangible assets such as trademarks, customer relations, et cetera. And for the Britvic acquisition, this license agreement that we have with Pepsi. As regards to intangible assets, where you can give an expected service life.

Accounting rules require that you depreciate the asset across this period, the service life, that is. But it's only in connection with the acquisition of companies that these rules apply. In Kazakhstan, where we've just taken over the Pepsi license, we do not have to do amortization of this agreement. And we don't have to fix a value or do amortization if we launch a new trademark in a new country. So it doesn't give the right picture of earnings to include these amortizations in our internal review and assessment of the results in individual markets and regions. So we're not doing it externally either. Our international competitors and many other big companies, actually, they use the same practice as we do. Obviously, we wish to be fully transparent concerning the adjustments that we make so that you, as account readers, you can use the numbers that you find to be correct. So that's why on Page 23 in the annual report, we have a table showing all these corrections.

In the rest of my report, when I talk about MPM, it means that we have adjusted the number for the Britvic-related amortization of intangible assets, right? And that was an increase of the [ LICs ] number, I think. I hope you enjoyed that anyway. Back to Western Europe, where the organic growth rates were affected by the loss of San Miguel in the U.K. Excluding the San Miguel volume, our volume went up by 1.3% because we had good progress for premium and nonalcoholic beer and soft drinks. Again, in '25, we took price increases to offset the increase in our total costs. Because of San Miguel, the revenue organically declined by 1.7%. Without San Miguel, our revenue increased organically also by 1.7% despite the impact of San Miguel, we were able to deliver a positive organic growth in the operating result of 0.7%. Our results in Asia were not affected by Britvic-related amortization, but the business was affected by low consumer trust across the region.

Growth in China was not able to offset the decline in volume in other markets, particularly in Cambodia, Vietnam and Laos. Total volumes went down by 2.4%. Thanks to an improvement in the revenue per hectoliter, the organic decline in revenue was 1.2% smaller than the decline in volume. The operating result increased organically by 0.7%. Unfortunately, a negative currency development meant that the reported operating result declined by 3.6%. Let me move to Central and Eastern Europe and the India region. There was a small impact from the Britvic amortization because Brazil is in this region. The region delivered very strong results, both on top and bottom lines. The reported volume growth was 8.6% as a result of the consolidation of the business in Nepal after we bought out our partner in November '24 and the inclusion of the Britvic business in Brazil and the Pepsi volume that we started selling in Kazakhstan in the fourth quarter.

The reported revenue went up by 10.4%. The organic development was a bit more subdued since this region too, was characterized by lower consumer confidence across the markets apart from India, where our local business delivered high 1-digit volume growth. On an ongoing basis, we assess the different opportunities for creating more value for Carlsberg shareholders. Potentially, this could involve listing on the stock exchange of the business in India. But at the present time, this has not been decided. For the region as a whole, there was a small organic fall in volume, 0.6%, but thanks to price increases and a positive mix. Our revenue organically went up by 2.7% and our operating result went up by 9%. And now to the group's consolidated numbers. The sold volume in '25 went up by 17.7% to 148 million hectoliters. It's just under 15 billion liters. Revenue went up by 18.6% to DKK 89.1 billion. The organic volume development was minus 2%. So this decline was offset by an increased revenue per hectoliter of 1.4%.

That's why the organic development in revenue was minus 0.6%. The organic gross result was at the level of the year before, positively affected by continued efficiency improvement. The gross result, MPM was DKK 40.3 billion. As expected, the gross margin declined a bit to 45.2% because of the inclusion of Britvic. The result of primary operations, MPM amounted to DKK 14 billion, an increase of 22.7%. The organic growth was 5%. This was at the high end of what we reported as expectation for the year because we said, as you may recall, 3% to 5%. The operating margin, MPM was improved by 0.5 percentage points to 15.7%. Special items net were very high in '25, DKK 1.9 billion. Special items, they are nonrecurring costs. They concern costs related to restructuring, including severance pay, integration, value impairment of assets, trademarks, et cetera. In '25, the acquisition of Britvic led to very high special items related to integration, various charges, adjustment of stocks and derived restructurings in Carlsberg's original business in the U.K. and reorganization of the French business that I talked about before.

All in all, these items amount to DKK 1.5 billion. And in Asia, we had to take additional measures to adjust the business to the very difficult market conditions, particularly in Cambodia. So there were restructuring costs here in the region of DKK 100 million. It's obvious that in '26, we do not expect special items anywhere near the level of '25. Financial costs net amounted to DKK 2.4 billion. This was much higher than the year before. That was because of the -- obviously, because of the increased interest-bearing debt as a result of the acquisition of Britvic. The tax was DKK 2.1 billion, an effective tax percentage of 22.9%. The Carlsberg Group's share of the corporate result amounted to DKK 6 billion. The adjusted net result, MPM, again, adjusted for special items after tax amounted to DKK 8.1 billion. Cash flows from operations amounted to DKK 12.4 billion and cash flows from investments were minus DKK 5.4 billion.

So the free -- as you can quickly see, the free cash flow was DKK 7 billion. The free cash flow after financial investments, obviously was affected by the payment for Britvic. We paid DKK 29.4 billion for it. So we ended at minus DKK 21.7 billion. The net interest-bearing debt at the end of '25 amounted to DKK 61.6 billion. EBITDA, this is the result before depreciation, interest and tax. The debt was 3.2 -- our gearing was 3.28 higher than our goal, which is 2.5 as the maximum gearing. At the end of '27, at the latest, we'll be back at that level. We think it's a suitable level as a company for a company such as Carlsberg. Now expectations for the year that we are in now, '26. Since we published our expectations concerning earnings at the start of February, a lot has happened in the world, not least in Iran and the Middle East as a whole. Carlsberg only has a limited direct exposure to that part of the world, the expert and license business, primarily with the nonalcoholic Moussy brand.

It's important for me to stress, first of all, that all our employees, I mean, their safety is always at the top of our agenda. Everyone works in this part of the business and all employees in Carlsberg, they are safe and secure. We follow the situation, and we take timely measures. The situation in the Middle East has already had an effect, particularly on the oil price. In the longer term, it might influence inflation and consumer behavior in our markets. We are following the situation closely, and we'll take whatever measures may become necessary. In February, we expected the volatile and uncertain global situation to continue for some time, still influence consumer trust in many of our markets.

The current situation obviously only supports this expectation. In '26, we'll have a bit of a better volume development because of the takeover of the Pepsi license in Kazakhstan and Kyrgyzstan. They expect to contribute 1.5 percentage points to the organic volume development. In addition, we expect to realize an additional 30% to 40% of the notified Britvic-related cost synergies of GBP 110 million. Against this background, we expect organic growth of 2% to 6%, primary operating result compared with the operating result, MPM in '25 of DKK 14 billion. Before I end my report, I can say that in November, we welcome Torsten Steenholt back to Carlsberg. He's in charge of the supply chain and a member of our Executive Committee.

Welcome back to you, Torsten. Together with the other changes we made in '24, we today have a very strong management team with the right competencies to execute on our growth ambitions. Now this brings me to the end of my report. I'd like to take the opportunity to thank the Supervisory Board for its support and cooperation. I'd also like to thank very much all our committed, enthusiastic employees, it is a great pleasure to work with you. That's for sure. And finally, I'd like to thank all you shareholders, for supporting our Carlsberg. With these words, I hereby recommend Carlsberg's annual report for '25 for the approval of the AGM. Thank you for your attention.

Thank you very much. Before I open for the debate, I can inform the AGM that the annual report signed by the Executive Committee, the Supervisory Board and the company auditors have been presented to me. We have an unqualified auditor's report on Page 191, and it sounds like this. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the financial position of the group and the parent company at the December 31, 2025 and of the results of the group and the parent company's operations and cash flows for the financial year from January to December 2025 in accordance with IFRS accounting standards as adopted by the EU and additional requirements of the Danish Financial Statements Act.

That leads us to a debate concerning agenda item 1 to 4. We already have 2 speakers on the list, ATP and the Association of Danish Shareholders. Should there be any other speakers who wish to take the floor, please reach out to Sophie, as I mentioned before, and please don't forget your voting slip and your access card. But first, I will pass the floor to Mark Jessen from ATP. Go ahead, Mark.

Thank you very much. As mentioned, my name is Mark Jessen, and I represent ATP. Thank you to the Chairman and the CEO for their good reports. Let me touch upon 3 things today. First of all, the strategic development into a brewery company with a broad portfolio of beverages and also, unfortunately, a remuneration policy and report that again increases the framework for bonus incentive schemes. But first, let me mention the strategic development. For more than 175 years, the identity as a brewery has been very clear in Carlsberg and rightly so. We all know the history and the legacy and the continued role of the foundation as a stable and long-term owner. And in that light, I would like to praise the foundation as well as the Board for daring to acquire Britvic. As I see it, it's not an acquisition as just anyone else. It's really an acquisition that gives you scale within other types of beverages.

My best bet is that it was due diligence that you entered into more categories, especially because the younger generation enjoy a much wider range of products than the older generation. You might say that the older generation chose between a cold beer, a glass of wine or a cold Coca-Cola. The younger generation is a bit more diverse than that. Some might say you could have taken this step earlier. But looking at the big international competitors, they have not really taken this step yet. And that means that Carlsberg is well positioned to make good experiences here in the Nordic countries and be a step ahead of the game. As I see it, investors as well as analysts have taken some time to digest this news, but it seems that they get the picture now because with a yield of 25% in 2025 compared to 5% in the C '25 index, the figures just speak for themselves. And I see positive feedback from share analysts. And I know they can't tell the future, but 70% of analysts were positive by the end of 2025.

And 10 years ago, that number was only 25% of them. So it has been a bold step, and you have had a good start in the U.K. with more synergies than expected, and this gives you a broader range internationally. Now let's look at the remuneration policy. It's probably no surprise that we will not be voting in favor from ATP's side. In 2024, I praised you for not just focusing on percentages of alcohol, but also lowering percentages in your bonus schemes. I was hoping this to be a more long-term prospect when it came to remuneration as well. Therefore, my question is about the composition of the remuneration and more specifically, the annual bonus. Because if you look at 2025 objectively, you saw that cost management was what really saved your earnings, but still you paid out a handsome bonus. So I might be asking a stupid question, but what is the purpose of the annual bonus scheme if you can just get it paid out without really achieving the targets.

And finally, sustainability. We must protect nature and Carlsberg is one of the very few companies on the Danish Stock Exchange who has really articulated this effort. You are really leading the way towards a more regenerative and sustainable agricultural practices. Now our agricultural sector is not a speedboat, but a supertanker that needs to turn around. And you can still see that a very small percentage of your ingredients come from regenerative agriculture. So again, I could be afraid that these are very fine targets that might not come to fruition in the coming years. So how are you going to get to that target of 50%? And with those words, I would like to wish the management and employees of Carlsberg a good 2026.

Thank you. There were 2 questions for management, and I give the floor to the Chairman, Henrik Poulsen, first, at least to answer one of those questions.

Thank you very much, Anders. And thank you to Mark and ATP for the kind words about the Britvic acquisition and the expansion of our product platform and for your support for our strategic journey. And also thank you for the kind words about our efforts when it comes to biodiversity. I would also like to thank you for the question about remuneration for our CEO and the elements that are comprised in this remuneration package. It is a significant subject. And in the Supervisory Board, we completely agree that it's important to strike the right balance. The founding principles here are that our remuneration should be competitive. It should also create value to the shareholders, and it should comply with relevant external benchmarks. Competition for top management and talent is international, and it is quite a tough competition.

And it is of great significance to Carlsberg's performance and development that we are able to attract top management with the relevant skills and with the right caliber. And to do that, we need to have remuneration tools at our disposals that are competitive in an international market for talent. It is our assessment that it is in the interest of the company and the shareholders that we are able to attract and retain talent, even if it requires a variable incentive pay as the one we proposed today. Variable pay is closely linked to the achievement of our financial and strategic targets and will only be paid out to the extent that management delivers on these targets and thereby creates value to our shareholders. To the question of whether we were satisfied with 2025 and the paid out bonus to our group CEO, the answer is yes.

We were very satisfied with the development of the company in 2025, not least in connection with the very difficult consumer market we were operating in all over the world and in comparison with peer companies within the beverage sector. On that basis, we believe that Carlsberg did very well. The short-term bonus depends on the revenue growth. It depends on operating profits, and it depends on our cash flows. And it's no secret that at the very top line revenue, we didn't meet our expectations, but still management really delivered strong results in operating profits and cash flows. And that was what led to the paid out cash bonus for 2025. I can also tell you that the total remuneration package has been compared to comparable companies in Denmark and internationally, and it is clearly within the framework of relevant benchmarks. And that means that we are not separating ourselves from these benchmarks.

Let me underline that we listen to the feedback that we get from ATP and other shareholders. And therefore, in recent years, we have adjusted our remuneration to ensure that we strike the right balance. As you noticed, Mark, we have adjusted the top of the variable incentive scheme, the long-term incentive scheme, also called the LTI in recent years. And as mentioned, we work actively towards striking the right balance, and it will be an important focus point for the Supervisory Board going forward.

Also, thank you from me, Mark. When it comes to regenerative farming, we really appreciate your support for this agenda. We have decided to be very ambitious within this field and try to set a course not just for our company, but also we have tried to create partnerships across our value chain. We have doubled our purchasing of ingredients that have been grown regeneratively, and we have also set a number of targets across the sustainability agenda. As the Chairman said, we are seeing an 8% reduction of CO2 emissions across the value chain last year. That's quite significant. Out of the global breweries in the world, you are definitely shareholders in the most sustainable one. Our new sustainability strategy Brewing Tomorrow, which was also mentioned, we have a target of 50% regenerative ingredients by 2032. But -- and of course, there's a long way to go, as you mentioned, but it's a development that's going very, very fast.

When we look at Denmark last year and this year, we are seeing a 30x increase in the purchasing of regeneratively farmed barley. And of course, this development is not going equally fast in all countries, of course, but we have now created a structure surrounding our purchasing and procurement. That means that we will now take the tool called regenerating together, which gives us some fixed standards and structures when it comes to all of the crops in our crop mix. And that means that we can really make progress when it comes to regenerative ingredients. It makes it easier for farmers, and it makes it easier for our purchasers. It will not be easy. We completely agree. But if there is something that characterizes the spirit in Carlsberg and the long history in our company and our founding fathers, it is that we continue to set standards.

And we believe we have a good chance of achieving the target of 50%, but we have to deliver on our plans. So we recognize that the level of ambition is quite high, but we will try to reach our target. And if I may, I have another comment. I would like to thank a shareholder that wanted to speak today but didn't have the right to speak at today's AGM. But we have received a comment from a shareholder talking about how we should use hubs more. And I just want to say that we do pay attention, and this is a comment that should be listened and the [ hubs leaves ] is something that should become the symbol of Carlsberg. And that is something we really are seeing momentum on in several of our countries. So it was a good comment about the [ hubs leaves ]. And I'm sorry, you weren't able to make your comment here on the rostrum, but it is really something that we try to make an integral part of our brand. So thank you very much.

Next speaker is Mikael Bak from the Danish Shareholders Association. You have the floor, Mikael.

Thank you. Thank you for allowing me to look at the work of art that has now taken the space away from some shareholders, I'm afraid. I don't know if it's going to be next year here. We'll see. Well, on behalf of the members of the Danish Shareholders Association, many of us are present today. I'd like to thank Board and management for a good report and for the dividend you are recommending. So I'd like to thank Carlsberg for once again being very open for dialogue. We had the pleasure of having a big members event at Carlsberg in November. We're able to talk more in detail about the business with you, Jacob. Thank you for that. The year had a good result and the analysis that you referred to, they say that growth is driven by acquisitions, mainly Britvic. But we also see uncertainty in the global consumer markets and the weak demand, particularly in traditional categories. So we can see that Carlsberg not only follows the market, but is a step ahead of the competition. brings me to the first of the 2 questions that I have brought.

I'd like to ask you what you have learned and experienced in the last 12 to 18 months, very restless months. What have you learned? And what significance can that have for the future direction for Carlsberg? I'd like to like to hear on behalf of the shareholders, which 3 countries, the geographical markets, those that are -- which ones are most important for you right now? And my final question concerns the market in Eastern Europe, the unfortunate situation we are still seeing in Ukraine. We saw that you were able to discontinue your activities in Russia. We supported that. Unfortunately, we are still seeing Russian aggression in Ukraine and Europe continues to put pressure on Russia. I'm sure that shareholders support that line.

I'd like to hear from you whether you can confirm that today, you have no commercial relations on the Russian market, not even parallel imports that you know of. I'd also like to ask you to what extent Carlsberg trademarks are still being used lawfully or illegally in the Russian market. Finally, on behalf of private investors, I wish Carlsberg and not least the many thousand employees all the best in the coming years. We hope for progress for the business and for the share price. And the MPM concept, I thought -- what about SPM, shareholder-defined performance measures. So SPM, I think we should have that next year. Let's go for a share price of DKK 1,000, right? Why don't we? Right. Okay. On that, I wish you all the best. Thank you.

I give the floor to Jacob, the CEO, to give his reply.

Thank you to the Shareholders Association, Mikael Bak. I felt that there was more than 2 questions. I don't know. I wrote down a few things. Yes, you got DKK 1,000 on the share price, but somebody decided to introduce a war and it fell again. We'll see what we can do. But first of all, I'd like to say that we really appreciate. We really appreciate the good constructive dialogue we have with you. It was a pleasure in November to host the Shareholders Association in Carlsberg at the Carlsberg Museum. We really support shareholder democracy. We think it's an important task for us as a big listed company to do that. So please continue your good work, and we hope we can continue to have a good dialogue. I noted down a few questions. The first question, I think what we've learned over the last 12 to 18 months. I think that you said how can it influence our future direction. I could talk for hours, but the chair of the meeting won't allow that, I'm afraid. Let me focus on a few points.

First of all, I would say that our business is stronger when we have a broad product portfolio across categories. We've learned that over the last 12 to 18 months. I think we knew that before, but we have seen that really. And our best results are in countries where we have a broad portfolio of beer and soft drinks such as the 4 Nordic countries in the U.K. And it also says that we must continue focusing on creating broader, more robust portfolios across the countries. And we must add soft drinks to our strong beer portfolios in countries where we don't have that. One element in that work is to expand our cooperation with Pepsi further. The other thing I'd like to mention is that we have seen our global brand do very well even in times of crisis for consumers. That is really outstanding. The Carlsberg Group has 180 different brands. If we did a quiz in this room, I think we could maybe remember 12 or 13 if we try hard, right? But 180 is not -- it's also [indiscernible] and Kazakhstan, I don't know, I could continue.

But Carlsberg and Tuborg are the 2 biggest global players, and they delivered good growth despite difficult times for the beer industry. So we must continue being -- we must invest in our big global brands because the global brands, they are robust even in times of adversity. So the broadness of our portfolio and our global brands. Yes, I could give you many other examples. But anyway, there's no time for that, but the robustness of our portfolio and the big brands. Right. And the other question was, which 3 countries do we see as the most important strategic growth areas right now? I mentioned 180 brands. I can mention that our products can be purchased in 150 countries. But the 3 growth countries that I'd like to focus on is India. India, we have seen very strong growth for a number of years there. We've grown 10% per year over the last 10 years in India.

The U.K. We see big advantages from the Britvic acquisition. That momentum must continue. It's a big market for us. And I would say Central Asia, Kazakhstan is our main country there, and we see strong growth, particularly after we took over Pepsi in that country. So India, the U.K. and Central Asia. Other country managers are listening in. I'm sure they'll be disappointed. But anyway, there are many good countries in the Carlsberg Group. You had a few questions about Russia, too. First of all, we can confirm that we sold Baltika in December '24. We finalized all legal outstandings, all commercial outstandings. We have no presence and no expectation to Russia. Our trademarks are still registered in Russia. But this is because we want to make sure that others cannot abuse our brands. We are not aware of any parallel importation. We can't be 100% certain. We can't stop that. But I mean, nothing happens that we know of. That's for sure.

It is happening without our knowledge and of course, without our approval. So we are really out. And from a management perspective, it's a relief really. We no longer spend any time on that country. The Russian situation, well, Carlsberg has chosen to invest a lot in Ukraine. I think I should just mentioned that, we are the biggest brewer in Ukraine. We have 3 big breweries. We have 1,400 employees, 1,400 fantastic, heroic employees, and we have 1/3 of the Ukrainian in beer market. We made big investments during the war, in the Kyiv brewery we invested in, in '23. It's one of the biggest private investments in Ukraine in '23. We are continuing our investment later this year. We will be expanding one of the breweries. We're also one of the biggest taxpayers in Ukraine, and that helps finance the defense of the country. We can take pride in that, I think. So we'll continue supporting Ukraine's fight for freedom. Thank you.

Thank you very much. We have no further speakers on the list. And I will, therefore, conclude that the debate on Item 1 to 4 is concluded and that the AGM has taken note of the report on the activities of the past year with the additional remarks that we have heard here today. Item 2 is the presentation of the revised annual report for approval and the distribution of discharge. That just means that the company will not hold the Supervisory Board and the Executive Board liable when it comes to the subjects covered by the annual report for 2025. In general, Carlsberg wants to have a full account of the voting result for each item on the agenda. That means that we need to make an account of how many votes are for and against a given proposal. And if the Annual General Meeting will allow me to do this in the way that we usually do this here at Carlsberg, we will do the following. For each agenda item, we will ask the participants if anybody wants to vote against or abstain.

And if it's only a limited number of participants, they will hand over a voting slip, voting against or abstaining. And then I will conclude that everyone else has voted in favor. That way, we can add the proxies and postal votes that we have already received, including instruction proxies. And that way, we can give an account of the exact voting result. However, if a greater number of shareholders present wish to vote against, then we can initiate an actual vote. Are there any remarks? If that's not the case, then we will go to the approval of the annual report and the resolution to discharge the Supervisory Board and Executive Board. Does anyone wish to vote against? That is not the case, and I can, therefore, conclude that the annual report for 2025 has been approved and that the AGM has discharged the Supervisory Board and Executive Board from liability. That leads me to item 3 on the agenda, which is the proposal of dividend and distribution of profits, as mentioned in the Chairman's report. And here, we have a proposal for a dividend of DKK 29 per share from the Supervisory Board.

The point of information is that according to the Companies Act, the AGM cannot decide on a higher dividend than the one proposed by the Supervisory Board. On that basis, I would like to ask whether there are shareholders who want to vote against or abstain this proposal for dividend. That is not the case, and I can therefore conclude that the proposal has been adopted, and that leads me to Item 4, which is the presentation and advisory vote on the remuneration report for 2025. And in accordance with the Companies Act, this is only an advisory vote. And that means that if the shareholders do not approve the remuneration report, then Carlsberg has to explain in the remuneration report for '26, how they have taken this result into account. Does anyone wish to vote against? That is not the case. And that means that the remuneration report has been approved. That was item 1 to 4, and we will now go to Item 5, which is an amendment of the remuneration policy for the Supervisory Board and the Executive Committee.

Now the Chairman explained that in this report. The proposal is that the draft changed remuneration policy that you have received with the convening notice that, that should be adopted in its entirety. The most important changes are described in the overview of changes and the Chairman also mentioned them. And you can see them also in the draft amended remuneration policy. Are there any questions or comments? Does anyone wish to vote against or refrain from voting? Not the case. So the remuneration policy has been duly adopted. That brings us to Item 5b, approval of the Board's remuneration for '26. The Board proposes that the basic fee be increased by 3% to DKK 502,000 and the Chairman explained in his report the reason for the proposal. So the total proposal is that ordinary Board members will receive a basic fee of DKK 502,000. Chairman of the Board will receive a fee that is 4.5x the basic fee, doesn't receive anything extra for any committee work. The Deputy Chair received twice the basic fee.

The Chairman of the Audit Committee received 120% extra of the basic fee. The President or the Chairman of the Remuneration Committee and the People and Culture Committee received 60% extra. Ordinary members of the Audit Committee received an additional fee of 60% of the basic fee and ordinary members of the remuneration Committee and the People and Culture Committee receive an additional fee of 40% of the basic fee. Does that give rise to any questions or comments? That is not the case. Does anyone wish to vote against or abstain from voting? That is not the case. So the proposal has been duly adopted. That brings us to Item 6, election of members to the Supervisory Board.

According to the articles, the AGM elected Board is elected for 1 year at a time so that all members of the Supervisory Board are up for election. And the Board proposes to reelect Henrik Poulsen, Michael Schultz, Magdi Batato, Lilian Fossum Bine, Jens Hjorth, Bob Kunze-Concewitz, Punita La and Winnie Ma. Are there any other nominations? Not the case. So the Supervisory Board has been duly reelected. Congratulations. brings us to Item 7. That's the election of auditor. You must have one, of course. And as you can see in the convening notice, the Board is proposing in accordance with the recommendation from the Audit Committee is suggesting to reelect PricewaterhouseCoopers and that the audit task must also include the statement concerning the sustainability report in the management review. Are there any other proposals concerning auditor? Not the case.

PricewaterhouseCoopers have been duly reelected. That brings us to Item 8 on the agenda, authorization of the Chairman of the meeting. This is a standard thing that I just truly be authorized to report what has happened to the business authority and carry out any registration required. Does that give rise to any question or comment? That is not the case. Does anyone wish to vote against or abstain from voting? Not the case. So I have been duly authorized. Thank you very much. So this exhaust the agenda. Thank you very much for carrying it out in good order and being constructive. And I give the floor back to the Chairman of the Supervisory Board. Over to you, Henrik.

Thank you, Anders. Apart from that, all that is left for me to do is to thank our Chairman of the AGM for competently navigating us through this AGM. And thank you to all the shareholders for your support and for being here today. Thank you very much and get home safely.

Ladies and gentlemen, welcome to the Carlsberg FY 2025 Financial Statement Conference Call. I am Hillie, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Jacob Aarup-Andersen, CEO. Please go ahead.

Thank you very much, operator, and good morning, everyone, and welcome to Carlsberg's Full Year 2025 Conference Call. As said, my name is Jacob Aarup-Andersen, I'm the Group CEO, and I have with me our Group CFO, Ulrica Fearn; and Vice President, Investor Relations, Peter Kondrup. 2025 has been an eventful year. We executed on major initiatives that will shape the future of Carlsberg, while at the same time, we navigated through quite a volatile environment in the year.

Let me summarize the key headlines for the year. We closed the Britvic transaction in mid of January. We upgraded synergy expectations and overdelivered on expected 2025 synergies. We delivered good underlying gross margin improvement, and we increased our capability investments across the company. As a consequence, we delivered continued solid profit development. We delivered operating margin improvement and improving cash flow and delivered at the top end of the guidance range. Finally, we increased adjusted EPS by 11%, and we are increasing dividends by 7% to DKK 29 per share.

Before going into the usual presentation, I'm going to hand over to Ulrica, who will go through the changes to our reporting that has and will be implemented. Over to you, Ulrica.

Thank you, Jacob. And now please turn to Slide 3. So as you will have noticed in the release this morning, we have introduced Management-defined Performance Measures or MPMs in our review of the performance and the results. And this, we have done for 2 reasons. Firstly, due to the significant impact from amortization of intangible assets recognized in the PPA that is related to the Britvic acquisition; and secondly, as we're preparing for IFRS 18.

So firstly then, Britvic has had a significant impact on the group's reported financial results. And as part of the purchase price allocation that is done in accordance with IFRS 3, a significant proportion of the purchase price was allocated to the Pepsi partnership to brands and customer relationships and all intangible assets that must be amortized. So for 2025, the amortization of these intangible assets amount to some DKK 640 million, and this is, of course, noncash. So the amortization of brands is reported in cost of sales, while the amortization of the Pepsi partnership and customer relationships is reported in sales and distribution expenses.

In our internal management performance reviews, we don't include the PPA-related amortization. And therefore, to align the internal and external reporting, we provide reported figures adjusted for the PPA-related amortization. And these we call -- these figures we call MPM, and they are short for these Management-defined Performance Measures. And there is a full bridge of MPM and reported on Page 3 in the announcement and key figures are shown on the next slide. But just to make it perfectly clear, there is no change in our presentations in organic development.

And then secondly, as you probably know, the new IFRS 18 reporting requirements will be the mandatory reporting framework from 2027. IFRS 18 will introduce requirements for subtotals, like operating profit, and they will include all income and expenses if they do not meet the definitions of investing, financing, income taxes or discontinued operations categories. And that means that IFRS 18 does not allow for the use of special items as these items has to be classified for the functional area where they derived. However, IFRS 18 do open up for the introduction of Management-defined Performance Metrics or MPMs, in order to improve clarity and consistency in the financial reporting.

So to prepare for the new reporting requirements and avoid unnecessary confusion down the line, we have chosen to use this IFRS terminology for the PPA-related adjustments we have done in our 2025 announcement. And we plan then to be early adopters of the new reporting requirements already from this year. And that means that we will report half 1 in accordance with IFRS 18, and we aim to provide more information on what this means for our future reporting compared to the current framework at a later point.

So then on Slide 4 then, we show the reconciliation of MPM with reported figures for 2025. Going forward, organic development and commentary will be based on changes compared to the previous year's reported MPM figures. MPM adjustments will be the PPA-related amortizations and from 2026, all IFRS 18 related adjustments. Consequently, MPM figures will be fully aligned with our internal KPIs, our incentive schemes and so on, and will reflect how we run our business. And we will reconcile all MPM adjustments, including the PPA-related amortization in a new line below EBIT, and this will be somewhat similar to what we today call special items.

So with that, over to you, Jacob.

Thank you, Ulrica. Always great with an accounting class here. I appreciate that. So let's go to Slide #5 and a brief overview of the 2025 results. So we delivered very strong top and bottom line growth due to Britvic. Total reported volumes were up by 17.7%. Reported revenue grew by 18.8% and operating profit by 22.7%. The organic development was impacted by the loss of San Miguel in the U.K. from the 1st of January '25 and of course, the soft consumer sentiment across our regions. Given the challenging trading environment, we are satisfied that when you adjust for San Miguel, revenue grew organically by 1.1%. Volumes declined slightly, mainly driven by Asia. Our organic operating profit grew by 5% with an acceleration in the second half. Ulrica will go through the financials in more detail.

So please go to Slide 6 for a few strategic highlights of 2025. 2025 was another busy year with many activities and strong progress on a number of our key priorities. Most significant was, of course, the completion of the Britvic acquisition in mid-January and the integration of this business. That started immediately upon completion. I'll come back to Britvic in a few slides, but I'm just going to repeat our excitement about this business and the significant opportunities it's created not only for the combined U.K. business but for the Carlsberg Group as a whole. One such opportunity was the Pepsi license in Kazakhstan and Kyrgyzstan. As highlighted during the year, a lot of work went into the preparations for what is an exciting expansion of our business.

On the back of our strong results for the Pepsi portfolio, we were proud to be awarded European Bottler of the Year by PepsiCo. In the U.K., we were very successful in driving other premium world lager offerings to our customers and consumers in replacement of San Miguel. Of course, we didn't get there in the first year, but we've been very pleased to see the strength of our premium brands and the results that we can achieve with the right level of support.

Poretti volumes more than doubled. That's a remarkable achievement in the mature and highly competitive U.K. market. In China, we continued growing the 1-liter can format in response to the growing importance of the off-trade channel. This pack format, which many of you saw at our Capital Markets Day in the fall, is designed to be shared amongst friends on social occasions, and it offers a crafty and premium look that stands out on the shelf.

Two other exciting initiatives that will strengthen our brands in the coming years with the new multiyear UEFA sponsorship, which we announced back in March and the announcement in October that Robert Pattinson will be the global ambassador for 1664 Blanc. We advanced strongly on our digital journey with development projects across the business. As an example, in the commercial area, I want to highlight our new and advanced value management tools and the launch of the new and advanced online B2B platform, [ Served ]. Finally, it almost goes without saying that we continue the execution of our sustainability agenda, including carbon emission reduction initiatives and actions to reduce water consumption and replenish our water use in high-risk areas with solid progress shown in many areas.

Slide 7, please, and our growth categories and international brands. As you can see on the slide, our 4 growth categories combined account slightly more than half of total volumes now. It was encouraging to see that all growth categories except the smaller Beyond Beer category delivered solid growth in 2025. Our premium portfolio grew by 5%, driven by good growth in all 3 regions. We saw particularly strong growth for Carlsberg and for local premium brands such as Wind Flower Snow Moon in China, Pirinsko in Bulgaria and Zatecky in Poland.

Soft drinks more than doubled due to the Britvic acquisition and now accounts for 30% of total volumes. Soft drinks grew organically by 3%, supported by solid growth in Western Europe and the shipments in Q4 in Kazakhstan ahead of taking over the Pepsi license. We saw particularly good growth for the Pepsi portfolio in Sweden and Switzerland for the relaunched Tuborg Squash brand in Denmark and good initial results for the soft drinks launch in China. We also saw very good growth for Pepsi in the U.K. and Ireland.

Alcohol-free brews grew by 4%. Excluding Ukraine, which is a large AFB market, volumes grew by 7%. Growth was broad-based across most markets in Western Europe and CEEI. While alcohol-free brews accounts for 4% of total group beer volumes, the category accounts for 7% of beer volumes in Western Europe and 5% in our Central and Eastern European markets. In 5 of our markets across Europe, AFB's share of beer volumes is around 10%. Beyond Beer volumes declined by 4%. We saw good growth for Garage, which for the first time exceeded the 1 million hectoliter mark and for Wind Flower Snow Moon in China, but this was more than offset by lower Somersby volumes.

Looking at our international brands, total Carlsberg volumes grew by 4%, while the brand's premium volumes were up by 13%. The strong premium growth was driven by CEEI and Asia with very good growth in China, Laos and India. The mainstream volume growth was mainly thanks to the growth in the U.K. Tuborg volumes were up by 2%, supported by growth in China and many CEEI markets, in particular, India, Kazakhstan and Nepal. In January 2026, we announced a refreshed, bold brand identity, amplifying the brand's energy and modernity while staying true to its iconic roots. 1664 Blanc grew by 2%. We delivered solid growth in multiple markets, but the total volumes were impacted by Blanc's super premium price point in the large Chinese market, where consumer sentiment remained under pressure.

Now let's move to Slide #8 and an update on Britvic. We're very pleased with this acquisition, and our first year of ownership has been excellent, both in terms of underlying performance, which was strong and the efficient and seamless integration. We began integration immediately after closing in January, and all people changes in the U.K. and Ireland related to the integration were concluded ahead of initial plans, and we're in the process of integrating procurement. We upgraded the cost synergy target to GBP 110 million at the Capital Markets Day on the 1st of October, mainly due to higher-than-expected people-related savings.

The cost synergy delivery in 2025 amounted to approximately 30%. That was well ahead of our initial expectations of 10% to 15%. The synergies were achieved in both Britvic and the legacy U.K. business. And for clarity, that, of course, means that they contribute positively to both the P&L in both the organic and the inorganic contribution. That means included in the operating profit of Britvic of GBP 253 million and in the organic operating profit growth.

The fast integration, of course, also meant that the integration costs in 2025 were higher than expected. Alongside the integration, we've had a razor-sharp focus on business continuity and sustaining Britvic's growth trajectory. That entails a step-up in commercial investments to support long-term growth. Britvic volumes in the U.K. grew by 4%, with particularly strong performance towards the end of the year, driven by very strong performance on the Pepsi brand, especially Pepsi Max. The Pepsi portfolio gained more than 1% volume and value market share, which is a stellar performance in a year of integration and strong competition.

In Ireland, volumes grew by 3%. The Teisseire business in France performed worse than expected due to an inefficient cost structure. Just a couple of weeks ago, we made a joint announcement with the employee representatives regarding a comprehensive reorganization of the business as we had originally announced on the 16th of October last year. This reorganization will enable us to adapt the company to the challenges of tomorrow and ensure Teisseire's long-term competitiveness.

Volumes in Brazil declined mainly due to soft demand and our own portfolio rationalization. We continue to optimize the long-term value of this business. Total reported volume and revenue contribution from Britvic and Carlsberg accounts were 24 million hectoliters and DKK 15.6 billion, respectively. The operating profit contribution was DKK 2.2 billion or GBP 253 million, slightly higher than expected due to the higher synergy delivery, but partly offset by lower profits in Teisseire in France.

Please turn to Slide #9 in Western Europe. The region's profile has changed significantly following the acquisition of Britvic with soft drinks now accounting for more than 55% of regional volumes. Total reported volumes grew by almost 50% due to Britvic. Excluding San Miguel, volumes grew organically by 1.3% as a result of soft drinks and other beverages growth of 4.3% and almost flat beer volumes in Western Europe. Revenue per hectoliter improved organically by 1.1%, positively impacted by price increases and growth for premium and AFB, partly offset by channel and product mix. Revenue, excluding San Miguel, grew organically by 1.7%.

Operating profit grew by 40% to DKK 7.4 billion. Organic operating profit grew by 0.7%. Cost initiatives across markets, Britvic synergies in the legacy U.K. business and certain compensations, including insurance indemnifications related to events that had a negative operating profit impact during the year more than offset the material net impact from the loss of San Miguel, and higher logistics costs and in the first half, higher IT costs. The operating margin was up by 40 basis points to 14.3%.

Looking at key markets, it was a very busy year for our U.K. business due to the integration of Britvic and the significant efforts to replace the lost San Miguel volume. Excluding San Miguel, the business delivered high single-digit organic volume growth with market share gains in the on- and off-trade and strong growth for both mainstream and premium for brands such as Carlsberg, Poretti and Kronenbourg 1664 in both channels.

The Nordic markets delivered low single-digit volume growth. We saw good growth for all growth categories except Beyond Beer. Total premium, AFB and soft drinks volumes delivered mid-single-digit growth rates in all 4 markets. We saw solid market share performance across markets and across categories. The French beer market was flat. Our volumes grew slightly, driven by premium beer and AFB. Mainstream beer volumes declined due to the continued softness of Kronenbourg, Red & White.

Now Slide 10 and Asia. In Asia, where beer volumes declined by 1.5% as growth in China was more than offset by soft volumes in particularly in Laos and Vietnam. Soft drinks and other beverage volumes continue to be impacted by energy drinks in Cambodia and therefore, declined by 8.1%. Revenue per hectoliter increased organically by 1.3%, resulting in an organic revenue development of minus 1.2%. Operating profit grew organically by 0.7% and the operating margin improved by 60 basis points to 23.2%. The weaker organic operating profit development in the second half versus the first half was due to soft volumes in some markets and higher sales and marketing investments, particularly in China.

Looking at the markets and starting in China, our volumes grew by almost 4% in Q4, supported by market share gains and on the back of easier comps. That led to full year volume growth of 1% in a market that declined by an estimated 1%. The volume and market share growth were driven by mid-single-digit volume growth in big cities and a growing presence in e-commerce and O2O. Our Western strongholds, which is predominantly mainstream and therefore, more exposed to the soft consumer sentiment, developed largely in line with the market. The channel shift to off-trade continues, in particular to e-commerce and modern off-trade and on-trade remains soft.

Our premium portfolio continued to outperform, seeing strong growth for Carlsberg and for Wind Flower Snow Moon and solid growth for Tuborg and WuSu, supported by strong growth of our 1-liter cans. Revenue per hectoliter was flat as the premium growth was offset by the negative channel mix. During the summer, we increased our sales and marketing investments in China, and therefore, our market share improvement was more pronounced in the second half. Building on the successful big city trajectory, we intend to seed the handful of new cities in 2026.

In Laos, consumer sentiment was severely impacted by the weak macro economy. Our full year volumes declined by mid-single digit, but with a stabilizing trend seen in the second half, we saw good premium beer growth fueled by Carlsberg, while mainstream declined. Our Vietnamese business was hit by a perfect storm in 2025. In the first half, the mainstream Huda brand lost market share and its stronghold in the central part of the country due to an intense promotional activity in the market. And at the same time, we went through a reorganization of our route to market in the South.

In Q4, Central Vietnam was hit by heavy rainfalls and floodings, which, of course, had an adverse impact on our volumes. The rainfalls and floodings in November in Vietnam last year were the heaviest in the history of the country with the heaviest rainfall ever. On the back of all of this, full year volumes declined double digit with an improving trend in the second half. As we continue to improve our business in Vietnam, we expect volume growth to resume in 2026.

Then we move to Slide 11 and the CEEI region, which delivered strong results for the year. Reported volumes grew by 8.6%, positively impacted by the consolidation of our business in Nepal, the inclusion of Britvic's Brazilian business and the sell-in of Pepsi products in Kazakhstan in Q4. The organic development of minus 0.6% was impacted by the soft market conditions across the region. Revenue per hectoliter improved by 3.3%, thanks to price increases and a positive product mix. Consequently, reported revenue grew by 10.4% and 2.7% in organic terms. Operating profit grew by 13.6%, supported by organic growth of 9% and acquisitions. The very strong organic profit growth in the second half was the positive result of tight cost control, supply chain savings and also certain compensations, including insurance indemnifications related to events that had a negative operating profit impact during the year. Operating margin strengthened by 50 basis points to 19.0%.

If we look at the key markets in the region, we had another good year in India. Our business delivered high single-digit volume growth following a strong end of year performance. We strengthened our market share in most of our states, and we saw very strong growth of Carlsberg Elephant and continued solid growth of Tuborg Strong, which is our largest brand in India. We launched 1664 Blanc early in the year, and the brand has come off to a good start. I would, at this point, like to mention that we are exploring different options for increasing shareholder value, and that may potentially include an IPO of our business in India, but no final decision has been made at this time.

It was a very difficult year in the Ukraine with war activities intensifying, particularly in the second half, creating an increasingly volatile and unsafe environment for people across the country. Consequently, our volumes declined by double digit, but our market share was flat.

We're very excited about our business in Kazakhstan, where we are now a combined beer and soft drinks player after the takeover of the Pepsi license. Our volume growth was in the mid-teens with good results for the alcohol-free brews, Beyond Beer and the local mainstream brand. We were able to start early shipments of Pepsi products already in Q4, and this led to very strong growth for soft drinks. Volumes in our export and license business declined slightly. We saw good growth for Carlsberg, Kronenbourg 1664 and our alcohol-free, Moussy brand in the Middle East, but this was offset by soft Tuborg and Somersby volumes.

And with that, back to you, Ulrica.

Thank you very much, Jacob. And now let's go to Slide 12 and the P&L. So the reported revenue was, of course, positively impacted by the inclusion of Britvic, which meant that revenue grew by 18.8%. And the organic development was minus 0.6%. But as Jacob already explained, this figure was impacted by the loss of San Miguel in the U.K. and without which the organic revenue growth would have been plus 1.1%. The currency impact was minus 2.0% and mainly due to currencies in Asia, Ukraine and Kazakhstan.

Revenue per hectoliter was up organically by 1.4% as a result of price increases and also a positive category mix. And we continue to work to deliver supply chain efficiencies that mitigate inflation and help cost of sales per hectoliter to be flattish and rebuild gross margin to enable the growth investments that we do in brands and commercial activities. And cost of sales per hectoliter increased organically by slightly less than 1% as these efficiency improvements offset most of the inflationary pressure and the product mix impact and the underabsorption of fixed costs from lower volumes. Group profit per hectoliter increased organically by 2% and resulted in an organic improvement in gross margin of 30 basis points. And as expected, gross margin MPM declined by 60 basis points to 45.2%, and this is due to the consolidation of Britvic that came in with a lower gross margin.

We increased sales investments organically by 5%, mainly due to the higher level of activity in China and in preparation for the takeover of the Pepsi business in Kazakhstan. And as expected, reported marketing over revenue was down by 50 basis points to 8.3%, and this is due to the inclusion of Britvic. Operating profit MPM grew by 22.7%, of course, significantly supported by the Britvic acquisition. And organic operating profit grew by 5%.

And as you will have noted, we saw quite a sequential improvement from half 1 to half 2, and this was due to expected higher synergy delivery from Britvic and cost initiatives as well as certain compensations, including insurance indemnifications, which related to events with negative operating profit impact during the year.

Reported special items amounted to minus DKK 1.9 billion. And the main items here were the Britvic-related costs, restructuring charges and impairment costs, and this was across all 3 regions. Special items MPM includes the PPA-related amortization and amounted to minus DKK 2.6 billion. And you can find the specification of special items in Note 4 in this morning's release.

Net financials were minus DKK 2.4 billion. And excluding currency gains and losses, these financial items amounted to minus DKK 2.2 billion. And this was an increase of DKK 1.1 billion and due to the significantly higher net interest-bearing debt. The effective tax rate was 22.9%, and this is in line with our expectations. Adjusted net profit MPM was DKK 8 billion, and adjusted earnings per share NPM grew by 11.1% to DKK 61, and this was positively impacted by the consolidation of Britvic and organic operating profit growth.

So now to Slide 13, please. The free operating cash flow amounted to DKK 7 billion versus DKK 6.4 billion in 2024 and with the main driver here being the higher EBITDA, thanks to Britvic, but also organic operating profit growth. The change in trade working capital was plus DKK 730 million. And although we saw a significant improvement in trade working capital in Britvic, it is below the level of Carlsberg. And therefore, average trade working capital to revenue for the year declined as expected, ended at minus 15.6% on a rolling 12-month basis. And looking at the Carlsberg Group, excluding Britvic, average trade working capital to revenue was stable at minus 20.1%.

CapEx then amounted to DKK 5.6 billion, and this is below our initial expectation, but it is equal to 6.3% of revenue, and this is in line with our general guidance for CapEx, which is to be 6% to 7% of revenue. And as with all other cost items, we do actively manage CapEx to align with the revenue development. And CapEx was in particularly impacted by the expansion investments in India and Vietnam, the building of the new soft drinks plant and sales investments ahead of taking over the Pepsi license in Kazakhstan.

Net interest-bearing debt was, of course, impacted by the acquisition of Britvic and amounted to DKK 61.6 billion. Net interest-bearing debt to EBITDA was 3.28x, and we maintain our expectation of reaching our leverage target of max 2.5x net interest-bearing debt to EBITDA by the end of 2027 at the latest. Return on invested capital MPM was 10.8% and mainly impacted by the Britvic acquisition. Excluding goodwill, return on invested capital MPM was 30.9%.

So then to Slide 14 and the proposed dividend for the year. At the Annual General Meeting in March, the Supervisory Board will propose another step-up in dividends to DKK 29 per share, which is an increase of 7%. We have been very clear that we are maintaining our dividend policy, which stipulates a dividend payout of around 50% of adjusted net profit despite temporarily being above our leverage target of max 2.5x net interest-bearing debt to EBITDA. The proposed dividend equals an adjusted payout ratio of 48%, so in line with the policy. We are increasing dividends while at the same time reducing leverage from the pro forma level of 3.4x at the time of the acquisition.

And as a reflection of the financial performance of our business, dividend per share has more than tripled since 2015 when it was DKK 9, as you can see here on the slide. And this is a reflection on an increased payout ratio and doubling of earnings per share over the past 10 years. And we expect dividend per share to continue to grow in line with adjusted EPS. And as soon as the financial leverage is below 2.5x, we will aim to be there at later -- no later than by the end of 2027, as you know. And then we can again return cash -- excess cash to shareholders through share buybacks.

And now Slide 15 and the full year earnings outlook. 2026, we are expecting here to be relatively stable but subdued consumer environment. We also expect that the volatile and uncertain environment will stay with us for some time due to the geopolitical situation, and that will impact consumer sentiment and behavior in many of our markets. We will get some volume support this year from the takeover of the Pepsi license in Kazakhstan and Kyrgyzstan, which will add approximately 1.5 percentage points to the organic volume development. And we continue to see inflation through the P&L. And for COGS, we expect to mitigate the underlying inflation and achieve flattish COGS per hectoliter through our continued focus on delivery of supply chain efficiencies.

On SG&A, we implemented a number of cost initiatives in half 2 2025, and we will keep this tight focus on SG&A costs and expect a slight increase in marketing investments and higher capability and digital investments. And then while the integration of Britvic is ahead of schedule, positively impacting 2025, our expectations for 2026 are unchanged, and we expect to deliver 30% to 40% of the GBP 110 million cost synergies then. Consequently, we have -- we expect to have delivered up to 60% to 70% of cost synergies already after 2 years of ownership. And as a result of all this, we expect an organic operating profit growth of 2% to 6% on operating profit MPM in 2025, and that was DKK 13.996 billion.

Please note that in the announcement also include a similar guidance on reported organic operating profit growth, and this is due to regulatory requirements. And based on yesterday's FX rates, we assume a translation impact of around DKK 100 million negative for 2026. And please note that we've ceased the hyperinflation in Laos in July 2025. On financial expenses, excluding foreign exchange losses or gains, it's expected to be around DKK 2.2 billion. The reported effective tax rate is expected to remain around 23% and CapEx is expected to be DKK 6 billion to DKK 7 billion.

And with that, back to you, Jacob.

Thank you so much, Ulrica. Before we open up for the Q&A, let me just summarize the key highlights of 2025. First and foremost, we closed the Britvic transaction, and we upgraded synergy expectations and overdelivered on expected 2025 synergies. We delivered good underlying gross margin improvement and increased our capability investments across the company. We delivered continued solid profit development, operating margin improvement and cash flow growth, and we delivered at the top end of the guidance range. We increased EPS by 11%, and we increased dividends by 7% to DKK 29 per share.

I'm sure you may have many questions as always, but can we please limit the number of questions to 2 per person to ensure as many as possible, get a chance to get through. After your questions are welcome to join the queue again. And I think with that, let's take some questions.

[Operator Instructions] The first question comes from the line of Trevor Stirling from Bernstein.

Two questions from my side, please. The first one, Jacob, concerning China, you had 1% volume growth for the full year. But what do you think your read on the exit rate from China coming out of Q4 and into the first few weeks of 2026? And some of the high-frequency data is looking a little bit more encouraging, particularly for mainstream beer.

And second one, maybe for Ulrica. Ulrica, with guidance, I hesitate to use the word cautious, but you've got Britvic synergies coming through, that's probably a 2% boost to operating profit. There's something coming through from Kazakhstan as well. And in that context, your 2% to 6% looks prudent, should I put it that way?

Thank you, Trevor. Let me start, as you suggest on China. So listen, you know us, we don't give monthly exit rates, et cetera. But there's no doubt when you look at Q4, we're quite pleased with the performance in Q4. So we did 4% growth in Q4. Of course, we had easier comps as well, but it was clearly better than the market.

What drives it is, I think you can put it down to 3 things. It's -- our big city growth continues to be strong. We're doing well in the channels that are clearly the winning channels. So that's O2O and it's e-commerce and it's convenience. And then the third element is some of the new winning formats. We've also been playing that well. So 1-liter cans, of course, is the most clear one of that. So I think those 3 elements are important.

As we go into '26, I'm not going to give you a status on January numbers, but you say, overall, as we look at '26, we think the consumer is stabilizing. We're not giving you any euphoric statements around China suddenly changing growth trajectory. But we think we're seeing a stable beer market, which gives us opportunity to perform. We're also, of course, looking at a year where, as always, it will be interesting to see also what policy measures we may see, et cetera, around stimulating the consumer.

But overall, the way we're set up the strategic approach we've chosen in China, we've proven in the last quarter again that there's growth to be had for us, continued growth to be had for us. And as we look at 2026, I think that continues. So we would expect to see growth out of our Chinese business in '26. I'm going to be cautious around how the consumer is going to develop through the year. You know us, we prefer to start the year a bit conservative, and I'll do that as well when I look at the Chinese consumer. So -- but with the environment we're in right now, we do expect to be able to deliver growth also in '26 in China.

I'll hand it over to you, Ulrica, on the guidance question.

Yes. Thank you, Trevor. And I think, well, Jacob just mentioned it around China. You are right. We are in the very early time of the year. The world, when you look around, remains pretty uncertain and volatile. So we are a little bit conservative given where we are in the year. But you are also right, there will be support through Britvic synergies coming in, giving us 200, a little bit more basis points of support. We do have one negative against that. I guess, we do have the Carlsberg boom, which is our property gain in 2025 that we talked about, which sits in the half 1. So that goes a little bit against us.

But other than that, we do also expect some increase in our marketing investments and a bit pressure on SG&A from both underlying inflation and IT capability building projects that we continue even in these environments. So albeit, as you also know, we try to offset those by efficiencies. So all of that gives you a little bit of color on the uncertain and volatile world and why we are maybe early in the year a bit conservative with a 2% to 6%.

We now have a question from the line of Sanjeet Aujla from [ Calstock ].

The next question comes from the line of Simon Hales from Citi.

So my 2 questions, please. My first one is just on Britvic, Jacob. But I wonder if you could just talk a little bit more about the performance of the business in Q4, particularly in the U.K., some of the share and brand, sort of trends and momentum you saw? And also, you talked a little bit about how having Britvic now in combination with that broader beer business in the U.K. is enhancing your relationships with the key retailers? And is that meaning anything because you've come into this year's price renegotiation rounds in U.K. and the rest of Europe? So that's my first question.

And then secondly, just on Kazakhstan and the Pepsi license. Can you say how much of an impact those early shipments had on Q4? And how do we think about the build of the rollout of Pepsi in Kazakhstan over the first half of this year and 2026 more generally?

Simon -- we don't know what happens to Sanjeet there, but I'm sure he will try to come back. But thanks for stepping in so far. Listen, let me speak to the Britvic question, and then Ulrica will talk to Kazakhstan. So on Britvic, listen, if you look at the performance, you asked specifically around Q4 as well. We're very pleased with what we saw in the U.K. in Q4. The U.K. volumes were up 7% in Q4, and we saw a very strong performance, especially from the Pepsi brand. When we look at our December, so the 4-week rolling in December, which, of course, is a very important month for all of us, the Pepsi Max took more than 2% value share in December. So really strong performance in the fourth quarter.

We're not going to extrapolate that as the new run rate. But there's no doubt that, of course, in the fourth quarter, our business started being more unconstrained as the integration -- the initial integration efforts were over. So there's no doubt that the team was more able to focus purely on the commercial side of things. So quite pleased to see the performance in Q4 and a very, very strong holiday period as well.

We said from the beginning that we think there is a lot of the potential to unleash in the Pepsi brands, and we're really seeing that play out, especially as we move towards the end of the year. So strong performance there, but it's also strong performance from a number of the breakthrough brands, whether it's Plenish, whether it's Jimmy's, those types of brands also doing very well. 7UP Pink Lemonade has also been a very strong performer. So a number of brands carrying that Britvic performance in Q4, but really, really strong, as you point to.

In terms of the key retailers, I'm not going to specifically comment on the negotiations. They are, of course, tough as they should be because we -- everyone needs to fight their own corner. But I think we're having very strong strategic partnership discussions across the board. It's really -- it's given us a different vantage point post the Britvic acquisition. And it's great to see the partnership discussions we're having with the major retailers also around innovation pipelines, not just for the next 6 months, but for the next couple of years, being able to plan more strategically around also major launches of new products and thinking shared business plans to a larger degree.

So we are excited about what we're seeing in the U.K. I think many people would have expected that 2025 would have been a transition year. But I have to say when you look at the numbers, it's very strong numbers already in '25. And as we go into '26, we do think that we can continue the strong momentum given the relationships that are being built. That doesn't mean that I'm guiding for Q4 run rate to just be the run rate going forward, but at least it's a taste of what we can achieve with this business. So very pleased with the first year of Britvic.

Over to you, Ulrica, on Kazakhstan.

Yes. So a few comments on that, Simon. So yes, we did agree with PepsiCo to take over the license already in Q4. So there were some volumes coming through towards the end of Q4. It's a small proportion of the total, but there are some. And if I then lean into 2026, as we mentioned earlier on, about 1.5% group volume growth will come from the top line of -- supported by Kazakhstan as we ramp up. And it is a little bit hard to say because there's uncertainty due to dependency of co-packers and it's a pretty long supply chain there.

And -- there is always, of course, market reactions as well as you come to market. But so far, no major hiccup. So we are -- that 1.5% group volume growth at the top line is what probably is the most likely at this point in time. And I will also say that -- take the opportunity to say that we are producing, as you heard with co-packers, so outside Kazakhstan. So our facility is not up and running yet and we will, therefore, have not had any profits in 2026.

But there is no news...

There's no new news. Same as before.

The next question comes from the line of Sanjeet Aujla from UBS.

A couple from me, please. Firstly, on Western Europe, your volumes in beer were minus 9% in Q4. I appreciate San Miguel might be a bigger impact, but can you just walk us through the underlying dynamics in Western Europe beer? What's really down in Q4? How you're thinking about it into '26?

My second question is around the potential IPO of India. Can you just walk us through the strategic rationale for that? Is it just to pay down debt? Or what are the benefits would you anticipate from an IPO?

Sanjeet, good to get you back online. So that's good. Let's just take your 2 questions. So first of all, on Western Europe. So yes, you're right that if we look isolated at beer in the fourth quarter in Western Europe, so the trend was worse than it was in the quarters before. There are 2 reasons for that, if I can be very high level. One is we had a major conflict in one of our countries in October, November and into December. That conflict has been closed and resolved, and we're back on the shelf in December. But there was a major conflict there that impacted us. And then the other one is San Miguel. The impact of San Miguel was more pronounced in Q4 if you look at the year-on-year comps than it was in the 3 other quarters. So it's a combination of that conflict and then the San Miguel impact.

Your other question on India. So you're right, we are today confirming the intention to explore an IPO of India, and we have not made any final decisions yet on that. It also, unfortunately, restricts me from a legal perspective in terms of what I can say and not say around that. But I can -- so what I can say is that this exploration is due to -- is driven by our aim to create shareholder value. So we are assessing this on the back of assessing whether we can create shareholder value. So it's purely driven from a shareholder value perspective. And the assessment we're doing right now is whether it's -- it will create adequate shareholder value.

Beyond that, we cannot comment more around the potential IPO. If we do make a decision to go ahead, of course, we can be more specific. But at this stage, that's all we're saying. But it's shareholder value-driven, the deliberations.

We now have a question from the line of Olivier Nicolai from GS.

A couple of questions. First of all, you're running ahead of schedule on the cost synergies on Britvic. I was wondering if you could perhaps quantify the potential revenue synergies as well that you could see, whether it's in the U.K. or also about exporting some of Britvic brands like Jimmy's or London Essence into some European markets?

And then secondly, just on the CapEx guidance, DKK 6 billion to DKK 7 billion, so for 2026, an increase compared to '25. Is there any new greenfield brewery there? Or how should we think about CapEx in the long run?

Olivier, I'm going to disappoint you on the first one, and you probably knew I was going to say this, but we're not going to quantify the revenue synergies. I think we -- as we said in the past, I think with the way we want to be measured on revenue synergies is if you look at market growth rates, we need to be able to beat those market growth rates across categories, and that's how you measure the revenue synergies. We've seen enough car crashes around the companies giving specific revenue synergy targets because it becomes very difficult to separate hot and cold water, and we don't not want to end up being that type of company.

So we're giving you cost synergies. We're delivering ahead of plan on them, and we will continue to power ahead on delivering value to you through the cost synergies. And then the revenue synergies will play out in the coming years. I think it's quite clear. also if you just look at the Britvic performance, but our Carlsberg Britvic performance, both on the soft drinks and the beer side towards the end of the year, you're seeing that there are revenue synergies clearly coming through here. But we do think that we've only so far we're only scrapping the surface. So we think there is significant revenue synergies in the coming years from this.

And as you say, part of those will come longer term from some of these excellent brands migrating to other countries. What we have made very clear is that our 100% focus for the team has to be to go and overdeliver, as we've now said to you on the cost synergies. And then before everyone gets distracted by wanting to launch brands in other markets as well. You will see in the coming time that there will be some of the brands starting to travel. And we will let you know as they launch. But for now, the focus still has to be on delivering on the execution plan in front of them. I don't want people to get too distracted. But revenue synergies is clearly there. And I think the last couple of quarters have only put 2 lines under the potential that's there.

Ulrica, on the CapEx?

Yes. On the CapEx, no, there's no major greenfields in there. The main spend this year will be on maintenance, et cetera, but also capacity and commercial expansion rather than greenfield. There is also a little bit of an inclusion of CapEx continuation in Kazakhstan, where we had to also purchase a new site. So there's a little bit of spillover from that into 2026, but that all fits into that guidance we've given of DKK 6 billion to DKK 7 billion for 2026.

The next question comes from the line of Edward Mundy from Jefferies.

Two questions, please. So the first is on top line. I know you're not guiding on top line, but are you able to comment on how you think about fiscal '26 relative to your medium-term run rate of 4% to 6%. Western Europe seems to put a firmer footing. You've got Britvic in the organics. San Miguel drag is gone. Asian markets moving in the right direction. You've got the Kazakhstan boost. I'd love to get your sense on your growth for fiscal '26.

And then the second question is really picking up on your point around getting recognition as the European Pepsi Bottler of the Year. Could you comment on how conversations are progressing around opening the door for further Pepsi licenses?

Ed, good to speak. Let's start with the top line. So if you look at the top line, you know and you also said it yourself, we don't provide an annual guidance on revenue growth. The 4% to 6% ambition is a through-the-cycle ambition. If you look at it, if we just look at the components of it, so first of all, we don't expect any major change in consumer sentiment. When we look at our business plans and when we look at the guidance we've given you, we're not assuming any change there. So we are assuming a subdued consumer environment in most markets. So let's see how that develops.

You're right, the Pepsi business in Kazakhstan is going to have a positive impact. It's going to drive, as Ulrica said earlier, around 1.5% volume growth. Then we do expect continued growth of our growth categories. So that's premium, that's soft drinks, that's alcohol-free, and we should also see Beyond Beer moving back into growth. So -- and as you know, that's now a bit more than half of our entire business, these growth categories.

Then there are markets where we have easier comps for '25. That's Vietnam, as an example, of course, Q3 in India, we had bad weather in Poland, some big markets. But we also have some markets that are tough comps like we had great weather in the Nordics and U.K. And then Ukraine is a question mark. We simply -- no one knows how that will develop during the year.

Then you have the World Cup in football. Of course, we're going to do football-related activations. I'm pleased to see that a lot of our countries have qualified. So that's good. Our home market is still struggling, but we'll take that in another conversation. But the timing of matches is not ideal for European and Asian consumers. So it's more -- as always, I will caution that weather is more important than football for us in the summer as always.

And then we're taking price increases in most markets as well. If you look at that, I think we have quite a constructive setup for 2026. The consumer will be a key variable, of course, consumer sentiment, but it is a constructive setup, and we are expecting both volume and revenue growth in 2026, but I am not going to put a number on it. We -- as you know, what we guide you for is how we convert that into earnings growth, and that's what you heard about the operating profit growth.

Then you asked about more Pepsi opportunities. Listen, we have not been shy around the fact that we have a great partnership with Pepsi. We've been very pleased with the how that has developed over the last couple of years. Kazakhstan is off to a good start. Britvic is off to a fantastic start as a relationship. We're seeing good performance across our different markets. So very pleased with that. And yes, we do have conversations with Pepsi around potential further opportunities. So that is progressing. I would be surprised if we don't come back to you during 2026 with some updates on that. But of course, these things take the time they take.

The important thing for us is we don't want to just add more countries because we feel any type of pressure from people like you, Ed. We want to add countries that create value for our shareholders. And that's -- this is not a flag setting exercise. It's not about having as many flags on the map as possible. Every single market, it has to make sense for our existing business. It has to create true value for our beer portfolio and therefore, creating those multi-beverage synergies in the market and creating stronger moats around our beer business. And we see some opportunities in front of us. We're having good conversations on those, and let's see if anything happens. We -- I would think we will come back in '26 with some news on that. But we'll leave it at that.

We have now a question from the line of Soren Samsoe from SEB.

Just a couple of questions. A follow-up on Britvic. Quite impressive integration so far, but what parts of the integration has been going faster than you originally planned for? And will this lead you to adjust the original target of 5-year obtaining the synergies to maybe a shorter period?

And then secondly, an accounting question for Ulrica. You are preparing for IFRS 18, you say. But to my knowledge, then you -- that gives, you say, a different way of defining special items, so you will need to bring some of them above the EBIT line. Could you maybe elaborate a little bit on how this will impact your numbers going forward in terms of special items and maybe other items that you have looked at?

Soren, thank you for that. Let me take the Britvic question, and Ulrica will go into the depth of accounting, which is lovely. Listen, on Britvic, you're right, we are ahead of plan, which is great. And when you look at the original 5-year horizon, I think at this stage, we are going to realize the synergies faster than the 5 years. That's the expectation. When you look at it at the end of this year, we will have delivered between 60% and 70% of the cost synergies. And then there is a tail, that's correct, but we don't think that tail will be 5 years anymore. So -- which is very pleasing because, of course, we're also at a stage where we want the business to focus on driving commercial outcomes and not focusing on driving cost synergies. So the faster we can execute on this, the better.

And you can say the majority of the people-related synergies are fully in the numbers now that we've guided you for. What we're looking at right now, so it is also people-related synergies that have gone faster than expected. What the focus is on now and which is the remainder of the synergies is basically procurement and logistics. And on the procurement side, the reason why there was a tail is that part of some of the procurement is renegotiation of major contracts that may have a duration. So we need to wait for them to expire before we can renew them. Because overall, that sale is becoming shorter. And you're right. So we will do this faster than the 5 years. But the guidance for this year stands with the 30% to 40% realization of cost synergies, which we're very pleased with.

Ulrica, on the MPMs?

Yes. So the question was on the IFRS 18 and the special items and how that relates. Yes, it is -- you're absolutely correct. IFRS 18 means that basically you have to put back special items to where they -- in the category which they belong. So for this year, our MPMs includes taking away the amortization of this intangible assets. But as I talked about, but for 2026, when we implement this IFRS 18, we will also show a track as to how we add back the special items and then come back to pretty much the same number as where we were before, but through the MPM metric rather than the definition we had before.

So this is all done, to be able to compare and come back to the same place where we have special items and amortization adjusted for, if that makes sense. And we are doing this early now just to introduce some of this terminology right now as we had to change anyway. And rather than to change to something now and then to something else later on, we will just continue to use the same terminology and adjust with what IFRS 18 will expect from both us and others to do in the future. Hopefully, that's clear.

The next question comes from the line of Andre Thormann from Danske Bank.

I just have 2 questions as well. First question is maybe a bit on the longer term here. Can you maybe talk a little bit about how you see the underlying organic EBIT growth potential for Carlsberg? If you strip away everything that is related to new contracts in Pepsi and potential Britvic synergies, et cetera. So if we strip away that, how does the underlying organic EBIT growth profile looks for the company longer term?

And then my second question is related to Q4. So I'm just curious how much of the organic EBIT growth or maybe in 2025 as a whole is easier, is driven by essentially synergies from Britvic that was from, yes, the Carlsberg U.K. business that Jacob alluded to in the beginning? That's my questions.

Andre, so on the underlying EBIT growth, so of course, first of all, I'll make the statement that you know I will always make, which is you will never ever get a year where there's no impact from anything. But of course, if you look at the underlying, also because we -- you say the added Pepsi contracts, et cetera, et cetera, that's all adding organic earnings growth to the business as well. But if you look at it, we firmly believe in our growth algorithm, and we firmly believe that this business should be delivering 4% to 6% revenue growth. And as that -- in that algorithm, we believe that it should be delivering a higher EBIT growth than 4% to 6%. So our algorithm is pretty clear around that.

The -- and as such, we don't see any change to that. So the 4% to 6% top line growth or revenue growth needs to convert into a higher EBIT growth, and we don't see any change to that. That's also what we are confirming again and again also when you look at this year.

Then I'm fully aware that -- and I also -- I read your research, which is excellent, but I'm also aware that you would have liked a slightly higher guidance. But as Ulrica has already answered the guidance question earlier today around how we start out the year with the uncertainties in front of us. But we do have undiminished belief in our growth algorithm, which is that conversion.

Then on the -- the impact from inorganic on synergies, it's slightly less than 1% of our EBIT growth. So if you look at the 5% EBIT growth we just delivered, it's slightly less than 1%, which is driven by synergy realization on the organic side. We are not going to go into the exact math on it, but we can obviously track that because we can see where the synergies are being realized. And it's natural when we are combining 2 major businesses that some of the synergies will be in the organic business.

Do remember that the Britvic U.K. business was significantly bigger than the Carlsberg U.K. business. So of course, there would also be synergies on the Carlsberg side of things as well. So slightly less than 1% total contribution to the 5% growth.

Can I just ask a quick follow-up on the first answer you gave, Jacob. It's just to be sure, this higher EBIT -- organic EBIT growth than the 4% to 6% volume growth that you guide, isn't it true that, that will be significantly lower if you strip away Britvic synergies and Pepsi?

I'm not sure why I should strip away Pepsi because Pepsi is part of our business, and it's organic. It's...

[ Contracts ] and Pepsi, sorry.

Well, if I'm adding Pepsi into a market, it's like adding a -- launching a new beer into a market. It's an organic. We're adding a category. We're adding a product to our business. So -- when we're looking at organic business, it's not different than from that perspective. And by the way, not to go into a long discussion on it. But by the way, when you look at Kazakhstan this year, I think Ulrica said it earlier, it's not adding any material EBIT growth for us. So over time, I think Pepsi growth is, of course, part of our organic growth. When we are acquiring something, it should be inorganic until it's introduced.

Synergies from Britvic is incredibly important. But of course, our underlying business needs to deliver. So of course, I fully contend to what you're saying around synergies. That's a specific element. And if you look at the long term, of course, you're not going to have synergies every year playing into that. But these businesses are our growth businesses. When you look at our categories, our growth categories are all helping us deliver within the algorithm. So we're super excited about the growth potential that this portfolio gives us.

We have now a question from the line of Laurence Whyatt from Barclays.

A couple from me, please. Firstly, just on the U.K. business, good to see the good results you're getting through there. Of course, we've seen a lot of news in the U.K. press around the difficulties the hospitality industry is facing. And one of your peers in the distribution space has already sort of commented on that with one of their recent announcements. Just wondering if you're seeing any issues within the U.K. market, if you've seen any deterioration over the past couple of months and going into 2026?

And secondly, it's also great to see your success in soft drinks in the Nordic market. I was wondering if you could split that out between the areas where you've got Coke contracts and Pepsi contracts and perhaps comment on how the relationship is with Coke as you embed yourself further with Pepsi, whether anything has changed there or if that continues to be a very strong relationship.

Laurence, so no, we do understand what it is you're referring to from a peer in the market. So if you look at the U.K., there is no doubt that on-trade is going through a difficult time or the hospitality industry is going through a difficult time. We don't think we're seeing a step change, just to be clear. It has, as a channel, been under pressure for quite a long time, but we're not seeing a step change. We're not going to go that far.

If you look at it, we're quite pleased with the fact that we've been taking market share in both on-trade and off-trade. But as channels go, there's no doubt there's more pressure on on-trade than off-trade, which is, let's be honest, that's a trend we're seeing across most markets. I know it's getting a lot of attention in the U.K., but it's what we're seeing across most markets. Part of this is, of course, cyclical. I'm not going to wait into a bigger political debate around the U.K. market as such. And of course, I'm fully aware there are some structural debates around also the conditions for the hospitality industry.

So -- but overall, we don't see a step change. We're not flagging that it's deteriorating at a faster pace than it's done over the last couple of years. So we have our own momentum at the moment. We've taken market share in on-trade, driven especially, as you know, with the focus we've had, especially around Poretti and 1664. And then Carlsberg, Danish Pilsner has done quite well in that channel as well. So we see -- in on-trade, we see continued opportunities for us also as we bring the combined portfolio into the on-trade space. So of course, we hope it stabilizes, but I'm not going to flag a significant step change in trend in recent months.

You asked about the Nordic region. We don't split Pepsi versus Coke. We don't do that for legal and competitive reasons. So hopefully, you can bear with me on that. So I'll focus on your -- the second question you had. But I would say that, listen, we're seeing good soft drinks performance in all 4 markets, that I can say. But I'm not going to be specific on market versus market.

You spoke about the Coke relationship. Listen, we have a fine relationship with Coke. I keep reminding you that we have for 30 years, almost been operating Pepsi and Coke in the Nordic region in different markets. And that, that has been a peaceful coexistence in those markets. As long as we're delivering for our partners in these markets, it hasn't been a major issue. So we still have good relationships with Coke. We have longer-term contracts with them. And I think that's basically it. So unchanged messaging on that.

The next question comes from the line of Richard Withagen, Kepler Chevreaux.

I have 2 as well, please. First of all, on the U.K., you mentioned high single-digit volume growth for the organic business, excluding San Miguel. I guess your beer brands have benefited from the soft drinks distribution and to some extent, also from the loss of the San Miguel brand. So on the existing brands, how should we think about the potential for further market share gains in 2026?

And then the second question is on your objective to reduce debt. What is the main focus to generate cash flow organically and thereby reduce debt? And also, besides the India IPO consideration, are you considering other inorganic initiatives to lower debt?

Richard, let me talk to the U.K., and Ulrica will speak to the net debt. So you're right, if you look at '25 performance, we're quite pleased with how the beer brands were doing. If you look at it, Poretti more than doubled. 1664 in the U.K. had high teens growth. Blanc almost doubled and Brooklyn had mid-single-digit growth. And at the same time, Carlsberg had mid-single-digit growth. So very pleased with that.

Of course, that strong performance. Part of that was, of course, driven by some outlets where it was easier to replace San Miguel, et cetera. And as we go into '26, that tailwind will be harder, of course. We do expect the brands will continue to drive growth. Market share growth will likely be less than it was in '25 due to that effect. But we do see quite strong momentum behind our brands and especially Poretti and 1664.

Ulrica, on the net debt?

Yes. So the question around continuing deleveraging, what we're doing organically, we expect to continue to reduce the debt through 2026 and much of that will be organically. And it will be the traditional levers. I mean the big one being really driving EBITDA growth in terms of getting the leverage down, that's a big impact, so focus on growth. But then the other one on the other side, operational free cash flow, we are continuously working on trade working capital, every lever there is. And this is in the organic business, but it's also in Britvic, where we feel there's a little bit more work to do.

And we are also, on top of that, to your question, investigating whether there are other inorganic opportunities that we can look into. So any cash-generating opportunities we will look into to make sure we continue this trajectory that we started. And I can say it's so well ingrained into the business. We've also put an additional incentive scheme in place to make sure we drive the focus on this in the short term when it's so important. So you'll see a combination of the 2, but the organic being a very big focus for 2026.

And with that, I'm told that we have one last question. So let's do that.

So the last question comes from the line of Thomas Lind from Nordea.

So also 2 questions, a bit sorry, accounting here. Just the other operating activities, you recorded, I think, DKK 550 million positive in '25, significantly above the last couple of years. That's almost 5% basically your entire EBIT growth for '25 is recorded here. Can you just elaborate a little bit on what is this? And then also going forward, is it then fair to assume that it will be like the past couple of years? So basically, I guess, around DKK 50 million, DKK 100 million. So I guess, a significant headwind into next year?

And then the 2 other questions, I guess, or one other question, a bit more also accounting, amortization, DKK 640 million, DKK 25 million, special items, DKK 1.9 billion. How should we think about this going into '26? Is it fair to assume that it's sort of the same levels? That would be my question.

Thanks, Thomas. Good to end with a bit of accounting. So I appreciate that. I hope you're well. I'll do the OOI and then Ulrica will speak to the technicalities of the PPAs, et cetera. So you're right, OOIs are higher this year. They are for some very specific reasons. You say the majority of the OOIs, and I think this is a very important point. The majority of the OOIs, they are basically a wash for the year. because most of these OOIs are compensation for events that have happened during the year and has impacted our EBIT negatively.

So basically, the compensations then get booked on OOI, while the negative EBIT impact is, of course, non-OOI, but it's basically a wash. So we understand that the OOI line looks bigger this year, but it's driven for those reasons. So most of it is basically a wash on the year. A few examples just to make it concrete. We had major floodings in Italy in the first half. You know our brewery was completely out and the insurance was received in the second half. We had a work kettle implosion in France in the first half, which had significant impact on our business and insurance again received in the second half. And we had a major breakdown in Sweden, a bottle washer, which basically took us out of capacity.

And again, insurance received in the second half. So we had a number of these things where we had reported EBIT losses that were then compensated by OOI. In the end, it's the same and it's within the year. So it's basically a wash. So we know the number looks big, but it's very clearly basically a wash on the lines. And if accounting was looking different, you wouldn't even notice it because it would just be netting each other out.

That also -- you're right that we don't expect that level of OOI next year. Of course, we can never -- given the things I've just explained to you, of course, we cannot predict those types of things. So it could be high next year, but we don't expect it to be as high next year. And that also means when you look at our 2% to 6% guidance, of course, the OOIs are not going to be repeated. So of course, that's also -- that makes the guidance -- gives also some perspective on the guidance and shows the ambition within that. So we're not being helped by the OOIs in the guidance for 2026.

Ulrica, on the PPA?

Yes. So that's -- I think it was on the amortization and the special items together, the DKK 2.6 billion. So the DKK 640 million that is the amortization is easy to answer. That will be the same coming in next year. It's an amortization that we now will face. And then in terms of the rest of it, which is about DKK 1.9 billion, that's about half of it is related to Britvic and then the other half of it is related to restructuring. And of course, these are special items and costs that we've incurred to drive benefits into the future. So we're expecting that to be a lot lower next year. But again, special items is one of these items that hard to predict, but these are extraordinary levels.

We have made the second largest acquisition in our history. So of course, you will see special items in a year like that.

Okay. I think with that, operator, I think we -- that was the last question. Thank you so much for your interest. And as always, we look forward to seeing many of you in the coming days. So until then, have a great day.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Thank you very much, and good morning, everybody, and welcome to the Carlsberg Q3 2025 Conference Call.

So, as I said, my name is Jacob Aarup-Andersen, I'm the Group CEO, and I have with me our Group CFO, Ulrica Fearn; and Vice President, Investor Relations, Peter Kondrup.

Before we get into the meat, let me begin by summarizing the key headlines for the quarter. First of all, we delivered strong volume and revenue growth due to the Britvic acquisition, for which both integration and synergy realization are progressing very well. In a soft consumer environment, we achieved solid underlying volume and revenue growth in Western Europe, and we achieved sequential quarterly improvement in Asia. As part of our well-embedded performance management process, we have, since early summer, taken decisive actions to adjust our cost base in order to protect continued earnings growth and to enable uninterrupted investments in our business. As you will have seen, we maintain our full-year earnings guidance.

Now I will provide the key group headlines for the quarter, and then Ulrica will take you through the regions and the full year outlook. So let's turn to Slide #3. As a result of the Britvic acquisition and the consolidation of Gorkha Brewery in Nepal, reported revenue grew strongly by 17.8% to DKK 24.1 billion. Organic growth was impacted by the loss of San Miguel in the U.K., the soft consumer sentiment and the war in Ukraine, the combination of which led to an organic revenue decline of 1.4%. However, adjusting for San Miguel, organic revenue grew slightly. The impact from currencies was minus 2.3% and mainly related to Asian and Eastern European currencies. So the 16.2% reported volume growth was also positively impacted by Britvic and Gorkha Brewery, while the organic development of minus 3.0% was subject to the factors I just went through. Excluding San Miguel, the volume decline was 1.7%.

We continue to see good progress for revenue per hectoliter, which improved by 2% with positive contribution from all three regions. The improvement was driven by price increases and also a positive product mix, partly offset by channel mix due to a soft on-trade across the regions.

Let's have a look at the positive mix drivers on Slide 4. Year-to-date, soft drinks accounted for 28% of our total volumes, making soft drinks our second largest volume segment after mainstream core beer. In Q3, soft drinks grew organically by 4%. This was driven by strong results in most of our major soft drinks markets. We saw particularly good growth for the Pepsi franchise in Norway, Sweden and Switzerland and the Coca-Cola business in Finland. In Denmark, Tuborg Squash delivered good results following the relaunch earlier in the year.

The 5% growth of our premium beer portfolio adjusted for San Miguel was the result of good performance in Western Europe and Asia, in particular, in markets such as the U.K., France, Finland, China and Lars. Premium volumes were down by low single digit in CEEI, primarily due to the very difficult circumstances in Ukraine. The soft consumer sentiment in Kazakhstan and the heavy monsoon in India.

Total alcohol-free brews were impacted -- the volumes of total alcohol-free brews were impacted by Ukraine, excluding which volumes grew by 6%. In Western Europe, the growth was strong at 9%, and it was broadly based. And in several CEEI markets, including Kazakhstan, Greece and Croatia, we achieved double-digit growth rates.

Beyond Beer had a difficult quarter. Although Wind Flower Snow Moon delivered close to 20% volume growth in China, this could not offset overall lower category volumes, particularly in the large markets of Ukraine and Poland. Our key international brands all delivered positive growth in the quarter. While total reported Carlsberg volumes grew by 3%, the brand grew by 8% in markets with a premium positioning, not least thanks to a very strong growth in China.

Reported Tuborg volumes grew by 2%, and this was mainly due to growth in premium markets, especially China and Vietnam. The 6% volume growth for 1664 Blanc was driven by strong performance in several Western Europe and CEEI markets. That more than offset continued challenges in China, where the brand is positioned in the super premium segment and was impacted by the decline in the night entertainment channel.

Let's take Slide 5 and an update on Britvic. We're very pleased with this acquisition. As you know, we increased the expected cost synergies by GBP 10 million to GBP 110 million at our Capital Markets Day on 1st of October. The upgrade was done based on the successful execution of our integration plans, which are delivering synergies across both the acquired Britvic business and across the old Carlsberg business. The teams are working hard to advance the integration as quickly as possible so we can ensure continued strong momentum in the coming years.

The increasingly positive feedback from major customers in the U.K. is confirming our very strong confidence in the advantages of combining beer and soft drinks also in the U.K. and the long-term value creation opportunities from this acquisition remains very strong. Thanks to our rigid focus on business continuity and commercial execution and despite the ongoing integration efforts, volumes in the U.K. and Ireland grew by 4%, and our market share strengthened, supported by the Pepsi franchise in both markets.

Total Britvic volume and revenue development was impacted by the decisions taken earlier in the year to exit unprofitable volumes in France and Brazil.

On October 16, we informed the Works Council of Teisseire in France of a project to overhaul the business model, impacting production, sales and back-office functions. More information can be found in the Q3 announcement.

With this, I'm going to hand over to Ulrica, who's going to take you through the regions and the outlook.

Thank you, Jacob, and good morning, everyone. Please go to Slide 6 and Western Europe, where we delivered strong reported growth due to Britvic, but also solid organic growth rates in many markets, including the Nordics, France and the U.K., excluding San Miguel. We delivered market share improvements in most markets in both beer and soft drinks. Reported revenue growth was 37.2%, while organic revenue was minus 1.2%. And adjusting for San Miguel, organic revenue growth was plus 3.1% and volumes followed the same pattern with reported growth of 48% and adjusted organic growth of plus 1.3%. Revenue per hectoliter was up by 1%, with low single-digit improvements in nearly all markets, thanks to a combination of price increases across the region and a positive category mix, partly offset by channel and country mix.

Looking at a few markets and starting with the U.K., and Jacob has already talked about soft drinks on the previous slide, so I will focus here on the organic business, which delivered very strong underlying set of results with mid-teens volume growth. The strong growth was in particular, the result of double-digit growth for Carlsberg Poretti and the 1664 brand family. We are very satisfied with the progress of replacing the lost San Miguel volumes with our own brands, and we gained market share in both the on- and the off-trade channels.

The Nordic markets delivered mid-single-digit volume growth, mainly driven by the very strong soft drinks performances, but also good growth for alcohol-free brews and premium beer. And on the back of easy comps, our French business continued the positive momentum in Q3, strengthening its market share and delivering low single-digit volume growth, thanks to the double-digit growth for alcohol-free brews and mid-single-digit growth for premium. And these solid growth rates were, however, partly offset by the continued decline of the mainstream Kronenbourg red and white.

It was a difficult quarter for our business in Poland, where the beer market suffered from both bad weather and the soft consumer sentiment. Our premium portfolio grew double digits, led by Zatecky and Blanc and alcohol-free brews saw high single-digit growth, but these categories are not yet large enough to offset the volume decline in mainstream. We gained market share, but total volumes declined by double-digit percentages. And our Swiss volumes declined slightly, mainly due to a soft on-trade.

So please go to Slide 7 and Asia, where we, as expected, saw sequential improvement, although consumer sentiment is still soft and the trading environment challenging. Organic revenue declined by 0.6% as a result of volume development of minus 1.2% and an increase in revenue per hectoliter of 1%. The positive development in revenue per hectoliter was driven by price increases and a favorable product and country mix. And the reported revenue development of minus 5.7% was impacted by the depreciation of the Chinese, Laos, and Vietnamese currencies.

Looking at China, the beer market declined by an estimated 2% in Q3 despite easy comparables. And this was due to a tough macro environment and low consumer confidence. Our volumes were flat, and we strengthened our market share, both in Q3 and year-to-date. And year-to-date, our volumes in China were slightly up, while the market was slightly down. We saw mid-single-digit growth in the big cities, while our mainstream SKU businesses in the Western stronghold declined slightly.

Our premium portfolio grew by mid-single digits, thanks to more than 25% growth in Carlsberg and Wind Flower Snow Moon and mid-single-digit growth for the very large Tuborg brand. Revenue per hectoliter was slightly up due to the positive brand mix, partly offset by channel mix.

In Vietnam, our business delivered sequential quarterly improvement, in line with our expectations. Our market share stabilized towards the end of the quarter, and we saw mid-single-digit growth for our premium portfolio led by Carlsberg and Tuborg and for Somersby. However, our big mainstream Huda brand was impacted by a weak market in the central part of the country, exacerbated by three big storms in the quarter. And consequently, total volumes declined by mid-single digits. And while we see a continued progress in Q4, we will see an impact from the heavy rainfalls and floodings in Central Vietnam that are happening as we speak.

In Laos, our business stabilized in Q3. Although seeing signs of improvement in Q3, the market remained under pressure, impacted by soft consumer sentiment and labor migration. Premium beer grew strongly, albeit from a low base, and total volumes were slightly up, mainly driven by soft drinks.

So let's go to Slide 8 and CEE&I, where reported volumes grew by 2.5% and revenue by 3.1%, positively impacted by the Britvic acquisition and consolidation of the Gorkha Brewery in Nepal. Organic numbers were impacted by the overall soft consumer sentiment, the war in Ukraine and the monsoon in India. And consequently, revenue declined organically by 2.8% and volumes by 5.2%. Revenue per hectoliter improved by 3%, mainly driven by price increases.

And then a few comments on the largest businesses in the region. As already mentioned a few times today, the Indian beer market was negatively impacted by the heavy monsoon in the quarter. However, growth resumed in September. And while our volumes were not immune to the weather, declining 1% for the quarter, we still outperformed the market and gained further market share. As with the market, our volumes grew in September. Our volumes in Ukraine declined by high teens percentages. And in addition to the war-related challenges, including mobilization, missile attacks and immigration, the market were also impacted by cold and rainy weather during the season and high inflation.

In Kazakhstan, our volumes increased by low single digits, supported by good growth of the mainstream portfolio. And here, we are preparing for the full takeover of the Pepsi license from the 1st of January. And as we mentioned in August, the construction of the new bottling facility is ongoing and expected to be operational in half 2 2026. And until then, we will make use of co-packers, which means that we will not expect any profit contribution from the Pepsi business in Kazakhstan in 2026.

Now please go to Slide 9 and the earnings outlook for the year. In August, we updated our full year earnings expectations to the upper end of the previous range. Based on the Q3 performance, we maintain the outlook of an organic operating profit growth of 3% to 5%. And remember that this includes the negative San Miguel impact of around 2 to 3 percentage points.

We have a strong cost culture in Carlsberg and well-embedded performance management process to ensure that we, when necessary, can take cost actions and/or reallocate resources quickly. And as part of this process, we have since early summer, taken actions to adjust our cost base to mitigate the impact from the subdued consumer environment. And these actions will protect earnings growth and at the same time, secure the financial flexibility to allow us to increase our commercial investments in digital tools and capabilities and also in sales and marketing investments in key markets such as China in half 2.

The expected GBP 250 million of operating profit contribution from Britvic remains unchanged, and we continue to focus on fast deleveraging. And to repeat what we said earlier, the leverage reduction will be rather modest in 2025, and this is due to high cash costs this year, mainly related to the Britvic integration. And based on yesterday's spot rates, we assume a currency impact on operating profit of minus DKK 200 million, unchanged compared to the previous assumption. And this excludes the impact from hyperinflation in Laos. All other assumptions are also unchanged. Net financial expenses, excluding FX, are expected at minus DKK 2.4 billion. The expected tax rate is unchanged at 23%. And we also keep the CapEx outlook of around DKK 7 billion, although with a bias towards less than DKK 7 billion.

And with that, over to you, Jacob.

Thank you, Ulrica. Before we open up for Q&A, let me just summarize what you just heard. First of all, we delivered strong volume and revenue growth due to the Britvic acquisition. And on the Britvic acquisition, integration and synergy realization are progressing very well. In a soft consumer environment, we achieved solid underlying volume and revenue growth in Western Europe, and we delivered sequential quarterly improvement in Asia.

As part of our well-embedded performance management process, we have since early summer, taken decisive actions to adjust our cost base. And we're doing that to protect continued earnings growth and to enable uninterrupted investments in our business. And then as Ulrica just said, we maintain our full-year earnings guidance.

For the Q&A, we're going to limit the number of questions to two per person, so everyone can get a chance to get through. After you had your questions answered, you're welcome to join the queue again. And with that, let's take some questions.

[Operator Instructions] The first question comes from the line of Sanjeet Aujla from UBS.

Two for me, please. Can we dig a little bit into China in terms of how you're seeing the on-trade versus off-trade momentum? I think you spoke about the big cities being up mid-single digit, but love to get a bit more color on how you're seeing your Western provinces evolve. Is that the softness there macro, more competitive? Or just love to get an update on the status quo there and maybe what you start seeing at the start of Q4?

And then my second question was really specific on Poland. I think you called out your volumes down double digit. Clearly the market is in a tough place. But what are you really seeing in terms of the outlook there? I'm conscious as we go into '26, there's an excise duty on beer coming through as well. Would you anticipate continued category volume declines on Poland into next year on the back of that?

Thanks, Sanjeet. So let's start in China, as you suggest. So yes, so color on Western and on on-trade. So just in terms of on-trade, off-trade, we don't see any different momentum in Q3. It's the same. We're seeing on-trade remain weak, and we're seeing part of that spillover into off-trade. So there is that channel mix continuing in China, which is favoring off-trade over on-trade. There's been a number of factors affecting on-trade. We also highlighted that at our Q2 results. When we look at the overall Chinese market, it's down 2%, and part of that is the on-trade weakness, so the 2% down in Q3. I know we had some pushback when we said it on Q2, but I guess we turned out to be right on China from that perspective.

To also note, of course, that the minus 2% in the market, we're flat, so we're taking a bit of share. But we're not seeing a change in on-trade. We didn't see a particularly sharp decline, but we just saw a continued weakness in on-trade due to a number of factors, whether that's the personal disposable income, overall consumer sentiment and then also some of these government measures that you're aware of.

When we look at the -- you spoke about the Western strongholds versus the big cities. You're right, big cities are growing mid-single digits. So continued good growth there. That's also good for -- from a mix perspective -- product mix perspective. On the Western stronghold, so they're down a bit, down low single digit. That low single-digit drop is basically in line with overall market and macro. We're not seeing ourselves lose share in any of those strongholds. There's no meaningful change in market share. So this is basically macro/market-driven. It's not a competitive element. So when you look at that going forward and you look into the coming quarters, we're not seeing any change in the broader themes around Western versus -- sorry, Western strongholds versus big cities and off-trade versus on-trade. I think that's too early to call a shift in those patterns.

When you look at Poland, yes, you're right, listen, I think some of our esteemed colleagues have also been highlighting a very, very tough market in Poland. The fact that we can say that we had double-digit declines and we took market share, I think that says everything around how tough that market has been for all of us operating in it. With that being said, I think it's too early to call how '26, you asked specifically around how '26 will be. Currently, it's a very tough market. Year-to-date, we estimate that the market decline is around 6%. It's a soft consumer. It was also a very tough summer comp in terms of weather comp from last year, combined with bad weather this year. So there is not just consumer, but also a weather impact on it. We are seeing that premium and alcohol-free has been growing, but mainstream has been declining. So there's also some nuances within the mix there.

As we go into '26, I'm not going to paint a bullish picture on Poland. We do expect it to remain tough. But of course, the market comps will be easier going into '26. But I think we need more data on the Polish consumer before we can start calling any significant change in the overall outlook.

The next question comes from the line of Andrea Pistacchi, Bank of America.

I just wanted to follow up with the first question on China, please, a minute. So we've been hearing about some signs of easing of the government an extra against a crackdown in China. So, I just wanted to hear your perspective on that. You just talked about the on-trade continuing to be weak. But if you -- have you seen any improvement towards the end of the quarter -- and how you're feeling about accelerating growth in China in Q4 on an easy comp?

My second question, please, is on the guidance. You narrowed the EBIT guidance back in the summer. Today, you're confirming that 3% to 5% organic EBIT, yet the environment in some markets has turned out probably to be more difficult like Ukraine, you have then the bad weather in India. So are there any offsetting positives that support the guidance? You were talking earlier about tighter cost control. So could you also elaborate a bit on that? What is -- what you've changed in recent months maybe on the cost control?

Thank you, Andrea. Let me start on China, and then Ulrica will speak to the guidance question.

So you did sneak two questions into one there. So let's just have a look at it. First of all, you asked about the anti-extravagance and whether there is an easing towards the end of the quarter. I think that is too much of a nuance for us to try to have a perspective on. I think there are many moving factors right now in on-trade in China. We are not seeing any decisive change in on-trade in China. So we would not go as far as to call that. We've heard many opposing views on the effects of this decree. And I think it's too early to call. We said in early August in Q2, and we had several people in the market making the same statements as you're just making here. It turned out not to be true. So I'm not going to -- I think it's too early to make a decisive call on the impact on on-trade.

On-trade remains weak in China. You're referring to a specific factor around anti-extravagance, but there is a number of factors that is impacting on-trade, and this is just one of them. We remain focused, of course, on gaining any opportunity we can get in on-trade in China, but where we're seeing real opportunity for us is especially in off-trade. As you know, also with new innovations such as the 1-liter cans that are doing incredibly well and also what we're doing, more beyond beer as well.

You also asked around the momentum into Q4. So when we look at China in Q4, we do expect the market to decline slightly in Q4. where we are for Carlsberg, we are assuming volume growth in China, so positive volume growth in Q4 for Carlsberg. You're right, there are easier comps. We're also doing higher commercial investments. But overall, we do expect to grow positively in Q4 in China.

And then Ulrica, on the guidance and the cost question.

Yes. Thank you, Andrea. And I think you're absolutely right, the 3% to 5%, we're reiterating and -- but we're also calling a subdued consumer environment to be expected to continue. And you asked about what are the positives we've seen there. And we have talked about this in the past, given what we saw in the consumer environment, we did, of course, always have a very tight cost focus, and we are set up to adapt rapidly, and that's what we're doing in an environment like this.

So one of the reasons that we feel confident in coming through at the 3% to 5% is the actions that we took before the summer, and we started to drive behind cost actions, whether that was reducing discretionary spend, looking at people's costs related to the Britvic integration or even pushing harder on our supply chain savings and making sure we spend the money also from a marketing point of view in the right places and given the environment, getting the right return, all of those is helping us support earnings growth, but also actually continue to invest in our strategic initiatives. So that would be the sort of mechanism that we put behind our confidence between the 3% to 5% guidance being maintained.

We now have a question from the line of Soren Samsoe from SEB.

Yes. It was actually just a follow-up on the previous question. Maybe you can quantify a little bit how much is impacting your EBIT growth, these cost adjustments that you're talking about?

And then secondly, on the CapEx, if you can help us a little bit going into next year, if we should look for the same level? And also how much is the Kazakhstan investment impacting -- will impact CapEx?

Yes. I can take both of those. I think we won't put a specific number on the cost, but I can say that we are constantly adjusting to the top line to make sure that we're fitting into the top line, the long-term growth algorithm is what we keep in the back of our minds. And when the top line is not there, we need to lean further into the cost side to make sure that fits to that top line. So refer back to that, that will give you a bit of a sense of what we're trying to achieve.

On the CapEx side, we haven't given any specific guidance, but generally, we are saying we're sitting about 6% to 7% of revenue, and that is what we'll continue to aim for within that range up and down depending on the environment.

The next question comes from the line of Simon Hales from Citi.

So just a couple of market questions for me, please. Can I just start off on Vietnam? Ulrica, I think you said that you were seeing some market share stabilization towards the end of the quarter. I assume that means that the exit rate of the business there was back to growth. I appreciate, as you said, there's flooding as we move into Q4 that's going to impact your business. But is it right to think that the underlying momentum into Q4 and as we head into 2026 is probably for positive volume growth for now, excluding any of those one-offs like flooding?

And then secondly, on the Ukraine, clearly, a tough situation there. How do we think about what's driving that? I think clearly, obviously the intensification of the war, I think more people leaving the country. What does that mean for how you think about Ukraine volumes not only in Q4 but into 2026? Should we assume a continued we've seen in the third quarter for the next few quarters?

Simon, why don't I start on Ukraine, and then Ulrica will speak to Vietnam.

So, listen, first of all, of course, as you also say, so this is very much externality. So it's not our own business. But the market and our volumes are very negatively impacted by the escalating war. If you look at the Q3 volumes, the decline is around 20% due to intensified bombings, the immigration effect we've seen from young men leaving the country, and then a very weak consumer sentiment on the back of this entire environment. And then on top of it, Ukraine also had bad weather in Q3 just to exacerbate things. Our market share is slightly up, flat to up depending on what segment you're looking at. So this is not a question of us losing share.

As we look at it, listen, there are -- it's a very, very difficult question to answer because given that our underlying share momentum for the last couple of years has been very strong in Ukraine, we've been very strong on new innovations. We've been taking good share in everything from premium to alcohol-free, et cetera. This is not really a Carlsberg execution question. This is a question of how the current war develops.

And we're not going to sit here and pretend that we are bigger experts than you are. We are planning for all eventualities. Of course, when you look into 2026, that's going to be the big decisive factor. We are planning in our business planning, the prudent way you would expect us to do, and that is for a continuation of the current environment. That doesn't mean that we expect Ukraine to be year-on-year minus 20% next year. That's not the case. But of course, we do expect that we need to navigate in a difficult environment.

I think right now, we're seeing a lot of negatives coming together at exactly the same time. This, of course, also creates easier comps next year. So I wouldn't be penciling in the dramatic numbers to the tune of what you've seen -- what you're seeing currently. But I think it's too difficult to call unless you have a perspective on how the war develops in Ukraine, unfortunately. We don't. We can have a personal perspective. But as a company, we need to assume status quo the way we plan. But of course, an improvement versus the current run rate has to be expected next year given the comps.

Ulrica on Vietnam?

Yes. What we are seeing there is that we are seeing the market in general improving with solid growth in Q3 in general. And I guess we have also seen through the year now our market share sort of bottoming out and starting to improve sequentially and it's now around 9%. And if you translate that into our volumes, we did see -- we are expecting to see sequential improvements also into Q4 in our volumes and hoping to get into up to north of zero into 2026. So on the back of that and the actions we've taken, that's the trend we're seeing.

The next question comes from the line of Andre Thormann from Danske Bank.

Yes. Just two questions from my side. First of all, I wonder if you can comment on the momentum for Western Europe into Q4. Have everything materially changed in that region? And then second of all, you see quite good growth in soft drinks, 4% volume growth. Can you maybe comment a bit on what exactly drives it? Are you taking market share? And maybe also, is this a sustainable growth rate going forward?

Andre, so let me look at those two. So on Western Europe into Q4, we don't see any major changes versus Q3. This is the last quarter with the large San Miguel impact, as you know. So that will be out of the numbers after that quarter. We expect to see continued good underlying performance in the Nordic region as we've been seeing in this quarter as well. U.K. momentum in terms of market share improvements also expected to continue. Poland remains challenging in Q4, no doubt about it. That market is going to remain tough. But overall, I think most of the trends we expect to see continue in Q4, including a good CSD or soft drinks performance. And that -- and now it's been a number of quarters where the team in Western Europe has performed very well and also held or taken market share in most markets. So it's good to see the momentum in -- which is very much our backyard.

Then when you look at the soft drinks question, yes, 4% growth in the -- both in the organic business and also in the Britvic business, U.K. and Ireland. So we didn't manipulate those numbers. It all ended up at 4%, but very good to see. It's a combination of factors. One, we've said it before, and we'll repeat it again, soft drinks is a structurally growing segment, and that's also why we see this as being very attractive. Two, in a number of our markets, we've also taken some share. So you're seeing Pepsi share gains, which is, of course, our biggest brand across those markets in a number of markets. You're also seeing strong performance from the Coca-Cola portfolio in Finland.

You're seeing a number of our own brands performing well. So generally, we are seeing good share performance as well. But the majority of the growth you're seeing here is driven by the fact that the market is growing. So soft drinks has had a good quarter.

We now have a question from the line of Sarah Simon from Morgan Stanley.

Yes. It was just a quick one on the announcement yesterday about the partnership in Africa. Is that something that you would expect to become meaningful to numbers? Or is it just kind of a bit of a rounding error that's maybe more significant for the partner?

Thanks, Sarah. So I think what you're referring to is, I think Varun commented that we were starting a partnership in Zimbabwe. It's an initiation of a partnership there. We -- it's -- so far, it's very small volumes, and it's us testing out a partnership in Zimbabwe. So let's see how that develops. As you know, we have a number of businesses in Africa and on an export license business. This is an addition to that, but it's too early to see -- to say what this will lead to.

We now have a question from the line of Thomas Lind from Nordea.

So two questions from my side. The first one is just -- sorry, we get to come back to this with the discretionary spending. Is it correctly understand that you're also adjusting the number of employees? And also, Jacob, did you say that this is primarily impacting China? Or how should we think about this?

And then the second question is regarding Britvic. I'm just wondering if you could put a bit more words on the strong performance here of 4% growth. Jacob, I didn't hear you highlight Pepsi. In the U.K., you highlighted Pepsi in many markets, but not in the U.K. as strong. Is that correct? Or how should we think about the Pepsi in U.K.

Yes. Let me start with the costs question. And no, it's not a China-specific thing. It is, as I mentioned before, it's part of how we run the business here in terms of when the market is not there, our performance management process are there to constantly adjust our costs and then reallocate resources across the portfolio. And in that, and as I said before and as you referred to before the summer, we concluded that we needed to start pushing this side of the P&L a little bit harder to make us, as I said also before, to continue support the earnings growth, but also to make sure we continue those big investments that we had started in commercial and digital.

And that will include, again, versus what I said before, both discretionary spend, but we will also adjust some structures, specifically around Britvic integration, as you already know, we're pushing for. And as we go through this by market, by function, it will also include making sure that we maybe delay some initiatives, we rephase some initiatives that might have some people cost implications as well. But as I said, this is not -- that's just one of the lines. We also focus on supply chain savings and other parts of the P&L to drive the cost. So there is a part of that is people cost, but it's much more than that.

And Thomas, on the Britvic side, so thanks for calling that out. So that gives me a chance to highlight it because I guess mentally, I was moving around in an organic world. And therefore, if we move to the inorganic part of this, Britvic, the strong performance in Britvic is very much driven by the Pepsi portfolio actually. It's more driven by the Pepsi portfolio compared to in the past.

If you look at it, we saw in across -- if you look at Cola, Pepsi takes -- we take around 1% market share gain in Poland. In non-sugar cola, we take 1.5% value share year-to-date. So very strong performance of the Pepsi brand. And on top of that, we're also seeing strong performance from 7UP in fruit flavor cups. 7UP is taking 0.5% market share. So a very strong performance by the Pepsi portfolio in the U.K. So very pleased with that. And it was my omission that I didn't go into that detail. So thanks for highlighting it.

[Operator Instructions] The next question comes from the line of Gen Cross from BNP Paribas.

A couple of questions from me. The first one, Jacob, I think you mentioned you didn't see any major changes in Western Europe in Q3. But I think other peers of yours have commented on being slightly concerned by stretched affordability in Europe and going as far as to comment on likely pricing being below CPI, not specifically in Europe but across their footprint. So I just wonder if you could comment on whether you see affordability being somewhat stretched in any of your markets and your latest thoughts on likely direction of pricing relative to CPI. That's the first question.

Second question, just a quick one on Britvic. Obviously, as previously commented on the performance in -- particularly in the U.K. and Ireland is very strong. 4% volume growth, but the total voles are slightly negative as you've exited unprofitable volumes. I just wonder if you could comment on how far you expect that exit of unprofitable volumes to progress by the time we get to the start of next year and Britvic starts moving into your organic growth?

Thanks, Gen. Let me talk to those two. So the first one around stretched affordability. So don't get us wrong. We're not saying that Western European markets are easy to operate. The consumer is clearly -- the consumer is clearly stretched across Western Europe and in some markets more than others. When we look across our Western European performance in this quarter, we had actually low to mid-single-digit growth across all four Nordic countries. So that was good to see. Switzerland, we saw a slight volume decline due to a challenged market. Poland, we talked about in a number of these questions, a very tough market. And you can say in France, we're taking share, but the overall market is not particularly strong. So -- and the same story in the U.K.

So there is a lot of nuances here. And so we completely agree with the notion that we have definitely seen a stronger Western European consumer than the one we're seeing right now, which is stretched affordability, no doubt about that. And -- but we also see disposable incomes being rebuilt over the coming years as wage increases come through. that should also ease some of it. So no, we're not striking an easy tone around Western Europe, but we are performing well in that environment, as you can see from the numbers. And we have no reason to believe that we cannot continue to hold our own and then some in those markets.

On the question on pricing, I'm not going to comment on what someone else has said on pricing. We at Carlsberg, we are very firm that we don't guide on pricing because that -- we don't think that's -- we think that's outside of the boundaries of what we can talk to. What we can say more holistically is that we always aim to recover the cost increases we see in our cost base via pricing. And when we look at the coming years, we do expect that we, therefore, need to continue to see pricing come through. But I'm not going to talk to specific markets. We don't go to that level for legal reasons. But we do expect to continue to take price in the coming years in Western Europe.

Your question on Britvic. So you're right, Brazil and France and also the international export business, we've taken down volumes in all 3 of those. It's not a really profitable volume. So it's more a volume thing than it's a profit thing. As you know, we've done most of that in Q1 and then a bit in Q2, but most in Q1, and that also means once you are past Q1 next year, you will have lapped those effects. So that will wash out of the comparables over the next couple of quarters.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Jacob Aarup-Andersen for closing remarks.

Thank you so much, and thanks for listening in. And as always, thank you for your questions. We look forward to seeing a bunch of you during the coming days and weeks. And until then, make sure you have a nice day. Thank you so much.