Royal Unibrew Stock

Good morning, everyone, and welcome to Royal Unibrew's presentation of our first half results for 2026 My name is Lars Jensen, CEO for Unibrew. And joining me today is CFO, Lars Vestergaard and Flemming Nielsen from Investor Relations. We will take you through the highlights of our first half performance, review, developments across our segments, discuss the financial results and outlook and then open the line for questions.

Now please turn to Slide #2. Before we begin, please note the usual disclaimer regarding forward-looking statements, assumptions and risk factors that may cause actual results to differ from expectations. And with that, please turn to Slide #3.

Before turning to our first half performance, I would like to briefly revisit our strategy and how it continues to evolve. The headline on this slide is simple. Our core strategy remains unchanged, but some components are now being prioritized even higher. The first area is partnerships. As you know, we announced changes to our PepsiCo partnership in Northern Europe earlier this year. While we do not comment on specific partnership opportunities, discussions of potential partners, value-creating partnerships remain an important part of our multi-beverage strategy. We continue to keep all options open and will pursue partnerships where they strengthen our portfolio and create value for both parties.

The second priority is our continued focus on growth categories. Consumer preferences continue to evolve, and our growth category framework remains at the center of how we allocate investments and commercial resources.

In the first half of '26, our growth categories accounted for approximately 62% of group net revenue and delivered growth of more than 6%, once again growing ahead of the group average and supporting our overall growth.

The third priority is to accelerate the development of our own brands, our recent years -- our strongest growth has increasingly been driven by our own brands. We continue to invest behind brands such as Faxe Kondi, Faxe Kondi Booster, Jaffa, Crodo, Ceres, Faxe and Original to support or supported by innovation, focused marketing and strong commercial execution.

As fourth and fifth priorities, we continue to see significant opportunity in international in Italy which remain true of our most attractive growth platforms. Both markets delivered strong performance in the first half and continue to benefit from favorable category exposure, strong brands and attractive long-term growth opportunities. Growth in Italy and International is developing ahead of the assumptions made when we established our long-term financial target and is expected to contribute more to our long-term EBIT growth ambitions than originally anticipated.

And finally, while growth remains important, we maintain a strong focus on operational efficiency across procurement, production, logistics and administration, we continue to identify opportunities to improve productivity and strengthen profitability.

This remains a key contributor to our ability to deliver profitable growth. Taken together, these priorities do not represent change in the strategy. Rather, they reflect the areas where we see the greatest opportunities to create value and accelerate growth in the coming years.

And with that, let's turn to our first half performance on Slide #4. First half was characterized by solid commercial execution and continued progress against our strategic priorities. Organic volume growth was 1.6%, while underlying net revenue growth was approximately 4%. The planned exit from lower-margin activities reduced reported net revenue growth to 1.2% and organic growth to 0.7%. Growth is primarily driven by our own brands and supported by innovation, focused brand investments and strong commercial focus across markets.

We delivered organic EBIT growth of 6.7% and expanded the EBIT margin by 80 basis points to 13.3%. Importantly, this was achieved while continuing to invest behind our brands and despite increasing inflation across energy, raw materials, consumables and transportation costs. Earnings per share increased by more than 10% and ROIC for the last 12 months improved by 80 basis points to 12.8%.

Our cash flow in balance sheet developed according to plan. And today, we launched a new share buyback program of DKK 300 million. And last but not least, on this slide, we reiterate our full year outlook and EBIT growth in the range of 6% to 10%, and we are on track to deliver earnings per share growth above 10% for the year.

Now let's look at the individual segments and starting with the Northern Europe business on Slide #5. When we turn to Northern Europe, our largest segment, which is accounting for 64% of group net revenue and 60% of group volume in the first half of '26. Before discussing the individual markets, let me highlight the impact from Easter timing. Easter fell in Q1 this year compared to Q2 last year, which makes the quarterly comparisons less meaningful.

As a result, we believe the first half development provides the most representative view of the underlying business performance.

For the first half, organic revenue growth was 2.3%, while underlying net revenue growth was approximately [indiscernible] adjusted for the planned exit from lower-margin businesses. Reported net revenue growth was on level with first half of '25. EBIT increased by -- increased to DKK 646 million from DKK 632 million last year, and the EBIT margin improved from 12.7% to 13% and was impacted by the exit from lower-margin business.

EBIT for the first half of '26 included an additional amortization charge of DKK 6 million as we accelerated amortization of intangible assets relating to the PepsiCo partnership through to the end of 2028.

And now looking at the individual markets. In Denmark, we gained market shares across most categories during the first half. Growth was driven by strong performance in carbonated soft drink, beer, enhanced beverages and the broader RTD category.

Within the carbonated space, carbonated soft drink space growth was led by Faxe Kondi, supported by strong brand investments, focused commercial execution and innovation. In beer, both Royal and Heineken delivered growth despite of a declining overall market. Faxe Kondi Booster continued to gain market share within energy drinks, while both Shaker and our recent launched Royal Club Delivered double-digit growth in RTD and gained close to 6% market share when we are talking about Royal Club.

In Finland, volume and net revenue both increased during the first half, supported by a strong commercial execution. Weather conditions in May and June was broadly in line with seasonal norms compared to a colder than normal period in the same month last year, so slightly easy comparison. Market shares were flat to slightly up across categories with the strongest development within water and RTD supported by innovation and new product launches within RTD growth was driven by hard sales and cocktails while the laundering category, where we hold a leading position declined.

While we are winning share in the total RTD category in Finland, this shift weighted on price mix as growth moves to more mainstream, more affordability in the RTD category. In Norway, we continued the positive commercial momentum from '25 and delivered strong growth in both RTD and beer. We also saw improving momentum in spirits and wine despite a challenging market as higher alcohol beverages is a decline. While we continue to gain share across several alcoholic beverage categories, the overall market remains in decline.

This reinforces the importance of building a stronger position in nonalcoholic beverages, where we see attractive long-term growth opportunities.

During the first half, we continued the rollout of Faxe Kondi in Norway. It was supported by the Uno-X Mobility Cycling team partnership but we also announced a long-term license agreement for Dr. Pepper, which from '27 will be locally produced, distributed and marketed, and sold in Norway.

In the Baltics, the market continues to be affected by geopolitical uncertainty, soft consumer sentiment, higher beer tax duties and the introduction of sugar tax on carbonated soft drink. And despite this backdrop, we achieved growth across most categories and sales channels. Beer, RTD and enhanced Beverages was the strongest growth drivers while we maintained our CSD market share despite a competitive pricing environment.

Original laundering, together with our beer and cider brands performed particularly well during this period. Overall, Northern Europe delivered good underlying growth, continued market share gains across key categories and improved profitability in the first half.

Now please turn to Slide #6 and focus on Western Europe. Western Europe delivered another strong contribution to group earnings in the first half of '26.

Organic net revenue increased by 1.1%, while organic EBIT growth reached 19.6%. EBIT increased to DKK 260 million, and the EBIT margin improved by 200 basis points to 13.6%, reflecting the continued strong performance in Italy and improved profitability in the Netherlands.

Overall, our commercial and operational performance was in line with our plans. Italy remains the segment's main growth driver and continued to gain market share across categories, partly offset by lower volume, net revenue in the Netherlands following the deliberate reduction of selected low- and no-margin promotional activities.

In Italy, we continue to deliver high single growth in a relatively flat market.

Our beer brands, Ceres, Faxe performed strongly, while the Crodo portfolio also continued to gain market share within carbonated soft drinks. The strength of our brands combined with focused innovation, new pack formats and strong execution across both off- and on-trade channels continue to support growth and profitability.

In France, we continue to expand Crazy Tiger and Lorina through focused brand activation, optimization of our price pack architecture and expansion into new consumption occasions.

In the Netherlands, performance developed in line with our plans. The revised commercial strategy implemented during the second half of '25 continue to weigh on volume and net revenue development in the first half but supporting improved profitability, revenue quality and a more attractive sales mix.

In BeLux, we continue to make progress through market share gains, commercial optimization and improved in-store execution. Growth was driven by the PepsiCo portfolio and supported by our own brands and in particular, Crodo. While BeLux remained broadly earnings neutral in the first half, the business continues to develop according to plan. And overall, Western Europe continues to demonstrate the attractive growth and profitability opportunities within our portfolio and remains an important contributor to the group's earnings growth.

Now please turn to Slide #7. On where we focus on the international business area. International remained a key growth engine for the group in the first half. Organic volume growth reached 11%, while net revenue increased by almost 9%. Growth was driven by the Faxe Beer, Crodo within soft drinks and our Malt Beverage portfolio, which includes brands such as Vitamalt and Supermalt. We continue to see strong consumer demand across our key markets particularly in Africa and estimate that the first half volume growth was broadly in line with the underlying sales outgrowth across our markets.

The comparison for the second quarter was impacted by tax related inventory buildup in the United States during the same period last year, making the growth comparison somewhat challenging. Profitability remained strong with EBIT growth of more than 13% and margin expansion despite increasing logistic costs driven by geopolitical development and inflationary pressure. Overall, we remain very satisfied with the development in international and continue to see significant long-term potential across the segment overall.

And with that, I will hand over to Lars Vestergaard for the financial review. Now please turn to Slide #8.

Thank you, Lars. Let me walk you through the financial development for the first half of 2026. Before reviewing the financials, let me again remind you that the quarterly development is impacted by Easter timing and the H1 growth rates provides the best indication of the underlying business performance.

As already highlighted, organic volume growth was 1.6%, while reported organic revenue growth came to 0.7%, adjusted for the planned exit from lower-margin activities, underlying net revenue growth for the group was approximately 4%. Gross profit increased by 3.4% to DKK 3.4 billion, while gross margin improved from 43.8% to -- from 42.8% last year. The improvements reflects a continued focus on profitable growth, operational efficiencies and the exit from lower-margin activities.

The first half was characterized by volatility and inflationary pressure across energy, raw materials, consumables and transportation through hedging fixed price agreements with suppliers efficiency initiatives and price increases, we managed to largely offset this impact. Sales and distribution expenses increased by 3.9% in the first half. The increase reflects continued investment in sales and marketing to sort our brands and growth ambitions.

The first half of 2026 was also impacted by higher cost for transportation and distribution as a result of higher fuel prices. Admin expenses declined by 5.5% compared to last year. This reflects our continued focus on efficiency and disciplined cost management across the organization. EBIT increased by 7% to DKK 1.26 billion. And the EBIT margin improved 80 basis points to 13.3%.

The financial expenses amount to DKK 119 million in the first half compared to DKK 133 million last year, while the effective tax rate was 22.1%, both in line within the expectations. Net profit increased 7.7% to DKK 707 million, while diluted earnings per share increased by 10.7% to 14.5% benefit from both higher earnings and lower number of outstanding shares.

Overall, we are pleased with the first half performance, which demonstrates our ability to deliver profitable growth and margin expansion while continuing to invest in our brands and commercial capabilities and managing the impact of increased cost inflation.

Please turn to Slide #9. Cash flow and balance sheet developments remains fully in line with our plans. Operating cash flow amounted to DKK 908 million, where capital development was less favorable than last year, reflecting normal seasonal developments and business growth. But overall, cash generations remain solid.

CapEx amounts to DKK 450 million, corresponding to a 5.8% of net revenue. Investment activity is expected to increase during the second half and we continue to expect full year CapEx of around 7% of net revenue. Free cash flow amounted to DKK 458 million, at the same level as last year. Net debt increased compared to the end of 2025, primarily due to higher share buybacks, while leverage remains well within our targeted range at 2.2x EBITDA. Trailing 12-months ROIC Improved by 80 basis points to 12.8%, reflecting our continued focus on value-[ creating ] earnings growth and capital efficiency across our business.

Please turn to Slide #10. Based on our performance in the first half and our expectations for the remainder of the year, we reiterate our outlook for 2026. We continue to expect organic EBIT growth in the range of 6% to 10%. The consumer environment remains challenging across our markets and geopolitical developments continue to create volatility across energy, commodity and logistics costs. While cost inflation has increased compared to our assumptions at the beginning of the year, we continue to expect impact to be mitigated through pricing initiatives operational efficiencies and ongoing cost management.

A portion of our raw material and energy requirements remain protected through hedging instruments and price agreement which further supports visibility for the remainder of the year.

Based on our current assumptions, the midpoint of the EBIT guide range remained the most likely outcome. However, given the continued uncertainty around consumer demand, commodity markets and geopolitical developments, the full guidance range remains achievable.

All other assumptions behind the outlook remain unchanged.

With that, please turn to Slide 11, and I will hand back the word to Lars.

Thank you, Lars, and let me briefly touch upon our management agenda for the remainder of the year. First, we remain fully focused on executing our growth strategy. The first half result demonstrates that our focus on strong local brands, innovation and attractive beverage categories continued to deliver profitable growth and we'll continue to invest behind these priorities.

At the same time, we are preparing for the previously announced PepsiCo partnership changes that will take effect from '29, while continuing to support and invest in and develop our broad multi-beverage portfolio. Innovation remains a key priority across markets. We continue to expand and strengthen our beverage portfolio through new flavors, formats and propositions aligned with evolving consumer preferences.

And as Lars just outlined, we continue to actively manage inflationary pressure across key cost categories, through pricing mix improvements, discipline, commercial execution and operational efficiencies.

We are working to offset these headwinds while continuing to invest in the business. Operational excellence and cost discipline remain important priorities across the group. We continue to optimize resource allocation, improve efficiencies and strengthen the profitability of our business.

And finally, we remain focused on delivering our '26 guidance while continuing to execute against our long-term financial targets. And please turn to Slide #12 for the key takeaways.

Let me conclude with a few key messages. The first half of '26 demonstrated the strength of our strategy and operational model. We continue to gain market shares, delivered profitable growth and expanded margins despite increasing cost inflation. Underlying net revenue growth was 4%, driven primarily by our own brands and supported by innovation and strong commercial execution.

International and Italy were the strongest growth contributors during the period, while Northern Europe demonstrated resilience and broad-based market share gains. We delivered 7% EBIT growth. We increased the earnings per share by 10.7%. We generated a solid cash flow. We maintained a robust balance sheet, and we improved our return on invested capital by 80 basis points. And finally based on our performance so far, we reiterate our full year outlook and remain confident in our ability to deliver our '26 targets.

Thank you for your attention. Now we are ready to take your questions, and I'll hand back to the operator.

[Operator Instructions] First question, and this question comes from the line of Matth Ford from BNP Pariba.

Just three quick ones from me, please. First one is just on the guidance. You touched on it at the end there. You've reiterated the 6% to 10% range at this stage. Clearly, we're already kind of well into Q3 at this point, and you have reasonably good visibility on how the kind of the summer has gone so far. So just -- yes, it would be good to get your sense of what is really driving that range at this point clearly, clearly, costs are an element of that, but it would be just good to get your sense of what's embedded within the top and bottom of that kind of full year expectation?

And then linked to that is just on, on COGS, I suppose, I mean you're kind of flagging potentially incremental COGS impact in the second half. It'd be good to get your sense potentially your early thoughts on '27, at this point, based on your current hedges and I suppose your expectations into next year at this point, at least.

And then the final question is just on volumes in Northern Europe actually. I mean Q2 was clearly in decline, granted that perhaps H1 is a better indication of the go-forward level of growth. But as we move into the second half and potentially in '27 as we cycle slightly tougher comps. How do you think about volume growth in Northern Europe? It doesn't feel like many of the issues around consumer affordability are going to materially improve. But clearly, weather was a bit of a benefit in Q2. So just good to get your sense of what is your kind of run rate of volume growth in Northern Europe into the second half and potentially into next year.

Yes. If I take the last one first, if you take Easter out of the equation, as we are trying to do by focusing on the first half, if you're taking the summer swings that naturally is there, we had a slight growth on volume underlying in the total Northern Europe European business. And that is -- when you're talking about the consumer sentiment, small skew towards off-trade than on-trade and a small skew towards the non-alcoholic portfolio than the Alcoholic portfolio when you look at it overall. And of course, Denmark, Finland and 3 Baltic countries there. From a volume standpoint, they are so big that whatever happens in Norway and Sweden, you're never going to see in those numbers in reality. But as we have said, we are gaining share in the Northern European territory in an otherwise flat -- flat volume situation. So consumers are not drinking more, they're drinking differently.

On the first question, I would say on your guidance question, I would say 3 Cs that we're always looking at. It's competition. You never know what competition will do. And of course, that has an impact. Consumer, depending on the sentiment, the willingness to spend and so on is always a factor. If the interest rate suddenly goes up for whatever reason, then that can cause negative suddenly. And you can find other positives if as an into a war, one of the wars, then I think the consumer sentiment will turn more to the positive and so on. So that still gives a swing.

And then you mentioned cost although that we have a fairly high level of hedging for the remainder of the year, there's always a part of the cost that you cannot hedge. So cost is eventually something that needs to be taken into the incretion that can be both positive and negative depending on what plays out.

And then to the results, we see as in the middle of the guided interval you need to adjust. I think that's fair to say for the DKK 6 million in amortization, which has come in unexpectedly on the back of Pepsi announcement. So this is cost that was unforeseen. We are not changing our guidance interval because of that. But if you change those DKK 6 million to the earnings that we are delivering, we are somewhere like, I don't know, 7.6, 7.7. So very, very close to the midpoint of the guidance that we have given.

And then for the further details on the cost, I'll hand over to Lars.

Yes. So in 2026, we are, of course, benefiting from the hedges we have in place, in particular, on aluminum and on energy. And when you look into '27, we do not have hedges from the past. So here, you will see a step-up in cost, in particular, on packaging material. So there is an unhedged element for next year, and we need to go out and make certain that we mitigate that with price/mix initiatives for next year.

There's nothing that's unique to Royal Unibrew. I think our cost will move very much in line with the whole industry. So that needs to be managed through pricing and mix initiatives for next year.

And this question comes from Thomas Lind Petersen from Nordea.

One question regarding your sales and distribution expenses and I guess, marketing costs also here. Just Wondering if you can help us quantify the fuel surcharges. I think at least we were hoping for some lower distribution costs owing to the new warehouse in Faxe, but now it seems like fuel surcharges are offsetting this. So can you help us please quantify the amount of fuel surcharges and how we should think about this going forward?

Then also in terms of sales and marketing costs, the new cycling sponsorship or the Faxe Kondi rollout, anything here you can help us quantify? And are these costs temporary? Or are these more structural? So that would be the first question.

And then the second question is regarding last, what you said regarding Italy and International, which has evolved ahead of your plans for the long-term growth of 6% to 8% CAGR. So I was just wondering what that means for the long-term EBIT growth CAGR here. Are we trending towards the high end that formula? Or should we more see it that you're just more comfortable with this range?

Yes. On the second question, if I take that first, on the sales and marketing costs. So we do believe in building brands. This is the core of how we think about our business, and we do put more money behind them. And there is -- '26 is going to be skewed more towards spending more on our own brands and slightly less on Partner Brands. There will be a slight mix between the segments. From a marketing standpoint, we are spending a bit less on International. And then we are spending more in Northern Europe. And yes, the essence of that is the money that we are spending on building on Faxe Kondi further in Denmark, but also outside of the Danish borders. And that is a weight on the costs in the first half, and it will also continue into second half, given that these are multi-year contracts. So that's, I would say, is the dynamics around the sales and marketing costs.

On the side of the International business, we took a 3-year initiative years back on trying to build a unique position in a country, and we concluded that the likelihood of success was not very high. So we ended that. And then we have moved that money into Northern Europe, so to speak. So that is what you are seeing. And on the growth on international and Italy, I think our growth formula, that's intact. And what we are trying to guide here is that also given the changes that we are going to see on the partnership front, that a part of the makeup of continuously delivering a growth organically of between 6% and 8%.

When we looked at that 2 years ago, They built the spreadsheets, we thought that Italy and International will be a smaller part than what we believe today, because of the growth rates are higher. But on the other hand, we also reckon that the messaging of the Northern European business then will take the expectation for that region down until that we have a full strategy in place from the first -- that will be active from 1st of January '29. So it's not -- when we look at the numbering now, the compensation for the loss of the PepsiCo business is not going to be only in the Nordics. We are looking at it as Royal Unibrew as a whole, and that means that we are going to put a higher emphasis on continuing the growth in the areas where we do see growth.

We are mentioning Italy and Internationally, obviously, but we're also finding a brand like Faxe Kondi. So how do we move more resources to a brand like that, so that, that becomes a bigger part of the growth engine. So that's the reason why that we are mentioning in it.

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

And this question comes from Richard Withagen from Kepler Cheuvreux.

Lars, Lars and Flemming. Three questions from me, please. First of all, on Northern Europe EBIT and the margin were a bit below consensus despite around 5% underlying revenue growth. So what specifically explains the weaker-than-expected operating leverage that we see in the region in the first half of the year?

Second question is on -- second and third question is perhaps on the Pepsi contract following the announcement of the loss of that contract in the Nordics by the end of '28, you've said to double down on your own brands growth. So how has execution or resource allocation change since April since you announced that Pepsi contract loss? So how has that changed to accelerate growth of your own brands? And finally, have you changed how you look at the geographic profile of the company after the announcement of the Pepsi contract loss?

Yes. So again, following up on the same as Thomas asked on International and Italy. Yes, we do see -- because of our -- we have been able to create a growth rate in those territories, which is higher than what we originally anticipated. We do believe that those two geographies will be a larger part of the total makeup of Royal Unibrew when we are in '29 and [ 2030 ] the way that we look at it right now. So yes, so that's the answer to that question.

On execution, I think we got the message mid of April, on our way into the high season, and it is generally not very good to make massive changes when you're in the season or in your way into the season. So you will see and have seen over the last 2, 3 months, relatively few changes in terms of the executional part. But of course, when it comes to priorities, we have been over prioritizing the PepsiCo portfolio in the Nordic countries because what we have done has been very successful. We are, over time, going to bring that down to and normal prioritization. And that then indirectly, of course, gives our own brands more space and more focus.

And then I think what is changing is that whenever we have looked at something or doing something together with PepsiCo, we could do the math with an unlimited time, so to speak. And now we have 2.5 years to earn the money, and there will be an exit cost. So building business cases on developing new things on the PepsiCo portfolio in the Northern Europe is going to be very difficult. And we are not going to deliver less innovation, less engagement, less marketing to the market.

So over time, that will, of course, put our own brands, I would say, higher on winning the resources because of the simple math on the payback on the initiatives that we do. But to say that you have seen a significant change now, no. That's, I would say, the clear answer.

And then on Northern Europe, we actually -- we do not see a weakness in Northern Europe. We see a strength. And when you look at it mathematically, it's small money that makes a difference between I would say what is in the consensus numbers and what we are delivering. And I think the two things that I would mention is the amortization. You need to take that in, as I call it, a non-expected cost because we need to do the amortization a few years faster.

And then the other part, as I mentioned, is a marketing cost. So we have moved marketing costs into Northern Europe, which is hopefully going to help us in accelerating the growth of our own brands. And when you correct for that, I think we are delivering a very strong result in Northern Europe. I think very few companies can demonstrate an underlying growth of 5% top line wise. So that's super strong, and it also converts to bottom line and cash flow.

And this question comes from Aron Adamski from Goldman Sachs.

I have three questions. First, on Finland. Could you please quantify your second quarter performance there, including the contribution from carbonates and Beer? And how is your market share evolving in these categories in Finland? And I guess, looking ahead, given a relatively tough third quarter comparison, how should we think about the volume trends in the broader market -- the broader outlook for Finland for the remainder of 2026.

Then my second question is on International. Can you please share with us where do you see the largest opportunities to accelerate growth over the next few years, in particular, which markets appear the most attractive to you? And are there any new geographies where you would expect to establish or meaningfully expand the presence? And then lastly, a bit of a housekeeping question. The amortization impact you've seen in H1, is there going to be a repeat of it in the second half? Or is this a one-off that we've seen in H1?

Yes. If we start with the housekeeping question, then we took some amortization in the first half, and that's going to repeat in the second half. So that is a shortening of the amortization period for some of the intangibles that relates to the PepsiCo distribution agreement. So that will repeat itself. Of course, it's a noncash charge. So it's not impacting the cash flow.

If you look at the Finnish market and on the shares, we do not give detailed information on all categories. I think as Lars mentioned in the intro. We are gaining shares in RTD, which is the biggest segment for us. However, within the RTD segment, you see some migration from the more high-priced segments, long drinks down to more affordable options, that has a slight negative margin impact, but we are taking shares in this segment. And so there, we are doing well. Pricing in CSD is extremely competitive. We are keeping our shares in that. And then there is a good development in our water business in Finland.

In terms of beer, it's important to note that in Finland, there are segments that are very unprofitable in -- so you can get some positions where you make absolutely 0 margin. But in the segments that we play, we have a decent development. But for us, beer is not about market share. it's about making certain that the things we have in the market is profitable so that we don't just use our capacity for MT calories. So I think that's the status on Finland.

Yes. And then on International, so it's a repeat of what you have seen over a fairly long period of time. Our Faxe beer is growing mostly in Africa, West Africa. The Crodo portfolio is growing very nicely. It's mostly in Europe. And then we have the Malt business, which is also growing nicely centered around Africa and a few selected markets in the Greater Caribbean area.

And when you look at the growth rates, that is -- the sequence that I mentioned is the sequence in terms of the opportunity and our current growth. And the biggest growth opportunity we have is still doing it better in the markets where we're already present. It's not so much about opening new markets, although that we are scouting for what could be new markets that can drive the growth in 3 to 5 to 10 years. But if you look at it over the next 2 to 3 to 4 years, I would say that it's the current markets that we have opened some even 20 years ago, that's where most of the growth is expected.

And this one comes from Nadine Sarwat from Bernstein.

Two questions from me, please, both related to your guidance. So earlier in the call, you said that you still believe you will be most likely in the middle of your guidance range for organic EBIT growth, that would be around 8%. Could you just confirm, does that comment on the midpoint you likely include the incremental amortization in H1 that you said would continue into H2 or excluding it?

And then my second question you're reiterating your guidance point again. On the midpoint, organic EBIT growth came in at 6.7% from the lower end for H1 that would imply an acceleration in H2, what would be driving that if so?

Yes. So the guidance includes the amortization. So that's impacted into the full year guidance. So of course, that is what you say, effectively -- what do you say at an underlying pressure on our earnings, but that is included in the guidance. So the midpoint is still the guidance. We make more money in the second half than we do in the first half. There are many moving parts, I would say we have seen some initiatives that we couldn't offset in the first half. So we've been doing some pricing initiatives in the middle of the year to offset the commodity price inflation. So there are a number of moving parts what will the mix be in the second half, what will competition do? So when we look at our plans for the rest of the year, and acceleration in the second half is absolutely part of that equation.

But it could also be that some of the geopolitical headwinds will lead to more headwinds. So we think that with the world as it is today, we can see both headwind and tailwind in the second half of the year.

And then I'll repeat the first question that regards and you have the 3 Cs, you have competition, you have a consumer sentiment and you have costs. Those are the three. So that's -- that's the answer.

This question comes from Edward Mundy from Jefferies.

I'd love to dig into Italy a little bit more. Are you seeing very strong growth relative to the market on trade-off trade? And I think you've highlighted some of the things that are driving that in the release. But could you talk about the sustainability of this momentum? And whether you're seeing any competitive response either in the Beer or Soft Drinks side of things?

And then my second question is around your opening comments around the importance of partnerships -- in the value-creating partnerships. Could you -- without going into too much detail, given its commercial sensitive. Could you perhaps give a bit of stear as to which categories you're looking at? Is it beer? Is it softies? Is it wine? Is it spirits? Where are the biggest opportunities for you to make the most of your strong distribution network?

Yes. I think the last question, I think the clear answer is that, of course, after '28, the biggest opportunity that sits in the Cola segment. So there's other areas where we can see that we can enhance our portfolios, but Cola is obviously the big one. In the meantime, for us, it's about making sure that we enhance everything else by Cola, and that's literally what the consumers want in most of the geographies where we do business on the nonalcoholic side. So that is a transition in all of that. But it's not only Cola, it's in multiple areas where we do see that we can enhance our portfolio, and we also look at it from a geographical point of view. That partnership is not just about what we are losing. We could potentially in other geographies, new geographies where we do not have partnerships that we could add partnerships. So yes, so all options are open, and we are running it through the funnel as we normally would do.

On Italy, yes, we are convinced that this is a sustainable growth. We have seen the growth for many years now. But I would say, in particular, for beer, it has accelerated. The growth -- we see growth in both on and off trade, but on-trade is under pressure from a consumer point of view, which you should have seen in most other markets as well. So the majority of our growth is deriving from off-trade. And it's a combination of better distribution, better price pack, architecture, more consumers into the brand and a higher frequency when you buy at Ceres. So it is kind of like a -- we have been able to create a multiplicator effect why not just expanding by one parameter, but at multiple parameters at the same time.

When it comes to competition, yes, we do see competition trying to get a piece of the pie because strong lager is where the growth sits in Italy. Heineken has launched a new brand in the category and Carlsberg has done the same. Too early days to conclude anything as they are 3, 4, 5 months into their launches but their launches have not yet made any significance.

I would then say on that one, we believe that it is important that you have strong competitors in the categories because that drives the growth even further. And that means that the more consumers that will move into strong lagers, the more is going to help us. So that's -- we consider this as being very sustainable and it's about the same story when it comes to the Soft Drink portfolio. We are very focused on the single-serve consumption occasion to a lesser extent on the large pack sizes and that is enhancing our value, it's enhancing our volumes. And then we are adding new flavors to the game, and they are working really, really well.

So when we bought the business, it was the Lemon Soda business, Orange soda is growing quite nicely. And we have a very strong growth on some of the side products as well like the Mojitos and the spirits. So, we are driving the, I would say, the non-Cola segment in Italy, which is very strong. So yes, we believe that this is sustainable.

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

Yes. We bring it in-house in Norway. We do not consider it as a Cola. It has a different flavor characteristics. What we are looking more at is occasions. And in the -- if you look at Norway, we do believe that Dr. Pepper will be able to compete with both Orange and Cola in terms of some of the occasions where you consume those. And I think if you look at the journey that Dr. Pepper has had in the U.S. and in other countries, also outside of the U.S., I think it's very promising what that brand can deliver.

And this one comes from Andre Thormann from Danske Bank.

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

Yes. So if we start with Norway, we have a number of strong building blocks in place for improving the profitability in Norway. So we have closed one site. We have launch new categories. So we are very happy with the development in Norway, we're not giving EBIT data on specific markets, but I would say Norway is a place where there's a lot of good building blocks for '26 and beyond. So we are on track in Norway.

And I would say the weather in Q2, early days was good in some markets -- sorry, Q3 was pretty good in Denmark, dreadful in Finland, okay-ish in parts of Norway. So probably across countries, the weather was neutral. So not a lot to read into the beginning of Q3.

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

And can you compensate that fully already in the second half, does it usually take longer to offset?

I think -- so we're looking at it as a whole. And I think you have also heard us talk about efficiencies and so on. So you can improve your value creation by manufacturers. So pricing is one. Price mix is one, you move your category -- your focus on categories in a certain direction where you earn more money and then you can try to be more efficient throughout the whole chain. And you would say that we are better positioned in the second half to cater for that compared to the second quarter because the inflation came in immediately, and there's a number of things that cannot be hedged. So you're always vulnerable when something negative happens. And that means that we see ourselves better positions far better positioned to cope with that for the second half of the year than we were capable of in the second quarter.

And this one is from Soren Samsoe from SEB.

So first question is on Northern Europe, where you have a negative price mix. I would maybe affect that the exit from the low-margin businesses would have a positive impact. So is this Finland that gives us a negative development in price mix? And is it more price? Or is it more mix?

I think overall, it's very difficult just to judge it on the basis of the net revenue per volume because it doesn't necessarily translate into profitability per volume. In some categories, they are just low on price, but they are also cheaper to produce and so on and so forth. When you look at it overall, the alcohol portfolio is -- is not growing, and that comes with a higher net revenue per volume, whereas the nonalcoholic portfolio is growing, so that is ordering it out, but it's not necessarily watering the profitability out.

When you look at it from a category standpoint, yes, in Finland, original laundering and the long drink category as such is one of the highest when it comes to net revenue per volume. And with that category in decline and other categories compensated for that, that will be a dilution on net revenue per volume.

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

In Finland, we bring a lot of innovation to the market. And we have recently launched a new lineup of original long drink, which is catering more for the same consumers as on hard sales and similar products. So slightly lower on calories, slightly lower on alcohol, a slightly lower price on shelf, which is predominantly led by the lower alcohol lower excise. And then in different way of selling, where most of what we sell on original laundering is either big containers, single serve or it is 6 packs with 33 whereas the hard seltzer and similar products is more on single serve. So we are adjusting as we speak to that. So a fairly high rate of innovation to fill the gap, so to speak.

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

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

And this one is from Andrea Pistacchi, from Bank of America.

Two from me, please. Firstly, you've started to implement pricing to offset cost pressures and you're saying you're planning to take more as we approach next year. Can you give us a bit more color, please, on where and in what channels you're implementing this pricing, what you've done so far, what comes next as much as you can share?

And the second question is a bit similar to this. It's on international where historically, you find it difficult to pass on higher transportation cost because in some of the markets you're competing with local players who are not sort of subject to the transportation cost appreciate you've localized your business to a certain degree. But is the situation different on the ability to pass on or not the transportation costs?

No, it's the same, Andre. So international will always be subject to a slightly different measurement because competition is different than it is in the local market, so to speak. So if we would not have had the increase in transportation costs, you would have seen the profitability in International would have been bigger in the quarter. That's our assessment. So we are trying to be very, very smart and massaging this without losing competitiveness, and this is market by market, category by category.

And when it comes to the broader discussion around pricing and improving mix and so on, it is very, very broad-based. We are working with price pack architecture, we are working with different analysis tools in terms of finding out what those different price points mean. And for some categories in some channels, we don't have an ability to push through pricing. But then in other categories, we have bigger opportunities. And of course, we are talking these through and giving the best advice to our customers so that we create a situation where we get the cost covered where our customers get their cost covered because they also see cost increases and where the consumers still see that they get a good price for the buy that they do. So we work very professionally with this and getting better at that every single day.

And this one comes from Aron Adamski, from Goldman Sachs.

I wanted to quickly follow up on pricing, actually. How are retailers responding to the increases you've announced? And are you seeing your competitors follow through with similar announcements? Or are you relatively quicker to announce price increases than your peers are?

And second, to quickly follow up again on amortization. I wanted to clarify whether the impact in the second half could be bigger than the DKK 6 million we've seen in the first half, given that the Pepsi license loss was announced sometime in the midway through the first half?

So take the last one first. It will be the same chart in the second half that we had in the first half.

And on pricing, we are, as I last said earlier on, we're all in the same boat. Everybody is going to see the same amount of price increases on COGS. There might be a different timing. And you also -- you could have different underlying needs depending on how your business is performing. Yes, we do see competition is also putting pricing. We don't know, of course, what is going on between the customer and our competitors, but we can see it on the shelf. We can see it on the promotion prices. And we have a clear impression that pricing is coming through as we speak.

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

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

Thank you.

[Interpreted] Dear shareholders, on behalf of the Board of Directors, I would like to welcome you to Royal Unibrew's Annual General Meeting. My name is Peter Ruzicka, and I'm the Chair of the Board in Royal Unibrew. Again this year, our Annual General Meeting is fully virtual. This is because we are convinced that a virtual AGM gives us a broader reach to all of our shareholders, including not least our shareholders abroad.

Shortly, our CEO, Lars Jensen, and I will take you through the company's development in 2025. We will also look at how we have been faring in the beginning of 2026 and what we expect for the rest of the year. After that, we will be deciding on the proposed resolutions. Should there be any questions during the course of the AGM, the Chair of the meeting will explain to you in a moment how this is going to take place.

I would also like to draw your attention to our website, royalunibrew.com. On this website, you can communicate and we can communicate with you. I hope that you benefit from our website and the information that we publish there on an ongoing basis. And not least, I, of course, hope that you are aware that in connection with the Annual General Meeting, all relevant information for shareholders is available on the website, including the annual report for 2025 and previous years. 

I would like to encourage all shareholders to register via the investor portal and have communication from Royal Unibrew sent to you electronically. In this regard, I would like to ask you to inform us of your e-mail address so that we can communicate directly to you, for instance, concerning the AGM.

With that, we will start this year's Annual General Meeting. And in accordance with Article 16 in the Articles of Association, the Board of Directors has asked attorney at Law, Niels Kornerup, to chair the meeting and take us through today's AGM.

Niels, the floor is yours.

[Interpreted] Thank you very much for appointing me Chair of the Annual General Meeting of Unibrew. I hope we'll have a good AGM and a good debate at this fully electronic AGM.

Before we start, I have to deal with all the formalities. And prior to the AGM, I have concluded that the convening notice was sent out on time in compliance with the Danish Companies Act and the Articles of Association of the company. And based on that, I conclude that the AGM has been legally convened and is competent for the transaction of the business on the agenda. 

We have about 20 seconds delay in our transmission. So, when I ask if I have the support of the AGM, I will slow down a bit, just like I've done now. And as I haven't heard any comments, I will conclude that the shareholders agree that the AGM has been legally convened and is competent and is quorate. 

Before we started, I saw that just over 70% of the votes and the share capital is represented here today after deduction of treasury shares. And the Board of Directors has received proxies and postal votes to the tune of more than 90%. There's also broad support for all proposals from the Board of Directors and for the candidates and the exact numbers will appear from the minutes.

As mentioned at earlier AGMs, we have to go through the Danish Companies Act Section 101, Item 5 about a complete record of votes. That would mean that we would need to know exactly who had voted for and against the vote, even though the result is quite clear. I hope we can do as we have done in previous years and deviate from that complete record of votes.

And I hope I have the support from all the shareholders in this. And that's again where the 20 seconds come into play to make sure that everybody has a chance to react if they want to, and I haven't heard any protests. So, thank you very much for your support. 

It is possible to follow the AGM both on the website of the company. And the Chairman mentioned the address, but it's also possible to use the AGM portal. On the company website, you cannot ask questions or make comments because that's just a webcast without the possibility of comments. But shareholders who have signed up and want to participate in the debate need to log in on the shareholders' portal.

If you want the floor during the AGM in the shareholders' portal, you need to access the messaging function and click send message. And you then choose the item on the agenda, and we'll roll down menu and fill in subject and intervention. And if you use a mobile phone, you need to first click the logo with three horizontal lines in the left corner and then send message.

I ask you that you send your questions or interventions as soon as possible, even though we haven't reached the item on the agenda yet. I'll then make sure that everything is put forward when it's time for each item. And we would very much appreciate that the messaging function is only used for interventions and questions and nothing else. And we hope that you have a brief and concise wording of your contributions, which I will then read out here in the AGM location. 

If you experience any technical issues, Euronext is ready to help you by phone and you can contact them with +45 for Denmark 4358-8894, and you can also find the number on the website of Euronext. 

And with that, we are ready to jump into the agenda. It has been sent out in the convening notice, and it's here on screen. First item is report on the company's business activities during the year; two, presentation of the audited annual report for approval; three, resolution to discharge the Board of Directors and the executive management; four, proposed distribution of profit for the year, including the amount of dividend.

Item 5, presentation of the remuneration report for 2025 for approval. Item 6, approval of remuneration of the Board of Directors for 2026. Item 7, consideration of proposals submitted by the Board of Directors, and there are three proposals this year. One regarding capital reduction; secondly, authorization to acquire treasury shares; and thirdly, amendment of the Articles of Association. Item 8 is election of members of the Board of Directors and Item 9, appointment of state authorized public auditor. And then we'll close with Item 10, any other business. 

With that, we move into the agenda. And as normal here in Royal Unibrew, we'll deal with Items 1 to 5 as section. And with that, I give the floor to the Chairman of the Board, who will cover the first part of the report and then CEO, Lars Jensen, will deal with the rest of the report. After that, the Chairman of the Board will take the floor again to motivate the proposals. And with that, I give the floor to the Chairman of the Board.

[Interpreted] Thank you very much, Niels. 2025 was another year with solid progress in Royal Unibrew. We delivered growth in revenue as well as earnings. We improved our margins, and we maintained a strong cash flow. We are quite happy with that development, and it is indeed the result of the hard work of our dedicated teams and our long-term strategic focus on growth and efficiency. 

At the same time, 2025 was a year where we, to an even greater extent, saw that consumer preferences continue to move between categories and channels. In spite of lowered consumer confidence across our markets, we saw continued good growth in selected categories. And that is exactly why our multi-beverage strategy and our versatile portfolio are so important.

Over the past few years, Royal Unibrew has developed into a larger and stronger business, and we have a solid platform for growth based on our multi-beverage strategy. Add to that, our agile mindset and our focus on innovation where we continue to develop products and taste profiles to fit local markets and changing consumer preferences.

With a focus on our growth categories where our own brands play an increasing role, and close customer relations and partnerships, we have a strong foundation for future growth. And speaking of partnerships, I will, of course, also touch upon our collaboration with PepsiCo and the announcement that we sent out about a week ago.

For many years, PepsiCo has been an important partner for Royal Unibrew in Denmark, Finland and the Baltics, and this collaboration has created significant value for both parties. Therefore, it was not the outcome we would have preferred that the collaboration in these three markets will cease at the end of 2028. But unfortunately, it has not been possible to reach an agreement on an extension.

The partnership with PepsiCo and BeNeLux is unaffected and will continue after 2028 in accordance with the existing agreements. The market has reacted significantly to the news, and the termination of the agreement is indeed expected to have a negative impact on revenue and earnings in 2029.

To mitigate this effect, we will launch a number of efficiency and cost management initiatives, but it also gives us new commercial opportunities that we are going to explore and improve over the next 2.5 years in which the agreement with PepsiCo will continue to run so that already in 2030, we expect to be back on the growth track. CEO, Lars Jensen, will get back to this later in his report.

We're already well into 2026. And during the first quarter, we have delivered results in accordance with our guidance. Therefore, we maintain our guidance for the full year. However, we have to say that with everything that is happening around us, the macroeconomic and geopolitical situation continues to be uncertain. It affects prices on commodities and energy. And in the end, it also affects consumer confidence in our markets.

Now let's take a brief look at the results for 2025. Net revenue reached a new record level for Royal Unibrew. And for a number of years, we have developed into a considerably larger business driven by acquisitions and strong organic development.

Net revenue increased by 5% to about DKK 15.7 billion. Organic revenue growth was 3%, and this development reflects our focus on the right categories as well as a strong commercial effort across all of our markets. Profits before financial items and taxes, that is the EBIT, came in at DKK 2.2 billion, which was 12% higher than in 2024. And organic EBIT growth was 10%.

Looking at the EBIT in relation to net revenue, that is the EBIT margin, it came in at 14%. That is an improvement of almost 1 percentage point vis-a-vis the year before, and that just goes to show the effect of our focus on efficiency, integration of acquired companies and continuous optimizations in the business. We are very happy with this development, and it is still our goal that profitability in the coming year will develop in a positive direction.

Looking at the net profit for the year, it came in at almost DKK 1.6 billion. That is an improvement of 6% compared to the year before. This result reflects disciplined management of the business and a positive development in the underlying earnings. Free cash flow for 2025 was DKK 1.4 billion. This was in line with our guidance and enabled us to acquire treasury shares to the tune of DKK 550 million during the year.

Looking at the development in 2025, I would like to point out that the annual profit and cash flow in 2024 was positively affected by approximately DKK 200 million in connection with the sale of shareholdings in a Polish subsidiary. So, the actual development in 2025 was quite strong.

The figure on the left-hand side of this slide shows you the development in net debt over the past few years. Here, you can see that our financial gearing ratio at the end of 2025 was twice the net interest-bearing debt to EBITDA. This is a level that we find appropriate and in line with our capital structure policy. This gives us financial flexibility and the opportunity to continue to develop business in accordance with our strategic priorities.

Our equity ratio, that is the size of the equity in relation to the total assets increased by 1 percentage point in relation to last year and increased to 37%. On the basis of this strong development, we have launched a new share buyback program of DKK 400 million, and we propose a dividend of DKK 16 per share, corresponding to 51% of annual profits.

And with that, I will pass the floor to our CEO, Lars Jensen, who will take you through the rest of the development for the year. Go ahead, Lars.

[Interpreted] Thank you, Peter. I'd like to start with going through the development in our business segments.

Northern Europe is our largest segment and still makes up the main part of both our net revenue and EBIT. Northern Europe performed solidly in a market that's still characterized by competition and frugal consumers. Volume was on the level of 2024 with 11 million hectoliters, while revenue increased by 2% to DKK 10.4 billion. We also improved the EBIT by 4% to DKK 1,518 million and raised the EBIT margin to 14.5%. This is a satisfactory result in a market where the total demand is relatively flat.

In both Western Europe and International, we again saw strong development, and both segments contributed positively to the group's total progress. In Western Europe, volume increased by 11% to 5.5 million hectoliters, while revenue increased by 13% to DKK 3.7 billion. Growth has been driven by both organic growth and integration of acquisitions we have made in recent years. EBIT increased by 55% to DKK 480 million, and the EBIT margin was improved by 3.5 percentage points to 12.8%.

International continued its positive development in 2025. We achieved growth in both volume and revenue with volume growth of 16% and a revenue growth of 7%. EBIT increased by 14% to DKK 239 million, and the EBIT margin was improved to 15.5%.

Everything is driven by increased demand in a number of markets and more effective use of our production capacity. International saw continued good demand across several markets and categories, and the segment contributes increasingly to the group's total growth and earnings.

In total, it's a development that confirms that our strategy works and that we can create growth across various markets and categories. As Peter mentioned, our growth category framework is a central driver in our development. We have a clear focus on four overall areas, soft drinks with low or no sugar, enhanced beverages, ready-to-drink and premium products.

Consumers increasingly want healthier products, functional beverages and greater variation, and we see a structural growth in these categories. This requires both innovation and speed of execution, and that is where our model with strong local brands and close cooperation with customers makes a difference. It's also here we find our attractive margins. So, we will continue to focus our investments and commercial efforts in these categories.

In our largest markets, there has been no growth overall. Consumption of beverages is relatively stable but moves between categories. And that's why we are so focused on the areas where we see the best opportunities.

In 2025, we saw continued strong growth in our growth categories that make up about 60% of our total revenue. Beverages with low or no sugar grew by about 9%, enhanced beverages by 5%, while ready-to-drink and premium products also contributed. At the same time, nonalcoholic beverages now make up 56% of our total revenue compared to 54% the year before.

As we've seen over the past 12 to 18 months, it's this combination of focused innovation and strong execution that drives our business development. And the growth is very much driven by our own brands that make up a large share of these categories. That is also why we expect these categories to continue to be a central driver for our growth going forward, also after 2028 when our partnership with PepsiCo in Northern Europe will end.

Historically, both our own brands and partner brands have contributed to our growth. But in recent years, our own brands have shown a stronger development, both when it comes to growth and profitability. I'll give you some examples.

In Denmark, Faxe Kondi delivered an average revenue growth of about 14% a year since 2019, and the brand has strongly positioned across categories such as CSDs, energy drinks and sports drinks. In Finland, Jaffa has also delivered growth higher than the market growth. And in Italy, we see a strong development in our lemon soda portfolio, both locally and international. These are brands that are close to the consumers and can quickly be adapted to change preferences.

Our results are driven by our good products, both our own local brands and the brands we have through partnerships. But good products cannot stand alone. They need a strong promotional effort, continued innovation and excellent execution in the market. It's about ensuring that our products are present where the consumers make their choice in the right form and in the right format or put in a different way, being the preferred choice, which is, of course, our purpose and ambition.

On this slide, you can see some of our market positions, and I won't go into detail, but you can see that across markets and categories we have some strong first and second places.

Our market position is supported by an integrated sustainability effort focusing on reducing our footprint in the areas that are most important to our business. And since last year, the share of products with low or no sugar has increased to 68% of our CSD revenue against 62% the year before.

At the same time, we reduced our water consumption by 4% and our CO2 emissions by 10%. We have also reduced the frequency of work-related accidents by 31%. That being said, health and safety is still something we're focusing very much on because one accident is one too many.

Before I talk a bit about the partnership with PepsiCo, I'll just go through our profits from this year's first quarter, which we published last week. It's important to know that the first quarter is also relatively small for Royal Unibrew, but we have made a good start.

The first quarter developed in line with our expectations and is a solid start to the year. We delivered organic volume growth by 5%, among other things, supported by the timing of Easter, but also strong commercial execution across our markets. The organic revenue growth was 2%, while the underlying growth was about 6% when we adjust for the end of low-margin activities in Northern Europe, where, for instance, we have left the snacks market.

At the same time, we improved profitability during the quarter. EBIT increased organically by 21% to DKK 273 million, and the EBIT margin was improved by 150 basis points to 8.3%. The development is very much driven by our own brands continue to be the strongest growth driver in the top line. And at the same time, we continue to grow our efficiencies across the business. The free cash flow was improved by DKK 98 million compared to last year, driven by the improved result.

Here, we have our outlook for 2026, which we announced when we sent out the annual report for 2025 at the end of February. In 2026, we expect an organic EBIT growth of 6% to 10%, corresponding to an EBIT level in the interval of DKK 2.325 billion to DKK 4.250 billion. And we expect our growth to be on a level with 2025. This reflects continued growth in beverages, but also how we counteract the loss of low-margin activities and that we have revenue by about 3.5% without the volume being affected or the EBIT.

Outlook is based on continued challenging consumer environments across our markets. At the same time, it's important to say that we work actively to handle the effects of commodities inflation and increasing energy prices. We do that through price mix and efficiencies and as part of our risk management, we have hedged the risk for price fluctuations in some of our commodities and our energy consumption. We follow the developments closely and will, of course, react if circumstances change.

As announced on the 21st of April, our partnership with PepsiCo in Denmark, including the border trade on the Danish-German border, Finland and the Baltic will end at the end of 2028. In the Netherlands, Belgium and Luxembourg, the partnership will continue under current contracts.

For decades, PepsiCo has been a strong and valuable partner in Northern Europe. The partnership has been mutually beneficial, and we are proud of what we've achieved. We would have liked to continue the partnership, but we haven't been able to reach an agreement.

It's important to emphasize that the end of the partnership does not change our strategic direction. We continue to focus on our multi-beverage model and will drive growth in both own brands and partnerships. The related contract makes up about 13% of our current net revenue, and we will continue operations until the end of the contract period in accordance with the agreement.

Towards 2028, we expect the Pepsi share of net revenue to gradually decline. This is partly because of the strong growth in our own brands, partly because the Cola category is generally declining in the total soft drinks market. Based on current circumstances, we expect an annual organic EBIT growth of 6% to 8% until the end of 2028, in line with our long-term financial targets.

2029 will be a transitional year, affected by lower revenue and reduced benefits of scale. And we will try to mitigate that by launching some cost and efficiency measures. It's central to our strategy that we have full control of our own brands so we can develop them to their full potential. And we will get greater flexibility going forward. So, as Peter said, the end of the partnership also creates new commercial opportunities, and we will accelerate growth in own brands and pursue new partnerships.

And we now have more than 2.5 years to plan and prepare this in detail. And also, after 2028, we will have Cola in our portfolio. And we're not starting from scratch because even though we didn't want the partnership with PepsiCo to end, it's a scenario we have dealt with as a natural part of our risk assessment and management.

In 2029, we expect transition costs of about DKK 300 million. And that's because we need to support our own brands and cover exit-related costs. From 2030, we expect growth to be back on track with earnings measured as an absolute EBIT over the level of 2028. The accumulated financial effect depends on various things. And of course, there's some uncertainty regarding timing and extent.

So, to sum up, based on our well-established, multi-beverage model, our growth categories and strong customer relations, we trust in our opportunities and our ability to ensure long-term growth and value creation. Therefore, our long-term financial targets are also unchanged. We still have an ambition to deliver an organic EBIT growth of 6% to 8% a year. This is a level we believe is both ambitious and realistic and which we have shown we can deliver on over time in spite of the dip we will see in 2029, because of the end of the PepsiCo contract in Denmark, Finland and the Baltics at the end of 2028.

As I already described, we have plans, which we expect will reduce the effect of the loss of Pepsi in 2029, and those costs will be related to the transition. We will continue the organic growth in the remaining part of the business. We will promote growth in our own brands. New partnerships can also be relevant, and we are open to opportunities. And finally, we will look at areas where we can achieve efficiencies and savings.

Our clear ambition is that for 2030, the EBIT will be back on or above the level of 2028. So, our capital structure policy is set. We strive for leverage below 2.5x the EBITDA, and that's today around 2x. And that gives us a robust balance sheet and flexibility to navigate in an uncertain market and to continue to invest in growth, both organically and through acquisitions. It is also still our target to distribute 40% to 60% of the year's net profits to shareholders and to make share buybacks to adjust the capital structure.

As one of the last things I want to go through some of the important things on our agenda for now. We have set ambitious financial targets for Royal Unibrew, both in the long term and the short term. We will continue to deliver growth and improve efficiencies across the business and to deliver on the targets.

A central focus area is still efficiency across the business. We work continuously to optimize our processes, improve our productivity and ensure that we get full return on investments that we have made in recent years. This applies to both our established business and the companies we have acquired in recent years, including in Norway and the Netherlands.

At the same time, we continue to invest in growth. We have a clear prioritization of our growth categories where we see the best opportunities for progress. And we will continue to focus our commercial measures and our innovation in these categories.

The development of our own brands is another central element. And as mentioned earlier, we see a strong development in our own brands, both when it comes to growth and profitability. and it's a development we expect will continue. Therefore, we will also continue to strengthen our portfolio and invest in innovation, promotion and distribution.

At the same time, we are focusing on improving the business for the time after 2028. This applies to both the development of our own brands, use of our capacities and our commercial setup. We see it as an opportunity to strengthen our position further and create an even more solid foundation for future growth.

For many of our colleagues, it's business as usual right now, but we will make sure that in relevant areas, we will already now start to adapt and pursue opportunities. And then there's the world around us. The macroeconomic and geopolitical uncertainty continues to be high, but we monitor the situation to respond to changes to ensure solid performance across our markets.

Last but not least, sustainability is an integral part of how we operate and invest in our business, and it will also be on our agenda in 2026. The financial performance Peter and I have just reviewed would, of course, not have been possible without our excellent colleagues. It's in our DNA to be flexible and dedicated. And again, this year, it has helped us through many challenges, but also opportunities.

Across the organization, our colleagues work focuses on innovation, customer cooperation and developing our local portfolio. Locally, everyone contributes to strengthen Royal Unibrew's position as preferred beverage partner in our markets. It's this adaptability, executive capacity and ability to continuously develop the business that gives us great belief in handling the transition after the end of the PepsiCo partnership. And it gives us the conviction that we are well prepared for the years to come. So, I would like to send a warm thank you to all the members of our staff.

And with that, I thank you for your attention, and I give the floor back to Peter.

[Interpreted] Thank you very much, Lars. With this report from our CEO, we conclude the review of the past year, the results of the first quarter of 2026. Our guidance for 2026 as well as the long-term perspectives for our business. That means that we can now move on to the investor-related items.

First of all, I would like to present and motivate some of the Board's proposals and then the Chair of the AGM will take us through the actual adoption process. First of all, the Board of Directors proposes that the Board and executive management are granted discharge from liability in relation to the approved annual report for 2025. This is a recurring item at the AGM, and it means that the general meeting approves the decision made by the management in relation to the approved annual report.

When it comes to the distribution of profit for the year, I can inform you that the net profit in Royal Unibrew for 2025 was DKK 1,430 million. The Board of Directors proposes to pay out a dividend of DKK 16 per share of nominally DKK 2, corresponding to a total dividend of DKK 803 million.

The Board proposes that the remaining net profit of DKK 627 million be carried forward. This proposal is in accordance with our principles for capital allocation, and it reflects our wish to pay out an attractive return to our shareholders and at the same time, maintain the necessary financial flexibility to develop our business.

Furthermore, the Board of Directors proposes that the remuneration report for 2025 be approved. The remuneration report outlines the remuneration allocated to the Board of Directors and the executive management for the financial year 2025, and the report is in accordance with current legislation and the remuneration policy of the company.

The purpose of the report is to create transparency on the remuneration in the company and ensure that the shareholders has a clear basis for the assessment of the remuneration and its alignment with the company's development and results. The Board recommends that the report be approved.

And now to the item concerning the Board fees for the financial year 2026. In general, we aim to match the remuneration for the Board with the level in comparable companies and to consider the demands to the Board members' competencies, efforts and the extent of the Board work, including the number of meetings.

The Board members are awarded a fixed cash fee, which is to be approved by the Annual General Meeting on an annual basis. The Board does not receive any variable or share-based remuneration. The Board proposes that the fees to the Board of Directors for 2026 are increased to the effect that the base fee will be DKK 460,000, corresponding to an increase of 2.2%.

It is also proposed that the Chair of the Board shall continue to receive 3x the base fee, including the base fee, and that the Deputy Chair shall continue to receive 1.75x the base fee, including the base fee for their extended duties and obligations.

Board members who also serve on the Nomination and Remuneration Committee or the Audit Committee will receive an additional annual fixed fee corresponding to 33% of the base fee per committee. For extended duties and obligations, the Chair of the Audit Committee receives an annual fixed fee corresponding to 80% of the base fee, while the Chair of the Nomination and Remuneration Committee receives an annual fixed fee corresponding to 50% of the base fee.

Furthermore, Royal Unibrew covers the Board members' expenses to travel, meetings, board and lodging, et cetera. And Royal Unibrew can also pay any foreign social costs and fees within the EU that may be levied by foreign authorities in relation to the remuneration of the Board members. That leads me to the item concerning the candidates who are proposed to be elected for the Board.

The AGM elected members are elected for a term of one year and are eligible for reelection. The Board proposes reelection of Jais Valeur, Catharina Stackelberg- Hammarén, Torben Carlsen, Lise Mortensen, Ingeborg Plochaet; and finally, myself, Peter Ruzicka.

Provided that the members of the Board of Directors are elected in accordance with the proposal of the Board, the Board of Directors consists of six members elected by the general meeting and three members elected by the employees. It is the intention of the Board of Directors to elect me as Chair and Jais Valeur as Deputy Chair.

Each year, we carry out an evaluation of the Board work and composition. In 2025, this evaluation was in the form of a self-assessment. The conclusion was that we have a good cooperation in the Board and in the committees and that the right competencies are represented.

Information on the background, qualifications, independence, managerial duties and other demanding organizational assignments of the Board candidates is available at the company's website and in Appendix 1 to the convening notice.

We also have three employee-elected members of the Board who contribute very well to the Board work with a strong insight into our business and in Royal Unibrew as a company. These are elected for a term of four years, and the employees of Royal Unibrew have in April, elected Jeanette Dahl Henriksen, who is the Head of Material Planning.

Jeanette is a new member of the Board. They have also elected Michael Nielsen, who is a brewery worker and has been reelected for the Board. And finally, Claus Kærgaard, who is a Sales Manager in off-trade and has also been reelected. Congratulation to all of you. We look forward to cooperating with you.

I would like to extend a warm thank you to Kenn Hvarre for his efforts on the Board. He will be resigning from the Board this time around. However, Kenn has been elected as a substitute along with Stine Berg and Lars Fini Christensen.

Before I give the floor to Niels Kornerup, who will take us through the rest of the agenda, I would like to extend a thank you to my Board colleagues, the management and our employees for their efforts in 2025. Last year's results are very satisfactory, and they show the effect of the long-term strategic work from production and distribution, sales and marketing to the administrative functions in our company. All of our teams have been working hard on solving day-to-day tasks and ensuring the continued development of Royal Unibrew.

Finally, I would, of course, like to extend a thank you to our shareholders. I can guarantee that in Royal Unibrew, we will do everything we can to continue to develop the company through value-creating growth. With that, I have concluded my report and the Chair of the meeting, attorney at law, Niels Kornerup, will now take us through the remaining agenda for today. Go ahead, Niels.

[Interpreted] Thank you to the Chairman and the CEO for the report and the motivations of the proposals. Now it's time for debate, and I ask that people who want to participate write their comments as directed earlier.

But before, I can tell you that the annual report has been signed by the Board, the executive management and the auditor and the auditor has on Pages 195 to 201, given an unqualified auditor's signature without supplementary comments and a limited liability for the company's sustainability reporting. The Chairman proposed, as mentioned, that the Board proposes a dividend of DKK 16 per share of nominally DKK 2, which is a total payout of DKK 803 million. And the remaining profit of DKK 627 million will be carried forward.

And with that, I open the debate, and I want to ask if anybody wants the floor to ask questions or make comments. And I remind you of the 20 seconds delay. So, I'll just slow down a bit to make sure that we have time to receive any comments or questions. And it doesn't seem like there are any comments pending. And I think I've now been speaking so slowly that we are not talking seconds, but probably a minute at least now. So I think I will conclude that nobody wants the floor under this item.

So I will conclude that the AGM has listened to the report and approved the AGM has granted discharge to the Board of Directors and executive management, agreed on the proposed distribution of profits and approved the remuneration report for 2025. And there's also support from that from the votes already cast. And this will then be added to the minutes.

With that, we close Items 1 to 5, which brings us to Item 6, which is approval of remuneration of the Board of Directors for 2026. The Chairman has already presented this. And the proposal for 2026 is a base fee of DKK 460,000, up from DKK 450,000 and that the Deputy Chairman receives 1/4 the basis fee, which is DKK 805,000.

The Chairman of the Board receives a fee of 3x the base fee, which is DKK 138,000. And there is an extra 33% of the base fee per membership of a committee. And the Chair of the Audit Committee receives 80% of the base fee as last year and the Chairman of the Nomination and Remuneration Committee again receives 50% of the base fee for that Chairmanship.

And again, I want to ask whether there are any comments from shareholders regarding the remuneration for the Board of Directors. And again, I slow down to make sure that everybody gets the opportunity. But with that, I will now conclude that this has been approved.

Then we have Item 7 proposals from the Board of Directors. And there are three proposals. 7.1 is a proposal on capital reduction with cancellation of treasury shares. 7.2 is authorization to acquire treasury shares. And finally, Item 7.3, amendment of the Articles of Association.

And with that, I'll dive into 7.1, which is the first proposal where the Board proposes that Royal Unibrew share capital be reduced by nominally DKK 1.8 million from nominally DKK 10,400 to DKK 98,600 through cancellation of 900,000 treasury shares of nominally DKK 2 each. This is the result of the share buyback program that was carried out in 2025. The proposal means that the Articles of Association will be rewarded as it is stated in the convening notice, but this will only be at least four weeks after this has been announced by the AGM. And I refer you to the convening notice for the details.

Are there any comments related to this? Comments, questions regarding this cancellation of shares. And I hope that you write in as quickly as possible and that you don't start writing when I ask for comments. That will certainly make this a bit easier.

I can just mention that this requires a change in Articles of Association because the capital value of the company appears from the Articles of Association. So, we need 2/3 support for this. But now I'll conclude nobody wants the floor, and I conclude that the proposal has been adopted, and we already also have the votes cast for that.

7.2 is a proposal like last year for the authorization to the Board of Directors to acquire treasury shares. This means that the company can acquire shares to a total of 10% of the company's share capital at the time of the authorization, provided that the company's total holding of treasury shares at no point exceeds 10% of the company's share capital.

The consideration must not deviate more than 10% from the official price quoted at NASDAQ Copenhagen at the time of acquisition. And this authorization will be valid until the AGM in 2027. I can tell you that the authorization is primarily used for any share buyback programs.

Does anybody want the floor under this item? That does not seem to be the case. And there's also broad support from the already -- the votes already cast. So, this proposal has been adopted.

The final proposal from the Board of Directors is Item 7.3, where the Board of Directors proposes to amend the Articles of Association. This concerns wording in Article 9 that sounds like this. "The Board of Directors may decide that the company's general meetings are held in English or Danish with or without offering simultaneous interpretation to and from Danish." In addition, the following wording is added to Article 27, and I quote, "The corporate language of the company is English." In general, I refer you to the convening notice where you can read the wording as well.

Does anyone wish to take the floor under this item? Here, again, I can inform you that an amendment of the Articles of Association requires a majority of 2/3 of the votes cast and the represented share capital.

I cannot see any indication that anyone wishes to take the floor. And speaking quite slowly now, I can now conclude that the proposal has been adopted. That leads me to Item 8, which is the election of members of the Board of Directors.

According to the Articles of Association, the members are elected for a term of one year. And the Board proposes reelection of Peter Ruzicka, Jais Valeur, Torben Carlsen, Catharina Stackelberg-Hammarén, Lise Mortensen and Ingeborg Plochaet. All in all, I refer you to the report we just heard from the Chair of the Board. And I can tell you that the other managerial posts of the candidates appear from Annex 1 to the convening notice, which has been available on the company website since the 27th of March.

Are there any other candidates for the Board? With the delay of 20 seconds in mind, I can now conclude that, that is not the case. And we only have the number of candidates for the number of posts available, and I can therefore conclude that everyone proposed by the Board have been elected. Congratulations.

As mentioned by the Chair of the Board, it is the attention of the Board to elect Peter Ruzicka as Chair and Jais Valeur as Deputy Chair immediately after the AGM. That means that we now have the following people on the Board, Peter Ruzicka, Jais Valeur, Torben Carlsen, Catharina Stackelberg-Hammarén, Lise Mortensen and Ingeborg Plochaet. Furthermore, the Board of Directors consists of the following employee representatives, Claus Kærgaard, Jeanette Dahl Henriksen and Michael Nielsen.

That leads me to Item 9, which is the election of state authorized auditor and again, the Board of Directors proposes reappointment of Deloitte, and this applies to both the statutory financial auditing as well as the assurance engagements relating to sustainability reporting. And I can inform you that this proposal is in accordance with a recommendation from the Audit Committee, which has not been influenced by third parties, nor has it been subject to any contractual obligation restricting the general meeting's choice of certain auditors or audit firms.

On the basis of that information, I would like to ask whether there are any other candidates to the position of state authorized auditor for Royal Unibrew. That is not the case. And that means that Deloitte has been reelected as company auditor, applying to both the statutory financial auditing and the sustainability reporting.

That leads me to Item 10, which is a recurring item, any other business. Here, the shareholders can take the floor and say anything in regard to the company. Does anyone wish to make any comments? It could be any comments or questions, praise or criticism. And I'm just slowing down.

Do I get any indication of any incoming comments? There might be some activity. No, that does not seem to be the case. I hope everyone out there has now had the chance to take the floor if anyone should wish to comment, but we have received no comments, and that means we can conclude this item and the agenda has now been exhausted, and I would, therefore, like to thank you for a good general meeting.

Left for me is only to resign as Chair of the Annual General Meeting and pass the floor back to the Chair of the Board for a closing remark. Thank you.

[Interpreted] Thank you, Niels. With that, I would like to say thank you for participating today in Royal Unibrew's AGM. And thank you to our Chairman of the AGM for guiding us through the meeting. And I hope you will also listen in next year. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good day, and thank you for standing by. Welcome to the Royal Unibrew's Trading Statement Q1 2026. [Operator Instructions] Please be advised today's conference is being recorded.

I'd now like to hand the conference over to your first speaker today, CEO, Lars Jensen. Please go ahead.

Thank you, and hello, everyone, and welcome to this call about Royal Unibrew's First Quarter 2026 trading update and our announcement about changes to one of our partnerships. My name is Lars Jensen. I'm the CEO of Royal Unibrew; and with me today is our CFO, Lars Vestergaard and Head of Investor Relations, Flemming Nielsen. We'll take you through the highlights of today's announcement and after the presentation, we will open up for questions. So let's start with the usual disclaimer on Slide #2.

Before we begin, please note the disclaimer covering forward-looking statements, assumptions and risk factors that may cause actual results to differ from expectations. We will skip the agenda on Slide #3, and let's move to the partnership changes on Slide #4.

As announced today, there will be some significant changes to our PepsiCo partnership. We will walk you through the implications and underlying elements in more details on the next slides. Starting with the facts. In Northern Europe, our partnership with PepsiCo will conclude at the end of 2028. This includes Denmark including the border trade in Germany, Finland and the Baltics. Our PepsiCo partnership in BeNeLux continues beyond '28, in line with the partnership agreements for those markets.

PepsiCo has been a valued partner for decades in Northern Europe and the collaboration has been mutual beneficial, and we are proud of what we have achieved. While Unibrew would have preferred to continue, however, this has not been proven possible. Importantly, this outcome does not change our strategic direction. Our multi-beverage strategy remains unchanged, and we continue to focus on growing both our own brands and partnerships.

If we look at our recent performance in these markets, our own brands have been the main driver of growth. This reflects both underlying market trend and our ability to respond effectively to changing consumer preferences. It is critical for our Unibrew strategy that we have fully control over our own brands, and we can develop them through their full potential. We will have more flexibility for this going forward.

The affected PepsiCo businesses represents approximately 13% of our current net revenue, and we will continue to operate the PepsiCo business for the remainder of the contractual period in accordance with the agreement. The Pepsi share of net revenue is expected to decline towards the end of '28, supported by the strong growth we are seeing in our own brands, while the Cola category share of the total soft drink market generally is in decline across most markets. We will implement a range of initiatives to mitigate the negative impact from the ending of the PepsiCo portfolio, and these initiatives span commercial actions, efficiency improvements and cost measures.

At the same time, we will ensure that our multi-beverage portfolio remains strong and attractive for our customers. We also see this as an opportunity to further develop our own brand portfolio and to pursue new partnerships where this creates strategic and financial value. Based on our current assumptions, we continue to expect to deliver organic EBIT growth of 6% to 8% by the end of 2028, fully in line with our financial targets. 2029 will be impacted by lost revenue and loss of scale, and we expect to offset this accelerating growth of our own brands, pursuing new partnerships, and right cost and efficiency initiatives.

Based on current assumptions, we expect transition costs of approximately DKK 300 million to support the acceleration of own brands in '29, as well as to cover potential exit-related costs associated with the ending of the partnership. On 2030, we expect our growth formula to be back on track with profitability measured as absolute EBIT exceeding 2028 levels. The financial impact from the conclusion of ending of -- the financial impact from ending of this partnership involves several moving parts, and there's naturally some uncertainty related to both timing and the actual impact. Lars Vestergaard will go more into details on this.

And with that, we will now turn into -- turn to why our growth core remains intact. So please turn to Slide #5. This slide includes key elements in our strategy and operating model. You have heard us talking about this before. We operate a highly efficient multi-beverage model across our Northern European markets, with strong embedded capabilities across product innovation, production, distribution and sales of multi-beverage categories. We have a clear focus, on growth categories where we prioritize innovation and commercial investments in various categories with the strongest growth potential.

We have a portfolio of local brands with strong market positions across categories, and we continue to invest and develop these brands. We complement this with close customer relationship across both on and off-trade channels. And with the combination of our strong beverage portfolio and service mindset, we aim to be the preferred choice of local beverage partner. We have always worked and pursued -- sorry, worked with trusted partners and have a strong track record of delivering growth and value for our partners. But not least, our culture and organization supports innovation and agility, and we aim to offer products that fit consumer trends and preferences.

Taken together, this growth core remains fully intact, and please turn to Slide #6. Our growth category framework remains unchanged, and these categories cover approximately 60% of our net revenue with our own brands accounting for a large share of this. The partnership that we are exiting after 2028 is primarily within the Cola category. And as such, it is included in the no/low sugar CSD category. We have always aimed to build portfolios with partners where the outcome is positive for both parties. This applies to all of our partnership and reflects our commitment to create win-win solutions for our partners and for Royal Unibrew.

As a result, there has been situations where we have deliberately chosen to limit opportunities for our own brands in order to deliver value for our partners' brands. In 2029, we'll be able to develop own brands freely. And furthermore, there will be opportunities to enter new partnerships. So looking ahead, we expect new opportunities to develop our growth category framework.

And now please turn to Slide #7. On this slide, we show selected examples of performance of our own brands. Historically, both own brands and partner brands have contributed to our growth. But in recent years, our own brands have demonstrated superior growth rates while also carrying significantly higher profitability. In Denmark, the Faxe Kondi brand has delivered 14% net revenue growth per year since 2029, with strong market positions across the carbonated soft drink space, energy and enhanced categories. Similarly, Jaffa in Finland has delivered growth ahead of the market and our Italian Lemonade, LemonSoda brand range is outperforming strongly both in Italy and across markets in Europe. These brands are well aligned with consumer trends, including demand for local relevance, innovation and new flavors. As we move forward, we expect growth in our own brands to further accelerate, supported by increased focus and greater commercial flexibility after 2028.

And now please turn to Slide #8, and I will hand over to Lars Vestergaard.

Thank you, Lars. This slide illustrates the current management thinking around financial implications of the changes that we've announced today. Please note that these graphs are for illustrative purposes only. And as Lars already mentioned, the financial impact from ending of the partnership involves several -- fairly large moving parts and there is naturally uncertainty related to both timing and the actual impact. And there is some years until they materialize.

What we're illustrating here is management's current thinking and ambition. Until 2028, we continue to expect organic EBIT growth of 6% to 8%, in line with our financial targets. As already mentioned, the affected PepsiCo business represents approximately 13% of our current net revenue, and we expect that this share will decline towards the end of 2028, as our own brands and in particular, growth in growth markets in International and Western Europe will be growing at a faster pace than in the Nordic segment. 2029 will be a transition year with some substantial moving parts.

The ending of the partnership leads to a loss of revenue with an EBIT margin close to group average as well as reduced scale effects. To mitigate these impacts, we will accelerate investments and increase focus on own brands. We will pursue potential new partnerships, and we will execute efficiency and cost initiatives. A significant part of our business is not affected by this change as we continue to deliver growth also in 2029. Based on the current assumption, we expect transition costs of around DKK 300 million to support the acceleration of own brands in 2029, as well as to cover potential exit costs related to the ending of the partnership.

It is important to note that the margins on own brands are higher than that of partner brands. Furthermore, CapEx is expected to be lower than under the continuation of the partnership. From 2030, we expect organic EBIT growth to resume with absolute EBIT level above 2028. Overall, this underlines the resilience of our model and our confidence in return to our long-term growth trajectory.

Now please turn to Slide #10 with Q1 highlights, and I will hand the word back to you, Lars.

Thank you, Lars. And now we will go through the Q1 update quickly to save time for questions. Q1 represents a good start to the year and the quarter developed in line with our expectations. We delivered solid organic volume growth of 5% with good commercial performance across markets. Growth in the quarter was supported by Easter timing, which is important in Northern Europe. Reported organic revenue growth was 2%, while underlying organic revenue growth was close to 6% adjusted for the planned exit from snacks and other low-margin businesses in Northern Europe.

As we have seen during the previous 12 to 18 months, our growth is driven by our own brands, supported by focused innovation and strong commercial execution across markets. We continue to deliver margin expansion with EBIT of more than 20% organically and EBIT margin of 8.3%, up 150 basis points year-on-year. Free cash flow is also following our plans and improved versus last year. Recent months have been quite eventful on the geopolitical scene, impacting energy and commodity prices despite increased macro and geopolitical uncertainty we reiterate our full year outlook for 2026. And obviously, this is a situation we monitor closely across our markets.

Let's now look at performance by segment, starting with Northern Europe on Slide #11. In Northern Europe, volumes grew organically by 8.4% in the quarter. Development was supported by the timing of Easter, while the comparison to last year was further impacted by a strike in Finland in the first quarter of '25. Adjusted for the exit from lower-margin activities, organic net revenue increased by around 8%, broadly in line with the volume growth. Growth was broad-based across markets, with Finland and Norway delivering the highest growth rates in the quarter.

In Finland, non-alcoholic beverages continued to show solid development and the [indiscernible] operation is performing in line with expectations from the business case. In Denmark, Faxe Kondi and Faxe Kondi Booster continued to perform very strongly, and we continued the rollout of Faxe Kondi in Norway, supported by our new cross-border sponsorship with the Uno-X Mobility Cycling team. In the Baltics, we achieved a slight market share growth during the quarter. Overall performance in Northern Europe is in line with our plans.

And now let's move to Western Europe on Slide #12. In Western Europe, volumes declined organically by 6.5%, while net revenue declined by 2.6%. Importantly, the development is in line with our plans and reflect our continued focus on quality of revenue and EBIT margin improvement. The decline was mainly driven by the Netherlands and reflect the ongoing commercial approach we implemented in the second half of 2025. And as part of this approach, we have focused on price pack optimization and intentionally reduce exposure to lower profit promotional activity. At the same time, own brands in Italy continue to gain market share in a broadly flat market, confirming the strength of our portfolio and execution. Overall, Western Europe continues to progress as planned.

And now let's move to International on Slide #13. International delivered another strong quarter, where organic volume growth was 24% and organic net revenue increased by close to 13%. Price and mix was impacted by country mix, reflecting continued strong growth from our Faxe beer in the African markets. These are attractive markets with structurally higher growth rates, but the average gross margin are lower due to the distributor-based model. Sales up growth across markets remain solid at low-teens level, and our growth in the quarter was supported by a structural inventory buildup across distributor supply chains reflecting the need for higher inventory levels to support a growing underlying business. Overall, the International segment continues to be a strong growth engine for the group.

And with that, please turn to Slide #14, and I'll hand over to Lars to walk you through the financials.

Thank you. Let me start by reminding you that Q1 is a seasonally small quarter and earlier Easter this year impacts comparability. And as already mentioned, the strike in Finland last year also moved some revenue from Q1 to Q2. That said, we delivered a good start to the year, fully in line with expectations. Gross margin and EBIT margin improved year-on-year, supported by operational efficiency and realized benefits from our ongoing CapEx program. Furthermore, the exit from lower-margin business also helped drive up margin. EBIT increased by almost 25%, and the EBIT margin expanded to 8.3%.

Financial items and tax were on expected level and earnings per share growth for the quarter came to 40%. Cash flow was also in line with the expectations. As usual, Q1 was cash flow negative, reflecting inventory buildup ahead of the high season, but free cash flow improved compared to last year, driven by higher earnings. Our balance sheet remains robust with a gearing ratio of 2.1x, and we continue to execute the DKK 400 million share buyback program, which runs until mid-August.

On April 29, we have our AGM and the expected dividend of around DKK 800 million will be paid out in Q2. Let's move to the outlook on Page 15.

We reiterate our full year 2026 outlook as communicated in the annual report. We continue to expect organic EBIT growth of 6% to 10%, supported by continued strong commercial performance, disciplined execution, operational efficiencies and margin management across the group. Net revenue for 2026 is expected to be broadly in line with 2025, reflecting continued growth in our beverage business, offset by the exit from lower-margin activities which will reduce the reported revenue by around 3.5%, mainly in Northern Europe with no impact on volumes or EBIT.

The geopolitical and macroeconomic environment remains uncertain, and commodity inflation risks have increased in recent months. A portion of our expected raw material and energy consumption for 2026 is hedged and we continue to actively manage the remaining exposure through pricing, mix and efficiency initiatives.

And with that, I'll hand the word back to you, Lars, on Slide 16.

Thank you, Lars. And to sum it up. As we have announced today, our partnership with PepsiCo in Northern Europe will not continue when the current license agreement expires by the end of 2028. This was not the desired and expected outcome. But as we have explained, our multi-beverage strategy remains intact, and we have a good commercial plan and mitigation actions in place.

Q1 '26 represents a good start to the year with strong commercial execution across markets. Operational efficiencies continue to drive margin expansion and cash flow and balance sheet remain strong. Despite increased macro uncertainty, we reiterate our full year guidance for 2026 and remain confident in our ability to deliver.

Thank you for your attention. We are now ready to take your questions.

[Operator Instructions] Our first question today comes from Thomas Lind Petersen from Nordea.

Please 2 from my side, both regarding the Pepsi partnership. So the first one is sort of if you could explain a bit why -- why you weren't able to reach an agreement with PepsiCo? I assume you've had negotiations and perhaps that they gave a reason for this? Was it related to performance? Or was it related to payments or anything here?

And then the second one is where does this leave your partnership with Pepsi? And of course, I'm thinking about BeNeLux here. I mean you've made significant investments into commercial and CapEx and so on. What do you sort of expect in the BeNeLux going forward given that Pepsi sort of has decided not to extend this partnership?

Thank you, Thomas. We will, of course, not be able to give you any details on why a negotiation has not ended in a certain way. I think as we have also put in the statement, our performance during the last 20 years in Denmark since we acquired the business in Finland. And since we took over the Pepsi portfolio in the Baltics, we have delivered an outstanding performance. These markets when you compare them across European markets, they stand out from a position point of view and from a growth point of view in all aspects. So if you want to have, I would say, further details, and you need to ask questions to PepsiCo. But it's our clear impression that we have done an outstanding job.

Does it change anything to the partnership in BeNeLux and for partnerships in general? I think the prepared notes that we have just given you, I think it cements that the partnership will remain a vital part of putting the most awesome portfolio together that can deliver value creation from -- for our customers. Then for the future, that's going to be a different mix of partners than having PepsiCo on board in the Nordic countries, but we will remain focused on delivering on the strategy that we have been very successful with.

And when it comes to BeNeLux, it is not changing our strategy around those assets. We will pursue the opportunities that we have there. And remember that we also have -- like we have in the Nordics, we have local brands. So Pepsi is a part of the makeup, but it's not the full makeup of the business. So we will continue working together with PepsiCo in those markets.

We'll now take our next question. This is from Matthew Ford from BNP.

Just a couple of questions from me, one on the quarter and then one on Pepsi. I suppose with the Pepsi one first.

Your chart that you lay out on Slide 8 is very interesting. And obviously, we know the moving parts in terms of the loss you've given the detail on the Pepsi contribution. Would you be able to give a little bit more detail on, I suppose, some of the scale impact that you're expecting from the loss of the Pepsi partnership. Potentially how much of this kind of gap you're looking to fill from new partnerships and potentially where you see those partnerships being category brand, et cetera, to get to that?

And then just on the transition cost, are you expecting all of that DKK 300 million in 2029? Or will that be spread over a couple of years?

And then just one last one quickly on Q1. Obviously, Easter was quite a big benefit in Q1 versus Q2. Would you be able to give some quantification for how much of the Q1 performance was from Easter and what we should expect therefore, in Q2?

Yes. So if we start with the question on the bridge. I think the reason why we have not given you sizes on the different elements is that they interlink. So I think we've given you one building block, which is the size of revenue that comes from the Pepsi partnership. Regarding the scale loss, of course, that can be mitigated with different means. One is, of course, that you rebuild the scale with own brands or other partnerships. We expect that to be a significant contribution to reducing the scale loss we have.

And then, of course, we continue to have underlying growth also from '26, up until the end of '29. And of course, we will make certain that we manage our cost base so that it's more fitted for life after this partnership. So the work already starts now to make certain that the scale of our business is linked to the size of business we expect at the end of '29.

And then depending on how much mitigation we can do on the revenue part, then we will make sure that we rightsize our cost base to make certain that we exit '29 with strong earnings run rate going into 2030. And when we talk about the transition cost, then, of course, '29 will be a year with a lot of transition in our business. So we will have to rebrand a big part of our business and have to exit some things that has the partnership name on it. So that will cost some money. But we will also invest significantly in building our own brands so that they get the attention that they need early on in '29. So for us, this is really about making the DKK 300 million is to make certain that we have sufficient money to make certain that we continue to serve all our customers with the right portfolio, with well supported brands. And therefore, we will spend money to make certain that we compensate as much of the revenue loss as possible with own brands or new partnerships.

And then on your Q1 Easter question, so it's always difficult to separate the hot and the cold water here because the sell-in and sell-out. So the way that we look at it is always to do that math at the end of April. So giving you a specific percentage number is difficult. But when we look at the performance that we have versus the market, we are performing well. And that's the most important thing when we judge that.

We'll now take the next question. This is from Nadine Sarwat from Bernstein.

Two for me, one on Pepsi, one on the core business. On Pepsi, so you stated and you have that illustrated charts expecting 2030 EBIT will be equal to or exceeding 2028. That implies quite aggressive growth in 2029 given the Pepsi business you've lost. Could you just explain in more detail how you explain strong growth to materialize? That just wasn't clear to me from that illustrative scenario slide, given that the organic and partnership growth is calculated off the 2029 EBIT adjusted for those transition costs. So that's the first question on Pepsi.

And the second, just on Western Europe. I appreciate your comments that the weakness we saw in the quarter was in line with your expectations, and that reflects the optimization plan in the Netherlands. Could you give us a sense of how we should expect this business to perform over the remainder of the year. Will these optimization plans continue to be such a meaningful drag?

Yes. If you just take the quick one. The Q question first. You should expect that to continue for the second quarter as well. Then we are cycling 12 months of doing that exercise. So we -- it doesn't really matter how much we sell of certain parts of the assortment unless that we increase the profitability. It's a bit the same as we have explained earlier on with the Belgium business, we cannot sell ourselves out of it. We need to make sure that there is proper margin both for us, for the trade and obviously, also for Pepsi on that part of the assortment.

So we are improving our EBIT, which is the focus. And then when we add an appropriate level of profitability, we can talk more about how to accelerate growth from a top line perspective. So that's the thinking that we have. On 2030, the numbers in terms of how much growth, I think, Lars, just tried to explain on how we think about the buildup. There's a lot of things that we are doing already as we also mentioned on the call in terms of our own portfolio performing in accordance with what the consumers are really asking for, local, relevant and everything that stays within the 4 growth categories where the 3 of those categories is not supported by Pepsi, but only the no/low sugar and within Cola is really supported by Pepsi. So scaling that up, and that's not just about scaling it up in '29 or 2030, it's about scaling it up from now on.

And then on top of that, we have some markets that are flying at fairly high growth rates. And one of the things that we are discussing is, of course, on how we can even accelerate those growth rates. So it's a Royal Unibrew exercise. It's not just a Nordic exercise. It's a Royal Unibrew exercise. So that's the thinking that we have.

We'll now move to our next question. It is Richard Withagen from Kepler Cheuvreux.

I have two, please. First of all, can you talk a bit about what the implications are for the effectiveness of the multi-beverage business in the markets that are affected? Once the Pepsi brands are out, how will that impact the remaining part of the portfolio? And in that, is there a big difference between the on-trade and off-trade customers?

And then the second question I have is, obviously, I mean, there's going to be some gaps in the portfolio once the Pepsi products are out. I think especially Cola and you mentioned that also in the release this morning. So can you already introduce a cola, or any fill any other gaps in the portfolio before the contract expires?

Yes. On your last question, there's a number of things that we can do, and then there's a few things that we cannot do, which is fairly natural with these type of agreements. It's not -- we also have our own license agreements in the international. And those are also, I would say, naturally tied up in some commitments from partners. So yes, certain things we can do, certain things we cannot do. When it comes to the -- in terms of the implications of not having, I would say, Pepsi Max in the assortment, then for off-trades, the discussion is multiple -- have multiple elements. How does the cooler look like? How much space do you retain? How many promotions do you get? Which type of promotion do you get, et cetera, et cetera?

And the strengths that we have had so far and have been building over a period of 20 years where we have taken the soft drink market shares from, let's say, roughly 20% to plus 40%. It's because of the symbiosis between brands. Now Denmark as an example. It's a symbiosis between the brands in terms of how they play their strength. And we need to find another way on how to play that strength. And it is, in our mind, likely going to be a combination of own brands and partner brands, so that we make sure that we get the scale, get the relevance, and thereby stay as we are today, the most valued partner for the trade.

When it comes to on-trade, it really depends on the type of outlet because many outlets do not have Cola as their priority #1 in the assortment. So there's a few type of outlets that have Cola today as the #1 choice. So that will be some of the quick service restaurants, burger joints and alike. And in order for us to give our customers within those stop channels, the best offering, we will have to think about how to capture and close the gap. And we're absolutely sure that we will be able to do that.

We want to remain the one with the best portfolio, most relevant portfolio with the best service concepts so that the value overall remains intact or is increased for our customers. It's very rare that it's one brand that is the only reason why a customer would choose to work with us. It's a totality. And then you're leaning back on the multi-beverage strategy. It is the way that we live and breathe the multi-beverage strategy that creates the value for our customers and also for us.

We'll now take our next question. This is from Mitch Collett from Deutsche Bank.

I've got 2 questions, please. Just coming back to the point on operating leverage. I appreciate you say in the release that it has EBIT margins close to the group average, but then you flagged the scale effect. I guess thinking about 13% of group sales is about [ DKK 2.5 billion ]. If we were to assume a gross margin in line with the rest of the group, that would imply about [ DKK 1 billion ] of lost gross profit. So I guess how do you stop all of that flowing through to lost EBIT, is my first question.

And then my second question is, how should we think about the growth algorithm without these contracts? I know you say that the sort of 6% to 8% is still in place. But was this part of the business growing faster or slower than the rest of the group historically? And therefore, would you expect that volume and/or revenue is -- growth is higher or lower without these distribution contracts?

So if we start with the operating leverage question, first of all, I would say you get the gross margin number you are mentioning is significantly off and we're not going to give you exact details on that for contractual reasons. But it is significantly off too high, what you're mentioning in your numbers.

In terms of the operating leverage, I think it's important to understand how Royal Unibrew operates. The biggest share of the partnership business is in Denmark, where you can say a lot of the cost sits in supply chain. Supply chain is also servicing the international markets. And with the growth rates we have in the international market, you can say some of the scale will be covered with the growth we have in international over the next couple of years.

And then I think it's quite obvious that when you look at the limitations we have on own brands related to these partnerships, then if we launch own brands that we cannot do at this point in time, they will come with substantially higher margin than the partnership brands. So we don't need to compensate the volume -- sorry, the revenue 100%. We need to cover it with somewhat less to get the same gross margin out of it.

And then I think it's also important to remember that Royal Unibrew is not about individual brands. It's a sales machine where we have outstanding customer relationships, and we prioritize the entire portfolio we have there. So the salespeople we have in all the stores in Denmark on an ongoing basis can now start to focus on own brands. So it's not just about the strength of the individual brands, it's also the sales machine, the customer relationships. So we are confident that we'll pick up quite a bit of, what do you say is the lost revenue.

So multiple ways to mitigate this. We have 3 years where we can make certain that the cost base we have when we enter into '29 is set for a different size of business than if we had continued with the partnership. We will substitute some of the revenue with higher-margin owned brands. And then, of course, some of the costs will be paid by the International division, where growth is quite strong at this point in time. So I would say there's a number of things that we can do. And then, of course, we need to rightsize the business during '29 to make certain that we have the right cost base when we exit '29. So I hope that helps a little bit.

And then on the growth algorithm, if you look at the last 12 to 18 months, the majority of the growth that we have created sits on own brands. If you look at historically, partnerships have been a part of that journey. But what we have seen in particular during that period of time, is a changed consumer environment, where consumers are asking more for local. They are moving more towards flavors when it comes to soft drinks.

So if you look at it in the beer category, as an example, partnership is a strong driver for us. We do quite well with Heineken in the portfolio. It is supporting what consumers are looking for. Whereas when it comes to the soft drink, it has not been the same. So this is where local has grown faster. This is where enhanced energy and so on is growing much faster than any other category. So that's a part of the growth algorithm for now. And we also expect that those dynamics will support that the growth rate of our own brands will go up over time.

We'll take our next question. This is from Andrea Pistacchi from Bank of America.

So also from me, a question on Pepsi then a couple of quick other ones. So I mean, given the amount of profit you're losing, and I mean there's a lot to do in terms of scaling up your own brand, which you've talked about new partnerships. And the third bucket, which you're referring to is cost savings or efficiencies.

Now it sounds like you will be starting immediately pushing even harder with efficiencies and you have been doing until now. But you also said that you will, sort of, see where the business is in 2029. So the question here is how, therefore, should we sort of think about the time line of these efficiencies? Are you -- I mean, does it start now effectively? And I guess, where is the focus? Is it distribution, G&A or a bit of everything?

And then please -- a couple of questions on -- sort of on the sort of current trading or this year. You've adopted a more cautious tone on commodities, I mean, unsurprisingly, given the environment. Could you give a bit more color possibly on your hedges? You say you're partly hedged and on how this environment, given where you are with your hedges, given where spot rates are, how it's affecting COGS this year? And I appreciate you're confirming your guidance?

And then a quick one, please. Going back to the impact in Q1 about the rationalization that you're doing, the commercial rationalization that you're doing in the Netherlands. Are you able to quantify to what degree this held back? What is the minus 6.5% volume in Western Europe was attributable to this?

I'll take the first one. Efficiency has always and will be an important part of it and all the parameters that Lars went through on the Slide #8 is obviously something that we are looking at -- will be looking at -- will be implementing from now on. So there's nothing that we are not going to do short term, apart from the pieces that is connected to the restrictions that we have, which we, of course, will not be able to deal with before 2029. So that is how you should consider it.

Will you take the hedging?

Yes. So if we take current trading. So I would say that the effect from increased commodity prices up until now has been fairly limited, but we will, of course, start to see an impact in the remainder of the year. We have a fairly high share of hedging on aluminum gas, et cetera. But of course, there is some residual costs that we are not able to hedge and we are working on actively working with pricing mix, a cost initiative to mitigate the additional costs we'll have on -- from what you say, all the increased energy costs, which hits both logistics and a number of categories.

So there is a cost increase expected that we are mitigating as we speak and as we write in the quarterly announcement. The hedge level we have up fairly high. But as you know, we cannot hedge all the elements of your business. So there is a residual element that we are mitigating by cost and pricing.

And when it comes to the question around the Netherlands in Q1. Remember that Q1 is a fairly small quarter. So the underlying base sales is not as high as it is in Q2 and Q3. And that means that when you're opting out on some promotions, you -- percentage-wise, you lose more, relatively seen. So the impact on top line in the Netherlands and volume for that matter, is negative in the quarter. But if you look at the bottom line and the quality of what we do, it's going up. So we earn more money in the Netherlands in Q1 than we did last year on a lower revenue base.

Okay. And in any case, by what you're saying in percentage terms, the impact should be less in Q2, right?

It should be less in Q2, and then we are circling that change in Q3.

We'll now take the next question. This is from Andre Thormann from Danske Bank.

Just a few. First of all, just to be sure on the question around the potential Cola launch. Was it correctly understood that you cannot launch a Cola before 2029? That's the first question.

The second is M&A part of closing this gap in 2029? Is it something you also consider to an even higher extent now after this?

And then maybe thirdly, just around the first quarter. Have you seen any significant effects in Norway from shutting down the Sarpsborg site? I cannot read much about it. But is there any significant rationalizations that contribute to EBIT from Norway as well.

Yes. So on the whole discussion around restrictions, I cannot come closer to what -- or deeper than what I did in my previous answer. So there are certain restrictions, and we have to live up to those, but the details of those are for contractual reasons, I cannot talk about those.

M&A, that remains a part of the agenda for us, and it's not something that we want to do more of because of this because there's a number of criteria that needs to be fulfilled when we're looking at M&A. It used to fit the strategy. We need to be ready from an organizational standpoint. And then, of course, it needs to give a strong return. So if anything fit through criteria, irrespective of what has happened here, we will look at that.

And when it comes to Sarpsborg no vital, I would say, differences to performance compared to last year. As we have been shutting down towards the end of the year, and we have been spending resources on ramping up in Bergen during Q1, the effects of that project will primarily be from Q2 and onwards.

We will now take our last question today. Final question is from Soren Samsoe from SEB.

Just a couple of questions. First of all, sort of this loss of this contract? What does this tell us about the risk you have on your other partnership contracts, and also the whole model of having partnerships has anything changed in your view there? And also after the loss of the contract with Pepsi in Northern Europe, how much of your revenues and EBIT now comes from partnerships, rough estimate on that?

And then finally, regarding this situation, if this also maybe creates some opportunities with other products where Pepsi was not so strong, for example, energy drinks, can you scale up your efforts there now on the back of this?

Yes. If I take the first and the third one. We haven't changed our view on partnership. And we have been a valuable partner. They have been a valuable partner to us and vice versa for 50 years in Denmark and for -- since '99 in Finland and so on. So of course, there might be reasons why that you cannot or will not work together but this is something that has rarely happened. And I think cements that long-term relationship can be very variable for partners and for us. So no partnership will remain a key element to Royal Unibrew. And as we have said a number of times, it's about portfolio and it's about having a win-win mindset. So that will continue.

And yes, I do think, as Lars also mentioned on the bridge on Slide #8, this will eventually give us some opportunities to pursue that we haven't been able to pursue within categories that have strong growth, strong brands that do not necessarily sit with the right partner to implement and maximize the full potential. And across countries, we will be open-minded and look at it the same way as we have looked at it for many years. Can we create a win-win? Then we should spend time on it. If we cannot, we shouldn't.

Yes. And maybe -- and then to your question on how big a share of our revenue and EBIT comes from partnership. We are not giving that number. But if you look at the other partnerships we have, we have a very strong beer partnership in the Nordics with Heineken. And -- but it does not have the same magnitude, or restrictions as the PepsiCo relationship that is a mutually very beneficial relationship.

Apart from that, we have wine and spirits partnerships where the churn rate is a little higher than it is on these other brands. But there will get new and we lose some every year. So it's a sizable part of the business. But you could say one in, there's no other partnership that has the same size as Pepsi, not even close. So I would say we are very happy with the partnerships we have. But you can say the event risk on the other ones is a lot less than it is on the Pepsi partnership.

We do have one more question coming through. And this is from Andre Thormann from Danske Bank.

Just one follow-up from me. Just to be sure, is it completely unlikely that you could do a partnership with Coca-Cola in Denmark and Finland or potentially do some kind of collab with the CCEP if they take over the contract?

We keep all options open for now, and we are not going to comment on specific brands or companies in terms of how we can partner up. We keep all options open.

And there are no further questions. I will now hand back to the speakers for any closing comments.

Yes. Thank you all for participating. As usual, you know where we are, and it came for everybody as a surprise that we came out with these 2. So thanks for spending time on it today. we are ready if you need us and enjoy the evening.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Speakers, please standby.

Good morning, everyone, and welcome to Royal Unibrew's presentation of our annual report for 2025. My name is Lars Jensen. I'm the CEO of Royal Unibrew, and I'm today joined by our CFO, Lars Vestergaard; and Flemming Nielsen, Investor Relations. We will take you through the highlights of the year, performance across our segments, the financial development and our outlook for 2026. After the presentation, we will open for questions.

Now please turn to Slide #2. And before we begin, please note the usual disclaimer regarding forward-looking statements and risk factors that may cause actual results to differ from expectations.

And with that, let's move to Slide #3 and the highlights of 2025. On Slide #3 here, we summarize 2025 in a few key points. '25 was a year where disciplined execution really made the difference. We delivered 5% revenue growth in line with our guidance of 5% to 6% and EBIT increased by 12% at the top end of our 8% to 12% guidance range. Our EBIT margin expanded by 90 basis points to 14%, reflecting continued improvement in operational efficiency across the organization. We also made good progress on our sustainability agenda during the year, both within our environmental and climate initiatives and within employee safety, which has been a key priority for us in 2025.

At the same time, we continue to strengthen cash generation and the balance sheet enabled shareholder returns, including share buybacks executed in '25 and a new program launched -- just launched and running until mid-August 2026. Importantly, this performance was delivered in a market environment that remained characterized by cautious consumer sentiment and ongoing macroeconomic uncertainty.

What makes the results particularly encouraging is that progress was broad-based across all segments and supported by stronger quality of revenue and continued operational efficiency. Based on this solid foundation, we have provided guidance for 2026 of 6% to 10% organic EBIT growth, which we will come back to later in the presentation.

Now please turn to Slide #4. If we step back, our performance in '25 rests on 2 key pillars: category focus and operational efficiency. Over the past 5 years, our growth category framework has guided how we allocate capital, management attention and commercial resources. This focus has become increasingly important in a market environment characterized by soft consumer demand and changing consumer preferences.

In 2025, approximately 60% of group net revenue was generated within our defined growth categories, no/low sugar CSD, enhanced beverages, RTD and premium beverages. This category exposure supported growth ahead of the market. During '25, we also sharpened revenue quality by exiting certain lower-margin activities. While this reduces top line in isolation, it strengthens the group's earnings profile going forward. From '26, this step will reduce group revenue by around 3.5% with no EBIT impact and with no volume impact. The revenue decline is predominantly related to snacks and will mainly affect the Northern European segment.

Operational efficiency remains deeply embedded in our culture. Across production, logistics and back-office functions, we continue to optimize our footprint, simplify processes and capture operating leverage. This is both in our established markets and in our newer markets. The strong EBIT margin development in '25 demonstrates that this mindset is delivering results, not only in our established markets, but also in the newer ones.

Finally, our long-term ambitions remained unchanged. We continue to target an organic EBIT growth of 6% to 8% per year, double-digit earnings per share growth and continuous improvement in return on invested capital, which improved to 13% in '25.

Please turn to Slide 5. Our growth category framework continues to guide our resource allocation. These are categories with stronger growth, driven by changing consumer trends. Today, around 60% of group net revenue sits in 4 growth categories, and we achieved average growth of 6% across the categories.

No/low sugar carbonated soft drinks grew 9% in '25. We continue to see strong growth as consumers prefer drinks with less calories or no calories. Growth is driven by both local brands like Faxe Kondi and our partner brands like Pepsi.

Enhanced beverages grew 5% in '25. The category includes energy drinks and beverages with added vitamins and similarly. The growth is mainly driven by our local brands like Faxe Kondi Booster and Sourcy Vitamin Water in the Netherlands. Across markets, we continue to see strong demand for functional propositions.

Ready-to-drink with alcohol grew 1% in '25. The category includes ready-made cocktails and also ciders, so in many different shapes and forms. Our portfolio includes both partner brands and local strong propositions, including Original Long Drink in Finland, Shaker in Denmark and [indiscernible] in Norway.

Premium grew 4% in '25 and includes beer brands like Ceres in Italy and our premium beer portfolios across markets. The category also includes malt drinks and lemonades and other premium soft drinks. The framework ensures that we concentrate investments where long-term demand trends are the strongest, and that discipline continues to pay off.

Now please turn to Slide #6, and let's focus on the regional developments. Northern Europe is our largest segment, accounting for around 2/3 of group net revenue and EBIT. In '25, we delivered a solid performance in what remains a relatively flat market environment. Full year revenue grew by 2%, while EBIT increased by 4% and with the strongest momentum in the second half of the year.

In Denmark, we gained value market share across most categories. Faxe Kondi continued to outperform in no/low sugar soft drinks, Booster maintained strong momentum in energy and Shaker delivered solid growth in ready-to-drink. In beer, both Royal and Heineken grew despite an overall declining beer market.

Finland remained impacted by cautious consumer behavior across both on and off-trade. Even so, we maintained a slightly improved market position in key categories, including no/low soft drink, premium beverages and enhanced beverages. The acquisition of Minttu and other spirit brands also contributed positively in '25.

In Norway, commercial momentum improved through the year, particularly the RTD and beer, but also Faxe Kondi that has been launched in '25 is showing promising rates of sales out of the stores. We completed key integration milestones and production has now been consolidated in Bergen, supporting long-term efficiency.

In the Baltics, the market was affected by relatively cold summer and an intense price environment. Despite this, we gained share in premium beer, energy drinks and enhanced waters while maintaining a strong cost discipline. Overall, Northern Europe continues to demonstrate the strength of our multi-beverage model, supported by strong execution from our local teams.

Now please turn to Slide #7. Western Europe was our strongest performing segment in '25. Revenue grew by 12% up for the full year. BeLux contributed 9 percentage points to that growth, reflecting that it was not included in the comparable base for the first 9 months.

EBIT increased by 55%, driven by operating leverage, efficiency initiatives and strong profitability improvements in Italy and France.

In Italy, we continue to gain market share with Ceres and Faxe beer and with Crodo in soft drinks. As previously communicated, we have reduced the private label production to prioritize our own brands. This supported price mix, while higher local production also helped reduce logistic costs. Underlying growth of own brands was about 6% in volume terms.

In France, Lorina and Crazy Tiger delivered continued value share gains, supported by focused brand activation and expansion into new consumption occasions. In the Netherlands, margin improved through price pack and promotion optimization. And despite exiting unprofitable promotions, we delivered net revenue growth for the year. With a strengthened sales organization and enhanced production capability, the business is well positioned for continued progress.

Finally, in BeLux, execution is progressing in line with the plan, and we estimate that we increased value market share. As expected, BeLux was loss-making in '25, but we remain confident that our strategic initiatives and strong local engagement will drive long-term value creation. Western Europe illustrates the operating leverage in our multi-niche models when scale mix and discipline align.

Please turn to Slide #8, and let's have a look at International, where growth accelerated strongly towards the end of the year. Volume grew 33% organically in Q4 and 16% for the year. Net revenue increased by 15% in Q4 and 7% for the year.

Full year volume growth was slightly ahead of sell-out as we build in-market inventory to support the higher growth. As a reminder, this business is inherited more volatile with quarterly volumes influenced by shipping timing and distributor inventory movements. U.S. tariff developments drove inventory buildup in late '24 for the first half of -- and for the first half of '25, followed by inventory reductions in the second half.

Price and mix in '25 was negatively impacted by strong growth in beer in African markets, most notably in Q4. Africa remains a structurally attractive growth region, but carries lower net revenue per hectoliter due to our distributor-based model.

Net revenue in '25 was also impacted by unfavorable currency movements and tariffs. Growth in '25 were driven by Faxe beer, soft drinks, including Crodo and the malt beverages with brands such as Vitamalt.

For the full year, EBIT increased by 14% to DKK 239 million with a 100 basis points margin expansion to 15.5%, which reflects a solid underlying performance. EBIT declined in the second half, driven by earnings phasing related to the tariff-driven inventory buildup earlier in the year and subsequently unwinding in the second half.

And with that, I will hand over to Lars for the financial review on Slide #9.

Thank you, Lars, and good morning to all. First, I will briefly walk you through the group P&L. Net revenue increased by 6% in Q4 and by 5% for the full year. Growth accelerated into the fourth quarter. And importantly, Q4 was on a fully comparable basis with BeLux also in the comparison number in '24.

Gross profit grew faster than revenue, up 9% in Q4 and 6% for the year. This reflects our continued focus on profitable growth with mix improvements and efficiency delivering solid margin expansion. Gross margin increased by 120 basis points in the quarter and by 50 basis points for the year.

The cost base developed in a disciplined manner in '25. Cost growth reflects the impact from BeLux and recent acquisitions, while the underlying development demonstrates continued focus on efficiency and cost control. As we have seen during the year, efficiency has mainly been achieved within sales and distribution expenses, while we continue to invest in sales and marketing to support our growth ambitions. We are seeing clear benefits from our improved production footprint and initiatives to streamline logistics and distribution operations.

Admin cost is increasing compared to '24 as we are investing in digital and have added BeLux to our footprint. The level in '25 is a good baseline for your modeling. This needs to be looked at on an annual basis as there can be some quarterly differences.

EBIT increased by 9% in Q4 and by 12% for the full year. The EBIT margin expanded by 90 basis points to 14%, driven by operating leverage and ongoing optimization initiatives with Western Europe contributing strongly, as discussed earlier.

Net financial expenses amounted to DKK 254 million for the full year, fully in line with expectations. Tax rate was 20.7%, impacted by the capitalization of tax loss carryforwards. Our normalized underlying tax rate is 22%. Overall, this delivered a 25% increase in adjusted earnings per share in '25. This excludes the impact from the sale of shareholdings in 2024.

Now let's move to Slide #10 and look at the cash flow. Let me start with a few key messages on cash flow and capital discipline. We delivered strong cash conversion in '25. Financial gearing remains in line with our targets and ROIC continues to improve.

Cash flow from operating activities increased by 9% to DKK 2.4 billion, driven by higher earnings and continued discipline in our net working capital management. CapEx amounted to DKK 1 billion or 6.4% of net revenue. This was below our expected level, mainly reflecting the delay of certain investments into '26. Free cash flow for the year was DKK 1.4 billion. While this is broadly in line with last year, it is important to know that 2024 benefited from the proceeds of sale of shareholdings in Poland. Adjusted for this, underlying free cash flow increased by 12% in '25.

Net interest-bearing debt ended the year at DKK 5.7 billion with leverage at 2x EBITDA, fully in line with our capital structure ambitions. Finally, return on invested capital improved to 13%, supported by higher earnings and improved capital efficiency. As previously communicated, Norway and Benelux remains on track to deliver around 10% cash ROIC by the end of 2026. Overall, the number reflects strong cash generation discipline in our capital allocations and continued progress on return.

Now please turn to Slide #11. Our capital allocation priorities have been the same for a number of years. We want to maintain financial flexibility, gearing below 2.4 -- 2.5, investment in organic growth with attractive returns, pursuing value-accretive acquisitions when relevant, and finally, return excess capital through dividends and share buyback. This disciplined approach continues to support both growth and shareholder returns.

The last couple of years, we have been running at -- a CapEx program above normal level. For '26, we expect CapEx around 7% of net revenue and some delays into '27 as it looks at this point in time. In other words, the lower CapEx in '25 will impact '26 and '27, same projects, same costs, but a slightly different timing.

Proposed dividend per share is DKK 16 per share. And today, we start a share buyback program of DKK 400 million. This runs until mid-August, so this is not a full year number.

Please turn to Slide #12. Our growth and value creation formula is unchanged and straightforward. We aim to deliver volume growth ahead of underlying markets, value growth through disciplined mix and price pack management, continued operational efficiency and cost control and disciplined capital allocation, including M&A and share buybacks. Together, these drivers support our long-term organic EBIT growth targets of 6% to 8% and 10% to 14% earnings per share growth.

Naturally, each year is different. The relative contribution from volume, value and efficiencies will vary over time depending on market condition. And as always, the timing of M&A is inherently difficult to predict.

Please turn to Slide #13. So if we look -- if we should conclude on our performance on organic EBIT growth, then we have delivered solidly since 2022, the year where inflation impacted earnings. The drivers of high organic EBIT growth is, to a large extent, the growth framework that delivers volume growth. The teams have also been good at value management and focusing on the parts of the portfolio with good margins.

And finally, cost efficiency is a substantial contributor. These numbers also reflect good progress in acquired companies. Our guidance suggests that our plans for 2026 are solid, and we continue the strong trend we have had in the recent couple of years. ROIC is also on a positive trajectory, and we expect this to continue in the coming years as we harvest the benefits from acquisitions in the past years and solid organic growth in earnings.

Please turn to Slide #14 and the 2026 outlook. We continue to expect a challenging consumer environment across our markets, and our guidance reflects a cautious and disciplined approach. For 2026, we expect organic EBIT growth of 6% to 10%. This is ahead of our long-term target of 6% to 8%, building on the strong margin and efficiency improvements delivered in '25.

We no longer guide on net revenue, but if you model net revenue for '26 to be broadly in line with 2025, then that would be a fair assumption. This reflects continued underlying growth in our beverage business, offset by the exit of lower-margin activities. As previously communicated, these exits are expected to reduce reported net revenue by around 3.5%, impacting mainly the Northern European segment with no impact on volumes or expected EBIT.

Net financial expenses are expected to be around DKK 250 million, excluding currency effects, and the effective tax rate is guided to be around 22%. CapEx is expected to be around 7% of net revenue, including repayments on leasing facilities. We expect limited commodity inflation, which we plan to offset through efficiencies and improved net revenue per hectoliter. Profitability in 2026 may, as always, be influenced by changing consumer sentiment, channel mix, the competitive environment and weather conditions during the peak season.

And with that, I'll give you the word back to Lars.

Thank you, Lars, and let's move to Slide #15 for sustainability, which remains an integrated part of how we run the business. It supports our efficiency, our resilience and long-term value creation.

On this slide, we have listed some of the most important targets. We will not go into details with those now, but there's a comprehensive 70 pages in the full year statement for the ones that are interested in the details.

Now please turn to Slide #16. Looking ahead to '26, our management agenda is clear and a continuation of '25. We continue executing on growth strategy across our markets. Innovation remains a key priority as we expand and refresh our beverage portfolio to stay closely aligned with the consumer trends. At the same time, we will maintain a strong focus on operational efficiency.

Sustainability remains firmly embedded in how we run the business, and we will continue to make progress on our agenda here. And finally, everything we do is geared towards delivering on our long-term financial targets. The picture here shown the Norwegian Uno-X Mobility Cycling team we just announced a partnership with. Looking forward to see the effects for our Faxe Kondi Hero brand on that one.

Now please turn to the final slide, which is Slide #17, and let me wrap up with the key takeaways. We delivered a solid financial performance in '25, fully in line with our guidance. Performance was strong across markets, supported by disciplined execution and continued growth in our priority categories.

Operational efficiency remains a key driver, and this is clearly reflected in the margin expansion we delivered during the year. At the same time, strong cash flow generation and a robust balance sheet gives us the flexibility to continue investing in the business and returning capital to shareholders at the same time.

Looking ahead, we expect organic EBIT growth of 6% to 10% in 2026, reflecting continued focus on profitable growth and efficiency in a still challenging environment.

Thanks for your attention, and we are now ready to take your questions.

[Operator Instructions] We will now take the first question from the line of Aron Adamski from Goldman Sachs.

I have 3 questions. First, on Netherlands. Can you give us an idea of where your EBIT margin stands right now? Is it still around high single digits? And given you're launching new pack formats there, can you give us some color on how the single-serve mix in that country compares to your other Pepsi businesses?

My second question is on the efficiency agenda. Could you give us some color on how much EBIT uplift do you expect the new warehouse in Denmark and the site closure in Norway to deliver within the guidance that you announced? And also what other efficiency projects are on the agenda for this year? And how do you expect them to be phased?

And third, the last question on M&A in light of the press headlines we've seen yesterday. Can you please give us an update on what type of deals are on top of your M&A agenda? And if you were to add a new country platform, what are you looking for in a potential asset?

Yes. If I start maybe with the last question, our M&A priorities have not changed at all. So we would always -- if you rank them in terms of optionality, profitability, likelihood of success, it's always the optimal to bolt on to what we already have. And we have previously highlighted a number of countries in that respect where the organization is ready and where our market positions is not so big that it will be difficult for us to put anything on top. So the priorities have not changed.

I would say just one thing, and that is that in this environment that we are seeing out there and when the ones that was rumored to be acquired by us, the Brewdog business, when assets like that or other assets locally come up for sale, there's often -- if you can move fast, there's often a relatively big upside to these type of businesses, assuming that you have an organization in place that can turn these businesses around. We have done it to a smaller extent with assets in our multi-beverage markets. So we will continue to be scouting for those, and we have to be very opportunistic with that kind of M&A activity.

If we move to Netherlands, I'm not going to give you a specific number on the margins, but the EBIT margin is moving upwards. We have had a strong focus on moving in a direction where we become competitive. The efficiency levels in the acquired business was not at a level where we were competitive in the marketplace. It's a bit of the same exercise as we went through in Finland more than 10 years ago, which was also the case when we bought that business, we were not competitive in the market. So we have put a big focus on the people agenda, on the efficiency agenda. And that is one of the reasons why that we are building the business.

And then the other one that we mentioned in the call is obviously our price pack promotion architecture that we build into it. The first layer was to look at the promotional activity and seeing what is value adding, what is not value adding. And then building the capabilities with, in particular, the new canning line so that we can move into the single-serve propositions, as you mentioned. So we are -- and you say in Pepsi businesses, it's not just about Pepsi businesses, it's all the brands, including Pepsi. And there's no doubt about that the Dutch business is under-indexing on single-serve pack formats. And that is one of the potential drivers for the next many years that we see.

So the market is behind compared to the most developed markets in terms of the mix between small pack and big pack. And then we are even under-indexing on that one. So that is a key pillar for the future. Now negotiations, some of them are already done. Some of them are being close to being finalized and so on. So for the Dutch business, I think we need to look at the numbers when we report on Q3 and it's through the high season, then we know if our initiatives have really paid off.

And then I'll let you, Lars.

On the efficiency piece, the way we look at the market right now is that consumers and customers are looking for affordability, and we have been under pressure for a number of years. This means efficiency is super important across our business, and that is a theme that we have been running.

If you look at the guidance we have for '26, if you just look at our normal growth framework, then you would have 1/4 coming from volumes, 1/4 from value management effect and then half of it coming from efficiencies. This year, we are expecting to deliver more than half from efficiency. So there is a substantial number in our bridge that comes from efficiency this year. Of course, it's early in the year. So things can change, and we remain flexible to ensure that we take the opportunity that presents itself.

So we are across the business, looking very intensively into ways of working. We have been trimming on people across the business. We have been looking at complexity, how can we do things simpler. So it's an awful lot of initiatives.

The 2 major projects you mentioned, so site closure in Norway as well as investments into efficiency in the main site in Norway is a substantial contributor to the 10% cash ROIC in Norway. If you look at the warehouse in Denmark, this will have a substantial impact on EBITDA as a lot of the costs that we used to use on external warehousing and logistics costs from our site, and Faxe 2 other sites that converts into depreciation. So it has a very attractive impact on EBITDA and a very nice impact on EBIT as well. So it is a substantial contributor, but we don't want to give you the numbers.

But I would say in terms of the warehousing, it's also a way to make certain that we are in control of the business because with the growth that we have seen in volumes coming out of the Faxe side over recent years, you cannot be in control if you have products standing all over the country. So this is a way to really get our hands around the business and get in control with an extremely streamlined logistics setup in Denmark.

Our next question is coming from the line of -- one moment, please, Thomas Lind Petersen from Nordea.

Also 3 questions from my side. So the first one is regarding your EBIT guidance, 6% to 10%. And then maybe just following up on the previous question, I guess. Could you help us with a bit of the EBIT growth driver elements in that 6% to 10%? You're saying a lot about efficiency here, Lars, but more specifically, is it freight costs from Italy? Is it Benelux, Norway? If you could help us quantify some of that, that would be great.

And then a question regarding consumer sentiment in, I guess, the Nordics is probably the most relevant. And just your expectations here. You're still seeing a challenging consumer sentiment, but we are getting tax cuts in some countries and various stimuli from governments. So just wondering here if you don't see anything that could sort of at least help a bit with the consumer sentiment in -- at least in the Nordics.

And then the final question would be regarding your EBIT margin. I think if everything pans out as you now guide for 6% to 10% EBIT growth and then basically no top line growth, then we are getting close to an EBIT margin around 15%. I think I remember you mentioning that you have previously worked internally with a 15% EBIT margin as a target. So just wondering where we could go from here. I know you obviously previously had a 20% to 21% long-term EBIT margin, and we will probably not go there at least in the short term, but just try and help us a bit how far can we go? Is 18% or 17% is that realistic in a long-term scenario?

Thank you, Thomas. The sound was a little bit bad. So I hope we got all the details of your questions. When we look at the consumer sentiment, I think it is generally consumers are a bit reluctant still to go out and spend a lot of money and that's the same scenario as we have seen for a number of years. That said, there's a number of categories where the consumers are actually willing to pay, say, an extra money because they see that they get an added benefit to what they buy. And that may be a perceived value or it's a real value. And that goes straight along with our growth category framework. So if you look at a category like energy drinks, consumers are less price sensitive than they are in a category like carbonated soft drink or mainstream beer.

So when we're talking about this, it's as an overall assumption because that is what we see in the marketplace. But there is ways around how to play this in the market, both by category but also by price pack and promotion. So we try as much as we can to -- in the environment that we have today, we try to cater for that in many different aspects. And that's the reason why that you would also see that our bottom line is increasing a bit more than our top line. So that is a whole smart thinking and on top of that, of course, the efficiencies. So that's the environment that we see. People are saving more money than spending more money. It's not a catastrophe, but it's a different toolbox that we need to use. So stimuli or not, it's not something that we see immediately convert into to a different consumer behavior.

And then on the EBIT margin, before I hand over to Lars, what we have said is that we believe that with the current makeup of our business, with the mix of the segments that we will be able to take to mid-single teens in terms of EBIT margins. And it's always a balance between absolute earnings growth and EBIT growth from a margin point of view. And so it's difficult to give you a clear answer to that. And this is actually not how we manage the business. That is not towards a specific target. We manage the business towards the growth rates of the EBIT bottom line. And at the same time, as we do that, we want to make sure that the quality of our earnings is intact or is improved. So that's the way that we operate. So we do not have an internal or have had an internal target of hitting 15%.

Yes. So I would say in terms of efficiency and where it comes from, it actually starts in a slightly different place. And as Lars mentioned, quality of earnings and how we run the business is where it starts. So we have a number of people. We have a number of assets, and we really want to make certain that people spend their time on something that generates profit. So in terms of the revenue lines, we're not guiding on it and revenue is not the key driver for us. It is really how can we make certain that the time and the assets we have are utilized in the most effective way to drive organic EBIT growth and make certain that we don't overinvest so that we make certain that if you have low-margin business that requires CapEx that we really put very low down on the priority list.

So in terms of the theme that we are running, it is really to make certain that we have clear priorities everywhere in the business about initiatives that you spend time on that they are generating high-margin business. We exit promotional activities with no value. And that, of course, have an effect on the whole cost line. So if you don't spend your time on low-margin business, then you can be more efficient in your salary lines and the assets are used in a better way. And that will give us a higher EBIT, so return on capital employed. So it's not -- what you can say, EBIT margin is not our ultimate target. If we can make a lot more money by compromising EBIT margin a little bit and not investing too much, we will do that. The ultimate target is that we have a high return on capital employed and solid cash conversion.

We will now take the next question from the line of Matthew Ford from BNP.

I've got 2 questions. The first one is just on sales. Obviously, you just touched on it. And clearly, the sales guidance for the year has sort of -- is a bit more informal than in previous years. But if we think about the sort of flat revenue progression in '26, obviously, you have the impact from the exit of the Snacks business. So underlying, it's sort of 3.5% growth. That implies a bit of a step-up versus the momentum we've seen in 2025. So it would be interesting just to get your sense of where across the business would you expect that to be driven from? Are there any areas of the business markets or categories where you would expect a sort of sequential improvement for any reason in '26 to hit that sort of underlying number?

And then the follow-up is just on pricing specifically, obviously embedded within your top line growth. But great to get a sense of your expectations for pricing for 2026 and anything that we should be thinking about in terms of the contribution there?

Yes. On the net revenue side of things, I think if you look at the quarter, we are organically delivering 3.7% organic net revenue growth. So we are flying faster out of the year than the start of the year. And remember that BeLux now is fully comparable when it comes to Q4. So with the guidance of around where we ended the year for '25 is actually a continuation of the flight attitude that we have established going out of the year. So we don't see the discrepancy that you're alluding to here.

With the mix of markets and what we have also said during the call, we have a strong underlying momentum in the business in international. We have it in Italy. We are growing beyond the market in France. We are seeing top line growth is strengthened in the Dutch operation during the second half of the year as our changed, I would say, strategic focus is paying its way. Norway is back to growth since June. We are gaining share. We are winning in important categories, and we have launched soft drinks into that market as well.

And then you have the old markets, so to speak, the big markets. And that's, as Lars is saying, that's a choice. We are -- in those markets, we are generally around 30% market share by value in those markets. We are big enough. So of course, we want to gain more volume. But if it's a better choice, not to push too hard on volume and get more from a price pack promotion architecture optimization, then that's the choice.

And that brings me into your second question around pricing, which I'm not going to give you any details to that. But I think it's fair to say that when you look at the total market for beverages, there has been a period of time, in particular, in alcohol, where prices have probably, I would say, gone too high and where consumers tend to see that it is becoming more and more expensive and affordability is an element that needs to be thought about.

Whereas when it comes to the soft drink side of things and the growth categories with enhanced, they will drive the mix in a higher position of net revenue per hectoliter. And then you have a lot of market mix that you need to put on top of that. So when we look at it, we are not in a super inflationary period. We see consumers that are reluctant to spend and have been that for quite some time and is hunting more for offers. And it's in that environment that we will do our best effort to try to massage the average up, and that can be done by hard price increases, smart price increases, changes of price pack and promotion. And we have all in play and in particular, in the multi-beverage markets.

We will now take the next question from the line of Richard Withagen from Kepler Cheuvreux.

First question on Finland. Yes, maybe -- I mean, you probably assume that, that will continue to be a challenging market in 2026. Are you changing anything in terms of commercial tactics in Finland in 2026? And maybe you could also give some sense of how the sugar tax or the change in the sugar tax will impact your business in Finland in 2026?

And then the second question is on a bit longer term, but you obviously have the medium-term 6% to 8% EBIT growth objective. And Lars Vestergaard already talked about some of the M&A that contributed to growth in the last few years. So what are the opportunities you are looking at to at least deliver on the higher end of this 6% to 8% range in the next, say, 3 to 5 years?

Good. If I take Finland first. Commercial tactics, we are always massaging and changing our commercial tactics as we go along. We are not changing anything, I would say, significantly compared to what we have done in the second half of '26. So that's a lot along the same lines. I think the biggest thing that we see is in the alco space, where first, that's more like 1.5 years ago, we saw the change in legislation. We saw these fermented beverages with less than 8% alcohol or 8% alcohol coming into the retailers. They took a fair chunk of the market. That is now churning, I would say, back again. So growth have gone out. Shelf space is shrinking and that shelf space is moving more into the hard seltzers and alike, cocktails and with less calories and slightly less alcohol.

And in that category, we have done a magnificent job, I would say, over the last 6 to 9 months. After one of our competitors came in with a sharp price point and moved the market, we are now close to being market leader in that category. So a magnificent job done by the Finnish organization. So yes, so this is where we see the biggest change, I would say. And then in general, we still see on-trade in Finland being on the soft side. affordability in on-trade is an issue. So this is also where we are working on how together with the outlet owners and how to increase traffic. And when consumers have entered the bar, the restaurant that they stay for longer. So we are working on various initiatives to help our customers in that.

And then I would say, finally, on the sugar tax, if you look at our non-alc portfolio, it is skewed much more towards no/low than the general market. So if anything, it is going to be an advantage for us, but too early to do any conclusions on that as it is fairly early.

And the 6% to 8%, I think the recipe is pretty clear. It is -- make certain that we continue to focus on the growth framework, as Lars explained. And this is a key driver across all our business that is to make certain that we move our business more towards categories that are in growth. They typically also have better margin dynamics than the ones that are in decline. An awful lot of work, as Lars mentioned, on value management, make certain we focus on the SKUs that have higher margin, and we are very cognizant of how much deep promotional activity we participate in.

Operating leverage is a key thing for us. We are on top of the cost in all markets. And then we try to do a few structural projects again and again that takes structural cost out of our business. We've mentioned a few today with closing a brewery in Norway and optimizing our logistics footprint in Denmark. But we are building a pipeline of these things, and we need to execute a few of these.

And then, of course, we have a strategy to do bolt-on acquisitions. So in the markets where we already have an operation, when we buy businesses, these normally generate not only in the first year, but also in the years following that, good opportunities to deliver EBIT margin -- EBIT growth. So bolt-on acquisitions is a key enabler for continued high organic growth. So this is the way we look at it. And I would say, I think we have been given a gift from our predecessors who made certain that we had a portfolio that was skewed towards growing categories. And I think the work that has been done over the last years to really focus on that, that is a very, very strong enabler of our future growth.

We will now take the next question from the line of Nadine Sarwat from Bernstein.

Yes. So just one question from me, circling back on the topic that was discussed earlier is M&A. You spoke about having previously discussed countries that are attractive from your perspective to potentially enter. Could you refresh our memories to your latest thinking on which of those markets are the most attractive and then more specifically, how the U.K. might fit within that?

Yes. So on the M&A side, we -- I would say, we have seen -- the Italian team, as an example, have done an excellent job on the LemonSoda acquisition. We have changed totally the business from being a one legged beer business to now have multiple legs. We acquired the brewery in San Giorgio that has been also with help from group supply chain have been totally transformed in a fairly short period of time, has taken over the production for the market and is now a stand-alone operation.

If the right proposition would come or pass by in Italy, I think we will be very curious. We have an organization that can deal with it, and we have a strong trajectory that can support that. And then bolt-ons, as I also talked about earlier on, those are highly valuable. We have seen recently the bolt-on of the spirits portfolio in Finland. And I think you can see on the inorganic numbers in Q4, how strong that proposition is building up. So it was an asset that was a part of a really worldwide international business where local brands were squeezed. And by getting them into our portfolio, it really enhances the thinking around the brand, enhance the distribution, the quality of implementation and so on, and it immediately delivers results. So those type of acquisitions, we are, of course, super curious on. There's not a lot of them, but we are very curious on them.

And then there's a couple of other markets. Take the Dutch market as an example, we have seen a buildup of profitability. We are seeing that the revenue generation is now going up. We bought a business that literally was flat to declining. So the turnaround is -- I wouldn't say almost completed, but at least the trajectory is totally different than what we acquired.

At a certain moment of time, we believe that, that business would potentially be ready to be a consolidator in the Dutch market, which is not a very consolidated market. So depending on the maturity in the different markets, the performance in the market, the organizational stability in the market, we evaluate all the time what is doable and what is doable. And at the end of the day, it always relates to an active seller. Are we super keen on moving into new markets as we speak only if it is something that can deliver a high return on invested capital fairly fast and with not too much risk. So that's the way that we look at it.

We will now take the next question on the line of Mitch Collett from Deutsche Bank.

Lars, I think you talked about admin expenses stepping up the digital investments. So could you give some color on where those digital investments are being targeted? And I think you mentioned that it might impact -- there might be some phasing impacts of that admin step-up. So can you maybe talk about what those phasing impacts are? And any other thoughts on how we should think about phasing across fiscal '26?

Yes. So actually, when I talked about phasing, it was actually more a comment on the comparison quarter in '24 where admin expenses in Q4 was pretty low. If you look at admin expenses across '25, they are, I would say, fairly stable and at a level that we believe is the level we look at going forward. So that is what you say, the level that we expect into the future.

To drive efficiencies, digital investment is super keen because that's really the place where you can drive a lot of efficiency. So we are looking at a number of tools that can help efficiency across the business, and that drives some IT costs, but also IT has been used to integrate some of the acquisitions we've had. So BeLux have been integrated in '25 into our SAP platform, and there was a number of projects in Norway and in Denmark that we have been executing. So we have been investing more into IT programs to deliver on the efficiency agenda. It's not something that's going to be a material step up from here. So it's just to explain why the number is increasing slightly from '24 into '25. '25 is a good baseline for modeling going forward.

We will now take the next question from the line of Andre Thormann from Danske Bank.

I just have 2 questions. First, maybe can you elaborate a bit on how this goal of reaching 10% cash ROIC in 2026 for both Benelux and Norway will contribute to EBIT growth in '26?

And maybe the second one on your long-term guidance of the 6% to 8%. Now you have delivered 10% in '25 on organic EBIT growth and you can potentially deliver 10% in 2026. So does this target seem maybe a bit conservative to you? That's my questions.

So if we start with the long-term targets, then we've been above for a couple of years. I would say that it is the synergies from acquisitions that are starting to help us. So we are getting good help from Norway, Sweden and from the Netherlands on these numbers. And then, of course, we have a few CapEx investments that are also helping into '26.

And on Norway and the Netherlands, we -- the plans are very clear. We have a lot of good initiatives in, and we can see the run rates are improving in both markets. So we are on target to deliver 10% cash ROIC in both Benelux as well as Norwegian plus the Swedish and parts of the Finnish assets because when you look at the cash flow target for Norway, it includes the business in Sweden as well as a small piece in Finland from the Solera acquisition. So all plans are clear, clear building blocks from -- that is already paying off in '25. And then in '26, there are a few big items that really moves the needle in both Norway and Netherlands.

Okay. And maybe just a follow-up on BeLux. Do you still expect that will be a positive EBIT in 2026?

We are assuming with the initiatives that we are taking currently, we will be assuming not that it's going to be positive, but it's going to be quite neutral on EBIT level. So that's the core assumption for the year.

We will now take the next question from the line of Soren Samsoe from SEB.

Just a follow-up on Norway and Holland. So if you could update us a bit on the commercial improvements you're seeing in Norway and Holland and how that's progressing? That's the first question. And then an update on the platform and also the cost base in those countries where you have done restructuring during the second half. Where does this leave you in terms of cost base and operational leverage going into 2026 if you see more volume growth in these markets?

Yes. We -- so I wouldn't call it restructuring. Soren, that's a big word. We are always adjusting our organizations, as the market changes and our performance is changing and we see opportunities in the market, and we are massaging in some areas, we are taking some admin people out and then we are putting more people into the field. So we do that all the time, and that's also why we do not have anything that we call extraordinary costs because what we do is ordinary course of business. It is changing the flight attitude. Lars talked about efficiency initiatives. So it is changing the flight attitude of the fixed cost in relation to net revenue, and thereby, we create the operational leverage. So we're well positioned, assuming that volume will grow a little bit. We are well positioned to take the benefits of that. And that goes across all countries. It's not just relating to the newer markets like Norway and Netherlands, yes.

Okay. So it sounds like we could see some improved operational leverage there. But also another -- just a second question on Italy, where you've seen very good progress and also France, I guess. But Italy is, of course, a much bigger market. The exit rates we're seeing there and the flight attitude as you call it, could that continue into '26 as you see now?

When we look at the Italian business, we are growing both share and beyond the market in volumes, and it is about a 6% growth, which is not what you would see reported because we have less private label. Now private label over time is, of course, less and less of the totality. We will still keep ourselves open-minded in terms of, I would say, sweating the assets. But what we -- so what we are exiting is the glass bottle private label because chillers is growing rapidly. So in that respect, we are taking one in and one out, but with a much, much higher margin. There is, of course, a limit on how much we can take out of private label because then it's not there anymore. What is left now is what we would call strategic private label because this is with customers where we also do business on our branded portfolio. So this is the status of the Italian business.

We will now take the next question from the line of Andrea Pistacchi from Bank of America.

I have 3 probably quick, quick questions. The first one, going back now to Netherlands and Belgium, the improving top line trajectory that you're starting to see and the commercial initiatives there. Can you just highlight where your main wins are? And then what -- I mean, over the medium term, as you do better revenue management there, you probably gain share, what sort of top line growth would you expect from Benelux? Can it grow, I don't know, 3%, 4% for you? What do you have in mind?

Second, probably a very quick one, costs of exiting Snacks. Have there been any -- have you booked anything in Q4 for this? And how much, please?

And the third one, in the last 6 months or so, you've alluded to probably more difficult pricing environment in carbs in Denmark, mainly and probably also Finland. Just an update on that. And is this connected in any way? I think your price/mix in Northern Europe was flattish or thereabouts in the quarter. I mean there's clearly lots of mix effects in there, yes, but if you can comment a bit on pricing in those markets.

Yes. So second question first, exit cost of Snacks. We have had none. So that has been done in a very smooth way, both from us, PepsiCo and the partner that has taken over. So well done for everybody.

When it comes to pricing in general, I think what we see is, again, back to what I said earlier on that in the more mainstream parts of the market, we do see from time to time, and it changes from market to market, some activities that is more volume-driven than value driven. What we, of course, do not have insight into from a competitive behavior point of view, is this is driven by the brand owners or the brand implementers or is this is driven by the trade that wants more traffic in the outlets. It's probably a combination. And when you look at the pricing in the fourth quarter, it has, from a consumer point of view, been more attractive. So slightly deeper on promotional pricing than what we have seen.

We have -- so our average pricing for our main categories is not very different than it was a year ago, but where we see some of our competitors have been with average pricing out of the stores at a lower level upon their choices or upon the store's choices, we don't know. But it's not something that is new. It's something that happens occasionally in markets and in categories, yes.

Okay. Just on value management, I think one of the things that is a key, what do you say, tool in the -- right Unibrew toolbox is that we have very granular data on how much money we make on individual screws, on promotions, et cetera. And I would say when we have acquired companies, one of the things we often do is to really make certain that we have that data available for the acquired companies and really make certain that we move the focus towards the segments where we do make money. So that's the first step we do when we start to integrate acquisitions. And that is giving us some good wins in Benelux and Norway as we get more granular insights into where we make money.

And then we have a team that takes best practice across the markets and work together with the local organizations to ensure that our price pack architecture is strong in each market, and then we are very focused on the segments where there is money to be made, and we deprioritize the segments where profitability is low. So this is very much about the basic financial ways of working that you focus on where money is made. But of course, when you look at some of the markets and the market share gains we've had in some of the Nordics, we have seen reactions from competition in terms of price because our market shares are growing very strongly over a number of years in -- particularly in Denmark and Finland, where we have been very successful.

And if I may, sorry, my sort of first question on Benelux, would you expect, as you do more of the revenue management as you've got everything in control now, would you expect the top line trajectory to improve there? And what's the sort of growth ambition in these markets?

Yes. But I also said it a little bit earlier, Andrea. I think we're doing a lot of changes on price pack. That's predominantly in Holland. We are changing our promotional priorities, which we have seen the effect of positively in the second half of the year mostly. And the success of the new strategy, we'll have to rely on seeing what is happening over the summer in the conversion of selling less big pack sizes at low prices, converting into smaller and instant size consumption occasions.

We have had, I would say, a really strong reception by the trade. But of course, the next layer is the consumers. So we'll have to be a little bit patient to conclude on that. But our overall idea about BeLux and Holland and for that matter, Norway is that the trajectory that we bought, which was more kind of like flattish and even to declining businesses is something that we can fix, will fix. Some of it we have fixed. And thereby, we should be able with those relatively small market shares that we have in those markets, we should be able to outgrow the market. So that's what we want to achieve.

And with that, I would like to thank everybody for participation. As usual, you know where we are, give us a ring, write to us, and we will be available. Thanks a lot, and enjoy the day.

Good morning, everyone, and welcome to Royal Unibrew's Q3 '25 Trading Statement. I'm Lars Jensen, CEO of Royal Unibrew, and I'm joined today by our CFO, Lars Vestergaard. We'll take you through the highlights of our performance in the third quarter and then open for questions at the end.

Before we begin, please note the usual disclaimer on Slide #2. It contains important information about forward-looking statements, assumptions and risks that may impact our outlook.

With that, let's start with a broader view on Slide #3. Let's start with a look at our strategic progress and long-term targets. Our financial performance demonstrates that the strategy is working with solid commercial execution and strong margin expansion. We continue to benefit from our growth framework, where 60% of our net revenue sits in attractive and growing beverage categories such as no/low sugar, carbonated soft drink, energy, enhanced RTD/cider and premium. In markets where consumer confidence generally remains low, we delivered organic revenue growth of more than 3% in the first 9 months of '25, which is ahead of European peers.

Our top line growth was supported by the new activities in BeLux, but also negatively impacted by reduced private label production in Italy and adverse currency movements. The key for Royal Unibrew is profitable growth. We focus on categories, markets and channels where we can grow sustainably and profitably, while exiting or diminishing areas that dilute our margin or strategic focus. From '26, this step will reduce group revenue by around 3.5%, but have no impact on EBIT or volumes. The decline in net revenue is predominantly from snacks and will impact the Northern European segment.

Operational efficiency is deeply rooted in our culture and across the organization. Our teams are constantly looking for smarter ways to operate, whether it's optimizing production and logistics or simplifying workflows or improving our allocation of resources. The strong EBIT margin development in the first 9 months of '25 shows that this mindset is delivering results, not just in our established markets, but also in the newer ones. Finally, on this slide, our long-term ambitions remain unchanged, and we aim to deliver an organic EBIT growth of 6% to 8% per year, double-digit earnings per share growth and continuous improvement in return on invested capital.

Now let's turn to the Q3 highlights on Slide #4. We delivered another strong quarter with reported EBIT growth of 15% and organic EBIT growth of 14%. Net revenue grew 3%, while organic growth was 4%. We saw continued strong execution in our growth categories and improved momentum in our Northern European segment. Earnings per share increased by 20% and free cash flow developed in line with our plans. And with less than 2 months to go of '25, we now expect to deliver full year EBIT growth at the high end of the 8% to 12% range.

Let's look closer at the performance in each of the segments now, and we will start with Northern Europe on the next slide, which is Slide #5. In Northern Europe, organic volume growth was 1% and net revenue increased by 3% in the quarter. Finally -- sorry, Finland rebounded after a soft Q2 market by cold weather that was impacted by cold weather. July was significantly warmer, which supported stronger volumes. As Finland has a more premium portfolio, the strong Q3 improved our price/mix for Northern Europe segment in total. In Denmark, we continue to gain value share across most categories. Faxe Kondi delivered strong growth, particularly in the no/low-calorie segment and Booster maintained momentum as the leading energy drinks in the market. Our beer portfolio led by Royal and Heineken also grew despite a declining total beer market.

In Norway, we saw solid revenue growth in the quarter, which is driven by the momentum in the RTD/cider category and beer. And this is despite a continued soft consumer sentiment. And overall, Norway is tracking on our plans. In the Baltics, we experienced a decline in volume and revenue in the quarter due to relatively cold summer and a more competitively pricing environment, but profit remained intact.

Now let's move to Slide #6 and look at Western Europe. Western Europe delivered a 9% organic volume growth and 11% revenue growth in Q3. Growth was driven by BeLux, which amounted -- accounted for around 12% of the total segment growth. In Italy, we continued to gain market share, but growth was lower than in the first half of the year due to a colder weather in Q3. Our beer brands, Ceder's and Faxe performed well, and the Crodo soft drink range continued to take share across channels. As we have previously described, we have reduced private label production to free up capacity for our own brands. This supports the price/mix and profitability even if total volume is down in the quarter.

In France, we continue to gain market share in soft drinks, which is driven by our 2 local hero brands, Lorina and Crazy Tiger. In the Netherlands, the business continues to track on plans on revenue and margins and margins are up year-to-date. We focus on profitable growth as we enhance our brands and focus on introduce more options to strengthen the price pack play. This is why we have deselected some nonprofitable promotions. In BeLux, we estimate that we have maintained market share in '25. BeLux remains loss-making this year as expected, but continues to develop according to plan. BeLux has now been part of our portfolio for a year. And starting from October '25, it's included in a year-on-year comparison.

Now let's turn to Slide #7 and the International business segment. The nature of the International business means that quarterly performance can be volatile and often influenced by timing effects of inventory movements. That's why we typically look at this in a 12-month running perspective or year-to-date when we are at this time of the year to get a clearer view of the underlying trends. When we look at sales outgrowth across our key market, it remains in the low teens, confirming a strong consumer demand for our brands. Sell-in growth declined in Q3 following some inventory buildup earlier in the year. Year-to-date volumes are up around 12%, which is now calibrated with the sales-out momentum.

Net revenue declined slightly in Q3, but was up 4.5% year-to-date. And besides the inventory normalization in Q3, net revenue was impacted by currency headwinds and country mix and with faster growth in African markets where price per liter is structurally lower. Category growth was led by the Faxe beer, the Crodo soft drink and Vitamalt. Profitability and margins remain strong in the segment.

And with that, I will hand over the word to Lars to walk you through the financials.

Thank you very much, Lars, and please turn to Slide #8. Net revenue has increased by 5.3% in Q3 or 4.3% organically. Gross profit grew by 5.9% in the quarter. The higher gross margin growth compared to net revenue reflects both our focus on profitable growth and efficiency improvements. The cost base increased by less than 2% year-on-year, which is mainly related to the impact from BeLux and recent acquisitions. The underlying development in cost reflects our strong focus on efficiency and cost control. The efficiencies have mainly been achieved within sales and distribution expenses, while we continue to invest in sales and marketing to support our growth ambitions.

We are seeing clear benefits from our improved production footprint and initiatives to streamline logistics and distribution operations. EBIT increased by 15% in Q3 and 13% year-to-date. The EBIT margin expanded by 160 basis points in the quarter and by 110 basis points year-to-date. Tax and financial expenses are developing as expected with an effective tax rate of 22% and net financial expenses in line with our guidance. Net profit is developing as per plan, but declined year-on-year. Please note that in Q3 2024, we benefited from a tax-free gain on the sale of the shareholdings in Poland of DKK 204 million. Adjusted for this, net profit was up 18% year-on-year in Q3 and year-to-date. Earnings per share adjusted for the extraordinary gain in 2024 increased by 20% in the quarter and 19% year-to-date.

Let's move to the cash flow and balance sheet on Page 9. Cash flow is tracking in line with our plans. Operating cash flow amounted to DKK 1.724 million year-to-date and up 18% from last year, supported by strong operating performance. Year-to-date, free cash flow reached DKK 973 million compared to DKK 1.032 billion last year. The decline reflects the one-off proceeds from the sale of our Polish shareholdings in 2024. Furthermore, we are running higher CapEx in 2025, and this will also continue into Q4. CapEx is according to plan, and we expect full year level of around 7% of revenue. Net interest-bearing debt was DKK 6 billion at the end of September, and the gearing ratio was 2.1x EBITDA, in line with our target. Our ongoing share buyback program of DKK 300 million runs until the 19th of December 2025. Finally, return on capital employed is improving, supported by higher earnings and Norway and BeLux are on track to deliver 10% cash ROIC by 2026.

Let's move to the outlook on Page 10. Based on our performance so far and our expectations for the remainder of the year with less than 2 months to go, we maintain our full year guidance range. However, we now expect EBIT growth to be in the higher end of the range of 8% to 12%, supported by our continued focus on efficiency and margin expansion across the organization. We still expect full year net revenue growth of 5% to 6%. This reflects an acceleration in Q4 compared to the first 9 months, and this is consistent with trends observed so far in the quarter. The consumer environment remains challenging but stable compared to 2024. This is also in line with our previous expectations. Other assumptions for guidance are unchanged. And with that, I'll hand the word back to you, Lars.

Thank you, Lars. And let's move to Slide 11. Our management agenda remains consistent with what we have communicated earlier. We are continuing to execute our growth strategy with focused efforts across growth markets like Italy, France and international. New markets such as Norway, Netherlands and BeLux is now about fueling the commercial momentum and the more developed markets like Denmark, Finland and Baltics is where the efficiency and cost discipline remained high on focus. We will keep driving operational efficiency across the organization and optimize resources used to strengthen margins further. We keep our focus on delivering on our sustainability targets as well as our long-term financial targets.

Now let's move to Slide #12 for the key takeaways. And to sum it up, we delivered a strong Q3 with revenue growth above industry average, a 15% EBIT growth and a solid margin expansion. Our strategy is working. We are growing in our key categories and markets while exiting low-margin business. And as a reminder, this will reduce net revenue by 3.5% in 2026, mainly in Northern Europe, while there will be no impact on EBIT and volumes. Our cash flow and balance sheet remains robust, enabling both investment and shareholder returns. And finally, we now expect to deliver the full year EBIT growth at the high end of the 8% to 12% interval.

And with that, we are ready to take the questions. So operator, please go ahead.

[Operator Instructions] And the first question comes from the line of Thomas Lind from Nordea.

Congrats on the very strong numbers here. Two questions from my side. The first one is regarding the sales and distribution expenses. They make up 22.5% of your revenue here for the quarter. As I can see it, this is the lowest, at least the percentage-wise sales and distribution expenses you've had only in 2020 when societies were locked down due to COVID, did you have a lower cost here. So I guess my question is what's driving these very low sales distribution expenses? And how sustainable is this very, very impressively low number? That would be my first question.

And then the second question is a bit more on markets. I would like to maybe hear you elaborate a bit on the Dutch Netherlands market. If you could just give us a bit of an update. It seems like it's returning to growth. What is driving this growth? Are you increasing the sales force? Or is it something else, the new slim cans? Yes. So any update there?

So if we start with the sales and distribution expenses, we have been working very hard to optimize our footprint. And of course, within logistics and the way we spend our money in the sales force, that is where we have found a number of efficiencies that is showing in the quarterly numbers. So it is low. Remember, there is quarterly variances between these numbers and do not take one quarter and extrapolate for that. But I think this is a place where we have seen solid improvements. Remember that we have moved some production closer to the end consumer, which, of course, helps distribution expenses structurally. And then we have been looking at smarter ways of doing things within the sales area. So this is an area where efficiencies are paying off.

And then on the question around the Netherlands, there's a lot of moving parts. And we are fairly -- I would say fairly consistently over the last 5, 6 months seen that the net of that is positive for the top line of the business, but it's also supporting our margin enhancement and the buildup of getting to a 10% return on invested capital. And I think the word that I would say that is the most important one is consistency in the strategy that we are pursuing. which is a mix of enhancing the price pack offering in the markets where we do see some elements in the market this year, but where I would say the expectation for the future is on a higher level, meaning '26, '27. That is where we have, I would say, a larger opportunity to enhance that agenda, in particular, in the carbonated soft drink space. It is [Technical Difficulty]

I've just got one really, and I suppose it is elaborating on the question on sales and distribution expenses performance. I suppose I'd just like to get your thoughts on the profit development going into next year. I mean you've now guided to the high end of 8% to 12% for this year. If I look at next year and compare to what we're seeing now, I mean, I think you've spoken about previously expecting a kind of tick up in a lot of these efficiencies and synergies going into 2026.

And then zooming out, I suppose we're going into a relatively benign sort of cost environment more generally. You do have this impact from the Pepsi snacks exit, but you've commented that, that won't have any impact on EBIT. So I suppose I just want to get your kind of your take on the moving parts in terms of the EBIT growth development for next year. And I suppose, is there any reason why we should expect any deceleration versus what we're seeing this year given that quite a few things, I suppose, are going to get incrementally more favorable?

I think we will allow ourselves to come with the guidance for '26 in February when we come with the full year statement. I think the way that you should look at it is that we have a robust underlying momentum of the business. And then on top of that, we have -- for a couple of years, we have spent, I would say, above normal levels of CapEx, which, of course, should generate some solid returns. I would say that if there's anything that potentially could play to -- or say, to the negative, then it's the quality of the net revenue.

In a market where the beer category is in decline, and you see some of our competitors have been losing value share for quite some time, we do see more, I would say, price allocation in terms of driving business forward than what we have seen, I'd say, over the last 3, 4 years. We have, I would say, a much stronger value focus than what we see from our peers, in particular in the Nordic countries. But we will come back to this in February. Obviously, the underlying momentum remains robust. And then for the rest of it, we need to massage and that's also why that we are sharp on efficiencies on every cost line so that we make sure that our competitiveness is not being diminished. Can you hear us?

Excuse me, Matt, any further questions? Now we'll take our next question and it comes from the line of Andrea Pistacchi from Bank of America.

So 2 also from me, please. The first one is on your confirmation of the sales guidance. Now you've -- at the 9 months, I think, reported sales was up 4.2%. So you -- it implies quite a material acceleration in Q4, which you said. Q4 should be growing around 7.5% to 12% and you won't have the benefit from the first time sort of consolidation of BeLux. So I just wanted to if you could unpack a bit what is behind this acceleration? I mean, I assume you've had a strong start to the quarter. If you comment a bit about the sort of recent trading, what maybe mean to? Is there any seasonality? Will that contribute more trading days? Is there any difference or maybe the snacks business as you -- before you exit the business, are you sort of selling more snacks? That's the first question. I understand that a bit.

And then the second one really is about the environment in Europe as we go into next year. So net of the snacks business you're exiting, how do you feel about the consumer environment, the trading environment going into next year? Any reason why there should be any difference in consumer sentiment in, say, Finland and Norway? And kind of connected to this, and it's something you just touched on now in the question about -- you talked about the quality -- potential quality of net revenue. And you said that you see a bit more price allocation to drive business from peers. Do you mean by that, that sort of you're seeing, I mean, peers may be a bit more aggressive on price in order to drive volume? So how is the pricing environment panning out, do you think?

Yes. So if I start with the last one first, yes, we do see, in particular, I would say, in the cola segment that pricing is being used to try to drive performance in, I'd say, our big home markets, 2 big home markets and a bit in the Baltics as well, and it doesn't seem to work. So it's an observation from our side that the behavior has changed over the last, I would say, 4 months or so, but it doesn't help the development for the one that does it, and it doesn't help the overall market. So it is still selective and not a broad development, but it's a different behavior than what we have seen. So that is the observation, I would say.

When it comes to the first question on the net revenue guidance, yes, October was a strong month for us. And that means that we are enhancing our flight altitude towards the remaining of the year. I think you should expect international to have a solid end to the year. And then the general momentum in the business indicates that in some of the newer markets like in Norway, that our trajectory on the net revenue is moving upwards. So that is the thoughts around why we believe that the 5% to 6% is still relevant as a guidance interval. On the trading environment -- yes.

Sorry, just on that question. So therefore, it sounds as it's really sort of underlying good momentum of the business rather than potential one-offs that could sort of help you in this quarter, right?

We do not really consider anything as one-offs. And then we would have said it if it would have been a one-off character. On the trading environment, I think as our guidance for the remainder of the year indicates, we are sticking with our assumptions as we laid them out in the beginning of the year, and I wouldn't call out anything materially in the consumer environment or sentiment as we see it right now anywhere, nor to the worse nor to the better. So when you call trading environment, it can be consumer, it can be customers, it can be competition. The competition I already talked about. And I think when it comes to the trading environment with our customers, I think we generally see a very positive tone of discussion in terms of driving value for us, driving value for them and driving value for the consumers. So that is the agenda that we pursue.

Now we're going to take our next question and it comes from the line of Richard Withagen from Kepler Cheuvreux.

I've got 2 questions as well, please. First of all, on the -- can you hear me?

Yes. We hear you.

Okay. Perfect. All right. Perfect. So on the Belgium-Luxembourg market, you talk about stable market share. Is that -- I mean, I should read that positive, right? Because the business has been under some market share pressure in the past. And then also you talk about initiatives to bring the business back into profits what are you doing to realize that. And then the second question I have is on the growth framework. You mentioned that 60% of revenues are covered now by the growth framework. Is that a good level? Are you looking to increase that? And what is the function of the remaining 40%? Is that to be able to offer the full multi-beverage model? Is this predominantly low growth but high-margin revenue? So just some details around that, please.

If we start with the business in BeLux, it is positive that we are maintaining market share because that business has been on a downward trajectory for a couple of years. The team have done an outstanding piece of work in building a winning organization in a very short period of time. We went live on SAP earlier this month, and the team did an excellent job on that. So if you look at what is it we need to do in Belgium, there's a number of things we need to do. So first of all, we need to look at the price pack architecture and make sure that it fits the markets and there's a good amount of work that needs to be done. And then we are moving some of the production to Holland so that some of the products are coming internally from, and that will give a nice cost saving when that is in-sourced. So I would say the plan for the Belgium and Luxembourg market is pretty clear, and there's very clear road map to getting into positive territory for next year. So a good organization that we built in a short period of time and price pack and in-sourcing are the 2 things that will drive benefits in the short term.

And then on the growth framework, I think the 60% is quite a handsome number, I would say. Can we enhance it? Yes, we can probably enhance it. But the trick is also that the remaining part, which is not a part of the growth framework, which is sugar soft drinks and a lot of mainstream beer that we at least keep that on the same level as where it is, so it doesn't become a burden. And this is where some of our, I would say, strong local brands, LemonSoda is an excellent example. So the no/low sugar proposition is growing very fast, but we are also gaining on the sugar variants. So it's not dragging us down. It's actually building on top of what we have.

The same goes for the business that we have in Africa on the Faxe 10%. It is not a part of the growth framework as it is not considered as a premium offering, but more a mainstream offering in the African countries. So the growth framework is categories where we see structural growth, whereas for the remainder of it, there's still growth opportunities, but they are of a different nature than in growing markets. So we feel that we are at a good level. Can we enhance it? Yes, we believe we can. And then it's about making sure that you don't lose out on the positions you have in no growth or declining categories. And we have so far been quite good at that, I would say. Yes, so that's how we look at it. Can you hear us, Richard?

Okay. Great. And then maybe Lars Vestergaard, just a quick follow-up on Belgium. I mean, Lars, can you say what the margin is in Belgium? Is it low single digit negative, mid-single digit negative? What's the margin there?

It's low single-digit negative, but let's not get into too much detail because there's a lot of moving parts in that business. At this point in time, there's a lot of things that we are fixing. So I would say that's -- the moving parts are a number into next year. And I think we would be surprised if it's not positive next year.

Now we're going to take our next question. And the question comes from the line of André Thormann from Danske Bank.

Yes. just a few questions from my side as well. First, can you comment a bit more on Norway and specifically the profitability development in the quarter? How has that gone and what has been driving it? And the second is, again, regarding BeLux. Could it already turn profitable in the fourth quarter? That's my question.

If we look at Norway, I think we're super happy to see that we are building momentum on the top line of our business. So when we look at year-to-date, then Norway -- in the Nordic countries, Norway, if you take the whole Northern European segment, Norway is a country where the growth of net revenue is the highest by everybody. And when we are looking at our market shares, both in beer and the RTD/cider category, we have been building momentum over the last half year. So there is a profit enhancement in the third quarter compared to last year. So all of the hard work that the team has been doing is really paying off. And at the end of the day, following the plan that we stipulated out and made in the beginning of the year. So super happy about that.

When it comes to BeLux, no, we do not expect BeLux to be profitable in Q4. As Lars said, there are some structural changes that will help us out. Those will come -- some of them from the beginning of the year and others will come when we have the trade windows in -- during the first quarter because they are more price pack oriented. So you should see an improvement coming from Q1 and then getting better during the year of '26.

Maybe just a follow-up on Norway. Can you also see that the cost actions that you have taken is driving profitability, not big time, but some in Q3 already?

The underlying cost initiatives are helping us, but we have -- I would say, we need to pay a bit of money to make sure that we get those effects. So those are more being leveled out, I would say. So we do have underlying efficiency gains, but we spend the money on taking the smaller one-offs here and there to make sure that we enhance the flight altitude, and that's predominantly on the people side.

And now we're going to take our next question. And the question comes from the line of Philip Spain from JPMorgan.

I had 2, please. The first one was just a follow-up on your comments on the Q4 trading. I just wanted to understand in terms of the shape of Q4 last year, how the phasing was between October and then the rest of the quarter. Just wondering if the comps were through the rest of this quarter get any easier or tougher compared to what you had in October? And also just to understand, I appreciate the BeLux business was already -- it's already in the comp base in Q4 last year. But given you've been ramping that business, should there also be at least some support from BeLux in Q4 this year as well?

And then my second question was just on the exit. So I know you've announced the 3.5% to come out next year. Are there any other businesses that you haven't announced and included in that 3.5% that you would consider exiting? Just to understand if there's more potential exits that we could see next year as well.

Yes. So if we look at the Q4 trading, the way we look at it is that we have looked at the quarter in totality, both last year and this year. And of course, we're looking at it. I cannot remember the complete phasing from last year. But when we look at it, the plans are in place to deliver on the guidance, and we have good momentum in the beginning of the quarter. I don't think we will see any significant step-out from BeLux in the fourth quarter. And remember, the reason why BeLux is interesting in terms of the net revenue development is not that it's changing a lot. It's just because it's new business, and therefore, it means something in terms of the top line improvement. So I would say a strong start to Q4, good plans in place. I cannot remember the phasing in detail from last year, but I think we had a good start to the year.

So -- and then, of course, we are looking at -- as part of our efficiency journey, we are looking at how can we take structural cost out of the business or reallocate our organization to things that has better margin. So we are also looking at other categories such as tea, coffee and really making certain that we put all our emphasis behind the brands we have that are successful, Pepsi, Faxe Kondi, Original, Ceres, et cetera. So making certain that the quality of the portfolio gets better over time. So we are exiting more. It will not be as big as the snacks we have. And I don't think we want to go into details on the numbers because there's a lot of moving parts. I think the positive thing is that the core portfolio we have of strong brands, they are doing well. So the quality of our top line is improving as we speak. So I think we are very pleased with the change in composition of our sales.

Now we're going to take our next question. And the question comes from the line of Soren Samsoe from SEB.

So first question is on Finland. This is a very important market for you and also high margin. And you had good weather in Q3, at least in July. So how much of the strong margin increase in Q3 comes from the improvement in Finland? And also, how does it look in Finland in Q4 so far?

And then secondly, in Western Europe, if you can comment or quantify how much negative impact the exit from the private label contracts had in Q3 in Western Europe? And then thirdly, we have seen barley prices and sugar prices come down quite a lot lately. Will that impact your 2025 figures? Or will this not impact until 2026?

Looking at Finland, yes, we got a nice rebound in Q3. And given the weather swings between the quarters, I think at the end of the day, we need to look at this on a year-to-date basis. And if we include October and look at the market share data also that is available, then we are in a good spot. We have been talking about the Original long drink circling now from the 1st of October, the open -- or the change in legislation that opened a number of outlets for up to 8% fermented beverages. And when we look at the performance in October, it looks, I would say, healthier than what we have seen over the last period of time as we are now circling the change. So I say the Finnish business remains very strong, intact and with a slight market share gain for us when we look at the total market. So this is how Finland is performing.

On Western Europe, I think the -- when we look at our business in Italy, we are up on revenue by a few percentage points. And the underlying of that is that private label is down 23%. It's in volume. The numbers or the percentages that I'm mentioning here is down by 23% this year. And the branded portfolio is up by 7%, and that is clearly beating the market. And the 7% -- the quality of the net revenue and the profit on the 7% is much, much higher than what we get out of private label. So this is -- when you look at the Western European segment, it is something that takes the top line down, but the underlying is that we are enhancing the quality of our business, as Lars just talked about in terms of are we looking at areas where we better put a focus on other priorities and the private label in Italy is one of them. So as long as we have spare capacity, it's a nice business that pays for some fixed cost. But as our underlying business is growing, we are freeing up capacity to sustain that for the coming periods.

And if we look at the commodity prices, then it is true that barley, sugar, et cetera, is on a good path. If you look at other categories such as aluminum, then that is going in the opposite direction. So in totality, it does not have a big impact on Q4, and most of it have been fixed in terms of pricing earlier on. And when you look into next year, we are seeing that the whole basket of what we buy is slightly more expensive than it is today, but not big movements as we have seen in some of the previous years.

But can you maybe elaborate a little bit on how -- where you are in hedging now because historically, you have been varying a little bit going from almost no hedging to, in some periods, hedge 6 to 12 months out. So where are you now on that?

I would say we are well covered for next year. There's, of course, still a lot of categories where we do not have 100% hedging. But I would say we have covered quite a bit of our commodity exposure for next year at this point in time.

Now we are going to take our next question. And it comes from the line of Edward Mundy from Jefferies.

I know it's far too early for you to give guidance for next year. But when you think about some of the puts and takes on growth, how are you thinking about the opportunities? And you've mentioned the 3.5% negative that doesn't impact your volumes or your profit. I mean, do you expect to grow revenues next year is the first question.

And then the second is really around the strength of the balance sheet. You're getting down to pretty healthy levels now. Could you perhaps talk about your appetite for further bolt-on deals or accelerating returns of cash to shareholders? That's the second question.

And the third question is around your CapEx, which is relatively elevated at the moment, around about 7% of sales and perhaps a little bit higher than some of your more mature market peers around about the 4% level. Do you see a route down towards that 4% or 5% of sales level for CapEx and over sort of what time frame?

If I start with your first question on growth looking into '26, when we have recalibrated, as we have said on the exiting pieces, the 3.5% from that starting point on, we believe that we will be able to grow the business next year through our growth framework and our positioning and on the underlying momentum in the business. We are in a competitive market in, I would say, in most countries and categories, growing market share by value, which is our focus. So yes, we will expect that we will be able to deliver net revenue growth on the adjusted starting point.

And in terms of the balance sheet, yes, it is getting healthy towards the year-end, and we have -- we are still executing one of the share buybacks. So I would say we are ending up the year where we want to be. So I think we're in a good spot there. In terms of bolt-on acquisitions, we are looking in the market, but I would say that the key priority we have at this point in time is to make certain that we deliver on our promises on Benelux and Norway, and we are on track on that. So full focus on integration is the target at this point in time. But of course, if anything comes around, we -- we are starting to see that the IT integrations have come quite far. And I would say the quality of our organization in the Netherlands as well as in Benelux is, in general, quite strong.

In Norway, there's a clear road map defined. And I would say the Norwegian team is doing an excellent job in terms of executing on these programs. So I would say there's more organizational capacity being freed up for other stuff. In terms of the CapEx level, our target is 7% this year. It will also be 7% next year as we finalize some of the CapEx programs. And then from that point onwards, we expect to return to more normal levels, which would be in the 5%-ish territory. So -- and as Lars mentioned, that's also one of the things that's driving efficiency and will help us next year as these CapEx programs mature and deliver the benefits. So 1 year more with high -- with elevated CapEx and then back to a more normalized level.

Now we are going to take our next question. And the question comes from the line of Aron Adamski from Goldman Sachs.

I have 2. First is on your innovation pipeline. Can you please give us an idea of how does the extra production capacity which you have added in recent years and have been also making available in Italy, how does that enable you to intensify the pace of innovation launches? And do you expect it to drive a significant impact on volume and mix in the medium term?

And the second is on revenue per hectoliter in Netherlands, which we speak about often on these calls. And I believe it's substantially lagging the other European bottling peers. So I was just wondering if you can give us a sense of how much runway in the medium term for price/mix improvement do you forecast there for Vrumona? How much of that gap versus European bottlers can you close through the targeted initiatives you've been making?

Yes. I think -- so the capacity expansions and capability expansions that we have made both in Italy, Denmark and in Holland is -- part of it is to drive price pack architecture. That's correct, call it, innovation or not. And we believe in a couple of years' time that, that is going to change the mix of the business, in particular, in Holland meaningfully. But a part of it is -- and that's in particular in Denmark and in Italy, that is to make sure that we have enough capacity to sustain the already underlying development that we have of our business.

And for the soft drink part of it, it is both in Italy, but it's also outside of Italy. So in the surrounding countries to Italy in Southern Europe, where the performance is really strong in the International segment. And all of this ultimately will help us out on having a more healthy net revenue per volume. But it's not the only thing that would, I would say, help us on that. It is also what we talked about earlier today is about the quality of what we're already selling today and making sure that we -- I would say, we get a reasonable pricing to stay in on promotions or that we exit promotions and use the resources elsewhere. So we have the right resource allocation of the money that we spend in the market. We -- since we acquired, I would say, both Netherlands and we onboarded the BeLux business, we have talked about how to increase the quality of the net revenue per volume. So yes, also the CapEx in this sense is supporting that.

[Operator Instructions] And now we're going to take our next question. And the question comes from the line of Richard Withagen from Kepler Cheuvreux.

I've got 2 additional questions, please. Can you hear me? I've got 2 additional questions. The first one is on the -- perfect. First one is on the gross margin. So you reported 20 basis points improvement in the third quarter. I would have expected that to be a bit more, especially with Finland bouncing back. So maybe you can talk a bit about what drives that 20 basis points margin improvement -- gross margin improvement.

And then the other question I had, Lars, you mentioned about an improving efficiency mindset in some of the new markets. So can you talk a little bit about how you're implementing that? What is the remaining opportunity to become even more efficient in the Netherlands and Norway, I guess?

Yes. So if you take the gross margin question, of course, there's an awful lot of moving parts in this. I think the one thing we should just remember is that the reason why we comment a bit on Finland's performance in Q3 was that it was quite poor in the first 6 months. So when you look at it year-on-year, it is not a substantial change in trajectory in Finland. So it was more to confirm that Finland is on track after a pretty difficult first half. So I think don't read too much into year-on-year comparisons on Finland. It's more just that it's on track and weather has impacted the Finnish business on a quarterly perspective, but not on a year-to-date basis. So Finland is on track. I would say there's a lot of mix happening in terms of gross margin. And as we've talked about for quite a while, the consumers are under pressure in most of our markets. And I would say the mix we sell is -- the margins are different and it's different from country to country. So I would say I would not conclude too much from the gross profit margin changes that we are seeing.

And then on the question on efficiencies going forward. We see efficiency opportunities everywhere. Now we have, I would say, a more recalibrated baseline on cost in the newer markets. And then a lot of the journey from here is about creating operational efficiency. So that means keep costs fairly flat and then utilize the machinery, the organization that has been built up and through that, improve the ratios of cost to sales, so to speak.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Lars Jensen, for any closing remarks.

Yes. Thank you very much, everybody, for participating. Good engagement, good questions. I apologize a bit for having some challenges on the connection, but I think we got through it. So thanks for your patience on that, and enjoy the day.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.