Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Royal Unibrew AS (FRA:0R1, Financial) achieved a 1% organic volume growth in Q2 despite poor weather conditions in June.
- The company reported a 4% organic net revenue growth in the quarter, driven by strong product mix and price increases.
- Royal Unibrew AS (FRA:0R1) increased its market shares in key categories and important brands.
- The company achieved a 9% reduction in absolute carbon emissions in the first half of 2024.
- An extraordinary dividend of DKK14.5 per share will be paid out in Q4, reflecting strong financial performance.
Negative Points
- The weather in June negatively impacted the company's performance in Q2.
- Net financial expenses increased significantly by 52% to DKK163 million in the first half due to higher net interest-bearing debt.
- The integration of the Belgium and Luxembourg markets is not expected to contribute to earnings in Q4 due to integration costs.
- The company faces macroeconomic uncertainty, impacting consumer spending in the on-trade segment.
- The Norwegian krone devaluation has affected profitability, requiring price increases to restore margins.
Q & A Highlights
Q: Can you elaborate on the difference between your guidance of at least DKK15 billion in revenue and the flat organic volume growth assumption for the full year?
A: Lars Jensen, CEO, explained that the addition of the Belgium and Luxembourg business, which was not part of the initial guidance, contributes to the revenue increase. Despite a strong momentum until May, poor weather in June affected the industry. The company remains value-focused rather than volume-focused, aiming for quality revenue capture.
Q: What is behind the narrowing of your EBIT guidance?
A: Lars Vestergaard, CFO, stated that efficiency initiatives are progressing well, and the relief from sourcing in Italy and the Netherlands has improved service levels and cost management. The businesses are performing according to the plans set at the beginning of the year.
Q: Are there any major differences in marketing and sales expenses among the markets?
A: Lars Jensen, CEO, noted no significant changes in marketing versus in-store expenses across markets. The main change is the ramp-up in Holland with a new field force setup, which is expected to stabilize and show results towards the end of the year.
Q: How does the Carlsberg acquisition of QuickChek affect your strategy with the Pepsi portfolio?
A: Lars Jensen, CEO, stated that the strategy remains unchanged. The consolidation trend among partners is seen as a way to create efficiencies and synergies, which aligns with Royal Unibrew's strategy.
Q: What is the status of the Norwegian business profitability?
A: Lars Jensen, CEO, confirmed that the Norwegian business is on track to restore the profitability level at the time of acquisition. This has been achieved through cost efficiencies and price increases to counteract the devaluation of the Norwegian krone.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
