Q2 2026 Carlsberg AS Earnings Call

August 19, 2026

Operator: Ladies and gentlemen, welcome to Carlsberg's H1 2026 Interim Financial Statement. I am Moritz, the Chorus Call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Jacob Aarup-Andersen, CEO. Please go ahead.

Speaker #1: The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #1: For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jacob Aarup-Andersen, CEO.

Speaker #1: Please go ahead.

Speaker #2: Thank you very much, operator. Good morning, everyone, and welcome to Carlsberg's half-year 2026 conference call. As mentioned, my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrik Færch, and Vice President of Investor Relations, Peter Kondrup.

Jacob Aarup-Andersen: Thank you very much, operator. Good morning, everyone, and welcome to Carlsberg's H1 2026 conference call. As said, my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrica Fearn, and Vice President Investor Relations, Peter Kondrup. Before we get into it, let me just begin by summarizing the key headlines for the half year. First of all, we delivered solid top line and solid earnings growth. We are delivering the Britvic synergies faster than expected. We are making strong progress on leverage reduction, and we are expanding our Pepsi partnership to many more markets. We are narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range.

Jacob Aarup-Andersen: Thank you very much, Operator. Good morning, everyone, and welcome to Carlsberg's H1 2026 Call. As said, my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrica Fearn, and Vice President Investor Relations, Peter Kondrup. Before we get into it, let me just begin by summarizing the key headlines for the half year. First of all, we delivered solid top line and solid earnings growth. We are delivering the Britvic synergies faster than expected. We are making strong progress on leverage reduction, and we are expanding our Pepsi partnership to many more markets. We are narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range.

Speaker #2: Before we get into it, let me just begin by summarizing the key headlines for the half-year. First of all, we delivered solid top-line and solid earnings growth.

Speaker #2: We are delivering the BRITVIX synergies faster than expected. We're making strong progress on leverage reduction, and we're expanding our Pepsi partnership to many more markets.

Speaker #2: And we're narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range. Before I cover the key headlines for the group and regions, and before Ulrike takes you through the financials and the full-year outlook, I will let her explain the exciting reporting changes following the implementation of IFRS 18.

Jacob Aarup-Andersen: Before I cover the key headlines for the group and regions, and before Ulrica takes you through the financials and the full year outlook, I will let her explain the exciting reporting changes following the implementation of IFRS 18. Over to you, Ulrica.

Speaker #2: So over to you, Ulrike.

Speaker #3: Thank you very much, Jacob. And please, everyone, turn to slide 3 for that. So, as we told you, IFRS 18 this year, and this is ahead of the mandatory adoption in 2027.

Ulrica Fearn: Thank you very much, Jacob. Please everyone turn to slide 3. As we told you in February, we have implemented IFRS 18 this year, and this is ahead of the mandatory adoption in 2027. This is a highly complex change, but we have been able to do this thanks to the robustness, the quality, and the depth of our data and systems. For those of you who are not aware, IFRS 18 concerns the presentation of figures in the income and cash flow statements and to a much lesser extent, the balance sheet. It is important to note up front that at the bottom line, i.e., net profit, net cash flow, and total asset is unchanged. For us and for most other companies, IFRS 18 does not correspond with our internally defined financial performance measures and KPIs.

Speaker #3: This is a highly complex change, but we have been able to achieve it thanks to the robustness, quality, and depth of our data and systems.

Speaker #3: And for those of you who are not aware, IFRS 18 concerns the presentation of figures in the income and cash flow statements, and to a much lesser extent, the balance sheet.

Speaker #3: And it is important to note up front that at the bottom line, net profit, net cash flow, and total assets are unchanged.

Speaker #3: For us, and for most other companies, IFRS 18 does not correspond with our internally defined financial performance measures and KPIs. Therefore, we're introducing Carlsberg Performance Measures, or CPMs, which reflect our internal reporting and performance management.

Ulrica Fearn: Therefore, we are introducing Carlsberg Performance Measures or CPMs, which reflect our internal reporting and performance management. This is in line with the requirements of the IFRS 18. I do want to emphasize that the CPMs, basically, with a few exceptions, reflect the way we have always looked at the business. We took the first step at this already in our full year 2025 reporting in February, when we provided restated management-defined performance measures or MPMs. However, under IFRS 18, MPMs can only be used for P&L subtotals and totals, and not for line items such as cost of sales or marketing, or ratios such as return on invested capital. Therefore, we are choosing to call our adjusted figures CPM. Last week, we sent out restated 2025 figures under IFRS 18 for full year and half year, and we also included the corresponding CPM figures for both periods.

Speaker #3: And this is in line with the requirements of IFRS 18. But I do want to emphasize that the CPMs, basically with a few exceptions, reflect the way we've always looked at the business.

Speaker #3: So, we took the first step in this already in our full-year 2025 reporting in February, when we provided restated management-defined performance measures, or MPMs.

Speaker #3: However, under IFRS 18, MPMs can only be used for P&L subtotals and totals, and not for line items such as cost of sales or marketing, or ratios such as return on invested capital.

Speaker #3: And therefore, we're choosing to call our adjusted figures CPM. Last week, we sent out restated 2025 figures under IFRS 18 for the full year and half year.

Speaker #3: And we also included the corresponding CPM figures for both periods. So, we hope that that helped you in preparing for our half-one announcements. Now, going forward, all P&L commentary on group and regional performance in announcements and presentations will be on CPM where these differ from IFRS 18 figures.

Ulrica Fearn: We hope that that helped you preparing for our H1 announcements now. Going forward, all P&L commentary on group and regional performance in announcements and presentations will be on CPM, where these differ from IFRS 18 figures. Likewise, organic growth figures will be presented for CPMs only. In today's announcement, CPM bridges are presented in Note 1, and those bridges will be included in all half and full-year announcements going forward as per IFRS 18. Details on the restatement of the 2025 figures reported in February to IFRS 18 are shown in Note 8. Let me first briefly explain the major changes following the adoption of IFRS 18, illustrated in the second and third column in the table on this slide, which show 2025 reported in February and the IFRS 18 restated figures.

Speaker #3: And likewise, organic growth figures will be presented for CPMs only. In today's announcement, CPM bridges are presented in note 1, and those bridges will be included in all half- and full-year announcements going forward, as per IFRS 18.

Speaker #3: And details on the restatement of the 2025 figures reported in February to IFRS 18 are shown in note 8. So let me first briefly explain the major changes following the adoption of IFRS 18, illustrated in the second and third columns in the table on this slide, which show 2025 reported in February and the IFRS 18 restated figures.

Speaker #3: First of all, the structures and subtotals in the P&L have changed, as the P&L is now split into operating, investing, and financing sections. Secondly, there are some significant movements between the lines in the P&L, with the main one being the share of profit of associates, which has moved from above operating profit to below operating profit.

Ulrica Fearn: First of all, the structures and subtotals in the P&L have changed as the P&L is now split into operating, investing, and financing sections. Secondly, there are some significant movements between the lines in the P&L, with the main ones being share a profit of associates, which has moved from above operating profit to below operating profit. Special items and other operating activities net, they no longer exist, but are instead recognized in the relevant cost lines, mainly above operating profit. Trade loans have moved from other operating activities to other investing income and expenses, which is below operating profit. FX gains and losses on operating assets, liabilities, and transactions, bank fees, and other financial fees have moved from net financial items to admin costs.

Speaker #3: And special items and other operating activities, net, no longer exist but are instead recognized in the relevant cost lines, mainly above operating profit.

Speaker #3: And trade loans have moved from other operating activities to other investing income and expenses, which is below operating profit. And efforts—gains and losses on operating assets, liabilities, and transactions, bank fees, and other financial fees—have moved from net financial items to admin costs.

Speaker #3: And as a result of the IFRS 18 mandatory reclassifications, 2025 operating profits have been restated from DKK 13.36 billion to DKK 10.23 billion.

Ulrica Fearn: As a result of the IFRS 18 mandatory reclassifications, 2025 operating profits have been restated from DKK 13.36 billion to DKK 10.23 billion. The reclassifications have no impact on net results, which is unchanged at DKK 7 billion, as you can see here in the table. We have also included a few lines from the cash flow statement. As with the P&L, there are a number of movements between the lines, but the most significant one is the change of interest paid on external financing. This used to be included in cash flow from operating activities, but it is now presented in the cash flow from financing activities. This means that free cash flow under IFRS 18 improved by DKK 1.67 billion, but this amount is offset in cash flow from financing activities.

Speaker #3: And the reclassifications have no impact on net results, which is unchanged at 7 billion Danish kroner, as you can see here in the table.

Speaker #3: We've also included a few lines from the cash flow statements. As with the P&L, there are a number of movements between the lines, but the most significant one is the change in interest paid on external financing.

Speaker #3: This used to be included in cash flow from operating activities, but it's now presented in cash flow from financing activities. This means that free cash flow under IFRS 18 improved by DKK 1.67 billion, but this amount is offset in cash flow from financing activities, so net cash flow is therefore unchanged.

Ulrica Fearn: Net cash flow is therefore unchanged. Zooming in on the CPM adjustments, these are shown in the last two columns in the table. The main adjustments relates to share of profit in associates, which has moved back into operating profit. Integration, restructuring costs, and impairment losses, which used to be accounted for in special items, are eliminated in CPM, as is the amortization of intangible assets recognized in the Britvic PPA. The CPM operating profit and net financial items differ slightly from the MPMs reported in February. The reason for this is that we have decided to align our internal reporting regarding trade loans, bank fees, and other financial fees with IFRS 18 to avoid unnecessary complexity between our internal reporting and external reporting.

Speaker #3: Now, zooming in on the CPM adjustments, these are shown in the last two columns in the table. The main adjustments relate to share of profit in associates, which has moved back into operating profit.

Speaker #3: Integration, restructuring costs, and impairment losses, which used to be accounted for in special items, are eliminated in CPM, as is the amortization of intangible assets recognized in the Britvic PPA.

Speaker #3: The CPM operating profit and net financial items differ slightly from the MPMs reported in February, and the reason for this is that we have decided to align our internal reporting regarding trade loans, bank fees, and other financial fees with IFRS 18, to avoid unnecessary complexity between our internal reporting and external reporting.

Speaker #3: And the net impact of these is approximately DKK 250 million, but they have no impact on net results or EPS. Then the small difference between 2025 adjusted net result and adjusted EPS MPM reported in February and the restated net profit and EPS CPM is due to certain special items, such as war-related costs in Ukraine and donations, which have been reclassified to operating costs, as well as some smaller tax adjustments related to one-offs.

Ulrica Fearn: The net impact of these are approximately DKK 250 million, but have no impact on net results for EPS. The small difference between 2025 adjusted net results and adjusted EPS MPM reported in February and the restated net profit and EPS CPM is due to certain special items, such as war-related costs in Ukraine and donations, which has been reclassified to operating costs and some smaller tax adjustments related to one-offs. Now on slide 4, where we have included the detailed bridge for H1 2026 from Note 1 in today's announcement, explaining the movements from IFRS 18 to CPMs. Hopefully, this bridge will enable you to understand the moving parts, and if not, IR will be more than happy to help after this call.

Speaker #3: So now on slide four, where we've included the detailed bridge for H1 2026 from note one in today's announcement, explaining the movements from IFRS 18 to CPMs.

Speaker #3: Hopefully, this bridge will enable you to understand the moving parts, and if not, IR will be more than happy to help after this call.

Speaker #3: As I've emphasized a couple of times already, the CPM figures are in accordance with our internally defined management performance measures and KPIs. And with all of that, back to you, Jakob.

Ulrica Fearn: As I have emphasized a couple of times already, the CPM figures are in accordance with our internally defined management performance measures and KPIs. With all of that, back to you, Jacob.

Speaker #1: Thank you very much, Ulrika. And I know a lot of people will regret this, but let's move away from the exciting world of accounting rules.

Jacob Aarup-Andersen: Thank you very much, Ulrika. I know a lot of people will regret this, but let's move away from the exciting world of accounting rules and let's talk about our CPM headline figures for the H1. Let's go to slide 5. Total volumes were up organically by 1.7%, driven by the very solid 6% growth for our growth categories. Revenue per hectolitre developed positively in all three regions, resulting in revenue per hectolitre growth for the group of 1%. The organic volume and the revenue per hectolitre growth led to revenue being up organically by 2.7% and us delivering revenue growth in all three regions. Operating profit was up organically by 5.9%, and the operating margin expanded by 30 basis points to 15.8%, positively impacted by the synergies in Britvic.

Speaker #1: And let's talk about our CPM headline figures for the first six months. So let's go to slide number five. Now, total volumes were up organically by 1.7%, driven by the very solid 6% growth in our growth categories.

Speaker #1: Revenue per hectare developed positively in all three regions, resulting in revenue per hectare growth for the group of 1%. The organic volume and the revenue per hectare growth led to revenue being up organically by 2.7%, and us delivering revenue growth in all three regions.

Speaker #1: Operating profit was up organically by 5.9%, and the operating margin expanded by 30 basis points to 15.8%, positively impacted by the synergies in Britvic.

Speaker #1: Slide six, and a quick reminder on the composition of our portfolio following the Britvic acquisition. Carlsberg is today a multi-beverage company, with about two-thirds of volume coming from beer products and one-third from soft drinks and other non-beer beverages.

Jacob Aarup-Andersen: Slide 6, a quick reminder on the composition of our portfolio following the Britvic acquisition. Carlsberg is today a multi-beverage company with about two-thirds of volume coming from beer products and one-third from soft drinks and other non-beer beverages. Looking at it from an alcohol versus alcohol-free perspective, the ratio is one-third non-alcohol, two-thirds with alcohol. Not surprisingly, Western Europe has the largest share of soft drinks, with 54% of total volumes coming from this category. Including AFB, the Alcohol-Free Portfolio accounts for almost 60% of volumes in Western Europe, and mainstream beer in Western Europe only accounts for 30%. The split is a little different in the other two regions, where beer still accounts for the majority of volumes. Slide 7, an update on growth categories and international brands, all of which delivered positive growth in the H1, except for one brand, 1664 Blanc.

Speaker #1: Looking at it from an alcohol versus alcohol-free perspective, the ratio is one-third non-alcohol to two-thirds with alcohol. Not surprisingly, Western Europe has the largest share of soft drinks.

Speaker #1: With 54% of total volumes coming from this category. Including AFB, the alcohol-free portfolio accounts for almost 60% of volumes in Western Europe, and mainstream beer in Western Europe only accounts for 30%.

Speaker #1: The split is a little different in the other two regions, where beer still accounts for the majority of volumes. Slide seven, and an update on growth categories and international brands.

Speaker #1: All of which delivered positive growth in the first half, except for one brand: 1664 Blanc. Soft drinks delivered strong organic growth of 9% and 13% in reported terms.

Jacob Aarup-Andersen: Soft drinks delivered strong organic growth of 9% and 13% in reported terms, with growth in Western Europe and Asia being supported by the Pepsi portfolio. Very strong growth in C&I was also positively impacted by Pepsi, and the volumes coming on board in Kazakhstan, since we are taking over the license back in Q4 last year. Excluding Kazakhstan, organic soft drinks volume growth was 4%. Our premium beer portfolio grew by 1% as mid-single digit growth in Western Europe and C&I was partly offset by lower volumes of local premium brands in China in Q2. We saw particularly strong growth for local premium brands such as Peroni in the UK, Eriksberg in Sweden, and Pirinsko in Bulgaria. Premium Carlsberg volumes grew by 16%, with strong growth seen in many markets, including China and India. Premium Tuborg volumes grew by 2%, supported by growth in China.

Speaker #1: Growth in Western Europe and Asia was supported by the Pepsi portfolio. Very strong growth in CNI was also positively impacted by Pepsi and by the volumes coming on board in Kazakhstan.

Speaker #1: Since we took over the license back in Q4 last year, excluding Kazakhstan, organic soft drinks volume growth was 4%. Our premium beer portfolio grew by 1%, as mid-single-digit growth in Western Europe and CNI was partly offset by lower volumes of local premium brands in China in Q2.

Speaker #1: We saw particularly strong growth for local premium brands such as Poretti in the UK, Eriksberg in Sweden, and Pirinsko in Bulgaria. Premium Carlsberg volumes grew by 16%, with strong growth seen in many markets, including China and India.

Speaker #1: And premium Tuborg volumes grew by 2%, supported by growth in China. Alcohol-free brews grew by 11%, thanks to strong growth in Western Europe of 15% and 6% in CNI.

Jacob Aarup-Andersen: Alcohol-free brews grew by 11%, thanks to strong growth in Western Europe of 15% and 6% in C&I. It is really encouraging to see the AFB volumes grew in almost all markets in these two regions. Albeit still a small category in Asia, we also saw strong growth in there. Calling out a few brands that did particularly well was Okocim in Poland, Tourtel in France, and Fix in Greece. The growth was supported by a high level of innovations, broadening consumer choice on occasions, like for instance, the Okocim 0.0% in Poland, the Somersby 0.0 in Germany, and Bilz Chill & Relax, our first functional AFB in the Swiss market. Beyond beer volumes grew by 1%, mainly due to strong growth for Garage, particularly in Poland. Innovations have been a key driver behind the growth of the Garage brand with new flavor types for Garage Hardcore in Poland and Kazakhstan.

Speaker #1: It's really encouraging to see the AFB volumes grow in almost all markets in these two regions. Albeit still a small category in Asia, we also saw strong growth there.

Speaker #1: Calling out a few brands that did particularly well was Okocim in Poland, Tourtel in France, and Fix in Greece. The growth was supported by a high level of innovations, broadening consumer choice on occasions.

Speaker #1: Like for instance, the Okocim Triple Zero in Poland, the Somersby Triple Zero in Germany, and Bill's Chill and Relax, our first functional AFB in the Swiss market.

Speaker #1: Beyond Beer volumes grew by 1%, mainly due to strong growth for Garage, particularly in Poland. Innovations have been a key driver behind the growth of the Garage brand, with new flavor types for Garage Hardcore in Poland and Kazakhstan.

Jacob Aarup-Andersen: Innovations have been a key driver behind the growth of the Garage brand with new flavor types for Garage Hardcore in Poland and Kazakhstan. Looking at the international brands, Pepsi volumes grew organically by 17%, supported by very good results in the UK, where the brand outperformed the market, and in markets such as Ireland, Sweden, Norway, and Cambodia. The strong volume growth was also supported by the volume ramp-up in Kazakhstan. Carlsberg volumes grew by 6%, thanks to the aforementioned mid-teens premium volume growth.

Speaker #1: Looking at the international brands, Pepsi volumes grew organically by 17%, supported by very good results in the UK, where the brand outperformed the market, and in markets such as Ireland, Sweden, Norway, and Cambodia.

Jacob Aarup-Andersen: Looking at the international brands, Pepsi volumes grew organically by 17%, supported by very good results in the UK, where the brand outperformed the market, and in markets such as Ireland, Sweden, Norway, and Cambodia. The strong volume growth was also supported by the volume ramp-up in Kazakhstan. Carlsberg volumes grew by 6%, thanks to the aforementioned mid-teens premium volume growth. Mainstream volumes were flat. Tuborg volumes grew by 3% with positive contributions from both the premium and mainstream portfolio. The latter was primarily due to double-digit growth in India. 1664 Blanc volumes grew in C&I and were flat in Western Europe, but this was offset by a decline in Asia, and the total brand volumes were -1%. Please turn to slide number 8. We are expanding our business, strengthening our portfolio in growth categories and growth markets.

Speaker #1: The strong volume growth was also supported by the volume ramp-up in Kazakhstan. Carlsberg volumes grew by 6%, thanks to the aforementioned mid-teens premium volume growth.

Speaker #1: Mainstream volumes were flat. Tuborg volumes grew by 3%, with positive contribution from both the premium and mainstream portfolios. The latter was primarily due to double-digit growth in India.

Jacob Aarup-Andersen: Mainstream volumes were flat. Tuborg volumes grew by 3% with positive contributions from both the premium and mainstream portfolio. The latter was primarily due to double-digit growth in India. 1664 Blanc volumes grew in C&I and were flat in Western Europe, but this was offset by a decline in Asia, and the total brand volumes were -1%. Please turn to slide number 8. We are expanding our business, strengthening our portfolio in growth categories and growth markets.

Speaker #1: 1664 Blanc volumes grew in CNI, were flat in Western Europe, but this was offset by a decline in Asia, and total brand volumes were minus 1%.

Speaker #1: So, please turn to slide number eight. We're expanding our business, strengthening our portfolio in growth categories and growth markets. Before going into details of the new Pepsi agreements, I want to highlight the strong performance of Britvic.

Jacob Aarup-Andersen: Before going into details of the new Pepsi agreements, I want to highlight the strong performance of Britvic. In line with our expectations, Britvic is positively adding to the group's revenue and profit growth. Thanks to top-line growth and synergy delivery, margins and ROI are improving. Britvic has truly been a brilliant addition to the Carlsberg Group. We advanced our PepsiCo partnership further. In April, we announced the takeover of the Pepsi license in Denmark, including the German border trade, Finland, and the three Baltic states from 1 January 2029. We are very excited about the long-term benefits of handling the Pepsi business across all Nordic and Baltic markets, where we have a very strong route to market, and we can create a Nordic Pepsi cluster.

Speaker #1: In line with our expectations, Britvik is positively adding to the group's revenue and profit growth, and thanks to top-line growth and synergy delivery, margins and ROIC are improving.

Speaker #1: Britvic has truly been a brilliant addition to the Carlsberg Group, and we advanced our PepsiCo partnership further. In April, we announced the takeover of the Pepsi license in Denmark, including the German border trade, Finland, and the three Baltic states, from the 1st of January 2029.

Speaker #1: We're very excited about the long-term benefits of having the Pepsi business across all Nordic and Baltic markets, where we have a very strong route to market and we can create a Nordic Pepsi cluster.

Speaker #1: In July, we announced the takeover of the Pepsi license in Azerbaijan, effective from January 1, 2027. So in only four and a half months, when the agreement with the current bottler expires.

Jacob Aarup-Andersen: In July, we announced the takeover of the Pepsi license in Azerbaijan from 1 January 2027, so in only four and a half months, when the agreement with the current bottler expires. The takeover is expected to double our volumes in the market, and we are seeing appealing growth opportunities for the Pepsi portfolio when combining the beer and soft drinks portfolio. Also, in July, we announced a new strategic joint venture with Sapporo in Southeast Asia and Hong Kong. The partnership builds on our successful cooperation with Sapporo since 2024 in Malaysia, Singapore, and Hong Kong, where this premium brand has been growing very fast. Supported by the strong provenance of Japanese brands in Asia, combined with our very strong route to market.

Speaker #1: The takeover is expected to double our volumes in the market, and we're seeing appealing growth opportunities for the Pepsi portfolio when combining the beer and soft drinks portfolios.

Speaker #1: Also in July, we announced a new strategic joint venture with Sapporo in Southeast Asia and Hong Kong. The partnership builds on our successful cooperation with Sapporo since 2024 in Malaysia, Singapore, and Hong Kong, where this premium brand has been growing very fast.

Speaker #1: Supported by the strong provenance of Japanese brands in Asia, combined with our very strong route to market. With the agreement, we extend the partnership to Vietnam, Laos, and Cambodia, securing the Sapporo brand in perpetuity in all of these markets covered by the JV.

Jacob Aarup-Andersen: With the agreement, we extend the partnership to Vietnam, Laos, and Cambodia, securing the Sapporo brand in perpetuity in all of these markets covered by the JV. We have also been granted a long-term brand license for Sapporo in the UK, strengthening our portfolio in the growing premium world beer segment. Gross cash proceeds to Carlsberg will be $643 million that we will use for debt and leverage reduction. Now slide 9 in Western Europe, where we saw 4% organic growth for our growth categories. Soft drinks and other beverages were up organically by 3.2%, while beer volumes declined by 3.9%, mainly due to lower mainstream beer volumes in Poland and Germany. Excluding these two markets, beer volumes grew slightly, and total volumes were flat organically.

Speaker #1: We've also been granted a long-term brand license for Sapporo in the UK, strengthening our portfolio in the growing premium world beer segment. Gross cash proceeds to Carlsberg will be $643 million, which we will use for debt and leverage reduction.

Speaker #1: Now, slide nine and Western Europe, where we saw 4% organic growth for our growth categories. Soft drinks and other beverages were up organically by 3.2%, while beer volumes declined by 3.9%.

Speaker #1: Mainly due to lower mainstream beer volumes in Poland and Germany. Excluding these two markets, beer volumes grew slightly, and total volumes were flat organically.

Speaker #1: Revenue per hectoliter improved organically by 1%, supported by price increases and a positive mix within beer, from the continued growth of premium and alcohol-free brews.

Jacob Aarup-Andersen: Revenue per hectolitre improved organically by 1%, supported by price increases and positive mix within beer from the continued growth of premium and alcohol-free brews. Channel mix was negative due to the continued soft on-trade. Organic revenue growth was 0.9%, while total revenue growth was 2.7% due to the impact in January from the Britvic acquisition. Organic operating profit growth was a solid 8.7%, supported by the synergies from Britvic, tight cost control, and good results in Super Bock, our associate in Portugal. The operating profit contribution from acquisitions was flat, as this impact related to the first 2 weeks of January prior to Britvic being consolidated from 16 January 2025. We are very pleased with the 80 basis points of margin progression, supported by strong synergy delivery in Britvic, which has driven a significant improvement in our UK margins.

Speaker #1: Channel mix was negative due to the continued soft on-trade. Organic revenue growth was 0.9%, while total revenue growth was 2.7%, due to the impact in January from the Britvic acquisition.

Speaker #1: Organic operating profit growth was a solid 8.7%, supported by the synergies from Britvic, tight cost control, and good results in Super Bock, our associate in Portugal.

Speaker #1: The operating profit contribution from acquisitions was flat, as this impact related to the first two weeks of January, prior to Britvic being consolidated from January 16, 2025.

Speaker #1: We're very pleased with the 80 bps of margin progression, supported by strong synergy delivery in Britvic, which has driven a significant improvement in our UK margins.

Speaker #1: So let me give a bit of color on the markets, and starting with the UK, we saw mid-single-digit volume growth for soft drinks.

Jacob Aarup-Andersen: Let me give a bit of color on the markets, starting with the UK, we saw a mid-single-digit volume growth for soft drinks. The Pepsi portfolio did very well, particularly Pepsi and Pepsi Max, which outperformed the market both in off-trade and in on-trade, and in volume and in value. We also saw exciting first results for Poppi, which was launched in March. Beer volumes grew by low single digits, driven by Peroni, 1664 Blanc, and the introduction of the Greek brand, Mythos. Carlsberg brand volumes declined due to competitors reformulating their recipes to enable their products to enter the lower ABV mainstream segment. Our Nordic businesses delivered a solid set of numbers with growth in all markets except Finland. Very positively, the growth categories delivered good progress.

Speaker #1: The Pepsi portfolio did very well, particularly Pepsi and Pepsi Max, which outperformed the market both in off-trade and in on-trade, and in volume and in value.

Speaker #1: We also saw exciting first results for Puppy, which was launched in March. Beer volumes grew by low single digits, driven by Poretti, 1664, and the introduction of the Greek brand Mützes.

Speaker #1: Carlsberg brand volumes declined due to competitors reformulating their recipes to enable their products to enter the lower-ABV mainstream segment. Our Nordic businesses delivered a solid set of numbers, with growth in all markets except Finland.

Speaker #1: Very positively, the growth categories delivered good progress. Total volumes in the Nordics grew by low single digits, as the positive development for the growth categories offset lower mainstream volumes.

Jacob Aarup-Andersen: Total volumes in the Nordics grew by low single digits as the positive development for the growth categories offset the lower mainstream volumes. The Pepsi portfolio grew in Norway and Sweden. Total beer volumes in France and Switzerland were up, driven by premium and alcohol-free brews, partly offset by slightly lower mainstream volumes. In Poland, alcohol-free brews continued to grow. We saw strong growth for Garage and Beyond Beer and flat premium volumes. Total volumes in Poland were impacted by the soft market and some market share loss in the lower mainstream segment. Please go to slide number 10 on Asia, where our volumes were flat for the H1, reflecting beer volume development of -0.9% and soft drinks and other beverages growth of 6.8%. That impacted the growth for our growth categories of 1%.

Speaker #1: The Pepsi portfolio grew in Norway and Sweden. Total beer volumes in France and Switzerland were up, driven by premium and alcohol-free brews, partly offset by slightly lower mainstream volumes.

Speaker #1: In Poland, alcohol-free brews continued to grow. We saw strong growth for Garage and Beyond Beer, and flat premium volumes. Total volumes in Poland were impacted by a soft market and some market share loss in the lower mainstream segment.

Speaker #1: Please go to slide number 10. In Asia, our volumes were flat for the first half, reflecting beer volume development of minus 0.9%, and soft drinks and other beverages growth of 6.8%.

Speaker #1: The latter was positively impacted by the growth that benefited our growth categories by 1%. Beer volumes were impacted by a soft beer market and severe weather conditions in China specifically.

Jacob Aarup-Andersen: Beer volumes were impacted by a soft beer market and severe weather conditions in China specifically. Revenue per hectolitre increased organically by 2%, and consequently, organic revenue development was +1.7%. The positive revenue per hectolitre development was supported by brand, mix, and by price increases. The depreciation of the Chinese currency in particular meant that the total revenue growth was flat. Operating profit grew organically by 3.0% thanks to flat cost of sales, supported by Fund the Journey savings and prudent SG&A management. Adverse currency movements meant that operating profit CPM growth was 1.7%. Our operating margin in Asia improved by 40 basis points to 26.3%. Let's look at a couple of the markets here. In China, the beer market remained soft.

Speaker #1: Revenue per hectoliter increased organically by 2%, and consequently, organic revenue development was 1.7% positive. The positive revenue per hectoliter development was supported by brand, mix, and price increases.

Speaker #1: The depreciation of the Chinese currency, in particular, meant that total revenue growth was flat. Operating profit grew organically by 3%, thanks to a flat cost of sales, supported by Funding Our Journey savings and prudent SG&A management.

Speaker #1: Adverse currency movements meant that operating profit CPM growth was 1.7%. Our operating margin in Asia improved by 40 basis points to 26.3%. Let's look at a couple of the markets here.

Speaker #1: In China, the beer market remained soft. In addition, our volumes in Q2, particularly in June, were severely impacted by very bad weather, including heavy rainfall and flooding across the central and southern parts of the country.

Jacob Aarup-Andersen: In addition, our volumes in Q2, particularly in June, were severely impacted by very bad weather, including heavy rainfalls and floodings across the central and southern parts of the country. This naturally affected consumer uptake in our strongholds, especially Chongqing and several of our big cities. We continued to see very strong growth for Carlsberg, which grew by more than 20%, and we also saw increasing Tuborg volumes. Due to lower volumes for the Chongqing brand, our local mainstream volumes declined. In Laos, our volumes increased by mid-single digits, benefiting from improved macroeconomic conditions and the beverage market returning to growth. Our business in Vietnam continued the positive trajectory from Q1 and delivered volume growth of more than 20% for the H1. The strong growth was on the back of easy comps, market growth, and an increase in export volumes.

Speaker #1: This naturally affected consumer uptake in our strongholds, especially Chongqing and several of our big cities. We continue to see very strong growth for Carlsberg, which grew by more than 20%, and we also saw increasing Tuborg volumes.

Speaker #1: Due to lower volumes for the Chongqing brand, our local mainstream volumes declined. In Laos, our volumes increased by mid-single digits, benefiting from improved macroeconomic conditions and the beverage market returning to growth.

Speaker #1: Our business in Vietnam continued the positive trajectory from Q1 and delivered volume growth of more than 20% for the half year. The strong growth was driven by easy comps, market growth, and an increase in export volumes.

Speaker #1: Our markets here stabilized, driven by HUDA, which is our large mainstream brand in the central part of the country. Slide 11—and Central and Eastern Europe and India—where we continue to see very good performance and even an acceleration of volume growth in Q2 compared with Q1.

Jacob Aarup-Andersen: Our market share stabilized, driven by Huda, which is our large mainstream brand in the central part of the country. Slide 11, Central and Eastern Europe and India, where we continued to see very good performance and even an acceleration of volume growth in Q2 compared with Q1. The region delivered organic volume growth of 6.2%, mainly driven by soft drinks, which grew strongly by 34%, positively impacted by the ramp-up of the Pepsi business in Kazakhstan. Beer volumes grew by 1.1% thanks to strong growth in India and Nepal, partly offset by weak volumes in Ukraine. Revenue per hectolitre grew organically by 3%, thanks to price increases and a positive product mix, resulting in organic revenue growth of 9.2%. Total revenue was up by 5.7% due to adverse currency movements, mainly in India and Ukraine.

Speaker #1: The region delivered organic volume growth of 6.2%, mainly driven by soft drinks, which grew strongly by 34%, positively impacted by the ramp-up of the Pepsi business in Kazakhstan.

Speaker #1: Beer volumes grew by 1.1%, thanks to strong growth in India and Nepal, partly offset by weak volumes in Ukraine. Revenue per hectoliter grew organically by 3%, thanks to price increases and a positive product mix, resulting in organic revenue growth of 9.2%.

Speaker #1: Total revenue was up by 5.7%, despite adverse currency movements, mainly in India and Ukraine. The region delivered good organic operating profit growth of 7.8%, thanks to the strong top line and easy comps, as the first half of '25 was impacted by certain one-off events.

Jacob Aarup-Andersen: The region delivered good organic operating profit growth of 7.8%, thanks to the strong top line and easy comms as the H1 of 2025 was impacted by certain one-off events. Operating margin declined by 40 basis points due to the margin dilution from the large Pepsi business in Kazakhstan, which as you know, is not profitable in 2026. Let's also here look at a couple of the markets. In India, the very positive trajectory continued. Our business delivered mid-teens percentage volume growth in the H1 with an acceleration in Q2 compared to Q1. Growth was driven by both Carlsberg and Tuborg. 1664 Blanc grew strongly from a low base as we continued to expand distribution. The work on the IPO continues and as you may have seen, Carlsberg India in July filed a so-called pre-filed draft red herring prospectus with the Indian authorities.

Speaker #1: Operating margin declined by 40 basis points due to margin dilution from the large Pepsi business in Kazakhstan, which, as you know, is not profitable in 2026.

Speaker #1: Let's also here look at a couple of the markets. In India, the very positive trajectory continued. Our business delivered mid-teens percentage volume growth in the first half, with an acceleration in Q2 compared to Q1.

Speaker #1: Growth was driven by both Carlsberg and Tuborg. 1664 Blanc grew strongly from a low base as we continue to expand distribution. The work on the IPO continues and, as you may have seen, Carlsberg India in July filed a so-called pre-filed draft red herring prospectus with the Indian authorities.

Speaker #1: And before you ask additional questions, we cannot provide further comments on the India performance or the process following the filing. We also saw good growth in Nepal, where volumes were up in the mid-teens.

Jacob Aarup-Andersen: Before you ask additional questions, we cannot provide further comments to the India performance or the process following the filing. We also saw good growth in Nepal, where volumes were up in the mid-teens. This was due to good progress for both the local Gorkha brand and for Tuborg and Carlsberg. We are very excited by the Pepsi expansion in Kazakhstan. The construction of the new soft drinks plant is on track, and we expect to start up production by the end of Q3. Total volume growth in the H1 was 70%, that is 70%, driven by soft drinks as beer volumes were flattish. In Ukraine, the market remains severely impacted by the war, and our volumes were down mid-single digits as growth for premium and AFB were offset by lower mainstream volumes.

Speaker #1: This was due to good progress for both the local Gorkha brand and for Tuborg and Carlsberg. We're very excited about the Pepsi expansion in Kazakhstan.

Speaker #1: The construction of the new soft drinks plant is on track, and we expect to start up production by the end of Q3. Total volume growth in the first half was 7.0%, driven by soft drinks, as beer volumes were flattish.

Speaker #1: In Ukraine, the market remains severely impacted by the war, and our volumes were down mid-single digits, as growth for premium and AFB was offset by lower mainstream volumes.

Speaker #1: Volumes in our export and license business returned to growth in Q2, led by solid growth for Carlsberg in license markets. And with that, over to you, Ulrika.

Jacob Aarup-Andersen: Volumes in our export and license business returned to growth in Q2, led by solid growth for Carlsberg in license markets. With that, over to you, Ulrika.

Speaker #2: Thank you, Jakob. And now, please go to slide 12 for some more details on the P&L. For the sake of good order, please note that my comments will be on CPM figures.

Ulrica Fearn: Thank you, Jacob. Now please go to slide 12 for some more details on the P&L. For the sake of good order, please do note that my comments will be on CPM figures. Revenue amounted to DKK 47.1 billion, which was up 2.7% organically, driven by both volume and revenue per hectolitre. The impact from acquisitions was +1.2% and related to Britvic, which was consolidated from 16 January 2025. The acquisition impact was offset by FX, which was -1.3% and mainly driven by the Polish, Chinese, and Ukrainian currencies. Cost of sales increased slightly. Gross profit grew organically by 1.8%, and gross margin was 45.7% and was impacted by the Pepsi business in Kazakhstan and acquisition of Britvic. Operating profit grew organically by 5.9%, and operating margin increased by 30 basis points to 15.8%.

Speaker #2: So revenue amounted to 47.1 billion Danish kroner, which was up 2.7% organically, driven by both volume and revenue per hectare liter. And the impact from acquisitions was plus 1.2% and related to Britvik, which was consolidated from January the 16th, 2025.

Speaker #2: And the acquisition impact was offset by FX, which was minus 1.3% and mainly driven by the Polish, Chinese, and Ukrainian currencies. Cost of sales increased slightly; gross profit grew organically by 1.8%, and gross margin was 45.7%. It was impacted by the Pepsi business in Kazakhstan and the acquisition of Britvic.

Speaker #2: Operating profit grew organically by 5.9%, and operating margin increased by 30 basis points to 15.8%. As part of IFRS 18, net financials are now presented as investing income and expenses, and financing income and expenses, respectively.

Ulrica Fearn: As part of IFRS 18, net financials are now presented as investing income and expenses and financing income and expenses, respectively. In note 5 in the H1 statements, we provide a reconciliation of these two lines and the net amount excluding FX, which was -DKK 990 million. The effective tax rate was 22.7%, while the IFRS reported tax rate was 23%. Net profit was up 6% to DKK 4.3 billion, and earnings per share were up 6% to DKK 32.4. Now to slide 13, please. Here you see free operating cash flow amounted to DKK 3.7 billion. This was an increase of DKK 776 million, positively impacted by the higher EBITDA and a smaller working capital outflow than in H1 2025, partly offset by higher CapEx.

Speaker #2: And in note 5 in the half-year statement, we provide a reconciliation of these two lines and the net amount excluding FX, which was minus DKK 990 million.

Speaker #2: The effective tax rate was 22.7%, while the IFRS reported tax rate was 23%. Net profit was up 6% to DKK 4.3 billion, and earnings per share were up 6% to DKK 32.4.

Speaker #2: Now to slide 13, please. So here you see free operating cash flow amounted to DKK 3.7 billion, and this was an increase of DKK 776 million, positively impacted by the higher EBITDA and a smaller working capital outflow than in H1 2025, partly offset by higher capex.

Speaker #2: And the change in total working capital was minus DKK 859 million, which was almost DKK 900 million better than in 2025. And looking at the 12-month average trade working capital to revenue, this was minus 15.6%, which was at the same level as the end of year 2025.

Ulrica Fearn: The change in total working capital was -DKK 859 million, which was almost DKK 900 million better than in 2025. Looking at the 12-month average trade working capital to revenue, this was -15.6%, which was at the same level as the end of year 2025. CapEx amounted to DKK 3.6 billion and included capacity expansion and sales investment linked to the Pepsi business in Kazakhstan and also capacity expansions in India and Laos. Net interest-bearing debt to EBITDA was reduced significantly from 3.9x to 3x, supported by solid operating free cash flow and the issuance of €1.8 billion of hybrid bonds in early May. The proceeds were used to repurchase outstanding bonds under our EMTN program, maturing in October 2026 and February and June in 2027.

Speaker #2: Capex amounted to DKK 3.6 billion and included capacity expansion and sales investment linked to the Pepsi business in Kazakhstan, as well as capacity expansions in India and Laos.

Speaker #2: Net interest-bearing debt to EBITDA was reduced significantly, from 3.9 times to 3 times, supported by solid operating free cash flow and the issuance of €1.8 billion of hybrid bonds in early May.

Speaker #2: And the proceeds were used to repurchase outstanding bonds under our EMTM program, maturing in October 2026, and February and June 2027. Accounting-wise, the hybrid bonds are accounted for as equity and are presented in a separate line above non-controlling interest in the statement of financial position.

Ulrica Fearn: Accounting-wise, the hybrid bonds are accounted for as equity and presented in a separate line above non-controlling interest in the statement of financial position. However, the credit rating agencies treat only 50% as equity and the remainder as interest bearing debt. Consequently, we use the same methodology when calculating net interest bearing debt and financial leverage. Lastly, the 12-month rolling return on invested capital improved by 20 basis points versus year-end 2025 to 10.8%. Compared with H1 2025, the development was impacted by Britvic and capacity expansion in Kazakhstan. Now please go to slide 14 and the earnings outlook for the year, which we are narrowing towards the upper end of the previous expectation. In H1, we delivered solid top line and earnings growth despite the challenging and volatile environment.

Speaker #2: However, the credit rating agencies treat only 50% as equity, and the remainder as interest-bearing debt. Consequently, we use the same methodology when calculating net interest-bearing debt and financial leverage.

Speaker #2: So lastly, the 12-month rolling return on invested capital improved by 20 basis points versus year-end 2025 to 10.8%. And compared with H1 2025, the development was impacted by Britvic and capacity expansion in Kazakhstan.

Speaker #2: So now, please go to slide 14 and the earnings outlook for the year, which we are narrowing towards the upper end of the previous expectation.

Speaker #2: In half 1, we delivered solid top-line and earnings growth despite the challenging and volatile environment. For the remainder of the year, we're not assuming any material changes to the external environment or consumer sentiment.

Ulrica Fearn: For the remainder of the year, we are not assuming any material changes to the external environment or consumer sentiment. Despite this, we expect to continue our earnings growth trajectory in H2. Let me provide some color on what we have seen so far in Q3 and our assumptions per region for H2. In Western Europe, we are lapping a good July last year, but the warm weather in multiple markets again this year supported volumes during the summer. In Asia, we do not expect the soft beer market, particularly in China, to improve, and the bad weather at the end of Q2 continued in the first part of Q3. In C&I, the positive trends from H1 have continued into the beginning of Q3.

Speaker #2: But despite this, we expect to continue our earnings growth trajectory in H2. So let me provide some color on what we have seen so far in Q3 and our assumptions per region for H2.

Speaker #2: In Western Europe, we're lapping a good July last year, but the warm weather in multiple markets again this year supported volumes during the summer.

Speaker #2: In Asia, we don't expect a soft we do not expect a soft beer market, particularly in China, to improve, and the bad weather at the end of Q2 continued in the first part of Q3.

Speaker #2: In CNI, the positive trends from H1 have continued into the beginning of Q3. So we're not assuming any major change in COGS per hectoliter outlook for the year, despite the higher spot prices on some inputs, including aluminium and energy.

Ulrica Fearn: We are not assuming any major changes in COGS per hectoliter outlook for the year, despite the higher spot prices on some inputs, including aluminum and energy. As always, there will be significant variations between markets. The Britvic integration is progressing well, and we are very pleased that we are now expected to achieve approximately 80% of total synergies by the end of this year. This is well ahead of our initial expectations and even at a higher speed than anticipated at the beginning of the year. Based on this, we are updating our earnings guidance range for 2026 and now expecting organic growth in operating profit CPM of 4% to 6%, compared to the previous guidance of 2% to 6%. Please note that the 2025 operating profit CPM differs slightly from the MPM figure that was used in our guidance in late April.

Speaker #2: And, as always, there will be significant variations between markets. The Britvic integration is progressing well, and we are very pleased that we're now expected to achieve approximately 80% of total synergies by the end of this year.

Speaker #2: And this is well ahead of our initial expectations, and even at a higher speed than anticipated at the beginning of the year. Based on this, we're updating our earnings guidance range for 2026 and now expecting organic growth in operating profits, CPM, of 4% to 6%, compared to the previous guidance of 2% to 6%.

Speaker #2: Please note that the 2025 operating profit CPM differs slightly from the MPM figure that was used in our guidance in late April. The difference relates to the reclassification of bank fees and trade loans, which reduce operating profit but improve net financials, resulting in zero impact on net profit.

Ulrica Fearn: The difference relates to the reclassification of bank fees and trade loans that reduce operating profit but improve net financials, resulting in zero impact on net profit. Based on yesterday's spot rates, we assume no currency impacts on operating profit, and this is the same as our previous assumption. We are lowering our expectation on net finance costs, excluding FX, to around DKK 1.8 billion. The reduction, compared to our previous expectation of DKK 2.2 billion, is due to the redemption of EMTN bonds following the hybrid bond issuance in Q2 and the reclassification of bank fees and trade loans. Note that interest on the hybrid bonds do not show up in the P&L but are presented separately in the allocation of net profit in the line called interest payments to hybrid bondholders.

Speaker #2: Based on yesterday's spot rates, we assume no currency impacts on operating profit, and this is the same as our previous assumption. We are lowering our expectation on net finance costs excluding FX to around DKK 1.8 billion. The reduction compared to our previous expectation of DKK 2.2 billion is due to the redemption of EMTN bonds following the hybrid bond issuance in Q2, and the reclassification of bank fees and trade loans.

Speaker #2: And note that interest on the hybrid bonds does not show up in the P&L, but is presented separately in the allocation of net profit, in the line called 'interest payments to hybrid bondholders.'

Speaker #2: Interest on hybrid bonds is not accrued, but recognized at the time of payment, and there is only one payment on one of the hybrid bonds in 2026, and that's in August.

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

Speaker #2: Our assumption for CAPEX remains at DKK 6 to 7 billion, and our assumption for tax rate is unchanged at 23%. And with that, back to you, Jakob.

Speaker #1: Thank you very much, Ulrika. It's time for Q&A, but just before opening up for that, let me summarize the key messages. First and foremost, we delivered solid top-line and solid earnings growth.

Jacob Aarup-Andersen: Thank you very much, Ulrika, and it is time for Q&A. Just before opening up for that, let me summarize the key messages. First and foremost, we delivered solid top line and solid earnings growth. We are, as Ulrika just said, delivering the Britvic synergies faster than expected, and we are making strong progress on leverage reduction. We have also been expanding our Pepsi partnerships to more markets, and we are narrowing our full year guidance for organic operating profit growth towards the upper end of our previous guidance range. Now to Q&A. As always, please note that we will limit the number of questions to two per person to ensure that as many of you get a chance to get through. You are always welcome to rejoin the queue. With that, over to you, operator, and the Q&A.

Speaker #1: We are, as Ulrika just said, delivering the Britvic synergies faster than expected, and we're making strong progress on leverage reduction. We've also been expanding our Pepsi partnerships to more markets, and we're narrowing our full-year guidance for organic operating profit growth towards the upper end of our previous guidance range.

Speaker #1: And now to Q&A. As always, please note that we will limit the number of questions to two per person to ensure that as many of you as possible get a chance to participate.

Speaker #1: You're always welcome to rejoin the queue. With that, over to you, operator, for the Q&A.

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their telephone.

Operator 2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. Today's first question comes from Andrea Pistacchi from Bank of America. Please go ahead.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. Today's first question comes from Andrea Pistacchi from Bank of America. Please go ahead.

Speaker #3: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.

Speaker #3: Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time.

Speaker #3: And today's first question comes from Andrea Pistacci from Bank of America. Please go ahead.

Speaker #1: Yeah, good morning, Jakob, Ulrika, and Peter. So, my two questions are the following. I'll start with China. I was hoping that you could unpack a bit more the Q2 performance in China.

Andrea Pistacchi: Yep. Good morning, Jacob, Ulrika, and Peter. My two questions are the following. I will start with China. I was hoping that you could unpack a bit more the Q2 performance in China. Do you have possibly a sense of what the severe weather impact may have been? You normally give us a split big cities versus strongholds performance. Then the inventory situation, given the likely poor sell-out in China, how has this left distributor stock levels? You already told us how trading has started for Q3, which sounds still a bit soft. My second question probably for Ulrika is on the guidance. You delivered close to 6% organic EBIT in H1 and you narrowed the guidance, which implies, I think, around 2% to 6% for the second half.

Speaker #1: Do you possibly have a sense of what the severe weather impact may have been? Could you give us—since you normally give us a split—big cities versus strongholds?

Speaker #1: Performance, and then the inventory situation given the likely poor sell-out in China. How has this left distributor stock levels? And you already told us how trading has started for Q3, which still sounds a bit soft.

Speaker #1: My second question, probably for Ulrika, is on the guidance. So, you delivered close to 6% organic EBIT in H1, and you narrowed the guidance, which implies, I think, around 2% to 6% for the second half.

Speaker #1: So, could you please talk through some of the key drivers that are likely to shape the second half relative to the first half? And, thinking on the positive side, you'll be annualizing the higher marketing spend in China.

Andrea Pistacchi: Could you talk please through some of the key drivers that are likely to shape H2 relative to H1? I am thinking on the positive side you will be annualizing the higher marketing spend in China. Kazakhstan profitability probably should start to improve once you go live with the factory. I think you said that the COGS inflation will not be higher in H2 versus H1. All of this would seem to support another solid EBIT delivery in H2. Against this, are there any meaningful headwinds we should be aware of that could explain why profit growth would moderate in the second half? Thank you.

Speaker #1: Kazakhstan profitability probably should start to improve once you go live with the factory. I think you said that the COGS inflation won't be higher in H2 versus H1.

Speaker #1: So, all of this would seem to support another solid EBIT delivery in H2. But against this, are there any meaningful headwinds we should be aware of that could explain why profit growth would moderate in the second half?

Speaker #1: Thank you.

Speaker #4: Thank you, Andrea. Let me start on China, and then Ulrika can speak to the guidance element. Yeah, no, listen, I can give you a bit more color, of course.

Jacob Aarup-Andersen: Thank you, Andrea. Let me start on China, and then Ulrika can speak to the guidance element. Well, listen, I can give you a bit more color, of course, and unfortunately, it is impossible to separate hot and cold water in terms of what is weather impact and what is weak consumer, et cetera. No doubt, if we look at Q2, when we look at the already soft consumer, which we have seen for quite a while, as you know, we then had that significant impact from weather. I have to say, it is pretty dramatic also, if you have been following the pictures of the events as they unfolded in June in China and into early July. Of course, that has an impact. You can say we are seeing a hit to some of our strongholds, but it is also very clear that this is not a Carlsberg thing.

Speaker #4: And unfortunately, it's impossible to separate hot and cold water in terms of what's weather impact and what's weak consumer, etc. But no doubt, if we look at Q2, when we look at the already soft consumer, which we've seen for quite a while, as you know, we then had that significant impact from weather.

Speaker #4: And I have to say, it's pretty dramatic also if you've been following the pictures of the events as they unfolded in June in China.

Speaker #4: And into early July. And, of course, that has an impact—you can say we're seeing a hit to some of our strongholds. But it's also very clear that this is not a Carlsberg thing.

Speaker #4: This is quite clearly a market thing. We’re seeing everyone being hit by this. We can separate it, but if you look at our strongholds versus big cities—which is also what you were asking about—strongholds are down a bit, less than mid-single digit, while the big cities are flat.

Jacob Aarup-Andersen: This is quite clearly, it is a market thing. We are seeing everyone being hit by this. We cannot separate it, but if you look at our strongholds versus big cities, which is also where you were asking around. Strongholds are down a bit less than mid-single digit, while the big cities are flat. It tells you something around the fact that some of our strongholds were hit harder, which is also what we were pointing to. Big cities in general, we have an underlying good growth rate. The weather impact takes that underlying good growth rate down, and therefore overall, you end up with the number you ended up with. We are not seeing this as any sort of step change.

Speaker #4: And it tells you something around the fact that some of our strongholds were hit harder, which is also what we were pointing to. Big cities in general—we have an underlying good growth rate.

Speaker #4: So the weather impact takes that underlying good growth rate down, and therefore, overall, you end up with the number you ended up with. We are not seeing this as any sort of step change. It's, of course, unfortunate that we have significant adverse weather across China.

Jacob Aarup-Andersen: It is, of course, unfortunate that we have significant adverse weather across China going into a summer season where people have been building up stock for a strong summer season. This also happened a couple of years ago, and listen, this is life. We deal with it. We do not see that as creating any longer-term structural drama. Of course, it is a short-term headwind we have to deal with, just like the rest of the players in the industry have. It is also why I have to say, I am very pleased to see the performance of the overall group, because it also shows despite this weak impact in China, we still deliver good results across the group. It says something around the resilience and diversification we built up over the recent years. You asked about the start to Q3.

Speaker #4: Going into a summer season where people have been building up stock for a strong summer season. This also happened a couple of years ago when—listen, this is life.

Speaker #4: We deal with it. We don't see that as creating any longer-term structural drama. But, of course, it's a short-term headwind we have to deal with, just like the rest of the players in the industry have.

Speaker #4: It's also why I have to say I'm very pleased to see the performance of the overall group, because it also shows that despite this weak impact in China, we still deliver good results across the group.

Speaker #4: And this has something to do with the resilience and diversification we've built up over recent years. You asked about the start to Q3. Yeah, there's no doubt that, of course, on your question on inventories with distributors, etc., it's a given that distributors will have more inventory than initially expected because of the lack of demand, especially in on-trade, because on-trade was hit very hard.

Jacob Aarup-Andersen: Yeah, there's no doubt that, of course, on your question on inventories and with distributors, et cetera, of course, it's a given that distributors will have more inventory than initially expected because of the lack of demand, especially in on-trade, because especially on-trade was hit very hard. That will have an impact in Q3 for the whole industry. You have to expect that Q3 will be soft in China. I think that's a given. I think that's also expected by now. The system will have worked through those inventories, and then we can get back to a more normal environment again. Of course, assuming no other weather impacts. Just to underline, listen, strategically and financially, our Chinese business is in a great shape.

Speaker #4: So, that will have an impact in Q3 for the whole industry. So you have to expect that Q3 will be soft in China. I think that's a given.

Speaker #4: I think that's also expected by now. And then the system will have worked through those inventories, and we can get back to a more normal environment again.

Speaker #4: Of course, assuming no other weather impacts. Just to underline—listen, strategically and financially, our Chinese business is in great shape. We're delivering very good profitability and very good cash flow.

Jacob Aarup-Andersen: We're delivering very good profitability, very good cash flow, and we have the highest EBIT margins in the market, strong brands, and you know the commercial track record. A setback on one or two quarters due to heavy weather hitting us, I think that's, for us, no drama, and we think that we will return to the previous structural position post these impacts. But of course, we'll have a softish Q3 as this is worked through the system. Ulrika, over to you on the guidance side.

Speaker #4: And we have the highest EBIT margins in the market, strong brands, and you know the commercial track record. So, a setback in one or two quarters due to heavy weather hitting us, I think that's, for us, no drama.

Speaker #4: And we think that we will return to the previous structural position post these impacts. But, of course, we'll have a softer Q3 as this has worked through the system.

Speaker #1: Ulrika, over to you on the guidance side.

Speaker #2: Yes, thank you, Andrea. So, on the guidance, as you said, yes, we now have visibility into the big summer months and the start of Q3.

Ulrica Fearn: Yes. Thank you, Andreas. On the guidance, as you said, yes, we now have visibility into the big summer months and the start of Q3, and that's allowed us to increase the guidance range up to 4% to 6%. It is the good start in Q3 in Western Europe. It is the good start in the rest of Asia, in Laos and Vietnam, and then C&I continuing the similar trends as in H1 that's allowed us to do that. But also, the visibility into H2, which does not include anything that you probably have missed, which was your question. I will say, commenting on the two factors you brought forward, one was Kazakhstan.

Speaker #2: And that's allowed us to increase the guidance range up to 4 to 6%. And it is a good start in Q3 in Western Europe.

Speaker #2: It is a good start in the rest of Asia, in Laos and Vietnam, and then CNA, continuing, CNI continuing the similar trends as in half one.

Speaker #2: That's allowed us to do that. But also the visibility into half two, which does not include anything that you probably have missed—which was your question.

Speaker #2: I will say, commenting on the two factors you brought forward, one was Kazakhstan. Yes, we will start ramping up production in the second half in Kazakhstan.

Ulrica Fearn: Yes, we will start ramping up production in H2 in Kazakhstan, but it will just be ramped up from the end of Q3, so I wouldn't expect any big profitability coming from that in this year. You mentioned also COGS. They will be pretty much in line with H1, so flattish, but there is a little bit up, so we won't get a big support from that in H2. You said H1 and H2. There are some movements between the two halves which might be worthwhile pointing out. We do have a couple of insurance payments in H2 that we need to lap, which makes it a little bit more difficult. Western Europe and C&I actually had easy comps in H1, because they had some supply chain disruptions last year, like the Italy flooding that we talked about.

Speaker #2: But it will just be ramped up from the end of Q3, so I wouldn't expect any significant profitability coming from that this year.

Speaker #2: And you mentioned also COGS. They will be pretty much in line with H1, so flattish, but there is a little bit up, so we won't get a big support from that in H2.

Speaker #2: We have; however, there are some— you said half one and half two—there are some movements between the two halves which might be worthwhile pointing out.

Speaker #2: We do have a couple of insurance payments in H2 that we need to lap, which makes it a little bit more difficult. Western Europe and CNI actually had easy comps in H1 because they had some supply chain disruptions last year, like the Italy flooding that we talked about.

Speaker #2: And then, of course, Jakob talked about the China softness as well. So those are the big moving parts in why we're moving forward to the 4% to 6%.

Ulrica Fearn: And then, of course, Jacob talked about the China softness as well. Those are the big moving parts in why we are moving forward to the 4% to 6%.

Speaker #1: Got it. Thank you very much.

Jacob Aarup-Andersen: Got it. Thank you very much.

Andrea Pistacchi: Got it. Thank you very much.

Speaker #4: Thank you.

Ulrica Fearn: Thank you.

Jacob Aarup-Andersen: Thank you.

Speaker #3: The next question comes from Celina Panuti from J.P. Morgan. Please go ahead.

Operator 2: The next question comes from Celine Pannuti from JP Morgan. Please go ahead.

Operator: The next question comes from Celine Pannuti from JP Morgan. Please go ahead.

Speaker #5: Thank you. Good morning. I have two questions. First, on Europe—thank you for giving us a bit of a steer on the beginning of the quarter.

Celine Pannuti: Thank you. Good morning. My two questions. First on Europe. Thank you for giving us a bit of a steer on the beginning of the quarter. Could you go into a bit more details in terms of the underlying demand on beer in the key regions, as well as the overall competitive performance in your key markets? My second question may be following on what you just said on COGS inflation. Obviously, for this year you have been hedged. How do you see the COGS inflation into 2027 and the ability to pass this on, and given the consumer environment, I am thinking about Europe, the pricing ability? Thank you.

Speaker #5: Could you go into a bit more detail in terms of the underlying demand on beer in the key regions, as well as the overall competitive performance in your key markets?

Speaker #5: And my second question may be following up on what you just said about COGS inflation. Obviously, for this year, you have been hedged. How do you see the COGS inflation in 2027?

Speaker #5: And the ability to pass this on, and given the consumer environment—I'm thinking about Europe—the pricing ability. Thank you.

Speaker #4: Celine, thank you so much. You said underlying demand of beer in different regions, but your question was specifically on Europe—is that correct?

Jacob Aarup-Andersen: Celine, thank you so much. You said underlying demand of beer in different regions, but your question was specifically on Europe, is that correct?

Jacob Aarup-Andersen: Celine, thank you so much. You said underlying demand of beer in different regions, but your question was specifically on Europe, is that correct? Just to clarify.

Speaker #5: On Europe, on Europe. Yes.

Celine Pannuti: On Europe.

Celine Pannuti: Just to clarify.

Celine Pannuti: On Europe, yes.

Speaker #4: Yes, okay. Fine, fine. So, yeah, if you look at Western Europe, the region for us, we've had, as you also alluded to, a good start to Q3.

Jacob Aarup-Andersen: Yes. Okay, fine. If you look at Western Europe, the region for us, we have had, as you also alluded to, a good start to Q3, supported by favorable weather in several markets. It is very much the similar trends we have seen in H1 across Western Europe. There are some markets that remain tough, especially Poland remains tough, which is not a surprise. On the other hand, we continue to see good strength in the Nordic region and good strength in the UK. You are asking Europe and beer markets. I would just underline that 55% of our Western European business is now soft drinks. There, we are seeing continued good growth, so we are very happy with that. On the beer side of things, which is now, as you know, the minority of the business in Western Europe, Poland remains challenged, no doubt about it.

Speaker #4: Supported by favorable weather in several markets. It's very much the similar trends we've seen in the first half across Western Europe. There are some markets that remain tough, especially Poland, which remains tough and is not a surprise.

Speaker #4: On the other hand, we continue to see good strength in the Nordic region and good strength in the UK. And you're asking about Europe and beer markets.

Speaker #4: I would just underline that 55% of our Western European business is now soft drinks, and there we're seeing continued good growth. So we're very happy with that.

Speaker #4: On the beer side of things—which is now, as you know, the minority of the business in Western Europe—Poland remains challenged, no doubt about it.

Speaker #4: The Nordic region remains constructive, especially for premium beer. Alcohol-free beer continues to perform well. Mainstream beer, I think we're constructive around that being stable. I think the market where you're seeing, or the beer market continuing to be highly competitive, is especially the UK.

Jacob Aarup-Andersen: Nordic region remains constructive, especially premium beer, alcohol-free beer continues. Well, mainstream beer, I think we are constructive around that being stable. I think the beer market continuing to be highly competitive, is especially the UK. Here we see the mainstream market is highly competitive while we are seeing good growth in the world beer segment with some of the launches we have had recently. So I think it is a mixed picture. Also you have the French beer market is growing. The Portuguese beer market is growing as well. So we have two beer markets there, two important beer markets for us that are growing and where we also are happy with the overall performance. You also asked about competitive and therefore you can say relative market share. We are quite happy with the performance.

Speaker #4: Here we see the mainstream market is highly competitive, while we're seeing good growth in the world beer segment with some of the launches we've had recently.

Speaker #4: So I think it’s a mixed picture. Also, the French beer market is growing, and the Portuguese beer market is growing as well.

Speaker #4: So, we have two beer markets there—two important beer markets for us—that are growing, and where we are also happy with the overall performance.

Speaker #4: You also asked about competitive and i.e., therefore, you can say relative market share, et cetera. We are quite happy with the performance. The markets where we have slipped a bit on market share if you look at the statistics, like Poland, that's a market where we have decided not to fully participate in everything that goes on in lower mainstream are focus has been on driving a significant mix improvement.

Jacob Aarup-Andersen: The markets where we have slipped a bit on market share, if you look at the statistics like Poland, that is a market where we have decided not to fully participate in everything that goes on in lower mainstream. Our focus has been on driving a significant mix improvement, and we now have the highest net revenue per hectoliter of any player in the Polish market, which has been a strong development by the team. There are certain markets where we decide to do that. Overall, very happy with the performance of the teams. We are not losing any share that we are not deliberately doing, and I think it is a constructive outlook for beer. Overall, of course, the mainstream beer segment, and especially lower mainstream beer segment, is the segment where we see the least growth.

Speaker #4: And we now have the highest net revenue per hectoliter of any player in the Polish market, which has been a strong development by the team.

Speaker #4: So, where we—there are certain markets where we decide to do that. Overall, very happy with the performance of the teams. We're not losing any share that we're not deliberately doing.

Speaker #4: And I think it's a constructive outlook for beer overall. Of course, the mainstream beer segment, and especially the lower mainstream beer segment, is the segment where we see the least growth.

Speaker #4: That's not a surprise, as some of those consumers are moving more towards premium or alcohol-free beer, or even moving into non-alcoholic categories like soft drinks.

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

Speaker #4: So, I think we have a constructive perspective on beer in Europe, but especially within the growth categories of premium and alcohol-free. Ulrika, do you want to answer on the COGS side of things here?

Ulrica Fearn: Yeah. Sure, Aislinn. You talked about COGS for 2027 specifically, and here we do, of course, have some hedges in place already for 2027. As you also can well see, volatility in many of the commodities are very high, and so it is very hard to say anything directly about 2027 at this point in time. We do, however, I can say try to pick up when price weakness is out there to increase those hedges for 2027. I can also say that it continues to be aluminum and energy that are the ones that we see the biggest cost push on, and there are still some tailwinds on commodities like barley and sugar. There are, of course, commodities that we are not hedging as well. So we are clearly monitoring the situation closely, and we take the necessary action.

Speaker #2: Yeah, sure. Hi Celina. You talked about COGS for 2027 specifically, and here we do, of course, have some hedges in place already for 2027.

Speaker #2: But as you can also see, volatility in many of the commodities is very high. So it's very hard to say anything directly about 2027 at this point in time.

Speaker #2: We do. However, I can say that we try to pick up when price weakness is out there to increase those hedges for 2027. And I can also say that it continues to be aluminium and energy.

Speaker #2: Those are the ones where we see the biggest cost push. There are still some tailwinds on commodities like barley and sugar. And now, of course, there are commodities that we're not hedging as well.

Speaker #2: So, we’re clearly monitoring the situation closely, and we take the necessary action. We’ll continue to do that into 2027, whether that’s efficiencies to offset this, or supply chain actions and commercial initiatives.

Ulrica Fearn: We will continue to do that into 2027, whether that is efficiencies to offset this or supply chain actions and commercial initiatives. As per company policy, we will also have to take price increases to cover any of those cost increases should they arise. But I cannot say specifically where we are for 2027 now, but I will say that it will be an increase on 2026. But I can also say that the cost push will be significantly less than it was back in 2022, 2023.

Speaker #2: And as per company policy, we will also have to take price increases to cover any of those cost increases should they arise. But I cannot say specifically where we are for 2027 now, but I will say that it will be an increase on 2026.

Speaker #2: But I can also say that the cost push will be significantly less than it was back in 2022 or 2023.

Speaker #5: Thank you so much.

Celine Pannuti: Thank you so much.

Speaker #1: Then the next question comes from Edward Mundy from Jefferies. Please go ahead.

Operator 2: Then the next question comes from Edward Mundy from Jefferies. Please go ahead.

Operator: Then the next question comes from Edward Mundy from Jefferies. Please go ahead.

Speaker #4: Good morning, Jacob or Peter. So, two questions, please. The first is on Britvic, where you've brought forward your pace of synergy realization from 30-40% to 50% this year.

Edward Mundy: Morning, Jacob, Ulrika, and Peter. Two questions, please. The first is on Britvic, where you have brought forward the pace of synergy realization from 30% to 40% to 50% this year. The question is: Is there potentially more? I know you have already upgraded it once, but as you do the work, is there potentially more to go for on Britvic? The second is really around the fact the business shape has changed quite a bit over the last couple of years. You have had obviously Britvic, Kazakhstan, Azerbaijan, you have had Sapporo, and we have got the five new markets coming in 2029. When we think about the end game here, especially on that slide 6, are we largely done, Jacob?

Speaker #4: The question is, is there potentially more? And they've already upgraded once, but as you do the work, is there potentially more to go for on Britvic?

Speaker #4: And then the second is really around the fact that the business shape has changed quite a bit over the last couple of years. You’ve had, obviously, Britvic, Kazakhstan, Azerbaijan, you’ve had Sapporo, and we’ve got the five new markets coming in 2029.

Speaker #4: When we think about the endgame here, especially on that Slide 6, are we largely done, Jacob? Or, if there are further opportunities, can you reshape this business without putting a lot more capital to work—e.g., taking on new Pepsi franchises or your rather smart deal with Sapporo?

Edward Mundy: Or if there are further opportunities, can you reshape this business without putting a lot more capital to work, e.g., taking on new Pepsi franchises or your rather smart deal with Sapporo?

Speaker #4: Thank you so much, Ed. Quickly, we'll start with Britvic. So, you're a greedy man. We've just upgraded the synergy realization today, and you already want more.

Jacob Aarup-Andersen: Thank you so much, Ed. Quickly, we will start with Britvic. You are a greedy man. We have just upgraded the synergy realization today, and you already want more. It is amazing. But listen, of course, last year, as you know, we took the overall guidance from 100 to 110 million. This year, we are increasing the realization rate of that 110 million. There is no doubt that you are pointing to the right topic, which is the synergy realization momentum is, of course, very strong. Therefore, the momentum is also on the upside and not on the downside. I am not going to sit here and speculate whether we are going to increase synergies further. If we were going to do that, we would have said that today, but it is of course more likely that we do that compared to downgrading it. The momentum is good, it is very strong.

Speaker #4: It's amazing. But no, listen, of course—last year, as you know, we took the overall guidance from 100 to 110 million. This year, we are increasing the realization rate of that 110 million.

Speaker #4: So there's no doubt that you're pointing to the right topic, which is that the synergy realization momentum is, of course, very strong. And therefore, the momentum is also on the upside and not on the downside.

Speaker #4: I'm not going to sit here and speculate whether we're going to increase synergies further. If we were going to do that, we would have said so today.

Jacob Aarup-Andersen: If we were going to do that, we would have said that today, but it is of course more likely that we do that compared to downgrading it. The momentum is good, it is very strong. And we have to say that the teams are doing a phenomenal job. The Britvic acquisition has been a strong success, not just in terms of the impact it is having specifically on our overall new combined UK business, but also the ripple effects it is having throughout the business in terms of capabilities, innovation, power, and in terms of, you can say, the momentum it is giving us in terms of our overall Pepsi relationship. So I think it is having significant ripple effects that go way beyond just the cost synergies.

Speaker #4: But it's, of course, more likely that we do that compared to downgrading it. So, the momentum is good—it's very strong. And we have to say that the teams are doing a phenomenal job.

Jacob Aarup-Andersen: And we have to say that the teams are doing a phenomenal job. The Britvic acquisition has been a strong success, not just in terms of the impact it is having specifically on our overall new combined UK business, but also the ripple effects it is having throughout the business in terms of capabilities, innovation, power, and in terms of, you can say, the momentum it is giving us in terms of our overall Pepsi relationship. So I think it is having significant ripple effects that go way beyond just the cost synergies. But on the question of cost synergies, of course, we are very pleased with the upgrade today of that. And of course, the momentum is on the upside. Then on the end game, I think you can see from the level of activity coming out of us, we are not standing still.

Speaker #4: The Britvic acquisition has been a strong success, not just in terms of the impact it's having specifically on our overall new combined UK business, but also the ripple effects it's having throughout the business in terms of capabilities, innovation power, and, you can say, the momentum it's giving us in terms of our overall Pepsi relationship.

Speaker #4: So I think it's having significant ripple effects that go way beyond just the cost synergies. But on the question of cost synergies, of course, we're very pleased with the upgrade today of that.

Jacob Aarup-Andersen: But on the question of cost synergies, of course, we are very pleased with the upgrade today of that. And of course, the momentum is on the upside. Then on the end game, I think you can see from the level of activity coming out of us, we are not standing still. We are with high intensity, constantly driving forward to create value for our shareholders. And we are super excited about the opportunities in front of us. We are super excited about the portfolio we have today. We think we have a great mix of amazing beer portfolios, amazing soft drinks portfolios, and a lot of emerging innovations and within other categories such as Beyond Beer. When you look at that, we do not sit here with an end goal of a certain mix. I think that would be naive.

Speaker #4: And of course, the momentum is on the upside. Then, on the endgame, I think you can see from the level of activity coming out of us, we're not standing still.

Speaker #4: We are, with high intensity, constantly driving forward to create value for our shareholders, and we're super excited about the opportunities in front of us.

Jacob Aarup-Andersen: We are with high intensity, constantly driving forward to create value for our shareholders. And we are super excited about the opportunities in front of us. We are super excited about the portfolio we have today. We think we have a great mix of amazing beer portfolios, amazing soft drinks portfolios, and a lot of emerging innovations and within other categories such as Beyond Beer. When you look at that, we do not sit here with an end goal of a certain mix. I think that would be naive. What we are looking at is we see continued opportunities to expand within our growth categories. Part of that opportunity is potentially to do more Pepsi partnerships. And we are not going to rule that out because we think that they are. I have to say, I would probably be disappointed if we, over the next couple of years, do not add further Pepsi franchises.

Speaker #4: We're super excited about the portfolio we have today. We think we have a great mix of amazing beer portfolios, amazing soft drinks portfolios, and a lot of emerging innovations within other categories.

Speaker #4: Such as Beyond Beer. When you look at that, we don't sit here with an end goal of a certain mix. I think that would be naive.

Speaker #4: What we are looking at is, we see continued opportunities to expand within our growth categories. Part of that opportunity is potentially to do more Pepsi partnerships.

Jacob Aarup-Andersen: What we are looking at is we see continued opportunities to expand within our growth categories. Part of that opportunity is potentially to do more Pepsi partnerships. And we are not going to rule that out because we think that they are. I have to say, I would probably be disappointed if we, over the next couple of years, do not add further Pepsi franchises. But it is, for us, always the key litmus test is are we creating value for our shareholders or not? We are not doing this because we think it is nice to do. We do this because we are here to create value for our shareholders, both in the short term and the long term.

Speaker #4: And we're not going to rule that out, because we think that there—I have to say, I would probably be disappointed if we, over the next couple of years, do not add further Pepsi franchises.

Speaker #4: But for us, always the key litmus test is: are we creating value for our shareholders or not? We're not doing this because we think it's nice to do.

Jacob Aarup-Andersen: But it is, for us, always the key litmus test is are we creating value for our shareholders or not? We are not doing this because we think it is nice to do. We do this because we are here to create value for our shareholders, both in the short term and the long term. You can already today see, when you look at this H1, you can see the positive power of the changes we have done over the last couple of years. It has improved the shape of our business, the shape of our P&L, the shape of our portfolio. So as long as we can do that, we will continue to do it. We do not have a fixed target around what the portfolio should look like, but the key for us is to have a strong, diversified portfolio mix, a multi-beverage mix where we create value for shareholders.

Speaker #4: We do this because we are here to create value for our shareholders, both in the short term and the long term. You can already today see when you look at this first half, you can see the positive power of the changes we've done over the last couple of years.

Jacob Aarup-Andersen: You can already today see, when you look at this H1, you can see the positive power of the changes we have done over the last couple of years. It has improved the shape of our business, the shape of our P&L, the shape of our portfolio. So as long as we can do that, we will continue to do it. We do not have a fixed target around what the portfolio should look like, but the key for us is to have a strong, diversified portfolio mix, a multi-beverage mix where we create value for shareholders.

Speaker #4: It has improved the shape of our business, the shape of our P&L, and the shape of our portfolios. So, as long as we can do that, we will continue to do it.

Speaker #4: We don't have a fixed target regarding what the portfolio should look like, but the key for us is to have a strong, diversified portfolio mix and a multi-beverage mix, where we create value for shareholders.

Speaker #4: And don't forget, Ed, that this is not just about adding soft drinks. This is about creating a portfolio mix that benefits all of our categories.

Jacob Aarup-Andersen: And do not forget, Ed, that this is not just about adding soft drinks. This is around creating a portfolio mix that benefits all of our categories. As we add soft drinks into our beer markets, we see an immediate uplift of the performance of our beer portfolio as well, as you have seen in UK. Last comment, I know it is a long answer, but it is an important topic. You said capital allocation and capital usage. We are very disciplined around how we use capital. And so if we are deploying any capital in these partnerships, we do that with a strong return in mind. But we have also said very clearly that we do not have anything on the horizon the size of Britvic or anything like that. We are very disciplined around the use of capital.

Speaker #4: As we add soft drinks into our beer markets, we see an immediate uplift in the performance of our beer portfolios, as you have seen in the UK.

Speaker #4: Last comment. I know it’s a long answer, but it’s an important topic. You said capital allocation and capital usage. We are very disciplined around how we use capital.

Speaker #4: And so, if we are deploying any capital in these partnerships, we do that with a strong return in mind. But we've also said very clearly that we do not have anything on the horizon the size of Britvic, or anything like that.

Speaker #4: We're very disciplined about the use of capital. If any of these partnerships with, as an example, Pepsi—if they involve capital, it's purely as a replacement for the organic capex we would have to do anyway ourselves.

Jacob Aarup-Andersen: If any of these partnerships with, as an example, Pepsi, if they involve capital, it is purely as a replacement for the organic CapEx we would have to do anyway ourselves. So we look at that in a very disciplined fashion around creating returns for our shareholders. Thanks, Ed.

Speaker #4: So, we look at that in a very disciplined fashion around creating returns for our shareholders. Thanks, Ed.

Speaker #1: Thank you.

Simon Hales: Thank you.

Edward Mundy: Thank you.

Speaker #2: The next question comes from Simon Hales from Citi. Please go ahead.

Operator 2: The next question comes from Simon Hales from Citi. Please go ahead.

Operator: The next question comes from Simon Hales from Citi. Please go ahead.

Speaker #4: Thank you. Good morning, Jacob, Ulrika, and Peter. My first question is: can I just come back to China, and could you help me understand exactly what you're building into the guidance for the second half of the year?

Simon Hales: Thank you. Morning, Jacob, Ulrika, and Peter. My first one is, can I just come back to China and just help me understand exactly what you are building into the guidance for the H2 of the year? I think Ulrika, on your closing comments, you said you did not expect to see any improvement in the H2, and Jacob, you have talked about the heavy destock we should see in Q3. Is the assumption that we continue to see a minus 6% volume for the H2, obviously skewed to H2? Or is it a minus 3% volume for the H2, i.e., in line with the H1 performance you saw? Just a bit of color on how we think about modeling that. My second question was going back to the Western European performance.

Speaker #4: I think Ulrika, on your closing comment, you said you didn't expect to see any improvement in the second half. And Jacob, you've talked about the heavy de-stocking we should see in Q3.

Speaker #4: Is the assumption that we continue to see a sort of minus 6% volume for the second half—obviously skewed to H2—or is it a minus 3% volume for the second half, i.e., in line with the H1 performance you saw?

Speaker #4: So, just a bit of color on how we think about modeling that. And then my second question was going back to the Western European performance.

Speaker #4: Could you talk a little bit about the volume momentum as we exited the quarter and came into July? I'm just trying to understand how much of a weather benefit we've perhaps seen in both the soft drinks and the beer business, given that the whole of Q2 was also impacted by things like Poland and the Easter unwind effect.

Simon Hales: Could you talk a little bit about the volume momentum as we exited the quarter and came into July? I am just trying to understand how much of a weather benefit we have perhaps seen in both the soft drinks and the beer business, given that the whole of Q2 was also impacted by things like Poland and the Easter unwind effect. Associated with that, can you actually quantify, I may have missed this, but can you quantify how big the Britvic synergies were in H1 itself? You have given us a full year guide, but I am not sure you have given us what you actually delivered in H1.

Speaker #4: And just associated with that, can you actually quantify—it may have missed this—but can you quantify how big the Britvic synergies were in H1 itself?

Speaker #4: You've given us a full-year guide, but I'm not sure you've told us what you actually delivered in H1. Hi Simon. I think you actually sneaked in three questions, but due to the long relationship with Peter Cantwell, we're going to allow it.

Jacob Aarup-Andersen: Hi, Simon. I think you actually sneaked in three questions, but due to the long relationship with Peter Kondrup, we are going to be allowing it, but no one else should get any good ideas. On China H2, we are not going to give you a specific number in terms of what to put into your model. Well, first of all, as you know, Chongqing is a listed company, and we are not going to sit here and give specific guidance for H2. We are not even allowed to do that. But we are making it very clear that Ulrika has told you that we are increasing our confidence in our guidance and going to the high end of the previous range. We are doing that with full open eyes around the fact that H2 will also be soft in China.

Speaker #4: But no one else should get any good ideas. On China’s second half, we’re not going to give you a specific number in terms of what to put into your model.

Speaker #4: Well, first of all, as you know, Chongqing is a listed company, and we're not going to sit here and give specific guidance for the second half.

Speaker #4: We're not even allowed to do that. But we are making it very clear that Ulrika has told you that we're increasing our confidence in our guidance and moving to the high end of the previous range.

Speaker #4: And we're doing that with our eyes wide open to the fact that the second half will also be soft in China. That should give you significant confidence in the strength of the business and the earnings power of Carlsberg right now.

Jacob Aarup-Andersen: That should give you a significant confidence of the strength of the business and the earnings power right now of Carlsberg. We are very pleased with that. But we do not have any heroic assumptions around China in H2. As you know, Q3 is a big quarter, but Q4 is actually quite a small quarter. Given what we said and what we are seeing also in the competitive landscape and what we are seeing from all of our peers, we think it is going to be a soft H2, which will be a negative number. But we are not going to speculate on the exact size of that number. But that is already in the guidance, and we do not lift the guidance range randomly. We do that when we have a lot of confidence that we deliver. As I said earlier, this is a temporary impact.

Speaker #4: So we're very pleased with that. But we do not—we don't have any heroic assumptions around China in the second half. As you know, Q3 is a big quarter, but Q4 is actually quite a small quarter.

Speaker #4: And given what we said and what we're seeing also in the competitive landscape, and what we're seeing from all of our peers, we think it's going to be a soft second half, which would be a negative number.

Speaker #4: But we're not going to speculate on the exact size of that number. However, that is already included in the guidance, and we do not lift the guidance range randomly.

Speaker #4: We do that when we have a lot of confidence that we deliver. So, as I said earlier, this is a temporary impact. That cyclicality will be out of the numbers again in a couple of quarters, and then we move on.

Jacob Aarup-Andersen: That cyclicality will be out of the numbers again in a couple of quarters, and then we move on. We are not particularly seeing any drama here. You asked about July and then Western Europe, and how much is weather impact. I would love to be able to separate weather impacts from underlying businesses. Weather is an element. Do remember, we are saying that we had a good start to Q3 in Western Europe, and this is despite actually having tough comps from last year. Weather in Western Europe in July last year was also strong. From that perspective, I think that is the best indication that the portfolio itself is doing well, because we are not lapping an easy July, we are actually lapping a tough July. Despite that, we are quite pleased with what we are seeing. Of course, then you have all the specifics of different markets. That is fine.

Speaker #4: So, we're not particularly seeing any drama here. You asked about July and Western Europe, and how much is weather impact. I would love to be able to separate weather impacts from underlying business.

Speaker #4: Weather is an element. Do remember, we're saying that we had a good start to Q3 in Western Europe, and this is despite actually having tough comps from last year.

Speaker #4: Weather in Western Europe in July last year was also strong. So, from that perspective, I think that's the best indication that the portfolio itself is doing well.

Speaker #4: Because we're not lapping an easy July—we're actually lapping a tough July. And despite that, we're quite pleased with what we're seeing. Of course, then you have all the specifics of different markets.

Jacob Aarup-Andersen: Despite that, we are quite pleased with what we are seeing. Of course, then you have all the specifics of different markets. That is fine. As I indicated before to, I think it was Celine, we are not seeing, as an example of Poland, suddenly recovering, et cetera. So you have the same trends continuing. But overall, we were quite constructive on the Western European performance, and part of that is also that we see our soft drinks portfolio, which is now the majority of our portfolio. We are seeing that continuing to power ahead. On the Britvic synergies, we are not going to quantify H1 versus H2. We have not done that in the guidance, and we are not going to start doing it here.

Speaker #4: That's fine. As I indicated before, too, I think it was Celine we're not seeing as an example of Poland suddenly recovering, except us. So, you have the same trends continuing.

Jacob Aarup-Andersen: As I indicated before to, I think it was Celine, we are not seeing, as an example of Poland, suddenly recovering, et cetera. So you have the same trends continuing. But overall, we were quite constructive on the Western European performance, and part of that is also that we see our soft drinks portfolio, which is now the majority of our portfolio. We are seeing that continuing to power ahead. On the Britvic synergies, we are not going to quantify H1 versus H2. We have not done that in the guidance, and we are not going to start doing it here. But as you would expect, for it to be in the full year numbers, a lot of the realization will have had to happen in the beginning of the H1. Therefore, you would expect a bit more in the H2 versus H1.

Speaker #4: But overall, we were quite constructive on the Western European performance, and part of that is also that we see our soft drinks portfolio, which is now the majority of our portfolio—we're seeing that continuing to power ahead.

Speaker #4: On the Britvic synergies, we're not going to quantify H1 versus H2. We haven't done that in the guidance, and we're not going to start doing it here.

Speaker #4: But as you would expect, a lot of the realization happens for it to be in the full-year numbers. A lot of the realization will have had to happen at the beginning of the first half.

Jacob Aarup-Andersen: But as you would expect, for it to be in the full year numbers, a lot of the realization will have had to happen in the beginning of the H1. Therefore, you would expect a bit more in the H2 versus H1. That is a given the annualization impact of that. So a bit more in the H2 than H1, which would be the mathematical conclusion, but we are not going to give you an exact split. It is not a dramatic difference between the two halves.

Speaker #4: So, therefore, you would expect a bit more in the second half versus the first half. That's a given, due to the annualization impact of that. So, a bit more in the second half than the first half, which would be the mathematical conclusion.

Jacob Aarup-Andersen: That is a given the annualization impact of that. So a bit more in the H2 than H1, which would be the mathematical conclusion, but we are not going to give you an exact split. It is not a dramatic difference between the two halves.

Speaker #4: But we're not going to give you an exact split. It's not a dramatic difference between the two halves. Brilliant, thanks for that. Too much cheeky, three.

Simon Hales: Brilliant. Thanks ever so much. Cheeky three. Thank you.

Speaker #4: Thank you.

Speaker #2: The next question comes from Sanjit from UBS. Please go ahead.

Operator 2: The next question comes from Sanjeet from UBS. Please go ahead.

Operator: The next question comes from Sanjeet from UBS. Please go ahead.

Speaker #1: Hi Jacob, Ulrika, Peter. I'll stick to two. Firstly, coming back to Britvic, 18 months into the transaction now, can you just speak a little bit more about the revenue synergy side of things between beer and soft drinks?

[Analyst] (UBS): Hi, Jacob, Ulrika, Peter. I will stick to two. Firstly, coming back to Britvic, 18 months into the transaction now, can you just speak a little bit more about the revenue synergy side of things between beer and soft drinks? I say that in the context of what seems to be your UK beer volumes probably slightly declining in Q2. Then just coming back to China, again, you have spoken about weather, weak consumer. Can you touch upon the competitive landscape? I say that in the context of the largest brewer, China Resources, I think, reporting volume growth in H1 of around 2%. Thanks.

Sanjeet Aujla: Hi, Jacob, Ulrika, Peter. I will stick to two. Firstly, coming back to Britvic, 18 months into the transaction now, can you just speak a little bit more about the revenue synergy side of things between beer and soft drinks? I say that in the context of what seems to be your UK beer volumes probably slightly declining in Q2. Then just coming back to China, again, you have spoken about weather, weak consumer. Can you touch upon the competitive landscape? I say that in the context of the largest brewer, China Resources, I think, reporting volume growth in H1 of around 2%. Thanks.

Speaker #1: And I say that in the context of what seems to be your UK beer volume is probably slightly declining in Q2. And then, just coming back to China again, you've spoken about weather, weak consumer.

Speaker #1: Can you touch upon the competitive landscape? And I say that in the context of the largest brewer, China Resources, I think, reporting volume growth in H1 of around 2%.

Speaker #1: Thanks.

Speaker #4: Thanks, Sanjit. Just starting on the UK: if you look at the overall synergies in the UK on the revenue side, we're quite happy with what we're seeing.

Jacob Aarup-Andersen: Thanks, Sanjeet. Just starting on the UK. If you look at the overall synergies in the UK on the revenue side, we are quite happy with what we are seeing. You are right that we saw a bit more pressure on the beer portfolio towards the end of H1, and I think that is specifically driven by one thing that is happening around the mainstream brands of Carlsberg which I also alluded to in my initial comments, which is driven by the fact that we have seen the other players go now also reformulating their recipes to a lower ABV, and therefore getting a different excise regime. That has upped the pressure, the competitive pressure around this. I think we are just being very careful that we are not just blindly following other people, but making sure that we are also running a profitable business.

Speaker #4: You're right that we saw a bit more pressure on the beer portfolio towards the end of the first half, and I think that's specifically driven by one thing that's happening around, say, the mainstream brands of Carlsberg.

Speaker #4: Which I also alluded to in my initial comments, which is driven by the fact that we've seen the other players go now also reformulating their recipes to a lower ABV and therefore getting a different exercise regime that has upped the competitive pressure around this.

Speaker #4: And I think we're just being very careful that we are not just blindly following other people, but making sure that we're also running a profitable business.

Jacob Aarup-Andersen: I should not comment on the behaviors of other competitors, but we are focusing on at least driving a sensible business within that category. If you look at outside of that, we are seeing a very nice growth in the other categories within beer and also within brands. Very nice growth in both 1664, Peroni, Michters is off to a great start with the sole launch we did with One Banner. So very pleased with that. We are now going to expand that further to other banners. Overall, part of that, what we are seeing is that we are seeing the positive impact in off-trade of having the strength of the combined portfolio, which also gives a strong impetus in terms of being able to launch new brands, in terms of getting more shelf space for existing world beer brands, et cetera. So no, we are very happy with what we are seeing.

Speaker #4: I shouldn't comment on the behaviors of other competitors, but we are focusing on at least driving a sensible business within that category. If you look at the outside of that, we're seeing very nice growth in our other in our other beer in the other categories within beer and also within brands.

Speaker #4: Very nice growth in both '16, '64, Poretti. Mützers is off to a great start with the sole launch we did with one banner, so very, very pleased with that.

Speaker #4: We're now going to expand that further to other banners. And overall, part of that, what we're seeing is the positive impact in off-trade of having the strength of the combined portfolio, which also gives a significantly stronger impetus in terms of being able to launch new brands, in terms of getting more sales space for existing world beer brands, etc., etc.

Speaker #4: So no, we're very happy with what we're seeing. I don't think, as an example, we could have done the very successful launch of Mützers pre-summer and into the summer if it wasn't for the sheer size we now have as a combined multi-beverage company.

Jacob Aarup-Andersen: So no, we are very happy with what we are seeing. I do not think, as an example, we could have done the very successful launch of Michters pre-summer and into the summer if it was not for the sheer size we now have as a combined multi-beverage company. So happy with that, and you are also seeing the combination of that leading on the soft drink side to continued growth, taking significant share in a summer where there was a lot of competition around World Cup, et cetera. Pepsi Max took more than 1% both value and volume share, so very pleased with that. So, no, I would not say that because there is a significant shift from a couple of players around the lower mainstream segment, that means that we are not suddenly seeing revenue synergies. We are seeing revenue synergies. We are very pleased with that.

Jacob Aarup-Andersen: I do not think, as an example, we could have done the very successful launch of Michters pre-summer and into the summer if it was not for the sheer size we now have as a combined multi-beverage company. So happy with that, and you are also seeing the combination of that leading on the soft drink side to continued growth, taking significant share in a summer where there was a lot of competition around World Cup, et cetera. Pepsi Max took more than 1% both value and volume share, so very pleased with that. So, no, I would not say that because there is a significant shift from a couple of players around the lower mainstream segment, that means that we are not suddenly seeing revenue synergies. We are seeing revenue synergies. We are very pleased with that.

Speaker #4: So happy with that. And you're also seeing the combination of that leading on the soft drink side to continue growth, taking significant share in a summer where there was a lot of competition.

Speaker #4: Around the World Cup, etc., etc., Pepsi Max took more than a percentage point in both value and volume share, so we're very pleased with that. So no, I would not say that because there is a significant shift from a couple of players around the lower mainstream segment, that means we're not suddenly seeing revenue synergies—we are seeing revenue synergies.

Speaker #4: We're very pleased with that. And you can say the off-trade volumes and the overall growth of Britvic—and Carlsberg Britvic in the UK—is a testament to that.

Jacob Aarup-Andersen: And you can say the off-trade volumes and the overall growth of Carlsberg Britvic in the UK is a testament to that. We are growing faster than our peers in the UK in total. Then on China, we are aware of China Resources' performance. We could also highlight other players that have worse growth than us in China. China Resources have done well in recent quarters, no doubt about that. I think if you look at their exposure where they have their strongholds, but also their portfolio has catered a little bit better to some of the consumer trends recently. So well-played to them. We do not see this as a structural difference as such. We are being hit, weather-wise, significantly in a couple of our strongholds. Given that we are a smaller player than China Resources, it will just have a more disproportional impact on us.

Speaker #4: We're growing faster than our peers in the UK in total. Then on China, yeah, we're aware of China Resources' performance. We could also highlight other players that have worse growth than us in China.

Speaker #4: But China Resources have done well in recent quarters, no doubt about that. I think they're both there. If you look at their exposure, where they have their strongholds, but also, that portfolio has catered a little bit better to some of the consumer trends recently.

Speaker #4: So, well played to them. We don't see this as a structural difference as such. We are being hit, weather-wise, significantly in a couple of our strongholds.

Speaker #4: And given that we are a smaller player than China Resources, it will just have a more disproportionate impact on us. We are not, in the same way, a full national player like they are.

Jacob Aarup-Andersen: We are not, in the same way, a full national player like they are, and therefore we do not have that diversification. So if a couple of our big strongholds get hit hard by weather, it will, of course, impact our portfolio disproportionately more than it would for someone who is in all cities, in all regions across the market. So nothing there. Listen, China Resources sees strong growth with the Heineken brand in premium. I think 20% plus, as I recall it. We are with Carlsberg. In China, we are seeing more than 20% growth. So I think we are seeing the same growth in these premium segments. So this is a weather impact that we are quite relaxed around, I have to say.

Speaker #4: And therefore, we cannot just—we don't have that diversification. So if a couple of our big strongholds get hit hard by weather, it will, of course, impact our portfolio disproportionately more than it would for someone who is in all cities and in all regions across the market.

Speaker #4: So nothing there. Listen, China Resources sees strong growth with the Heineken brand and premium. I think 20% plus, as I recall it. We are with Carlsberg in China.

Speaker #4: We're seeing more than 20% growth, so I think we're seeing the same growth in these premium segments. This is a weather impact that we are quite relaxed about, I have to say.

Speaker #1: Great. Thank you.

[Analyst] (UBS): Great. Thank you.

Sanjeet Aujla: Great. Thank you.

Speaker #2: Then the next question comes from Richard Witthagen from Kepler Cheuvreux. Please go ahead.

Operator 2: Then the next question comes from Richard Withagen from Kepler Cheuvreux. Please go ahead.

Operator: Then the next question comes from Richard Withagen from Kepler Cheuvreux. Please go ahead.

Speaker #1: Yeah, good morning, Jacob, Ulrika, and Peter. Two questions from me. First of all, a bit more on the UK soft drinks side—you still have a very strong performance.

Richard Withagen: Good morning, Jacob, Ulrika, and Peter. Two questions from me. First of all, a bit more on the UK soft drinks side. You still have a very strong performance, again, for the Pepsi portfolio. What drivers remain really in 2026? Is it driven more by distribution expansion or is it increasing velocity or do innovations play a specific role for the portfolio? That is my first question. Then the second question is, if you look at group level, your operating expenses declined organically by about 1%. We obviously have the Britvic synergies, but besides this, how much further structural cost opportunity remains, particularly after Britvic, but also some efficiency initiatives that you took in the last couple of years?

Speaker #1: Again, for the Pepsi portfolio: what drivers really remain in 2026? Is it driven more by distribution expansion, or is it increasing velocity? Or do innovations play a specific role for the portfolio?

Speaker #1: So that's my first question. And then the second question is: if you look at group level, your operating expenses declined organically by about 1%.

Speaker #1: Now, we obviously have the Britvic synergies, but beyond this, how much further structural cost opportunity remains? Particularly after Britvic, but also considering some of the efficiency initiatives that you took in the last couple of years.

Speaker #4: Thanks, Richard. Let me talk to soft drinks in the UK, and then Ulrika can talk to the OPEX. Listen, the growth we're seeing is very broad-based.

Jacob Aarup-Andersen: Thanks, Richard. Let me talk to soft drinks in the UK, and then Ulrika can talk to the OpEx. Listen, the growth we are seeing is very broad-based. It is also driven by the fact that the market is growing, especially off-trade is growing. Soft drinks is a growing category. That is the starting point. We do not have to take significant share to grow the soft drinks. It is a growing category. We have been taking share, especially in the important cola segment. Looking at the numbers, if I look at the H1, Pepsi Max took value share of 1.9% and volume share of 1.1%, which also is a testament to the fact that this is not price-led growth, it is actually the contrary. We are managing to drive strong value growth as well.

Speaker #4: And it's also driven by the fact that the market is growing, especially off-trade is growing. So, soft drinks is a growing category. So that's the starting point.

Speaker #4: So we don't have to take significant share to grow in soft drinks. It's a growing category. We have been taking share, especially in the important cola segment.

Speaker #4: Looking at the numbers, if I look at the first half, Pepsi Max took value share of 1.9% and volume share of 1.1%, which also is a testament to the fact that this is not price-led growth.

Speaker #4: It's actually the contrary. So we're managing to drive strong value growth as well. If you look across our CSD growth in the UK, of course, we've talked about Pepsi, but we're also seeing flavored CSDs and good performance for 7Up.

Jacob Aarup-Andersen: If you look across our CSD growth in the UK, of course, we have talked about Pepsi, but we are also seeing a flavored CSD, a good performance for 7Up. We are not super happy with the Tango performance, but we have recently relaunched with a new visual identity and strong ads, and we are quite excited about how that will play out in the H2. Then we had a very successful launch of Poppi, and that is now going to be listed at new customers, both on-trade and off-trade. There you are going to see distribution expansion. We are still winning new customers. Recently we gained Starbucks, which is an important win as well. There is a lot of good momentum around distribution expansion still within soft drinks. Then innovation. If you look across our major brands within soft drinks, there is innovation going into all of them.

Speaker #4: We're not super happy with the Tango performance, but we have recently relaunched with a new visual identity and strong ads. We're quite excited about how that will play out in the second half.

Speaker #4: And then we had a very successful launch of Poppy, and that is now going to be listed at new customers, both on-trade and off-trade.

Speaker #4: So there, you're going to see distribution expansion. We're still winning new customers. Recently, we gained Starbucks, which is an important win as well.

Speaker #4: So, there's a lot of good momentum around distribution expansion still within soft drinks. And then, innovation. So if you look across our major brands within soft drinks, there's innovation going into all of them.

Speaker #4: Also, Pepsi—like Pepsi Treats—keeps on innovating. And I think that's a key element as well of the soft drinks portfolio. There is so much innovation going into it.

Jacob Aarup-Andersen: Also Pepsi, like Pepsi Treats keeps on also innovating. I think that is a key element as well of the soft drinks portfolio. There is so much innovation going into it. Also limited launches, limited editions all the time within brands like Tango, J2O, Robinsons, et cetera. It is distribution expansion and innovation, and then underlying market growth. Ulrika, on the OpEx?

Speaker #4: Also, limited launches, limited editions all the time within brands like Tango, J2O, Robinsons, etc. So, it's distribution expansion and innovation, and then underlying market growth.

Speaker #4: Ulrika, on the OPEX?

Speaker #3: On the OPEX, yes. Good observation. And yes, it is absolutely partly driven by the Britvic synergies. But I will also say that it is, as you also mentioned, driven by the fact that we took some restructuring and some cost programs through in 2023.

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

Speaker #3: And they're starting to pay off. The question was, do we continue? Yes, we do. We will continue to drive that OPEX ratio to stay the same or go down going forward.

Speaker #3: And that comes from more synergies, as Jacob was mentioning—positive momentum behind the Britvic synergies and more synergies in our multi-beverage markets in general. We continue to drive that there.

Speaker #3: But also, when we look at systems, processes, and AI, there are big opportunities to go after as well. So, we will continue that delivery and pressure on OPEX to go down as a percentage of net revenue.

Speaker #4: I would just correct Ulrika on one thing. I think the cost programs went to 25 and not 23. Yeah, yeah, exactly. Otherwise, it's very long synergies.

Jacob Aarup-Andersen: I would just correct Ulrika, one thing. I think the cost programs went 2025 and not 2023.

Ulrica Fearn: Yeah, sorry. That is right.

Jacob Aarup-Andersen: Yeah, exactly. Otherwise, it is very long synergies.

Ulrica Fearn: They are very long synergies. Absolutely.

Speaker #4: Yeah, that's fine. All right, thank you so much, Richard. Thank you.

Jacob Aarup-Andersen: Yeah, that is fine. All right. Thank you so much, Richard.

Richard Withagen: Thank you both. Bye.

Jacob Aarup-Andersen: Thank you.

Speaker #2: The next question comes from Genn Cross from BNP Paribas. Please go ahead.

Operator 2: Then the next question comes from Jen Cross from BNP Paribas. Please go ahead.

Operator: Then the next question comes from Jen Cross from BNP Paribas. Please go ahead.

Speaker #5: Good morning, Jacob, Ulrika, and Peter. Thank you. A couple of questions from me. The first one is actually on Brazil. I think you commented on a return to growth, profitability, and improving cash generation there.

Jen Cross: Good morning, Jacob, Ulrika, and Peter. Thank you. A couple of questions from me. The first one is actually on Brazil. I think you commented on return to growth and profitability and cash generation improving there. If I am not mistaken, I think at the CMD, a bit less than a year ago, you talked about that business being reviewed. So I just wonder if that review is still ongoing and what the latest is. The second question is on Vietnam, obviously, volume growth very strong in H1 on the back of easy comps. So I think you commented on market share stabilization. So I just wondered if you could give us a bit more color on that market share development. Also, just looking longer term, the potential of adding the Sapporo brand. Thank you.

Gen Cross: Good morning, Jacob, Ulrika, and Peter. Thank you. A couple of questions from me. The first one is actually on Brazil. I think you commented on return to growth and profitability and cash generation improving there. If I am not mistaken, I think at the CMD, a bit less than a year ago, you talked about that business being reviewed. So I just wonder if that review is still ongoing and what the latest is. The second question is on Vietnam, obviously, volume growth very strong in H1 on the back of easy comps. So I think you commented on market share stabilization. So I just wondered if you could give us a bit more color on that market share development. Also, just looking longer term, the potential of adding the Sapporo brand. Thank you.

Speaker #5: If I'm not mistaken, I think the CMD a bit less than a year ago talked about that business being reviewed. So I just wonder if that review is still ongoing, and what the latest is.

Speaker #5: And then the second question is on Vietnam. Obviously, volume growth was very strong in the first half on the back of easy comps, so I think you commented on market share stabilization.

Speaker #5: So, I just wondered if you could give us a bit more color on that market share development. And also, just looking longer term, the potential of adding the Sapporo brand.

Speaker #5: Thank you.

Speaker #4: Thank you so much. Again, let me speak to Vietnam. I think Ulrika will speak to Brazil. Yeah, so a bit of color on Vietnam.

Jacob Aarup-Andersen: Thank you so much. Let me speak to Vietnam. I think Ulrika will speak to Brazil. So a bit of color on Vietnam. First of all, if you look at it, we have a market that if you look at the official statistics is growing mid-single digit. We have in H1 delivered more than 20% growth. Of course, we had some easier comps from last year where we had a soft start to the year. The growth has mainly been driven by Huda and Halida in our stronghold in the central. Then some good growth in the south, more in the south from Blanc and Somersby. Our market share has stabilized now.

Speaker #4: So, first of all, if you look at it, we have a market that, if you look at the official statistics, is growing mid-single digits. We have, in the first half, delivered more than 20% growth.

Speaker #4: Of course, we had some easier comps from last year, where we had a soft start to the year. The growth has mainly been driven by Huda and Halida in our stronghold in the central.

Speaker #4: And then some good growth in the south, north, and in the south from Blanc and Somersby. Our market share has stabilized now. As you know, we did a significant restructuring of our route to market, where we reorganized our distribution network—our outlet universe—because we felt we needed to have a higher-quality and more Brazilian route to market for the future.

Jacob Aarup-Andersen: As you know, we did a significant restructuring of our route to market, where we reorganized our distribution network, our outlet universe, because we felt we needed to have a more high quality and resilient route to market for the future. That work has been done. It is basically done. There are some places where we are still doing some changes, but it is very nice to see that the underlying growth is back. The team is doing very well in terms of also seeing a good growth in number of products sold per outlet, good momentum around the core brands, and good brand equity strength, especially around the Huda brand, which is the anchor of our performance in Vietnam. We are then selectively building out the international premium brands, both Blanc and especially 1664 Blanc and Tuborg. But we are making sure that we are doing this in a creative and responsible way.

Speaker #4: That work has been done. It's basically done. There are some places where we're still making some changes, but it's very nice to see that the underlying growth is back.

Speaker #4: The team is doing very well in terms of also seeing good growth in the number of products sold per outlet, good momentum around the core brands, and strong brand equity, especially around the Huda brand, which is the anchor of our performance in Vietnam.

Speaker #4: We're then selectively building out the international premium brands, both Blanc—and especially Blanc, 1664 Blanc—and Tuborg. But we are making sure that we're doing this in a creative and responsible way.

Jacob Aarup-Andersen: But we are making sure that we are doing this in a creative and responsible way. The focus of the team is to continue the good momentum they have built over the last now 9 to 12 months. As you know, the momentum improved already from the middle of last year, but we then had a setback in Q4 due to the significant typhoons in the center of Vietnam. Good growth. I am very happy to see the team performing there. Overall, the market itself is constructive. You will have seen that also from a certain major competitor, that they are also talking constructively around the underlying market. The consumer is back in the beer market, and that structural growth rate also, of course, helps for all of us. We are constructive around Vietnam.

Speaker #4: So the focus of the team is to continue the good momentum they built over the last, now, nine to twelve months. As you know, the momentum had already improved from the middle of last year, but we then had a setback in Q4 due to the significant typhoons.

Jacob Aarup-Andersen: The focus of the team is to continue the good momentum they have built over the last now 9 to 12 months. As you know, the momentum improved already from the middle of last year, but we then had a setback in Q4 due to the significant typhoons in the center of Vietnam. Good growth. I am very happy to see the team performing there. Overall, the market itself is constructive. You will have seen that also from a certain major competitor, that they are also talking constructively around the underlying market. The consumer is back in the beer market, and that structural growth rate also, of course, helps for all of us. We are constructive around Vietnam. We expect the H2 to also be positive growth in Vietnam. So we will be capping a good year, 2026, in Vietnam and are very constructive on the coming years there.

Speaker #4: In the sense of Vietnam, there is good growth. I'm very happy to see the team performing there. Overall, the market itself is constructive. You will have seen that also from a certain major competitor, that they're also talking constructively around it.

Speaker #4: The underlying market—so, the consumer is back in the beer market. And that structural growth rate also, of course, helps for all of us.

Speaker #4: So we're constructive around Vietnam. We expect the second half to also see positive growth in Vietnam. So we'll be capping a good year 2026 in Vietnam.

Jacob Aarup-Andersen: We expect the H2 to also be positive growth in Vietnam. So we will be capping a good year, 2026, in Vietnam and are very constructive on the coming years there. Ulrika, do you want to talk to Brazil?

Speaker #4: And I'm very constructive on the coming years there. Ulrika, do you want to talk to Brazil?

Jacob Aarup-Andersen: Ulrika, do you want to talk to Brazil?

Speaker #3: Yes, I can do that. Hi, Genn. You're absolutely right. We did take some steps to improve the financial performance of the business, and we mentioned that as we did it, we exited some of the non-profitable contracts and SKUs, and had a big push on cost reductions.

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

Speaker #3: So yes, we've gotten to a place where we are now getting a much more profitable entity and cash-generating. And we're seeing now a good H1, with mid-single-digit volume growth in H1, with that better profitability and cash flow coming through.

Speaker #3: At the same time, we are continuing to review the strategic journey and the way forward for the business, and we are in the middle of that as we speak.

Speaker #4: Thank you very much. I'm being alerted that we have time for one more question.

Jacob Aarup-Andersen: Thank you very much. I am being alerted that we have time for one more question.

Speaker #2: The next question comes from Mitch Collett from Deutsche Bank. Please go ahead.

Operator 2: Then the next question comes from Mitch Collett from Deutsche Bank. Please go ahead.

Operator: Then the next question comes from Mitch Collett from Deutsche Bank. Please go ahead.

Speaker #6: Morning, Jacob. Morning, Ulrika. I'll stick to two. Firstly, I know this is probably linked in part to Britvic, but sales and marketing expenses were down 60 basis points as a percentage of sales.

Mitch Collett: Morning, Jacob. Morning, Ulrika. I will stick to two. Firstly, I know this is probably linked in parts of Britvic, but sales and marketing expenses were down 60 basis points as a percentage of sales. Can you give a bit of color on how that is divided between sales expense and also marketing expense? I guess, are you investing in your brands appropriately? Then can you just give a bit more color on the Sapporo JV and how you think that is going to benefit your businesses in Laos, Vietnam, Cambodia, and also the UK? Thank you.

Speaker #6: Can you give a bit of color on how that's divided between sales expense and also marketing expense? And, I guess, are you investing in your brands appropriately?

Speaker #6: And then, can you just give a bit more color on the Sapporo JV and how you think that's going to benefit your businesses in Laos, Vietnam, Cambodia, and also the UK?

Speaker #6: Thank you.

Speaker #4: Thanks, Mitch. Let me talk to Sapporo, and then Ulrika can talk to the SG&A. So, yeah, listen. First of all, we're super excited about it.

Jacob Aarup-Andersen: Thanks, Mitch. Let me talk to Sapporo, and Ulrika can talk to the STNA. First of all, we are super excited about it. As you know, we have 2 years of experience of working with Sapporo in Malaysia, Singapore, and Hong Kong, where we have been very positively surprised by the strength of that brand, the ease of which it has been taking share in the combination with what is a very strong route to market from our side. So it is a premium to super premium brand that has very strong consumer attraction. Not just the Japanese provenance, but Sapporo in itself really has some very strong brand equity cues that resonates very well with consumers. So very happy with that.

Speaker #4: As you know, we now have two years of experience working with Sapporo in Malaysia, Singapore, and Hong Kong, where we have been very positively surprised by the strength of that brand and the ease with which it's been taking share. This, combined with what is a very strong route to market from our side, has been very encouraging.

Speaker #4: So there's definitely, it's a premium to super premium brand that has very strong consumer attraction. And not just the Japanese provenance, but Sapporo itself really has some very strong brand equity cues that resonate very well with consumers.

Speaker #4: So, very happy with that. And that's also what then led to the further conversation because, of course, both parties could see that there was something very significant and long-term here in the way that we were operating together.

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

Speaker #4: So, it's a natural extension for us to increase this partnership to more markets. We do expect, over the coming years, that we will both be able to introduce—through our distribution channels—the Sapporo brand in a meaningful way.

Speaker #4: And it will be a nice growth driver in the premium segment for us in those markets. We're going to build it in the right way.

Speaker #4: We're not in a hurry in terms of seeing significant millions of hectoliters of sales over the short term, but it's really about building the brand equity correctly. This is such a strong premium brand that if you build it correctly, you're going to have a significant growth journey in front of you.

Jacob Aarup-Andersen: We're not in a hurry in terms of seeing significant millions of hectoliters of sales over the short term, but it's really around building the brand equity correctly, because this is such a strong premium brand that if you build it correctly, you're going to have a significant growth journey in front of you. We don't have any reason to believe that we shouldn't be able to do the same journey as we've done in Malaysia, Singapore, Hong Kong, and the other Asian markets based on all the consumer work we've done. Then bringing it to the UK as well, we think Sapporo in Europe can play a significant impact longer term for the premium portfolio. Japanese provenance is also really something that has strong traction. It's had a level of traction for a while, but we're seeing an accelerating traction for that.

Speaker #4: So we don't have any reason to believe that we shouldn't be able to do the same journey as we've done in Malaysia, Singapore, Hong Kong, and the other Asian markets.

Speaker #4: Based on all the consumer work we've done, and then bringing to the UK as well, we think Sapporo in Europe can play a significant role longer term for the premium portfolio.

Speaker #4: Japanese provenance is also really something that has strong traction. It's had a level of traction for a while, but we're seeing accelerating traction for that.

Speaker #4: And the Sapporo brand—we think there is so much more potential in the UK than what has been realized so far. We'll now be exclusive long-term.

Jacob Aarup-Andersen: The Sapporo brand, we think there is so much more potential in the UK than what has been realized so far. We'll now be exclusive long term, and therefore we can also build it in the right way in the UK, in a market where the consumer is also very focused on world beer brands. We think now with the combined strength of the new Carlsberg Britvic business, we also have a much stronger machine behind building that brand. Of course, it's no secret that if we see that success in the UK, you should not be surprised to start seeing Sapporo in more European markets. But for now, let's get UK off to a good start. A strong addition to the premium portfolio, especially driving net revenue per hectoliter, and then volume growth will come gradually, which is something we're looking forward to.

Speaker #4: And therefore, we can also build it in the right way in the UK. In a market where the consumer is also very focused on world beer brands, we think now, with the combined strength of the new Carlsberg Britvic business, we also have a much stronger machine behind building that brand.

Speaker #4: And of course, it's no secret that if we see that success in the UK, you should not be surprised to start seeing Sapporo in more European markets.

Speaker #4: But for now, let's see. Let's get the UK off to a good start. So, there's a strong addition to the premium portfolio, especially driving net revenue per hectoliter, and then volume growth will come gradually, which is something we're looking forward to.

Jacob Aarup-Andersen: Ulrika, do you want to talk to Mitch's question on ST&E?

Speaker #4: Ulrika, do you want to address Mitch's question on SG&A?

Speaker #3: Yeah, I think, Mitch, it was sales and marketing you referred to. And yes, you're absolutely right, there is some of the effectiveness coming through from Britvic into those lines.

Ulrica Fearn: Yeah, I think, Mitch, it was sales and marketing you referred to. Yes, you're absolutely right. There are some of the effectiveness coming through from Britvic into those lines, so you will at least see some improvements in terms of how we spend on those two lines within that. But I will also say that there is a bit of phasing here between H1 and H2, so the trend, we have still not spent July and August when you look at the H1 numbers. There is a little bit of phasing in it as well, and I think that's as far as we go on that.

Speaker #3: So you will see some improvements in terms of how we spend on those two lines within that. But I will also say that there is a bit of phasing here between half one and half two.

Speaker #3: So it's not all the trend. We have still not spent July and August when you look at the first-half numbers, so there is a little bit of phasing in it as well.

Speaker #3: And I think that's as far as we go on that.

Speaker #6: Thank you both.

Mitch Collett: Thank you both.

Speaker #4: Thank you. All right, I think that basically concludes the final question for today. Thanks for listening in, and thank you for all of your questions.

Jacob Aarup-Andersen: Thank you. All right. I think that basically concludes the final question of today. Thanks for listening in, and thank you for all of your questions. We are going to see a lot of you over the coming days and weeks, so looking forward to that, of course. Until then, have a nice day. Thank you.

Speaker #4: We're going to see a lot of you over the coming days and weeks, so looking forward to that, of course. Until then, have a nice day.

Speaker #4: Thank you.

Operator 2: Ladies and gentlemen, the conference is now over. Thank you for joining, and have a pleasant day. Goodbye.

Operator: Ladies and gentlemen, the conference is now over. Thank you for joining, and have a pleasant day. Goodbye.

Browse all earnings call transcripts

Q2 2026 Carlsberg AS Earnings Call

Request TrialDemo

Carlsberg

Earnings