Outlook for 2019

The outlook for Royal Unibrew’s financial development in 2019 has been prepared taking into account a number of circumstances, including how the Company’s markets are expected to be affected by general economic activity, fiscal developments and consumer sentiment. Moreover, specific assumptions relating to the development in material expense categories as well as the effect of initiatives completed and initiated are taken into account.

The Board of Directors has decided to initiate as soon as possible a share buy-back program of up to DKK 400 million covering the period until end October 2019. The Board of Directors will recommend to the AGM in 2019 a distribution of ordinary dividend of DKK 10.80 per share. Hence, DKK 950 million is expected to be distributed based on the Financial Statements for 2018. With this distribution of a total of DKK 950 million we maintain our strategic flexibility.

Assumptions about markets and main priorities for 2019

The markets in which Royal Unibrew offers a broad beverage portfolio are generally expected to see a small decline in total demand in 2019 as the extraordinary good summer weather increased consumption of beverages in 2018. Our efforts to defend and expand Royal Unibrew’s market positions and to further strengthen customer partnerships will continue through focus on innovation and value management. At the same time, our broad beverage portfolio supports the possibilities of obtaining continued operational efficiency at all organizational levels. Our targeted efforts to create further improvements will be a core priority, including our efforts directed at investment-driven initiatives, which will contribute towards achieving both efficiency and commercial improvements. Generally, Royal Unibrew’s market shares on branded products are expected to be maintained or solidified.

We expect two key consumer trends to continue in 2019: On the one hand, consumers focus on more healthy or functional products and on the other hand on more authentic, local and indulgence-oriented products. For certain product categories we see the two trends melting together creating even stronger propositions. We expect growth in e.g. low and non alcoholic beer, waters and non-sugar carbonated soft drinks, and as for the functional products we expect to see growth in enhanced products, including energy drinks. For the craft/artisanal, local and indulgence products we see growth opportunities for brands such as e.g. Lorina, Terme di Crodo, Nohrlund, Kissmeyer, Aura and Lahden Erikois as they all connect to special drinking occasions where you prefer to serve products that really make people feel good.

Overall, in the multi beverage markets we will continue our efforts to create value across categories, a.o. through our price/pack strategies that focus on consumers’ drinking and shopping occasions. For parts of our product range we see opportunities for improving the distribution in selected channels.

In the niche markets, which cover Italy, France and International, we continue to focus on increasing our presence in already established markets. We highly emphasize to establish and retain our relationships and partnerships through consumer- and customer-oriented marketing investments with a view to strengthen our brand positions. For our newly acquired businesses we will focus on increasing the distribution and activation, while optimizing our price/pack strategies to secure value and premiumization of our offerings.

Outlook for 2019
mDKK Outlook 2019 Actual 2018 Actual 2017
Net revenue 7,400-7650 7,298 6,384
EBIT (mDKK) 1,340-1,465 1,339 1,069


Financial assumptions

  • 2018 was positively affected by very good summer weather in North Europe, which lead to a higher EBIT of between DKK 70 and 90 million net of higher commercial spending. Our 2019 outlook is based on normal weather and thereby a normalized level of net revenue and EBIT.
  • Net selling prices are assumed to be slightly increasing during 2019 as a result of higher input prices, which, however, will be reflected in selling prices on an average basis. Our efforts to improve the product mix will continue unchanged with focus on all product categories and channels.
  • While the acquisitions of Lorina and CULT are expected to affect net revenue positively, the planned and expected closing down of the production of certain of Campari’s products will affect revenue negatively. In total, we expect a positive effect of about DKK 300 million.
  • Generally, costs are expected to follow inflation in 2019. Commercial costs are expected to increase in connection with growth initiatives and investments in the existing business, while our assumption of a normal summer will lead to adjusted commercial spending.
  • We will continue our focus on generating continuous improvements and enhancing efficiency across the business and in all entities.
  • Royal Unibrew has entered into hedging agreements for a large part of the expected consumption of key raw and packaging materials for 2019.
  • Exchange rates between DKK and other currencies are expected to remain unchanged as compared to the end of February 2019.
  • Gross investments, including operating leases (IFRS 16 implemented already in 2018) are expected to stay around 4.7% of net revenue.
  • Corporate income tax rate is expected to amount to about 22.5% of profit before tax excluding income after tax from investments in associates. DKK 36 million of the deferred tax is expected to be due for payment in 2019.
mDKK 2014 2015 2016 2017 2018
Dividend 374 386 426 451
Share buy-backs 293 443 508 484
Total distribution 667 829 934 935
as a % of prior-year consolidated profit 107 117 119 113