Outlook for 2021

The start to 2021 has taken place in the shadow of COVID-19. Our On-Trade business has been hit through tough restrictions imposed on restaurants, bars, night entertainment, sports and music events and much more.

The Off-Trade business is not picking up as much of the lost sale in On-Trade during the winter months, as the case was in the spring of 2020. This is because there are not the same outdoor drinking occasions during the winter and because gathering restrictions are much tighter now compared to the first round of lock-downs. As a result, uncertainty continues at elevated levels, and this year’s results are strongly dependable on when restrictions on the On-Trade business are lifted, and on when gathering restrictions are eased.

The current environment therefore caters for a continued focus on cost flexibility, production planning, the capability to deliver, while at the same time pursue our commercial agenda and continuously find the pockets of growth in our markets and still be ready for the reopening of societies on the back of the pandemic. Despite the current circumstances, we expect to deliver an EBIT in the range of DKK 1,475-1,625 million, which should be compared to EBIT of DKK 1,515 million in 2020. Compared to 2019 where we realized an EBIT of DKK 1,469 million, we therefore expect to grow our EBIT by up to 11%, despite the negative impacts caused by COVID-19.


The Board of Directors has decided to initiate a share buyback program of up to DKK 250 million as soon as possible covering the period until 30 June 2021. During the summer, it will be decided whether an additional share buy-back will be initiated based on the state of COVID-19 and our financial flexibility at that point.The Board of Directors will recommend to the AGM in 2021 a distribution of ordinary dividend of DKK 13.50 per share. Hence, at least DKK 915 million is expected to be distributed based on the Financial Statements for 2020.

Assumptions about markets and main priorities for 2021
We want to continue to grow faster than the market in all the markets we compete, by overinvesting in pockets of growth across our footprint. We expect to move towards normalization as restrictions are eased, normalizing our sales and marketing expenses, building our brand equity further and investing in the opportunities that will arise once societies reopen. Our organization is prepared for different scenarios given the volatile environment we are in, which means that we have a tight focus on our cost base, while we at the same time invest cautiously behind our mainstream brands. Given our new sustainability strategy we are investing in CSR to strengthen our medium-term opportunities, as well as we are investing in capacity expansions.

Our strategic focus remains set on products with low and no sugar and alcohol and premium and craft products. On top of this, we want to take advantage of the high growth in energy drinks and RTD/cocktails, as well as the continuing trend towards healthier beverages, which are benefiting our enhanced waters.

That said, 2021 will be a year with continued high uncertainty why flexibility in planning and use of cost is very important. The key risks to our business outlook are when restrictions will be lifted and gathering restrictions eased, especially in Denmark, Italy and Finland, but also if consumers after this will return towards the consumption behavior they had in 2019.

The high end of our EBIT guidance range assumes that On-Trade restrictions are lifted and gathering restrictions eased around 1 April 2021, and that the On-Trade therefore is opened through the entire summer. At the low end of our EBIT guidance range, we have assumed that restrictions are lifted around 1 July 2021.

The low end of our EBIT guidance range includes lower sales and marketing costs, compared to the high end of the guidance range. In that scenario, the development in gathering restrictions will be an important factor, because when these are eased, people are able to meet again inside, but also outside in the spring and early summer months. We are assuming a normal summer in 2021 and Christmas season.

Our free cash flow in 2020 was positively affected by several factors, of which around DKK 200 million are expected to revert during 2021. In 2020, mix shifted towards Off-Trade and northern Europe where businesses in general have shorter payment terms. We expect business activity to normalize during 2021. We also do not expect to continue the extraordinary beer campaign activity in Finland, which will impact our cash flow negatively compared to 2020. On top of this comes payment of delayed tax payments and for holiday accruals in Denmark (legislation change). In total, these factors are expected to generate a net working capital headwind of around DKK 200 million in 2021 compared to 2020.


Financial assumptions

  • As 2020 was a normal summer, the 2021 outlook has been made under same assumption.
  • Net selling prices are assumed to be slightly increasing during 2021 as a result of the reopening of the On-Trade business as well as growth in the convenience (single serve) channel. In addition, our overall premiumization efforts and price/pack strategies in each segment and country will support a positive price/mix development. These efforts are unchanged and include optimization of the product mix.
  • Generally, costs are expected to follow the inflation in 2021. Commercial costs are expected to increase in connection with growth initiatives and investments in the existing business, as well as a pick-up in sales and marketing costs compared to 2020 following the expected reopening.
  • 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 2021.
  • Exchange rates between DKK and other currencies are expected to remain unchanged as compared to the end of February 2021.
  • COVID-19 has had a significant impact on the On-Trade business in the first months of 2021, which is expected to continue until restrictions are lifted. The guidance is based on an opening during Q2.
  • In 2021, our net investments are expected to be higher than set by our financial targets of around 5%, due to the fact that some capex-plans from 2020 were pushed into 2021, we will increase our investments in CSR and expand capacity to support future growth.
  • Corporate income tax rate is expected to amount to around 21% of profit before tax excluding income after tax from investments in associates.