Outlook for 2018

The outlook for Royal Unibrew’s financial development in 2018 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 programme of up to DKK 400 million covering the period to 22 February 2019. The Board of Directors will recommend to the AGM in 2018 the distribution of ordinary dividend of DKK 8.90 per share. Hence, DKK 870 million is expected to be distributed based on the Financial Statements for 2017. With this distribution of a total of DKK 870 million we maintain our strategic flexibility.

Assumptions about markets and main priorities for 2018

The markets in which Royal Unibrew offers a broad beverage portfolio are generally expected to see a minor structural decline in total demand. Our efforts to defend and expand Royal Unibrew’s market positions and to further strengthen customer partnerships will continue to focus on innovation and value management. At the same time, our broad beverage portfolio supports the possibilities of high operational efficiency at all organisational levels. Our targeted efforts to create continuous improvements will continue, 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 increased for the key brands.

In Finland, Hartwall’s product range comprises a broad beverage portfolio, and Hartwall holds an overall runner-up position in the Finnish market. To ensure Hartwall’s continued position as a market-leading beverage business in Finland, our main priorities in 2018 will remain concentrated, without any change, on commercial focus, organisational development and continuous improvements. The Finnish market has been characterised by declining consumption throughout a number of years due to, among other things, the very high level of excise duties. This development is expected to continue in 2018. The extraordinary campaign activity is assumed only in Q2 and Q3 2018, which will affect the net revenue development in Q1 and Q4 2018 negatively.

In the Danish consumer market, Royal Unibrew holds an overall runner-up market position approaching the market through a broad beverage portfolio. Danish consumption is expected to stagnate (adjusted for the weather effect), whereas the value of the overall consumption is expected to be slightly increasing because the market for branded products is expected to increase slightly, whereas the market for discount products is expected to show a slight decline.

In the Baltic countries, Royal Unibrew has a broad brand portfolio, primarily within beer, fruit juices, soft drinks and mineral water. The development and continued strengthening of the beverage portfolio are necessary to maintain economies of scale in a declining market and to continue strengthening customer partnerships. Consumption in the Baltic market is expected to decline due to tightening of legislation, most significantly in the beer category. The market for non-alcoholic beverages is expected to be stable or slightly increasing.

In Italy, where Royal Unibrew holds a strong position in the super-premium segment with Ceres Strong Ale, the market is expected to increase slightly. We still expect to strengthen our working relationships with the many wholesalers, off-trade customers and cash & carry customers by expansion of the product portfolio and strong consumer-oriented initiatives. At 2 January 2018, Royal Unibrew acquired the soft drinks business Terme di Crodo, and as both the existing beer products and the acquired soft drinks products target the same customers and are sold through the same channels, further strengthening of customer relations and an increase in business volume are expected.


In the Malt Beverages and Exports segment, we continue our focus on increasing our presence in already established markets. Great emphasis is placed on selecting and retaining our working relationships through customer- and consumer-oriented marketing investments with a view to establishing and reinforcing brand positions. The malt beverage markets in Europe and the Caribbean are expected to remain unchanged. However, the malt beverage and beer markets in Africa, North and Central America are expected to show slight increases, primarily driven by population growth. A number of the countries, primarily in Africa, will continue to be negatively affected by the macroeconomic development and devaluation of local currencies.

Outlook for 2018
mDKK Outlook 2018 Actual 2017 Actual 2016
Net revenue (mDKK) 6,650-6,900 6,384 6,340
EBITDA (mDKK) 1,450-1,550* 1,362 1,306
EBIT (mDKK) 1,090-1,190 1,069 1,001
*Approx. DKK 50 million impact from implementing IFRS 16 (operational leasing)


Financial assumptions

  • Slightly increasing net selling prices are assumed as a result of increasing input prices assumed to be paid by consumers on an average basis. Efforts to improve the product mix will continue unchanged with focus on all product categories and channels.
  • The acquisition of Terme di Crodo is expected to affect net revenue positively by about DKK 265 million, including revenue resulting from the agreement to produce Campari’s products.
  • Generally, basic costs are expected to follow inflation in 2018. Towards the end of 2018, certain efficiency gains are expected to be achieved from the acquisition of Terme di Crodo, primarily relating to logistics. Costs are expected to increase in connection with growth initiatives and support of the existing business. The growth initiatives relate primarily to the Malt Beverages and Exports segment, Craft and specialty beer and an increased sales and marketing effort in Italy. We will continue our focus on generating continuous improvements and enhancing efficiency across the business and in all entities.
  • Based on exchange rates at the end of February 2018, the prices of the key raw materials categories are expected to increase in 2018. Royal Unibrew has entered into hedging agreements for a large part of expected consumption in 2018 in key consumption categories.
  • Exchange rates between DKK and other currencies are expected to remain unchanged as compared to the end of February 2018.
  • Gross investments including the effect of approx. DKK 50 million from implementing IFRS 16 (operating leases) are expected to amount to DKK 315-335 million.
  • Tax is expected to amount to about 21% of profit before tax excluding income after tax from investments in associates.
  • Free cash flow is expected to be negatively affected by approx DKK 120 million as an extraordinary campaign in Finland is assumed to terminate in 2018.
mDKK 2013 2014 2015 2016 2017
Dividend 242 374 386 426
Share buy-backs 110 293 443 508
Total distribution 352 667 829 934
as a % of prior-year consolidated profit 94 107 117 119