Good morning, everyone, and welcome to Royal Unibrew's Q3 25 trading statement. I'm Lars Jensen, CEO of Royal Unibrew, and I'm joined today by our CFO, Lars Vestergaard.

We'll take you through the highlights of our performance in the third quarter and then open for questions at the end. Before we begin, please note the usual disclaimer on slide number 2.

It contains important information about forward-looking statements, assumptions, and risks that may impact our outlook. With that, let's start with a broader view on slide number 3.

Let's start with a look at our strategic progress and long-term targets. Our financial performance demonstrates that the strategy is working: a solid commercial execution and strong margin expansion.

We continue to benefit from our growth framework, where 60% of our net revenue sits in attractive and growing beverage categories, such as no/low sugar, carbonated soft drink, energy, enhanced, RTD cider, and premium. In markets where consumer confidence generally remains low, we delivered organic revenue growth of more than 3% in the first 9 months of 25, which is ahead of European peers.

Our top-line growth was supported by the new activities in BeLux, but also negatively impacted by reduced private label production in Italy and adverse currency movements. The key for Royal Unibrew is profitable growth.

We focus on categories, markets, and channels where we can grow sustainably and profitably, while exiting or diminishing areas that dilute our margin or strategic focus. From 26, this step will reduce group revenue by around 3.5%, but have no impact on EBIT or volumes.

The decline in net revenue is predominantly from snacks and will impact the Northern European segment. Operational efficiency is deeply rooted in our culture and across the organization.

Our teams are constantly looking for smarter ways to operate, whether it's optimizing production or logistics, or simplifying workflows, or improving our allocation of resources. The strong EBIT margin development in the first 9 months of 25 shows that this mindset is delivering results, not just in our established markets, but also in the newer ones.

Finally, on this slide, our long-term ambitions remain unchanged, and we aim to deliver an organic EBIT growth of 6% to 8% per year, double-digit earnings per share growth, and continuous improvement in return on invested capital. Now let's turn to the Q3 highlights on slide number 4.

We delivered another strong quarter with reported EBIT growth of 15% and organic EBIT growth of 14%. Net revenue grew 3%, while organic growth was 4%.

We saw continued strong execution in our growth categories and improved momentum in our Northern European segment. Earnings per share increased by 20%, and free cash flow developed in line with our plans.

With less than 2 months to go of 25, we now expect to deliver full-year EBIT growth at the high end of the 8% to 12% range. Let's look closer at the performance in each of the segments now, and we'll start with Northern Europe on the next slide, which is slide number 5.

In Northern Europe, organic volume growth was 1%, and net revenue increased by 3% in the quarter. Finland rebounded after a soft Q2 market that was impacted by cold weather.

July was significantly warmer, which supported stronger volumes. As Finland has a more premium portfolio, the strong Q3 improved our price mix for Northern Europe segment in total.

In Denmark, we continued to gain value share across most categories. Faxe Kondi delivered strong growth, particularly in the no/low calorie segment, and Booster maintained momentum as the leading energy drinks in the market.

Our beer portfolio, led by Royal and Heineken, also grew despite a declining total beer market. In Norway, we saw solid revenue growth in the quarter, which is driven by the momentum in the RTD cider category and beer.

This is despite a continued soft consumer sentiment. Overall, Norway is tracking on our plans.

In the Baltics, we experienced a decline in volume and revenue in the quarter due to relatively cold summer and a more competitively pricing environment, but profit remained intact. Now let's move to slide number 6 and look at Western Europe.

Western Europe delivered a 9% organic volume growth and 11% revenue growth in Q3. Growth was driven by BeLux, which accounted for around 12% of the total segment growth.

In Italy, we continued to gain market share, but growth was lower than in the first half of the year due to a colder weather in Q3. Our beer brands, Ceres and Faxe, performed well, and the Crodo soft drink range continued to take share across channels.

As we have previously described, we have reduced private label production to free up capacity for our own brands. This supports the price mix and profitability, even if total volume is down in the quarter.

In France, we continued to gain market share in soft drinks, which is driven by our two local hero brands, Lorina and Crazy Tiger. In the Netherlands, the business continues to track on plans on revenue and margins, and margins are up year-to-date.

We focus on profitable growth as we enhance our brands and focus on introduce more options to strengthen the price pack play. This is while we have deselected some non-profitable promotions.

In BeLux, we estimate that we have maintained market share in 25. BeLux remains loss-making this year as expected, but continues to develop according to plan.

BeLux has now been part of our portfolio for a year, and starting from October 25, it's included in our year-on-year comparison. Now let's turn to slide number 7 and the International business segment.

The nature of the International business means that quarterly performance can be volatile and often influenced by timing effects of inventory movements. That's why we typically look at this in a 12-month running perspective or year-to-date when we are at this time of the year to get a clearer view of the underlying trends.

When we look at sales-out growth across our key market, it remains in the low teens, confirming a strong consumer demand for our brands. Sell-in growth declined in Q3 following some inventory buildup earlier in the year.

Year-to-date volumes are up around 12%, which is now calibrated with the sales-out momentum. Net revenue declined slightly in Q3, but was up 4.5% year-to-date.

Besides the inventory normalization in Q3, net revenue was impacted by currency headwinds and country mix, and with faster growth in African markets where price per liter is structurally lower. Category growth was led by the Faxe beer, the Crodo soft drink, and Vitamalt.

Profitability and margins remain strong in the segment. With that, I'll hand over the word to Lars to walk you through the financials.

Thank you very much, Lars, and please turn to slide number 8. Net revenue has increased by 5.3% in Q3, or 4.3% organically.

Gross profit grew by 5.9% in the quarter. The higher gross margin growth compared to net revenue reflects both our focus on profitable growth and efficiency improvements.

The cost base increased by less than 2% year-on-year, which mainly relates to the impact from BeLux and recent acquisitions. The underlying development in cost reflects our strong focus on efficiency and cost control.

The efficiencies have mainly been achieved within sales and distribution expenses, while we continue to invest in sales and marketing to support our growth ambitions. We are seeing clear benefits from our improved production footprint and initiatives to streamline logistics and distribution operations.

EBIT increased by 15% in Q3 and 13% year-to-date. The EBIT margin expanded by 160 basis points in the quarter and by 110 basis points year-to-date.

Tax and financial expenses are developing as expected, with an effective tax rate of 22% and net financial expenses in line with our guidance. Net profit is developing as per plan, but declined year-on-year.

Please note that in Q3 2024, we had benefited from a tax-free gain on the sale of the shareholdings in Poland of 204 million. Adjusted for this, net profit was up 18% year-on-year in Q3 and year-to-date.

Earnings per share, adjusted for the extraordinary gain in 2024, increased by 20% in the quarter and 19% year-to-date. Let's move to the cash flow and balance sheet on page 9.

Cash flow is tracking in line with our plans. Operating cash flow amounted to 1,724 million year-to-date and up 18% from last year, supported by stronger operating performance.

Year-to-date, free cash flow reached 973 million compared to 1 billion and 32 million last year. The decline reflects the one-off proceeds from the sale of our Polish shareholdings in 2024.

Furthermore, we are running higher capex in 2025, and this will also continue into Q4. Capex is according to plan, and we expect full-year level of around 7% of revenue.

Net interest-bearing debt was 6 billion at the end of September, and the gearing ratio was 2.1 times EBITDA, in line with our target. Our ongoing share buyback program of 300 million runs until the 19th of December 2025.

Finally, return on capital employed is improving, supported by higher earnings, and Norway and BeLux are on track to deliver 10% cash ROIC by 2026. Let's move to the outlook on page 10.

Based on our performance so far and our expectations for the remainder of the year, with less than 2 months to go, we maintain our full-year guidance range. However, we now expect EBIT growth to be in the high end of the range of 8% to 12%, supported by our continued focus on efficiency and margin expansion across the organization.

We still expect full-year net revenue growth of 5% to 6%. This reflects an acceleration in Q4 compared to the first 9 months, and this is consistent with trends observed so far in the quarter.

The consumer environment remains challenging, but stable compared to 2024. This is also in line with our previous expectations.

Other assumptions for guidance are unchanged. With that, I'll hand the word back to you, Lars.

Thank you, Lars, and let's move to slide 11. Our management agenda remains consistent with what we have communicated earlier.

We are continuing to execute our growth strategy with focused efforts across growth markets like Italy, France, and International; new markets, such as Norway, Netherlands, and BeLux, is now about fueling the commercial momentum; and the more developed markets, like Denmark, Finland, and Baltics, is where the efficiency and cost discipline remained high on focus. We'll keep driving operational efficiency across the organization and optimize resource use to strengthen margins further.

We keep our focus on delivering on our sustainability targets, as well as our long-term financial targets. Now let's move to slide number 12 for the key takeaways.

To sum it up, we deliver a strong Q3 with revenue growth above industry average, a 15% EBIT growth, and a solid margin expansion. Our strategy is working.

We are growing in our key categories and markets while exiting low-margin business. As a reminder, this will reduce net revenue by 3.5% in 2026, mainly in Northern Europe, while there will be no impact on EBIT and volumes.

Our cash flow and balance sheet remains robust, enabling both investment and shareholder returns. Finally, we now expect to deliver the full-year EBIT growth at the high end of the 8% to 12% interval.

With that, we are ready to take the questions. Operator, please go ahead.

Good morning, Lars, Lars, Flemming, everyone. Congrats on the very strong numbers here.

Two questions from my side. The first one is regarding the sales and distribution expenses.

They make up 22.5% of your revenue here for the quarter. As I can see it, this is the lowest—at least a percentage-wise—sales and distribution expenses you've had.

Only in 2020, when societies were locked down due to COVID, did you have a lower cost here. I guess my question is: what's driving these very low sales distribution expenses, and how sustainable is this very, very impressively low number?

That would be my first question. Then the second question is a bit more on markets.

I would like to maybe hear you elaborate a bit on the Dutch, Netherlands market, if you could just give us a bit of an update. It seems like it's returning to growth.

What is driving this growth? Are you increasing the sales force or is it something else, the new slim cans?

Any update there. Thank you.

If we start with the sales and distribution expenses, we have been working very hard to optimize our footprint and, of course, within logistics and the way we spend our money in the sales force. That is where we have found a number of efficiencies that is showing in the quarterly numbers.

It is low. Remember there is quarterly variances between these numbers, and do not take one quarter and extrapolate for that.

I think this is the place where we have seen solid improvements. Remember that we have moved some production closer to the end consumer, which, of course, helps distribution expenses structurally.

Then we have been looking at smarter ways of doing things within the sales area. This is an area where efficiencies are paying off.

Then

on the question around the Netherlands, there's a lot of moving parts, and we fairly consistently over the last 5, 6 months seen that the net of that is positive for the top line of the business, but it's also supporting our margin enhancement and the buildup of getting to a 10% return on invested capital. I think the word that I would say that is the most important one is consistency in the strategy that we are pursuing, which is a mix of enhancing the price pack offering in the markets, where we do see some elements in the market this year, but where, I would say, the expectation for the future is on a higher level, meaning 26, 27, that is where we have a larger opportunity to enhance that agenda, in particular in the carbonated soft drink space.

Morning all, and thanks for the call, thanks for the question. I've just got one really, and I suppose it's elaborating on the questions on sales and distribution expenses performance.

I suppose I'd just like to get your thoughts on the profit development going into next year. You've now guided to the high end of 8% to 12% for this year.

If I look at next year and compare to what we're seeing now, I think you've spoken about previously expecting kind of tick up in a lot of these efficiencies and synergies going into 2026. Then zooming out, I suppose, we're going into a relatively benign sort of cost environment more generally.

You do have this impact from the Pepsi snacks exit, but you've commented that that won't have any impact on EBIT. I suppose I just want to get kind of your take on the moving parts in terms of the EBIT growth development for next year.

I suppose, is there any reason why we should expect any deceleration versus what we're seeing this year, given that quite a few things, I suppose, are going to get incrementally more favorable? Thank you.

I think we will allow ourselves to come with the guidance for 26 in February when we come with a full-year statement. I think the way that you should look at it is that we have a robust underlying momentum of the business.

Then on top of that, we have, for a couple of years, we have spent, I would say, above normal levels of capex, which, of course, should generate some solid returns. I would say that if there's anything that potentially could play to, I would say, to the negative, then it's the quality of the net revenue.

In a market where the beer category is in decline and you see some of our competitors have been losing value share for quite some time, we do see more, I would say, price allocation in terms of driving business forward than what we have seen over the last, yeah, 3, 4 years. We have a much stronger value focus than what we see from our peers, in particular in the Nordic countries.

We'll come back to this in February. Obviously, the underlying momentum remains robust.

Then for the rest of it, we need to massage, and that's also why that we are sharp on efficiencies on every cost line so that we make sure that our competitiveness is not being diminished. Can you hear us?

No, that's all from me. Thank you.

Yes, thank you. Morning, Lars, Lars, and Flemming.

Two also from me, please. The first one is on your confirmation of the sales guidance.

Now you've, at the 9 months, I think, reported sales was up 4.2%. It implies quite a material acceleration in Q4, which you said.

Q4 should be growing around 7.5% to 12%, and you won't have the benefit from the first-time sort of consolidation of BeLux. If you could unpack a bit what is behind this acceleration.

I assume you've had a strong start to the quarter. If you could comment a bit about the sort of recent trading, whether maybe Minto, is there any seasonality?

Will that contribute more? Trading days, is there any difference?

Or maybe the snacks business, before you exit the business, are you sort of selling more snacks? That's the first question, understand that a bit.

Then the second one really is about the environment in Europe as we go into next year. Net of the snacks business, you're exiting, how do you feel about the consumer environment, the trading environment going into next year?

Any reason why there should be any difference in consumer sentiment in, say, Finland and Norway? Kind of connected to this, and it's something you just touched on now in the question, you talked about potential quality of net revenue.

You said that you see a bit more price allocation to drive business from peers. Did you mean by that that sort of you're seeing peers maybe a bit more aggressive on price in order to drive volume?

How is the pricing environment panning out, do you think? Thank you.

If I start with the last one first. Yes, we do see, in particular, I would say, in the cola segment, that pricing is being used to try to drive performance in, I would say, our two big home markets, and a bit in the Baltics as well.

It doesn't seem to work. It's an observation from our side that the behavior has changed over the last, I would say, 4 months or so, but it doesn't help the development for the one that does it, and it doesn't help the overall market.

It is still selective and not a broad development, but it's a different behavior than what we have seen. That is the observation, I would say.

When it comes to the first questions on the net revenue guidance, yes, October was a strong month for us, and that means that we are enhancing our flight altitude towards the remaining of the year. I think you should expect International to have a solid end to the year, and then the general momentum in the business indicates that in some of the newer markets, like in Norway, that our trajectory on the net revenue is moving upwards.

That is the thoughts around why we believe that the 5% to 6% is still relevant as a guidance interval. On the trading environment— Yeah.

Yeah. No, sorry, just on that question.

Therefore, it sounds as it's really sort of underlying good momentum of the business rather than potential one-offs that could sort of help you in this quarter, right?

We do not really consider anything as one-offs, and then we would have said it if it would have been one-off character.

Perfect. Thanks.

On the trading environment, I think, as our guidance for the reminder of the year indicates, we are sticking with our assumptions as we laid them out in the beginning of the year, and I wouldn't call out anything materially in the consumer environment or sentiment as we see it right now anywhere, not to the worse, not to the better. When you call trading environment, it can be consumer, it can be customers, it can be competition.

The competition I already talked about, and I think when it comes to the trading environment with our customers, I think we generally see a very positive tone of discussion in terms of driving value for us, driving value for them, and driving value for the consumers. That is the agenda that we pursue.

Thank you very much.

Morning, Richard.

Good morning, Lars, Lars, and Flemming. I've got two questions as well, please.

Good morning, can you hear me?

Yes. We hear you.

We hear you. We hear you.

Okay. Perfect.

On the Belgium Luxembourg market, you talk about stable market share. I should read that positive, right, because the business has been under some market share pressure in the past.

Then also you talk about initiatives to bring the business back into profits. What are you doing to realize that?

Then the second question I have is on the growth framework. You mentioned that 60% of revenues are covered now by the growth framework.

Is that a good level? Are you looking to increase that?

What is the function of the remaining 40%? Is that to be able to offer the full multi-beverage model?

Is this predominantly low-growth but high-margin revenue? Just some details around that, please.

Yeah. If we start with the business in BeLux, it is positive that we are maintaining market share because that business have been on a downward trajectory for a couple of years.

The team have done an outstanding piece of work in building a winning organization in a very short period of time. We went live on SAP earlier this month, and the team did a excellent job on that.

If you look at what is it we need to do in Belgium, there's a number of things we need to do. We need to look at the price pack architecture, make sure that it fits the market.

There's a good amount of work that needs to be done. Then we are moving some of the production to Holland so that some of the products are coming internally from, and that will give a nice cost saving when that is insourced.

I would say the plan for the Belgian and Luxembourg market is pretty clear, and there's very clear roadmap to getting into positive territory for next year. Good organization that we built in a short period of time, and price pack and insourcing are the two things that will drive benefits in the short term.

Then

on the growth framework, I think the 60% is quite a handsome number, I would say. Can we enhance it?

We can probably enhance it. The trick is also that the remaining part, which is not a part of the growth framework, which is sugar soft drinks and a lot of mainstream beer, that we at least keep that on the same level as where it is so it doesn't become a burden.

This is where some of our, I would say, strong local brands, Lemonsoda is an excellent example. The no/low sugar proposition is growing very fast, but we are also gaining on the sugar variants, it's not dragging us down.

It's actually building on top of what we have. The same goes for the business that we have in Africa on the Faxe 10%.

It is not a part of the growth framework as it is not considered as a premium offering, but more a mainstream offering in the African countries. The growth framework is a categories where we see structural growth, whereas for the reminder of it, there's still growth opportunities, but they're of a different nature than in growing markets.

We feel that we are at a good level. Can we enhance it?

Yes, we believe we can. Then it's about making sure that you don't lose out on the positions you have in no-growth or declining categories.

We have so far been quite good at that, I would say. Yeah.

That's how we look at it. Can you hear us, Richard?

Great. Thanks, Lars.

Then maybe Lars Vestergaard, just a quick follow-up on Belgium. Lars, can you say what the margin is in Belgium?

Is it low single-digit negative, mid single-digit negative? What's the margin there?

It's low single-digit negative. Let's not get into too much detail because there's a lot of moving parts in that business at this point in time.

There's a lot of things that we are fixing. I would say the moving parts are a number into next year.

I think we would be surprised if it's not positive next year.

All right, perfect. Thanks a lot, Lars.

Thank you.

Yes, thank you so much. Just a few questions from my side as well.

First, can you comment a bit more on Norway, and specifically the profitability development in the quarter? How has that gone and what has been driving it?

The second is again regarding BeLux. Could it already turn profitable in the fourth quarter?

That's my questions.

If we look at Norway, I think we're super happy to see that we are building momentum on the top line of our business. When we look at year-to-date, then Norway, in the Nordic countries, Norway, if you take the whole Northern European segment, Norway is the country where the growth of net revenue is the highest by everybody.

When we are looking at our market shares, both in beer and the RTD cider category, we have been building momentum over the last half year. There is a profit enhancement in the third quarter compared to last year.

All of the hard work that the team has been doing is really paying off. At the end of the day, following the plan that we stipulated out and made in the beginning of the year.

Super super happy about that. When it comes to BeLux, no, we do not expect BeLux to be profitable in Q4.

There's, as Lars said, there's some structural changes that will help us out. Those will come, some of them from the beginning of the year, and others will come when we have the trade windows during the first quarter because they're more price pack oriented.

You should see an improvement coming from Q1, and then getting better during the year of 2026.

Thank you so much. Maybe just a follow-up on Norway.

Can you also see that the cost actions that you have taken is driving profitability not big time, but some in Q3 already?

The underlying cost initiatives are helping us. I would say, we need to pay a bit of money to make sure that we get those effects.

Those are more being leveled out, I would say. We do have underlying efficiency gains, but we spend the money on taking the smaller one-offs here and there to make sure that we enhance the flight attitude.

That's predominantly on the people side.

Thank you so much.

Hi, good morning. Thanks very much for taking my questions.

I had two, please. The first one was just a follow-up on your comments on the Q4 trading.

I just wanted to understand in terms of the shape of Q4 last year, how the phasing was between October and then the rest of the quarter, just wondering if the comps for the rest of this quarter get any easier or tougher compared to what you had in October. Also just understand, I appreciate that the BeLux business is already in the comp base in Q4 last year.

Given you've been ramping that business, should there also be at least some support from BeLux in Q4 this year as well? Then my second question was just on the exit.

I know you've announced the 3.5% to come out next year. Are there any other businesses you haven't announced and included in that 3.5% that you would consider exiting, just to understand if there's more as we go into next year as well?

Thank you.

If we look at the Q4 trading, the way we look at it is that we have looked at the quarter in totality both last year and this year. Of course, I cannot remember the complete phasing from last year, but when we look at it, the plans are in place to deliver on the guidance, and we have good momentum in the beginning of the quarter.

I don't think we will see any significant standout from BeLux in the fourth quarter. Remember, the reason why BeLux is interesting in terms of the net revenue development is not that it's changing a lot, it's just because it's new business, and therefore it means something in terms of the top-line improvements.

I would say a strong start to Q4, good plans in place. I cannot remember the phasing in detail from last year, but I think we had a good start to the year.

Then, of course, we are looking at, as part of our efficiency journey, we are looking at how can we take structural cost out of the business or reallocate our organization to things that has better margin. We are also looking at other categories, such as tea, coffee, and really making certain that we put all our emphasis behind the brands we have that are successful: Pepsi, Faxe Kondi, Original, Ceres, etc.

Making certain that the quality of the portfolio gets better over time. We are exiting more.

It will not be as big as the snacks we have, and I don't think we want to go into details on the numbers because there's a lot of moving parts. I think the positive thing is that the core portfolio we have of strong brands, they are doing well.

The quality of our top line is improving as we speak. I think we are very pleased with the change in composition of our sales.

Thanks so much.

Yes, thank you, and good morning, Lars, Lars, and Flemming. First question is on Finland.

This is a very important market for you and also high margin. You had good weather in Q3, at least in July.

How much of the strong margin increase in Q3 comes from the improvement in Finland? Also, how does it look in Finland in Q4 so far?

Then secondly, in Western Europe, if you can comment or quantify how much negative impact the exit from the private label contracts had in Q3 in Western Europe. Then thirdly, I've seen barley prices and sugar prices come down quite a lot lately.

Will that impact your 2025 figures or will this not impact until 2026? Thank you.

Looking at Finland, yes, we got a nice rebound in Q3. Given the weather swings between the quarters, I think, at the end of the day, we need to look at this on a year-to-date basis.

If we include October and look at the market share data also that is available, then we are in a good spot. We have been talking about the original long drink circling now from the 1st of October the change in legislation that opened a number of outlets for up to 8% fermented beverages.

When we look at the performance in October, it looks, I would say, healthier than what we have seen over the last period of time as we are now circling the change. I think the Finnish business remains very strong, intact, and with a slight market share gain for us when we look at the total market.

This is how Finland is performing. On Western Europe, I think when we look at our business in Italy, we are up on revenue by a few percentage points, and the underlying of that is that private label is down 23%.

It's in volume, the numbers or the percentages that I'm mentioning here, is down by 23% this year. The branded portfolio is up by 7%.

That is clearly beating the market, and the 7%, the quality of the net revenue and the profit on the 7% is much, much higher than what we get out of private label. This is when you look at the Western European segment, it is something that takes the top line down, but the underlying is that we are enhancing the quality of our business.

As Lars just talked about in terms of are we looking at areas where we better put a focus on other priorities, and the private label in Italy is one of them. As long as we have spare capacity, it's a nice business that pays for some fixed cost.

As our underlying business is growing, we are freeing up capacity to sustain that for the coming periods.

If we look at the commodity prices, then it is true that barley, sugar, etc., is on a good path. If you look at other categories such as aluminum, then that is going in the opposite direction.

In totality, it does not have a big impact on Q4, and most of it have been fixed in terms of pricing earlier on. When you look into next year, we are seeing that the whole basket of what we buy is slightly more expensive than it is today, but not big movements as we have seen in some of the previous years.

Can you maybe elaborate a little bit on where you are in hedging now because historically, you have been varying a little bit going from almost no hedging to in some periods hedge 6 to 12 months out? Where are you now on that?

I would say we are well-covered for next year. There's, of course, still a lot of categories where we do not have a 100% hedging, but I would say we have covered quite a bit of our commodity exposure for next year at this point in time.

Okay. Thank you.

Morning, guys. Thanks for taking the question.

I know it's far too early for you to give guidance for next year. When you think about some of the puts and takes on growth, how you're thinking about the opportunities and you've mentioned the 3.5% negative that doesn't impact your volumes or your profit.

Do you expect to grow revenues next year? That's the first question.

Then the second is really around the strengths of the balance sheet, getting down to pretty healthy levels now. Could you perhaps talk about your appetite for the bolt-on deals or accelerating the returns of cash to shareholders?

That's the second question. The third question is around your capex, which is relatively elevated at the moment, around about 7% of sales.

Perhaps a little bit higher than some of your more mature market peers, around about the 4% or 5% level. Do you see a route down towards that 4% or 5% of sales level for capex and sort of what time frame?

If I start with your first question on growth looking into 26, when we have recalibrated, as we have said on the exiting pieces, the 3.5%, from that starting point on, we believe that we'll be able to grow the business next year through our growth framework and our positioning and the underlying momentum in the business. We are in a competitive market in, I would say, most countries and categories growing market share by value, which is our focus.

Yes, we will expect that we will be able to deliver net revenue growth on the adjusted starting point. In terms of the balance sheet, yes, it is getting healthy towards the year-end.

We're still executing one of the share buybacks. I would say we are ending up the year where we want to be.

I think we are in a good spot there. In terms of bolt-on acquisitions, we are looking in the market, but I would say that the key priority we have at this point in time is to make certain that we deliver on our promises on the BeLux and Norway, and we are on track on that.

Full focus on integration is the target at this point in time. Of course, if anything comes around, we are starting to see that the IT integrations have come quite far.

I would say the quality of our organization in the Netherlands, like in BeLux, is in general quite strong. In Norway, there's a clear roadmap defined, and I would say the Norwegian team is doing an excellent job in terms of executing on these programs.

I would say there's more organizational capacity being freed up for other stuff. In terms of the capex level, our target is 7% this year.

It will also be 7% next year as we finalize some of the capex programs. Then from that point onwards, we expect to return to more normal levels, which would be in the 5-ish percent territory.

As Lars mentioned, that's also one of the things that's driving efficiency and will help us next year as these capex programs mature and deliver the benefits. One one year more with elevated capex, and then back to a more normalized level.

Got it. Thank you.

Thank you. Good morning, Lars, Lars, and Flemming.

Thanks for taking my questions. I have two.

First is on your innovation pipeline. Can you please give us an idea of how does the extra production capacity which you have added in recent years and have it also making available in Italy, how does that enable you to intensify the pace of innovation launches, and do you expect it to drive a significant impact on volume and mixing in the medium term?

The second is on revenue per hectoliter in Netherlands, which we speak about often on these calls. I believe it's substantially lagging the other European bottling peers.

I was just wondering if you can give us a sense of how much runway in the medium term for price mix improvement you forecast there for Vrumona? How much of that gap versus European bottlers can you close through the targeted initiatives you've been making?

Thank you.

I think so the capacity expansions and capability expansions that we have made, both in Italy, Denmark, and in Holland, part of it is to drive price pack architecture. That's correct.

Call it innovation or not. We believe in a couple of years' time that that is going to change the mix of the business, in particular in Holland, meaningfully.

A part of it is and that's in particular in Denmark and in Italy, that is to make sure that we have enough capacity to sustain the already underlying development that we have of our business. For the soft drink part of it, it is both in Italy, but it's also outside of Italy, in the surrounding countries to Italy in Southern Europe, where the performance is really strong in the International segment.

All of this, ultimately, will help us out on having a more healthy net revenue per volume. It's not the only thing that would, I'll say, help us on that.

It is also what we talked about earlier today is about the quality of what we're already selling today and making sure that we, I would say, get a reasonable pricing to stay in on promotions or that we exit promotions and use the resources elsewhere, we have the right resource allocation or the money that we spend in the market. Since we acquired I would say both Netherlands and we onboarded the BeLux business, we have talked about how to increase the quality of the net revenue per volume.

Also the capex in this sense is supporting that.

Hi, guys. Just thanks for the follow-up.

I've got two additional questions, please. Yeah.

Can you hear me?

We

hear you. Perfect.

First one is on the gross margin. You reported 20 basis points improvement in the third quarter.

I would have expected that to be a bit more, especially with Finland bouncing back. Maybe you can talk a bit about what drives that 20 basis points gross margin improvement.

Then the other question I had, Lars, you mentioned about an improving efficiency mindset in some of the new markets. Can you talk a little bit about how you're implementing that, what is the remaining opportunity to become even more efficient in the Netherlands and Norway, I guess?

Thanks.

If you take the gross margin question, of course, there's an awful lot of moving parts in this. I think the one thing we should just remember is that the reason why we comment a bit on Finland's performance in Q3 was that it was quite poor in the first 6 months.

When you look at it year-on-year, it is not a substantial change in trajectory in Finland. It was more to confirm that Finland is on track after a difficult first half.

I think don't read too much into year-on-year comparisons on Finland. It's more that it's on track, and weather has impacted the Finnish business on a quarterly perspective, but not on a year-to-date basis.

Finland is on track. I would say there's a lot of mix happening in terms of gross margin.

As we've talked about for quite a while, the consumers are under pressure in most of our markets, and I would say the mix we sell is the margins are different and is different from country to country. I would say I would not conclude too much from the gross profit margin changes that we are seeing.

Then on the question on efficiencies going forward, we see efficiency opportunities everywhere. Now we have, I would say, a more recalibrated baseline on cost in the newer markets.

Then a lot of the journey from here is about creating operational efficiency. That means keep cost fairly flat, and then utilize the machinery, the organization that has been built up, and through that, improve the ratios of cost to sales, to speak.

Thanks, Lars

Thank you very much to everybody for participating, good engagement, good questions. Apologize a bit for having some challenges on the connection, but I think we got through it.

Thanks for your patience on that, and enjoy the day.