Annual Report
2020
Royal Unibrew A/S CVR no. 41 95 67 12
Corporate social
responsibility
Page ๎๎
Our new long-term
sustainability strategy
CEO Letter
Page ๎
CEO Lars Jensen
commenting on ๎๎๎๎ and
the strategy evolution
Organizational support
Preferred
choice
Strategy
Page ๎๎
Main elements
of our strategy
Contents
Who we are ๎
Royal Unibrew in brief ๎
Results for ๎๎๎๎ and outlook for ๎๎๎๎ ๎
CEO letter ๎
Results for ๎๎๎๎ - business segments ๎
Financial and non-financial highlights
and ratios ๎
CFO letter ๎๎
Strategy ๎๎
Purpose and Ambition ๎๎
Our strategy ๎๎
Business model ๎๎
Operating Model ๎๎
Our growth formula ๎๎
Multi beverage and niche ๎๎
Non-alcoholic categories ๎๎
Alcoholic categories ๎๎
Financial targets, capital structure
and distribution policy ๎๎
Outlook for ๎๎๎๎ ๎๎
Performance ๎๎
Financial review ๎๎
Western Europe ๎๎
Baltic Sea ๎๎
International ๎๎
Governance ๎๎
Corporate Governance ๎๎
Risk Management ๎๎
Remuneration ๎๎
Board of Directors and Executive Management
๎๎
Shareholder information ๎๎
Corporate Social Responsibility ๎๎
Our new long-term sustainability strategy ๎๎
Sustainability framework ๎๎
Our consumers and customers ๎๎
Our products ๎๎
Our people ๎๎
Signatures and statements ๎๎
Managementโs Statement
on the Annual Report ๎๎
Independent auditorโs report ๎๎
Consolidated Financial Statements ๎๎๎๎ ๎๎
Income Statement ๎๎
Balance Sheet ๎๎
Cash Flow Statement ๎๎
Statement of Changes in Equity ๎๎
Notes ๎๎
Parent Company Financial Statements ๎๎๎
Income Statement ๎๎๎
Balance Sheet ๎๎๎
Cash Flow Statement ๎๎๎
Statement of Changes in Equity ๎๎๎
Notes ๎๎๎
Other Information ๎๎๎
(part of management report)
Group Structure ๎๎๎
Quarterly Financial Highlights and Ratios ๎๎๎
Definitions of Financial Highlights and Ratios ๎๎๎
Disclaimer ๎๎๎
ROYAL UNIBREW Annual report 20202
Contents
โ
Foto:Sami Tuoriniemi
Royal Unibrew in brief I Results for 2020 and outlook for 2021 I CEO letter I
Results for 2020 - business segments I Financial and non-financial Highlights and ratios (5Y) I CFO letter
Who we are
ROYAL UNIBREW Annual report 20203
Who we are
Who โ COVER
Non-
alcoholic
Baltic
Sea
Baltic
Sea
Above
mainstream
brands
Multi-niche
and niche
InternationalInternational
Alcoholic
Western
Europe
Western
Europe
Mainstream
brands
Multi-
beverage
MARKETS
Multi-beverage
Multi-niche
Production
Associates
65
65
35
35
2019
2020
45
48
43
44
9
11
2019
2020
48505052 2019
2020
77
77
23
23
2019
2020
42
44
48
49
8
9
2019
2020
Royal Unibrew is a leading regional multi-bever-
age company providing strong brands to our main
markets Denmark, Finland, Italy, Germany, France
and the Baltics, and to 65+ countries in the rest of
the world.
We serve our consumers by offering high quality beverages
within beer, malt beverages, soft drinks as well as ciders, ready-
to-drink, juice, energy and water products.
In addition to our own brands, we offer license-based
international brands from PepsiCo and Heineken in Northern
Europe.
Together with our ๎,๎๎๎ employees, we are facilitating great
moments and enjoyment for our consumers and creating
valuable partnerships with our customers โ always in a
responsible way.
NET REVENUE SPLIT IN
ALCOHOLIC VS. NON๎ALCOHOLIC
(%)
Royal Unibrew
in brief
NET REVENUE BY BRAND CATEGORY
(%)
VOLUME BY SEGMENT
(%)
EBIT BY SEGMENT
(%)
NET REVENUE SPLIT
(%)
ROYAL UNIBREW Annual report 20204
Who we are
Who โ Royal Unibrew in brief
2016 2017 2018 2019 2020
Net revenue
4,000
5,000
6,000
7,000
8,000
0
5
10
15
20
EBIT margin
2016 2017 2018 2019 2020
0
5
10
15
20
25
2016 2017 2018 2019 2020
CO
2
from production
CO
2
(kgCO
2
/hl) scope 1+2
0
10
20
30
40
1
2
3
4
5
2016 2017 2018 2019 2020
0
400
800
1,200
1,600
2016 2017 2018 2019 2020
0
400
800
1,200
1,600
2016 2017 2018 2019 2020
No/Low sugar
80
100
120
140
160
With strong performance in Off-Trade, planning and
cost focus we managed to deliver highest EBIT ever
despite the impact from COVID-19.
Developments in ๎๎๎๎
โข Strong financial performance
โข Increased market shares in our key markets
โข Both EBITDA margin and EBIT margin increased
โข Free cash flow increased by ๎๎% to DKK ๎,๎๎๎ million
compared to ๎๎๎๎, but is positively impacted by the
extraordinary beer campaign in Finland and COVID-๎๎
related channel and country mix changes
โข Earnings per share up from DKK ๎๎.๎ to DKK ๎๎.๎ (+๎%)
โข New Management team
โข Updated strategy including sustainability
โข In 2020, total distribution to shareholders was DKK 962
million
โข A dividend of DKK 13.50 per share for 2020 (2019:
DKK๎12.20) is proposed to the AGM
โข A new share buy-back program of DKK 250 million is
initiated
+
3%
EBIT INCREASE FOR ๎๎๎๎
TO DKK ๎,๎๎๎ MILLION
+
3%
EBITDA INCREASE FOR ๎๎๎๎
TO DKK ๎,๎๎๎ MILLION
-
2%
NET REVENUE DECREASE FOR ๎๎๎๎
TO DKK ๎,๎๎๎ MILLION
20.0%
EBIT๎MARGIN FOR ๎๎๎๎,
AN INCREASE OF ๎.๎ PERCENTAGE POINT
EARNING PER SHARE
(DKK)
NET REVENUE/EBIT๎MARGIN
(mDKK) (%)
VOLUME GROWTH
IN SOFTDRINKS WITH
LOW OR NO SUGAR
(Index)
CO๎ FROM PRODUCTION
Outlook for ๎๎๎๎
Medium-term EBIT margin target remains ๎๎-๎๎%
Actual Actual
mDKK Outlook 2020 2019
Net revenue 7,557 7,692
EBIT 1,475-1,625 1,515 1,469
Results for 2020 and outlook for 2021
EBIT
(mDKK)
FREE CASH FLOW
(mDKK)
ROYAL UNIBREW Annual report 20205
Who we are
Who โ Results for 2020 and outlook for 2021
CEO Letter
Increased focus on sustainable and
profitable growth
๎๎๎๎ was probably the most abnormal year for many
decades โ at least for Royal Unibrew. However, our
strategy proved its strength and our local management
model demonstrated once again agility, customer
closeness and great service levels despite significant
changes on a daily basis. While working intensively
on the short-term hour by hour, we managed to keep
focus on the long-term growth opportunities within
e.g. low/no-alcohol, low/no-sugar and in categories
within energy drinks and ready-to-drink and thereby
enhanced our position in these categories.
The beginning of ๎๎๎๎ was at full steam, January and Febru-
ary were strong and our pipeline of launches and innovations
was very promising in all channels. When COVID-๎๎ broke
out in Italy at the beginning of March and soon thereafter
in Northern Europe, sales in On-Trade and convenience in
particular halted and Off-Trade did not really catch up as con-
sumers destocked home inventories. April and May were very
uncertain months but as societies partly re-opened towards
summer, we experienced improved sales despite restrictions
in events and gatherings in general. The uplift in sales was led
by a combination of good weather and staycation effects. In
total, September and October turned out to be close to nor-
mal months, while November and December on the contrary
were quite difficult months. Just to illustrate the volatility we
have experienced.
Despite all of the above:
โข We managed to get through the year with very few
COVID-๎๎ infected employees
โข Our ranking by our customers was strength-
ened even further
โข We increased our value market share in
all our key markets by channel
โข We managed to improve our financial
performance
โข Our produced and supplied volume
is the highest ever by the company
We could not have done this with-
out an outstanding performance
and strong teamwork in the entire
organization. We managed to in-
crease communication instant-
ly and digitally to secure that
everybody was well informed,
and we shared learnings
across countries and within
countries across channels.
Some employees moved from
On-Trade to Off-Trade or from
On-Trade to logistics with few
daysโ notice; others were sent
home on different schemes
or simply taking holidays while
ROYAL UNIBREW Annual report 20206
Who we are
Who โ CEO letter
some unfortunately had to leave the company on a more
permanent basis. I would like to thank all employees for a
solid performance, something we can all be proud of.
In the convenience, On-Trade, sports and event channels the
pandemic has had huge consequences, and many custom-
ers have had to rethink their business model and e.g. move
into take-away instead of restaurant dining. I hope that our
customers have felt that we - with innovation and local un-
derstanding - have been there for them throughout ๎๎๎๎. We
are ready and eager to assist them in re-establishing solid
business when the societies re-open to a new normal.
From an investor perspective our share price has been on
a rollercoaster during the year as we were one of the first
companies in the beverage industry to withdraw guidance.
We were also one of the first ones to resume with a guidance,
which in our mind was the right thing to do from a legal
perspective, but certainly also from a business perspective.
Most importantly for us, has been to secure our strong flight
altitude into ๎๎๎๎ and towards a more permanent opening of
the societies in which we do business. This also means that
commercially we have spent sufficiently in ๎๎๎๎ in order not
to lose ground versus competition and to increase likelihood
for future growth. As we got full transparency on the cash
generation during the summer, we resumed the share buy-
back and paid out the full dividend.
Since I took the helm as CEO on ๎ September ๎๎๎๎, we have
reorganized the leadership of the company by establishing a
Senior Leadership Team with six leaders including HR with
a core focus on commercial closeness, continuity and diver-
sity. We aim to build our organization even stronger and with
a bench that continuously evolves and will supplement the
existing team in our aspiration to grow organically as well as
through acquisitions.
Together, we have re-visited and aligned on our short-term
as well as on our longer-term strategy. On our strategic route
we are continuously creating evolution rather than revolution
and, in that context, we have taken a longer view on cate-
gories, countries and channels during recent months and
established our long-term view on consumer trends. Our
conclusion is a combination of reconfirming and redefining
our focus slightly. We reconfirm areas within low/no-alcohol,
low/no-sugar & premium products, while we increase our
ambitions and growth views in e.g. the energy drinks, en-
hanced drinks and ready-to-drink categories.
Finally, as specified in the full year statement from ๎๎๎๎ we
have established a long-term ambition for the total CSR area
which aims to move us in the front among sustainable bev-
erage companies within the next five years. We are generally
already performing well but have identified mid-term oppor-
tunities that will enhance the outcome quite significantly. Not
all is yet known and technologies will evolve so we will stay
open-minded through our journey. An important factor - and
in particular in terms of the CO๎ emission - is the support
we get from our suppliers but also from local municipalities
in the areas where we produce. Generally, we see CSR as an
integrated part of our strategy which enhances our business
opportunities.
Thanks to all around us for continued support.
Lars Jensen
President & CEO
โWe have established a long-
term ambition for the total
sustainability area aiming to
move us in the front among
sustainable beverage companies
within the next five years.โ
ROYAL UNIBREW Annual report 20207
Who we are
Results for 2020 - business segments
Western Europe
DENMARK, GERMANY, ITALY AND FRANCE
Baltic Sea
FINLAND, LATVIA, LITHUANIA AND ESTONIA
International
๎๎ MARKETS IN AMERICAS AND EMEAA
4,682
thl
VOLUME
(down by 3%)
5,409 thl
VOLUME
(up by 3%)
1,002 thl
VOLUME
(up by 6%)
687mDKK
EBIT
(down by 5%)
675 mDKK
EBIT
(up by 3%)
171 mDKK
EBIT
(up by 30%)
3,548mDKK
NET REVENUE
(down by 4%)
3,237mDKK
NET REVENUE
(down by 2%)
772 mDKK
NET REVENUE
(up by 11%)
19.4%
EBIT๎MARGIN
(down by 0.2pp)
20.8%
EBIT๎MARGIN
(up by 1.0pp)
22.2%
EBIT๎MARGIN
(up by 3.2pp)
Read more: page 28 Read more: page 30 Read more: page 32
ROYAL UNIBREW Annual report 20208
Who we are
Who โ Results for 2020 business segments
2020 2019 2018 2017 2016
Volume (million hectolitres) 11.1 11.0 10.8 9.9 9.9
INCOME STATEMENT (MDKK)
Net revenue 7,557 7,692 7,298 6,384 6,340
Organic growth net revenue (%) -3% 1% 9% 1% 5%
EBITDA 1,861 1,814 1,673 1,362 1,306
EBITDA margin (%) 24.6 23.6 22.9 21.3 20.6
Earnings before interest and tax (EBIT) 1,515 1,469 1,339 1,069 1,001
EBIT margin (%) 20.0 19.1 18.4 16.7 15.8
Income after tax from investments in associates 33 25 20 18 28
Other financial income and expenses, net -43 -36 -31 -31 -31
Profit before tax 1,505 1,458 1,328 1,056 998
Net profit for the year 1,198 1,140 1,040 831 784
Parent company shareholdersโ share of net profit 1,183 1,142 1,041 831 784
BALANCE SHEET (MDKK)
Non-current assets 7,015 7,163 6,775 5,121 5,180
Total assets 8,306 8,493 8,062 6,778 6,076
Equity 3,332 3,106 2,908 2,814 2,911
Net interest-bearing debt 2,193 2,705 2,522 975 991
Net working capital -875 -671 -748 -957 -881
Invested capital 5,930 6,211 5,835 4,030 4,111
CASH FLOWS (MDKK)
Operating activities 1,738 1,402 1,214 1,168 985
Investing activities -324 -262 -401 -218 37
Free cash flow 1,414 1,140 813 950 1,022
Compared to the Annual Report ๎๎๎๎ the definition of fre cash flow has been updated to reflect market practise
of the IFRS ๎๎ implementation. Comparables for ๎๎๎๎ and ๎๎๎๎ have been adjusted.
Financial Highlights and Ratios
2020 2019 2018 2017 2016
SHARE RATIOS (DKK)
Number of shares (million) 49.4 50.1 51.0 52.7 54.1
Earnings per share (EPS) 24.1 23.0 20.6 16.0 14.7
Diluted earnings per share 24.1 22.9 20.6 16.0 14.6
Free cash flow per share 28.8 23.0 16.1 17.8 18.7
Dividend per share 13.5 12.2 10.8 8.9 8.2
Year-end price per share 706.6 610.0 449.0 371.8 272.6
EMPLOYEES
Average number of employees (FTE) 2,631 2,567 2,416 2,299 2,350
FINANCIAL RATIOS (%)
Return on invested capital including goodwill (ROIC) 20 19 21 21 18
Return on invested capital excluding goodwill (ROIC) 33 30 33 32 28
Free cash flow as a percentage of net revenue 19 15 11 15 16
Capex as a percentage of net revenue 5 4 6 4 0
Cash conversion 118 100 78 114 130
Net interest-bearing debt/EBITDA (times) 1.2 1.5 1.5 0.7 0.8
Equity ratio 40 37 36 42 48
Return on equity (ROE) 37 38 36 29 27
Dividend payout ratio (DPR) 56 54 53 56 56
Ratios comprised by the โRecommendations and Financial Ratiosโ issued by the Chartered Financial Analyst So-
ciety Denmarkโs Committee for Accounting standards have been calculated according to the recommendations.
Definitions of financial highlights and ratios are provided on page ๎๎๎.
Due to adoption in ๎๎๎๎ of IFRS ๎๎ (leases) using the modified retrospective approach the ๎๎๎๎ to ๎๎๎๎ highlights
and ratios are not comparable with those for ๎๎๎๎-๎๎๎๎.
ROYAL UNIBREW Annual report 20209
Who we are
Who โ Financial highlights and ratios
2020 2019 2018 2017 2016
Production figures
Production sites 9 9 9 7 7
Production volume, total million hl 10.6 10.3 10.4 9.1 9.3
Environment & Climate
Purchased Electricity GWh 79.1 81.4 81.2 73.7 75.4
Natural gas GWh 88.3 94.2 88.9 80.1 82.1
Purchased Heat/steam/cooling GWh 30.6 37.8 40.8 43.7 46.5
Other GWh 2.8 1.9 2.9 2.5 0.7
Energy, total GWh 200.8 215.3 213.8 200.0 204.7
CO๎ from production
(location based)* million kgCO๎ 35.7 40.0 39.8 36.5 37.1
CO๎ from production
(market based)** million kgCO๎ 24.2 26.2 n/a n/a n/a
Total water consumption million hl 33.3 33.3 33.3 28.2 29
Total amount of
wastewater discharged million hl 22.3 22.3 22.7 18.5 19.3
Hazardous waste million kg 0.1 0.1 0.1 0.1 0.1
Landfilled waste million kg 0.9 0.4 0.5 0.4 0.4
Incinerated waste million kg 0.7 1.5 1.1 0.9 0.9
Recycled waste million kg 5.0 5.9 5.4 3.1 4.3
Other waste*** million kg 0.5
Solid Waste, total million kg 7.2 7.9 7.1 4.5 5.7
Spent grain & yeast million kg 76.8 77.4 80.9 91.3 96.7
Relative production figures
Energy kWh/hl 18.9 20.9 20.6 20.1 22.1
CO๎ kgCO๎/hl 3.4 3.9 3.8 4.0 4.0
Water hl/hl 3.1 3.2 3.2 3.1 3.1
2020 2019 2018 2017 2016
Packaging material****
Cans % 15.6 13.4 n/a n/a n/a
Returnable glass bottles % 17.8 21.5 n/a n/a n/a
Non returnable glass bottles % 42.8 42.8 n/a n/a n/a
PET % 12.0 8.1 n/a n/a n/a
Kegs % 2.1 7.5 n/a n/a n/a
Bulk % 9.7 6.7 n/a n/a n/a
People well-being & development
Occupational Health & Safety
Total number of lost-time incidents (LTIs) 56 42 39 46 52
Lost time incident frequency 13.7 10.8 10.2 12.9 14.3
Number of Lost days 2,070 1,594 687 n/a n/a
Lost day rate 506 412 180 n/a n/a
Fatalities 0 0 0 0 0
Employee engagement
Employee turnover % 15.3 17.5 20.6 n/a n/a
Leave of absence due to illness
(not work related) % 3.7 3.9 3.5 n/a n/a
Diversity
Percentage of employees by gender, total
Female % 24 25 26 24 24
Male % 76 75 74 76 76
Employees by gender,
Int. Management teams
Female % 33 32 31 30 35
Male % 67 68 69 70 65
* Location based: Calculated CO๎ emission based on IEA country factors
** Market based: Subtracting CO๎ emission covered by green certificates
*** Other waste is R11 and 12 according to the EU waste directive
**** Packaging material: Weight basis distribution
Non-financial highlights and ratios
ROYAL UNIBREW Annual report 202010
Who we are
2020 started with ambitious plans and focus on
continuing the underlying positive development in
earnings. After a strong beginning in January and
February all plans were changed in March when the
COVID-19 pandemic became a reality.
To manage the high uncertainty, we revised our plans based
on the following principles:
โข Protect our employees
โข Support customers
โข Prepare for the worst case and manage cost
โข Protect our liquidity position
Initially, in late March and April it was difficult to foresee
how the market environment would react. However, since
June our business has performed strongly until November
when our main markets were impacted by the second wave
of the pandemic.
Our revised new plan for the year has worked and we have
managed to deliver a profitability slightly above ๎๎๎๎ and with
growing market shares.
Strong performance in ๎๎๎๎
The assumptions for our plans for ๎๎๎๎ were no longer rele-
vant after the lockdown in March. Compared to any other year,
categories and sales channels have developed very differently
during the year. The commercial parts of our organization
have done an outstanding job in refocusing sales efforts to
the growing categories and sales channels and at the same
CFO letter
Tight focus and planning led to
strong performance
time spending a minimum of resources on declining are-
as. We have never experienced such extensive changes in
volumes from On-Trade to Off-Trade and from kegs to cans
and PET. Our supply chain colleagues have shown great
ability to adapt to the new reality and produced record
volumes during the summer.
A key learning in situations when assumptions change
dramatically is to drop the budget and make a new plan
with maximum flexibility. As we worked with limited
visibility, we had clear guiding principles for decision
making. Across the business we made many new short-
term plans and shifted resources to segments with
positive momentum. Our business model with strong
country organizations and clear local decision power
has shown very effective also in situations with high
uncertainty.
โWe expect 2021 to end with
a good momentum, but the
start of the year seems to be
challengingโ
ROYAL UNIBREW Annual report 202011
Who we are
Who โ CFO letter
2016 2019 202020182017
10
15
20
25
30
%
35
Balancing short and long term
The spending level we had during the summer months was
not consistent with our ambitions to continue to grow and
develop the business. Consequently, we started initiatives
during the late summer to ensure that we have momentum
as we move into ๎๎๎๎. This includes capacity expansion pro-
jects, selective commercial initiatives, IT investments and
maintenance cost.
Liquidity and capital allocation
As uncertainty was high in the spring, we made additional
credit facilities, postponed dividend payment and the initiated
share buy-back program. The guiding principle has been to
maximize our financial flexibility in order to be ready for both
difficult markets but also for potential M&A projects.
Over the summer, we saw the markets develop positively and
cash flow generation was strong. Therefore, we decided to
pay out dividend and initiate two tranches of share buy-back
programs.
In order to secure that our ROIC develops positively over time,
we target to manage the investments by keeping investments
around ๎% of revenue (excl. M&A). This will be a challeng-
ing target to meet as our ambitions within sustainability will
require investments as well as the continued growth will
demand more investments in capacity.
Back to growth
Our ambition is to return to profitable topline growth again in
๎๎๎๎. Across the business we have interesting organic growth
opportunities that we aim to focus on. The planning for ๎๎๎๎
is a bit unusual as we still live with COVID-๎๎ related restric-
tions and it is likely that the start of the year will be difficult.
Consequently, we have commercial initiatives that will not be
committed before we have more clarity on how restrictions
and the vaccine will impact the trading conditions.
We expect ๎๎๎๎ to end with a good momentum, but the start
of the year may be challenging.
Lars Vestergaard
CFO
ROIC incl. goodwill ROIC excl. goodwill
ROIC DEVELOPMENT 2016๎2020
ROYAL UNIBREW Annual report 202012
Who we are
โ
Purpose and Ambition I Our strategy
Strategy
ROYAL UNIBREW Annual report 202013
Strategy
Strategy โ COVER
our people
We recruit, develop and retain
entrepreneurial and empowered
people thirsting for success and
striving to do better every day.
Our people drive our success
and progress โ and live and
protect our values. We work as
one team and find solutions to
all challenges.
our consumers
Bringing people together and
facilitating great moments and
enjoyment is the heart of our
business. We offer strong local
beverage brands in combination
with global brands โ continu-
ously striving to match con-
sumersโ changing preferences
through meaningful innovations
and by offering a broad range
of refreshments that deliver
choice.
The preferred choice
We want to be the preferred choice of local beverage partner that challenge
the status quo by doing better every day in a fun, agile and sustainable way
The preferred choice for
Purpose and Ambition
our customers
We partner with our customers
and strive to grow together by
offering a portfolio of relevant
brands and having a challenger
mindset. With our local, decen-
tralized setup we focus on agility
and close collaboration โ aiming
to provide best-in-class service
as well as pursuing extraor-
dinary brand execution in all
channels.
the future
We are deeply rooted in the
communities where we work,
and we partner with all our
stakeholders to make a positive
impact on society. Our focus is
to build a long-term sustainable
business and to minimize the
environmental footprint of our
operations from raw materials
to the end consumption.
our shareholders
Our main focus is to invest behind
the categories and channels that
grow the most, pushing premiu-
mization and driving organic EBIT
growth. On top of this, we will do
value accretive bolt-on, as well as
strategic acquisitions if possible.
We aim to increase distribution to
shareholders over time through
dividend and share buy-backs.
ROYAL UNIBREW Annual report 202014
Strategy
Strategy โ Purpose and Ambition
Build sustatinable
business
Prepare for
future growth
Grow the most
committed
employees
Organizational support
Preferred
choice
Royal Unibrewโs overall strategy remains to be a
strong regional multi-beverage provider in select-
ed core markets and in other markets to build and
develop strong niche positions.
Royal Unibrew operates in diverse markets that are char-
acterized by different dynamics. We aim to be the preferred
choice for our consumers, customers, shareholders and peo-
ple through the following four strategic priorities.
We want to expand our markets and market shares through multi-beverage and niche strategies.
We need to continuously develop and innovate our product portfolio and channel mix to be the preferred choice for
consumers. We will also continue to pursue opportunities to continuously enhance the efficiency across the company.
We want to be the preferred partner for our customers with the most relevant innovations for our consumers by
addressing consumer demographies, geographies and trends of e.g. health and wellness, authenticity and care for
the environment.
We will pursue structural improvements through M&A and partnerships with focus on Western Europe.
We will maintain Royal Unibrewโs financial flexibiliy by continuously considering our capital structure with the intention
of adjusting it to support the realization of the strategic and financial targets.
We will convert our energy consumption to renewable energy and also focus on the entire value chain and include
the consumption by our suppliers. We will work with suppliers that share our values and focus on green energy
consumption and lower the impact from packaging material through recycling.
As a regionally based beverage company founded on strong local presence in the societies of typically rural areas,
Royal Unibrew aims to be a responsible member of the community.
We will invest in renewable energy and have an open mindset towards new technologies. Operational efficiencies
and circular thinking have always been a part of the Royal Unibrew DNA.
Becoming the most sustainable beverage company requires that all employees are engaged in the journey and we
will work persistently to embed a sustainability mindset throughout our organization.
Become the most
sustainable beverage
company
Insights and strong competences are required to reach our ambitious strategic targets. Therefore, we strive to create a
culture that encourages talent, develops skills and competences, recognizes achievements and values each individual.
We give high priority to retaining experienced employees and recruiting new employees who bring accelerated
momentum and new knowledge. This includes a diverse and strong blend of educational background, work and life
experience, diversity of beliefs, nationality and gender.
A succession process ensures identification of talents and ensures acceleration of careers within Royal Unibrew.
Our strategy
Our growth formula: Volume + Value + Efficiency ๎ Investments in growth = Increased Earnings
ROYAL UNIBREW Annual report 202015
Strategy
Strategy โ Our strategy
โ
Operating Model I Our growth formula I Multi beverage and niche I
Non-alcoholic categories I Alcoholic categories I
Financial targets, capital structure and distribution policy I Outlook for 2021
Business
model
ROYAL UNIBREW Annual report 202016
Business
Busi โ COVER
We have a strong performance culture with a very
solid operating model that fits well with our portfolio
of strong local brands.
Royal Unibrew has built its business on the core belief that
beverages and the nature of the business make it important
to be close to customers and act locally. This is reflected in
the composition of our business and brands.
Our business is built on one common group IT platform, per-
formance management system and procurement setup. This
gives us the ability to obtain transparency and to optimize our
business processes across the group.
All other functions are managed locally under the supervision
of the country manager. We operate with marketing depart-
ments and sales organizations having competences to make
commercial decisions in each individual country/market. This
ensures proximity to our consumers and customers in the
different markets and product portfolios which are managed
locally. Profitability and competition by category differ from
country to country and consequently our model enables our
local organization to prioritize where to invest and focus.
Royal Unibrew operates with a flat organizational structure
with few management layers. E.g., all country managers re-
port directly to the Senior Leadership Team. The corporate
functions are designed according to the business model and
consequently group functions are kept at a minimum level.
This ensures that activities in the single countries are not
duplicated centrally.
Digital approach
Our digital journey is a key enabler of our future success. For
the main processes we strive to work on common systems
once the processes have reached a certain maturity level. E.g.,
we operate with one groupwide ERP system based on SAP
and several related tools that are common across the group.
In areas where development varies across countries, we allow
local solutions to be developed; particularly in the commercial
area. However, as the processes mature we strive to roll out
common solutions across the group.
Operating model
ROYAL UNIBREW Annual report 202017
Business
Busi โ Operating model
Volume growth
Our growth formula
We continue to pursue and remains committed
to deliver profitable growth and thereby a strong
cash-flow generation. To maintain momentum in our
business we work within a number of areas:
We aspire to be consumersโ and customersโ preferred bev-
erage provider through investments in our existing portfolio,
but also from developing new products and thereby over time
providing a more sustainable beverage offering.
We strive to create a culture that attracts and maintains
talents, develops skills and competences, as well as offers
personal development opportunities for our employees.
We aim to create a positive total shareholders return, through
a combination of growing distribution (dividends and share
buy-backs) over time as well as an increasing share price.
Our target is to grow faster than the market in which we
compete and consequently increase our value market share.
The ambition is to reduce the ratio of fixed costs per net
revenue every year.
We also strive to create value by acquiring companies. The
foundation for acquisitions is always that it can be incorporat-
ed in our operating model and our business model enables
us to extract synergies.
To fuel growth in medium to long-term, we strive to increase commercial
spending directed towards growth initiatives every year. The increase will
depend on the opportunities identified in the marketplace.
โข We want to be the preferred partner
to our customers. This is achieved
by strong focus on in-store execution
and ensuring that our products are
displayed well in customersโ prem-
ises to ensure that customers per-
form well in the individual beverage
categories.
โข We want to grow distribution by fo-
cusing on channels where our prod-
ucts are underrepresented.
โข We want to prioritize commercial
spending to support growing cate-
gories and channels.
Efficiency
improvements
โข Efficiency remains a key pillar in our
value creation journey. The key driver
of efficiency is operating leverage.
We achieve operating leverage by
growing the topline faster than our
fixed cost. Our multi beverage oper-
ating model enables us to achieve
higher utilization of fixed assets, sell
more per salesperson, have higher
average drop size to customers and
in general have higher productivity
per employee.
โข The foundation for continued im-
provement of our productivity is that
we are able to digitalize and stand-
ardize as many processes as possi-
ble. In terms of servicing our custom-
ers there is a constant battle between
offering a good and personalized
service level and at the same time
manage costs. Our guiding principle
is to spend as little time as possible
on repetitive tasks in order to direct
time towards value creating tasks.
Premiumization
โข We want to continuously develop
new products at a more premium
level than the average portfolio we
currently offer. This enables Royal
Unibrew to obtain a higher price and
to deliver better value to consumers
and customers.
โข We want to grow the more profitable
channels faster and thereby offer a
product portfolio with better value.
โข We want to direct our commercial
spending to the more premium part
of our portfolio.
ROYAL UNIBREW Annual report 202018
Business
Busi โ Our growth formula
MARKETS
Multi beverage Multi-niche Niche
Denmark Italy Austria
Finland US Switzerland
Lithuania UK Africa
Latvia Germany Middle East
Estonia Canada Caribbean
France and more
Royal Unibrew has two fundamental strategic routes
which is multi beverage and niche position. The
multi-beverage strategy is relevant in markets with
a wide coverage of beverage categories and full
channel coverage. The portfolio would aim to cover
mainstream and above mainstream.
The multi-beverage strategy is currently being pursued in
Denmark, Finland, Lithuania, Latvia and Estonia.
From a value perspective the largest beverage categories
in the markets are often beer, carbonated soft drink, energy
drinks and RTD. Our brand portfolios in the multi beverage
markets are combinations of own locally anchored brands
and partner brands from e.g. PepsiCo, Heineken and Dia-
geo. In the multi beverage market the combined value of the
full portfolio is very important as it delivers leverage for our
customers and for Royal Unibrew. Economies of scale on all
dimensions is a winning formula.
The niche strategy is more targeted to either single brands
or a few brands in the specific market. This strategy is
currently being pursued in markets like e.g. Italy, France,
Germany, Austria, Switzerland, US and Canada. Currently, most
markets outside of the multi beverage territory would be
either single brand or two brands markets, while markets like
Italy, US, UK, Germany, Canada and France are multi-niche
markets. In most cases we would leverage an individual
sales organization covering several channels in multi-niche
markets, while niche markets would be serviced by local
partners through our international key account organization.
Multi beverage and niche
ROYAL UNIBREW Annual report 202019
Business
Busi โ Multi beverage and niche
CSD
Water
Energy
Malt
Non-alcoholic beers
Other non-alcoholic
beverages
CSD Malt Other non-
alcoholic
beverages
Non-
alcoholic
beers
EnergyWater
-20
-10
0
10
20
67
66
12
14
7
8
6
7
2
2
5
4
2019
2020
Non-alcoholic categories
Our non-alcoholic beverage portfolio is outgrowing
our alcoholic beverage portfolio, and we are repre-
sented in some very interesting growth categories.
Carbonated Soft Drinks (CSD) constitutes ๎๎% of our non-al-
coholic revenue. We have very strong positions in Denmark
and Finland where Faxe Kondi and Jaffa have market leading
positions, respectively. In Italy, Lemon Soda is #๎ in the lemon
category in the Off-Trade. On top of these local super brands,
we have an International partnership with PepsiCo covering
Denmark, Finland and the Baltic countries.
Around ๎๎% of our non-alcoholic revenue stems from water.
In Finland, Novelle is the market leader and operates within
still, sparkling, and enhanced water. Our CO๎ neutral brand
Egekilde, which is sold in PET bottles made of ๎๎๎% recycled
plastic holds a market leading position in Denmark. ๎๎๎๎
was negatively impacted by Convenience and On-Trade sales.
Energy has grown to become a relatively large part of our
non-alcoholic portfolio with ๎% of revenue in ๎๎๎๎. Energy is
growing faster than the average beverage market in all our
markets, and our brands Cult, Faxe Kondi Booster and ED is
very well received by consumers and customers.
Our Malt Beverage business is ๎% of our non-alcoholic rev-
enue. Our brands, Vitamalt, Supermalt and Power Malt are
primarily sold in the Americas and Africa as well as among
ethnic groups from these areas living in and around major
cities in Europe and the US.
The share of non-alcoholic beers has increased to more than
๎% of our non-alcoholic beverage revenue, as it grew almost
๎๎% from ๎๎๎๎ to ๎๎๎๎. We have a strong portfolio of alcohol-
free beers based on our local strong brand portfolio, as well
as Heineken ๎.๎ through our international partnership cov-
ering Denmark and Finland.
Other non-alcoholic beverages constitute ๎% of our non-
alcoholic revenue of which the majority is juice where our
Cido brand has a very strong market position in the Baltic
countries.
REVENUE SPLIT, NON๎ALCOHOLIC BEVERAGES
(%)
NON๎ALCOHOLIC REVENUE GROWTH RATES
(2020 VS 2019)
(%)
ROYAL UNIBREW Annual report 202020
Business
Busi โ Non-alcoholic categories
Beer
Cider/RTD
Wine & spirits
Beer Wine & spiritsCider/RTD
-16
-12
-8
-4
0
71
71
21
21
8
8
2019
2020
REVENUE SPLIT, ALCOHOLIC BEVERAGES
(%)
ALCOHOLIC REVENUE GROWTH RATES
(2020 VS 2019)
(%)
In 2020, the alcoholic beverage segment was severe-
ly impacted by COVID-19 in all our markets, espe-
cially in the On-Trade segment.
Beer is by far the largest revenue contributor to our alcoholic
beverage segment, as it contributes around ๎๎% of revenue.
We have strong market positions in Denmark, Finland and
the Baltic Countries and is the market leader in the super
premium segment in Italy. We also produce, sell and distrib-
ute Heineken in Denmark and Finland. Our export brand Faxe
is growing significantly in the international segment and is
heading toward ๎ mhl in ๎๎๎๎.
Around ๎๎% of our alcoholic beverage revenue stems from Ci-
der and RTD where we have strong positions in Denmark and
Finland. In Denmark, Shaker has a strong position, whereas
Original Long Drink in Finland is the market leader in the
segment.
In Finland, we offer a range of international spirits and wine
brands, including Johnny Walker, Captain Morgan, Lanson,
JP Chenet and Baileys on an agency basis, and constitutes
around ๎% of revenue in the alcoholic beverages segment.
Alcoholic categories
ROYAL UNIBREW Annual report 202021
Business
Busi โ Alcoholic categories
EBIT
margin
2016 2017 2018 2019 2020
๎๎.๎% ๎๎.๎% ๎๎.๎% ๎๎.๎%๎๎.๎%
NIBD /
EBITDA
2016 2017 2018 2019 2020
๎.๎๎.๎ ๎.๎ ๎.๎ ๎.๎
Equity ratio
2016 2017 2018 2019 2020
๎๎%๎๎% ๎๎% ๎๎% ๎๎%
Dividend
2016 2017 2018 2019 2020
๎๎%๎๎% ๎๎% ๎๎% ๎๎%
๎๎-๎๎%
<๎.๎
times
At least
๎๎%
๎๎-๎๎%
of consolidated
profit for the year
Financial targets, capital structure and distribution policy
Our financial targets are based both on creating
shareholder value and developing the business for
the benefit of all stakeholders. To achieve this, we
aim to create financial flexibility to develop the busi-
ness over the medium to long term.
The capability of achieving the financial targets is conditional
on continuous business development through focus on growth
opportunities, partnerships, innovation, sales and marketing,
and on continuous efficiency measures. The positive devel-
opment in recent years has enabled us to increase our EBIT
margin target and to make considerable distributions to our
shareholders.
EBIT margin
Our medium-term EBIT margin target is ๎๎-๎๎%.
In ๎๎๎๎, we achieved an EBIT margin of ๎๎%. The year was very
unusual as the margin over the year varied significantly from a
normal year due to COVID-๎๎ and cost level was unusually low.
The EBIT margin is best in class when compared to other bev-
erage companies in Europe and has increased substantially
over recent years due to strong strategic and commercial
execution and cost management. The profit growth formu-
la has worked well in recent years and will be continued in
alignment with the same principles.
Our focus is to stay within the EBIT margin target and focus
on growing the absolute EBIT by securing funds to invest in
supporting the organic growth opportunities that arise in
our markets.
Capital structure and distribution policy
The objective of our capital structure policy is to secure
enough flexibility to develop the business in line with our stra-
tegic priorities. It remains the target that net interest-bearing
debt is not to exceed ๎.๎ times EBITDA and that an equity
ratio of at least ๎๎% is to be maintained at year-end. Given
the current composition of the balance sheet, the equity ratio
is the ratio that determines the pay-out capabilities. We may
depart from the targeted ratios for a certain period of time if
structural business opportunities arise.
Our priorities for capital allocation are as follows:
๎. Maintain financial flexibility
โข Net debt/EBITDA less than ๎.๎
โข Equity ratio of more than ๎๎%
๎. Invest in organic growth
๎. Acquisitions
๎. Stable dividend pay-out ratio (๎๎-๎๎%)
๎. Share buy-backs to adjust capital structure
Our annual investments including repayment on lease facil-
ities (IFRS ๎๎) are expected to be around ๎% of net revenue.
Management evaluates on an ongoing basis if the capital
structure is to be adjusted by launching share buy-back pro-
grams. It is generally the intention that shares bought back
will be cancelled.
ROYAL UNIBREW Annual report 202022
Business
Busi โ Financial targets, capital structure
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 ๎๎๎๎. 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 yearโs results are strongly dependa-
ble 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 ๎,๎๎๎-๎,๎๎๎
million, which should be compared to EBIT of DKK ๎,๎๎๎ mil-
lion in ๎๎๎๎. Compared to ๎๎๎๎ where we realized an EBIT of
DKK ๎,๎๎๎ million, we therefore expect to grow our EBIT by
up to ๎๎%, despite the negative impacts caused by COVID-๎๎.
The Board of Directors has decided to initiate a share buy-
back program of up to DKK ๎๎๎ million as soon as possible
covering the period until ๎๎ June ๎๎๎๎. During the summer,
it will be decided whether an additional share buy-back will
be initiated based on the state of COVID-๎๎ and our financial
flexibility at that point.The Board of Directors will recommend
to the AGM in ๎๎๎๎ a distribution of ordinary dividend of DKK
๎๎.๎๎ per share. Hence, at least DKK ๎๎๎ million is expected
to be distributed based on the Financial Statements for ๎๎๎๎.
Assumptions about markets and main priorities for ๎๎๎๎
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 normali-
zation 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, ๎๎๎๎ 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 ๎๎๎๎.
The high end of our EBIT guidance range assumes that
On-Trade restrictions are lifted and gathering restrictions
eased around ๎ April ๎๎๎๎, 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 ๎ July ๎๎๎๎.
The low end of our EBIT guidance range includes lower sales
and marketing costs, compared to the high end of the guid-
ance 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 as-
suming a normal summer in ๎๎๎๎ and Christmas season.
Our free cash flow in ๎๎๎๎ was positively affected by several
factors, of which around DKK ๎๎๎ million are expected to
revert during ๎๎๎๎. In ๎๎๎๎, mix shifted towards Off-Trade and
northern Europe where businesses in general have shorter
payment terms. We expect business activity to normalize
during ๎๎๎๎. We also do not expect to continue the extraordi-
nary beer campaign activity in Finland, which will impact our
cash flow negatively compared to ๎๎๎๎. On top of this comes
payment of delayed tax payments and for holiday accruals in
Denmark (legislation change). In total, these factors are ex-
pected to generate a net working capital headwind of around
DKK ๎๎๎ million in ๎๎๎๎ compared to ๎๎๎๎.
OUTLOOK FOR 2021
mDKK Outlook 2021 Actual 2020
EBIT 1,475-1,625 1,515
Outlook for 2021
ROYAL UNIBREW Annual report 202023
Business
Busi โ Outlook for 2021
Financial assumptions
โข As ๎๎๎๎ was a normal summer, the ๎๎๎๎ outlook has
been made under same assumption.
โข Net selling prices are assumed to be slightly increasing
during ๎๎๎๎ 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.
โข Generally, costs are expected to follow the inflation in
๎๎๎๎. 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 ๎๎๎๎ following the expect-
ed reopening.
โข We will continue our focus on generating continuous
improvements and enhancing efficiency across the
business and in all entities.
โข Royal Unibrew has entered into hedging agreements for
a large part of the expected consumption of key raw and
packaging materials for ๎๎๎๎.
โข Exchange rates between DKK and other currencies are
expected to remain unchanged as compared to the end
of February ๎๎๎๎.
โข COVID-๎๎ has had a significant impact on the On-Trade
business in the first months of ๎๎๎๎, which is expected
to continue until restrictions are lifted. The guidance is
based on an opening during Q๎.
โข In ๎๎๎๎, our net investments are expected to be higher
than set by our financial targets of around ๎%, due to
the fact that some capex-plans from ๎๎๎๎ were pushed
into ๎๎๎๎, we will increase our investments in CSR and
expand capacity to support future growth.
โข Corporate income tax rate is expected to amount to
around ๎๎% of profit before tax excluding income after
tax from investments in associates.
TOTAL DISTRIBUTION FOR THE YEAR
mDKK 2020 2019 2018 2017 2016
Dividend 600 538 451 426 386
Share-buy-back 362 433 484 508 443
Total distribution 962 971 935 934 829
as a % of prior year consolidated profit 84 93 113 119 117
ROYAL UNIBREW Annual report 202024
Business
โ
Financial review I Western Europe I Baltic Sea I International
Performance
ROYAL UNIBREW Annual report 202025
Performance
Perform โ COVER
Financial review
2020 was a challenging year due to COVID-19, but
through tight planning and strong cost focus, Royal
Unibrew came out of 2020 with increased market
shares and a strong earnings performance.
Initially ๎๎๎๎, started with ambitious plans to continue the
underlying positive development in earnings, despite tough
comparable from a very strong ๎๎๎๎. Already in March, the
COVID-๎๎ pandemic forced us to revise our plans, as restric-
tions were imposed on the On-Trade channel in many of our
markets. Through tight planning and with a strong focus on
costs, we managed to deliver a profitability slightly above
last year, as well as expanding our market shares across
most markets.
Volumes
The volumes sold increased by ๎% to ๎๎.๎ mhl and were or-
ganically at the same level as last year.
Net revenue
Net revenue amounted to DKK ๎,๎๎๎ million and decreased
๎% organically. The reported net revenue decrease by ๎% as
the acquisitions contributed positively with ๎%.
Net revenue was negatively impacted by COVID-๎๎ in the
Western Europe and Baltic Sea segment, whereas the Inter-
national segment was able to grow ๎% organically.
EBIT
EBIT amounted to DKK ๎,๎๎๎ million, an increase of ๎% com-
pared to ๎๎๎๎. EBIT increased in the Baltic Sea and Interna-
tional segments, whereas Western Europe declined mainly
related to the result in the Italian On-Trade channel.
Acquisitions impacted EBIT by less than ๎% at group level.
In all our market the On-Trade business was affected by
COVID-๎๎ restrictions, which was only partly recovered by
increased sales in the Off-Trade business. Lower sales, mar-
keting and fixed costs contributed positively to the improved
EBIT result.
Read more: page 80
Balance sheet
Total assets at ๎๎ December ๎๎๎๎ amounted to DKK ๎,๎๎๎
million, which is DKK ๎๎๎ million below the ๎๎ December
๎๎๎๎ figure, which is mainly explained by lower receivables
and because amortization and depreciation of non-current
assets exceeds investments in ๎๎๎๎.
Equity amounted to DKK ๎.๎๎๎ million and the equity ratio
improved by ๎ percentages points to ๎๎% by the end of ๎๎๎๎.
Read more: page 82
Cash flow
The free cash flow amounted to DKK ๎,๎๎๎ million in ๎๎๎๎ ver-
sus DKK ๎,๎๎๎ million in ๎๎๎๎. The increase of DKK ๎๎๎ million
was positively impacted by the extraordinary beer campaign
in Finland, extended payment term on employee tax, as well
as channel and country mix.
The positive impact on cash flow from the extraordinary beer
campaign in Finland is due to longer payment terms on the
excise payment compared to the customer payment and is a
phasing impact between ๎๎๎๎ and ๎๎๎๎. In ๎๎๎๎, mix shifted
towards Off-Trade and northern Europe โ both with shorter
payment terms than group average โ this is expected to nor-
malize in ๎๎๎๎. During ๎๎๎๎, different support programs and
aid packages has been presented across countries. Royal
Unibrew has only to a limited extend benefitted from these
programs and packages. At the end of ๎๎๎๎, Danish employee
taxes to a total of DKK ๎๎ million were postponed into ๎๎๎๎.
We estimate that the normalized free cash flow level for Royal
Unibrew in ๎๎๎๎ was around DKK ๎,๎๎๎ million. In ๎๎๎๎, free
cash flow will be negatively impacted as some of the positive
impacts from ๎๎๎๎ will flow back, see outlook section.
Read more: page 84
Financing
Net interest bearing debt was DKK ๎,๎๎๎ million at the end
of ๎๎๎๎, corresponding to a net decrease of DKK ๎๎๎ million
equal to the positive free cash flow less distribution to share-
holders. At the end of ๎๎๎๎, the net interest-bearing debt to
EBITDA ratio was ๎.๎x (๎๎๎๎: ๎.๎x). Our revolving credit facility
has been extended for ๎ year with final maturity end of ๎๎๎๎.
Share buy-back
During the year, Royal Unibrew has repurchased shares at
a total purchase price of DKK ๎๎๎ million. (๎๎๎๎: DKK ๎๎๎
million). Total announced programs were DK ๎๎๎ million.
The remainder of the programs have been completed in the
beginning of ๎๎๎๎.
Read more about the share buy-back programs on page 46.
ROYAL UNIBREW Annual report 202026
Performance
Perform โ Financial review
2019
2020
48
45
2019
2020
48
47
2019
2020
43
44
2019
2020
43
43
2019
2020
9
11
2019
2020
9
10
Overview business segments
financial performance
Western Europe
DENMARK, GERMANY, ITALY AND FRANCE
Baltic Sea
FINLAND, LATVIA, LITHUANIA AND ESTONIA
International
๎๎ MARKETS IN AMERICAS AND EMEAA
Further information: page 28 Further information: page 30 Further information: page 32
SHARE OF NET REVENUE SHARE OF NET REVENUE SHARE OF NET REVENUE
SHARE OF EBIT SHARE OF EBIT SHARE OF EBIT
ROYAL UNIBREW Annual report 202027
Performance
Perform โ Overview business segments
2018
450
500
550
600
650
700
750
2016 2017 2019 2020
2018
17.5
18,0
18.5
19.0
19.5
20.0
20.5
2016 2017 2019 2020
2016 2017 2018 2019 2020
3,100
3,400
3,700
4,000
4,300
4,600
4,900
2018
1,900
2,200
2,500
2,800
3,100
3,400
3,700
2016 2017 2019 2020
Western
Europe
Financial Performance
In Western Europe, total volumes showed a ๎% decrease in
๎๎๎๎ and a total of ๎.๎ mhl.
Net revenue from beverages was ๎% lower than in ๎๎๎๎, as
the On-Trade and Border business was significantly hit by
COVID-๎๎ restrictions.
Earnings before interest and tax (EBIT) for ๎๎๎๎ showed a
DKK ๎๎ million decrease from DKK ๎๎๎ million in ๎๎๎๎ to DKK
๎๎๎ million in ๎๎๎๎, due to the lower net revenue. The EBIT
margin decreased slightly by ๎.๎ percentage points to ๎๎.๎%.
WESTERN EUROPE
Q4 Q4
mDKK 2020 2019 % changes 2020 2019 % changes
Volumes (thl) 4,682 4,813 -3 1,041 1,085 -4
Net revenue 3,548 3,691 -4 769 831 -7
EBIT 687 722 -5 120 132 -9
EBIT margin 19.4 19.6 15.6 15.8
โThe On-Trade business was highly
impacted by the COVID-19 restrictions.
However, due to the close cooperation
with our customers as well as an
agile organization and supply chain
we succeeded to direct our efforts
towards the growing Off-Trade business
โ resulting in satisfactory results and
increasing market shares.โ
Jan Ankersen,
SVP South Europe and GM Italy
In Q๎ ๎๎๎๎, volumes declined by ๎% compared to Q๎ ๎๎๎๎,
whereas net revenue declined by ๎% in the same period. Both
due to the COVID-๎๎ restrictions imposed on the On-Trade
channel throughout the region.
The EBIT margin declined by ๎.๎ percentage point from ๎๎.๎%
in Q๎ ๎๎๎๎ to ๎๎.๎% in Q๎ ๎๎๎๎.
EBIT
(mDKK)
EBIT๎MARGIN
(%)
VOLUMES
(thl)
NET REVENUE
(mDKK)
4.7
mhl
VOLUME
(down by 3%)
687mDKK
EBIT
(down by 5%)
3.5 bDKK
NET REVENUE
(down by 4%)
19.4%
EBIT๎MARGIN
(down by 0.2pp)
ROYAL UNIBREW Annual report 202028
Performance
Perform โ Western Europe
Development and initiatives in 2020
During ๎๎๎๎, COVID-๎๎ restrictions on social gatherings and
opening hours challenged the On-Trade business in all mar-
kets. It also opened new opportunities that the organization
quickly responded to.
After the COVID-๎๎ outbreak in Denmark, a number of re-
strictions were introduced in March, including a closure of the
borders to Germany. The restrictions had a positive impact on
the Off-Trade business in Denmark and Germany, although
not in a scale that could compensate for the lost business in
the On-Trade channel and border business.
The sales and supply teams responded quickly to support the
growing Off-Trade business, while at the same time support-
ing On-Trade customers in the difficult situation. During the
lockdown, for example, we hosted the biggest virtual beer
testing event in Denmark and brewed a beer to the famous
Danish TV show โNatholdetโ, and when the market re-opened
during the summer period, we supported bars and restau-
rants with initiatives to support their business.
To support future growth, particular in the Danish market and
at the German border, the construction of a new High Bay
Warehouse in Faxe started in ๎๎๎๎ (expected to be put in use
in ๎๎๎๎). The new facilities will increase the storage capacity
significantly at the site and thus the flexibility of delivery to
our customers.
In Italy about ๎๎% of our business is in On-Trade. To part-
ly compensate for the effects of the significant decrease in
sales during the periods with lockdowns and restrictions, we
have focused on boosting our supermarket operations and
ensuring that the wholesale and Cash & Carry channels were
well-stocked and activated with our Ceres and LemonSoda
brands. Ceres has in particular performed well in the Off-
Trade channel where we launched a range of speciality beer
next to our iconic Ceres Strong Ale. We have also actively
supported bar owners in the periods between the lockdowns.
In France, we focus on building a solid platform from which
we can drive high value creation and with focus on in-store
execution and e-commerce initiatives for our Lorina brand. In
๎๎๎๎, we reach all time high market share in lemonade, a cat-
egory which grew faster than the general soft drink market.
During the COVID-๎๎ period, we have reached out to our con-
sumers online in both Italy and France. In Italy the Italian ๎๎.๎๎
Ceres virtual apero event and in France the Lorina mixer event
each Friday at ๎๎.๎๎ are just a few of many new occasions
where our brands created happiness and new moments of
enjoyment among consumers.
Faxe Kondi
in Denmark
๎๎๎๎ was a great year for our
Faxe Kondi brand, especially
for the ๎ calories which grew
๎๎% in volume.
Successful virtual
beer tasting events
During the very unusual ๎๎๎๎, we have supported a number
of initiatives to help our customers and local societies. One
example is our virtual beer tasting events in Denmark,
where we promoted more than ๎๎ local craft breweries
and sold more than ๎๎๎.๎๎๎ of their beers.
ROYAL UNIBREW Annual report 202029
Performance
Baltic Sea
2018
3,700
4,000
4,300
4,600
4,900
5,200
5,500
2016 2017 2019 2020
2018
1,600
1,900
2,200
2,500
2,800
3,100
3,400
2016 2017 2019 2020
2018
350
400
450
500
550
600
650
700
2016 2017 2019 2020
2018
12
14
16
18
20
22
2016 2017 2019 2020
BALTIC SEA
Q4 Q4
mDKK 2020 2019 % changes 2020 2019 % changes
Volumes (thl) 5,409 5,268 3 1,321 1,229 7
Net revenue 3,237 3,308 -2 765 787 -3
EBIT 675 654 3 99 127 -22
EBIT margin 20.8 19.8 12.9 16.2
Financial performance
In Baltic Sea, volumes for ๎๎๎๎ showed a ๎% increase com-
pared to ๎๎๎๎ primarily due to the large beer campaign in
Finland in Q๎. Net revenue showed a ๎% decrease and was
affected by the product and channel mix.
EBIT increased to DKK ๎๎๎ million and were DKK ๎๎ million
above the ๎๎๎๎ figure. The EBIT margin increased by ๎ percent-
age point from ๎๎.๎% in ๎๎๎๎ to ๎๎.๎% in ๎๎๎๎. The earnings de-
velopment was positively affected by tight cost management
during the lockdown periods and the acquisition of Bauskas.
โIn a challenging year, we have benefited
from our broad portfolio and have taken
advantage of the growth in the low/no
sugar/alco segments. The satisfactory
results in 2020 can also be attributed to
our ability to deliver the right products
at the right time.โ
Kalle Jรคrvinen,
SVP Baltic Sea & MD Hartwall
Volumes increased by ๎% in Q๎ ๎๎๎๎, which is primarily due
to the extraordinary beer campaign in Finland, as we did not
have that campaign in Q๎ ๎๎๎๎. Revenue declined by ๎% due
to COVID-๎๎ restrictions, whereas the EBIT margin declined
by ๎.๎ percentage points from ๎๎.๎% in Q๎ ๎๎๎๎ to ๎๎.๎% in
Q๎ ๎๎๎๎.
VOLUMES
(thl)
NET REVENUE
(mDKK)
EBIT
(mDKK)
EBIT๎MARGIN
(%)
5.4 mhl
VOLUME
(up by 3%)
675 mDKK
EBIT
(up by 3%)
3.2 bDKK
NET REVENUE
(down by 2%)
20.8%
EBIT๎MARGIN
(up by 1.0pp)
ROYAL UNIBREW Annual report 202030
Performance
Perform โ Baltic Sea
Development and initiatives in 2020
The Baltic Sea segment was also impacted by the COVID-๎๎
restrictions, but to a lesser extent as well as at a later stage
for some of the countries compared to Italy and Denmark.
Due to a fast response and great flexibility, we succeeded to
obtain an even better result than in the record year ๎๎๎๎, and
at the same time we gained market share.
In Finland, we continued the premiumization of our beer
portfolio, with our brands Aura, Lahden Erikois and Lapin
Kulta Pure. We also continued our efforts in the low/no sugar
/alco area, including introducing a new Lapin Kulta ๎.๎%, and
our portfolio delivered very strong growth rates.
In the Ready-to-Drink category, Original Long Drink con-
tinued to grow. The campaign โThe greyest day of the yearโ
reached ๎๎๎.๎๎๎ participants in ๎๎๎๎ compared to ๎๎๎.๎๎๎
the year before and despite COVID-๎๎. In ๎๎๎๎, we continued
our innovation adding new tastes and the Original Long Shot
to the portfolio.
In the Baltics, we have been less impacted by COVID-๎๎ as we
are less dependent on the On-Trade channel in this region.
CULT energy was introduced to the market in ๎๎๎๎ and was
well received by the consumers. The beer sale in Lithuania
and Latvia has developed positively, supported by products
from our latest acquisition Bauskas, which are perform-
ing better than expected. The addition of Bauskas in Latvia
has strengthened our multi-beverage model in the Baltics.
Bauskas is now fully integrated into the business, which has
strengthened our presence in the craft beer segment in the
country. We have also successfully captured new customers
in the On-Trade segment as a result of the acquisition.
On ๎ March ๎๎๎๎, Bauskas was moved to our group-wide SAP
system.
Zero Zone in
supermarkets
In all countries in the Baltic Sea segment we are gaining
ground with our low/no beverage portfolio, with PepsiMax
leading the growth, and supported by our own strong local
brands such as Jaffa and Enjoy.
To make the choice even more visible for consumers, we
have established Zero Zone areas together with the super-
markets โ efficiently presenting our no sugar and no alcohol
products.
ROYAL UNIBREW Annual report 202031
Performance
Inter-
national
2018
18
19
20
21
22
23
24
2016 2017 2019 2020
2018
150
300
450
600
750
900
1,050
2016 2017 2019 2020
2018
50
70
90
110
130
150
170
2016 2017 2019 2020
2018
400
500
600
700
800
2016 2017 2019 2020
Financial Performance
Volumes in ๎๎๎๎ showed a ๎% increase and net revenue in-
creased by ๎๎%. The net revenue was impacted by positive de-
velopments in all categories and brands. EBIT amounted to
DKK ๎๎๎ million and were DKK ๎๎ million above the ๎๎๎๎ figure.
The EBIT margin went up by ๎.๎ percentage points from ๎๎.๎%
to ๎๎.๎%. The earnings development was positively affected by
a better product mix and savings on travel costs.
INTERNATIONAL
Q4 Q4
mDKK 2020 2019 % changes 2020 2019 % changes
Volumes (thl) 1,002 942 6 285 220 30
Net revenue 772 694 11 198 170 16
EBIT 171 132 30 39 24 63
EBIT margin 22.2 19.0 19.9 14.0
โIn 2020, things have gone well in almost
all markets in International and we have
been favored by a number of factors,
including a strong position of our main
brands, a re-branding of some of our
products and an increasingly wider
distribution.โ
Carsten Nรธrland,
SVP International
In Q๎ ๎๎๎๎, volumes increased by ๎๎% as some markets were
restocked to reflect sale out. Revenue increased by ๎๎% in
the same period, less than volumes because of market mix.
The EBIT margin increased by ๎.๎ percentage points from
๎๎.๎% in Q๎ ๎๎๎๎ to ๎๎.๎% in Q๎ ๎๎๎๎. This development can
partly be explained by impairment in Q๎ of DKK ๎ million last
year (Q๎-๎๎๎๎ EBIT-margin adjusted for impairment ๎๎.๎%).
VOLUMES
(thl)
EBIT
(mDKK)
EBIT๎MARGIN
(%)
NET REVENUE
(mDKK)
1.0 mhl
VOLUME
(up by 6%)
171 mDKK
EBIT
(up by 30%)
0.8 bDKK
NET REVENUE
(up by 11%)
22.2%
EBIT๎MARGIN
(up by 3.2pp)
ROYAL UNIBREW Annual report 202032
Performance
Perform โ International
Development and initiatives in 2020
The impact from COVID-๎๎ has been fragmented in the Inter-
national segment and we have seen countries in Asia moving
towards a more normal situation with a reopening of bars and
restaurants faster than in countries in Europe.
With reference to the Danish Vikings, our FAXE brand had a
great year in ๎๎๎๎, especially in Africa. We have built the brand
over many years in close cooperation with our local distribut-
ers offering affordable premium products to the consumers.
In ๎๎๎๎, we also supplemented the FAXE brand with a non
alcoholic variant with great taste.
The Tempt cider brand continues to grow significantly in Asia,
where the COVID-๎๎ impact was mainly seen in the beginning
of the year.
The Malt business is also performing well across countries,
and we have invested in digital campaigns as well as new
packaging formats to support the positioning of the malt
brands.
In ๎๎๎๎, we will focus on the areas that have performed in-
creasingly well in the past couple of years.
Donation of Supermalt
Supermalt can in many respects be considered
a dietary supplement, and during the COVID-๎๎
outbreak we have donated Supermalt and Vita-
malt to hospitals in Africa and the Caribbean
to support patients and health staff.
Virtual carnival
No matter what happens in the world, we all
need a break, socializing and fun โ with a Vi-
tamalt event we supported the yearly carnival
in London, which in ๎๎๎๎ was organized as a
virtual carnival.
ROYAL UNIBREW Annual report 202033
Performance
โ
Corporate Governance I Risk Management I Remuneration I
Board of Directors and Executive Management I Shareholder information
Governance
ROYAL UNIBREW Annual report 202034
Governance
Gover โ COVER
Corporate governance
ROYAL UNIBREW Annual report 202035
Governance
Gover โ Corporate governance
ROYAL UNIBREW Annual report 202036
Governance
ROYAL UNIBREW Annual report 202037
Governance
Risk is an inherent part of business and we take an
active approach to risk management, ensuring that
our key risks are identified and mitigated in a struc-
tured and prioritized manner. Royal Unibrew has
defined clear risk management processes, including
policies and procedures, to strive to minimize the
effect of our key risks as well as to protect our repu-
tation, values and freedom to operate.
The key enterprise risks are: market risks, industry and part-
nerships related risk, business interruption and third-party
risks and financial risks. A detailed description of the financial
risks is included in note ๎.
We assess risks within each of the key risk areas based on
their potential impact and likelihood. To ensure a sound and
deeply rooted risk culture within the Royal Unibrew group,
local risk owners as well as central risk owner from group
functions are appointed to facilitate the risk identification,
control and mitigation, supported by the central risk man-
agement function.
A challenging ๎๎๎๎ with COVID-๎๎
The Royal Unibrew multi-beverage model and risk manage-
ment setup have demonstrated their resilience over time and
not at least in a time with COVID-๎๎ related uncertainties.
However, the pandemic continues to challenge our employ-
ees, consumers and customers, placing additional require-
ments on our risk management and business planning.
Initiatives have been taken to ensure the safety of our em-
ployees during ๎๎๎๎, and we have succeeded not to close or
reduce the production at any of our production sites during
the pandemic.
With restricted opening hours at bars and restaurants, closed
nightlife, no larger events and festivals as well as closed
borders between many of our home markets, extra support
to customers and more frequent re-planning of production
has been needed during ๎๎๎๎.
To be able to meet changes in market demand, we continue to
invest in our production sites, to secure sufficient production
and storage capacity. Our agile way of working has helped us
to adjust to new opportunities both commercially and across
the supply chain.
Risk management
ROYAL UNIBREW Annual report 202038
Governance
Gover โ Risk management
SENIOR LEADERSHIP TEAM
Determines risk management policies and strategies for the
individual risks and ensures implementation of these adequate
mitigation efforts. Ensures consistency between the risk management
policy and the business objectives.
Monitors risk management and the development in key risks and ensures that
adequate resources are available to implement efficient risk management.
STAFF FUNCTIONS AND BUSINESS UNITS
Identify, assess, quantify and record risks. Make suggestions for mitigation.
Monitor risk management activities initiated. Report regularly to the Senior Leadership Team.
BOARD๎OF
DIRECTORS
Approves the
overall risk policy
and reviews the findings
reported by the Executive
Management.
AUDIT COMMITTEE
Monitors the development in the total strategic
risk exposures and the individual risk factors and
verifies compliance with the overall risk policy.
Risk management structure and Governance
Royal Unibrewโs risk management structure is based on a
systematic process of risk identification, risk analysis and
risk assessment. This structure provides a detailed overview
of key risks relating to the realization of our strategies in the
short and long term and enables Royal Unibrew to take the
required measures to address risks.
The Board of Directors assesses the overall risk factors re-
lating to Royal Unibrewโs activities. Risks are assessed under
a two-dimensional โheat mapโ assessment system which
estimates the impact of the risk in relation to profit, damage
to Royal Unibrewโs reputation, violation of legislation or en-
vironmental implications as well as the likelihood of the risk
resulting in an incident. Based on the continuous assessment
of potential risks, the โheat mapโ is updated to bring a cur-
rent and better understanding of potential risks to ensure
adequate mitigations efforts are initiated.
The identified risks and proposed action plans are reviewed
and assessed by the Companyโs Senior Leadership Team,
whereas, the Audit Committee reviews the adequacy and the
effectiveness of the risk management system.
Based on this the Executive Management presents the key
risks to the Board of Directors and reports the necessary
risk-mitigating activities/action plans for review.
The overall risk management structure is outlined below.
RISK MANAGEMENT STRUCTURE
ROYAL UNIBREW Annual report 202039
Governance
Key risk factors in ๎๎๎๎
In addition to financial risks, the following risk factors are considered key risks in ๎๎๎๎:
Area Description Risk mitigation
Commodity
prices
and raw
materials
The prices of a large number of key commodities fluctuate in line with world market
prices. To the extent that higher unit costs cannot be compensated for by higher
selling prices per unit or in other ways of increasing the average selling price per
unit correspondingly, Royal Unibrewโs earnings will decrease. The price fluctuation
can also lead to deficiency of raw materials and effect Royal Unibrew's earnings
negatively.
Royal Unibrew monitors the trend in commodity prices. Hedging against short-term price increases
takes place through agreements with suppliers and through commodity hedges with financial institu-
tions. The Groupโs policy for hedging commodity risks involves a smooth and time-differentiated effect
of commodity price increases.
For 2021, more than 60% of our commodity price exposure is hedged.
Industry In most markets, the product categories beer and soft drinks are characterized by
tough price competition and intensive marketing from a number of suppliers. The
COVID-19 pandemic has led to an increase in local e-commerce and entry of global
e-commerce providers has opened new routes to customers.
Royal Unibrewโs earnings and competitiveness are ensured through constant focus on markets and
segments in which Royal Unibrew holds or may achieve a significant position. Our investment in digital
solutions and the continuous improvements across the business will contribute towards limiting the
negative effect from the changes in the industry. Moreover, Royal Unibrew focuses on value manage-
ment through the development of products, containers and packaging, cooperation with customers
and communication with consumers.
In 2020, we have launched a B2B e-commerce platform for our customers in Denmark.
IT risks Royal Unibrewโs activities are to a large extent dependent on the use of the estab-
lished IT systems and the quality of the applied IT security solutions. A prolonged
breakdown, unintended maloperation or an unauthorized break-in into the systems
supporting sales and supply processes as well as internal information systems may
involve a significant risk of interruption of Royal Unibrewโs activities.
Royal Unibrew works consistently to improve our IT security and have established procedures to ensure:
โข day-to-day operation of the IT systems supporting the key business processes
โข protection against data loss
โข protection against unauthorized access to and distribution of confidential data
โข general protection against cybercrime and securing physical access to RU facilities
When acquiring companies, it is our risk philosophy to adopt the companies into our existing IT system
landscape and IT Security framework. On 1 March 2021, Bauskas was integrated into Royal Unibrew's
ERP platform.
Macro-
economic
uncertainty
Royal Unibrewโs product portfolio is sold in markets and market areas where market
developments are usually determined by long-cycle trends. Macroeconomic uncer-
tainty, including changes of free trade agreements or low growth of long duration or
outbreaks causing a threat to the public health, may affect earnings negatively. As a
consequence of this we might experience declining consumption or shifts in product
mix towards products in other packaging formats with lower earnings.
By focusing on flexibility in our action plans, Royal Unibrew is striving to get some leeway for reducing
the effect of macroeconomic uncertainty and changes to consumption patterns.
The efforts directed at continuous improvements across the business will contribute towards limiting
the negative effect of macroeconomic changes.
We continue to invest in our production set-up, including new can filling lines.
Partnership Royal Unibrew cooperate with different partners across markets and product cate-
gories. Changes to these relationships may affect the Groupโs sales and net revenue,
and thus earnings.
Royal Unibrew has in general a long history with our partners and mitigate the partnership risk by
entering into long term agreements and by providing adequate business results to ensure a mutually
beneficial development of the partnerships.
Statutory
restrictions
Royal Unibrewโs activities are subject to national legislation in the markets in which
Royal Unibrew operates. Any legislative changes may impact the ability to operate,
e.g. by way of restrictions in respect of the sale, marketing, packing material and
production of Royal Unibrewโs products or due to increasing consumption taxes.
Such restrictions may affect the Groupโs sales and earnings significantly.
Royal Unibrew participates in local and international cooperation fora within the brewery industry with
a view to influencing legislative decision makers to ensure that conditions for producing and marketing
beer and soft drinks do not deteriorate, and that consumption taxes are applied in a balanced manner.
Weather The sale of Royal Unibrewโs products is dependent on weather conditions. Usually,
the consumption of Royal Unibrewโs products is highest in the summer months.
However, this presupposes dry and fair weather. The weather in the summer of 2020
is regarded as normal.
Through focus on flexibility of action plans and production capacity, Royal Unibrew operates with a flex-
ible cost structure and can partly adjust to lower earnings caused by unfavorable weather conditions in
the summer months, and at the same time ensuring the agility to support the customers in years with
favorable weather.
ROYAL UNIBREW Annual report 202040
Governance
Remuneration of the Executive Management
mDKK 2020 Change 2019
Fixed salaries to Executive Management 20 63% 12
Short-term bonus scheme for Executive Management 9 63% 6
Long-term bonus scheme for Executive Management 9 41% 6
Remuneration of Executive Management* 38 57% 24
Remuneration of Board of Directors 5 6
43 30
Average remuneration of employees
Royal Unibrew employees (Group)** 0.4 -1% 0.4
* The increase from 2019 to 2020 is primarily due to the changes in the Executive Management which includes
severance payment to Johannes Savonije. Excluding of this, the remuneration has increased by 7%.
** The average salary is impacted by amongst other acquisitions where more employees are in countries with
lower salaries, as well as postponed replacements of higher paid jobs during COVID-19.
The overall objective of the remuneration is to attract, motivate
and retain qualified members of the Board of Directors and the
Executive Management.
The remuneration of the Board of Directors and Executive
Management during the past financial year has been provid-
ed in accordance with the remuneration policy and incentive
guidelines of Royal Unibrew adopted by the Annual General
Meeting on ๎๎ April ๎๎๎๎.
The complete Remuneration Policy and Remuneration Report
for the Board of Directors and the Executive Management are
disclosed at the Companyโs website at http://investor.royaluni-
brew.com/corporate-governance.
The Overall Guidelines for Incentive Pay adopted at the Com-
panyโs Annual General Meeting are available at http://investor.
royalunibrew.com/corporate-governance.
Read our full Remuneration Report here
Remuneration
ROYAL UNIBREW Annual report 202041
Governance
Gover โ Remuneration
Board of Directors and Executive Management
Walther Thygesen
Chairman of the Board
Jais Valeur
Deputy Chairman of the Board
Martin Alsรธ
Elected by the employees
Position Professional board member in a number of
enterprises
Group CEO of Danish Crown Business Unit Manager
Directorships Chairman of the board of directors of Sonion
Holding A/S, DK, and Kartago Development ApS,
DK; Member of the board of directors of German
High Street and Properties A/S (GHSP), DK
Member of the board of directors of Foss A/S, DK
Special competences Special expertise in general management with
experience from both Denmark and abroad as
well as sales and marketing expertise, especially
in the business to business market
Special expertise in general management
of international enterprises within FMCG
(Fast Moving Consumer Goods)
Committees Chairman of the Nomination and Remuneration
Committee
Member of the Nomination and Remuneration
Committee
Initially elected 2010 2013 2014
Term of office 2020-2021 2020-2021 2018-2022
Considered independent Yes Yes No
Nationality Danish Danish Danish
Year of birth and gender 1950, male 1962, male 1974, male
No. of Royal Unibrew shares
(change from 1 January 2020)
15,000
(+5,500)
536
(+536)
2,400
(+ 500)
Board of Directors
ROYAL UNIBREW Annual report 202042
Governance
Gover โ Board of Directors and Executive Board
Einar Esbensen Nielsen
Elected by the employees
Heidi Kleinbach-Sauter
Member of the Board
Claus Kรฆrgaard
Elected by the employees
Position Terminal worker Professional board member Sales Manager Off-Trade
Directorships Member of the board of directors of Chr. Hansen
Holding A/S, DK
Special competences Broad international experience within general
management and special expertise within the
food and beverage industry.
Committees
Initially elected 2018 2019 2018
Term of office 2018-2022 2020-2021 2018-2022
Considered independent No Yes No
Nationality Danish German/US Danish
Year of birth and gender 1954, male 1956, female 1968, male
No. of Royal Unibrew shares
(change from 1 January 2020)
119
(+72)
- 180
(+180)
Board of Directors (continued)
ROYAL UNIBREW Annual report 202043
Governance
Christian Sagild
Member of the Board
Catharina Stackelberg-Hammarรฉn
Member of the Board
Floris van Woerkom
Member of the Board
Position Professional board member Executive Chairman of the Board, Marketing Clinic Entrepreneur and independent consultant
Directorships Member of the board of directors of Ambu A/S,
DK, and Danske Bank, DK; Chairman of the board
of directors of Nordic Solar Energy A/S, DK, and
Nordic Solar Global A/S, DK
Member of the board of directors of Alma Media,
Finland, Marimekko, Finland, Marketing Clinic Oy
(including subsidiaries), Finland, and Scansecurities
Oy, Finland
Special competences Special expertise within general management
of listed enterprises, including in-depth insight
within finance and risk management
Special expertise in strategy and marketing
within the food and beverage industry for FMCG
(Fast Moving Consumer Goods) in the Nordic
markets
Broad international experience, including
experience within the beer industry and FMCG
(Fast Moving Consumer Goods) as well as special
expertise within finance, risk management, stra-
tegy and management of international corporati-
ons
Committees Member of the Audit Committee Chairman of the Audit Committee
Initially elected 2018 2019 2018
Term of office 2020-2021 2020-2021 2020-2021
Considered independent Yes Yes Yes
Nationality Danish Finnish Dutch
Year of birth and gender 1959, male 1970, female 1963, male
No. of Royal Unibrew shares
(change from 1 January 2020)
3,000
(+1,500)
450
(+150)
1,000
Board of Directors (continued)
ROYAL UNIBREW Annual report 202044
Governance
Lars Jensen
President & CEO
Lars Vestergaard
CFO
Qualifications Diploma in business economics, informatics and
management accounting, Copenhagen Business
School
Master of Science (MSc) in Economics from
Aarhus University
Directorships Member of the board of directors of Hansa Borg
Holding AS including subsidiaries, Norway
Position CEO from September 2020
COO April-August 2020
CFO December 2011-March 2020
Joined in 1993
CFO from April 2020
Member of the Board of Directors
April๎2018-March๎2020
Nationality Danish Danish
Year of birth and gender 1973, male 1974, male
No. of Royal Unibrew shares
(change from 1 January 2020)
71,988
(+ 30,413)
1,183
(+ 768)
Executive Management
ROYAL UNIBREW Annual report 202045
Governance
Shareholder information
DEVELOPMENT IN ROYAL UNIBREWโS SHARE CAPITAL
DKK โ000 2020 2019 2018 2017 2016
Share capital 1/1 100,200 102,000 105,400 108,200 110,985
Capital reduction -1,500 -1,800 -3,400 -2,800 -2,785
Capital increase -
Share capital 31/12 98,700 100,200 102,000 105,400 108,200
Royal Unibrew strives to maintain a high and con-
sistent level of information to our shareholders and
other stakeholders and to keep them continuously
up-to-date on the Companyโs development.
Share information
The Royal Unibrew share is listed on Nasdaq Copenhagen
and is included in the blue chip index OMX C๎๎.
In ๎๎๎๎, a total of ๎๎,๎๎๎,๎๎๎ (๎๎๎๎: ๎๎,๎๎๎,๎๎๎) shares were
traded, corresponding to ๎๎% (๎๎๎๎: ๎๎%) of the total number
of shares (at year end), through Nasdaq Copenhagen (source:
Bloomberg). The trading value amounted to DKK ๎๎,๎๎๎ billion
(๎๎๎๎: DKK ๎๎.๎ billion) representing an ๎๎% increase.
At the end of ๎๎๎๎, the price of the Royal Unibrew share was
๎๎๎.๎ compared to ๎๎๎.๎ per share of DKK ๎ at the end of ๎๎๎๎.
Royal Unibrewโs market capitalization amounted to DKK ๎๎.๎
billion at the end of ๎๎๎๎ compared to DKK ๎๎.๎ billion at the
end of ๎๎๎๎. Each share carries one vote, and all shareholders
registered in the Companyโs register of shareholders are
entitled to vote.
Change of control
The realization of a takeover bid resulting in change of control
of the Company will entitle a few trading partners and lend-
ers to terminate trading agreements entered. The Executive
Management will not be entitled to any compensation. How-
ever, a member of the Executive Management may choose
to consider himself dismissed.
BASIC INFORMATION
Share capital, DKK 98,700,000
Number of shares 49,350,000
Denomination DKK2
Number of share classes 1
Restriction of voting right None
Place of listing Nasdaq Copenhagen A/S
Short name RBREW
ISIN code DK0060634707
Bloomberg code RBREW DC
Reuter code RBREW.CO
Index OMXC25
Treasury shares in ๎๎๎๎
At the AGM on ๎๎ April ๎๎๎๎, the Board of Directors was au-
thorized to acquire treasury shares for up to ๎๎% of the total
share capital in the period up until the next AGM.
On ๎๎ March ๎๎๎๎, the Board of Directors initiated a share buy-
back program for a maximum market value of DKK ๎๎๎ mil-
lion and for a term until ๎๎ October ๎๎๎๎. Due to the evolving
situation around COVID-๎๎ the share buy-back program was
suspended on ๎๎ March ๎๎๎๎ at which point Royal Unibrew had
bought back ๎๎๎,๎๎๎ shares representing a market value of
DKK ๎๎ million. A new share buy-back program was initiated
on ๎๎ September ๎๎๎๎ for a maximum market value of DKK
๎๎๎ million and a term until ๎๎ December ๎๎๎๎. The share
buy-back program was completed on ๎๎ November ๎๎๎๎. After
completion Royal Unibrew had bought back ๎๎๎,๎๎๎ shares
representing a market value of DKK ๎๎๎ million. A third share
buy-back program was initiated on ๎๎ November ๎๎๎๎ for a
maximum of DKK ๎๎๎ million. The program was completed
on ๎๎ January ๎๎๎๎ with a total buy-back of ๎๎๎,๎๎๎ shares.
The initiated share buy-back programs were carried out in
accordance with the โSafe Harbourโ method.
In ๎๎๎๎, Royal Unibrew bought back a total of ๎๎๎.๎๎๎ shares
at a market value of DKK ๎๎๎ million and as of ๎๎ December
Royal Unibrew held ๎๎๎,๎๎๎ treasury shares of a nominal
value of DKK ๎ each, corresponding to ๎,๎% of the Companyโs
share capital of which approx. ๎๎,๎๎๎ are for the purpose of
covering the incentive program offered to the Executive Man-
agement. In ๎๎๎๎, ๎๎๎,๎๎๎ shares were cancelled.
ROYAL UNIBREW Annual report 202046
Governance
Gover โ Shareholder information
2019
2020
42
4
50
51
6
1
2
44
0
20
40
60
80
100
120
140
160
jan feb mar apr may jun jul aug sep okt nov dec
Royal Unibrew
OMX C 25
Peer group
MAY
3
29
28
28
APRIL
APRIL
APRIL
At the end of ๎๎๎๎, the total number of shares of the Company
was ๎๎,๎๎๎,๎๎๎, including treasury shares.
Ownership
At the end of ๎๎๎๎, Royal Unibrew had approx ๎๎,๎๎๎ registered
shareholders holding together ๎๎% of the total share capital.
According to the latest Company Announcements or other
public announcements, the following shareholders hold more
than ๎% of the share capital:
Shareholder End of February 2021
Chr. Augustinus Fabrikker A/S, 15.02%
Denmark
(reported on 22 September 2017)
BlackRock, Inc., 10.01%
USA
(reported on 23 July 2019)
DIVIDEND DATES FOR 2021
Resolution at AGM
Last trading date with
right to dividend for ๎๎๎๎
First trading date without
right to dividend for ๎๎๎๎
Distribution of dividend
BREAK๎DOWN OF SHAREHOLDERS AT THE END OF 2020
Share transactions made by members of the Board of Direc-
tors and the Executive Management are governed by Royal
Unibrewโs insider rules, and their transactions as well as
those of their connected persons are subject to a notifica-
tion requirement according to the Market Abuse Regulation.
Individuals on Royal Unibrewโs insider lists as well as their
spouses and children below the age of ๎๎ may trade Royal Uni-
brew shares only when the Board of Directors has announced
that the window for trading shares is open (and provided that
they do not have inside information). This normally applies
for a period of four weeks following an announcement of
financial results.
On ๎๎ December ๎๎๎๎, board members held ๎๎,๎๎๎ shares of
the Company, and members of the Executive Management
held ๎๎,๎๎๎ shares, corresponding to a total of ๎.๎% of the
share capital.
SHARE PERFORMANCE 2020
(index)
Note: The peer group consists of Anheuser-Busch InBev, Carlsberg, Heineken, Molson Coors Brewing Company, Britvic, Olvi and AG Barr (Source: Bloomberg)
Foreign Investors
Danish Investors
Not registered Danish
and foreign investors
Royal Unibrew
Royal Unibrew
OMX C25
Peer group
ROYAL UNIBREW Annual report 202047
Governance
NOVEMBER
17
23
28
28
APRIL
APRIL
AUGUST
FINANCIAL CALENDAR FOR 2021
๎๎ April ๎๎๎๎ Trading Statement for
the period ๎ January - ๎๎ March ๎๎๎๎
๎๎ April ๎๎๎๎ Annual General Meeting
๎๎ August ๎๎๎๎ Interim Report for the
period ๎ January - ๎๎ June ๎๎๎๎
๎๎ November ๎๎๎๎ Trading Statement for
the period ๎ January - ๎๎ September ๎๎๎๎
AGM
The Companyโs AGM will be held on ๎๎ April ๎๎๎๎, at ๎ pm CET.
The AGM will be convened electronically, and information
on the registration for electronic communication is provided
at Royal Unibrewโs website www.royalunibrew.com under
โInvestorโ.
Registration of shareholderโs name is handled by the bank
holding the shares in safe custody.
The Board of Directors will propose the election of the fol-
lowing two new candidates at the AGM:
Peter Ruzicka is the former CEO of Orkla in Norway, and
he brings international senior leadership experience within
FMCG retail business. He currently serves as Chairman of
Pandora A/S, board member of Norwegian Aspelin Ramm AS
and Norwegian AKA AS.
Torben Carlsen is the CEO of DFDS and currently serves
on the investment committee of Copenhagen Infrastructure
Partners, Gro Capital and Navigare Capital. He brings a strong
commercial and value creation track record with experience
in Finance and M&A having previously worked as CFO and for
various Private Equity companies.
SHARE RATIOS
Per share of DKK 2 โ DKK 2020 2019 2018 2017 2016
Parent Company shareholdersโ share
of earnings per share 24.1 23.0 20.6 16.0 14.7
Parent Company shareholdersโ diluted share of
earnings per share 24.1 22.9 20.6 16.0 14.6
Free cash flow per share 28.8 23.4 18.7 17.8 18.7
Year-end price per share 706.60 610.0 449.0 371.8 272.6
Dividend per share 13.5 12.20 10.80 8.90 8.15
Number of shares 49,350,000 50,100,000 51,000,000 52,700,000 54,100,000
Investor relations activities
Royal Unibrew aims to ensure open and timely information
to its shareholders and other stakeholders.
In order to maintain and develop good relations with the Com-
panyโs stakeholders a number of activities are carried out
continuously. In ๎๎๎๎, Royal Unibrew facilitated four audio
casts in connection with the publication of the Annual Report
๎๎๎๎ as well as the Q๎ Trading Statement, H๎ Interim Report
and Q๎ Trading Statement ๎๎๎๎. Audio casts and presenta-
tions from audio casts and seminars are available at Royal
Unibrewโs website, www.royalunibrew.com under investor.
Moreover, Royal Unibrew facilitates and participates in analyst
and investor meetings in connection with the publication of
financial reports. This year, the majority of the meetings have
been virtual and around ๎๎๎ individual and group meetings
with Danish as well as foreign investors have taken place.
Currently, Royal Unibrew is covered by ๎๎ brokers including
brokers from major international investment banks. Analysts
covering the Royal Unibrew share can be found at www.royal-
unibrew.com under investor.
Shareholders, analysts, investors, stockbrokers and
other stakeholders who have questions concerning
Royal Unibrew may contact
Royal Unibrew A/S,
Faxe Alle 1, DK-4640 Faxe:
Contacts
Jonas Guldborg Hansen (Head of IR)
Jonas.Guldborg@royalunibrew.com
Telephone +45 20 10 12 45
Stine Felten (daily IR contact)
Stine.Felten@royalunibrew.com
Telephone +45 29 23 04 93
ROYAL UNIBREW Annual report 202048
Governance
ROYAL UNIBREW Annual report 202049
Corporate Social Responsibility
CSR โ COVER
ROYAL UNIBREW Annual report 202050
Corporate Social Responsibility
CSR โ Our new long-term
ROYAL UNIBREW Annual report 202051
Corporate Social Responsibility
CSR โ Achievement highlights in 2020
ROYAL UNIBREW Annual report 202052
Corporate Social Responsibility
CSR โ Overall KPIs
ROYAL UNIBREW Annual report 202053
Corporate Social Responsibility
CSR โ Sustainability - Overview
ROYAL UNIBREW Annual report 202054
Corporate Social Responsibility
CSR โ Sustainability framework
ROYAL UNIBREW Annual report 202055
Corporate Social Responsibility
CSR โ Our policies and systems
ROYAL UNIBREW Annual report 202056
Corporate Social Responsibility
CSR โ Our governance structure
KPI ๎๎๎๎
ROYAL UNIBREW Annual report 202057
Corporate Social Responsibility
CSR โ Our customers and consumers
ROYAL UNIBREW Annual report 202058
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202059
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202060
Corporate Social Responsibility
KPI ๎๎๎๎
ROYAL UNIBREW Annual report 202061
Corporate Social Responsibility
CSR โ Our products
ROYAL UNIBREW Annual report 202062
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202063
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202064
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202065
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202066
Corporate Social Responsibility
CSR โ Our people
ROYAL UNIBREW Annual report 202067
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202068
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202069
Corporate Social Responsibility
ROYAL UNIBREW Annual report 202070
Corporate Social Responsibility
โ
Management's statement on the Annual Report I Independent auditor's report
Signatures and
statements
ROYAL UNIBREW Annual report 202071
Signatures and statements
Sign โ COVER
Management's Statement on the Annual Report
ROYAL UNIBREW Annual report 202072
Signatures and statements
Sign โ Management statement
Independent auditor's report
ROYAL UNIBREW Annual report 202073
Signatures and statements
Sign โ Independent auditor
ROYAL UNIBREW Annual report 202074
Signatures and statements
ROYAL UNIBREW Annual report 202075
Signatures and statements
ROYAL UNIBREW Annual report 202076
Signatures and statements
Consolidated financial statements
2020
ROYAL UNIBREW Annual report 202077
Consolidated Financial Statement
ConFin โ COVER
Consolidated Income Statement
mDKK Note 2020 2019
Net revenue 7,557 7,692
Production costs 6, 7 -3,613 -3,612
Gross profit 3,944 4,080
Sales and distribution expenses 6. 7 -2,085 -2,262
Administrative expenses 6, 7 -344 -349
EBIT 1,515 1,469
Income after tax from investments in associates 13 33 25
Financial income 8 3 5
Financial expenses 9 -46 -41
Profit before tax 1,505 1,458
Tax on the profit for the year 10 -307 -318
Net profit for the year 1,198 1,140
Profit for the year is attributable to:
Equity holders of Royal Unibrew A/S 1,183 1,142
Non-controlling interests 15 -2
Net profit for the year 1,198 1,140
Earnings per share (DKK) 17 24.1 23.0
Diluted earnings per share (DKK) 17 24.1 22.9
mDKK Note 2020 2019
Net profit for the year 1,198 1,140
Other comprehensive income
Items that may be reclassified to the income statement
Exchange adjustment of foreign group enterprises -29 4
Value adjustment of hedging instruments 11 14
Tax on other comprehensive income (fair value adjustment) 10 -2 -3
Total -20 15
Items that may not be reclassified to the income statement
Actuarial gain on pension schemes 1 2
Tax on actuarial gain on pension schemes 0 0
Total 1 2
Other comprehensive income after tax -19 17
Total comprehensive income 1,179 1,157
Comprehensive income for the year is attributable to:
Equity holders of Royal Unibrew A/S 1,164 1,159
Non-controlling interests 15 -2
Net profit for the year 1,179 1,157
Consolidated Income Statement for 1 January - 31 December Consolidated Statement of Comprehensive Income for 1 January - 31 December
ROYAL UNIBREW Annual report 202078
Consolidated financial statements
ConFin โ Income statement
2016 2017 2018 2019 2020
3,700
4,700
5,700
6,700
7,700
2016 2017 2018 2019 2020
8,000
9,000
10,000
11,000
12,000
Sales and earnings
VOLUMES
(thl)
NET REVENUE
(mDKK)
Volumes, net revenue and gross profit
Change, Q4 Q4 Change,
2020 2019 % 2020 2019 %
Volumes, beverages (thl) 11,093 11,024 1% 2,647 2,534 4%
Net Revenue (mDKK) 7,557 7,692 -2% 1,733 1,787 -3%
Gross Profit (mDKK) 3,944 4,080 -3% 878 908 -3%
Volumes for ๎๎๎๎ show an aggregated sale of ๎๎.๎ million hectolitres of beverages, which was ๎% higher com-
pared to ๎๎๎๎. Organically the volumes were at the same level as in ๎๎๎๎.
Net revenue for ๎๎๎๎ decreased by ๎% and amounted to DKK ๎,๎๎๎ million compared to DKK ๎,๎๎๎ million in ๎๎๎๎.
The decrease primarily related to impact from Covid-๎๎ in Western Europe and Baltic Sea. In the International
segment the Covid-๎๎ impact was more than compensated by increased sales in International and due to better
product-mix and USD currency rates in Americas. Organic growth decreased ๎% compared to ๎๎๎๎. Compared
to ๎๎๎๎ the overall average selling price per volume unit has decreased with ๎% due to Covid-๎๎-related shift
from On-Trade to Off-Trade sales channel.
The gross profit for ๎๎๎๎ was DKK ๎๎๎ million below ๎๎๎๎ figure and amounted to DKK ๎,๎๎๎ million equivalent
to a ๎% decrease (Q๎: -๎%). The gross margin was ๎.๎ percentage point below the ๎๎๎๎ margin (Q๎: increase
๎.๎pp) and represented ๎๎.๎% compared to ๎๎.๎% for ๎๎๎๎. Gross profit per volume unit was ๎% lower (Q๎:
lower ๎%) than in ๎๎๎๎.
Expenses
Change, Q4 Q4 Change,
2020 2019 % 2020 2019 %
Sales and distribution
expenses (mDKK) 2,085 2,262 -8% 528 541 -2%
Administrative expenses (mDKK) 344 349 -1% 98 100 -2%
Sales and distribution expenses for ๎๎๎๎ was DKK ๎๎๎ million below the figure ๎๎๎๎ and amounted to DKK ๎,๎๎๎
million compared to DKK ๎,๎๎๎ million for ๎๎๎๎. The net saving covers lower spending on sales activity due to
COVID-๎๎ and marketing, while increased provision for loss on trade receivables has had the opposite impact.
Administrative expenses for ๎๎๎๎ showed a DKK ๎ million decrease compared to ๎๎๎๎ and amounted to DKK
๎๎๎ million compared to DKK ๎๎๎ million for ๎๎๎๎, primarily caused by COVID-๎๎ related cost savings.
๎,๎๎๎ mDKK
in net revenue
A DECREASE OF ๎% COMPARED TO ๎๎๎๎
ROYAL UNIBREW Annual report 202079
Consolidated financial statements
2016 2017 2018 2019 2020
500
700
900
1,100
1,300
1,500
1,700
1,900
18
19
20
21
22
23
24
25
EBITDA AND EBITDA MARGIN
(mDKK) (%)
EBITDA EBITDA margin
2016 2017 2018 2019 2020
0
500
1,000
1,500
2,000
0.0
7.5
15.0
22.5
30.0
EBIT AND EBIT MARGIN
(mDKK) (%)
EBIT EBIT margin
EBITDA, EBIT and financials
Change, Q4 Q4 Change,
2020 2019 % 2020 2019 %
EBITDA (mDKK) 1,861 1,814 3% 329 361 -9%
EBIT (mDKK) 1,515 1,469 3% 252 267 -6%
Net interest expenses -43 -36 19% -13 -9 44%
Income after tax
from investments 33 25 32% 15 9 67%
Earnings before interest, tax, depreciation and amortization (EBITDA) for ๎๎๎๎ showed a DKK ๎๎ million in-
crease and amounted to DKK ๎,๎๎๎ million compared to DKK ๎,๎๎๎ million for ๎๎๎๎. In Q๎ EBITDA decreased
by DKK ๎๎ million compared to the same period in ๎๎๎๎. EBIT for ๎๎๎๎ amounted to DKK ๎,๎๎๎ million, which
is DKK ๎๎ million above the ๎๎๎๎ figure. The positive development in both EBITDA and the EBIT are primarily
attributable to the International and Baltic Sea segments, while due to COVID-๎๎ EBIT and EBITDA decreased
in the western europe .
The EBIT margin for ๎๎๎๎ was ๎๎.๎% compared to ๎๎.๎ % realized in ๎๎๎๎.
Net financials expenses for ๎๎๎๎ were DKK ๎ million higher than in ๎๎๎๎ aggregating an expense of DKK ๎๎
million. Financial expenses were DKK ๎๎ million on a net basis compared to DKK ๎๎ million in ๎๎๎๎, mainly
due to exchange rate losses.
Profit and earnings per share
Change, Q4 Q4 Change,
2020 2019 % 2020 2019 %
Profit before tax (mDKK) 1,505 1,458 3% 254 267 -5%
Tax on profit (mDKK) -307 -318 -3% -36 -45 -20%
Net profit (mDKK) 1,198 1,140 5% 218 222 -2%
Earnings per share (DKK) 24.1 23.0 5% 4.6 4.3 7%
Profit before tax for ๎๎๎๎ was DKK ๎๎ million above the ๎๎๎๎ figure and amounted to DKK ๎,๎๎๎ million compared
to DKK ๎,๎๎๎ million for ๎๎๎๎, equivalent to an increase of ๎%.
Tax on the profit for ๎๎๎๎ was an expense of DKK ๎๎๎ million and corresponds to a tax rate of ๎๎.๎% on the
profit excluding income after tax from investments in associates.
The net profit for ๎๎๎๎ amounted to DKK ๎,๎๎๎ million, which is DKK ๎๎ million above the ๎๎๎๎ figure, equivalent
to an increase of ๎%.
The earnings per share increased in ๎๎๎๎ to DKK ๎๎.๎ per share compared to ๎๎.๎ for in ๎๎๎๎, equivalent to
an increase of ๎%.
The Parent Companyโs profit for the year amounted to DKK ๎,๎๎๎ million compared to DKK ๎,๎๎๎ million for
๎๎๎๎. Dividend income from subsidiaries and associates amounted to DKK ๎๎๎ million compared to DKK ๎๎๎
million for ๎๎๎๎.
ROYAL UNIBREW Annual report 202080
Consolidated financial statements
ConFin โ Income statement text
Consolidated Balance Sheet
Assets at 31 December Liabilities and Equity at 31 December
mDKK Note 2020 2019
NON-CURRENT ASSETS
Intangible assets 11 4,408 4,516
Property, plant and equipment 12 2,455 2,501
Investments in associates 13 131 126
Other non-current investments 14 21 20
Non-current assets 7,015 7,163
CURRENT ASSETS
Inventories 15 517 463
Receivables 16 639 736
Prepayments 54 59
Cash and cash equivalents 81 72
Current assets 1,291 1,330
Assets 8,306 8,493
mDKK Note 2020 2019
EQUITY
Share capital 17 99 100
Other reserves 716 746
Retained earnings 1,827 1,640
Proposed dividend 666 611
Equity contributable to equity holders of Royal Unibrew A/S 3,308 3,097
Non-controlling interests 24 10
Equity 3,332 3,107
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax 18 554 546
Mortgage debt 3, 20 831 851
Credit institutions 3, 20 1,293 1,303
Other payables 52 105
Non-current liabilities 2,730 2,805
CURRENT LIABILITIES
Mortgage debt 3, 20 19 4
Credit institutions 3, 20 131 619
Trade payables 1,047 1,018
Provisions 10 17
Corporation tax 10 9 29
Other payables 19 1,028 894
Current liabilities 2,244 2,581
Liabilities 22 4,974 5,386
Liabilities and equity 8,306 8,493
ROYAL UNIBREW Annual report 202081
Consolidated financial statements
ConFin โ Balance Sheet
2016 2017 2018 2019 2020
0
2,000
4,000
6,000
8,000
2016 2017 2018 2019 2020
-1,500
-1,000
-500
0
500
2016 2017 2018 2019 2020
0
10
20
30
40
ROIC excl goodwill
ROIC incl goodwill
Balance sheet and financial position
NET WORKING CAPITAL
(mDKK)
ROIC
(%)
INVESTED CAPITAL
(mDKK)
Balance Sheet
Royal Unibrewโs balance sheet ๎๎๎๎ amounted to DKK ๎,๎๎๎ million, which is DKK ๎๎๎ million below the
๎๎๎๎ figure. The decrease is mainly caused by a net inventories and receivables decrease of DKK ๎๎ million
due to lower sales activities end of Q๎ and to amortisation and depreciation of non-current assets exceeding
investments in the amount of DKK ๎๎๎ million. Further, the performance based earn-out part of the agreed
purchase price for Bev.Con ApS (Cult) will not be paid due to lower than expected performance in ๎๎๎๎, hence
the fair value of the assets and the earn-out debt have been lowered by DKK ๎๎ million when preparing the
final purchase price allocation (we refer to note ๎๎).
Invested capital decreased by DKK ๎๎๎ million from ๎๎๎๎ to ๎๎๎๎. ROIC excluding goodwill calculated on a run-
ning ๎๎ months basis increased by ๎.๎ percentage points to ๎๎.๎% mainly due to the decrease in the invested
capital. ROIC including goodwill increased by ๎.๎ percentage points to ๎๎.๎%.
Compared to ๎๎๎๎, the equity ratio increased by ๎ percentage points in ๎๎๎๎ amounting to ๎๎% end of ๎๎๎๎
compared to ๎๎% at the end of ๎๎๎๎.
Equity at the end of December ๎๎๎๎ amounted to DKK ๎,๎๎๎ million compared to DKK ๎,๎๎๎ million at the
end of ๎๎๎๎. The DKK ๎๎๎ million increase comprised the positive comprehensive income of DKK ๎,๎๎๎ million
(๎๎๎๎: DKK ๎,๎๎๎ million) reduced by distribution to shareholders of DKK ๎๎๎ million (๎๎๎๎: DKK ๎๎๎ million) by
way of dividend and share buy-back.
Net interest-bearing debt for ๎๎๎๎ showed a DKK ๎๎๎ million decrease and amounted to DKK ๎,๎๎๎ million
at ๎๎ December ๎๎๎๎ compared to DKK ๎,๎๎๎ million at the end of ๎๎๎๎. The decrease in net interest-bearing
debt was as expected and comprised the positive free cash flow before prepayment of lease facilities of DKK
๎,๎๎๎ million less distribution to shareholders of DKK ๎๎๎ million and other items of DKK ๎๎ million. The net
interest-bearing debt to EBITDA ratio (running ๎๎ months basis) was ๎.๎x (๎๎๎๎: ๎.๎x).
Funds tied up in working capital showed a negative DKK ๎๎๎ million at the end of December ๎๎๎๎ compared
to a negative DKK ๎๎๎ million at the end of ๎๎๎๎. Funds tied up in working capital thus decreased by DKK ๎๎๎
million in ๎๎๎๎ (๎๎๎๎: increase of DKK ๎๎ million), mainly due to the beer campaign in Finland and channel mix.
Funds tied up in inventories, trade receivables and trade payables decreased by DKK ๎๎ million (๎๎๎๎: increase
of DKK ๎๎ million), whereas funds tied up in the other elements of working capital such as excise taxes and
witholding tax on salaries decreased by DKK ๎๎๎ million (๎๎๎๎: decrease of DKK ๎๎ million).
๎,๎๎๎ mDKK
in equity
AN INCREASE OF ๎๎๎ MDKK COMPARED TO ๎๎๎๎
ROYAL UNIBREW Annual report 202082
Consolidated financial statements
ConFin โ Balance text
Consolidated Cash Flow Statement
for 1 January - 31 December
mDKK Note 2020 2019
Debt financing:
Proceeds from increased drawdown on credit facilities 20 149 546
Repayment on credit facilities 20 -579 -419
Repayment on lease facilities 20 -73 -62
Dividends paid to shareholders -600 -538
Acquisition of shares for treasury -362 -433
Capital increase, minority shareholders 0 2
Cash flows from financing activities -1,465 -904
Change in cash and cash equivalents 15 -74
Cash and cash equivalents at 1 January 72 145
Exchange adjustment -6 1
Cash and cash equivalents at 31 December 81 72
From the 1 Janury 2020 Royal Unibrew defines the free cash flow as
net cash operating activities less net cash used in investing activities
excluding acquisitions and net proceeds from intangible assets and
fixed asset investments, less repayment on leasing facilities.
Comparable numbers 2019 have been adjusted.
Free cash flow
Net cash from operating activities 1,738 1,402
Net cash used in investing activities -251 -200
Repayment on lease facilities -73 -62
Free cash flow 1,414 1,140
Effect from changed free cash flow definition -18
mDKK Note 2020 2019
Net profit for the year 1,198 1,140
Adjustments for non-cash operating items 21 670 680
Change in working capital 227 -43
Received financial income 4 5
Paid financial expenses -46 -40
Financial expenses related to leasing -2 -2
Corporation tax paid -313 -338
Cash flows from operating activities 1,738 1,402
Dividends received from associates 21 25
Sale of property, plant and equipment 8 36
Purchase of property, plant and equipment -280 -261
Acqusition of subsidiaries -6 -365
Purchase/-sale of intangible assets and fixed asset investment -1 -7
Cash flows from investing activities -258 -572
ROYAL UNIBREW Annual report 202083
Consolidated financial statements
ConFin โ Cash Flow Statement
Net interest bearing debt
NIBD/EBITDA lb 12 months
Due to adoption in 2018 of IFRS 16 (leases)
using the modified retrospective approach
2016-2017 are not comparable to 2018-2020
2016 2017 2018 2019 2020
0
700
1,400
2,100
2,800
0.0
0.5
1.0
1.5
2.0
2016 2017 2018 2019 2020
0
500
1,000
1,500
2,000
2016 2017 2018 2019 2020
0.0
1.5
3.0
4.5
6.0
Cash Flow
NIBD AND NIBD/EBITDA
(mDKK)
FREE CASH FLOW
(mDKK)
Cash Flow Statement
Cash flows from operating activities for ๎๎๎๎ amounted to DKK ๎,๎๎๎ million (๎๎๎๎: DKK ๎,๎๎๎ million) compris-
ing DKK ๎,๎๎๎ million (๎๎๎๎: DKK ๎,๎๎๎ million) of profit for the period adjusted for non-cash operating items,
positive working capital cash flow of DKK ๎๎๎ million (๎๎๎๎: a negative DKK ๎๎ million), net interest paid of DKK
๎๎ million (๎๎๎๎: DKK ๎๎ million) and taxes paid of DKK ๎๎๎ million (๎๎๎๎: DKK ๎๎๎ million).
The free cash flow for ๎๎๎๎ amounted to DKK ๎,๎๎๎ million, which was an increase of DKK ๎๎๎ million compared
to ๎๎๎๎. Cash flows from operating activities and dividend from associates showed a DKK ๎๎๎ million increase
compared to the ๎๎๎๎ figures, and net investments in property, plant and equipment showed a DKK ๎๎ million
decrease, comprising DKK ๎๎ million higher gross investments and DKK ๎๎ million lower revenues from asset
divestments. Further repayment on lease facilities increased DKK ๎๎ million. We estimate that the normalized
free cash flow level (without COVID-๎๎ impact and extraordinary beer campaign in Finland) for Royal Unibrew
was around DKK ๎,๎๎๎ million.
๎,๎๎๎ mDKK
free cash flow
๎๎๎ MDKK HIGHER THAN ๎๎๎๎
OF WHICH ๎๎๎ MDKK FROM WORKING CAPITAL
INVESTMENTS IN % OF NET REVENUE
(%)
ROYAL UNIBREW Annual report 202084
Consolidated financial statements
ConFin โ Cash flow text
Consolidated Statement of Changes in Equity
for 1 January - 31 December
Parents
Share Proposed company
Share premium Translation Hedging Total other Retained dividend share of Minority
mDKK capital account reserve reserve reserves earnings for the year equity share Total
Equity at 31 December 2019 100 773 -24 -3 746 1,641 611 3,098 9 3,107
Changes in equity in 2020
Net profit for the year 0 1,183 1,183 15 1,198
Other comprehensive income -29 11 -18 1 -17 -17
Tax on other comprehensive income 0 -2 -2 -2
Total comprehensive income 0 0 -29 11 -18 1,182 0 1,164 15 1,179
Dividends paid to shareholders 0 -600 -600 -600
Dividend on treasury shares 0 2 -2 0 0
Acquisition of shares for treasury 0 -362 -362 -362
Proposed dividend 0 -657 657 0 0
Capital reduction -1 -12 -12 13 0 0
Share-based payments 0 7 7 7
Tax on changes in equity, shareholders 0 1 1 1
Total shareholders -1 -12 0 0 -12 -996 55 -954 0 -954
Total changes in equity in 2020 -1 -12 -29 11 -30 186 55 210 15 225
Equity at 31 December 2020 99 761 -53 8 716 1,827 666 3,308 24 3,332
The share capital at 31 December 2020 amounts to DKK 98,700,000 (2019: DKK 100,200,000 ) and is distributed on shares of DKK 2 each.
Proposed dividend for the year amounts to DKK 13.50 per share (2019: DKK 12.20 per share).
ROYAL UNIBREW Annual report 202085
Consolidated financial statements
ConFin โ Equity
Consolidated Statement of Changes in Equity
for 1 January - 31 December
Parents
Share Proposed company
Share premium Translation Hedging Total other Retained dividend share of Minority
mDKK capital account reserve reserve reserves earnings for the year equity share Total
Equity at 31 December 2018 102 787 -31 -17 739 1,507 551 2,899 9 2,908
Changes in equity in 2019
Net profit for the year 0 1,142 1,142 -2 1,140
Other comprehensive income 7 14 21 -1 20 20
Tax on other comprehensive income 0 -3 -3 -3
Total comprehensive income 0 0 7 14 21 1,138 0 1,159 -2 1,157
Minority shareholdersโ share of acquired businesses 0 2 2
Dividends paid to shareholders 0 -538 -538 -538
Dividend on treasury shares 0 13 -13 0 0
Acquisition of shares for treasury 0 -433 -433 -433
Proposed dividend 0 -611 611 0 0
Capital reduction -2 -14 -14 16 0 0
Share-based payments 0 6 6 6
Tax on changes in equity, shareholders 0 5 5 5
Total shareholders -2 -14 0 0 -14 -1,004 60 -960 2 -958
Total changes in equity in 2019 -2 -14 7 14 7 134 60 199 0 199
Equity at 31 December 2019 100 773 -24 -3 746 1,641 611 3,098 9 3,107
ROYAL UNIBREW Annual report 202086
Consolidated financial statements
Descriptive notes
๎ Basis of preparation ..............................................๎๎
๎ Significant accounting estimates
and judgements .................................................... ๎๎
๎ Financial risk management .................................. ๎๎
๎ Derivatives .............................................................. ๎๎
๎ Segment reporting................................................. ๎๎
Notes referring to Income Statement,
Balance Sheet and Cash Flow Statement
๎ Staff expenses .........................................................๎๎
๎ Expenses broken down by nature ........................ ๎๎
๎ Financial income ...................................................๎๎๎
๎ Financial expenses ...............................................๎๎๎
๎๎ Tax on the profit for the year ................................๎๎๎
๎๎ Intangible assets ................................................... ๎๎๎
๎๎ Property, plant and equipment ............................ ๎๎๎
๎๎ Investments in associates ....................................๎๎๎
๎๎ Other fixed asset investments .............................๎๎๎
๎๎ Inventories .............................................................๎๎๎
๎๎ Receivables ............................................................๎๎๎
๎๎ Equity and basis of earnings/
cash flow per share ..............................................๎๎๎
๎๎ Deferred tax ............................................................ ๎๎๎
๎๎ Other current payables ......................................... ๎๎๎
๎๎ Debts .......................................................................๎๎๎
๎๎ Cash Flow Statement ............................................๎๎๎
Other notes
๎๎ Contingent liabilities, security
and other liabilities ................................................๎๎๎
๎๎ Related parties .......................................................๎๎๎
๎๎ Acquisition of subsidiaries ....................................๎๎๎
Notes to Consolidated Annual Report
ROYAL UNIBREW Annual report 202087
Consolidated Financial Statement
ConFin โ Notes contents
Descriptive notes to Consolidated Annual Report
Note 1 Basis of preparation of Consolidated Annual Report
Basis of preparation
Royal Unibrew A/S is a limited liability company registered in Denmark.
The Financial Statements for the period ๎ January - ๎๎ December ๎๎๎๎
presented in the Annual Report comprise both Consolidated Financial
Statements of Royal Unibrew A/S and its subsidiaries (Group) and sep-
arate Parent Company Financial Statements.
The Financial Statements of Royal Unibrew for ๎๎๎๎ have been prepared
in accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU and additional Danish disclosure requirements
for financial statements, cf the Danish Statutory Order on Adoption of
IFRS issued pursuant to the Danish Financial Statements Act.
The Board of Directors and the Executive Management considered and
adopted the Annual Report of Royal Unibrew A/S for ๎๎๎๎ on ๎ March
๎๎๎๎. The Annual Report will be submitted for adoption by the sharehold-
ers of Royal Unibrew A/S at the Annual General Meeting on ๎๎ April ๎๎๎๎.
The Financial Statements are presented in Danish kroner (DKK).
Accounting policies are unchanged from last year.
Significant accounting policies
This section describes the general accounting policies applied by Royal
Unibrew. A detailed description of the accounting policies applied and
critical estimates made with respect to specific reported amounts is
presented in the relevant notes. The purpose of this is to create full
transparency of the disclosed amounts by providing a total description of
the relevant accounting policy, the critical estimates and the numerical
information for each note.
The description of accounting policies in the notes constitutes part of
the overall description of Royal Unibrewโs accounting policies.
Accounting policies are unchanged from last year except from imple-
mention of:
โข Amendments to References to the Conceptual Framework in IFRS
Standards
โข COVID-๎๎-Related Rent Concessions (Amendment to IFRS ๎๎)
โข Amendments to IFRS ๎ Definition of a Business
โข Amendments to IAS 1 and IAS 8 Definition of Material
โข Amendments to IFRS ๎, IAS ๎๎ and IFRS ๎ Interest Rate Benchmark
Reform โ Phase ๎ (IBOR)
None of the new standards have had any impact on recognition and
measurement on the Group's consolidated financial statements ๎๎๎๎.
New and amended standards and interpretations
that have not yet taken effect
At the time of publication of this Annual Report, the IASB has issued new
and amended financial reporting standards and interpretations which
are potentially relevant, but not mandatory, for Royal Unibrew A/S at
the time of preparation of the Annual Report for ๎๎๎๎:
โข IFRS ๎๎ Insurance Contracts including amendments to IFRS ๎๎
โข Amendments to IAS ๎: Classification of liabilities as current or
non-current
โข Amendments to IFRS ๎ Business Combinations: Reference to the
Conceptual Framework
โข Amendments to IAS ๎๎ Property, Plant and Equipment: Proceeds
before Intended Use
โข Amendments to IAS ๎๎ Provisions, Contingent Liabilities and Contin-
gent Asset: Onerous Contracts โ Costs of Fulfilling a Contract
โข Annual Improvements ๎๎๎๎ โ ๎๎๎๎
โข Amendments to IFRS ๎ Insurance Contracts โ deferral of IFRS ๎
โข Amendments to IFRS ๎, IAS ๎๎, IFRS ๎, IFRS ๎ and IFRS ๎๎: Interest
Rate Benchmark Reform โ Phase ๎
The adopted, not yet effective standards and interpretations will be
implemented as they become mandatory for Royal Unibrew A/S. None
of the new standards or interpretations are expected to have a signif-
icant impact on recognition and measurement for Royal Unibrew A/S.
Consolidated Financial Statements
The Consolidated Financial Statements comprise Royal Unibrew A/S
(the Parent Company) and enterprises in which the Parent Company
exercises control (subsidiaries).
Enterprises in which the Group holds between ๎๎% and ๎๎% of the
votes and exercises significant influence but not control are classified
as associates.
The Consolidated Financial Statements are prepared on the basis
of Financial Statements of all group enterprises prepared under the
Groupโs accounting policies by combining accounting items of a uniform
nature. Elimination is made of intercompany income and expenses,
unrealized intercompany profits and losses, balances and sharehold-
ings. Comparative figures are not adjusted for newly acquired, sold or
wound-up enterprises.
Acquired enterprises are recognised as of the date of acquisition. Enter-
prises disposed of are recognised in the consolidated income statement
up until the date of disposal.
Non-controlling interestsโs share of profit/loss for the year and of the
equity in subsidiaries is included as part of Royal Unibrews profit and
equity respetively, but shown as seperate items.
Translation policies
For each of the reporting entities of the Group, a functional currency
is determined. The functional currency is the currency of the primary
ROYAL UNIBREW Annual report 202088
Consolidated financial statements
ConFin โ Note 01
Note 1 Basis of preparation of
Consolidated Annual Report (continued)
Note 2 Significant accounting estimates
and judgements
economic environment in which the reporting entity operates. Transac-
tions in other currencies than the functional currancy are transactions
in foreign currencies.
Transactions in other currencies than the functional currency are in-
itially translated into Danish kroner (DKK) at the exchange rates at
the dates of transaction. Receivables, payables and other monetary
items in foreign currencies not settled at the balance sheet date are
translated at the exchange rates at the balance sheet date. Exchange
adjustments arising due to differences between the transaction date
rates and the rates at the dates of payment or the rates at the balance
sheet date, respectively, are recognised in financial income and ex-
penses in the income statement. Property, plant and equipment and
intangible assets, inventories and other non-monetary asset purchase
in foreign currencies and measured at historical cost are translated at
the transaction date rates.
On recognition in the Consolidated Financial Statements of enterprises
with another functional currency than Danish kroner (DKK), income
statements are translated at average annual exchange rates. Balance
sheet items are translated at the exchange rates at the balance sheet
date.
Exchange adjustments arising on the translation of the opening balance
sheet items of foreign enterprises at exchange rates at the balance
sheet date and on the translation of income statements from average
exchange rates to exchange rates at the balance sheet date are recog-
nised in other comprehensive income. Similarly, exchange adjustments
arising due to changes made directly in equity of foreign enterprises
are recognised in other comprehensive income.
On recognition in the Consolidated Financial Statements of associates
with a functional currency that differs from the presentation currency
of the Parent Company, the share of results for the year is translated
at average exchange rates, and the share of equity including goodwill
is translated at the exchange rates at the balance sheet date. Exchange
adjustments arising on the translation of the share of the opening
equity of foreign associates at exchange rates at the balance sheet
date and on the translation of the share of results for the year from
average exchange rates to exchange rates at the balance sheet date
are recognised in other comprehensive income and classified in equity
under a separate translation reserve.
In connection with the preparation of the Parent Company and Consoli-
dated Financial Statements, Management makes estimates and judge-
ments as to how recognition and measurement of revenue, assets and
liabilities should take place based on the accounting policies applied.
Judgements as an element in significant accounting policies
The calculation of carrying amounts of certain assets and liabilities
requires judgement as to how assets and liabilities should be classified
in the Financial Statements and how future events will affect the value
of these assets and liabilities at the balance sheet date. In connection
with the financial reporting for ๎๎๎๎, the following judgments have been
considered material affecting the related items as described in relevant
notes, see list below.
Critical accounting estimates
Managementโs estimates are based on assumptions which Manage-
ment considers reasonable but which are inherently uncertain and
unpredictable. In connection with the financial reporting for ๎๎๎๎, the
following critical estimates have been made as described in the notes,
see list below.
Note
Derivative financial instruments
4
Segment reporting
5
Net revenue
5
Share-based payments
6
Expenses
7
Financial income
8
Financial expenses
9
Corporation tax
10
Intangible assets
11
Property, plant and equipment
12
Investments in associates
13
Other fixed asset investments
14
Inventories
15
Receivables
16
Equity
17
Deferred tax
18
Deposit returnable packaging
19
Debt 20
Cash Flow Statement
21
Purchase Price Allocation (PPA)
24
Legends
Significant accounting policies
Judgements as an element in significant accounting policies
Critical accounting estimates
Comments to the note
ROYAL UNIBREW Annual report 202089
Consolidated financial statements
ConFin โ Note 02
The Groupโs financial risks are managed centrally according to the
Treasury Policy approved by the Board of Directors, which includes
guidelines for the handling of currency, interest rate, liquidity and credit
risks. Commodity risks are also managed under a commodity risk policy
approved by the Board of Directors.
Currency risk
Royal Unibrew is exposed to currency risks through the geographic
spread of the Groupโs activities. This currency exposure is reflected
through the activities in the subsidiaries and the Parent Companyโs
export activities where cash flows are earned in foreign currencies,
and in connection with the purchase of raw materials primarily in EUR
and USD, including purchases which involve an indirect USD risk on
the part of the purchase price related to the raw material element.
Purchases are in all materiality made in the currencies in which the
Group has income, which results in a total reduction of the currency
risk. Furthermore, the translation of loans to/from subsidiaries as well
as the Groupโs net debt is subject to currency risk where these are not
established in DKK.
The above describes Royal Unibrewโs transaction risks, which are
hedged actively according to the Treasury Policy. EUR is not hedged as
the risk is immaterial provided that the existing ๎.๎% band of DKK to
EUR under Denmarkโs monetary policy is maintained. The objective is
to reduce negative effects on the Groupโs profit and cash flows (cf. note
๎). The risk is therefore monitored and hedged continually. The Groupโs
cash flows are primarily in EUR, USD, CAD and GBP.
The total gross currency risk (before hedging) on the balance sheet
items was calculated at ๎๎ December ๎๎๎๎. The following table shows
Note 3 Financial risk management
Earnings impact Earnings impact Equity Equity impact
mDKK Change before tax 2020 before tax 2019 impact 2020 2019
EUR 0.1% -1.1 0.7 -1.1 0.7
USD 10% 2.5 3.6 2.5 3.6
GBP 10% -1.1 0.3 -1.1 0.3
CAD 10% 2.1 1.3 2.1 1.3
the sensitivity to a positive change in the cross rates at ๎๎ December
๎๎๎๎ with all other variables remaining unchanged. A negative change
has a corresponding effect merely with the sign reversed.
Royal Unibrews translation risk relates primarily to US (USD), Canada
(CAD), UK (GBP), France, Italy, Finland, Latvia, Estonia as well as Lithu-
ania (EUR). The translation risk related to Royal Unibrewโs investments
in foreign subsidiaries is, as a general rule, not hedged.
Financial risks such as the loss of competitive strength due to long-
term exchange rate changes are not hedged by financial instruments
but are included in Royal Unibrewโs strategic considerations and risk
management.
Interest rate risk
Royal Unibrewโs interest rate risk at consolidation is substantially re-
lated to the Groupโs loan portfolio which is primarily denominated in
DKK and EUR. Interest rate changes will affect the market value of
fixed-interest loans as well as interest payments on floating-rate lia-
bilities. Debt is established only in currencies in which the Group has
commercial activities.
In Royal Unibrewโs assessment, the key interest rate risk is related to
the immediate effect of interest rate changes on the Groupโs interest
expenses and payment flows and Royal Unibrew focuses only secondar-
ily on changes in the market value of the debt. It is group policy to limit
the effect of interest rate changes on profit and cash flows while, within
this framework, also achieving the lowest possible financing cost. At the
end of ๎๎๎๎, mortgage debt amounted to DKK ๎๎๎ million (๎๎๎๎: DKK ๎๎๎
million) with an average term to maturity of ๎.๎ years (๎๎๎๎: ๎.๎ years).
Bank debt comprises committed bank credit facilities and long term
loan with an agreed term to maturity between ๎ to ๎ years (๎๎๎๎: ๎ to ๎
years). ๎๎% (๎๎๎๎: ๎๎%) of the mortgage and bank debt is fixed-interest
through the Groupโs hedging of interest rate risk and fixed rate loans
with a fixed-interest period between ๎-๎ years (๎๎๎๎: ๎-๎ years). A one
percentage point interest rate change will affect the Groupโs interest
expenses by approx +/- DKK ๎ million (๎๎๎๎: approx +/- DKK ๎๎ million),
and the interest expenses of the Parent Company by approx +/- DKK ๎
million (๎๎๎๎: approx +/- DKK ๎ million).
Credit risks
The Groupโs credit risks relate primarily to trade receivables and coun-
terparty risks.
The Groupโs counterparty risks comprise both commercial and financial
counterparty risk. The commercial counterparty risk relates primarily
to business agreements with a built-in element of firm rate/price. The
financial counterparty risk relates to hedging agreements as well as
net bank deposits. The financial counterparty risk is actively reduced by
distributing net bank deposits on banks in accordance with the credit
rating criteria determined in the Treasury Policy.
Royal Unibrew seeks to limit risks relating to credit granting to cus-
tomers in export markets through extensive use of insurance cover and
other types of hedging of payments. Where effective hedges cannot be
established, Royal Unibrew has established procedures for approval of
such risks. The credit risk is generally higher relating to customers in
the on-trade sales channel than relating to off-trade customers. This
difference in credit risk is addressed through various approval proce-
dures and credit granting conditions for customers in the two sales
ROYAL UNIBREW Annual report 202090
Consolidated financial statements
ConFin โ Note 03
Note 3 Financial risk management (continued)
channels. In Finland, risks on major single receivables from customers
are reduced through sale of the receivables DKK ๎๎๎ million (๎๎๎๎: DKK
๎๎๎ million). The increase was caused by the beer campaign in Finland
ending Q๎ ๎๎๎๎. Credit risks relating to trade receivables are reduced
by setting off accrued bonus. At ๎๎ December ๎๎๎๎, accrued bonus
amounts to DKK ๎๎๎ million (๎๎๎๎: DKK ๎๎๎ million) set off against
trade receivables.
The maximum credit risk corresponds to the carrying amount of the
financial assets.
Liquidity risks
It is group policy that its cash resources should be adequate to meet
the expected liquidity requirements in the current and next financial
year. The cash resources may be bank deposits, short-term bonds and
unutilised credit facilities.
Capital management
Royal Unibrew wants to ensure structural and financial flexibility as well
as competitive power. To ensure this, continuous assessment is made
to determine the appropriate capital structure of Royal Unibrew. It is the
target that the Groupโs net interest-bearing debt should not exceed ๎.๎
x EBITDA and that an equity ratio of at least ๎๎% should be maintained
at year end. The target for dividend payout ratio is ๎๎-๎๎% of the profit.
At the operational level, continuous efforts are directed at optimising
working capital. Subject to adequate capacity and capability, invest-
ments in production facilities will be limited to replacement of individual
components, related to specific products or to optimisation of selected
processes as well as maintenance.
Commodity risks
The commodity risk relates primarily to the purchasing of cans (alu-
minium), malt (barley), hops and packaging materials (cardboard) as
well as energy. The commodity risk is actively hedged commercially and
financially in accordance with the Groupโs Treasury Policy.
The objective of managing Royal Unibrewโs commodity risk is to achieve
a smooth and time-differentiated effect of commodity price increases,
which is primarily achieved by entering into fixed-price agreements
with the relevant suppliers. As regards to the Groupโs purchase of cans,
financial contracts have been made to hedge the risk of aluminium
price increases. Exchange rate changes with respect to the settlement
currency of aluminium (USD) are an element of the overall currency
risk management.
The most significant part of purchases for the next ๎๎ months has, in
accordance with Royal Unibrewโs policy, been hedged by entering into
supplier agreements and financial contracts. A +/-๎๎% change in the
price of aluminium would have an effect on the income statement of
approx +/- DKK ๎ million (๎๎๎๎: DKK ๎ million).
ROYAL UNIBREW Annual report 202091
Consolidated financial statements
Financial liabilities
Maturity
Group Contractual Maturity > 1 year Maturity Carrying
mDKK cash flows < 1 year < 5 years > 5 years amount
31/12 2020
Non-derivative financial
instruments:
Financial debt, gross 2,185 121 1,616 448 2,121
Leasing 156 72 81 3 153
Trade payables 1,047 1,047 1,047
Other payables 475 423 52 475
Total 3,863 1,663 1,749 451 3,796
The debt is classified as โdebt at amortised costโ with DKK ๎,๎๎๎ million and โdebt at fair valueโ with DKK ๎
million.
31/12 2019
Non-derivative financial
instruments:
Financial debt, gross 2,631 606 1,343 682 2,554
Leasing 231 64 163 4 223
Trade payables 1,018 1,018 1,018
Other payables 526 421 105 526
Total 4,406 2,109 1,611 686 4,321
The debt is classified as โdebt at amortised costโ with DKK ๎,๎๎๎ million and โdebt at fair valueโ with DKK
๎ million.
Note 3 Financial risk management (continued)
Derivative financial instruments
Derivative financial instruments are initially recognised in the balance sheet at fair value and are subsequently
remeasured at their fair values. Positive and negative fair values of derivative financial instruments are included
as other receivables and other payables, respectively.
Changes in the fair values of derivative financial instruments that are designated and qualify as fair value
hedges of a recognised asset or a recognised liability are recognised in the income statement as are any
changes in the value of the hedged asset or the hedged liability.
Changes in the fair values of derivative financial instruments that are designated and qualify as hedges of
future cash flows are recognised in other comprehensive income. Income and expenses relating to such
hedging transactions are transferred from other comprehensive income on realisation of the hedged item
and are recognised in the same entry as the hedged item.
For derivative financial instruments which do not meet the criteria for hedge accounting, changes in fair values
are recognised on a current basis in financial income and expenses in the income statement.
Derivative financial instruments
When entering into derivative financial instruments, Management exercises judgement to determine whether
the instrument qualifies as effective hedging of recognised assets or liabilities or expected future cash flows.
Derivative financial instruments recognised are tested for effectiveness at least quarterly, and any ineffec-
tiveness identified is recognised in the income statement.
ROYAL UNIBREW Annual report 202092
Consolidated financial statements
Currency, commodity and interest rate risks and use of derivative financial instruments
Hedging of currency, commodity and Interest risk
The risk is managed by entering into derivatives such as forward contracts and swaps.
At the end of ๎๎๎๎, the Group had only few short term FX contracts, to cover the balance sheet exposure end
of ๎๎๎๎ in USD, CAD and GBP.
The Group actively hedges the commodity risk related to aluminium. At the end of ๎๎๎๎, the Group has hedged
๎๎% (๎๎๎๎: ๎๎%) of the expected use with in the next ๎๎ month.
The interest rate swaps hedge the interest rate exposure on the the mortgage debt in Denmark and Finland.
Hedge effectiveness is assessed on a regular basis by comparing changes in the value and timing of the
underlaying exposure, with the value and timing of the designated hedging transaction.
Derivative financial instruments entered into to hedge expected future transactions and qualifying as hedge
accounting under IFRS ๎:
Group
mDKK 2020 2019
Deferred Deferred
gain (+) gain (+)
Period / loss (-) / loss (-)
Forward contracts:
USD 0 - 1 year 0 0
CAD 0 - 1 year 0 0
GBP 0 - 1 year 0 0
Total 0 0
Commodity hedge:
mainly aluminium 0 - 1 year 10 1
Total 10 1
Interest rate swaps:
Mortgage and bank loans 5 year -2 -4
Total hedging instruments 8 -3
The fair value of the hedging instruments is included in current liabilities under other payables.
The derivative financial instruments applied in ๎๎๎๎ and ๎๎๎๎ may all be classified as level-๎ instruments in
the IFRS fair value hierarchy.
The determined fair value of derivative financial instruments is based on observable market data such as
yield curves or forward rates.
Realized hedging transactions in the income statement
mDKK 2020 2019
Realized hedging transactions are included
in the income statement as follows:
Net revenue includes currency hedges of 0 0
Production costs include foreign currency and
commodity hedges of -10 -17
Financial income and expenses include currency,
commodity and interest rate hedges of -4 -4
Total -14 -21
Note 4 Derivatives
ROYAL UNIBREW Annual report 202093
Consolidated financial statements
ConFin โ Note 04
The Groupโs results, assets and liabilities break down as follows on segments:
Western Inter-
mDKK Europe Baltic Sea national Unallocated Total
2020
Net revenue* 3,548 3,237 772 7,557
Amortisation and depreciation 150 171 23 2 346
Impairment 0
Earnings before interest
and tax (EBIT) 687 675 171 -18 1,515
Financial income 0
Financial cost -6 -11 0 -26 -43
Share of income from associates 33 33
Profit/loss before tax 714 664 171 -44 1,505
Tax -307 -307
Profit/loss for the year 714 664 171 -351 1,198
Assets 2,766 5,353 56 8,175
Associates 131 131
Total assets 2,897 5,353 56 0 8,306
Additions of property,
plant and equipment 268 102 3 373
Additions by acquisitions
(adjustment fair value) -58 -58
Liabilities** 682 1,817 21 2,454 4,974
Sales (million hectolitres) 4.7 5.4 1.0 11.1
* all goods sold in International are produced by group entities in Western Europe
** Unallocated liabilities include the Parent Companyโs net interest-bearing debt.
Western Inter-
mDKK Europe Baltic Sea national Unallocated Total
2019
Net revenue* 3,691 3,308 694 7,693
Amortisation and depreciation 147 170 19 2 338
Impairment 7 7
Earnings before interest
and tax (EBIT) 722 654 132 -39 1,469
Financial income 1 0 4 5
Financial cost -5 -10 -26 -41
Share of income from associates 25 25
Profit/loss before tax 742 645 132 -61 1,458
Tax -319 -319
Profit/loss for the year 742 645 132 -380 1,139
Assets 2,991 5,287 89 0 8,367
Associates 126 126
Total assets 3,117 5,287 89 0 8,493
Additions of property,
plant and equipment 202 141 1 344
Additions by acquisitions 1 10 1 12
Liabilities** 957 1,788 25 2,616 5,386
Sales (million hectolitres) 4.8 5.3 0.9 11.0
* all goods sold in International are produced by group entities in Western Europe
** Unallocated liabilities include the Parent Companyโs net interest-bearing debt.
Note 5 Segment reporting
ROYAL UNIBREW Annual report 202094
Consolidated financial statements
ConFin โ Note 05
Geographically, revenue and non-current assets break down as follows:
2020 2019
Net Non-current Net Non-current
mDKK revenue assets revenue assets
Denmark 2,229 1,574 2,070 1,565
Italy 714 663 853 664
Finland 2,418 3,384 2,515 3,504
Other countries 2,196 1,394 2,255 1,430
Total 7,557 7,015 7,693 7,163
The geographic breakdown is based on the geographic location of the Groupโs external customers and com-
prises countries that individually account for more than ๎๎% of the Groupโs net revenue as well as the country
in which the Group is headquartered.
No single customer accounts for revenue in excess of ๎๎% of the Groupโs net revenue.
Note 5 Segment reporting (continued)
ROYAL UNIBREW Annual report 202095
Consolidated financial statements
Note 5 Segment reporting (continued)
Segment reporting ๎๎๎๎ - ๎๎๎๎
The Groupโs activities break down as follows on segments:
Western Inter- Un-
mDKK Europe Baltic Sea national allocated Group
2020
Net revenue 3,548 3,237 772 7,557
Earnings before interest
and tax (EBIT) 687 675 171 -18 1,515
Assets 2,897 5,353 56 8,306
Liabilities 682 1,817 21 2,454 4,974
Sales (million hectolitres) 4.7 5.4 1.0 11.1
2019
Net revenue 3,691 3,308 694 7,693
Earnings before interest
and tax (EBIT) 722 654 132 -40 1,468
Assets 3,117 5,286 89 8,492
Liabilities 957 1,788 25 2,616 5,386
Sales (million hectolitres) 4.8 5.3 0.9 11.0
2018
Net revenue 3,378 3,338 582 7,298
Earnings before interest
and tax (EBIT) 645 599 127 -32 1,339
Assets 2,816 5,166 80 8,062
Liabilities 976 1,719 28 2,431 5,154
Sales (million hectolitres) 4.5 5.5 0.8 10.8
Western Inter- Un-
mDKK Europe Baltic Sea national allocated Group
2017
Net revenue 2,829 3,076 479 6,384
Earnings before interest
and tax (EBIT) 564 431 106 -32 1,069
Assets 1,733 5,006 0 39 6,778
Liabilities 771 1,711 7 1,475 3,964
Sales (million hectolitres) 3.9 5.3 0.7 9.9
2016
Net revenue 2,870 2,986 484 6,340
Earnings before interest
and tax (EBIT) 527 395 108 -29 1,001
Assets 1,051 4,986 0 39 6,076
Liabilities 250 1,697 6 1,212 3,165
Sales (million hectolitres) 3.8 5.4 0.7 9.9
Segment reporting
The Groupโs business segment is beverage sales. Reporting on the business segment is by geographical mar-
kets. Segment reporting is based on the Groupโs returns and risks and its internal financial reporting system.
Items included in net profit for the year, including income from investments in associates and financial income
and expenses, are allocated to the extent that the items are directly or indirectly attributable to the markets.
Items allocated both by direct and indirect computation comprise โproduction costsโ and โadministrative
expensesโ, which are allocated by indirect computation based on allocation keys determined on the basis of
the marketโs drain on key resources. Administrative expenses incurred in the group functions of the Parent
Company are partly allocated.
Assets comprise the non-current assets that are directly or indirectly used in connection with activities in
the markets.
Segment liabilities comprise liabilities derived from activities in the market, including provisions, trade payables,
VAT, excise duties and other payables.
ROYAL UNIBREW Annual report 202096
Consolidated financial statements
Note 5 Segment reporting (continued)
Net revenue
Net revenue from the sale of goods is recognised in the income statement at the point in time when the control
of goods and products is transferred to the customer, which is generally upon delivery, and if revenues can
be measured reliably and are expected to be received.
Net revenue from contracts with customers is measured at an amount that reflects the consideration to which
the Group expects to be entitled in exchange for those goods. Net revenue is measured exclusive of VAT and
net of discounts as well as excise duties collected on behalf of third parties.
The Group gives various discounts and fees depending on the nature of the customer and business.
Discounts comprise unit price reductions as well as contributions to promotional activities and product pro-
motion based on volumes or value of purchases. The discounts are either granted as deductions from the
invoice amount or are earned as a bonus paid at the end of the bonus period. All types of discounts granted
are recognised in net revenue
The Group considers whether contracts include other promises that constitute separate performance obli-
gations and to which a portion of the transaction price needs to be allocated.
Note 6 Staff expenses
Staff expenses are included in production costs, sales and distribution expenses as well as administrative
expenses and break down as follows:
mDKK 2020 2019
Fixed salaries to Executive Management 20 12
Short-term bonus scheme for Executive Management 9 6
Long-term bonus scheme for Executive Management 9 6
Remuneration of Executive Management 38 24
Remuneration of Board of Directors 5 6
43 30
Wages and salaries 966 951
Contributions to pension schemes 109 112
1,075 1,063
Other social security expenses 21 21
Other staff expenses 44 46
Total 1,183 1,160
Average number of employees 2,631 2,567
ROYAL UNIBREW Annual report 202097
Consolidated financial statements
ConFin โ Note 06
Note 6 Staff expenses (continued)
Executive Share price Total fair value
Share-based payment Management Board at grant date at time of grant
Number DKK DKK thousand
Program 2017/2019 58,564 264 15,058
Program 2017/2019 8,250 370 3,052
Program 2020 17,921 370 6,631
Anti-dilution adjustment 1,457
Outstanding at 1 January 2019 86,192
Anti-dilution adjustment 1,535
Outstanding at 31 December 2019 87,727
Excercised -69,806
Outstanding at 31 December 2020 17,921
Exercisable at 31 December 2020 17,921
2020 2019
Remaining Remaining
Matching term to Matching term to
shares maturity shares maturity
Number Months Number Months
Matching shares 2017-19 0 0 69,806 0
Matching shares 2020 17,921 0 17,921 12
Outstanding at 31 December 2020 17,921 87,727
Comment
The share-based payments to the Executive Management comprise a programme of ๎๎,๎๎๎ restricted (condi-
tional) shares allotted for no consideration vesting in the period ๎ January ๎๎๎๎ to ๎๎ December ๎๎๎๎.
These shares are excerciable at ๎๎ December ๎๎๎๎. No further restricted (conditional) shares are outstanding
at ๎๎ December ๎๎๎๎.
Share-based payments
The Group only has schemes classified as equity-settled schemes. Restricted shares are measured at fair
value at the time of granting and are recognised in staff expenses in the income statement over the vesting
period. The counter item is recognised directly in equity.
At the initial recognition of the restricted shares, the number of shares expected to vest is estimated. Sub-
sequently, the estimate of the number of restricted shares is revised so that the total recognition is based on
the actual number of shares allotted.
Share-based payments
The fair value of the expected allotment of restricted shares is estimated under the Black-Scholes model. In
determining fair value, conditions and terms related to the restricted shares are taken into account.
The market value of program applying to ๎๎๎๎ has been calculated under the Black-Scholes model at DKK
๎๎๎ per share of DKK ๎, which is equal to Royal Unibrew A/S market price at the time of allotments ๎ March
๎๎๎๎. The market price was DKK ๎ million for the estimated maximum number of shares. The market value
has been charged to the income statement on an estimated straight-line basis over the vesting period, cor-
responding to the rate at which the conditions for the allotment of the shares was expected to be met. The
conditions have been fully (๎๎๎%) met at ๎๎ December ๎๎๎๎.
ROYAL UNIBREW Annual report 202098
Consolidated financial statements
Note 7 Expenses broken down by nature
mDKK 2020 2019
Aggregated by function
Production costs 3,613 3,612
Sales and distribution expenses 2,085 2,262
Administrative expenses 344 349
Total 6,042 6,223
Break down by nature as follows:
Raw materials and consumables 2,856 2,862
Wages, salaries and other staff expenses 1,183 1,160
Operating and maintenance expenses 263 281
Distribution expenses and carriage 532 564
Sales and marketing expenses 713 869
Bad trade debts 27 5
Office supplies etc 122 137
Amortisation and depreciation 346 345
Total 6,042 6,223
Total amortisation and depreciation are included
in the following items in the income statement:
Production costs 185 177
Sales and distribution expenses 145 143
Administrative expenses 16 25
Total 346 345
Fee to auditors elected at the general assemply
Fee for the audit of the Annual Report:
KPMG 2 2
Total 2 2
KPMG fee for non-audit services:
Other assurance services 0 0
Other assistance* 0 2
Total 0 2
* Fees for other assistance than statutory audit of the financial statements provided by KPMG primarily com-
prise services relating to financial due dilligence.
Expenses
Production costs
Production costs comprise direct and indirect expenses incurred to manufacture the finished goods repre-
senting revenue for the year, including expenses for raw materials and consumables purchases, salaries
and wages, renting and leasing as well as depreciation of and impairment losses on plant and machinery.
Production costs also include development costs that do not meet the criteria for capitalisation.
Sales and distribution expenses
Sales and distribution expenses comprise expenses for distribution and sales campaigns relating to goods
sold during the year, including expenses for sales personnel, marketing, depreciation and amortisation as
well as losses on trade receivables.
Administrative expenses
Administrative expenses comprise expenses for management and administration of the Group, including ex-
penses for administrative personnel, management, office supplies, insurance, depreciation and amortisation.
Leases
Under IFRS ๎๎, the Group assesses whether a contract is or contains a lease based on the definition of a lease
based on the assessment of whether:
โข fulfilment of the arrangement was dependent on the use of a specific asset or assets; and
โข the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the
asset if one of the following was met:
โข the purchaser had the ability or right to operate the asset while obtaining or controlling more than an
insignificant amount of the output;
โข the purchaser had the ability or right to control physical access to the asset while obtaining or controlling
more than an insignificant amount of the output; or
โข facts and circumstances indicated that it was remote that other parties would take more than an insig-
nificant amount of the output, and the price per unit was neither fixed per unit of output nor equal to the
current market price per unit of output.โ
ROYAL UNIBREW Annual report 202099
Consolidated financial statements
ConFin โ Note 07
Note 8 Financial income
mDKK 2020 2019
Finance income
Trade receivables 1 2
Other financial income 1 1
Interest tax-extempt 0 0
Exchange adjustments
Trade receivables 0 2
Trade payables 1
Cash at bank and in hand and external loans
Total 3 5
Note 9 Financial expenses
mDKK 2020 2019
Finance costs
Mortgage debt 8 8
Credit institutions 27 26
Leasing 2 2
Finance costs on liabilities at amortised cost 37 36
Other financial expenses 1 2
Exchange adjustments
Cash at bank and in hand and external loans 0
Trade receivables 6
Trade payables 0
Forward contracts 2 3
Total 46 41
Financial income and expenses
Financial income and financial expenses comprise interest, capital gains and losses on investments, balances
and transactions in foreign currencies, amortisation of financial assets and liabilities, fair value adjustments
of derivative financial instruments that do not qualify as hedge accounting as well as extra payments and
repayment under the on-account taxation scheme, etc.
Note 10 Tax on the profit for the year
mDKK 2020 2019
Tax on the taxable income for the year 302 303
Adjustment of previous year 2 2
Adjustment of deferred tax 4 11
Total 308 316
which breaks down as follows:
Tax on profit for the year 307 318
Tax on other comprehensive income 2 3
Tax on changes in equity, shareholders -1 -5
Total 308 316
Current Danish tax rate 22.0 22.0
Adjustment of previous year 0.1 0.2
Income from associates after tax -0.4 -0.4
Effect on tax rate of permanent differences 0.4 0.3
Differences in effective tax rates of foreign subsidiaries -1.7 -0.3
Effective tax rate 20.4 21.8
Tax on the profit for the year
Tax for the year consists of current tax for the year and movements in deferred tax for the year. The tax at-
tributable to the profit for the year is recognised in the income statement and other comprehensive income,
respectively, whereas the tax attributable to equity entries is recognised directly in equity.
The Parent Company is jointly taxed with its Danish subsidiaries. The Danish current tax for the year is allo-
cated to the jointly taxed Danish enterprises in proportion to their taxable incomes (full allocation with credit
for tax losses).
Corporation tax
Current tax liabilities are recognised in the balance sheet as calculated tax on the expected taxable income
for the year adjusted for tax on taxable incomes for previous years and for tax paid on account.
ROYAL UNIBREW Annual report 2020100
Consolidated financial statements
ConFin โ Note 08 ConFin โ Note 09 ConFin โ Note 10
Note 11 Intangible assets
Distribution Customer
mDKK Goodwill Trademarks rights relations Total
2020
Cost at 1 January 2020 2,342 1,962 248 154 4,706
Exchange adjustment -9 -7 -2 -1 -19
Disposals -13 -13
Addition by acquisition -43 -15 -58
Cost at 31 December 2020 2,290 1,940 233 153 4,616
Amortisation and impairment
losses at 1 January 2020 -7 -6 -87 -90 -190
Exchange adjustment 1 2 3
Reversal of depreciation
of disposals 13 13
Amortisation for the year -15 -19 -34
Imparment for the year 0
Amortisation and impairment
losses at 31 December 2020 -7 -6 -88 -107 -208
Carrying amount
at 31 December 2020 2,283 1,934 145 46 4,408
Distribution Customer
mDKK Goodwill Trademarks rights relations Total
2019
Cost at 1 January 2019 2,125 1,775 235 128 4,263
Exchange adjustment 1 1 0 0 2
Addition by acquisition 216 186 13 26 441
Cost at 31 December 2019 2,342 1,962 248 154 4,706
Amortisation and impairment
losses at 1 January 2019 -6 -75 -74 -155
Exchange adjustment 0 0 -1 -1
Amortisation for the year -12 -15 -27
Impairment for the year -7 -7
Amortisation and impairment
losses at 31 December 2019 -7 -6 -87 -90 -190
Carrying amount
at 31 December 2019 2,335 1,956 161 64 4,516
ROYAL UNIBREW Annual report 2020101
Consolidated financial statements
ConFin โ Note 11
Impairment test of goodwill and trademarks
As in ๎๎๎๎, the impairment test in ๎๎๎๎ did not give rise to recognising any impairment losses.
The carrying amount of goodwill and trademarks with indefinite useful lives at ๎๎ December ๎๎๎๎ is related
to the cash-generating operational units and breaks down as follows:
mDKK Goodwill Trademarks Total Share
2020
Western Europe 899 681 1,580 37%
Baltic Sea* 1,384 1,253 2,637 63%
Total 2,283 1,934 4,217 100%
*the most significant value relates to Finland
The recoverable amount is based on value in use, which is calculated by means of expected net cash flows
on the basis of budgets and forecasts for ๎๎๎๎-๎๎๎๎ approved by Management as well as estimated market
driven discount rates and growth rates.
The consumption in the markets in which Royal Unibrew operate is generally expected to regain the negative
impact from Covid-๎๎ on the ๎๎๎๎ as from H๎ ๎๎๎๎. In Western Europe and Baltic Sea consumption of Royal
Unibrews beverage categories is in addition to the assumed disapperance in H๎ ๎๎๎๎ of Covid-๎๎ impact
expected to be at the same level as in ๎๎๎๎ but changing towards high value products in the coming years.
Through further developing the businesses acquired in ๎๎๎๎ and ๎๎๎๎, continued focus on exploiting commercial
opportunities and innovation following the consumer trends, Royal Unibrew expects to gain market shares and
consequently increase the revenue and earnings from the core brands and business areas. Gross margins are
expected to remain stable at the present level through continuous focus on value management and continuous
efficiency improvements. The key assumptions for the calculation of recoverable amount are shown below.
Western
Europe Baltic Sea
Growth rate 2024-2027 0.0-1.0% 0.5-0.7%
Growth rate on terminal value 0.2-1.5% 0.9-2.0%
Discount rate pre tax 4.4-6.5% 4.4-5.4%
The forecasted results approved by Management are based on previously achieved results and expected market
developments assuming no negative impact from Covid-๎๎ as from ๎๎๎๎, see above. The average growth rates
applied are in accordance with Managementโs expectations taking into account industry conditions in the in-
dividual markets. The discount rates applied are before tax and reflect current specific risks in the individual
market. External consultants have advised how to determine the discounts rates.
Note 11 Intangible assets (continued)
Comment
Goodwill and trademarks with indefinite useful lives relating to Hartwall (Finland) represents more than ๎๎%
of the total value of goodwill and trademarks.
Development costs incurred are immaterial and have been recognised in production costs.
Goodwill
Goodwill is initially recognised in the balance sheet at cost. Subsequently, goodwill is measured at cost less
accumulated impairment losses.
The carrying amount of goodwill is allocated to the Groupโs cash-generating units at the time of acquisition. The
determination of cash-generating units is based on management structure and internal financial management.
Trademarks, distribution rights and customer relations
Trademarks, distribution rights and customer relations are initially recognised in the balance sheet at cost.
Subsequently, they are measured at cost less accumulated amortisation and less any accumulated impair-
ment losses. Distribution rights and customer relations are amortised on a straight-line basis over their
estimated useful lives.
Trademarks are not amortised as they are all well-established, old and profitable trademarks which custom-
ers are expected to continue demanding unabatedly, other things being equal, and which Management is not
planning to stop selling and marketing.
Distribution rights are amortised on a straight-line basis over their estimated useful lives, maximum ๎๎ years.
Customer relations are amortised on a straigt-line basis over their estimated useful lives, maximum ๎ years.
Goodwill and trademarks with indefinite useful lives are not amortised but are tested annually for impairment.
It is the Groupโs strategy to maintain trademarks and their value.
ROYAL UNIBREW Annual report 2020102
Consolidated financial statements
The forecasted results ๎๎๎๎ approved by Management are based on previously achieved results and expected
market developments, see above. The average growth rates applied are in accordance with Managementโs
expectations taking into account industry conditions in the individual markets. The discount rates applied are
before tax and reflect current specific risks in the individual market. External consultants have advised how
to determine the discounts rates. In Western Europe, the highest point of the range indicated for the discount
rate relates to Italy. In Baltic Sea, the lowest point of the range indicated for the growth rates of terminal
value and discount rate relates to Finland. The assumptions applied by Management are inherently subject
to uncertainty and unpredictability. Reasonably probable changes will not lead to recognition of impairment
losses, why no sensitivity analysis has been disclosed.
Impairment
The carrying amounts of intangible assets and property, plant and equipment are reviewed on an annual
basis to determine whether impairment has incurred other than that expressed by normal amortisation
and depreciation. If so, the asset is written down to the higher of net selling price and value in use. Goodwill
and other assets for which a value in use cannot be determined as the asset does not on an individual basis
generate future cash flows are reviewed for impairment together with the group of assets (cash-generating
units) to which they are attributable.
The carrying amount of goodwill and trademarks with indefinite useful lives is tested for impairment at least
on an annual basis, together with the other non-current assets of the cash-generating unit to which goodwill
has been allocated, and is written down to recoverable amount in the income statement if the carrying amount
exceeds the recoverable amount.
The carrying amount of financial assets measured at cost or amortised cost is written down for impairment
if, due to changed expected net payments, the net present value is lower than the carrying amount.
Intangible assets
In relation to trademarks, Management makes an annual judgement to determine whether the current market
situation has reduced the value or affected the useful life of the trademarks, including whether past estimates
of indefinite useful lives may be maintained.
An annual impairment test is made of the values recognised in the Financial Statements of goodwill and trade-
marks assessed to have indefinite lives which are therefore not amortised. For a description of the discount
rates and growth rates applied in connection with the impairment test of goodwill and trademarks as well as
other assumptions of the impairment test, reference is made to the above note.
Note 11 Intangible assets (continued)
In Western Europe, the highest point of the range indicated for the discount rate relates to Italy. In Baltic Sea,
the lowest point of the range indicated for the growth rates of terminal value and discount rate relates to
Finland. The assumptions applied by Management are inherently subject to uncertainty and unpredictability.
Reasonably probable changes will not lead to recognition of impairment losses, and therefore no sensitivity
analysis has been disclosed.
mDKK Goodwill Trademarks Total Share
2019
Western Europe 946 698 1,644 38%
Baltic Sea* 1,389 1,258 2,647 62%
Total 2,335 1,956 4,291 100%
*the most significant value relates to Finland
The recoverable amount is based on value in use, which is calculated by means of expected net cash flows
on the basis of budgets and forecasts for ๎๎๎๎-๎๎๎๎ approved by Management as well as estimated market
driven discount rates and growth rates.
The consumptions in markets in which Royal Unibrew operates is generally expected to remain at the same
level in ๎๎๎๎ as in ๎๎๎๎. In Western Europe the Danish consumption of Royal Unibrews beverage categories
is expected to be stagnant in the coming years. In the Baltic Sea segment Royal Unibrew expects unchanged
Finnish consumption for ๎๎๎๎ while the consumption in the Baltic countries will still be negatively affected
by legislative changes and the demographic development. Through further developing the business acquired
in ๎๎๎๎ to ๎๎๎๎ and with continued focus on exploring commercial opportunities and innovation following the
consumer trends, Royal Unibrew expects to be able to maintain or increase the revenue and earnings from the
core brands and business areas mainly through volume increase. Gross margins are expected to remain stable
at the present level through continuous focus on value management and continuous efficiency improvements.
The key assumptions for the calculation of recoverable amount are shown below.
Western
2019 Europe Baltic Sea
Growth rate 2023-2026 0.0-1.0% 0.0-0.5%
Growth rate on terminal value 0.2-1.3% 0.7-1.3%
Discount rate pre tax 5.8-7.1% 5.8-7.4%
ROYAL UNIBREW Annual report 2020103
Consolidated financial statements
2020 Other fixtures Property, Leasing of Total other
and fittings, plant and property, property,
Land and Plant and tools and equipment plant and plant and
mDKK buildings machinery equipment in progress equipment equipment
Cost at 1 January 2020 1,850 2,527 1,026 101 320 5,824
Exchange adjustment -4 -4 -2 1 -1 -10
Adjustment previous year 0
Additions 6 61 102 111 89 369
Additions by acquisitions 0
Disposals -6 -49 -71 -112 -238
Transfers for the year 5 44 17 -66 0
Cost at
31 December 2020 1,851 2,579 1,072 147 296 5,945
Depreciation, revaluation
and impairment losses
at 1 January 2020 -767 -1,730 -725 0 -100 -3,322
Exchange adjustment 0 2 3 5
Adjustment previous year 0
Depreciation for the year -45 -104 -96 -69 -314
Reversal of depreciation
of assets sold 5 48 65 23 141
Depreciation, revaluation
and impairment losses
at 31 December 2020 -807 -1,784 -753 0 -146 -3,490
Carrying amount
at 31 December 2020 1,044 795 319 147 150 2,455
Leasing of property,
plant and equipment:
Cost at 31 December 2020 147 149 296
Depreciation, revaluation
and impairment losses
at 31 December 2020 -60 -86 -146
Carrying amount
per asset type 87 63 150
Land and buildings at a carrying amount of DKK ๎๎๎ million have been provided as security for mortgage debt
of DKK ๎๎๎ million.
Contracts for the delivery of property, plant and equipment in ๎๎๎๎ or later have been entered into only to an
immaterial extent.
2019 Other fixtures Property, Leasing of Total other
and fittings, plant and property, property,
Land and Plant and tools and equipment plant and plant and
mDKK buildings machinery equipment in progress equipment equipment
Cost at 1 January 2019 1,842 2,439 900 141 281 5,603
Exchange adjustment 0 0 0 0 0 0
Additions 9 0 5 -3 11
Additions by change in
accounting policy 21 47 138 41 97 344
Additions by acquisitions 5 4 2 0 1 12
Disposals -36 -24 -30 -56 -146
Transfers for the year 9 61 11 -81 0 0
Cost at
31 December 2019 1,850 2,527 1,026 101 320 5,824
Depreciation, revaluation
and impairment losses at
1 January 2019 -727 -1,635 -653 0 -58 -3,073
Exchange adjustment 1 -1 2 -1 1
Adjustment previous year -9 0 -5 3 -11
Depreciation for the year -41 -110 -93 -63 -307
Reversal of depreciation
of assets sold 9 16 23 19 67
Depreciation, revaluation
and impairment losses
at 31 December 2019 -767 -1,730 -725 0 -100 -3,323
Carrying amount
at 31 December 2019 1,083 797 301 101 220 2,501
Leasing of property,
plant and equipment:
Cost at 31 December 2019 184 136 320
Depreciation, revaluation
and impairment losses
at 31 December 2019 -44 -56 -100
Carrying amount
per asset type 140 80 220
Land and buildings at a carrying amount of DKK ๎,๎๎๎ million have been provided as security for mortgage
debt of DKK ๎๎๎ million.
Contracts for the delivery of property, plant and equipment in ๎๎๎๎ or later have been entered into only to an
immaterial extent.
Note 12 Property, plant and equipment
ROYAL UNIBREW Annual report 2020104
Consolidated financial statements
ConFin โ Note 12
Property, plant and equipment
Land and buildings, plant and machinery and other fixtures and fittings, tools and equipment are measured
at cost less accumulated depreciation and less any accumulated impairment losses. Borrowing costs relating
to the acquisition of property, plant and equipment are capitalised.
Depreciation is calculated on a straight-line basis over the useful lives of the assets.
Profits and losses on the disposal of property, plant and equipment are calculated as the difference between
the sales sum less the expenses necessary to make the sale and the carrying amount at the time of sale.
Profits or losses were immaterial in both ๎๎๎๎ and ๎๎๎๎ and have been recognised in the income statement as
an adjustment to depreciation in production costs, sales or distribution expenses or administrative expenses,
respectively.
Property, plant and equipment
The expected useful lives of the assets remain unchanged from ๎๎๎๎ and are as follows:
Buildings and installations, 25-40 years
Leasing of property, plant and equipment over the term of the lease
Plant and machinery, 10-15 years
Other fixtures and fittings, tools and equipment, 5-8 years
Vehicles 4-5 years
IT hardware and software 3 years
Returnable packaging, 3-10 years
Management reviews its estimate of the useful lives of property, plant and equipment annually.
Leases
Under IFRS ๎๎, the Group recognises right-of-use assets and lease liabilities for most leases - i.e. these
leases are on-balance sheet.
The Group decided to apply the recognition exemptions to short-term and low value leases.
Note 12 Property, plant and equipment (continued)
ROYAL UNIBREW Annual report 2020105
Consolidated financial statements
Investments
mDKK in associates
Cost at 1 January 2020 76
Cost at 31 December 2020 76
Value adjustments at 1 January 2020 50
Exchange adjustment -7
Dividend, net -21
Share of profit for the year 33
Other comprehensive income 0
Value adjustments at 31 December 2020 55
Carrying amount at 31 December 2020 131
Cost at 1 January 2019 76
Cost at 31 December 2019 76
Value adjustments at 1 January 2019 48
Exchange adjustment 2
Dividend, net -25
Share of profit for the year 25
Other comprehensive income 0
Value adjustments at 31 December 2019 50
Carrying amount at 31 December 2019 126
Judgement concerning accounting policy: Financial disclosures on associates
Financial disclosures are provided on an aggregated basis for all associates as none of Royal Unibrewโs shares
of net revenue or balance sheet total constitute more than ๎% in proportion to the Consolidated Financial
Statements; therefore, it is not considered essential to provide disclosures separately for each associate.
Royal Unibrewโs share of:
mDKK 2020 2019
Profit from continuing operations for the year 33 25
Other comprehensive income 0 0
Comprehensive income 33 25
Total carrying amount at 31 December of the Groupโs total
investments in associates, share of equity 131 126
Investments in associates in the Consolidated Financial Statements
Investments in associates are measured in the balance sheet at the proportionate share of the net asset
value of the enterprises calculated under the accounting policies of the Group with deduction or addition
of the proportionate share of unrealized intercompany profits and losses and with addition of the carrying
amount of goodwill.
Associates with a negative net asset value are measured at DKK ๎. If the Group has a legal or constructive
obligation to cover the negative balance of the associate, this obligation is recognised in liabilities.
The proportionate share of the results of associates is recognised in the income statement of the Group after
adjusting for impairment losses on goodwill and eliminating the proportionate share of unrealized intercom-
pany gains and losses.
Note 13 Investments in associates
ROYAL UNIBREW Annual report 2020106
Consolidated financial statements
ConFin โ Note 13
Other Other Total other
invest- recei- fixed asset
mDKK ments vables investments
Cost at 1 January 2020 64 8 72
Exchange adjustment 0
Additions by acquisition 1 1
Additions 0
Disposals 0
Cost at 31 December 2020 64 9 73
Value adjustments at 1 January 2020 -52 0 -52
Value adjustments at 31 December 2020 -52 0 -52
Carrying amount at 31 December 2020 12 9 21
Cost at 1 January 2019 60 5 65
Exchange adjustment 0 0 0
Additions 1 1
Disposals 3 5 8
Disposals 0 -2 -2
Cost at 31 December 2019 64 8 72
Value adjustments at 1 January 2019 -52 0 -52
Value adjustments at 31 December 2019 -52 0 -52
Carrying amount at 31 December 2019 12 8 20
Other investments
Other investments classified as fair value trough profit and loss are recognised in non-current assets at fair
value at the trading date and at estimated fair value calculation on the basis of market data and recognised
valuation methods as regards unlisted securities. Unrealized value adjustments are recognised in other com-
prehensive income except for impairment losses and reversal of impairment losses which are recognised in
financial income and expenses in the income statement. Upon realisation, the accumulated value adjustment
recognised in other comprehensive income is transferred to financial income and expenses in the income
statement. Other investments may be classified as level-๎ instruments.
Other receivables
Other receivables under fixed asset investments held to maturity are initially recognised at fair value and are
subsequently measured at amortised cost or an estimated lower value at the balance sheet date.
Other investments
In connection with the presentation of the Financial Statements for ๎๎๎๎, Management estimated the fair value
of its investments (๎๎% of the share capital) in the Polish brewery company Perla Browary Lubelskie at DKK
๎ due to governance issues. Since ๎๎๎๎, Management has maintained its fair value estimate of DKK ๎ as these
issues have not subsequently been resolved. The consolidated financial statements of Perla Browary Lubelskie
S.A. for ๎๎๎๎ (๎๎๎๎ not yet avalable) have been prepared on the basis of Polish accounting law and show a profit
after tax of PLN ๎๎ million (DKK ๎๎ million) and equity of PLN ๎๎๎ million ( DKK ๎๎๎ million). The fair value
measurement of the investments in Perla Browary Lubelskie is classified in level ๎ of the fair value hierarchy.
Note 14 Other fixed asset investments
ROYAL UNIBREW Annual report 2020107
Consolidated financial statements
ConFin โ Note 14
mDKK 2020 2019
Raw materials and consumables 210 190
Work in progress 22 27
Finished goods and goods for resale 285 246
Inventories 517 463
Inventories
Indirect production costs are recognised in the value of work in progress and finished goods at DKK ๎๎ million
(๎๎๎๎: DKK ๎๎ million). As in ๎๎๎๎, write down of inventories is an insignificant amount, DKK ๎ million (๎๎๎๎:
DKK ๎ million). Inventory write down recognised in the income statement amounts to DKK ๎๎ million (๎๎๎๎:
DKK ๎๎ million). .
Inventories
Inventories are measured at the lower of cost under the FIFO method and net realisable value of individual
product groups. The net realisable value of inventories is calculated at the amount of future sales revenues
expected to be generated by inventories at the balance sheet date in the process of normal operations and
determined allowing for marketability, obsolescence and development in expected sales sum with deduction
of calculated selling expenses.
The cost of raw materials, consumables, goods for resale and purchased finished goods comprises invoiced
price plus expenses directly attributable to the acquisition.
The cost of work in progress and finished goods comprises the cost of materials and direct labour with addi-
tion of indirect production costs. Indirect production costs comprise the cost of indirect materials and labour
as well as maintenance and depreciation of and impairment losses on the machinery, factory buildings and
equipment used in the manufacturing process as well as costs of factory administration and management.
mDKK 2020 2019
Trade receivables 600 701
Other receivables 39 35
Receivables 639 736
Receivables are classified as โassets measured at amortised costโ under IFRS ๎.
Trade receivables falls due as follows:
Not due and Due Due Due >
mDKK prepaid bonus 1-15 days 16-90 days 90 days Total
2020
Trade receivables 548 48 22 31 649
Impairment provision* -25** -1 -5 -18 -49
Trade receivables
after impairment 523 47 17 13 600
Impairment provision % *** -4.6% -2.1% -22.7% -58.1% -7.6%
Provisions for bad debts, beginning of year -33
Bad debts realized during the year 12
Provision for the year -28
Total -49
* Lifetime expected credit loss.
** Hereof mDKK 17 (3.1%) relates to prepaid bonus
*** Historical average loss rate is approx. 1%
2019
Trade receivables 557 89 44 44 734
Impairment provision* -12** -9 -5 -7 -33
Trade receivables after impairment 545 80 39 37 701
Impairment provision %*** -2.1% -9.8% -12.3% -16.3% -4.5%
Provisions for bad debts, beginning of year -38
Bad debts realized during the year 8
Provision for the year -3
Total -33
* Lifetime expected credit loss.
** Hereof mDKK 11 (2.0%) relates to prepaid bonus
*** Historical average loss rate is approx. 1%
Note 15 Inventories Note 16 Receivables
ROYAL UNIBREW Annual report 2020108
Consolidated financial statements
ConFin โ Note 15 ConFin โ Note 16
Receivable
Current receivables, other than trade receivables, all fall due for payment in ๎๎๎๎.
Receivables
Trade receivables and contract assets are measured at amortized cost less allowance for lifetime expected
credit losses.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due. Furthermore, an allowance for lifetime expected credit losses for trade
receivables is recognized on initial recognition.โ
Trade receivables and contract assets are written off when all possible options have been exhausted and there
is no reasonable expectation of recovery.
The cost of allowances for expected credit losses and write-offs for trade receivables and contract assets are
included in Sales and distribution costs.
Treasury shares held by the Parent Company:
Nom. value % of
Number in mDKK Capital
Portfolio at 1 January 2020 883,509 2 1.8
Additions 524,856 1 1.0
Capital reduction -750,000 -1 -1.5
Portfolio at 31 December 2020 658,365 2 1.3
The Group holds no other treasury shares.
Portfolio at 1 January 2019 923,397 2 1.8
Additions 860,112 2 1.7
Capital reduction -900,000 -2 -1.8
Portfolio at 31 December 2019 883,509 2 1.8
The share capital has been paid in full.
Basis of calculation of earnings and cash flow per share
2020 2019
The Parent Company shareholdersโ share of profit for
the year amounts to (mDKK) 1,183 1,142
The average number of treasury shares amounted to (number, DKK 2 each) 585,724 911,013
The average number of shares in circulation amounted to (number) 49,108,026 49,601,487
The average number of shares in circulation incl
restricted shares amounted to (number) 49,125,947 49,689,214
Cost of share buy-backs during the year (mDKK) 362 433
The share capital has been fully paid.
Diluted earnings and cash flow per share have been calculated on the basis of the Parent Company share-
holdersโ share of profit/loss for the year.
Note 16 Receivables (continued) Note 17 Equity and basis of earnings/cash flow per share
ROYAL UNIBREW Annual report 2020109
Consolidated financial statements
ConFin โ Note 17
Comment
Shares were bought back during the year as an element in the optimisation of the Companyโs capital structure.
It is the intention to cancel the bought-back shares to the extent that they are not to be used for share-based
payment to the Executive Management.
Policy Equity / Proposed dividend
Dividend is recognised as a liability at the time of adoption at the Annual General Meeting. Dividend distribution
for the year proposed by Management is disclosed as a separate equity item.
Treasury shares
Treasury shares acquired by the Parent Company or subsidiaries are recognised at cost directly in equity under
retained earnings. Where treasury shares are subsequently sold, any consideration is also recognised directly
in equity. Dividend on treasury shares is recognised directly in equity under retained earnings.
Share premium account
Share premium account comprises amounts in excess of the nominal share capital paid up by shareholders
in connection with capital increases.
Revaluation reserves
Revaluation reserves in parent company comprise value adjustment of assets from cost to an estimated
permanently higher fair value. Revaluation reserves are transferred to retained earnings when the revalued
asset is realized.
Translation reserve
The translation reserve in the Consolidated Financial Statements comprises exchange adjustments arising
on the translation of the Financial Statements of foreign enterprises from their functional currencies into the
presentation currency of the Group (DKK).
Upon full or partly realisation of the net investment in the foreign enterprises, exchange adjustments are
recognised in the income statement.
The translation reserve was reset at ๎ January ๎๎๎๎ in accordance with IFRS ๎.
Hedging reserve
The hedging reserve comprises changes to fair values of derivative financial instruments that are designated
and qualify as cash flow hedges of future transactions.
On realisation, the hedging instrument is recognised in the income statement in the same item as the hedged
transaction.
Note 17 Equity and basis of earnings/cash flow per share (continued)
ROYAL UNIBREW Annual report 2020110
Consolidated financial statements
mDKK 2020 2019
VAT, excise duties, etc 494 341
Other payables 423 421
Deposit, returnable packaging 111 132
Total other current payables 1,028 894
Deposit, returnable packaging is specified as follows:
Balance at 1 January 132 129
Adjustment for the year -21 3
Balance at 31 December 111 132
Comment
The change in the deposit on returnable packaging for the year reflects the net exchange with customers of
returnable packaging for the year less estimated wastage of returnable packaging in circulation. The devel-
opment in ๎๎๎๎ of the liability is due to packaging shifting from returnable packaging toward not returnable
packaking, e.g. cans and PET-bottles which is not refilled but reused in production of new cans and PET-bottles.
The payable relating to deposit on returnable packaging is calculated on the basis of the estimated total
packaging volume less packaging held in inventory.
Deposit, returnable packaging
Plastic crates, bottles and kegs in circulation and held in inventory are recognised in property, plant and
equipment, and the obligation to repay the deposit when the packaging in circulation is taken back on inventory
is recognised in other payables.
Note 19 Other current payables
mDKK 2020 2019
Deferred tax at 1 January 546 542
Change in deferred tax for the year 4 11
Deferred tax, no income statement effect for the year -48
Change in deferred tax by acqusitions 42
Exchange adjustments 1 0
Adjustment of previous year 3 -1
Deferred tax at 31 December 554 546
Expected realisation within 1 year -31 -33
Deferred tax relates to:
Intangible assets 428 417
Property, plant and equipment 153 147
Current assets -7 13
Non current liabilities -24 11
Current liabilities 4 -42
Total 554 546
The utilisation of unutilised tax losses in one of the Groupโs foreign enterprises is not certain. Therefore, the
tax asset corresponding to DKK ๎.๎ million (๎๎๎๎: DKK ๎.๎ million) has not been recognised.
Deferred tax
Deferred tax is recognised in respect of all temporary differences between the carrying amounts and the tax
base of assets and liabilities except for temporary differences arising at the time of acquisition that do not affect
the profit for the year or the taxable income and temporary differences concerning goodwill. In cases where
the computation of the tax base may be made according to alternative tax rules, deferred tax is measured on
the basis of the intended use of the asset or settlement of the liability, respectively.
Deferred tax assets are recognised at the value at which they are expected to be realized, either by elimination
in tax on future earnings or by set-off against deferred tax liabilities.
Deferred tax is measured on the basis of the tax rules and tax rates expected under the legislation at the
balance sheet date to be effective when the deferred tax crystallises as current tax.
In the balance sheet, set-off is made between deferred tax assets and deferred tax liabilities within the same
legal tax entity and jurisdiction.
Note 18 Deferred tax
ROYAL UNIBREW Annual report 2020111
Consolidated financial statements
ConFin โ Note 18 ConFin โ Note 19
Note 20 Debts
Changes to interest-bearing debts
Additions by Exchange
mDKK 31/12 2019 acquisitions Repayment New facilities adjustment 31/12 2020
Interest-bearing long-term debts 1,991 0 -96 149 -2 2,042
Interest-bearing short-term debts 562 0 -483 0 79
Total interest-bearing debt, mortgage and credit institutions 2,553 0 -579 149 -2 2,121
Interest-bearing long-term leasing debt* 163 -13 -67 -1 82
Interest-bearing short-term leasing debt* 60 -60 71 71
Total interest-bearing leasing debt 223 0 -73 4 -1 153
Total 2,776 0 -652 153 -3 2,274
* Leasing debt is included in the balance sheet as โCredit institutionsโ
Additions by Exchange
31/12 2018 acquisitions Repayment New facilities adjustment 31/12 2019
Interest-bearing long-term debts 2,397 -390 -16 1,991
Interest-bearing short-term debts 45 -29 546 0 562
Total interest-bearing debt, mortgage and credit institutions 2,442 0 -419 546 -16 2,553
Interest-bearing long-term leasing debt 129 1 -5 39 -1 163
Interest-bearing short-term leasing debt 56 -57 61 60
Total interest-bearing leasing debt 185 1 -62 100 -1 223
Total 2,627 1 -481 646 -17 2,776
Debts
Mortgage loans and loans from credit institutions are recognised initially at fair values. Subsequently, the
financial obligations are measured at amortised cost equal to the capitalised value using the effective interest
method; the difference between the proceeds and the nominal value is recognised in financial income and
expenses in the income statement over the loan period.
Other debts, comprising trade payables, payables to subsidiaries and associates, VAT, excise duties, etc as
well as other payables, are measured at amortised cost, substantially corresponding to the nominal debt.
Debts
In connection with the acquisition of Hartwall in ๎๎๎๎, defined benefit liabilities were acquired relating to a
pension scheme which has not been offered to new employees for a number of years. At ๎๎ December ๎๎๎๎, the
net liability amounted to approx DKK ๎.๎ million (๎๎๎๎: approx DKK ๎.๎ million). Taking into account the amount
of the liability, that it has been at the same level in recent years and that it is being phased out, Management
does not consider it material to provide the disclosures on the composition of the liability required by IAS ๎๎.
mDKK 2020 2019
Mortgage debt 850 855
Credit institutions 1,424 1,922
Other debts 2,136 2,046
Debts 4,410 4,823
ROYAL UNIBREW Annual report 2020112
Consolidated financial statements
ConFin โ Note 20
mDKK 2020 2019
Rental and operating lease commitments
Total future payments:
Within 1 year 16 12
Between 1 and 5 years 23 17
Beyond 5 years 0 0
Total 39 29
Rental and lease commitments relate to low value assets
and service not included under IFRS 16.
Third-party guarantees 31 26
Security
No security has been provided in respect of loan agreements with credit institutions.
As regards security for loan agreements with mortgage credit institutes, reference is made to note ๎๎.
Contingent liabilities
The outcome of pending legal actions is not expected to have any material impact on the financial position
of the Group.
Note 22 Contingent liabilities, security and other liabilities
Adjustments for non-cash operating items:
mDKK 2020 2019
Financial income -3 -5
Financial expenses 46 41
Amortisation and impairment of intangible assets 34 35
Depreciation of property, plant and equipment 314 307
Tax on the profit for the year 307 318
Income from investments in associates -33 -25
Profit and loss from sale of property, plant
and equipment (see note 12 re leasing part) -2 3
Share-based payments and remuneration 7 6
Total 670 680
Cash flow statement
The consolidated cash flow statement is presented under the indirect method based on the net profit for the
year. The statement shows cash flows for the year, changes for the year in cash and cash equivalents as well
as the Groupโs cash and cash equivalents at the beginning and end of the year.
Cash flows from operating activities are calculated as the net profit/loss for the year adjusted for non-cash
operating items, changes in working capital, financial income and financial expenses, and corporation tax paid.
Cash flows from investing activities comprise acquisitions and disposals of property, plant and equipment and
fixed asset investments as well as dividend received from associates. Cost is measured inclusive of expenses
necessary to make the acquisition and sales prices after deduction of transaction expenses.
Cash flows from financing activities comprise changes to the amount or composition of the Groupโs share
capital, payment of dividend as well as borrowing and repayment of interest-bearing debt.
Cash and cash equivalents include securities with a maturity of less than ๎ months that can readily be turned
into cash and are only subject to an insignificant risk of value changes.
Note 21 Cash Flow Statement
ROYAL UNIBREW Annual report 2020113
Consolidated financial statements
ConFin โ Note 21 ConFin โ Note 22
Acquisition in ๎๎๎๎
In ๎๎๎๎ no acquisitions have been completed.
Acquisition in ๎๎๎๎
Acquisition of Bev.Con ApS (CULT)
On ๎๎ June ๎๎๎๎, Royal Unibrew entered into an agreement to acquire the company Bev.Con ApS, which owns
brands such as CULT Energy, SHAKER and MOKAร. The acquisition was completed on ๎๎ February ๎๎๎๎.
The final acquisition price has been agreed upon based on an enterprise value of DKK ๎๎๎ million and has been
financed by bank borrowings. The final acquisition price is divided by DKK ๎๎๎ million in cash and a potential
performance based earn-out of DKK ๎๎ million. The final cash acquisition price has been settled in Q๎ ๎๎๎๎,
while the earn-out part of the acquisition price should be settled in Q๎ ๎๎๎๎ based on a net revenue target for
the period ๎ January ๎๎๎๎ - ๎๎ December ๎๎๎๎. As the target has not been achieved, the earn-out part of the
acquisition price will be DKK ๎.
CULT was the first to introduce energy drinks in the Danish market, and, through the acquisition, Royal Uni-
brew reinforces its market position in Denmark and broadens the range in RTD (Ready-to-Drink) and Cider
categories and the market for energy drinks.
Royal Unibrew expects to be able to achieve increased distribution and activation of the CULT portfolio, and
the acquisition increased Royal Unibrewโs earnings per share (EPS) already in ๎๎๎๎.
The company had approx ๎๎ employees focusing on commercial activities; production and logistics have been
contracted out to a third party.
Royal Unibrew A/S has incurred transaction costs relating to the acquisition of approx DKK ๎ million for legal,
financial and commercial advisers in connection with the realisation of the transaction. The costs were rec-
ognized as administrative expenses in the Annual Report for ๎๎๎๎.
The company has been included in the Consolidated Financial Statements of Royal Unibrew as of the date
of acquisition in ๎๎๎๎.
As part of the integration activities Bev.Con ApS and its ๎๎๎% owned subsidiary, Cult A/S, has been merged
with Royal Unibrew A/S as the continuing company.
Note 24 Acquisition of subsidiaries
Related parties comprise the Board of Directors and the Executive Management as well as subsidiaries and
associates, see the sections on Board of Directors and Executive Management on page ๎๎ and Group Structure
on page ๎๎๎. No shareholder exercises control.
The following transactions have been made with related parties:
Group
mDKK 2020 2019
Revenue
Sales to associates 18 18
Financial income and expenses
Dividends received from associates 21 25
Executive Management
Remuneration paid 29 17
Debt re cash-based bonus schemes 7 6
Debt re share-based bonus scheme 7 19
Board of Directors
Remuneration 5 6
Transactions with subsidiaries are eliminated in the Consolidated Financial Statements in accordance with
the accounting policies applied.
Note 23 Related parties
ROYAL UNIBREW Annual report 2020114
Consolidated financial statements
ConFin โ Note 23 ConFin โ Note 24
Acquisition of Bruce Ashly Group Inc.
On ๎๎ August ๎๎๎๎, Royal Unibrew entered into an agreement to acquire ๎๎๎% of the shares in the Canadian
company, Bruce Ashley Group Inc. (BAG). The acquisition was completed on ๎๎ August ๎๎๎๎.
The acquisition price of DKK ๎ million, which has been paid in cash, is based on an enterprise value of DKK
๎ million. The valuation of BAG has been based on the price multiples applicable to comparable businesses.
BAG is an agency business that during the last ๎๎ years built up a strong portfolio of Japanese sake and
European beer brands, including Royal Unibrewโs Faxe Brand.
BAG has an organization of ๎๎ employees within sales and marketing.
Royal Unibrew A/S has incurred transaction costs relating to the acquisition of approx DKK ๎ million for le-
gal, financial and commercial advisers in connection with the realisation of the transaction. The costs were
recognized as administrative expenses in the Interim Report for the period ๎ January - ๎๎ September ๎๎๎๎.
BAG has been included in the Consolidated Financial Statements of Royal Unibrew as of the date of acquisition.
Royal Unibrew has made the following final calculation of the fair value of the acquired net assets and of
goodwill at the time of acquisition. Compared to the preliminary calculation of the fair value disclosed in the
Annual Report ๎๎๎๎ the final acquisition price in Q๎ ๎๎๎๎ was reduced by DKK ๎ million.
DKK โ000
Distribution rights 11,589
Property, plant and equipment 1,369
Inventories 6,913
Receivables 6,360
Prepayments 213
Deferred tax -443
Trade payables -15,592
Other payables -2,124
Acquired net assets 8,285
Goodwill 0
Estimated fair value of the business 8,285
Acquired cash at bank and in hand -4,162
Cash consideration 4,123
The receivables acquired include trade receivables of a fair vaue of DKK 6 million corresponding to the
gross amount receivable according to contract.
Note 24 Acquisition of subsidiaries (continued)
Royal Unibrew has in Q1 2020 made the following final calculation of the fair value of the acquired net
assets and of goodwill at the time of acquisition. Compared to the calculation of the fair value disclosed in
the Annual Report 2019 the final acquisition price is DKK 55 million lower than expected by the end of 2019,
as the earn-out part of the acquisition price is not to be paid. The fair value of the trademark is estimated
to be DKK 15 million lower than by the end of 2019.
DKK โ000
Trademark 148,000
Customer relations 9,000
Property, plant and equipment 2,388
Inventories 14,120
Receivables 13,677
Prepayments 773
Deferred tax -33,538
Trade payables -6,055
Other payables -3,981
Acquired net assets 144,384
Goodwill 146,494
Estimated fair value of the business 290,878
Earn-out debt 0
Estimated fair value of the business at closing 290,878
Acquired cash at bank and in hand 26,465
Cash consideration at closing 317,343
The receivables acquired include trade receivables of a fair vaue of DKK ๎๎ million corresponding to the gross
amount receivable according to contract.
Cf. company announcement no. ๎๎/๎๎๎๎ of ๎๎ June ๎๎๎๎, the normalized yearly net revenue and EBIT is approx
DKK ๎๎๎ million respectively approx DKK ๎๎ million.
ROYAL UNIBREW Annual report 2020115
Consolidated financial statements
The receivables acquired include trade receivables of a fair value of DKK ๎,๎ million corresponding to the gross
amount receivable according to contract.
The receivables acquired include trade receivables of a fair value of DKK ๎,๎ million corresponding to the gross
amount receivable according to contract.
Business combinations
On acquisition of new enterprises the purchase method is applied, under which the identifiable assets and
liabilities of newly acquired enterprises are measured at fair value at the time of acquisition.
Upon business combinations, positive differences between cost and fair value of identifiable assets and liabilities
acquired are recognised as goodwill in intangible assets. At the time of acquisition, goodwill is allocated to the
cash-generating units that subsequently form the basis of impairment tests. Goodwill and fair value adjust-
ments in connection with the acquisition of a foreign enterprise with a functional currency that differs from
the presentation currency of the Group are treated as assets and liabilities belonging to the foreign entity and
are translated to the functional currency of the foreign entity at the exchange rates at the dates of transaction.
Gains or losses on disposal of subsidiaries and associates are calculated as the difference between the sales
sum and the carrying amount of net assets at the time of sale (including the carrying amount of goodwill) net
of expected expenses and adjusted for exchange adjustments previously recognised in equity.
Recognition of acquisition of subsidiary
Royal Unibrew acquired in ๎๎๎๎ three businesses, Bev.Con ApS (Cult), Bruce Ashley Group Inc. and SIA Bauskas
Alus by purchasing shares in the companies wherein the businesses were established. The businesses assets,
liabilities and contingent liabilities has been recognised under the purchase method in the Financial Statements
of Royal Unibrew. The key assets of the businesses are goodwill, trademarks, customer relations, property, plant
and equipment, inventories, receivables, deferred tax and payables. Especially with regard to the intangible
assets acquired, there are no efficient markets to be used to determine fair value. Management has therefore
made an estimate in connection with the calculation of the fair value of the acquired assets and liabilities at
the date of acquisition and has allocated the purchase price on that basis. The fair value calculation is subject
to uncertainty and will subsequently be adjusted within a ๎๎ month period from the acquisition date if a need
to do so is identified. The unallocated part of the purchase price has been recognised as goodwill related to
synergies and the development potential of the activities acquired.
Note 24 Acquisition of subsidiaries (continued)
Acquisition of SIA Bauskas Alus
On ๎๎ May ๎๎๎๎, Royal Unibrew entered into an agreement to acquire ๎๎๎% of the shares in the Latvian company,
SIA Bauskas Alus (Bauskas). The acquisition was completed on ๎ November ๎๎๎๎.
The acquisition price of DKK ๎๎ million, which has been paid in cash, is based on an enterprise value of DKK ๎๎
million. The valuation of Bauskas has been based on the price multiples applicable to comparable businesses.
Bauskas is a Latvian craft brewery that during the last ๎๎ years has built up a strong portfolio of craft beer
products.
Bauskas has an organization of approx ๎๎ employees within production, sales, marketing and administration.
Royal Unibrew A/S has incurred transaction costs relating to the acquisition of approx DKK ๎,๎ million for
legal, financial and commercial advisers in connection with the realisation of the transaction. The costs were
recognized as administrative expenses in the Interim Report for the period ๎ January - ๎๎ September ๎๎๎๎.
Bauskas has been included in the Consolidated Financial Statements of Royal Unibrew as of the date of
acquisition.
Royal Unibrew has made the following final calculation of the fair value of the acquired net assets and of
goodwill at the time of acquisition.
DKK โ000
Trademark 23,246
Customer relations 16,529
Property, plant and equipment 9,734
Inventories 4,958
Receivables 3,496
Prepayments 46
Deferred tax -7,957
Trade payables -946
Other payables -5,205
Acquired net assets 43,901
Goodwill 21,336
Estimated fair value of the business 65,237
Acquired cash at bank and in hand 1,629
Cash consideration at closing 66,866
ROYAL UNIBREW Annual report 2020116
Consolidated financial statements
Parent Company Annual Report
2020
ROYAL UNIBREW Annual report 2020117
Signatures and statements
ParFin โ COVER
Parent Company Income Statement
mDKK Note 2020 2019
Net revenue 3,630 3,675
Production costs 3, 4 -1,774 -1,798
Gross profit 1,856 1,877
Sales and distribution expenses 3, 4 -917 -989
Administrative expenses 3, 4 -219 -199
EBIT 720 689
Dividends received from subsidiaries and associates 531 559
Financial income 5 6 6
Financial expenses 6 -31 -28
Profit before tax 1,226 1,226
Tax on the profit for the year 7 -156 -152
Net profit for the year 1,070 1,074
Earnings per share (DKK) 24.1 23.0
Diluted earnings per share (DKK) 24.1 22.9
mDKK Note 2020 2019
Net profit for the year 1,070 1,074
Other comprehensive income
Items that may be reclassified to the income statement
Value adjustment of hedging instruments 6 9
Tax on other comprehensive income 7 -1 -2
Total 5 7
Other comprehensive income after tax 5 7
Total comprehensive income 1,075 1,081
Income Statement for 1 January - 31 December Statement of Comprehensive Income for 1 January - 31 December
ROYAL UNIBREW Annual report 2020118
Parent Company Annual Report
ParFin โ Income statement
Parent Company Balance Sheet
Assets at 31 December Liabilities and Equity at 31 December
mDKK Note 2020 2019
NON-CURRENT ASSETS
Intangible assets 9 403 463
Property, plant and equipment 10 1,055 1,017
Investments in subsidiaries 11 4,388 4,389
Investments in associates 11 77 77
Receivables from subsidiaries 12 60 127
Other non-current investments 12 8 8
Non-current assets 5,991 6,081
CURRENT ASSETS
Inventories 13 185 158
Receivables 14 341 325
Receivables from subsidiaries 53 71
Corporation tax 1 0
Prepayments 14 18
Cash at bank and in hand 15 0
Current assets 609 572
Assets 6,600 6,653
mDKK Note 2020 2019
EQUITY
Share capital 15 99 100
Other reserves 765 771
Retained earnings 1,558 1,485
Proposed dividend 666 611
Equity 3,088 2,967
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax 16 159 154
Mortgage debt 2, 19 553 572
Credit institutions 2, 19 830 756
Other payables 50 104
Non-current liabilities 1,592 1,586
CURRENT LIABILITIES
Mortgage debt 2, 19 19 4
Credit institutions 2, 19 82 600
Trade payables 415 391
Payables to subsidiaries 1,053 831
Corporate tax 0 1
Other current payables 17 351 273
Current liabilities 1,920 2,100
Liabilities 3,512 3,686
Liabilities and equity 6,600 6,653
ROYAL UNIBREW Annual report 2020119
Parent Company Annual Report
ParFin โ Balance sheet
Parent Company Cash Flow Statement
mDKK Note 2020 2019
Net profit for the year 1,070 1,074
Adjustments for non-cash operating items 18 -199 -240
Change in working capital 78 31
Received financial income 6 6
Paid financial expenses -31 -28
Finacial expenses related to leasing -1 -1
Corporation tax paid -148 -126
Cash flows from operating activities 775 716
Dividends received from associates 531 559
Sale of property, plant and equipment* 3 5
Corporation tax paid, sale of project development properties
Purchase of property, plant and equipment* -173 -158
Acqusition of subsidiaries 1 -302
Purchase/-sale of intangible assets and fixed asset investment -3
Cash flows from investing activities 362 101
Debt financing:
Proceeds from increased drawdown on credit facilities 149 500
Repayment on credit facilities -581 -342
Repayment on lease facilities -26 -24
Change in financing of subsidiaries 298 18
Dividends paid to shareholders -600 -538
Acquisition of shares for treasury -362 -433
Cash flows from financing activities -1,122 -819
for 1 January - 31 December
mDKK Note 2020 2019
Change in cash and cash equivalents 15 -2
Cash and cash equivalents at 1 January 0 2
Exchange adjustment 0
Cash and cash equivalents at 31 December 15 0
Free cash flow
Net cash from operating activities 775 716
Net cash used in anvesting activities 361 406
Repayment on lease facilities -26 -24
Free cash flow 1,110 1,098
Effect from reversed free cash flow definition 7
From the 1 Janury 2020 Royal Unibrew defines the free cash flow as net cash operating activities less net
cash used in investing activitiesโโ excluding acquisitions and net proceed from intangible assets and fixed
asset investments, less โโrepayment on leasing facilities Comparable numbers 2019 has been adjusted.
ROYAL UNIBREW Annual report 2020120
Parent Company Annual Report
ParFin โ Cash flow
Parent Company Statement of Changes in Equity
Share Proposed
Share premium Hedging Total other Retained dividend
mDKK capital account reserve reserves earnings for the year Total
Equity at 31 December 2019 100 773 -2 771 1,485 611 2,967
Changes in equity in 2020
Profit for the year 0 1,070 1,070
Other comprehensive income 6 6 0 6
Tax on other comprehensive income 0 -1 -1
Total comprehensive income 0 0 6 6 1,069 0 1,075
Liability upon acquisition 0 0
Dividends paid to shareholders 0 -600 -600
Dividend on treasury shares 0 2 -2 0
Acquisition of shares for treasury 0 -362 -362
Proposed dividend 0 -657 657 0
Capital reduction -1 -12 -12 13 0
Share-based payments 0 7 7
Tax on changes in equity, shareholders 0 1 1
Total shareholders -1 -12 0 -12 -996 55 -954
Total changes in equity in 2020 -1 -12 6 -6 73 55 121
Equity at 31 December 2020 99 761 4 765 1,558 666 3,088
Share premium account, hedging reserve and retained earnings may be applied for distribution of dividend to the Parent Company shareholders.
The share capital at ๎๎ December ๎๎๎๎ amounts to DKK ๎๎,๎๎๎,๎๎๎ and is distributed on shares of DKK ๎ each.
Proposed dividend for the year is DKK ๎๎.๎๎ per share (๎๎๎๎: DKK ๎๎.๎๎ per share).
for 1 January - 31 December
ROYAL UNIBREW Annual report 2020121
Parent Company Annual Report
ParFin โ Equity
Parent Company Statement of Changes in Equity
for 1 January - 31 December
Share Proposed
Share premium Hedging Total other Retained dividend
mDKK capital account reserve reserves earnings for the year Total
Equity at 31 December 2018 102 786 -11 775 1,418 551 2,846
Changes in equity in 2019
Profit for the year 0 1,074 1,074
Other comprehensive income 9 9 0 9
Tax on other comprehensive income 0 -1 -1
Total comprehensive income 0 0 9 9 1,073 0 1,082
Liability upon acquisition 0
Dividends paid to shareholders 0 -538 -538
Dividend on treasury shares 0 13 -13 0
Acquisition of shares for treasury 0 -433 -433
Proposed dividend 0 -611 611 0
Capital reduction -2 -13 -13 15 0
Share-based payments 0 6 6
Tax on changes in equity, shareholders 0 4 4
Total shareholders -2 -13 0 -13 -1,006 60 -961
Total changes in equity in 2019 -2 -13 9 -4 67 60 121
Equity at 31 December 2019 100 773 -2 771 1,485 611 2,967
ROYAL UNIBREW Annual report 2020122
Parent Company Annual Report
Notes to Parent Company Annual Report
Descriptive notes
๎ Basis of preparation ........................................ ๎๎๎
๎ Financial risk management ............................ ๎๎๎
Notes referring to Income Statement,
Balance Sheet and Cash Flow Statement
๎ Staff expenses ................................................. ๎๎๎
๎ Expenses broken down by nature ................... ๎๎๎
๎ Financial income ............................................. ๎๎๎
๎ Financial expenses .......................................... ๎๎๎
๎ Tax on the profit for the year ........................... ๎๎๎
๎ Realized hedging transactions ....................... ๎๎๎
๎ Intangible assets ............................................. ๎๎๎
๎๎ Property, plant and equipment ....................... ๎๎๎
๎๎ Investments in subsidiaries
and associates .................................................๎๎๎
๎๎ Receivables from subsidiaries
and other fixed asset investments ..................๎๎๎
๎๎ Inventories ........................................................๎๎๎
๎๎ Receivables .......................................................๎๎๎
๎๎ Share capital .................................................... ๎๎๎
๎๎ Deferred tax ..................................................... ๎๎๎
๎๎ Other current payables ................................... ๎๎๎
๎๎ Cash Flow Statement ...................................... ๎๎๎
Other notes
๎๎ Debts ................................................................ ๎๎๎
๎๎ Contingent liabilities, security
and other liabilities ......................................... ๎๎๎
๎๎ Related parties ................................................ ๎๎๎
ROYAL UNIBREW Annual report 2020123
Signatures and statements
ParFin โ Notes contents
Basis of preparation
Significant accounting policies
The Parent Companyโs accounting policies remain unchanged from last
year. Significant accounting policies are identical to those applied by the
Royal Unibrew Group except for those mentioned below.
Translation policies
Exchange adjustment of balances regarded as part of the total net
investment in enterprises with another functional currency than DKK
is recognised in financial income and expenses in the Parent Company
income statement.
New and amended standards and interpretations that have taken
effect
Reference is made to note ๎ to the Consolidated Financial Statements.
Critical judgements and accounting estimates
In connection with the preparation of the Parent Company and Con-
solidated Financial Statements, Management makes estimates and
judgements as to how recognition and measurement of assets and
liabilities should take place based on the accounting policies applied.
Judgements as an element in significant accounting policies
The calculation of carrying amounts of certain assets and liabilities
requires judgement as to how assets and liabilities should be classified
in the Financial Statements and how future events will affect the value
of these assets and liabilities at the balance sheet date. In connection
with the financial reporting for ๎๎๎๎, the following judgments have been
made materially affecting the related items as described in relevant
notes, see list below.
Critical accounting estimates
Managementโs estimates are based on assumptions which Manage-
ment considers reasonable but which are inherently uncertain and
unpredictable. In connection with the financial reporting for ๎๎๎๎, the
following critical estimates have been made as desribed in relevant
notes, see list below.
Accounting policies, judgements as an element in significant account-
ing policies as well as critical accounting estimates are described in
the notes:
Parent
Consolidated Company
FS note FS note
Derivative financial instruments
4
Segment reporting
5
Net revenue
6
Share-based payments
7
Expenses
8
Financial income
9
Financial expenses
10
Corporation tax
11
Intangible assets
12
Property, plant and equipment
13
Investments in associates
14
11
Other fixed asset investments
15 11
Inventories
16
Receivables
17
Equity
18
Deferred tax
19
Deposit returnable packaging
20
Debt
21
Cash Flow Statement
22
Purchase Price Allocation (PPA) 25
Note 1 Basis of preparation of Parent Company Annual Report
Legends
Significant accounting policies
Judgements as an element in significant accounting policies
Critical accounting estimates
Comments to the note
ROYAL UNIBREW Annual report 2020124
Parent Company Annual Report
ParFin โ Note 01
Financial liabilities
Maturity
Contractual Maturity > 1 year Maturity Carrying
mDKK cash flows < 1 year < 5 years > 5 years amount
31/12 2020
Non-derivative financial
instruments:
Financial debt, debt
financing, gross 1,468 87 1,089 292 1,421
Financial debt, subsidiaries 1,053 1,053 0 0 1,053
Leasing 65 25 39 1 63
Trade payables 415 415 415
Other payables 303 253 50 303
Total 3,304 1,833 1,178 293 3,255
The debt is classified as โdebt at amortised costโ with DKK ๎,๎๎๎ million and โdebt at fair valueโ with DKK
๎ million.
The fair value of the total debt is assessed to equal carrying amount.
31/12 2019
Non-derivative financial
instruments:
Financial debt, debt
financing, gross 1,909 596 869 444 1,853
Financial debt, subsidiaries 831 831 831
Leasing 82 24 58 0 79
Trade payables 391 391 391
Other payables 316 212 104 316
Total 3,529 2,054 1,031 444 3,470
The debt is classified as โdebt at amortised costโ with DKK ๎,๎๎๎ million and โdebt at fair valueโ with DKK
๎ million.
The fair value of the total debt is assessed to equal carrying amount.
For a description of the Parent Companyโs and the Groupโs currency, interest rate, credit, commodity and other
risks as well as capital management, reference is made to note ๎ to the Consolidated Financial Statements.
Staff expenses are included in production costs, sales and distribution expenses as well as administrative
expenses and break down as follows:
mDKK 2020 2019
Fixed salaries to Executive Management 20 12
Ordinary bonus scheme for Executive Management 9 6
Share-based payments to Executive Management (conditional) 9 6
Remuneration of Executive Management 38 24
Remuneration of Board of Directors 5 6
43 30
Wages and salaries 487 479
Contributions to pension schemes 44 43
531 522
Other social security expenses 6 7
Other staff expenses 18 22
Total 598 581
Average number of employees 973 969
Note 2 Financial risk management Note 3 Staff expenses
ROYAL UNIBREW Annual report 2020125
Parent Company Annual Report
ParFin โ Note 02 ParFin โ Note 03
mDKK 2020 2019
Production costs 1,774 1,798
Sales and distribution expenses 917 989
Administrative expenses 219 199
Total 2,910 2,986
break down by nature as follows:
Raw materials and consumables 1,426 1,444
Wages, salaries and other staff expenses 598 581
Operating and maintenance expenses* 118 131
Distribution expenses and carriage 187 186
Sales and marketing expenses 356 427
Bad trade debts 9 2
Office supplies etc 72 76
Amortisation and depreciation 144 139
Total 2,910 2,986
Note 4 Expenses broken down by nature Note 4 Expenses broken down by nature (continued)
Total amortisation and depreciation are included in the following items in the income statement:
mDKK 2020 2019
Production costs 83 78
Sales and distribution expenses 46 47
Administrative expenses 15 14
Total 144 139
Fee to auditors
Fee for the audit of the Annual Report:
KPMG 1 1
Total 1 1
KPMG:
Other assurance services 0 0
Other assistance* 0 2
Total 0 2
* Fees for other services than statutory audit of the financial statements provided by KPMG
Statsautoriseret Revisionspartnerskab primarily comprise services relating to financial due dilligence.
ROYAL UNIBREW Annual report 2020126
Parent Company Annual Report
ParFin โ Note 04
mDKK 2020 2019
Finance income
Cash at bank and in hand 0 1
Trade receivables 0 0
Receivables from subsidiaries 2 3
Other financial income 0
Exchange adjustments
Cash at bank and in hand and external loans 3
Trade receivables 2
Trade payables 1
Loans from subsidiaries 0
Forward contracts
Income liquidation of subsiduary 0
Total 6 6
Note 6 Financial expenses
mDKK 2020 2019
Finance costs
Mortgage debt 5 5
Credit institutions 18 16
Other financial expenses 2 3
Leasing 1 1
Exchange adjustments
Cash at bank and in hand and external loans 0
Trade receivables 4
Trade payables 0
Loans from subsidiaries 0
Forward contracts 1 3
Total 31 28
Note 5 Financial income Note 7 Tax on the profit for the year
mDKK 2020 2019
Tax on the taxable income for the year 146 147
Adjustment of previous year 2 0
Adjustment of deferred tax 8 3
Total 156 150
which breaks down as follows:
Tax on profit for the year 156 152
Tax on other comprehensive income 1 2
Tax on equity entries -1 -4
Total 156 150
Current Danish tax rate 22.0 22.0
Dividends received from subsidiaries and associates -9.7 -10.0
Effect on tax rate of permanent differences 0.3 0.4
Adjustment of previous year 0.1 0.1
Effective tax rate 12.7 12.5
Note 8 Realized hedging transactions
mDKK 2020 2019
Realized hedging transactions are included
in the income statement as follows:
Net revenue includes currency hedges of 0 0
Production costs include foreign currency and commodity hedges of -7 -11
Financial income and expenses include currency, commodity
and interest rate hedges of -2 -3
Total -9 -14
Reference is made to note ๎ to the Consolidated Financial Statements for a description of hedging policies
ROYAL UNIBREW Annual report 2020127
Parent Company Annual Report
ParFin โ Note 05 ParFin โ Note 06 ParFin โ Note 07 ParFin โ Note 08
Distribution Customer
MDKK Goodwill Trademarks rights relations Total
Cost at 1 January 2020 270 188 12 9 479
Disposals -12 -12
Additions by merger -43 -15 -58
Cost at 31 December 2020 227 173 0 9 409
Amortisation and impairment losses
at 1 January 2020 0 -3 -12 -1 -16
Reversal depreciation of disposals 12 12
Amortisation for the year 0 0 0 -2 -2
Amortisation and impairment losses
at 31 December 2020 0 -3 0 -3 -6
Carrying amount
at 31 December 2020 227 170 0 6 403
Note 9 Intangible assets
Distribution Customer
MDKK Goodwill Trademarks rights relations Total
Cost at 1 January 2019 80 25 12 117
Additions 190 163 9 362
Cost at 31 December 2019 270 188 12 9 479
Amortisation and impairment losses
at 1 January 2019 0 -3 -12 -15
Amortisation for the year -1 -1
Amortisation and impairment losses
at 31 December 2019 0 -3 -12 -1 -16
Carrying amount
at 31 December 2019 270 185 0 8 463
Trademarks
Trademarks are not amortised as they are all well-established, old and profitable trademarks which custom-
ers are expected to continue demanding unabatedly, other things being equal, and which Management is not
planning to stop selling and marketing.
Reference is made to note ๎๎ to the Consolidated Financial Statements for a description of impairment test.
ROYAL UNIBREW Annual report 2020128
Parent Company Annual Report
ParFin โ Note 09
Other fixtures Property, Leasing of Total other
and fittings, plant and property, property,
2019 Land and Plant and tools and equipment plant and plant and
mDKK buildings machinery equipment in progress equipment equipment
Cost at 1 January 2019 728 1,308 499 52 94 2,681
Additions 20 29 57 52 37 195
Additions by change in
accounting policy 1 0 1
Disposals -1 -13 -20 0 -10 -44
Transfers for the year 8 27 10 -45 0 0
Cost at 31 December 2019 755 1,351 547 59 121 2,833
Depreciation, revaluation
and impairment losses
at 1 January 2019 -404 -926 -361 0 -21 -1,712
Depreciation for the year -14 -48 -47 -25 -134
Reversal of depreciation
and impairment of
assets sold 0 11 14 5 30
Depreciation, revaluation
and impairment losses
at 31 December 2019 -418 -963 -394 0 -41 -1,816
Carrying amount
at 31 December 2019 337 388 153 59 80 1,017
Leasing of property,
plant and equipment:
Cost at 31 December 2019 49 71 120
Depreciation, revaluation
and impairment losses
at 31 December 2019 -13 -28 -41
Carrying amount
per asset type 36 43 79
Land and buildings including plant and machinery at a carrying amount of DKK ๎๎๎ million have been provided as
security for mortgage debt of DKK ๎๎๎ million.
Contracts for the delivery of property, plant and equipment in ๎๎๎๎ or later have been entered into only to an imma-
terial extent.
Note 10 Property, plant and equipment
Other fixtures Property, Leasing of Total other
and fittings, plant and property, property,
2020 Land and Plant and tools and equipment plant and plant and
mDKK buildings machinery equipment in progress equipment equipment
Cost at 1 January 2020 755 1,351 547 59 121 2,833
Additions 3 36 48 86 23 196
Additions by merger 0
Disposals -6 -39 -42 -19 -106
Transfers for the year 3 15 7 -25 0
Cost at 31 December 2020 755 1,363 560 120 125 2,923
Depreciation, revaluation
and impairment losses
at 1 January 2020 -418 -963 -394 0 -41 -1,816
Depreciation for the year -14 -51 -48 -28 -141
Reversal of depreciation
and impairment of
assets sold 6 39 39 6 90
Depreciation, revaluation
and impairment losses
at 31 December 2020 -426 -975 -403 0 -63 -1,867
Carrying amount
at 31 December 2020 329 388 157 120 62 1,055
Leasing of property,
plant and equipment:
Cost at 31 December 2020 44 81 125
Depreciation, revaluation
and impairment losses
at 31 December 2020 -19 -44 -63
Carrying amount
per asset type 25 37 62
Land and buildings including plant and machinery at a carrying amount of DKK ๎๎๎ million have been provided
as security for mortgage debt of DKK ๎๎๎ million.
Contracts for the delivery of property, plant and equipment in ๎๎๎๎ or later have been entered into only to an
immaterial extent.
ROYAL UNIBREW Annual report 2020129
Parent Company Annual Report
ParFin โ Note 10
Investments Investments
mDKK in subsidiaries in associates
Cost at 1 January 2020 4,478 77
Additions -1
Disposals
Cost at 31 December 2020 4,477 77
Impairment losses at 1 January 2020 -89 0
Impairment losses at 31 December 2020 -89 0
Carrying amount at 31 December 2020 4,388 77
Cost at 1 January 2019 4,466 77
Additions 12 0
Disposals 0
Cost at 31 December 2019 4,478 77
Impairment losses at 1 January 2019 -89 0
Impairment losses at 31 December 2019 -89 0
Carrying amount at 31 December 2019 4,389 77
Dividend on investments in subsidiaries and associates
Dividend on investments in subsidiaries and associates is recognised in the Parent Companyโs income state-
ment in the financial year in which dividend is declared.
Investments in subsidiaries and associates in the Parent Company Financial Statements
Investments in subsidiaries and associates are measured at cost and tested in the event of indication of
impairment. Where cost exceeds the recoverable amount, the investment is written down to its lower recov-
erable amount.
Estimate
The carrying amount of investments in subsidiaries and the values of intangible assets contained therein is
tested to identify any impairment. Reference is made to note ๎๎ to the Consolidated Financial Statements..
Receivables Total other
from Other Other fixed asset
mDKK subsidiaries investments receivables investments
Cost at 1 January 2020 127 55 5 60
Exchange adjustment 0
Additions 0
Disposals -67 0
Cost at 31 December 2020 60 55 5 60
Revaluations and impairment losses
at 1 January 2020 0 -52 0 -52
Revaluations and impairment losses
at 31 December 2020 0 -52 0 -52
Carrying amount at 31 December 2020 60 3 5 8
Cost at 1 January 2019 119 55 2 57
Exchange adjustment 0
Additions 20 3 3
Disposals -12 0
Cost at 31 December 2019 127 55 5 60
Revaluations and impairment losses
at 1 January 2019 0 -52 0 -52
Revaluations and impairment losses
at 31 December 2019 0 -52 0 -52
Carrying amount at 31 December 2019 127 3 5 8
Note 11 Investments in subsidiaries and associates Note 12 Receivables from subsidiaries and Other fixed asset investments
ROYAL UNIBREW Annual report 2020130
Parent Company Annual Report
ParFin โ Note 11 ParFin โ Note 12
Note 13 Inventories Note 14 Receivables (continued)
Trade receivables fall due as follows:
Not due
and prepaid Due Due Due >
bonus 1-15 days 16-90 days 90 days Total
2020
Trade receivables 285 35 14 2 336
Impairment provision* -6 -1 -3 -2 -12
Trade receivables after impairment 279 34 11 - 324
Impairment provision % ** -2.1% -2.9% -21.4% -100.0% -3.6%
Provisions for bad debts, beginning of year -8
Bad debts realized during the year 7
Provision for the year -11
Total -12
* Lifetime expected credit loss.
** Historical average loss rate is approx. 1%
Current receivables, other than trade receivables, all fall due for payment in ๎๎๎๎.
2019
Trade receivables 282 17 8 12 319
Impairment provision -1 - -3 -4 -8
Trade receivables after impairment 281 17 5 8 311
Impairment provision %* -0.2% -1.7% -38.0% -33.0% -2.5%
Provisions for bad debts, beginning of year -12
Bad debts realized during the year 6
Provision for the year -2
Total -8
* Lifetime expected credit loss.
** Historical average loss rate is approx. 0.6%
Receivables
Reference is made to note 17 to the Consolidated Financial Statements.
mDKK 2020 2019
Raw materials and consumables 78 71
Work in progress 9 11
Finished goods and goods for resale 98 76
Total inventories 185 158
Inventories
Indirect production costs are recognised in the value of work in progress and finished goods at DKK ๎ million
(๎๎๎๎: DKK ๎ million). As in ๎๎๎๎, inventories have not been written down materially.
Note 14 Receivables
mDKK 2020 2019
Trade receivables 324 311
Other receivables 17 14
Total receivables 341 325
ROYAL UNIBREW Annual report 2020131
Parent Company Annual Report
ParFin โ Note 13 ParFin โ Note 14
Note 15 Share capital
Reference is made to note ๎๎ to the Consolidated Financial Statements.
Note 16 Deferred tax
mDKK 2020 2019
Deferred tax at 1 January 154 115
Change in deferred tax for the year 8 3
Addition by merger 37
Adjustment of previous year -3 -1
Deferred tax at 31 December 159 154
Due within 1 year -7 -9
Deferred tax relates to:
Intangible assets 36 38
Property, plant and equipment 105 102
Fixed asset investments 18 18
Current assets 11 10
Current liabilities -11 -14
Total 159 154
Note 17 Other current payables
mDKK 2020 2019
VAT, excise duties, etc 69 23
Other payables 253 212
Deposit, returnable packaging 29 38
Total other current payables 351 273
Deposit, returnable packaging is specified as follows:
Balance at 1 January 38 38
Adjustment for the year -9 0
Balance at 31 December 29 38
Comment
The change in the deposit on returnable packaging for the year reflects the net exchange with customers of
returnable packaging for the year less estimated wastage of returnable packaging in circulation.
Note 18 Cash Flow Statement
Adjustments for non-cash operating items:
mDKK 2020 2019
Dividens received from subsidiaries and associates -531 -559
Financial income -6 -6
Financial expenses 31 28
Amortisation and impairment of intangible assets 2 1
Depreciation of property, plant and equipment (see note 10 re leasing part) 141 134
Tax on the profit for the year 156 152
Profit and loss from sale of property, plant and equipment 1 4
Share-based payments and remuneration 7 6
Total -199 -240
ROYAL UNIBREW Annual report 2020132
Parent Company Annual Report
ParFin โ Note 15 ParFin โ Note 16 ParFin โ Note 17 ParFin โ Note 18
Note 19 Debts
Changes to interest-bearing debts
mDKK 31/12 2019 Cash flow Additions 31/12 2020
Interest-bearing long-term debts 1,272 -77 149 1,345
Interest-bearing short-term debts 1,449 -504 208 1,152
Total interest-bearing debt,
mortgage and credit institutions 2,721 -581 357 2,497
Interest-bearing long-term leasing debt 56 -3 -15 38
Interest-bearing short-term leasing debt 23 -23 25 25
Total interest-bearing leasing debt 79 -26 10 63
Total 2,800 -607 367 2,560
mDKK 31/12 2018 Cash flow Additions 31/12 2029
Interest-bearing long-term debts 1,676 -404 1,272
Interest-bearing short-term debts 805 144 500 1,449
Total interest-bearing debt,
mortgage and credit institutions 2,481 -260 500 2,721
Interest-bearing long-term leasing debt 54 -12 14 56
Interest-bearing short-term leasing debt 18 -18 23 23
Total interest-bearing leasing debt 72 -30 37 79
Total 2,553 -290 537 2,800
mDKK 2020 2019
Guarantees
Guarantees relating to subsidiaries 661 684
Total 661 684
Rental and lease commitments
Total future payments:
Within 1 year 7 8
Between 1 and 5 years 11 12
Beyond 5 years 0 0
Total 18 20
Rental and lease commitments relate to low value assets and
service not included under IFRS 16.
Third-party guarantees 11 11
Security
No security has been provided in respect of the Groupโs loan agreements with credit institutions other than
the Parent Companyโs liability for the amounts drawn by subsidiaries on group credit facilities.
As regards security for loan agreements with mortgage credit institutes, reference is made to note ๎๎.
Contingent liabilities
The outcome of pending legal actions is not expected to have any material impact on the financial position of
the Parent Company or the Group.
Note 20 Contingent liabilities, security and other liabilities
ROYAL UNIBREW Annual report 2020133
Parent Company Annual Report
ParFin โ Note 19 ParFin โ Note 20
Related parties comprise the Board of Directors and the Executive Management as well as subsidiaries and
associates, see the sections on Board of Directors and Executive Management on page ๎๎ and Group Structure
on page ๎๎๎. No shareholder exercises control.
The following transactions have been made with related parties:
mDKK 2020 2019
Revenue
Sales to subsidiaries 561 523
Sales to associates 18 18
Costs
Purchases from subsidiaries 70 52
Financial income and expenses
Dividends received from associates 21 25
Dividends received from subsidiaries 510 537
Interest received from subsidiaries 2 3
Interest paid to subsidiaries 0 0
Executive Management
Remuneration paid 29 17
Debt re cash-based bonus schemes 7 6
Debt re share-based bonus scheme 7 19
mDKK 2020 2019
Board of Directors
Remuneration 5 6
Intercompany balances at 31 December
Loans to subsidiaries 93 183
Receivables from subsidiaries 19 15
Loans from subsidiaries 1,076 868
Payables to subsidiaries 23 -37
Capital contributed to subsidiaries 7
Guarantees and security
Guarantee for subsidiaries 661 696
Note 21 Related parties
ROYAL UNIBREW Annual report 2020134
Parent Company Annual Report
ParFin โ Note 21
โ
Group Structure I Quarterly Financial Highlights and Ratios I
Definitions of Financial Highlights and Ratios I Disclaimer
Other
ROYAL UNIBREW Annual report 2020135
Other
Other - COVER
Group Structure
Segment Ownership Currency Capital
Parent Company
Royal Unibrew A/S, Denmark DKK 98,700,000
WESTERN EUROPE
Subsidiaries
Aktieselskabet Cerekem International Ltd., Denmark* 100% DKK 1,000,000
Albani Sverige AB, Sweden* 100% SEK 305,000
Ceres S.p.A., Italy 100% EUR 206,400
The Curious Company A/S, Denmark* 100% DKK 550,000
Etablissement Geyer-Frรฉres S.A., France 100% EUR 159,687
Nohrlund ApS, Denmark 51% DKK 103,030
Terme di Crodo S.r.l. 100% EUR 19,000,000
Associates
Grรธnlandskonsortiet I/S, Denmark 50% DKK
Hansa Borg Holding AS, Norway 25% NOK 55,510,000
Nuuk Imeq A/S, Nuuk, Greenland 32% DKK 38,000,000
BALTIC SEA
Subsidiaries
AB Kalnapilio-Tauro Grupe, Lithuania 100% EUR 1,153,337
Oy Hartwall Ab 100% EUR 13,240,140
Lapin Kulta Oy 100% EUR 16,819
Royal Unibrew Services UAB, Lithuania 100% EUR 43,500
SIA โCido Grupaโ, Latvia 100% EUR 1,117,060
SIA Lacplesa Alus, Latvia 100% EUR 68,945
SIA Bauskas Alus, Latvia 100% EUR 932,064
Oร Royal Unibrew Eesti, Estonia 100% EUR 200,000
Segment Ownership Currency Capital
INTERNATIONAL
Subsidiaries
Centre Nordique dโAlimentation EURL, France* 100% EUR 131,000
Ferell sp. z.o.o.* 100% PLN 120,200
Supermalt UK Ltd., UK 100% GBP 9,700,000
Vitamalt (West Africa) Ltd., UK 100% GBP 10,000
Royal Unibrew Nigeria Ltd. 100% NGN 10,000,000
The Danish Brewery Group Inc., USA* 100% USD 100,000
Bruce Ashley Group Inc. 100% CAD 133
Activity
Production, sales and distribution
Sales and distribution
Holding company
Other
* not audited as not mandatory audit
ROYAL UNIBREW Annual report 2020136
Other
Other - Group structure
Quarterly Financial Highlights and Ratios (Group)
mDKK (unaudited) Q1 Q2 Q3 Q4
2020 2019 2020 2019 2020 2019 2020 2019
Sales (million hectolitres) 2.2 2.2 3.1 3.3 3.2 3.0 2.6 2.5
Income Statement
Net revenue 1,524 1,521 2,042 2,270 2,258 2,114 1,733 1,787
EBITDA 287 296 546 584 699 573 329 361
EBITDA margin (%) 18.8 19.5 26.7 25.7 31.0 27.1 19.0 20.2
Earnings before interest and tax (EBIT) 200 211 463 499 600 492 252 267
EBIT margin (%) 13.1 13.9 22.7 22 26.6 23.3 14.5 14.9
Income from investments in associates -2 -2 6 11 14 7 15 9
Financial income and expenses -10 -9 -9 -10 -11 -8 -13 -9
Profit before tax 188 200 460 500 603 491 254 267
Net profit for the period 145 153 360 388 475 377 218 222
Balance Sheet
Non-current assets 7,070 7,125 6,974 7,099 6,940 7,089 7,015 7,163
Total assets 8,518 8,735 8,837 8,907 8,390 8,594 8,306 8,493
Equity 3,181 3,001 3,545 2,663 3,398 2,934 3,332 3,106
Net interest-bearing debt 2,832 3,047 2,113 3,000 1,837 2,681 2,193 2,705
Net working capital -465 -399 -650 -749 -957 -695 -875 -671
Invested capital 6,430 6,503 6,076 6,068 5,648 6,018 5,930 6,211
Cash Flows
From operating activities -5 -101 707 816 959 490 77 197
From investing activities* -67 -62 -55 -41 -60 -63 -142 -96
Free cash flow* -72 -163 652 775 899 427 -65 101
Financial Ratios (%)
Free cash flow as a percentage of net revenue -5 -11 32 34 40 20 -4 6
Cash conversion -50 -107 181 200 189 113 -30 45
Net interest-bearing debt/EBITDA** 1.6 1.8 1.2 1.7 1 1.5 1.2 1.5
Equity ratio 37 34 40 30 41 34 40 37
Ratios comprised by the โRecommendations and Financial Ratiosโ issued by the Chartered Financial Analyst Society Denmarkโs Committee for Accounting standards have been calculated according to the recommendations.
Definitions of financial highlights and ratios are provided on page ๎๎๎.
* Compared to the Annual Report 2019 the definition of free cash flow has been updated to reflect market practise of the IFRS 16 implementation. Comparables for 2019 have been adjusted.
** running 12 months
ROYAL UNIBREW Annual report 2020137
Other
Other - Quarterly financial highlights
Definitions of Financial Highlights and Ratios
EBITDA Earnings before interest, tax, depreciation, amortisation and im-
pairment losses as well as profit from sale of property, plant and
equipment and amortisation of intangible assets.
EBITDA margin EBITDA as a % of net revenue.
EBIT Earnings before interest and tax.
EBIT margin EBIT as a percentage of net revenue.
Net interest-bearing debt Mortgage debt and debt to credit institutions less cash at bank
and in hand, interest-bearing current investments and receivables.
Net working capital Inventories + receivables - current liabilities except for corporation
tax receivable/payable as well as mortage debt and debt to credit
institutions.
Invested capital Equity + minority interests + provisions + net interest-bearing
debt - financial assets.
Investing activities Dividend received from associates, purchase net of sale of property,
plant and equipment less net cash used in investing activities
excluding acquisitions and net proceed from intangible assets
and fixed assets investments, less repayment on lease facilities.
Free cash flow Cash flow from operating activities less investing activities.
Earnings per share Parent Company shareholders' share of profit for the year/average
number of shares in circulation.
Diluted earnings per share Parent Company shareholders' share of earnings from operating
activities/average number of shares in circulation including re-
stricted shares "in-the-money".
Free cash flow per share Free cash flow from operating activities/average number of shares
in circulation.
Dividend per share Proposed dividend per share.
Return on invested capital
including goodwill (ROIC)
EBIT net of tax as a percentage of average invested capital.
Return on invested capital
excluding goodwill (ROIC)
EBIT net of tax as a percentage of average invested capital, ex-
cluding goodwill.
Free cash flow as a percentage
of net revenue
Free cash flow as a percentage of net revenue.
Capex as a percentage of net revenue Purchase net of sale of property, plant and equipment plus repay-
ment on lease facilities as a percentage of net revenue.
Cash conversion Free cash flow as a percentage of net profit for the year.
Net interest-bearing debt/
EBITDA before special items
The ratio of net interest-bearing debt at year end to EBITDA.
Equity ratio Equity at year end as a percentage of total assets.
Return on equity (ROE) Consolidated profit after tax as a percentage of average equity.
Dividend payout ratio (DPR) Dividend calculated for the full share capital as a percentage of
the Parent Company shareholders' share of net profit for the year.
ROYAL UNIBREW Annual report 2020138
Other
Other - Definitions
Disclaimer
This Annual Report contains forward-looking statements, includ-
ing statements about the Groupโs sales, revenue, earnings, spend-
ing, margins, cash flows, inventories, products, actions, plans,
strategies, objectives and guidance with respect to the Groupโs
future operating results. Forward-looking statements include,
without limitation, any statement that may predict, forecast, indi
-
cate or imply future results, performance or achievements, and
may contain the following words or phrases โbelieve, anticipate,
expect, estimate, intend, plan, project, will be, will continue, likely
to result, could, may, mightโ, or any variations of such words or
other words with similar meanings. Any such statements involve
known and unknown risks, estimates, assumptions and uncer
-
tainties that could cause the Groupโs actual results, performance
or industry results to differ materially from the results expressed
or implied in such forward-looking statements. Royal Unibrew
assumes no obligation to update or adjust any such forward-look
-
ing statements (except for as required under the disclosure
requirements for listed companies) to reflect actual results,
changes in assumptions or changes in other factors affecting such
forward-looking statements.
Some important risk factors that may have direct bearing on the
Groupโs actual results include, but are not limited to: economic
and political uncertainty (including interest rates and exchange
rates), financial and regulatory developments, development in the
demand for the Groupโs products, intro- duction of and demand
for new products, changes in the competitive environment and
the industry in which the Group operates, changes in consumer
preferences, increasing industry consolidation, the availability and
pricing of raw materials and packaging materials, cost of energy,
production- and distribution-related issues, information
technology failures, breach or unexpected termination of
contracts, price reductions resulting from market-driven
price reductions, determination of fair value in the opening
balance sheet of acquired entities, litigation, pandemic,
environmental issues and other unforeseen factors.
New risk factors may emerge in the future, which the Group
cannot predict. Furthermore, the Group cannot assess
the impact of each factor on the Groupโs business or the
extent to which any individual risk factor, or combination of
factors, may cause results to differ materially from those
contained in any forward-looking statement. Accordingly,
forward-looking statements should not be relied on as a
prediction of actual results.
ROYAL UNIBREW Annual report 2020139
Other
Other - Disclaimer
Design and production: Noted
Royal Unibrew A/S
Royal Unibrew A/S
Faxe Alle ๎
DK-๎๎๎๎ Faxe
Tel +๎๎ ๎๎ ๎๎ ๎๎ ๎๎
CVR No.: ๎๎ ๎๎ ๎๎ ๎๎
Financial year: ๎ January โ ๎๎ December
Registered municipality: Faxe
Homepage: www.royalunibrew.com
E-mail: contact@royalunibrew.com
