Royal Unibrew (Buy, TP: DKK720.00) - Strong top-line but margin pressure
We expect robust top-line growth in Q1 (report due in the afternoon of 27 April), but margins likely under continued pressure from cost inflation as price rises are still catching up (we are c6% above consensus EBIT). We still believe the 2023 guidance could be conservative, but it is likely too early for the company to adjust it. We reiterate our BUY and have increased our target price to DKK720 (575) on estimate changes and a sector re-rating.Royal Unibrew is a holding company based in Denmark. Co. is engaged in the production, marketing, sale and distribution of beverages. Co.'s main focus is on branded products, such as beer, malt, and soft drinks, including carbonated soft drinks, mineral water and fruit juices. Co.'s portfolio comprises both its own international brands, such as Royal, Ceres, Faxe, and national brands, such as Lomza in Poland, Lacplesa Alus in Latvia. Co. also offers license-based brands, such Heineken and the Pepsi Group's products, which are distributed in Denmark on the basis of license agreements. Co. is primarily active in Western and Eastern Europe and in the international malt drinks markets. .
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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