Guinness European Equity Income Fund on Royal Unibrew A/S
Thesis
Royal Unibrew's Q2 results were softer as higher input costs and increased sales and marketing investment pressured margins, while Northern European volumes were weak. The higher spending partly reflects deliberate investment behind the company's own brands ahead of the loss of its PepsiCo licensing agreement from 2029. Management is also exiting lower-margin categories and promotional activity, creating a near-term volume drag but potentially improving the quality of the portfolio over time.
“should improve the quality of its portfolio over time.”
Key risks
- Higher input costs and increased sales and marketing expenditure
- Weak sales volumes in Northern Europe
- Loss of the PepsiCo licensing agreement from 2029