Royal Unibrew conference takeaways: owned brands, international business, and price increases are the key levers to offset Pepsi license expiry

Overview

This report is Goldman Sachs’ post-conference takeaways note on Royal Unibrew following its European Consumer Staples and Retail Conference. CEO Lars Jensen and Investor Relations head Flemming Nielsen discussed the FY29 Pepsi license expiry, owned-brand strategy, growth in the International and Italy businesses, pricing plans amid cost inflation, and valuation and key risks.

Core views

The central view is that Royal Unibrew is offsetting the Pepsi license expiry and cost pressure by increasing the share of owned brands, expanding flavored carbonates and water in Denmark, preparing to launch its own cola in FY29, sustaining growth in the International and Italy businesses, and implementing price increases. Goldman Sachs believes these measures should help protect earnings, but because the target price still implies only a neutral return profile, the rating remains Neutral.

Analysis framework

The report analyzes management discussion, segment growth momentum, price/cost pass-through, license-brand expiry scenarios, earnings forecasts, and the valuation framework. Valuation uses a 50/50 blend of DCF and P/E multiples, supplemented by the GS Forecast, GS Factor Profile, and a risk list.

Methodology notes

• Valuation methodsDCF/valuation multiple hybrid

  The 12-month target price is derived with a 50/50 weight on DCF and P/E multiples

  DCF assumes an 8.9% WACC and a 2.0% perpetual growth rate, implying an intrinsic value of DKK 472 per share; the multiples method applies a 12.5x P/E to Q5-Q8 EPS estimates, implying DKK 477 per share, and the final target price is rounded to DKK 475.

• Stock profileGS Factor Profile

  Compares stock characteristics across growth, financial returns, valuation multiples, and composite metrics

  Growth is based on forward sales, EBITDA, and EPS growth; financial returns are based on ROE, ROCE, and CROCI; valuation multiples include P/E, P/B, P/D, EV/EBITDA, EV/FCF, and EV/DACF; and the composite percentile is the average of growth, financial return, and inverse valuation percentiles.

• M&A assessmentM&A Rank

  Goldman Sachs assigns a 1-to-3 score for the likelihood of a covered company being acquired

  M&A rank 1 indicates a high likelihood of acquisition, 2 indicates a medium likelihood, and 3 indicates a low likelihood. Royal Unibrew is shown with an M&A rank of 3 in the chart and is typically not included in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Royal Unibrew (RBREW.CO)

  Covered company in the report

  Strengths

  Owned brands have higher profitability; International and Italy growth momentum is strong; price increases should improve price/mix from the second half of 2026; forecasts show improving EPS, FCF yield, and CROCI, with leverage declining.

  Weaknesses

  The FY29 Pepsi license expiry creates pressure on volume and channel relationships; pricing windows are long in some markets, creating a lag in cost pass-through; the target price has been cut materially from the March 2026 peak.

  Comparison

  The rating is relative to the broader European consumer goods coverage universe, including companies such as Carlsberg, Heineken, Nestle, Danone, and Diageo.

  Risks

  Nordics consumer sentiment, core business and M&A margin development deviating from expectations, intensified price competition in key markets, changes to sugar taxes or excise taxes, wholesaler destocking, non-renewal of partner licenses, and FX volatility.

Key data

• RatingNeutralGoldman Sachs maintains a Neutral rating.
• 12-month target priceDKK 475The result of a 50/50 blended valuation using DCF and valuation multiples.
• Current priceDkr405.40The price shown in the chart and disclosures.
• Implied upside17.2%Total return potential based on the target price versus the current price.
• Transformation costDKK 300 millionThe incremental investment for the FY29 own-cola launch is included in this transformation cost.
• Planned price increaseabout 2.5%Used to offset average cost inflation, with price/mix expected to benefit from the second half of 2026.
• 2026E revenueDkr15,724.4mnGS Forecast chart data.
• 2026E EBITDkr2,355.5mnGS Forecast chart data.
• 2026E EPSDkr34.02GS Forecast chart data.
• 2028E EPSDkr40.86The forecast shows continued EPS growth.

Impact & implications

For investors, the FY29 Pepsi license expiry is the key medium-term uncertainty, but management emphasizes that owned brands are more profitable, meaning earnings may be protected without fully replacing Pepsi volume. If the International and Italy businesses continue to grow above the medium-term framework assumptions, that will strengthen resilience; price increases can ease cost inflation, but consumer sentiment, competition, and tax policy may still affect execution.

Risks

• Weaker-than-expected consumer sentiment in the Nordics.
• Core business and M&A margin trends weaker or stronger than expected.
• Intensifying price competition in key markets.
• Adoption or increases of sugar taxes in key markets.
• Changes in excise taxes in key markets.
• Potential wholesaler destocking.
• Non-renewal of partner licenses, especially risks related to Pepsi license expiry.
• FX volatility.

What to watch

• Progress in increasing the share of owned brands before the FY29 Pepsi license expiry.
• Growth in Denmark flavored carbonates and water.
• The FY29 own-cola launch plan and the effectiveness of the DKK 300 million transformation cost allocation.
• Whether the International and Italy businesses continue to grow above medium-term organic EBIT framework assumptions.
• The rollout pace of the roughly 2.5% price increase across markets and the magnitude of price/mix improvement in the second half of 2026.
• Management’s assessment near the end of FY29 on whether the business scale needs to be adjusted.