Q1 Report 2009
Q1 Report 2009
April 29, 2009 at 12:00 AM EDT
Q1 Result 2009 571.3 KB
Company Announcement No 16/2009 29 April 2009 In Q1, Royal Unibrew focused on implementing a number of activities to strengthen the Group's earnings and improve cash flows from operating activities. In spite of difficult market conditions in Q1 and decreas-ing revenue, operating results improved showing a loss of DKK 28 million in Q1 compared to a loss of DKK 35 million last year. The improvement is primarily attributable to increasing net selling prices, a changed sales mix and enhanced efficiency. At the same time, cash flows from operating activities im-proved significantly. "In connection with the announcement of our annual results, we established four main priorities for 2009 - adjustment of the activities in Poland, completion of the changes to the Danish production and distribution system as well as implementation of s major structural and organisational adjustments, establishment of joint operating management in the Baltic countries and, finally, improvement of the Group's cash flow. We are proceeding well with these activities and are directing targeted efforts at creating further improvements” says Henrik Brandt, CEO. HIGHLIGHTS • In Q1 2009, Royal Unibrew achieved improved operating results: ? Operating results above expectations showing a loss of DKK 28 million (2008: a loss of DKK 35 million) ? The planned selling price increases were implemented as targeted ? Sales and revenue declined due to the global recession, but in most main markets, market shares were won or maintained ? Net selling price increases, a changed sales mix as well as cost adjustments and enhanced efficiency led to results above expectations in spite of declining revenue • Cash flow development above expectations: ? Free cash flow above expectations ? Cash flows from operating activities DKK 63 million above the Q1 2008 figure ? Net working capital - excluding investment creditors - was reduced by some DKK 55 million. As ex-pected due to projects initiated in 2008, investments in Q1 were some DKK 40 million higher than in 2008 ? As expected, net interest-bearing debt increased by DKK 134 million in Q1, which is the off-season for the Group's products • Realisation of the main priorities as presented in the Announcement of Annual Results for 2008 is pro-gressing as planned: ? Poland: Instead of the planned closure of the Koszalin brewery, a conditional agree-ment has been made to sell it. The new owner has offered to take on the em-ployees, which reduces the expected redundancy payments. The sale of the Koszalin brewery as well as other adjustments will reduce the number of em-ployees by some 100 full-time employees. ? Denmark: The change of the production and distribution structure in Denmark is pro-gressing as planned. A structural and organisational adjustment has been implemented resulting in a reduction of the number of employees by the expected some 100 full-time employees. ? Baltic countries: Joint operating management has been established for Lithuania and Latvia. ? Cash flow and capital structure: Trade receivables and inventories have together been reduced by some DKK 30 million compared to 31 December 2008. Minor divestments have been made with a total positive cash flow effect of some DKK 30 million in 2009. Targeted efforts continue to be directed at reducing working capital and ensuring a more appropriate capital structure. For further information on this Announcement: Henrik Brandt, CEO, tel + 45 56 77 15 13 The Announcement has been prepared in Danish and English. In case of discrepancy, the Danish version shall prevail. This Company Announcement consists of 31 pages The primary activities of Royal Unibrew are to market, sell, distribute and produce quality beverages focusing on bran-ded products primarily within beer, malt and soft drinks. The Group's products are sold in approx. 65 markets in Western Europe, Eastern Europe, the Caribbean, North America and Africa. Royal Unibrew comprises the Albani and Faxe brew-eries in Denmark, Kalnapilis in Lithuania, Livu Alus and the soft drinks bottlery Cido in Latvia, Browar Lomza and Strzelec in Poland as well as Antigua Brewery, Dominica Brewery and St. Vincent in the Caribbean. It is the vision of Royal Unibrew to develop the Group's position as a leading provider of beverages in Western and East-ern Europe and in our malt drinks markets with increasing profitability. Outside these areas, we will develop selected profitable export markets. To read more, visit www.royalunibrew.com. CONTENTS Side Highlights 1 Financial Highlights and Key Ratios 4 Management's Review 5 Financial Calendar 15 Company Announcements 15 Management's Statement 16 Financial Statements Income Statement 17 Assets 18 Liabilities and Equity 19 Statement of Changes in Equity 20 Cash Flow Statement 22 Notes Descriptive Notes 1 Significant Accounting Policies 23 2 Accounting Estimates and Judgements 23 3 Segment Reporting 24 4 Share-based Payment 25 Notes Relating to Income Statement, Balance Sheet and Cash Flow Statement 5 Tax on the Loss for the Period 26 6 Basis of Calculation of Earnings and Cash Flow per Share 26 7 Treasury Shares 27 8 Cash Flow Statement 28 Other Notes 9 Acquisitions 29 1 Definitions of Key Figures and Ratios 30 28 FINANCIAL HIGHLIGHTS AND KEY RATIOS 1/1 - 31/3 2009 2008 2007 2006 2005 SALES (thousand hectolitres) 1,310.0 1,544.0 1,298.0 1,236.0 1,087.0 FINANCIAL HIGHLIGHTS (mDKK) Income Statement Net revenue 767.6 838.3 704.6 648.0 626.4 Operating loss before special items (27.9) (35.1) (43.1) (35.5) (5.9) Special items, net (16.5) (32.6) 0.0 5.0 0.0 Loss before financial income and expenses (44.4) (67.7) (43.1) (35.5) (5.9) Net financials 0.3 (28.1) (16.0) (15.6) (10.9) Loss before tax (44.1) (95.8) (59.1) (51.1) (16.8) Consolidated loss (34.6) (68.3) (42.6) (37.7) (12.3) Royal Unibrew A/S' share of loss (34.5) (68.3) (42.9) (37.7) (12.3) Balance Sheet Total assets 4,016.5 3,866.3 3,230.2 3,087.2 2,644.1 Equity 522.2 990.4 1,067.5 1,100.8 1,063.3 Net interest-bearing debt 2,325.7 1,906.1 1,124.6 1,091.7 807.6 Free cash flow (129.9) (142.7) (50.4) (76.9) (75.9) Per share Royal Unibrew A/S' share of earnings per share (DKK) (6.3) (12.4) (7.4) (6.0) (1.9) Royal Unibrew A/S' diluted share of earnings per share (DKK) (6.3) (12.4) (7.5) (6.0) (1.9) Cash flow per share (DKK) (5.3) (25.8) (8.7) (6.6) (8.5) Diluted cash flow per share (DKK) (5.3) (25.9) (8.8) (6.6) (8.5) Key figures (mDKK) EBITDA 2.0 (26.1) (5.6) 13.4 39.1 EBIT (44.4) (67.7) (43.1) (35.5) (5.9) Key ratios (%) Profit margin (3.6) (4.2) (6.1) (5.5) (0.9) EBIT margin (5.8) (8.1) (6.1) (5.5) (0.9) Free cash flow as a percentage of net revenue (16.9) (17.0) (7.2) (11.9) (12.1) Equity ratio 13.0 25.6 33.0 35.7 40.2 Debt ratio 445.3 192.5 105.3 99.2 76.0 The key ratios have been calculated in accordance with the “Recommendations and Financial Ratios 2005” of the Danish Society of Financial Analysts. MANAGEMENT'S REVIEW STRATEGIC MAIN PRIORITIES In 2009, Royal Unibrew will have special focus on the Group's earnings, cash flows from operating activities, reduction of the investment volume considering the projects in progress as well as capital structure. Due to this focus as well as the general uncertainty of the economic development and consumer behaviour, Royal Unibrew is prepared and ready to implement all the necessary efficiency enhancing measures and cost reductions war-ranted by developments. As mentioned in the Announcement of Annual Results for 2008 (see Company Announcement No 2/2009), the changed strategy for Royal Unibrew is based on the following main areas: • Structural and operational adjustment in Poland The adjustment of the Polish activities is progressing as planned. As announced, Royal Unibrew is prepar-ing discontinuation of operations at the Koszalin brewery and has entered into a conditional agreement to sell all activities related to the brewery. At the same time, the employees will be offered employment by the new owner. The sale and other adjustments in Poland are expected to result in a total reduction of the number of employees by some 100. The activities implemented will have financial impact in the coming months. Efficiency enhancing measures will still be required in Poland from 2010 and ahead. All necessary initiatives are being considered. • Structural and organisational adjustment in Denmark These major projects are expected to be realised in all material respects by the end of 2009. The projects are progressing as planned. Moreover, the planned structural and organisational adjustment was initiated in March 2009 resulting in a reduction of the number of salaried employees by some 100 full-time employees. The impact of this adjustment will be felt in future months. • Joint operating management in the Baltic countries The overall organisational framework has been determined and the executives to be in charge have been appointed. The new operating management will focus on improved joint resource utilisation and compe-tencies both in the short and long term. This will strengthen the local market organisations and further en-hance efficiency in other areas. • Cash flow and reduction of debt The Group's existing financial structure is considered inappropriate, and the process to ensure a more ap-propriate financial structure therefore continues. In that connection, consideration of relevant possibilities will continue. A sale of the brewery site in Aarhus continues to have high priority. Royal Unibrew does not intend to par-ticipate in development of the area, but will seek to sell the site. A project appraisal and a proposal for a development plan for the area have just been submitted to the local authorities as a basis for the prepara-tion of a changed local plan. Multi-purpose use of the site is expected, primarily for offices and housing. A changed local plan is expected to be finally approved in mid 2010. In Q1, a conditional agreement was made to sell the Group's brewery in Koszalin in Poland, which will have a positive cash flow effect of some DKK 30 million in 2009. Continued efforts are made to optimise working capital, and in Q1 2009, inventories and trade receivables were reduced by some DKK 30 million. The Group's investments will be kept at a low level possible in 2009 and 2010, see Prospects section on page 13. As previously announced, the Group has entered into an agreement with its primary bankers that they will make available until 31 March 2011 the credit facilities considered necessary by the Group (see also page 12). RESULTS 1 JANUARY - 31 MARCH 2009 In Q1 2009, the Royal Unibrew Group realised a loss before tax of DKK 44 million, which is above expectations and a DKK 52 million improvement on 2008. A loss is usual for brewery businesses in the winter season, which is used to carry out major maintenance work on production facilities while demand for beer and soft drinks, and thus sales and production volumes, is lim-ited. Therefore, the results for the period do not reflect a proportionate share of the full-year results. In Q1 2009, Royal Unibrew improved its earnings and market position as compared to the same period of last year in spite of the global crisis and the resulting changed customer and consumer behaviours causing lower sales and revenue. In the period, the Group extended or maintained its market shares in all key markets. In certain markets - in particular Latvia - significant efficiency enhancing measures and a dynamic cost adjustment have been implemented in the light of reduced sales, which has contributed towards protecting earnings in the areas in question. Developments in sales and revenue in the period 1 January - 31 March from 2008 to 2009 were as follows: Developments 2008-2009 Western Europe Eastern Europe Malt and Over-seas Markets Royal Unibrew total Growth Total Growth Total Growth Total Growth Total Sales (thousand hectolitres) (12.2%) 672 (19.1%) 533 (12.3%) 105 (15.2%) 1,310 Share of sales 51% 41% 8% 100% Net revenue (mDKK) (3.4%) 491 (21.0%) 181 (5.5%) 96 (8.4%) 768 Share of net revenue 64% 24% 12% 100% Total group sales in Q1 aggregated 1.3 million hectolitres of beer, malt and soft drinks, which is a 15.2% decrease from 2008. The net revenue of the Group was, however, only reduced by some 8% from 2008 amounting to DKK 768 million. Of the 8% reduction, a negative 2 percentage points are attributable to the declining PLN rate. The termination of an unprofitable supply agreement concerning private label as well as the closure of Maribo Bryghus reduced revenue by an additional 2 percentage points. Selling price increases were introduced in almost all markets, and partly sales shifted, measured proportionally, from Eastern Europe towards Western Europe, where the realisable value per unit is considerably higher. Unlike last year when Easter was in Q1, the extra sales usually seen at Easter will not be realised until in Q2 in 2009. Gross profit amounted to DKK 304 million, which is 8% below the 2008 figure. The gross margin for Q1 was 39.6% compared to 39.5% in the same period of last year. From an overall perspective, the higher realisable values per unit have thus compensated for the increase in production costs, primarily relating to raw materials the purchase prices of which are covered by forward contracts to a considerable extent. The focus on sales and marketing efforts in the first three months of the year resulted in a 10% reduction of the Group's sales and distribution expenses in 2009 compared to 2008. Administrative expenses were reduced by some 11%, and the impact of the adjustments implemented primarily in Denmark and Poland will be felt in future months. Operating loss before special items amounted to DKK 28 million for Q1 2009, which is a DKK 7 million improvement on 2008 and above expectations. It has thus been possible to reduce the cost level to a higher extent than the reduction in gross profit which is primarily a result of the economic decline. In the Announcement of Annual Results for 2008 (see Company Announcement No 2/2009 of 26 February 2009) ”special items” were estimated at an expense of DKK 35 million in Q1 2009, whereas they actually amounted to DKK 17 million. For the full year, a total expense of an unchanged amount (DKK 35 million) is expected. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by DKK 28 million amounting to DKK 2 million compared to a negative DKK 26 million in 2008. Earnings before interest and tax (EBIT) amounted to a negative DKK 44 million compared to a negative DKK 68 million in 2008. Income from investments in associates increased by DKK 4 million, primarily because the Polish brewery, Perla Browary Lubelskie, has not been recognised as an associate in 2009. The Group's net financial expenses decreased by some DKK 24 million from 2008. The decrease was primarily due to exchange gains. Moreover, as required by IAS 23R, interest expenses of some DKK 4 million have been capitalised in respect of investments made. The loss before tax for the period 1 January - 31 March 2009 amounted to DKK 44 million compared to a loss of DKK 96 million in 2008. Consolidated loss (after tax) amounted to DKK 35 million, a DKK 23 million improvement on the loss of DKK 68 million realised in 2008. DEVELOPMENTS IN INDIVIDUAL MARKET SEGMENTS The developments in the Group's activities for the period 1 January - 31 March 2009 break down as follows on market segments: Western Europe Eastern Europe Malt and Overseas Markets Unallocated Group Sales (thousand hectolitres) 672 533 105 - 1,310 Share of sales (%) 51 41 8 - 100 Net revenue (mDKK) 491 181 96 - 768 Share of net revenue (%) 64 24 12 - 100 Operating profit/loss (before special items) (mDKK) 0.1 (18.2) 2.1 (12.0) (28.0) Profit margin (%) 0.0 (10.1) 2.2 (3.6) Earnings before interest and tax EBIT (mDKK) (8.3) (22.9) (1.3) (12.0) (44.5) EBIT margin (%) (1.7) (12.7) (1.4) (5.8) Western Europe Western Europe 2009 2008 % change Sales (thousand hectolitres) 672 765 (12) Net revenue (mDKK) 491 508 (3) Operating loss (before special items) (mDKK) 0.1 (3.0) 97 Profit margin (%) 0.0 (0.6) EBIT (mDKK) (8.3) (35.6) 77 EBIT margin (%) (1.7) (7.0) The Western Europe segment comprises the markets for beer and soft drinks in Denmark and the Nordic countries as well as in Germany and Italy. In Q1 2009, Western Europe accounted for 51% of total sales and 64% of net revenue. The Group continued to win market shares in Denmark and Germany and maintained its market share in Italy in Q1 2009. However, these key markets in Western Europe were affected by the economic decline and declining consumption, and sales and revenue were 12% and 3%, respectively, below the 2008 figures. The operating result improved by DKK 3 million to DKK 0 million. EBIT in Q1 was negatively effected by ”special items” of DKK 8 million net, primarily due to provision for redundancy payments related to the business reorganisation as well as change of the distribution structure in Denmark. The impact of these measures will be felt gradually in future months. Western Europe Actual Q1 2009 Growth over 2008 Net revenue (mDKK) Sales (thousand hectolitres) Net revenue (%) Sales (%) Denmark 253 320 (6) (16) Italy 130 90 (1) (4) Germany 102 246 5 (5) Nordic countries 6 16 (50) (48) Other markets *) 0 0 0 0 Total Western Europe 491 672 (3) (12) *) The beer sales operations in France have as of 2009 been combined with the malt drinks sales operations in France. Therefore, segment reporting has been changed in accordance with IFRS 8 to the effect that as of 2009 beer sales in France are reported under the segment Malt and Overseas Markets. Comparative figures for 2008 have been restated accordingly. It is estimated that total branded beer sales in Denmark decreased by some 10% in Q1 2009, whereas soft drinks sales were reduced by some 12%. The development in Royal Unibrew's total sales in Q1 2009 was affected by the closure of the Maribo brewery in Q1 2008 and the termination of a major, unprofitable supply agreement concerning Private Labels in Q1 2009. Adjusting for these reductions in the Company's sales of low-price products, net revenue in Q1 2009 was at the level of the corresponding period last year, while sales increased by almost 2%. In Q1, sales shifted partly from beer towards soft drinks and partly towards sales units with higher volumes. Both Royal Unibrew's market shares for branded beer and soft drinks increased in Q1. Price increases were introduced in Denmark in Q1 2009. The Egekilde brand range was extended in Q1 with the introduction of a new taste variety. It is estimated that the total beer market in Italy declined by 8-10% in Q1 with a greater decline in the HoReCa segment than in the retail segment. Royal Unibrew realised the planned price increases, which, combined with an improved product mix and increasing sales, measured proportionally, to the HoReCa segment, results in increased value per unit sold. Royal Unibrew's sales in Italy in Q1 2009 are considered to have been affected by the rebuilding of inventories, and the Company's market share is estimated to be unchanged. In the German market (including cross-border trade), total sales declined primarily due to competition in the Fehmarn area from Swedish brands which are favoured by the low SEK rate. Royal Unibrew's branded product sales increased, which, combined with price increases introduced, resulted in total revenue in Q1 2009 being 5% higher than in 2008. Eastern Europe Eastern Europe 2009 2008 % change Sales (thousand hectolitres) 533 659 (19) Net revenue (mDKK) 181 229 (21) Operating loss (before special items) (mDKK) (18.2) (22.3) 18 Profit margin (%) (10.1) (9.7) EBIT (mDKK) (22.9) (22.3) (3) EBIT margin (%) (12.7) (9.7) The Eastern Europe segment comprises the markets for beer, fruit juices and soft drinks in Latvia, Lithuania and Poland. In Q1 2009, Eastern Europe accounted for 41% of group sales and 24% of net revenue. The markets in the segment were in 2009 affected by the reduction in beverages consumption which in the case of Latvia and Poland occurred in 2008 and which was seen in Lithuania too in Q1 2009. Net revenue in the segment was reduced by 21% of which 6 percentage points were due to the negative exchange rate develop-ment of PLN. EBIT was negatively affected by ”special items” of DKK 4.7 million in Q1 relating to reorganisation in Poland and the Baltic countries. Eastern Europe Actual Q1 2009 Growth over 2008 Net revenue (mDKK) Sales (thousand hectolitres) Net revenue (%) Sales (%) Lithuania 70 163 (9) (10) Latvia 60 185 (25) (30) Poland 51 184 (26) (11) Other markets 0 1 (85) (87) Total Eastern Europe 181 533 (21) (19) In Lithuania the total beer market decline is estimated at some 10-15% in Q1 2009, whereas the total fruit juice market declined by some 20%. In Q1, Kalnapilio-Tauro Grupe continued to increase its market shares on both beer and fruit juices and measured by both value and volumes. In Q1 2009, price increases were introduced in Lithuania, and the Tauras brand was strengthened by launching the products in profile bottles. The total product portfolio was strengthened through the introduction of a cider product range. The results achieved in Lithuania in Q1 2009 were as expected. In Latvia the market for fruit juices, nectar and still drinks showed a more distinct sensitivity to the economic trends than the beer segment. It is estimated that the fruit juice, nectar and still drinks segment declined by more than 30% in Q1 2009, whereas total beer consumption is estimated at an approximate 14% decline. In 2009, Royal Unibrew has been able to increase its market shares on fruit juices and mineral water as well as branded beer. In Q1, price increases were introduced for most product categories. Furthermore, a cider product range was launched. As compared to Q1 2008, significant reductions of the cost base were realised in Latvia, and results for Q1 were as expected. National beer consumption in Poland is estimated at a 5-10% decline in Q1 2009 from the same period of last year due to, among other things, increasing duties on beer. Royal Unibrew's sales and revenue declined by 11% and 26%, respectively. Adjusted for the negative PLN rate development, the revenue decline represents only 7%. Results for Q1 (excluding ”special items”) were as expected but continue to be unsatisfactory. As announced in Company Announcement No 9/2009 of 27 March 2009, Royal Unibrew Polska has entered into an agreement to sell the brewery in Koszalin. The agreement also provides for the brewery employees be-ing offered employment by the new owner, which reduces the previously estimated expenses (provisions) for redundancy payments etc (”special items”) by some DKK 4 million. Malt and Overseas Markets Malt and Overseas Markets 2009 2008 % change Sales (thousand hectolitres) 105 120 (12) Net revenue (mDKK) 96 101 (6) Operating profit (before special items) (mDKK) 2.1 1.9 11 Profit margin (%) 2.2 1.9 EBIT (mDKK) (1.3) 1.9 (168) EBIT margin (%) (1.4) 1.9 The Malt and Overseas Markets segment comprises the Group's breweries and distribution company in the Caribbean, the export and licence business for malt drinks as well as beer and soft drinks exports to other mar-kets. In Q1, Malt and Overseas Markets accounted for 8% of total sales and 10% of net revenue. Malt and Overseas Markets Actual Q1 2009 Growth over 2008 Net revenue (mDKK) Sales (thousand hectolitres) Net revenue (%) Sales (%) The Caribbean 62 56 (7) (17) The UK 4 6 (20) 5 Africa 14 19 7 (8) Other markets 16 24 (6) (8) Total Malt and Overseas Markets 96 105 (6) (12) Developments in the Caribbean continued to be affected by the general economic crisis. Increasing unemployment rates, declining tourism and fewer money transfers from relatives residing in the USA resulted in declining sales in the local markets. At the same time, sales in Guadeloupe and Martinique were heavily impacted by a general strike, which has now been concluded, in long periods of Q1. While Vitamalt product sales therefore did not live up to expectations in Q1 2009, the earnings of the three brewery subsidiaries in the region were as expected - also as a result of efficiency enhancing measures implemented. In the UK activity was low in the first part of the year. Moreover, sales were affected by inventory reductions with a major customer. Malt drinks revenue continued to be affected by the low GBP rate. The other markets in the segment realised lower sales than expected primarily due to the global economy and the reduction of inventories in the supply chain. On a total basis, earnings in the segment were at last year's level, but lower than expected. EBIT was negatively affected by ”special items” of DKK 3.4 million relating to reorganisation in Q1. SHARE OPTIONS As announced in Company Announcement No 12/2009 of 31 March 2009, the Company's Supervisory Board decided to cancel the share option programme entered into for the period 2008-2010 applying to the Executive Board and some 20 executives as from 2008 to the effect that the grants for the 2008 financial year and grants for the 2009 and 2010 financial years lapse. In Q1, a provision of DKK 2.5 million was made in remuneration of the change to the total compensation agreement of the employees affected. Moreover, a provision of DKK 0.9 million was reversed in Q1 in respect of the share of the market value of the cancelled programmes expensed in 2008. After this, the following share options remain unexercised from previous share option programmes: Granted Total number unexercised Number held by Executive Board Exercise price Exercise period Re 2004 8,080 2,092 478 4/2008 - 4/2010 Re 2005 15,832 2,462 648 4/2009 - 4/2011 Re 2006 16,172 2,756 695 4/2010 - 4/2012 Re 2007 12,362 2,231 510 4/2011 - 4/2013 Granted 2008 re Strategic Plan 20,460 2,231 510 4/2011 - 4/2013 Total 72,906 11,772 The market value of the unexercised options is estimated at DKK 0.1 million under the Black-Scholes formula. The Company's obligations under the option programmes are covered by the Company's portfolio of treasury shares (106,674 shares). BALANCE SHEET AND CASH FLOW STATEMENT Royal Unibrew's balance sheet total amounted to DKK 4,016 million at 31 March 2009, which matches the level at the end of 2008. Group equity amounted to DKK 522 million at the end of March and was in all material respects affected only by the negative comprehensive income of DKK 54 million - comprising the loss of DKK 35 million for the pe-riod, positive exchange adjustments of the Group's foreign group enterprises of DKK 4 million as well as a negative development in the value of currency and interest rate hedging instruments of DKK 23 million. The equity ratio represented 13% compared to 14.2% at the end of 2008. Free cash flow for the first three months of the year amounted to a negative DKK 130 million compared to a negative DKK 143 million in Q1 2008. Cash flows from operating activities (before financial income and expenses and tax) improved by DKK 17 mil-lion on Q1 2008, whereas net interest and corporation tax paid in Q1 together affect cash flows positively by DKK 46 million as compared to 2008. Overall, cash flows from operating activities totalling a negative DKK 29 million showed a DKK 63 million improvement on 2008. Investments amounted to DKK 101 million, which is some DKK 40 million above the 2008 figure. This is pri-marily due to the completion of the investments initiated in 2008. Investments in receivables and inventories were reduced by DKK 42 million in the period, whereas trade pay-ables and other debt resulted in cash outflows of DKK 65 million primarily caused by payment of investment creditors. Adjusted for investment creditors, net working capital decreased by some DKK 55 million in Q1. FUNDING AND CAPITAL STRUCTURE As announced in the Announcement of Annual Results for 2008, Royal Unibrew has entered into an agreement with its primary bankers that for the next two years (until 31 March 2011) they will make available to the Group the credit facilities considered necessary by the Company based on plans and budgets. Due to, among other things, the completion of the investments initiated in 2008, the Group's free cash flow in 2009 is not expected to result in any material change of net interest-bearing debt compared to ultimo 2008. The credit lines provided by the agreement with the banks will in 2009 be adjusted to the seasonal fluctuations in the Group's capital requirements, and the budget for 2009 shows satisfactory cash resources throughout the year. The agreement is based on the condition that in 2010 the credit lines will be reduced to an extent which, in addition to requiring cash inflows from operating activities, will also require cash inflows from the sale of assets. The funding agreement is based on the requirement that the credit lines be reduced during H2 2010 from DKK 2.5 billion to DKK 2.0 billion. Net interest-bearing debt amounted to DKK 2.2 billion at the end off 2008. The funding agreement includes a number of covenants which are measured quarterly: EBITDA, the ratio of net interest bearing debt to EBITDA, solvency ratio, investments and cash flow targets. Based on the Group's plans and budgets, it is estimated that the Group will be able to comply with the agreed covenants. In Q1 2009, developments in these areas were in accordance with plans. Moreover, the credit undertaking by the banks is based on the condition that the Company will not distribute any dividend or buy back shares for treasury. The Group will continue its focus on freeing as much cash as possible through reduction of investments in working capital and investment restraint. At the same time, as previously mentioned, all relevant opportunities of ensuring a more appropriate financial structure will be considered. PROSPECTS On an overall basis, the Group's results for Q1 2009 showed improvement on the results for the corresponding period of last year and were also above expectations. For all segments, earnings increases were achieved (operating profit/loss before special items) compared to Q1 2008, and only malt and overseas markets as well as the Danish supply function achieved results that were not quite up to expectations. The considerable projects in progress in Denmark relating to the reorganisation of the production structure and change of the distribution system are progressing as planned and will be completed by the end of April. Furthermore, the initiatives relating to adjustments in Poland and Denmark as well as establishment of joint operating management in the Baltic counties mentioned in the Announcement of Annual Results for 2008 have been or are being completed in accordance with plans. In Q1 2009, Royal Unibrew extended or maintained its market shares in most key markets, and these positions are expected to be maintained or strengthened in the coming quarters of 2009. The moderate net selling price increases planned for 2009 were realised in Q1. Raw materials costs on a full-year basis are still expected to increase by some 6% over 2008, and pay increases in the remaining part of the year are still expected to be moderate. The reorganisation of the Danish production structure and distribution system will have a positive effect on profitability. Moreover, the initiatives implemented in Poland and Denmark and the resulting staff reductions will continue to contribute towards reducing the Group's expenses. Total gross investments in 2009 are expected to amount to some DKK 250 million of which some DKK 160 million relates to the completion of the major investment projects initiated in 2008. Based on this, the Group's gross depreciation in 2009 is expected to increase by some DKK 20 million over 2008. With a view to strengthening cash flow, the investment level in 2010 will also be kept at a low level. ”Special items” are still expected to represent an expense of DKK 35 million in 2009, and these are substantially attributable to the reorganisation in Denmark and Eastern Europe, primarily Poland. Net financial expenses, which were previously estimated at a level of DKK 160-180 million in 2009, are now es-timated at DKK 145-165 million. The reduction is primarily attributable to the exchange gain realised in Q1 in respect of the completion of a forward exchange contract. The effective tax rate for EBIT and ”special items” is expected to be 38% and the rate for financials is expected to be 12%. On this basis, it is expected that Royal Unibrew's total sales and revenue in 2009 will decrease from 2008, and that EBIT (before ”special items” and impairment) will show an increase over 2008 (EBIT in 2008: DKK 135 million). In spite of Q1 results now having been realised above expectations, the continued general uncertainty of the economic development, possibly changed consumption habits and difficult financial conditions imply that predictions of the future are still significantly more difficult to make than previously, and that expectations of future developments, even in the short term, are subject to considerable uncertainty. At the end of Q2 and in connection with the interim reporting at the end of August, considerable parts of the summer sales will be known; it is therefore expected to be possible, at that time, to present more precise expectations of the results for the full year 2009. The said expected development in 2009 is - in addition to the above-mentioned issues - subject primarily to the general economic situation not deteriorating further and to no significant shifts occurring in consumer behaviour during the year. Increased duties on beer and soft drinks and potentially increasing VAT rates may have a negative effect on any affected markets. Intensified competition may eliminate the net price increases assumed by Royal Unibrew. In terms of foreign exchange, it has been assumed that DKK will remain stable to EUR. Material changes as compared to the exchange rates at the end of 2008, primarily LAT, LTL and GBP, may affect the above expectations. STATEMENTS ABOUT THE FUTURE The statements about the future made in the Q1 Report 2009 reflect Management's expectations in respect of future events and financial results, as well as of economic trends in key markets and developments in interna-tional money, foreign exchange and interest rate markets. Statements about the future will inherently involve uncertainty and may be affected by - in addition to global economic conditions - market-driven price reduc-tions, market acceptance of new products, packaging and container types, unforeseen termination of working relationships and changes to regulatory aspects (taxes, environment, packaging), etc. The actual results may therefore deviate from the expectations stated. Royal Unibrew is a party to a limited number of legal actions. These legal actions are not expected to have any material impact on the financial position of Royal Unibrew. FINANCIAL CALENDAR 2009 General meeting: 29 April 2009 Annual General Meeting in Odense It has been decided that as of 2009, Royal Unibrew A/S will no longer hold shareholders' meetings. Announcements of financial results: 26 August 2009 H1 Report 2009 19 November 2009 Q3 Report 2009 2010 General meeting: 27 April 2010 Annual General Meeting in Odense Announcements of financial results: 25 February 2010 Announcement of Annual Results 2009 27 April 2010 Q1 Report 2010 26 August 2010 H1 Report 2010 25 November 2010 Q3 Report 2010 ANNOUNCEMENTS TO NASDAQ OMX COPENHAGEN IN 2009 23 February 2009 01/2009 Major shareholder information pursuant to section 29 of the Danish Securities Trading Act 26 February 2009 02/2009 Announcement of Annual Results for 2008 11 March 2009 03/2009 Reporting according to the Danish Securities Trading Act section 28a 12 March 2009 04/2009 Reporting according to the Danish Securities Trading Act section 28a 19 March 2009 05/2009 Major shareholder information pursuant to section 29 of the Danish Securities Trading Act 23 March 2009 06/2009 Reporting according to the Danish Securities Trading Act section 28a 25 March 2009 07/2009 Reporting according to the Danish Securities Trading Act section 28a 26 March 2009 08/2009 Reporting according to the Danish Securities Trading Act section 28a 27 March 2009 09/2009 Royal Unibrew Polska Sp. z o.o. accelerates the divesture of the brewery in Koszalin 30 March 2009 10/2009 Reporting according to the Danish Securities Act section 28a 31 March 2009 11/2009 Major shareholder information pursuant to section 29 of the Danish Securities Trading Act 31 March 2009 12/2009 Cancellation of the Share Option Programme 01 April 2009 13/2009 Major shareholder information pursuant to section 29 of the Danish securities Trading Act 08 April 2009 14/2009 Major shareholder information pursuant to section 29 of the Danish securities Trading Act 15 April 2009 15/2009 Notice of the Annual General meeting MANAGEMENT'S STATEMENT ON THE REPORT The Executive and Supervisory Boards have presented the Q1 Report of Royal Unibrew A/S. The Q1 Report has today been considered and adopted. The Q1 Report, which has not been audited or reviewed by the Company's auditors, was prepared in accor-dance with IAS 34 “Interim Financial Reporting” as adopted by the EU and additional Danish disclosure re-quirements for listed companies. We consider the accounting policies applied appropriate and the accounting estimates made reasonable, and, in our opinion, the Q1 Report provides the information relevant to assess the financial circumstances of the Group and the Parent Company. Accordingly, in our opinion, the Q1 Report gives a true and fair view of the financial position of the Group as well as of the results of the Group operations and cash flows for the period 1 January - 31 March 2009. In our Opinion, Management's Review gives a true and fair view of the development in the activities and fi-nancial circumstances of the Group, of results of operations for the period and of the overall financial position of the enterprises comprised by the Consolidated Financial Statements, and a description of the key risks and uncertainties facing them. Faxe, 29 April 2009 Executive Board Henrik Brandt CEO Ulrik Sørensen Hans Savonije CFO Executive Director Supervisory Board Steen Weirsøe Tommy Pedersen Chairman Deputy Chairman Henrik Brandt Ulrik Bülow Erik Christensen Erik Højsholt Allan Meier Jensen Kirsten Liisberg Hemming Van INCOME STATEMENT (DKK ‘000) 1/1 - 31/3 2009 1/1 - 31/3 2008 1/1 - 31/12 2008 Note Revenue 896,651 993,441 4,918,600 Beer and mineral water excises (129,006) (155,132) (739,897) Net revenue 767,645 838,309 4,178,703 Production costs (464,026) (507,150) (2,433,298) Gross profit 303,619 331,159 1,745,405 Sales and distribution expenses (278,574) (307,124) (1,387,543) Administrative expenses (53,700) (60,038) (226,844) Other operating income 725 934 3,835 Operating loss before special items (27,930) (35,069) 134,853 Special items (16,506) (32,595) (50,125) Impairment losses 0 0 (384,957) Loss before financial income and expenses (44,436) (67,664) (300,229) Income after tax from investments in associates (93) (4,525) 22,654 Impairment losses 0 0 (70,104) Financial income 26,445 2,504 33,899 Financial expenses (25,984) (26,076) (139,185) Loss before tax (44,068) (95,761) (452,965) Tax on the loss for the period 5 9,500 27,500 (30,200) Loss for the period (34,568) (68,261) (483,165) distributed as follows: Parent Company shareholders' share of loss for the period (34,504) (68,333) (484,333) Minority shareholders' share of loss for the pe-riod (64) 72 1,168 Loss for the period (34,568) (68,261) (483,165) Parent Company shareholders' share of earn-ings per share (DKK) 6 (6.3) (12.4) (89.0) Parent Company shareholders' share of di-luted earnings per share (DKK) 6 (6.3) (12.4) (89.0) Comprehensive income Revaluation of project development properties 0 0 240,000 Value and exchange adjustment of foreign group enterprises 3,560 (4,332) (99,434) Value adjustment of hedging instruments (23,323) (12,823) (48,345) Tax on equity entries 0 2,627 (56,315) Net gains recognised directly on equity (19,763) (14,528) 35,906 Loss for the period (34,568) (68,261) (483,165) Comprehensive income (54,331) (82,789) (447,259) BALANCE SHEET, ASSETS (DKK ‘000) 31/3 2009 31/3 2008 31/12 2008 Note NON-CURRENT ASSETS Goodwill 313,937 489,815 311,275 Trademarks 167,516 286,403 167,885 Distribution rights 6,852 8,189 7,186 Intangible assets 488,305 784,407 486,346 Land and buildings 662,233 828,216 643,363 Project development properties 400,336 0 400,000 Plant and machinery 519,902 504,918 529,291 Other fixtures and fittings, tools and equip-ment 242,506 231,399 214,997 Property, plant and equipment in progress 306,015 119,437 291,787 Property, plant and equipment 2,130,992 1,683,970 2,079,438 Investments in associates 88,878 225,257 87,650 Receivables from associates 22.830 25,239 20,634 Other investments 56,889 3,039 56,900 Other receivables 12,018 14,403 11,939 Financial assets 180,615 267,938 177,123 Non-current assets 2,799,912 2,736,315 2,742,907 CURRENT ASSETS Raw materials and consumables 122,106 170,363 122,194 Work in progress 26,423 40,317 27,177 Finished goods and purchased finished goods 258,787 198,549 265,302 Inventories 407,316 409,229 414,673 Trade receivables 516,634 533,876 541,566 Receivables from associates 1,544 1,301 1,008 Other receivables 104,810 72,869 113,679 Prepayments 167,004 39,030 147,191 Receivables 789,992 647,076 803,444 Cash at bank and in hand 19,283 73,667 90,384 Non-current assets held for sale 0 0 0 Current assets 1,216,591 1,129,972 1,308,501 Assets 4,016,503 3,866,287 4,051,408 BALANCE SHEET, LIABILITIES AND EQUITY (DKK ‘000) 31/3 2009 31/3 2008 31/12 2008 Note EQUITY Share capital 7 56,000 59,000 56,000 Revaluation reserves 180,000 0 180,000 Translation reserve (98,848) (8,961) (102,279) Hedging reserve (57,926) 461 (34,603) Retained earnings 441,502 911,760 925,121 Proposed dividend 0 59,000 0 Loss for the period (34,504) (68,333) (484,333) Equity of Parent Company shareholders 486,224 952,927 539,906 Minority interests 36,002 37,503 34,922 Equity 522,226 990,430 574,828 Deferred tax 179,398 120,930 179,378 Mortgage debt 734,689 749,501 734,655 Credit institutions 1,633,129 1,020,094 968,888 Non-current liabilities 2,547,216 1,890,525 1,882,921 Mortgage debt 0 953 0 Credit institutions 0 234,500 599,335 Repurchase obligation, returnable packaging 64,247 92,384 74,056 Trade payables 406,282 387,429 523,175 Corporation tax 0 2,124 0 VAT, excise duties, etc 113,272 80,954 61,439 Other payables 363,260 186,988 335,654 Current liabilities 947,061 985,332 1,593,659 Liabilities 3,494,277 2,875,857 3,476,580 Liabilities and equity 4,016,503 3,866,287 4,051,408 STATEMENT OF CHANGES IN EQUITY FOR 1 JANUARY - 31 MARCH 2008 (DKK ‘000) Share capital Revaluation reserves Transla-tion re-serve Hedging re-serve Retained earnings Proposed dividend for the year Minority share Total Equity at 1 January 2008 59,000 0 (7,694) 10,057 960,411 59,000 38,689 1,119,463 Value and exchange adjustment of foreign group en-terprises (1,267) (1,807) (1,258) (4,332) Tax on value and exchange adjustment (600) (600) Value adjustment of hedging instruments, end of pe-riod 620 620 Reversal of value adjustment of hedging instru-ments, beginning of period (13,443) (13,443) Tax on hedging instruments 3,227 3,227 Net gains recognised directly in equity 0 0 (1,267) (9,596) (2,407) 0 (1,258) (14,528) Loss for the period (68,333) 72 (68,261) Comprehensive income 0 0 (1,267) (9,596) (70,740) 0 (1,186) (82,789) Acquisition of shares for treasury (46,244) (46,244) Total shareholders 0 0 0 0 (46,244) 0 0 (46,244) Total equity movements 1/1 - 31/3 2008 0 0 (1,267) (9,596) (116,984) 0 (1,186) (129,033) Equity at 31 March 2008 59,000 0 (8,961) 461 843,427 59,000 37,503 990,430 STATEMENT OF CHANGES IN EQUITY FOR 1 JANUARY - 31 MARCH 2009 (DKK ‘000) Share capital Revaluation reserves Translation re-serve Hedging re-serve Retained earnings Proposed dividend for the year Minority share Total Equity at 1 January 2008 56,000 180,000 (102,279) (34,603) 440,788 0 34,922 574,828 Value and exchange adjustment of foreign group en-terprises 3,431 (1,015) 1,144 3,560 Tax on value and exchange adjustment 0 Value adjustment of hedging instruments, end of pe-riod (57,926) (57,926) Reversal of value adjustment of hedging instru-ments, beginning of period 34,603 34,603 Tax on hedging instruments 0 0 Net gains recognised directly in equity 0 0 3,431 (23,323) (1,015) 0 1,144 (19,763) Loss for the period (34,504) (64) (34,568) Comprehensive income 0 0 3,431 (23,323 (35,519) 0 1,080 (54,331) Share-based payment 1,729 1,729 Tax on equity movements, shareholders 0 0 Total shareholders 0 0 0 0 1,729 0 0 1,729 Total equity movements 1/1 - 31/3 2009 0 0 3,431 (23,323) (33,790) 0 1,080 (52,602) Equity at 31 March 2009 56,000 180,000 (98,848) (57,926) 406,998 0 36,002 522,226 CASH FLOW STATEMENT (DKK ‘000) 1/1 - 31/3 2009 1/1 - 31/3 2008 Note Loss for the period (34,568) (68,261) Adjustments for non-cash operating items 8 44,647 77,067 10,079 8,806 Change in working capital: +/- change in receivables 37,206 27,673 +/- change in inventories 4,789 (58,987) +/- change in payables (65,260) (7,522) Cash flows from operating activities before finan-cial income and expenses (13,186) (30,030) Financial income 20,901 863 Financial expenses (17,638) (33,656) Cash flows from ordinary activities (9,923) (62,823) Corporation tax paid (18,918) (29,135) Cash flows from operating activities (28,841) (91,958) Sale of property, plant and equipment 5,939 19,002 Purchase of property, plant and equipment (107,046) (69,745) Free cash flow (129,948) (142,701) Acquisition of subsidiaries 8 0 (126,546) Acquisition of intangible and financial assets (38) (2,964) Cash flows from investing activities (101,145) (180,253) Proceeds from raising of non-current debt 58,175 165,903 Repayment of non-current debt 0 (286) Change in current debt to credit institutions 0 69,361 Acquisition of shares for treasury 0 (46,244) Cash flows from financing activities 58,175 188,734 Change in cash and cash equivalents (71,811) (83,477) Cash and cash equivalents at 1 January 90,384 157,832 Exchange adjustment 710 (688) Cash and cash equivalents at 31 March 19,283 73,667 NOTES TO THE Q1 REPORT Note 1 Significant Accounting Policies The Q1 Report is presented in accordance with IAS 34 “Interim Financial Reporting” as adopted by the EU and additional Danish disclosure requirements for interim financial reporting of listed companies. Except for the implementation of the amended IFRS 2 (Share-based Payment), IFRS 8 (Segment Reporting) and IAS 23R (Borrowing Costs), the accounting policies are unchanged from those applied in the Annual Report for 2008, to which reference is made. Only IAS 23R affects the financial statements as compared to the previous recognition and measurement as well as note disclosures. The implementation of IAS 23R, under which borrowing costs relating to own construction of non-current as-sets are to be capitalised, has affected results (financial expenses) for the period and the value of property, plant and equipment in progress positively by some DKK 4 million (2008: some DKK 1 million.) as compared to the accounting policy previously applied. The recognition for prior periods has not been adjusted. Except for the above description relating to the implementation of IAS 23R, the Annual Report for 2008 pro-vides a total description of accounting policies significant to the financial statements. Note 2 Accounting Estimates and Judgements The preparation of interim financial reporting requires that Management make accounting estimates and judgements which affect the application of accounting policies and recognised assets, liabilities, income and expenses. Actual results may deviate from these estimates. The key estimates made by Management in applying the Group's accounting policies and the key uncertainties relating to the estimates are the same when preparing the interim financial reporting as when preparing the Annual Report at 31 December 2008. The estimates made at 31 March 2009 of the fair value of project development properties and securities did not give rise to changing the fair values recognised at 31 December 2008. NOTES TO THE Q1 REPORT Note 3 Segment Reporting The Group's activities break down as follows on seg-ments: (mDKK) 1/1 - 31/3 2009 1/1 - 31/3 2008 Western Europe Eastern Europe Malt & Overseas Markets Unallocated Total Western Europe Eastern Europe Malt & Overseas Markets Unallocated Total 491.3 180.8 95.5 767.6 Net revenue 508.4 228.8 101.1 838.3 0.1 (18.2) 2.1 (12.0) (28.0) Operating profit/(loss) (3.0) (22.3) 1.9 (11.7) (35.1) (8.4) (4.7) (3.4) (16.5) Special items (32.6) (32.6) (8.3) (22.9) (1.3) (12.0) (44.5) Earnings before interest and tax (EBIT) (35.6) (22.3) 1.9 (11.7) (67.7) (1.6) 0.0 1.5 (0.1) Share of income from associ-ates (2.2) (3.2) 0.9 (4.5) (0.8) (5.5) 1.8 5.0 0.5 Other financial income and expenses (0.2) (2.3) 0.2 (21.3) (23.6) (10.7) (28.4) 2.0 (7.0) (44.1) Profit/(loss) before tax for the period (38.0) (27.8) 3.0 (33.0) (95.8) 9.5 9.5 Tax on the profit/(loss) for the period 27.5 27.5 (34.6) Profit/(loss) for the period (68.3) 0.0% -10.1% 2.2% -3.6% Profit margin -0.6% -9.7% 1.9% -4.2% NOTES TO THE Q1 REPORT Note 4 Share-based Payment For shareholder value purposes, the following share option schemes have been established for the Executive Board and other members of the management team of the Group. Each option carries a right to acquire 1 share of DKK 10. Executive Other man. Board team Total Exercise Exercise number number number price period Granted in 2002 14,564 0 14,564 240-315 6/2005-5/2009 Granted re 2003 7,492 7,492 14,984 401 4/2007-4/2009 Granted re 2004 5,230 4,524 9,754 478 4/2008-4/2010 Granted re 2005 16,258 9,856 26,114 648 4/2009-4/2011 Granted re 2006 14,236 8,626 22,862 532 4/2010-4/2012 Unexercised at 31 December 2006 57,780 30,498 88,278 Adj. of grant 2006, final price (292) 250 (42) 695 Expected granting re 2007 14,305 4,840 19,145 534 4/2011-4/2013 Exercised in 2007 (16,437) (5,245) (21,682) 240-401 Changed classification (5,303) 5,303 0 Unexercised at 31 December 2007 50,053 35,646 85,699 Adj. of grant 2007, final price (6,194) 1,481 (4,713) 510 Cancelled in 2007/08 (6,262) (4,004) (10,266) Unexercised at 31 March 2008 37,597 33,123 70,720 Granted re Strategic Plan 2008-10 6,223 14,237 20,460 510 4/2011-4/2013 Exercised in 2008/09 (2,919) (628) (3,547) 401-478 Cancelled in 2008/09 (6,606) (8,121) (14,727) Changed classification (22,523) 22,523 0 Unexercised at 31 March 2009 11,772 61,134 72,906 distributed on: Granted re 2004 2,092 5,988 8,080 478 Granted re 2005 2,462 13,370 15,832 648 Granted re 2006 2,756 13,416 16,172 695 Granted re 2007 2,231 10,131 12,362 510 Granted re Strategic Plan 2008-10 2,231 18,229 20,460 510 11,772 61,134 72,906 Market value at 31 March 2008 (mDKK) 3.9 3.5 7.6 Market value at 31 March 2009 (mDKK) 0.0 0.1 0.1 Based on a share price of the Royal Unibrew share of 36.2 at 31 March 2009 the market value of the options has been calculated by means of the Black-Scholes model. The calculation is based on an assumption of 81% volatility (2008: 35%), a risk-free interest rate of 2.1-3.3% (2008: 4.3-4.7%) and annual dividend per share of 0% (2008: 2%). NOTES TO THE Q1 REPORT Note 5 Tax on the Loss for the Period The tax expense for the period recognised in the income statement has been calculated per legal entity included in the Consolidated Financial Statements on the basis of the book profit before tax and the estimated effective tax rate for 2009. In addition to the tax recognised in the income statement, a tax income of DKK 0k has been recog-nised directly in equity related to the equity entries for the period (at 31 March 2008 an income of DKK 3,789k for the full year 2008 an expense of DKK 56,315k). Note 6 Basis of Calculation of Earnings and Cash Flow per Share 1/1 - 31/3 2009 1/1 - 31/3 2008 The Parent Company shareholders' share of profit for the year (DKK ‘000) (47,404) (68,333) The average number of treasury shares amounted to 106,674 371,237 The average number of shares in circulation amounted to 5,493,326 5,528,763 The average number of shares in circulation incl. share options "in-the-money" amounted to 5,493,326 5,511,143 Diluted earnings and cash flow per share have been calculated on the basis of the Parent Company shareholders' share of loss for the period. NOTES TO THE Q1 REPORT Note 7 Treasury Shares Value of treasury shares held: Parent Company 2009 2008 Balance at 1 January 0 0 Additions 0 46,244 Transferred to equity. net 0 (46,244) Balance at 31 March 0 0 Treasury shares held: Number Nom. value % of capital Portfolio at 1 January 2008 316,847 3,168 5.4 Additions 92,874 929 1.5 Portfolio at 31 March 2008 409,721 4,097 6.9 Portfolio at 1 January 2009 106,674 1,067 1.9 Additions 0 0 0.0 Portfolio at 31 March 2009 106,674 1,067 1.9 NOTES TO THE Q1 REPORT Note 8 Cash Flow Statement 1/1 - 31/3 2009 1/1 - 31/3 2008 Adjustments for non-cash operating items Financial income (26,445) (2,504) Financial expenses 25,984 26,076 Amortisation, depreciation and impairment of intan-gible assets and property, plant and equipment 44,111 49,092 Tax on the loss for the period (9,500) (27,500) Income from investments in associates 93 4,525 Net profit/loss from sale of property, plant and equip-ment 2,344 (7,524) Share-based payments and remuneration 1,729 0 Other adjustments 6,331 34,902 Total 44,647 77,067 Acquisition of subsidiaries 1/1 - 31/3 2009 1/1 - 31/3 2008 Assets Non-current assets 125,577 Current assets 969 Acquisition price 0 126,546 NOTES TO THE Q1 REPORT Note 9 Acquisitions No acquisitions were made in Q1 2009. The following acquisitions were made in 2008: At 1 January 2008, Royal Unibrew A/S' subsidiary Lacpleasa Alus acquired assets and activity of the Latvian brewery Livu Alus. Livu Alus markets, sells and produces its own beer brand in Latvia, pri-marily in the Liepaja region. Fair value at date of acquisition Intangible assets 6,419 Property, plant and equipment 119,158 Inventories 969 Cash acquisition price 126,546 including acquisition costs (consulting fees) of 1,022 The carrying amounts prior to the acquisition are not available. DEFINITIONS OF KEY FIGURES AND RATIOS Net interest-bearing debt Mortgage debt and debt to credit institutions less cash at bank and in hand, interest-bearing current investments and receivables Free cash flow Cash flow from operating activities less net investments in property, plant and equipment and plus dividends from as-sociates Earnings per share (DKK) Royal Unibrew A/S' share of the profit for the year/number of shares in circulation Cash flow per share (DKK) Cash flow from operating activities/number of shares in cir-culation Diluted earnings and cash flow per share (DKK) Royal Unibrew A/S' share of earnings and cash flow, respec-tively, from operating activities/average number of shares in circulation including share options "in-the-money" EBITDA Earnings before interest, tax, depreciation, amortisation and impairment losses as well as profit from sale of property, plant and equipment and amortisation of intangible assets EBIT Earnings before interest and tax Profit margin Operating profit before special items as a percentage of net revenue EBIT margin EBIT as a percentage of net revenue Free cash flow as a percentage of net reve-nue Free cash flow as a percentage of net revenue Equity ratio Equity at year end as a percentage of total assets Debt ratio Net interest-bearing debt at year end as a percentage of year-end equity