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Introduction & Market Context
Royal Unibrew (CPH:CSE:RBREW) presented its Q1 2025 trading statement on April 30, highlighting a quarter of mixed regional performance amid challenging market conditions. The Danish beverage company reported flat volume and revenue growth compared to the same period last year, while achieving a modest 4% increase in EBIT and a more substantial 25% growth in earnings per share.
The company’s shares had declined 3.89% to 544 DKK on April 29, ahead of this trading update, suggesting some investor caution. This follows Royal Unibrew’s Q4 2024 performance, which saw the company miss analyst expectations with EPS of 4.6 against a forecast of 5.98.
Quarterly Performance Highlights
Royal Unibrew maintained steady overall performance despite facing headwinds from a week-long strike in Finland and the later timing of Easter in 2025. The company reported volume and net revenue on par with Q1 2024, while achieving EBIT growth of 4% and an EBIT margin expansion of 0.2 percentage points to 6.8%.
As shown in the following summary of Q1 2025 expectations:
The company’s financial highlights for the quarter reveal improvements in profitability metrics despite flat top-line growth. Gross profit increased by 3% year-over-year, reflecting successful margin management strategies. However, free cash flow deteriorated by 13% compared to Q1 2024, which the company attributes to higher investments and inventory build-up related to Easter timing.
The detailed financial performance is illustrated in this table:
Regional Performance Analysis
Royal Unibrew’s quarterly performance varied significantly across its three main business segments. Western Europe and International markets showed strong double-digit growth, while Northern Europe experienced declines in both volume and revenue.
The Northern Europe segment, which includes Denmark, Germany, Finland, Norway, Sweden, Latvia, Lithuania, and Estonia, saw volume decrease by 8% and net revenue decline by 6%. This underperformance was partially attributed to the strike in Finland.
In contrast, Western Europe (Italy, France, the Netherlands, Belgium, and Luxembourg) delivered impressive results with 15% volume growth and 14% revenue growth. Similarly, the International segment, covering over 70 markets across the Americas and EMEAA regions, achieved 10% volume growth and 9% revenue growth.
The regional breakdown is clearly presented in the following segment analysis:
Financial Analysis
Q1 is traditionally a smaller quarter for Royal Unibrew, with seasonal factors like Easter timing and trading days significantly impacting results. The company emphasized its focus on operational efficiency while continuing to invest in growth markets and categories.
The 4% EBIT growth (from 210m DKK in Q1 2024 to 219m DKK in Q1 2025) and 20 basis point margin expansion demonstrate the company’s ability to improve profitability despite flat revenue. This represents a positive development compared to the company’s Q4 2024 performance, which saw significant earnings misses.
The negative free cash flow of -543m DKK (compared to -480m DKK in Q1 2024) reflects both seasonal patterns and strategic investments. The company noted that Q1 is traditionally cash-flow negative, with this year’s figure further impacted by higher investments and inventory adjustments related to Easter timing.
2025 Outlook & Strategic Focus
Royal Unibrew reiterated its full-year 2025 guidance despite acknowledging increasing macroeconomic uncertainty. The company continues to expect net revenue growth of 5-7% (including M&A impact) and EBIT growth of 7-13%, targeting total EBIT between 2,100-2,225m DKK.
The outlook is based on several key assumptions, including stable demand across markets, no major channel mix changes, and continued market share gains driven by growth categories. The company also expects to improve EBIT margin and Return on Invested Capital (ROIC) through ongoing operational efficiency initiatives.
The detailed 2025 outlook is presented here:
Royal Unibrew’s strategic focus remains on investing in its portfolio of high-quality brands while driving operational efficiencies. The company specifically mentioned its continued investments in product portfolio development, which aligns with CEO Lars Jensen’s previous statement that "We need to live the categories of today and not the categories of yesterday."
Market Reaction
The 3.89% decline in Royal Unibrew’s stock price on April 29, ahead of this trading update, suggests investors may have had concerns about the company’s Q1 performance. This reaction follows a pattern of cautious investor sentiment after the company missed earnings expectations in Q4 2024.
Despite these short-term market reactions, Royal Unibrew’s management expressed confidence in their strategic direction and maintained their full-year guidance. The key takeaways from their presentation emphasize that 2025 has started in line with expectations, despite temporary headwinds from the Finnish strike and Easter timing.
The company’s summary of key messages highlights their balanced view of the quarter:
While Royal Unibrew faces challenges in Northern Europe, the strong performance in Western Europe and International markets demonstrates the benefits of the company’s geographical diversification. The maintained full-year guidance suggests management believes the growth momentum in these regions will continue to offset any ongoing weakness in Nordic markets throughout 2025.
Full presentation:
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