Good morning, everybody, and welcome to Carlsberg's Q1 2019 Conference Call. My name is Keesa Hart and I have with me CFO, Heine Dahlgaard and Vice President of Investor Relations, Peter Gundlub. I will go through the highlights of the quarter and Heine will talk you through the regions and outlook. Please turn to slide 2. Q1 is traditionally a very small quarter for our businesses in Western and Eastern Europe due to seasonality, while Q1 for our Asian business is an important quarter due to the festive season.
We delivered a solid start to the year in all three regions which broadly based organic top line growth. Organic net revenue in the quarter grew by 6.4% and this was driven by a 3% pricemix and 3.4% organic volume growth. Reported volumes grew by 6.7% due to the last year's acquisition of additional 25% of Cambrew in Cambodia. Reported net revenue grew by 9.3% as well due to the acquisition of Cambrew and a very small positive currency development. We confirm our full year expectations for organic operating profit growth.
Please turn to slide 3 and a few comments on our international premium brands for which we saw good growth. 6064 Blanc grew by 30% despite cycling a very strong Q1 last year with volume growth of 44%. The continued expansion in our Asian markets remains the key driver, but Russia and Ukraine were also significant contributors to the impressive growth momentum. Grimbergen grew by 4% in the quarter as it was impacted by phasing of commercial activities and shipments in France in Q4 versus Q1. The brand strengthened its market share slightly in its biggest market France and saw good growth in markets such as Russia, Switzerland, Italy, Poland, Germany, Belarus and China.
Our largest brand Tuborg grew by 7% supported by strong growth in China, India, the Balkans and the Turkish licensed market. We just kicked off this year's Tuborg Open music activation with Grammy Awards winners Clean Bandit. The Carlsberg brand grew by 2% with strong growth achieved in several Asian markets, particularly in China. In Western Europe, we saw strong growth in markets such as Poland, France and Germany, while volumes in the U. K.
Were soft ahead of the launch of the new Carlsberg Danish Pilsner brew in April. Across the globe, we continued the rollout of the new Carlsberg visuals and communication, the environmental friendly packaging and line extensions. Please turn to slide 4 and a brief update on a few of our strategic priorities. The growth trajectory in the craft and specialty category continues and we grew our craft and specialty portfolio by 18%. We saw growth across most markets with particularly strong results in Poland, Ukraine, China and Russia.
Alcohol free brews grew by 15% for the group. The category and our brands are showing good progress across basically all markets in both Western and Eastern Europe. To mention a few other activities, we have expanded our offerings for our proprietary one way keg system DraughtMaster to include alcohol free brews and Somersby. The availability of alcohol free brews on tap is an exciting proposition as we have not previously been able to offer our customers this option. Within our digital activities, we launched a couple of new on trade applications that will support our customers in terms of training and quality.
In China, our e commerce business is showing strong results more than doubling volumes year on year in Q1. After just 2 years of e commerce operations in China, our market share in the online beer market exceeds our offline market share. With that, I will hand over to Heine, who will take us through the regions and outlook.
Thank you, Kees. Please turn to Slide 5 and Western Europe. Net revenue in Western Europe grew organically by 2.4% as a result of plus 1 percent pricemix and total organic volume growth of 1.6%. Reported net revenue was in line with the organic development due to an insignificant currency impact. We saw a positive price mix in almost all markets driven by both price increases and a continued positive mix due to growth of premium products.
The volume growth was particularly strong at the beginning of the quarter most profoundly in France, Denmark, Norway, Germany, Bulgaria, Poland and Croatia, whereas the end of the quarter was softer, impacted by the later sell in to the Easter versus last year. Looking at a few selected markets, our volumes in the Nordics grew by low single digit percentages as they were impacted by the later sell in to the Easter compared with last year. In Denmark, our beer business developed well and our volume and value share showed solid improvement. March was weak due to the aforementioned Easter effect. In Norway, the positive momentum continued with particularly solid results for our craft and specialty portfolio, alcohol free brews and soft drinks businesses.
In Sweden, we saw good growth for our craft and specialty and alcohol free portfolios, while total volumes were impacted by the later sell in to Easter. Our French business delivered solid volume growth in the quarter. Pricing remains challenging whereas mix continues to improve. Our craft and specialty brands developed positively with growth of brands such as 1664 Blanc and Klimbergen. In Poland, our volumes grew by mid single digit percentages.
And even more importantly, our pricemix improved by double digit percentages following price increases and a continued strong performance of our premiumization brands. As already mentioned by Keith, volumes in the U. K. Declined by high single digit ahead of the launch in the U. K.
Of the new Carlsberg, the Danish Pilsner broom at the beginning of April following the launch of new visuals and packaging for the brand in Q1. Please note that the Carcreek Pilsner sold in the U. K. Is different from the rest of the world containing a lower ABV of 3.8%. In some of our smaller Western European markets such as Bulgaria, Croatia and Germany, we saw solid growth.
In all markets, pricemix developed favorably. Please turn to Slide 6 and Asia. Q1 was another strong quarter for our Asian business despite the Chinese New Year being earlier this year and consequently with part of the sell in happening already in Q4 2018. Net revenue grew organically by 15.3% as a result of plus 5 percent pricemix and total organic volume growth of 9.5%. Reported net revenue grew by 27%, positively impacted by currency movements, in particular, the Chinese, the Malaysian and the layout currencies and also the impact from the Cambrew acquisition.
The pricemix improvement was the result of price increases and premiumization with our international brands delivering strong results in most markets in the region. We achieved strong results in our largest market, China. Volumes here grew by 11% following strong execution of Chinese New Year activities and strong growth of our premium portfolio supported by our big city expansion and leading to a very healthy pricemix. Our Indian volumes grew by mid single digit despite very tough comps with a strong Q1 last year. We had a very strong start to the year, but March was weak in India.
In most of the other markets, we saw good business momentum with particularly strong performance in Vietnam, Laos and Malaysia, Singapore. In Cambodia, our work with rebuilding the business is ongoing and will continue in the coming years. Please turn to slide 7 and our smallest region, Eastern Europe. Net revenue in Eastern Europe grew by 5.1% as a result of strong pricemix up +8%, which offset the volume decline of 2.4%. Reported net revenue grew by 1.1% impacted by weaker currencies compared to Q1 last year.
In Russia, our volumes declined by 4%, while our pricemix developed favorably resulting in flat organic net revenue. Market conditions in Russia are challenging. In Q4 2018 and Q1 this year, our shelf prices increased by 5% to 6% due to the 1 sorry due to the 2 percentage point VAT increase as at January 1st and additional price increases to offset the higher input costs. We lost market share due to a temporary delisting in some outlets in connection with our negotiations with certain retailers and a higher than anticipated price premium vis a vis competition. We monitor the situation very closely and we are taking appropriate actions.
Our agrothel specialty and alcohol free portfolio delivered solid growth, which also supported the healthy pricemix. We achieved very strong net revenue growth in Ukraine due to price increases and continued growth of our craft and specialty, while volumes were down. Please turn to Slide 8 and the outlook for the year. We started the year well and based on the Q1 performance, we confirm our key priorities for the year as well as our full year financial outlook. Consequently, we still expect to deliver organic operating profit growth of mid single digit percentages.
Based on the spot rates, on May 1, we assume a positive translation impact of around plus €150,000,000 compared to the previous assumption of 0 currency impacts. The change compared to February is primarily due to the strengthening of the Russian, the Chinese and the Ukrainian currencies. Other relevant assumptions remain unchanged. Finance costs excluding FX of DKK700 million to DKK750 million and effective tax rate of below 28% and CapEx of around DKK4.5 billion at constant currencies. Our SAIL 22 financial priorities also remain unchanged for 2019, meaning that we want to grow operating profit organically, increase ROIC and secure an optimal capital allocation.
Our share buyback program, which was launched on February 6 and executed according to the safe harbor rules, is running smoothly. As at April 26, 1,041,000 shares have been purchased at a total value of 849,000,000 dollars The daily volume bought represents an average of around 7% of daily traded volume on NASDAQ Copenhagen. I also just want to remind you that in April, we sold the former brewery site in Tondheim in Norway. That will result in a gain of approximately DKK400 1,000,000 booked in special items and a net cash flow effect of slightly less than DKK 500,000,000 And now back to you, Kees. Thank you, Heine.
Before we open up for questions, a few final remarks from my side. We delivered a good start to the year in Q1. We see solid growth in our key strategic priorities such as craft and specialty 2019 and we've maintained the outlook for the year. And with this, we are now ready to take your questions.
Our first question comes from the line of Jonas Goldberg from Danske Bank.
Questions from my side. First of all, if you could just talk a little bit more about Russia. You're losing market shares and you're saying you're taking appropriate measures. Could you talk a little bit about what measures you're taking? Thank you.
Then looking at the 11% volume growth in China, are you able to say how much of that is due to the expansion into big cities? And then finally, my third question is on this sale of brewery site in Norway and the capital gain of around €500,000,000 will that affect your current share buyback program or will it affect it next year, so to speak?
Thank you. Thank you and good morning. With regard to Russia, as you know, we increased prices in late 2018 and in Q1 2019. We now see on the shelf that our price premium vis a vis competition is increasing and therefore we're losing market share. Season.
And as always, we need to balance this in As always, we need to balance this in the dominant logic of the golden triangle. And therefore, we take measures in such a way that we balance market share, operating profit and margins. What we're going to do, of course, we're not going to drill here. But you can assume that we will correct our Q1 with regards to market share. Then with regards to China, we're not giving specific underlying figures with regard to the big cities.
However, we can say that the big cities as such continue to grow significantly. We have in terms of our total international premium brands portfolio and that's highly depending as well on the rollout in the big cities. We now see a 12% volume that's 12% of our total portfolio. Within that Carlsberg grew 10%, Tuborg 11%, 6064 Block even 42%. And we are gaining market share in the premium and the sub premium segment in China.
And that shows that we are making good progress in our cities.
Then the third one, Heine? Yes. Good morning, Jonas. So the question on Trondheim in Norway. So there's a gain in special items of approximately CHF400 1,000,000 and as you say cash flow positive cash flow effect of slightly less than DKK500 1,000,000.
And to your question, no, it will not affect our share buyback plans for this year, just as a small acquisition of DKK500 million would not have affected it either. So it is something that we will take into consideration for next year when deciding on share buybacks.
Okay. Very clear. Thank you very much.
Thank you. Our next question comes from the line of Faem Sampri from SEB. Please go ahead. Your line is now open.
Yes. Hello. Just a question regarding Asia. If you could elaborate a little bit on what brands specifically driven growth in Asia and if you can quantify the growth of these brands a bit? And secondly, some comments around your incremental margin in Asia.
Is there any reason to believe that should be lower than for the rest of the group? Thank you.
Thank you, Soren, and good morning. Well, with regard to the brands growing in Asia, we see well, as you said, the Chinese market being very favorable for us with our international premium brands. So they grew at the level that I just quoted. Then we had a very good start in Vietnam, and that is basically across our total portfolio and a very good buy in at the beginning of this year of debt and a very good throughput for the Chinese New Year in Vietnam. And then we had as well a good momentum in India, especially January February with regards to our Carlsberg and Tuborga portfolio.
So these are the brands that were growing in the different countries. When we look at it from an Asian perspective Tuborg grew by 9% and Carlsberg by 6%. Then a second thing on in terms of the margin, Heine?
Yes. No. So I didn't frankly, I didn't really get what the question was. But you know, we don't comment specifically on the development in the margin development sort of region per region. So for the full year, we may
It was more general question whether your margins in Asia your incremental margins in Asia is in general lower than for the rest of the group. So when you're growing in Asia, is that on that incremental volume, is the margin lower than what you see for the rest of
the group? That's what it was.
No, no, it's the opposite. Okay, great. And then finally
Okay, interesting. And then finally, just on India, you grew 5%, but given you had a comparable of 30%, what how should we think of the underlying growth in India currently?
The 30% of Q1 was vis a vis a very easy comps in the year before because of the highway ban. When we look at the Q1 in India, our volume growth was almost 7%. So that was good. We had a bit of a soft March. But please remember that in the isopold type business due to the differences per state.
And obviously as well is some lower sales in some states in anticipation of dry days due to the elections. And as well we have changed some prices in some states. So all in all, we started off in India with a total 6.7% volume growth and 16.6% net revenue.
Great. Thank you.
Thank you, sir.
Thank you. Our next question comes from the line of Andrea Pistacchi from Deutsche Bank. Please go ahead. Your line is now open.
Good morning. A couple of questions, please. Firstly, on Russia, if I could ask for a little more color here, in particular, on the pricing situation. I mean from what you're saying, it seems that I could be wrong, of course, that the competition hasn't followed at all really the price increases you put through. And then on you alluded to some delistings.
Is this one or several players? And what is the situation there? Are you I mean, can you get back in now as you adjust prices? Or does this mean you're out for the year with those retailers? And if I can please ask you on China, on your local business there, which I believe is also growing.
Is the and I think you're taking share, but is the market back drop you some of the Chinese brewers are talking about improving market conditions in mainstream. Are you seeing this?
Andrea, good morning. Thank you very much. With regard to Russia, yes, indeed, the calls basically the conclusion is when we look at Nielsen that we see some competitors having a widening gap between volume and value. That means indeed that competition seems not to have increased their prices. With regard to the delistings, it's good to say that we are back on all the shelves.
But at the moment, you negotiate price increases, sometimes retailers delish you just to increase the pressure. But basically we have been able to successfully increase our prices and we are back on the shelves. However, what I said earlier, we lost our market share and we need to review that in line with our golden triangle. Then with regard to China, yes indeed our local business is or the local brands are growing. It's fair to say I think in terms of the mainstream brands that they had easy comps versus last year because in general we had some lower inventory last year at the start of Q1.
However, we saw as well a good share development in Yunnan. We had a stock up for Chongqing extra malt. That's a new product launch that we will see in April. So there was a combination of factors where as well the mainstream brands had a very good start of the year. With regard to the general outlook, we see indeed some pricing in the mainstream segment.
And indeed, that would give an indication that underlying circumstances as well on that segment are a bit better than what we have seen over the last couple of years. So in total, we are positive about Q1 in China.
Thank you.
Thank you, Andrea.
Thank you. Our next question comes from the line of Hans Gregersen from Nordea. Please go ahead. Your line is now open.
Good morning. Two quick household questions. Your guide sorry, interest ex FX, can you guide to what the FX will be based on current exchange rates? DraughtMaster, you gave back in Q4 a growth rate of I think it was 35%. What has the growth been in the Q1?
Then to the real questions. If we look on Kampev, what is the integration update there and how is the 3 year outlook? On Russia, we have seen a very aggressive campaign activity, especially from some of your key competitors in the last couple of years. Any easing there? And then finally, on India, when should we expect the next brewery expansion?
Thank
you. Good.
First question for you, Ralf.
So if I take the first one, good morning, Hans. So you're right, we're guiding for net financials, excluding FX of SEK 700,000,000 SEK 750,000,000 and then whether we comment on where it would look with FX as of today, no, we don't comment on that.
Can you say whether it's a positive or negative figure at least?
No, it's not something we comment on. We end up in all kinds of speculations and it's basically a nonsense number.
Then your second question about the DraughtMaster growth. We grew 30% in the number of installations and we had as well 30 percent volume growth and especially then in Nordics and Germany as well Italy had the growth, but it was a bit more modest. Then Hans due to some mic issues here, we didn't get your 3rd or 4th question. So can you please repeat that one?
Yes. Cambodia, can you give an integration update and sort of outline where is the company going to be in the 3 year outlook? And then on India, given the strong growth, when should we expect the next brewery expansion?
Right. Okay. Thank you. With regard to Cambodia, I was there 2 weeks ago, got a total update on the business. It's fair to say that there's a lot that we need to do there and put in place.
And we see that more as a kind of 3 year program rather than a short and sweet success turnaround in a few months. So we need to get the fundamentals in place. However, it's a very attractive market. We see as well that the brands that we have have good base and have a good relation if you like with customers and consumers. So I think we will get there, but it takes indeed like you say it's a 3 year plan rather than a 3 month turnaround.
Are you still seeing a negative market share trend?
No. No. We grew in the 1st month after we took over. So we are gaining some market share. But frankly there as well we need to get this golden triangle right.
So we're not obsessed by only by market share only. It needs as well a review of the current margins and the profitability. So in total for us potentially a very good market, But we need to see through the consequences of all the initiatives we take now. We have an excellent team there. So I'm really confident that we're doing the right things and that the results will be over time will be seen and accretive to Carlsberg.
With regard to India, for the time being, we don't have new plans for brewery. As you know, we have this kind of logic that we continue with our growth by first making sure that we have the number 1 and number 2 position in a state and then continue to invest in another state. The last state we did was in Canada. We opened a brewery half a year ago and that's what we are now focusing on. So with regard to capital investment, we do not see short term any expansion there.
Thank you. That's it Hans.
Thank you. Our next question comes from the line of Michael Rasmussen from ABG. Please go ahead. Your line is now open.
Thank you very much. First of all, can you quantify if India turned around in April? My second question, a follow-up on DraughtMaster. Can you quantify how many systems by numbers that you have installed at the moment? And what is the ambition by 2020 as an example, please?
Then finally, on the relaunch of the Carlsberg brand, firstly, ly, can you share a bit of the initial thoughts from the trade in the U. K. Here about a month in? And secondly, please confirm if the rollout plans into the other markets are following the plans that you've set out? Thank you very
much. Thank you, Michael. Well, turnaround in India in April feels as if there's a disaster in India. That's not at all the case. Margin was a bit more soft.
As I said, April is doing okay. We again, what we said earlier, there are elections in the coming period in India. That means that we have in some of the states some dry days. We have as well changed some prices. We see the consequences of that.
But in that respect there is no new news to say at this moment of time with regard to India. With regard to our DraughtMaster system, I don't think we're going to move into these details hopefully. Competition is listening as well. What we do in Denmark as we speak is we are converting from steel to DraughtMaster. That conversion is going very well.
We are going to move further as you know in Sweden and in Norway. We get a very good review and feedback from customers on this. Consumers get more fresh beers. So this is a system which really helps us to serve our customers and consumers better. And as we said earlier, we see it back in the figures.
Then with regards of the U. K. Relaunch, we launched, as we said, Carlsberg Danish Pilsner with a new brew, new design, new pack formats and as well now in Snap Pack. We have received very good customer feedback. And we are pleased to say that now Carlsberg Danish Pilsner including the Snap Pack is listed in Tesco, which with in store support from the 5th May.
Very early days, but it will be the first time that the core Carlsberg variant has been listed since 2015 in Tesco. And we are delighted by this support from a key customer. We will secure distribution of all major targeted off trade retailers including then the Tesco indeed Asda and Morrisons and Aldi Lidl and so forth. So basically, we got the full support for this from the trade. When you talk about the rollout, I would like to highlight that the relaunch of Carlsberg in the U.
K. Is of a different order of magnitude because there we have a different brew. As you know, we have improved the brew of this infrastructure with the consumer. And we had this famous 3.8% ABV and with not a huge appreciation of the taste from our consumers. That is very, very different in the other countries.
There's no reason to significantly change the brew there. There we talk more about new design and some new pack formats and new advertising. So they're different, if you like, these are 2 different projects. Both are early days. We get very good feedback, but we want to see it now in the figures.
Thank you. If I can just ask a follow-up question on the SNAP PAC. I think that in the Nordics at least, we've heard kind of a little bit mixed feedback in the media. Can you please confirm that everything is going as planned on the Snap Pack, please?
Yes. I can fully confirm that, especially in Denmark. We saw an uplift of our volume of that format of 19% in Q1. So that shows that it's good and I'm not talking about Eastern impact to them yet. So yes, there are some maybe small complaints about how to unlock if you like one of the cans from the total pack and maybe need to do the communication a bit better because it's a bit of a trick, but relatively easy to learn.
So we're not at all afraid for that. And in fact, we see in the figures again very good throughput.
Great. Thank you very much and well done.
Thank you. Thank you.
Thank you. Our next question comes from the line of Ed Mundy from Jefferies. Jefferies. Please go ahead. Your line is now open.
Good morning, everyone. Three questions, please. The first is on Poland, where grew volumes mid singles and had a double digit price increase. This is quite different to Poland of old. I was wondering whether you could provide a bit more color around that.
The second is your acquisition, Chinese craft brewing A. Beijing, I think, is a challenging market for you. What does Jing A do to help to get you distribution in this market? Or are you planning to sell this beer around your other territories? And then the third question is on Vietnam.
I think the Hanoi Times is reporting that there have been some breakthroughs in negotiations on the stake sale. I was wondering whether you've got any comments on that?
Yes. Thank you. And good morning, Charles. We in Poland, yes, we had a volume increase of 2.6% and our value is 12.6%. We go ahead with our value oriented strategy.
That means that we are indeed where possible increase our prices. We are focusing very much at the higher end of the market and that improves significantly our mix and has a very good quarter for Poland and a continuation, if you like, of the success in Poland of our more premium portfolio part of the portfolio. With regard to J and A, we just got it. We have our plans. We are not going to announce it.
But let's first make sure that we get the further momentum of JingA in China. As you know, the craft brands in China pick up. So we're really excited by this acquisition and how we maybe roll out that further in the globe, we will see. But first, we want to make it a further success in China. Then with regard to Vietnam, the Habeco, Hanoi, the business or the brewery in Hanoi, I can't say we have a breakthrough.
The only thing I can say is we continue our good conversations with the government. And in that respect, we are basically progressing slowly, slowly, but no breakthrough, but good talks.
Great. Thank you. And just as a follow-up, I think in Western Europe, you said that volumes dipped a little bit at the end of the quarter largely due to the timing of Easter. Given the better weather in April and the shift in Easter from Q1 to Q2, is it fair to assume that Q2 started well in Western Europe?
Yes. That's fair to assume we had a good April. The Easter impact in Q2 is always a bit less than in Q1. Q1 is a smaller quarter. Q2 is always a bigger quarter and there you have well the spring and the early summer impact.
So don't exaggerate these kind of things in your expectations for Q2, but we had a good April as the totality of March April show that we had a more than good Easter.
Okay. Thank you.
Thank you, Ed.
Thank you. Our next question comes from the line of Tristan Van Strien from Redburn Partners. Please go ahead. Your line is now open.
Three questions. One just to follow-up on Cambodia from Hans' question. Just can you just maybe give some color on the pricing environment there? And to what extent has that market down traded? The second one in Western Europe, I assume that your Tuborg license in Turkey is outperforming the rest of Europe.
So what impact has that had on your pricemix in the region? And then lastly, just to Heine, just in terms of your tax rate, as your business shifts away from Russia towards Asia, is it fair to assume that enhances your tax rates in a positive manner for you? Thank you.
Okay. Thank you. With regard to pricing in Cambodia, yes, it's the level of promotions is huge in Cambodia, especially because of the ring pull promotion. That's I think the one that reduces the value in the market. And one of the things we are reviewing now, how to move away from that kind of very deep promotion in such a way that we don't massively lose market share gain margin and improve our profit.
So that's the kind of review we have as we speak. So that's with regard to Cambodia. With regard to Tuborg in Turkey, it has a slightly negative impact on the mix. That's how you need to read that. And with regard to tax, I hand over to Heine.
Yes. Hi, Tristan. So actually the tax rate in Russia is slightly below the average for the group. So good profit in Russia is good for overall tax percentage. So as profit goes down that does put a bit pressure on our outlook for tax.
We do remain confident in what we have said all along which is that we can over the next few years see a tax rate of around 26% and that sort of remains the case.
Just a follow-up on that, Heine.
I mean, I assume your Asian tax rate then is above the group rate. Are there possibilities to work on that? Or is this just what it is?
No. You mean specifically for Russia?
For Asia.
No. But there's a lot of different opportunities for us to work on optimizing further optimizing our tax rate also in Asia. It's clear that for a lot of the Asian markets the growth rates or the tax rates are sort of negative versus group average. But there is a lot of different optimization projects we're working on in order to optimize both our structure and also specific initiatives within tax. So if you balance all these different things out and as you know we are working on let's say 10, 15 different tax initiatives every year, then the outlook remains the same.
Okay. Thank you very much. Thank you, Tristan.
Thank you. Our next question comes from the line of Simon Hill from Citi. Please go ahead. Your line is now open.
Thank you. Good morning, everybody.
I wonder if I could just follow-up
on your comments around the Easter impact. I mean, could you quantify a little bit more how much of a shift we've seen in hectoliter perhaps from Q1 to Q2 just to help us think about the underlying Western European trend as we move forward? And then secondly, the non beer volumes performed quite well in the Q1. I wonder if you could just flesh out a little bit what was going on in some of the regions there. And finally, Kees, just on China.
I mean, how many big cities are you now in China? And what's been the sort of the delta in Q1 versus where you were at the end of 2018?
Okay. Thank you, Simon, and good morning. The Easter impact, well, first of all, when we talk about the Western Europe because the rest of the globe, if you like, doesn't show that big Easter effect, The Easter effect or impact in Europe is Western Europe is mainly coming from the northern part of Western Europe. And there we saw a very good strong April. As I said earlier, it's always more visible in Q1 than Q2 when the larger spring and the early summer volumes dilutes the Easter volumes.
An exact number is always difficult to estimate. And how we do that internally is putting March April together vis a vis last year. And then I can just tell you that we are very satisfied and basically in line with what we see in Q1. Then on the non beer, I'm afraid I need to I don't have the answer on that.
No, I don't know if you have the answer, but I can certainly give you an answer, Simon. So you're absolutely right that the non beer part is performing well in across Western Europe in particular and it is something we see across the region. So that's absolutely right. When you look into the percentages for Eastern Europe, you have to bear into mind that it's very, very small numbers. So if you look at the Q2 Q1 sorry numbers, even though we're growing 17% in non beer, we are talking about 200,000 hectoliters.
So it's small numbers. In Asia, you have to take into account when you look at the total growth of non beer, you have to take into account that a significant part of that growth comes from Cambodia where we have a very strong soft drink business.
And then Simon with regard to the big cities in China, as we said earlier, it's a rolling program. We started almost one half year ago with 5 cities and then we opened new cities at the moment that we were really seeing the success in the first five cities. By the end of 2018, we were in more than 20 cities. At the end of 2019, we expect to be at least in 30, 32 cities. So it's we are adding up or adding cities towards our current program.
And the good thing is that we see still continued growth in the cities we opened in 1.5 year ago as the first five cities. And in that respect it helps If you are really interested in the year over year, of course it helped in Q1 because we opened several cities in the second half of 2018 to build up to the 20 cities where we were at the end of 2018. With this answer, I suggest we have the final question please.
Thank you. Our final question will be from Trevor Stirling from Bernstein. Please go ahead. Your line is now open.
Good morning, Kaes and Heine. Two quick questions from my side. First one on China, I think you commented on healthy pricemix in China. I think last year pricemix was 7%. Is it reasonable to expect that broad trend continuing?
And second question, perhaps broader. Again, towards the end of last year, we're talking in terms of your ambition to take sufficient price and cost cuts to offset input cost inflation. Looking at the pretty healthy pricemix you're achieving around the world, it seems like you're well on track to do that.
Thank you, Trevor, and good morning. With regard to the mix in China, yes, of course, it depends on, if you like, 3 different parts. These need to come together in order to continue this very good pricemix. That's the further rollout of the big cities. I think it's a tick to further rollout or the further volume development of our international premium brands.
I think there we show as well very good momentum. And the third thing is then of course our mainstream brands. And as we said earlier in the call, it seems that we see there are some better circumstances with regard to taking price. So yes, it's not at all a statement here, but the 5% to 7% mix should be possible there in China. Then with regard to taking prices in general, that's over to Heinek.
Yes. So good morning Trevor. The short answer is yes. And a little bit longer answer is that as you know we've been well hedged for 2019. I don't disclose the exact hedging.
And that we expected, as we also said some months ago, the cost per hectoliter to increase by 2% to 3% in net net because of these significant price increases in raw materials than offset by the hedging. We will aim at mitigating the cost impact through pricing and through mix and then to the conclusion, so far so good. Yes, we are getting pricing through.
Great. Thank you very much, Arne and Kees.
Thank you, Trevor. That was the final question for today. Thank you for listening in and thank you for your questions. We are looking forward to meeting some of you during the coming days weeks. Have a nice day.
Bye bye.