Ladies and gentlemen, welcome to the Carsberg's Q1 2021 Trading Statement Conference Call. For the first part of this call, all participants are in a listen only mode. Afterwards, there will be a question and answer session. This conference call is being recorded. I will now hand it over to the speakers.
Please begin.
Good morning, everybody, and welcome to Carlsberg's Q1 2021 conference call. I hope you are all safe and well despite the continued challenges posed by COVID-nineteen. My name is Keesen Hart, and I have with me CFO, Heine Dahlgaard and Vice President of Investor Relations, Peter Condru. The group delivered a good start to the year, thanks to strong performance in some of our key markets, notably in Asia and Central and Eastern Europe. This more than offset continued COVID-nineteen related challenges in many Western European markets.
I will provide the headlines for the quarter and our performance against our Sail 22 priorities, and Heine will take you through the regions and The full year outlook. Q2 seasonality. Q1 is traditionally a very small quarter for our businesses across Europe, While in Asia, it is an important quarter due to the festive season. The 11.5% organic volume growth was mainly driven by more than 50% volume growth in China as well as solid double digit volume growth in markets such as Russia and India. Reported volumes grew by 12.8 percent due to last year's acquisitions.
Our international premium brands performed very well. Tuborg, 1664 Blanc and Somersby were up by 20% to 30%, mainly driven by growth in Asia and Central and Eastern Europe, And for Summersby, also strong growth in Poland. Carlsberg and Grimbergen were impacted by on trade restrictions and therefore declined. Organic revenue grew by 3.8%. The revenue per hectoliter of -7% was due to negative country mix In both Western Europe and Asia and channel mix due to less on trade, in addition to higher promotions in Russia compared with Same quarter last year.
Please turn to Slide 4 and a brief update on some of our strategic priorities. When we look at the strong growth numbers for all our growth priorities on this slide, we were, of course, very satisfied. We saw good underlying growth dynamics, although the numbers are also impacted somewhat by easy comparables for Q1 last year. Asia is our designated growth region and delivered as such in Q1. Albeit that we had easy comparables, We saw particularly strong growth in China, and we also saw good growth in India.
Heine will provide more color on Asia in a moment. On the back of a good growth in 2020, the growth trajectory for our alco free brews continued with 24% growth in Q1. The category growth is supported by an increasing awareness of health and well-being, which has only been further accelerated by COVID-nineteen. We saw very good progress in all regions, although strong growth in Asia was from a very low base. Our craft and specialty volumes grew strongly in Asia and Central and Eastern Europe, while category volumes were down in Western Europe.
Total volumes grew by 13% with 1664 Blanc being the star performer with 33% of growth. Sonosby also delivered very strong results in the Q1, and this was particularly driven by strong growth in Russia, Poland, Kazakhstan and Australia. An important driver of the strong progress for our craft and specialty and alcohol free brews As well as a stronger core beer portfolio has been the step up in our innovation efforts in line with Sail 22. On the next slide, I will give more details on our innovations. Please turn to slide 5.
In recent years, we have significantly strengthened our innovation efforts and processes, and as a result, seen And a number of improvements, including optimization of existing products, renovations, expansion of existing products in new markets and innovations, both within liquid and pack innovation. A few examples are shown on this slide. Delta Gas 0 It's our largest alcohol free brand in Russia and the group. The innovation, Baltica Zero Grapefruit, outperformed the alcohol free segment and supported the very strong growth of our alcohol free portfolio in Q1 in Russia. Another successful innovation comes from Friedland in Norway, where the brand serves as a bridge between mainstream and craft and specialty.
The Jussie IPA Was born in 2020 to support the brand equity of being a trendy, high quality brand and has been very popular with consumers contributing to the stellar performance in Norway. Summersbee 0.0 is the number 1 voted alco free brand in Poland. In 2020, we launched Summersbee 0.0 Wild Berries to further accelerate the growth of both the Summersbee brand And our ALCO free portfolio. The very strong brand and category growth in Poland serve as Solid proof points of the success of our continued innovation efforts for Summersbee. In China, Tuborg Pure Draft was another innovation launched in 2020.
Priced at a premium to Tuborg Green, It has been very well received by young Chinese consumers and volumes have been ahead of our expectations. In total, innovations accounted for more than 10% of group revenue in 2020. Please turn to Slide 6. We have in recent months received many questions regarding our strategy And what's next? So let me elaborate on our thinking.
1st and foremost, I want to emphasize that sales 22 remains our strategy until end 2022. However, we are now starting to look at our next The strategy period shows from 2023 onwards. The process will very much mirror the successful process, which we applied back in late 2015 early 2016 when developing Sail22. A few insights into this are that we will kick off the discussion at our annual strategy seminar with the Supervisory Board in June. After that, in the late summer, early fall, we will start doing more thorough analysis and deep dives.
This work will again be a co creation and conducted in different work streams and driven by all the members of our extended leadership team to ensure the involvement of all relevant markets and functions. The valuable learnings from the development of Sail22 We're that the broad engagement in the strategy and development process facilitated a committed buy into and acceptance of the strategy by All key people across the organization and therefore a high level of engagement and speed in the execution of the strategy. Not surprisingly, the strategy work will include considerations with respect to categories, brands, markets, capabilities and execution. As you can see on the slide, the working title is SAIL 27. It is important to emphasis that the next leg of the journey for Carlsberg will most likely be a continuation of Sail 22, So an evolution rather than a revolution.
We expect that many of the priorities in Sail22 will remain, such as craft and specialty, algal free brews and growth in Asia. We will, of course, look into possibly interesting new categories And whether some capabilities need to be further strengthened. We expect to share with you information on the updated strategy, including How we see the future growth algorithm for our company during 2022. Slide 7 please, and a few words on our geographic footprint that provides a strong foundation for our current and future growth ambitions. We are pleased with having a very good balance between growth and mature markets.
Our mature markets provide interesting value growth opportunities, while our growth markets provide both volume and value growth opportunities. The balance between these markets has strengthened a lot during the past years, and the importance and size of the growth markets in Asia that strengthened significantly. In particular, the big markets, China, India and Vietnam provides interesting growth opportunities. We are also seeing market volume growth in Eastern European countries such as Kazakhstan and Ukraine. Even Russia has had a positive market volume development in recent years.
Across our regions, The value growth opportunities through the ongoing premiumization remains very attractive. We are therefore confident And even more confident than back in 2015 when SAIL 22 was developed, that continued strong execution of our strategic priorities in all our markets And now over to Heine for the Q1 regional update. Thanks.
Thank you, Kees, and good morning, everybody. Please turn to Slide 8 And Western Europe that again this quarter was significantly impacted by lockdowns and restrictions. Volumes declined organically by 5.8% Due to lockdowns of the on trade across the entire region, revenue was down by almost 15% due to channel and culture mix. Reported, the volume and revenue development was slightly better due to last year's acquisition of Werner Skrune and the Marston's brewing activities. Our alcohol free beverages continued to perform very well and grew by 26% with brands such as Tourtell in France And Solvency 0.0 in Poland being the key drivers.
In the Nordics, Norway continued last year's Growth trajectory helped by the closed orders. Finland and Sweden were impacted by restrictions And in the case of Sweden, also by less order sales to the Norwegians. Volumes in Denmark were flat With off trade growth offsetting the decline in the on trade and order. Our business in France was impacted by lockdown of the on trade That will probably stay in force until mid May. We saw very good growth in the off trade and our market share improved slightly Due to good performance of our premium portfolio, Switzerland was impacted by on trade restrictions.
Our business over indexed in on trade and events and under indexed in off trade and therefore volumes declined. Poland continued its growth trajectory, seeing good growth of alcohol free, craft specialty and some continued good execution in the off trade. In the U. K, the integration of mass restructuring activities is progressing very well and cost synergies are tracking well. Our U.
K. Volumes were challenged by lockdowns as strong off trade demand was insufficient to offset the lost on trade business. As you know, On Trade opened for outdoor serving 2 weeks ago, and we've seen great excitement among consumers who are finally And now Slide 9 and Asia, please, where we saw a great Thanks to very strong performance, in particular, in China. Volume and revenue grew by approximately 30% for the region. We saw strong premium growth in a number of markets.
The 1% growth in revenue per XLILTA was impacted by customer mix due to stronger growth in markets such as China and India where revenue per hectoliter is below the regional average. Our Chinese business delivered more than 50% organic volume growth due to good execution of the Chinese New Year, Continued growth of our premium brands, both local and international, continued city expansion and Easy comparables with Q1 last year that was significantly impacted by COVID-nineteen. We continued to strengthen our market share, driven by growth of our local premium and international premium brands as well as growth in the e commerce channel. Excluding China, the rest of Asia reported organic volume growth of 5%. We saw a good start to the year in India and Vietnam with both markets delivering high teen volume growth.
In India, the growth was mainly due to lower excise taxes in some states, trade loading in other states ahead of price adjustments and easy comparable numbers for the month of March. In Vietnam, the growth was driven by restrictions being lifted during the quarter and growth outside our core region in the central part of the country. In other markets such as Nepal and Malaysia, our business remained locked down and also in lockdown and also declined for the quarter. Net net, a good start to the year in Asia, but The situation remains very fragile in several markets and we see intensified lockdowns following increases in infection rates. Therefore, we expect continued volatility in the coming quarters.
And now Slide 10 and Central and Eastern Europe, please. The region delivered a solid start to the year. Revenue grew organically by 3.1%. This was driven by 8.9% organic volume growth, partly offset by declining revenue per hectoliter. The lower revenue per hectoliter was mainly the result of the higher level of promotions in Russia compared with the same quarter last year and in some markets, and that is primarily in Southern Europe and negative channel mix due to on trade restrictions.
Reported revenue declined by 9% with a currency impact of minus 12% due to the depreciation of Eastern European currencies in second half twenty twenty. With the exception of Belarus, all markets in Central and Eastern Europe delivered Strong organic volume growth for the quarter. Russia achieved strong mid teens volume growth, mainly due to a higher market share year on year following our so called plan B with a higher level of promotion that was initiated at the end of Q1 last year. Our market share in Q1 this year was at the same high level as in Q4. In Ukraine, our volumes grew slightly in a declining market that was impacted by cold weather and Frequent changes in COVID-nineteen related restrictions.
In Southern Europe, January and February were challenging, But in March, all markets reported strong volume growth. This was mainly due to easy comps as restrictions started in March 2020. However, in the large foreign trade markets in Southern Europe such as Italy, Greece and Croatia, The situation remains uncertain due to continued lockdowns and the dependency on the tourist season. In our export license business Growth was driven by license businesses in Turkey and Ireland and the export business to South Korea and to Australia in particular. Now Slide 11, please, as an update on our share buybacks.
As we said in February, we will execute the 20 The Q1 share buyback program ended Friday last week. In total, 749,879 shares were purchased at the total value of DKK750 1,000,000 corresponding to an average share price of DKK1 1,000 per share. The daily volume board represented an average of around 6% of daily trade volumes on NASDAQ Copenhagen. Today, we then initiate the 2nd quarterly buyback. As we had a good start to the year, the value of this 2nd share buyback program has been increased.
The intention is to buy back Carlsberg B shares amounting to €1,000,000,000 up until August 13. Cardholder Research Foundation will participate in share buyback on a pro rata basis. Further details can be found on Page 4 in the Q1 Trading statements. Please turn to Slide 12 and the outlook for the full year. As we assumed in February when we gave full year guidance, the year of 2021 would be uncertain and volatile.
And as a result, we prepare ourselves for different scenarios to be ready if or when the business environment would change. In addition, we took again a strict view on costs, while at the same time being prepared to invest more when markets open up. This has served us very well. And thanks to this and a strong recovery in some markets, we started the year very well. In February, we communicated our 2021 guidance expectations and earnings expectations of 3% to 10% organic growth and operating profit, which was based on Western Europe being impacted well into Q2, China and LEO being on a recovery trajectory, but the situation in other Asian markets remaining fragile, Central and Eastern Europe being impacted by restrictions in Southern Europe and the competitive environment in Russia remaining fierce.
This situation has not changed significantly versus our expectations. In Western Europe and Central Eastern Europe, We have seen restrictions being prolonged in many markets well into Q2. At the same time, the Asian and in particular Chinese performance was very strong for Q1, while in Q2, several markets are seeing an increase in inflation rates, and that has led to renewed lockdowns in markets such as Layers, India and Cambodia. Based on these different puts and takes and As we have visibility for 4 months into the year, we are able to raise the bottom end of the range in our earnings expectations to 5 to 10% organic growth and operating profit compared to the previously announced 3% to 10%. It is important to emphasize that the volatility and uncertainty in many markets remain high.
In Western Europe and Central and Eastern Europe, We have the important peak season ahead of us and continued lockdowns, restrictions or changes in consumer behavior may influence full year results significantly. Based on the spot rates yesterday, we assume a currency impact of around on profit of around DKK 250,000,000,000. All other assumption remains unchanged. That means net finance costs, excluding FX, I'll therefore assume to be around €600,000,000 tax rate around 25% and CapEx between €4,000,000,000 and €4,500,000,000 And now, back to you, Gijs.
Thanks, Heine. Before opening for Q and A, let me summarize. We delivered a good start to the year, Thanks to strong performance in some of our key markets, notably in Asia and Central and Eastern Europe. In many Western European markets, the business environment was challenging and remained so due to COVID-nineteen related restrictions. We are able to raise the bottom end of our earnings outlook.
And with this, we are ready to take your questions. Peter, please remind everybody the process for this.
Yes. Good morning, everybody. As Kees said, we
are now ready for the Q and A session. In order to ensure that everybody gets a chance to ask questions, please limit the number of questions to just 2 questions per person. If you have further questions, you can answer the queue again. So operator, can we take the first question, please?
The first question is from the line of Edward Mundy from Jefferies. Please go ahead. Your line will now be unmuted.
Good morning, everyone. Thanks for taking the question. I've got 2, please. You've got off to a very strong start. Europe has gradually Starting to reopen, China is flying.
You obviously raised the bottom end of your guidance. What's held you back from raising the top end of the guidance at this stage? And then my second question is on China. Over 50% growth, you mentioned some of the key drivers in the presentation. Is there any phasing of shipments The boosting the numbers here or just the 50% plus actually reflect underlying consumer uptake.
Thank you, Wes. Over to Heine?
Yes. Good morning, Ed. So On the guidance outlook, we feel more comfortable for good reasons, but we believe there is still a High degree of uncertainty as to how the pandemic and its consequences will evolve here during 2021. The bottom end of the range has been raised due to a few factors, including the fact that we have Slightly more certainty for the year with now almost 4 months concluded with, as you can see, relatively good results and that includes A strong start to the year in China. And at the same time, that's to your question, we have had a challenging start in Western Europe And we see increasing risk for Q2 due to the sort of prolonged restrictions.
But overall, we feel more comfortable.
With regards to your question on China, Ed, well, we had a very strong start in China in Q1. And indeed, we had easy Comparables with Q1 where our Chinese volumes declined by approximately 20%. However, we also had a good execution of Chinese New Year. It's good loading ahead of the Chinese New Year and good throughput at the distributors. All our premium brands Have very good momentum at this moment of time.
It's over 60% that we grow with them. And the continued market share growth It's driven by Premium Brands and our big city expansion. Then if you look at Q1 versus Q1 2019, so Q1 2021 over 2019, we grew by 20%. With regards to shipment, we saw a continuation of our growth In April. So it's in all kind of from whatever angle you look at it, it's a strong quarter.
Thank you. And just coming back to the guidance question as to why you're not reading the top end. Is it just you're waiting to see exactly when Does Western Europe reopen? And is that degree of uncertainty that's holding you back at this stage?
Well, there's a lot of different factors to take into account. But the Western European sort of lockdowns is certainly one of the key factors. There are other factors like for instance Whether there will be further restrictions in China, how the infection sort of evolve In the other Asian markets, so there is a lot of uncertainty out there. And just to remind everyone, We are still ahead of sort of peak season in particular, Western Europe and Central and Eastern Europe.
The next question comes from the line of Vincent Ryan from JPMorgan. Please go ahead. Your line will now be unmuted.
Good morning, Kaes, Heine, Peter. Thanks for the questions. Just 2 for me, please. Firstly, with regards to your price mix, I appreciate sort of the pressures around channel and country mix you mentioned in terms of Q1. But do you have any concerns around or Questions around your ability to take like for like pricing and in particular, at least potentially right at an increasing raw material inflation environment.
And specifically around in Russia, could you give us an update of how the pricing negotiation of the customers have gone in Q1? And what you'd hope for In terms of price mix for the rest of the year there, the competitive environment generally. And then secondly, just in terms of The competitive environment, in particularly in France and Denmark. Again, Denmark, you mentioned that volumes are broadly flat And the answer off trade shares held up
at least Q1. And what were
the main drivers of certain improved performance in those markets? And like would you Be anticipating to be able to gain share in both the on trade and the off trade once both channels are reopened during the year.
Thank you. Good morning, Sander, and thanks a lot for your questions. With regards to pricemix in Europe, as you said, the main driver of that It's indeed channel and country mix. And we Gives you an example, Poland grew by 7%. If you look at France with a significantly higher Net revenue per hectoliter declining with 60%.
You can understand that on a total Western European level, The price mix is negative. However, we don't see underlying issues with our price mix, Especially also because craft specialty is growing significantly For the group, 13% of you as you have seen, COFRI is growing significantly. That's not so much a net revenue A play in life with more margin play. But in total, we don't see any issue going forward regards to price mix, of course, we also see the increases in the raw materials, and we are preparing How to mitigate that? For the time being, we are well hedged.
So it's something that comes towards us in 2020 2. With regards to Russia, the competitive situation in Russia is, in our view, unchanged. The high level of promotion pressure has continued. We announced a 2% price increase in October November To partly cover the RUB1 tax increase, we have not seen yet any higher prices On the shelves from our competitor, and we continue to try to optimize price mix without losing market share in order to offset inflation on input costs. We are very satisfied with the current market share level and would, of course, like to see Less promotional market pressure in the market.
But at this moment of time, as you have seen in Russia, We're doing pretty well with a good growth of 16% in volume and also having established our continued our Market share, which we grew over 2020, finishing at a level of Roughly 27%, 27.5% end of last year and continuing that in this year. And then with regards to France market share, there We have been able to improve our market share at the end of 2020. In off trade, it is now flat versus last year. We see growth in 6064 in Greenberg and Total. So in that respect, we are able to get more promotional slots.
As you know, we had some issues which related to COVID last year because our brewery wasn't able to pre produce the production needed for the volumes in summer, and hence, we could not participate in some big promotional slots. We have been able to repair the situation in the second half or better to say in the last quarter, and by that we also saw our market share improving. With regards to Denmark, we have lost some share during 2020. It has been to do with the closed border to Germany. That's where price sensitive consumers buy, so Danish consumers buying relatively lower priced Beer and brands at the border.
And at the moment, they can't do it there. They do it in Denmark This probably at the discount channels and hence we have lost some share there. And also the so called Brown Plus were closed, where we over indexed and also there we see some Less backdoor sales of Tuborg from the retail and hence some pressure on our market share. So as we read the situation, no structural issues, Moh, due to COVID related issues, we are confident that we can come back on market share in the second half of the year. At the moment, especially in Denmark, COVID issues are easing as we speak.
The next question comes from the line of Trevor Stirling from Bernstein.
Sorry, Peter and Heine, I should
have pressed 5 star. All my questions have been asked already.
Thank you. Good morning, Trevor.
Okay. Thank you. So the next question comes from the line of Frederic Eversham from ABG. Please go ahead. Your line will now be unmuted.
Hello, gentlemen. Thank you very much.
Hi, guys. Couple of questions for me. First, back to China. You referred to volumes being 20% higher than For 'nineteen, I'm just curious here whether that might be a level that you forecast for the rest of the year as well in your internal budgeting? That's my first one.
And then also coming back to the raised guidance, wonder whether that's a volume thing that's Driving you to raise it or if it's more of a mix thing, maybe referring to Craft and Specialty growing by 13%, I guess the Corresponding figure of last year was 1%. So yes, just curious to hear what your thoughts on that is.
Thank you very much, Frederic, and good morning again. With regards to China, no, we don't think we will end up with 20% versus 20 19 in total. We are not giving, let's say, our internal budgeting. However, we see a good momentum. We see our Market share improving.
We also see some very strong months ahead of us vis a vis 2019, especially as you recall, May, June, July were extremely strong. So we focus very much on The market share development and the development in the different levers of growth, including the big city, the Wuzu Brand that is still continuing to show good growth and also our international premium brand. So In total, we are on a good trajectory in China. Heine?
Yes. Good morning, Frederic. So on the guidance And whether it's volume or mix, it's actually both. So it's both elements. It's both volume and It's also the mix element.
And then on top of that, when you talk guidance, which in our case then is EBIT guidance, it's also the fact That we are well prepared for different scenarios with, as you know, our firm sort of funding the journey And OCM approach, so we have, as we also said, again, taken a strict view on our costs So that we are prepared for different scenarios. And we do that for two purposes. One is that we want to defend our EBIT and our cash. The second reason is that we want to ensure that we are 100% ready to invest into top line growth When the markets come back and we are ready. So it's both volume, it is mixed and it's also our Firm transparency and view and discipline within costs that makes us comfortable with the full year outlook.
The next question comes from the line of Laurence Wyatt from Barclays. Please go ahead. Your line will now be unmuted.
Morning, Keus, Heine and Peter. A couple for me, if that's okay. Firstly, on China, just following on from Ed's Question, you mentioned that one of the reasons you're keeping guidance at the level is and not raising the top end is potential lockdowns In China, I was wondering
if you could give us
a bit more detail on the current level of restrictions in China and sort of what level potentially could come in during the rest of the year. And secondly, on China, I was wondering if you could give us a bit of color around Price versus mix growth in the country, it looks like price mix overall was very strong given the overall level of price mix in Asia. Just wondering, particularly within China, how much of that was absolute price increases? Thank you very much.
Thank you, Laurence, and good morning. With regards to China and logins, I think that Heine wanted to say that you never know at this moment of time. We see Sometimes, cities being closed for a while, Unum, was I think 3, 4 weeks ago. They were closed for a couple of days. It seems that the government is able to really direct immediately resources to such a COVID incident, Takes measures and then is able to clear the situation relatively quickly.
However, we see a different situation in, as you all know, In India, but also in layers now, in Nepal, Malaysia. So COVID in Asia is not at all Behind us yet. So in general, we see less risk for China. We see it in Realistically if you are realistic, we see some risk for India. You saw a very good quarter, But at this amount of time, the volumes, of course, are a bit lower due to the situation there and the same That applies for Leos.
With regards to price versus mix, frankly, China is not a market where you can easily take pricing. Our big competitors don't take price. It's more than, if you like, A country where we really want to grow our volume and we do that at the high end of the portfolio. So with a brand like 66 for Blanc, but also Carlsberg Thurg and also UZU is basically And increasing the price mix vis a vis the other Brands. So in total, we see a further strong growth of our international premium brands And hence, we continue to have a strong pricemix in China, if that answers your question, Doris.
Yes, it does. Thank you very much.
Thank you.
The next question comes from the line of Mitch Alex from Deutsche Bank, please go ahead. Your line will now be unmuted.
Good morning. I also have two questions. Coming back to guidance, I think when you gave the guidance at the start of the year, You said that you were assuming the restrictions were lifted before the summer season in both Western Europe and the southern part of Central and Eastern Europe. I know you've already commented a bit on the underlying drivers of guidance and the change, but can you just confirm whether or not that's still your expectation or not? And then my second question is, you comment in the release about strong March growth rates, again, in Western Europe and I think The southern part of Central and Eastern Europe.
Can you perhaps give us some numbers or some direction about what the March growth rates look like either for those parts of your business or for the overall group? Thank you.
Thank you, Mitch. The first part is for Heine.
Yes. Good morning, Mitch. So yes, you're right. It was our assumption when we started the year and when we gave our full year guidance That many restrictions are being lifted before the peak season and that is still our expectations. So no change there.
With regards to the March 'twenty one volumes, We saw indeed a relatively strong March. That was of course vis a vis more easy comps last year. But Western Europe was up by 15%, Q1-five, Asia 43% and Central and Eastern Europe by 12%. So in total, 22%, Mitch.
The next question comes from the line of Nick Oliver from UBS. Please go ahead. Your line will now be unmuted.
Hey, good morning, Kate. Hi, Peter. Thanks a lot for the questions. 2 from me on China, please. Firstly, the Wussu brand, you mentioned, the strong growth.
Can you just remind us how big that is now as a percent of the portfolio? And any guidance you can give us on how you think that brand can grow over the medium term because I guess there's a like for like also a regional Penetration and element to that brand. And then secondly, on margins in China, I think previously you'd indicated that they might edge down Slightly this year, as you invested behind the growth. Just given the strong start we've seen on the premium side, Is that still the case, just given that the gross margin differential between premium and more mainstream parts of the portfolio? Thank you.
Good morning, Nick. With regards to the Woozoo brand, indeed it's a very strong brand With a cultural hard core spirit, I would say, it's our strong local power brand with Much preferred liquid and also ABV. It is plus 5% ABV versus typically 3% ADT in China, as you know, and that profile helps us a lot. The consumer like it, And they're willing to pay a premium for it. So it's more or less almost 24%, 25% of our portfolio in China, so it's big.
And we are having focused commercial approach in promoting the brand via social media. We are able to reach The younger and also the aspirational consumer effectively to offer them a premium, better tasting liquid, as I said. And by that, the Woozoo brand economy continues to grow. As you know, it's a very big brand in the West, And it found its way more to the center in the east. And therefore, we, for the foreseeable future, See a continuation of the potential of Wu Zhu and by that also a continuation of the growth of the Hu Zhu brand in China.
However, it's part of a mix. As I said earlier, also the international premium brands Worked very well for us. The big city approach continues. So in that respect, it's part of multiple A number of elements that help us to grow in China. Then with regards to margin, over to Heine.
Yes. Good morning, Nick. So on margins in China, For Q1, margins are up in China for the good reasons that last year, as you know, was heavily impacted And that we throughout the year took firm actions, which then on top of a good growth as you've seen This year just has resulted in very, very strong margins in Q1. What we have said with respect to the full year remains the case, which is that our algorithm for China is to invest as much as we practically can into top line growth. It's not that we want to hold down margins as a priority.
It's just that when we prioritize the top line growth Versus market progression, China in particular focuses on top line growth and that remains The priority for the country. And that has not changed with the premium expansion.
The next question comes from the line of Paul Ed Nicolai from Goldman Sachs. Please go ahead. Your line will now be unmuted.
Good morning. Just two questions on my side. Just in Europe first, as we see restriction easing In Q2 across Europe, plus you have also the coming Euro Football Club, where I believe Denmark is actually qualified Among many other countries, why you are big. What are you hearing from your customers in the honor of trade? And are they still cautious about increasing their inventories?
Or are they more optimistic than a few months ago? And the second question, just a follow-up on China. Have you noticed a change in The premium segment and is there more upside on big city strategy or any more distribution gains going forward? Thank you.
Thank you, Olivier, and good morning to you. So when we look at Europe, frankly, it's a bit patchy. In France, our customers are a bit more, if you like, depressed than now in the Nordics, especially in Denmark. Yes. In most of the markets where we are in Western Europe, the local or the country team has been qualified.
In that respect, that's good. It's maybe too early to say what the general rule is. Obviously, all our customers are really focused On the dates to open their preferable restaurant again, what helps us significantly is our DraughtMaster system because It reduces the risk for them. As you know, the whole beer is fresh for more than 30 days And that helps them to take also a bit of a risk on the stock. So in total, where customers can open, they're extremely willing to accommodate our brands A focus on a big and a fast restart for their premises, but it's very difficult at this moment of time to A general view on Europe.
Then with I can't see my own handwriting anymore. In China, sorry, about the premium brands, the big city remains to be in the upside For us, we are in the 39 cities as we speak. We see also that Ruzu on its own It is moving towards other big cities where we have not established yet our own distributors. So also that is good with regards to the future development of our big city strategy. And hence, This remains to be extremely important part of our portfolio, both in terms of And also in terms of growing from the core, where we started 3 years ago, these big cities continue to do very well.
And that gives us confidence also for the future that this is not only at the moment that we can't move to more big cities anymore Then the growth is over. On the contrary, we see from the core that the growth of our portfolio is continuing there.
The next question comes from the line of Pinar Erkrum from Morgan Stanley. Please go ahead. Your line will now be unmuted.
Good morning. Thank you for taking my questions. The first one is on on trade. Some of your peers appear to have struggled to meet The rising on trade demand in the UK recently, are you comfortable with Carlsberg's ability to supply peak on trade demand If we were to see a strong recovery over the summer, and that's both in the U. K.
And elsewhere. And the second one is on shareholder returns. Does the top up in Q2 buybacks mean more shareholder returns could be on the cards should demand accelerate over the rest of the year? Thank you.
Thank you, Friederin. Good morning. With regards to the old trade, yes, everything is, of course, being ready to follow the markets, I would say. Again, our DraughtMaster system helps on that. But also there, we don't have DraughtMaster.
Our supply chain is, we think, agile enough To really cater for the peak in the home trade, so far there where we started in Both in Denmark and the U. K, we have not seen disruptions yet. Of course, we need to learn going forward, but The entire team, both the commercial team and the supply team, is very much focused to deliver the volume in time I think all of you are forward. Hi, Ben.
Yes. Good morning, Klein. And on your question on shareholder returns, Then just to reiterate, the SEK1 billion was decided based on the fact that we had a good start to the year, which then gave us comfort To increase the return in Q2 versus the SEK750 1,000,000 in the first quarter program Buyback, just to reiterate that, has for the last few years and will remain for the coming years an integrated part of our capital allocation principles. And by announcing by quarters, as we've discussed before, We have the flexibility to initiate, to reduce or to increase and also to the size of the amount by quarter Depending, of course, on the business development, the impact from COVID-nineteen and M and A. So from our point of view, No change.
Our policy and our focus on shareholder returns remains unchanged.
Thank you.
Thank you, Pinar.
The next question comes from the line of Tristan Van Strien from Redburn Partners. Please go ahead. Your line will now be unmuted.
Good morning.
Just one clarification and two questions on China. You mentioned earlier a revenue per hectoliter in France. I wasn't sure if you said it was down 60, 6 0 or 16%. So just checking on that one. And then 2 on China.
1, I don't think you actually gave the actual price mix in China, this would be wonderful if you give that and maybe also give a sense that you're comfortable with the rate for the next several years. And then related to that, Broader on the wheat beer, the white beer market in China, can you just give us how big that market now is in China And where do you think it will go to? And perhaps a bit more content, where is that growth coming from? Is that just a shift from lager? Is that women coming into the category?
Why is wheat beer working so well in China and Asia as a share of beer relative to Europe, for example?
Tristan, good morning. With regards to France, what I said is that the volume in France was minus 16. And I didn't mention any net revenue per hectoliter associated with relative To Poland, France is significantly higher than Poland and hence a negative country mix as a consequence of the fact that Poland was growing by 7% France was declining by 16%, 16%. With regards to the price mix, China, it's 5%. We are yes, we think we can continue that more or less in that way.
So that's your first question. And then your second question with regards to wheat beer, well, Frankly, I'm not a specialist on wheat beer in China. What we know is that indeed it's a segment that's growing very fast. It seems to really Because maybe also it's a bit live, really appeal to the consumers. We see some of our brands that have a range Extension in Big Bear doing this very well.
It's not really yet a part of our Four levers of growth, but it's in a very so far a very good Range extension. Then we have 66 for Banco Forth, which is excellent. There we see That is part of the interest of the consumer in international brands, but also the very specific Liquids that we have combined with the very iconic bottle and that combination makes it extremely successful. We also see that it's not only male, but also female drink. So there we get, if you like, a broader consumer base.
And hence, we continue very much to support that brand in China.
Thank you. Maybe just a follow-up, sorry. How big is that market now in China? Are we now A proper single digit percentage there or is it still insignificant in terms of the overall beer markets?
Well, tomorrow I have a 6 hour commercial review with China. So I will ask the question. Frankly, I don't know This is done. How that part of the market is. But Peter will come back to you afterwards.
Thank you.
Very good. Thanks, Tristan. Can we have the last question, please?
The last question comes from the line of Simon Hales from Citi. Please go ahead. Your line will now be unmuted.
Brilliant. Good morning all. One quick one then for me, please. I mean, Kees, you talked about sort of your increasing confidence about the medium Term outlook for the business given the implementation of SAIL 22 you've put through and what will come thereafter. I think in the past, you've sort of indicated that Medium term, you'd expect to sustain this 3% to 4% ish type compounding top line growth.
Are you suggesting that your confidence See that rise above that over the medium term given what you're seeing as we recover?
Thanks, Ivan. Yes, what we have set for sale Q is that we would have a CAGR of 2% to 5% of net revenue growth. Indeed, what will be said in some conversations we think going ahead, especially with regard to the higher share of the Asian business In our portfolio, that could be higher, maybe even 3% to 5%. Frankly, we need to do our math At the moment that we do our sale 27 program, as we said, we started We will start in 5 to 6 weeks from now with the 1st Michigan Supervisory Board. Of course, we've done our homework in terms of what are there at this point of time.
What is So far, the achievements of the different categories that we've chosen in 2015, and then we still see some leeway further into the future, which Facilitate growth for Carlsberg. And at the moment that we have done that, including maybe also So further investments in either countries or sub categories or adjacent markets become to a new target internal target for the net Revenue for the future. But indeed, quoting that, we think that for the foreseeable future, we could be between the 3% and 5%. Thank you, Simon. And 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 for now.