Peter Kondrup -Vice President - IR Joergen Buhl Rasmussen - President and CEO Joern Peter Jensen -Deputy CEO and CFO

Trevor Stirling - Sanford Bernstein Ian Shackleton - Nomura Michael Rasmussen - ABG Sundal Collier- Casper Blom - Handelsbanken Sanjeet Aujla - Credit Suisse Soren Samsoe - SEB Nik Oliver - BofA Merrill Lynch Melissa Earlam - UBS Hans Gregersen - Nordea Andrea Pistacchi - Citi Andrew Holland - Societe Generale Frans Hoyer - Jyske Bank Mitch Collett - Goldman Sachs

Thanks a lot and good morning, everybody. Welcome to our Six Months Results Conference Call. My name is Joergen Buhl Rasmussen and I have with me our CFO, Joern Peter Jensen and also Vice President of Investor Relations, Peter Kondrup. Please turn to Slide 3 and the headline for the first six months. We saw mix beer market development across our three regions. We had a flat market share in Western Europe, we had market share decline in Eastern Europe and market share improvement in Asia. Driven by our increasingly stronger commercial execution, we continued to improve price and mix and delivered a very healthy 5% price/ mix improvement. We keep pushing our commercial agenda and maintain a high level of investments in our international brand portfolio and we launched several innovations and maintained an overall high level of commercial activities. Our cost agenda remains unchanged and we focused on executing on our many efficiency programs including the rollout of BSP1. The integration of Chongqing is progressing according to schedule. And we sustained a solid operating profit growth delivering 8% organic growth for the first six months. And adjusted net profit was flat for the six months about the 7% growth in Q2. And now Slide 4 please. Our Eastern European business delivered very good performance for the first six months in spite of the challenging market conditions. Our teams in Russia and Ukraine are doing an excellent job mitigating the impact of the challenges. However, due to recent macro events, the general consumer sentiment and the outlook for some of the economies in Eastern Europe are becoming increasingly challenging and uncertain. In light of this, we believe that consumer spending in Eastern Europe will be impacted more negatively than previously anticipated, and as a consequence of this the beer category will deteriorate further in the second half of the year. This will impact us in two ways. Firstly, we expect the Russian and Ukrainian beer markets to decline more than previously expected. The Russia declining by high single digit percentages for the full year. Secondly, we expect our partners in Russia to be less inventories at yearend than previously due to the potentially related financing opportunities as well as the possible freeze of excise duties for 2015. Please note that the lowest stocking is more placing issue as these volumes will then be sold in Q1, 2015 instead. We have taken tough decisions to adapt our business to current challenges. Our actions include the implementation of several structural changes in different branch of the organization such as logistics, sales and production. In addition, we are considering brewery closures as well. We will not comment further on such closures but we will come back to you when final decisions are made. Not withstanding a tough approach to the current challenges, we will continue to do what is right for our business long term. This includes investing in our brands and keeping commercial activities at high level. We don't want to optimize short-term profits for the long-term health of our Eastern European business. We want to ensure that we maintain a very strong and very profitable Eastern European business now and in the future. In conclusion, this unfortunate means that we have to adjust our 2014 outlook downwards. And Joern will go through the details later. And now to Slide 5 please. Beer volumes in the first half declined organically by 3%. Organic volumes grew in Western Europe and they were flat in Asia and declined in Eastern Europe. Reported volumes grew by 3% due to the execution impact of the Chongqing Brewery acquisition in December, 2013. And Slide 6. Organic net revenue growth was 4% supported by the continued good price/mix development of 5%. Operating profit grew organically 8%, is 14% growth in Q2. All three regions delivered organic operating profit growth with particular strong performance in Western and Eastern Europe. Profit in Asia was impacted by growth investments such as higher sales and marketing investments and expansion into new market. The acquisition impact was related to the purchase of Chongqing Brewery and the substantial negative currency impact was due to weak currencies in several markets. All-in-all, the group delivered a 1% reported operating growth despite the volume decline in Eastern Europe and the substantial negative currency headwind. Slide 7. And an update on some of our commercial activities. Overall we continue to push our commercial agenda and saw strong performance of our international premium brands. The Carlsberg brand grew 3% in its premium markets. The brand gain market share in the majority of its market and did particularly well in Asia, driven by good performance of Chill and Light in China and Carlsberg Elephant in India. The Tuborg brand grew by 26%. And important driver was Asia where volumes more in stock as a result of good performance in China and in India. 1664 grew by 15% mainly driven by good performance in France which was partly due to easy comps, due to de-stocking in Q1 last year and partly due to market growth and share gain in France. Our super beer Grimbergen grew almost 40% in the first six months due to the expansion to new markets and market share gains in France. And Somersby grew 48% as a result of rollout in new markets, line extension in existing markets and continue strong positive performance. And now Slide 8 please. Our innovation agenda is very broaden and has a very positive result of centralized and very structured innovation process; we are able to bring more innovation to our market faster than what it is previously. On this slide, we highlight just a few interesting products that are either completely new innovations or existing products that are being launched in new markets. Some of these products are targeting the increasing demand in some markets for specific products such as low alcoholic beverages and flavored beers. Other products are targeting the specialty or crack beer category that is also great advanced and perhaps more importantly or to creating a renewed interest for the beer category. All these products are premium products which help drive beer price and mix and margins. Finally, we also working on further improving the beer experience for consumers by developing products and systems which enables customer to serve and sell beer of the highest quality. Our Draught Master Technology is a good example of the breakthrough technology which delivers towards this demand. And now Slide 10 please. And a few comments on our regions. The Western European beer markets grew by estimated 2% to 3% for the first six months. And an estimated 3% to 4% in Q2. Q2 this year was positively impacted by the football World Cup and Easter. We continue to deliver robust market share performance. Our overall Western European market share was flat, the growth in market such as France, Holland, Italy, Portugal and Greece. Our beer volumes grew organically by 5% mainly as a result of the overall volume and de-stocking in France last year. Price mix in this region was flat. The positive impact from our value management efforts across the region was offset by the strong growth in other beverages which impacted price mix negatively. Our non beer volumes grew organically by 6% primarily due to strong performance in the Nordics and Switzerland. In Poland, we grew 6% in a market growing by an estimated 1% to 2%. Strong performance of our local power brands Somersby and Radler explains the strong growth. Price mix was flat. Our French volumes grew 25% in a market growing by 7%. Our volumes were positively impacted by last year's de-stocking in Q1. Our market share was slightly offset driven by strong performance of our premium brads such 1664, Grimbergen and Tuborg Skoll. The UK market grew 4% with a strong operating Q2. Our market share declined slightly. BSP1 was launched in the UK in March which gave some initial challenges in our overall business. And then our Nordic business performed strongly driven by good weather compared to last year, growth of soft drinks and strong commercial execution including innovations and value management efforts. All markets grew with the exception of Finland. Operating profit grew strongly by 11% and operating profit margin expanded by 50 basis points to 12.4%. The earnings growth was driven by the volume growth, so the savings and then supply chain driven by our centralized supply chain organization and the overall efficiency improvement in all areas throughout the region. Slide 11. Eastern Europe. The Eastern European beer market was challenging for the first six months due to the overall uncertain macro environment in Russia and Ukraine. The Russian beer market declined by 6% to 7% in the first six months while in Ukraine it was down by approximately 10%. Our beer volumes declined by 11% mainly driven by our Russian business. Organic net revenue declined by 2% and by 18% in DKK due to the significant negative currency impact from the Russian and Ukrainian currencies. Approximately 70% of the FX impact in the region was from Russia and 25% from Ukraine. Price mix was strong at 80%. The price mix was mainly driven by price increases and change excises in Russia which I will address shortly. Organic operating profit grew by 7% despite the suspension in negative volume development. Operating profit margin improved by 170 basis point to 20.2% and then even higher improvement of 460 basis points in Q2. The earnings growth and margin improvement was mainly driven by cost to price mix, different spacing of marketing investments versus last year and accelerated cost savings and business improvements. Profits in Russia, Kazakhstan, Belarus and Azerbaijan increased by profits in Ukraine decline. Slide 12. And Russia. The Russian market declined by an estimated 6% to 7% for the first six months. The market was impacted by a slower economic growth in Russia which impacted overall consumer spending nature. The Russian market has become increasingly challenging under the current geo political tensions, we will not expect market conditions to ease in the remainder of the year. Our volume market share declined by 120 basis points for the first six months. Our strategy is to always balance volume and value and value share declined considerably less as our share loss was mostly pronounced in the economy segments which we gained -- while we gained share and local premium thanks to good performance of Baltika. The overall market share declined can mainly explained by three factors. Firstly, our price leadership during past of the half year impacted share development negatively. Secondly, the aggregate of SKUs, that SKU is containing slightly less liquid which is done to minimize price increases and improve affordability. This did not impact the number of bottles sold but as we have solid less liquid, it impacted share performance negatively or price mix positively. And finally, we had to list these new SKUs at the same time as practical change to its legal structure. That created more disruption in deliveries due to the required administrative work that expect across and our customers. And it took longer to execute than expected. Our shipments declined by 11% due to the market decline and market share development. Price mix for beer was dropped 9% driven by price increases in March and May, mix improvements and value endearing i.e. the launched of the aforementioned smaller pack sizes. And now Slide 13. And Asia please. In Asia, we continue to strengthen our market share in most markets across the region. We kept the high level of commercial activities including growing up of our international premium portfolio further strengthening of sales capabilities and revitalizing of local brands. As mentioned previously, our international premium brands delivered outstanding performance with Tuborg Gold and doubling its volume and Carlsberg of 12% in premium market. Volumes declined organically by 2% due to slight trend improvement in Q2, their volume were flat. Including the Chongqing acquisition, beer volumes grew by 21%. We saw particular strong growth in India, Nepal, Cambodia and Laos and for the international premium portfolio in China and India. The beer market in the Western Chinese provinces performed worse than overall China for the first six months due to unrest and bad weather in Xinjiang as well as the very wet summer in Chongqing. In addition, we have dealers with unprofitable SKUs in one province and consequently our overall Chinese volumes decline organically. In spite of the 2% organic volume decline in the region, our revenue grew organically by 9% due to a very strong price mix of 7%. Organic revenue growth and price mix accelerated from Q1 to Q2. The strong price mix improvement was driven by our international premium brands, price increases and value management efforts across the region and delisting of low priced and unprofitable SKUs in China. Organic operating profit grew by 5%. Profits were impacted by investments in growth such as stock in Myanmar and higher sales and marketing investments. However, this negative impact was more than offset by the positive price mix and income from terminated license agreement. The operating margin declined up 300 basis points was due to the consideration of Chongqing Brewery accounting the margin somewhat below the region average. And with this I would like to hand over to Joern, who will walk us through with the financials.

Thank you, Joergen. And now please turn to Slide 15. Our business delivered solid organic growth rate in first six months of the year. As already mentioned, volumes were suppressed due to the market conditions in Eastern Europe and worst events in Asia particularly China, but a very strong price mix was able to offset this. Adjusted net profit was flat as collage of impact from organic growth and acquisitions were neutralized by quite negative FOREX. Free cash flow of DKK 600m versus last year. The rollout plan for BSP1 is on track and the next market to go live will be Poland, Finland and Switzerland in the fall. In May, we successfully placed 10-year EUR notes at a principal amount of EUR 1b with a coupon of 2.5%. Before I dig further into the numbers, I would like to reaffirm our strong focus on earnings and cash flow in all business units. The challenging conditions in our largest market only further emphasize the importance of our Group wide efficiency agenda. However, as we have also stated before we will not compromise the continued investments in our brands and the future growth of our business. And now Slide 16. Organic net revenue increased by 4% or DKK 1.1b as a result of strong price mix of 5%. The negative currency impact was due to several currencies bust most pronounced were the Russian, Ukrainian, Norwegian and Chinese currencies. Organic COGS per hectoliter were up 3% and reported churns down 4%. Reported gross profit margin improved by 80 basis points. Total OPEX increased primarily as a result of BSP1 implementation costs which in the first half amounted to approximately DKK 250m, higher logistic costs particularly in Eastern Europe and placing of sales and marketing investments. All in all organic operating profit amounted to DKK 4.4b of 8% versus last year. Organic operating profit growth was strong in Western Europe and Eastern Europe. However, in Eastern Europe the significant negative currency impact of 18% versus the first half of 2013 resulted in lower operating profit in that region in report terms. Consequently reported group operating profit was up 1% to DKK 4.1b. And now to Slide 17, where you also will notice the Carlsberg Nordic relation which has been launched in several markets this year. Special items were minus DKK 124m in line with our last year. Generally especially items related to structuring initiatives. Net financial were down DKK 44m compared to last year, DKK 102m were lower interest charges as a result of lower average spending costs. We've seen average spending costs coming down continuously over the past few years. Other financial items were DKK 58m mainly due to currency movement, fair value adjustments and fees. The tax rate was 25%. And so all in all reported net profit was DKK 2.1b. Adjusting for special items after tax, net profit was DKK 2.2b. The flat to betterment versus last year was due to adverse currencies. And now to cash flow on Slide 18. The sum of the first three lines, EBITDA including other non cash items is up to DKK 5.9b, a small increase of DKK 61m. The change in trade working capital was minus DKK 673m. As usual trade working capital was impacted by normal seasonality, but this year this was further impacted by higher sales in Western Europe end up to June. Other working capital was impacted by lower VAT payables at the end of the quarter compared to last year. I would like to remind you that our working capital revenues either we are using the average trade working capital i.e. during the year and not the number period end. Our track record in reducing the average trade working capital during the year has proven quite solid and at the end of Q2, the 12 month average trade working capital to net revenues was minus 3.8% compared to minus 3.1% in last year. Paid net interest was DKK 768milion, down DKK 0.5b due to lower funding costs as well as settlement of financial instruments last year. All in all, cash flow from operations was DKK 2.9b on par with last year. And Slide 19. CapEx was DKK 2.2b. In the first half CapEx primarily including investments in sales equipment to generate top line growth, capacity expansion in Asia and different projects in Western Europe to improve structure and efficiency. Net acquisitions amount to minus DKK 30m. All in all free cash flow follows the normal seasonality of our business and amounted to DKK 641m. The quality of DKK 624m versus last year was mainly due to the prepayment last year related to the Chongqing Brewery acquisition. And now to Slide 21. And our outlook for the year. As Joergen stated earlier in the presentation, we have had to change our outlook due to the recent Eastern European macro events. Our 2014 results are being impacted in two ways. Firstly, the weak macro economy in Russia and Ukraine means that we are now assuming that the Russian beer market will decline by high single digit percentages compared to previously mid single digit. We also see the Ukrainian beer market being on the increasing pressure with decline of 10% in the first half year. Secondly, we don't anticipate the usual high level of stocking at distributors as we've seen recent years due to the potentially restricted financing opportunities in Russia and also the possible of fees of excise duties for 2015. Although the stocking issue is merely a question of pacing a shipments from Q4 this year into Q1 next year. It will impact numbers negatively in Q4. Although assumptions are largely unchanged. Based on these assumptions, we now expect a low to mid single digit percentage growth in organic operating profit this year compared to our previous expectation of a high single digit increase. Including the acquisition impact from Chongqing and the assumed significant currency hitting, reporting operating profit is expected to decline by low to mid single digit percentages. Adjusted net profit or clean EPS is expected to decline by mid to high single digit percentages compared to previously mid single digit increase.

Thank you, Joern. And that was all for today. And to summarize, this 8% organic operating profit growth be delivered satisfactory performance for the first six months. We also delivered solid market share performance in most of our markets except Russia, and especially our international premium brands are performing strongly. Outlook for second half for Eastern Europe has become increasingly challenging lately which will impact the beer market and our 2014 profitability negatively. And finally, we are taking some tough decisions and are implementing several structure changes to mitigate the impact from the lower Eastern European volumes. And with this we are happy now to take your questions.

(Operator Instructions) We have our first question is coming from Mr. Trevor Stirling from Sanford Bernstein. Please go ahead Trevor Stirling - Sanford Bernstein: Good morning, gentlemen. Two questions from my side. The first one, in terms of the downgrade to expectations of roughly 8% to 9% to the net profit level, can you just quantify how much of that is your expectations for weaker or underlying beer market? And that the change in placing of shipments in Russia?

If you wanted as a percentage, sorry, if you want this kind of FT percentage it is -- well it is a little more than 70% which is kind of market consumer macro related and the rest being call it less stocking being expected. Trevor Stirling - Sanford Bernstein: Less stocking. So then as I think forward to 2015, you regained that 30% that was due to the de-stocking in Q1? And you also have an easy comp in Q4, is that the right way to think about it?

Yes. Trevor Stirling - Sanford Bernstein: Great. And then the second question may be for Joern which is the 250 basis points market share decline year-on-year and you went through the various factors that -- but also look at the others and the others have yet another big increase in market share. And up to 22.8% in the quarter. I mean is something that starts to worry you now about that of continued increase in the other share even though the macro environment is looking bit better? You probably just talk a little bit more about the other share.

I am not sure we see the macro environment losing a little better. Maybe in fact going in the opposite direction again. And what we see others is all show the average value is coming slightly down. So it is a little more price also in this product group. If you look at market share development and volume and in volume so I think what we've seen in the first half would be that the gain has been driven a lot by, let say a bit of price from some other and also one of the key players and then the other factors I also refer into in my presentation being the downsizing so to speak of some SKUs and also this listing of new SKUs and change of legal entities also. Trevor Stirling - Sanford Bernstein: Yes. And do you think that growth in the others, you don't have the potential of destabilize the pricing structure in the market in the second half?

No. Because it is not that significant. It's just -- if you calculate the average we see a slight decline on average price for others.

Our next question is coming from Mr. Ian Shackleton - from Nomura. Please go ahead. Ian Shackleton - Nomura: Yes, good morning, gentlemen. A few questions around Russia. And first question is have the sanctions had any impact at all in the way you are running the business in Russia? And secondly, how confident are you that duties won't increase in 2015? And the third question really in the Baltika release I see that there is talk about change in the management team and the supply change structure. And if you could just talk about what's happen there.

Yes. In terms of the sanctions, the impact sanctions would have in the way we run the business, I would not say not directly because we operate within Russia. At the same time because of the worsening macro economy, we do see the consumer being less willing to spend. Yes, we are looking at every measure we can take to compensate what we expect to be lower sales in Russia. So in that sense you could say it impact how we run the business. On duties increases, I don't want to say how confident, we are not confident at the moment there is proposal, a decision by the government not to increase duties and have to be approved by the DUMA [ph] as well time that your --

The third question Ian there is no correlation so to speak between that announcement and what we are talking about in our release this morning. That's more calling it normal management change within the supply chain in Russia. Ian Shackleton - Nomura: Are you able -- I know you won't going to talk too much about for the brewery close, but could you outline a little bit what's happened within the business already in Russia in terms of the changes you mentioned?

Of course, the overall logic is of course that when the market is declining more than what we expect it of course at some point in time becomes apparent that we have -- and will have for very long time more capacity in the market than what we need. And that of course leads to the consideration around how the brewery landscape should be or also some years out through Russia. But if you want something sample on this then when we referred to we are changing structure, we are taking -- making all the statement changes, they also being Eastern Europe moving towards one supply chain organization across at all markets. If you are taking sales, we have less sub regions in sales today than what we used to have. Again we are structuring how things set up in sales. If you take the whole G&A area, I mean in every brewery where we also have admin organization and in headquarter in St. Petersburg, we also in a lot of places changing structure how we operate to take out cost and be as efficient as possible in this very challenging market right now.

Next question is coming from Mr. Michael Rasmussen - ABG Sundal Collier. Please go ahead, sir. Michael Rasmussen - ABG Sundal Collier: Thank you. A few questions if I may. If could start by talking a little bit about the proposed PC ban, are you-- are we likely to see this being pushed into 2015? And how would you think the effects on average retail prices there would be kind of in the three steps the propose look like right now? And then second question being on Asia, can you give us little bit more insight into how large volumes are you placing out that are unprofitable in China and also in terms of volumes again, how big of an area of China has been affected by the poor weather and political unrest? Just so we can kind of understand how is Asia doing excluding these kind of one off things? And then my final question being on Ukraine. As I understand did the Q2 looked a little bit worse than the 10% decline in first half? What is happening in Q2 in terms of the market in Ukraine and where do you see Ukraine go in terms of your new guidance? Are we looking at 20% decline in second half or what you have assumed in your guidance? Thank you.

I hope you got all you questions, Michael. If not you have to repeat maybe in particular last one but if we start with PC propose, I know we put forward a proposal and that was broadly kind of a offset this we believe in the government, so we could believe the proposal being took over by the Russian government back in the early part of this year is likely to be implemented. And that was a kind of state implementation. I don't think I need on this call to go to all the different stages but again we would get to not being able to sell beer in PC, is more than one half of the PC size of the end being 2017, we think that still likely route forward for PC. It won't have also in the proposal; it was not supposed to have any impact onto into 2015 with the first step. And as we have commented on before we think if it become in line with that proposal, we have time precision, we can then manage and also covert some of that volume into multi pack and other type of packaging. Not having big sizes of PC will of course the positive for average selling price to the consumer over time. Michael Rasmussen - ABG Sundal Collier: And do you think that this could mean that we could see the group of others loose a bit of market share gain?

Yes. As I said always I think the other group they really got momentum back in 2009, 2010 when we were hit by the crisis and everyone kind of supported more local community and local producers, that how they started getting that momentum and because the margin line in Russia's interest not really been an easy environment. It has been improved a lot since. So that they are been able to build on this momentum including by introducing some kind of retro Soviet style size brand in some places. And also local drought beer, where it grown by drought beer in some outlets including off trade. We do not believe these growing trends will continue. We still believe it is closed to having repeat, the uncertainty right now about the macro economic does not help but again overall the trend we don't see them getting a much higher share of that market. I think it is same last time when they were up with the new results. Ukraine and Asia volume--

Michael, on Asian volumes as you know, we don't normally kind of do this market-by-market but China was really impacted a lot in Western China by weather, by the unrest in Chongqing northwest of China which is a big contributor both volume and earnings wise in our Chinese business. And the delisting of unprofitable SKUs in other province. So it was in the majority of our Chinese business that we were having this so called one off effects. If we exclude China as such from the Asian volume numbers then we had a very solid underline, actually a little more than mid single digit growth in the first half.

Ukraine, Mike, it was above-- Q2 was worse than Q1 was that the question in terms of market development? Michael Rasmussen - ABG Sundal Collier: Yes. And then what are you assuming second half in Ukraine?

You are right. I mean Q2 was definitely worse than first half. And that's how we got close to the minus 10%. So you are right, the development is getting worse. We still see very big variances between east and west. So in the west it's basically flat volume year-on-year. If you go to region like Liv [ph] or then if you go to east it could be pretty vast depending on what's going on at the moment. So if anything we would expect what we see in Q2 to probably continue for the remainder of the year. But that will imply kind of some double digit decline in the market, would it be a lot more than 10%, probably not but again it's very difficult to predict. I mean what will happen in Ukraine in the second half only time will tell.

Our next question is coming from Mr. Casper Blom from Handelsbanken. Please go ahead, sir. ++ Casper Blom - Handelsbanken: Thanks a lot. Hey, couple of questions from my side also. Firstly, on the Russian market share. I know that you don't like to talk too much about the quarterly development. But still there is a lot to try here in the second quarter. Now that the legal structure falls okay is in place, have you seen any sort of normalizing of the market share going into the third quarter? And also relating to that the change in SKU pack size, have you seen any of your competitors following that? And then secondly on Western Europe, could you give sort of an overall update on the weather situation now that you have gone through the summer period, has it been worse or better than last year when you sort of look at Western Europe overall? And then finally on Eastern Europe, I know your comment of placing of sales and marketing spending and could you give sort of an indication on the level of this and how the underlying profitability development looks in Eastern Europe? Thank you.

: Casper Blom - Handelsbanken: Then on Eastern Europe.

If you see the very solid earnings progression in Eastern Europe as we said before it is several things. Price mix is of course is very important. All the cost and efficiency programs that we are running are really delivering. And then there is also as I said a small element of placing of sales and marketing. But we are not separating into all these different cost lines. So a bit off season marketing but more importantly very positive price mix and a good result on all the efficiency programs.

Our next question is coming from Sanjeet Aujla from Credit Suisse. Please go ahead. Sanjeet Aujla - Credit Suisse: Few questions please. Firstly, just a clarification on the guidance. The downgrade to adjusted net profit seems to be larger than the downgrade to organic EBIT. I just wanted to understand the moving part there, is the FX is a high minorities because the tax rate doesn't seemed to be changing? So if you can clarify that that will be great. And then secondly just on the price mix development in Western Europe. One of your competitors this morning is talking about inflationary pressures, are you guys seeing the same? Can you please talk a bit more around that? Thank you.

On the first question there is nothing -- as you are saying there is nothing else really changing kind of below EBIT. So it's a more kind of that the simple fact that of course the EBIT change after tax in percentage terms becomes big on the bottom line than it does on the EBIT line. Sanjeet Aujla - Credit Suisse: Sure, okay.

And to your price mix in Europe, we don't see a big change compared to the past. So in general you can get us very little on price increases. We do see negative impact in general across Europe for channel mix. And that's what kind of reflected in the flat price mix for Western Europe.

Our next question is coming from Mr. Soren Samsoe from SEB. Please go ahead, sir. Soren Samsoe - SEB: Yes, hello, gentlemen. And first a question on Russia regarding the major food inflation after the food ban prices up to 30% on different categories. How this -- how does is this going to impact your sales? Or if you could maybe elaborate on how food price increase has impacted your sales in the past in Russia? Second question regarding the BSP program. I understand that you are spending a little bit less this year than planned. Maybe go into detail why and what countries? Third question regarding the production structure in Russia. It's lagging little bit that you want to maybe do changes there but is this I mean how is this possible given that you already have a pretty optimal structure in Russia and then could that lead to one of costs going forward? And then finally, you have very strong marketing development in Eastern Europe, if you are going to detail with that because I mean your volumes is down and I am sure you have also saved costs, is this price mix effect going through or how come this very strong development? Thank you.

Soren, could you just repeat questions four. I am not -- Soren Samsoe - SEB: Sorry about too many questions. Just a market increase 460 bips in Q2 in Eastern Europe is very strong, just if you could elaborate on how we can do that with the volumes down so much and the market share also -- is it the price mix effect or cost savings or what is it? Thank you.

I can take the first one on food inflation. In Russia, you are right is going up and in July I think we are looking at the food inflation being around at 10%. So higher than what we saw for the first six months in Russia. It will of course impact disposable income and that's really also -- I mean that's why we are saying second half will be tougher in Russia, in Eastern Europe than what we had anticipated before. Due to sanctions what will happen to inflation we said one, so that's really reflected in the outlook.

And then Soren to take other three questions, BSP1, it is broadly base so to speak and of course as we are getting close and closer, and more and more into each and every market, the estimates of what will be required in each and every market also becomes more precise. So that's nothing kind of structurally in kind of this in this change. Soren Samsoe - SEB: But is it deposit going better than you have planned or --

No, it's in line with plan, in general the BSP1 rollout which is a big exercise and a big change project in general and Western Europe, it is on plan. On the potential brewery closures that we have not -- as I said before talks specifically about as you know is always in connection with a brewery closure that you would normally see special items one off cost come with that in order to develop kind of in higher savings in the future. When it comes to margin, margin in Eastern Europe. Same answer as before that it is price mix. It is very price -- very positive price mix. It is all the cost and efficiency programs that we are running in the region and then as also said it is also slightly impacted by placing of sales and marketing. Soren Samsoe - SEB: But just going back to regarding the production structure in Russia. I mean you have earlier stated that it is not really make sense for you because you have such a good structure already. So I mean is it fair to assume that the saving from this would not be that significant compared to for example savings which you are making in Western Europe would prove brewery closure there.

We get to that if and when we announce brewery closure in Eastern Europe, but of course it is also so that the market is now lower than what we previously expected it to be. And of course that also means that we now does not have the same optimal brewery structure in Eastern Europe as we used to have.

Our next question is coming from Mr. Nik Oliver from BofA Merrill Lynch. Please go ahead. Nik Oliver - BofA Merrill Lynch: Hey, good morning, guys. And just few questions left on my side. And one is coming back to the East European margin. And given your comments about the key drivers in the first half and assuming that the price mix holds up in the high single digit in the second half, should we still expect decent margin expansion into 8% in Eastern Europe, even given the tougher comp as we annualized the 3Q costs from last year? And second question on Asia, I think in the past your mid terms of volume outlook used to be around 5% to 7%, is that still hold at a decent run rate or you are being at more so conservative now given few quarters of slower growth?

And Nik on your question, it would -- we would consider it to be a bit too optimistic to kind of assume margin expansion this year so more flattish I would say. Nik Oliver - BofA Merrill Lynch: Okay and the key swing factor there, I guess that's a weaker volumes and even the phasing of the marketing spent, would that be right?

Yes. And specially the volume development of both. Nik Oliver - BofA Merrill Lynch: Okay. On Asia?

Yes, on Asia the volume outlook I would say I mean 5% to 7% that is above the very high end and it is always an average of many, many markets we are in and as we see again and again China is have some changes in region somewhere, we changed the volumes trends but then we have to compensate in different ways, but it was the better than what we have seen year-to-date and we are certainly closer to kind of mid single digit increase than we talk volume for Asia.

Our next question is from Melissa Earlam from UBS. Please go ahead. Melissa Earlam - UBS: Good morning and just a couple of questions following up on Russia please. First of all, could you give us an idea how much headcount is down in both on a year-over-year basis? And whether you still see significant scope for rationalization there? And second question, you mentioned how food inflation have been rising and obviously with import restriction the risk that it continues to rise putting further pressure on disposable income. Do you think you've pushed the pricing lever too aggressively? And how significant is your SKU initiative to mitigate that? Thanks.

Melissa on the first one, headcount-- the headcount in Eastern Europe has been reduced quite significantly over the last year's in line with volumes coming down. It is also down a bit this year. So of course with if we will continue to see lower volumes at least for the remainder of this year, of course that will eventually lead to a need for fewer FTEs than we currently have on the payroll. Again those kind of things we like to come back to when we actually making the final decisions.

On your second question about Russia and pricing and if we are pushing pricing too much in Russia. Of course, we don't believe so and we think also in tough times it is really important not to touch get to focused on volume, it was taken really harm to category development long term and make it more and more commodity and not a branded category. I think we have to strike that balance and we believe we are finding the right balance and using some volume short term, that's okay. But of course we won't -- we never said we keep losing volume then we have to respond at some point in time. And that I have said before as well. And in general a lot of the players in the market are following what we are doing on pricing with a few exceptions.

Our next question is from Mr. Hans Gregersen from the Nordea. Go ahead, sir. Hans Gregersen - Nordea: Good morning. Just a clarification first. Was it right pull that you stated back 50% of the total packs have now been reduced and that has set a negative margin impact of 0.8%? Over to the questions. If I look at your market guidance which implies more than double digit decline in 8.2% , is that what's --what is already happened as of now in quarter three or is it more during by four, what looking at your expectations? The first question. Second question is you mentioned you have some falling issues in terms of your legal structure and then your products; will that have any impact at all for the second half? Thirdly, you mentioned that you have this modestly decline from the lower pack size, what -- can you give a little bit more flavor on what the comparative reaction has been as of now and then finally, given wise where you will end up this year and what would it take to you to consider returning more capital associated with this? Thank you.

Hans to your first question about the clarification. Yes, it is correct; it is 50% of our volume that's now being sold in pack sizes being slightly smaller than what it was before. The impact on an annualized basis is 0.8%; of course it will be a little less for the first half because we introduced those SKUs in the first half. When we talk about market guidance, guidance is always forward looking. And the legal structure, I hope I explained it earlier about the SKU change and legal structure change and the all administrative work you have to your key account to get that listed and the paper work involved in that in case of Russia is enormous. It is all behind us. You won't see any negative impact in terms of market share and volume development in the second half of that. Hans Gregersen - Nordea: Could I just clarify your previous answer? Am I right in understanding you say that the changed market guidance has nothing to do with July or so far in August?

I mean we use all the knowledge we have but it is forward looking and our expectations on the market in the remainder of the year.

Then there was a question on leverage that we are guiding at now leverage including the negative effect in Q4 that basic will be reversed in Q1. But anyway will what we think will be reported numbers for the year. And leverage will be relatively similar to what it was end of last year. Hans Gregersen - Nordea: What would be EBIT impact from the stocking effect you were mentioning?

That we have not guiding on specifically but I guess -- one of the first answers in this call is we kind of agree that around 30% of the adjustments for the outlook is probably due to the less stocking expected end of this year.

Our next question is coming from Ms. Andrea Pistacchi from. Please go ahead. Andrea Pistacchi - Citi: Yes, hi, good morning. I have two questions please. First one on Western Europe, volumes there. Now obviously very strong quarter with a lot of positive moving part of sort weather, World Cup, Easter etcetera. Could you -- do you have a sense roughly of what an underlying growth rate in Western Europe could be? Or to put it another way, are you seeing an underlying improvement in the market macro driven in places like GB, France in particular? Then secondly on Russia. You talked about price leadership is one of the reasons for losing share. Now you partly answered I think this with another question. But compare to three - six months ago, are you seeing any change in the competitive behavior from the other place in terms of pricing?

Yes, thanks. On Western Europe, compared to a slightly declining market which was probably the trend before. I think we underlying a very tiny improvement so maybe now it is more underlying flash or maybe a little bit up and the rest would be weather and World Cup and other factors we believe. So slight improvement but not a significant change on underlying West European total market development in the markets we are in. On Russia, remind me again the question. Was it -- yes, competitive behavior? We don't see any significant change I would say it's more of the same. That is one, maybe not leading as much on price as the rest. And in particular in modern trade but apart from that we don't see a change.

The next question is from Andrew Holland from Societe Generale. Please go ahead. Andrew Holland - Societe Generale: Very quickly because I think we have going to have to come to end here. And can you just talk about your isolated Q2 volumes in Russia which is I don't think you have given. I can't see them anyway. And what you think the market did in Q2 to give us an idea of the sort of difference routine your stock levels and what was going on in the market? And then the second one is just related to the sanctions in Russia. Can you say what if anything you are importing from the EU in to Russia to produce your products in Russia?

On the market development, Andrew, it was worse in Q2 than Q1. It was little more than 8% down in Q2; we said that the three year to the 6% to 7% so worse in Q2.

And on the imports, it is very rare that we are currently importing -- very few of the raw materials is that we are using to produce. And as you can imagine we have also taking actions in order to ensure that we will not run out of those raw materials in the near future. Andrew Holland - Societe Generale: Okay. Just kind of better that first question. So the market was down 8% in Q2, what were you down?

We were down by minus 13% so replacing also market share loss in Q2.

Our next question is from Mr. Frans Hoyer from Jyske Bank. Please go ahead, sir. Frans Hoyer - Jyske Bank: Thanks very much. A question on Western Europe and the price mix in Western Europe in Q2 separately. And if you could strip out the effect of the growth in soft drink, that would be good.

I mean so price mix, we won't split out the number by quarter here but I can tell you that not a big difference on price mix quarter one to quarter two. Frans Hoyer - Jyske Bank: And secondly on the market share coming back to that in Eastern Europe, it was down 190 basis points Q-on-Q, in volume terms what about value terms. You mentioned that you did better in value terms but could you be more specific?

Significantly better so we tend not to go into a long debate on market share development and value share as well. But significantly better on value share. Frans Hoyer - Jyske Bank: But still a decline?

Still decline, yes.

I think we have time for one more question. I know many of you probably want to get on your article right now as well.

Okay. We take our last question will come from Ms. Mitch Collett from Goldman Sachs. Please go ahead, sir. Mitch Collett - Goldman Sachs: Hi, there. And I just wanted to come for the lack of stock sold in Q4. I think we first saw stock that was in Q4 in 2011 and that was about 1 million hectoliters, can you maybe quantify -- is it going to be similar sort of saving and I think I understood from an earlier question that you will stock building in Q4 next year. So we should basically stripping million out from this year and added back to next year and then I suppose going forward, and then maybe more broadly my second question is we haven't really seen meaningful volume growth in Russia since 2008. You are obviously talking about removing and building infrastructure. What do you think the long-term growth opportunity is for beer volumes in Russia from here?

To the first question on stock building, of course it is very difficult to say because it is not really that much off to ask, it depends on what the distributors want to stock up with. When we are saying that we don't expect them to do it this year, it is for these two reasons. One is that its excise duty is not increasing they might not see the need to do it. They might not be having the same extras to financing to have high inventories to keep inventories into this year as they have done in previous years. So it's very much based on us not expecting them to stock build this year as they have done in previous years. When it comes to what was kind of impact in previous question, I agree that it is seemed to imply that there would be easy comps for Q4 next year in the sense that there would be stock building next year and no stock building this year. That we do not know anything about at this point in time. So we need to get through that kind of when we are get into next year. It's just too early to say. Mitch Collett - Goldman Sachs: I guess what I am trying to ask is that prior to 2011 not like there was Q4 stock, so is it possible we revert to a pack enough business where you have done have a Q4 stock build from now on?

I think if -- a generic answer would be that with the expected excise, the previously announced excise duty increased for the coming years that are significantly lower than what we have seen in past years. The reason to build inventories end of year for distributors is definitely not the same as it has been in previous years. Mitch Collett - Goldman Sachs: Okay, understood. And then on the long term falling price potential?

And it is one of course I am getting always little bit more reluctant to kind of this cost based and what we have seen now for years in terms of market decline. But again underlying the step need all -- all indicators point towards we should see micro capital growth coming back into this market again than the whole macro economic situation kind of normalized whenever that will be -- and it is driven by this very, very low consumption capital now being below 60, it is also based on an any market the more you develop kind of culture of drinking, alcohol consumption in the past in history you can see markets move away from strong spirit and into wine, into low alcoholic beverages including beer should benefit. We would assume beer income go up in Russia on average every year. It does not major macro economic crisis that we maybe having now. So a lot of indicators point towards at some point in time we should get back to growth in this market place. End volume and in value and remember, if you look back now the last four five years, every year except one that was 2009, we have seen value growth in the beer market. So despite the volume decline, market has been growing in value every year. Mitch Collett - Goldman Sachs: I guess is that true -- does it make sense to removing brewing infrastructure out?

Sorry? Mitch Collett - Goldman Sachs: If you say it is true, does it actually make sense to remove brewing infrastructure that might become useful at some point in the future?

That is the kind of decision we go to before make the final decisions. Probably did not the case of course that the capacity utilization we will be at end of this year is quite low and in spite of us taking out some capacity we will still have enough capacity also for market is slowing starting to grow again. Mitch Collett - Goldman Sachs: Thank you.

I think we have to close the call now. But thanks for attending. And I am sure to speak to many of you in the coming days. Thanks a lot.