Cees't Hart - President and Chief Executive Officer Christopher Warmoth - Senior Vice President for Asia Jan Rasmussen - Head of Finance, Interim Chief Financial Officer Peter Kondrup - Vice President of Investor Relations

Søren Samsøe - SEB Trevor Stirling - Bernstein Jonas Hansen - Carnegie Hans Gregersen - Nordea Jamie Norman - Société Générale Tristan van Strien - Deutsche Bank Chris Pitcher - Redburn Partners Stephanie Diaz - Bank of America Merrill Lynch Frans Høyer - Jyske Bank Tobias Bjorklund - Danske Bank

Hello. And welcome to today's Carlsberg Q3 2015 Report Call. Throughout this, all participants will be in listen-only mode, and afterwards, there will be question-and-answer session. And just to remind you, this call is being recorded. Today, I'm pleased to present Cees't Hart, President and CEO. Please begin, sir. Cees't Hart: Thank you very much. Good morning, everybody, and welcome to Carlsberg's nine months 2015 results conference call. My name is Cees't Hart. And I have with me: Senior Vice President for Asia, Chris Warmoth, who is heading up Funding the Journey; Head of Finance, Jan Thieme Rasmussen, who is currently interim CFO until we find Jørn's replacement; and Vice President of Investor Relations, Peter Kondrup. Today, I will go through the Q3 and nine months performance. The headline is that we, in Q3, delivered solid performance with 9% organic operating profit growth. However, before I go into the details, we would like to make a few comments on the quite substantial initiatives we are taking to prepare Carlsberg's for the future. Please turn to slide 3. We have taken stock of Carlsberg's performance and outlook. The financial performance of the group has not been satisfactory in recent years. Earnings have, at best, been flat. And if you don't take the necessary measures, there's a risk that this flat performance will continue based on trends we see in our markets for the next years. Although, we are getting closer to the inflection point when Asia will become much bigger than Eastern Europe, we will take a more disciplined approach to cost, complexity, structures and commercial activities to ensure that we have a long-term sustainable business model. We are in the process of reviewing our strategy, but we must bring the company into a positive cycle and create funding for the strategy and start growing profits again. Consequently, if unified under one overall program all existing as well as new profitability improvement initiatives named Funding the Journey. We estimate that the total net benefits of Funding the Journey will amount to DKK 1.5 to DKK 2 billion compared to 2015 with full-year impact in 2018. Part of the benefits will help us improving profits and thereby bringing us out of the current vicious circle whereby we do a lot of activities that don't see bottom line growth. The other part of the benefits will be reinvested in the business. The size of the reinvestment will depend on the decisions made in our strategy review, which could be activities such as further brand support improvement of a market execution, development of new activities or capabilities and so on. Strategic review is ongoing and on track. It is a co-creative process with the top 60 leaders in the group. And I'm very pleased with the dedication of the management team and the progress so far. It will be a seven-year strategy, which will set the future direction of the group. As mentioned at previous occasions, we will be ready to communicate and implement a strategy which we have named SAIL2022, by the end of the first quarter of 2016. To set expectations, it will be rather an evolution than a revolution of the Carlsberg Group building on our core strengths. I will now leave the floor to Chris who will explain in more detail what Funding the Journey is about. Chris, over to you.

Thanks, Cees't. Slide 4, please. The actions within Funding the Journey can be divided into four groupings: value management, supply chain efficiency, operating expense efficiency and right-sizing of businesses. Many of the projects within these groupings are not new and has been underway for a while. What is different is the way we structured the implementation and follow-up with the various projects with the objective of ensuring that we fully realize the identified savings. Within value management, we're looking to the optimal balance of volume, market share, and profits. And, in some cases, this will mean a shift towards value over volume. Some of these has already been done. But we believe that by sharpening our focus and rigorously implementing the right sales tools and metrics, we can achieve a more profitable mix of brands, channels, pack sizes, and promotional activities. Within supply chain efficiency, we'll leverage more fully the central supply chain organization we've established to drive incremental savings. And in Western Europe, BSP1 will be an important enabler for this. We see opportunities across all areas of the supply chain: procurement, production, and warehousing and logistics. We're also looking to make our business less complex by simplifying our portfolio with the aim to achieve a more profitable mix. For operating expense efficiency, this is a continuation of the work we started at the beginning of the year, targeting duplicative processes and other inefficiencies within white-collar functions. We already made significant reductions before the summer including a program to reduce head count in our central organizations. The work has continued since then. By the end of the program in 2016, we expect to have reduced white collar head count by about 2,000 people. And we're already over two-thirds of the way to the target. We're also in the process of further outsourcing various services. At the end of October, we announced our nearly 400 employees in our shared services centers in Poland and China have been transferred to an external provider with the intention to outsource additional work in the coming year or two. We're also targeting to reduce all other SG&A costs by implementing our Operating Cost Management approach, sometimes known as ZBB. This has been fully implemented in Asia, and the rollout is now underway in the rest of the company. The fourth grouping is right-sizing of businesses. And I'll discuss that now in more detail. So, please turn to slide 5. On right-sizing of businesses, we have run evaluations recognizing that market reality in some cases has changed versus previous expectations. And based on an updated assessment of anticipated future earnings of our businesses and brands, we've come to the conclusion that impairments and operational interventions are unavoidable. First Russia. Here, the larger than expected 2015 market declined, driven, in particular, by the worsening macroeconomic situation and weaker consumer sentiment has led us to reassess future projections. We do expect our Russian business to remain nicely profitable and to secure a majority of the local profit pool. We have, however, concluded that the very challenging market conditions are likely to persist. And that consequently, the beer category will continue to decline. As a result, we have to adjust the book value of certain brands and find ways to further restructure our operation to reflect the new reality. Total projected impairment of the Russian business is DKK 5 billion. Second, China. We acquired the so-called Eastern Assets in China at the same time which we acquired Chongqing Brewery Company or CBC. We already knew that Eastern Assets was a tough business and not profitable, and a number of actions are being taken to turn the business around. However, in light of the current beer market decline in China and the intensified competition on the East Coast, we now realize that we will not be able to achieve our original plans for Eastern Assets making an impairment necessary. Then on our broader Chinese business, we see an opportunity to continue to optimize our brewery footprint. Finally, our local Chinese brands that are part of CBC have underperformed expectations due to the higher-than-expected growth on Tuborg which is up 60% this year in China. The consequence of all this is the need to plan for a restructuring including an impairment of tangible and intangible assets with a projected total of around DKK 4 billion. Third is the UK where our financial performance has worsened in the past few years, and the recent delisting of a major customer has further added to the challenges. We have, therefore, decided to restructure the business with the aim to reduce capacity and costs. Finally, in other markets, we're assessing whether we can provide an even better alignment of our production and logistics capacity with market requirements. This would see us reducing excess capacity in breweries and possibly include some brewery closures. And finally, as part of our focus on maximizing return on invested capital, we will also, as appropriate, look to release the capital employed by often small less core assets. Total impairments and restructuring costs will amount to approximately DKK 10 billion, of which less than 10% will be cash costs. Approximately DKK 8.5 billion will be taken in 2015, of which DKK 7.6 billion fell into Q3. Less than 3% of the 2015 charges will be cash. The remaining impairments and restructuring costs will be taken during 2016 and 2017. These impairments will, of course, improve ROIC. But we would like to stress that this was not our motivator. The purpose has solely been to restructure and adjust certain key businesses to reflect our best projections of the future. We intend to further improve ROIC by a strong focus on profit and optimize utilization of our assets across the group. Slide 6. This shows an overview of the major elements of Funding the Journey and the timelines for the various activities. As you can see, some already started earlier this year and some are currently being initiated. All should be pretty up and running by early 2016. The earnings impact from Funding the Journey will be modest in 2016, with a larger impact in 2017 and full impact will be in 2018. Back to you, Cees't. Cees't Hart: Thank you very much. Slide 7. About the outlook. Based on the group's solid Q3 and October performance and an expected Q4 that will decline year-on-year, we maintained the underlying outlook for the year. Let me give a few extra comments on the expected Q4 performance as well a reclassification of a one-off in coming Q4 and restructuring cost that will be included in operating profit. Q4 in Asia and Eastern Europe will be impacted negatively by different phasing of sales and marketing expenses as well as certain other cost items versus last year. It means that despite of the strong Q3 performance in both regions, you should anticipate organic operating profit to decline in those two regions. In addition, we have decided to reclassify the income from the termination of the Staropramen UK agreement which will be booked in Q4. We have expected it to be booked in operating profit, and consequently, it was included in the operating profit outlook. We will move that income into special items together with the other one-offs related to the UK business. In addition, as part of Funding the Journey, there will be a restructuring cost charged against operating profit in Q4. Based on this, we now expect organic operating profits to decline by high-single-digit percentages. But the key message is, underlying, the business is performing as expected. But due to the change in accounting treatment of the license termination fee and some above-the-line restructuring cost in Q4, the earnings outlook is revised. A couple of other assumptions worth mentioning are the following. We now assume a negative translation impact on operating profit of DKK 200 million negative compared to the previous assumption of DKK 300 million negative. The underlying tax rate is expected to be around 28%, in line with previous expectations. Other assumptions are unchanged including that the supervisory board is expected to be able to propose to the AGM in March, the dividend per share is kept unchanged compared to 2014. Please turn to slide 9 for a few financial highlights for Q3 and the nine months. Q3 showed very solid performance with 3% organic net revenue growth despite 3% lower volumes. Price mix goes up 4%. Asia continued to deliver a very strong set of results and also Eastern Europe showed strong operating profit growth in Q3. Consequently, organic operating profit growth was 9%, and despite the currency headwind, the reported operating profit grew 2%. And likewise, adjusted net result grew by 2%. So, all in all, a solid quarter. For the nine months, organic beer volumes declined by 4%, while net revenue increased by 1% both organically and in reported terms. Price mix was up plus 4%, with a particularly strong improvement in Eastern Europe. Organic operating profit declined by 3%. The strong result in Asia was more than offset by the continued weakness in Eastern Europe and the weaker than expected performance this year in Western Europe year-to-date. Free cash flow was strong at DKK 5.6 billion, which was an increase of DKK 2.6 billion compared to last year. Slide 10, please. Here, an overview of net revenue. Organic development in Western and Eastern Europe was slightly negative, while Asia continued its positive momentum. The negative impact from currencies of 1% was offset by the impact from acquisitions. Slide 11, please. Here, an overview of the development of operating profit. Organic operating profit was DKK 7.2 billion. The Asian region continued its strong progression. This was, however, offset by lower profits in Eastern and Western Europe. We will go into more details per region shortly. The lower unallocated costs were mainly due to different phasing between quarters versus last year. The currency impact of minus DKK 140 million was positively impacted by stronger Asian, Swiss and UK currencies, and negatively impacted by mainly the weaker Eastern European currency. The negative net acquisition impact is mainly related to the consolidation of the loss-making Eastern Assets that was consolidated from November 2014. All in all, reported operating profit was DKK 7 billion, a decline of 5% versus 2014. Q3 dynamics were significantly more positive driven by around 20% organic operating profit growth in Eastern Europe and Asia. Slide 12. On the individual P&L items, cost per hectoliter was up organically 3% due to the negative transaction impact from hard currency denominated input costs in Eastern Europe. However, the positive price/mix meant that we were able to offset the higher cost and gross profit per hectoliter was up 5% organically. Operating expenses were up 3% organically and in reported terms. The main driver of the organic increase was higher sales and marketing investments in many markets. This was a result of our decision at the beginning of the year to slightly increase these investments to support our brands and new product launches. Special items were severely impacted by the asset review and impairment tests done during the third quarter. Including impairment and restructuring charges related to Funding the Journey, special items were DKK 8 billion. Net financials were minus DKK 1.137 billion. This was an increase of DKK 124 million. The increase was only due to other financial items, which were negatively impacted by foreign exchange adjustments. Net interests were down 10% or DKK 88 million, reflecting lower average funding cost. Adjusted net profit was DKK 3.9 million. The 11% decline versus last year was a result of the lower operating profit and a higher other financial factors. For Q3, adjusted net results grew by 2%. Slide 13, please. Free cash flow showed significant improvement this year reaching DKK 5.6 billion versus DKK 2.6 billion in 2014. The improvement was mainly driven by improved working capital and lower CapEx. The change in trade working capital was up by DKK 565 million versus down by DKK 427 million last year. The trade working capital to net revenue ratio declined further reaching an all-time low at minus 4.4%. This compare is minus 2.6% at the end of last year. The change in other working capital amounted to a DKK 786 million and was, among other things, positively impacted by VAT payables. As communicated at the beginning of the year, CapEx will be significantly lower this year versus last year. Net CapEx was DKK 2.6 billion, down DKK 790 million compared to the same period last year. As said earlier, we still expect that CapEx will be around DKK 4 billion for the year, which means there will be as quite significant cash used in Q4 on CapEx. Net base interests were slightly down, reflecting the lower average funding costs, which, to some extent, were offset by settlement of financial instruments. Slide 14, please. Net interest-bearing debt end of September was down DKK 3.8 billion compared to year-end 2014. Net interest-bearing debt-to-EBITDA was 2.6 times on a rolling 12 months basis. Reducing this ratio further has been and will continue to be a key focus area. The vision is still a leverage of maximum 2.5 by the end of the year. 96% of the gross financial debt is long term and the net financial debt 85%. The specification of the movements in net interest-bearing debt is shown in note 6 of the release. Turning to slide 15, acknowledging that we are now delivering satisfactory returns. The group-wide focus on growth is important and we will continue to take the necessary actions to ensure that it will improve in the coming years and it will be part of SAIL2022. The rolling 12 months numbers at end of September are shown on the slide. They reflect the continuous difficult trading environment in Eastern Europe and lower operating profit in Western Europe. In Asia, the main reason for the slight decline is the consolidation of Eastern assets and currency impact. As I have a bit of a rusty voice and prefer to saving my voice for the Q&A, I will now hand over to Chris for the review of the regions. Chris.

Slide 17, on Western Europe. Q3 in Western Europe shows an improvement compared to the disappointing Q2. We estimate that the market was flat to year-to-date nine months but up around 3% in Q3, slightly in easy comparables. We continue to improve our overall share with good performance in several important markets. Our volumes year-to-date were flat with positive volume growth in Q3 of 2% mainly due to easier previous year comparables. Price mix year-to-date was also flat despite a challenging price environment and the negative customer and channel mix. So with volumes and price mix flat year-to-date, organic net revenue was also flat, but was up 2% in Q3. Operating margin declined 110 basis points year-to-date due to challenging markets, higher sales and marketing investments and lacked the anticipated savings this year. Slide 18, please, a look at the key businesses in Western Europe. The Nordic markets were negatively impacted by very poor weather this summer, and declined 2%. Our volumes declined 1% as we gained share in all four markets, achieving more than 1 percentage point improvement in Denmark, Norway and Finland. This is mainly driven by sales execution and good performance of our products in the specialty segment. Our French volumes grew by 7%. We improved our market share, thanks to the strong performance of Kronenbourg 1664, Grimbergen, Skøll Tuborg with innovations supporting the market share gain. In addition, the launch of the non-alcoholic Tourtel Twist brand has so far, been successful. In Poland, we continue to have positive trend on volume and value market share. The Kasztelan brand delivered good performance, and Somersby achieved strong growth at 29%. However, price mix in the market deteriorated due to increased competition and negative channel mix. In Switzerland, the market was flat, with the stronger Swiss franc leading to a change in consumer dynamics and resulting in growth of the imported beer category. We held market share and Somersby, which was launched last year, has delivered positive performance. Our UK business remains challenging. And our volumes declined by 5% in a market that declined by an estimated 1%. Business results were negatively impacted by the loss of a few customer contracts. Earlier in the year, we began revitalizing the Carlsberg brand behind the communication platform of probably the best than Carlsberg did. And this has helped improve brand image and visibility. Slide 19, please, in Eastern Europe. In Eastern Europe, our regional market share declined slightly, negatively impacted by Russia, but with strong share performance in Ukraine and Kazakhstan. Year-to-date beer volumes in the region declined organically by 16%, reflecting declines in Russia and Ukraine, but growth in Kazakhstan. Year-to-date price mix was plus 14%, the result of significant price increases in most markets in the region. Mix itself was flat. As a result, organic net revenue year-to-date was also flat, though, plus 6% in Q3. Reported net revenue, however, with the currency impact, was down 25%. Organic operating profit was down 14% impacted by higher cost of sales and higher selling and marketing expenses. Reported operating profit declined 32% with the negative currency impact of 18%. Organic data per hectoliter indicates the positive impact to pricing. Year-to-date gross profit per hectoliter grew organically by 13% and by 19% in Q3 despite the negative volume. Operating profit per hectoliter also improved positively growing 2% organically, with a 36% improvement in Q3, but Q3 performance was helped by easy comparables versus last year. Slide 20. The macro environment and consumer sentiment in Russia continues to be very challenging. And as a result, the Russian market declined by approximately 10% for the first nine months. And in Q3, although we were cycling easy comparables due to last year's destocking, our beer volumes remained under pressure due to the overall market decline, market share loss and the need for distributors to further reduce inventories because of the continued shift from traditional to modern trade. In value terms, the market was up by a low-single-digit percentage as a result of the several price increases. Our market share was 35.1% for the nine months, more than 100-basis-point decline. Our volume share loss was primarily due to our price leadership during the summer. Our value share developed more favorably. As I said earlier, we do expect the market to remain difficult and 2016 will likely be a challenging year due to the macro economy, the tax increase of RUB 2, PET self-restrictions and the implementation of the alcohol register system, [indiscernible]. In Ukraine, the steep decline of the market continued in the third quarter, as the economy remains in deep recession. We gained market share as a result of the activation of the Lvivske brand and the launch of line extensions at local premium beer. Finally, the Kazakh market showed positive growth and we gained market share. The share improvement was driven by the relaunch of the local power brand, Irbis, and by packaging innovations. Slide 22 is on Asia. In Asia, our overall market growth - all markets grew with the exception of China that slowed considerably. We gained share in most markets and our volumes grew organically by 3% and 10% including Eastern Assets in China. The Tuborg and Carlsberg brands delivered strong performance, with Tuborg growing 54% and Carlsberg 2% in its premium markets. We also continue to regularly upgrade our range of local power brands. Asia net revenue grew organically by 6% driven by volume growth and positive price/mix of 2%. In reported terms, net revenue grew 28% due to the positive currency impact into Eastern Assets. Organic operating profit in Asia grew 16% year-to-date and 20% in Q3, driven by the pub line growth and by tight cost control. The Asian businesses have been piloting a new operating cost management framework and it has delivered positive results. The profit growth was achieved despite tough comparables as last year in Q2 we built an income from a terminated license agreement. Operating margin increased by 160 basis points organically but which dropped to 20 basis points in reported terms as a result of the consolidation of Eastern Assets. So, in summary, the Asian business continued its strong performance and will this year, for the first time, generate a somewhat larger proportion of the group's earnings than Eastern Europe. Slide 22, some market-specific highlights in Asia. In Indochina, we've delivered 2% volume growth year-to-date, mainly driven by strong growths of the Angkor brand in Cambodia and solid performance in Laos due to a good Pi Mai Festival. Our volumes in Vietnam declined slightly due to Dumai flooding in the northern part of the country. Our Chinese volumes year-to-date declined by 1% organically in a market declining by an estimated 5%. The overall volume decline was predominantly in the mainstream segment, while the international premium category showed solid growth. For Carlsberg, both Tuborg and 1664 delivered very strong growth rates. Volumes grew particularly well in Xinjiang and in Chongqing, while our businesses in the eastern provinces declined. Our Indian business year-to-date grew 41% organically in a market growing by an estimated 3%. The business also delivered a significant earnings improvement and, for the first time, achieved a positive EBIT contribution, driven by a combination of volume growth and tight cost control. Tuborg grew 47%, and our total market share was around 15%, the highest level ever. And in Q3, Tuborg maintained its position from Q2 as the second largest brand in India. In May, we opened our new brewery in Myanmar, introducing a local brand, Yoma and Tuborg. In the fall, our business recovered after the earthquake in Q2 and has delivered good results on top line and earnings. That was all on the regions, and I'll now hand over to Cees't for some closing remarks. Cees't Hart: Thank you, Chris. This was all from us today. To summarize, we delivered a solid performance in Q3 with 9% organic operating profit growth. We are launching Funding the Journey, where the key elements are: we are unifying under one overall program all the existing and new profit improvement initiatives, we will restructure parts of our business in order to reflect the market reality and the total benefits will be DKK 1.5 billion to DKK 2 billion, of which, part will improve profits, and part will be reinvested. Finally, we changed outlook for the year due to one-offs. Underlying business is performing as expected. And now, we are ready to take your questions.

Thank you. [Operator Instructions] Our first question is from the line of Søren Samsøe at SEB. Please go ahead with your question, sir. Your line is open. Søren Samsøe: Yes. Good morning, gentlemen. Søren Samsøe, SEB. First question regarding the new Funding the Journey program. Just, if you want to - if you could maybe elaborate a little bit of the part you expect there from the ongoing DSP1 program. Do you still see the same, you can say, upside from that as communicated by the top management? Is that in those, you can say DKK 1.5 billion to DKK 2 billion that you have communicated? And then secondly, if you could just update in - you had some problems with the DSP1 program in Q2. Is that continually into Q3 or is that sort of now developing better? And also, if you would say if you're using - say, if you're increasing your marketing cost further in Q3 as we saw you did in Q2. Thank you. Cees't Hart: Okay. Thank you very much for your question. Maybe the second one you would like to repeat, but let me start with the DSP1. DSP, we see as an enabler for the program we call Funding the Journey. We might have a different view on all the savings that were anticipated earlier. But clearly, it's an enabler for us to drive Funding the Journey. Can you repeat your question on the margins? Søren Samsøe: Yes. It was just regarding that you said in Q2 that there was problems with the DSP1 program. It was not going according to plan. Just wondering if you had seen a better development in Q3 that's, if any improvement has been done there. And then the last one was on marketing cost. How much you have increased it in Q3, basically? Cees't Hart: Okay. With regard to DSP in Q2, I think the open answer is that we don't see that many savings coming through in Q3. I said earlier, we think that the DSP is an enabler, not so much that it will give us that many savings, and obviously, for that reason, we didn't see that coming in Q3. However, again, it's an important enabler. And we are going to use that for the August savings and benefits. With regard to the marketing cost in Q3, there's the increase in our cost in parts of Europe and especially in Asia. I don't know the number by head at this moment of time in regard to the details. So, we will tell you later the detail. Søren Samsøe: Okay. And then final question regarding return on invested capital. Carlsberg started in the beginning of the year to focus more on that, but has not said so much about it since then. How much would that be a focus for you going forward? Cees't Hart: With SAIL2022 we will, let's say, renew our peak performance in the guidance and for sure ROIC will be part of that. So, we will, let's say, improve the focus on that one.

Okay. We will now go to the line of Trevor Stirling at Bernstein. Please go ahead. Your line is open.

Hi. Good morning, Cees't and Christopher. Two questions on my side, so it was a bit more technical. The guidance for the full year and the organic - declining organic operating profit include I think you're saying restructuring charge. If you didn't have the restructuring charge, what would it be in the organic profit improvement? The second question is in Russia. You saw significant margin expansion in the quarter, but you also have easy comps in the write-off of the obsolete stock. If you didn't have that write-off, what would it be in the margin expansion in the quarter? Cees't Hart: Okay. Trevor, good morning. Thank you. With regard to Q4, it's a bit technical if you like. [indiscernible] was announced from the beginning of the year that it was part of our, let's say, guidance. It was indeed in the guidance in Q2 as well. And when it was stand-alone it was above EBIT. But once we get into restructuring, accounting experts advised us to take these as special items. And in addition, I think we want to improve the transparency. There's DKK 100 million isolated production lines. Restructuring have been taken in Q4 as well. So, the two parts, Staropramen and the DKK 100 million on the production line write-off. Then with regard to the [indiscernible], the margin were indeed pretty strong. That has to do with - in a comparison versus last year but as well in the quarter as such. That has to do with price increases which we have taken before the season, and by that, the price mix have been pretty positive. What we see is that we have a higher price stream in the market than some of our competitors, and that means that we lost some volume and market share.

Thank you very much, Cees't.

We now go onto the line of Jonas Guldborg Hansen of Carnegie. Please go ahead. Your line is open.

Yeah. Good morning. I have a couple of questions here. Firstly, with regards to the expected benefits of DKK 1.5 billion to 2 billion from Funding the Journey, from which starting point is this to be measured? Does it include this DKK 300 million to DKK 350 million less of cost from this SAP implementation? And what about - does it also include lower depreciation and amortization or should we rather measure it from an EBITDA level? And then my second question is on Russia. And you announced you are doing further restructuring of your production network here. Will this mean a further closing of breweries? What should we expect here?

Thank you, Jonas, for your question. With regard to the base, 2015 will be the base with DKK 1.5 billion to DKK 2 billion benefits. And that includes - and I think you should take it on the EBIT and that includes as well some of, if you like, the savings on depreciation after the restructuring. With regard to closures in Russia, we have - I think one of our competitive advantages is that we have a very good network across the country, you know how huge the country is. So we are looking more at downsizing parts of the factories rather than closing factories. We have maybe one or two factories which basically could stay out of the network. We are studying that. But the income acquisition at this moment of time is that we mainly look at reducing a number of lines in different factories.

Okay. Maybe just a follow-up also on Russia, you made three price increases at the first half. Have you done any in Q3?

No. Not in Q3.

Thank you very much.

Welcome.

We're now over to the line of Hans Gregersen of Nordea. Please go ahead for your question. Your line is open.

Good morning. Three questions, please. Jan's comment from UK's on the - if you look on your brand portfolio, what state would you see being in and how has the trend in your view been performing over the last couple of years? That's the first question. Second question, if you look on the [indiscernible] program which was announced a year or so back, it would sort of indicate that should drive a 1-percentage-point market share gain in the coming years. Does that still stand as a target, and how far have you progressed? And then finally, on your cost reduction targets, how much is incremental, and what is the geographical distribution, and what impact will there be on changed economic principles? Thank you. Cees't Hart: Thanks, Hans. With regard to brand portfolio, as you know, we have a huge brand portfolio with very strong brands. And the underlying trend is that we have, if you like, winners and some of the brands are a little less strong. To talk about winners, Tuborg in Asia is doing a fantastic job, both in China, as you have heard from Chris but as well in India with 41% of growth, and it's mainly Tuborg. Somersby is another winner at this moment of time in the portfolio. They have some nice local ones as well like Turtle. If you talk about the less strong brands, that's more than depending a bit on the region or the country. And as you know, Carlsberg in the UK is not a very strong brand. And as we speak, we'll announce in the UK as well some changes there. So, it's an old portfolio with strong brands, but some things to repair as well.

But do you see a strong need for massive reinvestments into the brand portfolio? Is it specific country problems or is it more generic issues you're looking at? Cees't Hart: I think it's fair to say that over the time, we have taken maybe a bit our eye from marketing investment. I'm not saying it's massive, but when we talk about the DKK 1.5 billion, DKK 2.2 billion as benefits, part of that, for sure we'll reallocate to support our brands in the future.

Okay. Cees't Hart: Sorry. Sorry. Then the second one was over the 1% share. Basically, what we have is - what we have is - what we had, if you like, is very much focused on market share development, maybe sometimes on the cost of the margin development. And what we want in the future is to, what I call, focus on the krone triangle. That's the margin, the market share and the EBIT. So I don't have to talk about the gross margin, market share and EBIT. And as the - if you like, to the Group, a new guidance, we have been - indeed been a successful market share. But again, you're seeing the development of our margins, and we going to balance that a bit more in the future. But we have gained, to your question. Then in terms of the cost reduction incremental, what we want to close is all the different programs that we had in the past and that has not led to clarity in the company as it is. So we said we may run a program, and at the end of the day, it's all about improving our underlying EBIT generation by which we're able to throw back some, towards investment in [indiscernible] and some towards our shareholders. So we're not going to split these savings again. We're talking about, by the way, benefits rather than our savings. So we look as well into our new management of our portfolio.

Okay. We'll now go to the line of Jamie Norman at Société Générale. Please go ahead. Your line is open.

Yes. Good morning. Firstly, I wanted to ask about your thoughts on the fighting between the discounters and the broad-based retailers. I'm thinking in particular of the UK and France. Clearly, that's been very challenging backdrop. Do you expect that to be incrementally more challenging looking out to 2016 or is that sort of in the base so to speak? And secondly, in markets where there's some GDP growth and stronger consumer spending on the back of lower fuel prices among others, do you see any recovery in the on-trade, which has been under pressure for so long? Cees't Hart: Thank you. With regard to the fight between the discounters and retailers in the previous [indiscernible] as well, we've seen that in many, many countries. It's difficult to predict what will happen country-by-country. The dynamics are different. Obviously, for the UK it's a relatively new phenomena the last few years, and we are one of the brands that are in the discounters. And as I've said earlier, we are looking in, especially in the UK, to move much more to value rather than volume. And obviously then we'll reassess as well our strategy with regard to what kind of channels we would like to offer our products. It is in the base because it's, if you like, normal business. But as you pointed out, it is dynamic in a market which we need to monitor carefully. With regard to the GDP growth recovery on trade, we do not see any change in the trends. A lot has to do, as you know, with the weather. The weather in our region has not been fantastic this summer, if not in Q3 in Baltic/Nordic. So, we - the answer is, we do not see that back, maybe it's a bit too early as well at the moment that we get a good spring and a good summer. We might see more in this.

Thank you.

We're now over to the line of Tristan van Strien of Deutsche Bank. Please go ahead. Your line is open.

Good morning, Cees't. Three questions if I may. The first one is on the UK and Tesco and what led to that delisting of situation there and do you see any - what's the timeframe of getting back into that customer? The second question is on Russia. Can you just remind us what proportion of your portfolio is above 1.5-liter PET and what impact that will have on your next year and the year beyond on this EBIT and margin as the industry does that voluntary ban on that? And then the last one, on India, some very strong growth there. Can you just give a bit of color on the states where that is happening and also in terms of whether that growth is actually profitable at this point? Thank you. Cees't Hart: Thank you, Tristan. Good morning. Tesco, I think it's a consequence that they have been delisted. It's a consequence of having focused too much on volume. By that, we are in channels like the discounters but as well, in other channels was used from what we were, is use promotions, and that has led to the deterioration of the brand values. And that was one of the reasons that it does grow at a certain moment and delisted us. I think it's too optimistic to say that we will come back in 12 months there. We first need to improve ourselves and that's one of the reasons that we move now to a more value orientation rather than volume orientation. So, it's clear that our brand is in the [indiscernible]. We have changed the management. We are announcing today our managers there, and these measures will help us to move from a focus on volume towards focus on value. With regard to PET for - I think it's something like 45% of the portfolio in beer is in PET and something like 45% is above 1.5 liters. Our portfolio above 1.5 liters is 20%. And, obviously, it is difficult to predict what will happen in the Russian market at the moment that there is the ban. At this moment of time, we have a kind of guidance - or an agreed position that we will move out of 1.5 liters plus ourselves by the 1st of July. Whether they will have impact on volume is difficult to say. We could argue that the price per liter will improve because the consumers that want still to drink beer go to more profitable parts like other bottles, smaller bottles, and things. So, the price value - or the price volume relation could change by this. But this could have an impact on the volume especially in the beginning. With regards to the Indian states, we sell in many states and we're seeing growth broadly. The main [indiscernible] there where we have our breweries. And then we've talked about West Bengal and Maharashtra. I hope that I pronounced it well. The profitability is different by state. But we focus, of course, on the development of our profit and that has changed this year significantly. This is the first year that we see India in or above zero, so above breakeven. So we're progressing well there.

Okay. Thank you very much. Very insightful. Good luck on the new program. Cees't Hart: Okay. Thank you.

We're now over to the line of Chris Pitcher at Redburn Partners. Please go ahead.

Thank you very much. I have three follow-ups, and apologies if I missed it. Obviously, there've been other announcements during the call. A follow-up to Trevor's question earlier, did you actually quantify the margin benefit from the obsolete stocks in Russia in the quarter? And then secondly, on the cost saving program's guidance, the DKK 1.5 billion to DKK 2 billion, I think you alluded to it. But how much of this is ahead of your previous expectations, because what we have here is a formalization of cost saving targets? And I'm wondering how much of this is sort of incremental to the old business? And then third question, on the whole returns of the business, will management remuneration be based on a sort of pre-goodwill return on invested capital? Because, obviously, with the write-downs we're seeing right now, that's helping get your return on invested capital up in the short-term. Thank you. Cees't Hart: Yeah. Thank you very much. I look at my [indiscernible] with regard to the margin benefit of the obsolete stock, we don't have that and we don't give too many details on. By the way, on the obsolete stocks, the problem with obsolete stocks is declining a bit. We are having a more clear policy on stocks in Russia, as you know we have been I'd say punished at a certain moment by - having overstock at the market may be here and there at a certain moment, and by that we've got some option in stocks. The kind of number of days we have articulated towards the local management and that's what we call draw by the end of the month. So, where we see, however, a bit of a change is that the traditional trade is going down rapidly. And by that we still see some stocks in the trade, because these generals lose share, and by that overtime cannot sell all their stock and their stocks are creeping up. So, that's still something we have on our radar.

Could I just follow up on that? Because, obviously, at the second quarter results we have the impact from destocking, and we were reassured that that was now largely done. But judging by the commentary in the results today, the stocking issue is still very real. And it sounds like from your comments that there are still risks of further destocking. Can you give us an idea of how much of a drag this will be on the business and for how long it will continue? Cees't Hart: No. Maybe then I have not been clear enough. I think we have done the control. The only point I want to make is that the underlying dynamics of the business is that there is no channel shift from traditional trades towards modern trade, and that obviously, will have some operational issues. But as we speak, we've looked at it even yesterday, there is a power risk in business as a good control and handle on the stocks.

Okay. Thank you.

With regard to your question, Chris, on DKK 1.5 billion to DKK 2 billion, whether it's a [indiscernible] or an incremental and so on. Well in the past you have heard many figures and these were mainly gross. Here we talk about net. So, we've changed, if you like, the clarity on that one, because gross can have all kinds of, let's say, reductions because of inflation and other things. So, we talk about a program, which should delivers DKK 1.5 billion to DKK 2 billion net benefits. And with regard to goodwill remuneration, obviously we're not going to remunerate on things that are too easy. So we will exclude goodwill from that.

Thank you.

We're now off to the line of Stephanie Diaz of Bank of America Merrill Lynch. Please go ahead, Stephanie. Your line is now open.

Yes. Hi. Could you please give us a bit more insight on the new interim CEO in the UK and the trends that you are implementing there? The second question relates to the implication. Would there be any on the credit ratings from the DKK 10 billion write-off and were there any inventory write-downs in Q3? And then finally just coming back on your full-year guidance being unchanged despite the strong bid in Q3, does that imply Q4 only negative due to the UK or would there be any other factors? Thank you. Cees't Hart: Thank you very much. With regard to the interim CEO. We thought the UK has not performed well over the last 18 to 24 months. I think it was clear that we needed to intervene there. At the moment if you intervene sometimes it's needed to have new leadership as well. An interim CEO was available short term and he comes in with quite a lot of different credentials. He has worked in the UK for VAT. He's worked for Heineken in the past and for [indiscernible]. And we are happy to have him on board for as long as we need that, because we are looking now for a new CEO in the UK. The program as such that we will announce, has a lot to do with adjusting our volume or our production base to the new volume circumstance in the UK after divesting some of our channels. But as well, we're going to review our commercial strategy. By that, we will restructure parts of the business that we will as well, build new capabilities in the UK in order to really extract more value in the future. With regard to the DKK 10 billion, I look at my files, correct.

There's no - you say - unusual on mature and immature write down on inventory there. Cees't Hart: Okay. And with regard to Q4. I said earlier, in Russia and Asia, because of especially marketing and sales support, we see some shift from Q3 to Q4. That makes us think that Q4, despite a very - a solid Q3, we think that Q4 will be a bit lower, but it has to do with the shift per quarter from the support levels.

Okay. And sorry, just going back on management, could you give us an update on new CFO? Sorry, just - and coming back on the cost saving program of DKK 1.5 billion to DKK 2 billion. You only mentioned cash costs below DKK 1 billion. How does that reconcile with the cash versus the cost saves of DKK 1.5 billion to DKK 2 billion versus DKK 1 billion cash savings whereas - because obviously, there are the 2,000-job cuts that is a big part of that for lower depreciation because of the lower PPE given the write-downs? Cees't Hart: Okay. I will hand over that to my finance colleague in a minute. With regard to the new CFO, we are in search. We are interviewing the candidates almost as we speak. And I hope to announce that as soon as possible for us. This kind of process really takes some time. People are who in their current job. So, I expect that we have by the 1st May or the 1st June a new CFO. I think that's the most [indiscernible] time table. With regard to your...

Yes, other question. On the DKK 10 billion restructuring and impairments that we are looking at in this part here of which the main part is taking down in Q3. We announced that less than 10% will be cash of that. That's the one thing. And looking at the DKK 1.5 billion to DKK 2 billion is the benefits from the Fund the Journey, that will be more or less cash, all of that.

Thank you.

We're now over to the line of Frans Høyer at Jyske Bank. Please go ahead. Your line is open. Frans Høyer: Yes. Good morning. We'll, you mentioned that it's still not quite clear how you intend to deploy the DKK 1.5 billion to DKK 2.0 billion benefits. Some of it will go to the bottom line, some of it will be plowed back into the operation by way of marketing investment. Could you give me an idea of, let's say, you wanted to increase your marketing investment by [indiscernible] percent, how much of the saving would that take care of? Cees't Hart: The line [indiscernible] broke down for a moment, but let me try to cut your answer - your question and maybe you want to have more details. When I say still not clear, it sounds maybe as if we don't have a clue. The thing is more that we are in the process of SAIL2022. That's our strategic process. We do that again with the top 60. And maybe good to know for the audience is that we finish this by December with the top 60 then we move to the supervisory board mid-February and we will announce before the end of Q1. It will be probably strange at the moment that we now already say what kind of level of investments go to some of the projects we will identify in SAIL2022, whilst, at this moment in time, we're still in preparation of the strategy and our new priorities. So, we will leave you that at the moment that we have SAIL2022 ready. But obviously, it's clear that we understand that there needs to be a balance between the investments for the future and the attractiveness of our company [indiscernible]. Frans Høyer: I was just - I hope you can hear me now, but I was just wondering, as a theoretical question, how much would a 10% increase in your marketing investment be in money terms? Cees't Hart: I don't think that we disclose it at this moment in time. Frans Høyer: Okay. Just to have one more question regarding - we've been talking a lot in Carlsberg about the optimal brewery network structure in Western Europe. I think we are just over 20 breweries at the moment. Do you have any thoughts on that? And how much scope for integration or consolidation of the network that you can imagine in Western Europe? Cees't Hart: Yes. You can imagine that this is one of the questions [indiscernible] when you come in. And I must say that it feels that we - optimal was always a difficult word, of course, but it seems that we have the right network at this moment of time for the volume development we have. Let's say, if you look at the total network at the moment, as you move or shift your [indiscernible] from country to country against tremendous logistical cost, so I'm convinced at this moment of time is a volume development we have that this is the network we needed to have in terms of breweries. In optimizing some of the efforts per factory, then we talk - that's I think something we just quite offer the program that which Chris was [indiscernible]. So, it's optimizing then more in terms of the assets per factory than per brewery than in terms Carlsberg Breweries. Frans Høyer: Okay. Thanks very much. Cees't Hart: Can we have now the final question? Is it possible?

Yes, of course. The final question is from the line of Tobias Bjorklund of Danske Bank. Please go ahead. Your line is open.

Thank you and good morning. So, a question about China. You posted 1% decline in the - volume decline in Chinese market versus a 5% market decline, I think at nine month's numbers. But I wonder about the market in your relevant regions that's in Western China, and then as a follow-up on that, you talk about optimizing your Chinese footprint. When you say this, what do you think about here? If you could shed some light on that. Thank you. Cees't Hart: Thank you, Tobias. The western part of China is slightly better than the eastern part, but still down. What we see there is that our Tuborg brand is growing very fast. We are still gaining market share, so that's good news. We see as well a bigger difference between the east and the west. In the east, we have tried to make all the good out of the Eastern Assets. What we see there is a steep decline of the market, a huge overcapacity. We see products, or these is the 650 ml beer for $0.30. That's almost not paying for the raw material; and very strong brands. Whilst in the east, we have not started yet with Tuborg. So, that's the reason why we have decided to move out of the east to concentrate ourselves on the west. With regard to the brewery footprint, we have some small breweries that can be - we can close them, they can be sourced from the bigger one. There are one or two isolated in the east, and we will review the situation of this in the coming 12 months.

Right. Thank you. Cees't Hart: Thank you, Tobias.

As that was the final question we have time for, Cees't Hart, can I please pass the call back to you for any final thoughts and to close? Cees't Hart: So, first of all, thank you very much for calling in this morning. Many of you I'll see in the coming days either in Denmark, London, or the U.S. I'm looking forward to the conversations. I wish you, for now, a very good continuation of the day. Thank you.

This now concludes today's call. Thank you all very much for attending. You may now disconnect your lines.