Carlsberg （CARLb.CO）First Take： Solid organic EBIT growth in H1 despite A&P step~up； guidance raised

Investment Rating - The report assigns a "Buy" rating for Carlsberg with a 12-month price target of DKK 1,100, indicating a potential upside of 36.7% from the current price of DKK 804.40 [10][11]. Core Insights - Carlsberg reported strong organic EBIT growth of +4.6% in H1, with a gross margin expansion of +160bps to 46.3%, allowing for a 20% year-on-year increase in marketing spend [1][2]. - The company raised its organic EBIT growth guidance to +4% to +6%, up from a previous range of +1% to +5%, reflecting confidence despite unfavorable weather conditions in Western Europe [2][9]. - The report highlights that Carlsberg's valuation is undemanding, trading at 12.9x CY25 P/E and 8.3x EV/EBITDA, excluding the expected accretion from Britvic [3][9]. Summary by Region Western Europe - Western Europe, accounting for 51% of FY23 sales, experienced a volume decline of -3.0% in Q2 due to poor weather, leading to an organic revenue decline of -1.3% [6]. - The region's organic operating profit grew by +1.0%, supported by higher revenue per hectoliter despite increased marketing costs [6]. Asia - Asia, representing 32% of FY23 sales, saw organic revenue growth of +4.7% in Q2, with beer volumes increasing by +1% [7]. - Despite significant marketing investments, organic operating profit grew by +5.3%, with strong performance in the premium portfolio in China [7]. Central & Eastern Europe and India (CEE&I) - CEE&I, which contributed 18% to FY23 sales, reported total volume growth of +6.0% in Q2, with organic revenue growth of +9.8% [8]. - The region's organic operating profit increased by +14.1%, driven by strong performance in Ukraine and solid growth in the premium portfolio [8].