Summary of Q123 sales A strong start to the year from Carlsberg with Q1 LFL sales growing +14.2% (c.+480bp ahead of co. cons.). The LFL beat was driven primarily by price / mix (+11.9% vs. co. cons. +7.9%) but encouragingly LFL volumes (+2.1% vs. co. cons. +1.4%) were also modestly ahead of expectation. Price / mix was exceptionally strong in Central and Eastern Europe at +29% (co. cons. +12.1%). Carlsberg increased the bottom-end of its FY23 LFL EBIT guidance range (now -2% to +5%) reflecting increased confidence and visibility in China. News We highlight that Carlsberg expects to achieve mid-to-high single digit LFL revenue growth in China in FY23e. Earnings We make no material revisions to our FY23e / FY24e / FY25e EPS estimates. Investment thesis While the valuation is undemanding, an uncertain volume outlook in Europe (Carlsberg has the highest exposure of the three European brewers) keeps us Neutral. Rating and target price We maintain our Neutral rating. Our target price moves from DKK990 to DKK1,160 (driven by an increase to our target multiple reflecting wider sector re-rating). 15 questions for management If material COGS deflation in FY24e comes to fruition, how would you think about how much gross margin expansion should be re-invested back into the business?