Carlsberg Brewery Malaysia Bhd managing director Stefano Clini.
KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd
will be reinvesting in its brands to safeguard the future of the business amid the tough business environment.
Managing director Stefano Clini pointed out that over the last three years, for every ringgit invested in the business, the company has been earning over a ringgit in profit.
He said the group’s return on invested capital (ROIC) for 2020, 2021, 2022 and 2023 were 85%, 117%, 180% and 133%, respectively.
“Over the last three years, all our key indicators are way ahead of where the group was before Covid-19,” he said at a briefing after the brewery’s AGM yesterday.
He emphasised that the group’s ability to generate over 100% ROIC should provide assurance to all investors.
“We’re making good use of company funds. Sometimes it goes to dividends, sometimes to invest in our assets and that is to future-proof the business,” he added.
For the financial year 2023 (FY23), Carlsberg Malaysia declared a dividend of 93 sen a share, translating to a payout ratio of 87%, up from 85% in FY22.
For FY24, the brewery is allocating RM92mil for capital expenditure (capex), earmarked for a new canning line and beer filtration plant.
“This brings a cumulative additional investment of RM200mil over the last three years, marking it as the largest capex in the brewery’s history since its inception.”
Meanwhile, Clini, who assumed the role in 2019, has confirmed the increase in beer prices to uphold the group’s profit margins, with the last increase occurring in 2022.
He acknowledged that the price hike presents challenges for the near term. However, Clini expressed confidence in the longer term, citing the country’s growing population.
“For the short term, there may be a slight impact on volume but in the medium to longer term, we are optimistic,” he said.
He attributed the hike in prices to the rise in input costs across the board.
On the outlook for FY24, Clini expressed moderate optimism, acknowledging that consumers are a little bit anxious about spending their money.
He attributed the optimism to the group’s strategic plans and vision.
Regardless, Clini also remains cognisant of factors such as tempered consumer sentiments, attributed to the high interest rates and increase in sales and service tax.
Additionally, Clini said the group is introducing Kronenbourg 1664 Blanc Brut, aligning with the group’s focus on premiumisation.
“We overinvest in premium brands because the margins are there,” he said, but remained tight-lipped when asked about the margins.
He said the group is geared to step up in premiumisation with the local production and distribution of Sapporo beer since January, adding that it is also excited to launch its newest product innovation – 1664 Brut, a premium lager beer in April.
“Premium brands are the key revenue growth drivers and will remain attractive as consumers have become more discerning and alcoholic beverages are getting more complex,” Clini noted.
Carlsberg Malaysia closed at RM18.38 per share yesterday, marking a 14.11% decline from a year ago.
