KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd
is entering a new phase of capital discipline, as it concludes a multi-year investment cycle of over RM300mil and shifts focus towards more normalised capital expenditure (capex) levels.
The brewer said the bulk of its transformation spending, comprising about RM200mil in physical brewery upgrades and RM77mil in digital investments, is nearing completion this year.
Managing director Stefano Clini said this marks the end of an elevated capex cycle, during which the group had “over-invested” by roughly RM300mil above typical maintenance levels to future-proof its operations.
“We are almost at the finish line,” he told a press conference after the group’s AGM yesterday.
A key component of its digital investment is the rollout of its new enterprise resource planning (ERP) system, dubbed Smart Core.
The RM77mil digital upgrade, spanning 2025 and 2026, involves migrating from a SAP-based system to Microsoft Dynamics 365, and is expected to reshape the group’s operational ecosystem.
Alongside its digital transformation, Carlsberg Malaysia is also commissioning a new state-of-the-art ammonia plant this year as part of its brewery modernisation.
While capex is expected to normalise from next year, Clini stressed that investments will continue, particularly in maintenance and innovation.
“Of course, we’re going to keep investing,” he added.
Despite rising geopolitical tensions, including the ongoing conflict in the Middle East, Clini said the group’s immediate priority remains business continuity.
He said Carlsberg Malaysia has conducted detailed assessments of its raw and packaging materials and does not foresee any disruptions to brewing, packaging or distribution.
“We don’t have an issue of business continuity and we feel quite confident that we’re going to be able to continue business,” he said.
However, he said cost pressures are expected to intensify, with inflation likely to rise amid rising energy prices.
“There would be an impact on cost. But there is a lot of uncertainty of how long and how much,” he said.
To navigate this, he said the company is relying on a combination of cost management, portfolio premiumisation, pricing strategies and value management.
Clini emphasised that price hikes are not the sole lever, noting that the group’s historical price increases have generally trailed inflation.
Chief financial officer Anthony Yong Mun Seng said the group benefits from economies of scale as part of the global Carlsberg group, as well as long-term supply contracts that help mitigate pricing risks.
“There are certain suppliers that have no choice but to pass on inflation to us. We are managing that very well,” he said.
On the demand side, the brewer expects consumer sentiment to remain subdued, as macroeconomic instability typically leads to more cautious spending.
This, Stefano said, has reinforced an ongoing shift from on-trade (on-premise consumption) to off-trade (in-home consumption), a trend that emerged in recent years and is expected to persist.
The company’s on-trade and off-trade channels are now roughly balanced, a shift from the past when on-trade dominated.
Clini said geopolitical developments could further dampen consumption, particularly in the on-trade segment.
On supply chains, he said the group maintains diversified sourcing, with at least two to three suppliers for key ingredients as part of its contingency planning.
“There is no plan to shift ingredients,” he said, noting that supplier diversification is a longstanding practice rather than a response to current geopolitical risks.
Looking ahead, Clini said the group will continue to focus on innovation and premiumisation to support margins and cater to evolving consumer preferences, although details of upcoming product launches remain undisclosed.
For its financial year ended Dec 31, 2025 (FY25), Carlsberg Malaysia’s revenue fell 4.9% to RM2.26bil from RM2.38bil a year earlier, while net profit rose 11.4% to a record RM375.64mil from RM337.08mil.
The group declared a record dividend of RM339.4mil, or RM1.11 per share, representing a 90% payout ratio.
In terms of contributions, Carlsberg Malaysia paid RM1bil in excise duties in Malaysia and Singapore during FY25, down 3.3% in line with lower revenue.
Meanwhile, 83% of its procurement spending was directed to local vendors, up 10.7% from 2024.
