Carlsberg Malaysia sets course towards SAIL’22 strategy

Shah Alam, April 21, 2016 – Carlsberg Brewery Malaysia Berhad (Carlsberg Malaysia Group) announced at its 46th Annual General Meeting (AGM) that the new Carlsberg global corporate strategy, SAIL’22, was rolled out across its Malaysia and Singapore operations in end March. It sets the strategic direction of the Group for the next seven years till year 2022.

SAIL’22 aims to strengthen the Group’s core business, take advantage of growth opportunities and deliver enhanced shareholder value. The strategy is supported by an efficiency and value creation program named ‘Funding the Journey’ that will unlock resources and release funds for investments amidst a more challenging operating environment.

According to Managing Director Henrik Juel Andersen, the Group achieved satisfactory performance in 2015, a year in which the operating environment was very challenging. Revenue of the Group for the year ended 31 December 2015 rose to RM1.66 billion, up 1.5% compared with the previous year. Profit after tax increased by 1.5% to RM220.2 million whilst results from operating activities grew by 2.1% to RM273.1 million. Adjusting for the one-off impairment loss on the divestment of Luen Heng F&B Sdn Bhd (LHFB), the Group’s full year net profit surged by 7.3%

At the AGM, the shareholders approved a final and special single tier dividend of 67.0 sen per ordinary share of 50 sen. Together with the interim dividend of 5.0 sen per ordinary share of 50 sen each paid on 9 October 2015, the total dividend declared for the financial year 2015 is 72.0 sen per ordinary share of 50 sen each.

Andersen commented: “This satisfactory result was achieved despite challenges in the Malaysian macroeconomic landscape. The successful implementation of effective commercial strategies and cost control initiatives mitigated the unfavourable impact of subdued consumer sentiment post the implementation of the Goods and Services Tax (GST), and depreciation of the Ringgit”.

“Our Singapore operations continued its growth momentum. Revenue grew by 31.8% to RM545.4 million while results from operating activities improved by 67.8% to RM107.5 million. Our investment in Sri Lanka also turned in a solid performance with a double digit growth in revenue and improved market share”, he added.

“Our commercial strategies paid off with our flagship brand Carlsberg registering steady organic growth and our premium brands successfully gaining share in their respective segments. The global advertising campaign – “If Carlsberg did…” boosted brand equity of our flagship brand and gained excellent traction amongst the younger and more urban consumers. Our premium brews Kronenbourg 1664, Somersby Cider, Asahi Super Dry and Connor’s Stout Porter registered double digit growth in sales and distribution 2015”, said Andersen. 

During the year, the ‘Funding the Journey’ programme helped to improve performance with the right price, product and channel mix, supply chain efficiencies and achieved greater synergies between its Malaysia and Singapore operations.

The Group anticipates the Malaysian market to remain subdued until the macroeconomic situation improves and consumer sentiment stabilises. Despite this, the Group remains encouraged by the prospects of its future business.

Commenting on the recent hike in excise duties, Andersen said: “We are disappointed with the Government’s decision to impose a significant hike on excise duties on 1 March 2016 as we are still struggling to cope with the influx of low-priced parallel import products in Malaysia. It was an unjust and imbalanced reform as the quantum of tax increase on locally produced beer, stout and cider, ranging from 10% to 99%, was significantly higher than for higher alcohol wine and spirits. This favours the importers of foreign beer and liquor over the local beer producers, the logic of which is difficult to comprehend. Furthermore, the new excise duty structure could lead to increased influx of contraband imported beers”.

"We are off to an encouraging start to the year with a successful Chinese New Year campaign. Also, in early April, we introduced a new brand named Carlsberg Smooth Draught to consumers in the traditional on-trade. This received very encouraging response. Coupled with the soon-to-be launched Carlsberg’s UEFA EURO 2016 campaign, we are confident that our consumers will continue to patronize our brands”, Andersen shared.

As we venture forth with a set of new strategic and financial priorities under the SAIL’22 programme, the Carlsberg Malaysia Group is embarking on a journey with the ambition to become a successful, professional and attractive brewer in our markets. The brewer plans to strengthen its core business, capture growth opportunities and create a team-based performance winning culture that will enable the Group to improve financial performance and deliver value creation for shareholders.


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