Malaysia: Carlsberg Brewery Malaysia says outlook for recovery in 2022 is encouraging

Carlsberg Brewery Malaysia Bhd says the outlook for business recovery in 2022 is encouraging as Malaysia begins transitioning to the endemic phase of Covid-19 and reopens international borders to travel and tourism, according to managing director Stefano Clini, The Sun Daily reported on April 15.

The two developments send very encouraging signals for the outlook of business recovery in the country, he said at a press briefing after Carlsberg’s AGM on April 14.

However, Clini expects 2022 to be another challenging year with the emergence of a new variant of the Covid-19 virus and escalating commodity prices exacerbated by the Ukraine-Russia crisis, which create costs pressure and uncertainties.

Clini disclosed that the group’s sales have not yet returned to pre-pandemic levels as the continued closure of entertainment outlets limits the recovery in the on-trade channel.

In spite of that, he is confident that the brewer will be able to “navigate the uncharted waters” and deliver growth this year through innovation and premiumisation of its products.

“This year, we will continue investing in our flagship brand Carlsberg while intensifying the premiumisation in 1664 Blanc, Somersby Cider, Connors’ Stout Porter and Asahi Super Dry. Importantly, this year will mark our entry in the alcohol-free brew segment in Malaysia,” said Clini.

Additionally, he said, the group’s RM110 million capital expenditure to modernise and increase the efficiency of its brewery in Shah Alam will enhance prospects.

Chairman Datuk Toh Ah Wah said as economies rebound, Carlsberg expects international tourism to gradually return. This will, in turn, boost demand, especially for its premium brands, as well as craft and speciality offerings.

“The increase in health awareness, driven by the public health crisis, is expected to drive demand for lower-alcohol and lower-calorie beverages. We expect consumer sentiment, which has been suppressed for close to two years, to rebound,” Toh said in its annual report.

SAIL’22, the group’s five-year corporate strategy, enters its final lap in 2022. With this journey almost complete, Carlsberg will be setting forth the next instalment of its corporate strategy, SAIL’27, for 2023 onwards.

On portfolio choices, it will step up its premium products, strengthen mainstream core beer, and accelerate alcohol-free brews to grow beyond beer. With SAIL’27, Carlsberg believes it can capture long-term growth opportunities, and it is therefore increasing its financial and sustainability ambitions for the SAIL’27 period, including organic revenue growth of 3-5% compound annual growth rate, organic operating profit growth above revenue growth, and continued return on invested capital focus.

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