CABJF - Carlsberg A/S (CABGY) Q4 2023 Earnings Call Transcript
2024-02-07 16:26:06 ET
Carlsberg A/S (CABGY)
Q4 2023 Results Conference Call
February 07, 2024 3:30 AM ET
Company Participants
Jacob Aarup-Andersen - CEO
Ulrica Fearn - CFO
Conference Call Participants
Andrea Pistacchi - Bank of America
Edward Mundy - Jefferies
Gen Cross - BNP Paribas
Olivier Nicolai - Goldman Sachs
Laurence Whyatt - Barclays
Mitch Collett - Deutsche Bank
Richard Withagen - Kepler Cheuvreux
Sanjeet Aujla - UBS
Simon Hales - Citi
Søren Samsøe - SEB
Trevor Stirling - Bernstein
Presentation
Jacob Aarup-Andersen
Thank you very much, and good morning, everybody, and welcome to Carlsberg's Full Year 2023 Conference Call and also Strategy Update. So my name is Jacob Aarup-Andersen, and I have with me our CFO, Ulrica Fearn; and Vice President from Investor Relations, Peter Kondrup.
First of all, let me begin by summarizing the key headlines for 2023. We delivered a solid set of results in what we believe was a challenging environment. We saw continued volume growth in -- especially driven by Asia, and we delivered solid organic operating growth in line with expectations, while at the same time increasing our commercial investments.
As a consequence of our continued strong financial health, we are also today launching a new share buyback program of DKK 1 billion. And then we are launching our refreshed strategy with higher long-term growth conditions.
I will start off by explaining our refreshed strategy, after which, I will go through the key headlines for the year and the regions. Ulrica will then take over and explain the financials and the full year outlook. So let's turn to Slide #3. As previously confirmed, SAIL'27 remains the strategic frame for Carlsberg.
It sets a clear direction. It's well understood and it's well embedded across the company. I've made that very clear from day 1. However, following some tough years due to well-known headwinds, it's also time to change our mindset to become more long-term focused, therefore the Executive Committee and the broader leadership team have conducted a strategic review of the SAIL'27 priorities. The outcome of this review is Accelerate SAIL, signaling that we stay within the remit of SAIL'27, but that we will be zooming in on specific levers and enable us to accelerate growth.
We want to truly be a growth company. And with Accelerate SAIL, we are ramping up investments in our brands, markets, capabilities and people to capture the many growth opportunities that we have identified. The starting point for Accelerate SAIL is strong. Carlsberg has great brands and market positions. And we also have a strong culture and with an excellent cost mentality, providing us with a fantastic foundation to build on.
Slide 4, please. So looking at our new long-term financial ambitions. As you saw from yesterday's announcement, we have raised our ambitions for long-term top and bottom line growth. We're confident about the growth opportunities of Accelerate SAIL and therefore, our new long-term ambition for organic growth is 4% to 6% CAGR, up from 3% to 5% previously.
We will aim at growing organic operating profit faster than revenue, and by that, deliver long-term margin expansion. The baseline for our updated growth ambition in 2024 being the first year of Accelerate SAIL. There are no changes to our ROIC focus or our capital allocation principles. To support our growth agenda, we will step up marketing investment levels in the coming years.
Consequently, marketing to revenue will increase from the current levels of 8% to 8.5% to around 9% in 2027 and eventually to around 10%. We will also increase sales investments to strengthen route to market, specifically in Asia, in markets such as China and Vietnam and later India....
Carlsberg A/S (CABGY) Q4 2023 Earnings Call Transcript