CARLSBG – Fundamental Analysis (12 Apr 2016)

Excel – Download the analysis file

Latest Financial – Q4 2015 Financial Report (26 Feb 2016)

FY15 Q4 Results Highlight:

  • In FY15, CARLSBG’s revenue increased by 1.5% YoY to RM1,660 million; For 4QFY15, the Group’s revenue increased by 4.2% QoQ to RM422.5 million.
  • In FY15, EBITA increased by 3.6% YoY from RM282.1 million to RM 292.3 million.
  • The 4QFY15 earnings outperformance was due to better-than-expected sales and margins contribution from Singapore.
  • FY15 domestic revenue contracted 9% YoY mainly due to the revenue impact from its Luen Heng divestment. EBIT fell 19% YoY, impacted also by higher raw material costs on the weaker MYR. Its Singapore ops saw EBIT jump 68% YoY on the back of
    • higher FY15 revenue,
    • better cost efficiencies,
    • improved price and product mix,
    • improved contribution from Maybev,
    • positive currency impact – stronger SGD.


  • In my opinion, fair value of CARLSBG range from 14 to 15. Uncertainty risk of fair value is MEDIUM to HIGH.


Going Forward:

  • 3 Mar 2016 – The government has gazette into law some changes to the methodology in which excise duty (ED) on beers and liquor is calculated. Previously the ED on beers was calculated as RM7.40/litre + 15% ad valorem tax. Effective 1/3/2016 the duty is calculated on basis of RM175 per 100% vol/litre.
    • 3 Mar 2016 – Brewery – A Relieving Excise Duty Revision
  • I remain conservative and skeptical above volume growth in the brewery sector as some reports show that the industry is saturated. However, earnings should be sustainable at current levels.
  • On the other hand, the better product mix with more investment and brand building on the premium brands, including Somersby Apple Cider, Somersby Pear Cider and Kronenbourg is expected to drive earnings growth as sales volume growth is expected to be subdued due to the soft consumer sentiment.
  • The exposure in Singapore has grown to 37.6% from 24.0% a year ago which is positive as it provides a market for the Group to diversify away from the local market which is dogged by persistently weak consumer sentiment and contrabands beers.
  • The Group’s effective cost management programmes, which had helped to reduce the impact of MYR depreciation on the operating costs.
  • As expected, final DPS of 67.0sen was declared, bringing FY15 total DPS to 72.0sen (vs FY14: 71 sen), which DPS translates into a pay-out ratio of 96.9%.

At the time of writing, I owned shares of CARLSBG.


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