Today, we are fortunate to be here
at Carlsberg's headquarter in Copenhagen
with Cees 'T Hart to talk about
Carlsberg's transformation since 2015.
Could you maybe first layout the overall transformation
that you have been going through the last year?
We took stock of the situation
and came to the conclusion that we needed to have
a new strategy for Carlsberg going forward.
We had two, if you like, two options.
Either to go in a kind of ivory tower
and to script a strategy, maybe together as consultants,
and then to say,
"Look, I have thought about it,
and this is what you need to do."
That is maybe a good process
and will really be speedy in terms
of getting to at least some results
in terms of definition of a strategy,
however, it doesn't engage people.
So we did it differently.
We asked the heads of the countries
and the heads of the functions to come together.
We like to call that the top-60.
We went through the kind of analysis of the business.
I said, "Look, based on this,
we now need to have to build a longer-term strategy."
We set up a strategy which is called SAIL'22,
a seven-year strategy.
But the way to fund that strategy was by first focusing
on a new program, which is called Funding the Journey,
and that Funding the Journey aspired
to go for a reduction of cost, or savings if you like,
of 1.5 to 2 billion DKK
in order then to half use that for investing
in SAIL'22 program and the other half
to improve our returns to the shareholders.
And the last part
of that meeting was about creating a kind of circle
and say, "Look, guys, we have gone through this for three,
four months, are we sure that this is our strategy?"
And that meeting was a decisive meeting, of course
because basically, there are people committed
to the strategy.
Both Funding the Journey and the first moves of SAIL'22
went much faster than we anticipated.
How did you manage to get
this sense of urgency to the organization
and believe that something had to be done?
My first presentation was about the glass is half full
and the glass is half empty.
So we need to respect the past, but stating as well
that a few things needed to be done.
The other side is that we got some pressure from analysts
and in share price from shareholders as well
over the last five years.
So the combination of that really helped to stage
a kind of need for change.
I think for many people, the motivating part
was that half of the savings would be used
for the brands and building the capabilities.
What kind of financial effects
and also more general holistic effects, if you wish,
would you say that the transformation so far has delivered
and what kind of changes are you looking at in the future?
So when we started off with the entire program,
we said to the shareholder,
"We will improve our margin,
we will increase our cash,
we will reduce our debt,
we will improve our dividend,
and then we will do acquisitions or share buybacks."
And we were talking about that, that
would be after the first three years.
The program has been extremely fast,
so we have been able to really improve our margins,
increase our cash, reduce our debt,
and we are now in share buybacks,
because we don't have relevant targets for M&A.
Our share price grew from roughly 500 in 2015,
by let's say 878, 880 nowadays,
so there's a nice improvement.
Our TSR is, relative to our sector
and peers, very good, performing at the top quartile.
And now what we need to do
is to further improve our margins
and basically continue our current trajectory.
Carlsberg is a very old company
and very proud tradition, from 1847 actually,
and also with a very distinct sense of purpose.
Could you say a few words
on how you have connected the transformation
with the purpose and the history?
We raised ourselves three questions:
the what, the how, and the why.
We started with the what, what the objectives are.
The how, there's the strategy.
We went through all the kinds of thoughts and behaviors
of the founder and came to the conclusion
that basically what he did in the past
was very relevant for now.
And we reframed that, if you like,
with a purpose we brew for a better today and tomorrow,
and out of that came our guidance towards the future
improving our quality of the brews
and getting back to people.
There are so many changes happening in the environment.
So how do you get your team to think about those changes
and actually start acting ahead of the curve?
Challenge, if you like,
to see how digital and new technologies
will impact our business and business environment.
In this program, we will more or less apply the same
as we did to this Funding the Journey and SAIL'22.
We really want to focus first
on projects that have a quick return
in order to reinvest these kinds of returns
into new projects and digitals.
I talk about the supply chain focus in smart brewery,
I talk about maybe a different view on the sales
and operational planning, where we could use, or can use,
or will use artificial intelligence.
One of the things I've been impressed
with is that drive into sustainability.
A few words on how you have been driving that agenda.
We have the purpose
brewing for a better today and tomorrow.
Out of that brewing for a better tomorrow,
we got a program which is called Together Towards ZERO.
Part of that is very much focused about environment.
What we saw by being very serious about this,
that if we've got a lot of initiatives
from people within the company, but as well from suppliers.
So they say, "Look, you made almost a kind
of industry statement about your purpose
that you really want to have no emissions of CO2 by 2030,
and no water waste by 2030."
We got via LinkedIn,
hundreds of applicants of young people
that want to work with us.
Thank you, Cees, lots of interesting learnings here
and a very impressive transformation.
Thank you for your time today.
Thank you very much for your interest in the company.
Thank you.