After battling the pandemic, inflation and the turbulence of global conflicts, Carlsberg is once again ready to accelerate growth. Group CFO Ulrica Fearn is making sure that capital is allocated to the right activities – and she is very upfront about what growth algorithm is fit for the historic brewery.

Think for a moment of this situation: You have clear principles for how you allocate capital, and you have made a conscious decision to accelerate growth. You also know your market, you know where to invest, and you know how to monitor financial performance.

Put all those elements together, and you could find yourself having a so-called ‘growth algorithm’, according to Carlsberg Group CFO Ulrica Fearn. Since taking over the role in January of 2023, she has continued the brewery’s long-time history of disciplined capital allocation, but she is also committed to taking full advantage of new commercial opportunities.

Despite recent years of market turmoil, Ulrica Fearn is very aware that she has joined a company that is in good shape:

“The external events of the past few years have definitely had a large impact on our markets, but they have also created a very strong focus on performance. Today, our tools for monitoring costs are very solid; we have a robust portfolio model, and we are very clear on outcomes when it comes to allocating capital. This ‘performance rhythm’ is absolutely essential for steering the company. It is our muscle for creating profitable growth,” she explains.

According to Ulrica Fearn, the stabilisation of the global markets was the main reason for reviewing the strategic priorities in late 2023 and early 2024, after which Carlsberg announced a refresh of the SAIL’27 strategy, called ‘Accelerate SAIL’:

“Launching ‘Accelerate SAIL’ in February 2024 was our way of saying that we now feel that we are standing on more solid ground and that we are therefore ready to sharpen our focus on growth. From a capital allocation point of view, this also means that we are ready to increase our investments in our biggest growth drivers. Of course, we will still keep our well-embedded cost focus, and we will continue to improve our supply chain, but the goal right now is to accelerate growth and secure long-term sustainable cash flows.”

A holistic view on capital

Although Carlsberg is entering an era of accelerated investments, Ulrica Fearn is committed to upholding a financial model that has a holistic view on capital:

“To me, capital allocation ultimately starts with the financial model that in Carlsberg resides in our FP&A team. This is really where we make sure that our capital allocation is aligned with our long-term strategy and that we see the holistic impact of our investment decisions. From there, we can work with shorter-term and dynamic decisions that pass through the regions, the Executive Committee and the Board as appropriate. What is important, however, is that we not only see each initiative on its own merits. Effective capital allocation is about seeing the marginal improvement and how each investment fits in the big picture.”

In line with her stringent approach, Ulrica Fearn also insists that prior capital allocation decisions are continuously reviewed:

“Both on our capex and opex investments, I would say that Carlsberg today has very strong review processes. We review costs every month, we perform regular post-investment reviews, and we continuously work to improve the transparency of our numbers. My philosophy is that there are so many decisions in a company that are not financial in nature, so the least we can do is to have our house in order. It starts with financial discipline, and then we can take it from there.”

Financial discipline is also what Ulrica Fearn brings to Carlsberg’s Executive Committee, something she sees as one of the core responsibilities of being a CFO:

“To me, capital allocation is not just part of my job; it is what I do – and I do it in a way where it is controlled, where it follows our strategy, and where it contributes to the overall success of our company. Group Commercial and the three regions and countries come with the commercial content, I align it with the financial model, and the CEO puts it all together. That is really the essence of my job.”

Looking to the future

All in all, Ulrica Fearn seems to be thriving in the high-energy world of fast-moving consumer goods. She admits that it is very different from her previous job as CFO of Equinor, or the one before as Director of Group Finance at the British telecommunications company, BT. One theme, however, has remained stable throughout her career in Finance: Her focus on creating long-term financial success. Ulrica Fearn explains:

“I can safely say that capital allocation has been massively different throughout my career. In oil and gas, you work with 20+-year horizons, in telecoms you balance the day-to-day market and mid-term technology investments, and in the beverage industry, things are moving extremely fast with very little lead time. The common denominator, however, is the ambition to generate long-term sustainable cash flows while also delivering on short-term expectations. I would say that this is the hallmark of any CFO.”

Speaking of hallmarks, Carlsberg’s long-term successful and trusted financial model will continue with Ulrica Fearn at the steering wheel, she confirms – even in a new era of growth:

“Although we have now chosen to accelerate growth, I am very pleased that we have been able to uphold the principles of our current financial model, which is also what our shareholders know and trust. To me that is really the core of consistent capital allocation: We are transparent about our financial policy, we are ambitious about our goals, and we are 100 per cent clear about what it takes to get there. Who can argue with that?”

What are your three best pieces of advice for CFOs who want to get a better handle on capital allocation within their company?

  1. Be clear on your capital allocation criteria and stick to your principles: Make sure that you have a global portfolio model that clearly weighs your investment choices. Do not just make it up as you go along.
  2. Put processes in place to make sure you get the right information: Capital allocation does not just sit with the CFO. It has to be closely connected to the commercial business and fully aligned with the strategy.
  3. Do not look at initiatives on their own merits: Apply a holistic perspective to capital allocation and look at the marginal impact of investment decisions. Clarity, transparency and consistent choices are key elements for fuelling a growth algorithm that matches both your long-term and short-term ambitions.

About Carlsberg Group

Established in 1847 by brewer J.C. Jacobsen, the Carlsberg Group is one of the leading brewery groups in the world today, with a large portfolio of beer and other beverage brands.

More than 31,000 people work for Carlsberg Group, and the products are sold in more than 125 markets.

Contact us

Kim Hendil Tegner

North South Europe Leader, Finance & Performance and leader of Deloitte’s CFO Programme

+45 30 93 64 46

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