Diageo Delivers Another Year of Strong, Consistent Performance

 Breaking News
  • Arla Foods Further Strengthens its Innovation Agenda As Arla Foods continues its pursuit to become one of the leading dairy innovators in the world, it is taking a bold new approach to innovation and new product development, including creating a new Product and Innovation organisation and appointing a new Senior Vice President. Driving the development of the new organisation is the opportunity Arla has [...]...
  • Orkla Buys Pama Brand Okla, the leading branded consumer goods company in the Nordic region, has purchased the Pama brand, a local brand offering consumers porridge rice in Denmark and Sweden, from PepsiCo for an undisclosed price. Pama had been a part of PepsiCo since its acquisition of The Quaker Oats Company in 2001. Orkla Foods Danmark is currently distributor [...]...
  • Label&Print 2019 Welcomes the Future of the Print Industry Label&Print, which returns to Birmingham’s NEC on 27 & 28 February 2019, will offer visitors an exclusive look at the future of the industry, showcasing the very latest products, services and technologies available to the packaging community. From leading sellers and manufacturers of print and labelling equipment, through to designing, branding and finishing experts, it [...]...
  • PepsiCo Elects CEO Ramon Laguarta as Chairman PepsiCo’s board of directors has unanimously elected Ramon Laguarta as the company’s Chairman, succeeding Indra K. Nooyi who announced in August 2018 her intention to step down as PepsiCo CEO effective October 3, 2018 and remain Chairman until early 2019 to ensure a smooth and seamless transition. The appointment is effective when Chairman Nooyi retires from the company [...]...
  • Visitors to Irish Whiskey Distilleries Up 13% in 2018 The Irish Whiskey Association (IWA) has published statistics which show that there were 923,000 visitors to Irish whiskey distilleries in 2018. This marks a 13.4% increase on 2017, when visitor numbers reached 814,000. The figures are based on returns from 13 Irish whiskey distillery visitor centres and brand homes located across the island of Ireland. Overseas [...]...

Diageo Delivers Another Year of Strong, Consistent Performance

Diageo Delivers Another Year of Strong, Consistent Performance
July 30
09:58 2018

Diageo has reported a 3.7% increase in operating profit pre-exceptionals to £3.819 billion on sales up 0.9% to £12.163 billion for the year ended 30 June 2018, as organic growth was partially offset by adverse currency exchange factors. All regions contributed to the broad based organic growth, with organic net sales up 5.0% and organic volume up 2.5%. Organic operating profit rose by 7.6%, improving organic operating margins by 78 basis points, as higher marketing investment was more than offset by efficiencies from Diageo’s productivity programme.

During the year Diageo returned £1.5 billion to shareholders through a share buyback as the global drinks group delivered strong cash flow generation. Consequently, the Diageo board has approved a share buyback programme to return up to £2.0 billion to shareholders during the year ending 30 June 2019.

“Diageo has delivered another year of strong, consistent performance,” comments Ivan Menezes, chief executive of Diageo. “These results reflect the high performance culture we have created in Diageo, the ongoing rigorous execution of our strategy, our focus on the consumer and our ability to move swiftly on trends and insights.”

Ivan Menezes, chief executive of Diageo.

He elaborates: “The changes we have made in the business and the shifts in culture we continue to drive, ensure we are well placed to capture opportunities and deliver sustained growth. Our financial performance expectations are unchanged and we expect to continue to invest in the business to deliver our mid-term guidance of consistent mid-single digit organic net sales growth and 175bps of organic operating margin expansion for the three years ending 30 June 2019.”

Diageo’s Europe and Turkey business achieved operating profit before exceptional items up 10% to £1.028 billion. The region delivered 4% net sales growth to £2.932 billion, reflecting another year of consistent performance in Europe where net sales were up 4% and a strong performance in Turkey growing net sales by 11%. Europe growth was largely driven by Great Britain, Ireland and Continental Europe, with continued share gains in spirits, up 50bps across Western Europe.

Performance was led by strong growth in gin, where Tanqueray gained share in the fastest growing category and Gordon’s benefitted from the launch of its Pink variant. Guinness was up 6% driven by a good performance for Guinness Draught supported by double digit growth in Hop House 13 Lager.

Net sales of Captain Morgan grew 7%. Johnnie Walker grew 2% despite lapping a strong performance last year. Smirnoff declined 4% driven by Iberia and Great Britain, in line with the vodka category. In Turkey net sales were up 11% driven by volume growth of 5% and price increases across all categories. Operating margin improved 126bps as up-weighting in marketing investment was more than offset by ongoing productivity initiatives and lapping other one-off operating costs.

About Author



Related Articles

Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here