Diageo Delivers Another Year of Strong, Consistent Performance

 Breaking News
  • Pernod Ricard to Acquire Super-premium Italian Gin Brand Pernod Ricard is acquiring Italian super-premium gin brand Malfy from Biggar & Leith for an undisclosed price. Malfy is a range of super-premium gins distilled by the Vergnano family in the Italian region of Moncalieri, and already present in several international markets such as the United States, United Kingdom and Germany. Each gin in the [...]...
  • Nestlé and Carrefour Give Consumers Access to Blockchain Platform Nestlé and Carrefour, the French retail group, have announced that they are giving consumers access to blockchain data for Mousline purée in France. This is the first time that Nestlé is sharing information on its products with consumers via a blockchain platform. Consumers can use their smartphone or other device to scan a QR code on [...]...
  • Plastics Action Alliance Sets Targets to Achieve Sustainable Reduction in Use of Plastic in Ireland Plastics Action Alliance, the recently formed group that comprises of 11 leading agricultural processing and food businesses in Ireland, has set out its key objectives. The industry leading group aims to significantly reducing the use of plastic packaging across its members’ operations. Formed at the end of 2018, the Plastics Action Alliance is a collaboration that [...]...
  • Carlsberg UK Gets Honest About Its Beer Carlsberg UK has launched its most ambitious and honest consumer facing campaign ever in a bid to drive reappraisal of its flagship beer brand. Expected to reach 97% of the UK, the £20 million campaign conceived in collaboration with agency partners Fold7, Clifford French and Initiative – trades on the equity of the brand’s renowned [...]...
  • Alternative Proteins Challenge Dairy Dominance The value of the sports nutrition market is set to grow by around 8% per year to reach over US$17 billion globally in 2021, according to Innova Market Insights’ forecasts. The mainstreaming of the market has led to a surge in interest in plant-based alternatives with the traditional dominance of whey and other dairy proteins [...]...

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
  • June 25, 2019BevExpo 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here