As well as favourable impacts from foreign exchange, mainly due to the strengthening of the US dollar, the results show that organic net sales (excluding the effect of acquisitions and currency moves) grew 9.4% due to volume growth of 1.8% and higher prices, with a 9.7% growth for organic operating profit.
Charlie Huggins, head of equities at Wealth Club and Diageo share owner, said: “While not immune from economic headwinds and inflationary pressures, Diageo looks better placed than most to weather the storm.
“It is much easier to raise prices on a bottle of Johnnie Walker than on a bottle of shampoo or deodorant. So Diageo ought to have more pricing power than most consumer goods peers. This is a key reason for its resilient margins.”
Over the medium-term, from fiscal 23 to fiscal 25, Diageo expects organic net sales to consistently grow within a range of 5% to 7% and organic operating profit to grow sustainably within a range of 6% to 9%.
Diageo saw growth delivered across most categories, primarily scotch, tequila and beer, as premium-plus brands contributed 57% of reported net sales and drove 65% of organic net sales growth.
Ivan Menzez, Diageo chief executive, said: “Sales growth was supported by our continued focus on premiumising our portfolio, bolstered by strong global premiumisation trends, with our super-premium-plus brands growing organic net sales 12%. As category growth trends continue to normalise following Covid-19, winning quality market share remains a key focus.”
There was continued optimisation of its portfolio through acquisitions. The company acquired Mr Black, the Australian coffee liqueur, and Balcones Distilling, a Texas craft distiller. It also recently announced an agreement to acquire Don Papa rum, a super-premium, dark rum from the Philippines.
