Diageo reports 16% organic net sales growth

29 July, 2021

Diageo has outperformed analysts’ expectations by reporting organic net sales growth of 16% for the year to June 30.

The Johnnie Walker, Smirnoff and Guinness producer reported organic growth of 20.2% in North America, its largest region, while sales enjoyed a strong rebound around the world.

Reported net sales increased 8.3% to £12.7 billion, as the strong organic growth was partially offset by foreign exchange impact.

Organic operating profit rose by 17.7%, while reported operating profit grew by 74.6% to £3.7 billion.

Shares in Diageo have increased by around 25% over the past year. In May, it announced the resumption of its return of capital scheme. Shareholders can expect £1 billion of payments by the end of the 2022 financial year, with £500 million in share buybacks to be completed by November 2021.

Chief executive Ivan Menezes said: “We delivered organic net sales growth across all regions, led by a strong performance in North America, and we held or gained off-trade market share in over 85% of our business.

“These results demonstrate the strength and relevance of our brands and the extraordinary efforts of our talented people.

“I would like to thank all of my colleagues for their dedication and resilience, and to express my deepest condolences to all who have lost loved ones this year due to the pandemic.

“I believe that our foundation, built through outstanding brand-building, active portfolio management, consumer-led innovation, smart investment in data analytics tools and embedding a culture of everyday efficiency, has been a key competitive advantage for Diageo.

“We were well-positioned to successfully manage the challenges created by Covid-19, we have responded quickly to changing consumer trends and we have emerged stronger.”

Sales are ahead of fiscal 2019 (the year to June 30, 2019) in three of Diageo’s five regions. Menezes is pleased with the rally, but he expects near-term volatility in some markets.

“However, I remain optimistic about the growth prospects for our industry, with spirits continuing to gain share of total beverage alcohol globally and premiumisation trends remaining strong,” he added. “I believe Diageo is very well positioned to capture these exciting opportunities to drive long-term sustainable growth and shareholder value.”





Digital Edition

Drinks International digital edition is available ahead of the printed magazine. Don’t miss out, make sure you subscribe today to access the digital edition and all archived editions of Drinks International as part of your subscription.

Comment

Nick Strangeway

Bar food's blurred lines

Once upon a time pubs and bars were somewhere you went with the sole purpose of getting pissed and there wasn’t a knife and fork in sight, just a packet of dry roasted nuts.

Instagram

Facebook