Profit rises at spirits group
Menezes hails ‘high performance culture’ at Diageo
Ivan Menezes: CEO at the Edinburgh offices of Diageo earlier this year (pic: Terry Murden)
Spirits group Diageo, the biggest producer of Scotch whisky, has reported a strong performance with sales of scotch 4% higher in North America, its biggest market.
Overall, revenues rose to £18.4bn from £18.1bn and operating profit for the year was up 3.7% at £3.7bn.
The company, which owns Johnnie Walker whisky, reported net sales 0.9% higher at £12.2 billion and said all regions contributed to broad based organic growth, with organic net sales up 5% and organic volume up 2.5%.
Organic operating profit was up 7.6%, improving organic operating margins by 78 basis points, as higher marketing investment was more than offset by efficiencies from the productivity programme.
The board has recommended a final dividend increase of 5% bringing the full year dividend to 65.3p per share.
Ivan Menezes, chief executive, said: “Diageo has delivered another year of strong, consistent performance. Organic volume and net sales growth is broad based across regions and categories. We have expanded organic operating margin while increasing investment behind our brands ahead of organic net sales growth.
“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.
“During the year we returned £1.5 billion to shareholders through a share buyback. We have delivered another year of strong cash flow generation in F18. Consequently, the board has approved an additional share buyback programme of up to £2 billion during F19.
“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.”