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Diageo reports 4% growth in operating profits
27 August, 2009
Diageo has reported £9.3 billion in net sales for the year ended June 30, up 15%. Operating profit before exceptional items is up 4% to £2.6bn. Earnings per share is up 10%.
The largest drinks company in the world, Diageo, has reported £9.3 billion in net sales for the year ended June 30, up 15%. Operating profit before exceptional items is up 4% to £2.6bn. Earnings per share is up 10%.
Chief executive, Paul Walsh, said: “While the economic downturn has affected all markets, the response of customers and consumers has not been uniform and therefore the impact on our business has been varied.
“By region, International, North America and Asia Pacific have been stronger than Europe. By category, we have delivered growth in categories which account for over 50% of our sales, primarily vodka, rum, tequila and beer. The gin and wine categories have been weaker and scotch and liqueurs have been most impacted by de-stocking,” said Walsh
“Smirnoff, Captain Morgan, Jose Cuervo and Guinness, two of our three largest local priority brands, Buchanan’s and Windsor, and category brands, Ciroc, Cacique and Harp, all grew supported by innovation and effective marketing. We benefited from the addition of Ketel One vodka, Zacapa rum and Rosenblum Cellars wine, all of which have broadened our brand range in important categories. Johnnie Walker faced a tougher market environment being at a relatively higher price point and saw more impact from de-stocking.
“The consumer downturn in Spain and de-stocking in a number of markets also affected the performance of Baileys,” reported Walsh.
The Unite trade union, which is leading the battle to stop Diageo’s plans to close the Johnnie Walker site in Kilmarnock; close its distillery and cooperage at Port Dundas and cut jobs at its Glasgow bottling plant, reacted strongly to the results.
Len McCluskey, assistant general secretary of Unite, said: “Even in a global recession, Diageo can pull in billions of pounds in pure profit. Surely now Diageo’s claims that it must cut Scottish jobs to reduce costs can be seen once and for all for what they are - about short-term greed, not long-term need.
“For 185 years, generations of Scotland’s workers have delivered for this company. Their hard work has made this company extraordinarily wealthy and its products loved around the world.
“They deserve better than to be thrown on the scrapheap to slate Diageo’s thirst for yet ever more profits,” said McCluskey.
