Diageo reports increased sales in preliminary results

Diageo has reported net sales of more than £12bn and increased operating profit in its preliminary results for the year ending 30 June 2018.

Here is the breakdown of the key points from the financial report:

  • Reported net sales (£12.2 billion) and operating profit (£3.7 billion) were up 0.9% and 3.7%, respectively, as organic growth was partially offset by adverse exchange

  • All regions contributed to broad based organic growth, with organic net sales up 5.0% 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 our productivity programme

  • Cash flow continued to be strong, broadly in line with last year, with £3.1 billion net cash from operating activities and £2.5 billion free cash flow

  • Basic eps of 121.7 pence was up 14.8%. Pre-exceptional eps was 118.6 pence, up 9.3%, principally due to higher organic operating profit

  • On 26 July the Board approved a share buyback programme to return up to £2.0 billion to shareholders during the year ending 30 June 2019

  • The Board recommended a final dividend increase of 5% bringing the full year dividend to 65.3 pence per share

Ivan Menezes, chief executive, said: “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. 

“During the year we returned £1.5bn 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 £2.0bn during F19. 

“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.”

For the full set of financial results click here