Diageo reports net sales up 5.8% for second half of 2018
Diageo, the world’s largest premium drinks company, has reported net sales of 5.8% and an operating profit of £2.4bn, up 11.0%, driven by organic growth.
Diageo chief executive, Ivan Menezes (pictured) said: “Diageo delivered broad-based volume and organic net sales growth across regions and categories. We continue to expand organic operating margins while increasing investment in our brands ahead of organic net sales growth.
“These results are further evidence of the changes we have made in Diageo to put the consumer at the heart of our business, to embed productivity and to act with agility to enable us to win sustainably.
“At £1.3bn, we delivered another period of strong free cash flow. As a result the board approved an incremental share buyback of £660m, bringing the total programme up to £3bn for the year ending 30 June 2019."
This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year and to expand operating margins in line with our previous guidance of 175 bps for the three years ending 30 June 2019.
"As we deploy our strategy, we remain focused on building the long-term health of our brands and ensuring we grow our business in a consistent and sustainable way,” says Menezes.
Thomas Buckley of Bloomberg News comments: “The first-half sales that topped analysts’ estimates, citing strong growth in China and other markets” and the organic net sales beat the analyst estimate of 5.5%.” The company added £660m ($867m) to the existing £2.34bn share buyback programme it announced last year.
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