Diageo interim results in brief

Diageo has reported increased profits for the six months ended 31 December 2019 with a 4.2% rise in reported net sales.

For the full set of results click here.

Here are the key figures according to the interim results release:

  • Reported net sales (£7.2bn) increased 4.2% driven by organic growth. Reported operating profit (£2.4bn) increased 0.5%, driven by organic growth offset by poor exchange, positive operating items and acquisitions and disposals.
  • All regions contributed to broad based organic net sales growth, up 4.2%, with organic volume up 0.2%.
  • Organic operating profit grew 4.6%, ahead of organic net sales, driven by productivity benefits from everyday cost efficiencies and strong price/mix, partially offset by cost inflation and up-weighted marketing investment.
  • Continued solid cash flow with net cash from operating activities at £1.3bn, £0.3bn lower than prior period and free cash flow at £1bn, £0.4bn lower than prior period largely due to one-off tax impacts and timing of tax payments.
  • Interim dividend increased 5% to 27.41 pence per share.

Ivan Menezes, chief executive, said: "Diageo has delivered another good, consistent set of results in the first half, with broad based organic net sales growth across regions and categories. We have continued to increase investment behind marketing and growth initiatives, while expanding organic operating margins.

“During the half, we returned £1.1bn to shareholders via share buybacks, as part of our plan to return up to £4.5bn of capital to shareholders for the period Fiscal 20 to Fiscal 22. We have also delivered another half of solid free cash flow at almost £1bn.

“They (the results) are in line with our current mid-term guidance and have been delivered in the face of increased levels of volatility in India, Latin America and Caribbean and Travel Retail.

“For the full year, we therefore expect organic net sales growth to be towards the lower end of our 4-6% mid-term guidance range. We continue to expect organic operating profit to grow roughly one percentage point ahead of organic net sales.

“There is ongoing uncertainty in the global trade environment and we would not be immune from further policy changes. We remain focused on building the long-term health of our brands, supported by data-led insights and a culture of everyday efficiency.”