Diageo has delivered strong net sales and operating profit growth within medium-term guidance.
The drinks group reported net sales up 10.7% to £17.1bn, reflecting strong organic net sales growth, and favourable impacts from foreign exchange.
Reported volume declined by 7.4%, and organic volume declined by 0.8%.
Diageo said the growth reflected its portfolio of strong brands, diversified footprint, and premiumisation.
Reported operating profit grew 5.1% to £4.6bn, with margins declining due to exceptional operating items and foreign exchange.
Organic sales growth was delivered across most categories, particularly in the group’s largest categories, scotch, tequila and beer.
Premium-plus brands comprised 63% of reported net sales, a 7 percentage point increase since 2019.
Diageo acquired Mr Black, a leading Australian premium coffee liqueur, Balcones Distilling, a Texas craft distiller and one of the leading producers of American single malt whiskey and Don Papa Rum, a super-premium, dark rum from the Philippines.
It completed the sale of Guinness Cameroun S.A., disposed of Archers and completed the disposal and franchising of a portfolio of brands in India.
The group invested £1.2bn of capital expenditure (capex) in supply capacity, sustainability, digital capabilities and consumer experiences.
Debra Crew, chief executive, said: “These results demonstrate Diageo’s ability to consistently deliver resilient performance, even in challenging macro environments. I am also proud of how our Diageo family has come together in recent weeks following the loss of our much loved and respected former CEO, Sir Ivan Menezes…
“Looking ahead to fiscal 24, I expect operating environment challenges to persist, with continued cost pressure and ongoing geopolitical and macroeconomic uncertainty. This requires us to move with greater speed and agility…
“I believe total beverage alcohol (TBA) is an attractive sector underpinned by strong consumer fundamentals, including population growth, increased spirits penetration, and resilience in premiumisation globally. I see a long runway of future growth opportunities for Diageo to go after with our winning strategy. And, I firmly believe we have an advantaged portfolio to capitalise on, to drive sustainable long-term growth and generate value for shareholders.”
