Diageo Sees Net Sales Up 8.3%, Boosted By Bars Reopening
Spirits group Diageo has reported a 8.3% increase in reported net sales in the full year to 30 June, to £12.7 billion (€14.93 billion), boosted by the reopening of bars and restaurants in some markets and strong retail demand across all its regions.
Organic net sales across the business rose by 16.0%, and by 20% in North America, the company's biggest market, where consumers traded up to more premium spirits including tequilas and higher-end versions of Johnnie Walker Scotch whiskey.
Reported operating profit was up by 74.6% in the period, while reported operating margin increased by 1,112 basis points, it said.
Organic operating profits were up 17.7%, with growth in all regions except for Europe and Turkey, it noted, adding that its beer market in Europe was 'significantly restricted' by COVID-19.
'Long-Term Sustainable Growth'
"I am very pleased with the strong financial results we have delivered in fiscal 21, while continuing to invest in long-term sustainable growth," commented Ivan Menezes, chief executive. "We delivered organic net sales growth across all regions, led by a strong performance in North America, and we held or gained off-trade market share in over 85% of our business.
"These results demonstrate the strength and relevance of our brands and the extraordinary efforts of our talented people."
Organic net sales in Africa rose 20%, fuelled by Guinness and spirits such as Smirnoff vodka.
The maker of Tanqueray Gin also said it expects the organic net sales momentum to continue into fiscal 2022, but with 'near-term volatility' in some markets. The company also sees travel retail remaining under pressure.
"However, I remain optimistic about the growth prospects for our industry, with spirits continuing to gain share of total beverage alcohol globally and premiumisation trends remaining strong," added Menezes.
"I believe Diageo is very well positioned to capture these exciting opportunities to drive long-term sustainable growth and shareholder value."