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    Friday, July 26, 2019

    Diageo Marketing Increase Pays Dividends with Global Sales Growth

    Diageo Plc, on Thursday, reported on its full-year results for the 2018/2019 financial year ending on 30th June 2019. The spirits maker said it recorded broad-based growth across all regions with sales growing by 5.8% to £12.9bn from £12.2bn in the previous year. The growth was driven by improved price/mix,  new product innovations and productivity benefits from everyday cost efficiencies.
    Net profit rose by 5% to £3.2bn, from £3bn in the previous year.

    Commenting on the results, Ivan Menezes, Chief Executive Officer, Diageo Plc, said “Diageo has delivered another year of strong performance. Organic volume and net sales growth was broad-based across regions and categories, with new product innovation being a strong contributor.
    “These results reflect the steady progress we are making and as we look ahead we see attractive opportunities to deliver consistent growth and create shareholder value,” he said.
    The company said that its Board has approved plans to return an additional £4.5bn to shareholders over 2020 to 2022 financial year.

    Looking at the group’s performance by region, Africa delivered net sales growth of 7%, driven by strong performance in East Africa, Africa Regional Markets and South Africa, which offset decline in Nigeria. Diageo said that net sales declined by 7% in Nigeria, driven by the continued tough economic and competitive environment in the lager segment. However, it noted that net sales grew in Malta Guinness, Guinness and spirits.

    In East Africa, net sales grew by 13%, with Kenya continuing to grow strongly, driven by double-digit growth in beer and mainstream spirits as well as partially benefitting from lapping prior-year weakness in the first half as a result of the 2017 presidential election. Tanzania also performed well, with a 13% growth in beer (Serengeti Lite).
    In Africa Regional Markets, net sales increased by 8% with double-digit growth in Ghana and Angola and a return to growth in Cameroon as it lapped prior year challenges in the distributor network.

    South Africa returned to growth with a 6% sales lift, helped by strong spirits performance in Tanqueray, double-digit growth in Smirnoff 1818 and Captain Morgan and the launch of “White Walker by Johnnie Walker.
    In other markets outside of Africa, Diageo reported 5% sales growth in North America, with growth coming from all three markets. The U.S. and Canada both saw a 5% sales lift from spirits, with Canada benefitting from a strong ready-to-drink performance.

    Europe and Turkey delivered 4% net sales growth, driven by strong performance in Continental Europe, Great Britain and Ireland.
    Latin America and the Caribbean delivered 9% sales growth with strong performances in Brazil, Mexico, Colombia and Central America (CCA).
    Asia Pacific delivered 9% growth in net sales with strong growth across the region except for North Asia.
    Looking forward to the 2019/2020 financial year, Diageo said it expects organic net sales growth in the mid-single-digit range and to grow organic operating profit ahead of net sales in the range of 5%-7%.
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