Diageo has posted a 1% net sales increase in its full-year results as it benefited from the continued popularity of gin.
The company – which owns brands such as Guinness, Don Julio and Captain Morgan – saw revenues rise to £12.16 billion, with operating profit up 3.7% to £3.69 billion.
In its Europe and Turkey unit, net sales grew by 4%, with performance led by gin, where Tanqueray grew its market share and Gordon’s benefited from the launch of a new pink variant. Meanwhile, Guinness sales were up 6% and Captain Morgan rose by 7%.
Earlier this year Daigeo announced it would buy German vermouth manufacturer Belsazar through its Distill Ventures accelerator.
In North America, Diageo’s largest unit, the company struggled, with net sales down 1%. Vodka sales shrunk by 3% but the firm said that there was some improvement compared to last year, driven by Ketel One and Cîroc.
Sales in Asia Pacific increased by 3%, with strong growth in both China and India. In Greater China, net sales increased by 27%, driven by Chinese white spirits.
Diageo CEO Ivan Menezes
In terms of category, global net sales of gin were up 16%, vodka declined by 1% and beer rose by 4%.
Diageo CEO Ivan Menezes said: “Diageo has delivered another year of strong, consistent performance. Organic volume and net sales growth is broad based across regions and categories. We have expanded organic operating margin while increasing investment behind our brands ahead of organic net sales growth.
“These results reflect the high-performance culture we have created in Diageo, the ongoing rigorous execution of our strategy, our focus on the consumer and our ability to move swiftly on trends and insights.
“During the year we returned £1.5 billion to shareholders through a share buyback. We have delivered another year of strong cash flow generation in F18. Consequently, the board has approved an additional share buyback programme of up to £2 billion during F19.
“The changes we have made in the business and the shifts in culture we continue to drive, ensure we are well placed to capture opportunities and deliver sustained growth. Our financial performance expectations are unchanged and we expect to continue to invest in the business to deliver our mid-term guidance of consistent mid-single digit organic net sales growth and 175bps of organic operating margin expansion for the three years ending 30 June 2019.”
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