Diageo reported a 6.1% rise in organic net sales in its full-year figures, thanks to the growth of its gin brands and performance in China.
For the year to the end of June, the owner of Johnnie Walker, Captain Morgan and Smirnoff posted reported net sales of £12.9 billion. Reported operating profit increased 9.5% to £4 billion.
In North America, Diageo’s largest segment, the company was boosted by double-digit growth of both Don Julio and Casamigos tequila. In December, Diageo completed the sale of a portfolio of 19 brands to Sazerac for $550 million.
Strong sales of Gordon’s ready-to-drink gin and Tanqueray helped Diageo post a 4% net sales growth in Europe and Turkey.
Meanwhile, net sales were up 19% in Greater China, with double-digit growth of Chinese white spirits and Scotch. In April, Diageo announced a new joint venture in China with Jiangsu Yanghe Distillery.
Diageo CEO Ivan Menezes 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. We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth.
“Fiscal 19 has been another year of strong free cash flow delivery at £2.6 billion and we have returned £2.8 billion to shareholders via share buybacks. The board has approved plans for an additional return to shareholders of up to £4.5 billion over fiscal 20 to fiscal 22.
“Our focus on quality sustainable growth is backed by a culture of everyday efficiency that enables us to invest smartly in marketing and growth initiatives while expanding margins.
“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.”
Menezes added that in the medium term he expects Diageo to maintain 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% to 7%.
© FoodBev Media Ltd 2019