Diageo has recorded a 21.4% increase in its full-year revenue, driven by strong organic net sales growth across all regions.
In the year ended 30 June, the owner of Smirnoff vodka posted full-year net sales of £15.5 billion. Overall, net sales of spirits grew 21%, with a particularly strong performance in scotch, tequila, vodka, gin and Chinese white spirits.
Reported operating profit grew by 18.2% to £4.41 billion, driven by strong organic operating profit growth of 26.3%, partially offset by the negative impact of non-cash impairments related to India and Russia.
In North America, Diageo saw a 17% rise in net sales, driven by the performance of US spirits and favourable impacts from foreign exchange and acquisitions.
Led by tequila, net sales of US spirits grew 19%, reflecting the recovery of the on-trade channel and resilient consumer demand in the off-trade channel, as well as market share gains.
On an organic basis, tequila sales grew 57%, Scotch’s grew by 19% and vodka sales by 1%. However, the company saw a decrease of 8% in Baileys sales, while Captain Morgan sales declined 6%, as the rum category continued to lose spirits market share. Meanwhile, Diageo Beer Company recorded organic net sales growth of 2%.
Elsewhere, Diageo reported a 19% rise in net sales in Africa; 26% growth in Europe; 16% in Asia Pacific; and 46% in the company’s Latin America and Caribbean region.
Diageo CEO Ivan Menezes said: “We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85% of our total net sales value in measured markets. We expanded operating margin while increasing marketing investment ahead of net sales growth, and we used our strong cash generation to invest in long-term growth.”
He continued: “In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams. Our net sales growth was across categories. We benefitted from the on-trade recovery, continued global premiumization trends, with our super-premium-plus brands up 31%, and from price increases across our regions. I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.”
“Looking ahead to fiscal 2023, we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty. Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.”
