Diageo has posted results for the half year that ended on December 31, 2018, revealing that the drinks company's operating profit rose 11% to £2.4 billion during the period.
Net sales rose 5.8% to £6.9 billion, with organic growth reportedly being partially offset by unfavourable exchange. Diageo stated that all regions contributed to broad based organic net sales growth of 7.5%, with organic volume being up 3.5%.
The company's organic operating profit grew 12.3%, while its net cash from operating activities rose £356 million to £1.6 billion and its free cash flow increased £317 million to £1.3 billion.
Growth Across Regions And Categories
Commenting on the results, Diageo CEO Ivan Menezes said, "Diageo delivered broad-based volume and organic net sales growth across regions and categories. We continue to expand organic operating margins while increasing investment in our brands ahead of organic net sales growth.
"These results are further evidence of the changes we have made in Diageo to put the consumer at the heart of our business, to embed productivity and to act with agility to enable us to win sustainably.
"At £1.3 billion, we delivered another period of strong free cash flow. As a result, the board approved an incremental share buyback of £660 million, bringing the total programme up to £3 billion for the year ending 30 June, 2019.
"This half has benefitted from some one-time and phasing gains in both organic net sales and operating profit, and therefore we continue to expect to deliver mid-single digit organic net sales growth for the year, and to expand operating margins in line with our previous guidance of 175 bps for the three years ending 30 June, 2019.
"As we deploy our strategy, we remain focused on building the long-term health of our brands and ensuring we grow our business in a consistent and sustainable way."
Meanwhile, addressing the topic of Brexit, Diageo stated, "While there continues to be uncertainty over future trading arrangements between the UK and the rest of the world, we have mitigation plans in place for the short-term disruption that could arise from a 'no deal' scenario."
On-Trade Director, ROI
Diageo also announced the appointment of Colin Green to the role of on-trade director for the Republic of Ireland, following the recent move of Annmarie Phillips to the position of operations director at Diageo's Shieldhall packaging site in the international supply centre.
Diageo Ireland country director Oliver Loomes asserted, "I’m really delighted to be in a position to appoint someone of Colin’s calibre and commercial experience to lead our work with publicans, restaurateurs and hoteliers across Ireland. Colin is known for his passion in unlocking new commercial opportunities, and we’re really looking forward to him bringing this to the fore in his new role."
© 2019 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.