Diageo has released its interim results for the half year that ended on December 31, 2019, revealing that its net sales increased 4.2% to £7.2 billion while its operating profit increased 0.5% to £2.4 billion.
The drinks company stated that all regions contributed to a broad based organic net sales growth of 4.2% and organic volume grew 0.2%.
Additionally, Diageo's organic operating profit grew 4.6% ahead of organic net sales; its net cash from operating activities in the period totalled £1.3 billion, which was £0.3 billion lower than the prior period; its free cash flow totalled £1 billion, which was £0.4 billion lower than the prior period; basic eps of 79.2 pence decreased by 2.1%; pre-exceptional eps grew 4.2% to 80.2 pence; and the company's interim dividend increased 5% to 27.41 pence per share.
"Another Good, Consistent Set Of Results"
In a statement on Diageo's website, Diageo chief executive Ivan Menezes said, "Diageo has delivered another good, consistent set of results in the first half, with broad based organic net sales growth across regions and categories. We have continued to increase investment behind marketing and growth initiatives, while expanding organic operating margins.
"During the half, we returned £1.1 billion to shareholders via share buybacks as part of our plan to return up to £4.5 billion of capital to shareholders for the period fiscal 20 to fiscal 22. We have also delivered another half of solid free cash flow at almost £1 billion.
"These results reflect the changes we are making in the business to drive shifts in our culture. They are in line with our current mid-term guidance and have been delivered in the face of increased levels of volatility in India, Latin America and Caribbean and Travel Retail.
"For the full year, we therefore expect organic net sales growth to be towards the lower end of our 4% to 6% mid-term guidance range. We continue to expect organic operating profit to grow roughly one percentage point ahead of organic net sales.
"There is ongoing uncertainty in the global trade environment and we would not be immune from further policy changes. We remain focussed on building the long-term health of our brands, supported by data-led insights and a culture of everyday efficiency. With the consumer at the heart of the business, and with greater agility and discipline in the execution of our strategy, we are growing Diageo in a consistent, sustainable way."
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