Guinness and gin sales help drive profits at Diageo

Guinness sales in Ireland grew 2pc in 12 months (Stock image)
Guinness sales in Ireland grew 2pc in 12 months (Stock image)

Operating profit at drinks giant Diageo increased 3.7pc year-on-year to £3.7bn (€4.2bn) in the 12 months to 30 June.

Reported sales at the group were £12.2bn (€13.7bn) for the 12 month period, up 0.9pc year-on-year, as organic growth was partially offset by adverse exchange movements.

All regions contributed to broad based organic growth, with organic net sales up 5pc and organic volume up 2.5pc, the company said in its annual results statement.

“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,” Ivan Menezes, CEO of Diageo, said.

“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.”

In Ireland net sales were up by 3pc.

Guinness sales in Ireland grew 2pc driven by the continued success of Hop House 13 Lager and the launch of the ‘Behind every town’ campaign across the country. Meanwhile in spirits, Irish sales were up 14pc, which the company said was largely driven by strong performance in Gordon’s and Tanqueray gins.

Overall the European market delivered net sales growth of 4pc for the group, in what Diageo described as a “consistent” performance for the region.

The group’s performance in Europe was led by strong growth in gin, where Tanqueray gained share in the fastest growing category and Gordon’s benefitted from the launch of its Pink variant.

Guinness in Europe was up 6pc driven by a good performance for Guinness Draught supported by double digit growth in Hop House 13 Lager, while net sales of Captain Morgan grew 7pc.

However sales of Smirnoff in Europe declined 4pc during the period.

Turning to the North American market and it delivered net sales growth of 4pc, with share gains achieved for all key brands in the spirits category except vodka.

The group also reported sales growth of 3pc in its African market, where Guinness and Malta Guinness grew 7pc and 4pc respectively.

The group also announced a share buyback programme to return up to £2bn to shareholders during the year ending 30 June 2019.

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