Diageo’s ‘resilient performance’, Guinness boosts GB sales

Despite a “volatile operating environment”, the drinks business reported net sales of $20.3bn, which were down 1.4% because of “an unfavourable foreign exchange impact and organic net sales decline” but were partially offset by “hyperinflation adjustments”.

Reported operating profit grew 8.2% and organic net sales declined by 0.6% ($129m).

The business, whose GB business owns Johnnie Walker, Captain Morgan and Casamigos, grew or held total market share in more than 75% of total net sales in measured markets, including in the US.

Strong performance in Guinness​

Net cash flow from operating activities increased by $0.5bn to $4.1bn while free cash flow increased by $0.4bn to $2.6bn.

Its European arm was the only world region to see an improvement in reported growth net sales from the previous year as it leapt 12% worth $501m. Meanwhile, organic growth in net sales for the Europe rose by 3% ($124m).

Diageo reported: “Great Britain net sales grew 5%, primarily driven by strong performance in Guinness, which gained share in both the on-trade and off-trade.

“Share gains were driven by continued recruitment through strong brand building and new occasions, supported by Guinness 0.0 and Nitrosurge innovations.”

Well positioned for growth​

Diageo chief executive Debra Crew said: “While [the 2024 financial year] was a challenging year for both our industry and Diageo – with continued macroeconomic and geopolitical volatility – we focused on taking the actions needed to ensure Diageo is well positioned for growth as the consumer environment improves.

“[The 2024 financial year] was impacted by materially weaker performance in Latin America and the Caribbean (LAC). Excluding LAC, organic net sales grew 1.8%, driven by resilient growth in our Africa, Asia Pacific and Europe regions. This offset the decline in North America, which was attributable to a cautious consumer environment and the impact of lapping inventory replenishment in the prior year.

“Diageo is a resilient business, benefiting from its global reach and unrivalled brand portfolio. With iconic brands that have been enjoyed for decades, Diageo takes a long-term view, and will continue to invest in our brands, people and diversified footprint to deliver sustainable long-term growth and generate shareholder value.”