Diageo Underlying Earnings Up 13%
The company’s world leading brands, Johnnie Walker, Smirnoff, Baileys and Guinness along with Captain Morgan and Buchanan’s were the strongest performing brands this year. Johnnie Walker enhanced its position as the world's leading Scotch whisky.
30/08/07 Diageo, the world's biggest alcoholic drinks group, has reported a 13 per cent underlying rise in annual earnings. Diageo reported continued strong growth in the year with organic top line growth of 7.3%, operating profit growth of 8.7% and underlying eps growth of 13%. Guidance is for increased organic operating profit growth in 2008 of 9%.
Paul Walsh, Chief Executive of Diageo, commenting on year ended 30 June 2007 said, “Diageo’s focus on proven brand and market building strategies has again delivered strong growth in top and bottom line and strong cash flow.”
“In North America we outperformed the US spirits market for the third consecutive year. In Europe we improved performance in the second half and increased our investment in the growth drivers by brand and market. In International strong performance by our beer brands and the investment we made behind our Scotch brands delivered another year of excellent growth. In Asia Pacific we grew in all markets, gained share in our key markets and improved performance in the second half,” he commented.
The company’s world leading brands, Johnnie Walker, Smirnoff, Baileys and Guinness along with Captain Morgan and Buchanan’s were the strongest performing brands this year. Johnnie Walker enhanced its position as the world's leading Scotch whisky and now sells over 15 million cases. Smirnoff reinforced its position as the world's number one premium spirits brand and Baileys grew strongly, supported by the successful launch of the new Baileys flavours. Guinness grew despite the impact of weak beer markets in Great Britain and Ireland as a result of double digit growth in International on the back of the Guinness Greatness campaign in Africa. Captain Morgan is primarily a North American brand but strong performance in Europe delivered 10% of the brand's growth this year. Finally Buchanan’s delivered excellent growth as the brand continued to gain share in the fast growing Scotch markets of Latin America.
“Together these regional and brand performances have driven top line growth of 7.3%. Operating margin expansion of 40 basis points resulted in operating profit growth of 8.7%. Another year of strong cash flow enabled us to return a further £2.3 billion to shareholders through dividends and our share buyback programme,” Walsh said.
“Whilst we watch for any impact the current volatility in financial markets may have on broader trading conditions, the investments we have made in brands and markets this year have created an even stronger platform for the future. Therefore we currently expect increased organic operating profit growth in 2008 of 9%”, he added.
