News
$304m decline in operating profit at Diageo after ‘challenging’ year
During a period which chief executive Debra Crew described as “challenging for both our industry and Diageo”, the firm saw organic net sales fall by $129m or 0.6% year-on-year. Organic volume declined by 3.5% during the same period.
This translated to a $304m or 4.8% fall in organic operating profit, of which $302m was attributable to the Latin America and Caribbean (LAC) region.
LAC saw organic net sales fall by 21.1% year-on-year, while sales declined 2.5% in North America. Meanwhile, net sales rose by 12.2%, 4.4% and 2.8% in Africa, Asia Pacific and Europe respectively.
Diageo owns several leading alcoholic drinks brands including Guinness, Johnnie Walker, Baileys, Smirnoff and Captain Morgan.
'Well-positioned for growth'
Commenting on its performance, Crew said that Diageo was “focused on taking the actions needed” to ensure that it was “well-positioned for growth” as market conditions improve.
She added: “Fiscal 24 was impacted by materially weaker performance in 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. In fiscal 24 we made good progress against our strategic priorities.”
Elsewhere, Diageo grew or held total market share in over 75% of total net sales in measured markets, including in the US.
It also generated $2.6bn in free cash flow while increasing strategic investments.
“Diageo is a resilient business, benefitting from its global reach and unrivalled brand portfolio,” Crew continued.
“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."
In other news, a new £46m fund to support local agrifood and drink processors in Northern Ireland has just been launched by economy minister Conor Murphy.
