Diageo plc reports net sales rose 8.3% worldwide, led by North America where sales rose 20.2% reflecting resilient consumer demand, spirits gaining market share from beer and wine and replenishment of stock levels by distributors and retailers. The results are preliminary, so the company didn’t provide an income statement, so net profit figures are not available, but it did say it increased basic earnings-per-share 89.4%, and recommended a 5% increase in its final dividend.
Diageo reported sales growth across all regions, resulting in a 16% increase in organic net sales globally. It noted the sales figure benefitted from “lapping a reduction of inventory levels by our customers in fiscal 20,” when the global pandemic waging raging.
Diageo said it increased spending on marketing 23% and expanded its gin and ready-t0-drink portfolios, including the acquisition of Aviation American Gin.
Over the past 10 years, the company said, it increased shareholder return 13% a year.
Ivan Menezes, CEO, said he believes the company’s “foundation, built through outstanding brand-building, active portfolio management, consumer-led innovation, smart investment in data analytics tools and embedding a culture of everyday efficiency, has been a key competitive advantage for Diageo. We were well-positioned to successfully manage the challenges created by Covid-19, we have responded quickly to changing consumer trends and we have emerged stronger.
“A key priority has been supporting the hospitality sector through the pandemic, including our $100 million global fund to enable the safe re-opening and recovery of pubs and bars. We have also built on our successful ESG track record with the launch of ‘Society 2030: Spirit of Progress’, our new 10-year action plan to shape a more sustainable and inclusive business.
“While our business has recovered strongly in fiscal 21, with net sales growth on a constant basis ahead of fiscal 19 in three of our five regions, we expect near-term volatility in some markets. However, I remain optimistic about the growth prospects for our industry, with spirits continuing to gain share of total beverage alcohol globally and premiumisation trends remaining strong. I believe Diageo is very well positioned to capture these exciting opportunities to drive long-term sustainable growth and shareholder value.”