Diageo beats forecasts with strong sales growth across all regions

Diageo has reported net sales of £15.5 billion, up 21.4 per cent, for its financial year ended on 30 June 2022, primarily driven by strong organic net sales growth, up 21.4 per cent, with strong double-digit growth across all regions.

The world’s biggest spirits maker has beat full-year sales forecasts, helped by favourable industry trends of spirits taking share of total beverage alcohol and premiumisation. The company added that its growth reflects continued recovery of the on-trade, resilient consumer demand in the off-trade and market share gains.

The company has seen a 18.2 per cent increase in reported operating profit to £4.4 billion, but the reported operating margin decreased 77bps, with organic margin expansion more than offset by exceptional operating items of £388 million.

The company added that price increases and supply productivity savings more than offset the absolute impact of cost inflation, and mostly offset the adverse impact on gross margin.

Diageo said the growth was broad-based across categories, with particularly strong growth of scotch, tequila and beer. Premium-plus brands contributed 57 per cent of reported net sales and drove 71 per cent of organic net sales growth.

Off-trade market share grew or held in over 85 per cent of total net sales value in measured markets.

“In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams,” Ivan Menezes, chief executive, said.

“We benefitted from the on-trade recovery, continued global premiumisation trends, with our super-premium-plus brands up 31 per cent, and from price increases across our regions. I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.”

Menezes said they expect the operating environment to be challenging in the 2023 fiscal, but said the business has the resilience and ability to navigate the headwinds.

“We believe we have an advantaged portfolio with extraordinary brands across geographies, categories and price points. And we continue to actively shape our portfolio to fast-growing categories through innovation and acquisitions,” he said.