In total, Diageo lost nearly £330m in net sales compared to 2014/15 and £137m in net profits due unfavourable exchange movements and weak currencies against the sterling, including the South African rand, Venezuelan Bolivar and the Brazilian real.
Advertisement
Diageo Plc reported full-year earnings growth in line with analysts’ estimates as improved demand for whiskey and vodka in the US offset declines in Brazil and China.
This gain was offset by two disposals throughout the year, with Diageo selling off its Bushmillls Irish whiskey, trading it for Don Juilo, and its Glenagles Hotel estate in Scotland.
Net profits stood at £2.24 billion, down from £2.38 billion a year earlier as tumbling exchange rates hampered its performance in Africa and Brazil.
Operating profit, before exceptional items, fell 1.9% to £3 billion on the back of unfavourable currency movements.
Menezes said North America had performed well and had good momentum, Europe had “done well and the emerging markets are strong”, he said.
In Europe net sales grew by 3%, driven by continental Europe and Great Britain, where net sales grew 4%. Organic revenue grew 3%, says Bloomberg News.
“The UK is only about 6 per cent of our business, secondly we have the most successful export industry in the food and drinks sector”, he said in an interview with CNBC this morning.
The company, which advocated that the United Kingdom remain a member of the 28-nation bloc, has said that it is a priority to ensure the country continues to benefit from open access to the EU. Gin is still the fastest growing segment in Ireland. Our six global brands and our U.S. spirits business are all back in growth and we have seen a significant improvement in the performance of our scotch and beer portfolios. “The delivery of volume growth; organic margin expansion; increased free cash flow; and the disposal of £1bn in non-core assets, comes from an everyday focus on efficiency in each aspect of our business”.
Chief Executive Ivan Menezes on Thursday said Diageo’s six global brands-Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray and Guinness-and its US spirits business are back in growth while scotch and beer have improved.
Smirnoff net sales were up 1 per cent supported by a full year of the £4.5m “We’re Open” platform, while Guinness net sales were up 1 per cent, which Diageo said was a result of its Rugby World Cup activation and “improved distribution and innovation successes from “The Brewers Project”.
Advertisement
He continued: “These results position us well to deliver a stronger performance in F17”.
