Sales up nearly 16% in H1
Premium products accounted for more than half of net sales
Expected acceleration of share buybacks
Diageo-Premium spirits boost H1 sales | Photo credits: Diageo plc
by Richa Naidu
LONDON, Jan 27 (Reuters) – Global spirits leader Diageo reported first-half sales up nearly 16% on Thursday, buoyed by demand for premium spirits for domestic consumption and by the reopening of bars.
The British group, owner of Johnnie Walker whisky, Smirnoff vodka and Guinness beer, also said it wanted to accelerate its share buyback program and plans to finalize its 4.5 billion pound plan (5.40 billion euros) in its 2023 financial year rather than by the end of June 2024 as initially announced.
Group operating profit rose 22.5% to 2.7 billion pounds in the six months to December 31, with an operating margin up 190 basis points.
Diageo saw its net sales increase by 15.8% to reach 8 billion pounds, thanks to purchases of spirits for consumption at home during the pandemic which particularly benefited high-end products. The latter accounted for more than half of net sales over the period.
The lifting of containment measures, particularly in Europe and North America, also forced bars to restock alcohol in larger quantities than the previous year. Net sales increased 13% in North America and 27% in Europe.
French rival Remy Cointreau said this week it was confident of growing profits this year, buoyed by demand for its premium cognac in the United States and Europe. Its quarterly sales beat forecasts.
On the London Stock Exchange, Diageo shares rose 0.2% in the morning. (Reportage Richa Naidu; French version Dagmarah Mackos, edited by Blandine Hénault)