- Full-year net sales up 6.5% to GBP17.1bn [US$21.9bn]
- Growth in all regions except North America as ‘normalisation’ bites
- Strong performance from Scotch, Tequila and beer
- Company maintains medium-term guidance of 5-7% revenue growth
A resilient performance in the first six months of 2023 helped Diageo to deliver full-year organic revenue growth of 6.5%, despite challenging market conditions in the US.
The company’s volumes edged down 0.8% on the year, but the figures largely met analyst expectations – and Diageo maintained its medium-term guidance of delivering 5-7% organic revenue growth.
Four of the company’s five reporting regions reported sales increases – North America being the exception – and the performances of Scotch whisky, Tequila and beer were standouts.
“These results demonstrate Diageo’s ability to consistently deliver resilient performance, even in challenging macro environments,” said company chief executive Debra Crew, who took over from the late Sir Ivan Menezes in June this year.
“We delivered strong growth in four of our five regions, with Europe and Asia Pacific growing double-digit. North America delivered stable performance as the US spirits industry continued to normalise post-pandemic, and we lapped strong comparators, particularly in the second half of fiscal ’23.”
Scotch whisky and Tequila delivered robust growth in fiscal 2023: Johnnie Walker overcame a double-digit revenue decline in the US to post overall net sales growth of +15%, with single malts up +16%, backed up by Old Parr (+18%), Black & White (+20%) and Windsor (+41%).
Don Julio and Casamigos again spearheaded Tequila’s +19% revenue increase, despite some signs of the agave boom moderating in the US after years of stellar growth.
Further highlights were provided by Guinness (+16%) and Smirnoff (+8%), but Crown Royal, Shui Jing Fang and Cîroc all declined by double digits, and Bulleit fell by -6%.
Diageo’s best-performing region in fiscal 2023 was Asia Pacific, where revenues rose +13%, despite declines for local white spirits dragging down Greater China. India again recorded strong double-digit growth.
North America was flat as US spirits fell back by -1%, thanks to a mixed performance that combined declines for Crown Royal, Johnnie Walker and Cîroc with gains for Tequila, Buchanan’s and single malts.
Double-digit growth in most markets helped Europe’s revenues to rise by +11%, and similarly positive trends in Latin America and Caribbean led to a +9% sales increase. Africa revenues rose +5% despite beer declines in East Africa.
“Looking ahead to fiscal ’24, I expect operating environment challenges to persist, with continued cost pressure and ongoing geopolitical and macroeconomic uncertainty,” said Crew. “This requires us to move with greater speed and agility.”
Maintaining medium-term guidance, Diageo predicted fiscal 2024 would be characterised by a gradual improvement in the first half, followed by an acceleration of sales growth in the second six months with softer comparatives.
Diageo's official results announcement.
Company presentation on recent performance.
Why infinite whiskey/whisky onto finite US shelves won’t go – Market Intel
