Diageo has reported operating profits up 18.2% to £4.4bn, with net sales up 21.4% to £15.5bn, according to the group’s preliminary results. Net cash flow from operating activities increased £300m to £3.9bn.
The growth reflects the recovery of the on-trade coupled with resilient consumer demand in the off-trade and, according to Diageo, it was underpinned by favourable industry trends of spirits taking share of total beverage alcohol and premiumisation.
Scotch whisky, tequila and beer performed particularly well although growth was strong across categories with premium-plus brands contributing 57% of reported net sales, driving 71% of organic net sales growth.
Diageo also increased organic marketing investment by almost a quarter (24.7%) and invested in £1.1bn of capital in production, sustainability, digital, and consumer experiences.
Ivan Menezes, Chief Executive, said, “I am very pleased with our fiscal 22 results. We delivered double-digit organic net sales growth across all regions and we gained or held off-trade market share in over 85%(1) of our total net sales value in measured markets. We expanded operating margin while increasing marketing investment ahead of net sales growth and we used our strong cash generation to invest in long-term growth. I am very proud of what my 28,000 colleagues have achieved through their energy and creativity.
“In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams. Our net sales growth was across categories. We benefitted from the on-trade recovery, continued global premiumisation trends, with our super-premium-plus brands up 31%, 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.
“Looking ahead to fiscal 23, we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty. Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.”
