TIDMDGE
RNS Number : 4590S
Diageo PLC
16 November 2021
Diageo Capital Markets Day
Diageo outlines drivers of competitive advantage for sustainable
long-term growth and provides medium-term guidance ahead of
historical growth rates
-- New medium-term guidance: expecting organic net sales growth
in a range of 5% to 7% and organic operating profit growth
in a range of 6% to 9% for fiscal 23 to fiscal 25.
-- Introducing ambition to achieve a 50% increase in total beverage
alcohol (TBA) market value share, from 4% in 2020, ([1]) to
6% by 2030.
-- Expecting strong organic net sales growth of at least 16%
in the first half of fiscal 22 and organic operating profit
growth ahead of organic net sales growth.
Today, Diageo is hosting its biennial Capital Markets Day in
London. Ivan Menezes, Chief Executive, and the executive leadership
team will discuss how Diageo is successfully executing its strategy
to deliver consistent, sustainable growth. The executive leadership
team will highlight Diageo's competitive advantages and how its
people and culture are delivering on its ambition to be one of the
best performing, most trusted and respected consumer products
companies in the world.
Ivan Menezes, Chief Executive, Diageo:
"Since our last Capital Markets Day, we have continued to invest
in our brands, sharpened our focus on accelerating growth and
quickly responded to shifts in consumer behaviour. We have also
launched 'Society 2030: Spirit of Progress', our ten-year
sustainability action plan, building on our strong track record of
doing business the right way, from grain to glass.
Our culture of everyday efficiency is embedded in our business
and we continue to challenge ourselves to achieve more. In fiscal
21, despite the challenges created by Covid-19, we delivered strong
organic net sales growth, drove an improvement in organic operating
margin and delivered strong cash flows, while continuing to invest
in long-term sustainable growth.
We believe our sales growth trajectory has accelerated,
underpinned by the strength of our advantaged position across
geographies, categories and price tiers. TBA is a large, growing
and attractive sector of which Diageo currently has a 4% value
share. With continued investment in marketing, digital capabilities
and our people, we have significant headroom for growth. This gives
us the confidence that we can grow Diageo's value share of TBA from
4% in 2020,(1) to 6% by 2030."
Lavanya Chandrashekar, Chief Financial Officer, Diageo:
" Our focus on everyday efficiency enables us to continue to
increase investment in our brands and strategic growth initiatives,
while underpinning organic operating margin improvement.
This self-sustaining growth model gives us confidence that we
can accelerate our organic net sales growth within a range of 5% to
7% for fiscal 23 to fiscal 25. This compares to growth of 4% to 6%
in fiscal 2017 to fiscal 2019. While we expect inflationary
pressures to increase, we also expect to benefit from operating
leverage, premiumisation, revenue growth management and
productivity gains. As a result, we expect organic operating profit
to grow sustainably in a range of 6% to 9% for fiscal 23 to fiscal
25.
As we announced in our AGM statement, we have made a strong
start to fiscal 22. We are delivering organic net sales growth
across all regions, as we benefit from resilience in the off-trade
and continued recovery in the on-trade. This is benefitting organic
operating margin, despite rising inflationary pressures, which are
partly due to supply chain constraints. We expect organic net sales
growth of at least 16% in the first half of fiscal 22 and organic
operating profit growth ahead of organic net sales growth. We
expect the strong growth momentum in the first half of fiscal 22 to
continue through the remainder of the fiscal year. However, in the
second half of fiscal 22 we will be lapping a tougher
comparator."
Copies of the materials from today's Capital Markets Day will be
available on www.diageo.com .
For further information please contact:
Investor relations:
Durga Doraisamy +44 (0) 7902 126 906
Lucinda Baker +44 (0) 7974 375 550
Belinda Brown +44 (0) 7590 810 246
Media relations:
Dominic Redfearn +44 (0) 7971 977 759
Jessica Rouleau +44 (0) 7925 642 561
About Diageo
Diageo is a global leader in beverage alcohol with an
outstanding collection of brands including Johnnie Walker, Crown
Royal, J B, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and
Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo is a global company whose products are sold in more than
180 countries around the world. The company is listed on both the
London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
For more information about Diageo, our people, our brands, and
performance, visit us at www.diageo.com . Visit Diageo's global
responsible drinking resource, www.DRINKiQ.com , for information,
initiatives and ways to share best practice.
Celebrating life, every day, everywhere.
Cautionary statement concerning forward-looking statements
This document contains 'forward-looking' statements, including
statements related to new medium term guidance, future Total
Beverage Alcohol market share ambitions and Diageo's expectations
of performance for the six months ending 31 December 2021.
Forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. In particular,
forward-looking statements include all statements that express
forecasts, expectations, plans, outlook, objectives and projections
with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the
impact of changes in interest or exchange rates, the availability
or cost of financing to Diageo, anticipated cost savings or
synergies, expected investments, the completion of any strategic
transactions or restructuring programmes, anticipated tax rates,
changes in the international tax environment, expected cash
payments, outcomes of litigation or regulatory enquiries,
anticipated changes in the value of assets and liabilities related
to pension schemes and general economic conditions. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors (including those
set out under "Our principal risks and risk management" in Diageo's
Annual Report and under "Risk Factors" in Diageo's Annual Report on
Form 20-F filed with the US Securities and Exchange Commission for
the year ended 31 June 2021) that could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, including factors that are
outside Diageo's control. Any forward-looking statements made by or
on behalf of Diageo speak only as of the date they are made. Diageo
does not undertake to update forward-looking statements to reflect
any changes in Diageo's expectations with regard thereto or any
changes in events, conditions or circumstances on which any such
statement is based.
An explanation of non-GAAP measures, including organic
movements, is set out on page 74 of Diageo's Annual Report for the
year ended 30 June 2021.
Diageo plc LEI: 213800ZVIELEA55JMJ32
[1] IWSR, Diageo's 2020 Retail Sales Value (RSV) % Share of
Total Beverage Alcohol (TBA) Market
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