Diageo reports robust annual performance; Asia and Middle East travel retail sales climb by double digits

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Diageo today reported that a +5.8% increase in net sales to £12.9 billion (US$16.1 billion) for the year ended 30 June 2019, with travel retail playing a solid role.

Travel Retail Asia and Middle East net sales grew 13%, driven by launches within the Johnnie Walker portfolio, including White Walker by Johnnie Walker and Johnnie Walker Blue Label innovation.

Greater China sales grew +19%, driven by strong performance in both Chinese white spirits and Scotch, while Asia Pacific as a whole delivered +9% growth in net sales.

Reported operating profit increased +9.5%, driven by organic growth, lower exceptional operating charges, and favourable exchange rates, partially offset by acquisitions and disposals.

“Diageo has delivered another year of strong performance,” said Chief Executive Ivan Menezes.

“Organic volume and net sales growth was broad based across regions and categories, with new product innovation being a strong contributor. We expanded organic operating margin ahead of our guidance and increased investment behind our brands ahead of organic net sales growth.”

Scotch accounted for 25% of Diageo’s net sales, rising +6% with growth across all regions except Europe. This growth was driven by Johnnie Walker, with net sales up +7%.

Primary Scotch brands grew +9%, largely driven by Black & White in Asia Pacific and White Horse in Latin America and Caribbean and Asia Pacific.

Strong growth in gin in Europe continued with Tanqueray and Gordon’s showing double-digit growth.

By region, North America represented 35% of net sales for Diageo in the period, followed by Europe and Turkey (23%) and Asia Pacific (21%).