16th Nov 2021 09:00
(Alliance News) - Diageo PLC on Tuesday set out new medium term growth guidance as it looks to lift its market share by the end of the decade.
The brewer and distiller, which also owns the Guinness and Smirnoff brands, eyes annual organic net sales growth in the range of 5% and 7% between the 2023 and 2025 financial years. For the year ended June 30, Diageo's net sales rose 8.3% on a reported basis to GBP12.73 billion. Organically, they jumped 16%.
Organic operating profit is seen rising in the the range of 6% to 9% annually between financial 2023 and financial 2025.
For the first half of the current year, Diageo expects net sales growth of at least 16%. The organic operating profit growth rate will top this, it added.
The second half will lap a tougher comparative, however, Diageo warned.
Diageo will outline its medium-term targets at its latest capital markets day in London on Tuesday.
"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," Chief Executive Ivan Menezes said.
"We believe our sales growth trajectory has accelerated, underpinned by the strength of our advantaged position across geographies, categories and price tiers."
By 2030, eyes a total beverage alcohol market value share of 6%, up from 4% in 2020. It will do this through "continued investment in marketing, digital capabilities and our people", Menezes added.
Chief Financial Officer Lavanya Chandrashekar cautioned that inflationary pressures will gather pace though Diageo can manage this through "operating leverage, premiumisation, revenue growth management and productivity gains".
Diageo shares were 2.5% higher at 3,911.76 pence each in London on Tuesday morning.
By Eric Cunha; [email protected]
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