29 JAN 2015
29 JAN 2015 Press release
Interim results, six months ended 31 December 2014
A strong business improving in a challenging environment
- Organic net sales in the half were broadly flat (-0.1%) with volume down 1.9%. Performance improved in Q2
- Continued strong performance of reserve brands, up 10%, was a key driver of positive overall price/mix
- Marketing spend was in line with net sales, as effective spend benefitted from procurement efficiencies worth 3% of total marketing investment
- Restructuring benefits drove operating margin improvement of 28bps with organic operating profit up 0.7%
- Free cash flow was £699 million, up £373 million on the first half last year
- Eps before exceptional items was 53.7 pence per share, down 8.9 pence per share driven mainly by negative exchange impacts and lower income from associates and joint ventures
- Interim dividend up 9% to 21.5 pence per share
Ivan Menezes, Chief Executive, commenting on the six months ended 31 December 2014
"We have improved our performance during the half and we have again shown: the strength of our brands, which is driving our share gains; our strong innovation capability, which has enabled us to access new growth opportunities; and our focus on cost. We delivered the planned savings from our global efficiency programme together with procurement benefits in marketing spend which we have reinvested in our brands and we increased our investment in our routes to consumer while again expanding our margins.
We have already taken action to improve the performance of those brands and markets that have not performed as well as we would expect. This contributed to our stronger second quarter performance and I expect to maintain this momentum through the year.
The half saw Diageo acquire control of USL, putting us in the position to create an iconic leader in spirits in an attractive market. We have also reached agreement to acquire all of Don Julio, which will significantly strengthen our position in one of our fastest growing categories.
The quality of these results in a tough environment, with depletions ahead of shipments and improving cash flow, reinforce my confidence that Diageo can realise its full potential and deliver our performance ambition."
Investor enquiries to:
Catherine James +44 (0) 20 8978 2272
Pier Falcione +44 (0) 20 8978 4838
Angela Ryker Gallagher +44 (0) 20 8978 4911
Colette Wright +44 (0) 20 8978 1380
James Crampton +44 (0) 20 8978 4613
Media enquiries to:
Rowan Pearman +44 (0) 20 8978 4751
Clemmie Raynsford +44 (0) 20 8978 6168
Victoria Ward +44 (0) 20 8978 4353
Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits, beer and wine categories. These brands include 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, and our 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.
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