Stronger second half performance drives full year growth.
- Strong second half performance; net sales up 6% driving 2% organic net sales growth for the year
- Organic operating profit growth for the year was 2%; cost reduction programmes offset a 14% organic increase in marketing spend in the second half
- eps pre-exceptionals 72.0p, up 13%
£2 billion free cash flow; tight working capital management was the biggest driver of the £820 million increase - Recommended 6% increase in final dividend to 23.5 pence per share
Paul Walsh, Chief Executive of Diageo, said:
“As expected this has been a year of challenges and opportunities. Our performance was much stronger in the second half than in the first: our performance in the developing markets drove overall growth while markets in North America and Europe remained weak. However, even though markets and categories have been affected in different ways and to differing degrees, we have been consistent in our focus to deliver growth and build a stronger business for the future. We increased marketing in growing categories, delivering 5% organic net sales growth in scotch and 5% organic net sales growth in beer, and in growing markets with organic marketing spend up 13% in International, and behind our leading brands especially Johnnie Walker, Smirnoff and Captain Morgan. As a result we have outperformed and delivered share gains across most of our biggest markets. We launched innovations to meet the opportunities which changing consumer and customer trends offer. We have invested to strengthen our routes to market especially in Asia and we are building industry leading customer marketing skills in the on and off trade with our key customers. We have delivered very strong cash flow and return on invested capital increased to 14.8%.
“The impact of the global economic crisis varied by market and the strength of the recovery appears to be equally variable. However, as we demonstrated this year, the global diversity of our business, together with the strength and range of our brands and the agility we have demonstrated gives us confidence that in fiscal 2011 we will be able to improve on the organic operating profit growth we have delivered this year. We are recommending a 6% increase in the final dividend and expect to at least maintain this rate of dividend growth in fiscal 2011.”