UK – Diageo has reported its 2018 interim results, with a 1.7% increase in its net sales for the half year ended 31 December 2017, amounting to US$8.1 billion and US$2.73 billion operating profit, an increase of 6.1%.
According to the company, the strong performance reflects consistent and rigorous execution of its strategy as all the regions contributed to broad based organic net sales growth, up 4.2%, and organic volume growing 1.8% for the year.
Organic operating profit also grew 6.7%, ahead of top line growth, as higher marketing investment was more than offset by efficiencies from the company’s productivity programme.
Cash flow continued to be strong and in line with last year, with net cash from operating activities at US$ 1.5 billion and free cash flow at US$ 1.24 billion.
The company increased the interim dividend 5% to 24.9 pence per share.
“These results demonstrate continued positive momentum from the consistent and rigorous execution of our strategy.
We have delivered broad based improvement in both organic volume and net sales growth,” said Ivan Menezes, Chief Executive, commenting on the results.
“We have increased investment behind our brands and expanded organic operating margin through our sustained focus on driving efficiency and effectiveness across the business.
By consistently delivering on our six strategic priorities, Diageo continues to get stronger: we have better consumer insight through superior analytics, improved execution on brand and commercial plans and have embedded everyday efficiency across the business through our productivity initiatives.
This has enabled continued growth, improved agility, and consistent cash flow generation.”
According to Menezes, the company’s financial performance expectations for the year remain unchanged.
“We are confident in our ability to deliver consistent mid-single digit top line growth and 175bps of organic operating margin improvement in the three years ending 30 June 2019,” he added.