REG - Diageo PLC - Diageo Capital Markets Day

DiageoAnnouncement

16/11/2021 07:05

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RNS Number : 4590S  Diageo PLC  16 November 2021

Diageo Capital Markets Day
Diageo outlines drivers of competitive advantage for sustainable long-term growth and provides medium-term guidance ahead of historical growth rates
 ·                             New medium-term guidance: expecting organic net sales growth in a range of 5%
                               to 7% and organic operating profit growth in a range of 6% to 9% for fiscal 23
                               to fiscal 25.
 ·                             Introducing ambition to achieve a 50% increase in total beverage alcohol (TBA)
                               market value share, from 4% in 2020,(( 1 )) to 6% by 2030.
 ·                             Expecting strong organic net sales growth of at least 16% in the first half of
                               fiscal 22 and organic operating profit growth ahead of organic net sales
                               growth.

 

Today, Diageo is hosting its biennial Capital Markets Day in London. Ivan
Menezes, Chief Executive, and the executive leadership team will discuss how
Diageo is successfully executing its strategy to deliver consistent,
sustainable growth. The executive leadership team will highlight Diageo's
competitive advantages and how its people and culture are delivering on its
ambition to be one of the best performing, most trusted and respected consumer
products companies in the world.

 

Ivan Menezes, Chief Executive, Diageo:

"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.

 

Our culture of everyday efficiency is embedded in our business and we continue
to challenge ourselves to achieve more. In fiscal 21, despite the challenges
created by Covid-19, we delivered strong organic net sales growth, drove an
improvement in organic operating margin and delivered strong cash flows, while
continuing to invest in long-term sustainable growth.

 

We believe our sales growth trajectory has accelerated, underpinned by the
strength of our advantaged position across geographies, categories and price
tiers. TBA is a large, growing and attractive sector of which Diageo currently
has a 4% value share. With continued investment in marketing, digital
capabilities and our people, we have significant headroom for growth. This
gives us the confidence that we can grow Diageo's value share of TBA from 4%
in 2020,(1) to 6% by 2030."

 

Lavanya Chandrashekar, Chief Financial Officer, Diageo:

"Our focus on everyday efficiency enables us to continue to increase
investment in our brands and strategic growth initiatives, while underpinning
organic operating margin improvement.

 

This self-sustaining growth model gives us confidence that we can accelerate
our organic net sales  growth within a range of 5% to 7% for fiscal 23 to
fiscal 25. This compares to growth of 4% to 6% in fiscal 2017 to fiscal 2019.
While we expect inflationary pressures to increase, we also expect to benefit
from operating leverage, premiumisation, revenue growth management and
productivity gains. As a result, we expect organic operating profit to grow
sustainably in a range of 6% to 9% for fiscal 23 to fiscal 25.

 

As we announced in our AGM statement, we have made a strong start to fiscal
22. We are delivering organic net sales growth across all regions, as we
benefit from resilience in the off-trade and continued recovery in the
on-trade. This is benefitting organic operating margin, despite rising
inflationary pressures, which are partly due to supply chain constraints. We
expect organic net sales growth of at least 16% in the first half of fiscal 22
and organic operating profit growth ahead of organic net sales growth. We
expect the strong growth momentum in the first half of fiscal 22 to continue
through the remainder of the fiscal year. However, in the second half of
fiscal 22 we will be lapping a tougher comparator."

Copies of the materials from today's Capital Markets Day will be available on
www.diageo.com (http://www.diageo.com) .

For further information please contact:

 

Investor relations:

Durga
Doraisamy
+44 (0) 7902 126 906

Lucinda
Baker
+44 (0) 7974 375 550

Belinda
Brown
+44 (0) 7590 810 246

 

Media relations:

Dominic
Redfearn
+44 (0) 7971 977 759

Jessica
Rouleau
+44 (0) 7925 642 561

 

 

About Diageo

Diageo is a global leader in beverage alcohol with an outstanding collection
of brands including Johnnie Walker, Crown Royal, JεB, Buchanan's and Windsor
whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don
Julio, Tanqueray and Guinness.

Diageo is a global company whose 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
(http://www.diageo.com) . Visit Diageo's global responsible drinking resource,
www.DRINKiQ.com (http://www.DRINKiQ.com) , for information, initiatives and
ways to share best practice.

Celebrating life, every day, everywhere.

 

Cautionary statement concerning forward-looking statements

This document contains 'forward-looking' statements, including statements
related to new medium term guidance, future Total Beverage Alcohol market
share ambitions and Diageo's expectations of performance for the six months
ending 31 December 2021.  Forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts.  In
particular, forward-looking statements include all statements that express
forecasts, expectations, plans, outlook, objectives and projections with
respect to future matters, including trends in results of operations, margins,
growth rates, overall market trends, the impact of changes in interest or
exchange rates, the availability or cost of financing to Diageo, anticipated
cost savings or synergies, expected investments, the completion of any
strategic transactions or restructuring programmes, anticipated tax rates,
changes in the international tax environment, expected cash payments, outcomes
of litigation or regulatory enquiries, anticipated changes in the value of
assets and liabilities related to pension schemes and general economic
conditions.  By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future.  There are a number of factors (including those set
out under "Our principal risks and risk management" in Diageo's Annual Report
and under "Risk Factors" in Diageo's Annual Report on Form 20-F filed with the
US Securities and Exchange Commission for the year ended 31 June 2021) that
could cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements, including factors
that are outside Diageo's control.  Any forward-looking statements made by or
on behalf of Diageo speak only as of the date they are made.  Diageo does not
undertake to update forward-looking statements to reflect any changes in
Diageo's expectations with regard thereto or any changes in events, conditions
or circumstances on which any such statement is based.

 

An explanation of non-GAAP measures, including organic movements, is set out
on page 74 of Diageo's Annual Report for the year ended 30 June 2021.

 

Diageo plc LEI: 213800ZVIELEA55JMJ32

 

 1  IWSR,  Diageo's 2020 Retail Sales Value (RSV) % Share of Total Beverage
Alcohol (TBA) Market

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