Global drinks giant Diageo has reported net sales of £6.9 billion (US$9.1 billion) for the six months to 31 December 2018 (H1 2019), up 5.8% year-on-year. Operating profit of £2.4 billion was up 11.0%, driven by organic growth, said the London multinational.
The company reported a net sales increase of 24% for Travel Retail Asia and Middle East and organic volume growth in the sector of 15%. Other travel regions are reported within local divisions.
Diageo said the sales growth in Travel Retail Asia and Middle East was driven by “improved commercial activation” and successful launches of premium scotches including White Walker by Johnnie Walker, a tie-in with the fantasy television programme Game of Thrones.
The company’s share price rose 4.3% on the news. It attributed sales growth to stronger demand from China and India and said it would buy back £660 million (US$867 million) of shares.
Organic net sales growth in all regions was up 7.5% with organic volume up 3.5%. Organic operating profit grew 12.3%. Net cash from operating activities stood at £1.6 billion (US$2.1 billion), up £356 million (US$468 million), and free cash flow at £1.3 billion (US$1.7 billion), up £317 million (US$416 million).
In Greater China, organic net sales were up 20%, led by strong performance in scotch and Chinese white spirits. Scotch net sales increased by 19% in Greater China, driven by Johnnie Walker super deluxe and single malts.
Gin continued its outstanding surge, with sales growth of 28%. Tequila net sales rose 29% but net sales of rum were down 3%.
Tanqueray gin, Don Julio tequila and Ketel One vodka all posted very strong organic sales growth of 21%, 26% and 21% respectively.
CEO Ivan Menezes said: “These results are further evidence of the changes we have made in Diageo to put the consumer at the heart of our business, to embed productivity and to act with agility to enable us to win sustainably.
“As we deploy our strategy, we remain focused on building the long-term health of our brands and ensuring we grow our business in a consistent and sustainable way.”
