Diageo’s organic net sales up 5% to £12.2 billion

Drinks giant Diageo’s organic net sales rose by 5% to £12.2 billion in its 2018 fiscal year, which CEO Ivan Menezes dubbed a “strong, consistent performance”.

On an organic basis, all of Diageo’s regions enjoyed growth in the past year. Asia Pacific performed the best, with net sales growth of 9%.

The only spirit in decline was vodka, which suffered an organic net sales loss of 1%, with Smirnoff down by 2% and Ketel One and Cîroc down by 1%.

Tequila enjoyed the fastest rate of growth at 40% thanks to a strong performance from Don Julio, which became a one million case brand last year.

Diageo’s CEO, Ivan Menezes, called the company’s performance “strong and consistent”

Diageo’s Tequila sales have also been boosted by the acquisition of George Clooney’s Casamigos brand last year.

The company’s reported net sales growth was slower than its organic growth, at 0.9%, due to fluctuating exchange rates.

Meanwhile, Diageo’s operating profit for the year to 30 June 2018 grew by 3.7% to £3.7bn.

The board has approved a share buyback programme worth £2bn for the coming year. It also recommended a final dividend increase of 5%, bringing the full year dividend to 65.3 pence per share.

“These results reflect the high performance culture we have created in Diageo, the ongoing rigorous execution of our strategy, our focus on the consumer and our ability to move swiftly on trends and insights.

“During the year we returned £1.5 billion to shareholders through a share buyback. We have delivered another year of strong cash flow generation in F18,” Menezes said.

“The changes we have made in the business and the shifts in culture we continue to drive, ensure we are well placed to capture opportunities and deliver sustained growth.

“Our financial performance expectations are unchanged and we expect to continue to invest in the business to deliver our mid-term guidance of consistent mid-single digit organic net sales growth for the three years ending 30 June 2019,” he added.