Diageo backs guidance for organic net sales growth

Drinks giant Diageo has backed its guidance to deliver organic net sales growth towards the upper end of its mid-single digit range on Wednesday.

Chief executive Ivan Menzes also reaffirmed the company’s targeted 175 basis points operating margin improvement over the three years ending 30 June 2019.

In a speech at an investor conference in New York later in the day, Menzes will say: "Diageo has delivered strong performance over the past two years with consistent mid-single digit organic top line growth; upweighted investment in our brands; as well as organic operating margin expansion and strong cash flows.

"During the same period we have generated attractive total shareholder returns and, from fiscal 17 to fiscal 19 H1, have returned £7bn to shareholders via dividends and share buy-backs."

The CEO also said in the statement that looking ahead to the end of fiscal 2022, he expects Diageo to maintain organic net sales growth in the mid-single digit range and to grow organic operating profit ahead of net sales in the range of 5% to 7%.

At 1255 BST, the shares were down 1.2% at 3,286.00p.