Diageo business 'continuing to strengthen'
Diageo issued an update on its trading on Wednesday morning, claiming its business continued to strengthen through improved marketing, innovation and commercial execution, as investors prepared for the company’s annual general meeting.
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The FTSE 100 distilling giant said it remained “well set up” to deliver in line with its own expectations.
“We expect the H1 organic net sales growth rate will be impacted by the later timing of Chinese New Year and by the expected impact of the highway ban in India,” chief executive Ivan Menezes noted.
“Our productivity work continues to move at pace.”
As it had previously announced, Menezes said Diageo was “up-weighting” its investment behind US spirits and scotch whisky, and as a result the board expected its organic operating margin expansion would be weighted towards the second half.
“Our expectations on overall performance for the year remain unchanged.”
Menezes said underlying momentum and progress in implementing productivity gave management “continued confidence” in its ability to deliver sustainable growth.
“We re-affirm our expectation of mid-single digit top line growth and 175 bps of organic operating margin improvement over the three years ending 30 June 2019.”