Diageo Plc, the Parent Company of Guinness Nigeria Plc, reported that its operating profit declined by 8.3% to £2.2 billion at the end of H1 2020/21 of its accounting reference period.
The company revealed that Africa net sales were flat during the period under review, as growth in Nigeria and Africa Regional markets was not enough to offset declines in East Africa and South Africa.
In line with the information contained in the press release published by the spirit producer, Diageo revealed that it recorded a strong sequential performance improvement in all regions in 2021 compared to the second half of the fiscal year 2020.
The management of the company maintained that it will be expecting continued impact in the second half of fiscal 2021 from on-trade restrictions and disruption to Travel Retail.
- Diageo’s net sales (£6.9 billion) down 4.5%, as organic growth of 1.0% was more than offset by the unfavourable exchange.
- Operating profit (£2.2 billion) declined 8.3%, driven by unfavourable exchange and a decline in organic operating profit.
- Organic net sales up by 1.0%, despite a significant impact from Travel Retail and on-trade restrictions.
- North America was up by 12.3%, offsetting declines in other regions, except for Africa which was broadly flat.
- Organic operating profit down by 3.4%, driven by channel and category mix.
- Basic Earnings Per Share decreased by 14.6% to 67.6 pence
- Interim dividend increased by 2% to 27.96 pence per share.
What they are saying
Diageo’s Chief Executive Officer, Ivan Menezes while commenting on the results said:
“We delivered a strong performance in a challenging operating environment, returning to top-line organic sales growth during the half. We rapidly pivoted to the channels and occasions most relevant to consumers and invested in new opportunities. This more than offset the impact of on-trade restrictions and the decline in Travel Retail.”
“Organic operating margin improved compared to the second half of fiscal 20 driven by increased operating leverage and tight control of discretionary expenditure.
“The decline compared to the first half of fiscal 20 reflected an adverse channel and portfolio mix. We expect margins to improve as the on-trade and Travel Retail recover and with the continued benefit of everyday efficiency.
“Our proprietary tools and data-led insights are enabling us to invest smartly in effective marketing and innovation. We continue to strengthen brand equity, premiumise our portfolio and expand our digital capabilities.”