The world’s largest spirits maker, which has 55 sites in Scotland, including 29 malt distilleries, said net sales leapt 21.4 per cent to £15.5 billion in the year to June 30, beating analysts’ forecasts for a rise of about 16 per cent. It enjoyed strong double-digit growth across all regions.
The FTSE-100 group has benefited since the start of the pandemic from drinkers trading up to more expensive types of alcohol, investing along the way in its premium brands.
Diageo, which is Scotland’s biggest whisky producer by volume and also owns Bell’s, said growth had been broad-based across its drink categories, with particularly strong growth of Scotch, tequila and beer. It has also strengthened its portfolio through various acquisitions and disposals.
Johnnie Walker, which last year opened a major visitor attraction on Edinburgh’s Princes Street, has been a particularly strong performer in recent months. It grew net sales by 34 per cent in the financial year, exporting some 21 million cases of whisky.
The firm said “premium-plus” brands contributed 57 per cent of reported net sales and drove 71 per cent of organic net sales growth over the year.
Diageo directly employs some 3,500 people in Scotland and the drink giant’s other global brands include Gordon’s gin, Smirnoff vodka and Captain Morgan rum.
Chief executive Ivan Menezes said: “In a year of significant global supply chain disruption, our double-digit volume growth demonstrates the tremendous agility and resourcefulness of our teams.
“Our net sales growth was across categories. We benefited from the on-trade recovery, continued global premiumisation trends, with our super-premium-plus brands up 31 per cent, and from price increases across our regions.
“I am particularly proud of the performance of Johnnie Walker, which delivered double-digit growth across all regions to surpass 21 million cases globally. This fantastic milestone exemplifies our world-class brand-building and execution capabilities.”
He added: “Looking ahead to [the new financial year], we expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty. Notwithstanding these factors, I am confident in the resilience of our business and our ability to navigate these headwinds.”
Matt Britzman, equity analyst at investment firm Hargreaves Lansdown, noted: “2022 was a year to celebrate at Diageo. Full-year results beat estimates across all regions, as premiumisation trends continue to favour Diageo’s spirit portfolio and bar and restaurant sales recover from deflated levels last year.
“These results were great, but it’s the outlook that’ll capture more attention from investors. Unsurprisingly, management sounded cautiously optimistic with warnings of cost inflation and weakening consumer spending power.
“The hefty growth figures seen across the board in the year just gone are all set to moderate, again though, that’s to be expected.
“The positive news is that guidance in the medium term remains on track for net sales growth of 5-7 per cent, though it’s uncertain whether that relates specifically to the new financial year or not.”