Whiskey giant SCOTCH Diageo warned of “continued volatility” linked to geopolitical events, inflation and Covid, as it highlighted an encouraging start to its current financial year.
Distiller Johnnie Walker and Bell yesterday highlighted its “resilience” and “ability to navigate these headwinds” while saying it remains “well positioned” to meet its medium-term guidance for sales and profit growth.
The beverage giant, which has an extensive portfolio of brands including Guinness, Gordon’s, Tanqueray and Baileys, told the city it expects organic operating profit growth “sustainably within a range of 6% to 9%” over the next two years.
READ MORE: Scotch whiskey giant Diageo hails ‘star’ Johnnie Walker as sales recover
Chief Executive Officer, Ivan Menezes, said, “We are off to a good start for FY23, with organic net sales growth across all regions, reflecting our advantageous portfolio, continued investment in brand building and our agile supply chain and culture. I want to thank my colleagues for their continued creativity and drive.
“We expect the operating environment to remain challenging with continued volatility due to geopolitical uncertainty, weakening consumer purchasing power, inflationary pressures and Covid-19 related disruptions.
“However, I am confident in the resilience of our business and our ability to weather these headwinds while executing our strategic priorities, including our ambitious 2030 sustainability plan.
“We remain well positioned to deliver our medium-term guidance for FY23-25 of consistent organic net sales growth in the 5% to 7% range and sustainable organic operating profit growth in a range of 6% to 9%. ”
The update comes after Diageo highlighted a ‘star’ Johnnie Walker show in July as the company reported a 21.4% rise in net sales to £15.5billion for the year to June 30.
The distiller said it sold more than 21 million cases of its flagship brand of Scotch whiskey in the period, representing a 34% rise in sales, helped by the recovery in the food trade after the pandemic.
Last month, Diageo announced that it had sold the Archers Peach Schnapps brand to De Kuyper Royal Distillers of the Netherlands.
The company said that as part of the transaction, it entered into a 24-month manufacturing supply agreement with the new owner.
Diageo shares closed the day up 22.64p at 3,804.14p.