Game of Thrones whisky and gin boost Diageo sales to £13 billion

Diageo’s Game of Thrones whisky helped the company to boost its net sales this year to £12.9 billion.

 

Diageo’s reported net sales grew 5.8% to £12.9 billion in the year to 30 June 2019, up from 5% last year, as CEO Ivan Menezes told investors the company has “committed to consistent value growth”.

In a webcast set live today (25 July), the spirits boss said the company’s focus on targeting steady, mid-single digit percentage growth since 2017 has given Diageo the leverage to be able to invest in its brands.

CFO Katherine Mikells said the growth came as a result of “continued premiumisation, improved capabilities in net revenue management and successful premium innovation performance.”

“This included the launch of “White Walker by Johnnie Walker” and sustained growth in premium innovations launched in prior years including Ketel One Botanical, Crown Royal Regal Apple and Tanqueray Flor de Sevilla.”

Net sales of Diageo’s gin brands rose 22%, with Tanqueray delivering double digit growth, although gin still makes up just 4% of the company’s total revenues.

Scotch net sales were up 6% with strong growth in all regions, aside from Europe, she said, where Scotch sales were flat.

However, the spirits giant’s rum portfolio struggles last year with a 2% decline in sales, which the CFO attributed to poor performance of its Captain Morgan rum.

The group has made a number of high value acquisitions since 2014, including Don Julio, USL and Tequila brand Casamigos, as well as increasing its investment in Shui Jing Fang.

It also sold a chunk of its spirits portfolio to rival producer Sazerac for US$550 million in November, offloading its Seagram’s Canadian whisky label, Goldschlager and Booth’s Gin among others.

Menezes said he predicts the group will “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%-7%.”

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