Diageo reports financial results

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Related tags: Marketing, Diageo, Generally accepted accounting principles

Diageo, the premium drinks company, announced on September 6, its
preliminary results for the year ended June 30, 2001.

Diageo, the premium drinks company, announced on September 6, its preliminary results for the year ended June 30, 2001. Premium drinks continues to perform strongly with volume up 4 per cent, net sales grew nine per cent, marketing up 10 per cent to $1.403m and operating margin improved by 1.1 percentage points to 18.9 per cent. Driven by growth in the global priority brands, volume is up 6 per cent, net sales grew 15 per cent and marketing is up 15 per cent to $998m (Euro1.115bn). Burger King operating profit fell 12 per cent to $250m (Euro280m) and Pillsbury operating profit increased 5 per cent to $730m (Euro815.8m). Profit before goodwill amortisation, exceptional items and tax reached $2.792m. Final dividend was up 6 per cent to 18.9 cents per share and free cash flow increase $502m to $1.720m. Paul Walsh, Group Chief Executive of Diageo, commenting on the year ended June 30, 2001 said: "The benefits of Diageo's position as the world's leading premium drinks company are reflected in these results. They demonstrate the strength of our premium drinks business and how, by driving top line growth in our global priority brands and in our most important markets, we continue to deliver growth in shareholder value."​ Commenting on current trading, Paul Walsh said: "Since the start of the new financial year the key drivers of performance have remained unchanged. In premium drinks, top line growth, in terms of both volume and net sales, has been maintained despite some weakening of economic conditions." "The expansion of our ready to drink portfolio continues to provide growth from new consumer occasions at new price points. We are on track to deliver the cost efficiencies we announced from the merger of Guinness and UDV." "Burger King's performance is still adversely impacted by the slowdown in Europe and as in 2001 the results for the current year will be affected by the reduction in the number of new restaurants opening. We do not expect to see an improvement in performance before the second half of the new year. Pillsbury's performance in the year was adversely impacted by the decline in the food service business, though trading there has improved in the last two months. Trading in Pillsbury North America has continued to be good and overall the Pillsbury business has started the year well. We look forward to the completion of the strategic transactions which will further Diageo's focus on premium drinks."

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