Diageo (DGE) H2 2024 earnings summary

Executive summary

• Fiscal 2024 was marked by operational excellence and productivity initiatives amid inflation, cautious consumers, and post-COVID normalization.

• Strategic actions included inventory management, resource redeployment, and productivity acceleration to support resilience and long-term growth.

• Over 75% of net sales value in measured markets held or gained share despite challenging conditions.

• Market share improved in the second half, with share held or grown in over 75% of measured markets.

Financial highlights

• Organic net sales declined 0.6% year-over-year; excluding LAC, grew 1.8%.

• Organic operating margin contracted 130 bps; excluding LAC, contraction was 56 bps.

• Free cash flow rose to $2.6 billion, up $400 million from prior year, driven by working capital management.

• Basic EPS before exceptional items declined 8.6% to $1.796 (179.6 cents), impacted by lower operating profit and higher finance charges.

• Dividend increased by 5%, continuing a 25-year progressive dividend policy, reaching 103.48 cents.

Outlook and guidance

• Challenging consumer and retail environment expected to persist into fiscal 2025, with continued margin pressure.

• Focus remains on productivity, cost mitigation, disciplined investment, and strategic growth.

• Medium-term guidance targets a return to organic net sales and profit growth, aiming for 6% TBA value share by 2030 and profit growth to match or exceed sales growth.