Diageo’s H1 Irish volumes down 23%

Diageo reports that its volumes here in Ireland were down 23% in the first half of its 2021 Financial Year to the 31st of December 2020 (or 17% on an organic basis), according to its interim results published today.

Similarly, Diageo reports a value decline of 40% or a net 37% in organic terms.

Net sales of beer were down 44% driven by on-trade restrictions and closures which particularly impacted the sale of Guinness kegs.

“Total spirits grew 4%, driven by Baileys, Gordon’s and Captain Morgan,” reports Diageo which (perhaps unsurprisingly) adds that, “Both spirits and beer gained market share in the off-trade”.

Globally, sales of Guinness were down 18% in value “due to the impact of Covid-19 on the on-trade, particularly in Ireland and Great Britain”.

At £6.9 billion, reported net sales at Diageo were down 4.5% “as organic growth of 1.0% was more than offset by unfavourable exchange” according to the company which pointed out that this growth – mostly driven by good US sales – was “despite a significant impact from Travel Retail and on-trade restrictions”.

Diageo’s reported Operating Profits were down 8.3% to £2.2 billion from 2019’s H1 figure of £2.4 billion, driven by unfavourable exchange and a decline in organic operating profit.

“We delivered a strong performance in a challenging operating environment” said Diageo Chief Executive Ivan Menezes, commenting on the results, “We rapidly pivoted to the channels and occasions most relevant to consumers and invested behind new opportunities. This more than offset the impact of on-trade restrictions and the decline in Travel Retail.”

Diageo, “delivered strong sequential improvement compared to the second half of fiscal 20,” he stated, “This reflects improved market share performance through excellent execution in the off-trade channel and the partial re-opening of the on-trade channel in certain markets”.

He concluded, “We expect ongoing volatility and disruption in the second half of the year, particularly in the on-trade channel, which will make performance more challenging. The medium and long-term growth drivers and opportunities for our business remain intact and I am confident in our strategy, the resilience of our business and Diageo’s ability to emerge stronger.”