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Diageo PLC ADR DEO

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PREMIUM

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PREMIUM

Economic Moat

PREMIUM

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PREMIUM

Diageo's Preliminary Fiscal 2021 Results Indicate Strong End to Year

Analyst Note

| Philip Gorham, CFA, FRM |

Diageo's preliminary fiscal 2021 results indicate that the firm beat our forecasts on the top line and delivered margins that were in line with our expectations. Organic net sales growth of 16% was marginally above our forecast, driven by 20% growth in North America. Operating profit grew almost 17% organically, implying underlying margin expansion of around half a percentage point. Management said growth was broad-based across categories, but tequila and baijiu are likely to have been the key drivers, while product innovation in Baileys is likely to have gained traction in the off-trade this year.

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Company Profile

Business Description

The product of a merger between Grand Metropolitan and Guinness in 1997, Diageo is one of the world's leading producers of branded premium spirits, approximately level with Kweichow Moutai in revenue terms. It also produces and markets beer and wine. Brands include Johnnie Walker blended scotch, Smirnoff vodka, Crown Royal Canadian whiskey, Captain Morgan rum, Tanqueray gin, Baileys Irish Cream, and Guinness stout. Diageo also owns 34% of premium champagne and cognac maker Moet Hennessy, a subsidiary of French luxury-goods maker LVMH Moet Hennessy-Louis Vuitton, and a near-55% stake in India's United Spirits.

Contact
Lakeside Drive, Park Royal
London, NW10 7HQ, United Kingdom
T +44 2089786000
Sector Consumer Defensive
Industry Beverages - Wineries & Distilleries
Most Recent Earnings Jun 30, 2008
Fiscal Year End Jun 30, 2022
Stock Type
Employees 27,783

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