Diageo's (DEO) CEO Ivan Menezes on Interim 2017 Results - Earnings Call Transcript

Jan. 26, 2017 5:49 AM ETDiageo plc (DEO)1 Comment
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Diageo plc (NYSE:DEO) Interim 2017 Earnings Conference Call January 26, 2017 2:15 AM ET


Ivan Menezes - CEO

Kathryn Mikells - CFO


Ivan Menezes

Good morning everyone. As you saw in our results announcement this morning, our performance demonstrates continued effective execution of our strategy. In the half, we have increased our participation in emerging markets by expanding the position of our mainstream spirits brands and through the launch of primary scotch brands in new markets.

We have delivered good growth and positive mix in developed markets through the strength of our scotch brands and the improvements we are driving in U.S. spirits. Through the application of our six priorities, we are building a stronger company, and our performance has not only improved, it is more consistent. This is a set of results which reinforces our confidence in delivering our medium-term guidance and enables our long-term performance ambition to be one of the best-performing, most trusted and respected consumer products companies in the world.

We measure our progress towards best-performing through KPIs focused on efficient growth and value creation. And as you can see on this slide, we made good progress again this half. And Kathy will cover our return metrics, which also look good.

We have delivered improvement in both volume growth and price mix. Volume grew 1.8% and net sales grew 4.4% with stronger growth in scotch and U.S. spirits, two of our focus areas for fiscal ‘17. The cost of organizational change and productivity work is now taken to operating profit, but despite higher costs in the half, growth of scotch and U.S. spirits, together with marketing procurement benefits, has enabled us to maintain margin.

This is a stronger outcome for the half than we had anticipated at the time of the AGM. The half has

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