Diageo PLC (DEO) Q2 2023 Earnings Call Transcript

Jan. 26, 2023 8:32 AM ETDiageo plc (DEO), DGEAF
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Diageo PLC (NYSE:DEO) Q2 2023 Earnings Conference Call January 26, 2023 4:30 AM ET

Company Participants

Ivan Menezes - CEO & Executive Director

Lavanya Chandrashekar - CFO & Director

Conference Call Participants

Sanjeet Aujla - Crédit Suisse

Pinar Ergun - Morgan Stanley

Nik Oliver - UBS

Laurence Whyatt - Barclays Bank

Edward Mundy - Jefferies

Mitchell Collett - Deutsche Bank

Simon Hales - Citigroup

Celine Pannuti - JPMorgan Chase & Co.

Andrea Pistacchi - Bank of America Merrill Lynch


Good morning, and welcome to Diageo's 2023 Interim Results Q&A Call. Your call today will be hosted by Ivan, Diageo's CEO; and Lavanya, Diageo's CFO. This conference is being recorded [Operator Instructions]. We are now ready to start the call. Ivan, please go ahead.

Ivan Menezes

Thank you. Hi, everyone, and thank you for joining our interim results call. I hope you've had a chance to read our press release and watch the presentation webcast on diageo.com. I'm pleased with our results for the first half of fiscal '23. We delivered organic top line and operating profit growth above our medium-term guidance.

Net sales up 9% with growth across all regions. Volume grew 2% even as we implemented strategic price increases, operating profit up 10%. Organic margin expanded 9 basis points. We generated GBP800 million of free cash flow, fueling continued investment in long-term growth. We expect to deliver stronger free cash flow in the second half as we lap more normalized working capital movements.

We continue to gain or hold share in the majority of our markets, 75%. Our Super Premium Plus brands grew organic net sales by 12%. I'm particularly pleased with the strong growth in scotch, up 19%; tequila up 28%; and Guinness up 17%. On a constant basis, Diageo is 36% bigger than before pre-COVID and with a 4-year CAGR for organic net sales of

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