For the six months to
31 December 2017, net sales rose by 1.7% to reach £6.53 billion and operating
profit increased by 6.1% to £2.19 billion.

Growth was strongest
in its Latin America and Asia Pacific regions, which both saw net sales rise by
7%. The company’s key rum brands posted double-digit growth in Latin America
and Johnnie Walker is growing in popularity in Brazil, Mexico and Colombia.

Its North America
region delivered net sales growth of 2%, with US Spirits growing 3%. However,
vodka sales were down 8% due to a poor performance of Smirnoff, Cîroc and Ketel
One. Don Julio tequila, which Diageo bought in 2014, saw sales
increase by 39%.

Growth was broad
across all key categories in Europe, but primarily driven by gin, where
Tanqueray gained share in a growing category and Gordon’s benefited from
the launch of its Pink variant. Scotch net sales were
up 2% led by growth in Russia. Meanwhile, sales of Captain Morgan grow by

Diageo CEO Ivan
Menezes said: “These results demonstrate continued positive momentum from the
consistent and rigorous execution of our strategy. We have delivered broad
based improvement in both organic volume and net sales growth. We have
increased investment behind our brands and expanded organic operating margin
through our sustained focus on driving efficiency and effectiveness across the

“By consistently
delivering on our six strategic priorities, Diageo continues to get stronger:
we have better consumer insight through superior analytics, improved execution
on brand and commercial plans and have embedded everyday efficiency across the
business through our productivity initiatives. This has enabled continued
growth, improved agility, and consistent cash flow generation.

“Our financial
performance expectations for this year remain unchanged. We are confident in
our ability to deliver consistent mid-single digit top line growth and 175bps
of organic operating margin improvement in the three years ending 30 June

Last year Diageo said
it expects to deliver £500 million in savings by the end of
, along with a considerable improvement in its organic margins.
It has been reinvesting some of the savings produced through cost-cutting
initiatives into advertising, particularly in the US.

Source: FoodBev