Recently, both Diageo and Remy Cointreau have disclosed the interim report and the third quarter report for the 2023 fiscal year.
In the first half of fiscal year 2023, Diageo has achieved double-digit growth in both sales and profits, of which sales were 9.4 billion pounds (about 79 billion yuan), an increase of 18.4% year-on-year, and profits were 3.2 billion pounds, a year-on-year increase of 15.2%. Both markets achieved growth, with Scotch Whiskey and Tequila being the standout categories.
However, Remy Cointreau’s data in the third quarter of fiscal year 2023 was lower, with organic sales down 6% year-on-year, with the Cognac division seeing the most pronounced decline at 11%. However, based on the data of the first three quarters, Remy Cointreau still maintained a positive growth of 10.1% in organic sales.
Recently, Diageo (DIAGEO) released its financial report for the first half of fiscal year 2023 (July to December 2022), showing strong growth in both revenue and profit.
During the reporting period, Diageo’s net sales were 9.4 billion pounds (about 79 billion yuan), a year-on-year increase of 18.4%; operating profit was 3.2 billion pounds (about 26.9 billion yuan), a year-on-year increase of 15.2%. For sales growth, Diageo believes that benefited from strong global premium trends and its continued focus on product mix premiums, profit growth is due to price increases and supply chain cost savings offsetting the impact of absolute cost inflation on gross profit.
In terms of categories, most of Diageo’s categories have achieved growth, with Scotch whiskey, tequila and beer contributing most prominently. According to the report, net sales of Scotch whiskey increased by 19% year-on-year, and sales volume increased by 7%; net sales of tequila increased by 28%, and sales volume increased by 15%; net sales of beer increased by 9%; net sales of rum increased by 5%. %; net sales of vodka alone fell 2% overall.
Judging from the transaction market data, during the reporting period, all regions covered by Diageo’s business grew. Among them, net sales in North America increased by 19%, benefiting from the strengthening of the US dollar and organic growth; in Europe, adjusted for organic growth and Turkey-related inflation, net sales increased by 13%; in the continued recovery of the travel retail channel and price increases Under the trend, net sales in the Asia-Pacific market increased by 20%; net sales in Latin America and the Caribbean increased by 34%; net sales in Africa increased by 9%.
Ivan Menezes, CEO of Diageo, said that Diageo has made a good start in fiscal year 2023. The team size has expanded by 36% compared with before the outbreak, and its business layout has continued to diversify, and it is continuing to explore advantageous product portfolios. It is still full of confidence in the future. It is expected that in the fiscal year 2023-2025, the sustainable organic net sales growth rate will be between 5% and 7%, and the sustainable organic operating profit growth rate will be between 6% and 9%.
The financial report shows that Remy Cointreau’s organic sales during the reporting period were 414 million euros (about 3.053 billion yuan), a year-on-year decrease of 6%. However, Remy Cointreau saw the decline as expected, attributing the drop in sales to a higher base of comparison following a normalization of U.S. cognac consumption and two years of exceptionally strong growth.
From the perspective of category breakdown, the sales decline was mainly due to the 11% drop in sales of the Cognac department in the third quarter, which was the combined effect of the unfavorable trend in the United States and the sharp rise in shipments in China. Liqueurs and spirits, however, rose 10.1%, mainly due to the outstanding performance of Cointreau and Broughrady whiskey.
In terms of different markets, in the third quarter, sales in the Americas fell sharply, while sales in Europe, the Middle East, and Africa fell slightly; sales in the Asia-Pacific region grew strongly, thanks to the development of China’s travel retail channel and the continued recovery in other parts of Asia.
Organic sales were on the rise in the first three quarters of the fiscal year, despite a slight decline in organic sales in the third quarter. The data shows that the consolidated sales in the first three quarters of fiscal 2023 will be 13.05 euros (approximately RMB 9.623 billion), an organic growth of 10.1%
Rémy Cointreau believes that overall consumption is likely to stabilize at “new normal” levels in the coming quarters, especially in the US. Therefore, the group regards medium-term brand development as a long-term strategic goal, supported by continuous investment in marketing and communication policies, especially in the second half of fiscal year 2023.
Post time: Jan-29-2023