Game Of Thrones Inspired Scotch Boosts Diageo's Sales

By Donna Ahern
Game Of Thrones Inspired Scotch Boosts Diageo's Sales

Diageo, the world's largest spirits company, reported higher annual profit on Thursday, helped by growth across all its markets and the popularity of its Game of Thrones inspired scotch.

The company also approved plans to return up to £4.5 billion ($5.6 billion) to shareholders over financial years 2020-2022, less than some analysts had expected, which pushed its shares 1.8% lower.

Diageo reported pre-exceptional earnings per share of 130.8 pence, beating company supplied estimates of 128.8 pence, saying results were also helped by an improved price mix and cost controls.

Diageo has been restructuring in recent years to improve performance and streamline its portfolio, while trying to bulk up on newer, hipper brands. It has looked to focus on its scotch business and grow its operations in India and the United States.

The maker of Johnnie Walker scotch whisky, Smirnoff vodka and Guinness stout said operating profit rose 10% to £4 billion ($5 billion) for the year ended 30 June.


Asia Pacific sales rose 9% on strong demand in China and India. Net sales in North America rose 5%, with total net sales up 5.8% at £12.9 billion.

'White Walker' Wins Converts 

Scotch represents a quarter of Diageo's net sales and was up 6% with broad-based growth across all regions except Europe.

Diageo said Scotch growth in the period was driven by Johnnie Walker, helped by the launch of "White Walker by Johnnie Walker" inspired by HBO's global hit Game of Thrones, which recruited new consumers into scotch.

Diageo, however, faces potential pressure from U.S. President Donald Trump's use of tariffs as a weapon in trade conflicts because Scotland's most famous export could get caught up in the crossfire.


The company also faces headwinds in Scotland, where talks over pay between the company and two of its biggest Scottish unions fell apart on Wednesday, threatening the production of some the region's most popular whiskies.

"I would say it's just too early to tell whether that trade dispute between the U.S. and the EU is going to have (an impact)on our industry and to what degree,"Kathryn Mikells, chief financial officer  told reporters on a call.

"We wouldn't be immune from a trade war but I think it's important to remember how resilient Diageo is, given the broad portfolio," she added.

News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.

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