Diageo is a leading alcoholic beverage business with ownership of brands such as Smirnoff, Johnnie Walker, Baileys, Crown Royal and Guinness. Of the fourteen brands that contribute 67% of total sales, eleven are either number 1 or 2 in their respective markets.
Diageo operates in over 180 countries worldwide through a diversified manufacturing base, with 11 North American facilities, 31 in Western Europe, 20 across Africa, Eastern Europe and Turkey and 2 in the Asia Pacific. Diageo generates 45% of its operating profit in North America, with 19% in Western Europe, 17% in Africa, Eastern Europe & Turkey, 10% in Latin America & Caribbean and 9% in the Asia Pacific.
ANALYST SUMMARY

  • Diageo is the world’s largest spirits business with leading brands such as Smirnoff, Johnnie Walker, Baileys, Crown Royal and Guinness.
  • Spirits is a superior business line relative to beer and wine, evident in the superior margins and profitability displayed over the long term.
  • Diageo has steadily increased its volumes sold, supported by ~3% growth p.a across both the Asia Pacific and International divisions.

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