05 OCT 2015
05 OCT 2015 Press release
Unaudited financial results for the six months ended 30 September 2015 Net sales increase 8%
Net sales increase 8%
- Net sales up 8% in the first half, 6% up in the second quarter
- Direct sales of the Diageo brands portfolio added Rs. 183 Crore of net sales in the first half (Rs. 141 Crore in the second quarter) Prestige and above brands net sales grew 16% in the first half with over 9pps positive price/mix*
- EBITDA up 39% to Rs. 520 Crore
- EBITDA margin of 12.52% with 274bps improvement versus last year – driven largely by the Related Party Transactions benefit(1)
- Profit after tax of Rs. 949 Crore (versus Rs. (86) Crore last year) positively impacted by the UBL(2) divestment
- Net debt reduced by Rs. 1,324 Crore mainly driven by UBL(2) share divestment (*) Imputed revenue based on internal management data; (1) Refer below the EBITDA Margin Bridge; (2) United Breweries Limited
Anand Kripalu, CEO, commenting on the six month ended 30 September 2015 said:
“Our F16 half year results are starting to show the dividends of our comprehensive strategic plan focused behind our power brands with a clear prioritized geographical participation strategy. The divestment of the UBL shares during the quarter has generated Rs.870 Crore of free cash that has been used to retire debt and has reduced our net debt position to less than Rs.4,000 Crore from over Rs.5,000 Crore six months ago.
The “Prestige and Above” growth of 16% in the half and the resultant positive mix underpins our focus on our premiumisation strategy and the benefit of the full Diageo brands integration into our portfolio. Our renovations strategy on our core brands has commenced with encouraging results from the re-launch of our Royal Challenge brand (49% volume growth in the last six months) and we look forward to the McDowell’s No.1 re-launch that is currently underway. We have however faced challenges in the last three months including specific industry challenges in states such as Uttaranchal and Chhattisgarh plus a temporary pricing related challenge in Karnataka on our lead brand of Haywards. The highly regulated environment in respect of pricing remains a key challenge for the industry as a whole and needs to be remedied.
Our focus on driving productivity through every aspect of the P&L continues to fuel our strategy to invest behind capabilities and our brands (underlying marketing investment up 18% in the half versus last year). Our EBITDA delivery before taking into account the exception gain on the UBL share sales remains robust and in line with our expectations for the period.
We continue to focus on driving change which will further strengthen this business and deliver our performance ambition. Our brands, our regional footprint / network and our people gives me confidence that USL can deliver strong and sustained performance in the forward years."
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Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer categories. These brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.
Diageo is a global company, and our products are sold in more than 180 countries around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
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