Diageo PLC (DGE)
What is Diageo?
Diageo is a global producer of well-known alcoholic beverages such as Baileys, Smirnoff and Johnnie Walker. The company's product portfolio features more than 200 famous brands present in 180 countries. But it would be fair to say that while many of these brands have instant name recognition, the name Diageo itself isn’t as well-known among the general public.
As of 5 February 2018, Diageo was the 6th-largest company in the FTSE 100 index, with a market capitalisation of around £62.3 billion. In 2017, Forbes ranked Diageo number 261 in its survey of the world’s biggest food, beverage and tobacco companies. You can find out how the stock has been doing recently by checking our DGE chart.
Diageo says its strategy is to be “one of the best performing, most trusted and respected consumer products companies in the world”. It aims to increase its market share of international premium spirits to take advantage of growing incomes around the world – not least in developing economies. Diageo also says its goal is to create a positive role for alcohol in society through programmes that reduce harmful drinking.
Who are the key people at Diageo?
Ivan Menezes has been Chief Executive since July 2013. He’s also a member of the Council of the Scottish Whisky Association, and Chair of the CEO Group of the International Alliance for Responsible Drinking. Other key executives at Diageo include Group Strategy Director Victoria Frame; and David Cutter, President, Global Supply and Procurement. Javier Ferrán has been Chairman of Diageo since January 2017.
What is the modern history of Diageo?
Diageo was established in 1997 through the merger of Grand Metropolitan and Guinness. In 2000 it consolidated its operations, selling food assets such as Burger King in order to focus on premium alcoholic beverages. Years of acquisitions followed. In 2001 Diageo acquired some of the Seagram wine and spirits business, and 10 years later the £1.3 billion purchase of Turkey’s leading spirits producer Mey Içki massively boosted its presence in the country. In 2012 Diageo announced a £1 billion investment in Scottish whisky production, and in 2014 it acquired Peligroso Tequila.
What are the latest developments at Diageo?
Diageo reported stronger than forecast first-half results in January 2018, with a 6 per cent rise in pre-tax profits to £2.2 billion in the six months to December 31, 2017. The company saw a 4.2 per cent year-on-year rise in organic net sales – this was above analysts’ expectations. The group warned that sterling’s strengthening against the US dollar would hit full-year operating profits, but said it would gain from the Trump administration’s tax cutting programme.
Diageo’s gin and tequila brands enjoyed strong growth in the second half of 2017. Premium tequila Don Julio, acquired by Diageo in 2014, saw growth of 39 per cent, driven by sales in North America. And in Europe, Gordon’s and Tanqueray gin both posted double-digit growth figures as the gin boom among millennial drinkers showed no signs of abating.
To see how the Diageo share price currently stands, check out Capital.com.
Where does Diageo operate?
Diageo has a truly global presence – it employs over 30,000 people and produces its brands from more than 140 sites around the world. North America and Europe currently account for over half of its net sales, but Asia Pacific is a growing market as incomes rise and tastes change. Diageo’s head office is located in London.
Where is Diageo traded?
Diageo shares are traded on the London Stock Exchange (LSE) and on the New York Stock Exchange (NYSE). The company is a member of the FTSE 100 market index. Check out Capital.com for the latest DGE chart.