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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
Diageo (DGE LN) 1H24 (6M to Dec-23) results out and have missed consensus while credit has been trading tighter.
- Net sales were EUR10.96bn (1% y/y organic and below consensus of 11.24bn) and adj. operating profit was EUR3.51bn (-7% y/y, consensus: 4.11bn). So a miss at both levels driven by both FX and poor trading in LAC (LatAm & Caribbean). Scotch was the weakest category, not a good comp for Pernod Ricard (RI FP), the global #2.
- The outlook statement is very limited indicating only an expectation to grow organic net sales and operating profit (so likely an earnings downgrade here). FCF was good thanks to “working capital mgmt” though capex guidance (USD1-3-1.5bn p.a.) is unchanged and looks set to remain above long-run % of sales averages until 2027.
- Diageo’s cash curve has been fairly rangebound YTD. The most liquid ’25 bond (DGELN 1 04/22/25) has tightened into results though and through both Heineken and Pernod Ricard’s comparables (see graphic).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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