Diageo is one of the leading global alcoholic beverage companies. The company is the global leader in super-premium and above international spirits with a retail sales value of over £6.1bn. The company's super-premium-plus portfolio grew by 31% in 2022 (year-end on 30 June). Diageo operates a portfolio of over 200 brands in different product categories and sells products in more than 180 countries. The company operates 132 sites globally. The brand portfolio includes Johnnie Walker, the world's number one Scotch whiskey brand with a sales volume of over 21mn 9L cases in 2021/22. In 2020, the company announced the target to increase its value share of the total beverage alcohol (TBA) market from 4% to 6% by 2030 (4.6% TBA share was in 2022). Diageo announced its return on capital (ROC) program of up to £4.5bn, under which Diageo repurchased shares with an aggregate value of £3.65bn by 30... Diageo is one of the leading global alcoholic beverage companies. The company is the global leader in super-premium and above international spirits with a retail sales value of over £6.1bn. The company's super-premium-plus portfolio grew by 31% in 2022 (year-end on 30 June). Diageo operates a portfolio of over 200 brands in different product categories and sells products in more than 180 countries. The company operates 132 sites globally. The brand portfolio includes Johnnie Walker, the world's number one Scotch whiskey brand with a sales volume of over 21mn 9L cases in 2021/22. In 2020, the company announced the target to increase its value share of the total beverage alcohol (TBA) market from 4% to 6% by 2030 (4.6% TBA share was in 2022). Diageo announced its return on capital (ROC) program of up to £4.5bn, under which Diageo repurchased shares with an aggregate value of £3.65bn by 30 June 2022. The company reported 21.4% revenue growth in 2022 with premium-plus brands contributing 57% of reported net sales. Volume growth reached 10.3% YoY in 2022.
Diageo PLC is a global alcoholic beverage company. The Company operates in various categories, including spirits and beer. The Company’s geographic segments include North America, Europe, Asia Pacific, Africa, America and the Caribbean, Supply Chain and Procurement (SC&P). The Company’s principal products include Scotch whisky, Gin, Vodka, Rum, Beer, Irish Cream Liqueur, Wine, Raki, Tequila, Canadian Whisky, American Whiskey, Progressive Adult Beverages, Cachaca, Brandy, and Ready to Drink. Its brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Ciroc, and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness. It also produces a... Diageo PLC is a global alcoholic beverage company. The Company operates in various categories, including spirits and beer. The Company’s geographic segments include North America, Europe, Asia Pacific, Africa, America and the Caribbean, Supply Chain and Procurement (SC&P). The Company’s principal products include Scotch whisky, Gin, Vodka, Rum, Beer, Irish Cream Liqueur, Wine, Raki, Tequila, Canadian Whisky, American Whiskey, Progressive Adult Beverages, Cachaca, Brandy, and Ready to Drink. Its brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Ciroc, and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness. It also produces a range of ready-to-drink products mainly in the United Kingdom, Italy, South Africa, Australia, the United States, and Canada. The Company has approximately 200 brands and sells in more than 180 countries.
The total beverage alcohol (TBA) market is a resilient market with attractive long-term trends. The retail sales value of the total global alcohol market is £865bn in 2021 (IWSR, 2021), which is 5 billion total equivalent units of alcohol sold. The total beverage alcohol market is driven by global middle-class growth. An additional 600mn consumers are expected to come of age by 2032 (World Bank, 2022). Hundreds of millions of new consumers will be able to access premium brands in the coming years choosing "drink better, not more". Spirits penetration remain low - there are only 50% of household purchase spirits every year in the US. However, consumer preferences changed during the pandemic with premium brands getting a higher market share. Premiumisation is a long-term trend, with the highest rice brands growing at more than double the international spirits category growth rate between 2016 and 2021.
- Diageo benefits from a strong market position and a good brand portfolio
- Diageo is present in a super-premium segment with one of the highest growth rates in the TBA market
- The company targets an increase of market share in TBA by 2030 by 50% from 4% to 6% vs 2020
- The company responds to environmental changes by implementing sustainability practices. It also develops sustainable sourcing from emerging countries, including Africa, South America, and India
- Diageo follows a policy of return to shareholders, both via dividend payouts and buyback programs.
- Increased inflation, including soaring prices of soft commodities represents a risk for the company's margin
- Weak macro in target markets may result in slow demand growth in premium and super-premium segments
- The pandemic represents a serious interruption for the company's business, for example in China
- Supply chain disruptions due to global macro risks and consumer preferences change may result in a risk for production volumes
- The company is exposed to regulatory changes in countries it produces and sells products
- Regulatory changes, trade barriers, direct and indirect taxes
- Global macro and geopolitical risks, including inflation and commodity markets volatility
- Pandemic and business interruptions
- Climate change and sustainability affect production and sourcing practices, as well as investment decisions
- Supply chain risks
- Changing consumer preferences
- Competition from existing and new brands
| Company | RIC | Market Capitalization, $mn | Last reporting year | P/E Fwd 1Y | P/E Fwd 2Y | EV/EBITDA 1Y fwd | EV/EBITDA 2Y fwd | EV/Revenues 1y fwd | EV/Revenues 2y fwd |
|---|---|---|---|---|---|---|---|---|---|
| Diageo PLC | DGE.L | 96,934 | 2022-06-30 | 20.6 | 19.5 | 15.7 | 15.1 | 5.4 | 5.3 |
| Anheuser-Busch Inbev SA | ABI.BR | 98,886 | 2022-12-31 | 18.2 | 15.5 | 8.6 | 8.0 | 2.9 | 2.7 |
| Pernod Ricard SA | PERP.PA | 56,955 | 2022-06-30 | 21.3 | 20.1 | 15.8 | 15.0 | 5.1 | 4.9 |
| Heineken NV | HEIN.AS | 60,396 | 2022-12-31 | 18.5 | 15.8 | 10.7 | 9.5 | 2.3 | 2.1 |
| Remy Cointreau SA | RCOP.PA | 8,129 | 2023-03-31 | 27.0 | 23.8 | 17.0 | 15.4 | 5.3 | 4.9 |
| Carlsberg A/S | CARLb.CO | 23,191 | 2022-12-31 | 19.8 | 17.6 | 11.9 | 10.9 | 2.4 | 2.3 |
| 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 15,695 | 16,064 | 16,332 | 14,571 | 17,606 | 26,569 | 21,627 | 22,174 | 23,699 |
| Growth | 2% | 2% | -11% | 21% | 51% | -19% | 3% | 7% | |
| EBITDA | 5,151 | 5,518 | 5,693 | 5,201 | 5,936 | 7,164 | 7,401 | 7,705 | 8,392 |
| EBITDA margin | 32.8% | 34.4% | 34.9% | 35.7% | 33.7% | 27.0% | 34.2% | 34.7% | 35.4% |
| Net income | 3,467 | 3,991 | 4,011 | 1,747 | 3,678 | 3,888 | 4,721 | 4,919 | 5,342 |
| Net margin | 22.1% | 24.8% | 24.6% | 12.0% | 20.9% | 14.6% | 21.8% | 22.2% | 22.5% |
| Net debt | 10,433 | 12,095 | 14,758 | 17,184 | 17,000 | 17,135 | 17,135 | 17,135 | 17,135 |
| MktCap | 100,530 | 91,884 | 127,553 | 7,937,728 | 7,937,728 | 7,937,728 | 7,937,728 |
Historical Multiples
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|
| EV/Revenue | 7.1 | 7.5 | 8.2 | 299.4 | 367.8 | 358.7 | 335.7 |
| EV/EBITDA | 20.3 | 21.0 | 24.4 | 1110.4 | 1074.9 | 1032.4 | 947.9 |
| P/E | 25.1 | 52.6 | 34.7 | 2041.6 | 1681.2 | 1613.7 | 1486.0 |
