Latest news with #Pampero
Yahoo
19-05-2025
- Business
- Yahoo
Diageo eyeing 'substantial' asset sales
Diageo could make 'substantial changes' to its product portfolio in the form of asset disposals, CFO Nik Jhangiani said today (19 May). Speaking to analysts, Jhangiani said Diageo had identified opportunities to offload assets that were different in scope to the deals the Johnnie Walker maker had conducted in recent years. 'Clearly we see through our reviews that we've been doing internally and with the board some opportunities for what I would call substantial changes versus portfolio trimming,' Jhangiani said. 'I can't say any more than that but clearly it's going to be above and beyond the usual smaller brand disposals that you've seen over the last three years.' Diageo has offloaded assets including rum brands Cacique and Pampero and Safari liqueur. The group has also sold assets in Africa, although in October it reportedly called off the sale of its Pimm's gin-based liqueur after failing to secure an agreement with potential buyers. Jhangiani was speaking after Diageo announced plans to save around $500m in costs over the next three years. The Tanqueray maker said the move would help the company invest in 'future growth' and improve its 'operating leverage'. Diageo said the cuts were part of a broader initiative – dubbed 'Accelerate' – that will see 'a shift in how we do business', including developing a 'more agile global operating model'. Under the plans, the UK-listed group also said it expects to generate around £3bn free cash flow a year from its 2025/26 fiscal year. Asked where the $500m in savings would come from, Jhangiani pointed to Diageo's 'trade investment', its spending on A&P, overheads and the company's supply chain. 'The … piece … around overheads. We've highlighted in the release how we want to think about our operating framework and model choices to really leverage our scale but continue to build a much more agile and resilient [company] but then drive efficiency and effectiveness how we do things,' he explained. Jhangiani said Diageo plans to provide more detail on the Accelerate programme in August, when the company is scheduled to report its full-year financial results. He added: 'Our supply teams continue to do a great job as we look at offsetting inflationary pressures but there's also broader efficiency plays that we'll be looking at within supply and part of that goes back to some of the work that the team has done with the supply agility programme, so those will start coming through as well.' Just Drinks has approached Diageo to ask what impact the savings plan could have on jobs. At the end of Diageo's 2021/22 financial year, the company announced a 'supply chain agility programme' to cover the subsequent five years, efforts designed to boost productivity and, then CEO Ivan Menezes said, 'strengthen our supply chain, improve its resilience and agility'. Asked on today's call if that programme was ongoing or would be part of the new Accelerate efforts, CEO Debra Crew said: 'We've had some different productivity numbers flying around and supply agility as well and what was included in what. As Nik came in – and he talked about it at the first half results – we stepped back, have re-cut and taken a look across all of these programmes because some of these productivity things that were laid out were under very different macro conditions, different growth expectations, different capex expectations, etc. 'As part of that $500m, the supply agility, the programmes that are ongoing will be included in that. We're trying to give better transparency to sort of one number that's all inclusive of all of these efforts.' The announcement came alongside a trading update for the third quarter of Diageo's current financial year, three months that ran to the end of March. Net sales increased 2.9% to £4.38bn and were up 5.9% on an organic basis. The company said the 'phasing' of its sales boosted its organic net sales by around four percentage points. Diageo said its volumes rose 2.8% organically. In North America, Diageo's reported net sales rose 5.9% during the quarter. On an organic basis, the company's spirits sales in the region were up 7%, with depletions growing by around 5%. Diageo said distributors had pulled forward imports in anticipation of changes to tariffs. In Europe, despite 'strong momentum' from Guinness, the group's net sales dipped 1.3%, with organic sales 0.4% lower. Crew said: 'The Guinness performance, putting that aside, it has been impacted by consumer pressure and just uncertainty surrounding all the geopolitical conflict and we are seeing that impact in having some downtrading on spirits. 'Price-mix, we are seeing a downward pressure. It's hard to see, because Guinness gives us such great price-mix. You see overall Europe showing very positive price-mix but we definitely are seeing downtrading on the spirit side. We do have a very standard-priced portfolio within Europe, so we're having to navigate through that but, no doubt, that is one of the pieces of uncertainty that we're really feeling in the market as well.' Shares in Diageo were down 0.93% at 2,132p at 12:45 BST. "Diageo eyeing 'substantial' asset sales" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-04-2025
- Business
- Yahoo
Diageo Reaches Ciroc Deal With LeBron James-Backed Tequila
(Bloomberg) -- Diageo Plc is forming a joint venture between its Ciroc vodka brand and a tequila backed by basketball star LeBron James. Housing Agency Aims to Relocate Its DC Headquarters Boston Mayor Wu Embraces Trump Resistance as Campaign Heats Up This Skinny Mexico City Tower Is Just 14 Feet Wide on One Side The Irish Hot Press Is the Low-Tech Laundry Trick the World Needs What Would 'Transportation Abundance' Look Like? Ciroc will join with tequila brand Lobos 1707 in the venture, offering a solution for Diageo, which had been seeking to offload the vodka label following a decline in sales and a legal bust-up with its former marketing partner, the music mogul Sean 'Diddy' Combs. Bloomberg News reported in December that Diageo had reached out to potential suitors, including beverage companies and buyout firms, to gauge their interest in Ciroc. Diageo has instead formed a venture with Main Street Advisors Inc., an investment and advisory firm led by Paul Wachter, who helps manage the fortunes of celebrities such as Arnold Schwarzenegger and Los Angeles Lakers star James. Lobos, founded in 2020, is a premium tequila brand established by actor Diego Osorio. As part of the deal, Diageo is exchanging its majority ownership of Ciroc in North America for a majority stake in Lobos 1707 globally. The UK beverage group, which also owns brands including Guinness and Johnnie Walker, will retain the rights to Ciroc outside the US. Diageo needed to do something 'different and fresh and innovative' to restore the Ciroc brand, which led to the tie-up with Main Street Advisors, according to Ed Pilkington, chief marketing and innovation officer for Diageo North America. Financial terms weren't disclosed, but Diageo won't retain a majority stake in the venture. James will remain an investor in Lobos and become an investor in Ciroc through the tie-up. Diageo agreed to a settlement with Combs in January 2024 following a lawsuit in which he accused the spirits company of racism in its alleged neglect of Ciroc and another brand, DeLeon Tequila. He withdrew his allegations and business relations were ended. The UK group, along with rival distillers Pernod Ricard SA and Remy Cointreau SA, has been struggling to drive growth due to slumping demand in China and high post-pandemic inventories in the US. Diageo's stock has dropped about 30% in the past year, wiping some £18 billion ($23 billion) from its market value. The company has been divesting assets as it manages its stable of brands, agreeing last July to sell Pampero rum and Safari flavored liqueur. While Ciroc sales have slumped of late, the vodka has a strong presence in nightclubs and there are hopes that Main Street, along with a new team, will be able to revitalize the brand. Nick Tran, the former global head of marketing at TikTok, has been appointed president and chief marketing officer of the venture and charged with making both brands resonate with a wider group of consumers. --With assistance from Thomas Hall. (Updates with Diageo share performance in ninth paragraph) AI Coding Assistant Cursor Draws a Million Users Without Even Trying How One MBA Grad Blew the Whistle on a $2 Billion Deal With Shake Shack in First Class, Airline Food Is No Longer a Joke India's Destination Weddings Fuel a New Tourist Economy China Tells Kids to Study Manufacturing to Fill Factory Jobs ©2025 Bloomberg L.P.
