Diageo, the world's largest spirits company, has seen its share price more than halve in recent months. On Thursday, the new CEO will detail his plans for the first time after an intensive review of the company's operations worldwide:
On January 4, 2022, Diageo's shares hit an all-time high, making it the FTSE 100's third most valuable company, with a market value of nearly £90 billion (approximately $121 billion). However, the company, whose brands include Johnnie Walker, Smirnoff, Tanqueray, Captain Morgan, Don Julio, and Guinness, has seen its share price decline significantly:
The company enjoyed astonishing sales growth during the Covid-19 lockdowns, but this slowed as inflation impacted disposable incomes. In November, Diageo issued a profit warning, admitting that Scotch whisky sales in Latin America and the Caribbean had slumped:
New CEO Dave Lewis, who previously led Unilever, is expected to implement cost cuts and potential asset sales. He has already sold the Royal Challengers Bengaluru cricket team for £1.4 billion, and there is speculation that Diageo may sell its 63% stake in Sichuan Swellfun:
Lewis believes that the company can restore sales growth and has pledged to undertake "very selective price repositioning" that will be done "surgically":
Diageo accounts for £1 in every £10 worth of U.K. food and drink exports, making it a vital cog in the economy.
