Diageo optimistic of hitting growth target in 2017 fiscal year

Drinks maker Diageo said on Wednesday it had good momentum going into 2017 fiscal year.

Ivan Menezes, the company’s CEO said “As expected, the momentum we created last year, strengthening our business through improved marketing, innovation, and commercial execution, has set us up to deliver a stronger performance. Key drivers of improved top-line growth are our fiscal 2017 priorities: Scotch, U.S. spirits and India,” Mr. Menezes said ahead of the company’s annual general meeting on Wednesday.

“We have made a strong start to our productivity work and are moving at pace. As we no longer take productivity-related costs as an exceptional item, in the second half these costs will impact our organic operating profit margin,” Mr. Menezes said.

The company expects productivity-related costs to decline in the second-half of the year, which it believes will result in higher savings and profit from its targeted reinvestment of those gains.

This will contribute to organic margin expansion for the full year, Mr. Menezes said.

“Our top line momentum and progress in implementing productivity changes, gives us continued confidence in achieving our objective of mid-single digit top line growth, and over three years ending fiscal 19 delivering 100bps of organic operating margin improvement.”

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