Recently appointed chief executive Dave Lewis, known in some quarters as ‘Drastic Dave’ for his occasionally cut-throat business decisions, has revealed plans that would see production of Diageo’s flagship Guinness brand almost double.
The announcement came as the drinks manufacturer reported mixed full-year results, posting a 3% drop in net sales to US$19.64 billion, but a “better-than-expected” 2% rise in organic operating profit to US$5.68 billion.
On a more positive note, the London-based firm saw its shares rise by 8.7% yesterday following Lewis’ reaffirmation of his turnaround plan, which includes cuts to a “significant” portion of the company’s 30,000-strong workforce.
Lewis has so far declined to provide a more precise figure for the planned job losses, which are expected to form a central part of his strategic overhaul.
The former Tesco chief executive was brought into Diageo in November last year to help reverse the company’s declining commercial fortunes, and some analysts had initially speculated that he might offload Guinness, arguably the crown jewel in the group’s portfolio.
However, this week the iconic Irish stout received a clear vote of confidence from Lewis, with plans pointing towards increased investment in the brand rather than a potential sale.
Much of the savings required to put Diageo back on track are instead expected to come from reductions across its global workforce.
