The chief executive of embattled booze giant Diageo will step down after two years marred by profit warnings, supply woes and a sharp fall in market value.
Diageo, which owns Guinness as well as Johnnie Walker whisky and Gordon’s gin, on Wednesday revealed finance chief Nik Jhangiani will take the reins on an interim basis after Debra Crew stepped down with immediate effect.
The Wednesday afternoon update followed shortly after a report in the Financial Times claimed Diageo was on the hunt for Crew’s successor.
Diageo told investors Crew had stepped down ‘by mutual consent’ and it has already started a ‘comprehensive formal search process’ that will consider both internal and external candidates.
Chair John Manzoni said: ‘The board’s focus is on securing the best candidate to lead Diageo and take the company forward.’
Crew became chief executive in June 2023, having served as a non-executive director, president of Diageo North America and group chief operating officer.
Diageo CEO Debra Crew exits ‘by mutual consent’ after two years
Diageo shares, which have lost more than 40 per cent since the beginning of June 2023, added 2.8 per cent on Wednesday afternoon.
The group, like many firms in the sector, has seen weaker sales as cash-strapped and health-conscious drinkers have turned away from premium booze in recent years.
It is also shouldering the impact of hundreds of millions of dollars worth of US trade tariffs, while supply issues last year saw UK pubs run short of Guinness.
In response, Diageo launched the first phase of its Accelerate programme, which it expects to deliver about $3billion in free cash flow each year from 2026, supported by $500million in cost savings over three years.
Manzoni said: ‘On behalf of Diageo and the board, I would like to thank Debra for her contributions to Diageo, including steering the company through the challenging aftermath of the global pandemic and the ensuing geopolitical and macroeconomic volatility.
‘We strongly believe Diageo is well placed to deliver long-term, sustainable value creation.’
Verushka Shetty, equity analyst at Morningstar, said the positive market reaction to the news is unsurprising.
She added: ‘Crew assumed the role in a declining environment, and conditions have worsened since.
‘Key bumps in the road for Diageo include mismanaged inventory in Latin America, missed targets, and tariff headwinds.
‘Diageo’s entire portfolio is the strongest in the industry, based on aggregate brand power. We think Diageo’s current focus on cash generation and portfolio streamlining will put the firm in a better position to secure growth opportunities as the environment improves.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .