For Diageo, best known for its high-value alcoholic spirits, Sir Dave Lewis, formerly of Tesco fame, is taking the chief executive role. His appointment is to begin 1 January. This surprise maneuver comes on the heels of a 78% plunge in the firm’s operating profits and a nearly 10% decline in sales. The drop is particularly significant in our major markets, including in the United States and China. Sir Dave Lewis to take over as new chief executive. He succeeds Nik Jhangiani, who has served as interim CEO since Debra Crew resigned in July after two years under the title.
Under the leadership of now-CEO Debra Crew, Diageo saw one of the worst declines in financial performance. The firm’s underlying profits tumbled to £3.2 billion for the year to the end of June. This represents a shocking 28% drop from last year. This economic downturn was the reason why the board conducted a highly experienced leader to guide the district through uncharted waters.
Sir Dave Lewis brings a wealth of experience to Diageo, having served as the chief executive of Tesco for six years until 2020. Prior to joining Tesco, he spent nearly three decades at Unilever. There, he gained the moniker “Drastic Dave” due to the willingness to take drastic action rather than simply tweaking existing programs. The board appreciates the confidence that the Lewis community has in Lewis’s proven leadership skills. They call him “the right leader for Diageo at this moment.”
Sir Dave Lewis’s appointment had already done wonders to Diageo SHNR.L stock performance. Shares jumped 7%, at one point, in early trading immediately following the announcement. Dan Coatsworth, head of markets at AJ Bell, emphasized the urgency of Lewis’s task, stating, “Dave Lewis needs to put Diageo back on track quickly.” He emphasized that Lewis is famous for his executive action and decisive style. While he listens intently to customers and suppliers alike, for the moment at least, Lewis is focused on addressing the company’s short-term problems before pursuing long-term opportunity.
“His style is to listen closely to customers and suppliers and work out what’s gone wrong. The focus will be on repair work, not long-term growth.” – Dan Coatsworth, head of markets at AJ Bell.
Lewis acknowledged the difficulties facing the market, stating, “The market faces some headwinds but there are significant opportunities.” He can’t wait to get out of the trenches with the Diageo squad. Through it all, they will face challenges and find opportunities that increase shareholder value.
“I look forward to working with the team to face these challenges and realise some of the opportunities in a way which creates shareholder value.” – Sir Dave Lewis.
As Diageo seeks to stabilize its operations and regain its footing in a competitive marketplace, industry observers will be closely monitoring Sir Dave Lewis’s actions and strategies in the coming months. The beverage corporation behind a diverse portfolio of iconic brands such as Johnnie Walker whisky, Smirnoff vodka, and Captain Morgan rum.