Spirits maker Diageo forecasts $150 million hit from tariffs
Johnnie Walker bottles on a shelf in a supermarket in Sarajevo, Bosnia and Herzegovina, Oct. 29, 2024.
Dado Ruvic | Reuters
Spirits maker Diageo said Monday that it expects to take a $150 million hit annually from U.S. President Donald Trump’s U.S. tariffs while simultaneously launching a $500 million cost savings program.
The owner of Johnnie Walker and Casamigos said the estimated impact is based on the assumption that U.S. tariffs on U.K. and EU imports remain at 10%, and that those from Mexico and Canada remain exempt under the United States-Mexico-Canada Agreement. It added that it saw no material impact from tariffs on China.
Diageo said it expects to be able to mitigate around half of those costs under its existing processes “before any pricing” measures.
The company also announced a $500 million cost savings program over three years which it said would enable “reinvestment in future growth and improved operating leverage.”
That comes as the company reported a 5.9% rise in third-quarter organic net sales and reiterated its full-year guidance.
— Karen Gilchrist
Ryanair CEO touts airline’s ‘strong position’ in Europe as profit slumps 16%
Passengers wait to board an aircraft of low cost Irish airline Ryanair at the Berlin-Brandenburg airport in Schoenefeld near Berlin, Germany, on March 13, 2024.
John Macdougall | Afp | Getty Images
Budget airline Ryanair reported full-year profit after tax of 1.61 billion euros ($1.8 billion) on Monday, down 16% year-on-year but slightly above analyst expectations of 1.6 billion euros, according to FactSet.
Total revenue for the year rose 4% to 13.95 billion euros, above the 13.89 billion euros anticipated by analysts.
Ryanair said its average fare had dropped by 7% throughout the course of 2024, which drove traffic up by 9% year-on-year to a record 200 million passengers.
Speaking to CNBC’s “Europe Early Edition” on Monday, Ryanair CEO Michael O’Leary described the airline’s fiscal year as “very difficult,” citing an online travel agent boycott in the spring of last year, as well as delivery delays of Boeing aircraft.
He argued the airline had “come through that very well.”
“We’ve reported about 1.61 billion [euros] net profit in a year when average fares fell by 7%,” he said, noting that the company’s operating costs had remained flat. “The gap between us and every other airline in Europe is widening in terms of costs. That puts us in a very strong position.”
— Chloe Taylor
What to keep an eye out for today
European markets on Monday are likely to be focused on a number of geopolitical events that affect the region.
First, there’s the much-anticipated U.K.-EU summit taking place in London on Monday. It’s expected that British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen will announce a new defense and security pact as well as further deals on cutting red tape, youth mobility and easing trade restrictions. Critics say the British government risks reversing Brexit.
Later, U.S. President Donald Trump will be holding a call with Russia’s President Vladimir Putin. Both leaders decided to skip peace talks that were set to be held in Turkey last week. Both Russia and Ukraine blame each other for the failure to reach a ceasefire deal.
— Holly Ellyatt
European markets: Here are the opening calls
Here are the opening calls ahead of the new trading week:
European bourses are expected to open in mixed territory on Monday, with London’s FTSE expected to open 5 points lower, Germany’s DAX up 18 points at 23,766, the French CAC 40 up 25 points at 7,872 and Italy’s FTSE MIB up 91 points at 40,133, according to data from IG.
— Holly Ellyatt
