Guinness Owner Paves Way For Humer Successor

Diageo (LSE: DGE.L - news) , the owner of Guinness, Johnnie Walker and Smirnoff, is laying the foundations for the appointment of a successor to its veteran chairman.

Sky News has learnt that Diageo has appointed JCA Group, a leading boardroom headhunter, to identify a non-executive director capable of replacing Franz Humer in a couple of years.

Dr Humer, a respected European businessman who previously ran Roche, the healthcare giant, has chaired Diageo since 2008.

People close to the FTSE-100 drinks group characterised JCA's appointment as being part of "careful long-term boardroom succession planning", pointing to Dr Humer's presence on its board since 2005.

A number of existing non-executives are also likely to be considered during the search for Dr Humer's successor.

The hunt has kicked off during a period of significant change for Diageo, which recently sold the bulk of its wine operations to Australia's Treasury Wine Estates.

That deal unwound a chunk of the deal struck by Ivan Menezes' predecessor, Paul Walsh, in 2000 when Diageo bought parts of Seagram in a £5.5bn joint bid with France's Pernod Ricard (Paris: FR0000120693 - news) .

Diageo also unveiled during the autumn a three-part asset swap with Heineken (Other OTC: HEINY - news) which strengthens the UK company's presence in Africa and sees it hand over control of the Red Stripe brand.

Its brand portfolio also includes multinational brands such as Captain Morgan rum and Baileys.

There had been signs that Mr Menezes, Diageo's chief executive, had started to come under pressure from some investors amid lacklustre sales performance.

Sales in emerging markets such as Venezuela and China have experienced sharp slowdowns, with an intensifying row about the stewardship of its majority-owned Indian operations also proving a management distraction.

However, a recent trading update offered the Diageo chief some respite, with Mr Menezes saying that the financial year had started well and that sales growth would be better this year than in 2014.

"Momentum has improved and the changes we have made are now driving stronger volume growth with depletions ahead of shipments as we benefit from our focus on embedding our sell-out culture," he said this month.

"Trading in the first four months is in line with our expectations and therefore we continue to believe that we can deliver improved top line growth, driven by stronger volume growth, and modest margin improvement for the full year.

"In the first half, as we outlined in our results presentation in July, we expect net sales in North America to be down 2% as the result of our move to a replenishment system for innovation launches.

"This will impact Diageo's top line growth and margin in the first half with stronger performance in the second half."

In addition to its wine division, Diageo recently announced the sale of Gleneagles, the hotel and golf resort which staged last year's Ryder Cup.

Diageo declined to comment.