Diageo has announced its preliminary full year results for the year ending 30 June, reporting 6 per cent growth in net sales and an increase of 9 per cent in operating profit. Spirits sales and growth in emerging markets boosted the drinks giant's performance.
Paul Walsh, group CEO, said, "We have increased our presence in the faster growing markets of the world, through both acquisitions and strong organic growth. We have enhanced our leading brand positions globally, through effective marketing and industry leading innovation and we have strengthened our routes to market."
Emerging markets, making up about 40 per cent of the group's trading, saw growth of 15 per cent in net sales and 23 per cent in operating profit.
In Europe, operating profits were up 3 per cent although net sales declined by 1 per cent. Morgan said, "The economy remains very uneven in Europe. We continue to deliver substantial sales and profit growth in Europe’s emerging countries."
Spirits led the way in Western Europe with a 6 per cent growth in net sales and a hike of sales of almost 60 per cent in Captain Morgan sales. With the beer market in decline sales of Guinness declined by 3 per cent, with a 5 per cent drop in the group's net sales in Ireland and France remained flat.
Andrew Morgan, president of Diageo's European operations, described Southern Europe as "challenging", as volumes declined 6 per cent with a slump of 9 per cent in net sales.
The group saw growth in Russia (particularly scotch), Eastern Europe and reported a strong performance in Northern Europe. Turkey is a growing market for the company with the acquisition of Mey ?çki in Turkey adding £320 million of net sales and £82 million of operating profit after transaction and integration costs.
During the year the company ramped up its marketing investment by 8 per cent, taking up to 15.8 per cent of net sales, with an emphasis on strategic brands and the fastest growing markets.
Walsh added, "A year ago I set out our expectations for the medium term and these results put us firmly on track to meet those goals." (23 Aug)
© 2012 - ESM: European Supermarket
