Diageo has reported sales growth for its first quarter, ending 30 September 2012. The global drinks giant saw a 5 per cent increase in organic net sales, and a 6 per cent rise on a reported basis, with total volumes up 2 per cent. However, net sales growth for the same period last year was 9 per cent on an organic basis.
Europe was the only division to see a drop in sales. The 1 per cent decrease reflects the economic difficulties in Southern Europe and Ireland, as well as the impact of duty increases at the beginning of the year in France. Turkey, Russia and Eastern Europe delivered double digit net sales growth for the group. Speaking about Western Europe, Diageo CEO, Paul Walsh said, "While the consumer environment in Western Europe remained challenging we delivered over 30 per cent net sales growth in the faster growing markets of Europe, especially in Turkey where we have driven share gains from the successful integration of Mey ?çki."
Organic net sales growth in the US was 6 per cent, underpinned by the continuing strong performance of spirits.
Diageo also saw double digit net sales growth in Africa at 11 per cent, with "strong growth" in spirits in South Africa and in beer in East Africa which offset "weakness" in Nigeria.
The best performer was the Latin America and Caribbean region with net sales growth of 16 per cent despite a "tough comparison" in the prior year.
Asia Pacific delivered growth of 2 per cent. The group noted the impact of "continued weakness" in South Korea which Walsh said was "challenging". The region's emerging market, South East Asia and China, performed well with scotch a particular strength, but this was offset by "the postponement into the second quarter of sales to Global Travel customers" and weak vodka sales in India.
Walsh described the performance as "solid", saying, "The strength of our brands and our routes to market, coupled with the investments we have made in faster growing markets continue to drive the performance of our business." He continued, "As a global business we continue to be aware of the uneven nature of the global economy. However we remain confident that we will deliver our medium term goals, given the strength of our brands and our routes to market." (17 Oct)
© 2012 - ESM: European Supermarket Magazine
