Diageo sales up 5pc driven by strong US growth
Published 31/01/2013 | 08:35
DIAGEO, the world's biggest spirits group, reported steady sales growth in the second half of 2012, driven by price rises and the growth in the United States of premium brands like Ketel One vodka and Bulleit Bourbon.
The maker of Johnnie Walker whisky and Guinness beer saw sales grow 5 percent like-for-like to €7.03 billion in the half year to December, while pre-exceptional earnings per share rose 9 percent to 60.9 pence.
Analysts had expected sales to rise 5.1 percent, according to Thomson Reuters data.
Underlying sales in North America, which accounts for around a third of group sales, grew by 5 percent, supported by price increases and double-digit growth of premium brands.
European sales, which make up about 28 percent of Diageo's total, fell by 2 percent as fast-growing Turkey, Russia and eastern Europe helped compensate for a fall of 19 percent in crisis-hit southern Europe.
Faced with sluggish growth in recession-hit European economies, Diageo has been on a buying spree as it looks to tap burgeoning middle classes in Africa, Asia and Latin America, where it aims to make around half of its turnover by 2015.
Diageo saw underlying sales in Asia, which now accounts for abut 14 percent of sales, rise 6 percent, weighed down by a contraction of the whisky market in South Korea that Diageo already flagged when it reported July-September results.
Pernod Ricard, the world's second-largest spirits group and the firm behind Absolut vodka and Mumm champagne, said last month it faced slowing growth in Asia, including the key China market. It reports results on Feb. 14.