Monday 23 October 2017

Emerging markets help Diageo offset sales slump in Europe

SALES at Diageo, the world's biggest distilled drinks group, were up 6pc in the first three months of 2012 with fast- growing emerging markets and a recovery in North America offsetting falling sales in Europe.

The London-based maker of Guinness and Captain Morgan rum said yesterday that, despite weakness in Europe, its fiscal third-quarter performance was in line with expectations and put it on track to hit its medium-term target.

The group gained as markets in Latin America, Africa and Asia showed strong demand for its range of drinks, and economic recovery in the US gathered steam; however, Spain and Greece were in decline and the UK market disappointed.

Strong

"Trading in the third quarter remained strong with the year-to-date performance in line with our expectations," said chief executive Paul Walsh.

The 6pc rise in its January-March third quarter underlying sales beat a forecast for 5pc growth from a Reuters survey of six brokers. The rise was split equally between price rise and volume increases.

This saw the group's nine-month sales to the end of March rise 7pc, similar to the increase in its July-December first half, with some 3pc coming from price rises.

The nine-month sales picture was led by Latin America and the Caribbean with an 18pc rise; Africa was up 12pc; Asia Pacific 10pc; and North America 5pc; however, Europe fell by 1pc.

Last week, Pernod Ricard, Diageo's biggest rival, reported a 3pc rise in its third-quarter sales, with growth in the period limited by the early Chinese New Year and by French consumers stocking up ahead of a tax rise which boosted sales in the closing months of 2011. Its nine-month sales rose 9pc

Diageo's shares have risen around 30pc over the last 12 months, outperforming Pernod by some 20pc. The company's shares closed at 1,590 pence. (Reuters)

Irish Independent

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