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.
"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)