Diageo sales rise fuelled by emerging markets
Sales at Diageo, the world’s biggest distilled drinks group, were up six per cent 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 Smirnoff vodka and Captain Morgan rum said that despite weakness in Europe its fiscal third-quarter performance was in line with its expectations, and this put it on track to hit its medium-term target which is also for 6 percent sales growth.
The British group gained as markets in Latin America, Africa and Asia showed strong demand for its range of drinks, a US recovery gathered steam while in Europe, 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 the first half and our expectations,” said Chief Executive Paul Walsh in a trading update.
The 6 percent rise in its January-March third quarter underlying sales beat a forecast for 5 percent 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 end-March rise 7 percent, similar to the increase in its July-December first half, with some three per cent coming from price rises.
The nine-month sales picture was led by Latin America and Caribbean with a 18 percent rise, Africa was up 12 percent, Asia Pacific 10 per cent ahead and North America 5 percent higher while Europe saw a fall of one percent.
Last week Pernod Ricard, Diageo’s biggest rival, reported a 3 percent 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 at the expense of early 2012.