Diageo profits and sales grow in 2013

31st July, 2013 by Andy Young

Diageo has announced net sales growth of 5% and an operating profit growth of 8% in its preliminary results for the year ending 30 June 2013.

DiageoThe growth was helped by a strong performance in North America, where net sales were up 5% and the operating profit grew by 9%. Emerging markets are also proving to be a key area for the drinks giant, with net sales from that sector accounting for 42% of Diageo’s business, following 11% net sales growth and “acquisitions which added £233 million.”

Commenting on his first set of results as CEO Ivan Menezes said: “These results reflect Diageo’s strengths. We have delivered 5% net sales growth reflecting the strength of our US spirits business and continued double digit growth in the emerging markets, despite weakness in some markets.

“Price increases in each region, positive mix in North America and Latin America and the rigour we have in managing our cost of production and controlling our overheads drove significant expansion in operating margin.”

Menezes also acknowledged the growth of Johnnie Walker which grew by over one million cases, taking past the 20m case mark. He added: “The effectiveness of our marketing campaigns remains a competitive advantage for us and this year we have seen these campaigns extend the leadership of our brands in many markets during the year. This has been a key driver of our performance in scotch, our biggest and most profitable category, especially for Johnnie Walker which is now a 20 million case brand.”

Western Europe remains a problem area for Diageo, with net sales down by 4% over the year and the company’s CFO Deirdre Mahlan explained: “The strong positions of our strategic brands in Western Europe have of course left them exposed to market weaknesses here, primarily JεB in Spain, Guinness in GB and Ireland and Baileys in Southern Europe.”

She added: “In Western Europe, the underlying trends are unchanged. The stronger second half performance was due to the comparison against a weak third quarter in France in the prior year and in the fourth quarter, we had good momentum in Western Europe from continued growth of Captain Morgan and from innovation with the introduction of Captain Morgan Spiced and the expansion of premixes.”

In further good news for investors the results mean that Diageo will be increasing its dividend by a further 9%.

In making his first results presentation as CEO Menezes also paid tribute to the work done by his predecessor Paul Walsh, saying: “Paul Walsh provided Diageo with exceptional leadership and shaped our strength and global position, and I want to take this opportunity to thank him on behalf of the entire Diageo team. As these results again demonstrate, Paul did make a strong business even stronger.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales Executive (London – Craft Spirits)

Bimber Distillery
London, UK

2 x Buying Assistants

Berry Bros. & Rudd
Battersea and Basingstoke, UK

Temporary Christmas Sales Support - Wines & Spirits

Harrods
Knighsbridge, London, UK

Head of Wholesale

Hispamerchants Ltd
London, UK

Sales Manager

Hispamerchants Ltd
London, UK

National Sales Manager

Maverick Drinks
Field based, UK

Regional Sales Executive

EWGA
Gloucestershire, UK

Senior Content Writer

Rude Wines
Ledbury, UK

The World Bulk Wine Exhibition

Amsterdam,Netherlands
20th Nov 2017

The Drinks Business Green Awards 2017

London,United Kingdom
20th Nov 2017

The Global Spirits Masters Lunch

London,United Kingdom
1st Dec 2017
Click to view more

Green Awards 2017

Deadline : 25th October 2017

The Global Riesling Masters 2017

Deadline : 30th October 2017

Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more