Asia and Africa fuel Diageo growth

Double-digit growth of Scotch in Asia Pacific coupled with a strong performance of premium and super premium brands in North America were behind a 6% organic net sales growth for drinks group Diageo in Q3.

Organic net sales for the nine months ending 31 March 2012 grew 7% compared to the same period last year, with Latin America and the Caribbean (18%) and Africa (12%) showing the most growth for the period, despite changes in shipping patterns to Latin America and a single digit decline in Nigeria.

Paul Walsh, chief executive of Diageo, said that while the group was concerned for the outlook in Western Europe – despite strong performance in markets such as Germany – sales continued to surpass expectations in Asia.

“In Asia Pacific, our premiumisation strategy in Scotch in the emerging Asian markets continues to deliver double digit growth and therefore, while in Australia and North Asia consumer trends are weaker, the year to date performance is in line with the first half,” he said.

Net sales for the three quarters grew by 9% due to the acquisitions of Mey Icki, Serengeti Breweries and Meta Abo Breweries during the period.

Net assets for the group were down £97m to £6,001m, while debt increased to £8,387m, up £92m on the previous year.

Walsh added: “Our year to date performance continues to demonstrate that Diageo is well positioned with our balance of businesses across categories and with a large and increasing presence in the faster growing emerging markets. We remain confident that the investments we have made and the changes we have implemented to our operating model will continue to drive improving performance.”

Diageo will announce its end of year results on 23 August 2012.