Double-digit sales growth for United Spirits

India’s United Spirits has reported net sales growth of 13% in 2015/16 following the integration of Diageo’s brands into its portfolio.

United Spirits’ FY net sales grew 13% in the 12 months to 31 March 2016

In the 12 months to 31 March 2016, net sales of United Spirits Limited, which is controlled by UK-based Diageo, hit Rs. 9.092 crore, however volumes declined 1%.

Sales were boosted by the direct distribution and sales of Diageo brands, which added Rs. 676 crore, coupled with “stronger performance” of USL’s prestige and above brands.

USL identified the “main contributors” to growth as the Johnnie Walker, Black & White and VAT69 blended whisky brands, as well as Smirnoff vodka. Furthermore, the re-launch of leading Indian whisky brands McDowell’s No.1 and Royal Challenge also boosted sales.

USL’s portfolio now consists of 20 Diageo-owned brands, adding 1.3m cases. The integration has enhanced USL’s premiumisation strategy, with its prestige and above brands growing 26% in 2015/16.

The group attributed its volume decline to “temporary pricing challenge” for Haywards whisky in the southwest Indian state of Karnataka.

“Looking at F16, the robust top line and bottom line performance gives me confidence in our strategy behind our power brands, our clear focus on the prestige and above segment and our selected participation play in the Popular segment,” said Anand Kripalu, CEO of United Spirits.

“We have successfully completed the integration of the Diageo brand portfolio this year and we now have an outstanding portfolio of brands across each key category and price point.

He added: “As highlighted earlier this year, we have faced specific industry challenges in states such as Uttarakhand and Chhattisgarh and the Haywards temporary pricing challenge in Karnataka also negatively impacted performance this fiscal,” added Kripalu.

“These results and the actions that are driving this growth give me confidence that USL can deliver strong and sustained performance in the coming years.”

United Spirits has experienced widely-reported turbulence in recent years. Following an internal board revolt, USL chairman Vijay Mallya resigned from his position after Diageo agreed to pay the tycoon US$75m.