Diageo delivers “consistent” results despite Western Europe woes

Diageo has reported a “consistent performance” in its nine-month financial update, despite declining sales in beleaguered Western Europe.

Diageo’s sales grew 4% in Latin America and the Caribbean as Ypioca Cachaca purchase pays off

Organic net sales for the period grew by 6%, led by a good performance in North America (6%) off the back of stronger price/mix, and Latin America and Caribbean (14%), where Diageo’s purchase of Ypioca cachaca is paying dividends despite “consumer weakness” in Brazil limiting sales potential.

Although sales in Asia Pacific grew 4% – despite the continued decline of the Scotch market in Korea – and Africa, Eastern Europe and Turkey by 9%, Diageo’s overall performance was dampened by continued economic strife in Western Europe, where sales declined by 4% year-on-year.

All-in-all, volume for the period was up 1%, but down 1% in the third quarter.

Paul Walsh, chief executive of Diageo, described the third quarter performance as robust. “Our performance in the quarter… demonstrates Diageo’s strengths, global reach and category breadth and depth,” he said.

“Therefore despite consumer weakness in three markets, Korea, Nigeria and Brazil, Diageo’s performance for the nine months is in line with the first half and our expectations. Strong performance from our biggest business, US spirits; the continued growth of spirits in Africa; share gains across our markets in Asia Pacific and double digit growth of Johnnie Walker, Crown Royal, Buchanan’s, and Tanqueray are the highlights of the quarter. Given our market positions and geographic diversity we remain confident that Diageo’s performance continues to be in line with our medium term guidance.”