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Diageo increases 2013 final Dividend by 9%

Investment Tools Ltd.
Diageo increases 2013 final Dividend by 9%

Net sales growth of 5%, driven by 4 percentage points of positive price/mix

Operating profit growth of 8%, driven by 0.8 percentage points of margin expansion

Marketing investment up 5%, to 15.7% of net sales, focused on the strategic brands

Strong performance in North America with net sales up 5% and operating profit up 9%

Emerging markets' net sales are 42% of Diageo's business, following 11% net sales growth and acquisitions which added £233 million

Emerging markets operating profit up 18%, as increased scale led to operating margin expansion

Acquisition of the Ypióca brand in Brazil in August 2012

Free cash flow was £1.5 billion, after making a £400 million contribution to the UK pension scheme

Growth of 11% in eps pre-exceptional items, to 104.4 pence per share

Board recommending a 9% increase in the final dividend

Increased stake in Shuijingfang and acquired the major interest in USL since the year end

Ivan Menezes, Chief Executive, commenting on the year ended 30 June 2013

"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. 

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. Innovation is driving growth in every region, with our biggest launches in US spirits where we continue to lead the innovation agenda in the industry. Elsewhere, the investments we have made to enhance our routes to market in Africa, Latin America and Eastern Europe have driven strong growth.

The breadth of our good performance is reflected in the strength of the cash flow, in our double digit eps growth and a recommended 9% increase in the final dividend. This year we have again made a strong business stronger and we remain on track to deliver our medium term guidance."

 

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