Strong sales growth continues: 6% organic net sales growth in Q3
In the quarter ended 31 March 2012, Diageo delivered 6% organic net sales growth with 3% organic volume growth and 3ppts price/mix against last year. In the nine months ended 31 March 2012 organic net sales growth was 7% with volume up 3%, which is in line with the performance in the first half of the 2012 fiscal year.
Organic net sales growth, by region, for the nine month period was:
- North America 5%
- Europe (1)%
- Africa 12%
- Latin America and Caribbean 18%
- Asia Pacific 10%
Reported net sales grew 11% in the quarter ended 31 March 2012 and 9% in the nine months ended 31 March 2012, both against the comparable prior period. Reported net sales grew faster than organic sales mainly due to the acquisitions of Mey Icki, Serengeti Breweries and Meta Abo Breweries.
Net assets were £6,001 million at 31 March 2012, compared with £6,098 million at 31 December 2011. Net borrowings were £8,387 million at 31 March 2012 having been £8,295 million at 31 December 2011.
Foreign exchange movements, primarily the weakness of the US $, are currently expected to have an adverse impact on operating profit for the year ending 30 June 2012 of approximately £25 million.
Paul Walsh, Chief Executive of Diageo commented
'Trading in the third quarter remained strong with the year to date performance in line with the first half and our expectations.
'The performance of our premium and super premium brands continues to drive growth in North America. Volume in the quarter grew as we lapped a weak volume performance in the prior year when Diageo reduced discounts in US spirits. In Europe, Q3 performance was in line with Q2. Despite strong performance in markets such as Germany, we remain cautious for the outlook in Western Europe. In Africa, a strong performance in East Africa more than offset a low single digit decline in Nigeria. In Latin America, while consumer trends continue to be robust, Q3 was adversely impacted by changes in shipment patterns year on year, which are expected to reverse in the fourth quarter. 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.
'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.'
Reporting Dates
The Preliminary Results for the year ending 30 June 2012 will be announced on 23 August 2012. Diageo will issue the first interim management statement for the year ending 30 June 2013 on 17 October 2012. The Interim Results for that year will be announced on 31 January 2013 and the Preliminary Results for the year ending 30 June 2013 will be announced on 31 July 2013. Diageo will issue the interim management statement for the nine months ending 31 March 2013 on 25 April 2013.
