Diageo Results Boosted by Emerging Markets

Acquisitions in faster growing markets, primarily Mey Içki in Turkey, added £320 million of net sales and £82 million of operating profit after transaction and integration costs.

27 Aug 2012 --- Diageo has reported in its preliminary results, year ended 30 June 2012, growth of: 6% net sales; 4 percentage points of positive price/mix; 9% operating profit and 60 basis points of margin expansion. Emerging markets which amount to almost 40% of Diageo's business, grew net sales 15% and operating profit 23%. Acquisitions in faster growing markets, primarily Mey Içki in Turkey, added £320 million of net sales and £82 million of operating profit after transaction and integration costs. Marketing investment up 8%, up 30 basis points to 15.8% of net sales, focused on strategic brands and the fastest growing markets.

During the year Diageo increased its ownership stake in Shuijingfang and Halico and announced an agreement to acquire the Ypióca brand in Brazil and the intention to invest a further £1 billion in scotch capacity

Paul S Walsh, Chief Executive, commented: "Diageo is a strong business, getting stronger and the results we released this morning show that very clearly. We have increased our presence in the faster growing markets of the world, through both acquisitions and strong organic growth. We have enhanced our leading brand positions globally, through effective marketing and industry leading innovation and we have strengthened our routes to market. 6% organic top line growth, 9% operating profit growth and 60 basis points of margin expansion is a strong performance and demonstrates our commitment to delivering efficient growth.

“A year ago I set out our expectations for the medium term and these results put us firmly on track to meet those goals. In F12, we have continued to invest to ensure this business is well positioned for the future. Our confidence in the achievement of our medium term guidance is underscored by the 8% recommended increase in our final dividend."