Interim Management Statement (4501Q)
October 19 2011 - 4:54AM
UK Regulatory
TIDMDGE
RNS Number : 4501Q
Diageo PLC
19 October 2011
19 October 2011
Interim Management Statement for the three months ended 30
September 2011
Diageo delivered 9% organic net sales growth in Q1
In the quarter ended 30 September 2011 Diageo delivered organic
net sales growth of 9% against the comparable period with volume up
5%. Organic net sales growth by region was:
-- North America 5%
-- Europe 6%
-- Latin America and Caribbean 30%
-- Africa 9%
-- Asia Pacific 14%
On a reported basis, including net sales of GBP29 million
attributable to the acquisition of Mey Icki on 23 August 2011, net
sales grew by 9% in the quarter against the comparable period.
In North America net sales growth was driven by continued
positive price/mix across all categories while volume was down 2%.
Price/mix in US spirits benefitted from comparison against the
prior period which saw the launch of the lower priced R KK. The
wine category remained weak and beer was broadly flat. Double digit
growth in Russia and Eastern Europe, in Germany and the Nordic
markets and in Spain, where performance benefitted from the
comparison to a destock there in the prior period, drove net sales
growth in Europe. There was some price/mix erosion as a result of
the continued difficult consumer environment. Each market in the
Latin America and Caribbean region delivered very strong double
digit growth and the performance in Venezuela benefitted from
comparison against reduced shipments in the prior period. In Africa
there was continued strong performance in all markets except South
Africa which saw negative price/mix due to the growth of lower
priced locally produced spirits. In Asia Pacific the developed
markets delivered low single digit net sales growth while the
developing markets grew very strongly led by the performance of
Johnnie Walker.
Net assets were GBP6,572 million at 30 September 2011, compared
with GBP5,985 million at 30 June 2011 primarily as a result of net
profit for the period. Net borrowings were GBP8,358 million at 30
September 2011 having been GBP6,450 million at 30 June 2011. The
increase is primarily due to the acquisition of Mey Icki for GBP1.3
billion.
Foreign exchange movements are currently expected to reduce
reported operating profit for the year ending 30 June 2012 by
approximately GBP35 million against the prior year. This is higher
than the guidance given at the time of the preliminary results as a
result of the strength of sterling against a number of currencies
partially offset by the strength of the US dollar against
sterling.
Paul Walsh, Chief Executive of Diageo commented:
'Diageo has delivered a good start to the new financial year.
Net sales growth was marginally ahead of expectations and the
quarter did benefit from some one-off factors which are not
expected to reoccur in the second quarter. Consumer trends are
broadly unchanged. We have delivered positive price/mix in North
America, an improvement in net sales growth in Europe and we have
driven strong growth in the developing markets with net sales up
20%. We continue to expect that net sales growth for the first half
will improve on that delivered in fiscal 2011.
'We are alert to any impact which the fragile global economy may
have on trading patterns as we continue to build our brands with
consumers and enhance our relationships with customers. The
sharpened focus we have brought to our investment in marketing,
innovation and sales to build the strength of our brands and our
routes to market underpins our confidence in the performance of the
business.'
ENDS
Contacts
Investor enquiries to: Nick Temperley +44 (0) 7595 808 536 /
+44 (0) 20 8978 4223
Sarah Paul +44 (0) 7803 856 876 /
+44 (0) 20 8978 4326
Angela Ryker Gallagher +44 (0) 7803 855 003 /
+44 (0) 20 8978 4911
investor.relations@diageo.c
om
Media enquiries to: Stephen Doherty +44 (0) 7973 826 639 /
+44 (0) 20 8978 2528
Kirsty King +44 (0) 7855 808 959 /
+44 (0) 20 8978 6855
media.comms@diageo.com
Editor notes
Diageo is the world's leading premium drinks business with an
outstanding collection of beverage alcohol brands across spirits,
beer and wine. These brands include Johnnie Walker, Crown Royal, J
B, Buchanan's, Windsor and Bushmills whiskies, Smirnoff, Ciroc and
Ketel One vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray
and Guinness.
Diageo is a global company, with its products sold in more than
180 countries around the world. The company is listed on both the
New York Stock Exchange (DEO) and the London Stock Exchange (DGE).
For more information about Diageo, its people, brands, and
performance, visit us at Diageo.com. For our global resource that
promotes responsible drinking through the sharing of best practice
tools, information and initiatives, visit DRINKiQ.com.
Celebrating life, every day, everywhere.
Forward-looking statements
This document contains 'forward-looking statements'. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. In particular,
forward looking statements include all statements that express
forecasts, expectations, plans, outlook and projections with
respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the
impact of interest or exchange rates, the availability or cost of
financing to Diageo, anticipated cost savings or synergies, the
completion of Diageo's strategic transactions and restructuring
programmes, anticipated tax rates, expected cash payments, outcomes
of litigation and general economic conditions. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by these forward-looking statements, including
factors that are outside Diageo's control. All oral and written
forward-looking statements made on or after the date of this
document and attributable to Diageo are expressly qualified in
their entirety by the 'risk factors' contained in Diageo's annual
report on Form 20-F for the year ended 30 June 2011 filed with the
US Securities and Exchange Commission (SEC). Any forward-looking
statements made by or on behalf of Diageo speak only as of the date
they are made. Diageo does not undertake to update forward-looking
statements to reflect any changes in Diageo's expectations or any
changes in events, conditions or circumstances on which any such
statement is based. The reader should, however, consult any
additional disclosures that Diageo may make in documents it
publishes and/or files with the SEC. All readers, wherever located,
should take note of these disclosures. The information in this
document does not constitute an offer to sell or an invitation to
buy shares in Diageo plc or an invitation or inducement to engage
in any other investment activities. Past performance cannot be
relied upon as a guide to future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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