Olly Wehring

Focus - Diageo's Q1 Sales by Region

By | 17 October 2013

Diageo released its Q1 trading update this morning

Diageo released its Q1 trading update this morning

Earlier today (17 October), Diageo posted a 3.1% lift in sales in the three months to the end of September. Here, just-drinks takes a closer look at the company's performance in the period by region.

North America (33% of net sales) - +5.1%

Diageo's  US spirits business was cited as a key driver in North America. Strong performances from Cîroc, Crown Royal and Ketel One were highlighted, with the three contributing to mix improvement, Diageo said.

Western Europe (19% of net sales) - -1.1%

Underlying trends in the region were unchanged from those seen in the final quarter of the previous fiscal year, according to the company. However, performance in the quarter did benefit from some restocking in France. “I still expect a low single-digit net sales decline for the full year (in Western Europe),” said CEO Ivan Menezes.

Africa, Easter Europe & Turkey (20% of net sales) - +1.3%

The region was hit particularly hard by a sales decline in Russia as the country cycled a “very strong” first quarter in the prior year. Africa delivered a year-on-year sales lift of 5.0% following weaker trading in Nigeria and Ghana. “Both markets are expected to strengthen during the year,” the company noted.

Latin America & Caribbean (13% of net sales) - +10.9%

Despite the healthy performance, the company highlighted weakness in Colombia in the period. Also, the West LatAm & Caribbean sub-division was hampered by currency weakness that led to destocking in the distributor channel.

Asia Pacific (15% of net sales) - +0.6%

“Government policies in China have led to a substantial fall in net sales in Diageo’s Chinese white spirit subsidiary (ShuiJingFang),” the company said, referring to anti-extravagance measures introduced late last year. South-East Asia, meanwhile, was hampered by currency-related distributor destocking. On the plus side, South Korea saw improvements, as did India. Super and ultra-premium Scotch whisky also grew strongly in China, but the region as a whole saw its growth slow in the quarter.

Expert analysis

Diageo plc - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage.

Sectors: Beer & cider, Company results, Emerging markets – BRIC, Spirits, Wine

Companies: Diageo, Crown Royal

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