just The Preview - Diageo Q3
Diageo will release its Q3 trading update on Thursday
Diageo will give a third-quarter trading update on Thursday (18 April). Here, just-drinks takes a look at the group's highs and lows in the three months to the end of March.
- Shenanigans in India dominated Diageo's time in the first three months of 2013. In early-January, the company was moved to re-confirm that its plan to take majority control of United Spirits was still set to complete by the end of March, despite a delay in the third and final prong of its transaction. However, as things stand today, Diageo's move is still awaiting completion, although the firm is in no apparent rush.
- Also in early-January, we published an interview with Randy Millian, Diageo's president of Latin America and the Caribbean. Among the issues we discussed with Millian were the wide range of markets in the region, the race to secure route-to-market in Brazil and the role of beer for Diageo on a continent healthily represented by brewers.
- Speaking exclusively to just-drinks at the end of January, Diageo CEO Paul Walsh said that the company remains keen to take full ownership of its Ketel One vodka JV with the Nolet family. Walsh conceded however, that the likelihood was not high. “They are very happy with the relationship, as are we,” he said. “I don't see that (the option being taken) happening.”
- Much as Diageo has used its beer portfolio to provide growth in Africa, the firm set its spirits sights on the continent in mid-March, when it created the position of managing director of Africa spirits transformation. Gerald Mahinda, who has held the MD post at South African JV Brandhouse since 2009, has been charged with “embedding optimum supply, sales and marketing solutions in key markets for spirits”, Diageo said.
- The introduction of a ban on high-level luxury banquets in China last year may be giving the likes of Pernod Ricard and Remy Cointreau a headache, but Diageo believes it has not been hit as hard. In March, the company's chief operating officer, Ivan Menezes, said that sales in the country were still strong for Diageo. “Our business in China is not that dependent on the classic institutional sales and classic gifting,” he told delegates at this year's CAGE conference in London.“We've got a Scotch whisky business where the key growth is coming from super-deluxe … A lot of it is consumed in the on-premise, it's not the institutional government-to-government gifting.”
Net sales rose by 4.9% to GBP6.04bn (US$9.52bn) on a 1% lift in volumes
Operating profits climbed by 11% to GBP2.05bn
Net profits leapt by 57.1% to GBP1.60bn on year-earlier tax charge
Net sales increased by 5%
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