Interim Management Statement for the Nine Months Ended 31 March 2011
By Diageo Plc, PRNEWednesday, May 4, 2011
Diageo Delivers 7% Organic Net Sales Growth in Q3
LONDON, May 5, 2011 - In the quarter ended 31 March 2011 Diageo delivered organic
net sales growth of 7% against the comparable period with volume up 2%.
In the nine months ended 31 March 2011 net sales increased 5%
on an organic basis against the comparable period and volume was up 3%.
Organic net sales growth by region was:
- North America 3%
- Europe (3)%
- International 14%
- Asia Pacific 9%
On a reported basis net sales grew by 3% in the quarter ended
31 March 2011 and by 2% in the nine months ended 31 March 2011, against the
comparable prior period in each case.
Net assets were GBP5,407 million at 31 March 2011, compared with GBP5,650
million at 31 December 2010. The accrual for the interim dividend, partially
offset by profit for the period, were the only material changes in the
financial position of the group in the quarter. Profit for the period
included an exceptional charge amounting to GBP54 million for increased
liabilities for ongoing excise tax disputes in Turkey and Thailand, partially
offset by a reduction in the provision for corporate tax liabilities
following settlement with tax authorities. Net borrowings were GBP7,062
million at 31 March 2011 having been GBP7,010 million at 31 December 2010.
Foreign exchange movements are currently expected to increase
operating profit for the year ending 30 June 2011 by GBP25 million against
the prior year. This represents a reduction of approximately GBP30 million
against the guidance given at the time of the interim results and is mainly
as a result of the weakness of the US dollar against sterling.
Paul Walsh, Chief Executive of Diageo commented:
'Trading in the third quarter was in line with our
expectations that the second half would be stronger than the first.
'In North America consumer trends are improving, albeit
modestly, and Diageo's scotch, vodka and tequila brands performed strongly in
the quarter. Better mix and lower discounts offset volume decline to drive
top line growth. Overall trading in Europe continues to be challenging
although in the quarter stronger price/mix in Great Britain and Russia offset
weaker price/mix in Ireland and Greece and a deterioration of the on trade in
Spain. Further improvement in price/mix in both International and Asia
Pacific in the quarter were driven by the continuing strength of our scotch
brands especially around Chinese new year, improving trends for our beer
brands in Africa, especially in Nigeria, and stronger growth in South Africa
and Australia.
'This overall improving trend is the result of our focus on
our priority brands and our strengths in market. We remain confident that our
up weighted marketing investment together with the increased investment we
have made in emerging markets in the year will continue to deliver improving
performance.'
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 2010 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
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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.
Investor enquiries to: Nick Temperley, +44(0)20-8978-4223, Sarah Paul, +44(0)20-8978-4326, Kelly Padgett, +1-202-715-1110, Investor.relations at diageo.com . Media enquiries to: Stephen Doherty, +44(0)20-8978-2528, Rowan Pearman, +44(0)20-8978-4751, media.comms at diageo.com .
Tags: Diageo plc, London, May 5, United Kingdom