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Whisky drives profit for Diageo

Diageo has seen profit growth of 8% – operating profit came in at£3,530m up from £3,198 million last year. The company’s preliminary results for the year ended 30 June 2013, also revealed net sales growth worth more than half a billion pounds.

Ivan Menezes, Chief Executive, said, “The effectiveness of our marketing campaigns remains a competitive advantage for us and this year we have seen these campaigns extend the leadership of our brands in many markets during the year. This has been a key driver of our performance in scotch, our biggest and most profitable category, especially for Johnnie Walker.”

In his presentation to investors he also revealed, “This year we delivered net sales growth worth over half a billion pounds and in a year which had its challenges. That’s the equivalent of creating a global brand the size of Captain Morgan in one year.” He continued, “For me the performance of Johnnie Walker this year has been amazing. It is Diageo’s biggest brand across many measures and we have added another million cases this year. It is now a 20 million case brand. In fact in the last 10 years, we have added nearly 10 million cases and over £1 billion of sales. It is inspiring for me to think of how many people across production, marketing, sales, and innovation have contributed to the brand’s strong continued performance.”

Although sales and profits dipped in Western Europe, which includes Britain, Andrew Cowan, Country Director, Diageo Great Britain, said, “During the year, Diageo Great Britain (GB) successfully executed on its strategy to improve price mix.  In GB trading was resilient and innovation and double digit growth of reserve brands offset the impact of a weaker beer market. Diageo’s market share remains strong at 31.9% of the Total Trade. (MAT w.e. 15.06.13 (on trade) 22.06.13 (off trade))”. He continued, “Captain Morgan saw a good performance following the ‘Live like the Captain’ TV advertising campaign, while Smirnoff net sales growth was ahead of vodka category growth following the ‘Yours for the Making’ campaign, the Smirnoff ‘World’s Best Drinks’ programme and the launch of new variants Blueberry, Vanilla and Espresso, which gained market share. Overall beer volume performance was impacted by consumption decline in the off trade. As we continued to invest behind Guinness, we achieved share growth in the final quarter, although net sales declined 3% over the year.”

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