Global drinks giant Diageo has posted a 6% year-on-year increase in net sales to £11.4bn ($17.4bn) and pre-tax profits of £3.12bn ($4.75bn) for the full-year ended June 30, 2013.
Diageo’s total marketing spend for the full year was £1.79bn ($2.72bn). Its spirits portfolio saw the biggest increase in net sales, up 8%, and net sales across its wine portfolio rose 4%. Its beer brands, however, saw a 3% drop in net sales.
Among its key strategic brands, Buchanan’s posted the strongest growth in net sales (+19%), followed by Crown Royal (+17%), Johnnie Walker (+13%) and Tanqueray (+12%).
Latin America and the Caribbean saw the biggest growth in terms of net sales, up 15% year-on-year to reach £1.46bn ($2.22bn), following an 11% increase in marketing spend. The group delivered a strong performance in Mexico, while Paraguay, Uruguay and Brazil were impacted by a slowdown.
Africa, Eastern Europe and Turkey posted 10% growth in net sales to £2.28bn ($3.47bn), the result of a 16% rise in marketing spend. Diageo also increased its marketing spend in North America by 10%, resulting in 5% growth in net sales to £3.73bn ($5.68bn).
The drinks giant decreased its marketing spend in Asia-Pacific by 1%, leading to a 3% rise in net sales to £1.67bn ($2.54bn).
Western Europe was the only region to post a decline in net sales, down 4% to £2.22bn ($3.38bn). Diageo decreased its overall marketing spend in the region by 6%. Double figure growth was delivered in Germany, Austria and Benelux.
“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,” says Diageo chief executive Ivan Menezes. “This has been a key driver of our performance in scotch, our biggest and most profitable category, especially for Johnnie Walker which is now a 20 million case brand.”
“Innovation is driving growth in every region, with our biggest launches in US spirits where we continue to lead the innovation agenda in the industry,” adds Menezes. “Elsewhere, the investments we have made to enhance our routes to market in Africa, Latin America and Eastern Europe have driven strong growth.”
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