Last night (Tuesday December 3), I attended a tasting of Balblair vintages. We tasted five whiskies, 2003, 1997, 1990, 1983 and 1969, prefaced by a glass of Balblair’s base spirit.
The key results are:
- Growth of: 6% net sales; 4 percentage points of positive price/mix; 9% operating profit and 60 basis points of margin expansion;
-Emerging markets which amount to almost 40% of Diageo's business, grew net sales 15% and operating profit 23%;
- Acquisitions in faster growing markets, primarily Mey İçki in Turkey, added £320 million of net sales and £82 million of operating profit after transaction and integration costs;
- Marketing investment up 8%, up 30 basis points to 15.8% of net sales, focused on strategic brands and the fastest growing markets;
- Free cash flow of £1.6 billion;
- During the year Diageo increased its ownership stake in Shuijingfang and Halico and announced an agreement to acquire the Ypióca brand in Brazil and the intention to invest a further £1 billion in scotch capacity;
- Earnings per share (EPS) pre-exceptional items up 13% to 94.2 pence per share;
- Recommended 8% increase in final dividend
Diageo chief executive Paul Walsh, said: "Diageo is a strong business, getting stronger and the results we released this morning show that very clearly. We have increased our presence in the faster growing markets of the world, through both acquisitions and strong organic growth. We have enhanced our leading brand positions globally, through effective marketing and industry leading innovation and we have strengthened our routes to market. 6% organic top line growth, 9% operating profit growth and 60 basis points of margin expansion is a strong performance and demonstrates our commitment to delivering efficient growth.
“A year ago I set out our expectations for the medium term and these results put us firmly on track to meet those goals,” he said.
“In F12, we have continued to invest to ensure this business is well positioned for the future. Our confidence in the achievement of our medium term guidance is underscored by the 8% recommended increase in our final dividend," said Walsh.