Diageo, the world's biggest spirits maker, posted a 6 percent rise in revenues for the first three months of 2012, after strong demand in Latin America, Africa, Asia and North America, helped offset falling sales in Europe.
For the nine months ending 31 March 2012, the maker of Smirnoff vodka reported a 7 percent net sales growth and a 3 percent rise in volume.
Although the London-based company's performance is in line with its own expectations, the group said sales in Spain and Greece declined and UK growth was disappointing, which also led it to post a cautious outlook for the region.
"The performance of our premium and super premium brands continues to drive growth in North America," said Paul Walsh, Chief Executive of Diageo in a company statement. "Volume in the quarter grew as we lapped a weak volume performance in the prior year when Diageo reduced discounts in US spirits. In Europe, third quarter performance was in line with the second quarter. Despite strong performance in markets such as Germany, we remain cautious for the outlook in Western Europe."
While organic net sales growth for the nine month period ending 31 March 2012 in Europe was 1 percent, growth across emerging markets was resolutely higher. Latin America and Caribbean posted a rise of 18 percent in organic net sales growth, Asia Pacific a 10 percent rise, Africa 12 percent and North America 5 percent.
"In Africa, a strong performance in East Africa more than offset a low single digit decline in Nigeria," said Walsh. "In Latin America, while consumer trends continue to be robust, the third quarter was adversely impacted by changes in shipment patterns year on year, which are expected to reverse in the fourth quarter. In Asia Pacific, our premiumisation strategy in Scotch in the emerging Asian markets continues to deliver double digit growth and therefore, while in Australia and North Asia consumer trends are weaker, the year to date performance is in line with the first half."
Diageo shares slipped 0.5 percent in early London trading to 1,583.5 pence per share. The stock is up around 12.6 percent so far this year.