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Africa, Eastern Europe and Turkey

Key financials

2012 Reported
(restated)£ million
Exchange
£ million
Aquisitions and disposals
£ million
Organic movement
£ million
2013 reported
£ million
Reported movement
%
Net sales 2,051 (28) 59 198 2,280 11
Marketing spend 232 (6) 3 36 265 14
Operating profit before exceptional items 575 (12) 31 60 654 14
Exceptional items (7)       (5)  
Operating profit 568       649 14

"This year we are reporting Africa, Eastern Europe, and Turkey as a newly formed region, which is now Diageo's second largest and is the biggest contributor to net sales growth. Net sales grew 10% from strong performance of spirits and a robust performance of beer in Africa, where we grew net sales despite volume declines.

Our important spirits markets grew strongly driven by Johnnie Walker in scotch and Smirnoff in vodka. Growing scotch is our priority in spirits and I am pleased to see our strong share gains across the majority of our markets as we scaled up our marketing campaigns. In Eastern Europe and Turkey our focus is primarily on spirits, and Africa remains the key opportunity for growing our outstanding beer business, and expanding spirits. In Africa, while the economic and political situations vary and have impacted beer volume in certain markets, we are investing in beer capacity and building routes to market to fuel long term growth. We have continued to invest in supply and production capacity in Nigeria, Kenya, Ghana, Cameroon, and the expansion of the Meta Abo Brewery in Ethiopia. We are also committed to our community and environmental responsibilities, driving down energy consumption, using local raw materials for beer production, and utilising returnable packaging. Our marketing investment grew 16% to support growth of well established brands and bring new brands and variants to emerging middle class consumers. We have introduced innovation at scale delivering new packaging and fantastic products such as Ruut Extra in Ghana, which is Diageo's first beer brewed using cassava, Jebel grain spirit in Kenya, and Shark Tooth rum in Russia. I am pleased with the progress we continue to make in building our brands and our organisation, and with these good results."

Nick Blazquez, President, Africa, Turkey, Russia, Central & Eastern Europe, Global Sales

  Organic volume movement *
%
Organic
net sales movement
%
Reported
net sales movement
%
Key markets and categories      
Africa, Eastern Europe and Turkey 4 10 11
Africa 3 9 8
Nigeria (1) 5 6
East Africa 3 10 13
Africa Regional Markets (1) 9 7
South Africa 14 17 5
Russia and Eastern Europe 14 16 14
Turkey (4) 8 22
       
Spirits 8 13 14
Beer (1) 5 6
Ready to drink 27 32 28
       
The strategic brands:**      
Johnnie Walker 22 22 19
JεB 5 4 -
Smirnoff 8 19 11
Captain Morgan 17 19 12
Baileys 13 13 11
Guinness (2) 2 1

* Organic equals reported movement for volume except for: Africa, Eastern Europe and Turkey 7%, Africa 5%, Africa Regional Markets 5%, Turkey 9%, spirits 11%, beer 1%, reflecting the acquisition of Meta Abo and Mey İçki.

** Spirits brands excluding ready to drink.

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