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Western Europe

Key financials

2013 Reported
(restated)*£ million
Exchange
£ million
Aquisitions and disposals
£ million
Organic movement
£ million
2014 Reported
£ million
Reported movement
%
Net sales 2,203 9 (38) (5) 2,169 (2)
Marketing spend 328 (4) (1) 323 (2)
Operating profit before exceptional items 650 (5) (8) 2 639 (2)
Exceptional items (31)       20  
Operating profit 619       619

* Restated following the adoption of IFRS 11 and the amendment to IAS 19.

"Western Europe still has weak economies and fragile consumer confidence but there has been steady improvement and our business has stabilised year on year, gaining share of spirits. There was modest growth in Great Britain, Benelux, France and the Nordics which counter-balanced the slowing declines in Southern Europe and Ireland. Germany was weaker due to higher trade investment and an increasingly price competitive off trade. Marketing was targeted more effectively, and we kept our investment as a percentage of net sales flat while prioritising higher growth and margin brands. We have focused on fewer, bigger pan-regional innovation launches with Baileys Chocolat Luxe, Smirnoff Gold, frozen pouches and premix, and our reserve business was strong with net sales up 15% driven by the scotch malts, Cîroc, Zacapa and Johnnie Walker. Operating margin expansion of nearly 20bps was driven by product optimisation and reductions in warehousing and logistic costs. Our route to consumer programme focused on efficiency, effectiveness and expansion, increasing the focus of our sales people, improving their capabilities and putting more feet on the street, which has given us a strong platform as we move into next year."

  Organic volume movement *
%
Organic
net sales movement
%
Reported
net sales movement
%
Key categories:      
Western Europe - - (2)
       
Spirits** 1 (1) (2)
Beer (5) (3) (3)
Wine (2) (2) (10)
Ready to drink 1 5 5
       
Global and local leaders**:      
Johnnie Walker 1 (1) (1)
JεB (9) (11) (10)
Smirnoff 1 (6) (6)
Captain Morgan 15 6 6
Baileys (4) (2) (2)
Guinness (4) (3) (2)

* Organic equals reported movement for volume except for Western Europe (2)%, spirits (1)% and wine (9)%, reflecting the termination of some agency

** Spirits brands excluding ready to drink.

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