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Latin America and Caribbean

Key financials

2013 Reported
(restated)* £ million
Exchange
£ million
Aquisitions and disposals
£ million
Organic movement
£ million
2014 reported
£ million
Reported movement
%
Net sales 1,453 (328) (8) 27 1,144 (21)
Marketing spend 233 (30) (2) 2 203 (13)
Operating profit before exceptional items 468 (151) 2 9 328 (30)
Exceptional items       (14)  
Operating profit 468       314 (33)

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

"Our Latin America and Caribbean business has delivered a good set of results despite mixed performance in individual countries. In West LAC, our biggest market, net sales were down 8% following a destocking in the border zones. Both Brazil and Colombia delivered solid performance, benefiting from changes in the route to consumer and, in Brazil, from synergy with Ypióca. In a challenging operating environment Venezuela net sales grew 78%, with slower growth in the second half as high inflation and currency devaluation has affected demand and the affordability of imported products. Mexico was weak as tax reforms and a general economic slowdown impacted consumers discretionary spend. While scotch remains the largest category in the region, growth came from the investment we made to widen participation to categories such as vodka, cachaça, liqueurs and to capture the growing affluent and emerging middle class. Despite the negative country mix from weakness in West LAC and Mexico, total operating margin for the region improved 18bps driven by strong price/mix, and a focus on overhead cost reductions."

  Organic volume movement *
%
Organic
net sales movement
%
Reported
net sales movement
%
Key markets and categories      
Latin America and Caribbean (1) 2 (21)
       
PUB 9 10 (4)
Venezuela (17) 78 (71)
Colombia 5 8 (7)
Mexico (1) (4) (10)
West LAC (9) (8) (15)
       
Spirits** (1) 1 (23)
Beer 5 10 (3)
Wine (19) 2 (24)
Ready to drink 6 16 (11)
       
Global and local leaders**:      
Johnnie Walker (7) (4) (15)
Buchanan's (20) 1 (32)
Smirnoff 12 18 (1)
Baileys 9 (6)

* Organic equals reported movement for volume except for Venezuela (19)%, Colombia (3)%, Mexico (2)% and WestLAC (10)% and spirits (2)% reflecting the disposal of Nuvo and the termination of the distribution agreement with Jose Cuervo.

** Spirits brands excluding ready to drink.

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