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Latin America and Caribbean

Key financials

2012 Reported
(restated)£ million
Exchange
£ million
Aquisitions and disposals
£ million
Organic movement
£ million
2013 reported
£ million
Reported movement
%
Net sales 1,239 (26) 62 182 1,457 18
Marketing spend 208 (5) 8 22 233 12
Operating profit before exceptional items 369 (4) 9 97 471 28
Exceptional items (2)       -  
Operating profit 367       471 28

"Our Latin America and Caribbean business has delivered another strong set of results. Net sales grew 15%, driven by volume, price and mix improvement. Strong double digit growth in Venezuela, Mexico, and West LAC offset a slowdown in Brazil, mostly due to destocking in the wholesale channel driven by a stricter enforcement of tax collections. Scotch remains the growth engine of the region contributing 81% of overall net sales growth.

We have expanded our reach to emerging middle class consumers by investing strongly in Johnnie Walker Red Label, Black&White and White Horse. As we drive our premiumisation strategy, we have focused our marketing on super and ultra premium brands. Our reserve brands grew net sales double digit, with particularly strong performance of Johnnie Walker Gold Label Reserve, Buchanan's Special Reserve, and Cîroc. At the same time we have continued to invest in our route to market, particularly in Brazil and Mexico, and increased our focus on innovation which this year accounted for more than a tenth of the net sales in the region. Strong price/mix enabled us to increase marketing investment and still grow operating profit 26% with 300bpts of margin expansion. Overall, despite some headwinds in Brazil and volatility in Venezuela, these are long term, high-growth markets with favourable population demographics and we are well positioned to capture these opportunities and consolidate our leadership position in the region."

Randy Millian, President, Diageo Latin America and Caribbean

  Organic volume movement *
%
Organic
net sales movement
%
Reported
net sales movement
%
Key markets and categories      
Latin America and Caribbean 4 15 18
PUB 1 1 10
Andean 7 39 41
Mexico 14 18 21
West LAC 2 12 10
       
Spirits 4 17 21
Beer 1 5 2
Wine (5) 4 (5)
Ready to drink (6) - (4)
       
The strategic brands:**      
Johnnie Walker 6 11 9
Buchanan's 10 26 27
Smirnoff (3) 3 (6)
Baileys (8) (1) (1)

* Organic equals reported movement for volume except for: Latin America and Caribbean 35%, PUB 95%, Andean 9%, spirits 39%, reflecting the acquisition of Ypióca beer 4%, and ready to drink 0% reflecting restatements in the year.

** Spirits brands excluding ready to drink.

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