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North America

Key financials

2013 Reported
(restated)£ million
Exchange
£ million
Aquisitions and disposals *
£ million
Organic movement
£ million
2014 Reported
£ million
Reported movement
%
Net sales 3,723 (156) (231) 108 3,444 (7)
Marketing spend 581 (27) (24) 10 540 (7)
Operating profit before exceptional items 1,478 (54) (71) 107 1,460 (1)
Exceptional items -       (35)  
Operating profit 1,478       1,425 (4)

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

"North America, our biggest and most profitable region given our brand and market strength and its consistent strong performance, again delivered top line growth, driven by 5% growth in US Spirits and Wines, and margin expansion of 183bps as a result of gross margin expansion and cost reduction. Economic recovery in the US is uneven and this is reflected in the consumer trends seen in US spirits with overall spirits category growth slowing and premium and above price points driving category growth. Our growth reflects this with scotch, North American whiskey and tequila leading the growth. Our strength in innovation has continued. Launches of super and ultra premium variants have accelerated growth of our reserve brands, which grew 14%, and innovations against our premium core brands have driven brand relevance and recruited new consumers. However, performance in vodka was weak as Smirnoff volume has been impacted as its price premium has been maintained for another year. In Canada the spirits market is softer than the US and net sales grew 1%. Our DGUSA business declined 7% mainly reflecting reduced focus on the pouches segment."

  Organic volume movement *
%
Organic
net sales movement
%
Reported
net sales movement
%
Key markets and categories      
North America (1) 3 (7)
       
US Spirits and Wines (1) 5 (7)
DGUSA (5) (7) (11)
Canada (2) 1 (17)
       
Spirits** (1) 4 (7)
Beer (7) (5) (9)
Wine (1) 6 2
Ready to drink (5) (9) (24)
       
Global and local leaders**:      
Johnnie Walker 6 2
Crown Royal (4) (4)
Buchanan's 22 24 19
Bulleit 69 69 63
Smirnoff (4) (2) (6)
Ketel One vodka 1 4
Cîroc (3) (3) (7)
Captain Morgan 2 5
Baileys (1) 2 (3)
Tanqueray (1) 1 (3)
Don Julio 26 26 22
Guinness (6) (3) (8)

* Organic equals reported movement for volume except for North America (8)%, US Spirits and Wines (9)%, Canada (4)%, spirits (8)% and ready to drink (7)%, reflecting the disposal of Nuvo and the termination of the Jose Cuervo distribution agreement.

** Spirits brands excluding ready to drink.

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