Tags: Diageo | premium | brands | DEO

Diageo Grows with Global Premium Brands

By    |   Wednesday, 23 Nov 2011 02:28 PM

United Kingdom beverage distributor Diageo (DEO) has a global marketing strategy to generate revenue and profit growth. The company's premium brands result in a global leadership position in the sales of spirits worldwide.

Diageo is the global distributor of a wide range of alcoholic spirit brands, including Smirnoff, Johnnie Walker, Baileys Irish Cream, Tanqueray gin and Guinness stout. The company also holds the North America distribution rights for Jose Cuervo.

For the 2011 fiscal year, the revenue breakdown was 33 percent from North America, 26 percent in Europe, 28 percent international (Latin America and Africa, primarily), and 12 percent in the Asia Pacific region. Diageo's stock symbol is DGE on the London Stock Exchange. Each U.S.-traded ADR share (DEO) is worth four DGE shares.

The Diageo fiscal year ends on June 30 and the company reports financial results semi-annually. For the 2011 fiscal year, revenues increased by 5 percent to $15.8 billion. Net income for the year was $5.28 per ADR share, up 16 percent from $4.55 in 2010.

In Diageo's home currency of British pounds, profit per share also increased 16 percent year-over-year. For the three months ending on Sept. 30, the company issued a limited financial results report indicating revenues in the quarter had increased 9 percent year-over-year.

Global growth

Diageo's growth prospects are focused on emerging market economies around the globe. In 2011, emerging markets accounted for 34 percent of sales, and the company expects that portion to increase to 50 percent in the future. Along that line, marketing costs were increased by 22 percent in 2011 for the emerging markets compared to an 8 percent overall increase.

Starting with the 2012 fiscal year, financial results will further break down the marketing regions to show the sales growth in regions such as Eastern Europe, Latin America and Africa.

Diageo is followed primarily by London-based and European investment company analysts. Of the 34 analysts following the stock, 21 have an outperform or buy rating on Diageo. The first quarter sales results through September where several percent better than the analyst estimates, but some worry about a strong U.S. dollar against the pound.

The company next reports on Feb. 9.

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United Kingdom beverage distributor Diageo (DEO) has a global marketing strategy to generate revenue and profit growth. The company's premium brands result in a global leadership position in the sales of spirits worldwide. Diageo is the global distributor of a wide range...
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2011-28-23
Wednesday, 23 Nov 2011 02:28 PM
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