Diageo to see slight growth in 2014

Analysts have predicted Diageo’s net sales growth will have risen by 0.5% in 2014, ahead of the release of the company’s full end of year results next week.

Diageo CEO – Ivan Menezes

Organic net sales are expected to grow by 0.5% and organic operating profit by 2.4%, UBS analysts said today.

Compared to last year, when Diageo posted increases of 5% and 8% respectively, the growth is slight.

Total net sales are predicted to reach £10.4 billion, which could represent a significant net sales decline of around £1bn compared to last year when the group posted revenues of £11.4bn.

UBS also predicted an overall volume decline of 2.5% for the year, and that the group’s emerging focus on vodka rather than American whiskey could cause it to lose shares in the US market.

The Asian Pacific region took the biggest hit in terms of sales with UBS predicting a decline in sales of 7%.

Diageo is currently undertaking a destocking process due to a decline in demand due to a continued slowdown in China amid continued austerity measures.

Earlier this year Diageo announced it was to axe 200 jobs at its London head office along with some regional posts as part of a bid to cut costs and save £200m by 2017.

While in June, the company officially took control of India’s United Spirits following a $1.1 billion deal. 

Diageo’s full end of year results are due to be released on 31 July.