Diageo Plc. (1.2%) (DEO - $127.08 - NYSE)(DEO) is the leading global producer of alcoholic beverages, with brands including Smirnoff, Johnny Walker, Ketel One, Captain Morgan, Crown Royal, J&B, Baileys, Tanqueray, and Guinness. The company has a balanced geographic presence in both mature and emerging markets, and it benefits from the trend of consumers around the world trading up to premium branded products. In 2011 and 2012, Diageo made several acquisitions that enhanced its presence in emerging markets: Mey Icki, the leading spirits company in Turkey; Shui Jing Fang, a leading Chinese baiju producer, Ypioca, the leading cachaca producer in Brazil; and an increased stake in Halico, the leading domestic spirits producer in Vietnam. Diageo also made an investment in United Spirits, the leading spirits producer in India, which will provide the company with the leading position in another fast growing emerging market. Over the medium term, Diageo expects organic top line growth of 6% and 200 bps of margin improvement, leading to double digit earnings per share growth. Longtime executive Ivan Menezes took over as CEO on July 1, 2013, and we expect him to continue to drive the company's growth in both mature and emerging markets.
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From Mario Gabelli (Trades, Portfolio)'s third quarter 2013 commentary.
