Diageo, the world's biggest spirits group, said it was in the early stages of recovery when reporting a 5 percent rise in half-year earnings and keeping its profit growth target for the year.
The London-based maker of Smirnoff vodka, Johnnie Walker whisky and Guinness beer posted underlying earnings for the half year to end-December of 44.2 pence a share, below a consensus of 46.2 pence.
The interim dividend was raised 5 percent to 14.6 pence.
We are in the early stages of recovery with more encouraging signs in the emerging and developing markets, said chief executive Paul Walsh in a results statement.
The British group's annual underlying sales were down 2 percent, while operating profit was off 3 percent.
Diageo and arch rival Pernod Ricard suffered from the global downturn and big destocking in the United States in early 2009, but are now both looking to benefit from the first signs of recovery.
Diageo reiterated its target for a low single digit percentage rise in operating profit for the year to June 2010, after last month Pernod repeated its similar target for 1-3 percent growth in underlying annual profit.
(Reporting by David Jones; Editing by Dan Lalor)