Diageo , the world's biggest spirits group, said strongly growing emerging markets and a slow recovery in North America helped to offset weakness in Europe, prompting upbeat comments about meeting its 2012 targets.

The British maker of Johnnie Walker whisky and Smirnoff vodka said it expected the emerging markets of Latin America, Africa and Asia to continue to grow and was encouraged by North America, while Europe had now stabilised with flat sales.

Chief Executive Paul Walsh said with underlying half-year sales growing at 7 percent the group was well-placed to meet its medium-term financial targets for 6 percent annual sales growth, margin expansion and 10-percent plus earnings growth.

He said that there was no sign of a major slowdown in emerging markets, some trading up to higher priced drinks in North America while in Europe 10-percent plus growth in Germany, France and Russia offset weakness in Greece, Spain and Ireland.

We are cautious as to the consumer and economic trends we will face in 2012 but these first-half results have positioned us well, he said after the group beat forecasts with a 16 percent rise in half-year earnings on Thursday.

Walsh said the group's emerging market business grew 18 percent in the half year, and now accounts for nearly 40 percent of its business, driven by strong performances from Johnnie Walker whisky especially in Brazil, China and South Africa, and saw no sign of the slowdown seen by consumer goods groups Unilever and Reckitt Benckiser .

The London-based group is expanding into fast-growing emerging markets with recent deals in China and Turkey and expects half its turnover to come from these markets by 2015.

European chief Andrew Morgan said his business had been stabilised but there was no sign of an improvement in southern Europe, while a hoped for improvement in Britain did not materialise and the general outlook was less certain.

It's tough to call but it is not getting any easier, there are hard yards to make for the foreseeable future, he said.

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Spirits industry graphics: http://r.reuters.com/pak53s

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Diageo shares rose 0.1 percent to 1,463 pence by 1520 GMT in a slightly firmer London stock market after a sharp rise of 36 percent since the group's annual results in late August 2011 with the stock hitting a new record high of 1,484p on Wednesday.

UBS analyst Melissa Earlam described the results as very good as the group beat forecasts for sales and profit growth.

Management flags general caution regarding the consumer and economic trends they face in 2012, while there is certainly no sense of an underlying deterioration in trends from these results, she added.

Diageo, which also sells Captain Morgan rum and Guinness beer, saw 9 percent underlying profit growth for its July-December half year, helping drive earnings up 16 percent to 55.9 pence a share, above a company-compiled consensus of 54.8p and a ThomsonReuters I/B/E/S forecast of 54.8p.

Its half-year dividend rose 7 percent to 16.6 pence a share.

Investors should be encouraged by strong trading in the U.S, as well as continuing momentum in developing and emerging markets, though Europe remains a mixed bag, said analyst Martin Deboo at Investec Securities.

Diageo Finance Director Deirdre Mahlan reiterated the group was looking for a deeper interest in the Jose Cuervo tequila brand if the owning Beckmann family desire this as Diageo's long-term distribution deal with the Beckmann's comes to an end in June 2013. Analysts estimate the world best-selling tequila could be worth around $3.4 billion (2.1 billion pounds).

Diageo's arch rival and world No. 2, Pernod Ricard
, reports its half-year results on Feb 16.

(Reporting by David Jones; Editing by Jodie Ginsberg and Helen Massy-Beresford)