TIDMDGE
RNS Number : 4074V
Diageo PLC
03 December 2019
3 December 2019
Change in method for calculating organic non-GAAP measures
Diageo announced, at its Capital Markets Day on 22 May 2019,
that it would change its method of calculating organic growth for
periods beginning with the six months ending 31 December 2019.
Organic growth is a non-GAAP financial measure. See 'Explanatory
Notes' below for an explanation and reconciliation of non-GAAP
measures.
Going forward, Diageo will calculate the exchange adjustment
included in the organic movement calculation by translating the
current period results at the prior period weighted average
exchange rates. Previously, Diageo had calculated the exchange
adjustment included in the organic calculation by translating the
prior period results at the current period exchange rates.
This change in methodology will significantly simplify Diageo's
internal reporting processes by more closely aligning its
calculation of organic movements with its internal management
reporting. Diageo also believes this methodology will allow
investors to better compare Diageo's organic movements with its
peer group listed on page 92 of the Annual Report 2019.
Exchange impacts in respect of the external hedging of the
intergroup sales of products and the intergroup recharging of third
party services will continue to be allocated to the geographical
segment to which they relate. Any residual exchange impacts will
continue to be reported in Corporate. Results from markets that
have hyperinflationary economies are translated at respective
years' actual rates. As a result, no exchange difference is
reported. Under the revised methodology, the adjustments included
in respect of Acquisitions and Disposals in the organic
reconciliation, calculated at the prior period's weighted average
rate, have not changed materially.
Organic growth for sales, net sales, marketing and operating
profit for the years ended 30 June 2019 and 2018 and for the six
month period ended 31 December 2018 are set out in the tables below
under both the prior methodology and the new methodology with no
significant difference for all periods, geographical segments and
key categories:
Explanatory notes
Definitions and reconciliation of non-GAAP measures to GAAP
measures
Diageo's strategic planning process is based on certain non-GAAP
measures, including organic movements. These non-GAAP measures are
chosen for planning and reporting, and some of them are used for
incentive purposes. The group's management believes these measures
provide valuable additional information for users of the financial
statements in understanding the group's performance. These non-GAAP
measures should be viewed as complementary to, and not replacements
for, the comparable GAAP measures and reported movements
therein.
Organic movements
Organic information is presented using pounds sterling amounts
on a constant currency basis excluding the impact of exceptional
items and acquisitions and disposals. Organic measures enable users
to focus on the performance of the business which is common to both
years and which represents those measures that local managers are
most directly able to influence.
Calculation of organic movements under new methodology
The organic movement percentage is the amount in the row titled
'Organic movement' in the tables below, expressed as a percentage
of the absolute amount in the associated relevant row titled
'adjusted'. Organic operating margin is calculated by dividing
operating profit before exceptional items by net sales after
excluding the impact of exchange rate movements and acquisitions
and disposals.
(a) Exchange rates
'Exchange' in the organic movement calculation reflects the
adjustment to recalculate the reported results as if they had been
generated at the prior period weighted average exchange rates.
Exchange impacts in respect of the external hedging of inter
group sales by the markets in a currency other than their
functional currency and the inter group recharging of services are
also translated at prior period weighted average exchange rates and
are allocated to the geographical segment to which they relate.
Residual exchange impacts are reported as part of the Corporate
segment.
(b) Acquisitions and disposals
For acquisitions in the current period, the post acquisition
results are excluded from the organic movement calculations. For
acquisitions in the prior period, post acquisition results are
included in full in the prior period but are included in the
organic movement calculation from the anniversary of the
acquisition date in the current period. The acquisition row also
eliminates the impact of transaction costs that have been charged
to operating profit in the current or prior period in respect of
acquisitions that, in management's judgement, are expected to be
completed.
Where a business, brand, brand distribution right or agency
agreement was disposed of, or terminated, in the period up to the
date of the external results announcement, the group, in the
organic movement calculations, excludes the results for that
business from the current and prior period. In the calculation of
operating profit, the overheads included in disposals are only
those directly attributable to the businesses disposed of, and do
not result from subjective judgements of management.
(c) Exceptional items
Exceptional items are those that in management's judgement need
to be disclosed by virtue of their size and/or nature. Such items
are included within the income statement caption to which they
relate, and are separately disclosed in the notes to the
consolidated financial statements, and are excluded from the
organic movement calculations.
Exceptional operating items are those that are considered to be
material and/or unusual or non-recurring in nature and are part of
the operating activities of the group such as impairments of fixed
assets, indirect tax settlements, property disposals and changes in
post-employment plans.
Gains and losses on the sale of businesses, brands or
distribution rights, step up gains and losses that arise when an
investment becomes an associate or an associate becomes a
subsidiary and other material, unusual non-recurring items, that
are not in respect of the production, marketing and distribution of
premium drinks, are disclosed as non-operating exceptional items
below operating profit in the consolidated income statement.
Exceptional current and deferred tax items, comprising material
unusual non-recurring items, impact taxation. Examples include,
direct tax provisions and settlements in respect of prior years and
the remeasurement of deferred tax assets and liabilities following
tax rate changes.
It is believed that separate disclosure of exceptional items and
the classification between operating and non-operating items
further helps investors to understand the performance of the
group.
Organic movement calculations for the year ended 30 June 2019
under both the new and old methodologies were as follows:
Year ended 30 June 2019
------------------------------------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
As calculated under new methodology As calculated under old methodology
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Corporate North Corporate
America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total
GBP million GBP million GBP million GBP million GBP million million GBP million GBP million GBP million GBP million GBP million GBP million million GBP million
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Sales Sales
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 reported 4,671 5,232 2,083 1,352 5,042 52 18,432 2018 reported 4,671 5,232 2,083 1,352 5,042 52 18,432
Exchange (34) (1) (4) 5 (17) (1) (52) Exchange 200 (291) 12 (35) (120) - (234)
Disposals (175) (7) (4) (1) (10) - (197) Disposals (185) (7) (4) (1) (10) - (207)
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 adjusted 4,462 5,224 2,075 1,356 5,015 51 18,183 2018 adjusted 4,686 4,934 2,091 1,316 4,912 52 17,991
Organic movement 239 223 145 127 461 3 1,198 Organic movement 249 195 142 127 443 1 1,157
Acquisitions and Acquisitions and
disposals 133 2 2 1 1 - 139 disposals 139 3 2 1 1 - 146
Exchange 240 (317) 13 (40) (121) (1) (226) Exchange n/a n/a n/a n/a n/a n/a n/a
2019 reported 5,074 5,132 2,235 1,444 5,356 53 19,294 2019 reported 5,074 5,132 2,235 1,444 5,356 53 19,294
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Organic movement Organic movement
% 5 4 7 9 9 6 7 % 5 4 7 10 9 2 6
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Net sales Net sales
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 reported 4,116 2,932 1,491 1,069 2,503 52 12,163 2018 reported 4,116 2,932 1,491 1,069 2,503 52 12,163
Exchange (28) (4) (4) 3 (8) (1) (42) Exchange 176 (95) 8 (29) (36) - 24
Disposals (136) (3) (3) (1) (6) - (149) Disposals (143) (3) (3) (1) (6) - (156)
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 adjusted 3,952 2,925 1,484 1,071 2,489 51 11,972 2018 adjusted 4,149 2,834 1,496 1,039 2,461 52 12,031
Organic movement 206 113 104 89 231 3 746 Organic movement 216 104 100 90 226 1 737
Acquisitions and Acquisitions and
disposals 93 - 1 1 1 - 96 disposals 95 1 1 1 1 - 99
Exchange 209 (99) 8 (31) (33) (1) 53 Exchange n/a n/a n/a n/a n/a n/a n/a
2019 reported 4,460 2,939 1,597 1,130 2,688 53 12,867 2019 reported 4,460 2,939 1,597 1,130 2,688 53 12,867
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Organic movement Organic movement
% 5 4 7 8 9 6 6 % 5 4 7 9 9 2 6
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Marketing Marketing
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 reported 662 474 158 196 388 4 1,882 2018 reported 662 474 158 196 388 4 1,882
Exchange (5) (4) 1 - (2) - (10) Exchange 24 (10) 1 (7) (3) - 5
Reclassification - - 10 - - - 10 Reclassification - - 10 - - - 10
Disposals (1) - - - - - (1) Disposals (1) - - - - - (1)
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 adjusted 656 470 169 196 386 4 1,881 2018 adjusted 685 464 169 189 385 4 1,896
Organic movement 71 27 4 11 27 (1) 139 Organic movement 75 26 5 12 27 (1) 144
Acquisitions and Acquisitions and
disposals 2 - - - - - 2 disposals 2 - - - - - 2
Exchange 33 (7) 1 (6) (1) - 20 Exchange n/a n/a n/a n/a n/a n/a n/a
2019 reported 762 490 174 201 412 3 2,042 2019 reported 762 490 174 201 412 3 2,042
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Organic movement Organic movement
% 11 6 2 6 7 (25) 7 % 11 6 3 6 7 (25) 8
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Operating profit Operating profit
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 reported 1,882 1,028 191 308 568 (158) 3,819 2018 reported 1,882 1,028 191 308 568 (158) 3,819
Exchange (23) (3) 6 - (3) 6 (17) Exchange 74 (35) (6) (2) (6) - 25
Acquisitions and Acquisitions and
disposals (85) (2) (2) - (2) - (91) disposals (90) (2) (2) - (2) - (96)
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2018 adjusted 1,774 1,023 195 308 563 (152) 3,711 2018 adjusted 1,866 991 183 306 560 (158) 3,748
Organic movement 62 29 77 67 148 (44) 339 Organic movement 52 22 91 59 143 (31) 336
Acquisitions and Acquisitions and
disposals 30 (1) - - - (1) 28 disposals 30 1 1 - - - 32
Exchange 82 (37) 3 (10) (8) 8 38 Exchange n/a n/a n/a n/a n/a n/a n/a
2019 reported 1,948 1,014 275 365 703 (189) 4,116 2019 reported 1,948 1,014 275 365 703 (189) 4,116
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Organic movement Organic movement
% 3 3 39 22 26 (29) 9 % 3 2 50 19 26 (20) 9
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Organic operating Organic
margin operating margin
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
2019 44.2% 34.6% 17.1% 32.3% 26.1% n/a 31.8% 2019 43.9% 34.5% 17.2% 32.3% 26.2% n/a 32.0%
2018 44.9% 35.0% 13.1% 28.8% 22.6% n/a 31.0% 2018 45.0% 35.0% 12.2% 29.5% 22.8% n/a 31.2%
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Margin Margin
improvement/ improvement/
(decline) (bps) (73) (35) 399 357 352 n/a 85 (decline) (bps) (103) (49) 494 288 341 n/a 83
----------------- -------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- -------------------------------- ---------------- ------------------------------- -------------------------------- ------------------------------- ------------------------------- ------------------------------- --------- --------------------------------
Key categories - as calculated under Key categories - as calculated under
new methodology old methodology
-------------------------------------- ---------- ------------------------------------ ----------
Organic Organic Reported Organic Organic Reported
volume net sales net sales volume net sales net sales
movement movement movement movement movement movement
% % % % % %
------------ ----------- ---------- ---------- ----------- ----------- ---------- ----------
Spirits 3 7 6 Spirits 3 7 6
Scotch 2 6 6 Scotch 2 6 6
Vodka 2 2 4 Vodka 2 2 4
US whiskey 2 4 9 US whiskey 2 4 9
Canadian Canadian
whisky 6 6 8 whisky 6 6 8
Rum (3) (2) (3) Rum (3) (2) (3)
Indian-Made
Indian-Made Foreign
Foreign Liquor
Liquor (IMFL) (IMFL)
whisky 6 8 3 whisky 6 8 3
Liqueurs 1 3 4 Liqueurs 1 4 4
Gin 17 23 23 Gin 17 22 23
Tequila 19 29 37 Tequila 19 29 37
Beer 1 3 4 Beer 1 3 4
Ready to
Ready to drink 7 12 12 drink 7 12 12
-------------- ---------- ---------- ---------- ----------- ----------- ---------- ----------
Organic movement calculations for the six months ended 31
December 2018 under the new and old methodologies were as
follows:
Six months ended 31 December 2018
---------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
As calculated under new methodology As calculated under old methodology
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Corporate North Corporate
America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total
GBP million GBP million GBP million GBP million GBP million million GBP million GBP million GBP million GBP million GBP million GBP million million GBP million
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Sales Sales
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 reported 2,467 2,887 1,088 840 2,625 27 9,934 2017 reported 2,467 2,887 1,088 840 2,625 27 9,934
Exchange (70) (45) (10) (14) (61) (1) (201) Exchange 52 (193) (1) (47) (125) - (314)
Reclassification 1 12 - - (13) - - Reclassification 1 12 - - (13) - -
Disposals (92) (4) (2) - (9) - (107) Disposals (97) (4) (3) - (9) - (113)
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 adjusted 2,306 2,850 1,076 826 2,542 26 9,626 2017 adjusted 2,423 2,702 1,084 793 2,478 27 9,507
Organic movement 143 193 74 59 292 2 763 Organic movement 151 174 74 70 286 1 756
Acquisitions and Acquisitions and
disposals 88 3 2 1 1 - 95 disposals 93 3 2 1 1 - 100
Exchange 130 (167) 8 (22) (70) - (121) Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 2,667 2,879 1,160 864 2,765 28 10,363 2018 reported 2,667 2,879 1,160 864 2,765 28 10,363
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Organic movement Organic movement
% 6 7 7 7 11 8 8 % 6 6 7 9 12 4 8
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Net sales Net sales
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 reported 2,183 1,599 774 649 1,298 27 6,530 2017 reported 2,183 1,599 774 649 1,298 27 6,530
Exchange (63) (17) (9) (11) (22) (1) (123) Exchange 44 (60) (1) (35) (39) - (91)
Reclassification 1 12 - - (13) - - Reclassification 1 12 - - (13) - -
Disposals (72) (2) (2) - (5) - (81) Disposals (75) (2) (2) - (5) - (84)
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 adjusted 2,049 1,592 763 638 1,258 26 6,326 2017 adjusted 2,153 1,549 771 614 1,241 27 6,355
Organic movement 125 86 50 49 156 2 468 Organic movement 130 83 49 57 156 1 476
Acquisitions and Acquisitions and
disposals 69 1 1 1 1 - 73 disposals 73 1 1 1 1 - 77
Exchange 113 (46) 7 (16) (17) - 41 Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 2,356 1,633 821 672 1,398 28 6,908 2018 reported 2,356 1,633 821 672 1,398 28 6,908
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Organic movement Organic movement
% 6 5 7 8 12 8 7 % 6 5 6 9 13 4 7
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Marketing Marketing
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 reported 338 246 83 109 188 4 968 2017 reported 338 246 83 109 188 4 968
Exchange (4) - 4 (2) (3) (2) (7) Exchange 10 (7) 3 (6) (4) - (4)
Reclassification (1) - - 1 - - - Reclassification (1) - - 1 - - -
Disposals (1) - - - - - (1) Disposals (1) - - - - - (1)
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 adjusted 332 246 87 108 185 2 960 2017 adjusted 346 239 86 104 184 4 963
Organic movement 30 18 4 7 25 (1) 83 Organic movement 36 21 5 6 24 (2) 90
Acquisitions 2 - - - - - 2 Acquisitions 1 - - - - - 1
Exchange 19 (4) - (5) (2) 1 9 Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 383 260 91 110 208 2 1,054 2018 reported 383 260 91 110 208 2 1,054
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Organic movement Organic movement
% 9 7 5 6 14 (50) 9 % 10 9 6 6 13 (50) 9
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Operating profit Operating profit
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 reported 1,027 599 120 218 316 (90) 2,190 2017 reported 1,027 599 120 218 316 (90) 2,190
Exchange (22) (9) 1 (3) (7) 11 (29) Exchange 39 (25) (2) (7) (3) (2) -
Reclassification 1 9 - (1) (9) - - Reclassification 1 9 - (1) (9) - -
Acquisitions and Acquisitions and
disposals (43) (1) (1) - (1) - (46) disposals (46) (1) (1) - (1) - (49)
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2017 adjusted 963 598 120 214 299 (79) 2,115 2017 adjusted 1,021 582 117 210 303 (92) 2,141
Organic movement 39 38 31 47 112 (7) 260 Organic movement 36 31 35 44 106 12 264
Acquisitions and Acquisitions and
disposals 42 1 1 - - - 44 disposals 44 1 1 - - - 46
Exchange 57 (23) 1 (7) (2) 6 32 Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 1,101 614 153 254 409 (80) 2,451 2018 reported 1,101 614 153 254 409 (80) 2,451
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Organic movement Organic movement
% 4 6 26 22 37 (9) 12 % 4 5 30 21 35 13 12
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Organic operating Organic
margin operating margin
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
2018 46.1% 37.9% 18.6% 38.0% 29.1% n/a 35.0% 2018 46.3% 37.6% 18.5% 37.9% 29.3% n/a 35.2%
2017 47.0% 37.6% 15.7% 33.5% 23.8% n/a 33.4% 2017 47.4% 37.6% 15.2% 34.2% 24.4% n/a 33.7%
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Margin Margin
improvement/ improvement/
(decline) (bps) (91) 34 285 445 530 n/a 152 (decline) (bps) (112) (1) 336 365 486 n/a 152
----------------- ------------------------------- ------------------------------- ------------------------------ ------------------------------- ------------------------------ --------- ------------------------------ ---------------- ------------------------------- -------------------------------- ------------------------------ --------------------------------- ------------------------------ --------- -------------
Key categories - as calculated under Key categories - as calculated under
new methodology old methodology
-------------------------------------- ---------- ------------------------------------ ----------
Organic Organic Reported Organic Organic net Reported
volume net sales net sales volume sales net sales
movement movement movement movement movement movement
% % % % % %
------------ ----------- ---------- ---------- ----------- ---------- ----------- ----------
Spirits 4 7 5 Spirits 4 7 5
Scotch 4 7 6 Scotch 4 7 6
Vodka 2 2 2 Vodka 2 3 2
US whiskey 2 4 6 US whiskey 2 4 6
Canadian Canadian
whisky 5 5 6 whisky 5 5 6
Rum (4) (4) (5) Rum (4) (3) (5)
Indian-Made
Indian-Made Foreign
Foreign Liquor
Liquor (IMFL) (IMFL)
whisky 9 11 2 whisky 9 11 2
Liqueurs - 2 2 Liqueurs - 3 2
Gin 25 29 29 Gin 25 28 29
Tequila 18 29 36 Tequila 18 29 36
Beer 2 4 5 Beer 2 4 5
Ready to
Ready to drink 9 16 15 drink 9 16 15
-------------- ---------- ---------- ---------- ----------- ---------- ----------- ----------
Organic movement calculations for the year ended 30 June 2018
under both the new and old methodologies were as follows:
Year ended 30 June 2018
---------------------------------------------------------------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
As calculated under new methodology As calculated under old methodology
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North Corporate North Corporate
America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total America Europe and Turkey Africa Latin America and Caribbean Asia Pacific GBP Total
GBP million GBP million GBP million GBP million GBP million million GBP million GBP million GBP million GBP million GBP million GBP million million GBP million
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Sales Sales
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 reported 4,725 4,985 2,132 1,303 4,923 46 18,114 2017 reported 4,725 4,985 2,132 1,303 4,923 46 18,114
Exchange 8 (6) (3) 26 14 - 39 Exchange (261) (113) (130) (61) (160) 1 (724)
Reclassification (8) 16 1 2 (11) - - Reclassification (8) 16 1 2 (11) - -
Disposals - (2) - - (216) - (218) Disposals - (3) - - (207) - (210)
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 adjusted 4,725 4,993 2,130 1,331 4,710 46 17,935 2017 adjusted 4,456 4,885 2,003 1,244 4,545 47 17,180
Organic movement 168 391 92 94 522 4 1,271 Organic movement 160 347 80 108 489 5 1,189
Acquisitions and Acquisitions and
disposals 58 - - - 8 - 66 disposals 55 - - - 8 - 63
Exchange (280) (152) (139) (73) (198) 2 (840) Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 4,671 5,232 2,083 1,352 5,042 52 18,432 2018 reported 4,671 5,232 2,083 1,352 5,042 52 18,432
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Organic movement Organic movement
% 4 8 4 7 11 9 7 % 4 7 4 9 11 11 7
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Net sales Net sales
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 reported 4,161 2,824 1,556 1,044 2,419 46 12,050 2017 reported 4,161 2,824 1,556 1,044 2,419 46 12,050
Exchange 8 (2) (2) 27 14 - 45 Exchange (228) (15) (105) (43) (64) 1 (454)
Reclassification (8) 16 1 2 (11) - - Reclassification (8) 16 1 2 (11) - -
Disposals - (2) - - (57) - (59) Disposals - (3) - - (55) - (58)
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 adjusted 4,161 2,836 1,555 1,073 2,365 46 12,036 2017 adjusted 3,925 2,822 1,452 1,003 2,289 47 11,538
Organic movement 150 124 48 55 232 4 613 Organic movement 142 110 39 66 210 5 572
Acquisitions and Acquisitions and
disposals 52 - - - 4 - 56 disposals 49 - - - 4 - 53
Exchange (247) (28) (112) (59) (98) 2 (542) Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 4,116 2,932 1,491 1,069 2,503 52 12,163 2018 reported 4,116 2,932 1,491 1,069 2,503 52 12,163
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Organic movement Organic movement
% 4 4 3 5 10 9 5 % 4 4 3 7 9 11 5
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Marketing Marketing
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 reported 642 443 166 195 343 9 1,798 2017 reported 642 443 166 195 343 9 1,798
Exchange 11 10 (2) 4 (13) (1) 9 Exchange (21) 2 (11) (8) (5) (1) (44)
Reclassification (2) 1 - 1 - - - Reclassification (2) 1 - 1 - - -
Disposals - - - - - - - Disposals - - - - - - -
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 adjusted 651 454 164 200 330 8 1,807 2017 adjusted 619 446 155 188 338 8 1,754
Organic movement 42 19 6 5 70 (3) 139 Organic movement 35 28 3 8 50 (4) 120
Acquisitions and Acquisitions and
disposals 8 - - - - - 8 disposals 8 - - - - - 8
Exchange (39) 1 (12) (9) (12) (1) (72) Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 662 474 158 196 388 4 1,882 2018 reported 662 474 158 196 388 4 1,882
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Organic movement Organic movement
% 6 4 4 3 21 (38) 8 % 6 6 2 4 15 (50) 7
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Operating profit Operating profit
before before
exceptional items exceptional
items
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 reported 1,899 936 218 250 487 (189) 3,601 2017 reported 1,899 936 218 250 487 (189) 3,601
Exchange 102 (5) 16 37 41 1 192 Exchange (60) 7 (20) 10 1 6 (56)
Reclassification (4) 11 2 (1) (8) - - Reclassification (4) 11 2 (1) (8) - -
Acquisitions and Acquisitions and
disposals - - - 1 - 1 2 disposals - - - - (2) 1 (1)
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2017 adjusted 1,997 942 236 287 520 (187) 3,795 2017 adjusted 1,835 954 200 259 478 (182) 3,544
Organic movement 24 93 - 48 85 32 282 Organic movement 43 74 (9) 49 89 24 270
Acquisitions and Acquisitions and
disposals 4 - - - 1 - 5 disposals 4 - - - 1 - 5
Exchange (143) (7) (45) (27) (38) (3) (263) Exchange n/a n/a n/a n/a n/a n/a n/a
2018 reported 1,882 1,028 191 308 568 (158) 3,819 2018 reported 1,882 1,028 191 308 568 (158) 3,819
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Organic movement Organic movement
% 1 10 - 17 16 17 7 % 2 8 (5) 19 19 13 8
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Organic operating Organic
margin operating margin
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
2018 46.9% 35.0% 14.7% 29.7% 23.3% n/a 32.2% 2018 46.2% 35.1% 12.8% 28.8% 22.7% n/a 31.5%
2017 48.0% 33.2% 15.2% 26.7% 22.0% n/a 31.5% 2017 46.8% 33.8% 13.8% 25.8% 20.9% n/a 30.7%
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Margin
Margin (decline)/ (decline)/
improvement improvement
(bps) (111) 175 (45) 295 131 n/a 70 (bps) (58) 126 (96) 299 181 n/a 78
----------------- ---------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- --------------------------------- ---------------- --------------------------------- --------------------------------- --------------------------------- -------------------------------- --------------------------------- --------- ---------------------------------
Key categories - as calculated under Key categories - as calculated under
new methodology old methodology
-------------------------------------- ---------- ------------------------------------ ----------
Organic Organic Reported Organic Organic Reported
volume net sales net sales volume net sales net sales
movement movement movement movement movement movement
% % % % % %
------------ ----------- ---------- ---------- ----------- ----------- ---------- ----------
Spirits 3 5 2 Spirits 3 5 2
Scotch 3 2 1 Scotch 3 2 1
Vodka 1 (1) (6) Vodka 1 (1) (6)
US whiskey 2 7 1 US whiskey 2 7 1
Canadian Canadian
whisky - 2 (4) whisky - 2 (4)
Rum (3) 1 (4) Rum (3) 1 (4)
Indian-Made
Indian-Made Foreign
Foreign Liquor
Liquor (IMFL) (IMFL)
whisky 4 8 (1) whisky 4 8 (1)
Liqueurs 6 5 4 Liqueurs 6 6 4
Gin 17 17 14 Gin 17 16 14
Tequila 35 40 56 Tequila 35 40 56
Beer 1 5 (1) Beer 1 4 (1)
Ready to
Ready to drink 2 4 - drink 2 4 -
-------------- ---------- ---------- ---------- ----------- ----------- ---------- ----------
Contacts
Investor enquiries: Andy Ryan +44 (0) 20 8978 6504
investor.relations@diageo.com
Editor notes
Diageo is a global leader in beverage alcohol with an
outstanding collection of brands across spirits and beer
categories. These brands include Johnnie Walker, Crown Royal,
J&B, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel
One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo's products are sold in more than 180 countries around the
world. The company is listed on both the London Stock Exchange
(DGE) and the New York Stock Exchange (DEO). For more information
about Diageo, its people, brands, and performance, visit us at
Diageo.com. For our global resource that promotes responsible
drinking through the sharing of best practice tools, information
and initiatives, visit DRINKiQ.com.
Celebrating life, every day, everywhere.
Diageo plc
LEI: 213800ZVIELEA55JMJ32
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUGGCCPUPBGMP
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December 03, 2019 02:00 ET (07:00 GMT)
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