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Diageo PLC (DGE)

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Monday 11 March, 2013

Diageo PLC

Supply review and revised segmental information

RNS Number : 6626Z
Diageo PLC
11 March 2013
 



Revised segmental information

 

11 March 2013

Diageo announces review of Global Supply operations and issues revised segmental information for prior reporting periods

Diageo has today announced that its Global Supply and Procurement operation will be refocused to enhance alignment between Global Supply and Diageo's 21 key markets. Responsibility for local operations will be transferred to the markets and regional structures will be reduced. The Global supply organisation will continue to be responsible for ensuring excellence across all operations. This change follows the reshaping of the in-market organisations through the implementation of the 2011 operating model review and is a consequence of Diageo's increasing presence in new faster growth markets.

Further work will be required to establish the exact nature of the reorganisation to be made. However an initial review has already established that efficiency-driven cost savings can be delivered which together with savings from footprint changes and cost reductions in respect of the regional supply organisations are expected to amount to approximately £60 million per annum. These savings are expected to be achieved in 3 years. Costs associated with the restructuring are estimated to be approximately £100 million.

Changes to reporting regional structure

As announced on 9 November 2012, Diageo has made changes to management responsibilities that have led to a change in the reporting for geographic segments.   Due to these changes, results for the year ending 30 June 2013 will be reported using the following geographical segments:

·      North America

·      Western Europe

·      Africa, Eastern Europe and Turkey

·      Latin America and Caribbean

·      Asia Pacific

·      Corporate

As a consequence of these changes the figures for the geographical segments for prior periods have been restated. 

Revised segmental information for the years ended 30 June 2012 and 30 June 2011 and the six month period ended 31 December 2012 and 31 December 2011 are provided below.

In addition, organic growth percentages by geographic segment have been restated for the year ended 30 June 2012 and the six month period ended 31 December 2012.

 

Volume


Year ended 30 June 2012


Year ended 30 June 2011


As

reported

units million

 

Reclass

units

million

 

Restated

units million


As

reported

units million

 

Reclass

units

million

 

Restated

units million

North America

53.0

53.0


52.3

52.3

Europe

45.2

(45.2)

-


40.5

(40.5)

-

Western Europe

-

34.7 

34.7


-

35.6 

35.6

Africa

24.9

(24.9)

-


23.1

(23.1)

-

Africa, Eastern Europe and Turkey

-

35.4 

35.4


-

28.0 

28.0

Latin America and Caribbean

17.2

17.2


15.7

15.7

Asia Pacific

  16.2

       - 

  16.2


  15.9

      - 

  15.9


156.5

       - 

156.5


147.5

      - 

147.5

 


Six months ended 31 Dec 2012


Six months ended 31 Dec 2011


As

reported

units million

 

Reclass

units

million

 

Restated

units million


As

reported

units million

 

Reclass

units

million

 

Restated

units million

North America

28.6

28.6


28.3

28.3

Europe

24.9

(24.9)

-


24.8

(24.8)

-

Western Europe

-

18.3 

18.3


-

19.2 

19.2

Africa

13.7

(13.7)

-


12.9

(12.9)

-

Africa, Eastern Europe and Turkey

-

20.3 

20.3


-

18.5 

18.5

Latin America and Caribbean

12.8

12.8


9.5

9.5

Asia Pacific

  8.8

       - 

  8.8


  8.6

       - 

  8.6


88.8

       - 

88.8


84.1

       - 

84.1

 

 

Sales


Year ended 30 June 2012


Year ended 30 June 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

4,094

4,094


3,895

3,895

Europe

4,966

(4,966)

-


4,279

(4,279)

-

Western Europe

-

3,834 

3,834


-

3,918 

3,918

Africa

1,869

(1,869)

-


1,764

(1,764)

-

Africa, Eastern Europe and Turkey

-

3,001 

3,001


-

2,125 

2,125

Latin America and Caribbean

1,491

1,491


1,293

1,293

Asia Pacific

2,104

2,104


1,931

1,931

Corporate

       70

         - 

       70


       70

         - 

       70


14,594

         - 

14,594


13,232

         - 

13,232

 


Six months ended 31 Dec 2012


Six months ended 31 Dec 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

2,223

2,223


2,162

2,162

Europe

2,735

(2,735)

-


2,699

(2,699)

-

Western Europe

-

1,985 

1,985


-

2,137 

2,137

Africa

1,043

(1,043)

-


950

(950)

-

Africa, Eastern Europe and Turkey

-

1,793 

1,793


-

1,512 

1,512

Latin America and Caribbean

967

967


843

843

Asia Pacific

1,225

1,225


   1,132

1,132

Corporate

     42

        - 

     42


     39

        - 

     39


8,235

        - 

8,235


7,825

        - 

7,825

 

 

Net sales


Year ended 30 June 2012


Year ended 30 June 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£  million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

3,556

3,556


3,366

3,366

Europe

2,949

(2,949)

-


2,703

(2,703)

-

Western Europe

-

2,345 

2,345


-

2,433 

2,433

Africa

1,447

(1,447)

-


1,357

(1,357)

-

Africa, Eastern Europe and Turkey

-

2,051 

2,051


-

1,627 

1,627

Latin America and Caribbean

1,239

1,239


1,063

1,063

Asia Pacific

1,501

1,501


1,377

1,377

Corporate

       70

        - 

       70


     70

         - 

     70


10,762

        - 

10.762


9,936

         - 

9,936

 


Six months ended 31 Dec 2012


Six months ended 31 Dec 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

1,947

1,947


1,880

1,880

Europe

1,577

(1,577)

-


1,625

(1,625)

-

Western Europe

-

1,182 

1,182


-

1,310 

1,310

Africa

795

(795)

-


731

(731)

-

Africa, Eastern Europe and Turkey

-

1,190 

1,190


-

1,046 

1,046

Latin America and Caribbean

796

796


687

687

Asia Pacific

882

882


795

795

Corporate

     42

        - 

     42


     39

        - 

     39


6,039

        - 

6,039


5,757

        - 

5,757

 

 

Marketing spend


Year ended 30 June 2012


Year ended 30 June 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

547

547


508

508

Europe

440

(440)

-


402

(402)

-

Western Europe

-

355 

355


-

357 

357

Africa

147

(147)

-


139

(139)

-

Africa, Eastern Europe and Turkey

-

232 

232


-

184 

184

Latin America and Caribbean

208

208


181

181

Asia Pacific

343

343


303

303

Corporate

       6

      - 

       6


       5

      - 

       5


1,691

      - 

1,691


1,538

      - 

1,538

 


Six months ended 31 Dec 2012


Six months ended 31 Dec 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

301

301


289

289

Europe

234

(234)

-


249

(249)

-

Western Europe

-

176 

176


-

206 

206

Africa

79

(79)

-


78

(78)

-

Africa, Eastern Europe and Turkey

-

137 

137


-

121 

121

Latin America and Caribbean

120

120


103

103

Asia Pacific

188

188


173

173

Corporate

     4

      - 

    4


    4

      - 

    4


 926

      - 

926


896

      - 

896

 

 

Operating profit before exceptional items


Year ended 30 June 2012


Year ended 30 June 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

1,360 

1,360 


1,265 

1,265 

Europe

914 

(914)


808 

(808)

Western Europe

717 

717 


727 

727 

Africa

378 

(378)


339 

(339)

Africa, Eastern Europe and Turkey

575 

575 


420 

420 

Latin America and Caribbean

369 

369 


320 

320 

Asia Pacific

342 

342 


286 

286 

Corporate

 (165)

      - 

 (165)


 (134)

      - 

 (134)


3,198 

      - 

3,198 


2,884 

      - 

2,884 

 


Six months ended 31 Dec 2012


Six months ended 31 Dec 2011


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million


As

reported

£ million

 

Reclass

£ million

 

Restated

£ million

North America

825 

825 


765 

765 

Europe

528 

(528)


535 

(535)

Western Europe

381 

381 


432 

432 

Africa

225 

(225)


194 

(194)

Africa, Eastern Europe and Turkey

372 

372 


297 

297 

Latin America and Caribbean

302 

302 


251 

251 

Asia Pacific

220 

220 


200 

200 

Corporate

   (71)

      - 

   (71)


   (79)

      - 

   (79)


2,029 

      - 

2,029 


1,866 

      - 

1,866 

 

 

Organic growth for the year ended 30 June 2012



Volume


Sales


Net sales

Increase/(decrease)


As reported

 

Restated


As reported

 

Restated


As reported

 

Restated



%

%


%

%


%

%

North America



5


Europe


(1)

n/a 


1

n/a 


(1)

n/a 

Western Europe


n/a 

(3)


n/a

(1)


n/a 

(3)

Africa


n/a 


11

n/a 


11 

n/a 

Africa, Eastern Europe and Turkey


n/a 


n/a

13 


n/a 

12 

Latin America and Caribbean


10 

10 


18

18 


19 

19 

Asia Pacific



7


Corporate


n/a 

n/a 


1


Total



6


 



Marketing spend


Operating profit*



Increase/(decrease)


As reported

 

Restated


As reported

 

Restated






%

%


%

%




North America


7


7




Europe


3

n/a 


1

n/a 




Western Europe


n/a

(1)


n/a

(2)




Africa


9

n/a 


16

n/a 




Africa, Eastern Europe and Turkey


n/a

15 


n/a

18 




Latin America and Caribbean


18

18 


19

19 




Asia Pacific


11

11 


10

10 




Total


8


9




* Operating profit before exceptional items

 

 

Organic growth for the six months ended 31 December 2012



Volume


Sales


Net sales

Increase/(decrease)


As reported

 

Restated


As reported

 

Restated


As reported

 

Restated



%

%


%

%


%

%

North America



4


Europe


(3)

n/a 


-

n/a 


(2)

n/a 

Western Europe


n/a 

(5)


n/a

(4)


n/a 

(6)

Africa


n/a 


11

n/a 


10 

n/a 

Africa, Eastern Europe and Turkey


n/a 


n/a

13 


n/a 

11 

Latin America and Caribbean



17

17 


18 

18 

Asia Pacific



4


Corporate


n/a 

n/a 


11

11 


11 

11 

Total



5


           



Marketing spend


Operating profit*



Increase/(decrease)


As reported

 

Restated


As reported

 

Restated






%

%


%

%




North America






Europe


(2)

n/a 


(3)

n/a 




Western Europe


n/a 

(9)


n/a 

(8)




Africa


n/a 


17 

n/a 




Africa, Eastern Europe and Turkey


n/a 

17 


n/a 

18 




Latin America and Caribbean


22 

22 


23 

23 




Asia Pacific



10 

10 




Total






* Operating profit before exceptional items

The reported figures are those reported in the press release dated 31 January 2013 or the press release dated 14 January 2013.

Net sales are after deducting excise duties.  See the company's annual report on Form 20-F for the year ended 30 June 2012 filed with the US Securities and Exchange Commission (SEC) for an explanation of organic movement calculations and further definitions, disclosures and information.


Contacts

Investor enquiries to:                                    Chris Davies                            +44 (0) 7590 810 164

      Catherine James                      +44 (0) 7803 854 550

                                                    investor.relations@diageo.com

Media enquiries to:                                       Rowan Pearman                      +44 (0) 20 8978 4751

                                                                  Jessica Rouleau                       +44 (0) 20 8978 4764

                                                                                                                 press.office@diageo.com 

 

Editor notes

Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, JεB, Buchanan's, Windsor and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness.

Diageo is a global company, with its products sold in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). 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.

 

Forward-looking statements

This document contains 'forward-looking statements'. These forward-looking statements can be identified by the fact that they do not related only to historical or current facts.  In particular, forward looking statements include all statements that express forecasts, expectations, plans, outlook and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, the completion of Diageo's strategic transactions and restructuring programmes, anticipated tax rates, expected cash payments, outcomes of litigation, anticipated deficit reductions in relation to pension schemes and general economic conditions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including factors that are outside Diageo's control.  All oral and written forward-looking statements made on or after the date of this document and attributable to Diageo are expressly qualified in their entirety by the 'risk factors' contained in Diageo's annual report on Form 20-F for the year ended 30 June 2012 filed with the US Securities and Exchange Commission (SEC).  Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made.  Diageo does not undertake to update forward-looking statements to reflect any changes in Diageo's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.  The reader should, however, consult any additional disclosures that Diageo may make in any document it publishes and/or files with the SEC.  All readers, wherever located, should take note of these disclosures.  The information in this document does not constitute an offer to sell or an invitation to buy shares in Diageo plc or an invitation or inducement to engage in any other investment activities.  Past performance cannot be relied upon as a guide to future performance.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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