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Diageo PLC (DGE)

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Tuesday 03 December, 2019

Diageo PLC

Methodology change for organic non-GAAP measures

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

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ million

 

 

North

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ 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 disposals

133

2

2

1

1

-

139

 

Acquisitions and 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 %

5

4

7

9

9

6

7

 

Organic movement %

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 disposals

93

-

1

1

1

-

96

 

Acquisitions and 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 %

5

4

7

8

9

6

6

 

Organic movement %

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 disposals

2

-

-

-

-

-

2

 

Acquisitions and 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 %

11

6

2

6

7

(25)

7

 

Organic movement %

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 disposals

(85)

(2)

(2)

-

(2)

-

(91)

 

Acquisitions and 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 disposals

30

(1)

-

-

-

(1)

28

 

Acquisitions and 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 %

3

3

39

22

26

(29)

9

 

Organic movement %

3

2

50

19

26

(20)

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic operating margin

 

 

 

 

 

 

 

 

Organic 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 improvement/ (decline) (bps)

                             (73)

                             (35)

                             399

                             357

                             352

 n/a

                               85

 

Margin improvement/ (decline) (bps)

                           (103)

                             (49)

                             494

                             288

                             341

 n/a

                               83

 

 

Key categories - as calculated under new methodology

 

 

Key categories - as calculated under old methodology

 

 

 

Organic volume

movement 

%

Organic net sales

movement

%

Reported net sales movement

%

 

 

 

Organic volume

movement 

%

Organic net sales

movement

%

Reported net sales 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 whisky

 

 

6

 

6

 

8

 

Canadian whisky

 

 

6

 

6

 

8

Rum

 

 

(3)

 

(2)

 

(3)

 

Rum

 

 

(3)

 

(2)

 

(3)

Indian-Made Foreign Liquor (IMFL) whisky

 

 

6

 

8

 

3

 

Indian-Made Foreign Liquor (IMFL) 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 drink

 

 

7

 

12

 

12

 

Ready to 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

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ million

 

 

North

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ 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 disposals

88

3

2

1

1

-

95

 

Acquisitions and 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 %

6

7

7

7

11

8

8

 

Organic movement %

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 disposals

69

1

1

1

1

-

73

 

Acquisitions and 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 %

6

5

7

8

12

8

7

 

Organic movement %

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 %

9

7

5

6

14

(50)

9

 

Organic movement %

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 disposals

(43)

(1)

(1)

-

(1)

-

(46)

 

Acquisitions and 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 disposals

42

1

1

-

-

-

44

 

Acquisitions and 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 %

4

6

26

22

37

(9)

12

 

Organic movement %

4

5

30

21

35

13

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic operating margin

 

 

 

 

 

 

 

 

Organic 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 improvement/ (decline) (bps)

                            (91)

                              34

                            285

                             445

                            530

 n/a

                            152

 

Margin improvement/ (decline) (bps)

                           (112)

                              (1)

                            336

                               365

                            486

 n/a

                            152

 

 

Key categories - as calculated under new methodology

 

 

Key categories - as calculated under old methodology

 

 

 

Organic volume movement 

%

Organic net sales

movement

%

Reported net sales movement

%

 

 

 

Organic volume movement 

%

Organic net sales

movement

%

Reported net sales 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 whisky

 

 

5

 

5

 

6

 

Canadian whisky

 

 

5

 

5

 

6

Rum

 

 

(4)

 

(4)

 

(5)

 

Rum

 

 

(4)

 

(3)

 

(5)

Indian-Made Foreign Liquor (IMFL) whisky

 

 

9

 

11

 

2

 

Indian-Made Foreign Liquor (IMFL) 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 drink

 

 

9

 

16

 

15

 

Ready to 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

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ million

 

 

North

America

£ million

Europe and Turkey

£ million

Africa

£ million

Latin America and Caribbean

£ million

Asia Pacific

£ million

Corporate

£ million

Total

£ 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 disposals

58

-

-

-

8

-

66

 

Acquisitions and 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 %

4

8

4

7

11

9

7

 

Organic movement %

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 disposals

52

-

-

-

4

-

56

 

Acquisitions and 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 %

4

4

3

5

10

9

5

 

Organic movement %

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 disposals

8

-

-

-

-

-

8

 

Acquisitions and 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 %

6

4

4

3

21

(38)

8

 

Organic movement %

6

6

2

4

15

(50)

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit before exceptional items

 

 

 

 

 

 

 

 

Operating profit before 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 disposals

-

-

-

1

-

1

2

 

Acquisitions and 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 disposals

4

-

-

-

1

-

5

 

Acquisitions and 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 %

1

10

-

17

16

17

7

 

Organic movement %

2

8

(5)

19

19

13

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic operating margin

 

 

 

 

 

 

 

 

Organic 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 (decline)/ improvement (bps)

                              (111)

                               175

                              (45)

                              295

                               131

 n/a

                                70

 

Margin (decline)/ improvement (bps)

                              (58)

                               126

                              (96)

                              299

                               181

 n/a

                                78

 

 

Key categories - as calculated under new methodology

 

 

Key categories - as calculated under old methodology

 

 

 

Organic volume movement 

%

Organic net sales

movement

%

Reported net sales movement

%

 

 

 

Organic volume

movement 

%

Organic net sales

movement

%

Reported net sales 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 whisky

 

 

-

 

2

 

(4)

 

Canadian whisky

 

 

-

 

2

 

(4)

Rum

 

 

(3)

 

1

 

(4)

 

Rum

 

 

(3)

 

1

 

(4)

Indian-Made Foreign Liquor (IMFL) whisky

 

 

4

 

8

 

(1)

 

Indian-Made Foreign Liquor (IMFL) 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 drink

 

 

2

 

4

 

-

 

Ready to drink

 

 

2

 

4

 

-

 

 

 

Contacts

Investor enquiries:                                          Andy Ryan                      +44 (0) 20 8978 6504

[email protected]

                                                                                                                                                                                 

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


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