List
identifying information required to be furnished
by
Diageo plc pursuant to Rule 13a-16 or 15d-16 of
The
Securities Exchange Act 1934
1 –
31 August 2008
|
Information
|
Required
by/when
|
|
Public
Announcements/Press
|
The
Stock Exchange, London
|
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(01
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(18
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(01
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(19
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(04
August 2008)
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(20
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(05
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(20
August 2008)
|
|
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(06
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(21
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(06
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(22
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(07
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(26
August 2008)
|
|
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(08
August 2008)
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(27
August 2008)
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(08
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(27
August 2008)
|
|
|
Announcement
Company
notified of transactions in respect of the Diageo Share Incentive
Plan and
Messrs Rose, Walsh and those persons discharging managerial responsibility
inform the Company of their interests therein. Dr FB Humer, Mr Stitzer
and
Mr Williams inform the Company of their beneficial interests.
(11
August 2008)
|
Announcement
Preliminary
results announcement.
(28
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(12
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(28
August 2008)
|
|
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(13
August 2008)
|
Announcement
Mr
Walsh informs the Company of his beneficial interest.
(29
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(13
August 2008)
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(29
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(14
August 2008)
|
Announcement
Company
announces total voting rights.
(29
August 2008)
|
|
|
Announcement
Company
releases shares from treasury to satisfy grants made under employee
share
plans.
(15
August 2008)
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(29
August 2008)
|
|
|
Announcement
Company
purchases its own securities for cancellation through Credit Suisse
Securities (Europe) Limited.
(15
August 2008)
|
FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Diageo plc
(Translation
of registrant's name into English)
8
Henrietta Place, London W1G 0NB
(Address
of principal executive offices)
indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F
Form
20-F
x Form
40-F o
indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes
o
No
x
If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):82 o
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorised.
|
Diageo
plc
|
||
|
(Registrant)
|
||
|
Date
6 September 2008
|
By
|
/s/ S Arsenić |
|
Name:
|
S
Arsenić
|
|
|
Title:
|
Assistant
Company Secretary
|
|
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
13:53
01-Aug-08
|
|
|
Number
|
|
81351-8020
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 370 ordinary
shares of 28 101/108 pence each in the Company ('Ordinary Shares'), to satisfy
grants made under employee share plans. The average price at which these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 278,206,145 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,527,096,114.
1
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:42
01-Aug-08
|
|
|
Number
|
|
5091A16
|
RNS
Number : 5091A
Diageo
PLC
01
August
2008
Diageo
plc
1 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 625,000 ordinary shares at a price
of 881.19 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:46
04-Aug-08
|
|
|
Number
|
|
6061A16
|
RNS
Number : 6061A
Diageo
PLC
04
August
2008
Diageo
plc
4 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 575,000 ordinary shares at a price
of 893.46 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:41
05-Aug-08
|
|
|
Number
|
7123A16
|
RNS
Number : 7123A
Diageo
PLC
05
August
2008
Diageo
plc
5 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 420,000 ordinary shares at a price
of 919.9 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
14:25
06-Aug-08
|
|
|
Number
|
81424-91BA
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 2,560
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 278,203,585 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,525,478,674.
6
August
2008
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:36
06-Aug-08
|
|
|
Number
|
8035A16
|
RNS
Number : 8035A
Diageo
PLC
06
August
2008
Diageo
plc
6 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 445,000 ordinary shares at a price
of 930.25 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:56
07-Aug-08
|
|
|
Number
|
9147A16
|
RNS
Number : 9147A
Diageo
PLC
07
August
2008
Diageo
plc
7 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 475,000 ordinary shares at a price
of 942.37 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
14:51
08-Aug-08
|
|
|
Number
|
81450-FAED
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 2,192
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 278,201,393 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,524,560,866.
8
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:36
08-Aug-08
|
|
|
Number
|
0084B16
|
RNS
Number : 0084B
Diageo
PLC
08
August
2008
Diageo
plc
8 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 150,000 ordinary shares at a price
of 952.75 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Director/PDMR
Shareholding
|
|
|
Released
|
16:06
11-Aug-08
|
|
|
Number
|
81604-9F4E
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 3.1.4 OF THE DISCLOSURE AND TRANSPARENCY RULES
The
notifications listed below were all received under Paragraph 3.1.2 of the
Disclosure and Transparency Rules.
Diageo
plc (the 'Company') announces that:
1.
it
received notification on 11 August 2008 of the following allocations of ordinary
shares of 28 101/108 pence each in the Company ('Ordinary Shares') under the
Diageo Share Incentive Plan (the 'Plan'), namely:
(i)
the
following directors of the Company were allocated Ordinary Shares on 11 August
2008 under the Plan, by Diageo Share Ownership Trustees Limited (the
'Trustee'):
|
Name
of Director
|
Number
of Ordinary Shares
|
|
|
N
C
Rose
|
18
|
|
|
P
S
Walsh
|
18
|
(ii)
the
following 'Persons Discharging Managerial Responsibilities' ('PDMR') were
allocated Ordinary Shares on 11 August 2008 under the Plan, by the
Trustee:
|
Name
of PDMR
|
Number
of Ordinary Shares
|
|
|
S
Fletcher
|
18
|
|
|
J
Grover
|
18
|
|
|
A
Morgan
|
18
|
|
|
G
Williams
|
18
|
The
number of Ordinary Shares allocated comprises those purchased on behalf of
the
employee using an amount which the employee has chosen to have deducted from
salary ('Sharepurchase') and those awarded to the employee by the Company
('Sharematch') on the basis of one Sharematch Ordinary Share for every two
Sharepurchase Ordinary Shares.
The
Sharepurchase Ordinary Shares were purchased and the Sharematch Ordinary
Shares
were awarded at a price per share of £9.925.
The
Ordinary Shares are held by the Trustee and in the name of the Trustee.
Sharepurchase Ordinary Shares can normally be sold at any time. Sharematch
Ordinary Shares cannot normally be disposed of for a period of three years
after
the award date.
2.
it
received notification on 11 August 2008 from Dr F B Humer, a director of the
Company, that he has purchased 801 Ordinary Shares on 11 August 2008 under
an
arrangement with the Company, whereby he has agreed to use an amount of
£
8,000
each month, net of tax, from his director's fees to purchase Ordinary Shares.
Dr
F B Humer has agreed to retain the Ordinary Shares while he remains a director
of the Company.
The
Ordinary Shares were purchased at a price per share of £9.925.
3.
it
received notification on 11 August 2008 from Mr H T Stitzer, a director of
the
Company, that he has purchased 100 Ordinary Shares on 11 August 2008 under
an
arrangement with the Company, whereby he has agreed to use an amount
of
£1,000
each month, net of tax, from his director's fees to purchase
Ordinary
Shares.
The
Ordinary Shares were purchased at a price per share of £9.925.
4.
it
received notification on 4 August 2008 of an increase in the interests of Mr
G
Williams, being the receipt by a connected person (David Rhys Williams) of
36
Ordinary Shares on 29 October 2007 in respect of a dividend reinvestment
plan
at a
price per Ordinary Share of £11.019.
As
a
result of the above transactions, interests of directors and PDMRs in the
Company's Ordinary Shares (excluding options, awards under the Company's LTIPs
and interests as potential beneficiaries of the Company's Employee Benefit
Trusts) are as follows:
|
Number
of Ordinary Shares
|
||
|
Dr
F B Humer
|
4,301
|
|
|
N
C
Rose
|
403,556
|
|
|
H
T
Stitzer
|
5,566
|
|
|
P
S
Walsh
|
683,373
|
|
|
Name
of PDMR
|
Number
of Ordinary Shares
|
|
|
S
Fletcher
|
135,524
|
|
|
J
Grover
|
182,776
|
|
|
A
Morgan
|
151,951
|
|
|
G
Williams
|
228,770
(of which 5,812 are held in the form of ADS*)
|
|
P
D
Tunnacliffe
Company
Secretary
11
August
2008
*1
ADS is
the equivalent of 4 Ordinary Shares.
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:35
12-Aug-08
|
|
|
Number
|
1859B16
|
RNS
Number : 1859B
Diageo
PLC
12
August
2008
Diageo
plc
12 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 350,000 ordinary shares at a price
of 991.19 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
15:37
13-Aug-08
|
|
|
Number
|
81536-2DC0
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 6,596
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 278,194,797 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,524,067,462.
13
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:42
13-Aug-08
|
|
|
Number
|
2854B16
|
RNS
Number : 2854B
Diageo
PLC
13
August
2008
Diageo
plc
13 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 450,000 ordinary shares at a price
of 987.6 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:49
14-Aug-08
|
|
|
Number
|
3826B16
|
RNS
Number : 3826B
Diageo
PLC
14
August
2008
Diageo
plc
14 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse
Securities (Europe) Limited 550,000 ordinary shares at a price
of 975.47 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
13:22
15-Aug-08
|
|
|
Number
|
81322-E80F
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 8,171
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 278,186,626 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,523,075,633.
15
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:45
15-Aug-08
|
|
|
Number
|
4767B16
|
RNS
Number : 4767B
Diageo
PLC
15
August
2008
Diageo
plc
15 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 475,000 ordinary shares at a price
of 991.05 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:39
18-Aug-08
|
|
|
Number
|
5679B16
|
RNS
Number : 5679B
Diageo
PLC
18
August
2008
Diageo
plc
18 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 550,000 ordinary shares at a price
of 982.21 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:43
19-Aug-08
|
|
|
Number
|
6671B16
|
RNS
Number : 6671B
Diageo
PLC
19
August
2008
Diageo
plc
19 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 560,000 ordinary shares at a price
of 983.22 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
14:49
20-Aug-08
|
|
|
Number
|
81448-CA74
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today:
1)
it
cancelled 30,000,000 ordinary shares of 28 101/108 pence each in the Company
('Ordinary Shares') held in treasury.
2)
it
released from treasury 555 Ordinary Shares to satisfy grants made under employee
share plans. The average price at which these Ordinary Shares were released
from
treasury was 1,013.80 pence per share.
Following
this cancellation and release, the Company holds 248,186,071 Ordinary Shares
as
treasury shares and the total number of Ordinary Shares in issue (excluding
shares held as treasury shares) is 2,521,491,188.
20
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:54
20-Aug-08
|
|
|
Number
|
7577B16
|
RNS
Number : 7577B
Diageo
PLC
20
August
2008
Diageo
plc
20 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 600,000 ordinary shares at a price
of 972.53 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:57
21-Aug-08
|
|
|
Number
|
8435B16
|
RNS
Number : 8435B
Diageo
PLC
21
August
2008
Diageo
plc
21 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 650,000 ordinary shares at a price
of 967.73 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:43
22-Aug-08
|
|
|
Number
|
9366B16
|
RNS
Number : 9366B
Diageo
PLC
22
August
2008
Diageo
plc
22 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 600,000 ordinary shares at a price
of 983.49 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:44
26-Aug-08
|
|
|
Number
|
0580C16
|
RNS
Number : 0580C
Diageo
PLC
26
August
2008
Diageo
plc
26 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 675,000 ordinary shares at a price
of 975.14 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
14:11
27-Aug-08
|
|
|
Number
|
81411-36A8
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 6,744
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 248,179,327 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,518,972,932.
27
August
2008
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Transaction
in Own Shares
|
|
|
Released
|
16:43
27-Aug-08
|
|
|
Number
|
1511C16
|
RNS
Number : 1511C
Diageo
PLC
27
August
2008
Diageo
plc
27 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 675,000 ordinary shares at a price
of 979.14 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
|
TIDM
|
DGE
|
|
|
Headline
|
Final
Results
|
|
|
Released
|
07:00
28-Aug-08
|
|
|
Number
|
1703C07
|
RNS
Number : 1703C
Diageo
PLC
28
August
2008
 |
Preliminary
results for the year ended 30 June
2008
|
Diageo
reports another year of strong organic growth: net sales up 7%, operating
profit
up 9% and underlying eps up 11%2
Results
at a glance
|
2008
|
|
2007
|
|
Reported
movement
|
|
Organic
movement
|
||||||||||
|
Volume
in millions of equivalent units
|
145.0
|
141.3
|
3
|
%
|
3
|
%
|
||||||||||
|
Net
sales
|
£
million
|
8,090
|
7,481
|
8
|
%
|
7
|
%
|
|||||||||
|
Operating
profit before exceptional items
|
£
million
|
2,304
|
2,119
|
9
|
%
|
9
|
%
|
|||||||||
|
Operating
profit
|
£
million
|
2,226
|
2,159
|
3
|
%
|
9
|
%
|
|||||||||
|
Profit
attributable to parent company’s equity shareholders 1
|
£
million
|
1,521
|
1,489
|
2
|
%
|
|||||||||||
|
Basic
eps 1
|
pence
|
59.3
|
55.4
|
7
|
%
|
|||||||||||
| · |
Marketing
spend increased 5%. Excluding Korea, marketing spend on non ready
to drink
brands increased 8%
|
| · |
Operating
exceptional charge of £78 million in the year ended 30 June 2008 in
respect of the restructuring of the Irish brewing
operations
|
| · |
Interest
charge increased £90 million to £341
million
|
| · |
eps
before exceptional items 2
increased from 54.8 pence in 2007 to 60.6 pence in 2008, which
excluding
acquisitions, disposals and exchange is an 11% increase (underlying
eps)
|
| · |
Return
on invested capital increased 50 basis points to
14.9%
|
| · |
Free
cash flow of £1,252 million
|
| · |
Recommended
full year dividend per share increase of 5% to 34.35
pence
|
| · |
£1.9
billion returned to shareholders: £857 million in dividends and £1.0
billion of share buybacks
|
1
For
year
ended 30 June 2008 tax rate of 24.9%. For year ended 30 June 2007 tax rate
of
32.4%. Discontinued operations gain after tax for the year ended 30 June
2008 of
£26 million, for the year ended 30 June 2007 of £139 million.
2
Using an
underlying effective tax rate of 24.5% in 2008 and 25.1% in 2007.
Unless
otherwise stated in this announcement: net sales are sales after deducting
excise duties; percentage movements are organic movements; commentary refers
to
organic movements and share refers to value share. See page 28 for additional
information for shareholders and an explanation of non-GAAP measures including
the reconciliation of basic eps to underlying eps.
Paul
Walsh, Chief Executive of Diageo, commenting on year ended 30 June 2008 said:
“The
combination of Diageo’s leading brands and our global reach has delivered
another year of strong organic growth with net sales up 7% and operating
profit
up 9%.
The
main
drivers of top and bottom line growth were International, where scotch in
Latin
America and beer in Africa drove net sales growth of 16%, and North America,
where growth in the priority brands drove a 5% increase in net sales. In
Europe,
we delivered better performance than last year, with net sales up 3% from
growth
in Eastern Europe, Russia and Great Britain. In Asia Pacific, even though
overall performance was impacted by the loss of our Korean licence for part
of
the year, we grew the top line 2% as we gained share in China and expanded
in
India and the markets of South East Asia.
We
have
continued to invest behind great campaigns and this year has seen our global
priority brands again extend their leadership positions. Smirnoff grew across
all markets posting 8% volume and 10% net sales growth. Johnnie Walker grew
net
sales by 12% and now has annual net sales of over £1 billion. The return to
growth of JεB
in
Europe together with its strong performance in International delivered 9%
net
sales growth. Guinness grew net sales 6% with over 50% of that growth coming
from Africa, where the brand grew 13%. Our other beer brands in Africa grew
net
sales 25%.
Price
rises and mix improvement covered increased input costs and gross margin
has
improved. We have benefited from marketing spend efficiencies and scale in
our
global brands and we have reduced marketing spend in ready to drink to maintain
the profitability of that segment. Overall we have delivered a further 70
basis
points organic improvement in operating margin.
During
the year we added Ketel One vodka, Zacapa rum and Rosenblum Cellars wine
to our
brand range. These are already successful brands and we intend to build on
that
success.
Our
financial results in recent years have mirrored the consistent improvement
we
have achieved in our business and we finish the year with a stronger business.
We enter the new financial year facing slowing global GDP growth and more
challenging global economic trends, but given the strength and diversity
of
Diageo’s business we believe we can deliver organic operating profit growth for
the coming year within our range of 7% to 9%. Together with the expected
positive impact of exchange rate movements on reported results and our share
buyback programme this means we expect to deliver double-digit reported eps
growth.”
Regional
summary
North
America - Strong performance of priority and reserve brands continued to
drive
growth
| · |
Volume
up 2%
|
| · |
Net
sales up 5%
|
| · |
Marketing
spend up 3%
|
| · |
Operating
profit up 10%
|
North
America’s performance reflects strong net sales growth with spirits up 7%, beer
up 6% and wine up 12%, partially offset by a 10% decrease in net sales of
ready
to drink. Strong volume growth in priority and reserve brands offset weakness
in
value brands. Smirnoff, Johnnie Walker, Captain Morgan, Crown Royal, Guinness,
Sterling Vineyards and Chalone wines were again the performance leaders.
Price
increases and strong growth of the reserve brands Cîroc, Don Julio and Johnnie
Walker Blue Label drove net sales growth. Marketing excluding ready to drink
was
up 5% with strong investment behind the reserve brands. Diageo’s share of US
spirits was broadly maintained at 28.3 percentage points, with share of priority
spirits brands up 0.3 percentage points.
Europe
- Improved performance through focused investment in key growth
drivers
| · |
Volume
up 2%
|
| · |
Net
sales up 3%
|
| · |
Marketing
spend up 6%
|
| · |
Operating
profit up 3%
|
In
Europe
performance improved against last year driven by growth in spirits, with
net
sales up 5% and the continued outperformance of Guinness against the beer
categories in Ireland and Great Britain. Increased focus behind the off trade
in
Great Britain, behind premium scotch brands in Continental Europe and further
investment in Eastern Europe and Russia drove the growth in spirits in Europe.
Smirnoff and Johnnie Walker performed particularly strongly with net sales
up 5%
and 11% respectively and JεB
returned
to growth in the region supported by the ‘Start a Party’ campaign. Ready to
drink however declined by a further 13%. Marketing spend increased more strongly
than net sales with increased spend on the priority brands in Great Britain
and
Ireland and behind Johnnie Walker in Spain.
International
- Strong performance of beer and scotch drove double-digit growth in both
net
sales and operating profit
| · |
Volume
up 5%
|
| · |
Net
sales up 16%
|
| · |
Marketing
spend up 16%
|
| · |
Operating
profit up 19%
|
International
continues to drive overall Diageo performance as scotch in Latin America,
South
Africa and Global Travel and Middle East grew net sales 11%, 24% and 20%
respectively, and Diageo’s beer brands in Africa continued their strong growth
with net sales up 19%. Growth in International is becoming increasingly broad
based and Smirnoff, Baileys, Cacique and JεB
all
grew as a result of increased consumer demand and marketing spend, which
grew
strongly again behind successful marketing campaigns. Price increases and
mix
improvements across most of Diageo’s brands in all hubs within International
resulted in strong operating profit growth.
Asia
Pacific - Investments in market infrastructure and disruption in Korea impacted
performance
| · |
Volume
up 2%
|
| · |
Net
sales up 2%
|
| · |
Marketing
spend down 6%
|
| · |
Operating
profit down 12%
|
The
overall performance in Asia Pacific was affected by a number of factors
including the loss of the import licence in Korea for part of the year.
Investment continued to support the expansion of the regional infrastructure
with the increase in locally bottled brands in India and the opening up of
new
markets such as Vietnam and the focus on priority brands in markets such
as
Australia. Diageo has maintained market leading positions and continued to
grow
share and awareness in the key scotch markets of the region such as China
and
Korea. Smirnoff also continued to grow its leadership of the vodka category
in
the region with growth in net sales of 29% and share gains in key markets
such
as India and Australia.
Financial
| · |
The
deficit in respect of post employment plans reduced by £11 million from
£419 million at 30 June 2007 to £408 million at 30 June 2008. The
reduction in equity valuations in the year was offset by the increase
in
value of interest rates and inflation swaps between 30 June 2007
and 30
June 2008. In the year ended 30 June 2008 finance income under
IAS 19 was
£46 million. In the year ending 30 June 2009, finance income under
IAS 19
is expected to be negligible.
|
| · |
In
the year ended 30 June 2008, exchange rate movements reduced operating
profit by £5 million and increased the net interest charge by £1
million.
|
| · |
For
the year ending 30 June 2009, at current exchange rates, foreign
exchange
movements (excluding the exchange impact under IAS 39) are forecast
to
increase operating profit by £60 million and increase the interest charge
by £15 million.
|
Brand
summary
|
Volume
movement*
%
|
Reported
net
sales
movement
%
|
Organic
net
sales
movement
%
|
||||||||
|
Global
priority brands
|
4
|
8
|
6
|
|||||||
|
Local
priority brands
|
2
|
10
|
4
|
|||||||
|
Category
brands
|
1
|
8
|
10
|
|||||||
|
Total
|
3
|
8
|
7
|
|||||||
|
Key
spirits brands**:
|
||||||||||
|
Smirnoff
|
8
|
12
|
10
|
|||||||
|
Johnnie
Walker
|
5
|
14
|
12
|
|||||||
|
Captain
Morgan
|
8
|
10
|
13
|
|||||||
|
Baileys
|
1
|
6
|
3
|
|||||||
|
JεB
|
5
|
15
|
9
|
|||||||
|
Jose
Cuervo
|
(4
|
)
|
(5
|
)
|
(3
|
)
|
||||
|
Tanqueray
|
1
|
2
|
4
|
|||||||
|
Crown
Royal – North America
|
5
|
5
|
9
|
|||||||
|
Buchanan’s
– International
|
(2
|
)
|
15
|
5
|
||||||
|
Windsor
– Asia Pacific
|
7
|
(17
|
)
|
(12
|
)
|
|||||
|
Guinness
|
1
|
9
|
6
|
|||||||
|
Ready
to drink
|
(7
|
)
|
(4
|
)
|
(5
|
)
|
||||
*
Reported and organic volume movements are the same for all brands in all
regions
**
Spirits brands excluding ready to drink.
Focus
on
the global priority brands drove almost two thirds of total net sales growth.
Smirnoff performed strongly across all regions with new campaigns and the
launch
of Smirnoff Black in a number of markets driving volume growth. Price increases
across most markets resulted in net sales growth.
The
International region together with Eastern Europe and Russia led the growth
in
Johnnie Walker. The strong performance of Johnnie Walker Black Label, Johnnie
Walker super deluxe labels and price increases in key markets drove price/mix
improvement of 7 percentage points.
Captain
Morgan sustained its strong performance from the first half. While the key
driver of growth is the brand’s performance in North America, the brand is now
delivering double-digit net sales growth in each region.
Strong
growth in Great Britain, Russia and Latin America drove the growth in Baileys.
In Great Britain and Russia Baileys Original Irish Cream performed strongly,
while in Latin America Baileys flavours continued to deliver double-digit
net
sales growth supporting further growth in Baileys Original Irish Cream. Overall
results were constrained by lower volume on Baileys flavours in all regions
except International as the brand lapped the launch in fiscal 2007.
JεB
grew
volume across all regions, in many markets supported by the success of the
global ‘Start a Party’ campaign. Price increases in key markets resulted in
improved price/mix driving net sales growth.
While
Jose Cuervo grew net sales in Latin America and Europe, Jose Cuervo’s
performance continued to be affected by the growth of the ultra premium tequila
segment in North America. Price increases and more premium launches have
driven
net sales growth in Latin America and Europe.
Tanqueray
increased net sales in all regions. North America remained the main contributor
to growth, where Tanqueray outperformed the gin category, driven by the
continued growth of Tanqueray Rangpur. A price increase on the core brand
in
North America drove price/mix improvement.
Crown
Royal continued to take share in North America and net sales grew benefiting
from price increases and successful innovations.
Price
increases on Buchanan’s, in line with Diageo’s overall scotch pricing strategy,
impacted volume but drove net sales growth.
Windsor's
performance reflected the loss of licence in Korea for part of the year which
reduced net sales per case while Diageo Korea was operating through a third
party distributor from July 2007 to the beginning of March 2008.
Growth
in
Guinness was fuelled by double digit net sales growth in International and
outperformance against the beer categories in Ireland and Great Britain as
a
result of successful advertising campaigns. Net sales grew ahead of volume
growth driven by price increases in key markets.
Crown
Royal, Buchanan’s and Windsor were the key local priority brands. In addition
Malta Guinness showed strong net sales growth as a result of successful
marketing campaigns, a new product launch and the development of the off
trade
in the key markets of Nigeria and Ghana.
Net
sales
growth of category brands was driven by the success of our global scotch
strategy, namely a focus on net sales growth not volume growth. Price/mix
improvement in scotch combined with double-digit growth of beer brands in
Africa
and growth of reserve and premium brands such as Cîroc, Don Julio and the
Classic Malts led to 9 percentage points of price/mix improvement.
Ready
to
drink remains challenging as expected and net sales were down 5% driven by
North
America and Europe. Strong performance of Smirnoff ready to drink in
International with growth in Nigeria, South Africa, Brazil and Venezuela
with
the introduction of new flavours and price increases drove 13% net sales
growth
in the region which partially offset the impact of the segment’s decline in
North America and Europe. Diageo’s ready to drink brands performed strongly in
Australia prior to the 70% duty increase which was implemented on the ready
to
drink segment at the end of April 2008. Since the increased duty was introduced,
net sales of ready to drink have declined, partially offset by net sales
growth
in core spirits.
Management
Reports
The
Annual Report for the year ended 30 June 2008, which will be published on
15
September 2008, will comprise the Annual Financial Report which Diageo is
required to publish under the EU Transparency Directive for the financial
year
which began on 1 July 2007. The trading update to be issued at the time of
the
AGM on 15 October 2008 will form the first interim management statement for
the
year ending 30 June 2009.
BUSINESS
REVIEW
For
the year ended 30 June 2008
OPERATING
REVIEW – analysis by business area
North
America
Summary:
| · |
Growth
driven by priority and reserve
brands
|
| · |
Net
sales growth of spirits up 7%, wine up 12% and beer up 6%
|
| · |
The
majority of the priority spirits, wine and beer brands gained
share
|
| · |
Share
of US spirits broadly maintained at 28.3 percentage points despite
share
loss in value brands as priority brands gained 0.3 percentage points
of
share
|
| · |
Ready
to drink segment continued to be challenging with net sales down
10%
|
Key
measures:
|
|
2008
|
2007
|
Reported
movement
|
Organic
movement
|
|||||||||
|
£
million
|
£
million
|
%
|
%
|
||||||||||
|
Volume
|
2
|
2
|
|||||||||||
|
Net
sales
|
2,523
|
2,472
|
2
|
5
|
|||||||||
|
Marketing
spend
|
366
|
364
|
1
|
3
|
|||||||||
|
Operating
profit
|
907
|
850
|
7
|
10
|
|||||||||
Reported
performance:
Net
sales
were £2,523 million in the year ended 30 June 2008 up by £51 million from £2,472
million in the prior year. Reported operating profit increased by £57 million to
£907 million in the year ended 30 June 2008.
Organic
performance:
The
weighted average exchange rate used to translate US dollar sales and profit
moved from £1 = $1.93 in the year ended 30 June 2007 to £1 = $2.01 in the year
ended 30 June 2008. Exchange rate impacts decreased net sales by £73 million.
Acquisitions increased net sales by £6 million, the loss of distribution rights
for certain champagne brands decreased net sales by £6 million and there was an
organic increase of £124 million. Exchange rate impacts reduced operating profit
by £27 million and transfers of costs between regions increased operating profit
by £4 million. Acquisitions and the loss of distribution rights for certain
champagne brands decreased operating profit by £2 million and there was an
organic increase in operating profit of £82 million.
Brand
performance:
|
Volume
movement
|
Reported
net sales
movement
|
Organic
net sales
movement
|
||||||||
|
%
|
%
|
%
|
||||||||
|
Global
priority brands
|
2
|
-
|
3
|
|||||||
|
Local
priority brands
|
3
|
5
|
8
|
|||||||
|
Category
brands
|
1
|
6
|
10
|
|||||||
|
Total
|
2
|
2
|
5
|
|||||||
|
Key
spirits brands*:
|
||||||||||
|
Smirnoff
|
8
|
9
|
12
|
|||||||
|
Johnnie
Walker
|
5
|
6
|
10
|
|||||||
|
Captain
Morgan
|
7
|
9
|
12
|
|||||||
|
Baileys
|
(6
|
)
|
(5
|
)
|
(3
|
)
|
||||
|
Jose
Cuervo
|
(5
|
)
|
(7
|
)
|
(4
|
)
|
||||
|
Tanqueray
|
-
|
(1
|
)
|
3
|
||||||
|
Crown
Royal
|
5
|
5
|
9
|
|||||||
|
Guinness
|
5
|
4
|
7
|
|||||||
|
Ready
to drink
|
(13
|
)
|
(13
|
)
|
(10
|
)
|
||||
*
Spirits
brands excluding ready to drink
Overall
volume growth was driven by the priority brands. Price increases on 40% of
spirits volume in the US drove net sales growth despite negative mix within
the
global priority brands due to the strong growth of Smirnoff and Captain Morgan.
The continued challenges in the ready to drink segment reduced overall volume
growth by 1 percentage point and net sales growth by 2 percentage points.
Marketing spend grew 3% as investment was realigned behind the priority and
reserve brands and away from ready to drink. Marketing excluding ready to drink
grew 5%. Diageo grew share on the majority of its priority spirits and wine
brands. Loss of share in the value brands resulted in overall share of US
spirits being broadly maintained during the year at 28.3 percentage points,
with
share of priority spirits brands up 0.3 percentage points.
In
Canada
share gains of 1.0 percentage points were delivered in the spirits category.
Volume grew 6% driven by the global priority brands and net sales were up 9%
as
price increases were implemented.
Smirnoff
continued its strong performance from the first half and grew volume 8%. Price
increases were taken in key markets driving net sales growth of 12% and share
grew 0.2 percentage points. Growth of Smirnoff Red was driven by two successful
advertising campaigns, the ‘Diamonds’ programme and ‘Vladimir’s Journey’, which
reinforced the quality image of the brand and its heritage. Smirnoff flavours
were driven by the launch of three new flavours: Blueberry, Passion Fruit and
White Grape and the ‘Simple Drinks’ campaign, which taught consumers simple ways
of making drinks at home with flavoured vodka.
Johnnie
Walker also grew ahead of the category with volume up 5% and net sales up 10%
driven by Johnnie Walker Black Label and the super deluxe labels, leading to
share growth of 1.2 percentage points. Price increases were taken across the
Johnnie Walker range. Expansion of the Johnnie Walker Blue Label bottle
engraving programme and the distribution of Johnnie Walker Blue Label King
George V drove growth of the super deluxe labels and improved mix.
Captain
Morgan volume was up 7% and net sales were up 12% driven by Captain Morgan
Original Spiced rum which gained a further 0.6 percentage points of share
despite the launch of two competitor brands in the rum category. Successful
marketing campaigns around holidays and the ‘Pose-off’ contest continued to
build this iconic brand.
The
overall Baileys results were constrained by lower volume in Baileys flavours,
which lapped the launch in fiscal 2007. Baileys Original Irish Cream
outperformed the category with volume up 3% and net sales up 7% as price
increases were taken across most of its markets. Strong year round marketing
support of the brand along with summer programming for Baileys ‘Shiver’ helped
drive the growth.
The
release of Jose Cuervo Platino in the first half of 2008 to good consumer
response is one of the ways Jose Cuervo is positioning itself in an increasingly
premiumising category. Jose Cuervo Especial experienced heavy pricing
competition and volume decreased 5% as the Jose Cuervo brand maintained price
and in some states increased it, to support the premiumisation of the brand.
Marketing spend on Jose Cuervo was weighted toward the summer season and
promoted the mixability of the brand.
Tanqueray
again outperformed a declining gin category gaining 1.6 percentage points of
share driven by the continued growth of Tanqueray Rangpur.
Crown
Royal continued to take share in the North American whiskey category, up 0.4
percentage points. Volume grew 5% and price increases drove net sales up 9%.
Crown Royal Cask 16, launched in October 2007, helped to drive mix. The brand
was supported by two off trade promotions, the ‘Legend of the Purple Bag’ and
‘I’d Rather Be’ as well as its continued sponsorship of NASCAR.
Guinness
showed good growth against the import segment which was broadly flat, with
volumes up 5% driven by keg sales and Guinness Extra Stout. Net sales grew
7% as
price increases were implemented. The brand was supported by a new advertising
campaign, ‘Guinness Alive Inside’.
The
local
priority brands grew volume 3% and net sales were up 8% benefiting from price
increases and mix improvement from the higher margin spirits brands. Crown
Royal
led this performance. Buchanan’s volume was up 18% and net sales up 24% and
Seagram’s 7 Crown and Seagram’s VO grew net sales 4% and 1% respectively on flat
volumes. Local priority wines grew volume 6% and net sales were up 8% driven
by
strong performance of Sterling Vineyards and Chalone and price/mix improvement
in Beaulieu Vineyards.
Within
the category brands, mix improvement was driven by strong growth of Don Julio
volume up 19% and net sales up 22%, the Classic Malts volume up 14% and net
sales up 19%, Bushmills volume up 13% and net sales up 16% and Cîroc volume up
89% and net sales up 90% on strong marketing and distribution gains. Successful
marketing of Smithwick’s Irish heritage delivered strong growth albeit off a low
base with volume up 19% and net sales up 20% following national price increases.
This offset net sales declines among the value brands such as Gordon’s vodka,
net sales down 10% and Gordon’s Gin, down 1%.
The
ready
to drink segment continued to decline with volume down 13% and net sales down
10%. This was driven by progressive adult beverages, led by the decline of
Smirnoff Ice. Smirnoff Ice Light, Smirnoff Ice Strawberry Acai and Captain
Morgan Parrot Bay Mojito were introduced in the second half of the year to
help
refresh the segment. The decline in progressive adult beverages was partially
offset by the success of the recently launched Smirnoff cocktail line which
has
performed very well to date. Consequently marketing spend has been reduced
on
progressive adult beverages and support provided to the spirit based
cocktails.
On
9 June
2008, Diageo completed the acquisition of a 50% equity stake in the newly formed
company Ketel One Worldwide BV, which holds the exclusive and perpetual rights
to market, sell and distribute Ketel One vodka products.
Europe
Summary:
|
·
|
Eastern
Europe and Russia contributed over two thirds of net sales
growth
|
|
·
|
Strong
performance in GB generated nearly 20% of the region’s
growth
|
|
·
|
Guinness’
outperformance against the beer categories in Great Britain and Ireland
continued
|
|
·
|
Strong
performance of JεB
with net sales growth driven by price increases in Spain and volume
growth
in Continental Europe
|
|
·
|
Price
increases implemented across the
region
|
Key
measures:
|
|
2008
|
2007
|
Reported
movement
|
Organic
movement
|
|||||||||
|
£ million
|
£ million
|
%
|
%
|
||||||||||
|
Volume
|
2
|
2
|
|||||||||||
|
Net
sales
|
2,630
|
2,427
|
8
|
3
|
|||||||||
|
Marketing
spend
|
438
|
391
|
12
|
6
|
|||||||||
|
Operating
profit
|
720
|
723
|
-
|
3
|
|||||||||
Reported
performance:
Net
sales
were £2,630 million in the year ended 30 June 2008 up by £203 million from
£2,427 million in the prior year. Reported operating profit decreased by £3
million to £720 million in the year ended 30 June 2008. Exceptional costs of £78
million in respect of restructuring costs for the Irish brewing operations
are
included within operating expenses in the year ended 30 June 2008. Reported
operating profit excluding exceptional items increased by £75 million to £798
million in the year ended 30 June 2008.
Organic
performance:
The
weighted average exchange rate used to translate euro sales and profit moved
from £1 = €1.48 in the year ended 30 June 2007 to £1 = €1.36 in the year ended
30 June 2008. Exchange rate impacts increased net sales by £128 million.
Acquisitions increased net sales by £1 million, transfers between regions
decreased net sales by £1 million and there was an organic increase of £75
million. Exchange rate impacts increased operating profit by £47 million.
Transfer of costs between regions increased operating profit by £6 million,
exceptional costs decreased operating profit by £78 million and there was an
organic increase in operating profit of £22 million.
Brand
performance:
|
Volume
movement
|
Reported
net sales
movement
|
Organic
net sales
movement
|
||||||||
|
%
|
%
|
%
|
||||||||
|
Global
priority brands
|
3
|
10
|
4
|
|||||||
|
Local
priority brands
|
(3
|
)
|
3
|
(2
|
)
|
|||||
|
Category
brands
|
-
|
9
|
4
|
|||||||
|
Total
|
2
|
8
|
3
|
|||||||
|
Key
spirits brands*:
|
||||||||||
|
Smirnoff
|
6
|
9
|
5
|
|||||||
|
Johnnie
Walker
|
6
|
19
|
11
|
|||||||
|
Baileys
|
4
|
11
|
4
|
|||||||
|
JεB
|
1
|
14
|
6
|
|||||||
|
Guinness
|
-
|
7
|
3
|
|||||||
|
Ready
to drink
|
(11
|
)
|
(10
|
)
|
(13
|
)
|
||||
*
Spirits
brands excluding ready to drink
Strong
volume growth in Great Britain, driven by Smirnoff and Baileys, and in Eastern
Europe and Russia, was partially offset by continued volume weakness in Iberia.
Price increases across Europe, combined with focus on the premium spirit brands,
offset negative market mix from the rapid growth in Eastern Europe and resulted
in net sales up 3%.
Global
priority brands were the key growth driver with volume up 3% and net sales
up
4%. Johnnie Walker was the main contributor with double-digit net sales growth.
JεB,
Smirnoff and Baileys also performed strongly and Guinness continued its positive
performance from the first half, delivering net sales growth for the full
year.
Smirnoff
volume was up 6% and net sales were up 5%. This performance was driven by Great
Britain where new advertising campaigns and a successful Christmas trading
period drove volume up 10%. Net sales were up 8% as a simplified promotional
strategy led to higher volume but an increased percentage of that volume being
sold on promotion. Within Continental Europe negative market mix generated
by
the growth of Smirnoff Vladimir in Poland was partially offset by price
increases and the growth of Smirnoff Black as it was seeded across a number
of
markets.
Johnnie
Walker volume was up 6% driven by growth in Eastern Europe and Russia both
of
which were up over 30%, albeit off a small base. Consistent advertising has
increased awareness and the status of the brand in these markets. This growth
was partially offset by declines in Iberia and Greece. Net sales were up 11%
as
a result of price increases and mix improvement as investment focused on Johnnie
Walker Black Label and Johnnie Walker super deluxe labels.
Baileys
returned to growth in Great Britain and delivered strong growth in Russia,
resulting in overall volume and net sales up 4%. In Great Britain a return
to
advertising on television and a revised promotional strategy at Christmas drove
the brand back to growth. In Russia Baileys continued to demonstrate great
potential with net sales growth of 37%, albeit off a small base. In Continental
Europe net sales were flat as the brand lapped the Baileys flavours launch
in
the prior year.
JεB
returned to growth in Europe supported by the ‘Start a Party’ advertising
campaign and expansion across Continental Europe. In Iberia category volume
declines worsened, however JεB
delivered net sales growth and share gains as further price increases were
implemented. Within Continental Europe, France and Eastern Europe were the
main
growth drivers. In France a price increase was implemented and JεB
gained
share. In Romania and Bulgaria, the brand’s biggest markets in Eastern Europe,
the ‘Start a Party’ campaign has delivered strong growth.
Guinness
volume was flat and net sales were up 3% as the brand continued to outperform
the beer categories in both Ireland and Great Britain. This was the result
of
new advertising campaigns, focus on quality and the cooler summer of 2007.
In
Ireland net sales were up 2% and share gains were made in both the on and off
trade, driving an overall share gain for Diageo Ireland in the beer category.
In
Great Britain the beer category worsened in the second half. However Guinness
net sales were up 2% as it continued to outperform the category, particularly
in
the on trade where it recorded its highest ever share. Volume was up 3% in
the
rest of Europe as a result of growth across a number of markets which combined
with price increases led to net sales up 6%.
Local
priority brand volume was down 3% and net sales were down 2%. This was driven
by
beer in Ireland and Cacique in Spain. Local beer brands in Ireland declined,
impacted by the continued decline of the beer category in the on trade and
the
decision to reduce the volume sold on promotion in the off trade. Carlsberg
however delivered net sales growth as a result of distribution gains and a
new
advertising campaign and gained share. In Spain lower volumes of Cacique were
partially offset by price increases.
Category
brands delivered price/mix improvement with volume flat and net sales up 4%,
as
a result of price increases on category scotch brands and the strategy to drive
net sales from wine through a change in promotional strategy and mix
improvement.
Ready
to
drink continued to decline driven by Smirnoff Ice in Great Britain. The segment
now accounts for less than 5% of net sales in the region.
International
Summary:
| · |
Continued
double-digit net sales growth in Latin America, Africa and Global
Travel
and Middle East driven by strong price/mix improvements across categories
and markets
|
| · |
In
Africa strong performance of beer brands with net sales growth of
19%
combined with continued net sales growth of spirits brands up 21%
drove
very strong growth
|
| · |
Volume
growth across the region combined with price increases drove strong
net
sales growth of 14% in scotch
|
| · |
Increased
focus on categories outside of scotch and beer, such as vodka and
rum,
drove broader based growth
|
Key
measures:
|
2008
|
2007
|
Reported
movement
|
Organic
movement
|
||||||||||
|
£ million
|
£ million
|
%
|
%
|
||||||||||
|
Volume
|
5
|
5
|
|||||||||||
|
Net
sales
|
1,971
|
1,667
|
18
|
16
|
|||||||||
|
Marketing
spend
|
244
|
208
|
17
|
16
|
|||||||||
|
Operating
profit
|
593
|
499
|
19
|
19
|
|||||||||
Reported
performance:
Net
sales
were £1,971 million in the year ended 30 June 2008, up £304 million from £1,667
million in the prior year. Reported operating profit increased by £94 million
from £499 million to £593 million in the year ended 30 June 2008.
Organic
performance:
Exchange
rate impacts increased net sales by £37 million. Transfers between regions
increased net sales by £1 million and there was an organic increase in net sales
of £266 million. Exchange rate impacts increased operating profit by £2 million
and transfers of costs between regions reduced operating profit by £5 million.
Acquisitions increased operating profit by £1 million and there was an organic
increase in operating profit of £96 million.
Brand
performance:
|
Volume
movement
|
Reported
net
sales
movement
|
Organic
net
sales
movement
|
||||||||
|
%
|
%
|
%
|
||||||||
|
Global
priority brands
|
6
|
17
|
15
|
|||||||
|
Local
priority brands
|
4
|
20
|
15
|
|||||||
|
Category
brands
|
4
|
19
|
17
|
|||||||
|
Total
|
5
|
18
|
16
|
|||||||
|
Key
spirits brands*:
|
||||||||||
|
Smirnoff
|
7
|
18
|
15
|
|||||||
|
Johnnie
Walker
|
8
|
21
|
18
|
|||||||
|
Baileys
|
1
|
9
|
6
|
|||||||
|
Buchanan’s
|
(2
|
)
|
15
|
5
|
||||||
|
Guinness
|
2
|
15
|
13
|
|||||||
|
Ready
to drink
|
3
|
12
|
13
|
|||||||
*
Spirits
brands excluding ready to drink
Across
global priority, local priority and category brands net sales growth outpaced
volume growth driven by price increases. Global priority brands are the drivers
of the International business and net sales were up 15% with Johnnie Walker,
Guinness and Smirnoff the main contributors.
Smirnoff
volume grew 7%, driven mostly by Brazil and South Africa where successful
marketing campaigns led to further share gains. Price increases in key markets
led to strong price/mix improvement, resulting in 15% net sales
growth.
Johnnie
Walker delivered 8% volume growth, mostly driven by South Africa, Mexico and
Global Travel and Middle East, fuelled by strong trade support and successful
advertising. Net sales increased by 18% as a result of price increases
implemented across the region and stronger growth in more profitable channels
in
Latin America and of higher margin brands in Africa and Global Travel and Middle
East.
Baileys
volume grew 1% and net sales were up 6%, driven by premium priced gift packs
combined with brand promotion in Global Travel and the launch of Baileys
flavours in Mexico and Central America.
Buchanan’s
is the key local priority brand in International. Buchanan’s strategy was to
increase price in all key markets and this impacted volume while increasing
net
sales. Volume decreased 2% while improved price/mix drove net sales growth
of
5%. The main growth came from Mexico driven by strong on trade activities and
successful media campaigns.
Guinness
volume increased 2%, with strong growth coming from Cameroon and East Africa
driven by the ‘Guinness Greatness’ campaign and economic expansion. Net sales
for the region were up 13% as a result of price increases and a benefit from
changes in excise duty in some markets.
Increased
focus on the ‘Start a Party’ campaign for JεB
led to
strong growth with volume up 13% and net sales up 21%. The key markets were
Mexico, South Africa and Global Travel and Middle East, where price increases
drove net sales growth.
Local
priority brands delivered 4% volume growth and 15% net sales growth mostly
driven by improved price/mix across Buchanan’s and beer. Tusker and Pilsner
continued to show double-digit net sales growth, driven by price increases
and
wider availability. As a result of successful marketing campaigns and the
development of the off trade in key markets Nigeria and Ghana, Malta Guinness
also showed double-digit net sales growth.
Category
brands volume increased 4% and net sales increased 17%. Volume growth was driven
by double-digit growth of beer brands in Africa. Significant price increases
on
value and standard scotch brands in Latin America resulted in volume decline,
but strong price/mix improvement drove net sales growth.
Ready
to
drink volume grew 3%, mainly driven by Smirnoff ready to drink brands, in
particular the introduction of new flavours in Brazil and the continued success
of Smirnoff Ice in Brazil and Nigeria and Smirnoff ready to drink in South
Africa. Net sales grew 13% mainly as a result of price increases in South
Africa, Venezuela and Brazil.
In
Diageo’s major African markets net sales growth was in double-digits, with the
main growth coming from East Africa, Nigeria and South Africa, where net sales
were up 23%, 14% and 20% respectively.
In
East
Africa net sales growth was driven by strategic price increases in the key
market of Kenya, significantly improving price/mix, and effective marketing
on
Guinness and Tusker increasing visibility and driving volume growth.
In
South
Africa Diageo’s scotch brands and Smirnoff benefited from price increases and,
supported by successful marketing campaigns, continued to outperform the
category. The introduction of Foundry cider contributed to growth and gave
access to a profitable and growing cider category.
In
Ghana
net sales grew 32%, driven by price increases across all brands. The largest
volume growth came from lagers, malt and stout, as a result of successful
marketing investments and expansion in the off trade. In Nigeria net sales
increased 14%, driven by a re-launch of Malta Guinness and price increases
across all brands. Net sales growth was 9% in Cameroon, as a result of price
increases on main brands combined with an improved route to
market.
Latin
America delivered double-digit net sales growth, with main growth coming from
Mexico and Brazil as a result of price increases in key brands and strong
marketing campaigns.
In
Venezuela and Mexico prices were increased across brands. In Venezuela volume
was down 14% as price increases were implemented as a result of the economic
situation, however net sales were up 4% as a result of improved price/mix and
strong performance in rum. Mexico’s volume grew 26%, as a result of continued
scotch category growth led by Diageo, combined with share gains. Mexico’s net
sales grew 31% driven by premiumisation and price increases.
Net
sales
grew 10% in the Brazil, Uruguay and Paraguay hub with scotch and Smirnoff the
key drivers. Successful marketing campaigns on scotch and Smirnoff combined
with
continued growth in the ready to drink segment led to volume increases.
Increased prices and favourable channel and product mix improved price/mix
driving net sales growth.
In
Global
Travel and Middle East volume grew 2% and net sales grew 16%. Volume growth
was
driven by strong performance of scotch, especially Johnnie Walker Black Label
and Johnnie Walker super deluxe labels, as a result of gifting pack promotions
and successful advertising campaigns. Strong price/mix improvements, driven
by
price increases combined with favourable mix on scotch, resulted in double-digit
net sales growth.
Asia
Pacific
Summary:
|
·
|
Continued
investment in regional infrastructure to support future growth
objectives
|
|
·
|
Net
sales growth in the region driven by global priority
brands
|
|
·
|
India
route to market strengthened as a result of continued growth of locally
produced brands
|
|
·
|
Further
share gains in scotch in China
|
|
·
|
Loss
of import licence in Korea for part of the year impacted all
measures
|
|
·
|
Ready
to drink performance was affected by the excise duty increase in
Australia
in the fourth quarter
|
Key
measures:
|
2008
|
2007
|
Reported
movement
|
Organic
movement
|
||||||||||
|
£ million
|
£ million
|
%
|
%
|
||||||||||
|
Volume
|
2
|
2
|
|||||||||||
|
Net
sales
|
877
|
840
|
4
|
2
|
|||||||||
|
Marketing
spend
|
191
|
199
|
(4
|
)
|
(6
|
)
|
|||||||
|
Operating
profit
|
170
|
196
|
(13
|
)
|
(12
|
)
|
|||||||
Reported
performance:
Net
sales
were £877 million in the year ended 30 June 2008, up £37 million from £840
million in the prior year. Reported operating profit decreased by £26 million
from £196 million to £170 million in the year ended 30 June 2008.
Organic
performance:
Exchange
rate impacts increased net sales by £19 million and there was an organic
increase in net sales of £18 million. Exchange rate impacts increased operating
profit by £2 million and transfers between regions decreased operating profit by
£4 million. There was an organic decrease in operating profit of £24
million.
Brand
performance:
|
Volume
movement
|
Reported
net sales
movement
|
Organic
net sales
movement
|
||||||||
|
%
|
%
|
%
|
||||||||
|
Global
priority brands
|
4
|
9
|
6
|
|||||||
|
Local
priority brands
|
4
|
(7
|
)
|
(7
|
)
|
|||||
|
Category
brands
|
(4
|
)
|
11
|
6
|
||||||
|
Total
|
2
|
4
|
2
|
|||||||
|
Key
spirits brands*:
|
||||||||||
|
Smirnoff
|
20
|
37
|
29
|
|||||||
|
Johnnie
Walker
|
(1
|
)
|
5
|
4
|
||||||
|
Windsor
|
7
|
(17
|
)
|
(12
|
)
|
|||||
|
Guinness
|
1
|
6
|
6
|
|||||||
|
Ready
to drink
|
(2
|
)
|
8
|
(1
|
)
|
|||||
*
Spirits
brands excluding ready to drink
Following
the loss of Diageo’s import licence in Korea the route to market was through a
third party distributor for part of the year. There was a reduction in net
sales
per case, marketing spend and operating profit in Korea and this had a
significant impact on the overall performance of Asia Pacific for the year.
Excluding Korea net sales increased 5% and marketing increased 4%. In addition
overheads increased to support the future performance in the region with the
establishment of in market companies in China and Vietnam, increased resources
behind the Indian domestic route to market and the creation of the distribution
hub in Singapore.
Smirnoff
grew volume 20% and net sales 29%. This performance was driven by double-digit
volume and net sales growth in India, Australia and Thailand. The focus on
Smirnoff flavours in India and Smirnoff Black and flavours in Australia drove
the overall price/mix improvement. A significant increase in marketing spend
fuelled performance in Thailand. The brand grew share in all these
markets.
Johnnie
Walker volume was marginally down with volume decline in India as a result
of
the closure of the duty free channel which was only partially offset by the
growth of sales in the domestic channel, in Australia where net sales grew
as a
result of significant price increases and in Taiwan where the scotch category
declined but Johnnie Walker gained share. In China Johnnie Walker grew volume
7%
in the second half. Therefore volume was flat for the year recovering from
the
8% decline in the first half. Full year net sales increased 4%, following a
10%
decline in the first half. Consumer demand continued to strengthen and Johnnie
Walker gained an estimated 3 percentage points of volume share in the growing
deluxe scotch segment in China. In Thailand Johnnie Walker grew net sales 5%
and
Diageo remained the market leader in both premium and deluxe scotch. Across
the
region net sales grew 4% on the back of price increases. Marketing spend was
broadly in line with last year.
Windsor
volume increased 7% whilst net sales were down 12% as a result of having to
pay
distributor margin in Korea for part of the year. Consistent marketing activity
throughout the year extended Windsor’s leading share within deluxe scotch by 1.1
percentage points in volume terms.
Guinness
volume was up 1% and net sales up 6%, with increased distribution and successful
consumer promotions driving strong double-digit net sales growth in Korea and
with the expansion of the brand in China following a new distribution agreement,
supported by significant marketing activity.
Overall
performance of local priority brands was impacted by Korea, with volume up
4%
but net sales down 7%. Excluding Korea volume was up 2% and net sales were
up
3%. This was driven by Bundaberg in Australia, with volume up 5% and net sales
up 6% as a result of strong sales of Bundaberg ready to drink prior to the
significant increase in duty which was implemented at the end of April and
after
this duty increase, an uplift in Bundaberg spirit sales. This was partially
offset by declines in Old Parr and Dimple.
The
volume of category brands in the region was down 4%, however net sales value
grew 6% as a result of continued focus on improving profitability of scotch
brands in Thailand where low value brands were discontinued. The growth of
locally bottled scotch brands in India, together with the growth of bottled
in
India brands in other categories enhanced Diageo’s route to market there and
offset much of the volume decline in category scotch brands. The growth of
The
Singleton malt whisky in Greater China further contributed to price/mix
improvement.
The
Australia ready to drink segment represents over 90% of ready to drink net
sales
in the region. Ready to drink brands in Australia performed strongly for the
first ten months of the year but slowed significantly following a 70% duty
increase in April 2008 and for the full year volume declined 2% and net sales
were down 1% for the region. For the year ending 30 June 2009 it is expected
that the increase in excise duty in Australia will reduce operating profit
by
£25 million.
Corporate
revenue and costs
Net
sales
were £89 million in the year ended 30 June 2008, up £14 million from £75 million
in the prior year. Net reported operating costs were £164 million, up from £149
million in the prior year. £29 million of this increase relates to exchange rate
movements. Excluding this and the impact of transfers and acquisitions (£2
million increase in costs), net operating costs decreased £16 million.
FINANCIAL
REVIEW
Summary
consolidated income statement
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£
million
|
£
million
|
||||||
|
Sales
|
10,643
|
9,917
|
|||||
|
Excise
duties
|
(2,553
|
)
|
(2,436
|
)
|
|||
|
Net
sales
|
8,090
|
7,481
|
|||||
|
Operating
costs
|
(5,864
|
)
|
(5,322
|
)
|
|||
|
Operating
profit
|
2,226
|
2,159
|
|||||
|
Sale
of businesses
|
9
|
(1
|
)
|
||||
|
Net
finance charges
|
(319
|
)
|
(212
|
)
|
|||
|
Share
of associates’ profits after tax
|
177
|
149
|
|||||
|
Profit
before taxation
|
2,093
|
2,095
|
|||||
|
Taxation
|
(522
|
)
|
(678
|
)
|
|||
|
Profit
from continuing operations
|
1,571
|
1,417
|
|||||
|
Discontinued
operations
|
26
|
139
|
|||||
|
Profit
for the year
|
1,597
|
1,556
|
|||||
|
Attributable
to:
|
|||||||
|
Equity
shareholders
|
1,521
|
1,489
|
|||||
|
Minority
interests
|
76
|
67
|
|||||
|
1,597
|
1,556
|
||||||
Sales
and net sales
On
a
reported basis, sales increased by £726 million from £9,917 million in the year
ended 30 June 2007 to £10,643 million in the year ended 30 June 2008. On a
reported basis, net sales increased by £609 million from £7,481 million in the
year ended 30 June 2007 to £8,090 million in the year ended 30 June 2008.
Exchange rate movements increased reported sales by £160 million and reported
net sales by £112 million, principally arising from the strengthening of the
euro. Acquisitions and disposals resulted in a net increase in reported sales
and reported net sales of £1 million for the year.
Operating
costs
On
a
reported basis operating costs increased by £542 million in the year ended 30
June 2008 due to an increase in marketing costs of £77 million, from £1,162
million to £1,239 million, an increase in cost of sales of £242 million, from
£3,003 million to £3,245 million, and an increase in other operating expenses of
£223 million, from £1,157 million to £1,380 million. Exceptional costs of £78
million in respect of restructuring costs for the Irish brewing operations
are
included within operating expenses in the year ended 30 June 2008. Offset within
other operating expenses in the year ended 30 June 2007 was an exceptional
gain
of £40 million on the disposal of land at Park Royal in the United Kingdom.
Excluding exceptional items, operating costs increased by £424 million from
£5,362 million in the year ended 30 June 2007 to £5,786 million in the year
ended 30 June 2008.
Post
employment plans
Post
employment costs for the year ended 30 June 2008 of £53 million (2007 - £56
million) included amounts charged to operating profit of £99 million (2007 -
£104 million) partly offset by finance income of £46 million (2007 - £48
million). At 30 June 2008, Diageo’s deficit before taxation for all post
employment plans was £408 million (2007 - £419 million).
Operating
profit
Reported
operating profit for the year ended 30 June 2008 increased by £67 million to
£2,226 million from £2,159 million in the prior year. In the year ended 30 June
2008, there were exceptional operating costs of £78 million in respect of the
restructuring of the Irish brewing operations. Exceptional property profits
of
£40 million relating to Park Royal were generated in the year ended 30 June
2007. Excluding exceptional items, operating profit for the year increased
by
£185 million from £2,119 million in the year ended 30 June 2007 to £2,304
million in the current year.
Exchange
rate movements reduced operating profit for the year ended 30 June 2008 by
£5
million compared to the prior year.
Sale
of businesses
In
the
year ended 30 June 2008, a gain of £9 million arose from the sale of businesses
including a £5 million gain on the sale of the 49% equity holding in Toptable
and a £4 million gain on the sale of distribution rights for ready to drink
products and Guinness in South Africa to a 42.25% equity accounted associate.
In
the year ended 30 June 2007, a loss before taxation of £1 million arose from the
disposal of businesses.
Net
finance charges
Net
finance charges increased by £107 million from £212 million in the year ended 30
June 2007 to £319 million in the year ended 30 June 2008.
The
net
interest charge increased by £90 million from £251 million in the prior year to
£341 million in the year ended 30 June 2008. This movement principally resulted
from the increase in net borrowings in the year and an increase in US dollar
and
euro interest rates. Exchange rate movements increased the net interest charge
by £1 million.
Other
net
finance income of £22 million (2007 - £39 million) included income of £46
million (2007 - £48 million) in respect of the group’s post employment plans.
Other net finance charges for the year ended 30 June 2008 of £24 million (2007 -
£9 million) includes net charges of £17 million (2007 - £16 million) in respect
of the unwinding of the discount on discounted provisions, £6 million (2007 -
nil) on the conversion of cash transferred out of countries where exchange
controls are in place and £1 million (2007 - income of £7 million) in respect of
exchange rate translation differences on inter-company funding arrangements
that
do not meet the accounting criteria for recognition in equity.
Associates
The
group’s share of associates’ profits after interest and tax was £177 million for
the year ended 30 June 2008 compared to £149 million in the prior year. Diageo’s
34% equity interest in Moët Hennessy contributed £161 million (2007 - £136
million) to share of associates’ profits after interest and tax.
Profit
before taxation
Profit
before taxation decreased by £2 million from £2,095 million to £2,093 million in
the year ended 30 June 2008.
Taxation
The
reported effective tax rate for the year ended 30 June 2008 is 24.9% compared
with 32.4% for the year ended 30 June 2007. Factors that increased the reported
effective tax rate for the year ended 30 June 2007 were a provision for the
settlement of tax liabilities relating to the Guinness/GrandMet merger, lower
carrying value of deferred tax assets primarily following a reduction in tax
rates and the tax impact of an intragroup reorganisation of certain brand
businesses. The underlying effective tax rate for continuing operations for
the
year ended 30 June 2008 is 24.5%, compared with 25.1% for the year ended 30
June
2007. The underlying effective tax rate is expected to be 25% for the year
ending 30 June 2009.
Discontinued
operations
In
the
year ended 30 June 2008, profit after tax in respect of discontinued operations
was £26 million. This principally arose from a tax credit of £24 million
relating to the disposal of the Pillsbury business. In the year ended 30 June
2007 profit after tax in respect of discontinued operations was £139 million.
This profit represented a tax credit of £82
million in respect of the recognition of capital losses that arose on the
disposal of Pillsbury and Burger King and a tax credit of £57 million following
resolution with the tax authorities of various audit issues including prior
year
disposals.
Exchange
rates
The
estimated effect of exchange rate movements on the results for the year ended
30
June 2008 as compared with the results for the year ended 30 June 2007 was
as
follows:
|
Gains/(losses)
£
million
|
||||
|
Operating
profit
|
||||
|
Translation
impact
|
7
|
|||
|
Transaction
impact
|
(12
|
)
|
||
|
Associates
|
||||
|
Translation
impact
|
13
|
|||
|
Transaction
impact
|
-
|
|||
|
Interest
and other finance charges
|
||||
|
Translation
impact
|
(1
|
)
|
||
|
Net
exchange movements on short term inter-company loans
|
(1
|
)
|
||
|
Net
exchange movements on net debt not meeting hedge accounting
criteria
|
(7
|
)
|
||
|
Total
exchange effect on profit before taxation
|
(1
|
)
|
||
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
Exchange
rates
|
|||||||
|
Translation
US$/£ rate
|
2.01
|
1.93
|
|||||
|
Translation
€/£ rate
|
1.36
|
1.48
|
|||||
|
Transaction
US$/£ rate
|
1.90
|
1.87
|
|||||
|
Transaction
€/£ rate
|
1.39
|
1.45
|
|||||
Dividend
The
directors recommend a final dividend of 21.15 pence per share, an increase
of 5%
on last year’s final dividend. The full dividend will therefore be 34.35 pence
per share, an increase of 5% from the year ended 30 June 2007. Subject to
approval by shareholders, the final dividend will be paid on 20 October 2008
to
shareholders on the register on 12 September 2008. Payment to US ADR holders
will be made on 24 October 2008. A dividend reinvestment plan is available
in
respect of the final dividend and the plan notice date is 29 September
2008.
Cash
flow
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Cash
generated from operations
|
2,305
|
2,272
|
|||||
|
Interest
paid (net)
|
(320
|
)
|
(237
|
)
|
|||
|
Dividends
paid to equity minority interests
|
(56
|
)
|
(41
|
)
|
|||
|
Taxation
|
(369
|
)
|
(368
|
)
|
|||
|
Net
sale/(purchase) of other investments
|
4
|
(6
|
)
|
||||
|
Payment
into escrow in respect of UK pension fund
|
(50
|
)
|
(50
|
)
|
|||
|
Net
capital expenditure
|
(262
|
)
|
(205
|
)
|
|||
|
Free
cash flow
|
1,252
|
1,365
|
|||||
Free
cash
flow decreased by £113 million to £1,252 million in the year ended 30 June 2008.
Cash generated from operations increased from £2,272 million to £2,305 million
in the year ended 30 June 2008. This £33 million increase is primarily a result
of higher operating profit of £67 million. This increase was offset by increased
net capital expenditure of £57 million, an increase in net interest payments of
£83 million, due to increased net borrowings during the year and higher interest
rates and an increase in dividend payments to minority interests of £15
million.
In
the
year ended 30 June 2008, Diageo invested £575 million in business acquisitions
(2007 - £70 million) and purchased 97 million shares as part of the share
buyback programme (2007 - 141 million shares) at a cost including fees of £1,008
million (2007 - £1,405 million). Net payments to acquire shares for employee
share schemes totalled £78 million (2007 - £25 million). Net equity dividends of
£857 million were paid during the year (2007 - £858 million).
Diageo
continues to target a range of ratios which are currently broadly consistent
with an A band credit rating. Under this capital structure Diageo would expect
to have the financial capacity to fund a share buyback programme of
approximately £750 million in the year ending 30 June 2009.
Balance
sheet
At
30
June 2008, total equity was £4,175 million compared with £4,170 million at 30
June 2007. The main movements in equity were shares repurchased for cancellation
or holding as treasury shares of £1,008 million and the net equity dividends of
£857 million paid offset by the profit for the period of £1,597 million and the
acquisition of minority interests of £456 million.
Net
borrowings were £6,447 million at 30 June 2008, an increase of £1,602 million
from net borrowings at 30 June 2007 of £4,845 million. The principal components
of this increase were payments of £1,008 million to repurchase shares, the £857
million net equity dividend paid, payments of £575 million to acquire businesses
and adverse exchange movements of £372 million offset by free cash inflow of
£1,252 million.
Economic
profit
Economic
profit increased by £104 million from £635 million in the year ended 30 June
2007 to £739 million in the year ended 30 June 2008. See page 35 for the
definition and calculation of economic profit.
DIAGEO
CONDENSED CONSOLIDATED INCOME STATEMENT
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
|||||||||
|
Notes
|
£ million
|
£ million
|
||||||||
|
Sales
|
2
|
10,643
|
9,917
|
|||||||
|
Excise
duties
|
(2,553
|
)
|
(2,436
|
)
|
||||||
|
Net
sales
|
8,090
|
7,481
|
||||||||
|
Cost
of sales
|
(3,245
|
)
|
(3,003
|
)
|
||||||
|
Gross
profit
|
4,845
|
4,478
|
||||||||
|
Marketing
expenses
|
(1,239
|
)
|
(1,162
|
)
|
||||||
|
Other
operating expenses
|
(1,380
|
)
|
(1,157
|
)
|
||||||
|
Operating
profit
|
2
|
2,226
|
2,159
|
|||||||
|
Sale
of businesses
|
3
|
9
|
(1
|
)
|
||||||
|
Net
interest payable
|
4
|
(341
|
)
|
(251
|
)
|
|||||
|
Net
other finance income
|
4
|
22
|
39
|
|||||||
|
Share
of associates' profits after tax
|
177
|
149
|
||||||||
|
Profit
before taxation
|
2,093
|
2,095
|
||||||||
|
Taxation
|
5
|
(522
|
)
|
(678
|
)
|
|||||
|
Profit
from continuing operations
|
1,571
|
1,417
|
||||||||
|
Discontinued
operations
|
6
|
26
|
139
|
|||||||
|
Profit
for the year
|
1,597
|
1,556
|
||||||||
|
Attributable
to:
|
||||||||||
|
Equity
shareholders of the parent company
|
1,521
|
1,489
|
||||||||
|
Minority
interests
|
76
|
67
|
||||||||
|
1,597
|
1,556
|
|||||||||
|
Pence
per share
|
||||||||||
|
Basic
earnings
|
59.3p
|
55.4p
|
||||||||
|
Diluted
earnings
|
58.9p
|
55.0p
|
||||||||
|
Average
shares
|
2,566m
|
2,688m
|
||||||||
DIAGEO
CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND
EXPENSE
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Exchange
differences on translation of foreign operations excluding
borrowings
|
336
|
(269
|
)
|
||||
|
Exchange
differences on borrowings and derivative net investment
hedges
|
(366
|
)
|
199
|
||||
|
Effective
portion of changes in fair value of cash flow hedges
|
|||||||
|
-
Gains taken to equity
|
26
|
28
|
|||||
|
-
Transferred to income statement
|
(69
|
)
|
35
|
||||
|
Actuarial
(losses)/gains on post employment plans
|
(15
|
)
|
328
|
||||
|
Tax
on items taken directly to equity
|
15
|
(99
|
)
|
||||
|
Net
(expense)/income recognised directly in equity
|
(73
|
)
|
222
|
||||
|
Profit
for the year
|
1,597
|
1,556
|
|||||
|
Total
recognised income and expense for the year
|
1,524
|
1,778
|
|||||
|
Attributable
to:
|
|||||||
|
Equity
shareholders of the parent company
|
1,445
|
1,719
|
|||||
|
Minority
interests
|
79
|
59
|
|||||
|
Total
recognised income and expense for the year
|
1,524
|
1,778
|
|||||
DIAGEO
CONDENSED CONSOLIDATED BALANCE SHEET
|
30 June 2008
|
30 June 2007
|
|||||||||||||||
|
Notes
|
£ million
|
£ million
|
£ million
|
£ million
|
||||||||||||
|
Non-current
assets
|
||||||||||||||||
|
Intangible
assets
|
5,530
|
4,383
|
||||||||||||||
|
Property,
plant and equipment
|
2,122
|
1,932
|
||||||||||||||
|
Biological
assets
|
31
|
12
|
||||||||||||||
|
Investments
in associates
|
1,809
|
1,436
|
||||||||||||||
|
Other
investments
|
168
|
128
|
||||||||||||||
|
Other
receivables
|
11
|
17
|
||||||||||||||
|
Other
financial assets
|
111
|
52
|
||||||||||||||
|
Deferred
tax assets
|
590
|
771
|
||||||||||||||
|
Post
employment benefit assets
|
47
|
38
|
||||||||||||||
|
10,419
|
8,769
|
|||||||||||||||
|
Current
assets
|
||||||||||||||||
|
Inventories
|
7
|
2,739
|
2,465
|
|||||||||||||
|
Trade
and other receivables
|
2,051
|
1,759
|
||||||||||||||
|
Other
financial assets
|
104
|
78
|
||||||||||||||
|
Cash
and cash equivalents
|
8
|
714
|
885
|
|||||||||||||
|
5,608
|
5,187
|
|||||||||||||||
|
Total
assets
|
16,027
|
13,956
|
||||||||||||||
|
Current
liabilities
|
||||||||||||||||
|
Borrowings
and bank overdrafts
|
8
|
(1,663
|
)
|
(1,535
|
)
|
|||||||||||
|
Other
financial liabilities
|
(126
|
)
|
(43
|
)
|
||||||||||||
|
Trade
and other payables
|
(2,143
|
)
|
(1,888
|
)
|
||||||||||||
|
Corporate
tax payable
|
(685
|
)
|
(673
|
)
|
||||||||||||
|
Provisions
|
(72
|
)
|
(60
|
)
|
||||||||||||
|
(4,689
|
)
|
(4,199
|
)
|
|||||||||||||
|
Non-current
liabilities
|
||||||||||||||||
|
Borrowings
|
8
|
(5,545
|
)
|
(4,132
|
)
|
|||||||||||
|
Other
financial liabilities
|
(124
|
)
|
(104
|
)
|
||||||||||||
|
Other
payables
|
(34
|
)
|
(38
|
)
|
||||||||||||
|
Provisions
|
(329
|
)
|
(274
|
)
|
||||||||||||
|
Deferred
tax liabilities
|
(676
|
)
|
(582
|
)
|
||||||||||||
|
Post
employment benefit liabilities
|
(455
|
)
|
(457
|
)
|
||||||||||||
|
(7,163
|
)
|
(5,587
|
)
|
|||||||||||||
|
Total
liabilities
|
(11,852
|
)
|
(9,786
|
)
|
||||||||||||
|
Net
assets
|
4,175
|
4,170
|
||||||||||||||
|
Equity
|
||||||||||||||||
|
Called
up share capital
|
816
|
848
|
||||||||||||||
|
Share
premium
|
1,342
|
1,341
|
||||||||||||||
|
Other
reserves
|
3,163
|
3,186
|
||||||||||||||
|
Retained
deficit
|
(1,823
|
)
|
(1,403
|
)
|
||||||||||||
|
Equity
attributable to equity shareholders of the parent
company
|
3,498
|
3,972
|
||||||||||||||
|
Minority
interests
|
677
|
198
|
||||||||||||||
|
Total
equity
|
10
|
4,175
|
4,170
|
|||||||||||||
DIAGEO
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||||||||
|
£ million
|
£ million
|
£ million
|
£ million
|
||||||||||
|
Cash
flows from operating activities
|
|||||||||||||
|
Profit
for the year
|
1,597
|
1,556
|
|||||||||||
|
Discontinued
operations
|
(26
|
)
|
(139
|
)
|
|||||||||
|
Taxation
|
522
|
678
|
|||||||||||
|
Share
of associates’ profits after taxation
|
(177
|
)
|
(149
|
)
|
|||||||||
|
Net
interest and other net finance income
|
319
|
212
|
|||||||||||
|
(Gains)/losses
on disposal of businesses
|
(9
|
)
|
1
|
||||||||||
|
Depreciation
and amortisation
|
233
|
210
|
|||||||||||
|
Movements
in working capital
|
(282
|
)
|
(180
|
)
|
|||||||||
|
Dividend
income and other items
|
128
|
83
|
|||||||||||
|
Cash
generated from operations
|
2,305
|
2,272
|
|||||||||||
|
Interest
received
|
67
|
42
|
|||||||||||
|
Interest
paid
|
(387
|
)
|
(279
|
)
|
|||||||||
|
Dividends
paid to minority interests
|
(56
|
)
|
(41
|
)
|
|||||||||
|
Taxation
paid
|
(369
|
)
|
(368
|
)
|
|||||||||
|
Net
cash from operating activities
|
1,560
|
1,626
|
|||||||||||
|
Cash
flows from investing activities
|
|||||||||||||
|
Disposal
of property, plant and equipment
|
66
|
69
|
|||||||||||
|
Purchase
of property, plant and equipment
|
(328
|
)
|
(274
|
)
|
|||||||||
|
Net
disposal/(purchase) of other investments
|
4
|
(6
|
)
|
||||||||||
|
Payment
into escrow in respect of UK pension fund
|
(50
|
)
|
(50
|
)
|
|||||||||
|
Disposal
of businesses
|
4
|
4
|
|||||||||||
|
Purchase
of businesses
|
(575
|
)
|
(70
|
)
|
|||||||||
|
Net
cash outflow from investing activities
|
(879
|
)
|
(327
|
)
|
|||||||||
|
Cash
flows from financing activities
|
|||||||||||||
|
Proceeds
from issue of share capital
|
1
|
1
|
|||||||||||
|
Net
purchase of own shares for share schemes
|
(78
|
)
|
(25
|
)
|
|||||||||
|
Own
shares repurchased
|
(1,008
|
)
|
(1,405
|
)
|
|||||||||
|
Net
increase in loans
|
1,094
|
1,226
|
|||||||||||
|
Net
equity dividends paid
|
(857
|
)
|
(858
|
)
|
|||||||||
|
Net
cash used in financing activities
|
(848
|
)
|
(1,061
|
)
|
|||||||||
|
Net
(decrease)/increase in net cash and cash
equivalents
|
(167
|
)
|
238
|
||||||||||
|
Exchange
differences
|
11
|
(50
|
)
|
||||||||||
|
Net
cash and cash equivalents at beginning of the year
|
839
|
651
|
|||||||||||
|
Net
cash and cash equivalents at end of the year
|
683
|
839
|
|||||||||||
|
Net
cash and cash equivalents consist of:
|
|||||||||||||
|
Cash
and cash equivalents
|
714
|
885
|
|||||||||||
|
Bank
overdrafts
|
(31
|
)
|
(46
|
)
|
|||||||||
|
683
|
839
|
||||||||||||
NOTES
1.
Basis of preparation
The
condensed consolidated financial information has been extracted from the
consolidated financial statements of Diageo plc for the year ended 30 June
2008.
These consolidated financial statements were prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted and endorsed
by
the European Union. They were also prepared in accordance with IFRS as issued
by
the International Accounting Standards Board (IASB). This consolidated financial
information has been prepared on the basis of accounting policies consistent
with those applied in the consolidated financial statements for the year ended
30 June 2007. IFRS is subject to ongoing review and endorsement by the EU or
possible amendment by interpretative guidance from the IASB.
The
following standards and interpretations, issued by the IASB and the
International Financial Reporting Interpretations Committee (IFRIC), are
effective for the first time in the current financial year and have been adopted
by the group with no significant impact on its consolidated results or financial
position:
Amendment
to IAS 1 – Presentation of financial statements: capital disclosures
(effective
for annual periods beginning on or after 1 January 2007). The amendment to
IAS 1
requires additional disclosures in the Annual Report on the objectives, policies
and processes for managing capital. Appropriate additional disclosures are
included in the 2008 Annual Report.
IFRIC
11 – Group and treasury share transactions
(effective for annual periods beginning on or after 1 March 2007)
The
following standards and interpretations, issued by the IASB or IFRIC, have
not
yet been adopted by the group:
IAS
1
(Revised) – Presentation of financial statements (effective
for annual periods beginning on or after 1 January 2009)
Amendment
to IAS 23 – Borrowing costs
(effective for annual periods beginning on or after 1 January 2009)
IAS
27 (Revised) – Consolidated and separate financial statements
(effective for annual periods beginning on or after 1 July 2009)
Amendment
to IAS 38 – Intangible assets
(effective for annual periods beginning on or after 1 January 2009)
Amendment
to IFRS 2 – Share-based payments (effective
for annual periods beginning on or after 1 January 2009)
IFRS
3 (Revised) – Business combinations (effective
for annual periods beginning on or after 1 July 2009)
IFRS
8 – Operating segments
(effective for annual periods beginning on or after 1 January 2009)
IFRIC
12 – Service concession arrangements (effective
for annual periods beginning on or after 1 January 2008)
IFRIC
13 – Customer loyalty programmes
(effective for annual periods beginning on or after 1 July 2008)
IFRIC
14 – IAS 19 – The limit on a defined benefit asset, minimum funding requirements
and their interaction (effective
for annual periods beginning on or after 1 January 2008)
IFRIC
15 – Agreements for the construction of real estate
(effective for annual periods beginning on or after 1 January 2009)
IFRIC
16 – Hedges of a net investment in a foreign operation
(effective for annual periods beginning on or after 1 October 2008)
The
amendment to IAS 23 generally eliminates the option to expense borrowing costs
attributable to the acquisition, construction or production of a qualifying
asset as incurred and instead requires the capitalisation of such borrowing
costs as part of the cost of specific assets. The group is currently assessing
the impact of the amendment on the results and net assets of the
group.
The
amendment to IAS 38 clarifies the accounting for advertising expenditure. The
group is currently assessing the impact this amendment to the standard would
have on the results and net assets of the group.
IFRS
3
(Revised) continues to apply the acquisition method to business combinations
with some significant changes, particularly around the measurement of contingent
payments, the calculation of goodwill and the treatment of transaction costs.
These changes will apply to business combinations occurring from 1 July
2009.
IFRS
8
contains requirements for the disclosure of information about an entity’s
operating segments and also about the entity’s products and services, the
geographical areas in which it operates, and its major customers. The standard
is principally concerned with disclosure and replaces IAS
14 – Segment reporting.
The
group is currently assessing the impact this standard would have on the
presentation of its consolidated results.
IFRIC
14
provides guidance on assessing the limit in IAS 19 on the amount of the surplus
that can be recognised as an asset. It also explains how the post employment
benefit asset or liability may be affected by a statutory or contractual minimum
funding requirement. It is not expected that the interpretation would have
a
material impact on the results or net assets of the group.
The
group
does not currently believe the adoption of the remaining standards or
interpretations would have a material impact on the consolidated results or
financial position of the group. With the exception of IAS 1 (Revised) and
IFRS
8, none of the above standards and interpretations not yet adopted by Diageo
have been endorsed or adopted for use in the European Union.
The
information in this preliminary announcement does not constitute the statutory
accounts of the group within the meaning of Section 240 of the Companies Act
1985. The statutory accounts of Diageo plc for the year ended 30 June 2007,
have
been filed with the registrar of companies. KPMG Audit Plc has reported on
those
accounts and on the statutory accounts for the year ended 30 June 2008. Both
the
audit reports were unqualified, did not include a reference to any matters
to
which they drew attention by way of emphasis without qualifying their report
and
did not contain any statement under section 237 (2) or (3) of the Companies
Act
1985.
2.
Business and geographical analyses
Business
analysis is presented under the categories of Diageo North America, Diageo
Europe, Diageo International, Diageo Asia Pacific and Corporate, reflecting
the
group’s management and internal reporting structure.
Business
analysis:
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||||||||
|
Sales
|
Operating
profit/(loss)
|
Sales
|
Operating
profit/(loss)
|
||||||||||
|
£ million
|
£ million
|
£ million
|
£ million
|
||||||||||
|
North
America
|
2,965
|
907
|
2,915
|
850
|
|||||||||
|
Europe
|
4,046
|
720
|
3,765
|
723
|
|||||||||
|
International
|
2,376
|
593
|
2,031
|
499
|
|||||||||
|
Asia
Pacific
|
1,168
|
170
|
1,131
|
196
|
|||||||||
|
10,555
|
2,390
|
9,842
|
2,268
|
||||||||||
|
Corporate
|
88
|
(164
|
)
|
75
|
(109
|
)
|
|||||||
|
10,643
|
2,226
|
9,917
|
2,159
|
||||||||||
Net
corporate operating costs and trading losses increased from £109 million to £164
million in the year ended 30 June 2008. Corporate revenues and costs are in
respect of central costs, including finance, human resources and legal, as
well
as certain information systems, service centres, facilities and employee costs
that are not directly allocated to the geographical operating units. They also
include the revenues and costs related to rents receivable in respect of
properties not used by Diageo in the manufacture, sale or distribution of
premium drinks, exchange movements on short term inter-company balances and
the
results of Gleneagles Hotel.
Geographical
analysis of sales and operating profit by destination:
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||||||||
|
Sales
|
Operating
profit
|
Sales
|
Operating
profit
|
||||||||||
|
£ million
|
£ million
|
£ million
|
£ million
|
||||||||||
|
North
America
|
3,001
|
922
|
2,958
|
873
|
|||||||||
|
Europe
|
4,187
|
576
|
3,912
|
636
|
|||||||||
|
Asia
Pacific
|
1,208
|
186
|
1,179
|
215
|
|||||||||
|
Latin
America
|
963
|
238
|
813
|
214
|
|||||||||
|
Rest
of World
|
1,284
|
304
|
1,055
|
221
|
|||||||||
|
10,643
|
2,226
|
9,917
|
2,159
|
||||||||||
Sales
and
operating profit by geographical destination have been stated according to
the
location of the third party customers.
Certain
businesses reported for internal management purposes within Diageo International
have been reported within the appropriate market in the geographical analysis
above. Corporate sales and operating loss (principally central costs) are
incurred in Europe.
The
festive holiday season provides the peak period for sales. Approximately 30%
of
annual sales volume arises in the last three months of each calendar
year.
|
30 June 2008
|
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Analysis
of total assets:
|
|||||||
|
North
America
|
889
|
842
|
|||||
|
Europe
|
1,239
|
1,063
|
|||||
|
International
|
964
|
808
|
|||||
|
Asia
Pacific
|
474
|
406
|
|||||
|
Moët
Hennessy
|
1,643
|
1,348
|
|||||
|
Corporate
and other
|
10,818
|
9,489
|
|||||
|
16,027
|
13,956
|
||||||
Corporate
and other total assets consist primarily of brands that are capitalised in
the
balance sheet, property, plant and equipment, maturing whisky inventories and
other assets that are not readily allocable to the group’s operating
segments.
Weighted
average exchange rates used in the translation of income statements were US
dollar - £1 = $2.01 (2007 - £1 = $1.93) and euro - £1 = €1.36 (2007 - £1 =
€1.48). Exchange rates used to translate assets and liabilities at the balance
sheet date were US dollar - £1 = $1.99 (2007 - £1 = $2.01) and euro - £1 = €1.26
(2007 - £1 = €1.48). The group uses exchange rate transaction hedges to mitigate
the effect of exchange rate movements.
3.
Exceptional items
Exceptional
items are those that in management's judgement, need to be disclosed by virtue
of their size or incidence in order for the user to obtain a proper
understanding of the financial information.
In
the
year ended 30 June 2008, operating costs of £78 million in respect of the
restructuring of Irish brewing operations, a gain of £9 million in respect of
business disposals have been identified as pre-tax exceptional items. In the
year ended 30 June 2007, operating profit included an exceptional gain of £40
million in respect of the sale of the site of the former brewery at Park Royal
in the United Kingdom, and there was an exceptional loss on business disposals
of £1 million.
4. Net
interest and other finance charges
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Interest
payable
|
(419
|
)
|
(332
|
)
|
|||
|
Interest
receivable
|
84
|
78
|
|||||
|
Market
value movements on interest rate instruments
|
(6
|
)
|
3
|
||||
|
Net
interest payable
|
(341
|
)
|
(251
|
)
|
|||
|
Net
finance income in respect of post employment plans
|
46
|
48
|
|||||
|
Unwinding
of discounts
|
(17
|
)
|
(16
|
)
|
|||
|
Other
finance charges
|
(6
|
)
|
-
|
||||
|
23
|
32
|
||||||
|
Net
exchange movements on certain financial instruments
|
(1
|
)
|
7
|
||||
|
Net
other finance income
|
22
|
39
|
|||||
5.
Taxation
For
the
year ended 30 June 2008, the £522 million taxation charge (2007 - £678 million)
comprises a UK tax charge of £43 million (2007 - £87 million) and a foreign tax
charge of £479 million (2007 - £591 million). A tax credit of £8 million on
exceptional items (2007 - nil) is included in the foreign tax
charge.
6.
Discontinued operations
In
the
year ended 30 June 2008, profit after tax in respect of discontinued operations
was £26 million. This principally arose from a tax credit of £24 million
relating to the disposal of the Pillsbury business. In the year ended 30 June
2007, a tax benefit of £82 million arose from the recognition of capital losses
arising on the prior year disposals of the Pillsbury and Burger King businesses.
In addition, a tax credit of £57 million arose following resolution with tax
authorities of various audit issues.
7.
Inventories
|
30 June 2008
|
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Raw
materials and consumables
|
294
|
239
|
|||||
|
Work
in progress
|
21
|
14
|
|||||
|
Maturing
inventories
|
1,939
|
1,745
|
|||||
|
Finished
goods and goods for resale
|
485
|
467
|
|||||
|
2,739
|
2,465
|
||||||
8.
Net borrowings
|
30 June 2008
|
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Borrowings
due within one year and bank overdrafts
|
(1,663
|
)
|
(1,535
|
)
|
|||
|
Borrowings
due after one year
|
(5,545
|
)
|
(4,132
|
)
|
|||
|
Fair
value of interest rate hedging instruments
|
27
|
(20
|
)
|
||||
|
Fair
value of foreign currency swaps and forwards
|
29
|
(29
|
)
|
||||
|
Finance
lease liabilities
|
(9
|
)
|
(14
|
)
|
|||
|
(7,161
|
)
|
(5,730
|
)
|
||||
|
Cash
and cash equivalents
|
714
|
885
|
|||||
|
(6,447
|
)
|
(4,845
|
)
|
||||
In
the
year ended 30 June 2008, the group issued a US $1,250
million global bond repayable in October 2017 with a coupon of 5.75%,
a US $750 million global bond repayable in January 2013 with a
coupon of 5.20% and a €1,150 million global
euro bond repayable in July 2013 with a coupon of 5.5%. Two US
$1,000 million bonds and three US $5 million retail notes were repaid.
There was also an increase in commercial paper of £472 million.
9.
Reconciliation of movement in net borrowings
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Net
borrowings at beginning of the year
|
(4,845
|
)
|
(4,082
|
)
|
|||
|
(Decrease)/increase
in net cash and cash equivalents before exchange
|
(167
|
)
|
238
|
||||
|
Cash
flow from change in loans
|
(1,094
|
)
|
(1,226
|
)
|
|||
|
Change
in net borrowings from cash flows
|
(1,261
|
)
|
(988
|
)
|
|||
|
Exchange
differences
|
(372
|
)
|
211
|
||||
|
Other
non-cash items
|
31
|
14
|
|||||
|
Net
borrowings at end of the year
|
(6,447
|
)
|
(4,845
|
)
|
|||
10.
Movements in total equity
|
Year ended
30 June 2008
|
Year ended
30 June 2007
|
||||||
|
£ million
|
£ million
|
||||||
|
Total
equity at beginning of the year
|
4,170
|
4,681
|
|||||
|
Total
recognised income and expense for the year
|
1,524
|
1,778
|
|||||
|
Dividends
paid to equity shareholders
|
(857
|
)
|
(858
|
)
|
|||
|
Dividends
paid to minority interests
|
(56
|
)
|
(41
|
)
|
|||
|
New
share capital issued
|
1
|
1
|
|||||
|
Share
trust arrangements
|
76
|
77
|
|||||
|
Tax
on share trust arrangements
|
(7
|
)
|
12
|
||||
|
Own
shares repurchased
|
(1,008
|
)
|
(1,405
|
)
|
|||
|
Purchase
of own shares for holding as treasury shares for share scheme
hedging
|
(124
|
)
|
(76
|
)
|
|||
|
Acquisition
of minority interest
|
456
|
1
|
|||||
|
Net
movement in total equity
|
5
|
(511
|
)
|
||||
|
Total
equity at end of the year
|
4,175
|
4,170
|
|||||
Total
equity at the end of the year includes gains of £15 million (2007 - £42 million)
in respect of cumulative translation differences and £2,341 million (2007 -
£2,333 million) in respect of own shares held as treasury shares.
11.
Dividends
|
Year ended
30 June 2008
£ million
|
Year ended
30 June 2007
£ million
|
||||||
|
Amounts
recognised as distributions to equity holders in the
year
|
|||||||
|
Final
dividend paid for the year ended 30 June 2007 of 20.15p
(2006
- 19.15p) per share
|
523
|
524
|
|||||
|
Interim
dividend paid for the year ended 30 June 2008 of 13.20p
(2007
- 12.55p) per share
|
336
|
334
|
|||||
|
859
|
858
|
||||||
|
Less:
Adjustment in respect of prior year dividends
|
(2
|
)
|
-
|
||||
|
857
|
858
|
||||||
A
final
dividend of 21.15 pence per share for the year ended 30 June 2008 (2007 - 20.15
pence per share) was recommended by the board on 27 August 2008 for approval
by
shareholders at the Annual General Meeting to be held on 15 October 2008; as
the
approval will be after the balance sheet date it has not been included as a
liability.
12.
Contingent liabilities and legal proceedings
(i)
Guarantees
In
connection with the disposal of Pillsbury, Diageo has guaranteed the debt of
a
third party to the amount of $200 million (£101 million) until November 2009.
Including this guarantee, but net of the amount provided in the consolidated
financial information, at 30 June 2008 the group has given performance
guarantees and indemnities to third parties of £104 million.
There
has
been no material change since 30 June 2008 in the group’s performance guarantees
and indemnities.
(ii)
Colombian litigation
An
action was filed on 8 October 2004 in the United States District Court for
the
Eastern District of New York by the Republic of Colombia and a number of its
local government entities against Diageo and other spirits companies. The
complaint alleges several causes of action. Included among the causes of action
is a claim that the defendants allegedly violated the Federal RICO Act by
facilitating money laundering in Colombia through their supposed involvement
in
the contraband trade to the detriment of government owned spirits production
and
distribution businesses. Diageo is unable to quantify meaningfully the possible
loss or range of loss to which the lawsuit may give rise. Diageo intends to
defend itself vigorously against this lawsuit.
(iii)
Turkish customs litigation
In
common with other beverage alcohol importers, litigation is ongoing against
Diageo’s Turkish subsidiary in the Turkish Civil Courts in connection with the
methodology used by the Turkish customs authorities in assessing the importation
value of and duty payable on the beverage alcohol products sold in the domestic
channel in Turkey. The matter involves multiple cases against Diageo’s Turkish
subsidiary at various stages of litigation including a group of cases under
correction appeal following an adverse finding at the Turkish Supreme Court.
Diageo is unable to quantify meaningfully the possible loss or range of loss
to
which these cases may give rise. Diageo's Turkish subsidiary intends to defend
its position vigorously.
(iv)
Other
The
group has extensive international operations and is defendant in a number of
legal proceedings incidental to these operations. There are a number of legal
claims against the group, the outcome of which cannot at present be
foreseen.
Save
as
disclosed above, neither Diageo, nor any member of the Diageo group, is or
has
been engaged in, nor (so far as Diageo is aware) is there pending or threatened
by or against it, any legal or arbitration proceedings which may have a
significant effect on the financial position of the Diageo
group.
ADDITIONAL
INFORMATION FOR SHAREHOLDERS
EXPLANATORY
NOTES
Definitions
Unless
otherwise stated, percentage movements given throughout this announcement for
volume, sales, net sales, marketing spend and operating profit are organic
movements (at level exchange rates and after adjusting for the effect of
exceptional items, acquisitions and disposals) for continuing operations.
Comparisons are with the equivalent period in the last financial year. For
an
explanation of organic movements please refer to ‘Reconciliation to GAAP
measures’ in this announcement.
Volume
has been measured on an equivalent units basis to nine litre cases of spirits.
An equivalent unit represents one nine litre case of spirits, which is
approximately 272 servings. A serving comprises 33ml of spirits, 165ml of wine,
or 330ml of ready to drink or beer. Therefore, to convert volume of products,
other than spirits, to equivalent units, the following guide has been used:
beer
in hectolitres divide by 0.9, wine in nine litre cases divide by five, and
ready
to drink in nine litre cases divide by 10, with certain pre-mixed products
that
are classified as ready to drink divide by five.
Net
sales are sales after deducting excise duties.
Exceptional
items are those that in management’s judgement need to be disclosed by virtue of
their size or incidence in order for the user to obtain a proper understanding
of the financial information. Such items are included within the income
statement caption to which they relate.
References
to ready to drink include progressive adult beverages in the United States.
References to Smirnoff ready to drink include Smirnoff Ice, Smirnoff Black
Ice,
Smirnoff Twisted V, Smirnoff Mule, Smirnoff Spin, Smirnoff Storm, Smirnoff
Caipiroska, Smirnoff Signatures and Smirnoff Cocktails. References to Smirnoff
Black Ice include Smirnoff Ice Triple Black in the United States and Smirnoff
Ice Double Black in Australia.
References
to reserve brands include Johnnie Walker Green Label, Johnnie Walker Gold Label,
Johnnie Walker Blue Label, Johnnie Walker Blue Label King George V, Classic
Malts, The Singleton of Glen Ord, The Singleton of Glendullan, The Singleton
of
Dufftown, Tanqueray Ten, Cîroc vodka, Don Julio, Ketel One vodka and Zacapa
rum.
Volume
share is a brand’s volume when compared to the volume of all brands in its
segment. Value share is a brand’s retail sales when compared to the retail sales
of all brands in its segment. Unless otherwise stated, share refers to value
share. Share of voice is the media spend on a particular brand when compared
to
all brands in its segment. The share and share of voice data contained in this
announcement is taken from independent industry sources in the markets in which
Diageo operates.
This
announcement contains forward-looking statements that involve risk and
uncertainty. 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 beyond Diageo's control. Please
refer to page 36 - ‘Cautionary statement concerning forward-looking statements’
for more details.
This
announcement includes names of Diageo’s products which constitute trademarks or
trade names which Diageo owns or which others own and license to Diageo for
its
use.
Reconciliation
to GAAP measures
|
(i)
|
Organic
movement
|
Organic
movements in volume, sales, net sales, operating profit, operating margin and
basic earnings per share are measures not specifically used in the consolidated
financial statements themselves (non-GAAP measures). The performance of the
group is discussed using these measures.
In
the discussion of the performance of the business, organic information is
presented using pounds sterling amounts on a constant currency basis. This
strips out the effect of exchange rate movements and enables an understanding
of
the underlying performance of the market that is most closely influenced by
the
actions of that market’s management. The risk from exchange rate movements is
managed centrally and is not a factor over which local managers have any
control.
Acquisitions,
disposals and exceptional items also impact the reported performance and
therefore the reported movement in any period in which they arise. Management
adjusts for the impact of such transactions in assessing the performance of
the
underlying business.
The
underlying performance on a constant currency basis and excluding the impact
of
acquisitions, disposals and exceptional items is referred to as ‘organic’
performance. Organic movement calculations enable the reader to focus on the
performance of the business which is common to both periods.
Organic
movements in volume, sales, net sales, operating profit and operating
margin
Diageo’s
strategic planning and budgeting process is based on organic movement in volume,
sales, net sales, operating profit and operating margin, and these measures
closely reflect the way in which operating targets are defined and performance
is monitored by the group’s management. Therefore organic movement measures most
closely reflect the way in which the business is managed.
These
measures are chosen for planning, budgeting, reporting and incentive purposes
since they represent those measures which local managers are most directly
able
to influence and they enable consideration of the underlying business
performance without the distortion caused by fluctuating exchange rates,
exceptional items and acquisitions and disposals.
The
group’s management believes these measures provide valuable additional
information for users of the financial statements in understanding the group’s
performance since they provide information on those elements of performance
which local managers are most directly able to influence and they focus on
that
element of the core brand portfolio which is common to both periods. They should
be viewed as complementary to, and not replacements for, the comparable GAAP
measures.
The
organic movement calculations for volume, sales, net sales and operating profit
for the year ended 30 June 2008 were as follows:
|
2007
Reported
units
million
|
Acquisitions
and
disposals
units
million
|
Organic
movement
units
million
|
2008
Reported
units
million
|
Organic
movement
%
|
||||||||||||
|
1.
Volume (1)(a)(b)
|
||||||||||||||||
|
North
America
|
50.2
|
0.1
|
0.8
|
51.1
|
2
|
|||||||||||
|
Europe
|
40.9
|
-
|
0.7
|
41.6
|
2
|
|||||||||||
|
International
|
37.3
|
-
|
1.8
|
39.1
|
5
|
|||||||||||
|
Asia
Pacific
|
12.9
|
-
|
0.3
|
13.2
|
2
|
|||||||||||
|
Total
|
141.3
|
0.1
|
3.6
|
145.0
|
3
|
|||||||||||
|
2007
Reported
£
million
|
Exchange(3)
£
million
|
Transfers,(2)
acquisitions
and
disposals(4)
£
million
|
Organic
movement
£
million
|
2008
Reported
£
million
|
Organic
movement
%
|
||||||||||||||
|
2.
Sales (a)(b)
|
|||||||||||||||||||
|
North
America
|
2,915
|
(91
|
)
|
-
|
141
|
2,965
|
5
|
||||||||||||
|
Europe
|
3,765
|
183
|
-
|
98
|
4,046
|
2
|
|||||||||||||
|
International
|
2,031
|
34
|
1
|
310
|
2,376
|
15
|
|||||||||||||
|
Asia
Pacific
|
1,131
|
33
|
-
|
4
|
1,168
|
-
|
|||||||||||||
|
Corporate
|
75
|
1
|
-
|
12
|
88
|
16
|
|||||||||||||
|
Total
sales
|
9,917
|
160
|
1
|
565
|
10,643
|
6
|
|||||||||||||
|
2007
Reported
£
million
|
Exchange(3)
£
million
|
Transfers,(2)
acquisitions
and
disposals(4)
£
million
|
Organic
movement
£
million
|
2008
Reported
£
million
|
Organic
movement
%
|
||||||||||||||
|
3.
Net sales (a)(b)
|
|||||||||||||||||||
|
North
America
|
2,472
|
(73
|
)
|
-
|
124
|
2,523
|
5
|
||||||||||||
|
Europe
|
2,427
|
128
|
-
|
75
|
2,630
|
3
|
|||||||||||||
|
International
|
1,667
|
37
|
1
|
266
|
1,971
|
16
|
|||||||||||||
|
Asia
Pacific
|
840
|
19
|
-
|
18
|
877
|
2
|
|||||||||||||
|
Corporate
|
75
|
1
|
-
|
13
|
89
|
17
|
|||||||||||||
|
Total
net sales
|
7,481
|
112
|
1
|
496
|
8,090
|
7
|
|||||||||||||
|
Excise
duties
|
2,436
|
2,553
|
|||||||||||||||||
|
Total
sales
|
9,917
|
10,643
|
|||||||||||||||||
|
2007
Reported
£
million
|
Exceptional
items(5)
£
million
|
Exchange(3)
£
million
|
Transfers,(2)
acquisitions
and
disposals(4)
£
million
|
Organic
movement
£
million
|
2008
Reported
£
million
|
Organic
movement
%
|
||||||||||||||||
|
4.
Operating profit (a)(b)
|
||||||||||||||||||||||
|
North
America
|
850
|
-
|
(27
|
)
|
2
|
82
|
907
|
10
|
||||||||||||||
|
Europe
|
723
|
(78
|
)
|
47
|
6
|
22
|
720
|
3
|
||||||||||||||
|
International
|
499
|
-
|
2
|
(4
|
)
|
96
|
593
|
19
|
||||||||||||||
|
Asia
Pacific
|
196
|
-
|
2
|
(4
|
)
|
(24
|
)
|
170
|
(12
|
)
|
||||||||||||
|
Corporate
|
(109
|
)
|
(40
|
)
|
(29
|
)
|
(2
|
)
|
16
|
(164
|
)
|
9
|
||||||||||
|
Total
|
2,159
|
(118
|
)
|
(5
|
)
|
(2
|
)
|
192
|
2,226
|
9
|
||||||||||||
Notes
– Information relating to the current period
| (1) |
Differences
between the reported volume movements and organic volume movements
are due
to acquisitions and disposals.
|
| (2) |
Transfers
represent the movement between operating units of certain activities,
the
most significant of which were the reallocation of certain net operating
items between corporate and the regions. Transfers reduced operating
profit for International, Asia Pacific and corporate by £5 million, £4
million and £1 million respectively and increased operating profit in
North America and Europe by £4 million and £6 million
respectively.
|
|
(3)
|
The
exchange adjustments for sales, net sales and operating profit are
principally in respect of the US dollar and the
euro.
|
|
(4)
|
Acquisitions
in the year ended 30 June 2008 that affected sales, net sales and
operating profit were the acquisition of Rosenblum Cellars, Ketel
One
Worldwide BV and the distribution rights for Zacapa rum, which contributed
volume, sales, net sales and operating costs of 65k equivalent units,
£7
million, £7 million and £1 million respectively in the year ended 30 June
2008. The only disposal affecting the year was the disposal of the
distribution rights of certain champagne brands, which contributed
volume,
sales, net sales and operating profit of 6k equivalent units, £6 million,
£6 million and £1 million respectively, in the year ended 30 June
2007.
|
|
(5)
|
Operating
exceptional items in the year ended 30 June 2008 comprised restructuring
costs for the Irish brewing operations of £78 million. Operating
exceptional items in the year ended 30 June 2007 comprised a gain
on the
disposal of land at the Park Royal site of £40
million.
|
Notes
– Information relating to the organic movement calculations
| a) |
The
organic movement percentage is the amount in the column headed
Organic
movement in the tables above expressed as a percentage of
the aggregate of
the column headed 2007 Reported, the column headed Exchange
and the
amounts in respect of transfers (see note (2) above) and
disposals (see
note (4) above) included in the column headed Transfers,
acquisitions and
disposals. The inclusion of the column headed Exchange in
the organic
movement calculation reflects the adjustment to exclude the
effect of
exchange rate movements by recalculating the prior period
results as if
they had been generated at the current period’s exchange rates. Organic
movement percentages are calculated as the organic movement
amount in £
million, expressed as a percentage of the prior period results
at current
period exchange rates and after adjusting for transfers,
disposals and
exceptional items. The basis of calculation means that the
results used to
measure organic movement for a given period will be adjusted
when used to
measure organic movement in the subsequent
period.
|
| b) |
Where
a business, brand, brand distribution right or agency agreement
was
disposed of, or terminated, in the current period, the
group, in organic
movement calculations, adjusts the results for the comparable
prior period
to exclude the amount the group earned in that period that
it could not
have earned in the current period (i.e. the period between
the date in the
prior period, equivalent to the date of the disposal in
the current
period, and the end of the prior period). As a result,
the organic
movement numbers reflect only comparable performance. Similarly,
if a
business was disposed of part way through the equivalent
prior period then
its contribution would be completely excluded from that
prior period’s
performance in the organic movement calculation, since
the group
recognised no contribution from that business in the current
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. For
acquisitions, a
similar adjustment is made in the organic movement calculations.
For
acquisitions subsequent to the end of the equivalent prior
period, the
post acquisition results in the current period 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 only
included from the anniversary of the acquisition date in
the current
period.
|
| c) |
Organic
movement in operating margin is the difference between the 2008
operating
margin (operating profit adjusted for exceptional items expressed
as a
percentage of sales) and an operating margin where the amounts
for each of
sales and operating profit are the aggregate of those captions
in the
column headed 2007 Reported, the column headed Exchange and the
amounts in
respect of transfers (see note (2) above) and disposals (see
note (4)
above) included in the column headed Transfers, acquisitions
and
disposals. Organic movement in operating margin is calculated
as the
movement amount in margin percentage, expressed in basis points,
between
the operating margin for the prior period results at current
period
exchange rates and after adjusting for transfers, disposals and
exceptional items and the operating margin for the current period
results
adjusted for current period exceptional items. The basis of calculation
means that the results used to measure organic movement for a
given period
will be adjusted when used to measure organic movement in the
subsequent
period.
|
Underlying
movement in earnings per share
The
group’s management believes basic earnings per share on an underlying organic
movement basis provides valuable additional information for users of the
financial statements in understanding the group’s overall performance. The
group’s management believes that the comparison of movements on both a reported
and underlying basis provides information as to the individual components of
the
movement in basic earnings per share being: the impact of exceptional items,
fluctuating exchange rates, acquisitions and disposals arising in the period
and
the application of an underlying effective tax rate. These measures should
be
viewed as complementary to, and not a replacement for, the comparable GAAP
measures such as basic and diluted earnings per share and reported movements
therein. These GAAP measures reflect all of the factors which impact on the
business.
The
underlying movement calculation in earnings per share for the year ended 30
June
2008 was as follows:
|
Pence per
share
(5)
|
||||
|
Reported
basic eps for year ended 30 June 2007
|
55.4
|
|||
|
Exceptional
items and discontinued operations (1)
|
(6.6
|
)
|
||
|
Tax
equalisation (4)
|
6.0
|
|||
|
Basic
eps before exceptional items and after tax equalisation for year
ended 30
June 2007
|
54.8
|
|||
|
Exchange
(3)
(d)
|
-
|
|||
|
Acquisitions
(2)
(b)
|
-
|
|||
|
Adjusted
basic eps for year ended 30 June 2007
|
54.8
|
|||
|
Reported
basic eps for year ended 30 June 2008
|
59.3
|
|||
|
Exceptional
items and discontinued operations (1)
|
1.3
|
|||
|
Tax
equalisation (4)
|
-
|
|||
|
Basic
eps before exceptional items and after tax equalisation for year
ended 30
June 2008
|
60.6
|
|||
|
Exchange
(3)
(d)
|
-
|
|||
|
Acquisitions
(2)
(b)
|
0.2
|
|||
|
Adjusted
basic eps for year ended 30 June 2008
|
60.8
|
|||
|
Reported
basic eps movement amount
|
3.9
|
|||
|
Basic
eps before exceptional items and after tax equalisation movement
amount
|
5.8
|
|||
|
Adjusted
basic eps movement amount (underlying movement) (c)
|
6.0
|
|||
|
Reported
basic eps growth
|
7
|
%
|
||
|
Basic
eps growth before exceptional items and after tax
equalisation
|
11
|
%
|
||
|
Underlying
growth (c)
|
11
|
%
|
||
Notes –
Information relating to the current period
| (1) |
The
exceptional items (after tax and attributable to equity shareholders)
in
the year ended 30 June 2008 were a charge of £61 million comprising a
charge of £78 million in respect of the restructuring of the Irish brewing
operations and related tax credit of £8 million and a gain of £9 million
in respect of business disposals. The exceptional items reported
by the
group for the year ended 30 June 2007 were a gain of £39 million
representing a gain of £40 million in respect of the sale of land at the
Park Royal site and a loss of £1 million relating to disposal of
businesses. Discontinued operations in the year ended 30 June
2008
represented tax credits of £26 million (2007 – £139 million) on prior
business
disposals.
|
| (2) |
Acquisitions
in the year ended 30 June 2008 are in respect of Ketel One Worldwide
BV,
Rosenblum Cellars and the distribution rights for Zacapa rum.
Disposals
affecting the year are the loss of distribution rights for certain
champagne brands.
|
| (3) |
Exchange
– the exchange adjustments for operating profit, net finance charges
and
taxation are principally in respect of the US dollar and the
euro.
Transaction exchange adjustments are taxed at the underlying
effective tax
rate for the
period.
|
| (4) |
Tax
equalisation – the impact of adjusting the group’s reported tax rate from
continuing businesses to the underlying effective tax rate for
each year
on profit from continuing businesses before exceptional items
(see (v)
below).
|
| (5) |
All
amounts are derived from amounts in £ million divided by the weighted
average number of shares in issue for the year ended 30 June
2008 of 2,566
million (2007 – 2,688
million).
|
Notes
– Information relating to the organic movement calculations
| a) |
Where
a business, brand, brand distribution right or agency agreement
or
investment was disposed of, or terminated, in the current period,
the
group, in underlying movement calculations, adjusts the profit
for the
period attributable to equity shareholders for the comparable
prior period
to exclude the following: (i) the amount the group earned in
that period
that it could not have earned in the current period (i.e. the
period
between the date in the prior period, equivalent to the date
of the
disposal in the current period, and the end of the prior period);
(ii) a
capital return in respect of the reduction in interest charge
had the
disposal proceeds been used entirely to reduce borrowings;
and (iii)
taxation at the rate applying in the jurisdiction in which
the asset or
business disposed of was domiciled. As a result, the underlying
movement
numbers reflect only comparable performance. Similarly, if
a business or
investment asset was disposed of part-way through the equivalent
prior
period then its impact on the profit for the period attributable
to equity
shareholders (i.e. after adjustment for a capital return from
use of the
proceeds of the disposal to reduce borrowings and tax at the
rate applying
in the jurisdiction in which the asset or business disposed
of was taxed)
would be excluded from that prior period’s performance in the underlying
movement calculation, since the group recognised no contribution
from that
business in the current
period.
|
| b) |
Where
a business, brand, brand distribution right or agency agreement
or
investment was acquired subsequent to the end of the equivalent
prior
period, in underlying movement calculations the group adjusts
the profit
for the current period attributable to equity shareholders to
exclude the
following: (i) the amount the group earned in the current period
that it
could not have earned in the prior period; (ii) a capital charge
in
respect of the increase in interest charge had the acquisition
been funded
entirely by an increase in borrowings; and (iii) taxation at
the rate
applying in the jurisdiction in which the business acquired is
domiciled.
As a result, the underlying movement numbers reflect only comparable
performance. Similarly, if a business or investment asset was
acquired
part way through the equivalent prior period then its impact
on the profit
for the period attributable to equity shareholders (i.e. after
adjustment
for a capital charge for the funding of the acquisition and tax
at the
rate applying in the jurisdiction in which the acquired business
is taxed)
would be adjusted only to include the results from the anniversary
of the
acquisition in the current period’s performance in the underlying movement
calculation, since the group recognised a full period’s contribution from
that business in the current
period.
|
| c) |
Organic
movement percentages for basic earnings per share are calculated
as the
underlying movement amount in pence (p), expressed as the percentage
of
the prior period results at current period exchange rates, and
after
adjusting for exceptional items, tax equalisation and acquisitions
and
disposals. The basis of calculation means that the results used
to measure
underlying movement for a given period will be adjusted when used
to
measure underlying movement in the subsequent
period.
|
| d) |
The
exchange effects of IAS 21 in respect of short term inter-company
funding
balances as recognised in other finance charges/income are removed
from
both the current and prior period as part of the underlying movement
calculation.
|
(ii) Free
cash flow
Free
cash flow is a non-GAAP measure that comprises the net cash flow from operating
activities as well as the net purchase and disposal of investments and property,
plant and equipment that form part of net cash flow from investing activities.
The group’s management believes the measure assists users of the financial
statements in understanding the group’s cash generating performance as it
comprises items which arise from the running of the ongoing
business.
The
remaining components of net cash flow from investing activities that do not
form
part of free cash flow, as defined by the group’s management, are in respect of
the purchase and disposal of subsidiaries, associates and businesses. The
group’s management regards the purchase and disposal of property, plant and
equipment as ultimately non-discretionary since ongoing investment in plant
and
machinery is required to support the day-to-day operations, whereas acquisitions
and disposals of businesses are discretionary. However, free cash flow does
not
necessarily reflect all amounts which the group either has a constructive or
legal obligation to incur. Where appropriate, separate discussion is given
for
the impacts of acquisitions
and disposals of businesses, equity dividends paid and the purchase of own
shares – each of which arises from decisions that are independent from the
running of the ongoing underlying business.
The
free cash flow measure is also used by management for their own planning,
budgeting, reporting and incentive purposes since it provides information on
those elements of performance which local managers are most directly able to
influence.
(iii) Return
on average total invested capital
Return
on average total invested capital is a non-GAAP measure that is used by
management to assess the return obtained from the group’s asset base. This
measure is not specifically used in the consolidated financial statements,
but
is calculated to aid comparison of the performance of the
business.
The
profit used in assessing the return on total invested capital reflects the
operating performance of the business after applying the underlying effective
tax rate for the period stated before exceptional items and
interest. Average total invested capital is calculated using the average derived
from the consolidated balance sheets at the beginning, middle and the end of
the
period.
Capital employed comprises net assets for the period, excluding post employment
benefit liabilities (net of deferred tax) and net borrowings. This average
capital employed is then aggregated with the restructuring and integration
costs
net of tax, and goodwill written off to reserves at 1 July 2004, the date of
transition to IFRS, to obtain the average total invested
capital.
Calculations
for the return on average total invested capital for the years ended 30 June
2008 and 30 June 2007 were as follows:
|
2008
|
2007
|
||||||
|
£
million
|
£
million
|
||||||
|
Operating
profit
|
2,226
|
2,159
|
|||||
|
Exceptional
items
|
78
|
(40
|
)
|
||||
|
Associates’
profits after interest and tax
|
177
|
149
|
|||||
|
Tax
at the underlying effective tax rate of 24.5% (2007 –
25.1%)
|
(608
|
)
|
(569
|
)
|
|||
|
1,873
|
1,699
|
||||||
|
Average
net assets
|
4,411
|
4,839
|
|||||
|
Average
net borrowings
|
5,672
|
4,494
|
|||||
|
Average
integration and restructuring costs (net of tax)
|
955
|
931
|
|||||
|
Goodwill
at 1 July 2004
|
1,562
|
1,562
|
|||||
|
Average
total invested capital
|
12,600
|
11,826
|
|||||
|
Return
on average total invested capital
|
14.9
|
%
|
14.4
|
%
|
|||
(iv) Economic
profit
Economic
profit is a non-GAAP measure that is used by management to assess the group’s
return from its asset base compared to a standard cost of capital charge. The
measure is not specifically used in the consolidated financial statements,
but
is calculated to aid comparison of the performance of the
business.
The
profit used in assessing the return from the group’s asset base and the asset
base itself are the same as those used in the calculation for the return on
average total invested capital (see (iii) above). The standard capital charge
applied to the average total invested capital is currently 9%, being
management’s assessment of a constant minimum level of return that the group
expects to generate from its asset base. Economic profit is calculated as the
difference between the standard capital charge on the average invested assets
and the actual return achieved by the group on those assets.
Calculations
for economic profit for the years ended 30 June 2008 and 30 June 2007 were
as
follows:
|
2008
|
2007
|
||||||
|
£
million
|
£
million
|
||||||
|
Average
total invested capital (see (iii) above)
|
12,600
|
11,826
|
|||||
|
Operating
profit
|
2,226
|
2,159
|
|||||
|
Exceptional
items
|
78
|
(40
|
)
|
||||
|
Associates’
profits after interest and tax
|
177
|
149
|
|||||
|
Tax
at the underlying effective tax rate of 24.5% (2007 –
25.1%)
|
(608
|
)
|
(569
|
)
|
|||
|
1,873
|
1,699
|
||||||
|
Capital
charge at 9% of average total invested capital
|
(1,134
|
)
|
(1,064
|
)
|
|||
|
Economic
profit
|
739
|
635
|
|||||
(v) Underlying
effective tax rate
The
underlying effective tax rate is a non-GAAP measure that reflects the tax charge
on profit from continuing businesses before exceptional items as a percentage
of
profit from continuing businesses before exceptional items. The group's
management believe the measure assists users of the financial statements in
understanding the group's effective tax rate as it reflects the tax arising
on
the profits from the ongoing business.
The
components of the reported tax charge which do not form part of the underlying
effective tax rate, as defined by the group's management, relate to tax on
items
reported as exceptional, movement on deferred tax assets arising from intragroup
reorganisations which are due to changes in estimates in expected future
utilisation, any other tax charge or credit that arises from intragroup
reorganisations and items which are offset by credits or debits in discontinued
operations.
The
underlying effective tax rate is also used by management for their own planning,
budgeting, reporting and incentive purposes since it provides information on
those elements of performance which management is most directly able to
influence.
The
group’s reported tax rate for the year ended 30 June 2008 is 24.9% (2007 -
32.4%). Adjusting the reported tax rate to exclude the net exceptional charges
of £69 million and the associated tax credit of £8 million, the group has an
underlying effective tax rate of 24.5% on profit before exceptional items for
the year ended 30 June 2008. Adjusting the reported tax rate for the year ended
30 June 2007 for the provision for the settlement of tax liabilities relating
to
the GrandMet/Guinness merger, and a lower carrying value of deferred tax assets
primarily following a reduction in tax rates, and the tax impact of an
intragroup reorganisation of certain brand businesses and excluding the net
exceptional income of £39 million which had no associated tax charge, the group
had an underlying effective tax rate of 25.1% on profit before exceptional
items
for the year ended 30 June 2007.
Cautionary
statement concerning forward-looking statements
This
announcement contains ‘forward-looking statements’ within the meaning of the
‘Safe Harbor’ provisions of the United States Private Securities Litigation
Reform Act of 1995 with respect to the financial condition, results of
operations and business of Diageo and certain of the plans and objectives of
Diageo with respect to and outlook for these items. In particular, all
statements that express forecasts, expectations 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 of financing to Diageo, anticipated cost savings or synergies
and
the completion of Diageo’s strategic transactions, are forward-looking
statements. 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.
These
factors include, but are not limited to:
|
·
|
increased
competitive product and pricing pressures and unanticipated actions
by
competitors that could impact on Diageo’s market share, increase expenses
and hinder growth potential;
|
|
·
|
the
effects of business combinations, partnerships, acquisitions or disposals,
existing or future, and the ability to realise expected synergies
and/or
cost savings;
|
|
·
|
Diageo’s
ability to complete existing or future acquisitions and
disposals;
|
|
·
|
legal
and regulatory developments, including changes in regulations regarding
consumption of, or advertising for, beverage alcohol, changes in
tax law
(including tax rates) or accounting standards, changes in taxation
requirements, such as the impact of excise tax increases with respect
to
the business, and changes in environmental laws, health regulations
and
laws governing pensions;
|
|
·
|
developments
in any litigation or other similar proceedings directed at the drinks
and
spirits industry;
|
|
·
|
developments
in the Colombian litigation, Turkish customs litigation or any similar
proceedings;
|
|
·
|
changes
in consumer preferences and tastes, demographic trends or perception
about
health related issues;
|
|
·
|
changes
in the cost of raw materials, labour and/or
energy;
|
|
·
|
changes
in economic conditions in countries in which Diageo operates, including
changes in levels of consumer
spending;
|
|
·
|
levels
of marketing, promotional and innovation expenditure by Diageo and
its
competitors;
|
|
·
|
renewal
of distribution or licence manufacturing rights on favourable terms
when
they expire;
|
|
·
|
termination
of existing distribution or licence manufacturing rights on agency
brands;
|
|
·
|
systems
change programmes, existing or future, and the ability to derive
expected
benefits from such programmes, and systems failure that could lead
to
business disruption;
|
|
·
|
technological
developments that may affect the distribution of products or impede
Diageo’s ability to protect its intellectual property rights;
and
|
|
·
|
changes
in financial and equity markets, including significant interest rate
and
foreign currency exchange rate fluctuations, which may affect Diageo’s
access to or increase the cost of financing or which may affect Diageo’s
financial results.
|
All
oral and written forward-looking statements made on or after the date of this
announcement and attributable to Diageo are expressly qualified in their
entirety by the above factors and the ‘Risk factors’ contained in the annual
report on Form 20-F for the year ended 30 June 2007 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
documents which it publishes and/or files with the SEC. All readers, wherever
situated, should take note of these disclosures.
The
content of the company’s website (www.diageo.com)
should not be considered to form a part of or be incorporated into this
document.
The
information in this announcement does not constitute an offer to sell or an
invitation to buy shares in Diageo plc or any other invitation or inducement
to
engage in investment activities.
This
announcement includes information about Diageo’s debt rating. A security rating
is not a recommendation to buy, sell or hold securities and may be subject
to
revision or withdrawal at any time by the assigning rating organisation. Each
rating should be evaluated independently of any other rating.
Past
performance cannot be relied upon as a guide to future
performance.
For
further information
Preliminary
Results Webcast
At
09.30
(UK time) on Thursday 28 August, Paul Walsh, CEO and Nick Rose, CFO will present
Diageo’s preliminary results as a webcast. This will be available to view at
www.Diageo.com.
The presentation slides and transcript will be available for download from
08.45
(UK time). An archived video and podcast of the presentation and Q&A session
will also be made available later that day.
If
you
would like to ask a question during the live Q&A session, please use the
following dial-in numbers:
|
UK
Toll free
|
0800
559 3272
|
|
North
America Toll free
|
1866
239 0753
|
|
International
Toll
|
+44
(0)20 7138 0825
|
|
France
Toll free
|
0800
970 211
|
|
Germany
Toll free
|
0800
181 4456
|
|
Ireland
Toll free
|
1800
944 320
|
|
Italy
Toll free
|
800
976 302
|
|
Netherlands
Toll free
|
0800
022 5992
|
|
Spain
Toll free
|
800
099 466
|
|
Switzerland
Toll free
|
0800
564 160
|
Please
quote confirmation code: 4658215
A
transcript of the Q&A session will be available for download from
www.Diageo.com
on 29
August.
Conference
Call
Diageo
management will host a conference call for analysts and investors at 15.00
(UK
time) on Thursday 28 August. To participate, please use the following dial-in
numbers:
|
UK
Toll free
|
0800
279 9640
|
|
North
America Toll free
|
1866
850 2201
|
|
International
Toll
|
+44
(0)20 7138 0842
|
|
France
Toll free
|
0805
770 155
|
|
Germany
Toll free
|
0800
673 8355
|
|
Ireland
Toll free
|
1800
944 322
|
|
Italy
Toll free
|
800
976 303
|
|
Netherlands
Toll free
|
0800
265 9174
|
|
Spain
Toll free
|
800
099 797
|
|
Switzerland
Toll free
|
0800
000 287
|
Please
quote confirmation code: 1426778
The
conference call will be available on instant replay from 17.00 (UK time) and
will be available until 12 September. The number to call is:
|
UK
Toll free
|
0800
559 3271
|
|
North
America Toll free
|
1866
883 4489
|
|
International
Toll
|
+44
(0)20 7806 1970
|
|
France
Toll free
|
0800
911 479
|
|
Germany
Toll free
|
0800
181 4459
|
|
Ireland
Toll free
|
1800
992 833
|
|
Italy
Toll free
|
800
925 259
|
|
Netherlands
Toll free
|
0800
027 0028
|
|
Switzerland
Toll free
|
0800
000 289
|
Please
quote confirmation code: 1426778
|
Investor
enquiries to:
|
Darren
Jones
|
+44
(0) 20 7927 4223
|
|
Sarah
Paul
|
+44
(0) 20 7927 4326
|
|
|
Kelly
Padgett
|
001
202 715 1110
|
|
|
Investor.relations@diageo.com
|
||
|
Media
enquiries to:
|
James
Crampton
|
+44
(0) 20 7927 4613
|
|
Rachael
Shaw
|
+44
(0) 20 7927 5820
|
|
|
Media@diageo.com
|
-
Ends -
|
Company
|
Diageo
PLC
|
|
TIDM
|
DGE
|
|
Headline
|
Transaction
in Own Shares
|
|
Released
|
16:39
28-Aug-08
|
|
Number
|
2499C16
|
RNS
Number : 2499C
Diageo
PLC
28
August
2008
Diageo
plc
28 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 700,000 ordinary shares at a price
of 981.1 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END
|
Company
|
Diageo
PLC
|
|
TIDM
|
DGE
|
|
Headline
|
Director/PDMR
Shareholding
|
|
Released
|
09:37
29-Aug-08
|
|
Number
|
80936-2488
|
TO:
Regulatory Information Service
PR
Newswire
RE:
Paragraph 3.1.4 of the Disclosure and Transparency Rules
The
notification below was received under Paragraph 3.1.2 of the Disclosure and
Transparency Rules.
Diageo
plc (the 'Company') announces that it received notification today that Mr PS
Walsh, a director, had sold 39,148 Ordinary Shares of 28 101/108 pence each
in
the Company ('Ordinary Shares') on 29 August 2008, at a price per share
of
£10.01.
As
a
result of the above, Mr Walsh's interests in the Company's Ordinary Shares
(excluding options, awards under the Company's LTIPs and interests as a
potential beneficiary of the Company's employee benefit trusts) is now
644,225.
29
August
2008
END
|
Company
|
Diageo
PLC
|
|
TIDM
|
DGE
|
|
Headline
|
Transaction
in Own Shares
|
|
Released
|
15:32
29-Aug-08
|
|
Number
|
81530-8ABD
|
TO:
Regulatory Information Service
PR
Newswire
RE:
PARAGRAPH 12.6.4 OF THE LISTING RULES
Diageo
plc - Transaction in Own Shares
Diageo
plc (the 'Company') announces that today, it released from treasury 10,638
ordinary shares of 28 101/108 pence each in the Company ('Ordinary Shares'),
to
satisfy grants made under employee share plans. The average price at which
these
Ordinary Shares were released from treasury was 1,013.80 pence per
share.
Following
this release, the Company holds 248,168,689 Ordinary Shares as treasury shares
and the total number of Ordinary Shares in issue (excluding shares held as
treasury shares) is 2,517,608,570.
29
August
2008
END
|
Company
|
Diageo
PLC
|
|
TIDM
|
DGE
|
|
Headline
|
Total
Voting Rights
|
|
Released
|
15:33
29-Aug-08
|
|
Number
|
81532-B907
|
TO:
Regulatory Information Service
PR
Newswire
RE:
Paragraph 5.6.1 of the Disclosure and Transparency Rules
Diageo
plc - Voting Rights and Capital
In
conformity with Paragraph 5.6.1 of the Disclosure and Transparency Rules Diageo
plc (the 'Company') would like to notify the market of the
following:
The
Company's issued capital consists of 2,765,777,259 ordinary shares of 28 101/108
pence each ('Ordinary Shares') with voting rights, which includes 248,168,689
Ordinary Shares held in Treasury.
Therefore,
the total number of voting rights in the Company is 2,517,608,570 and this
figure may be used by shareholders as the denominator for the calculations
by
which they will determine if they are required to notify their interest in,
or a
change to their interest in, the Company under the FSA's Disclosure and
Transparency Rules.
29
August
2008
END
|
Company
|
Diageo
PLC
|
|
TIDM
|
DGE
|
|
Headline
|
Transaction
in Own Shares
|
|
Released
|
16:37
29-Aug-08
|
|
Number
|
3702C16
|
RNS
Number : 3702C
Diageo
PLC
29
August
2008
Diageo
plc
29 August 2008
Diageo
plc announces that it has today purchased for cancellation through Credit
Suisse Securities (Europe) Limited 300,000 ordinary shares at a price
of 1,007.15 pence per share.
This
information is provided by RNS
The
company news service from the London Stock Exchange
END