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JεB is the No.1
scotch whisky in Spain
Black & White
is the No.1
primary scotch
whisky in Mexico 3
MARKETING
Cîroc is the
No.2
reserve vodka
in the United States
Bulleit is the
No.1 rye
whiskey in the
world
Don Julio is the No.2
reserve Tequila in the world
Talisker is the
No.1 super
malts whisky in
Europe
Zacapa is the
No.1 reserve rum in the world
Buchanan’s is the No.2
premium scotch
whisky in the
United States
Johnnie
Walker is the
No.1 scotch whisky in the world
Smirnoff is the No.1
vodkain the world
Captain
Morgan is
the No.2 rum
in the world
VOLUME
Our Sustainability and Responsibility priorities
#1
#2
#3
Create a positive role for alcohol in society
Build thriving communities
Reduce our environmental impact
Tanqueray
is the No.1
gin in the
United States
Financial strength
1 Pre exceptional items; 2 Reported movement; 3 Adjusted to
include net debt and post employment liabilities
Volume
126mEU
Net sales
£6.5bn
Marketing spend
£1.0bn
Operating profit1
£2.2bn
Eps1
67.8pence
Adj. net debt3
/ EBITDA1 ratio
2.2x
Reported
operating
margin1
33.5%
Dividend
24.9pence
2%
4%
7%
7%
9%2
Free cash
flow
£1.0bn
F18 H1 reported
figures
Organic
movement
5%2
Baileys is
the No.1
liqueur in the world
F03 F04 F05 F06 F07 F08 F09 F10 F11 F12 F13 F14 F15 F16 F17
0
5
10
15
03 10 17
£bn
NSV
OP
Growing dividend per share
NET SALES
Sustained performance
Net sales* increased from £6,636m in F03 to £12,050m in F17
Operating profit increased from £1,902m in F03 to £3,601m in F17
Guinness is
the No.1 stout
in the world 2
North American whisk(e)y
Scotch Vodka
Rum
Liqueurs Gin Tequila
Beer Ready to drink
IMFL whisky
Other
Crown Royal
is the No.1 Canadian
whisky in the world
126.4EUm
0
5
10
03 10 17
%
NSV
OP
£6,530m
Yenì Raki is
the No.1
aniseed based
spirit in the world
F17 dividend: 62.2 pence per share
Shui Jing Fang has 600 years
heritage and
distributed in 26
countries
World leading brands1
Bundaberg
is the No. 1
rum in
Australia
Old Parr is
the No.1
scotch whisky in Colombia
Local stars
McDowell’s is the No.2 IMFL
whisky in the world
Global giants
*Global giants and Local stars including reserve variants. 1IWSR 2016;
2canadean intelligence;
3 NISCAM November 2017
£968m
% of net sales 43%*
Singleton is the No.1 premium
scotch malts
whisky in Asia
Pacific
20%* 18%
Reserve
” I WANT TO CREATE ONE OF THE BEST PERFORMING, MOST TRUSTED AND RESPECTED CONSUMER PRODUCTS COMPANIES IN THE WORLD “
PERFORMANCE AMBITION
Organic growth
Year ended 30 June. Percentage increases are organic growth movements before exceptional items and have not been restated for accounting changes. *Net sales is after deducting excise duties. 2003-2004 as reported under UK GAAP. 2005 restated for IFRS. 2009 restated for IFRS. 2012-2013 restated for IAS19 and IFRS11.
Other
Tequila
Beer
North America delivered net sales
growth of 2% with US Spirits
growing 3%, continued growth in
DBC USA and Canada, and
improvement in Travel Retail. In US Spirits, category share gains
were achieved for all key brands
except in vodka. Net sales in Canada were up 1%.
DBC USA net sales grew 2% with
ready to drink growing 4% and beer
declining 1%.
RTDs Beer
Tequila
* Organic growth six months ended 31 December 2017, ** Other principally Travel Retail
Local Spirits
In Europe, net sales were up 4%
largely driven by Great Britain and
Continental Europe.
Growth primarily driven by gin, across
both Tanqueray and Gordon’s. Strong
performance on Johnnie Walker,
Captain Morgan and reserve brands
continued. Guinness net sales were up 4%.
In Turkey, net sales were up 10%
largely driven by price increases
across categories.
Liqueurs
Vodka
Asia Pacific net sales grew 7% with
strong growth in Greater China and
solid performance in India and South
East Asia partially offset by Korea
and Australia.
In scotch, net sales were up 5% as
strong performance in Johnnie
Walker more than offset the net sales decline in Windsor in Korea.
Net sales of reserve brands were up
29% mainly driven by Chinese white
spirits.
Net sales in India grew 2% largely
impacted by highway ban.
Gin
Liqueurs
Africa net sales increased 2%.
Growth in Nigeria was partially offset
by weakness in Africa Regional
Markets and South Africa. Kenya was
flat.
Beer performance with net sales up 5% was driven by Dubic in Nigeria
and Serengeti Lite in Tanzania.
Guinness and Malta Guinness showed
net sales growth of 3% and 9%
respectively.
Mainstream spirits continued to
deliver strong growth, up 14%.
RTDs
Turkey
Local spirits
RTDs
Other
Vodka
Rum
Latin America and Caribbean net
sales grew 7% with strong
performance in PUB, Mexico and
PEBAC partially offset by Colombia. In scotch net sales were up 2% with
strong performance by Johnnie
Walker and Black & White partially
offset by Old Parr. Don Julio and Smirnoff delivered
strong double digit growth. Tanqueray drove category growth in
Brazil and Mexico, and in rum net
sales were up double digit.
Super Premium
Other**
Standard
Standard
Value
Value
Premium Premium
Ultra Premium Ultra Premium
2%
3%
4%
12%
2%
(3)%
7%
10%
7%
17%
Other
Super
Premium
Scotch
Scotch
Vodka
Value
Standard
Premium
Super
Premium
Ultra
Premium
Other** Other** Other**
Europe
Liqueurs
Rum
Vodka
Scotch Beer
Gin
Beer
Other
Ultra Premium Value
Standard
Standard
Value
Premium
Premium
Liqueurs
Scotch
North American
whisk(e)y
Ultra Premium
Super Premium
Super Premium
PUB
Rum
Scotch Other
IMFL whisky
Vodka
Other** Canada
US Spirits
DBC USA
Beer
RTDs
Gin Liqueurs
Rum
cate
go
rie
s
pric
e s
eg
men
ts
markets
Net
sale
s c
on
trib
uti
on
by
RTDs
North America Europe and Turkey Africa Latin America and Caribbean Asia Pacific
% of net sales 33% 25% 12% 10% 20%
Local spirits
Net sales
movement*
Operating profit
movement*
Hig
hli
gh
ts
GEOGRAPHIC BREADTH – F18 H1 AT A GLANCE
India
Gin
Australia
East Africa
Greater China
Africa Regional
Markets
Nigeria
South Africa
South East
Asia
Mexico
CCA
Adrean
North Asia
PEBAC
KEY FINANCIAL INFORMATION BUSINESS REVIEW
Organic Reported Organic Reported
F18 H1 F17 H1
F18 H1 F17 H1
F18 H1 F17 H1 growth% growth% F17 H1 F16 H1 growth% growth% %* Eum %* Eum %* £m %* £m Volume EUm 126.4 129.4 2 (2) 129.4 130.3 2 (1) NORTH AMERICA
VO
LU
ME
1 25.2 1 24.8
NET
SA
LE
S
2 2,183 3 2,172 Net sales £m 6,530 6,421 4 2 6,421 5,606 4 15 EUROPE AND TURKEY 5 25.2 3 24.1 4 1,599 5 1,534
Marketing £m 968 908 7 7 908 822 (2) 10 AFRICA 4 17.4 3 16.8 2 774 4 808
Operating profit before exceptional items £m 2,190 2,065 7 6 2,065 1,717 4 20 LATIN AMERICA AND CARIBBEAN 9 12.5 - 11.6 7 649 11 628
Operating margin expansion* bps 81 (1) (1) 16 ASIA PACIFIC (1) 46.1 2 52.1 7 1,298 3 1,255
Operating profit £m 2,190 2,065 6 2,065 1,613 28 CORPORATE 8 27 14 24
Profit attributable to parent company’s
shareholders £m 2,058 1,514 36 1,514 1,406 8 DIAGEO 2 126 2 129
4 6,530 4 6,421
Basic earnings per share pence 82.2 60.3 36 60.3 56.1 7
F18 H1 F17 H1
F18 H1 F17 H1
F18 H1 F17 H1
Earnings per share before exceptional items pence 67.8 62.0 9 62.0 51.3 21 %* £m %* £m %* £m %* £m %* %*
Tax rate including exceptional items % 3.5 21.0 (83) 21.0 16.6 27 NORTH AMERICA
MA
RK
ET
IN
G
8 338 1 318
OP
ER
AT
IN
G P
RO
FIT*
*
3 1,027 6 1,019
OP
ER
AT
IN
G M
AR
GIN
47.4 47.3
Tax rate before exceptional items % 19.8 20.9 (5) 20.9 19.0 10 EUROPE AND TURKEY 6 246 (2) 229 12 599 6 535 37.5 35.1
Free cash flow £m 1,029 1,084 1,084 839 AFRICA 2 83 3 84 (3) 120 2 132 15.5 16.3
ROIC % 16.5 15.7 15.7 13.9 LATIN AMERICA AND CARIBBEAN 11 109 (6) 99 10 218 13 205 33.6 32.6
Average net debt £m (8,819) (9,066) (9,066) (9,671) ASIA PACIFIC 9 188 (6) 174 17 316 (6) 259 24.3 22.3
- -
CORPORATE 4 4 (14) (90) (20) (85)
- -
DIAGEO 7 968 (2) 908 7 2,190 4 2,065 33.6 32.8
* Organic, ** Pre-exceptional
60.3
82.2 13.8 2.2
(0.6)
5.5
(0.1)
1.1
(0.3)
0.3
F17 H1 Exceptionalitems after tax
Discontinuedoperationsafter tax
Exchange onoperating
profit
Organicoperating profit
growth(ii)
Associates andjoint ventures
Net financecharges
Tax Other F18 H1
15.7%
16.5%
10bps
(10)bps
126bps
(20)bps (18)bps (11)bps
F17 H1 Exchange Acquisitionsand disposals
Organicoperating
profit growth
Associatesand jointventures
Tax Other F18 H1
32.2%
33.5%
45bps 12bps 3bps
(44)bps
122bps
F17 H1 Exchange Acquisitionsand disposals
Gross margin Marketing Other operatingexpenses
F18 H1
Organic operating profit grew 6.7%, ahead of top line growth, as higher marketing investment was more than offset by efficiencies from our productivity programme
Basic eps of 82.2 pence was up 36.3%. Pre-
exceptional eps was 67.8 pence, up 9.4%, driven by
higher organic operating profit and lower finance
charges
The interim dividend increased 5% to 24.9 pence per share growth_CY_TOT
Cash flow continued to be strong and broadly in line with last year, with net cash from operating activities at £1.2 billion and free cash flow at £1 billion
All regions contributed to broad based organic net sales growth, up 4.2%, and organic volume grew 1.8%
Reported net sales (£6.5 billion) and operating profit (£2.2 billion) were up 1.7% and 6.1%, respectively, as organic growth was partially offset by adverse exchange
(i) Exchange rate movements reflect the translation of prior period reported results at current exchange rates. (ii) Excluding exchange. (iii) Exchange on operating profit before exceptional items. (iv) Operating profit excluding exchange, depreciation and amortisation, post employment charges and non-cash items. (v) Working capital movement includes maturing stock (vi) Other items include post employment payments, dividends received from associates and joint ventures and loans and other investments.
6,421 6,530
(134) (17)
111 149
F17 H1 Exchange(i) Acquisitionsand disposals
Volume Price/mix F18 H1
Organic movement
1,084 1,029
(17) (15)
86
(37)(101)
21 8
F17 H1 Capex Exchange(iii) Operatingprofit(iv)
Workingcapital(v)
Tax Interest Other(vi) F18 H1
Net sales growth (£ million)
Operating margin improvement (%)
FINANCIAL RESULTS – F18 H1
Basic eps (pence)
Free cash flow (£ million)
Return on average invested capital (ROIC) (%)
Organic movement
FINANCIAL RESULTS – F18 H1 STRATEGIC MARKETS PERFORMANCE (growth %) CATEGORY AND BRAND PERFORMANCE (growth %)
Organic volume Organic net sales Reported net sales Organic volume Organic net sales Reported net sales
F18 H1* F17 H1 F18 H1* F17 H1 F18 H1* F17 H1 F18 H1* F17 H1 F18 H1* F17 H1 F18 H1* F17 H1
NORTH AMERICA 1 1 2 3 1 16 SPIRITS** 2 2 5 6 3 20
US Spirits 1 1 3 4 - 17 SCOTCH 4 4 3 6 3 21
Diageo Beer USA 2 - 2 3 (4) 14 NORTH AMERICAN WHISK(E)Y 1 11 4 15 - 37
Canada (2) 4 1 5 1 21 VODKA**** 1 (2) (3) (2) (6) 15
EUROPE AND TURKEY 5 3 4 5 4 13 RUM**** (1) (4) 5 2 1 13
Europe 5 4 4 5 9 10 LIQUEURS 5 3 5 2 5 12
Turkey 7 (5) 10 5 (8) 15 TEQUILA 37 22 43 18 58 36
AFRICA 4 3 2 4 (4) 13 GIN**** 18 4 16 7 15 21
East Africa 4 5 - - (5) 19 IMFL WHISKY (2) 6 1 11 (3) 14
Africa Regional Markets (6) - (4) 6 (8) 22 BEER - 1 4 - - 7
Nigeria 17 7 20 6 - (19) READY TO DRINK (5) (5) (2) (1) (4) 21
South Africa 4 (2) (2) 10 (2) 42 DIAGEO 2 2 4 4 2 15 LATIN AMERICA AND
CARIBBEAN 9 - 7 11 3 20 GLOBAL GIANTS**
PUB 9 (6) 14 (6) 13 26 Johnnie Walker 5 4 7 6 6 20
Mexico 7 20 12 21 12 25 Smirnoff 2 (2) (1) (2) (3) 13
CCA (6) 7 (6) 10 (6) 4 Captain Morgan 8 4 6 2 5 20
Andean 16 (19) (1) 30 (12) 56 Baileys 6 5 6 3 6 17
PEBAC 31 3 17 5 18 (13) Tanqueray 16 12 16 9 15 28
ASIA PACIFIC (1) 2 7 3 3 12 Guinness 1 (3) 4 - 2 10
India (3) 2 2 4 (4) 3 LOCAL STARS** Greater China 29 24 32 22 32 44 Crown Royal 1 15 3 17 (1) 40
Australia (10) 2 (8) 3 (9) 29 Yenì Raki 2 (4) 7 5 (11) 16
South East Asia 8 4 10 2 7 15 JεB (5) 6 (8) 5 (6) 20
North Asia 6 10 (5) (2) (8) 23 Buchanan’s (3) 28 1 24 (2) 40
Travel Retail Asia and Middle East 29 (20) 27 (18) 32 (19) Windsor (11) (14) (15) (15) (16) 4
DIAGEO 2 2 4 4 2 15 Old Parr (11) 7 (15) 14 (16) 34
Bundaberg (13) (3) (8) 1 (9) 26
Black & White 31 21 42 9 42 27
* Organic equals reported volume movement except for:
Europe 7%, South East Asia 27%, India (15%) and Mexico 6%,
spirits (3)%, rum (10)%, IMFL whisky (9)%, vodka (1)%, tequila 53%, gin 13% and McDowell’s (15%) which were
impacted by acquisitions and disposals and the move from an owned to a franchise model in India and beer 2% and Guinness 4% which was impacted by an adjustment to include Malaysia and Singapore contract brew
volume in the reported beer figures.
Ypióca 12 - 7 (3) 5 32
McDowell's (3) 1 3 4 (6) 1
Shui Jing Fang*** 69 79 75 63 73 82
RESERVE**
Scotch malts 1 4 3 3 4 20
** Spirits brands excluding ready to drink. Cîroc (2) 7 (6) 6 (9) 25 *** Organic growth figures represent total Chinese white spirits of which Shui Jing Fang is the predominant brand. Ketel One vodka (6) (3) (11) (8) (14) 10 **** Vodka, rum, gin including IMFL brands. Don Julio 35 22 42 17 38 35
Bulleit 10 27 11 29 8 54
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