UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
30 July 2024
Commission File Number: 001-10691
DIAGEO plc
(Translation
of registrant’s name into English)
16 Great Marlborough Street, London, United Kingdom, W1F 7HS
(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
Diageo delivers resilient performance with improved market share in
the second half of the fiscal year, despite volatile operating
environment
- Reported
net sales of $20.3 billion declined 1.4% due to an unfavourable
foreign exchange impact and organic net sales decline, partially
offset by hyperinflation adjustments. Reported operating profit
grew 8.2% and reported operating profit margin grew 262bps,
primarily due to the positive impact of exceptional operating items
partially offset by a decline in organic operating
margin.
- Organic
net sales declined $129 million or 0.6%, positive price/mix of
2.9pps was more than offset by a 3.5% volume decline, primarily
driven by a 21.1% decline in our Latin America and Caribbean region
(LAC). Organic operating profit declined by $304 million or 4.8%,
of which $302 million was attributable to LAC; organic operating
margin contracted 130bps.
Excluding the impact of LAC:
-
Organic net sales grew $330 million or 1.8%, driven by price/mix of
3.9pps, partially offset by a 2.1% volume decline. A decrease in
organic net sales in North America of 2.5% was more than offset by
growth in Africa, Asia Pacific and Europe. Organic operating profit
declined 0.1%, and organic operating margin contracted
56bps.
- Diageo grew or held total market share in over 75%(1) of total net sales in measured markets, including in the US.
- Net
cash flow from operating activities increased by $0.5 billion to
$4.1 billion. Free cash flow increased by $0.4 billion to
$2.6 billion.
- Increased recommended full
year dividend by 5% to 103.48 cents
per share.
- Completed
$1.0 billion return of capital programme announced on 1 August 2023
through share buybacks.
- Leverage ratio of 3.0x as at 30 June 2024, Diageo remains committed to its target leverage ratio of 2.5x - 3.0x.
Debra Crew, Chief Executive, said:
While
fiscal 24 was a challenging year for both our industry and Diageo
with continued macroeconomic and geopolitical volatility, we
focused on taking the actions needed to ensure Diageo is
well-positioned for growth as the consumer environment
improves.
Fiscal
24 was impacted by materially weaker performance in LAC. Excluding
LAC, organic net sales grew 1.8%, driven by resilient growth in our
Africa, Asia Pacific and Europe regions. This offset the decline in
North America, which was attributable to a cautious consumer
environment and the impact of lapping inventory replenishment in
the prior year.
In
fiscal 24 we made good progress against our strategic priorities.
We ended fiscal 24 gaining or holding share in measured markets
totalling over 75% of our net sales value, including in the US. We
have taken actions to manage the inventory issues in LAC; we have
strengthened our consumer insights and redeployed resources towards
the best growth opportunities; we have stepped up our
route-to-market across several markets, including our most
significant transformation in at least a decade in our
US Spirits organisation; we have delivered record productivity savings of nearly $700 million; and we have generated $2.6 billion in free cash
flow while increasing strategic investments. We are confident that
when the consumer environment improves, the actions we are taking
will return us to growth.
Diageo
is a resilient business, benefitting from its global reach and
unrivalled brand portfolio. With iconic brands that have been
enjoyed for decades, Diageo takes a long-term view, and will
continue to invest in our brands, people and diversified footprint
to deliver sustainable long-term growth and generate shareholder
value.
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Volume (equivalent units)
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Operating profit
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Earnings per share (eps)
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EU230.5m
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$6,001m
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173.2c
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(F23:
EU243.4m)
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(F23(3):
$5,547m)
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(F23(3):
196.3c)
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Reported
movement
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(5)%
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↓
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Reported
movement
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8
%
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↑
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Reported
movement
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(12)%
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↓
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Organic
movement(2)
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(4)%
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↓
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Organic
movement(2)
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(5)%
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↓
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Eps
before exceptional items(2)
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(9)%
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↓
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Net sales
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Net cash from operating activities
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Total recommended full year dividend per share (4)
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$20,269m
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$4,105m
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103.48c
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(F23(3):
$20,555m)
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(F23(3):
$3,636m)
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(F23(3):
98.55c)
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Reported
movement
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(1)%
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↓
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F24
free cash flow(2)
$2,609m
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Increase
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5 %
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↑
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Organic
movement(3)
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(1)%
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↓
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F23
free cash flow(2),(3)
$2,235m
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(1) Internal
estimates incorporating Nielsen, Association of Canadian
Distillers, Dichter & Neira, Frontline, INTAGE, IRI, ISCAM,
NABCA, State Monopolies, TRAC, IPSOS and other third- party
providers. All analysis of data has been applied with a tolerance
of +/- 3 bps and the descriptions applied of gaining, holding or
losing share by the Company or brands are based on estimated
performance within that tolerance. Percentages represent percent of
markets by total Diageo net sales contribution that have held or
gained total trade share fiscal year to date. Measured markets
indicate a market where we have purchased any market share data.
Market share data may include beer, wine, spirits or other
elements. Measured market net sales value sums to 89% of total
Diageo net sales value in fiscal 24.
(2) See pages 42-43 for an explanation and reconciliation of non-GAAP measures.
(3) See pages
29-30
for an explanation under Basis of preparation.
(4) Includes recommended final dividend of 62.98 cents.
See
pages 42-43 for an explanation and reconciliation of non-GAAP
measures, including organic net sales, organic marketing
investment, organic operating profit, free cash flow, eps before
exceptionals, adjusted net debt, adjusted EBITDA and tax rate
before exceptional items. Unless otherwise stated, movements in
results are for the year ended 30 June 2024 compared to the year
ended 30 June 2023.
To view
the preliminary results document in full, please paste the
following URL into the address bar of your browser: http://www.rns-pdf.londonstockexchange.com/rns/2892Y_1-2024-7-29.pdf
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Investor
enquiries to:
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Durga
Doraisamy
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+44 (0)
7902 126 906
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Andy
Ryan
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+44 (0)
7803 854 842
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Brian
Shipman
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+1 917
710 3007
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Media
enquiries to:
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Brendan
O'Grady
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+44 (0)
7812 183 750
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Becky
Perry
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+44 (0)
7590 809 101
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Clare
Cavana
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+44 (0)
7751 742 072
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Isabel
Batchelor
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+44 (0)
7731 988 857
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Diageo plc
LEI: 213800ZVIELEA55JMJ32
The
preliminary results for the year ended 30 June 2024 have been
submitted in full unedited text to the Financial Conduct
Authority's National Storage Mechanism and will be available
shortly for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The
preliminary results are also available in full on the corporate
website at https://www.diageo.com/en/news-and-media/press-releases/2024/2024-preliminary-results-year-ended-30-june-2024
SIGNATURE
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 authorized.
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Diageo plc
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(Registrant)
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Date:
30 July 2024
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By:___/s/
James Edmunds
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James Edmunds
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Deputy Company Secretary
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EXHIBIT INDEX
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EXHIBIT
NUMBER
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EXHIBIT
DESCRIPTION
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99.1
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