SECURITY: DEO (Common)
EXCHANGE: London Stock Exchange (DGE) New York Stock Exchange
Indice: DJ
Stoxx F&BV
Diageo is the world's leading
premium drinks business with an outstanding collection of beverage alcohol
brands across spirits, wine and beer categories. These brands include:
Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray,
Captain Morgan, and Beaulieu Vineyard and Sterling Vineyards wines.
Diageo is a global company,
trading in over 180 markets around the world.
Interim
results for the six months ended 31 December 2005 16 February 2006
Strong operating performance
on all measures
Operational highlights
· North America:
continued share gains, especially in spirits where value share in the US
is now 28%
· Europe: organic
operating profit up driven by growth in spirits brands and cost efficiencies
· International:
very strong top and bottom line growth, particularly in Latin America,
driven by growth of priority brands and successful innovation. Performance
improvements delivered in Korea, Taiwan and Nigeria
Results at a glance
First half F'06 First
half F'05 Reported Movement Organic movement
Volume in equivalent units
Million 72.6 68.9 5% 5%
Net sales after deducting
excise duties £million 3,960 3,674 8%
5%
Operating profit before
exceptional items £million 1,261 1,185 6%
7%
Basic eps before exceptional
items Pence 31.1 25.0^ 24% 11%
Basic eps Pence
40.4 32.2^ 25%
^ First half F'05 basic
eps before exceptional items restated from 24.1p to 25.0p for IAS 21 amendment
adoption and other changes to finance charges. Similarly, first half
F'05 basic eps has been restated from 31.3p to 32.2p.
Financial highlights
· Spirits net sales
after deducting excise duties up 7%, ready to drink down 3%, beer up 4%,
wine up 5%
· 5% organic growth
in marketing spend
· Further operating
margin expansion of 0.2 percentage points on an organic basis
· Return on invested
capital increased 1.2 percentage points to 16.8%
· Free cash flow
increased to £651 million
· Share buyback doubled
to £700 million
· Interim dividend
increased 5% to 11.95 pence
· Strong first half
results underpin full year guidance of 7% organic growth in operating profit
before exceptional items
First half F'06 First
half F'05 Reported movement
Operating profit after operating
exceptional items
£million
1,261 1,169 8%
Profit attributable to parent
company's equity shareholders*
£million
1,166 967 21%
Diageo will prepare its
annual financial statements for F'06 in accordance with IFRS adopted for
use in the European Union. The first half of F'06 is presented on
this basis and the first half of F'05 has been restated for IFRS as issued
by the IASB, as described in note 1 to the interim financial statements
on page 22 of the full press release which is available here
Percentage movements are
organic movements unless otherwise stated. These movements and operating
margins are before exceptional items. Commentary, unless otherwise
stated, refers to organic movements. Share, unless otherwise stated, refers
to volume share. See page 32 for additional information for shareholders
and an explanation of non-GAAP measures including the reconciliation of
basic eps as reported to basic eps as restated and the organic eps movement
calculation.
* First half F'05 restated
for IAS 21 amendment adoption and other changes to finance charges.
Paul Walsh, Chief Executive
of Diageo, commenting on the interim results said:
'This is a strong first
half performance. We have invested in our brands and built our market positions.
We have again achieved our financial objectives delivering top and bottom
line organic growth, organic operating margin improvement and an increase
in return on invested capital. |
