Trading Update

RNS Number : 3195B

Diageo PLC

20 September 2018

 

Diageo plc
LEI: 213800ZVIELEA55JMJ3

20 September 2018

Diageo issues trading commentary ahead of AGM 2018

Ivan Menezes, Chief Executive, commented:

"The year has started well and performance is in line with our expectations. We continue to execute our strategy with discipline and agility and despite seeing increased volatility in some markets we continue to expect organic net sales growth in F19 to be broadly in line with last fiscal year and consistent with our medium-term guidance of mid-single digit growth.

We are focused on delivering both growth and efficiency, allowing us to continue to reinvest in the business to support the long-term growth of our brands. We continue to expect to grow organic operating margins in line with our guidance of 175bps of margin expansion in the three years ending 30 June 2019.

In recent weeks, we have experienced some increased emerging market foreign exchange volatility, which has been partially offset by a strengthening of the dollar. Based on current rates* we currently expect exchange to have a negative impact on net sales of £175m and a negative impact on operating profit of £45m for the fiscal year".

*Rates £1=$1.32, £1=€1.13

For further information

Media relations:	Dominic Redfearn	[phone]
	Rebecca Perry	[phone]
	[e-mail]
Investor relations:	Sharon Rolston	[phone]
	Andrew Ryan	[phone]
	[e-mail]

About Diageo

Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer categories. These brands include Johnnie Walker, Crown Royal, JεB, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

Diageo is a global company, and our products are sold in more than 180 countries around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). For more information about Diageo, our people, our brands, and performance, visit us at www.diageo.com. Visit Diageo's global responsible drinking resource, www.DRINKiQ.com, for information, initiatives, and ways to share best practice.

Celebrating life, every day, everywhere.

ENDS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This document contains 'forward-looking' statements.  These statements can be identified by the fact that they do not relate only to historical or current facts.  In particular, forward-looking statements include all statements that express forecasts, expectations, plans, outlook, objectives and projections with respect to future matters, and can be statements made about Diageo's strategy, trends in results of operations, margins, growth rates and growth rate objectives; estimates of Diageo's cash flows, effective interest and/or tax rates, cost savings, results of hedging instruments, cash contributions to post-employment plans, exchange rate impacts, dividend policies and other shareholder return objectives, executive compensation levels and outcomes of litigation, as well as the impact of new accounting policies on Diageo's consolidated results and financial position.  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 of Diageo's control.  These factors include, but are not limited to, economic, political, social or other developments (including the potential impact of any global, regional or local trade wars or any tariffs, duties or other restrictions or barriers imposed on the import or export of goods between territories); the negotiating process surrounding, as well as the eventual terms of, the UK's exit from the European Union; changes in consumer preferences and tastes; litigation and similar proceedings; changes in domestic and international tax environment; the impact of climate change or legal, regulatory or market measures intended to address climate change; changes in the cost of production; legal and regulatory developments, as well as any failure to comply with existing laws and regulations; contamination, counterfeiting or other circumstances that harm the level of customer support for Diageo's brands and/or damage Diageo's image and reputation; increased competitive and pricing pressures; any disruption to production facilities, business services centres or information systems, including as a result of cyber-attacks; Diageo's ability to execute and derive the expected benefits from its strategies; increased costs for talent and/or labour strikes or disputes; fluctuations in exchange and/or interest rates; movements in the value of assets and liabilities related to Diageo's pension plans; Diageo's ability to renew existing agreements; and/or any failure by Diageo to protect its intellectual property rights.

All oral and written forward-looking statements made on or after the date of this document and attributable to Diageo are expressly qualified in their entirety by the above factors and by the 'Risk factors' included in Diageo's annual report for the year ended 30 June 2018.  Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made.  Other than in accordance with its legal and regulatory obligations, 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 made in any documents which it publishes and/or files with the US Securities and Exchange Commission (SEC).  All readers, wherever located, should take note of these disclosures.

All rights are reserved in relation to any reference in this document to names of Diageo's products which constitute trademarks or trade names which Diageo owns, or which others own and license to Diageo for use. © Diageo plc 2018.

The information in this document does not constitute an offer to sell or an invitation to buy shares in Diageo plc or an invitation or inducement to engage in any other investment activities.  Past performance cannot be relied upon as a guide to future performance.

 

END

 

 

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