Diageo Plc · LSE:DGE
Diageo — H1 2002 Earnings Presentation
24 slides from Diageo's earnings presentation, Feb 21, 2002
Slide 1: 2002 Interim Results
2002 Interim Results 21 February 2002
Slide 2: Extract from the 2002 Interim Results Presentation
Extract from the 2002 Interim Results Presentation Presented on 21 February 2002 2
Slide 3: Burger King
Burger King Six months ended 31 December 2001 • System sales up 1%* • Operating profit down 29%* • Improving restaurant operations • 61 fewer restaurant openings • 58 more restaurant closures • Improving comps in US *Organic growth at level exchange after adjusting for acquisitions and before goodwi
Slide 4: Premium Drinks is delivering consistent financial performance
Premium Drinks is delivering consistent financial performance Six months Year ended Year ended Year ended ended 30 June 1999 30 June 2000 30 June 2001 31 Dec 2001 Volume growth* (6)% 3% 4% 5% Turnover growth* - 6% 7% 10% Incremental marketing* - 10% 10% 7% Operating profit growth* 9% 15% 14% 17% Inc
Slide 5: Premium Drinks turnover
Premium Drinks turnover Six months ended 31 December £379m £4,458m £4,064m £16m £118m £(119)m 2000 Exchange Disposals Acquisitions Organic 2001 growth 5
Slide 6: Growth in Premium Drinks
Growth in Premium Drinks Six months ended 31 December 2001 Including RTD Excluding RTD Volume Net sales Volume Net sales Global priority 9% 15% 4% 5% Local priority 2% 12% - 6% Category management (4)% 1% (4)% 1% Total brands 5% 11% 1% 4% Organic growth at level exchange after adjusting for acquisit
Slide 7: Global priority brand growth
Global priority brand growth Year ended 30 June 2000 Year ended 30 June 2001 Six months ended 31 December 2001 Volume growth 26% 12% 6% 5% 5% 3% 2% 3% 2% 1% (1)% Smirnoff J&B (2)% Guinness Johnnie Walker Net sales growth 59% 52% 7% 6% 4% 5% 3% n/a 1% n/a n/a n/a Johnnie Walker Guinness Smirnoff J&B
Slide 8: Global priority brand growth
Global priority brand growth Year ended 30 June 2000 Year ended 30 June 2001 Six months ended 31 December 2001 Volume growth 20% 14% 11% 12% 10% 10% 8% 4% 2% 2% Baileys Tanqueray Malibu (4)% (6)% Cuervo 21% Net sales growth 13% 11% 10% 9% 7% 5% n/a n/a n/a 1% n/a Baileys Cuervo Tanqueray Malibu Incl
Slide 9: Premium Drinks marketing
Premium Drinks marketing Six months ended 31 December Global priority brands Local priority brands Category management brands £554m** £509m £394m £357m £53m £62m £99m £98m 2000 restated* 2001 *For exchange and disposals. **Includes £10m for acquisitions 9
Slide 10: Premium Drinks operating profit
Premium Drinks operating profit Six months ended 31 December £135m £967m £21m £834m £17m £(40)m 2000 Exchange Disposals Acquisitions Organic 2001 growth 10
Slide 11: Market operating profit
Market operating profit Six months ended 31 December 2001 North America up 20% Spain up 18% Great Britain up 33% Key up 13% Ireland up 5% Venture up 11% 11
Slide 12: Continued improvement in Premium Drinks ROIC and economic profit
Continued improvement in Premium Drinks ROIC and economic profit Six months ended 31 December Economic ROIC, % profit, £m 500 30 £457m 25 400 £359m £294m 20 300 20.9% 18.1% 15 16.1% 200 10 100 5 0 0 1999 2000 2001 Includes Moët Hennessy associate Restated for FRS 19 12
Slide 13: Financial highlights
Financial highlights Six months ended 31 December 2000 2001 £m £m Operating profit - Continuing 933 1,046 - Discontinued 302 190 1,235 1,236 Associates 139 162 Interest (185) (170) Goodwill amortisation (11) (10) PBET 1,178 1,218 13
Slide 14: Financial highlights
Financial highlights Six months ended 31 December 2000 2001 £m £m PBET 1,178 1,218 Exceptional items (50) 57 Profit before tax 1,128 1,275 Taxation* (295) (423) Profit after tax 833 852 Minority interests (42) (42) Profit 791 810 EPS* 25.0p 26.2p *Taxation and EPS for 31 December 2000 restated for F
Slide 15: Free cash flow
Free cash flow Six months ended 31 December 2000 2001 £m £m Operating profit before exceptionals 1,224 1,226 Depreciation and amortisation 197 166 Working capital (331) (457) Restructuring and integration payments (87) (70) Other items (8) (44) Operating cash flow 995 821 Dividends from associates 3
Slide 16: Increased capital expenditure behind growth drivers
Increased capital expenditure behind growth drivers Six months ended 31 December 2000 2001 Premium Drinks £m £m - Maintenance capital 71 82 - Lehigh Pennsylvania - 25 - Plainfield Illinois - 13 - Santa Vittoria/Leven - 4 - Africa bottling/brewing - 8 Total 71 132 Burger King 65 47 Pillsbury 42 33 Di
Slide 17: Balance sheet movements
Balance sheet movements Six months ended 31 December 2001 Pillsbury Seagram 30 June trans- trans- 31 Dec 2001 action action Other 2001 £bn £bn £bn £bn £bn Intangible assets 5.7 (2.8) 2.8 (0.1) 5.6 Tangible assets 3.2 (0.9) 0.2 (0.1) 2.4 Investments 1.5 1.8 - (0.1) 3.2 Net current assets 0.8 (0.5) 0.
Slide 18: Balance sheet effect of Pillsbury transaction
Balance sheet effect of Pillsbury transaction Cash received Sale of and investment Pillsbury Pillsbury in GIS transaction £bn £bn £bn Intangible assets (2.8) - (2.8) Tangible assets (0.9) - (0.9) Investments (0.1) 1.9 1.8 Other net assets (0.5)* - (0.5) Net borrowings 0.2 4.0 4.2 Net assets (4.1) 5.
Slide 19: Balance sheet movements
Balance sheet movements Six months ended 31 December 2001 Pillsbury Seagram 30 June trans- trans- 31 Dec 2001 action action Other 2001 £bn £bn £bn £bn £bn Intangible assets 5.7 (2.8) 2.8 (0.1) 5.6 Tangible assets 3.2 (0.9) 0.2 (0.1) 2.4 Investments 1.5 1.8 - (0.1) 3.2 Net current assets 0.8 (0.5) 0.
Slide 20: Impact of FRS 17 on post employment costs
Impact of FRS 17 on post employment costs Current New basis treatment £m £m Operating profit 9 (84) Interest - 108 Profit before tax 9 24 Based on year ending 30 June 2002, excluding Pillsbury and Seagram 20
Slide 21: Impact of FRS 19
Impact of FRS 19 • Effective year ending 30 June 2002 • FRS 19 already factored into our 25% sustainable effective tax rate • No cash impact 21
Slide 22: Seagram update
Seagram update • Financial projections unchanged • Estimate of integration costs is unchanged • Future overhead structure • Progress on other disposals 22
Slide 23: Diageo is delivering consistent financial performance
Diageo is delivering consistent financial performance Six months Year ended Year ended Year ended ended 30 June 1999 30 June 2000 30 June 2001 31 Dec 2001 Turnover growth* 1% 4% 5% 9% Incremental marketing* 1% 7% 8% 7% Operating profit growth* 8% 11% 9% 11% EPS growth** *** 2% 13% 12% 5% Economic pr
Slide 24: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This document contains statements 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 these items. These forward-looking statements are made