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Diageo posts a 3.7% fall in FY 2009 pre-tax profit
In a year of global economic downturn, Diageo delivered organic net sales in line with the prior year: 4% organic growth in operating profit and 10% growth in reported eps.
Highlights
- Exchange rate movements increased net sales by £1,095m; brand additions, primarily Ketel One vodka, contributed £151m and there was an organic decline of £25m.
- Operating profit before exceptional items benefited by £167m from exchange rate movements, £43m from brand additions and £99m from organic growth.
- Exceptional operating costs were £170m, in respect of the global restructuring programme and the restructuring of Irish brewing operations.
- Associate income was £164m.
- Finance charges were £592m. Net interest was £516m, including £14m impact of IAS 39, and other finance charges were £76m, including £44m impact of IAS 21 and 39.
- Exchange rate movements increased finance charges by £66m.
- The reported tax rate was 14.5% and the underlying tax rate was 22.2%.
- Free cash flow was £1,204m.
- Recommended increase of 5% in final dividend per share to 22.20 pence.
Paul Walsh, CEO of Diageo, said: “This has been a very challenging year. Overall, however, our results demonstrate the resilience of our business. Our brand range and our geographic reach enabled us to deliver 4% organic operating profit growth and 10% eps growth. While the economic downturn has affected all markets, the response of customers and consumers hasn’t been uniform and therefore the impact on our business has been varied.
“While the global economy appears to be stabilising, there is still uncertainty as to the sustainability and pace of any recovery, and F10 will be challenging, as we lap a strong first quarter and a reasonable first half performance this year. That being recognised, we expect to deliver low single-digit organic operating profit growth in fiscal 2010.”
Source: Diageo
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