Document and Entity Information
Document and Entity Information | 6 Months Ended |
Dec. 31, 2022 | |
Document and Entity Information [Abstract] | |
Document Type | 6-K |
Entity Registrant Name | DIAGEO plc |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0000835403 |
Current Fiscal Year End Date | --06-30 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Income Statement - GBP (£) £ in Millions, shares in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Profit or loss [abstract] | ||
Sales | £ 13,219 | £ 11,753 |
Excise duties | (3,799) | (3,796) |
Net sales | 9,420 | 7,957 |
Cost of sales | (3,624) | (2,955) |
Gross profit | 5,796 | 5,002 |
Marketing | (1,577) | (1,351) |
Other operating items | (1,058) | (908) |
Operating profit/(loss) | 3,161 | 2,743 |
Non-operating items | 16 | (31) |
Finance income | 257 | 130 |
Finance charges | (549) | (310) |
Share of after tax results of associates and joint ventures | 172 | 190 |
Profit before taxation | 3,057 | 2,722 |
Taxation | (650) | (634) |
Profit for the period | 2,407 | 2,088 |
Attributable to: | ||
Equity shareholders of the parent company | 2,295 | 1,965 |
Non-controlling interests | 112 | 123 |
Profit for the period | £ 2,407 | £ 2,088 |
Weighted average number of shares | ||
Shares in issue excluding own shares (in shares) | 2,274 | 2,331 |
Dilutive potential ordinary shares (in shares) | 7 | 8 |
Weighted average number of shares (in shares) | 2,281 | 2,339 |
Basic earnings per share (in GBP per share) | £ 1.009 | £ 0.843 |
Diluted earnings per share (in GBP per share) | £ 1.006 | £ 0.840 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statement Of Comprehensive Income - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net remeasurement of post employment benefit plans | ||
Group | £ (527) | £ 585 |
Associates and joint ventures | 10 | 4 |
Tax on post employment benefit plans | 135 | (136) |
Changes in the fair value of equity investments at fair value through other comprehensive income | (3) | 7 |
Other comprehensive income that will not be reclassified to profit or loss, net of tax, Total | (385) | 460 |
Exchange differences on translation of foreign operations | ||
Group | (126) | 74 |
Associates and joint ventures | 91 | (45) |
Non-controlling interests | (39) | 46 |
Net investment hedges | (18) | (46) |
Income Tax Charge Credit Relating To Exchange Differences On Translation Of Foreign Operations And Net Investment Hedges Other Comprehensive Income Group | (2) | (5) |
Effective portion of changes in fair value of cash flow hedges | ||
Hedge of foreign currency debt of the group | 60 | 66 |
Transaction exposure hedging of the group | 148 | (87) |
Commodity price risk hedging of the group | (7) | 12 |
Hedges by associates and joint ventures | 14 | (10) |
Recycled to income statement - hedge of foreign currency debt of the group | (29) | (53) |
Recycled to income statement - transaction exposure hedging of the group | (64) | 26 |
Recycled to income statement - commodity price risk hedging of the group | (35) | (18) |
Tax on effective portion of changes in fair value of cash flow hedges | (17) | 12 |
Hyperinflation adjustments | 108 | (3) |
Tax on hyperinflation adjustments | (22) | 1 |
Other comprehensive income that may be reclassified to profit or loss, net of tax, Total | 62 | (30) |
Other comprehensive (loss)/income, net of tax, for the period | (323) | 430 |
Profit for the period | 2,407 | 2,088 |
Total comprehensive (loss)/income for the period | 2,084 | 2,518 |
Attributable to: | ||
Equity shareholders of the parent company | 2,011 | 2,349 |
Non-controlling interests | 73 | 169 |
Total comprehensive (loss)/income for the period | £ 2,084 | £ 2,518 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Balance Sheet - GBP (£) £ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Non-current assets | |||
Intangible assets | £ 12,130 | £ 11,902 | £ 10,921 |
Property, plant and equipment | 5,972 | 5,848 | 5,091 |
Biological assets | 119 | 94 | 75 |
Investments in associates and joint ventures | 3,925 | 3,652 | 3,473 |
Other investments | 42 | 37 | 50 |
Other receivables | 28 | 37 | 28 |
Other financial assets | 399 | 345 | 319 |
Deferred tax assets | 106 | 114 | 83 |
Post employment benefit assets | 1,060 | 1,553 | 1,544 |
Non-current assets | 23,781 | 23,582 | 21,584 |
Current assets | |||
Inventories | 7,552 | 7,094 | 6,235 |
Trade and other receivables | 3,874 | 2,933 | 3,328 |
Assets held for sale | 182 | 222 | 16 |
Corporate tax receivables | 166 | 149 | 151 |
Other financial assets | 398 | 251 | 66 |
Cash and cash equivalents | 2,766 | 2,285 | 1,780 |
Current assets | 14,938 | 12,934 | 11,576 |
Total assets | 38,719 | 36,516 | 33,160 |
Current liabilities | |||
Borrowings and bank overdrafts | (2,305) | (1,522) | (1,184) |
Other financial liabilities | (436) | (444) | (388) |
Share buyback liability | (215) | (117) | (184) |
Trade and other payables | (6,110) | (5,887) | (5,327) |
Liabilities held for sale | (76) | (61) | (30) |
Corporate tax payables | (266) | (252) | (380) |
Provisions | (113) | (159) | (111) |
Current liabilities | (9,521) | (8,442) | (7,604) |
Non-current liabilities | |||
Borrowings | (15,304) | (14,498) | (12,693) |
Other financial liabilities | (771) | (703) | (378) |
Other payables | (353) | (380) | (278) |
Provisions | (266) | (258) | (278) |
Deferred tax liabilities | (2,257) | (2,319) | (2,112) |
Post employment benefit liabilities | (381) | (402) | (486) |
Non-current liabilities | (19,332) | (18,560) | (16,225) |
Total liabilities | (28,853) | (27,002) | (23,829) |
Net assets | 9,866 | 9,514 | 9,331 |
Equity | |||
Share capital | 719 | 723 | 737 |
Share premium | 1,351 | 1,351 | 1,351 |
Other reserves | 2,193 | 2,174 | 1,551 |
Retained earnings | 3,876 | 3,550 | 4,019 |
Equity attributable to equity shareholders of the parent company | 8,139 | 7,798 | 7,658 |
Non-controlling interests | 1,727 | 1,716 | 1,673 |
Total equity | £ 9,866 | £ 9,514 | £ 9,331 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statement of Changes in Equity - GBP (£) £ in Millions | Total | Equity attributable to parent company shareholders | Share capital | Share premium | Other reserves | Total retained earnings | Own shares | Other retained earnings | Non-controlling interests |
Beginning balance at Jun. 30, 2021 | £ 8,431 | £ 6,897 | £ 741 | £ 1,351 | £ 1,621 | £ 3,184 | £ (1,877) | £ 5,061 | £ 1,534 |
Profit for the period | 2,088 | 1,965 | 1,965 | 1,965 | 123 | ||||
Other comprehensive (loss)/income | 430 | 384 | (74) | 458 | 458 | 46 | |||
Total comprehensive (loss)/income for the period | 2,518 | 2,349 | (74) | 2,423 | 2,423 | 169 | |||
Employee share schemes | 66 | 66 | 66 | 30 | 36 | ||||
Share-based incentive plans | 30 | 30 | 30 | 30 | |||||
Share-based incentive plans in respect of associates | 2 | 2 | 2 | 2 | |||||
Share-based payments and purchase of own shares in respect of subsidiaries | (13) | (8) | (8) | (8) | (5) | ||||
Associates' transactions with non-controlling interests | 1 | 1 | 1 | 1 | |||||
Unclaimed dividend | 4 | 3 | 3 | 3 | 1 | ||||
Change in fair value of put option | (11) | (11) | (11) | (11) | |||||
Share buyback programme | (631) | (631) | (4) | 4 | (631) | (631) | |||
Dividend declared for the period | (1,066) | (1,040) | (1,040) | (1,040) | (26) | ||||
Ending balance at Dec. 31, 2021 | 9,331 | 7,658 | 737 | 1,351 | 1,551 | 4,019 | (1,847) | 5,866 | 1,673 |
Beginning balance at Jun. 30, 2022 | 9,514 | 7,798 | 723 | 1,351 | 2,174 | 3,550 | (1,838) | 5,388 | 1,716 |
Profit for the period | 2,407 | 2,295 | 2,295 | 2,295 | 112 | ||||
Other comprehensive (loss)/income | (323) | (284) | 15 | (299) | (299) | (39) | |||
Total comprehensive (loss)/income for the period | 2,084 | 2,011 | 15 | 1,996 | 1,996 | 73 | |||
Employee share schemes | 32 | 32 | 32 | 17 | 15 | ||||
Share-based incentive plans | 27 | 27 | 27 | 27 | |||||
Share-based incentive plans in respect of associates | 3 | 3 | 3 | 3 | |||||
Share-based payments and purchase of own shares in respect of subsidiaries | 2 | 1 | 1 | 1 | 1 | ||||
Associates' transactions with non-controlling interests | (12) | (12) | (12) | (12) | |||||
Unclaimed dividend | 1 | 1 | 1 | 1 | |||||
Change in fair value of put option | (4) | (4) | (4) | (4) | |||||
Share buyback programme | (652) | (652) | (4) | 4 | (652) | (652) | |||
Dividend declared for the period | (1,129) | (1,066) | (1,066) | (1,066) | (63) | ||||
Ending balance at Dec. 31, 2022 | £ 9,866 | £ 8,139 | £ 719 | £ 1,351 | £ 2,193 | £ 3,876 | £ (1,821) | £ 5,697 | £ 1,727 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statement of Cash Flows € in Millions, £ in Millions, $ in Millions | 6 Months Ended | |
Dec. 31, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | |
Cash flows from operating activities | ||
Profit for the period | £ 2,407 | £ 2,088 |
Taxation | 650 | 634 |
Share of after tax results of associates and joint ventures | (172) | (190) |
Net finance charges | 292 | 180 |
Non-operating items | (16) | 31 |
Operating profit | 3,161 | 2,743 |
Increase in inventories | (468) | (187) |
Increase in trade and other receivables | (1,008) | (976) |
Increase in trade and other payables and provisions | 111 | 653 |
Net increase in working capital | (1,365) | (510) |
Depreciation, amortisation and impairment | 281 | 224 |
Dividends received | 5 | 1 |
Post employment payments less amounts included in operating profit | (23) | (23) |
Other items | 7 | 34 |
Adjustments to reconcile profit (loss), Total | 270 | 236 |
Cash generated from operations | 2,066 | 2,469 |
Interest received | 66 | 41 |
Interest paid | (248) | (185) |
Taxation paid | (636) | (378) |
Interest and income taxes paid (received), classified as operating activities | (818) | (522) |
Net cash inflow from operating activities | 1,248 | 1,947 |
Cash flows from investing activities | ||
Disposal of property, plant and equipment and computer software | 6 | 7 |
Purchase of property, plant and equipment and computer software | 435 | 382 |
Movements in loans and other investments | (2) | 3 |
Sale of businesses and brands | 99 | 2 |
Acquisition of subsidiaries(1) | (113) | (110) |
Investment in associates and joint ventures(1) | (31) | (24) |
Net cash outflow from investing activities | (476) | (504) |
Cash flows from financing activities | ||
Share buyback programme | (554) | (538) |
Net sale of own shares for share schemes | 9 | 42 |
Purchase of treasury shares in respect of subsidiaries | 0 | (13) |
Dividends paid to non-controlling interests | (79) | (51) |
Proceeds from bonds | 1,788 | 0 |
Repayment of bonds | (254) | (769) |
Cash inflow from other borrowings | 144 | 136 |
Cash outflow from other borrowings | (172) | (98) |
Equity dividends paid | (1,065) | (1,040) |
Net cash outflow from financing activities | (183) | (2,331) |
Net increase/(decrease) in net cash and cash equivalents | 589 | (888) |
Exchange differences | (63) | 14 |
Reclassification to assets held for sale | (47) | 0 |
Net cash and cash equivalents at beginning of the period | 2,211 | 2,637 |
Net cash and cash equivalents at end of the period | 2,690 | 1,763 |
Net cash and cash equivalents consist of: | ||
Cash and cash equivalents | 2,766 | 1,780 |
Bank overdrafts | (76) | (17) |
Net cash and cash equivalents | £ 2,690 | £ 1,763 |
Basis of preparation
Basis of preparation | 6 Months Ended |
Dec. 31, 2022 | |
Basis Of Preparation [Abstract] | |
Basis of preparation | Basis of preparation These unaudited condensed consolidated interim financial statements have been prepared in accordance with UK adopted IAS 34 ‘Interim Financial Reporting’, IAS 34 ‘Interim Financial Reporting’ as issued by the International Accounting Standards Board (‘IASB’), IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and The Disclosure Guidance and Transparency Rules sourcebook of the UK’s Financial Conduct Authority. These financial statements should be read in conjunction with the company’s published consolidated financial statements for the year ended 30 June 2022, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted by the UK, IFRSs as adopted by the EU and IFRSs as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. IFRS as adopted by the UK and by the EU differs in certain respects from IFRS as issued by the IASB, but the differences have no impact on the group’s consolidated financial statements for the periods presented. The consolidated financial statements are prepared on a going concern basis under the historical cost convention, unless stated otherwise. In preparing these condensed consolidated interim financial statements, the significant judgements made by management when applying the group’s accounting policies and the significant areas where estimates were required were the same as those that applied to the consolidated financial statements for the year ended 30 June 2022, with the exception of changes in estimates disclosed in note 3 Exceptional items and note 13 Contingent liabilities and legal proceedings. These condensed consolidated interim financial statements were approved for issue on 25 January 2023. The financial statements for Diageo plc for the year ending 30 June 2023 will be prepared in accordance with IFRS as adopted by the UK, IFRSs as adopted by the EU and IFRSs, as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. Going concern Management prepared cash flow forecasts which were also sensitised to reflect severe but plausible downside scenarios taking into consideration the group's principal risks. In the base case scenario, management included assumptions for mid-single digit net sales growth, operating margin improvement and global TBA market share growth. In light of the ongoing geopolitical volatility, the base case outlook and plausible downside scenarios incorporated considerations for a prolonged global recession, supply chain disruptions, higher inflation and further geopolitical deterioration. Even under these scenarios, the group’s cash position is still expected to remain strong, as the group's liquidity was protected by issuing $2,000 million of fixed rate dollar denominated bonds in the six months ended 31 December 2022. Mitigating actions, should they be required, are all within management’s control and could include reductions in discretionary spending such as acquisitions and capital expenditure, as well as a temporary suspension of the share buyback programme and dividend payments in the next 12 months, or drawdowns on committed facilities. Having considered the outcome of these assessments, the Directors are comfortable that the company is a going concern for at least 12 months from the date of signing the group's condensed consolidated interim financial statements. Weighted average exchange rates used in the translation of income statements were US dollar – £1 = $1.18 (2021 – £1 = $1.36) and euro – £1 = €1.16 (2021 – £1 = €1.17). Exchange rates used to translate assets and liabilities at the balance sheet date were US dollar – £1 = $1.2 (31 December 2021 – £1 = $1.35; 30 June 2022 – £1 = $1.21) and euro – £1 = €1.13 (31 December 2021 – £1 = €1.19; 30 June 2022 – £1 = €1.16). The group uses foreign exchange transaction hedges to mitigate the effect of exchange rate movements. New accounting standards and interpretations The following amendment to the accounting standards, issued by the IASB and endorsed by the UK and EU, was adopted by the group from 1 July 2022 with no impact on the group’s consolidated results, financial position or disclosures: – Amendments to IFRS 3 Updating a Reference to the Conceptual Framework – Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract The following standard issued by the IASB has been endorsed by the UK and EU and has not been adopted by the group: – IFRS 17 – Insurance contracts (effective from the year ending 30 June 2024) is ultimately intended to replace IFRS 4. Based on a preliminary assessment, the group believes that the adoption of IFRS 17 will not have a significant impact on its consolidated results or financial position. |
Segmental information
Segmental information | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of operating segments [abstract] | |
Segmental information | Segmental information The segmental information presented is consistent with management reporting provided to the Executive Committee (the chief operating decision maker). The Executive Committee considers the business principally from a geographical perspective based on the location of third-party sales and the business analysis is presented by geographical segment. In addition to these geographical selling segments, a further segment reviewed by the Executive Committee is the Supply Chain and Procurement (SC&P) segment, which manufactures products for other group companies and includes production sites in the United Kingdom, Ireland, Italy, Guatemala and Mexico, and comprises the global procurement function. The group's operations also include the Corporate segment. Corporate costs are in respect of central costs, including finance, marketing, corporate relations, human resources and legal, as well as certain information systems, facilities and employee costs that are not allocable to the geographical segments or to the SC&P. Diageo uses shared services operations to deliver transaction processing activities for markets and operational entities. These centres are located in India, Hungary, Colombia and the Philippines. These captive business service centres also perform certain central finance activities, including elements of financial planning and reporting, treasury and HR services. The costs of shared services operations are recharged to the regions. For planning and management reporting purposes, Diageo uses budgeted exchange rates that are set at the prior year's weighted average exchange rate. In order to ensure a consistent basis on which performance is measured through the year, prior period results are also restated to the budgeted exchange rate. Segmental information for net sales and operating profit before exceptional items are reported on a consistent basis with management reporting. The adjustments required to retranslate the segmental information to actual exchange rates and to reconcile it to the group’s reported results are shown in the tables below. The comparative segmental information, prior to retranslation, has not been restated at the current year’s budgeted exchange rates but is presented at the budgeted rates for the respective year. In addition, for management reporting purposes, Diageo presents the result of acquisitions and disposals completed in the current and prior year separately from the results of the geographical segments. The impact of acquisitions and disposals on net sales and operating profit is disclosed under the appropriate geographical segments in the tables below at budgeted exchange rates. (a) Segmental information for the consolidated income statement North America Europe Asia Latin America and Caribbean Africa SC&P Eliminate Total Corporate Total Six months ended 31 December 2022 £ million £ million £ million £ million £ million £ million £ million £ million £ million £ million Sales 3,847 3,427 3,170 1,394 1,337 1,330 (1,330) 13,175 44 13,219 Net sales At budgeted exchange rates (1) 3,092 1,815 1,724 995 916 1,318 (1,289) 8,571 44 8,615 Acquisitions and disposals 13 7 35 3 — — — 58 — 58 SC&P allocation 4 18 3 3 1 (29) — — — — Retranslation to actual exchange rates 408 54 75 99 26 41 (41) 662 — 662 Hyperinflation — 85 — — — — — 85 — 85 Net sales 3,517 1,979 1,837 1,100 943 1,330 (1,330) 9,376 44 9,420 Operating profit/(loss) At budgeted exchange rates (1) 1,260 630 557 407 212 39 — 3,105 (158) 2,947 Acquisitions and disposals (6) 2 5 — — — — 1 — 1 SC&P allocation 9 22 2 5 1 (39) — — — — Fair value remeasurements 14 (1) — — — — — 13 — 13 Retranslation to actual exchange rates 142 21 23 59 (33) — — 212 1 213 Hyperinflation — 20 — — — — — 20 — 20 Operating profit/(loss) before exceptional items 1,419 694 587 471 180 — — 3,351 (157) 3,194 Exceptional operating items (26) 14 (21) — — — — (33) — (33) Operating profit/(loss) 1,393 708 566 471 180 — — 3,318 (157) 3,161 Non-operating items 16 Net finance charges (292) Share of after tax results of associates and joint ventures 172 Profit before taxation 3,057 North America Europe Asia Latin America and Caribbean Africa SC&P Eliminate Total Corporate Total Six months ended 31 December 2021 £ million £ million £ million £ million £ million £ million £ million £ million £ million £ million Sales 3,257 3,178 2,999 1,052 1,244 972 (972) 11,730 23 11,753 Net sales At budgeted exchange rates (1) 2,959 1,782 1,544 822 888 1,027 (979) 8,043 23 8,066 Acquisitions and disposals 18 3 — — — — — 21 — 21 SC&P allocation 6 29 5 6 2 (48) — — — — Retranslation to actual exchange rates (19) (62) (18) (9) (22) (7) 7 (130) — (130) Net sales 2,964 1,752 1,531 819 868 972 (972) 7,934 23 7,957 Operating profit/(loss) At budgeted exchange rates (1) 1,288 647 454 333 192 (8) — 2,906 (132) 2,774 Acquisitions and disposals (16) (1) — — — — — (17) — (17) SC&P allocation 10 (23) (3) 9 (1) 8 — — — — Fair value remeasurements 5 21 — — — — — 26 — 26 Retranslation to actual exchange rates 8 (31) — (9) (15) — — (47) 7 (40) Operating profit/(loss) before exceptional items 1,295 613 451 333 176 — — 2,868 (125) 2,743 Exceptional items — — — — — — — — — — Operating profit/(loss) 1,295 613 451 333 176 — — 2,868 (125) 2,743 Non-operating items (31) Net finance charges (180) Share of after tax results of associates and joint ventures 190 Profit before taxation 2,722 (1) These items represent the IFRS 8 performance measures for the geographical and SC&P segments. (i) The net sales figures for SC&P reported to the Executive Committee primarily comprise inter-segment sales and these are eliminated in a separate column in the above segmental analysis. Apart from sales by the SC&P segment to the geographical segments, inter-segment sales are not material. (ii) Approximately 42% of calendar year net sales occurred in the last four months of calendar year 2022. (b) Category and geographical analysis Category analysis Geographical analysis Spirits Beer Ready to drink Other Total United India Great Rest of Total Six months ended 31 December 2022 Sales (1) 10,925 1,702 478 114 13,219 3,617 1,599 1,163 6,840 13,219 Six months ended 31 December 2021 Sales (1) 9,680 1,520 418 135 11,753 3,072 1,704 1,204 5,773 11,753 |
Exceptional items
Exceptional items | 6 Months Ended |
Dec. 31, 2022 | |
Exceptional Items [Abstract] | |
Exceptional items | Exceptional items Exceptional items are those that in management’s judgement need to be disclosed separately. Such items are included within the income statement caption to which they relate . Management believes that that separate disclosure of exceptional items and the classification between operating and non-oper ating items further helps investors to understand t he performance of the group. Changes in estimates and reversals in relation to items previously recognised as exceptional are presented consistently as exceptional in the current year. Exceptional operating items are those that are considered to be material and unusual or non-recurring in nature and are part of the operating activities of the group, such as one-off global restructuring programmes which can be multi-year, impairment of intangible assets and fixed assets, indirect tax settlements, property disposals and changes in post employment plans. Gains and losses on the sale or directly attributable to a prospective sale of businesses, brands or distribution rights, step up gains and losses that arise when an investment becomes an associate or an associate becomes a subsidiary and other material, unusual non-recurring items that are not in respect of the production, marketing and distribution of premium drinks, are disclosed as exceptional non-operating items below operating profit in the income statement. Exceptional current and deferred tax items comprise material and unusual or non-recurring items that impact taxation. Examples include direct tax provisions and settlements in respect of prior years and the remeasurement of deferred tax assets and liabilities following tax rate changes. Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Exceptional operating items Supply chain agility programme (a) (47) — Winding down Russian operations (b) 14 — (33) — Non-operating items Sale of businesses and brands Archers brand (c) 20 — USL Popular brands (d) 4 — United National Breweries (e) 2 2 Guinness Cameroon S.A. (f) (2) — Meta Abo Brewery (g) — (33) Step acquisition - Mr Black (h) (8) — 16 (31) Exceptional items before taxation (17) (31) Items included in taxation (note 5) Tax on exceptional operating items 12 — Tax on exceptional non-operating items 1 — Exceptional taxation 57 — 70 — Total exceptional items 53 (31) Attributable to: Equity shareholders of the parent company 52 (31) Non-controlling interests 1 — Total exceptional items 53 (31) (a) In the six months ended 31 December 2022, an exceptional charge of £47 million was accounted for in respect of the supply chain agility programme announced in July 2022. With this five-year spanning programme, Diageo expects to strengthen its supply chain, improve its resilience and agility, drive efficiencies, deliver additional productivity savings and make its supply operations more sustainable. Total implementation cost of the programme is expected to be up to £500 million over the five-year period, which will comprise non‐cash items and one‐off expenses, the majority of which are expected to be recognised as exceptional operating items. No restructuring cash expenditure was incurred in the period. (b) In the six months ended 31 December 2022, Diageo released unutilised provisions of £14 million from the £50 million exceptional charge taken in the year ended 30 June 2022 in respect of winding down its operations in Russia. (c) On 8 September 2022, Diageo announced the sale of its Archers brand. The transaction resulted in an exceptional gain of £20 million. (d) On 30 September 2022, Diageo announced the completion of the sale of the Popular brands of its USL business. The aggregate consideration for the disposal was £87 million, the disposed net asset included £31 million net working capital and £22 million brand, and £16 million goodwill was derecognised. The transaction resulted in an exceptional gain of £4 million and the respective share of non-controlling interest amounted to £9 million. Popular brands contributed £225 million to sales and £5 million to operating profit including transaction costs of £4 million in the six months ended 31 December 2022. (e) In the six months ended 31 December 2022, ZAR46 million (£2 million) of deferred consideration was paid to Diageo in respect of the sale of United National Breweries, the full amount of which represented a non-operating gain (2021 – a gain of £2 million). (f) On 14 July 2022, Diageo announced the agreement to sell Guinness Cameroon S.A., its brewery in Cameroon, to Castel Group. As regulatory clearance has been received, completion of the sale is highly probable and is expected in the second half of fiscal 23. As a result, the assets and liabilities of the brewing business of Guinness Cameroon S.A. were classified as held for sale. In the six months ended 31 December 2022, transaction costs relating to the prospective sale amounted to £2 million. (g) In the six months ended 31 December 2021, a loss of £33 million was recognised as a non-operating item attributable to the sale of Meta Abo Brewery Share Company in Ethiopia. |
Finance income and charges
Finance income and charges | 6 Months Ended |
Dec. 31, 2022 | |
Analysis of income and expense [abstract] | |
Finance income and charges | Finance income and charges Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Interest income 86 61 Fair value gain on financial instruments 142 58 Total interest income 228 119 Interest charge on bank loans, bonds and overdrafts (235) (181) Interest charge on leases (8) (5) Fair value loss on financial instruments (142) (59) Interest charge on other borrowings (125) (36) Total interest charges (510) (281) Net interest charges (282) (162) Net finance income in respect of post employment plans in surplus 29 10 Hyperinflation adjustment in respect of Venezuela (a) — 1 Total other finance income 29 11 Net finance charge in respect of post employment plans in deficit (7) (5) Foreign exchange revaluation of monetary items in respect of Lebanon (a) — (2) Unwinding of discounts (5) (6) Interest charge in respect of direct and indirect tax (17) (8) Change in financial liability (Level 3) — (7) Hyperinflation adjustment in respect of Turkey (a) (6) — Guarantee fees (1) — Other finance charges (3) (1) Total other finance charges (39) (29) Net other finance charges (10) (18) (a) Hyperinflation adjustment The group applied hyperinflationary accounting for its operations in Turkey, Venezuela and Lebanon. Turkey has been a hyperinflationary environment, the three-year cumulative inflation for the period ended 31 December 2022 exceeded 100%. Consequently, since March 2022, the group applies hyperinflationary accounting for its Turkish operation. The group’s consolidated financial statements for the six months ended 31 December 2022 include the results and financial position of its Turkish operations restated to the measuring unit current at the end of the period, with hyperinflationary gains and losses in respect of monetary items being reported in finance charges. The inflation rate used by the group is the official rate published by the Turkish Statistical Institute, TurkStat. The movement in the publicly available official price index for the six months ended 31 December 2022 was 15%. Venezuela is a hyperinflationary economy where the government maintains a regime of strict currency controls with multiple foreign currency rate systems. The exchange rate used to translate the results of the group’s Venezuelan operations was VES/£ 1,540 for the six months ended 31 December 2022 (2021 – VES/£593). These rates reflect management’s estimate of the exchange rate considering inflation and the most appropriate official exchange rate. Movement in the price index for the six months ended 31 December 2022 was 105% (2021 – 158%). The inflation rate used by the group is provided by an independent valuer because no reliable, officially published rate is available for Venezuela. The following table presents the contribution of the group’s Venezuelan operations to the consolidated income statement, cash flow statement and net assets for the six months ended 31 December 2022 and 31 December 2021 and with the amounts that would have resulted if the official reference exchange rate had been applied: Six months ended 31 December 2022 Six months ended 31 December 2021 At estimated exchange rate At official reference exchange rate At estimated At official reference 1,540 VES/£ 21 VES/£ 593 VES/£ 6 VES/£ £ million £ million £ million £ million Net sales — 7 — 8 Operating profit — 2 — 2 Other finance income - hyperinflation adjustment — — 1 120 Net cash outflow from operating activities — (1) — (3) Net assets 20 1,467 37 3,501 Sterling amounts presented at the official reference exchange rate are results of simple mathematical conversion. |
Taxation
Taxation | 6 Months Ended |
Dec. 31, 2022 | |
Income Taxes [Abstract] | |
Taxation | Taxation For the six months ended 31 December 2022, the tax charge of £650 million (2021 – £634 million ) comprises a UK tax charge of £122 million (2021 – £116 million) and a foreign tax charge of £528 million (2021 – £518 million). For the six months ended 31 December 2022, income tax expense was recognised based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period in line with the relevant accounting standard. Included in the tax charge of £650 million in the six months ended 31 December 2022 is an exceptional tax credit of £70 million, which includes a tax credit of £57 million in respect of the deductibility of fees paid to Diageo plc for guaranteeing externally issued debt of US group entities. Following engagement with the tax authorities, guarantee fees for the periods ended 30 June 2012 to 30 June 2022 will be fully deductible. The group has a number of ongoing tax audits worldwide for which provisions are recognised in line with the relevant accounting standard taking into account best estimates and management’s judgements concerning the ultimate outcome of the tax audit. For the six months ended 31 December 2022, ongoing audits that are provided for individually are not expected to result in a material tax liability. The current tax asset of £166 million (30 June 2022 – £149 million) and tax liability of £266 million (30 June 2022 – £252 million) include £169 million (30 June 2022 – £156 million) of provisions for tax uncertainties. On 20 July 2022, HM Treasury released draft legislation to introduce the OECD's Pillar Two Model Rules into UK law that would commence for accounting periods starting on or after 31 December 2023 (i.e. year ending 30 June 2025 for Diageo). Diageo is reviewing available legislation and monitoring the status of implementation outside the UK to understand the potential impact on the group. The tax rate before exceptional items for the six months ended 31 December 2022 was 23.4% compared with 23.0% for the six months ended 31 December 2021. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2022 | |
Inventories [Abstract] | |
Inventories | Inventories 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Raw materials and consumables 598 489 401 Work in progress 166 86 68 Maturing inventories 5,477 5,229 4,801 Finished goods and goods for resale 1,311 1,290 965 7,552 7,094 6,235 |
Net borrowings
Net borrowings | 6 Months Ended |
Dec. 31, 2022 | |
Borrowings [abstract] | |
Net borrowings | Net borrowings 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Borrowings due within one year and bank overdrafts (2,305) (1,522) (1,184) Borrowings due after one year (15,304) (14,498) (12,693) Fair value of foreign currency forwards and swaps 534 356 122 Fair value of interest rate hedging instruments (422) (283) 4 Lease liabilities (438) (475) (360) (17,935) (16,422) (14,111) Cash and cash equivalents 2,766 2,285 1,780 (15,169) (14,137) (12,331) |
Reconciliation of movement in n
Reconciliation of movement in net borrowings | 6 Months Ended |
Dec. 31, 2022 | |
Borrowings [abstract] | |
Reconciliation of movement in net borrowings | Reconciliation of movement in net borrowings Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Net increase/(decrease) in cash and cash equivalents before exchange 589 (888) Net (increase)/decrease in bonds and other borrowings (1) (1,508) 729 Net increase in net borrowings from cash flows (919) (159) Exchange differences on net borrowings (50) (31) Other non-cash items (2) (63) (32) Net borrowings at beginning of the period (14,137) (12,109) Net borrowings at end of the period (15,169) (12,331) (1) In the six months ended 31 December 2022, net increase in bonds and other borrowings excludes £2 million cash outflow in respect of derivatives designated in forward point hedges (2021 – £2 million). (2) In the six months ended 31 December 2022, other non-cash items were principally in respect of the reclassification of cash and cash equivalents in Guinness Cameroon S.A. to assets and liabilities held for sale. In the six months ended 31 December 2021, other non-cash items were principally in respect of additional leases entered into during the period. In the six months ended 31 December 2022, the group issued bonds of $2,000 million (£1,788 million- net of discount and fee) consisting of $500 million 5.2% fixed rate notes due 2025, $750 million 5.3% fixed rate notes due 2027 and $750 million 5.5% fixed rate notes due 2033, and repaid bonds of $300 million (£254 million). In the six months ended 31 December 2021, the group repaid bonds of €900 million (£769 million). |
Financial instruments
Financial instruments | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about financial instruments [abstract] | |
Financial instruments | Financial instruments Fair value measurements of financial instruments are presented through the use of a three-level fair value hierarchy that prioritises the valuation techniques used in fair value calculations. The group maintains policies and procedures to value instruments using the most relevant data available. If multiple inputs that fall into different levels of the hierarchy are used in the valuation of an instrument, the instrument is categorised on the basis of the most subjective input. Foreign currency forwards and swaps, cross currency swaps and interest rate swaps are valued using discounted cash flow techniques. These techniques incorporate inputs at levels 1 and 2, such as foreign exchange rates and interest rates. These market inputs are used in the discounted cash flow calculation incorporating the instrument’s term, notional amount and discount rate, and taking credit risk into account. As significant inputs to the valuation are observable in active markets, these instruments are categorised as level 2 in the hierarchy. Other financial liabilities include a put option, which does not have an expiry date, held by Industrias Licoreras de Guatemala (ILG) to sell the remaining 50% equity stake in Rum Creation & Products Inc., the owner of the Zacapa rum brand, to Diageo. The liability is fair valued and as at 31 December 2022, an amount of £217 million (30 June 2022 – £216 million) is recognised as a liability with changes in the fair value of the put option included in retained earnings. As the valuation of this option uses assumptions not observable in the market, it is categorised as level 3 in the hierarchy. As at 31 December 2022, because it is unknown when or if ILG will exercise the option, the liability is measured as if the exercise date is on the last day of the current financial year considering forecast future performance. The option is sensitive to reasonably possible changes in assumptions. If the option were to be exercised as at 30 June 2024, the fair value of the liability would increase by approximately £47 million. Included in other financial liabilities, the contingent consideration on acquisition of businesses represents the present value of payments up to £406 million linked to certain performance targets which are expected to be paid over the next eight years. There were no significant changes in the measurement and valuation techniques, or significant transfers between the levels of the financial assets and liabilities in the six months ended 31 December 2022. The group’s financial assets and liabilities measured at fair value are categorised as follows: 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Derivative assets 682 480 381 Derivative liabilities (552) (456) (237) Valuation techniques based on observable market input (Level 2) 130 24 144 Financial assets - other 172 184 167 Financial liabilities - other (575) (587) (483) Valuation techniques based on unobservable market input (Level 3) (403) (403) (316) In the six months ended 31 December 2022 and 31 December 2021, the decrease in financial assets - other of £12 million (2021 – £29 million) is principally in respect of the conversion of preference shares to equity in Mr Black. The movements in level 3 instruments, measured on a recurring basis, are as follows: Zacapa Contingent consideration recognised on acquisition of businesses (1) Zacapa Contingent consideration recognised on acquisition of businesses (1) Six months ended 31 December 2022 Six months ended 31 December 2022 Six months ended 31 December 2021 Six months ended 31 December 2021 £ million £ million £ million £ million At the beginning of the period (216) (371) (149) (429) Net gains/(losses) included in the income statement — 12 (7) 18 Net (losses)/gains included in exchange in other comprehensive income (2) (2) (4) (9) Net losses included in retained earnings (4) — (12) — Acquisitions — (5) — — Settlement of liabilities 5 8 3 106 At the end of the period (217) (358) (169) (314) (1) Included in the balance at 31 December 2022 is £145 million in respect of the acquisition of Aviation Gin and Davos Brands (2021 – £163 million), £60 million in respect of the acquisition of 21Seeds (2021 – £nil), and £57 million in respect of the acquisition of Lone River Ranch Water (2021 – £51 million). |
Dividends and other reserves
Dividends and other reserves | 6 Months Ended |
Dec. 31, 2022 | |
Share Capital, Reserves And Other Equity Interest [Abstract] | |
Dividends and other reserves | Dividends and other reserves Six months ended 31 December 2022 Six months ended 31 December 2021 Amounts recognised as distributions to equity shareholders £ million £ million Final dividend for the year ended 30 June 2022 of 46.82 pence per share (2021 - 44.59 pence) 1,066 1,040 An interim dividend of 30.83 pence per share (2021 – 29.36 pence) was approved by the Board of Directors on 25 January 2023. As the approval was after the balance sheet date, it was not included as a liability. |
Acquisition of businesses
Acquisition of businesses | 6 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisition of businesses | Acquisition of businesses Fair value of assets and liabilities acquired and cash consideration paid in respect of acquisition of subsidiaries in the six months ended 3 1 December 2022 were as follows: Acquisitions £ million Brands 45 Property, plant and equipment 24 Inventories 24 Other working capital 1 Deferred tax (3) Cash 1 Fair value of assets and liabilities 92 Goodwill arising on acquisition 22 Step acquisition (10) Consideration payable 104 Satisfied by: Cash consideration paid (96) Contingent consideration payable (5) Deferred consideration payable (3) (104) Diageo completed two acquisitions in the six months ended 31 December 2022: (i) on 29 September 2022, the acquisition of that part of the entire issued share capital of Mr Black Spirits Pty Ltd, owner of the Mr Black Australian premium cold brew coffee liqueur, that it did not already own; and (ii) on 2 November 2022, the acquisition of the entire issued share capital of Balcones Distilling, a Texas craft distiller and one of the leading producers of American single malt whisky in the United States. The fair values of assets and liabilities acquired in respect of the two acquisitions are provisional and will be finalised in the year ending 30 June 2023. Cash consideration paid in respect of the acquisition of businesses in the six months ended 31 December 2022 were as follows: Consideration £ million Acquisitions in the year Subsidiaries Cash consideration paid (96) Cash acquired 1 Investments in associates Cash consideration paid (3) Prior year acquisitions Subsidiaries Contingent consideration paid (8) Other consideration (10) Investments in associates Capital injection (28) Net cash outflow on acquisition of businesses (144) |
Assets and liabilities held for
Assets and liabilities held for sale | 6 Months Ended |
Dec. 31, 2022 | |
Assets And Liabilities Held For Sale [Abstract] | |
Assets and liabilities held for sale | Assets and liabilities held for sale 31 December 2022 30 June 2022 £ million £ million Intangible assets — 165 Property, plant and equipment 103 12 Other investments — 1 Inventories 19 21 Trade and other receivables 13 23 Cash 47 — Assets held for sale 182 222 Trade and other payables (61) (18) Corporation tax (2) (6) Deferred tax (5) (35) Provisions (2) — Leases (2) (2) Post employment benefit liabilities (4) — Liabilities held for sale (76) (61) Total 106 161 Assets and liabilities held for sale at 31 December 2022 consisted of Guinness Cameroon S.A., and as at 30 June 2022 assets and liabilities held for sale consisted of the Windsor business in Korea and USL's Popular brands. As at 31 December 2021 there were no assets and liabilities classified as held for sale. On 14 July 2022, Diageo announced the agreement to sell Guinness Cameroon S.A., its brewery in Cameroon, to Castel Group for £389 million. On completion, Castel will take over the production and nationwide distribution of Guinness in Cameroon under a licence and royalty agreement. The sale is considered to be highly probable as at 31 December 2022 and it is expected to be completed in the year ending 30 June 2023. Consequently, the impacted assets and liabilities were classified as held for sale at 31 December 2022 and measured at cost as the lower of cost and fair value less cost of disposal. On 27 September 2022, Diageo announced the termination of the conditional agreement to sell its Windsor business in Korea. Consequently, the recoverable assets and liabilities attributable to the business were reclassified out of held for sale. On 30 September 2022, Diageo announced the completion of the sale of the Popular brands of its USL business. The assets and liabilities attributable to the business were disposed from held for sale. The aggregate consideration for the disposal was £87 million, resulting in an exceptional gain of £4 million. |
Contingent liabilities and lega
Contingent liabilities and legal proceedings | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of contingent liabilities [abstract] | |
Contingent liabilities and legal proceedings | Contingent liabilities and legal proceedings (a) Guarantees and related matters As of 31 December 2022 , the group has no material unprovided guarantees or indemnities in respect of liabilities of third parties. (b) Acquisition of USL shares from UBHL and related proceedings in relation to the USL transaction On 4 July 2013 , Diageo completed its acquisition, under a share purchase agreement with United Breweries (Holdings) Limited (UBHL) and various other sellers (the SPA), of shares representing 14.98% in USL, including shares representing 6.98% from UBHL. The SPA was signed on 9 November 2012 as part of the transaction announced by Diageo in relation to USL on that day (the Original USL Transaction). Following a series of further transactions, as of 31 December 2022 , Diageo has a 55.94% investment in USL (excluding 2.38% owned by the USL Benefit Trust). Prior to the acquisition from UBHL on 4 July 2013 , the High Court of Karnataka (High Court) had granted leave to UBHL under the Indian Companies Act 1956 (the Leave Order) to enable the sale by UBHL to Diageo to take place (the UBHL Share Sale) notwithstanding the continued existence of certain winding-up petitions that were pending against UBHL on the date of the SPA. At the time of the completion of the UBHL Share Sale, the Leave Order remained subject to review on appeal. However, as stated by Diageo at the time of closing, it was considered unlikely that any appeal process in respect of the Leave Order would definitively conclude on a timely basis and, accordingly, Diageo waived the conditionality under the SPA relating to the absence of insolvency proceedings in relation to UBHL and acquired the 6.98% stake in USL from UBHL at that time. Following appeal and counter-appeal in respect of the Leave Order, this matter is now before the Supreme Court of India which has issued an order that the status quo be maintained with regard to the UBHL Share Sale pending a hearing on the matter before it. Following a number of adjournments, the next date for a substantive hearing is yet to be fixed. In separate proceedings, the High Court passed a winding-up order against UBHL on 7 February 2017 , and appeals filed by UBHL against that order have since been dismissed, initially by a division bench of the High Court and subsequently by the Supreme Court of India. Diageo continues to believe that the acquisition price of INR 1,440 per share paid to UBHL for the USL shares is fair and reasonable as regards UBHL, UBHL’s shareholders and UBHL’s secured and unsecured creditors. However, adverse results for Diageo in the proceedings referred to above could, absent leave or relief in other proceedings, ultimately result in Diageo losing title to the 6.98% stake in USL acquired from UBHL. Diageo believes, including by reason of its rights under USL’s articles of association to nominate USL’s CEO and CFO and the right to appoint, through USL, a majority of the directors on the boards of USL’s subsidiaries as well as its ability as promoter to nominate for appointment up to two-thirds of USL’s directors for so long as the chairperson of USL is an independent director, that it would remain in control of USL and would continue to be able to consolidate USL as a subsidiary for accounting purposes regardless of the outcome of this litigation. There can be no certainty as to the outcome of the existing or any further related legal proceedings or the time frame within which they would be concluded. (c) Continuing matters relating to Dr Vijay Mallya and affiliates On 25 February 2016 , Diageo and USL each announced that they had entered into arrangements with Dr Mallya under which he had agreed to resign from his position as a director and as chairman of USL and from his positions in USL’s subsidiaries. Diageo’s agreement with Dr Mallya (the February 2016 Agreement) provided for a payment of $75 million ( £63 million) to Dr Mallya over a five-year period of which $40 million (£33 million) was paid on signing of the February 2016 Agreement with the balance being payable in equal instalments of $7 million (£6 million) a year over five years (2017-2021). All payments were subject to and conditional on Dr Mallya’s compliance with the agreement. The February 2016 Agreement also provided for the release of Dr Mallya’s personal obligations to indemnify Diageo Holdings Netherlands B.V. (DHN) in respect of its earlier liability ($141 million (£118 million)) under a backstop guarantee of certain borrowings of Watson Limited (Watson) (a company affiliated with Dr Mallya). On account of various breaches and other provisions of agreements between Dr Mallya and persons connected with him and Diageo and/or USL, Diageo did not make the five instalment payments due during the five-year period between 2017 and 2021. In addition, Diageo has also demanded that Dr Mallya repay the $40 million (£33 million) paid by Diageo in February 2016 and sought compensation for various losses incurred by the relevant members of the Diageo group. On 16 November 2017, Diageo and other relevant members of the Diageo group commenced claims in the High Court of Justice in England and Wales (the English High Court) against Dr Mallya in relation to these matters. At the same time DHN also commenced claims in the English High Court against Dr Mallya, his son Sidhartha Mallya, Watson and Continental Administration Services Limited (CASL) (a company affiliated with Dr Mallya and understood to hold assets on trust for him and certain persons affiliated with him) for in excess of $142 million (£118 million) (plus interest) in relation to Watson’s liability to DHN in respect of its borrowings referred to above and the breach of associated security documents. Dr Mallya, Sidhartha Mallya and the relevant affiliated companies filed a defence to these claims, and Dr Mallya also filed a counterclaim for payment of the two instalment payments that had by that time been withheld as described above. Diageo continues to prosecute its claims and to defend the counterclaim. As part of these proceedings, Diageo and the other relevant members of its group filed an application for strike out and/or summary judgement in respect of certain aspects of the defence filed by Dr Mallya and the other defendants, including their defence in relation to Watson and CASL’s liability to repay DHN. The application was successful resulting in Watson being ordered to pay approximately $135 million (£113 million) plus various amounts in respect of interest to DHN, with CASL being held liable as co-surety for 50% of any such amount unpaid by Watson. These amounts were, contrary to the relevant orders, not paid by the relevant deadlines and Watson and CASL’s remaining defences in the proceedings were struck out. Diageo and DHN have accordingly sought asset disclosure and are considering further enforcement steps against Watson and CASL, both in the United Kingdom and in other jurisdictions where they are present or hold assets. A trial of the remaining elements of these claims was due to commence on 21 November 2022. However, on 26 July 2021 Dr Mallya was declared bankrupt by the English High Court pursuant to a bankruptcy petition presented by a consortium of Indian banks. Diageo and the relevant members of its group have informed the Trustee in Bankruptcy of their position as creditors in the bankruptcy and have engaged with the Trustee regarding their claims and the status of the current proceedings. An appeal by Dr Mallya against his bankruptcy (and an appeal by the bank consortium against orders made in the course of the bankruptcy proceedings) are pending. In light of the uncertainty posed by the ongoing bankruptcy proceedings, the trial of Diageo’s claim has been relisted to take place in February 2024. At this stage, it is not possible to assess the extent to which the various ongoing proceedings related to the bankruptcy will affect the remaining elements of the claims by Diageo and the relevant members of its group. Upon completion of an initial inquiry in April 2015 into past improper transactions which identified references to certain additional parties and matters, USL carried out an additional inquiry into these transactions (Additional Inquiry) which was completed in July 2016. The Additional Inquiry, prima facie, identified transactions indicating actual and potential diversion of funds from USL and its Indian and overseas subsidiaries to, in most cases, entities that appeared to be affiliated or associated with Dr Mallya. All amounts identified in the Additional Inquiry have been provided for or expensed in the financial statements of USL or its subsidiaries in the respective prior periods. USL has filed recovery suits against relevant parities identified pursuant to the Additional Inquiry. Further, at this stage, it is not possible for the management of USL to estimate the financial impact on USL, if any, arising out of potential non-compliance with applicable laws in relation to such fund diversions. (d) Other matters in relation to USL In respect of the Watson backstop guarantee arrangements, the Securities and Exchange Board of India (SEBI) issued a notice to Diageo on 16 June 2016 that if there is any net liability incurred by Diageo (after any recovery under relevant security or other arrangements, which matters remain pending) on account of the Watson backstop guarantee, such liability, if any, would be considered to be part of the price paid for the acquisition of USL shares under the SPA which formed part of the Original USL Transaction and that, in that case, additional equivalent payments would be required to be made to those shareholders (representing 0.04% of the shares in USL) who tendered in the open offer made as part of the Original USL Transaction. Diageo believes that the Watson backstop guarantee arrangements were not part of the price paid or agreed to be paid for any USL shares under the Original USL Transaction and that therefore SEBI's decision was not consistent with applicable law, and Diageo appealed against it before the Securities Appellate Tribunal, Mumbai (SAT). On 1 November 2017, SAT issued an order in respect of Diageo’s appeal in which, amongst other things, it observed that the relevant officer at SEBI had neither considered Diageo’s earlier reply nor provided Diageo with an opportunity to be heard, and accordingly directed SEBI to pass a fresh order after giving Diageo an opportunity to be heard. Following SAT’s order, Diageo made its further submissions in the matter, including at a personal hearing before a Deputy General Manager of SEBI. On 26 June 2019, SEBI issued an order reiterating the directions contained in its previous notice dated 16 June 2016. As with the previous SEBI notice, Diageo believes that SEBI's latest order is not consistent with applicable law and has filed another appeal before the SAT against the order. Diageo's appeal is currently pending. Diageo is unable to assess if the notices or enquiries referred to above will result in enforcement action or, if this were to transpire, to quantify meaningfully the possible range of loss, if any, to which any such action might give rise to if determined against Diageo or USL. (e) USL’s dispute with IDBI Bank Limited Prior to the acquisition by Diageo of a controlling interest in USL, USL had prepaid a term loan of INR 6,280 million (£63 million) taken through IDBI Bank Limited (IDBI), an Indian bank, which was secured on certain fixed assets and brands of USL, as well as by a pledge of certain shares in USL held by the USL Benefit Trust (of which USL is the sole beneficiary). The maturity date of the loan was 31 March 2015. IDBI disputed the prepayment, following which USL filed a writ petition in November 2013 before the High Court of Karnataka (the High Court) challenging the bank’s actions. Following the original maturity date of the loan, USL received notices from IDBI seeking to recall the loan, demanding a further sum of INR 459 million (£5 million) on account of the outstanding principal, accrued interest and other amounts, and also threatening to enforce the security in the event that USL did not make these further payments. Pursuant to an application filed by USL before the High Court in the writ proceedings, the High Court directed that, subject to USL depositing such further amount with the bank (which amount was duly deposited by USL), the bank should hold the amount in a suspense account and not deal with any of the secured assets including the shares until disposal of the original writ petition filed by USL before the High Court. On 27 June 2019, a single judge bench of the High Court issued an order dismissing the writ petition filed by USL, amongst other things, on the basis that the matter involved an issue of breach of contract by USL and was therefore not maintainable in exercise of the court’s writ jurisdiction. USL filed an appeal against this order before a division bench of the High Court, which on 30 July 2019 issued an interim order directing the bank to not deal with any of the secured assets until the next date of hearing. On 13 January 2020, the division bench of the High Court admitted the writ appeal and extended the interim stay. This appeal is currently pending. Based on the assessment of USL’s management supported by external legal opinions, USL continues to believe that it has a strong case on the merits and therefore continues to believe that the secured assets will be released to USL and the aforesaid amount of INR 459 million (£5 million) remains recoverable from IDBI. (f) Tax The international tax environment has seen increased scrutiny and rapid change over recent years bringing with it greater uncertainty for multinationals. Against this backdrop, Diageo has been monitoring developments and continues to engage transparently with the tax authorities in the countries where Diageo operates to ensure that the group manages its arrangements on a sustainable basis. The group operates in a large number of markets with complex tax and legislative regimes that are open to subjective interpretation. In the context of these operations, it is possible that tax exposures which have not yet materialised (including those which could arise as a result of tax assessments) may result in losses to the group. In the circumstances where tax authorities have raised assessments, challenging interpretations which may lead to a possible material outflow, these have been included as contingent liabilities. Where the potential tax exposures are known to us and have not been assessed, the group considers disclosure of such matters taking into account their size and nature, relevant regulatory requirements and potential prejudice of the future resolution or assessment thereof. Diageo has a large number of ongoing tax cases in Brazil and India. Since assessing an accurate value of contingent liabilities in these markets requires a high degree of judgement, contingent liabilities are disclosed on the basis of the current known possible exposure from tax assessment values. While not all of these cases are individually significant, the current aggregate known possible exposure from tax assessment values is up to approximately £568 million for Brazil and up to approximately £131 million for India. The group believes that the likelihood that the tax authorities will ultimately prevail is lower than probable but higher than remote. Due to the fiscal environment in Brazil and in India, the possibility of further tax assessments related to the same matters cannot be ruled out and the judicial processes may take extended periods to conclude. Based on its current assessment, Diageo believes that no provision is required in respect of these issues. Payments were made under protest in India in respect of the periods 1 April 2006 to 31 March 2019 in relation to tax assessments where the risk is considered to be remote or possible. These payments have to be made in order to be able to challenge the assessments and as such have been recognised as a receivable in the group's balance sheet. The total amount of payments under protest recognised as a receivable as at 31 December 2022 is £117 million (corporate tax payments of £105 million and indirect tax payments of £12 million). (g) Information request In 2021, Diageo received an information request from the US Securities and Exchange Commission relating to Diageo’s business operations in certain markets and to its policies, procedures and compliance environment. Diageo is responding to this information request but is currently unable to assess whether the inquiry will evolve into any enforcement action or, if this were to transpire, to quantify meaningfully the possible loss or range of loss, if any, to which any such action might give rise. (h) Other The group has extensive international operations and routinely makes judgements on a range of legal, customs and tax matters which are incidental to the group's operations. Some of these judgements are or may become the subject of challenges and involve proceedings, the outcome of which cannot be foreseen. In particular, the group is currently a defendant in various customs proceedings that challenge the declared customs value of products imported by certain Diageo companies. Diageo continues to defend its position vigorously in these proceedings. Save as disclosed above, neither Diageo, nor any member of the Diageo group, is or has been engaged in, nor (so far as Diageo is aware) is there pending or threatened by or against it, any legal or arbitration proceedings which may have a significant effect on the financial position of the Diageo group. |
Related party transactions
Related party transactions | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of transactions between related parties [abstract] | |
Related party transactions | Related party transactions The group’s significant related parties are its associates, joint ventures, key management personnel and post employment benefit plans. In October 2022 Diageo plc provided an interim credit facility of £1.0 billion to Diageo Pension Trust Limited, split into two separate agreements of £150 million for the Diageo Lifestyle Plan and £850 million for the Diageo Pension Scheme, to support temporary liquidity challenges until 29 December 2022. Subsequently, the Diageo Pension Scheme agreement was extended to 29 June 2023. At 31 December 2022, the outstanding balance due from the scheme under the credit facility was £nil. The movements in the credit facility are included in movements in loans and other investments on the consolidated statement of cash flows.There were no transactions with related parties during the six months ended 31 December 2022 on terms other than those that prevail in arm’s length transactions. |
Post balance sheet events
Post balance sheet events | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of non-adjusting events after reporting period [abstract] | |
Post balance sheet events | Post balance sheet eventsOn 17 January 2023, Diageo announced that it had reached an agreement to acquire Don Papa Rum, a super-premium dark rum from the Philippines. The upfront consideration is €260 million (£231 million) with further potential consideration of up to €178 million (£158 million) through to 2028 subject to performance, reflecting the brand’s expected growth potential. |
Basis of preparation (Policies)
Basis of preparation (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Basis Of Preparation [Abstract] | |
Basis of preparation | These unaudited condensed consolidated interim financial statements have been prepared in accordance with UK adopted IAS 34 ‘Interim Financial Reporting’, IAS 34 ‘Interim Financial Reporting’ as issued by the International Accounting Standards Board (‘IASB’), IAS 34 ‘Interim Financial Reporting’ as adopted by the EU and The Disclosure Guidance and Transparency Rules sourcebook of the UK’s Financial Conduct Authority. These financial statements should be read in conjunction with the company’s published consolidated financial statements for the year ended 30 June 2022, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted by the UK, IFRSs as adopted by the EU and IFRSs as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. IFRS as adopted by the UK and by the EU differs in certain respects from IFRS as issued by the IASB, but the differences have no impact on the group’s consolidated financial statements for the periods presented. The consolidated financial statements are prepared on a going concern basis under the historical cost convention, unless stated otherwise. In preparing these condensed consolidated interim financial statements, the significant judgements made by management when applying the group’s accounting policies and the significant areas where estimates were required were the same as those that applied to the consolidated financial statements for the year ended 30 June 2022, with the exception of changes in estimates disclosed in note 3 Exceptional items and note 13 Contingent liabilities and legal proceedings. These condensed consolidated interim financial statements were approved for issue on 25 January 2023. The financial statements for Diageo plc for the year ending 30 June 2023 will be prepared in accordance with IFRS as adopted by the UK, IFRSs as adopted by the EU and IFRSs, as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee. Going concern Management prepared cash flow forecasts which were also sensitised to reflect severe but plausible downside scenarios taking into consideration the group's principal risks. In the base case scenario, management included assumptions for mid-single digit net sales growth, operating margin improvement and global TBA market share growth. In light of the ongoing geopolitical volatility, the base case outlook and plausible downside scenarios incorporated considerations for a prolonged global recession, supply chain disruptions, higher inflation and further geopolitical deterioration. Even under these scenarios, the group’s cash position is still expected to remain strong, as the group's liquidity was protected by issuing $2,000 million of fixed rate dollar denominated bonds in the six months ended 31 December 2022. Mitigating actions, should they be required, are all within management’s control and could include reductions in discretionary spending such as acquisitions and capital expenditure, as well as a temporary suspension of the share buyback programme and dividend payments in the next 12 months, or drawdowns on committed facilities. Having considered the outcome of these assessments, the Directors are comfortable that the company is a going concern for at least 12 months from the date of signing the group's condensed consolidated interim financial statements. |
New accounting standards and interpretations | New accounting standards and interpretations The following amendment to the accounting standards, issued by the IASB and endorsed by the UK and EU, was adopted by the group from 1 July 2022 with no impact on the group’s consolidated results, financial position or disclosures: – Amendments to IFRS 3 Updating a Reference to the Conceptual Framework – Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use |
Expected impact of initial application of new standards or interpretations that have not been adopted by the group | The following standard issued by the IASB has been endorsed by the UK and EU and has not been adopted by the group: – IFRS 17 – Insurance contracts (effective from the year ending 30 June 2024) is ultimately intended to replace IFRS 4. Based on a preliminary assessment, the group believes that the adoption of IFRS 17 will not have a significant impact on its consolidated results or financial position. |
Segmental information (Tables)
Segmental information (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of operating segments [abstract] | |
Schedule of segmental information | (a) Segmental information for the consolidated income statement North America Europe Asia Latin America and Caribbean Africa SC&P Eliminate Total Corporate Total Six months ended 31 December 2022 £ million £ million £ million £ million £ million £ million £ million £ million £ million £ million Sales 3,847 3,427 3,170 1,394 1,337 1,330 (1,330) 13,175 44 13,219 Net sales At budgeted exchange rates (1) 3,092 1,815 1,724 995 916 1,318 (1,289) 8,571 44 8,615 Acquisitions and disposals 13 7 35 3 — — — 58 — 58 SC&P allocation 4 18 3 3 1 (29) — — — — Retranslation to actual exchange rates 408 54 75 99 26 41 (41) 662 — 662 Hyperinflation — 85 — — — — — 85 — 85 Net sales 3,517 1,979 1,837 1,100 943 1,330 (1,330) 9,376 44 9,420 Operating profit/(loss) At budgeted exchange rates (1) 1,260 630 557 407 212 39 — 3,105 (158) 2,947 Acquisitions and disposals (6) 2 5 — — — — 1 — 1 SC&P allocation 9 22 2 5 1 (39) — — — — Fair value remeasurements 14 (1) — — — — — 13 — 13 Retranslation to actual exchange rates 142 21 23 59 (33) — — 212 1 213 Hyperinflation — 20 — — — — — 20 — 20 Operating profit/(loss) before exceptional items 1,419 694 587 471 180 — — 3,351 (157) 3,194 Exceptional operating items (26) 14 (21) — — — — (33) — (33) Operating profit/(loss) 1,393 708 566 471 180 — — 3,318 (157) 3,161 Non-operating items 16 Net finance charges (292) Share of after tax results of associates and joint ventures 172 Profit before taxation 3,057 North America Europe Asia Latin America and Caribbean Africa SC&P Eliminate Total Corporate Total Six months ended 31 December 2021 £ million £ million £ million £ million £ million £ million £ million £ million £ million £ million Sales 3,257 3,178 2,999 1,052 1,244 972 (972) 11,730 23 11,753 Net sales At budgeted exchange rates (1) 2,959 1,782 1,544 822 888 1,027 (979) 8,043 23 8,066 Acquisitions and disposals 18 3 — — — — — 21 — 21 SC&P allocation 6 29 5 6 2 (48) — — — — Retranslation to actual exchange rates (19) (62) (18) (9) (22) (7) 7 (130) — (130) Net sales 2,964 1,752 1,531 819 868 972 (972) 7,934 23 7,957 Operating profit/(loss) At budgeted exchange rates (1) 1,288 647 454 333 192 (8) — 2,906 (132) 2,774 Acquisitions and disposals (16) (1) — — — — — (17) — (17) SC&P allocation 10 (23) (3) 9 (1) 8 — — — — Fair value remeasurements 5 21 — — — — — 26 — 26 Retranslation to actual exchange rates 8 (31) — (9) (15) — — (47) 7 (40) Operating profit/(loss) before exceptional items 1,295 613 451 333 176 — — 2,868 (125) 2,743 Exceptional items — — — — — — — — — — Operating profit/(loss) 1,295 613 451 333 176 — — 2,868 (125) 2,743 Non-operating items (31) Net finance charges (180) Share of after tax results of associates and joint ventures 190 Profit before taxation 2,722 (1) These items represent the IFRS 8 performance measures for the geographical and SC&P segments. (i) The net sales figures for SC&P reported to the Executive Committee primarily comprise inter-segment sales and these are eliminated in a separate column in the above segmental analysis. Apart from sales by the SC&P segment to the geographical segments, inter-segment sales are not material. (ii) Approximately 42% of calendar year net sales occurred in the last four months of calendar year 2022. |
Schedule Of Category And Geographical Analysis | (b) Category and geographical analysis Category analysis Geographical analysis Spirits Beer Ready to drink Other Total United India Great Rest of Total Six months ended 31 December 2022 Sales (1) 10,925 1,702 478 114 13,219 3,617 1,599 1,163 6,840 13,219 Six months ended 31 December 2021 Sales (1) 9,680 1,520 418 135 11,753 3,072 1,704 1,204 5,773 11,753 |
Exceptional items (Tables)
Exceptional items (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Exceptional Items [Abstract] | |
Schedule of exceptional items | Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Exceptional operating items Supply chain agility programme (a) (47) — Winding down Russian operations (b) 14 — (33) — Non-operating items Sale of businesses and brands Archers brand (c) 20 — USL Popular brands (d) 4 — United National Breweries (e) 2 2 Guinness Cameroon S.A. (f) (2) — Meta Abo Brewery (g) — (33) Step acquisition - Mr Black (h) (8) — 16 (31) Exceptional items before taxation (17) (31) Items included in taxation (note 5) Tax on exceptional operating items 12 — Tax on exceptional non-operating items 1 — Exceptional taxation 57 — 70 — Total exceptional items 53 (31) Attributable to: Equity shareholders of the parent company 52 (31) Non-controlling interests 1 — Total exceptional items 53 (31) |
Finance income and charges (Tab
Finance income and charges (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Analysis of income and expense [abstract] | |
Schedule of finance income and charges | Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Interest income 86 61 Fair value gain on financial instruments 142 58 Total interest income 228 119 Interest charge on bank loans, bonds and overdrafts (235) (181) Interest charge on leases (8) (5) Fair value loss on financial instruments (142) (59) Interest charge on other borrowings (125) (36) Total interest charges (510) (281) Net interest charges (282) (162) Net finance income in respect of post employment plans in surplus 29 10 Hyperinflation adjustment in respect of Venezuela (a) — 1 Total other finance income 29 11 Net finance charge in respect of post employment plans in deficit (7) (5) Foreign exchange revaluation of monetary items in respect of Lebanon (a) — (2) Unwinding of discounts (5) (6) Interest charge in respect of direct and indirect tax (17) (8) Change in financial liability (Level 3) — (7) Hyperinflation adjustment in respect of Turkey (a) (6) — Guarantee fees (1) — Other finance charges (3) (1) Total other finance charges (39) (29) Net other finance charges (10) (18) |
Schedule of the contribution of the Group's Venezuelan operations | The following table presents the contribution of the group’s Venezuelan operations to the consolidated income statement, cash flow statement and net assets for the six months ended 31 December 2022 and 31 December 2021 and with the amounts that would have resulted if the official reference exchange rate had been applied: Six months ended 31 December 2022 Six months ended 31 December 2021 At estimated exchange rate At official reference exchange rate At estimated At official reference 1,540 VES/£ 21 VES/£ 593 VES/£ 6 VES/£ £ million £ million £ million £ million Net sales — 7 — 8 Operating profit — 2 — 2 Other finance income - hyperinflation adjustment — — 1 120 Net cash outflow from operating activities — (1) — (3) Net assets 20 1,467 37 3,501 Sterling amounts presented at the official reference exchange rate are results of simple mathematical conversion. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Inventories [Abstract] | |
Schedule of inventories | 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Raw materials and consumables 598 489 401 Work in progress 166 86 68 Maturing inventories 5,477 5,229 4,801 Finished goods and goods for resale 1,311 1,290 965 7,552 7,094 6,235 |
Net borrowings (Tables)
Net borrowings (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Borrowings [abstract] | |
Schedule of net borrowings | 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Borrowings due within one year and bank overdrafts (2,305) (1,522) (1,184) Borrowings due after one year (15,304) (14,498) (12,693) Fair value of foreign currency forwards and swaps 534 356 122 Fair value of interest rate hedging instruments (422) (283) 4 Lease liabilities (438) (475) (360) (17,935) (16,422) (14,111) Cash and cash equivalents 2,766 2,285 1,780 (15,169) (14,137) (12,331) |
Reconciliation of movement in_2
Reconciliation of movement in net borrowings (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Borrowings [abstract] | |
Schedule of movement in net borrowings | Six months ended 31 December 2022 Six months ended 31 December 2021 £ million £ million Net increase/(decrease) in cash and cash equivalents before exchange 589 (888) Net (increase)/decrease in bonds and other borrowings (1) (1,508) 729 Net increase in net borrowings from cash flows (919) (159) Exchange differences on net borrowings (50) (31) Other non-cash items (2) (63) (32) Net borrowings at beginning of the period (14,137) (12,109) Net borrowings at end of the period (15,169) (12,331) (1) In the six months ended 31 December 2022, net increase in bonds and other borrowings excludes £2 million cash outflow in respect of derivatives designated in forward point hedges (2021 – £2 million). (2) In the six months ended 31 December 2022, other non-cash items were principally in respect of the reclassification of cash and cash equivalents in Guinness Cameroon S.A. to assets and liabilities held for sale. In the six months ended 31 December 2021, other non-cash items were principally in respect of additional leases entered into during the period. |
Financial instruments (Tables)
Financial instruments (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure of detailed information about financial instruments [abstract] | |
Schedule of financial assets and liabilities measured at fair value | The group’s financial assets and liabilities measured at fair value are categorised as follows: 31 December 2022 30 June 2022 31 December 2021 £ million £ million £ million Derivative assets 682 480 381 Derivative liabilities (552) (456) (237) Valuation techniques based on observable market input (Level 2) 130 24 144 Financial assets - other 172 184 167 Financial liabilities - other (575) (587) (483) Valuation techniques based on unobservable market input (Level 3) (403) (403) (316) |
Schedule of movements in level 3 instruments | The movements in level 3 instruments, measured on a recurring basis, are as follows: Zacapa Contingent consideration recognised on acquisition of businesses (1) Zacapa Contingent consideration recognised on acquisition of businesses (1) Six months ended 31 December 2022 Six months ended 31 December 2022 Six months ended 31 December 2021 Six months ended 31 December 2021 £ million £ million £ million £ million At the beginning of the period (216) (371) (149) (429) Net gains/(losses) included in the income statement — 12 (7) 18 Net (losses)/gains included in exchange in other comprehensive income (2) (2) (4) (9) Net losses included in retained earnings (4) — (12) — Acquisitions — (5) — — Settlement of liabilities 5 8 3 106 At the end of the period (217) (358) (169) (314) (1) Included in the balance at 31 December 2022 is £145 million in respect of the acquisition of Aviation Gin and Davos Brands (2021 – £163 million), £60 million in respect of the acquisition of 21Seeds (2021 – £nil), and £57 million in respect of the acquisition of Lone River Ranch Water (2021 – £51 million). |
Dividends and other reserves (T
Dividends and other reserves (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Share Capital, Reserves And Other Equity Interest [Abstract] | |
Schedule of dividends | Six months ended 31 December 2022 Six months ended 31 December 2021 Amounts recognised as distributions to equity shareholders £ million £ million Final dividend for the year ended 30 June 2022 of 46.82 pence per share (2021 - 44.59 pence) 1,066 1,040 |
Acquisition of businesses (Tabl
Acquisition of businesses (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Disclosure of acquisition and sale of businesses and purchase of non controlling interests | Fair value of assets and liabilities acquired and cash consideration paid in respect of acquisition of subsidiaries in the six months ended 3 1 December 2022 were as follows: Acquisitions £ million Brands 45 Property, plant and equipment 24 Inventories 24 Other working capital 1 Deferred tax (3) Cash 1 Fair value of assets and liabilities 92 Goodwill arising on acquisition 22 Step acquisition (10) Consideration payable 104 Satisfied by: Cash consideration paid (96) Contingent consideration payable (5) Deferred consideration payable (3) (104) |
Schedule of cash consideration paid in respect of acquisition of businesses and purchase of shares of non-controlling interests | Cash consideration paid in respect of the acquisition of businesses in the six months ended 31 December 2022 were as follows: Consideration £ million Acquisitions in the year Subsidiaries Cash consideration paid (96) Cash acquired 1 Investments in associates Cash consideration paid (3) Prior year acquisitions Subsidiaries Contingent consideration paid (8) Other consideration (10) Investments in associates Capital injection (28) Net cash outflow on acquisition of businesses (144) |
Assets and liabilities held f_2
Assets and liabilities held for sale (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Assets And Liabilities Held For Sale [Abstract] | |
Schedule of assets and liabilities held for sale | 31 December 2022 30 June 2022 £ million £ million Intangible assets — 165 Property, plant and equipment 103 12 Other investments — 1 Inventories 19 21 Trade and other receivables 13 23 Cash 47 — Assets held for sale 182 222 Trade and other payables (61) (18) Corporation tax (2) (6) Deferred tax (5) (35) Provisions (2) — Leases (2) (2) Post employment benefit liabilities (4) — Liabilities held for sale (76) (61) Total 106 161 |
Basis of preparation - Narrativ
Basis of preparation - Narrative (Details) $ in Millions | 6 Months Ended | ||
Dec. 31, 2022 USD ($) € / £ $ / £ | Dec. 31, 2021 € / £ $ / £ | Jun. 30, 2022 € / £ $ / £ | |
Euro | |||
Disclosure of foreign exchange rates [Line Items] | |||
Weighted average exchange rate used in the translation of income statements | € / £ | 1.16 | 1.17 | |
Exchange rates used to translate assets and liabilities | € / £ | 1.13 | 1.19 | 1.16 |
US Dollar | |||
Disclosure of foreign exchange rates [Line Items] | |||
Weighted average exchange rate used in the translation of income statements | $ / £ | 1.18 | 1.36 | |
Exchange rates used to translate assets and liabilities | $ / £ | 1.2 | 1.35 | 1.21 |
US Dollar | US Shelf Programme | |||
Disclosure of foreign exchange rates [Line Items] | |||
Notional amount bonds | $ | $ 2,000 |
Segmental information - Consoli
Segmental information - Consolidated income statement (Details) - GBP (£) £ in Millions | 4 Months Ended | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of operating segments [line items] | |||
Sales | £ 13,219 | £ 11,753 | |
Net sales | |||
At budgeted exchange rates(1) | 8,615 | 8,066 | |
Acquisitions and disposals | 58 | 21 | |
SC&P allocation | 0 | 0 | |
Retranslation to actual exchange rates | 662 | (130) | |
Hyperinflation | 85 | ||
Net sales | 9,420 | 7,957 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 2,947 | 2,774 | |
Acquisitions and disposals | 1 | (17) | |
SC&P allocation | 0 | 0 | |
Fair value remeasurements | 13 | 26 | |
Retranslation to actual exchange rates | 213 | (40) | |
Hyperinflation | 20 | ||
Operating profit/(loss) before exceptional items | 3,194 | 2,743 | |
Exceptional operating items | (33) | 0 | |
Operating profit/(loss) | 3,161 | 2,743 | |
Non-operating items | 16 | (31) | |
Net finance charges | (292) | (180) | |
Share of after tax results of associates and joint ventures | 172 | 190 | |
Profit before taxation | 3,057 | 2,722 | |
Percentage of calendar year net sales that occur in the last four months | 42% | ||
Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 13,175 | 11,730 | |
Net sales | |||
At budgeted exchange rates(1) | 8,571 | 8,043 | |
Acquisitions and disposals | 58 | 21 | |
SC&P allocation | 0 | 0 | |
Retranslation to actual exchange rates | 662 | (130) | |
Hyperinflation | 85 | ||
Net sales | 9,376 | 7,934 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 3,105 | 2,906 | |
Acquisitions and disposals | 1 | (17) | |
SC&P allocation | 0 | 0 | |
Fair value remeasurements | 13 | 26 | |
Retranslation to actual exchange rates | 212 | (47) | |
Hyperinflation | 20 | ||
Operating profit/(loss) before exceptional items | 3,351 | 2,868 | |
Exceptional operating items | (33) | 0 | |
Operating profit/(loss) | 3,318 | 2,868 | |
Eliminate intersegment sales | |||
Disclosure of operating segments [line items] | |||
Sales | (1,330) | (972) | |
Net sales | |||
At budgeted exchange rates(1) | (1,289) | (979) | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 0 | 0 | |
Retranslation to actual exchange rates | (41) | 7 | |
Hyperinflation | 0 | ||
Net sales | (1,330) | (972) | |
Corporate and other | |||
Disclosure of operating segments [line items] | |||
Sales | 44 | 23 | |
Net sales | |||
At budgeted exchange rates(1) | 44 | 23 | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 0 | 0 | |
Retranslation to actual exchange rates | 0 | 0 | |
Hyperinflation | 0 | ||
Net sales | 44 | 23 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | (158) | (132) | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 0 | 0 | |
Fair value remeasurements | 0 | 0 | |
Retranslation to actual exchange rates | 1 | 7 | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | (157) | (125) | |
Exceptional operating items | 0 | 0 | |
Operating profit/(loss) | (157) | (125) | |
North America | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 3,847 | 3,257 | |
Net sales | |||
At budgeted exchange rates(1) | 3,092 | 2,959 | |
Acquisitions and disposals | 13 | 18 | |
SC&P allocation | 4 | 6 | |
Retranslation to actual exchange rates | 408 | (19) | |
Hyperinflation | 0 | ||
Net sales | 3,517 | 2,964 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 1,260 | 1,288 | |
Acquisitions and disposals | (6) | (16) | |
SC&P allocation | 9 | 10 | |
Fair value remeasurements | 14 | 5 | |
Retranslation to actual exchange rates | 142 | 8 | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | 1,419 | 1,295 | |
Exceptional operating items | (26) | 0 | |
Operating profit/(loss) | 1,393 | 1,295 | |
Europe | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 3,427 | 3,178 | |
Net sales | |||
At budgeted exchange rates(1) | 1,815 | 1,782 | |
Acquisitions and disposals | 7 | 3 | |
SC&P allocation | 18 | 29 | |
Retranslation to actual exchange rates | 54 | (62) | |
Hyperinflation | 85 | ||
Net sales | 1,979 | 1,752 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 630 | 647 | |
Acquisitions and disposals | 2 | (1) | |
SC&P allocation | 22 | (23) | |
Fair value remeasurements | (1) | 21 | |
Retranslation to actual exchange rates | 21 | (31) | |
Hyperinflation | 20 | ||
Operating profit/(loss) before exceptional items | 694 | 613 | |
Exceptional operating items | 14 | 0 | |
Operating profit/(loss) | 708 | 613 | |
Asia Pacific | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 3,170 | 2,999 | |
Net sales | |||
At budgeted exchange rates(1) | 1,724 | 1,544 | |
Acquisitions and disposals | 35 | 0 | |
SC&P allocation | 3 | 5 | |
Retranslation to actual exchange rates | 75 | (18) | |
Hyperinflation | 0 | ||
Net sales | 1,837 | 1,531 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 557 | 454 | |
Acquisitions and disposals | 5 | 0 | |
SC&P allocation | 2 | (3) | |
Fair value remeasurements | 0 | 0 | |
Retranslation to actual exchange rates | 23 | 0 | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | 587 | 451 | |
Exceptional operating items | (21) | 0 | |
Operating profit/(loss) | 566 | 451 | |
Latin America and Caribbean | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 1,394 | 1,052 | |
Net sales | |||
At budgeted exchange rates(1) | 995 | 822 | |
Acquisitions and disposals | 3 | 0 | |
SC&P allocation | 3 | 6 | |
Retranslation to actual exchange rates | 99 | (9) | |
Hyperinflation | 0 | ||
Net sales | 1,100 | 819 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 407 | 333 | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 5 | 9 | |
Fair value remeasurements | 0 | 0 | |
Retranslation to actual exchange rates | 59 | (9) | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | 471 | 333 | |
Exceptional operating items | 0 | 0 | |
Operating profit/(loss) | 471 | 333 | |
Africa | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 1,337 | 1,244 | |
Net sales | |||
At budgeted exchange rates(1) | 916 | 888 | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 1 | 2 | |
Retranslation to actual exchange rates | 26 | (22) | |
Hyperinflation | 0 | ||
Net sales | 943 | 868 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 212 | 192 | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | 1 | (1) | |
Fair value remeasurements | 0 | 0 | |
Retranslation to actual exchange rates | (33) | (15) | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | 180 | 176 | |
Exceptional operating items | 0 | 0 | |
Operating profit/(loss) | 180 | 176 | |
SC&P | Operating segments | |||
Disclosure of operating segments [line items] | |||
Sales | 1,330 | 972 | |
Net sales | |||
At budgeted exchange rates(1) | 1,318 | 1,027 | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | (29) | (48) | |
Retranslation to actual exchange rates | 41 | (7) | |
Hyperinflation | 0 | ||
Net sales | 1,330 | 972 | |
Operating profit/(loss) | |||
At budgeted exchange rates(1) | 39 | (8) | |
Acquisitions and disposals | 0 | 0 | |
SC&P allocation | (39) | 8 | |
Fair value remeasurements | 0 | 0 | |
Retranslation to actual exchange rates | 0 | 0 | |
Hyperinflation | 0 | ||
Operating profit/(loss) before exceptional items | 0 | 0 | |
Exceptional operating items | 0 | 0 | |
Operating profit/(loss) | £ 0 | £ 0 |
Segmental information - Categor
Segmental information - Category analysis (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of products and services [line items] | ||
Sales | £ 13,219 | £ 11,753 |
Spirits | ||
Disclosure of products and services [line items] | ||
Sales | 10,925 | 9,680 |
Beer | ||
Disclosure of products and services [line items] | ||
Sales | 1,702 | 1,520 |
Ready To Drink | ||
Disclosure of products and services [line items] | ||
Sales | 478 | 418 |
Other | ||
Disclosure of products and services [line items] | ||
Sales | £ 114 | £ 135 |
Segmental information - Geograp
Segmental information - Geographical analysis (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of geographical areas [line items] | ||
Sales | £ 13,219 | £ 11,753 |
United States | ||
Disclosure of geographical areas [line items] | ||
Sales | 3,617 | 3,072 |
India | ||
Disclosure of geographical areas [line items] | ||
Sales | 1,599 | 1,704 |
Great Britain | ||
Disclosure of geographical areas [line items] | ||
Sales | 1,163 | 1,204 |
Rest of World | ||
Disclosure of geographical areas [line items] | ||
Sales | £ 6,840 | £ 5,773 |
Exceptional items (Details)
Exceptional items (Details) £ in Millions, R in Millions | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 GBP (£) | Dec. 31, 2022 GBP (£) | Dec. 31, 2022 ZAR (R) | Dec. 31, 2021 GBP (£) | Jun. 30, 2022 GBP (£) | |
Disclosure Of Exceptional Items [Line Items] | |||||
Exceptional operating items | £ (1,058) | £ (908) | |||
Non-operating items | 16 | (31) | |||
Exceptional items before taxation | 3,057 | 2,722 | |||
Items included in taxation | (650) | (634) | |||
Profit for the period | 2,407 | 2,088 | |||
Attributable to: | |||||
Equity shareholders of the parent company | 2,295 | 1,965 | |||
Non-controlling interests | 112 | 123 | |||
Profit for the period | 2,407 | 2,088 | |||
Decrease in working capital | (1,365) | (510) | |||
Sales | 13,219 | 11,753 | |||
Operating profit | 3,161 | 2,743 | |||
USL Popular brand | |||||
Attributable to: | |||||
Consideration received | £ 87 | ||||
Total exceptional items | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Exceptional operating items | (33) | 0 | |||
Non-operating items | 16 | (31) | |||
Exceptional items before taxation | (17) | (31) | |||
Items included in taxation | 70 | 0 | |||
Profit for the period | 53 | (31) | |||
Attributable to: | |||||
Equity shareholders of the parent company | 52 | (31) | |||
Non-controlling interests | 1 | 0 | |||
Profit for the period | 53 | (31) | |||
Supply chain agility programme | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Other expenses | £ (47) | 0 | |||
Attributable to: | |||||
Spanning programme, period | 5 years | 5 years | |||
Supply chain agility programme | Maximum | |||||
Attributable to: | |||||
Implementation cost, total | £ 500 | ||||
Winding down Russian operations | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Other expenses | £ (50) | ||||
Other expense released | 14 | 0 | |||
Archers brand | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | 20 | 0 | |||
USL Popular brand | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | 4 | 0 | |||
USL Popular brand | USL Popular brand | |||||
Attributable to: | |||||
Non-controlling interests | 9 | ||||
Decrease in working capital | 31 | ||||
Decrease intangible assets | 22 | ||||
Goodwill derecognized | £ 16 | ||||
Sales | 225 | ||||
Operating profit | 5 | ||||
Disposal-related costs | (4) | ||||
United National Breweries | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | 2 | R 46 | 2 | ||
Guinness Cameroon S.A. | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | (2) | 0 | |||
Meta Abo Brewery | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | 0 | (33) | |||
Step acquisition - Mr Black | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Non-operating items | (8) | 0 | |||
Tax on exceptional operating items | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Items included in taxation | 12 | 0 | |||
Tax on exceptional non-operating items | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Items included in taxation | 1 | 0 | |||
Exceptional taxation | |||||
Disclosure Of Exceptional Items [Line Items] | |||||
Items included in taxation | £ 57 | £ 0 |
Finance income and charges - Sc
Finance income and charges - Schedule of finance income and charges (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure Of Finance Income And Charges [Line Items] | ||
Interest income | £ 86 | £ 61 |
Fair value gain on financial instruments | 142 | 58 |
Total interest income | 228 | 119 |
Interest charge on bank loans, bonds and overdrafts | (235) | (181) |
Interest charge on leases | (8) | (5) |
Fair value loss on financial instruments | (142) | (59) |
Interest charge on other borrowings | (125) | (36) |
Total interest charges | (510) | (281) |
Net interest charges | (282) | (162) |
Net finance income in respect of post employment plans in surplus | 29 | 10 |
Total other finance income | 29 | 11 |
Net finance charge in respect of post employment plans in deficit | (7) | (5) |
Foreign exchange revaluation of monetary items in respect of Lebanon (a) | 0 | (2) |
Unwinding of discounts | (5) | (6) |
Interest charge in respect of direct and indirect tax | (17) | (8) |
Change in financial liability (Level 3) | 0 | (7) |
Guarantee fees | (1) | 0 |
Other finance charges | (3) | (1) |
Total other finance charges | (39) | (29) |
Net other finance charges | (10) | (18) |
Venezuela | ||
Disclosure Of Finance Income And Charges [Line Items] | ||
Hyperinflation adjustment in respect of Venezuela | 0 | 1 |
TURKEY | ||
Disclosure Of Finance Income And Charges [Line Items] | ||
Hyperinflation adjustment in respect of Venezuela | £ (6) | £ 0 |
Finance income and charges - Na
Finance income and charges - Narrative (Details) - Bs. / £ | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
TURKEY | ||
Disclosure of geographical areas [line items] | ||
Movement in Price Index in hyperinflationary economy | 15% | |
Venezuela | ||
Disclosure of geographical areas [line items] | ||
Movement in Price Index in hyperinflationary economy | 105% | 158% |
Venezuelan Bolivar Soberano | Venezuela | ||
Disclosure of geographical areas [line items] | ||
Closing foreign exchange rate | 1,540 | 593 |
Finance income and charges - Co
Finance income and charges - Contribution of the Group's Venezuelan operations (Details) £ in Millions | 6 Months Ended | ||
Dec. 31, 2022 GBP (£) Bs. / £ | Dec. 31, 2021 GBP (£) Bs. / £ | Jun. 30, 2022 GBP (£) | |
Disclosure of geographical areas [line items] | |||
Net sales | £ 9,420 | £ 7,957 | |
Operating profit | 3,161 | 2,743 | |
Net cash outflow from operating activities | 1,248 | 1,947 | |
Net assets | 9,866 | 9,331 | £ 9,514 |
Venezuela | |||
Disclosure of geographical areas [line items] | |||
Net sales | 0 | 0 | |
Operating profit | 0 | 0 | |
Other finance income - hyperinflation adjustment | 0 | 1 | |
Net cash outflow from operating activities | 0 | 0 | |
Net assets | 20 | 37 | |
Venezuela | Reported if in compliance with requirement of IFRS | |||
Disclosure of geographical areas [line items] | |||
Net sales | 7 | 8 | |
Operating profit | 2 | 2 | |
Other finance income - hyperinflation adjustment | 0 | 120 | |
Net cash outflow from operating activities | (1) | (3) | |
Net assets | £ 1,467 | £ 3,501 | |
Venezuelan Bolivar Soberano | Venezuela | |||
Disclosure of geographical areas [line items] | |||
Closing foreign exchange rate | Bs. / £ | 1,540 | 593 | |
Venezuelan Bolivar Soberano | Venezuela | Reported if in compliance with requirement of IFRS | |||
Disclosure of geographical areas [line items] | |||
Closing foreign exchange rate | Bs. / £ | 21 | 6 |
Taxation (Details)
Taxation (Details) - GBP (£) £ in Millions | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Disclosure of geographical areas [line items] | |||
Tax charge | £ 650 | £ 634 | |
Current tax assets | 166 | 151 | £ 149 |
Current tax liabilities | 266 | £ 380 | 252 |
Provision for tax uncertainties | £ 169 | £ 156 | |
The tax rate before exceptional items | 23.40% | 23% | |
US MAP | |||
Disclosure of geographical areas [line items] | |||
Tax charge | £ (57) | ||
Total exceptional items | |||
Disclosure of geographical areas [line items] | |||
Tax charge | (70) | £ 0 | |
Great Britain | |||
Disclosure of geographical areas [line items] | |||
Tax charge | 122 | 116 | |
Foreign | |||
Disclosure of geographical areas [line items] | |||
Tax charge | £ 528 | £ 518 |
Inventories (Details)
Inventories (Details) - GBP (£) £ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Inventories [Abstract] | |||
Raw materials and consumables | £ 598 | £ 489 | £ 401 |
Work in progress | 166 | 86 | 68 |
Maturing inventories | 5,477 | 5,229 | 4,801 |
Finished goods and goods for resale | 1,311 | 1,290 | 965 |
Inventories | £ 7,552 | £ 7,094 | £ 6,235 |
Net borrowings - Schedule of ne
Net borrowings - Schedule of net borrowings (Details) - GBP (£) £ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Borrowings [abstract] | ||||
Borrowings due within one year and bank overdrafts | £ (2,305) | £ (1,522) | £ (1,184) | |
Borrowings due after one year | (15,304) | (14,498) | (12,693) | |
Fair value of foreign currency forwards and swaps | 534 | 356 | 122 | |
Fair value of interest rate hedging instruments | (422) | (283) | 4 | |
Lease liabilities | (438) | (475) | (360) | |
Gross borrowings | (17,935) | (16,422) | (14,111) | |
Cash and cash equivalents | 2,766 | 2,285 | 1,780 | |
Net borrowings | £ (15,169) | £ (14,137) | £ (12,331) | £ (12,109) |
Reconciliation of movement in_3
Reconciliation of movement in net borrowings - Movement in net borrowings (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Borrowings [abstract] | ||
Net increase/(decrease) in cash and cash equivalents before exchange | £ 589 | £ (888) |
Net (increase)/decrease in bonds and other borrowings(1) | (1,508) | 729 |
Net increase in net borrowings from cash flows | (919) | (159) |
Exchange differences on net borrowings | (50) | (31) |
Other non-cash items | (63) | (32) |
Net borrowings at beginning of the period | (14,137) | (12,109) |
Net borrowings at end of the period | (15,169) | (12,331) |
Payments For Derivatives Designated In Forward Point Hedges | £ (2) | £ (2) |
Reconciliation of movement in_4
Reconciliation of movement in net borrowings - Narrative (Details) € in Millions, £ in Millions, $ in Millions | 6 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | Dec. 31, 2021 EUR (€) | Dec. 31, 2022 GBP (£) | |
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||||
Bonds issued | $ 2,000 | £ 1,788 | |||
Repayment of bonds | $ 300 | £ 254 | £ 769 | € 900 | |
Proportion of ownership interest in subsidiary | 100% | 100% | |||
Five Point Two Percentage Bonds Due Two Thousand Twenty Five | |||||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||||
Notional amount bonds | $ 500 | ||||
Borrowings, interest rate | 5.20% | 5.20% | |||
Five Point Three Percentage Bonds Due Two Thousand Twenty Seven | |||||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||||
Notional amount bonds | $ 750 | ||||
Borrowings, interest rate | 5.30% | 5.30% | |||
Five Point Five Percentage Bonds Due Two Thousand Thirty Three | |||||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||||
Notional amount bonds | $ 750 | ||||
Borrowings, interest rate | 5.50% | 5.50% |
Financial instruments - Narrati
Financial instruments - Narrative (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2024 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disclosure of detailed information about financial instruments [line items] | |||||
Financial liability including put option | £ 436 | £ 388 | £ 444 | ||
Fair value of gross borrowings | 17,609 | 16,020 | |||
Level 3 | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Contingent consideration included in other financial liabilities | 575 | 483 | 587 | ||
Increase (Decrease) in financial assets | (12) | 29 | |||
Level 1 | Fair value | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Fair value of gross borrowings | 16,716 | 15,628 | |||
Contingent consideration | Level 3 | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Contingent consideration included in other financial liabilities | £ 358 | £ 314 | 371 | £ 429 | |
Business combinations | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Contingent consideration payment period | 8 years | ||||
Business combinations | Contingent consideration | Undiscounted amount | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Contingent consideration included in other financial liabilities | £ 406 | ||||
Industrias Licoreras de Guatemala | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Equity stake held by external party | 50% | ||||
Industrias Licoreras de Guatemala | Level 3 | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Financial liability including put option | £ 217 | £ 216 | |||
Industrias Licoreras de Guatemala | Option exercised two years later | |||||
Disclosure of detailed information about financial instruments [line items] | |||||
Increase in fair value of liability | £ 47 |
Financial instruments - Schedul
Financial instruments - Schedule of financial assets and liabilities measured at fair value (Details) - GBP (£) £ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Valuation techniques based on observable market input (Level 2) | |||
Disclosure of detailed information about financial instruments [line items] | |||
Derivative assets | £ 682 | £ 480 | £ 381 |
Derivative liabilities | (552) | (456) | (237) |
Financial assets/(liabilities) | 130 | 24 | 144 |
Valuation techniques based on unobservable market input (Level 3) | |||
Disclosure of detailed information about financial instruments [line items] | |||
Financial assets/(liabilities) | (403) | (403) | (316) |
Financial assets - other | 172 | 184 | 167 |
Financial liabilities - other | £ (575) | £ (587) | £ (483) |
Financial instruments - Movemen
Financial instruments - Movements in level 3 instruments measured on a recurring basis (Details) - Level 3 - GBP (£) £ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disclosure of fair value measurement of liabilities [line items] | ||
At the beginning of the period | £ (587) | |
At the end of the period | (575) | £ (483) |
Zacapa financial liability | ||
Disclosure of fair value measurement of liabilities [line items] | ||
At the beginning of the period | (216) | (149) |
Net gains/(losses) included in the income statement | 0 | (7) |
Net (losses)/gains included in exchange in other comprehensive income | (2) | (4) |
Net losses included in retained earnings | (4) | (12) |
Acquisitions | 0 | 0 |
Settlement of liabilities | 5 | 3 |
At the end of the period | (217) | (169) |
Contingent consideration recognised on acquisition of businesses(1) | ||
Disclosure of fair value measurement of liabilities [line items] | ||
At the beginning of the period | (371) | (429) |
Net gains/(losses) included in the income statement | 12 | 18 |
Net (losses)/gains included in exchange in other comprehensive income | (2) | (9) |
Net losses included in retained earnings | 0 | 0 |
Acquisitions | (5) | 0 |
Settlement of liabilities | 8 | 106 |
At the end of the period | (358) | (314) |
Contingent consideration recognised on acquisition of businesses(1) | Aviation Gin and Davos Brands | ||
Disclosure of fair value measurement of liabilities [line items] | ||
At the end of the period | (145) | (163) |
Contingent consideration recognised on acquisition of businesses(1) | Lone River Ranch Water brand | ||
Disclosure of fair value measurement of liabilities [line items] | ||
At the end of the period | (57) | (51) |
Contingent consideration recognised on acquisition of businesses(1) | 21 Seed | ||
Disclosure of fair value measurement of liabilities [line items] | ||
At the end of the period | £ (60) | £ 0 |
Dividends and other reserves -
Dividends and other reserves - Schedule of dividends (Details) - GBP (£) £ / shares in Units, £ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share Capital, Reserves And Other Equity Interest [Abstract] | ||||
Final dividend for the year ended 30 June 2022 of 46.82 pence per share (2021 - 44.59 pence) | £ 1,066 | £ 1,040 | ||
Final dividend per share (in GBP per share) | £ 0.4682 | £ 0.4459 |
Dividends and other reserves _2
Dividends and other reserves - Narrative (Details) - GBP (£) £ / shares in Units, £ in Millions | 6 Months Ended | |||
Jan. 25, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | Jun. 30, 2022 | |
Disclosure of reserves within equity [line items] | ||||
Interim dividend per share (in GBP per share) | £ 0.2936 | |||
Other reserves | £ 1,551 | £ 2,193 | £ 2,174 | |
Capital redemption reserve | 3,206 | 3,224 | ||
Hedging reserve surplus | 61 | 96 | ||
Exchange reserve deficit | (1,716) | (1,127) | ||
Reserve of change in value of foreign currency basis spreads | £ 22 | £ 22 | ||
Major ordinary share transactions | ||||
Disclosure of reserves within equity [line items] | ||||
Interim dividend per share (in GBP per share) | £ 0.3083 |
Acquisition of businesses and p
Acquisition of businesses and purchase of non-controlling interests - Fair value of assets and liabilities acquired in respect of acquisition of businesses (Details) £ in Millions | Dec. 31, 2022 GBP (£) |
Disclosure of business combinations and purchase of NCI [line items] | |
Goodwill arising on acquisition | £ 22 |
Step acquisition | (10) |
Consideration payable | 104 |
Cash consideration paid | 96 |
Fair value | |
Disclosure of business combinations and purchase of NCI [line items] | |
Brands | 45 |
Property, plant and equipment | 24 |
Inventories | 24 |
Other working capital | 1 |
Deferred tax | (3) |
Cash | 1 |
Fair value of assets and liabilities | 92 |
Contingent consideration | |
Disclosure of business combinations and purchase of NCI [line items] | |
Contingent consideration payable | 5 |
Deferred consideration | |
Disclosure of business combinations and purchase of NCI [line items] | |
Contingent consideration payable | £ 3 |
Acquisition of businesses - Nar
Acquisition of businesses - Narrative (Details) £ in Millions | Dec. 31, 2022 GBP (£) |
Disclosure of detailed information about business combination [line items] | |
Cash transferred | £ 96 |
Acquisition of businesses - Sch
Acquisition of businesses - Schedule of cash consideration paid in respect of acquisition of businesses and purchase of shares of non-controlling interests (Details) £ in Millions | 6 Months Ended |
Dec. 31, 2022 GBP (£) | |
Disclosure of detailed information about business combination [line items] | |
Cash consideration paid | £ (96) |
Net cash outflow on acquisition of businesses | (144) |
Other consideration | |
Disclosure of detailed information about business combination [line items] | |
Cash consideration paid | (96) |
Other consideration | Prior year acquisitions | |
Disclosure of detailed information about business combination [line items] | |
Cash consideration paid | (10) |
Aggregated individually immaterial business combinations [member] | |
Disclosure of detailed information about business combination [line items] | |
Cash | 1 |
Aggregated individually immaterial business combinations [member] | Prior year acquisitions | |
Disclosure of detailed information about business combination [line items] | |
Cash consideration paid | (8) |
Cash consideration paid | |
Disclosure of detailed information about business combination [line items] | |
Cash consideration paid | (3) |
Capital injection | £ (28) |
Assets and liabilities held f_3
Assets and liabilities held for sale - Schedule of assets and liabilities held for sale (Details) - GBP (£) £ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Disclosure Of Assets and Liabilities Held For Sale [Line Items] | |||
Intangible assets | £ 12,130 | £ 11,902 | £ 10,921 |
Property, plant and equipment | 5,972 | 5,848 | 5,091 |
Other investments | 42 | 37 | 50 |
Inventories | 7,552 | 7,094 | 6,235 |
Trade and other receivables | 3,874 | 2,933 | 3,328 |
Trade and other payables | (6,110) | (5,887) | (5,327) |
Corporation tax | (266) | (252) | (380) |
Deferred tax | (2,257) | (2,319) | (2,112) |
Leases | (438) | (475) | (360) |
Liabilities held for sale | (76) | (61) | (30) |
Net assets | 9,866 | 9,514 | £ 9,331 |
Disposal groups classified as held for sale | |||
Disclosure Of Assets and Liabilities Held For Sale [Line Items] | |||
Intangible assets | 0 | 165 | |
Property, plant and equipment | 103 | 12 | |
Other investments | 0 | 1 | |
Inventories | 19 | 21 | |
Trade and other receivables | 13 | 23 | |
Cash | 47 | 0 | |
Assets held for sale | 182 | 222 | |
Trade and other payables | (61) | (18) | |
Corporation tax | (2) | (6) | |
Deferred tax | (5) | (35) | |
Provisions | (2) | 0 | |
Leases | (2) | (2) | |
Post employment benefit liabilities | (4) | 0 | |
Liabilities held for sale | (76) | (61) | |
Net assets | £ 106 | £ 161 |
Assets and liabilities held f_4
Assets and liabilities held for sale - Narrative (Details) - GBP (£) £ in Millions | Sep. 30, 2022 | Jul. 14, 2022 |
Guinness Cameroon S.A. | ||
Disclosure Of Assets and Liabilities Held For Sale [Line Items] | ||
Consideration received | £ 389 | |
USL Popular brand | ||
Disclosure Of Assets and Liabilities Held For Sale [Line Items] | ||
Consideration received | £ 87 | |
Gain on disposal of assets held for sale | £ 4 |
Contingent liabilities and le_2
Contingent liabilities and legal proceedings - Acquisition of USL shares from UBHL, winding-up petitions against UBHL and other proceedings in relation to the USL transaction (Details) | 6 Months Ended | |||
Dec. 31, 2020 | Jul. 04, 2013 ₨ / shares | Nov. 09, 2012 Petition | Dec. 31, 2022 | |
Disclosure of contingent liabilities [line items] | ||||
Proportion of ownership interest in subsidiary | 100% | |||
SPA | UBHL | ||||
Disclosure of contingent liabilities [line items] | ||||
Number of pending winding-up petitions | Petition | 5 | |||
United Spirits Limited | ||||
Disclosure of contingent liabilities [line items] | ||||
Percentage of interest acquired | 14.98% | |||
Proportion of ownership interest in subsidiary | 55.94% | |||
United Spirits Limited | USL Benefit Trust | ||||
Disclosure of contingent liabilities [line items] | ||||
Ownership interest held by external party | 2.38% | |||
United Spirits Limited | UBHL | ||||
Disclosure of contingent liabilities [line items] | ||||
Percentage of interest acquired | 6.98% | |||
Acquisition price per share (in INR per share) | ₨ / shares | ₨ 1,440 |
Contingent liabilities and le_3
Contingent liabilities and legal proceedings - Continuing matters relating to the resignation of Dr Vijay Mallya from USL and USL internal inquiries (Details) - 25 February agreement £ in Millions, $ in Millions | Mar. 12, 2018 instalment | Nov. 16, 2017 USD ($) | Nov. 16, 2017 GBP (£) | Feb. 25, 2016 USD ($) | Feb. 25, 2016 GBP (£) | Feb. 25, 2016 GBP (£) |
Dr Mallya | ||||||
Disclosure of contingent liabilities [line items] | ||||||
Committed payment relating to disengagement agreements | $ 75 | £ 63 | ||||
Consideration payment period | 5 years | 5 years | ||||
Amount paid relating to disengagement agreements | $ 40 | £ 33 | ||||
Amount payable relating to disengagement agreements in equal installments | 7 | £ 6 | ||||
Repayment demanded of original amount paid | 40 | 33 | ||||
Number Of Disputed Instalments | 2 | |||||
Watson Limited | ||||||
Disclosure of contingent liabilities [line items] | ||||||
Release of obligations to indemnify under guarantee of certain borrowings | $ 141 | £ 118 | ||||
Damages related to breach of associated security documents | $ 142 | £ 118 |
Contingent liabilities and le_4
Contingent liabilities and legal proceedings - Other continuing matters relating to Dr Mallya and affiliates (Details) £ in Millions, $ in Millions | May 24, 2019 USD ($) | May 24, 2019 GBP (£) | May 23, 2019 | Nov. 16, 2017 USD ($) | Nov. 16, 2017 GBP (£) |
Watson Limited | |||||
Disclosure of contingent liabilities [line items] | |||||
Damages awarded | $ 135 | £ 113 | |||
CASL | |||||
Disclosure of contingent liabilities [line items] | |||||
Damages awarded, co-surety percentage | 50% | ||||
25 February agreement | Watson Limited | |||||
Disclosure of contingent liabilities [line items] | |||||
Damages claimed | $ 142 | £ 118 |
Contingent liabilities and le_5
Contingent liabilities and legal proceedings - Other matters in relation to USL (Details) | 6 Months Ended |
Dec. 31, 2022 | |
United Spirits Limited | |
Disclosure of contingent liabilities [line items] | |
Shares percentage of additional equivalent payments required to be made to shareholders | 0.04% |
Contingent liabilities and le_6
Contingent liabilities and legal proceedings - USL’s dispute with IDBI Bank Limited (Details) ₨ in Millions, £ in Millions | Apr. 01, 2015 GBP (£) | Apr. 01, 2015 INR (₨) | Dec. 31, 2022 GBP (£) | Jun. 30, 2022 GBP (£) | Dec. 31, 2021 GBP (£) | Jun. 30, 2021 GBP (£) | Jul. 03, 2013 GBP (£) | Jul. 03, 2013 INR (₨) |
Disclosure of contingent liabilities [line items] | ||||||||
Borrowings | £ 15,169 | £ 14,137 | £ 12,331 | £ 12,109 | ||||
IDBI Bank Limited | United Spirits Limited | ||||||||
Disclosure of contingent liabilities [line items] | ||||||||
Damages claimed | £ 5 | ₨ 459 | ||||||
IDBI Bank Limited | IDBI term loan | United Spirits Limited | ||||||||
Disclosure of contingent liabilities [line items] | ||||||||
Borrowings | £ 63 | ₨ 6,280 |
Contingent liabilities and le_7
Contingent liabilities and legal proceedings - Tax (Details) £ in Millions | Dec. 31, 2022 GBP (£) |
Brazil | Maximum | Tax contingent liability | |
Disclosure of contingent liabilities [line items] | |
Potential liability | £ 568 |
India | |
Disclosure of contingent liabilities [line items] | |
Receivable for protest payments | 117 |
Receivable for protest payments, corporate taxes | 105 |
Receivable for protest payments, indirect taxes | 12 |
India | Maximum | Tax contingent liability | |
Disclosure of contingent liabilities [line items] | |
Potential liability | £ 131 |
Related party transactions (Det
Related party transactions (Details) - Diageo Pension Trust Limited £ in Millions | Dec. 31, 2022 GBP (£) | Oct. 31, 2022 GBP (£) credit_agreement |
Disclosure of transactions between related parties [line items] | ||
Related party transactions, interim credit facility provided | £ 1,000 | |
Related party transactions, number of agreements | credit_agreement | 2 | |
Receivables due from related parties | £ 0 | |
Diageo Lifestyle Plan | ||
Disclosure of transactions between related parties [line items] | ||
Related party transactions, interim credit facility provided | £ 150 | |
Diageo Pension Scheme | ||
Disclosure of transactions between related parties [line items] | ||
Related party transactions, interim credit facility provided | £ 850 |
Post balance sheet events (Deta
Post balance sheet events (Details) - Jan. 17, 2023 - Major business combination - Don Papa Rum € in Millions, £ in Millions | GBP (£) | EUR (€) | EUR (€) |
Disclosure of non-adjusting events after reporting period [line items] | |||
Consideration paid (received) | £ 231 | € 260 | |
Business combination, contingent consideration arrangements | £ 158 | € 178 |