Review of Global Supply Operations and Restated Segmental Information

Diageo announces review of Global Supply operations and issues revised segmental information for prior reporting periods

Diageo has today announced that its Global Supply and Procurement operation will be refocused to enhance alignment between Global Supply and Diageo’s 21 key markets. Responsibility for local operations will be transferred to the markets and regional structures will be reduced. The Global supply organisation will continue to be responsible for ensuring excellence across all operations.‬ This change follows the reshaping of the in-market organisations through the implementation of the 2011 operating model review and is a consequence of Diageo’s increasing presence in new faster growth markets.

Further work will be required to establish the exact nature of the reorganisation to be made. However an initial review has already established that efficiency-driven cost savings can be delivered which together with savings from footprint changes and cost reductions in respect of the regional supply organisations are expected to amount to approximately £60 million per annum. These savings are expected to be achieved in 3 years. Costs associated with the restructuring are estimated to be approximately £100 million.‬

Changes to reporting regional structure
As announced on 9 November 2012, Diageo has made changes to management responsibilities that have led to a change in the reporting for geographic segments. Due to these changes, results for the year ending 30 June 2013 will be reported using the following geographical segments:

- North America
- Western Europe
- Africa, Eastern Europe and Turkey
- Latin America and Caribbean
- Asia Pacific
- Corporate

As a consequence of these changes the figures for the geographical segments for prior periods have been restated.

Revised segmental information for the years ended 30 June 2012 and 30 June 2011 and the six month period ended 31 December 2012 and 31 December 2011 are provided in the attached.

In addition, organic growth percentages by geographic segment have been restated for the year ended 30 June 2012 and the six month period ended 31 December 2012.