Important Information
This document contains selected unaudited recast historical consolidated financial information of Diageo group (Diageo plc and its subsidiaries - Diageo) as of and for the years ended 30 June 2021, 30 June 2022 and 30 June 2023 reflecting a change in the presentation currency of Diageo from sterling to US dollars. This document is published in order to help the understanding of Diageo's past performance and financial position on a recast basis, in US dollars. Diageo's unaudited interim financial statements as at and for the six months ended 31 December 2023 used US dollars as the presentation currency.
This document also contains certain non-GAAP measures, including organic movements, calculated and reconciled to the relevant GAAP measure in US dollar. These non-GAAP measures are chosen for planning and reporting, and some of them are used for incentive purposes. The group’s management believes that these measures provide valuable additional information for users of the financial statements in understanding the group’s performance. These non-GAAP measures should be viewed as complementary to, and not replacements for, the comparable GAAP measures and reported movements therein. Note that the re-presentation to US dollars did not result in any material change to the organic growth movements for any of the periods, geographical segments or key categories. See “Definitions and reconciliation of non-GAAP measures to GAAP measures” below for more information.
Financial information coloured in blue in this document is incremental to the re-presented US dollar financial information Diageo published on 9 October 2023.
Change in the functional and presentation currency
Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc has changed from sterling to US dollars which is applied prospectively. This is because the group's share of net sales and expenses in the US and other countries whose currencies correlate closely with the US dollar has been increasing over the years, and that trend is expected to continue in line with the group's strategic focus. Diageo has also decided to change its presentation currency to US dollars with effect from 1 July 2023, applied retrospectively, as it believes that this change will provide better alignment of the reporting of performance with its business exposures.
The selected unaudited re-presented financial information included in this document has been derived from the consolidated financial statements and accounting records of Diageo for each of the years ended 30 June 2021, 30 June 2022 and 30 June 2023, prior to retrospectively applying the change in the presentation currency.
The selected historical financial information that was included in the consolidated financial statements of Diageo as of and for the years ended 30 June 2021, 30 June 2022 and 30 June 2023 was re-presented in US dollars following the translation methodology in IAS 21 - The Effects of Changes in Foreign Exchange Rates:
- assets and liabilities were translated into US dollars at the closing exchange rate prevailing at the relevant balance sheet date;
- the consolidated income statement and the consolidated statement of cash flows of non US dollar entities were translated into US dollars at weighted average exchange rates for the relevant period, which is consistent with the requirements of IAS21; except for subsidiaries in hyperinflationary economies that were translated with the closing rate at the end of the relevant period and for the substantial transactions that were translated at the rate on the date of the transaction (including acquisitions, disposals, impairment write off and dividends received and paid);
- share capital, share premium, capital redemption reserve included in other reserves and own shares in the statement of changes in equity were translated into US dollars at the closing exchange rate at the relevant balance sheet date; exchange differences arising on the retranslation to closing rates were taken to the exchange reserve; and
- the cumulative foreign exchange translation reserve was set to zero on 1 July 2004, the date of transition to IFRS and this reserve was re-presented as if the group reported in US dollars since that date.
In preparing the selected unaudited re-presented financial information in US dollars included in this document, the exchange rates used in respect of sterling and euro per $1 were:
| Year ended 30 June 2023 |
Year ended 30 June 2022 |
Year ended 30 June 2021 |
|
| Sterling | |||
| Income statement and cash flows(1) | 0.83 | 0.75 | 0.74 |
| Assets and liabilities(2) | 0.79 | 0.83 | 0.72 |
| Euro | |||
| Income statement and cash flows(1) | 0.96 | 0.89 | 0.84 |
| Assets and liabilities(2) | 0.93 | 0.96 | 0.84 |
(1) Weighted average rates
(2) Closing rates
Future dividend payments
Commencing with the interim dividend that was declared on 30 January 2024, Diageo's dividend is declared in US dollars. Holders of ordinary shares will continue to receive their dividends in sterling, but will have the option to elect to receive their dividends in US dollars. Holders of American Depositary Receipts (ADRs) will continue to receive dividends in US dollars.