UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
12 May 2021
Commission File Number: 001-10691
DIAGEO plc
(Translation
of registrant’s name into English)
Lakeside Drive, Park Royal, London NW10 7HQ
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F X
Form
40-F
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by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule
101(b)(1):
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by check mark whether the registrant is submitting the Form 6-K in
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12 May 2021
This release contains inside information
Diageo provides trading update and recommences its return of
capital programme
Diageo plc (Diageo) today announces that it expects organic
operating profit growth to be at least 14% in fiscal 21, slightly
ahead of organic net sales growth. In the context of this strong
performance, Diageo is recommencing its return of capital (ROC)
programme of up to £4.5 billion to shareholders announced on
25 July 2019. Due to the impact of Covid-19, the original
completion date for the ROC programme has been extended by two
years to 30 June 2024.
Current trading update
Following a strong performance in the first half of fiscal 21, with
a return to organic net sales growth, our business has continued to
deliver a good recovery across all regions. In North America, our
largest market, our performance has remained particularly strong,
reflecting resilient consumer demand, the breadth of our portfolio
and the effectiveness of our marketing and innovation.
In Europe, we are benefitting from strong execution in the
off-trade channel and the partial re-opening of the on-trade
channel in certain markets. In Africa, Asia Pacific and Latin
America and the Caribbean, we are seeing a continued recovery in
most markets, despite the ongoing impact from Covid-19. Travel
retail remains severely impacted.
Return of capital programme
On 25 July 2019, the Board of Diageo approved the return of up to
£4.5 billion to shareholders in the three-year period
from 1 July 2019 to 30 June 2022, utilising the most appropriate
mechanic of either share buybacks or special dividends depending on
market conditions. Under the first phase of the ROC programme,
which ended on 31 January 2020, Diageo repurchased shares to a
value of £1.25 billion. On 9 April 2020, Diageo announced
that it had not initiated the next phase of the ROC
programme.
Diageo is announcing today that it is initiating the second phase
of its ROC programme of up to £1.0 billion to be
completed by the end of fiscal 22. Diageo has entered into a
non-discretionary agreement with UBS AG London Branch (UBS) to
enable the company to buy back shares. This agreement will commence
on 12 May 2021 and is expected to end no later than 12 November
2021 and will be for a value of up to £0.5 billion. All
shares repurchased will be cancelled. Further execution phases of
the ROC programme will be announced in due course.
Ivan Menezes, Chief Executive, said:
"I am very pleased with how our business is recovering in fiscal
21, our strong competitive performance across key markets and our
robust cash generation. Our disciplined approach to capital
allocation is unchanged. Our priority remains to invest in the
business to deliver sustainable and efficient organic growth and to
pursue acquisitions that further strengthen our exposure to
attractive categories.
When we have excess cash, we have been clear that we will seek to
return it to shareholders. The Board's decision to resume our
return of capital programme at this time reflects Diageo's improved
performance in the first half of fiscal 21, the continued strong
recovery of our business, and our expectation that we will be back
within the top end of our target leverage ratio[1] of
2.5-3.0x at 30 June 2022, post completion of the second phase of
the return of capital programme. We are confident that Diageo will
continue to execute effectively in this challenging environment and
will emerge stronger."
Further details of the return of capital programme
UBS will make its trading decisions in relation to the company's
securities independently of, and uninfluenced by, the company. Any
repurchase of shares by Diageo contemplated by this announcement
will be carried out on the London Stock Exchange and/or other
recognised investment exchange(s).
The buybacks will be effected within certain pre-set parameters and
in accordance with Diageo's general authority to repurchase shares,
and will be conducted within the parameters prescribed by the
Market Abuse Regulation 596/2014, the Commission Delegated
Regulation (EU) 2016/1052 (both as incorporated into UK domestic
law by the European Union (Withdrawal) Act 2018) and, in the case
of Diageo, Chapter 12 of the Listing Rules.
The above share buyback programme of up to £0.5 billion will
fall within the maximum number of shares that may be repurchased
pursuant to Diageo's existing general authority from shareholders
to repurchase up to 232,820,888 shares granted at its 2020 annual
general meeting. A renewed general authority to repurchase shares
up to a maximum number of shares, representing approximately 10% of
Diageo's issued ordinary share capital as at the latest practicable
date prior to publication of the notice of Diageo's 2021 annual
general meeting, will be sought at Diageo's 2021 annual general
meeting.
This document contains inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014. For the
purposes of Article 2 of Commission Implementing Regulation (EU)
2016/1055, the issue of this document on behalf of the company is
made by Siobhán Moriarty, General Counsel and Company
Secretary, Diageo plc.
For further information please contact:
Investor relations:
Lucinda
Baker
+44 (0) 7974 375 550
Media relations:
Jessica
Rouleau
+44 (0) 7925 642 561
About Diageo
Diageo is a global leader in beverage alcohol with an outstanding
collection of brands across spirits and beer categories. These
brands include Johnnie Walker, Crown Royal, JeB, Buchanan's and
Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas,
Captain Morgan, Baileys, Don Julio, Tanqueray and
Guinness.
Diageo is a global company, and our products are sold in more than
180 countries around the world. The company is listed on both the
London Stock Exchange (DGE) and the New York Stock Exchange (DEO).
For more information about Diageo, our people, our brands, and
performance, visit us at www.diageo.com.
Visit Diageo's global responsible drinking
resource, www.DRINKiQ.com, for
information, initiatives and ways to share best
practice.
Celebrating life, every day, everywhere
Cautionary statement concerning forward-looking
statements
This document contains 'forward-looking' statements. These
statements can be identified by the fact that they do not relate
only to historical or current facts. In particular,
forward-looking statements include all statements that express
forecasts, expectations, plans, outlook, objectives and projections
with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the
impact of changes in interest or exchange rates, the availability
or cost of financing to Diageo, anticipated cost savings or
synergies, expected investments, the completion of any strategic
transactions or restructuring programmes, anticipated tax rates,
changes in the international tax environment, expected cash
payments, outcomes of litigation or regulatory enquiries,
anticipated changes in the value of assets and liabilities related
to pension schemes and general economic conditions. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could
cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements,
including factors that are outside Diageo's control. Any
forward-looking statements made by or on behalf of Diageo speak
only as of the date they are made. Diageo does not undertake
to update forward-looking statements to reflect any changes in
Diageo's expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
An explanation of non-GAAP measures, including organic movements,
is set out on page 62 of Diageo's Annual Report for the year ended
30 June 2020.
Diageo plc LEI: 213800ZVIELEA55JMJ32
[1] Calculated as adjusted
net debt to adjusted EBITDA.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Diageo plc
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(Registrant)
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Date:
12 May 2021
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By:___/s/
James Edmunds
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James Edmunds
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Deputy Company Secretary
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