Diageo(DEO) - 2024 Q4 - Annual Report

Introduction Diageo, a global leader in beverage alcohol, presents its Annual Report on Form 20-F for fiscal year 2024, detailing its extensive brand portfolio and financial performance Company Overview Diageo, a global leader in beverage alcohol, was formed in 1997 and owns iconic brands like Johnnie Walker and Guinness, with its fiscal 2024 Annual Report prepared under IFRS Accounting Standards - Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer, including Johnnie Walker, Crown Royal, Smirnoff, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness[10] - The Diageo group was formed in December 1997 through the merger of Grand Metropolitan Public Limited Company and Guinness plc groups[11] - This document is the Annual Report on Form 20-F for the fiscal year ended 30 June 2024. The consolidated financial statements are prepared in accordance with IFRS Accounting Standards[12][15] Strategic Report This section details Diageo's fiscal 2024 performance, strategic priorities, business model, and key financial and non-financial indicators Performance Snapshot In fiscal 2024, Diageo experienced a challenging year with a 1% decline in both reported and organic net sales, and a 5% decline in organic operating profit Fiscal 24 Financial Performance | Metric | Fiscal 2024 | Fiscal 2023 | Reported Movement | Organic Movement | | :--- | :--- | :--- | :--- | :--- | | Net Sales | - | $20,555m | (1)% | (1)% | | Operating Profit | $5,547m | - | 8% | (5)% | | Net cash from operating activities | $4,105m | $3,636m | - | - | | Free cash flow | $2,609m | $2,235m | - | - | | Earnings per share (eps) | 173.2c | 196.3c | (12)% | - | | Eps before exceptional items | - | - | - | (9)% | | Recommended dividend per share | - | 98.55c | 5% | - | Fiscal 24 Non-Financial Performance | Metric | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | | People educated on underage drinking | 2.2m | 1.9m | | Female leaders globally | 44% | 44% | | Ethnically diverse leaders globally | 46% | 43% | | Water efficiency (% change vs FY20) | (15.6)% | (12.3)% | | GHG emissions (% change vs FY20) | (23.8)% | (14.7)% | Our Business and Portfolio Diageo's portfolio consists of over 200 brands sold in nearly 180 countries, including 13 billion-dollar brands, holding number one global positions in key spirits categories - The portfolio includes over 200 brands, with 13 billion-dollar brands such as Johnnie Walker, Smirnoff, Guinness, and Don Julio[21] - Diageo holds number one global positions in scotch, vodka, tequila, Canadian whisky, liqueurs, and gin (IWSR, 2023)[21] Share of Reported Net Sales by Region (Fiscal 24) | Region | Share of Net Sales | | :--- | :--- | | North America | 39% | | Europe | 24% | | Asia Pacific | 19% | | Latin America and Caribbean | 9% | | Africa | 9% | - The portfolio is diversified across price tiers, from value (8%) and standard (30%) to premium (37%), super-premium (16%), and luxury (5% and 4%), enabling consumers to trade up[23] Market Overview and Investment Case The Total Beverage Alcohol (TBA) market is attractive and resilient, with spirits growing faster than the overall category due to consumer shifts and premiumization - The Total Beverage Alcohol (TBA) market has grown at a 4.4% CAGR over the 10 years to 2023, with international spirits growing faster at 5.1% CAGR[24] - Diageo's ambition is to increase its share of TBA from its current 4.5% to 6% by 2030[24] - Key competitive advantages include leading world-class brands, an advantaged geographic footprint, a broad portfolio across price points, and a diverse workforce[25][26][27] - The company has a disciplined approach to capital allocation, having grown its dividend for 25 consecutive years and returned approximately £25 billion to shareholders in dividends and buybacks in the 10 years through fiscal 2023. An additional $1 billion was returned via buybacks in fiscal 2024[30] Chair's Statement The Chair reflects on a challenging fiscal 2024, marked by global volatility, but expresses confidence in the long-term attractiveness of the TBA sector and Diageo's strategic positioning Fiscal 2024 Performance Highlights | Metric | Fiscal 2024 | Note | | :--- | :--- | :--- | | Organic Net Sales | -0.6% | Excluding LAC, grew 1.8% | | Organic Operating Profit | -4.8% | Primarily driven by LAC and North America | | Free Cash Flow | $2.6 billion | Increase from prior year | | Dividend Increase | 5% | Reflects confidence in long-term potential | | 1-Year Total Shareholder Return | (24)% | - | - Total maturing inventories reached $7.8 billion by the end of fiscal 2024, an increase of $0.5 billion from the prior year, reflecting commitment to long-term growth[35] - The 'Spirit of Progress' ESG plan has been refreshed to prioritize areas most material to the business, including reducing harmful use of alcohol, combating water stress, and climate change[36] - Significant Board changes are underway: Chair Javier Ferrán will retire in February 2025, to be succeeded by Sir John Manzoni. Nik Jhangiani will succeed Lavanya Chandrashekar as CFO on September 1, 2024[40] Chief Executive's Statement The CEO acknowledges fiscal 2024 was challenging but highlights decisive actions taken to improve execution, particularly addressing inventory issues in the Latin America and Caribbean (LAC) region Fiscal 2024 Key Performance Metrics | Metric | Movement | | :--- | :--- | | Organic Net Sales | (0.6)% | | Organic Net Sales (Excluding LAC) | 1.8% | | Organic Operating Profit | (4.8)% | | Organic Operating Margin | (130) bps | - Delivered a record year of productivity savings, nearly $700 million, over-delivering on the three-year goal by $200 million[44] - Guinness delivered 15% organic net sales growth, marking its seventh consecutive half of double-digit growth[48] - Implemented the biggest change in the US route-to-market in a decade, working with distributors to put more 'feet on the street' to target high-growth areas[46] Business Model Diageo's business model is built for the long term, leveraging global and local expertise with a consumer-centric approach, encompassing a seven-stage value chain from sourcing raw materials to helping consumers celebrate - The business model is structured around seven key activities: Sourcing, Innovating, Making, Transporting, Selling to customers, Marketing to consumers, and Helping consumers celebrate[56][58] - The model is designed to create value for a wide range of stakeholders, including consumers, customers, suppliers, communities, investors, and governments[55] Our Growth Ambition Diageo has evolved its strategy into 'Our Growth Ambition,' aiming to achieve a 6% share of Total Beverage Alcohol (TBA) by 2030, focusing on brand power, consumer trends, and operational excellence - The core strategy is to "Unleash the power of our brands and portfolio to lead and shape consumer trends executed with operational excellence"[59] - Strategic priorities include becoming the global leader in whisk(e)y and tequila, winning with local portfolios, and continuing the growth of Guinness[59][63] - The company is focused on leading consumer trends by driving premiumization, recruiting new consumers, and entering new occasions[71] - A new productivity target of $2 billion has been set for the next three years (fiscal 2025-27), following the delivery of $1.7 billion in the prior three years, which exceeded the $1.5 billion target[80][81][82] Key Performance Indicators This section outlines Diageo's key financial and non-financial performance indicators for fiscal 2024, showing declines in organic sales and profit but progress in ESG areas Financial Key Performance Indicators (Fiscal 2024) | Metric | Performance | | :--- | :--- | | Organic Net Sales Growth | (0.6)% | | Organic Operating Profit Growth | (4.8)% | | Earnings per share before exceptional items | 179.6c | | Free Cash Flow | $2,609m | | Return on Average Invested Capital (ROIC) | 15.8% | | Total Shareholder Return (TSR) | (24)% | Non-Financial Key Performance Indicators (Fiscal 2024) | Metric | Performance | | :--- | :--- | | People educated on underage drinking | 2.2m | | Employee Engagement Index | 81% | | Female Leaders Globally | 44% | | Ethnically Diverse Leaders Globally | 46% | | Water Efficiency (vs. FY20 baseline) | (15.6)% | | Scope 1 & 2 GHG Emissions (vs. FY20 baseline) | (23.8)% | Group Financial Review This section provides a detailed analysis of Diageo's fiscal 2024 financial performance, including regional and category breakdowns, and liquidity position Chief Financial Officer's Introduction The outgoing CFO characterized fiscal 2024 as challenging, with organic net sales down 0.6% due to weaker performance in the LAC region, but highlighted strong productivity savings and free cash flow generation - Organic net sales declined 0.6%, primarily due to weak performance in the Latin America and Caribbean (LAC) region[107] - Delivered nearly $700 million in productivity savings in fiscal 2024, exceeding the three-year commitment of $1.5 billion by delivering a total of $1.7 billion[107] - Generated $2.6 billion in free cash flow through disciplined management of working capital[107] - The leverage ratio was 3.0x as of June 30, 2024, and the dividend was increased by 5%[107] Operating Results 2024 compared with 2023 This section provides a detailed analysis of fiscal 2024 financial results compared to 2023, showing overall organic net sales and operating profit declines driven by weakness in LAC and North America Key Performance Indicators In fiscal 2024, Diageo's organic net sales declined by 0.6%, and organic operating profit fell 4.8%, leading to a 130 bps contraction in organic operating margin, despite an increase in free cash flow - Reported net sales declined 1.4%, while organic net sales declined 0.6%. Positive price/mix of 2.9 pps was more than offset by a 3.5% volume decline, primarily due to weakness in LAC and North America[109] - Reported operating profit grew 8.2% due to exceptional items, but organic operating profit declined 4.8%. This led to a 130 bps decline in organic operating margin[111][112] - Basic EPS decreased 11.8% to 173.2 cents, driven by lower organic operating profit and higher finance charges[113] - Free cash flow grew by $374 million to $2,609 million, driven by strong working capital management and lower tax payments, which offset lower operating profit and higher interest[131] North America North America's organic net sales declined by 3% in fiscal 2024, impacted by a cautious US consumer environment and retailer inventory adjustments, with a 79 bps contraction in organic operating margin North America Key Financials (FY24 vs FY23) | Metric | FY2024 ($m) | Organic Movement (%) | | :--- | :--- | :--- | | Net Sales | 7,908 | (3)% | | Operating Profit before exceptionals | 3,236 | - | | Operating Margin (Organic) | - | (79) bps | - Tequila net sales declined 5%, with Casamigos down 22% due to lower demand and lapping inventory replenishment, while Don Julio net sales increased 12%[145] - Crown Royal whisky net sales declined 1%, with the successful launch of Crown Royal Blackberry mostly offsetting declines in other variants[145] Europe Europe delivered resilient performance with 3% organic net sales growth, driven by strong momentum in Guinness, despite a 121 bps decline in organic operating margin due to increased marketing investment Europe Key Financials (FY24 vs FY23) | Metric | FY2024 ($m) | Organic Movement (%) | | :--- | :--- | :--- | | Net Sales | 4,804 | 3% | | Operating Profit before exceptionals | 1,379 | - | | Operating Margin (Organic) | - | (121) bps | - Beer net sales grew 18%, primarily driven by Guinness. Guinness 0.0 net sales and volume more than doubled[152] - Great Britain net sales grew 5%, driven by strong performance in Guinness, which gained share in both on-trade and off-trade[153] Asia Pacific Asia Pacific delivered 4% organic net sales growth and a 35 bps expansion in organic operating margin despite challenging macroeconomic conditions, driven by Chinese white spirits and India Asia Pacific Key Financials (FY24 vs FY23) | Metric | FY2024 ($m) | Organic Movement (%) | | :--- | :--- | :--- | | Net Sales | 3,817 | 4% | | Operating Profit before exceptionals | 1,063 | - | | Operating Margin (Organic) | - | 35 bps | - India net sales grew 8%, driven by double-digit growth in other whisky and scotch, supported by continued premiumisation[163] - Greater China net sales grew 12%, primarily driven by strong double-digit growth in Chinese white spirits, which lapped a double-digit decline in the prior year[163] Latin America and Caribbean Performance in Latin America & Caribbean (LAC) was materially weaker, with organic net sales declining 21% due to inventory reduction, soft consumer demand, and downtrading, leading to a significant 746 bps contraction in organic operating margin Latin America & Caribbean Key Financials (FY24 vs FY23) | Metric | FY2024 ($m) | Organic Movement (%) | | :--- | :--- | :--- | | Net Sales | 1,839 | (21)% | | Operating Profit | 502 | (36)% (Reported) | | Operating Margin (Organic) | - | (746) bps | - The decline was driven by soft demand, reduction of high inventory levels, and lapping strong double-digit growth from the prior year[172] - Mexico net sales declined 30%, driven by strong double-digit declines in tequila (led by Don Julio) and scotch[173] Africa Africa delivered robust organic net sales growth of 12% despite ongoing macroeconomic challenges, driven by price increases and strong beer performance, leading to a 194 bps expansion in organic operating margin Africa Key Financials (FY24 vs FY23) | Metric | FY2024 ($m) | Organic Movement (%) | | :--- | :--- | :--- | | Net Sales | 1,778 | 12% | | Operating Profit before exceptionals | 131 | - | | Operating Margin (Organic) | - | 194 bps | - Growth was driven by price increases, with price/mix up 18 pps, partially offset by a 6% volume decline[179] - Beer net sales grew 19%, benefiting from price increases and 4% volume growth. Malta Guinness, Guinness, and Senator each delivered double-digit net sales growth[179] Category and Brand Review In fiscal 2024, Spirits, Diageo's largest category, saw a 4% organic net sales decline, heavily impacted by Scotch and Tequila, while Beer performed strongly with 14% organic net sales growth driven by Guinness Performance by Key Category (Fiscal 2024 Organic Net Sales Movement) | Category | % of Net Sales | Organic Net Sales Movement | | :--- | :--- | :--- | | Spirits | 78% | (4)% | | Scotch | 24% | (6)% | | Tequila | 11% | (7)% | | Vodka | 9% | (6)% | | Beer | 16% | 14% | | Ready to drink | 4% | (1)% | Performance by Key Brands (Fiscal 2024 Organic Net Sales Movement) | Brand | Organic Net Sales Movement | | :--- | :--- | | Johnnie Walker | (2)% | | Guinness | 15% | | Don Julio | 4% | | Crown Royal | (1)% | | Smirnoff | (3)% | | Baileys | 2% | | Casamigos | (20)% | | Captain Morgan | (4)% | Liquidity and Capital Resources Diageo's primary source of liquidity is cash from operations, supplemented by commercial paper and term debt markets, with net borrowings increasing to $21.0 billion and a leverage ratio of 3.0x at year-end - The primary source of liquidity is cash generated from operations, used to pay interest, taxes, dividends, and fund capital expenditure and acquisitions[211] - As of June 30, 2024, Diageo had $3.25 billion in available undrawn committed bank facilities[212] Net Borrowings Trend | Date | Net Borrowings ($ million) | | :--- | :--- | | June 30, 2024 | (21,017) | | June 30, 2023 | (19,582) | | June 30, 2022 | (17,107) | - The adjusted net borrowings to adjusted EBITDA ratio was 3.0 times as of June 30, 2024, at the top end of the company's target range of 2.5-3.0 times[223] Operating Results 2023 (re-presented) compared with 2022 (re-presented) This section provides a comparative analysis of fiscal 2023 versus 2022, showing strong organic net sales growth of 6.5% and organic operating profit growth of 7.0%, with margin expansion across most regions Fiscal 2023 vs 2022 Key Metrics | Metric | Fiscal 2023 Performance | | :--- | :--- | | Organic Net Sales Growth | 6.5% | | Organic Operating Profit Growth | 7.0% | | Free Cash Flow | $2,235m | | Basic Earnings Per Share | 196.3 cents | | Return on Average Invested Capital | 18.4% | - Fiscal 2023 organic net sales growth of 6.5% was driven by 7.3 percentage points of positive price/mix, with a slight organic volume decline of 0.8%[238] - Organic operating profit grew 7.0% in fiscal 2023, ahead of net sales growth, with organic operating margin expanding by 15 bps[241][242] - Free cash flow declined in fiscal 2023 to $2,235 million, as strong operating profit growth was more than offset by higher working capital outflows, tax, and interest payments[247] 'Spirit of Progress' (ESG) Diageo's ESG strategy, 'Spirit of Progress', focuses on promoting positive drinking, championing inclusion and diversity, and pioneering grain-to-glass sustainability initiatives Overview and Governance Diageo's 'Spirit of Progress' is its Environmental, Social, and Governance (ESG) action plan, centered on three priorities, with targets refined in fiscal 2024 and performance linked to executive incentives - The ESG action plan, 'Spirit of Progress', is built on three priorities: Promote positive drinking, Champion inclusion and diversity, and Pioneer grain-to-glass sustainability[304] - In fiscal 2024, Diageo reviewed its ESG targets to direct resources towards areas with the best opportunity to mitigate the highest risks and deliver the highest impact[304] - Performance against five key ESG ambitions is linked to long-term incentive plans for executives, covering positive drinking, diversity, water efficiency, and carbon reduction[310] Promote Positive Drinking Diageo focuses on promoting moderation and tackling harmful alcohol use through targeted education programs like 'SMASHED' and 'Wrong Side of the Road', reaching millions and making moderation aspirational - Educated 2.2 million young people on the dangers of underage drinking in fiscal 2024 through the 'SMASHED' program, reaching a cumulative 5.9 million towards a 2030 target of 10 million[315] - Reached 1.0 million people with drink driving education programs in fiscal 2024, for a cumulative total of 2.2 million since fiscal 2020 towards a 2030 target of 5 million[318] - The company adheres to its Diageo Marketing Code (DMC) to ensure responsible marketing. In fiscal 2024, it achieved a 100% compliance rate with the IARD's Digital Guiding Principles[321] Champion Inclusion and Diversity Diageo continues to champion inclusion and diversity, maintaining 44% female leadership and exceeding its 2030 target for ethnic diversity in leadership at 46%, while also providing skills training to under-represented groups Leadership Diversity (Fiscal 2024) | Metric | Performance | 2030 Target | | :--- | :--- | :--- | | Female Leaders | 44% | 50% | | Ethnically Diverse Leaders | 46% | 45% (Achieved) | - Diageo was recognized as a Top Ten Best Performing company for women on boards and in leadership in the FTSE Women Leaders Review[346] - The 'Learning for Life' skills program reached 36,000 people in 36 countries in fiscal 2024, with over 50% being women, towards a 2030 goal of 200,000 people[354][355] Pioneer Grain-to-Glass Sustainability Diageo's sustainability strategy focuses on managing climate and nature risks, improving water efficiency by 15.6% and reducing Scope 1 & 2 GHG emissions by 23.8% from its 2020 baseline - Water efficiency across the company improved by 15.6% since the fiscal 2020 baseline, ahead of the trajectory for the 30% improvement target by 2030[385] - The company is on track to meet its 2026 target of replenishing more water than it uses in water-stressed areas, having cumulatively replenished 70% of the estimated fiscal 2026 volume[388] Greenhouse Gas (GHG) Emissions Reduction | Scope | FY24 Performance (vs FY23) | Cumulative Performance (vs FY20 Baseline) | 2030 Target (vs FY20 Baseline) | | :--- | :--- | :--- | :--- | | Scope 1 & 2 | (10.7)% | (23.8)% | Net Zero | | Scope 3 | (5.0)% | 13.5% | (50)% | - Progressed regenerative agriculture programs in key sourcing landscapes for barley, wheat, and agave, reaching 4 out of a target of 5 programs[407] Risk Factors This section identifies and details the principal risks and uncertainties that could materially impact Diageo's business, operations, and financial performance Principal Risks and Uncertainties This section outlines the principal risks that could materially impact Diageo's business, categorized into economic, climate, industry, and operational factors - Economic Risks: Unfavorable economic conditions, geopolitical instability (e.g., conflicts in Ukraine and the Middle East), and inflationary pressures could erode consumer confidence and reduce demand for Diageo's products[418][419][420] - Climate and Environmental Risks: Climate change poses physical risks to production facilities and agricultural supply chains. Water scarcity is identified as a significant risk that could increase production costs and constrain capacity[424][425] - Industry and Consumer Risks: Demand may be affected by shifts in consumer preferences towards premium, craft, or low/no alcohol products, as well as by increased competition and potential declines in the social acceptability of alcohol[429][430][432] - Business and Operational Risks: Key operational risks include the potential for cyber-attacks, disruptions to manufacturing and supply chains, failure to protect intellectual property, and reputational damage from contamination, counterfeiting, or failure to meet ESG ambitions[450][452][456] Governance This section outlines Diageo's corporate governance framework, including Board oversight, committee reports, and executive remuneration practices Corporate Governance Overview Diageo's governance framework supports long-term sustainable success and complies with the UK Corporate Governance Code 2018, with the Board overseeing strategy, risk, and culture, and managing significant leadership transitions - The company fully complied with the UK Corporate Governance Code 2018 for the year ended June 30, 2024[487] - As of July 2024, the Board has 70% female representation and 40% of directors self-disclose as being from minority ethnic groups, exceeding diversity targets[506] - Key Board decisions in fiscal 2024 included the approval of the new 'Growth Ambition' strategy and the refinement of the 'Spirit of Progress' ESG targets based on a materiality assessment[529][530] - The Board's workforce engagement program involved all Non-Executive Directors in 15 sessions with 539 colleagues to gather insights on culture, strategy, and ways of working[541][542] Audit Committee Report The Audit Committee oversaw financial reporting integrity, internal controls, and risk management during fiscal 2024, focusing on business transformation, inventory controls, cyber security, and significant judgments - An external audit services tender process was conducted during fiscal 2024, resulting in the decision to reappoint PricewaterhouseCoopers LLP (PwC) as the external auditor[567][570] - Significant issues reviewed by the committee included the carrying value of intangible assets, which led to the reversal of the Shui Jing Fang impairment ($379M) and new impairments for the Chase brand and others ($170M)[583] - The committee monitored the company's confidential whistleblowing service, SpeakUp, which received 759 allegations during the year, with a 34% substantiation rate, resulting in 70 employees exiting the business[575] - The committee reviewed and approved the change in the group's functional and presentation currency from sterling to US dollars, effective July 1, 2023[585] Nomination Committee Report The Nomination Committee's focus in fiscal 2024 was on board and executive succession planning, managing key leadership transitions, and overseeing an externally facilitated board evaluation that found the board effective - Managed the succession process for the Board Chair, recommending Sir John Manzoni to succeed Javier Ferrán upon his retirement in February 2025[595][596] - Oversaw the recruitment and recommendation for the appointments of a new Chief Financial Officer and a new Chair of the Audit Committee[598] - An externally facilitated evaluation of the Board concluded that it is well-governed and effective, with key strengths in its composition, expertise, diversity, and trust[599][537] - The Board maintains a strong commitment to diversity, with objectives of at least 40% female representation and at least one director from a minority ethnic group, both of which have been met[601] Directors' Remuneration Report This report details the implementation of the remuneration policy in fiscal 2024, reflecting low annual incentive payouts and moderate long-term incentive vesting due to challenging financial results FY24 Annual Incentive Plan (AIP) Payout | Executive | Financial Measures Payout (% of Max) | Total Payout (% of Max) | | :--- | :--- | :--- | | Debra Crew (CEO) | 16.0% | 24.8% | | Lavanya Chandrashekar (CFO) | 16.0% | 22.8% | 2021-2024 Long-Term Incentive Plan (DLTIP) Vesting | Executive | Performance Shares Vesting (% of Max) | Share Options Vesting (% of Max) | | :--- | :--- | :--- | | Debra Crew (CEO) | 58.9% | 0% | | Lavanya Chandrashekar (CFO) | 56.5% | 0% | - The CEO pay ratio for fiscal 2024 was 51:1 for the median UK employee, a significant decrease from 177:1 in fiscal 2023, reflecting the lower incentive payouts for the CEO[679][681] - For fiscal 2025, the CEO will receive a 4.25% salary increase, slightly below the expected average for the wider UK workforce. The incentive plan structures will remain unchanged[610][691] Financial Statements This section presents Diageo's audited consolidated financial statements for fiscal 2024, including the income statement, balance sheet, cash flow, and selected notes Report of Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP issued an unqualified opinion on Diageo's consolidated financial statements and internal controls for fiscal 2024, highlighting brand intangible asset impairment and Brazilian tax contingent liabilities as Critical Audit Matters - The auditors, PricewaterhouseCoopers LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[723] - A Critical Audit Matter was the assessment of brand intangible assets, due to the significant management judgment involved in estimating recoverable amounts using discounted cash flow models[729][730] - A second Critical Audit Matter was the assessment of contingent liabilities for taxes in Brazil, due to the significant judgments required in estimating provisions for a large number of ongoing, complex tax cases[732][733] Consolidated Financial Statements This section presents Diageo's primary consolidated financial statements for fiscal year 2024, reporting net sales of $20.3 billion, profit of $4.2 billion, total assets of $45.5 billion, and strong operating cash flow of $4.1 billion Consolidated Income Statement Summary (Year ended June 30) | ($ million) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net sales | 20,269 | 20,555 | 20,516 | | Operating profit | 6,001 | 5,547 | 5,897 | | Profit for the year | 4,166 | 4,479 | 4,410 | | Basic earnings per share (cents) | 173.2 | 196.3 | 184.6 | Consolidated Balance Sheet Summary (As of June 30) | ($ million) | 2024 | 2023 | | :--- | :--- | :--- | | Total non-current assets | 30,348 | 29,261 | | Total current assets | 15,126 | 15,622 | | Total assets | 45,474 | 44,883 | | Total liabilities | (33,404) | (33,174) | | Total equity | 12,070 | 11,709 | Consolidated Statement of Cash Flows Summary (Year ended June 30, 2024) | ($ million) | Amount | | :--- | :--- | | Net cash inflow from operating activities | 4,105 | | Net cash outflow from investing activities | (1,595) | | Net cash outflow from financing activities | (3,106) | Notes to the Consolidated Financial Statements (Selected) This section provides key accounting policies and detailed breakdowns for significant financial statement items, including the change to US dollar presentation currency, exceptional items, and the valuation of the Moët Hennessy investment - Effective July 1, 2023, the functional currency of Diageo plc changed from sterling to US dollar, and the presentation currency for the group also changed to US dollar, applied retrospectively to comparative periods[750] - Exceptional operating items in fiscal 2024 were a net gain of $56 million, primarily due to a $379 million reversal of the Shui Jing Fang brand impairment, partially offset by impairment charges for the Chase brand ($101 million) and various litigation matters ($107 million)[772] - Diageo's 34% investment in its principal associate, Moët Hennessy, was valued at $5,032 million on the balance sheet as of June 30, 2024. Diageo's share of Moët Hennessy's after-tax profit for the year was $414 million[795][796]