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DIAGEO ANNUAL REPORT 2014 OUR BUSINESS
OUR BUSINESS
Diageo is a global leader in beverage alcohol with iconic brands in spirits, beer and wine. We invest behind our brands to drive growth, providing consumers with choice and quality across categories and price points.
Our business is built on foundations laid by the giants of our industry. Arthur Guinness, Alexander Walker and all those that followed in their footsteps, cared deeply about the people and businesses they fostered. They were driven to create products that would last for generations, the best conditions for their people, and the best financial performance. Today, we act like those entrepreneurs, passionate about
WE PRODUCE Every year we produce more than 6.5 billion litres of our brands, from more than 100 sites in 30 countries. Our supply functions are responsible for the distilling, brewing, bottling, packaging and distribution of our brands. We are committed to efficient, sustainable production to the highest quality standards, and are proud that our supply facilities are recognised as leaders in environmental sustainability.
WE MARKET We are committed to ensuring that our brands are at the front of consumers’ minds whenever a purchase decision arises. The strength of our portfolio means that we have relevant brands at almost every price tier of every category.
We work tirelessly to engage and delight existing and new consumers, constantly innovating with our products and how we market. For decades our brands have been at the forefront of marketing innovation and the same remains true Our 21 markets are designated as today. We take seriously our obligations import markets, import and third-party to market our brands responsibly, and production markets or import and local to help our consumers make informed production markets. Our export-led decisions about drinking, or not drinking. International Supply Centre (ISC), We are committed to the development based in Europe produces many of and implementation of programmes our heritage brands, including our to educate consumers about Scotch whisky products. It employs responsible drinking. over 4,000 people across more than 55 sites in Scotland, England, Ireland, Italy and the Netherlands.
our brands, our customers and consumers, our communities, and society as a whole. Our purpose is to help our consumers celebrate life, every day, everywhere, and to do so responsibly. We give our people the freedom to do the best work of their careers. We take great pride in what we do, and in how we do it. Above all we value each other’s commitment to delivering the best.
WE INNOVATE Innovation is critical to our continued growth. We are committed to finding breakthrough innovations and ideas to serve our customers and consumers. We identify new consumer trends, and innovate at scale boldly. Innovation is a permanent engine of growth for our business and we are restless in our search for new products. We are open-minded to where these ideas will come from, combining our world-leading technical and research capability with investments in smaller start-ups. In each of the last five years our innovation pipeline has delivered double-digit growth for Diageo.
WE SELL Everyone at Diageo is encouraged to sell or to help to sell. This is just one expression of the world-class customer focus that is at the heart of our business. Our founders and all those who followed, were obsessed with providing the best quality products to their customers in markets at home and abroad. Today we are no different. In each of our 21 markets, we are passionate about ensuring our products are available to consumers in every appropriate shop or bar. We are continually working to deliver amazing consumer experiences and to extend our sales reach.
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DIAGEO ANNUAL REPORT 2014 OUR STRUCTURE
Diageo’s strength is in its geographic reach. We operate as 21 geographically based markets around the world and have a presence in over 180 countries. We employ 28,000 talented people across our global business. 39% of Diageo’s business is in the emerging markets in Latin America, Asia, Africa, Eastern Europe and Turkey. This presence is balanced through our strong businesses in the world’s most profitable beverage alcohol market, the United States, and an integrated Western European business.
Governance
DIAGEO REPORTS AS FIVE REGIONS
Strategic report
OUR STRUCTURE
North America
FINANCIALS BY REGION Volume (EUm) Net sales* (£m) Operating profit** (£m)
Africa, Eastern Europe and Turkey
Latin America and Caribbean
Asia Pacific
49.3 3,444 1,460
33.0 2,169 639
36.0 2,075 554
23.0 1,144 328
14.8 1,347 283
32 34 45
21 21 19
23 21 17
15 11 10
9 13 9
Reported net sales for the year ended 30 June 2014. *Excluding corporate net sales of £79 million; **Excluding exceptional operating charges of £427 million and corporate costs of £130 million.
% SHARE OF NET SALES BY OUR 21 MARKETS***
Financial statements
% SHARE BY REGION Volume (%) Net sales* (%) Operating profit** (%)
Western Europe
EACH OF OUR 21 MARKETS IS ACCOUNTABLE FOR ITS OWN PERFORMANCE AND FOR DRIVING GROWTH Western Europe
>20%
US Spirits & Wines
Western Europe
3-6%
Diageo-Guinness USA (DGUSA)
Africa, Eastern Europe and Turkey
Latin America and Caribbean
Asia Pacific
Nigeria
WestLAC
East Africa
Paraguay, Uruguay & Brazil
Global Travel Asia & Middle East
Turkey
2-3%
Africa Regional Markets Canada
Russia & Eastern Europe South Africa
