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
26 February 2020
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
Indicate
by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule
101(b)(1):
Indicate
by check mark whether the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule
101(b)(7):
26 February 2020
Trading Update - Impact of COVID-19 outbreak
When we released our interim results on 30 January 2020, we
commented on the expectation of an impact from the Coronavirus
(COVID-19) outbreak, which we were not able to quantify at the
time. We are now providing an update on the expected range of
the adverse impact in fiscal 2020 of the evolving COVID-19
situation.
As the situation continues to unfold, our primary concern remains
the welfare of our colleagues, their families and their local
communities and we will continue to provide all support possible.
Authorities in China and in other impacted countries have taken
strong and decisive action and continue to work tirelessly to
contain the spread of the virus.
Public health measures across impacted countries in Asia Pacific,
principally in China, have resulted in: restrictions on public
gatherings, the postponement of events and the closure of many
hospitality and retail outlets. Several countries and many
businesses have also imposed restrictions on travel.
It is difficult to predict the duration and extent of any further
spread of the COVID-19 outbreak both in and outside of Asia. Based
on current information we have made assumptions to estimate the
fiscal 2020 impact on the performance of the following
businesses:
Greater China:
●
Bars and restaurants
have largely been closed and there has been a substantial reduction
in banqueting. As the majority of consumption is in the on-trade,
we have seen significant disruption since the end of January which
we expect to last at least into March.
● Thereafter, we expect a gradual improvement with
consumption returning to normal levels towards the end of fiscal
2020.
On-trade, in other impacted countries in Asia Pacific:
● The outbreak in several other Asian countries,
especially South Korea, Japan and Thailand, has led to events being
postponed, a reduction in conferences and banquets, and a drop in
tourism which have all impacted on-trade
consumption.
● We expect gradual improvement throughout the
fourth quarter of fiscal 2020.
Travel Retail, mainly in the Asia Pacific region:
● The outbreak has caused a significant reduction in
international passenger traffic, especially in
Asia.
● Recovery of passenger traffic is assumed to be
gradual, resulting in weaker performance for the remainder of
fiscal 2020.
On this basis, we estimate the negative impact in fiscal 2020, on
the group's organic net sales and organic operating profit, to be
in a range of £225m to £325m and £140m to
£200m, respectively, with the timing and pace of recovery
determining the impact within these estimated ranges. The COVID-19
situation is dynamic and continues to evolve and these ranges
exclude any impact of the COVID-19 situation on other markets
beyond those mentioned above. We will continue to monitor the
situation closely.
We remain confident in the growth opportunities in our Greater
China and Asia Pacific business. We will continue to invest behind
our brands, ensuring we are strongly positioned for the expected
recovery in consumer demand.
For further information please contact:
Investor Relations:
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Vinod
Rao
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+44 (0)
7834 805 733
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Andy
Ryan
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+44 (0)
7803 854 842
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investor.relations@diageo.com
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Media Relations:
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Dominic
Redfearn
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+44 (0)
7971 977 759
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Jessica
Rouleau
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+44 (0)
7925 642 561
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press@diageo.com
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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).
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 49 of Diageo's interim results for the six
months ended 31 December 2019 published on 30 January
2020.
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:
26 February
2020
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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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Diageo (PK) (USOTC:DGEAF)
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