Diageo announces global supply operations review

11 March, 2013

Diageo has announced that its global supply and procurement operation will be refocused to improve supplying its 21 key markets.

Responsibility for local operations will be transferred to the markets and regional structures will be reduced.

This change follows the reshaping of the in-market organisations through the implementation of the 2011 operating model review and is a consequence of Diageo’s burgeoning presence in new faster growth markets.

The company says an initial review has established that efficiency-driven cost savings can be delivered which together with savings from footprint changes and cost reductions in respect of the regional supply organisations are expected to amount to approximately £60 million per annum. These savings are expected to be achieved in three years. Costs associated with the restructuring are estimated, by Diageo, to be approximately £100 million.

As announced last November, Diageo has made changes to management responsibilities that have led to a change in the reporting for geographic segments. Due to these changes, results for the year ending 30 June 2013 will be reported using the following geographical segments:

· North America

· Western Europe

· Africa, Eastern Europe and Turkey

· Latin America and Caribbean

· Asia Pacific

· Corporate

Diageo says as a consequence of these changes the figures for the geographical segments for prior periods have been restated.

Revised segmental information for the years ended June 30, 2012 and June 30, 2011 and the six month period ended December 31, 2012 and  December 31, 2011 are provided below.

Organic growth percentages by geographic segment have been restated for the year ended 30 June 2012 and the six month period ended 31 December 2012.

Keywords: spirits, diageo

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