Diageo reiterates FY25 guidance for organic net sales, operating profit

The company said, “The increased growth rate in Q3 compared to the first half of fiscal 25 is mainly driven by phasing and does not change our expectations for fiscal 25 full-year growth from those communicated at fiscal 25 interim results in February 2025. In the second half of fiscal 25, we continue to expect to deliver a sequential improvement in organic net sales growth compared with the first half of fiscal 25. We continue to expect a slight decline in organic operating profit in the second half of fiscal 25 compared with the prior year, broadly in line with the decline in the first half. This includes the impact of the tariffs currently announced which will impact fiscal 25. From and including our full year results for fiscal 25, we are changing how we report the effective tax rate, both pre and post exceptional items, and will exclude the share of after-tax results of associates and joint ventures from profit before tax. This will present a simpler calculation and is consistent with peer reporting. The historical impact of applying this approach over the last four years can be found in the appendix of this release. On this new basis, we expect the tax rate before exceptional items for fiscal 25 to be in the region of 25%, broadly in line with fiscal 24, which was 25.1% on the same basis. Given current market conditions and our debt maturity profile, we now expect the effective interest rate for the full year fiscal 25 to be slightly below full year fiscal 24, which was 4.3%. In fiscal 25, as guided previously, we expect capital expenditure for the full year to be towards the upper end of the previously guided range of $1.3-1.5bn. We continue to expect leverage at the end of fiscal 25 to remain above the target leverage range of 2.5 to 3.0x, and now expect this to be in the range of 3.3 to 3.5x.”