The alcoholic drinks firm, which also owns Smirnoff vodka and Guinness among many other brands, said adverse foreign exchange rate movements will lop around £150mln from operating profit in the current fiscal period, unless the exchange rate movements unwind.
Ahead of its annual general meeting, the company revealed its new financial year has started well, with performance in line with expectations.
The drinks brands giant has seen mid-single digit percentage volume growth, though it admitted that this was against particularly weak comparative figures from a year ago, particularly in the US spirits market.
For the balance of the first half of the fiscal year the comparatives get tougher, particularly relating to innovations in US spirits, chief executive Ivan Menezes revealed, as the company said its first half guidance for Diageo North America of an organic net sales decline of 2% remains unchanged.
The company is clearly having problems pushing through price increases, but Menezes held out the prospect of things picking up in fiscal 2017 (F17).
"As we achieve our productivity gains, from F17 we expect to deliver mid-single digit organic top line growth on a sustained basis and operating margin expansion of 100 basis points [one percentage point] over three years. Our brands, our global footprint and our people give me confidence that Diageo can deliver strong and sustained performance," Menezes told shareholders.