Diageo plc · LSE:DGE
Diageo — Investor Presentation (October 2006)
35 slides from Diageo's investor presentation, Oct 4, 2006
Slide 1: Continental Europe Investor Presentation
Continental Europe Investor Presentation 4 October 2006
Slide 2: Introduction
Introduction Gilbert Ghostine – Managing Director, Continental Europe > Joined Diageo in 1993 > General management roles across four continents in Diageo > Most recently MD of Northern Europe Hub 2
Slide 3: Diageo Europe
Diageo Europe Great Britain 13 million cases Russia 700,000 cases Main brands Smirnoff Main brands Guinness Johnnie Walker Ireland Baileys Baileys 6 million cases Main brand Guinness Iberia 8 million cases Main brands JεB Baileys Cacique Continental Europe Great Britain Smirnoff 13 million cases Ire
Slide 4: Diageo Continental Europe
Diageo Continental Europe Nordics & Baltics Main brands Smirnoff Baileys Ger, Swit, Aus Poland Main brands Main brands Baileys Benelux Smirnoff Smirnoff Johnnie Walker Main brands Johnnie Walker JεB Eastern Europe Main brands Johnnie Walker JεB France Main brands Turkey JεB Malts Main brands JεB Joh
Slide 5: Fit for purpose route to market
Fit for purpose route to market > Eleven IMCs > JV in France with MH > Distributors in the Baltics, Balkans and Eastern Europe JV = France Diageo IMC = Italy, Greece, Turkey, Poland, Germany, Austria, Switzerland, Benelux, Norway, Sweden, Denmark Distributor = Estonia, Latvia, Lithuania, Hungary, Cz
Slide 6: Organisation structure
Organisation structure Managing Director Continental Europe GM GM GM GM GM Greece France Italy Benelux Poland GM GM GM GM GM Turkey Nordics & Germany, Austria Eastern Europe Guinness CE Baltics & Switzerland 6
Slide 7: Net Sales by category
Net Sales by category +7% +6% Category share of +3% Continental Europe 0% net sales* Spirits 84% RTD 8% Beer 7% Wine 1% (22)% F06 Total growth, % Spirits growth, % RTD growth, % Beer growth, % Wine growth, % Year ended 30 June 2006. * Net sales is after deducting excise duties. 7
Slide 8: Delivering growth across spirits
Delivering growth across spirits Continental Europe net sales by category Other Scotch Whisky Diageo's Industry Gin growth* growth** Scotch Whisky 5% 0% Tequila Liqueurs 7% (2)% Rum Vodka 13% 0% Vodka Rum 8% 2% Tequila 2% 2% Gin 11% (4)% Liqueurs Other 0% (3)% Total Spirits 6% (1)% Year ended 30 Jun
Slide 9: Delivering growth in spirits across countries
Delivering growth in spirits across countries Continental Europe net sales by country Greece, 20% Rest of CE, 40% Diageo's Industry growth* growth** Greece 6% (1)% France 5% (1)% Germany 6% (1)% Italy 4% 0% France, 16% Rest of CE 8% (2)% Italy, 12% Germany, 12% Year ended 30 June 2006. * Net sales i
Slide 10: Trading environment in Continental Europe
Trading environment in Continental Europe > Low economic growth > Ageing population But opportunities for growth. . . > High GDP per capita > Shift from local spirits to international premium brands 10
Slide 11: Strategy based on three levers
Strategy based on three levers > Low economic growth Polarised choices > Ageing population But opportunities for growth. . . > High GDP per capita Driving premiums > Shift from local spirits to Innovation international premium brands 11
Slide 12: Focus markets
Focus markets Switz., Aust., Ger. 1.8 million cases Main brands Baileys Smirnoff France 2.5 million cases Main brands Greece JεB 2.3 million cases Malts Main brands Johnnie Walker Haig Italy France 1.5 million cases Italy Main brands Switzerland, Austria, Germany Pampero Greece Baileys Volumes as at
Slide 13: In France - outperforming a strong scotch market
In France - outperforming a strong scotch market. . . 13.3% 11.4% 8.0% 6.1% Market Diageo Diageo Malts JεB MAT, % Source: AC Nielsen 13
Slide 14: Driving growth through great marketing
. . .driving growth through great marketing. . . 14
Slide 15: Capitalising on interest in malts
. . .and capitalising on interest in malts > Market share gains > 12% net sales growth in F’06 > CRM uplift > Classic Malts & Modern Food (Oct 06) 15
Slide 16: Greece
Greece. . . > Johnnie Walker is an iconic brand in Greece > Johnnie Walker Red Label - market leader in standard whisky segment > Johnnie Walker Black Label - now over 100k cases 16
Slide 17: Germany – New business model implemented
Germany – New business model implemented > New route-to-market to focus on Key Accounts and Image On-Trade accounts > Strategic focus on premiumisation > Operational efficiencies through the merger of Germany, Austria and Switzerland 17
Slide 18: Germany – Growing Smirnoff through focus on premium credentials
Germany – Growing Smirnoff through focus on premium credentials > Clear strategic focus on building brand credentials > Integrated quality campaign across marketing and promotional programme > Clear improvement in brand equity Turnaround of brand, back to growth 18
Slide 19: Italy – Pampero
Italy – Pampero. . . > Venezuelan heritage and superior liquid drives strong consumer appeal > Media campaign has reinforced quality and distinctiveness > Pampero has become the number one rum in off trade, continuing to grow share in on trade F06: 9% volume growth, share gains 19
Slide 20: Eastern Europe
Eastern Europe Volume growth in focus markets: Poland +10% Bulgaria +43% Romania +9% Poland Eastern Europe Year ended 30 June 2006. 20
Slide 21: Strategy based on three levers
Strategy based on three levers > Low economic growth Polarised choices > Ageing population But opportunities for growth. . . > High GDP per capita Driving premiums > Shift from local spirits to Innovation international premium brands 21
Slide 22: Driving premiums
Driving premiums Diageo Continental Europe Profile > Trends toward Premium 24% premiumisation > Strong collection of brands in premium spirits Standard 77% Standard: JW Red, Smirnoff Red, Gordons Premium: Baileys, JW Black, Classic Malts, Tanqueray Pampero, Aniversario, JW Super Deluxe 22
Slide 23: Driving premiums: sponsorship
Driving premiums Capitalising on our sponsorship Venue Country Date Imola San Marino 23 April Nurburgring Germany 7 May Monte Carlo Monaco 28 May Magny Cours France 16 July Hockenheim Germany 30 July Hungaroring Hungary 6 Aug Istanbul Turkey 27 Aug Monza Italy 10 Sep Spa Belgium 17 Sept 23
Slide 24: Driving premiums: innovation marketing - gifting
Driving premiums Innovation marketing - gifting €240 €110 €46 €41 €130 €5 €41 €41 Regular Gifts Special Gift Price Value added 24
Slide 25: Driving premiums: direct marketing
Driving premiums Innovation marketing – direct marketing > Media Coverage > Tastings 25
Slide 26: Strategy based on three levers
Strategy based on three levers > Low economic growth Polarised choices > Ageing population But opportunities for growth. . . > High GDP per capita Driving premiums > Shift from local spirits to Innovation international premium brands 26
Slide 27: Innovation
Innovation Taking our brands into new occasions 27
Slide 28: Innovation
ss DIAGEO Innovation TWO NEW FLAVOURS TO ENJOY DRINK RESPONSBLY [i 28
Slide 29: Continuously looking at ways to improve operational leverage
Continuously looking at ways to improve operational leverage > Shared services > Polarised choices on marketing investments > Efficiencies in procurement, marketing and organisational costs > Price harmonisation across the markets 29
Slide 30: Sales Execution
Sales Execution > Maximising the impact at point of purchase > Improving the purchase experience Smirnoff in Tesco Poland 30
Slide 31: Sales Execution
Sales Execution > Sponsorship activity is paying dividends on the shop floor > Creating consumer interest in the profitable beers wines & spirits section Johnnie Walker - F1 MCLAREN MERCEDES Promotion 31
Slide 32: Wrap up
Wrap up > Investment prioritised behind growth opportunities > Continuing to drive efficiencies from the cost base > Well placed for continued out-performance 32
Slide 33: Questions
QUESTIONS 33
Slide 34: Slide 34
Slide 35: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This document contains statements with respect to the financial condition, results of operations and business of Diageo and certain of the plans and objectives of Diageo with respect to these items. These forward-looking statements are made