Diageo Plc · LSE:DGE
Diageo — H1 2025 Earnings Presentation
36 slides from Diageo's earnings presentation, Feb 4, 2025
Slide 1: Interim Results Fiscal 25
DIAGEO Interim Results Fiscal 25 Debra Crew, CEO & Nik Jhangiani, CFO 4 February 2025
Slide 2: Cautionary statements concerning forward-looking statements and non-GAAP financial measures
DIAGEO Cautionary statements concerning forward-looking statements and non-GAAP financial measures The following presentation contains ‘forward-looking’ statements. These staternents can be identified by the fact that they do notrelate only to historical or current facts and may generally, but not a
Slide 3: Nik Jhangiani, CFO
DIAGEO Interim Results Fiscal 25 6 Nik Jhangiani, CFO
Slide 4: Improved performance, organic net sales back to growth
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH DIAGEO Improved performance, organic net sales back to growth Strategy driving strong market share: 65% of net sales gaining/holding share Portfolio and geographic diversity and broad price tiers driving improved performance Investment in strategic
Slide 5: Diversified footprint driving resilience
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Diversified footprint driving resilience Slight growth in North America Resilient performance in Europe Macroeconomic environment in Greater China impacted Asia Pacific Modestly improving consumer environment in Latin America and Caribbean Strong gr
Slide 6: Strong market share, particularly in the US
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Strong market share, particularly in the US Percentage of Diageo total net sales gaining/ . . holding share in Gained share in almost all our largest markets measured markets Improved US share, shifted to share gain 65%+ Investment in digital and ro
Slide 7: North America: return to topline growth
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH North America: return to topline growth US gained share of TBA led by Don Julio and Crown Royal Continued positive momentum through innovation Targeted commercial strategic investment working in key areas Don Julio: #1 spirits share gainer, #1 categ
Slide 8: Scotch impacted by a softer overall category
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Scotch impacted by a softer overall category but positive share performance Gained share in measured markets representing 70% total NSV Johnnie Walker delivered strong share growth in scotch Impactful activation driving broader recruitment and inter
Slide 9: Expanding global leadership in tequila
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Expanding global leadership in tequila Tequila +21% organic net sales, gaining share globally Aged tequila interest accelerating, Don Julio Reposado A adie lle driving growth A SUMMER OF TA > Alene The Paloma cocktail driving category awareness and
Slide 10: Growing global momentum in Guinness
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Growing global momentum in Guinness; eighth consecutive half of double-digit growth Guinness +17% organic net sales growth LUTE faire Continued share gains; #1 TBA brand in Ireland, GUINNESS IN. GAME ON. #2 TBA brand and #1 beer brand in Great Brita
Slide 11: Nik Jhangiani, CFO
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Nik Jhangiani, CFO DIAGEO =z Interim Results Fiscal 25
Slide 12: H1 F25 key performance metrics
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH H1 F25 key performance metrics Organic net sales growth in 4 of the 5 regions, Efficient growth Don Julio and Guinness standout performers Organic net sales Organic operating profit Organic operating profit decline due to overheads, primarily staff
Slide 13: Top-line growth driven by solid price/mix across most regions
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Top-line growth driven by solid price/mix across most regions F25 H1 organic net sales growth! Volume declines due to cautious +12% -0.2% consumers Price/mix led by turnaround in LAC, and good performance in Africa, NAM, and Europe +1.0% Asia Pacifi
Slide 14: Organic operating profit declined reflecting overhead costs, offsetting efficiencies
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Organic operating profit declined reflecting overhead costs, offsetting efficiencies Movement in organic operating profit’ Gross Profit driven by performance million $ in LAC, Europe, and Africa, offset 437 162 by Greater China, South East Asia, o a
Slide 15: H1 F25 improved cash flow due to strong working capital management
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH H1 F25 improved cash flow due to strong working capital management Movement in free cash flow $m Working capital improvement 3,659 “629 driven by higher creditors and lower “414 maturing stock investment 2,616 -506 -384 Capex increased to support te
Slide 16: EPS negatively impacted by associates and joint ventures
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH EPS negatively impacted by associates and joint ventures and unfavourable FX impact Movement in EPS pre-exceptionals cents 108.1 SOY, 19 +2.5 61 +1.0 977 [| -9.6% F24 H1 EPS , Associates j F25 H1 EPS Pre-Exceptionals Eaheangs Organic OP Vas and JVs
Slide 17: Balance sheet at the end of the first half
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Balance sheet at the end of the first half DIAGEO F25 HI F24 FY F24 HI venvor) Closing net debt! $m (20,676) (21,017) (20,483) (193) Average Net Debt! $m (21,716) (21,034) (20,638) (1,078) Net interest charge $m (453) (906) (454) 1 Net other finance
Slide 18: US tariffs: pricing, promotion and inventory management
• 25% tariffs announced on goods imported into the US from Pricing and promotion Canada and Mexico management • Applies to our products made in Canada and Mexico Inventory management • Duration of tariffs unknown Supply chain optimisation • c.45% US sales are agave-based spirits and Canadian whisky
Slide 19: Reshape priorities to deliver sustainable performance
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Deliver sustainable Increase top-line growth operating leverage Reshape priorities to deliver sustainable Optimise long-term Maximise returns performa nce free cash flow DIAGEO = —|_Interinm Results Fiscal 25
Slide 20: Deliver sustainable top-line growth
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Deliver sustainable top-line growth Drive volume growth from favourable macro-economic drivers, strength of portfolio and brand building capabilities, and world class innovation Disciplined pricing using digital tools and price pack architecture Emb
Slide 21: Increase operating leverage
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH DIAGEO a Re-cut productivity programme across full business Increase operating leverage Sharper focus on commercial excellence Drive effectiveness and returns on A&P Fully leverage investment in systems and digital Evaluate and build capabilities to
Slide 22: Maximise free cash flow
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH More returns based review of future CAPEX Rigorous scenario planning on building maturing liquid Continued focus and rigour on sustainable working Maximise capital improvement free cash flow DIAGEO = -22_—|_ Interim Results Fiseal 25
Slide 23: Optimise and maximise returns
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Ensuring appropriate investment in the business for long and short-term Disposals in line with long term strategy Disciplined shareholder returns Optimise and maximise returns Selective M&A DIAGEO = -23._—|_ Interim Results Fiscal 25
Slide 24: Fiscal outlook: building momentum
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Fiscal 25 outlook: building momentum Organic net sales growth: H2 sequential improvement on first half fiscal 25 although tariffs could impact this building momentum Organic operating profit: H2 slight decline, broadly in line with decline in the fi
Slide 25: Looking beyond Fiscal 25
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Confident in favourable long term industry fundamentals and ability to outperform and deliver positive operating Looking leverage beyond Removed medium term guidance and moving to more regular near-term guidance given current macro and Fiscal 25 geo
Slide 26: In summary
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH In summary Good start in first half fiscal 25; positive momentum and share gains US back in growth with strong market share Investments in route-to-market, digital capabilities and supply chain position us favourably and are starting to deliver bene
Slide 27: Celebrating life, every day, everywhere
DIAGEO Celebrating life, every day, everywhere
Slide 28: Appendix
Appendix
Slide 29: Historic growth across regions — organic
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Historic growth across regions — organic North America Europe Asia Pacific Latin America and Caribbean Africa Total All figures prepared based off HI and FY published organic movement calculations, including implied H2 and price/mix, all figures quo
Slide 30: US Spirits Industry and Diageo Consumption Growth
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH US Spirits Industry and Diageo Consumption (Nielsen/NABCA) Growth; Diageo US Spirits Shipments, Depletions and Consumption Growth US Spirits Diageo Nielsen/NABCA sales US Spirits Growth vs prior year" F25 H1 growth vs prior year Industry Diageo HI 2
Slide 31: Foreign exchange information and guidance
FOCUSED ON DELIVERING SUSTAINABLE LONG-TERM GROWTH Foreign exchange information and guidance Translation FX rates DIAGEO Spotat Spotat Average Average 30June 31Dec actualHi actual H1 Currency 2024 2024 F24 F25 USD 1.00 1.00 1.00 1.00 GBP 0.79 0.80 0.80 0.78 EUR 0.93 0.96 0.92 0.92 INR 83.39 85.61 82
Slide 32: Investor Relations contacts
DIAGEO Sonya Ghobrial Head of Investor Relations Sonya.Ghobrial@diageo.com +44 (0) 7392 784 784 Andy Ryan Investor Relations Director Andrew.Ryan@diageo.com +44 (0) 7803 854 842 Brian Shipman Investor Relations Director Brian.Shipman@diageo.com +1(0) 917 710 3007 32 |__ Interim Results Fiscal 25
Slide 33: Definitions and reconciliation of non-GAAP measures to GAAP measures
DIAGEO Financial/legal appendix: Definitions and reconciliation of non-GAAP measures to GAAP measures Diageo's strategic planning process is based on certain nonGAAP measures, including organic movements. These nonGAAP measures are chosen for planning and reporting, and some of them are used for inc
Slide 34: Calculation of organic movements
DIAGEO Continued from the previous page Calculation of organic movements Anexplanation of non GAAP measures, including organic movements, is set out on pages 227-235 of Diageo's Annual Report for the year ended 30 June 2024, (a) Exchange rates Exchange in the organic movement calculation reflects th
Slide 35: Exceptional items
DIAGEO Continued from the previous page (c] Exceptional terns Exceptional items are those thatin management's judgement need to be disclosed separately. Such items are included within the income statement caption to which they relate, and are excluded from the organic movement calculations Managemen
Slide 36: Adjustment in respect of hyperinflation
Continued from the previous page Adjustment in respect of hyperinflation The group's experienceiis that hyperinflationary conditions result in price increases that include both normal pricing actions reflecting changes in demand, commodity and other input costs or considerations to drive commercial