Diageo plc · LSE:DGE
Diageo — Investor Presentation (April 2011)
30 slides from Diageo's investor presentation, Apr 14, 2011
Slide 1: Africa Webcast
Africa Webcast 14 April 2011
Slide 2: Nick Blazquez, President, Diageo Africa
Nick Blazquez President, Diageo Africa
Slide 3: Africa's potential is based on favourable demographics
Africa’s potential is based on favourable demographics. . . Population growth by geography, millions of people 108 8,306 160 (19) 270 195 +1,401 126 117 444 6,905 2010 Sub-Saharan AfricaSouth North Africa and Middle India North and Latin America China EU-Japan 2030 East Asia Middle EastAsia-Oceania
Slide 4: ...and promising GDP prospects
. . .and promising GDP prospects. . . GDP growth, unweighted annual average, % 6 African countries Asian 5 countries 4 3 2 1970s 1980s 1990s 2000s 2011-15* * Forecast. Source: The Economist, January 2011. 4
Slide 5: ...that translate into consumer opportunities
. . .that translate into consumer opportunities Share of households in each income Africa private consumption, $bn bracket, % millions of households 163 196 244 1,600 Discretionary income 37 44 1,200 53 800 4.9% p.a. 29 Basic needs 32 29 400 34 24 18 0 2000 2008 2020e 2000 2008 2020e Aspiring emergi
Slide 6: Diageo has the widest geographic coverage in Africa
Diageo has the widest geographic coverage in Africa Total beer and spirits volume in Africa, 2009 South Africa Other Diageo operating model Ethiopia Subsidiary License brewing Angola Third party distribution DRC Ghana Nigeria Cameroon Uganda Kenya Tanzania Source: Market interviews; Euromonitor; Pla
Slide 7: Our operating models are fit for purpose
Our operating models are fit for purpose Joint Venture with International Brewer Joint Venture with International Brewer Listed on local stock exchange Diageo operating model Subsidiary Associate License brewing Fully owned Joint Venture with Third party distribution subsidiary International Brewer
Slide 8: We have a track record of delivering growth
We have a track record of delivering growth 5 Year 1,250 Net sales*, £m Net sales* CAGR, % Beer 18 Spirits 13 1,000 Total 16 5 Year OP CAGR 12 F’11 H1 750 Organic,%** Volume 9 Net sales 10 500 F06 F07 F08 F09 F10 Marketing spend 10 * Year ended June 30. **6 months ended 31 December 2010. 8
Slide 9: Africa is growing in importance to Diageo
Africa is growing in importance to Diageo 14 Africa as % of Diageo net sales Africa beer as % of Diageo beer 2006 12 29% 10 8 6 2010 4 41% 2 2006 2007 2008 2009 2010 Year ended 30 June. 9
Slide 10: Our Africa strategy is founded on 3 principles
Our Africa strategy is founded on 3 principles Beer and spirits – a key differentiator Consistent investment behind our brands Local business with global strengths 10
Slide 11: Beer and spirits: A key differentiator
Beer and spirits: A key differentiator Diageo Africa net sales, % Spirits, 25% RTD, 6% Lager, 43% Guinness, 26% 6 months ended 31 December 2010. 11
Slide 12: Beer and spirits: Diageo's unique in its range
Beer and spirits: Diageo’s unique in its range Beer Lower Price points Higher Spirits 12
Slide 13: Beer and spirits: Accelerating growth
Beer and spirits: Accelerating growth Improves capabilities Improves routes to market Drives efficiencies and enhances pace 13
Slide 14: Beer and spirits: South Africa example
Beer and spirits: South Africa example 14
Slide 15: Beer and spirits: Together winning share
Beer and spirits: Together winning share Diageo share of spirits Windhoek and Heineken share of beer in South Africa, % volume share in South Africa, % volume share 35 6 33 5.2 31 30 4.1 30 4 3.5 28 27 26 26 26 2.5 2.2 25 2.0 2.0 2.0 25 2 1.8 20 0 F02 F03 F04 F05 F06 F07 F08 F09 F10 F02 F03 F04 F05
Slide 16: Consistent investment: Building sales capabilities
Consistent investment: Building sales capabilities “For the first time I foresee a clear future in partnership with Guinness, not just buying and selling products” - Cameroon “Platform for Growth must be in our DNA” - Kenya “It’s obvious that we have not even started to scratch the surface in terms
Slide 17: Consistent investment: In innovation
Consistent investment: In innovation Net sales, £m 5 Year 90 90 90 CAGR, 39% 80 80 80 5 Year 5 Year CAGR, 70 70 70 CAGR, 21% 31% 60 60 60 50 50 50 40 40 40 30 30 30 20 20 20 10 10 10 0 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Year ended 30 June. 17
Slide 18: Consistent investment: In marketing
Consistent investment: In marketing Proven growth driver, Integrated digital high-growth geography marketing campaigns 18
Slide 19: Consistent investment: Building capacity
Consistent investment: Building capacity 19
Slide 20: Local business: Partnering with communities
Local business: Partnering with communities 300k Tonnes of grain 4 Million people with water 20
Slide 21: Local business: Developing people
Local business: Developing people 21
Slide 22: East Africa: Business context
East Africa: Business context • Clear leadership position • Rapidly developing spirits market • Trading bloc benefits with some offset of tax rationalisation 22
Slide 23: East Africa: Growth drivers and opportunities
East Africa: Growth drivers and opportunities Building our spirits distribution footprint Leveraging proven pan-regional marketing Actively managing corporate responsibility agenda 23
Slide 24: South Africa: Business context
South Africa: Business context • Successful joint venture operating model • Gaining share versus market leader • Full brand range in Africa’s most developed spirits market 24
Slide 25: South Africa: Growth drivers and opportunities
South Africa: Growth drivers and opportunities Going to market as a category captain Driving brand growth Expanding capacity and moving to returnable bottles 25
Slide 26: Nigeria: Business context
Nigeria: Business context • Well-placed in a highly competitive market • Opportunity fuelled by scale and economic growth • Brand range, route to market and capacity key to further growth and profitability 26
Slide 27: Nigeria: Growth drivers and opportunities
Nigeria: Growth drivers and opportunities Expanding offering of beer and spirits Extending the reach of our route to market Investing in our manufacturing strategy 27
Slide 28: Summary: Well-placed to deliver continued growth
Summary: Well-placed to deliver continued growth Diageo has scale in the biggest African markets Diageo is connected to communities Diageo’s beer and spirits range is unique Diageo has the right capabilities across all sales drivers Diageo’s management team has deep experience in growing African bus
Slide 29: For further information on Diageo
For further information on Diageo, please visit the Investors section of: diageo.com The Investor Relations team can be contacted on: UK +44 (0)20 8978 4267 US +1 202 715 1110 or by email at: investor.relations@diageo.com 29
Slide 30: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation contains ‘forward-looking’ statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward-looking statements include all statem