Diageo plc (DEO) Q2 2026 Earnings Call

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WEBVTT 00:00:01.280 -- 00:00:05.507 Good morning and welcome to the Diageo interim results presentation. 00:00:05.507 -- 00:00:08.932 As you know, it's my first results session for Diageo. 00:00:08.932 -- 00:00:13.519 In fact, this is my seventh week, and I'll share a few initial impressions and immediate 00:00:13.519 -- 00:00:17.445 priorities with you later. But first, I'd like to hand over to Nick to share with you 00:00:17.445 -- 00:00:21.969 the results of the first half of 2026. Nick? 00:00:22.137 -- 00:00:27.187 Thank you, Dave, and welcome to Diageo. In the context of a continued challenging macro 00:00:27.187 -- 00:00:32.858 environment and industry backdrop in many of our markets, but in particular U.S. 00:00:32.858 -- 00:00:38.028 spirits and Chinese white spirits, both organic net sales and organic operating 00:00:38.028 -- 00:00:40.919 profit declined 2.8%. 00:00:40.919 -- 00:00:45.889 Notably, excluding the impact from Chinese white spirits, we would have reported organic 00:00:45.889 -- 00:00:51.760 net sales down approximately 0.5% and approximately 1.5% 00:00:51.760 -- 00:00:55.704 growth in organic operating profit. 00:00:55.808 -- 00:01:00.758 Europe, LAC and Africa delivered strong growth, but this was more than offset by NAM 00:01:00.758 -- 00:01:06.021 and APAC. Our focus on cost savings benefited organic operating profit, 00:01:06.021 -- 00:01:12.049 but did not offset lower gross profit given the mix of market growth. 00:01:12.049 -- 00:01:16.394 This profit decline, as well as lapping the impact of the disposal of our businesses 00:01:16.394 -- 00:01:21.640 in Ghana and Nigeria, impacted our EPS pre-exceptionals, 00:01:21.640 -- 00:01:24.381 which declined 2.5%. 00:01:25.081 -- 00:01:30.608 Our focus on cash delivery continues, delivering jus...