DIAGEO INTERIM RESULTS SIX MONTHS ENDED 31 DECEMBER 2017 1 CONSISTENT DELIVERY OF STRONG RESULTS
Reflecting our ambition to be one of the best performing, most trusted and respected consumer products companies in the world
Delivering through our six priorities with clear goals defined by our performance ambition
Four measures of our progress • efficient growth • value creation • credibility and trust • motivated people
2 CONSISTENT DELIVERY OF STRONG RESULTS
Organic volume 1.8%. Organic net sales 4.2% Organic operating margin expansion 81bps Consistent strong cash delivery: Free cash flow £1bn Eps pre-exceptionals up 9.4% Returned £0.8bn to shareholders through share buy-back Interim dividend up 5% 3 CONTINUING OUR PERFORMANCE MOMENTUM
Organic operating margin Organic net sales growth Free cash flow (£ million) improvement (bps) 4.3% 4.2% 77 81
2.8% 1,084 1,029 839 37 699 24 19 326 0.4% 0.0%
F14 F15 F16 F17 F18 H1 F14 F15 F16 F17 F18 H1 F14 H1 F15 H1 F16 H1 F17 H1 F18 H1
4 CONTINUED SOLID GROWTH IN THE THREE FOCUS AREAS: ORGANIC NET SALES GROWTH
Scotch 2.8%
US Spirits 2.9%
India 2.3%
5 CONTINUED MOMENTUM WHICH REFLECTS:
Delivering our strategy through our six execution priorities
Consistent broad based growth across the business and the three focus areas
Continued margin expansion enabled by productivity programme and strong cash flow Confidence in delivering our medium term guidance and enables our long term performance ambition 6 A SET OF RESULTS THAT DEMONSTRATE CONTINUED PERFORMANCE MOMENTUM
Efficient growth: F18 H1 Organic net sales growth 4.2%
Organic operating margin improvement +81bps Free cash flow £1.0bn Pre-exceptional eps up 9.4% to 67.8p
Value creation: ROIC up 77 bps to 16.5% Total Shareholder Return up 22%
7 REPORTED NET SALES UP 1.7%
4.2% ORGANIC GROWTH Organic growth
149 6,530
6,421
111
(134) (17)
F17 H1 Exchange Acquisitions Volume Price/mix F18 H1 and disposals 8 4.2% ORGANIC NET SALES GROWTH
Organic volume growth Price/Mix Organic net sales growth
4.3% 4.2%
3.2% 2.8% 2.4% 1.8% 1.3% 1.5% 1.1%
F16 F17 F18 H1
9 ALL REGIONS DELIVERED TOP LINE GROWTH
Organic net sales growth 6.9% 6.8% price/mix volume
4.4% 4.2% 1.7% 8.7% 8.3% 2.5% 2.4% 4.6% 1.7% 3.6% 1.8% 0.8%
(0.2)% (1.9)% (1.8)% (1.5)%
NAM EUROPE AFRICA LAC APAC DIAGEO & TURKEY 10 BROAD BASED ORGANIC GROWTH ACROSS OUR CATEGORIES Organic net sales growth 43% 16%
5% 5% 4% 4% 3% 1%
(3)% Scotch Vodka NAM Rum Liqueurs IMFL Gin Tequila Beer Whiskey Whisky Category as a % of net sales
27% 11% 9% 7% 6% 5% 4% 3% 15%
11 STRONG PERFORMANCE ACROSS OUR PORTFOLIO Organic net sales growth 11% Global giants
Johnnie Walker 7%
Smirnoff (1)%
Captain Morgan 6% 5% 5% Baileys 6%
Tanqueray 16%
Guinness 4%
Global Local Reserve giants stars 12 REPORTED OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS UP 6.1% ORGANIC OPERATING PROFIT UP 6.7%
£m F18 H1 F17 H1
PRIOR PERIOD OPERATING PROFIT * 2,065 1,717
Exchange (15) 303
Acquisitions & Disposals 2 (42)
Organic growth 138 87
CURRENT PERIOD OPERATING PROFIT * 2,190 2,065
*Reported operating profit before exceptional items 13 REPORTED OPERATING MARGIN EXCLUDING EXCEPTIONAL ITEMS UP 138 BPS ORGANIC OPERATING MARGIN GREW 81 BPS 81bps 33.5%
12bps 45bps
32.2%
F17 H1 Exchange Acquisitions Organic F18 H1 and disposals operating margin
14 ORGANIC OPERATING MARGIN UP 81 BPS
Movement in organic operating margin
122bps 33.6%
32.8% 3bps
(44)bps
F17 H1 Gross margin Marketing Other F18 H1 operating items 15 PRODUCTIVITY EFFICIENCY FUNDED A SIGNIFICANT INCREASE IN MARKETING ACTIVITY
£m F18 H1
Prior period marketing 908 Exchange (8) Acquisitions 2 Marketing efficiencies (69)
Underlying increase 15% 135
Current period marketing 968
16 ORGANIC OPERATING MARGIN UP 81 BPS
Movement in organic operating margin
122bps 33.6%
32.8% 3bps
(44)bps
F17 H1 Gross margin Marketing Other F18 H1 operating items 17 PRODUCTIVITY PROGRAMME ON TRACK TO DELIVER INCREASED GUIDANCE
F17-F19 Guidance Productivity target £700m 2/3 reinvested Margin improvement of 175bps
NET REVENUE GLOBAL ORGANISATION MARKETING INDIRECTS MANAGEMENT SUPPLY EFFECTIVENESS
18 STRONG FREE CASH FLOW DELIVERY
86
1,084 (37) (17) (15) 21 8 1,029
(101)
F17 Exchange (i) Operating Working Capex Tax Interest Other (iii) F18 profit (ii) capital
(i) Exchange on operating profit before exceptional items (ii) Operating profit excluding exchange, depreciation and amortisation, post employment charges and non cash items (iii) Other items include post employment payments, dividends received from associates and joint ventures, and loans and other investments 19 IMPROVED COST OF DEBT SUPPORTED BY FAVOURABLE REFINANCING
F18 H1 F17 H1 Movement
Closing net debt* £m (9,198) (8,936) (262) Average net debt* £m (8,819) (9,066) 247
Net interest charge £m (130) (153) 23 Net other finance charges £m (24) (29) 5 Net finance charges £m (154) (182) 28
Effective interest rate % 3.0 3.5 (0.5)
Adjusted** net debt* / EBITDA x 2.2 2.5 (0.3)
* Net debt is equivalent to net borrowings ** Adjusted to include net debt and post employment liabilities 20 DISCIPLINED APPROACH TO CAPITAL STRUCTURE, SHARE BUY BACK IS ON TRACK
Leverage policy Adjusted Net Debt* to EBITDA: 2.5x – 3.0x
Organic growth Dividends – 1.8x to M&A and portfolio 2.2x dividend cover management
* Net debt is equivalent to net borrowings. Adjusted net debt includes net debt and post employment liabilities 21 F18 EXCHANGE IMPACT NOW FORECAST TO BE NEGATIVE FOR BOTH OPERATING PROFIT AND NET SALES
Exchange rates Total Exchange Impact
Translation rate F18 F17* F18 F18 £m F17 F18 H1 H1** forecast *** forecast $/£ 1.27 1.32 1.36 Net Sales 1,359 (134) (460) €/£ 1.16 1.12 1.13 Operating * Average rate **Average rate Jul-Dec ***Weighted 447 (15) (60) average rate of F18 H1 and spot rate for H2 profit Net Transaction rate (28) 2 8 Interest F171 F18 H1 F18 forecast2 $/£ 1.45 1.41 1.37 €/£ 1.22 1.17 1.15
1. Average rate inc. hedging 2. 81% of £/$ exposure hedged 59% of €/£ exposure hedged 22 BASIC EPS INCREASED 36% EPS BEFORE EXCEPTIONAL ITEMS UP 9.4% Pence per share
F17 H1 eps before exceptional items 62.0 Exchange (0.6) Organic operating profit growth 5.5 Associates and joint ventures (0.1) Tax (0.3) Finance charges 1.1 Other 0.2 F18 H1 eps before exceptional items 67.8
23 A STRONG SET OF RESULTS DELIVERING EFFICIENT GROWTH AND VALUE CREATION
Efficient growth: F18 H1 Organic net sales growth 4.2%
Organic operating margin improvement 81bps Free cash flow £1.0bn Pre-exceptional eps up 9.4% to 67.8p
Value creation: ROIC up 77 bps to 16.5% Total Shareholder Return up 22%
24 CONSISTENT DELIVERY OF STRONG RESULTS
Reflecting our ambition to be one of the best performing, most trusted and respected consumer products companies in the world
Delivering through our six priorities with clear goals defined by our performance ambition
Four measures of our progress • efficient growth • value creation • credibility and trust • motivated people
25 ALCOHOL IN SOCIETY: DIAGEO’S AMBITIOUS NEW TARGETS
The outcome we seek through our Alcohol in Society work: Our consumers drink better, not more We contribute to the World Health Organization goal of 10% reduction in harmful drinking by 2025
By 2025, we will:
Educate 5 million young people, parents and teachers about the dangers of underage drinking
Collect 50 million pledges never to drink and drive through #JoinThePact
Reach 200 million people with moderation messages from our brands
26 A CLEAR STRATEGY DELIVERED THROUGH OUR SIX PRIORITIES
1 Keep premium core vibrant 2 Increase participation in mainstream spirits 3 Continue to win in reserve 4 Drive innovation at scale 5 Build advantaged routes to consumer 6 Embed productivity in our culture to drive out costs to invest in growth
27 EXECUTION OF THE SIX PRIORITIES IN MEXICO: DELIVERING CONSISTENT STRONG GROWTH AND SHARE GAINS
Organic net sales growth Rolling 12 month spirits industry value share* 28.6 29.1 27.5
19.9% 25.6 25.2
12.7% 11.9% 10.2%
F14 F15 F16 F17 November F18 (4.3)% F14 F15 F16 F17 F18 H1 *Source: NISCAM spirits industry reporting 28 KEEPING PREMIUM CORE VIBRANT WITH PURPOSE DRIVEN MARKETING IN MEXICO F15-F17 organic net sales CAGR 14%
29 INCREASING PARTICIPATION IN MAINSTREAM SPIRITS: BLACK & WHITE LEADING PRIMARY SCOTCH GROWTH IN MEXICO REGIONAL + NATIONAL + REGIONAL + NATIONAL ACCELERATE DISTRIBUTION DISTRIBUTION COMMUNICATIONS COMMUNICATIONS
550K cases
391K cases 231K cases 128K cases 65K cases
Value F13 F14 F15 F16 F17 Share* 5.0 12.3 14.6 21.6 27.9 *Share of primary scotch category. Source: NISCAM spirits industry reporting CONTINUE TO WIN IN RESERVE WITH THE LEADING LUXURY DRINKS PORTFOLIO IN MEXICO Rolling 12 month value share of reserve category* 49.4 46.8 47.0 47.9 45.2
F14 F15 F16 F17 November F18
31 *Source: NISCAM spirits industry reporting DRIVING INNOVATION AT SCALE IN MEXICO
32 BUILD ADVANTAGED ROUTES TO CONSUMER: EXPANDING OUR FOOTPRINT IN MEXICO
On Trade Expanded distribution from 50 to 75 cities More than doubled called on outlets while increasing sales force effectiveness
Off Trade Created a team 100% focused on execution Increased distribution by 25% Almost doubled called on outlets Automation to track and audit execution
Hotels and Third Space Small dedicated team to increase focus Increased hotel distribution more than 4X Reaching 30 festivals and over 10 million consumers
33 EMBEDDING PRODUCTIVITY TO DRIVE OUT COSTS TO INVEST IN GROWTH
Net revenue management enabling top line growth
Delivered supply savings through footprint optimisation, operational excellence and procurement savings
Marketing efficiencies delivered through rationalising media agencies, reducing cost of point of sale material and non-working spend
Organisational effectiveness and zero based budgeting driving overheads savings
34 GUINNESS IS VIBRANT AND GROWING
Organic net sales growth 5.6%
3.9% 3.7% 3.6%
2.1%
0.4% 0.0%
(1.6)%*
Total Beer Total Guinness *Excluding Orijin F15 F16 F17 F18 H1 35 GUINNESS IS VIBRANT AND GROWING Nigeria/Kenya
GB US
Ethiopia 36 CONTINUED SOLID GROWTH IN THE THREE FOCUS AREAS: ORGANIC NET SALES GROWTH
Scotch 2.8%
US Spirits 2.9%
India 2.3%
37 F18 FOCUS AREAS: SCOTCH SOLID FIRST HALF PERFORMANCE Organic net sales growth
16.2%
9.6% 8.8% 7.5% 6.0% 6.7% 6.5% 4.7% 4.8% 2.5% 2.8% 2.5% 0.4% 0.7% 0.9%
(4.5)%
(13.5)% (14.0)% F16 F17 F18 H1
Total Scotch Johnnie Walker Buchanan's Scotch Malts Primary Scotch Other
% of Scotch 57% 9% 12% 11% 11% net sales 38 F18 FOCUS AREAS: SCOTCH RECRUITING WITH JOHNNIE WALKER
INSPIRING STORIES COMPELLING DRINKS STRATEGY
GIFTING BLUE LABEL
39 THE YEAR WE PAINT THE WORLD JOHNNIE WALKER BLACK
40 F18 FOCUS AREAS: SCOTCH ACCELERATING THE FUTURE OF SCOTCH IN CHINA Liquid on Lips- Whisky Academy Love Whisky Prestige Scotch Social Media Platform for Whisky Enthusiasts
Whisky Boutiques Johnnie Walker Blue Label and The Singleton
41 F18 FOCUS AREAS: US SPIRITS ROBUST FIRST HALF PERFORMANCE
Organic volume and net sales growth
Volume Net sales NetNet sales sales excluding excluding Ciroc Cîrocand and Ketel KetelOne Onevodka vodka 6.1% 5.5% 4.2% 3.4% 3.1% 2.9% 1.5% 1.2% 0.9%
(1.5)% (2.1)% (3.5)% F15* F16 F17 F18 H1
* Excluding Wine 42 F18 FOCUS AREAS: US SPIRITS CATEGORY SHARE GAINS CONTINUED FOR ALL KEY BRANDS EXCEPT VODKA
Nielsen and NABCA combined value growth 34.2% 27.8% 15.0% 10.6% 11.9% 11.6% 7.3% 5.9% 5.3% 5.7% 4.7% 4.4%
1.5% 1.8% v
(1.6)%(2.4)% (2.4)% (8.1)% (3.9)% Core brands (14.4)%
Crown Royal Johnnie Captain Baileys Smirnoff CîrocCîroc Ketel One Don Julio Bulleit Buchanan's Walker Morgan vodka F17 H2 F18 H1*
F18 H1 category value share change* * Nielsen through 30 December, 2017, NABCA through 30 November, 2017 43 US SPIRITS: STRONG PLANS IN THE SECOND HALF
Execute proven plans for our brands in the second half supported by marketing up-weight
Improve super premium vodka
Continue double digit growth on reserve*
Robust innovation pipeline for the second half
* Excluding super premium vodka 44 F18 FOCUS AREAS: INDIA IMPROVED PERFORMANCE AS TOP LINE HEADWINDS SUBSIDE
Prestige and above brands organic net India organic net sales growth sales growth
5.3%
4.0% 11.3% 9.5% 2.3% 5.7%
2.8% 0.5%
45 F18 FOCUS AREAS: INDIA PRESTIGE AND ABOVE PLANS ARE WORKING Continuing renovation of Prestige and PAINTING INDIA JOHNNIE WALKER BLACK Above brands
Innovation Primary scotch - Black Dog
Black & White Captain Morgan Royal Challenge 12 year old Original Rum Xtra Bold 46 F18 FOCUS AREAS: INDIA MITIGATED GST IMPACT WITH ACCELERATED PRODUCTIVITY AND ADDITIONAL MITIGATION STEPS • Price increases implemented across 13 states Net Revenue • Efficiency in trade spend Management • Positive mix from prestige and above brands growth Gross margin improvement c. 200bps • Inputs rate negotiation with suppliers post GST roll-out COGS • Tramlining and Brand Value Engineering
• Efficiency in agency and point of sale costs Marketing • Leveraging new tools to improve ROI Overheads reduced 10% • Additional savings from organisation effectiveness Overheads • Zero based budgeting driving further indirect spend savings 47 EFFECTIVE EXECUTION OF OUR STRATEGY CONSISTENT DELIVERY OF STRONG RESULTS:
Delivering our strategy through our six execution priorities
Creating a more agile, disciplined and high performing organisation
Consistent top line growth and margin expansion enabled by productivity programme and strong cash flow
Confidence in delivering our medium term guidance and enables our long term performance ambition
48 APPENDIX 1: 1/2 FORWARD LOOKING STATEMENTS
Exchange rate outlook Using exchange rates £1 = $1.39; £1 = €1.13, the exchange rate movement for the year ending 30 June 2018 is estimated to adversely impact net sales by approximately £460 million and operating profit by approximately £60 million.
Net sales Looking to the full year, our expectations for fiscal 18 remain unchanged. We continue to expect organic net sales growth roughly in line with last year and consistent with our mid-term guidance of mid-single digit top line growth.
Operating margin On margin, we expect continued progress toward our goal to deliver 175 basis points of improvement for the three years ended June 2019, with more of the margin expansion across both financial years coming through in fiscal 19 as we expect to have less costs to absorb and will get greater benefits from our investments in NRM and marketing catalyst capabilities.
Net finance charges For the full year we expect our effective interest rate to remain around 3.0% as we continue to see the benefit from the refinancing with some risk of floating rates rising.
We expect other finance charges for the full year to be roughly in line with fiscal 17.
49 APPENDIX 1: 2/2 FORWARD LOOKING STATEMENTS
Taxation Our current expectation is that the tax rate before exceptional items for the year ending 30 June 2018 will be approximately 20%, a 1ppt improvement versus our prior guidance. The decrease between our prior expectation and the estimated tax rate for the year ending 30 June 2018 is principally driven by the headline rate reduction in the United States introduced by the Tax Cuts and Jobs Act enacted on 22 December 2017. As for most multinationals the current tax environment is creating increased levels of uncertainty.
Capital expenditure We expect our full year Capex spend to be in the range of £500m to £550m.
Dividend We have a progressive dividend policy and we expect to maintain a mid single digit increase until we rebuild dividend cover back to our target range of 1.8 to 2.2x.
Share buy-back In July 2017, the board approved a share buy-back programme to return up to £1.5bn of capital back to shareholders. We are on track and at the end of December £760m has been utilised to repurchase 29.5m shares with these shares having been cancelled.
50 APPENDIX 2: RECONCILIATION OF CASH FLOW STATEMENT Reconciliation of free cash flow waterfall on slide 19 Movement on operating profit as shown on Cash slide YoY F17 H1 F18 H1 Movement Statement of cash flows (£m) waterfall (£m) Operating profit after exceptional items 2,065 2,190 125 Operating profit after exceptional items 125 Increase in working capital excluding maturing stock (471) (428) 43 Depreciation, amortisation and impairment 9 Increase in maturing stock (22) (102) (80) Other items (45) Net increase in working capital (493) (530) (37) Post employment charges in operating profit (18) Depreciation, amortisation and impairment 178 187 9 Operating profit movement excluding non-cash items 71 Dividends received 4 3 (1) Post employment charges in operating profit 63 45 (18) Operating profit excluding exchange 86 Post employment payments (139) (111) 28 Exchange on operating profit (15) Post employment payments less amounts included in operating profit (76) (66) 10 Operating profit movement excluding non-cash items 71 Other Items 45 0 (45) Movement on other operating activities as shown on Cash slide Tax paid (307) (408) (101) YoY waterfall (£m) Net interest (149) (128) 21 Post employment payments 28 Net capex (184) (201) (17) Movements in loans and other investments (19) Movements in loans and other investments 1 (18) (19) Dividends received (1) Free cash flow 1,084 1,029 (55) Other operating activities 8
51 Cautionary statement concerning forward-looking statements
This document contains ‘forward-looking’ statements. These 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 statements that express forecasts, expectations, plans, outlook, objectives and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of changes in interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, expected investments, the completion of any strategic transactions and restructuring programmes, anticipated tax rates, changes in the international tax environment, expected cash payments, outcomes of litigation, anticipated deficit reductions in relation to pension schemes and general economic conditions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including factors that are outside Diageo's control.
These factors include, but are not limited to:
• economic, political, social or other developments in countries and markets in which Diageo operates, which may contribute to a reduction in demand for Diageo’s products, decreased consumer spending, adverse impacts on Diageo’s customer, supplier and/or financial counterparties, or the imposition of import, investment or currency restrictions; • the negotiating process surrounding, as well as the eventual terms of, the United Kingdom’s exit from the European Union, which could lead to a sustained period of economic and political uncertainty and complexity whilst detailed withdrawal terms and any successor trading arrangements with other countries are negotiated, finalised and implemented, potentially adversely impacting economic conditions in the United Kingdom and Europe more generally as well as Diageo's business operations and financial performance; • changes in consumer preferences and tastes, including as a result of changes in demographics, evolving social trends (including potential shifts in consumer tastes towards locally produced small batch products), changes in travel, vacation or leisure activity patterns, weather conditions, public health regulations and/or a downturn in economic conditions; • any litigation or other similar proceedings (including with customs, competition, environmental, anti-corruption and other regulatory authorities), including litigation directed at the drinks and spirits industry generally or at Diageo in particular; • changes in the international tax environment, including as a result of the OECD Base Erosion and Profit Shifting Initiative and EU anti-tax abuse measures, leading to uncertainty around the application of existing and new tax laws and unexpected tax exposures; • the effects of climate change, or legal, regulatory or market measures intended to address climate change, on Diageo’s business or operations, including any impact on the cost and supply of water; • (Continued on following page) 52 • (continued from previous page) • changes in the cost of production, including as a result of increases in the cost of commodities, labour and/or energy or as a result of inflation; • legal and regulatory developments, including changes in regulations relating to production, distribution, importation, marketing, advertising, sales, pricing, packaging and labelling, product liability, labour, compliance and control systems, environmental issues and/or data privacy; • the consequences of any failure by Diageo or its associates to comply with anti-corruption, sanctions, trade restrictions or similar laws and regulations, or any failure of Diageo’s related internal policies and procedures to comply with applicable law; • the consequences of any failure of internal controls, including those impacting compliance with new accounting and/or disclosure requirements; • Diageo’s ability to maintain its brand image and corporate reputation or to adapt to a changing media environment; • increased competitive product and pricing pressures, including as a result of actions by increasingly consolidated competitors, that could negatively impact Diageo’s market share, distribution network, costs and/or pricing; • Diageo’s ability to derive the expected benefits from its business strategies, including in relation to expansion in emerging markets, acquisitions and/or disposals, cost saving and productivity initiatives or inventory forecasting; • contamination, counterfeiting or other circumstances which could harm the level of customer support for Diageo’s brands and adversely impact its sales; • increased costs for, or shortages of, talent, as well as labour strikes or disputes; • any disruption to production facilities, business service centres or information systems, including as a result of cyber-attacks; • fluctuations in exchange rates and/or interest rates, which may impact the value of transactions and assets denominated in other currencies, increase Diageo’s cost of financing or otherwise adversely affect Diageo’s financial results; • movements in the value of the assets and liabilities related to Diageo’s pension plans; • Diageo’s ability to renew supply, distribution, manufacturing or licence agreements (or related rights) and licences on favourable terms, or at all, when they expire; or • any failure by Diageo to protect its intellectual property rights.
All oral and written forward-looking statements made on or after the date of this document and attributable to Diageo are expressly qualified in their entirety by the above risk factors and by the ‘Risk factors’ section contained in the annual report on Form 20-F for the year ended 30 June 2017 filed with the US Securities and Exchange Commission (SEC). Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made. Diageo does not undertake to update forward-looking statements to reflect any changes in Diageo's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Diageo may make in any documents which it publishes and/or files with the SEC. All readers, wherever located, should take note of these disclosures. This document includes names of Diageo's products, which constitute trademarks or trade names which Diageo owns, or which others own and license to Diageo for use. All rights reserved. © Diageo plc 2018. The information in this document does not constitute an offer to sell or an invitation to buy shares in Diageo plc or an invitation or inducement to engage in any other investment activities. This document may include information about Diageo’s target debt rating. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organisation. Each rating should be evaluated independently of any other rating. Past performance cannot be relied upon as a guide to future performance. 53 CELEBRATING LIFE, EVERY DAY, EVERYWHERE
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