Core Points - Diageo plc has appointed Sir Dave Lewis as the new Chief Executive Officer and Executive Director, effective January 1, 2026 [1] - Sir Dave Lewis is recognized as a proven CEO with extensive experience in marketing and brand building [1]

Core Viewpoint - Major shareholders in Diageo are increasingly frustrated with the company's inability to appoint a new chief executive following a profit warning that has caused its shares to drop to a ten-year low [1] Group 1 - Diageo's shares have reached a ten-year low due to a recent profit warning [1] - Shareholders are expressing growing dissatisfaction over the delay in naming a new chief executive [1]

Core Viewpoint - Diageo, the world's leading spirits manufacturer, is exploring external candidates for its CEO position, including former GSK CEO Emma Walmsley [1] Group 1 - Diageo is considering external candidates for the CEO role [1] - The report cites sources familiar with the situation regarding the CEO search [1] - Emma Walmsley, the outgoing CEO of GSK, is among the candidates being considered [1]

Core Viewpoint - Diageo has released its Q1 2026 Trading Statement, indicating ongoing performance and strategic direction under interim leadership [1]. Group 1 - Sonya Ghobrial serves as the Global Head of Investor Relations and is leading the presentation for the Q1 2026 Trading Statement [1]. - Nik Jhangiani and Deirdre Mahlan are introduced as the Interim CEO and Interim CFO, respectively, highlighting the company's current leadership structure [1]. - The company has issued a reminder regarding forward-looking statements, emphasizing the importance of understanding potential variances from actual results [1].

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if ad-blockers are enabled, suggesting the need to disable them for a seamless experience [1]

Core Insights - Diageo, the world's largest spirits maker, has reduced its sales and profit outlook following a disappointing quarterly performance, with shares hitting a decade low [1][2] Financial Performance - Net sales for Diageo were reported at $4.9 billion, reflecting a 2% year-over-year decline, while organic sales remained flat, which was better than analysts' expectations [2] - Volumes increased nearly 3%, but this was insufficient to improve overall results due to adverse impacts from pricing and product mix [2] Regional Performance - Latin America showed strong demand, particularly in Brazil, while sales in China and the US faced significant declines, with China experiencing a drop of over 7% [3][4] - In the US, organic sales fell nearly 3%, as consumers shifted from premium brands like Don Julio and Casamigos to more affordable options [3][4] Market Trends - The premium spirits industry is experiencing challenges post-pandemic, with inflation, moderation trends, and tariffs affecting global trade [4] - A notable shift in consumer behavior is observed, with a trend towards lower-quality products as consumers tighten their spending [4] Leadership and Future Guidance - Diageo's leadership is currently unstable, with the CEO leaving in July and no replacement announced, leading to a message of waiting for further guidance after the holiday season [5] Demographic Insights - There are significant demographic shifts affecting consumption patterns, particularly among Gen Z consumers who are drinking less due to health and wellness trends [6] - Concerns about the economy are prevalent among Hispanic and non-Hispanic consumers, impacting various sectors, including beer [7][8]

United Spirits has begun an assessment of its sports management unit that owns the Royal Challengers Bengaluru (RCB) franchise. In a stock exchange filing yesterday (5 November), the Diageo-controlled company said it is reviewing the investment in its wholly owned subsidiary, Royal Challengers Sports Private Limited (RCSPL). The review is expected to conclude by the end of March. RCSPL holds the RCB teams that compete in the Indian Premier League (IPL) and the Women’s Premier League. Previously, United ...

Financial Data and Key Metrics Changes - In Q1, organic net sales were flat, with reported net sales of $4.9 billion down 2.2% year-over-year, primarily impacted by the disposal of Guinness Nigeria and the Shiraz North America transaction [8][9] - Organic volume growth was 2.9%, offset by a negative price mix of 2.8%, largely due to the adverse impact of Chinese white spirits [8][9] - The company updated its fiscal guidance, now expecting organic net sales growth to be flat to slightly down for the fiscal year, with organic operating profit growth projected in the low to mid-single-digit range [15][17] Business Line Data and Key Metrics Changes - North America saw organic net sales decline by 2.7%, with U.S. spirits down 4.1%, while Diageo Beer Company grew by 9.2% [9][10] - Europe experienced organic net sales growth of 3.5%, driven by strong performance in Guinness Draught and spirits, particularly in Turkey and the Middle East [10][11] - Asia-Pacific faced a 7.5% decline in organic net sales, primarily due to reduced consumption of Chinese white spirits, which negatively impacted regional sales by approximately 13% [10][11] Market Data and Key Metrics Changes - In LAC, organic net sales grew by 10.9%, led by strong performance in Brazil, while Africa reported 8.9% organic sales growth, with broad growth across East Africa and Southwest and Central Africa [11][12] - The tequila category in North America is experiencing increased competitive pressure, with a decline in overall category growth from 10% in 2023 to just under 3% [32][35] - The company noted a shift in consumer behavior, with consumers trading down from super premium to premium products, impacting sales of Don Julio and Casamigos [35][36] Company Strategy and Development Direction - The company is advancing its "Accelerate" program to strengthen its foundations for long-term sustainable growth, with a focus on cost efficiency and process simplification [12][18] - Management is committed to improving operating leverage and enhancing commercial execution, particularly in key markets [13][15] - The company is exploring selective disposals of non-core assets to focus on growth opportunities in RTDs and brand activation during major events like FIFA 2026 [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed concern over current performance, particularly in North America, and emphasized the need for urgent actions to drive growth [5][6] - The economic environment is weighing on consumer sentiment, leading to weaker-than-expected results in the U.S. [9][15] - Despite challenges, management remains confident in delivering $3 billion in free cash flow for fiscal 2026, supported by ongoing initiatives [12][17] Other Important Information - The company is implementing a clearer decision-making framework to enhance speed and agility in operations [14][15] - Management highlighted the importance of maintaining brand equity while optimizing marketing spend across different markets [56][59] Q&A Session Summary Question: Insights on U.S. spirits performance and guidance - Management acknowledged the complexity of U.S. spirits performance, noting a decline in depletions and the impact of tariff-related pre-buys [21][22] Question: Competitive pressure in the tequila market - Management discussed increased competition in the tequila category, emphasizing the need for strategic interventions to improve performance [31][32] Question: EBIT guidance and margin support - Management expressed confidence in achieving low to mid-single-digit EBIT growth despite market challenges, citing cost efficiencies and stronger whiskey performance [45][47] Question: Impact of A&P reductions - Management clarified that A&P reductions in GB were part of a broader strategy to optimize marketing spend while maintaining brand equity [55][56] Question: Accelerate program details - Management provided insights into the Accelerate program, highlighting its role in driving efficiencies and improving resource allocation [63][66]

Financial Data and Key Metrics Changes - In Q1, organic net sales were flat, with reported net sales of $4.9 billion down 2.2% year-over-year, primarily due to the disposal of Guinness Nigeria and the Shiraz North America transaction [5][8][9] - Organic volume growth was 2.9%, offset by a negative price mix of 2.8%, largely due to the impact of Chinese white spirits [8][9] - The company updated its fiscal guidance, now expecting organic net sales growth to be flat to slightly down for the fiscal year, with organic operating profit growth projected in the low to mid-single-digit range [15][17] Business Line Data and Key Metrics Changes - North America saw organic net sales decline by 2.7%, with U.S. spirits down 4.1%, while Diageo Beer Company grew by 9.2% [9][10] - Europe experienced organic net sales growth of 3.5%, driven by strong performance in Guinness Draft and spirits, particularly in Turkey and the Middle East [10][11] - Asia-Pacific reported a 7.5% decline in organic net sales, primarily due to reduced consumption of Chinese white spirits [10][11] Market Data and Key Metrics Changes - In North America, the tequila category faced increased competitive pressure, leading to a decline in sales, while Scotch and ready-to-drink products showed strong growth [9][10][32] - Latin America (LAC) reported a robust organic net sales growth of 10.9%, led by double-digit growth in Brazil [11] - Africa saw organic sales growth of 8.9%, with broad growth across East Africa and Southwest and Central Africa [11] Company Strategy and Development Direction - The company is advancing its "Accelerate" program to strengthen its foundations for long-term sustainable growth, with a focus on cost efficiency and commercial execution [12][19] - There is a clear strategy to improve operating leverage and enhance decision-making frameworks across the organization [14][15] - The company is committed to returning to its target leverage ratio range of 2.5-3 times by fiscal 2028, supported by selective disposals [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment, particularly in the U.S. and Asia-Pacific, and emphasized the need for urgency in driving growth [5][6] - The management expressed confidence in achieving $3 billion in free cash flow for fiscal 2026, supported by ongoing cost management initiatives [12][17] - There is a focus on adapting to changing consumer preferences, particularly in the spirits category, and leveraging opportunities in ready-to-drink products [19][84] Other Important Information - The company is experiencing a shift in consumer behavior, with a trend towards smaller sizes and lower-priced products, particularly in the tequila category [32][36] - The management is actively addressing legal challenges related to tequila credentials, ensuring consumer confidence in product quality [43] Q&A Session Summary Question: Insights on U.S. spirits performance and guidance - Management noted that U.S. spirits declined 4.1% in Q1, with some benefits from tariff pull-forwards and highlighted the need to monitor consumer takeoff closely [21][22][23] Question: Competitive pressure in the tequila market - Management acknowledged increased competition in the tequila category and discussed strategies to improve performance for brands like Don Julio and Casamigos [31][32][34] Question: EBIT guidance and margin support - Management expressed confidence in achieving low to mid-single-digit EBIT growth despite challenges, citing cost efficiencies and stronger whiskey performance as key factors [46][48][49] Question: A&P spend reduction and efficiency - Management clarified that A&P development spend was reduced by optimizing agency use and reallocating resources for better returns [57][58][61] Question: Accelerate program and savings - Management confirmed that 40% of the savings from the Accelerate program would be delivered this fiscal year, emphasizing the importance of effective resource allocation [65][66][68]

Financial Data and Key Metrics Changes - In Q1, organic net sales were flat, with reported net sales of $4.9 billion down 2.2% year-over-year, primarily impacted by the disposal of Guinness Nigeria and the Shiraz North America transaction [6][7][10] - Organic volume growth was 2.9%, offset by a negative price mix of 2.8%, largely due to the adverse impact of Chinese white spirits [6][10] - The company updated its fiscal guidance, now expecting organic net sales growth to be flat to slightly down for the fiscal year, with organic operating profit growth projected in the low to mid-single-digit range [13][16] Business Line Data and Key Metrics Changes - North America saw organic net sales decline by 2.7%, with U.S. spirits down 4.1%, while Diageo Beer Company grew by 9.2% [7][10] - Europe experienced organic net sales growth of 3.5%, driven by strong performance in Guinness Draft and spirits, particularly in Turkey and the Middle East [9][10] - In Asia-Pacific, organic net sales declined by 7.5%, significantly affected by the downturn in Chinese white spirits, which impacted regional net sales by approximately 13% [9][10] Market Data and Key Metrics Changes - Latin America and Caribbean (LAC) reported organic net sales growth of 10.9%, led by strong performance in Brazil [10] - Africa showed organic sales growth of 8.9%, with broad growth across East Africa and Southwest and Central Africa [10] - The tequila category in North America faced increased competitive pressure, leading to a decline in overall performance [29][30] Company Strategy and Development Direction - The company is focused on sharpening its strategy and implementing initiatives to drive growth across its portfolio, particularly through the Accelerate program [5][11] - There is an emphasis on improving commercial execution and optimizing trade spend, with a commitment to delivering $3 billion in free cash flow for fiscal 2026 [11][16] - The company is also exploring selective disposals of non-core assets to enhance focus on core growth areas [17] Management's Comments on Operating Environment and Future Outlook - Management expressed concern over the current performance, particularly in North America, and acknowledged the need for urgent actions to drive growth [4][5] - The economic environment is weighing on consumer sentiment, leading to a cautious outlook for the U.S. market [7][10] - Management remains confident in the long-term growth potential of the portfolio, particularly in RTDs and Guinness [17][18] Other Important Information - The company is making progress on cost efficiency and process simplification, which are expected to contribute positively to margins [11][48] - The impact of foreign exchange on reported sales was negligible during the quarter [6] - The company is committed to returning to its target leverage ratio range of 2.5-3 times by fiscal 2028 [16] Q&A Session Summary Question: Insights on U.S. market performance and guidance - Management acknowledged the complexities in the U.S. market, noting that net sales were ahead of depletions, with depletion NSV down about 7% [20][22] - The impact of tariff pre-buying and seasonality was discussed, with management indicating that the unwinding of these factors would not be material in Q2 [24][25] Question: Competitive pressure in the tequila category - Management highlighted increased competitive pressure in the tequila category, with consumers trading down and shifting preferences impacting performance [28][30] - The company is focusing on its portfolio, particularly Don Julio and Casamigos, to adapt to changing consumer behaviors [30][32] Question: EBIT guidance and margin support - Management expressed confidence in delivering low to mid-single-digit EBIT growth despite challenges, citing cost discipline and operational efficiencies as key factors [44][46] - Input costs, particularly for agave, were noted but not seen as a major factor in efficiencies [51][52] Question: A&P spend reduction and efficiency - Management clarified that A&P development spend was reduced by optimizing agency use and reallocating resources for better returns [56][58] - The focus remains on maintaining brand equity while improving marketing efficiency across markets [58][59] Question: Details on the Accelerate program - Management provided insights into the Accelerate program, emphasizing its role in driving savings and improving operational effectiveness [61][64] - The program aims to enhance decision-making speed and resource allocation across the organization [64][65] Question: Margin and operating leverage - Management confirmed that 40% of savings from the Accelerate program would be realized this year, ahead of previous guidance [69][70] - The impact of depletions and consumer behavior in North America was discussed, with management indicating that these factors would be managed throughout the year [71][74]