Core Points - The EU and the US announced a new trade agreement detailing tariffs and market access, with the US imposing a 15% tariff on most EU goods while exempting certain products [1] - The EU committed to eliminating tariffs on US industrial goods and providing preferential market access for US seafood and agricultural products [1] - The EU plans to purchase $750 billion worth of US liquefied natural gas, oil, and nuclear products by 2028, along with $40 billion in US AI chips [1][2] Group 1 - The US will impose a 15% tariff on most EU imports, while certain natural resources, aircraft, and generic drugs are exempt [1] - The EU will eliminate tariffs on US industrial products and provide preferential access for US seafood and agricultural goods [1] - The EU aims to significantly increase its procurement of US military and defense equipment [1] Group 2 - The agreement has raised concerns about fairness, with critics arguing it disproportionately favors the US [4][8][16] - There are unresolved issues regarding steel and aluminum tariffs, with no clear solution provided in the agreement [9] - The digital regulatory divide remains a significant point of contention, with no substantial progress made in this area [11] Group 3 - The agreement has been described as a "terrible, complete surrender" by some EU officials, highlighting the lack of reciprocity [8] - Concerns have been raised about the potential negative impact on European growth and employment due to the perceived imbalance in the agreement [16] - The agreement lacks legal binding, raising questions about its long-term viability and enforcement [20][23] Group 4 - The EU is expected to initiate legislation to ensure the US commits to reducing auto tariffs retroactively [23] - The agreement is seen as a "loss control document" for the EU, reflecting its dependency on the US [23][25] - Future negotiations are anticipated to address a fair and balanced trade agreement, although skepticism remains about the EU's leverage [25]

Group 1 - Diageo reported preliminary results for the fiscal year 2025, with sales of $20.245 billion, slightly down 0.1% year-on-year, but better than the market expectation of $20 billion [1] - Organic sales grew by 1.7% year-on-year, surpassing the analyst consensus of 1.4% [1] - Operating profit fell by 27.8% to $4.335 billion, with an operating margin decline of 819 basis points to 21.4% [1] Group 2 - Diageo expects organic sales growth for fiscal year 2026 to be similar to that of fiscal year 2025, with operating profit anticipated to achieve mid-single-digit organic growth [1] - The company faces economic uncertainty and consumer inflation concerns due to tariffs imposed by former President Trump, with annual tariff costs now estimated at $200 million, up from a previous estimate of $150 million [1] - Diageo's interim CEO, Nik Jhangiani, announced an increase in the cost-saving target from $500 million to $625 million over the next three years [1] Group 3 - Nik Jhangiani took over as interim CEO after the departure of Debra Crew and indicated that the board may decide on a new CEO by the end of October [2] - Despite a challenging consumer environment, including preferences for non-alcoholic beverages and ready-to-drink cocktails, consumers, including Gen Z, continue to spend [2] - Analyst Ed Mundy from Jefferies noted that Diageo's sales growth target for fiscal year 2026 is in line with market expectations, and the company has maintained or grown market share in 65% of monitored markets, including the U.S. [2]

Financial Data and Key Metrics Changes - The company delivered 1.7% organic sales growth, or 1.5% before the impact of the Syrah transaction in North America, with organic profit declining 0.7% including the Syrah transaction impact and 1% excluding it [4][5] - Free cash flow was $2.7 billion, up $100 million from last year, reflecting solid working capital management [5][48] - EPS pre-exceptionals declined almost 9%, mainly due to a significantly lower contribution from Moire Tennessee and adverse foreign exchange [5][49] - Reported net sales were broadly flat at £20.2 billion, with positive organic growth offset by the net impact of acquisitions and disposals as well as unfavorable foreign exchange [42][43] Business Line Data and Key Metrics Changes - In North America, U.S. spirits net sales grew 1.6% organically with a positive price mix of 2.9%, driven by strong performance in tequila brands like Don Julio and Crown Royal [30][31] - In Europe, Guinness continued to drive growth, delivering double-digit organic net sales growth despite a challenging beer market [31][44] - In Asia Pacific, positive volume growth was particularly noted in India, while price mix declined due to consumer down trading in Southeast Asia and China [43][44] Market Data and Key Metrics Changes - The company gained market share in 65 of its total net sales in measured markets, including the U.S., despite challenging trading conditions [27] - In India, growth was driven by prestige and above whiskey, with the UK-India free trade agreement expected to support future growth potential [28] - In Africa, organic net sales growth was observed across all markets, led by Ghana [29] Company Strategy and Development Direction - The company is sharpening its strategy to leverage its portfolio and competitive strengths, focusing on commercial execution and optimizing trade investments [7][8] - The Accelerate program aims to deliver $625 million in cash savings over the next three years, with a commitment to drive better growth alongside cost-cutting measures [9][13] - The company is committed to delivering approximately $3 billion of free cash flow per annum from fiscal 2026, supported by mid-single-digit organic operating profit growth and reduced CapEx [20][54] Management's Comments on Operating Environment and Future Outlook - The management believes that the spirits sector remains attractive long-term, supported by favorable demographics and increasing female per capita consumption [21][22] - Near-term pressures on the sector are viewed as largely cyclical and driven by the macroeconomic environment, with consumer sentiment remaining subdued [23][25] - The company expects organic net sales growth to be slightly negative in fiscal 2026, with growth skewed to the second half of the year [54] Other Important Information - The company announced a flat full-year dividend, which is considered prudent given the current economic backdrop [5] - Significant exceptional charges of $1.4 billion were reported, including a $450 million charge related to Distill Ventures and a $230 million impairment charge for Aviation Gin [49][50] - The company is focused on optimizing its supply chain and has announced a new manufacturing and warehousing facility in Montgomery, Alabama [31] Q&A Session Summary Question: What are the expectations for organic net sales growth in fiscal 2026? - The company expects organic net sales growth to be slightly negative, with growth skewed to the second half of the year due to various factors [54] Question: How is the company addressing the challenges in the spirits sector? - The management is focused on leveraging its brand portfolio and optimizing commercial execution to drive growth despite the cyclical pressures [25][26] Question: What are the plans for cash flow and capital expenditures? - The company aims to deliver approximately $3 billion of free cash flow in fiscal 2026, with a reduced CapEx spend expected to trend to mid-single digits as a percentage of net sales [20][54]

Core Points - The U.S. has confirmed a 15% tariff on all EU goods entering the U.S. market, significantly impacting the EU wine and alcoholic beverage industry [2] - This new tariff replaces a previously proposed 30% punitive tariff, which was seen as a compromise but still worse than expected [2][8] - European producers had hoped for exemptions or a lower rate of 10%, but negotiations for a "zero-for-zero" tariff agreement are ongoing [2][9] Tariff Details - The agreement, finalized on July 27, includes a commitment from the EU to purchase a large volume of U.S. products in exchange for the 15% tariff on most EU goods [5] - Notably, wine and alcoholic beverages are excluded from these exemptions, posing a significant challenge for major producers in France, Italy, and Spain [5][8] - In 2024, the EU's export of alcoholic beverages to the U.S. is projected to reach €9 billion, with wine accounting for nearly €5 billion [5] Economic Impact - The increase in tariffs from 10% to 15% is viewed by many economists as a greater concession from Europe than the benefits gained [8] - The new tariff structure is expected to raise costs significantly, with estimates suggesting a potential 30% increase when factoring in currency fluctuations [11] - Italian wine producers anticipate a loss of €317 million over the next 12 months, with U.S. partners facing potential losses of nearly $1.7 billion [11] Market Challenges - The 15% tariff is likely to lead to higher shelf prices, reduced competitiveness, and a shift in consumer preference towards non-European products [13] - With the sales season approaching, exporters are reassessing pricing, logistics, and marketing strategies to adapt to the new tariff environment [13] - The European Wine Companies Committee (CEEV) is advocating for the inclusion of wine in the ongoing tariff negotiations, emphasizing its importance to both sides [9]

美国蒸馏酒协会：欧盟和美国之间的贸易协议最终可能导致两国烈酒产品达成免关税协议，该协议对饮 料制造商来说是积极的。 ...

Group 1 - The US and EU have reached a new trade agreement, reducing tariffs on most EU imports to 15%, down from a threatened 30% [1] - The agreement does not cover pharmaceuticals, with conflicting statements from US President Trump and EU Commission President von der Leyen regarding the inclusion of drug tariffs [1][4] - The US is initiating a "232 investigation" to assess whether imports of specific products, including pharmaceuticals, pose a national security threat [1][2] Group 2 - Disagreements remain regarding steel and aluminum tariffs, with Trump stating that a 50% tariff will remain unchanged, while von der Leyen suggests a reduction and quota system [4] - Key areas such as chips and spirits still lack a definitive tariff agreement, indicating ongoing negotiations [4] - The trade agreement has faced criticism within Europe, with concerns about its fairness and potential long-term harm to the EU [5]

法国贸易部长表示，欧盟与美国之间的框架贸易协议在数字服务领域仍需进一步努力，烈酒行业应是关 税被豁免的行业之一。（新华财经） ...

法国贸易部长：关于欧盟与美国的框架贸易协议，数字服务领域仍需进一步努力，烈酒行业应是被豁免 的领域之一。 ...

Core Viewpoint - Diageo has initiated a comprehensive search for a new CEO following the resignation of Debra Crew, with CFO Nik Jhangiani serving as interim CEO. The company's stock has dropped 43% since Crew's appointment in June 2023, although it saw a temporary increase of 4.5% after the announcement of her departure [1][2]. Group 1 - The board is considering both internal and external candidates for the CEO position [1]. - Diageo's stock performance has been negatively impacted during Crew's tenure, attributed to declining demand in key markets such as China and the U.S., leading to a drop in sales [1]. - Only the Asia-Pacific region reported organic net sales growth among five regional markets in the first half of fiscal year 2025 [1]. - Diageo has suspended its mid-term earnings guidance due to potential impacts from U.S. tariffs, awaiting further clarity [1]. - A cost-cutting plan has been announced to ensure sufficient funds for future growth and to enhance operational leverage over the next three years [1]. Group 2 - The chairman of Diageo, John Manzoni, expressed gratitude for Debra Crew's contributions, particularly in navigating challenges posed by the pandemic and geopolitical issues [3]. - The board emphasizes the importance of finding the best candidate to lead Diageo forward and is confident in the company's ability to create long-term sustainable value [3].

Core Viewpoint - Diageo's CEO Debra Crew has resigned immediately, prompting the board to initiate a formal succession process for her replacement [1][4]. Group 1: Leadership Changes - Debra Crew joined Diageo in 2019 and became the first female CEO in June 2023, succeeding Ivan Menezes, who had led the company for ten years [4][5]. - Under Crew's leadership, Diageo's performance declined, with the stock price dropping over 43% since June 2023 due to slowing demand in key markets like the US, China, and Latin America [4][5][7]. - Javier Ferrán, the chairman, initially praised Crew as the best candidate to lead the company into its next growth phase [6]. Group 2: Financial Performance - Diageo's net sales and profits reached record highs in the fiscal year 2023, but the company faced a downturn shortly after Crew took over [5][7]. - In the first half of fiscal year 2024, Diageo's net sales declined, particularly in the Latin America and Caribbean markets, which saw a 23% drop in organic net sales [7]. - The company reported a 3.5% year-on-year decline in sales volume, with management focusing on premiumization to offset the impact of declining sales [7][8]. Group 3: Strategic Plans - In May 2023, Crew announced a cost-saving plan aimed at achieving $500 million in savings through the sale of several brands [4][11]. - Following her resignation, the future of this "acceleration plan" remains uncertain, with the company having already begun asset sales, including the sale of its Italian subsidiary and stakes in various brands [13][14]. - Diageo continues to invest in its Chinese operations, including a planned investment of 800 million yuan in a new whiskey distillery in Yunnan [14][15].