Ivan Menezes. Chief Operating Officer

Transcription

1 at March 2013

2 Ivan Menezes Chief Operating Officer

3 A strong business Leading share of premium spirits brands across categories Other Beam Brown Forman Bacardi Diageo Pernod Global reach and in market strength #1 Spirits company in North America #1 International spirits company in Asia Pacific and Latin America & Caribbean The largest premium drinks company in Western Europe Strength in beer in Africa and leading the growth of international spirits in Africa, Russia, Eastern Europe and Turkey Financial strength Operating margin* 29.7% Dividend increase** 9% ROIC* 16.1% Single A credit rating Source: Impact Databank Top 100 premium spirits by value, February 2012.*Year ended 30 June 2012 ** Interim dividend for the year ending 30 June

4 A strong business: Industry leading brands across categories 4

5 The category breadth to deliver on consumer trends in all markets % net sales 100% 80% 60% 40% 20% Other RTDs Wine Beer Liqueurs Tequila Gin Vodka Rum Whiskey Other RTDs Wine Beer Local spirits Liqueurs Gin Vodka Rum Scotch 0% Six months ended 31 December Developed markets Scotch New high growth markets 5

8 Our changing geographic profile and our renewed focus on margin had accelerated performance 8.6% 8.8% 4.2% 5.9% 6.4% 5.2% Average growth Year ended 30 June 2005 to 2011 Net sales organic growth Year ended 30 June 2012 Operating profit organic growth Six months ended 31 December

9 Making a strong business even stronger through: Increasing our presence in the new high growth markets of the world Enhancing our position as the #1 spirits company in North America Building our brands through world class marketing Leading the industry in innovation Building stronger relationships with our customers Premiumising, especially in scotch Capturing efficient growth 9

10 Reaching the increasing number of consumers in high growth markets Capture the opportunity with wealthy consumers Create the opportunity with the emerging middle class Expanding our route to market Making global marketing campaigns locally relevant 10

11 Capturing the spirits opportunity in Africa 11

12 Capturing the spirits opportunity in Africa

13 Increasing our presence in the new high growth markets through acquisitions Mey İçki, Turkey Acquisition of Mey İçki in Turkey Leading spirits company Meta Abo, Ethiopia Acquired Meta Abo, the second largest beer in Ethiopia Premium beer Shui Jing Fang, China Increased our holding in ShuiJingFang Premium local spirits Vodka Hanoi, Vietnam Acquired equity interest in Halico in Vietnam Leading branded spirits Ypióca, Brazil Cachaça is the largest spirits category in Brazil Ypióca is the leader in the growing premium cachaça segment 13

14 Increasing our presence in the new high growth markets Number 2 by value and the number 3 by volume in the overall cachaça category Leader in the premium cachaça segment* with +60% share An exciting heritage brand; strongest brand image and quality attributes in the category Leadership position in home-state of Ceará, Northeast of Brazil Strong route to market reaching 256,000 outlets *Premium includes flavours

15 Increasing our presence in the new high growth markets through acquisitions Mey İçki, Turkey Acquisition of Mey İçki in Turkey Leading spirits company Meta Abo, Ethiopia Acquired Meta Abo, the second largest beer in Ethiopia Premium beer Shui Jing Fang, China Increased our holding in ShuiJingFang Premium local spirits Vodka Hanoi, Vietnam Acquired equity interest in Halico in Vietnam Leading branded spirits Ypióca, Brazil Cachaça is the largest spirits category in Brazil Ypióca is the leader in the growing premium cachaça segment United Spirits, India* United Spirits is the leading alcoholic beverages producer in India with a market leading brand portfolio *Announced 9 November

16 Enhancing our position as the #1 spirits company in North America A huge and growing beverage alcohol market Favourable demographics and consumption trends Premiumisation Category resilience Pernod Ricard Brown Forman Beam Heaven Hill Bacardi Sazerac* Bubble size determined by company value share of industry. *Sazerac volume and value is a Diageo internal estimate and includes White Rock brand volumes. Source: Beverage Information Group. 16

17 Building our brands through world class marketing Marketing innovation New consumer groups Emerging middle class consumers 17

18 Leading the industry in innovation Premiumising our brands Emerging middle class consumers Unlocking growth in developed markets Understanding and serving women 18

19 Enhancing our customer collaborations to create more value Off premise On premise Rituals Bar Staff Relationships Ease of shop Customer Retail Innovation Refreshed Beautiful Glassware 19

20 Premiumising especially in scotch

21 Delighting the consumer of luxury goods Gifting and limited edition Physical spaces Spectacular events World class Web activation 21

22 Capturing efficient growth 22

23 A great company is a good global and local citizen Alcohol in society Leading the industry in responsible marketing Partnerships and programmes to address alcohol misuse Engage in debate for balanced alcohol polices Environment All brands sourced, produced and delivered sustainably Improve water efficiency, reduce water wastage and reduce the polluting impact of wastewater Premium packaging delivered with the smallest environmental footprint Socio-economic development Generating broad based prosperity through our value chain Generating prosperity through direct investment and collaboration Take action through direct operations, community involvement Under-pinned by Governance and ethics 23

24 Diageo is a strong business Leading share of premium spirits brands across categories Global reach and in market strength Financial strength Getting stronger

25 Questions

26 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 statements that express forecasts, expectations, plans, outlook and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, expected investments, the completion of Diageo's strategic transactions and restructuring programmes, anticipated tax rates, expected cash payments, outcomes of litigation, anticipated deficit reductions in relation to pension schemes, general economic conditions and all statements on the slide outlook statements. 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 forwardlooking statements, including factors that are outside Diageo's control. These factors include, but are not limited to: global and regional economic downturns; increased competitive product and pricing pressures and unanticipated actions by competitors that could impact Diageo s market share, increase expenses and hinder growth potential; the effects of Diageo s strategic focus on premium drinks, the effects of business combinations, partnerships, acquisitions or disposals, existing or future, and the ability to realise expected synergies and/or costs savings; Diageo s ability to complete existing or future business combinations, restructuring programmes, acquisitions and disposals; legal and regulatory developments, including changes in regulations regarding production, product liability, distribution, importation, labeling, packaging, consumption or advertising; changes in tax law, rates or requirements (including with respect to the impact of excise tax increases) or accounting standards; and changes in environmental laws, health regulations and the laws governing labour and pensions; the costs associated with monitoring and maintaining compliance with anti-corruption and other laws and regulations, and the costs associated with investigating alleged breaches of internal policies, laws or regulations, whether initiated internally or by external regulators, and any penalties or fines imposed as a result of any breaches; developments in any litigation or other similar proceedings (including with tax, customs and other regulatory authorities) directed at the drinks and spirits industry generally or at Diageo in particular, or the impact of a product recall or product liability claim on Diageo s profitability or reputation; developments in the Colombian litigation, Korean customs dispute, thalidomide litigation or any similar proceedings; changes in consumer preferences and tastes, demographic trends or perception about health related issues, or contamination, counterfeiting or other circumstances which could harm the integrity or sales of Diageo s brands; changes in the cost or supply of raw materials, labour, energy and/or water; changes in political or economic conditions in countries and markets in which Diageo operates, including changes in levels of consumer spending, failure of customer, supplier and financial counterparties or imposition of import, investment or currency restrictions; levels of marketing, promotional and innovation expenditure by Diageo and its competitors; renewal of supply, distribution, manufacturing or licence agreements (or related rights) and licenses on favourable terms when they expire; termination of existing distribution or licence manufacturing rights on agency brands; disruption to production facilities or business service centres, and systems change programmes, existing or future, and the ability to derive expected benefits from such programmes; technological developments that may affect the distribution of products or impede Diageo s ability to protect its intellectual property rights; and changes in financial and equity markets, including significant interest rate and foreign currency exchange rate fluctuations and changes in the cost of capital, which may reduce or eliminate Diageo s access to or increase the cost of financing or which may affect Diageo s financial results and movements to the value of Diageo s pensions funds. All oral and written forward-looking statements made on or after the date of this presentation and attributable to Diageo are expressly qualified in their entirety by the above factors and the Risk factors contained in Diageo s Annual Report on Form 20-F for the year ended 30 June 2012 as 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 The information in this presentation 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 presentation includes 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. The contents of the company s website ( should not be considered to form a part of or be incorporated into this presentation.