Annual Report 2024

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F O RRMATION
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PERFORMANCE HIGHLIGHTS

Fiscal 24 financial performance

Diageo is a global leader in Total Beverage Alcohol (TBA) and one of the Volume
(equivalent units)
Net sales(2) Operating profit

world’s most successful brand builders. Our ambition is to create one of EU230.5m $20,269m $6,001m
the best performing, most trusted and respected, consumer products (2023: EU243.4m) (2023: $20,555m) (2023: $5,547m)
companies in the world. Reported movement (5)% â Reported movement (1)% â Reported movement 8%á
Organic movement(1) (4)% â Organic movement(1) (1)% â Organic movement(1) (5)% â

Net cash from operating Earnings per share (eps) Total recommended dividend
activities per share(3)
$4,105m 173.2c 103.48c
(2023: $3,636m) (2023: 196.3c) (2023: 98.55c)
(1)
2024 free cash flow $2,609m Reported movement (12)% â Increase 5%á
Eps before exceptional items
2023 free cash flow(1) $2,235m movement(1) (9)% â
Strategic report: Our business 2 Strategic report: Our performance 24 Governance report 87
Instantly recognisable brands 2 Our performance 24 Letter from the Chair of the Board of
Our business today 4 Summary financial review 28 Directors 88 Visit diageo.com for more information.

Market overview and investment case 6 Business review 32 Governance at a glance 90

Board of Directors 92
Fiscal 24 non-financial performance
Chair’s statement 8 Group financial review 45
Chief Executive’s statement 10 ’Spirit of Progress’ 48 Executive Committee 94

Business model 12 Promote positive drinking 51 Corporate governance report 96

Our Growth Ambition 14 Doing business the right way 53 Audit Committee report 111 Positive drinking Inclusion and diversity Water efficiency - Greenhouse gas
Our strategic enablers 15 Our people and culture 55 Nomination Committee report 118 across the company emissions
Health and safety
Champion inclusion and diversity
57
59
Directors’ remuneration report
Directors’ report
122
148
2.2mΔ 44%Δ (15.6)% (23.8)%
(2023: 1.9m) (2023: 44%) (2023: (12.3)%) (2023: (14.7)%)
Pioneer grain-to-glass sustainability 61
Financial statements Number of people educated Percentage of female leaders Percentage change in water Percentage change in total direct
Our ESG reporting approach 74 152
on the dangers of underage globally efficiency compared to fiscal and indirect greenhouse gas
Our principal risks and risk management 77 drinking through a Diageo 20 baseline emissions (market/net based)
Additional information supported education compared to fiscal 20 baseline
Viability statement 86 226
programme
Unaudited financial information 227 46%Δ
Cautionary statement 237
Non-financial reporting boundaries (2023: 43%)
and methodologies 238 Percentage of ethnically diverse
Independent Limited Assurance leaders globally
Report to the Directors of Diageo plc
on selected information 258
(1) See definitions and reconciliation of non-GAAP measures to GAAP measures on pages 227-235.
Other additional information 262 (2) Net sales are sales less excise duties.
(3) Includes recommended final dividend of 62.98c.
△ Within PricewaterhouseCoopers LLP’s (PwC’s) independent limited assurance scope – see pages 258-261 of this Annual Report. For Reporting boundaries and methodologies,
see pages 238-257.
Unless otherwise stated in this document, percentage movements refer to organic movements. For a definition of organic movement and reconciliation of all non-GAAP measures to GAAP
Visit diageo.com for more information. measures, see pages 227-235. Share refers to value share. Percentage figures presented are reflective of a year-on-year comparison, namely 2023-2024, unless otherwise specified.
Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc changed from sterling to US dollar which is applied prospectively. Diageo also decided to
Cover: Don Julio, Blanco. change its presentation currency to US dollar with effect from 1 July 2023, applied retrospectively, as it believes that this change will provide better alignment of the reporting of performance
Scan the QR code to read about our with its business exposures. Please see more information on page 166 under Accounting information and policies.
Don Julio case study.

Diageo Annual Report 2024 1

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INSTANTLY RECOGNISABLE BRANDS

Whether you’re heading out… or hosting at home...

In Europe, Guinness 0.0 Ketel One vodka and Mr Black
net sales and volume combine to make the ultimate
more than doubled in Espresso Martini cocktail
fiscal 24 and it is now
available on draught
in more than 1,500
outlets in Ireland

Smirnoff Spicy Tamarind Gordon’s Premium Pink

won a Double Gold Medal partnership with British media
at the San Francisco World
personality Maya Jama, centred
Spirits Competition in April
on bringing friends together

Casamigos got consumers in the summer spirit with its We welcomed summer 2024 This fiscal, we launched
terrace takeover on-trade activations in Great Britain in style with the launch of the Diageo's first alcohol-free
limited edition Cîroc Limonata, dark spirit, Captain Morgan
available in North America Spiced Gold 0.0%
and across Europe

In April, Tanqueray No. TEN

announced a season of
bartender residencies
across the globe to
showcase exceptional
cocktails

our brands help consumers... ...Celebrate life,

every day, everywhere
2 Diageo Annual Report 2024 Diageo Annual Report 2024 3
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OUR BUSINESS TODAY

Diageo has a portfolio of Diageo is well positioned to win in TBA

Advantaged portfolio: reach and scale Diageo reported net sales

iconic brands
(by category, fiscal 24)

Ready to drink, 4% US whiskey, 2%

IMFL whisky⁽¹⁾, 4%
Gin, 5% Scotch, 24%

With over 200 brands and sales in nearly Consumers are choosing to drink better, not more, and our Liqueurs, 5%
advantaged portfolio, positioned towards fast-growing categories,
180 countries, our portfolio brings together allows the consumer to premiumise through our extensive price Rum, 5%
Categories
some of the most iconic brands from around ladder as well as attracting the recruitment of new, legal purchase
age and above (LPA+) consumers.
the globe that consumers have enjoyed Canadian
Many of our much-loved and established brands have a unique whisky, 6%
for generations. heritage, but we do not stand still. Diageo's ambition is to create
one of the best performing, most trusted and respected consumer Beer, 16%
Our consumer insights, strong sense of purpose and pursuit of
products companies in the world. We move at pace to unleash the
financial excellence underpin our passion to continue to be one Other, 9%
power of our brands and portfolio to lead and shape consumer
of the best brand builders in the world and create value for our Geographies Price tiers
trends, and we execute decisively with operational excellence.
stakeholders. We are proud custodians of 13 billion-dollar brands
Vodka, 9%
including Johnnie Walker, Smirnoff, Guinness, Don Julio, Crown Alongside our brands, Diageo's entrepreneurial, talented and Tequila, 11%
Royal, Baileys and Tanqueray. diverse workforce of more than 30,000 people globally are
our biggest asset. Led by a highly experienced Executive
We have built number one global positions in scotch,
vodka, tequila, Canadian whisky, liqueurs and gin.(1)
Committee, Diageo aims to help our consumers celebrate life,
every day, everywhere, and capture the next phase of growth in Our portfolio gives consumers choice across price tiers
the TBA industry.
Diageo reported net sales Our scotch portfolio price ladder provides consumer choice within our largest category(2)
Our global footprint drives resilient growth (by price tier, fiscal 24) ($)

Share of reported net sales by region(2)(3)

(%) Luxury 4%
Ultra-premium 5%

North America Europe

39% 24% Super-premium 16%

Luxury
$250+

Premium 37% Ultra-premium

Up to $250

Super-premium
$40–$100

Asia Pacific Premium

Latin America and Caribbean
19%
$25–$40
9% Africa Standard 30% Standard

9%
$15–$25
Value 8%
Value
Under $15

(1) IWSR, 2023.

(2) The above map is intended to illustrate general geographic regions where Diageo has a presence and/or in which its products are sold. It is not intended to imply that Diageo
has a presence in and/or that its products are sold in every country or territory within a geographic region. (1) Indian-Made Foreign Liquor (IMFL) whisky.
(3) Based on reported net sales for the year ended 30 June 2024. Does not include corporate net sales of $123 million (2022–$104 million). (2) Diageo’s portfolio is diversified across price tiers as shown in the bar chart. The visuals are an example within Diageo’s scotch portfolio of this diversified footprint.

4 Diageo Annual Report 2024 Diageo Annual Report 2024 5

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MARKET OVERVIEW AND INVESTMENT CASE

...positioning us to
Diageo’s competitive advantages in an attractive industry drive:
Strong and resilient aligned to our Continued discipline of growth
algorithm
market dynamics… competitive advantages: • Driving long-term sustainable growth is our priority, and we
believe our growth algorithm continues to support this,
through winning quality market share.
Total Beverage Alcohol (TBA) is a highly
attractive and exciting consumer category. Leading world-class brands • Price and mix, driven by long-term premiumisation and
enabled by Revenue Growth Management, remain a
We have a proven track record in developing powerful consistent and core part of our top-line growth.
TBA is resilient and growing; and the spirits •
global brands. For example, Johnnie Walker’s RSV has • Since fiscal 18, we have generated annual savings of
category is growing even faster. TBA has increased over 400% since 2002.(2) approximately $500 million through productivity savings,
• Diageo brands have driven around 17% of total efficiencies and disciplined cost control and utilising our
grown at 4.4% CAGR in the 10 years through absolute dollar growth in the international spirits scale to fuel our investments.
to 2023, and international spirits has grown category since 2018.(1) • We take the benefits of growth, productivity and operating
leverage to reinvest smartly in brand building to drive
• Our strategic M&A activities and reputation for active
at 5.1% over the same period.(1) portfolio management position Diageo for sustainable quality market share – firmly balancing short-term share
long-term growth. gains, while building for long-term sustainable growth.

1 Consumers are choosing spirits

Diageo sees a long-term trend of consumers
choosing to switch to spirits from beer and wine.
Advantaged geographic footprint
• Our geographic footprint gives us access to consumers
A disciplined approach to capital
allocation
Spirits growth is supported by favourable population
demographics, the increasing size of the middle in the world’s largest markets, such as the United States, • We prioritise organic investment for long-term growth:
class in key markets globally and strong as well as the vibrant markets of India and China. maturing stock (increased from $5.3 billion in fiscal 18 to
premiumisation trends. These are expected to • Diageo’s geographic diversification supports resilient $7.8 billion in fiscal 24) and capex (increased from
continue into the future. performance through global volatility. $0.8-0.9 billion per annum fiscal 18-21 to $1.4-1.5 billion per
annum fiscal 22-24, driven by capacity increases).
• Active and disciplined portfolio management ($2.8 billion
invested in acquisitions and $1.6 billion generated from

2
disposals since fiscal 18).
Broad portfolio across price points • We have grown our dividend year on year for 25 years
People are drinking better, not more • Our advantaged portfolio enables trading up and down (dating back to fiscal 2000).
our extensive price ladder; whether our consumers are • Through fiscal 23, circa £25 billion has been returned to
Spirits' long-term value growth is also driven by looking for a Smirnoff and soda or a Don Julio 1942 on shareholders in dividends and share buybacks over the
premiumisation as consumers want to drink better, the rocks, Diageo's portfolio offers consumer choice. preceding 10 years.
not more. In the last 10 years, premium and above • Our diverse and balanced portfolio enables us to respond • We also returned $1 billion of excess capital, via share
spirits grew from 26% of category value to almost quickly to emerging and growing category trends. buybacks, during fiscal 24.
35%. The super-premium plus price-tier has grown in
value more than two times faster than other price
tiers in the category. This price tier gained 700 basis
points of share of international spirits retail sales value
(RSV) since 2013.(1) Diverse and talented workforce A robust strategy and clear ambition
• Our Executive Committee combines home-grown talent that will....
with externally recruited leaders who bring invaluable Build towards the next phase of our ambition to achieve TBA

3
market experience, a wealth of functional expertise and share of 6% by 2030. Our strategy to unleash the power of
Long runway for growth •
fresh perspectives.
Our talented management team and broader workforce
our brands and portfolio includes:
• Sustaining the momentum in our global brands of
enable us to respond flexibly and quickly to current and Guinness, Johnnie Walker and Don Julio while driving
In 2021, we set out our ambition to grow TBA share future challenges.
by 50% from 4% to 6% by 2030. With 4.5% value regional growth opportunities like Crown Royal in North
• Our global employee survey, Your Voice, remains above America and accelerating malt whiskey in Asia Pacific.
share of TBA(1) currently, we have significant external benchmarks with 81% engagement levels and
headroom for sustainable long-term growth. • Leading and shaping key consumer trends, including tapping
89% expressing pride in working for Diageo.
into the convenience, moderation and with food occasions
to recruit new consumers into new occasions at scale.
• Continuing to focus on operational excellence, including
strengthening our route-to-market and evolving our
approach to A&P efficiency, while driving accelerated
productivity and allocating resources with discipline.
(1) IWSR, 2023.
(2) Diageo consumption data.

6 Diageo Annual Report 2024 Diageo Annual Report 2024 7

CHAIR’S STATEMENT
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FORMATION

CHAIR’S STATEMENT

Recommended final Total dividend per share(1) Institute for Training and Research, aimed at raising awareness about Nik Jhangiani, currently Chief Financial Officer (CFO) at Coca-Cola
the consequences of drink driving on individuals and communities. Europacific Partners plc, the world’s largest Coca-Cola bottler, will
dividend per share WSOTR is available in digital and classroom formats and is now live succeed Lavanya Chandrashekar as Diageo’s CFO on 1 September

62.98c 5% to 103.48c
in 24 countries, and in fiscal 24, we reached more than one million 2024 and we look forward to welcoming him to the Board. Nik has
Recommended final Total dividend per share(1) people through WSOTR and other drink driving programmes. We have more than 30 years of finance experience gained in roles in the UK,
now reached more than 2 million people since fiscal 20. To embed Europe, India, Africa and the US, including 20 years in various CFO
dividend
2023: per share
59.98c 2023: 98.55c the message of moderation in culture in APAC we have partnered with roles, and has spent most of his career in the consumer and beverage

62.98c 5% to 103.48c
Total shareholder return Total shareholder return K-Pop star SUHO to produce a new song and music video, 'Savour industries. I am confident that his record of success as a CFO in
every moment'. This is the first time that responsible drinking multiple relevant markets will further strengthen our long-term track
(1 year) (10 year) messaging is conveyed through K-Pop. record of delivering sustainable returns for our shareholders.
2023: 59.98c 2023: 98.55c
(24)% 6%shareholder return
Total shareholder return Total
We are steadfast in our focus on water by improving water efficiency
at our own sites, investing in water replenishment and collective action.
After three years as CFO, the Board wishes to thank Lavanya warmly
for her strong contributions to Diageo over the past six years. She has
(1 year)
2023: (2)% (10 year)
2023: 9% For example, we are committed to replenishing more water than we been instrumental in framing our long-term ambitions, driving a culture
use in our tequila operations in Mexico by 2026, and mobilising of operational excellence throughout her tenure and embedding a
(24)%
(1) 6%
Includes recommended final dividend of 62.98c
collective action to improve water security. We are partnering with the
State of Jalisco and local municipality in Ocotlán, and in fiscal 24 we
culture of everyday efficiency which has already delivered highly
significant productivity savings across our business. We wish Lavanya
2023: (2)% 2023: 9% enabled large scale water reuse for local farmers, replenishing over well for the future as she returns to the US.
Fiscal 24 performance 470,000 cubic metres of water.
Julie Brown, CFO and Executive Director of GSK plc since May 2023,
In fiscal
(1) 24,recommended
Includes organic netfinal sales wereofdown
dividend 62.98c0.6%, with positive price/mix We continue to take significant action to create a sustainable low will be appointed as a Non-Executive Director, effective 5 August
performance mostly mitigating a decline in volume. Excluding our carbon future, and limit the damaging effects of climate change. We 2024, and on appointment will succeed Alan Stewart as Chair of the
Latin America and Caribbean region (LAC), the business grew organic are partnering with governments and institutions in key geographies Audit Committee. Julie brings many years of experience in financial,
Fiscal
net sales24 by performance
1.8%. Organic operating margin declined by 130bps, on our decarbonisation pathway. In the US, we were proud that the commercial and strategic roles in international companies operating in
primarily
In fiscal 24,driven
organicby LAC. Organic
net sales wereoperating
down 0.6%, profitwith
declined
positive4.8%, as a
price/mix Department of Energy selected Diageo as part of the Industrial highly regulated industries. She is strongly committed to enabling
result of the organic
performance mostly net sales decline,
mitigating a declineprimarily
in volume. due Excluding
to LAC andour North Demonstrations Program fund to support the installation of heat diversity in business and to creating sustainable, long-term value for
“It has been a true privilege to lead Diageo’s America.
Latin The decline
America was also region
and Caribbean driven (LAC),
by an increase
the business in investments
grew organic in batteries at our Shelbyville and Plainfield sites, with the goal of building stakeholders. Julie previously served as Chief Operating and Financial
strategic
net sales capabilities,
by 1.8%. Organic including in digital
operating and strengthening
margin declined by 130bps, route-to- a model that can be replicated.. Officer and Executive Director, Burberry Group plc. Julie has also
Board. I look forward to working with John, the market,
primarilyprimarily
driven byinLAC. the United
Organic States (US), and
operating profitin declined
marketing. 4.8%, as a served as Group CFO of Smith & Nephew plc and previously worked
Board and all my Diageo colleagues to ensure result of the organic net sales decline, primarily due to LAC and North Employee engagement for 25 years at AstraZeneca plc in various finance, commercial and
We generated free cash flow of $2.6 billion. Strong working capital
“It has been a true privilege to lead Diageo’s America. The decline was also driven by an increase in investments in Our people and inclusive culture are critical to Diageo’s success. strategic roles including as regional and country president and latterly
a smooth transition over the coming months.” management and lower tax payments more than offset the combined
strategic capabilities, including in digital and strengthening route-to- This year, Karen Blackett took over accountability as the designated as Interim Group CFO.
Board. I look forward to working with John, the impact of the decline in operating profit, higher interest payments and
market, primarily in the United States (US), and in marketing. Non-Executive Director for workforce engagement. All Non-Executive
Long-term On behalf of the Board, I would like to thank Alan who has been a
Board andview of the business increased investment in capex. Pre-exceptional earnings per share
all my Diageo colleagues to ensure declined
We generated mainlyfreeduecashto lower
flow of operating profitStrong
$2.6 billion. and higher
working finance
capital
Directors participated in the programme engaging with colleagues from
Director since 2014 and Chair of the Audit Committee since 2017.
Fiscal 24 has been a year of challenge and change for Diageo as we all regions, functions, and organisational levels. The Board values the
a
navigated global economic and sectoral coming
smooth transition over the volatility, setmonths.”
new priorities,
charges.
management
confidence
We increased
and lowerour
in decline
the long-term
taxdividend
payments
potential
bymore
5%, reflecting
of the
than offsetour
business and
thecontinued
our
combined openness of conversations and insights on positive aspects of Diageo’s
He has served Diageo with great distinction, and we have benefitted
greatly from his expertise and strategic input. We wish him the very
impact of the in operating profit, higher interest payments and culture, as well as areas for improvement. Diageo’s culture continues
and appointed Directors to our Board. best for the future.
Long-term view of the business commitment
increased investment
Total Shareholder
declined
to a progressive
mainly due
in capex.dividend
Return
to lower(TSR)operating
policy. Despite
Pre-exceptional
of -24% for fiscal
profit
earnings
and24,
theper12-month
the ten-year
higher
share
finance TSR
to be a source of pride and competitive advantage, with high quality
Despite the global economic and political headwinds we face,
Fiscal 24 has been a year of challenge and change for Diageo as we
the Total Beverage Alcohol (TBA) industry remains an attractive and remains solid
charges. at 6%. our dividend by 5%, reflecting our continued
We increased
accessible leadership. This was reflected in the engagement results Summary
navigated global economic and sectoral volatility, set new priorities, seen in our global employee survey, Your Voice, which remain in the
exciting sector. TBA has grown at a 4.4% compound annual growth confidence in the long-term potential of the business and our At Diageo, we speak of 'standing on the shoulders of giants' and
and appointed Directors to our Board.
rate (CAGR) over the past decade, and international spirits has grown Investing
commitmentfor to athe future dividend policy. Despite the 12-month
progressive
top quartile and above external benchmarks with 81% engagement
levels and 89% expressing pride in working for Diageo. honouring the founders on whose legacies this fantastic company is
at 5.1% the
Despite as measured (1)
by IWSRand
global economic over the same
political period,we
headwinds while
face,premium Total Shareholder
Diageo Return (TSR)
remains committed of -24% for
to delivering fiscalfor24,
value the ten-year TSR
shareholders. built. Some years have undoubtedly been challenging, but I am proud
beerTotal
the where Guinness
Beverage competes
Alcohol (TBA)has also grown
industry remainsahead of TBA. and
an attractive remains solid
Investing at 6%.
capital in maturing inventory and related production Board changes to have been part of the company’s journey and to have worked
exciting sector. TBA has grown at a 4.4% compound annual growth capacity is key to delivering long-term sustainable growth. Our total alongside such talented, dedicated, and entrepreneurial colleagues
We are confident in the long term trend of sector premiumisation and
rate (CAGR) over the past decade, and international spirits has grown Investing for thehave
maturing inventories future increased more than 42% over the past
We have announced further changes to the Board this year, and I am
and leaders: the giants of today. They will carry this business forward,
we believe that it will continue, supported by demographic trends, pleased that we have continued to attract high calibre of talent with
at 5.1% as measured by IWSR(1) over the same period, while premium five
Diageo years, resulting
remains in $7.8 billion
committed of total value
to delivering aged for inventory by the end
shareholders. live our purpose of celebrating life, every day, everywhere, and create
rising incomes in developing markets and spirits continuing to take deep experience across beverage, consumer and regulated industries.
beer where Guinness competes has also grown ahead of TBA. of fiscal 24,
Investing up $0.5
capital billion compared
in maturing inventorytoand therelated
prior year. Scotch is our
production value for our stakeholders. I am particularly proud of the great strides
share from beer and wine. Diageo’s advantaged portfolio is balanced largest
capacity category,
is key toaccounting for 24% ofsustainable
delivering long-term group net sales andOur
growth. comprising
total As we announced in March 2024, I plan to retire in February 2025 we have made on the inclusion and diversity agenda, and the diverse
across
We aregeographies
confident in and priceterm
the long tiers,trend
and of
in sector
2021, we set out our and
premiumisation the majority
maturing of the value
inventories haveofincreased
our maturing moreinventories,
than 42% which over the may be
past from the Diageo Board in my ninth year. My colleague and current leadership now in place on the Board and our Executive Committee. I
ambition
we believetothat
increase
it will our share supported
continue, of TBA to 6% by 2030. This year,
by demographic we set
trends, held for periods
five years, ranging
resulting in $7.8 from a minimum
billion of three
of total aged years to,
inventory byinthe some
end Non-Executive Director Sir John Manzoni has been appointed as my would like to express my deepest thanks to colleagues past and
strategic priorities
rising incomes that will drive
in developing futureand
markets performance and position
spirits continuing to take cases,
of fiscalmore
24, up than
$0.570 billion
years. compared to the prior year. Scotch is our successor. John joined the Diageo Board in October 2020, having present. As I pass the baton to John, I remain as excited about the
Diageo to capture
share from beer and thewine.
next Diageo’s
phase of advantaged
growth: we plan to drive
portfolio growth
is balanced largest category, accounting for 24% of group net sales and comprising been Chief Executive of the UK Civil Service. He is currently Chair of future growth potential of Diageo as I was when I joined the Diageo
in our largest
across categories,
geographies lead and
and price tiers,shape
and inconsumer trends
2021, we set out and
our ‘Spirit
the majority of Progress’:
of the value ofrefreshing
our maturing our approach
inventories, which may to ESGbe FTSE-listed multinational energy business SSE plc and a non-executive Board in July 2016. I look forward to watching the company and its
occasions,
ambition toand raise our
increase the bar
shareonofexecution.
TBA to 6% by 2030. This year, we set heldare for now
periods ranging from on a minimum of threeofyears director of engineering and technology company KBR, Inc. He was people thrive under John’s stewardship.
We nearly five years from the launch 'Spiritto,ofinProgress’,
some
strategic priorities that will drive future performance and position cases, more than previously a non-executive director of the multinational drinks business
As this report sets out, we are executing decisively against our growth our action plan on70 years.
Environmental, Social and Governance (ESG)
Diageo to capture the next phase of growth: we plan to drive growth SAB Miller plc for 11 years. John brings a wealth of experience both
ambition across our advantaged footprint, reinvesting behind our issues. We have reflected on our progress to date, what we have
in our largest categories, lead and shape consumer trends and
business and actively managing our portfolio through disciplined ‘Spirit
learned so offarProgress’:
and refreshed refreshing
our focus forour the approach
critical years ahead. to ESG from within the beverage alcohol world and from his extensive private
occasions, and raise the bar on execution. and public sector experience. I look forward to working with him,
acquisitions and disposals. We have
are now simplified andyears
nearly five prioritised
on fromthe the
goals that form
launch our of
of 'Spirit 'Spirit of
Progress’, Javier Ferrán
As this report sets out, we are executing decisively against our growth Progress'
our actionplan. planThis has allowed us Social
on Environmental, to prioritise the areas that
and Governance are most
(ESG) fellow Board members and my Diageo colleagues to ensure a Chair
ambition across our advantaged footprint, reinvesting behind our material
issues. We to have
our business
reflectedincluding reducingtothe
on our progress date,harmful
what usewe haveof alcohol, smooth transition.
business and actively managing our portfolio through disciplined combating
learned so far waterandstress and the
refreshed ourimpact
focus forof climate
the critical change.
years We ahead.are
acquisitions and disposals. also
We have accelerating
simplified ourandwork advocating
prioritised for responsible
the goals that form our alcohol
'Spirit of
consumption
Progress' plan.and Thiswater replenishment
has allowed activitiesthe
us to prioritise in areas
the communities
that are most
in which we
material operate.
to our business including reducing the harmful use of alcohol,
combating water stress and the impact of climate change. We are
I am encouraged by the progress we have made this year on our Statement on Section 172 of the Companies Act 2006
also accelerating our work advocating for responsible alcohol
positive drinking agenda. We have long championed awareness on Section 172 of the Companies Act 2006 Directors consider what is most likely to and the impact of the company’s activities on
(1) IWSR, 2023. consumption and water replenishment activities in the communities
the risks of drink driving, including collaborating with law enforcement requires the Directors to promote the success promote the success of the company for its local communities, the environment, including
in which we operate.
and local authorities. In 2021, we launched the Wrong Side of the of the company for the benefit of the shareholders in the long-term, as well as climate change, and the group’s reputation.
Road (WSOTR) digital
I am encouraged by the learning
progress resource
we have with the United
made this yearNations
on our members as a whole, having regard to the the interests of the group’s stakeholders.
positive drinking agenda. We have long championed awareness on
(1) IWSR, 2023.
the risks of drink driving, including collaborating with law enforcement interests of stakeholders in their decision- The Directors understand the importance of Read more about how stakeholders were taken into
8 Diageo Annual Report 2024 and local authorities. In 2021, we launched the Wrong Side of the making. In making decisions, the taking into account the views of stakeholders account in decision-making on pages 100-104.
Road (WSOTR) digital learning resource with the United Nations

8 Diageo Annual Report 2024 Diageo Annual Report 2024 9

CHIEF EXECUTIVE’S STATEMENT
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CHIEF EXECUTIVE’S STATEMENT

Reported volume Organic net sales In NAM, our strategic priorities remain clear. We will unlock growth by Diageo remains the world leader in scotch, our largest category. While our
driving our largest brands in our largest categories of whisk(e)y and scotch organic net sales performance was heavily impacted by LAC
movement movement tequila, recruiting into new occasions with innovation and raising the inventory reductions, momentum with consumers continued in fiscal 24.

(5)%
Reported volume (1)%
Organic net sales
bar on execution. Crown Royal Blackberry launched this year and has
been a great success, especially in recruiting new consumers to
We gained category share of scotch in 9 out of 10 of our largest measured
scotch markets. Johnnie Walker is living up to its “Keep Walking” mantra,
movement
2023: (7)% movement
2023: 7% whiskey. In tequila, Don Julio saw increased momentum in the second driving over half of our scotch organic net sales and continues to be the
half as it grew 15 times faster than the total US spirits industry, with the number one international spirits brand in value in calendar year 2023 as
(5)%
Organic volume movement
(1)%
Reported operating profit
movement
growth led by Don Julio Reposado where we increased investment
and expanded distribution. Guinness was the fastest-growing imported
measured by IWSR.

2023: (7)% 2023: 7% beer in the on-trade, bolstered by the new “Lovely Day” campaign Doing business the right way: ‘Spirit of Progress’
(4)%
Organic volume movement 8% operating profit
Reported with long time brand fan Jason Momoa. For spirits, we have made the
biggest change in our route-to-market for a decade. Working with our
This fiscal, I initiated a review of our ESG strategy and as a result,
we have simplified and prioritised the commitments that form our
2023: (1)% movement
2023: (6)% distributors, we are putting more 'feet on the street' to target 'Spirit of Progress' plan. We are prioritising the areas that have the

(4)% 8%
Reported net sales Organic operating profit categories, regions and locations with the highest growth potential. In most significant impact on our commercial performance and our
the US, we finished the year winning or maintaining TBA market share advocacy efforts, including the harmful use of alcohol, water stress,
movement movement carbon and our role in the communities in which we operate. We’re
for brands covering 90% of our US net sales.
2023: (1)% 2023: (6)%
(1)%
Reported net sales (5)%
Organic operating profit In Europe, we delivered resilient growth, mainly driven by another
year of strong momentum and double-digit growth for Guinness,
not only doing the right thing for our people, consumers and
communities, but also for our business in the long term.
movement
2023: 0% movement
2023: 7% helped in part by Guinness 0.0 for which net sales and volume more Our people and leadership
(1)% (5)% than doubled in the year. We achieved market share growth in most
European markets, despite lower consumer confidence.
During my first year as CEO, I have taken great pride in the resilience
and talent of our teams, including our Executive Committee who bring
2023: 0% 2023: 7% In Asia Pacific, we grew organic net sales, volume and operating together decades of experience in the industry, along with a breadth
Fiscal 24 was challenging for Diageo and for the broader industry, Resilient performance in a challenging margin in challenging macroeconomic conditions while increasing of market and functional expertise. I have spent time with our teams
with the unwinding and normalisation following the Covid-19 super-cycle
and the ongoing macroeconomic and geopolitical backdrop. Total environment investment in the region. Growth was driven by Chinese white spirits, around the world including in Ireland, US, Scotland, Kenya and Brazil.
Beverage Alcohol (TBA) however remains a highly attractive sector, After three years of extraordinary topline growth, with 14.5% CAGR and strong performance in India with continued premiumisation and I have seen first-hand the commitment, dedication, and resolve of
Fiscal
which 24
willwas challenging
deliver sustainablefor Diageo
long-term and for theand
growth broader industry,
generate from fiscal 21performance
Resilient to fiscal 23, this fiscal,in agroupchallenging
organic net sales declined double-digit growth in scotch and other whisky. Tequila also continues Diageo’s people. I would like to thank every single person in our
with the unwinding
shareholder value. and normalisation following the Covid-19 super-cycle 0.6%. The main driver was materially weaker performance in LAC, to gain momentum. organisation for their hard work this year.
and the ongoing macroeconomic and geopolitical backdrop. Total environment
which makes up 8% of Diageo’s organic net sales value. Excluding
Diageo is aAlcohol
resilient(TBA)
business, andremains
in fiscal a24highly
we have taken sector,
decisive In Africa, beer was the key driver of performance. Despite a tough I would particularly like to thank our outgoing Chief Financial Officer
Beverage however attractive After
LAC, three
organic years
net of extraordinary
sales grew 1.8%,toplinedriven growth,
by goodwith growth 14.5% CAGR
in Africa,
actions to deliver
improvesustainable
our near-term execution, including addressing the macroeconomic backdrop, we delivered organic net sales growth of (CFO) Lavanya Chandrashekar, who has been a trusted colleague
which will long-term growth and generate from fiscal 21 to fiscal 23, this fiscal, group organic
Asia Pacific, and Europe, partially offset by a decline in North America net sales declined
inventory issues in our Latin America and Caribbean (LAC) region. 12% driven by price increases partially offset by volume declines. and partner to me, both when we worked together in North America,
shareholder value. 0.6%.
(NAM).The NAM main driver was reflects
performance materially weaker performance
a cautious consumer environment in LAC,
We are strengthening our consumer insights, and by the end of calendar and more recently during my first year as Chief Executive. On behalf of
which makes up 8% of Diageo’s organic net sales
and the impact of lapping inventory replenishment in the prior year. value. Excluding These regional highlights bring to life the resilience and strength of our
Diageo
year 2024is aweresilient business,
will have rolled and in fiscal
out our 24 we have
proprietary taken Choice
Consumer decisive all Diageo colleagues, I wish her much future success as she returns to
LAC, organic net sales grew 1.8%, driven by good growth in Africa, diversified global footprint.
actions
Framework across markets covering a significant portion of our netthe
to improve our near-term execution, including addressing I’m the US. I am delighted that Nik Jhangiani will succeed Lavanya as
Asiapleased
Pacific, that
and in this challenging
Europe, environment
partially offset by a declinewe endedin North theAmerica
fiscal
inventory
sales. Thisissues in our
will give us aLatin
much America
deeperand Caribbean (LAC)
understanding region.
of consumer gaining or holding share in over 75% of our net sales value in measured Strengthening our operating model in key markets CFO; he has more than 30 years of finance experience gained in roles
(NAM). NAM performance reflects a cautious consumer environment
We are strengthening our consumer
We are insights, and our
by the end of calendar markets including in the UK, Europe, India, Africa and the US, including 20 years as
motivations and occasions. redeploying resources where and the impact of the US. We
lapping are also
inventory holding or gaining
replenishment shareyear.
in the prior in
As well as transforming our US route-to-market, we are also
year 2024the
we have webest
willopportunities
have rolled out our proprietary
to grow and we have Consumer
stepped Choice
up our most of our measured billion-dollar brands globally. CFO; and has spent most of his career in the consumer and beverage
Framework across markets covering I’m pleased that in this challenging environment we ended the fiscal transforming our operating model in key regions where we see growth industries including 20 years within the Coca-Cola system. His proven
route-to-market capabilities, includingainsignificant
the United portion
Statesof(US),
our our
net Organic
gaining oroperating
holding share profit in
declined
over 75% 4.8% andnet
of our oursales
organicvalueoperating
in measured opportunities. We are expanding our organisational structure in Dubai
sales. This will give us a much deeper understanding
largest market. We have also delivered a record year of productivityof consumer margin declined by 130bps, both primarily driven by LAC. share
Excluding track-record and international mindset mean he will be a strong
motivations and$700occasions. markets including the US. We are also holding or gaining in to solidify our leadership in premium spirits in the Middle East and
savings, nearly million,We are redeploying
over-delivering our three-year
on our resources where LAC,
most oforganic operatingbillion-dollar
our measured margin declined brands byglobally.
56bps and gross margin North Africa. We transformed our business model in the vibrant
addition to our leadership team.
we have thegoal
productivity best byopportunities
$200 million. to grow and we have stepped up our
route-to-market capabilities, including in the United States (US), our
grew 17bps, driven by price increases and productivity which offset the
Organic Nigerian market and entered a long-term partnership with a Outlook
impact ofoperating profit declined 4.8% and our organic operating
cost inflation. distributions specialist which will allow us to increase distribution of
largest market. We have also delivered a record year of productivity margin declined by 130bps, both primarily driven by LAC. Excluding The consumer and macroeconomic environment and continues to be
savings, nearly $700 million, over-delivering on our three-year Regional
LAC, organic performance Guinness – another example of Diageo’s proven asset light model for challenging with the conditions we saw towards the end of fiscal 24
Percentage of Diageo operating margin declined by 56bps and gross margin
the brand. We also announced that Diageo has acquired the
productivity persisting into fiscal 25, yet I continue to be confident in Diageo’s
total net sales value million.
goal by $200 grew
In LAC, 17bps, driven
following ourbyupdate
price increases
to investors andinproductivity
November 2023, whichwe offset the
have distribution rights of all remaining brands currently distributed by our
impact
worked of cost
with inflation. and customer partners to manage inventories
wholesale future.
gaining/holding share joint venture, Moët Hennessy Diageo France. This followed our
and ended fiscal 24 with more appropriate levels for the consumer
in measuredofmarkets
Percentage Diageo(1) Regional performance
environment. We implemented five targeted actions to improve
previous update in March 2024, where we outlined our phased Diageo possesses iconic and enduring brands from Guinness to
approach to transforming our distribution model in France by creating Tanqueray to Johnnie Walker, all with unmatched heritage, but with
total net sales value In LAC, following
inventory visibility:our update toour
expanding investors
accessintoNovember
sellout data; 2023, we have
incentivising our own in-market company. absolute relevance for today’s consumer. Our success has never come
worked with reporting;
wholesaleincentivising
and customer partners to stock
manage inventories
gaining/holding share
in measured markets(1) 75%+ sellout data
and ended
investing
environment.
in fiscal
commercial24 withplanning;
Wecustomers
implemented
independent
more appropriate
and piloting
five targeted
levels for the
digital
actions
counts;
caseconsumer
to improve
tracking, Performance in our largest categories
about by standing still, it has been achieved by blending those great
names with the most passionate teams, the best brand building, and
initially with two in Mexico. In Brazil, our largest LAC market, It has been another strong year for Guinness with the brand delivering a commitment to excellence. As the consumer and the operating
gaining/holding inventory visibility: expanding our access
the category improved in the second half to
and sellout data; incentivising
we gained share. 15% organic net sales growth, double-digit growth for seven environment continues to evolve, we will keep adapting to emerging
75%+
share sellout data reporting; incentivisingreduced
independent stock to counts;
Inventory levels have dramatically in Mexico more consecutive halves. We held or gained share in our top three markets tastes, new social occasions and consumer passions. We will unlock
investing
appropriate in commercial
levels, but we planning; and piloting
see persistent digitalincase
challenges tracking,
a highly for Guinness (Great Britain, Ireland and US) and we continued to growth to create one of the best performing, most trusted and
initially
competitive environment and have initiated a review to improvemarket,
with two customers in Mexico. In Brazil, our largest LAC
gaining/holding expand the brand's consumer base. Guinness 0.0, our alcohol-free respected consumer products in the world.
the category improved
performance. We knowinthe theimportance
second halfofand we gained
staying vigilantshare.
and
share offering, now accounts for nearly 3% of our Guinness volume globally.
Inventory levels have dramatically reduced
continue to work diligently to keep improving visibility into in Mexico to more
the
appropriate levels, but
distribution channels wethe
with seeaimpersistent
to deliverchallenges in a highly
better insights earlier. I My ambition to take tequila around the world just as Diageo did with
competitive
believe we have environment and have
the necessary initiated
processes, a review
data to improve
visibility, leadership, Johnnie Walker remains. It is a fun and versatile category and Diageo
performance.
incentives andWe know
sellout the importance
culture across the of staying
region vigilant
to more and align
closely was an early entrant. Tequila remains the fastest-growing scale spirits Debra Crew
(1) Source: Internal estimates, incorporating AC Nielson, Association of Canadian Distillers, continue to work diligently to keep improving
Dichter & Neira, Frontline, Intage, IRI, ISCAM, NAMBCA, State Monopolies, TRAC, IPSOS and future performance with consumer demand. visibility into the category and we have maintained our global tequila leadership by Chief Executive
other third party providers. All analysis of data has been applied with a tolerance of +/-3bps
distribution channels with the aim to deliver better insights earlier. I value. You can read a case study on our tequila roll out on page 18.
believe we have the necessary processes, data visibility, leadership,
(1) Source: Internal estimates, incorporating AC Nielson, Association of Canadian Distillers,
incentives and sellout culture across the region to more closely align
10 Dichter & Neira, Frontline,
Diageo
Intage,Annual Report
IRI, ISCAM, 2024State Monopolies, TRAC, IPSOS and
NAMBCA, future performance with consumer demand.
other third party providers. All analysis of data has been applied with a tolerance of +/-3bps

10 Diageo Annual Report 2024 Diageo Annual Report 2024 11

 S T R A T ESTRA
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BU
BU S ISNI N
E SESS SMM
OOD EDLE L

AA business
business built
built for
for the
the
long term
long term
Wedeliver
We deliverour
ourstrategic
strategicpriorities
prioritiesthrough
througha abusiness
businessmodel
modelthat thatleverages
leveragesglobal
globaland
andlocal
localexpertise,
expertise,
hasthe
has theconsumer
consumeratatitsitsheart,
heart,and
andputs
putsour
ourresponsibilities
responsibilitiestotoour
ourstakeholders
stakeholdersfront
frontand
andcentre.
centre.

Whatwe
What wedo
do 1. 1.We
Wesource
source 2.2.We
Weinnovate
innovate 3.3.We
Wemake
make 4. We transport 5. We sell to customers 6. We market to
consumers
7. We help consumers
celebrate
From
From smallholder
smallholder farmers
farmers in Africa
in Africa Using
Using ourour deep
deep understanding
understanding WeWe distil,
distil, brewbrew
andand bottle
bottle ourour We move our products to where We grow by working closely with We invest in world-class We continually evolve our
andand Mexico,
Mexico, to to multinational
multinational of of consumer
consumer trends
trends and
and spirits
spirits andand beer
beer brands
brands through
through they need to be in the world; our customers. Our global and marketing to build vibrant data tools to understand
companies,
companies, wewe workwork with
with ourour socialising occasions, wewe
socialising occasions, focus
focus a globally
a globally co-ordinated
co-ordinated supply
supply be that from a local distillery in local sales teams use our data, brands that resonate with our consumers’ attitudes and
suppliers
suppliers to to procure
procure high-quality
high-quality onon driving
driving sustainable
sustainable innovation
innovation operation,
operation, working
working to to
thethe highest
highest market or, for example, digital tools and insights to consumers. To do this motivations. We convert this
rawraw materials
materials and and services,
services, that
that provides
provides newnew products
products andand quality
quality andand manufacturing
manufacturing shipping scotch. extend our sales reach, improve responsibly, we have our information into insights which
with environmental sustainability
with environmental sustainability experiences for consumers;
experiences for consumers; standards.
standards. WeWe prioritise
prioritise usingusing our execution and help generate rigorous Diageo Marketing Code enable us to respond with
in in mind.
mind. Where
Where it isit right
is right
forfor bebe that
that a non-alcoholic
a non-alcoholic option
option local
local production
production where
where it isit right
is right value for us and for our which guides everything we do. agility to our consumers’ interests
our business, we
our business, we grow and grow and or an offering that
or an offering that suitssuits for our business.
for our business. customers. When our customers and preferences.
source
source locally.
locally. convenience
convenience or or
thethe on-trade.
on-trade. grow, we grow too.

Workingininthe
Working theinterest
interestofofour
our People
People
Creating value
stakeholders
stakeholders WeWe want
want ourour
they
people
people to to
bebe
best they can be. We offer a a
best can be. We
thethe
offer Our business model allows us
diverse
diverse and
and inclusive
inclusive workplace
workplace
with opportunities
with opportunities for for to create value across four
development
development andand progression.
progression. main areas:
Consumers
Consumers Customers
Customers Suppliers
Suppliers
WeWeareare passionate
passionate about
about thethe role
role WeWe work
work closely
closely with
with customers
customers WeWe partner
partner with
with suppliers
suppliers to to
ourour brands
brands play
play in in celebrations
celebrations to to build
build sustainable
sustainable ways
ways of of ensure
ensure long-term,
long-term, mutually
mutually
globally.
globally. WeWeareare committed
committed to to working that help grow
working that help grow their their beneficial
beneficial relationships.
relationships.
promoting moderation and businesses through great insight Respect Financial – for our investors
promoting moderation and businesses through great insight Respect forfor human
human rights
rights is is
reducing
reducing alcohol
alcohol misuse.
misuse. and execution.
and execution. embedded throughout ourour
embedded throughout
global
global value
value chain.
chain.
Human – for our people, suppliers,
Communities
Communities Investors
Investors Governments
Governments customers and consumers
andregulators
and regulators
WeWe help
help build
build thriving
thriving WeWe aim
aim to to maximise
maximise long-term
long-term WeWe advocate
advocate forfor laws
laws or or Social – for our communities
communities
communities byby making
making lasting
lasting investor
investor returns
returns through
through regulatory
regulatory change
change where
where wewe
contributions where we
contributions where we live, live, consistent,
consistent, sustainable
sustainable growth
growth think there is a positive impact
think there is a positive impact
work,
work, source
source andand sell.
sell. andand a disciplined
a disciplined approach
approach to to ononourour business
business andand a benefit
a benefit forfor
capital allocation.
capital allocation. our key stakeholders.
our key stakeholders. Natural – for our environment

1212 Diageo
Diageo Annual
Annual Report
Report 2024
2024 Diageo Annual Report 2024 13
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OUR GROWTH AMBITION OUR STRATEGIC ENABLERS

Our Growth STRATE GY

Ambition
In previous years, we were led by our well-established Performance Our Growth Ambition is our evolved strategy to win in fiscal 25 and
Ambition, a strategy which delivered strong results. As we navigate the beyond and to deliver the next phase of sustainable growth.
next phase in our journey, we have continued to evolve our strategy,
Through the Growth Ambition we will continue to focus on delivering
which centres on strong consumer and customer insights. As previewed at
on four key strategic outcomes that are now embedded in the
our Capital Markets Event in November 2023 and the Consumer Analyst
business: providing efficient growth; delivering consistent value
Group of New York (CAGNY) investor conference in February 2024,
creation; building credibility and trust; and ensuring that our people
we have sharpened our strategy in order for us to achieve quality share
and high-performing teams are fully engaged. Unleash the power of our to lead and shape executed with
of TBA of 6% by 2030 and generate value for our shareholders.
brands and portfolio… consumer trends… operational excellence

PURPOSE • To become the global leader in whisk(e)y • Premiumise the industry. • Evolving our brand building muscle
Celebrating life, every day, everywhere and tequila.
To win with local portfolios rooted in
• Recruit new consumers from across TBA. through smarter A&P.
Delivering commercial excellence across
• • Enter into new occasions. •
local culture. all our channels.
• To ensure we continue to drive growth • Accelerating productivity via Revenue
in Guinness, including 0.0. Growth Management and supply agility.
AMBITION To create one of the best performing, most trusted and respected,
Read more on page 16. Read more on page 18. Read more on page 20.
consumer products companies in the world
E NABLE RS

STRATEGY Unleash the power of our brands and portfolio to lead and shape
consumer trends executed with operational excellence

BRANDS AND CONSUMER OPERATIONAL

PORTFOLIO TRENDS EXCELLENCE
Whisk(e)y and tequila Premiumisation Evolve brand building muscle
Winning local portfolio Recruitment Commercial excellence
Guinness growth New occasions Everyday efficiency

ENABLERS Building a more Diverse and engaged talent ’Spirit of Progress’ and doing business
Digital Diageo with a focus on culture the right way from grain-to-glass
Building a more Diverse and engaged talent ’Spirit of Progress’ and doing
Digital Diageo with a focus on culture business the right way from
grain-to-glass
OUTCOMES Achieve quality TBA share of 6% by 2030 We are upweighting investment to fund a We continue to develop our talent, This continues to underpin everything that
holistic, prioritised programme of ensuring they embody our evolved we do. We have refreshed our flagship
digitisation, underpinned by transformation values and behaviours. ’Spirit of Progress‘ programme to maximise
EG CVC CT EP of data, analytics and systems. the impact of its next phase of delivery.

Efficient growth Consistent value creation Credibility and trust Engaged people
Consistently grow organic net Top-tier total shareholder Trusted by stakeholders for High-performing and
sales, grow operating profit, returns, increase return on doing business the right way, engaged teams, continuous Read more on page 22. Read more on page 23. Read more on page 23.
deliver strong free cash flow invested capital from grain-to-glass learning, inclusive culture

14 Diageo Annual Report 2024 Diageo Annual Report 2024 15

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O U R S T R A T E G I C E N A B L E R S continued

STRATEGY

Unleash the power

of our brands and portfolio
Our outstanding brands and broad portfolio remain Examples of progress in fiscal 24:
a competitive advantage • Johnnie Walker demonstrated its ability to continue to win across
Our strategy focuses on three areas: the price ladder. Johnnie Walker Blonde drove total trademark
share gains following its launch across Asia Pacific (APAC) and LAC.
1. Maintaining our undisputed number one value position in the At the luxury end of the portfolio, Johnnie Walker Blue Label gained
whisk(e)y and tequila categories(1), maximising the large growth share through the Xordinaire and Umami innovations(1).
opportunities they provide, while leveraging our heritage. • Godawan Single Malt, crafted with quality and sustainability at its
2. Winning with consumer-first local portfolios: markets must unleash core in the Alwar distillery, Rajasthan, was the most awarded Indian
the power of our portfolio by building strong brands with local single malt in 2023-2024.
relevance, informed by deep consumer insight. • We have seen continued double-digit growth of Don Julio tequila
in the United States, with momentum building internationally as we
3. Continue Guinness breakout growth with our asset light model shape the global expansion of the category.
and innovation. • Guinness is the number one selling beer in Great Britain by value in
the second half of the fiscal.(2)

Teaming up with the world’s Taking our brands to new heights at the Super
Bowl
biggest sporting events Diageo’s NFL platform is another example of how our iconic brands
can work with similarly iconic sporting events to deliver great results.
The power of sport knows no geographic limits – Over the last five years, Diageo has built official partnerships with
20 different NFL teams, enabling advertising and profiling of our
it is truly global. At Diageo, we are using sport to brands in stadiums and beyond. In the 2023 season alone, Diageo
lift our brands, partnering with iconic sporting brands used over 70 hours of digital signage at NFL stadiums and
over 71,000 samples were distributed across NFL league and team
occasions giving us incomparable visibility partner events.
across the globe. Great brand and sports partnerships also allow for fantastic creativity
to help build awareness and excitement. Nowhere was that creativity
Shaping the future of Guinness with sport more evident than on Super Bowl Sunday in February. In the week
Whilst Guinness has been the official partner of the Six Nations Rugby leading up to the Super Bowl, Don Julio took over the STRAT Hotel in
Championship since 2019, in 2024 the tournament helped it reach Las Vegas – using a projection to turn the hotel tower into a 1,149 ft tall
new heights. During this year's Six Nations, sales of pints of Guinness bottle of Don Julio 1942.
in stadiums were up 15% compared with 2022, while there was a
26% increase in pints of Guinness 0.0 sold in stadiums compared Winning in India with Royal Challenge
with 2023. One of the world’s most popular and watched annual sporting events
This year, Guinness also tapped into new areas at the Championship, is the Indian Premier League Cricket (IPL). While many brands sponsor
kicking off its official partnership with the Guinness Women’s Six teams, Royal Challengers Bangalore (RCB), one of the founder members
Nations and increasing the amount of Guinness 0.0 beer taps, of the IPL, and named after renowned Indian whisky brand Royal
driving awareness and consumption of the non-alcoholic choice. Challenge, is owned by United Spirits Limited, part of Diageo plc.
This expanded partnership is a key pillar in delivering against our This ownership gives Royal Challenge whisky unprecedented visibility
strategy of making Guinness more relevant to more people, on more in one of the largest whisky markets in the world. One of the greatest
occasions, more of the time. success stories this year has been via the Women’s Premier League,
with the RCB women's team winning the title in March.
New English Premier League partnership The global reach and attraction of sport is undeniable. We will continue
In June, Guinness announced that from August it would be the official to invest to showcase our iconic brands at events that excite and
beer of the English Premier League. Premier League games are matter to consumers across the globe.
broadcast into 900 million homes in 189 countries, heightening the
brand's relevancy and visibility even further. The four-year agreement (1) IWSR, 2023.
(2) Nielsen/CGA, 52 weeks to 18 May 2024.
will also see Guinness 0.0 named as the official non-alcoholic beer of
the Premier League.

16 Diageo Annual Report 2024 Diageo Annual Report 2024 17

 S T R A T ESTRA
G I CTEGIC
R E P OREPORT
RT G O V GOVERNA
E R N A N C ENCE
R E PREPORT
ORT F I NFINANCIAL
A N C I A L SSTATEMENTS
TATEMENTS A DADDITIONA
D I T I O N A L LI NINFO
FORMRMATION
ATION
O U R S T R A T E G I C E N A B L E R S continued
O U R S T R A T E G I C E N A B L E R S continued
STRATEGY
STRATEGY

To
To lead
lead and
and shape
shape
consumer
consumer trends
trends
Consumers remain at the centre of everything we do Examples of progress in fiscal 24:
Consumers
We remain
are focused at the centre
on anticipating of everything
and responding weindo
to shifts consumer •Examples of malts
Our luxury progress
are in fiscal a24:
playing key part in the premiumisation
trends,
We areenabled
focused by
on capabilities
anticipatingand
andtools which we
responding to are
shiftsconstantly
in consumer • of
Ourscotch.
luxuryFiscal
malts24aresaw the announcement
playing of premiumisation
a key part in the the Mortlach and
evolving. Shaping
trends, enabled byand leading and
capabilities consumer trendswe
tools which enables us to:
are constantly Philippe
of scotch.Starck
Fiscalpartnership, generating attention
24 saw the announcement of theand momentum
Mortlach and
evolving. Shaping and leading consumer trends enables us to: in key markets
Philippe Starck ready for product
partnership, launches
generating in fiscal
attention and25.momentum
1. Premiumise: We want to drive and lead the ongoing trend of
in key marketsisready
Convenience for productimportant
an increasingly launchescategory
in fiscal 25.
for consumers
premiumisation
1. Premiumise: Weinwant
our to
industry, andlead
drive and we continue
the ongoingto develop
trend ofour •
brand building capabilities
premiumisation to doand
in our industry, this.we
The nuancestoofdevelop
continue premiumisation
our • entering TBA. is
Convenience Fiscal 24 saw Smirnoff
an increasingly SMASH
important Tea and
category forCaptain
consumers
vary
brandbybuilding
market,capabilities
so we ensure ourthis.
to do brands hit the relevant
The nuances local
of premiumisation Morgan
entering Sliced execute
TBA. Fiscal fast Smirnoff
24 saw launchesSMASH
and distribution
Tea and ramp-ups
Captain
premium cues; for
vary by market, so example
we ensure being relevanthitinthe
our brands popular
relevantculture
localor in North Sliced
Morgan America, resulting
execute fast in both products
launches winning share
and distribution in
ramp-ups
in appropriate
premium cues; experiential
for examplespaces.
being relevant in popular culture or the category.
in North America, resulting in both products winning share in
the
The category.
2. in appropriate
Recruit: experiential
We continue spaces.
to recruit new consumers into and from across • global growth of Guinness 0.0 has supported increased
2. TBA. With
Recruit: We circa 550 million
continue newnew
to recruit legal purchaseinto
consumers ageandconsumers
from across • consumer
The globaldesire
growthforofmoderation
Guinness 0.0options and enables
has supported us to offer
increased
forecast
TBA. Withtocircaenter550
the million
TBA market by 2033
new legal (1)
, we will
purchase agerespond
consumerswith more in a wider
consumer desireset
forof occasions.options
moderation This, alongside our 0.0
and enables spirits
us to offer
agility
forecast to to
theenter
emerging
the TBA trends
marketthatbyresonate withwill
2033(1), we these new cohorts,
respond with brands
more inwhich constitute
a wider three of the
set of occasions. five
This, largest 0.0
alongside ourbrands globally,
0.0 spirits
(2)
keeping
agility to our
the brands
emerging relevant.
trends At theresonate
that same time,withwe
thesewillnew
keepcohorts,
winning gives
brandsuswhich
a strong portfolio
constitute to capitalise
three of the fiveonlargest
this trend.
0.0 brands globally,
in the right
keeping ouroccasions to recruitAtfrom
brands relevant. beer and
the same time,wine.
we will keep winning gives us a strong portfolio to capitalise on this trend.(2)
in theinright
3. Win new occasions
occasions:toWe recruit from beer
will enter andoccasions
into new wine. to drive
the growth
3. Win in new of our categories.
occasions: We willThe landscape
enter into newofoccasions
socialising
to isdrive
ever
evolving,
the growthfrom thecategories.
of our growth of theTheearly evening
landscape ofoccasion in issome
socialising ever
markets
evolving,tofrom
the the
desire for increased
growth options
of the early to moderate
evening occasion in others.
some
We will ensure
markets our portfolio
to the desire continues
for increased to evolve
options as consumer
to moderate in others.
occasions do the
We will ensure oursame.
portfolio continues to evolve as consumer
occasions do the same.

Taking tequila around the world in 33 countries and continues to recruit across Europe. This summer,

Taking tequila around the world

Our global rollout of tequila continued at
we
in 33have
Casa
we have
plans and
countries
Paloma
for over
plansinforGreat
one million
continues
over Britain.
consumers
to recruit
Increased
one million
to sample
across Europe.
investment
consumers
Thisthe
in these
to sample
summer,
the brands
to support
Casa theiringlobal
Paloma Great rollout
Britain.isIncreased
amplifiedinvestment
by our excellent
in thesemarketing
brands
Our global
pace in fiscal rollout of tequila continued
24, underpinned by strongat and brandtheir
to support building at scale,
global rolloutfor example,by
is amplified Don
ourJulio at the marketing
excellent Oscars
pace in fiscal 24,
commercial execution. underpinned by strong and the Super
brand Bowl.at scale, for example, Don Julio at the Oscars
building
commercial
Early bets onexecution.
tequila are paying off
and the Super
In APAC, we have Bowl.
tapped into the demand for luxury products,
positioning
In APAC, weDon Julio
have 1942 into
tapped as our
theflagship.
demandItforhasluxury
entered the most
products,
Early bets
Diageo’s on istequila
portfolio are
positioned paying
towards off categories
fast-growing aspirational on-trade
positioning Don venues,
Julio 1942 allowing
as our us toIt deliver
flagship. high-quality
has entered the most
and tequila
Diageo’s is the fastest
portfolio growing
is positioned spirits category
towards (+9%
fast-growing RSV
categories activations,
aspirational in partnership
on-trade withallowing
venues, influencers.
us to deliver high-quality
2022-2023).
and tequila isDiageo was growing
the fastest among the early
spirits entrants(+9%
category into the
RSVspace activations, in partnership with influencers.
and continues
2022-2023). to be was
Diageo the global
amongleader in tequila
the early with
entrants around
into a
the space The Paloma
quarter be the(2)global leader in tequila with around a
of valuetoshare.
and continues
(2)
Thefiscal
This Paloma
year, we identified the Paloma cocktail as a vehicle to
quarter
In NAM,ofour
value share.
tequila portfolio grew US spirits share, driven by recruit consumers
This fiscal year, weinto the tequila
identified category.
the Paloma Our consumer
cocktail insights
as a vehicle to
Don Julio,our
In NAM, which increased
tequila momentum
portfolio grew US spiritsin theshare,
second half, by
driven showed the Paloma
recruit consumers was
into theemerging as the cocktail
tequila category. of choiceinsights
Our consumer for
growing
Don Julio,15which
times increased
faster thanmomentum
the total USinspirits industryhalf,
the second and gaining bartenders
showed theand brand
Paloma ambassadors,
was emerging asparticularly
the cocktailinofSouthern Europe.
choice for
category
growing 15 share
timesoffaster
tequila andthe
than total(3)US
spirits. Spearheading
spirits industrythis
andgrowth
gaining bartenders and brand ambassadors, particularly in Southern
The Paloma is a grapefruit-based, refreshing and visually appealingEurope.
was Don Julio
category shareReposado, where
of tequila and we increased
spirits.(3) investment
Spearheading and
this growth premium
The Paloma aperitif: a big glass, vibrant
is a grapefruit-based, colour, and lots
refreshing of flavour.
visually appealing
expanded distribution
was Don Julio Reposado,to capitalise
where weon the increasing
increased popularity
investment and of The
premiumPaloma is alsoa an
aperitif: bigaccessible waycolour,
glass, vibrant for consumers
and lotsto ofdiscover
flavour.
aged tequila,
expanded as consumers
distribution rapidlyon
to capitalise become more knowledgeable
the increasing popularity of tequila:
The Paloma it is light, easy
is also an to make, and
accessible wayfitsforbeautifully
consumers into
to various
discover
about the category.
aged tequila, as consumers rapidly become more knowledgeable occasions
tequila: it iswhether consumers
light, easy to make,are
andatfits
home, in a bar,
beautifully orvarious
into enjoying
about the category.
We drove almost 12% organic net sales growth in markets outside itoccasions
with food.whether consumers are at home, in a bar, or enjoying
NAM and almost
We drove LAC, leading to substantial
12% organic market
net sales growthshare gains across
in markets outside it with
(1) food.
World Bank.
Europe,
NAM and APAC
LAC,and Global
leading Travel. Donmarket
to substantial Julio was the gains
share number one
across (2)
(1) IWSR,
World 2023.
Bank.
selling
Europe,tequila
APAC at
andLondon
GlobalHeathrow Airport
Travel. Don Juliothroughout most ofone
was the number the (3)
(2) Nielsen/NABCA,
IWSR, 2023. 2024
fiscal
sellingand is now
tequila available
at London in nearlyAirport
Heathrow 60 countries. Casamigos
throughout most ofisthe
now (3) Nielsen/NABCA, 2024
fiscal and is now available in nearly 60 countries. Casamigos is now

18 Diageo Annual Report 2024

18 Diageo Annual Report 2024 Diageo Annual Report 2024 19
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O U R S T R A T E G I C E N A B L E R S continued

STRATEGY

Executed with
operational excellence
Our evolved operational excellence agenda is focused on sales data and digital bidding algorithms. By combining our data
brand building, commercial excellence and productivity and consumer understanding, we have evolved our media targeting
strategies by showing consumers brand-relevant media at key
moments across hyper-targeted locations. This is now scaled across
• We are evolving our brand building muscle to upgrade the our US brand portfolio.
effectiveness and efficiency of our Advertising and Promotion (A&P)
to ensure we invest behind the right brands, in the right places and • The Crown Royal Blackberry launch was an example of commercial
through the right channels. execution excellence and resulted in consumer recruitment into
whiskey and share gains for the trademark. We partnered with
• We continue to upgrade our commercial capabilities with customers our customers to deliver standout point of sale experiences.
and consumers, building best-in-class execution partnerships, digital
merchandising and sales processes. The on-trade is also a critical • We continued to strengthen our RGM capabilities, which are key to
channel for brand building and exceptional experiences and we driving sustainable growth across volume, price and mix. We made
have increased focus. strategic price increases and targeted A&P investments holding our
overall A&P flat for the year.
• We will continue to deliver against our productivity agenda,
sharpening our resource allocation to drive efficiency. Through our • Smirnoff marketing teams in over 40 markets used the Diageo
Revenue Growth Management (RGM) capabilities and supply chain Virtual Studio to take global assets for the 'We Do We' campaign
excellence by investing in digitisation, incremental margin and delivered over 2,000 localised digital assets, saving nearly
enhancement and supply network design opportunities. $15 million. In Great Britain, we increased marketing investment
Examples of progress in fiscal 24: for Guinness by 14%, smartly managed pricing corridors, and drove
• In NAM, we improved our digital media efficiencies and volume growth of 18%.
effectiveness by applying enhanced technology to geographical

Fiscal 24 saw a record delivery Looking ahead, we have committed to significantly step up our
productivity target to $2 billion over the next three years (fiscal 25-27).
of nearly $700 million in This will be enabled by the acceleration in annual savings across
cost of goods, marketing and overheads and from our supply
productivity benefits unlocked agility programme.

$1.7 billion productivity savings, exceeding

Our culture of everyday efficiency is firmly embedded into the
business. We have delivered strong productivity benefits year on
commitment of $1.5 billion three-year target
year. At the end of fiscal 24, we completed a three-year period over (total productivity savings, $m)
which we delivered $1.7 billion of productivity benefits, significantly
695
exceeding the original commitment of $1.5 billion made at the
beginning of fiscal 22. Fiscal 24 was our third consecutive year of
productivity and price offsetting the absolute impact of cost of 535
515 505
goods inflation. 490

In fiscal 24, we delivered record productivity savings of nearly $700

million across cost of goods, marketing and overhead spend. The
productivity on cost of goods was across the end-to-end supply chain.
We renegotiated contracts on key materials such as glass, labels and $1.7billion
grain neutral spirits and drove savings in logistics by further optimising
warehousing capacity and container fill rate, and renegotiating key
ocean freight contracts. Across our manufacturing sites, we reduced
waste and drove savings via labour optimisation and robotics
automation. In addition, we started to see benefits from our five-year FY20 FY21 FY22 FY23 FY24
supply chain agility programme, announced at the end of fiscal 22.

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O U R S T R A T E G I C E N A B L E R S continued

ENABLERS

Our strategy is
underpinned by
three enablers
We are focused on transforming three of our We are also implementing our evolved ESG approach for the
next phase of delivery of our ‘Spirit of Progress‘ programme,
enablers: Digital, Talent and ESG which focuses on maximising impact while protecting our licence
We are upweighting investment to fund a holistic, prioritised to operate and grow.
programme of digitisation (i) to facilitate marketing transformation
and re-invent brand building; (ii) to transform commercial execution Examples of progress in fiscal 24:
and step-change our sales partnering; (iii) to unlock the next wave • Building a more Digital Diageo with 'What’s your Cocktail?',
of productivity savings. This is underpinned by the transformation of a generative AI platform to enable consumers to pair cocktails
data, analytics and systems. with food.
We continue to invest in talent transformation, ensuring our people • We have committed to creating an environment in which
embody our evolved values and behaviours. We are developing everyone at Diageo can thrive, feel engaged and valued for
capabilities to ensure our talent is upskilled in areas that are key their contributions.
to our strategy. • Driving triple wins with the Baileys Minis paper-based bottle trial.

1 Building a more
Digital Diageo 2 Diverse and engaged talent
with a focus on culture 3 ’Spirit of Progress’ and
doing business the right
'What's Your Cocktail?' An AI platform
way from grain-to-glass
pairing cocktails with food Diversity Baileys Minis paper-based bottle trial
40% of our Board and 46% of our leadership population, In May, at the Time Out Festival in Barcelona, we launched a trial
In May, we launched 'What’s Your Cocktail?', a generative AI-driven
including our Executive Committee, are from an ethnically diverse of a new innovation, the Baileys Minis paper-based bottle.
digital platform to recommend cocktail pairings with individual food
background. We are proud to have reached our 45% ethnicity
preferences. The platform helps consumers demystify cocktails by We know our consumers are increasingly looking for sustainable
leadership representation ambition ahead of 2030.
asking the desired atmosphere of their event and favourite food packaging alternatives, whilst also expecting premium quality and
flavours to ensure the perfect serve for every occasion. Engaged talent design from our brands. These bottles are a step in our journey
towards a more sustainable business.
Whilst the platform is consumer-first, we are also benefiting by
gathering millions of first-party consumer data points, which helps In the global employee survey, Your Voice, our results for the fiscal The Baileys Minis paper-based bottles are made with a dry
give our consumers exactly what they want. remained above external benchmarks with 81% engagement levels moulded fibre bottle which is 90% paper, with a thin plastic liner
and 89% pride in working for Diageo. and a foil seal.
Digital planning tool delivering productivity Culture The development work behind these bottles is the result of strong
wins in supply chain To unleash greater speed and agility in our business, we are
collaboration across our Diageo teams worldwide, along with the
help of valued external partners. This is further evidence of our
focusing strongly on culture and embedding four dial-up behaviours: dedication to progressing towards our ambition to accelerate to
This year we implemented a new Advanced Planning Tool (OMP)
external curiosity, efficient collaboration, experimentation and a low-carbon world.
across our tequila asset base. It monitors our end-to-end supply
learning, and acting decisively.
chain and gives us the ability to smoothly plan for and respond
to volatile changes in product demand.
For example, this fiscal we have seen accelerated demand for
Don Julio Reposado. The OMP tool enabled us to quickly run
scenarios, look into end-to-end demand and balance our inventory
and capacity, allowing us to communicate more quickly and
effectively with customers and our suppliers to fulfil that demand.

22 Diageo Annual Report 2024 Diageo Annual Report 2024 23

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OUR PERFORMANCE

Monitoring performance and progress

Reported measures Reported measures
Net sales growth Operating profit growth Basic earnings per share Net cash from operating activities Return on closing invested capital R Remuneration
(%) (%) (cents) ($ million) (%)

2024 (1.4) 2024 8.2 2024 173.2 2024 4,105 2024 34.5 Some KPIs are used as a measure in
the incentive plan for the remuneration
2023 0.2 2023 (5.9) 2023 196.3 2023 3,636 2023 38.3 of executives. See our Directors’
2022 19.3 2022 17.1 2022 184.6 2022 5,213 2022 38.3 remuneration report from page 122
for more detail.
2021 16.1 2021 84.9 2021 153.8 2021 4,932 2021 32.3
K KPI: Key Performance Indicator
2020 (10.8) 2020 (47.8) 2020 76.2 2020 2,921 2020 17.8

Definition Definition
Sales growth after deducting excise duties. Operating profit growth, including Profit attributable to equity shareholders of the Net cash from operating activities comprises the net Profit for the year divided by net assets at
exceptional operating items. parent company, divided by the weighted cash flow from operating activities as disclosed on the end of the financial year.
average number of shares in issue. the face of the consolidated statement of cash flows.

Non-GAAP measures Non-GAAP measures

Organic net sales growth Organic operating profit growth Earnings per share before Free cash flow Return on average invested capital (ROIC) Total shareholder return (TSR)
(%) (1)
(%) (1)
exceptional items (cents)(1) ($ million)(1),(2) (%) (%)

(0.6)% R K
(4.8)% R K
179.6 R K
2,609 R K
15.8% K
(24)% R K

2024 (0.6) 2024 (4.8) 2024 179.6 2024 2,609 2024 15.8 2024 (24)
2023 6.5 2023 7.0 2023 196.5 2023 2,235 2023 18.4 2023 (2)
2022 21.4 2022 26.3 2022 201.9 2022 3,779 2022 19.8 2022 4
2021 16.0 2021 17.7 2021 158.8 2021 4,106 2021 16.1 2021 32
2020 (8.4) 2020 (14.4) 2020 137.7 2020 2,059 2020 14.3 2020 (19)

Definition Definition
Sales growth after deducting excise duties, Organic operating profit growth is calculated on Profit before exceptional items attributable Free cash flow comprises the net cash flow from Profit before finance charges and exceptional items Percentage growth in the value of a Diageo
excluding the impact of exchange rate a constant currency basis, excluding the impact to equity shareholders of the parent operating activities aggregated with the net cash attributable to equity shareholders divided by average share (assuming all dividends and capital
movements, hyperinflation adjustment and of exceptional items, certain fair value company, divided by the weighted average expenditure paid for property, plant and invested capital. Invested capital comprises net assets distributions are re-invested).
acquisitions and disposals. remeasurement, hyperinflation adjustment and number of shares in issue. equipment, and computer software. Definition of excluding net post-employment benefit assets/
acquisitions and disposals. free cash flow has been redefined, see more liabilities, net borrowings and non-controlling interests.
details on page 31. Definition of return on average capital employed has
been redefined, see more details on page 31.
Why we measure Why we measure
This measure reflects our delivery of efficient growth The movement in operating profit measures Earnings per share reflects the profitability of Free cash flow is a key indicator of the financial ROIC is used by management to assess the return Diageo’s Directors have a fiduciary
and consistent value creation. Organic net sales our delivery of efficient growth and consistent the business and how effectively we finance management of the business. Free cash flow obtained from the group’s asset base. Over time, responsibility to maximise long-term value
growth is the result of the choices we make value creation. Consistent operating profit our balance sheet. Eps measures our reflects the delivery of efficient growth and ROIC reflects consistent value creation, as the returns for shareholders. TSR measures consistent
between categories and market participation, growth is a business imperative, driven by delivery of efficient growth in the year and consistent value creation as it measures the Diageo generates from its asset base are both value creation as it reflects the returns
and reflects Diageo's ability to build brand equity, investment choices, our focus on driving out consistent value creation over time. cash generated by the business to fund reinvested in the business and used to generate Diageo has delivered to investors in the year
increase prices and grow market share. costs across the business and improving mix. payments to our shareholders and future growth. returns for investors through dividends and return and over time. We also monitor our relative
of capital programmes. TSR performance against our peers.
Performance Performance
Reported net sales declined 1.4% due to an Reported operating profit grew 8.2%, primarily Basic eps decreased 23.1 cents, mainly Net cash from operating activities was $4,105 ROIC decreased 255bps, mainly driven by lower TSR was down 24% over the past 12
unfavourable foreign exchange impact, organic driven by the benefit from exceptional driven by lower organic operating profit, million, an increase of $469 million compared operating profit, increased capex, maturing stock months driven by the lower year-on-year
net sales decline and a negative impact from operating items, partially offset by a decrease higher finance charges and exceptional to fiscal 23. Free cash flow grew by $374 investment and continued portfolio optimisation share price.
acquisitions and disposals, partially offset by in organic operating profit. items, partially offset by lower tax and the million to $2,609 million. through acquisitions and disposals. The decline
hyperinflation adjustments. Organic net sales impact of share buybacks. was slightly offset by lower tax.
declined 0.6%. Positive price/mix of 2.9pps was more Organic operating profit declined 4.8% as a Free cash flow growth was driven by strong
than offset by a 3.5% decline in volume, primarily result of the organic net sales decline, primarily Basic eps before exceptional items working capital management and the positive
driven by materially weaker performance in LAC, due to a $302 million operating profit decline decreased 16.9 cents. impact of lapping one-off cash tax payments
driven by fast-changing consumer sentiment and in LAC and a $142 million operating profit in the prior year. These favourable factors
elevated inventory levels. A weaker consumer decline in North America. The decline was also more than offset the negative impacts of lower
environment and the impact of lapping inventory driven by an increase in investments in operating profit and increased interest
replenishment in the prior year in North America also strategic capabilities, including in digital and payments, attributable to the current higher
contributed to the decline. Excluding LAC, organic net strengthening route-to-market, primarily in the interest rate environment. The increase in
sales grew 1.8%. US, and in marketing. capital expenditure (capex) demonstrates our
commitment to investing in the business for
More detail on page 29. More detail on page 29. More detail on page 30.
long-term sustainable growth.
(1) Organic net sales growth, organic operating profit growth, earnings per share before exceptional items, free cash flow and return on average invested capital are non-GAAP measures.
See definitions and reconciliation of non-GAAP measures to GAAP measures on pages 227-235. More detail on page 31. More detail on page 31.
(2) For reward purposes this measure is further adjusted for the impact of exchange rates, hyperinflation adjustment and other factors not controlled by management, to ensure focus on our
underlying performance drivers.
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O U R P E R F O R M A N C E continued

Non-financial performance Non-financial performance

Positive drinking Employee Engagement Index Inclusion and diversity Water efficiency(4) Scope 1 and 2 greenhouse gas
emissions(4)

81%
Change vs baseline year Change vs baseline year
R K K R K

(15.6)% R K
(23.8)% R K

Number of people
educated on the 2.2m 2024 81%
Percentage of
female leaders 44% 2024 (15.6)% 2024 (23.8)%
dangers of globally (2023: 44%)
2023 (12.3)% 2023 (14.7)%
underage drinking 2023 84%
through a Diageo
supported
(2023: 1.9m) 2022 82%
Percentage of
ethnically diverse 46% 2022 (12.3)% 2022 (9.8)%

leaders globally (8.8)% 2021 (5.3)%

education Total to date: 2021 81% (2023: 43%) 2021

programme 5.9m(1) 2020 —%

2020 N/A(2) 2020 —%

Definition Definition
Number of people educated on the Measured through our Your Voice survey; The percentage of women and the percentage of Percentage change in water efficiency across the Percentage change in total direct and indirect
dangers of underage drinking through a includes metrics for employee satisfaction, ethnically diverse individuals who are in Diageo company compared to fiscal 20 baseline. Refer to greenhouse gas emissions (market/net based)
Diageo supported education programme. advocacy and pride.(3) leadership roles. page 249 for how this metric is measured. compared to fiscal 20 baseline.
Why we measure Why we measure
We want to change the way the world drinks Employee Engagement releases the full potential Nurturing an inclusive and diverse culture drives Our water efficiency programme is critical to Mitigating our impact on climate change is a
for the better by promoting moderation of our people and our business, and it’s a key commercial performance and is the right thing to helping us to address water security, particularly in business imperative. Reporting in detail on our
and addressing the harmful use of alcohol. enabler to our performance. The survey allows do. Transparently reporting the gender and ethnic water-stressed areas. In addition to preserving our efforts to reduce Scope 1 and 2 greenhouse gas
We build credibility and trust by transparently us to measure the extent to which employees diversity of our leadership cohort reflects our licence to operate, minimising water use within our emissions, even when it is challenging to do so,
reporting the total number of people believe we are living our values and is a measure commitment to consistent value creation through own operations underpins our commitment to demonstrates our commitment to reducing our
educated on the dangers of underage of our culture. Reflecting on the results of our our diverse workforce, building credibility and trust delivering long-term value by future-proofing our contribution to global warming and helps build
drinking. This figure also demonstrates our employee engagement level and taking action with our stakeholders and engaging with our business against the impacts of a changing credibility and trust. This is an important area for
commitment to engaging people on the where needed each year helps us build credibility people on inclusion and diversity. climate. It also helps to ensure this precious our business and external stakeholders, supporting
dangers of harmful alcohol use. and trust with our people. resource can continue to be shared with the our commitment to consistent value creation by
communities we live and work amongst. future-proofing our business.
Performance Performance
We delivered a significant increase in our This year 89% of our people completed our Your This year, 44% of our leadership roles were held This year, our water efficiency across the company Our Scope 1 and 2 greenhouse gas emissions
reach, particularly for the LAC region. Voice survey. 81% were identified as engaged. by women, the same percentage as last year, improved in total by 15.6% since our fiscal 20 reduced in total by 23.8% from our fiscal 20
Globally, we educated 2.2m young people 89% declared themselves proud to work for and 46% of our leaders were ethnically diverse, baseline. The main drivers contributing to the baseline. The main drivers contributing to the
about the dangers of underage drinking. Diageo, 81% would recommend Diageo as a compared with 43% last year. strong performance in fiscal 24 were the lower emissions are the increased use of on-site
great place to work and 74% were extremely continuous improvement initiatives in the water bioenergy (biomass, biogas and biofuel)
satisfied with Diageo as a place to work. recovery plants at our East Africa sites and the across Africa, scotch and tequila markets and
optimisation of the reverse osmosis plant at our additional renewable electricity use, particularly
Cameronbridge site. in North America.

More detail on page 51. More detail on page 55. More detail on page 59. More detail on page 67. More detail on page 69.

(1) The baseline year for our ‘Spirit of Progress’ goals is 2020 unless otherwise stated. For our target to educate 10 million young people, parents and teachers on the dangers of underage (4) In accordance with Diageo’s environmental reporting methodologies and, where relevant, WRI/WBCSD GHG Protocol; data for 2019, the baseline year 2020 and for the intervening
drinking the baseline year is 2018. period up to the end of last financial year has been restated where relevant.
(2) Because of the Covid-19 pandemic, in 2020 we did not run a full Your Voice survey. Instead we used a pulse survey tool to listen to employees’ feedback and learn from their
experiences of working during the pandemic. We therefore do not have a comparable employee engagement metric for 2020.
(3) In 2021, we updated the way we measure employee engagement in our Your Voice survey to bring it in line with standard practice.

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SUMMARY FINANCIAL REVIEW

Net sales ($ million) Reported net sales declined 1.4% due to an unfavourable foreign
exchange impact, organic net sales decline and a negative impact
Reported net sales declined 1.4% from acquisitions and disposals, partially offset by hyperinflation

Chief Financial Officer’s introduction Organic net sales declined 0.6%

adjustments.Organic net sales declined 0.6%. Positive price/mix of
2.9pps was more than offset by a 3.5% decline in volume, primarily
driven by materially weaker performance in LAC, driven by fast-
changing consumer sentiment and elevated inventory levels. A
Reported net sales growth Net cash from operating weaker consumer environment and the impact of lapping inventory
replenishment in the prior year in North America also contributed to
activities the decline. Excluding LAC, organic net sales grew 1.8%.

(1)% $4,105m Organic movement

Organic net sales growth (1)
Free cash flow (1)

(1)% $2,609m 20,555 335 588 20,269

Reported operating profit Return on closing invested
growth capital (424) (68) (717)

8% 34.5%
Organic operating profit Return on average invested
growth(1) capital(1)

(5)% 15.8%
Basic earnings per share Total shareholder return 2023 Exchange⁽²⁾ Acquisitions and disposals Hyperinflation⁽³⁾ Volume Price/mix 2024

173.2c (24)%
re-presented⁽¹⁾

(1) See pages 166-167 for an explanation under Accounting information and policies. (3) See pages 167 and 228-230 for details on hyperinflation adjustments.

'After three years of strong topline growth, the Earnings per share before (2) Exchange rate movements reflect the adjustment to recalculate the reported results as
if they had been generated at the prior period weighted average exchange rates.
exceptional items(1)
industry, as well as Diageo’s financial performance,
was challenged in fiscal 24. This was driven by the 179.6c
uncertain global consumer environment across Operating profit ($ million) Reported operating profit grew 8.2%, primarily driven by the benefit
(1) Organic net sales growth, organic operating profit growth, earnings per share before from exceptional operating items, partially offset by a decrease in
many of our markets. Organic net sales were down exceptional items, free cash flow and return on average invested capital are non- Reported operating profit grew 8.2% organic operating profit.
Organic operating profit declined 4.8% as a result of the organic net
0.6% driven by a volume decline and primarily GAAP measures. See definitions and reconciliation of non-GAAP measures to GAAP
measures on pages 227-235. Organic operating profit declined 4.8% sales decline, primarily due to a $302 million operating profit decline
attributable to weak performance in LAC, which in LAC and a $142 million operating profit decline in North America.
The decline was also driven by an increase in investments in strategic
was impacted by weaker consumer demand and capabilities, including in digital and strengthening route-to-market,
higher than expected inventory levels in the first half primarily in the US, and in marketing.
of the fiscal year. Organic operating margin
declined 56bps excluding LAC and was driven by 822 1
6,001
continued investment in the business through 5,547
(8) (43) (14)
(304)
overheads and A&P.'
In these times of an uncertain consumer environment, we have We remain a progressive dividend payer, increasing our dividend
focused on what we can control to continue to invest in our future. 5% in fiscal 24 as well as completing a new share buyback
We have focused on driving productivity, smart price mix and cash. programme up to $1 billion. Our leverage ratio was 3.0x as of 30
I’m pleased to say we have increased our annual productivity June 2024, and we remain committed to our leverage ratio and
and delivered nearly $700 million in savings in fiscal 24 with the our disciplined approach to capital allocation.
highest-ever contribution from cost of goods and supply initiatives.
Our brands and portfolio, as well as our ability to lead and shape 2023 Exceptional operating Exchange Acquisitions and FVR⁽³⁾ Hyperinflation⁽⁴⁾ Organic movement 2024
And with this, we have comfortably exceeded the delivery of our re-presented⁽¹⁾ items⁽²⁾ disposals
consumer trends, operational excellence and talented workforce
three-year commitment of $1.5 billion of productivity having delivered
give me confidence that we can navigate temporary volatility and
$1.7 billion. The supply chain agility programme which was set up (1) See pages 166-167 for an explanation under Accounting information and policies. (3) Fair value remeasurements. For further details see page 45.
uncertainty, while continuing to drive sustainable long-term growth
at the beginning of fiscal 22 has also contributed to this year’s (2) For further details on exceptional items see pages 45 and 172-173. (4) See pages 167 and 228-230 for details on hyperinflation adjustments.
and deliver shareholder value. With this being my last full fiscal year
productivity and is expected to continue to deliver incremental
at Diageo, I am proud of our accomplishments over the last few
savings over the coming years even as we continue to invest in
years. I am confident that Diageo will build on its foundation and
the business, including in overheads and in A&P.
remains on track to be one of the best performing, most trusted and
We have also continued our disciplined conversion of profit into respected consumer products companies in the world.
cash and delivered free cash flow of $2.6 billion. We have driven
this by significantly stepping up our capabilities in managing both
accounts payable and inventory with more discipline.

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S U M M A R Y F I N A N C I A L R E V I E W continued

Operating margin (%) Reported operating margin expanded by 262bps primarily due to the Net cash from operating activities and free Net cash from operating activities was $4,105 million, an increase of
positive impact of exceptional operating items partially offset by a $469 million compared to fiscal 23. Free cash flow grew by $374
Reported operating margin expanded by 262bps decline in organic operating margin. cash flow(1) ($ million) million to $2,609 million. Free cash flow growth was driven by strong
Organic operating margin declined by 130bps, primarily due to weak working capital management and the positive impact of lapping one-
Organic operating margin declined by 130bps performance in LAC and a cautious consumer environment in the US. Generated $4,105 million net cash from operating off cash tax payments in the prior year. These favourable factors
The decline was also driven by continued investment in the business, activities(2) and $2,609 million free cash flow. more than offset the negative impacts of lower operating profit and
primarily in overheads and marketing, partially offset by positive increased interest payments, attributable to the current higher interest
gross margin. Excluding LAC, organic operating margin declined by rate environment. The increase in capital expenditure (capex)
56bps and gross margin grew 17bps, driven by price increases and demonstrates our commitment to investing in the business for long-
productivity which offset the impact of cost inflation. term sustainable growth.

Organic movement
1,496 4,105
3,636

400bps 56bps 344 22 2,609

29.6% 646
2,235
27.0% (9)bps (55)bps (12)bps (15)bps (196)
(103)bps (95)
(1,401) (8)
(339)

2023 Net cash 2023 Capex 2023 Free Exchange⁽⁴⁾ Operating Working Capex Tax Interest Other⁽⁷⁾ 2024 Free 2024 Capex 2024 Net
from operating represented⁽³⁾ cash flow re- profit⁽⁵⁾ capital⁽⁶⁾ cash flow cash from
activities re- presented⁽³⁾ operating
presented⁽³⁾ activities

2023 Exceptional Exchange Acquisitions and Other⁽³⁾ Gross margin Marketing Other operating 2024
(1) Definition of free cash flow has been redefined, see more details on page 232.
re-presented⁽¹⁾ operating disposals items
items⁽²⁾ (2) Net cash from operating activities excludes net capex (2024 – $(1,496) million; 2023 – $(1,401) million).
(3) See pages 166-167 for an explanation under Accounting information and policies.
(4) Exchange on operating profit before exceptional items.
(1) See pages 166-167 for an explanation under Accounting information and policies. (5) Operating profit excludes exchange, depreciation and amortisation, post-employment charges of $11 million and other non-cash items.
(2) For further details on exceptional operating items see pages 45 and 172-173. (6) Working capital movement includes maturing inventory.
(3) Fair value remeasurements and hyperinflation adjustments. For further details on fair value remeasurements see page 45. See pages 167 and 228-230 for details on hyperinflation (7) Other items include dividends received from associates and joint ventures and other investments and post-employment payments.
adjustments.

Basic earnings per share (cents) Basic eps decreased 23.1 cents, mainly driven by lower organic Return on average invested capital (%)(1)(2) ROIC decreased 255bps, mainly driven by lower operating profit,
operating profit, higher finance charges and exceptional items, increased capex, maturing stock investment and continued portfolio
optimisation through acquisitions and disposals. The decline was
Basic eps decreased 11.8% from 196.3 cents to 173.2 partially offset by lower tax and the impact of share buybacks. ROIC decreased 255bps slightly offset by lower tax.
Basic eps before exceptional items decreased 16.9 cents.
cents
Basic eps before exceptional items(1) decreased 8.6%
from 196.5 cents to 179.6 cents 18.4%

(17)bps (26)bps 20bps

(106)bps 15.8%
(24)bps
196.3 (101)bps (1)bps
4.9 3.0 0.6 173.2
(6.2) (0.3) (1.4)
(13.4) (1.3) (0.6)
(8.4)

2023 Exchange Acquisitions and Organic operating Associates and joint Tax Working capital Other 2024
disposals profit ventures

(1) ROIC calculation excludes exceptional operating items from operating profit. For further details on ROIC see pages 233-234.
2023 Exceptional Exchange on Acquisitions Organic Associates Finance Tax⁽⁶⁾ Share Non- FVR⁽⁷⁾ 2024 (2) Definition of return on average invested capital has been redefined, see more details on pages 233-234.
re- items after operating and operating and joint charges⁽⁵⁾ buyback⁽⁴⁾ controlling
presented⁽²⁾ tax⁽³⁾ profit disposals⁽⁴⁾ profit ventures interests

(1) See pages 227-235 for an explanation of the calculation and use of non-GAAP measures.
(2) See pages 166-167 for an explanation under Accounting information and policies.
(3) For further details on exceptional items see pages 45 and 172-173.
(4) Includes finance charges net of tax.
(5) Excludes finance charges related to acquisitions, disposals, share buybacks and includes finance charges related to hyperinflation adjustments.
(6) Excludes tax related to acquisitions, disposals and share buybacks.
(7) Fair value remeasurements. For further details see page 45.

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BUSINESS REVIEW

Our global reach

Production facilities
The company owns manufacturing production facilities across the globe, including distilleries, breweries, packaging plants, maturation warehouses,
cooperages, and distribution warehouses. Diageo’s brands are also produced at plants owned and operated by third parties and joint ventures
at several locations around the world. We believe that our facilities are in good condition and working order. We have adequate capacity to meet
our current needs, and, in the beer and spirit categories, we have undertaken activities to increase our production capacity to address our
anticipated future demand.
The major facilities owned by Diageo with locations, principal activities, and products are presented in the table below as at 30 June 2024.
Our regional profile maximises the opportunity for growth in our sector. Where our products are sold
each market is accountable for its own performance and driving growth. Location Principal activities Products

United Kingdom distilling, bottling, warehousing, coopering beer, scotch, gin, vodka, rum, ready to drink, non-alcoholic
% share of reported net sales by region(1)(2) Ireland distilling, brewing, bottling, warehousing beer, liqueur, Irish whiskey, non-alcoholic
Italy distilling, bottling, warehousing vodka, rum, ready to drink, non-alcoholic
Türkiye distilling, bottling, warehousing raki, vodka, gin, liqueur, wine
North America distilling, bottling, warehousing vodka, gin, rum, Canadian whisky, US whiskey, ready to drink

North America Brazil distilling, bottling, warehousing cachaça, vodka, ready to drink
Europe
39% 24%
Mexico
East Africa
distilling, bottling, warehousing
distilling, brewing, bottling, warehousing
tequila
beer, rum, vodka, gin, whisky, brandy, liqueur, ready to drink,
bottled in East Africa (scotch)
Great Britain
Nigeria distilling, brewing, bottling, warehousing beer, rum, vodka, gin, ready to drink
US Spirits Southern Europe South Africa distilling, bottling, warehousing rum, vodka, gin
Northern Europe ARM distilling, brewing, bottling, warehousing beer, vodka, gin, ready to drink
Ireland India distilling, bottling, warehousing rum, vodka, Indian whisky, gin, brandy, bottled in India (scotch)
Diageo Beer Company (DBC) USA Türkiye
Canada Eastern Europe
Australia distilling, bottling, warehousing rum, vodka, gin, ready to drink
Other Other (principally Travel Retail) Greater China distilling, warehousing Chinese whisky, Chinese white spirits
(principally
Travel Retail)
Asia Pacific For more details about our capital investments please see page 262.
Latin America and Caribbean

9% Africa 19% Our route to consumer eMarketplace

9% We have five different route to consumer models across our business. Diageo sells to a third-party digital marketplace customer where that
customer sells to B2B customers and consumers.
Brazil India Most of the regions employ four of the five high level models defined
below; however, how each model operates in certain countries will Direct to Consumer
East Africa vary, as will the percentage of net sales delivered through the
Mexico Greater China Diageo sells directly to consumers, predominantly through portals such
respective models in each market.
as Thebar.com, which is a growing route to consumer model for our
CCA (Central America and Caribbean) Africa Regional Markets (ARM) Australia Wholesalers and Distributors business. It allows for direct interface with our consumers rather than
South East Asia Diageo sells to a wholesaler or distributor who also sells a range of through third-party sites as in the eMarketplace model above.
Andean Nigeria
North Asia other brands and categories directly to end outlets where consumers
South LAC South Africa Other (principally
Direct to Store
can purchase our brands. Where required, this model may include a
Other (principally Travel Retail Asia Diageo sells and delivers directly to end outlets rather than via a
Travel Retail) Other (principally government control board (or similar), such as in certain states in the
Travel Retail) and Middle East) central purchasing customer as in the Modern Trade model above.
US and provinces and territories in Canada.
This model is less common than the other models. For example,
Modern Trade it is used in Ireland for beer distribution.
(1) The above map is intended to illustrate general geographic regions where Diageo has a presence and/or in which its products are sold. It is not intended to imply that Diageo has a
presence in and/or that its products are sold in every country or territory within a geographic region.
Diageo sells directly to a customer who owns and manages retail
(2) Based on reported net sales for the year ended 30 June 2024. Does not include corporate net sales of $123 million (2023 – $104 million). outlets, who then in turn sells to consumers via their outlets.
Latin America
Fiscal 24 North America Europe Asia Pacific and Caribbean Africa

Volume (EU million ) 50.1 51.3 74.9 22.1 32.1

(1)
Reported net sales ($ million) 7,908 4,804 3,817 1,839 1,778
(2)
Reported operating profit ($ million) 3,039 1,257 1,438 502 131
Operating profit before exceptional items(3) ($ million) 3,236 1,379 1,063 502 131
Water efficiency, percentage change compared to fiscal 20 baseline 2% (12)% (38)% 4% (25)%
Percentage change in total direct and indirect greenhouse gas emissions
(market/net based) compared to fiscal 20 baseline (32)% 18 % (75)% (59)% (43)%
(4)
Average number of employees 3,144 10,524 8,763 4,437 3,499
(1) Excluding corporate net sales of $123 million (2023 – $104 million).
(2) Excluding net corporate operating costs of $366 million (2023 – $(397) million).
(3) Excluding exceptional operating charges of $56 million (2023 – $(766) million) and net corporate operating costs of $366 million (2023 – $(397) million).
(4) Employees have been allocated to the region where they live.

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B U S I N E S S R E V I E W continued

North
North America is the largest market for Diageo and represents over one-third of
our net sales. We have a well-positioned portfolio of brands that leans into Markets and categories: Key brands(6):
premiumisation and high-growth categories such as whiskey and tequila. Organic volume Reported volume Organic net sales Reported net sales Organic volume Organic net sales Reported net sales

America
movement movement movement movement movement(7) movement movement
Our strategy is focused on accelerating sustainable growth through data-led % % % % % % %

insights, targeted investment, and excellence in innovation and our route to market. North America(4) (4) (4) (3) (2) Crown Royal — (1) (1)
Don Julio 19 11 11
US Spirits(4) (5) (4) (3) (3) Casamigos(8) (16) (21) (22)
DBC USA (5)
1 1 3 3 Smirnoff (5) (2) (2)
Reported net sales by market (%) Reported net sales by category (%)
Canada (5) (4) (2) (3) Johnnie Walker (7) (10) (10)
Captain Morgan (10) (6) (6)
ò US Spirits ò Spirits
Spirits(4) (5) (5) (4) (4) Guinness 3 6 6
ò Diageo Beer Company USA ò Beer
Beer 3 3 5 5 Ketel One (9)
(4) (5) (5)
ò Canada ò Ready to drink
Ready to drink (8) (8) (3) (3) Baileys (2) — —
ò Other (principally Travel Retail) ò Other Bulleit whiskey(10) 6 12 12
Buchanan's 8 3 3

Acquisitions Reported
2023 and Organic movement (1) See pages 166-167 for an explanation under Accounting information and policies. (6) Spirits brands excluding cocktails, which includes ready to drink, ready- to-serve and
Key financials ($ million): North America re-presented(1) Exchange disposals movement Other
(2)
2024 % (2) Fair value remeasurements. For further details see page 45. non-alcoholic variants.
(3) For further details on exceptional operating items see pages 45 and 172-173. (7) Organic equals reported volume movement.
Net sales 8,109 3 2 (206) — 7,908 (2) (4) Reported volume movement includes impacts from acquisitions and/or disposals. For (8) Casamigos trademark includes both tequila and mezcal.
Marketing 1,631 1 5 (10) — 1,627 — further details see page 227-235. (9) Ketel One includes Ketel One vodka and Ketel One Botanicals.
(5) Certain spirits-based ready to drink products in certain states are distributed through (10) Bulleit whiskey excludes Bulleit Crafted Cocktails.
Operating profit before exceptional items 3,222 160 (10) (142) 6 3,236 — DBC USA and those net sales are captured within DBC USA.
(3)
Exceptional operating items (118) (197)
Regional performance: shipments with a 9% decline. Don Julio net sales increased 12%,
Operating profit 3,104 3,039 (2) despite lapping the impact of inventory replenishments in the prior
• North America (NAM) net sales performance was negatively
year. Supported by strong execution, depletions grew 21%,
impacted by a cautious US consumer environment while share
significantly ahead of shipments, and was led primarily by Don Julio
performance improved consistently through the year driven by
Reposado. Diageo's tequila portfolio grew share of the spirits industry
focused execution.
in fiscal 24, with acceleration in the second half, led by Don Julio.
• Diageo NAM performance was impacted by US Spirits due to a
• Crown Royal whisky net sales declined 1%, primarily due to Crown
cautious consumer environment, retailer inventory adjustments and
Royal Deluxe and Crown Royal Peach, mostly offset by the successful
the lapping of inventory replenishment in the prior year. Against this
launch of Crown Royal Blackberry. Crown Royal held share for the
backdrop, Diageo held share of US TBA in fiscal 24 and delivered
full year and gained share of the spirits industry in the second half of
share gains in the second half compared to the first half, supported
the fiscal year.
by innovation, focused investment, primarily in Don Julio and Crown
• Vodka net sales declined 8%, reflecting weakness in the category.
Royal, and improved execution.
Cîroc net sales declined 28%, partially offset by the launch of Cîroc
• Reported net sales declined 2%, due to weaker organic net sales
Limonata, which recruited consumers and gained category share.
performance.
Smirnoff net sales declined 3%, primarily driven by Smirnoff No.21.
• Organic net sales declined 3%, due to lower sales in US Spirits and
While Ketel One net sales declined 5%, primarily driven by Ketel One
Canada, partially offset by growth in Diageo Beer Company (DBC
Botanicals, Ketel One grew share of the vodka category supported
USA).
by our 'Made to Cocktail' campaign.
• Price/mix grew 2pps and was more than offset by a 4% decline in
• Johnnie Walker net sales declined 10%, due to continued
volume.
normalisation of demand for luxury variant Johnnie Walker Blue
• US Spirits net sales declined 3%, driven by a volume decline of 5%.
Label and lower demand for Johnnie Walker Red Label. The
Depletion growth was approximately one percentage point ahead of
trademark continues to outperform the scotch category and held
shipment growth, with some variations across brands. Overall inventory
share of the spirits industry, driven by strong performance in Johnnie
levels at distributors at the end of fiscal 24 remained in line with historical
Walker Black Label.
levels.
• Captain Morgan net sales declined 6%, primarily due to Captain
• DBC USA net sales grew 3%, reflecting strong growth in Guinness,
Morgan Original Spiced as consumers shifted into other spirits categories.
Smirnoff flavoured malt beverages, and the launch of Captain
Captain Morgan lost both category and spirits industry share.
Morgan Sliced Apple.
• Bulleit whiskey net sales increased 12%, significantly ahead of
• Organic operating margin declined 79bps, primarily due to an
depletions growth as inventory levels continue to normalise. Bulleit
increase in overhead costs in support of strategic initiatives and
held share of the spirits industry.
marketing investments, partially offset by improvements in gross
• Buchanan's net sales increased 3%, primarily driven by continued
margin. Gross margin improvement was driven by productivity
momentum in Buchanan’s Pineapple which recruited new consumers.
savings which more than offset an adverse impact from mix and
Buchanan's trademark gained share of the spirits industry.
inflation.
• Spirits-based cocktails(2) net sales increased 15%, driven by the
• Marketing investment declined 1%, but increased as a percentage of
successful launches of the Cocktail Collection and Smirnoff Smash,
net sales. Investment was focused in Don Julio and other key brands,
which both gained share of category and the spirits industry. The
while maintaining focus on marketing efficiencies.
Cocktail Collection consists of Ketel One Espresso Martini, Ketel One
US Spirits highlights(1): Cosmopolitan, Astral Margarita and Tanqueray Negroni.
• Tequila net sales declined 5%, largely due to a 22% decline in (1) Spirits brands and categories excluding cocktails, which includes ready to drink, ready-
Casamigos attributable to lower consumer demand and the impact to-serve and non-alcoholic variants, except where noted.
of lapping inventory replenishments in the prior year following supply (2) Spirits-based cocktails includes ready to serve and ready to drink variants.
shortages. As a result, Casamigos depletions were ahead of

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B U S I N E S S R E V I E W continued

Europe
Europe is a diverse region with a trend-leading on-trade channel and tourism hotspots,
all of which offer a strong platform for the development of our premium brands. Markets and categories: Key brands(6):
Organic Reported Organic Reported Organic Organic Reported
It is also home to Diageo's biggest beer business and a stronghold for Guinness. volume volume net sales net sales volume net sales net sales
We hold a leadership position across major categories and markets, and have movement
%
movement
%
movement
%
movement
%
movement(7)
%
movement
%
movement
%
been able to achieve share gains and resilient net sales growth in the last fiscal. Europe(5) (1) — 3 12 Guinness 11 22 27
Johnnie Walker 5 3 21
Reported net sales by market (%) Reported net sales by category (%)
Great Britain(5) (1) — 5 10 Baileys 5 6 10
ò Great Britain ò Spirits Southern Europe(5) (2) (8) (2) — Smirnoff (2) — 5
ò Southern Europe ò Beer Northern Europe(5) (3) (2) (4) — Captain Morgan (5) (5) —
ò Northern Europe ò Ready to drink Ireland(5) (2) (1) 7 11 Gordon's (9) (8) (1)
ò Ireland ò Other Türkiye(5) 4 4 31 59 Tanqueray (8) (9) (4)
ò Türkiye Eastern Europe(5) (6) (5) (7) (3) JεB (3) (6) 3
ò Eastern Europe
ò Other (principally Travel Retail) Spirits(5) (2) (1) (1) 9
Beer 8 8 18 23
Acquisitions Reported Ready to drink(5) (9) (9) (5) (3)
2023 and Organic movement
Key financials ($ million): Europe re-presented(2) Exchange Reclassification disposals movement Other(3) Hyperinflation(1) 2024 %

Net sales 4,303 (3) 62 26 124 — 292 4,804 12 (1) See pages 167 and 228-230 for details on hyperinflation adjustments. (6) Spirits brands excluding ready to drink and non-alcoholic variants.
Marketing 765 18 1 22 34 — 33 873 14 (2) See pages 166-167 for an explanation under Accounting information and policies. (7) Organic equals reported volume movement except for Johnnie Walker (11)%,
(3) Fair value remeasurements. For further details see page 45. Gordon's (8)% and JεB (2)%.
Operating profit before exceptional items 1,312 24 47 3 (15) (3) 11 1,379 5 (4) For further details on exceptional items see pages 45 and 172-173.
(5) Reported volume movement includes impacts from acquisitions and/or disposals. For
Exceptional operating items(4) (12) (122) further details see page 227-235.
Operating profit 1,300 1,257 (6)
Regional performance: Market highlights:
• Resilient net sales growth with continued strong momentum in • Great Britain net sales grew 5%, primarily driven by strong
Guinness. performance in Guinness, which gained share in both the on-trade
• Diageo Europe delivered strong performance with market share and off-trade. Share gains were driven by continued recruitment
growth across most European markets despite persistent cost through strong brand building and new occasions, supported by
inflation and lower consumer confidence. Guinness 0.0 and Nitrosurge innovations.
• Reported net sales grew 12%, primarily driven by a hyperinflation • Southern Europe net sales were 2% lower, mainly due to scotch,
adjustment(1) related to Türkiye and organic growth. rum and gin, reflecting category decline. This was in spite of the
• Organic net sales grew 3%, driven by double-digit growth in Türkiye majority of the markets within Southern Europe gaining share, driven
and mid single-digit growth in Great Britain and Ireland, partially by the continued momentum in Johnnie Walker.
offset by declines, primarily in Northern and Eastern Europe. • Northern Europe net sales declined 4%, due to macroeconomic
Excluding the impact of lapping the sales of inventories from the pressures impacting higher price point segments in scotch, gin and
previously announced winding down of operations in Russia in fiscal vodka. The decline was partially offset by double-digit growth in
23, overall organic net sales for the region grew 4%. Johnnie Walker Red Label, as consumers shifted into the standard
• Price/mix grew 4pps, driven by price increases across most markets, price tier. Market share of spirits declined, primarily driven by ready
with Guinness growth driving particularly strong price/mix in Great to drink (RTD) cocktails as a result of increased competitive activity.
Britain and Ireland. • Ireland net sales grew 7%, primarily driven by double-digit growth in
• Spirits net sales declined 1%, primarily due to softness in the spirits Guinness. Strong share gains in the on-trade were driven by
category despite improved market share performance through fiscal effective brand building and the roll-out of Guinness 0.0 draught,
24, and the impact of lapping final sales of inventories in Russia. now in more than 1,500 on-trade outlets.
Strong growth in raki and Baileys was more than offset by declines • Eastern Europe net sales declined 7%, primarily driven by lapping
in scotch, gin, and rum. Excluding the effect of lapping final sales of the final sales of inventories in Russia in the first half of the prior year.
inventories in Russia, spirits organic net sales grew 1%. Excluding Russia, net sales grew 8% driven by strong performance
• Beer net sales grew 18%, primarily driven by Guinness. Double-digit in Guinness and scotch.
volume and price/mix in Guinness were driven by share gains in • Türkiye net sales grew 31% with volume growth of 4%, primarily
Ireland and Great Britain, supported by strong marketing and reflecting the impact of price increases in response to inflation and
innovation. Guinness 0.0 net sales and volume more than doubled increased excise duties. Net sales growth was mostly driven by
in fiscal 24. strong performance in raki and Johnnie Walker, with share gains in
• Organic operating margin declined by 121bps. Strategic price whisky.
increases more than offset the impact of cost inflation. Margin
decline reflects increased marketing investment as well as
investments in strategic commercial initiatives. Excluding the impact
of lapping the profit from sales of inventories in Russia in fiscal 23,
operating margin declined by 85bps.
• Marketing investment increased 4%, primarily driven by investment
in tequila, beer and Johnnie Walker.

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Asia
In Asia Pacific, our focus is to grow in both developed and emerging markets
across our entire portfolio. We manage our portfolio to meet the increasing Markets and categories: Key brands(5):
Organic Reported Organic Reported Organic Organic Reported
demands of the growing middle class, and aim to inspire our consumers to

Pacific
volume volume net sales net sales volume net sales net sales
drink better, not more. movement
%
movement
%
movement
%
movement
%
movement(6)
%
movement
%
movement
%

Asia Pacific(4) 1 (7) 4 (1) Johnnie Walker (4) 1 —

Shui Jing Fang (7)
32 27 23
India(4) 2 (7) 8 3 McDowell's (2) 4 2
Reported net sales by market (%) Reported net sales by category (%) Greater China 14 15 12 8 The Singleton 14 12 10
Australia (7) (6) (8) (9) Royal Challenge 11 16 14
ò India ò Spirits
South East Asia(4) (9) (8) (8) (4) Guinness (2) 4 2
ò Greater China ò Beer
Travel Retail Asia and Middle East — (28) 10 (3) Black & White 20 24 21
ò Australia ò Ready to drink
North Asia (12) (13) 3 (17) Smirnoff 1 (1) (6)
ò South East Asia ò Other
ò North Asia
ò Other (principally Travel Retail Asia Spirits(4) 1 (7) 6 1
and Middle East) Beer (2) (3) 4 2
Ready to drink (16) (16) (14) (16)
Acquisitions Reported
2023 and Organic movement
Key financials ($ million): Asia Pacific re-presented(1) Exchange Reclassification disposals movement 2024 %
(1) See pages 166-167 for an explanation under Accounting information and policies. (5) Spirits brands excluding ready to drink and non-alcoholic variants.
Net sales 3,841 (30) (62) (96) 164 3,817 (1) (2) For further details on exceptional items see pages 45 and 172-173. (6) Organic equals reported volume movement except for Johnnie Walker (10)%, Smirnoff
Marketing 655 (11) (1) (8) 16 651 (1) (3) Organic equals reported volume movement except for Johnnie Walker (10)%, Smirnoff (1)%, Guinness (3)% and Black & White (19)%.
(1)%, Guinness (3)% and Black & White (19)%. (7) Growth figures represent total Chinese white spirits of which Shui Jing Fang is the
Operating profit before exceptional items 1,104 (29) (47) (25) 60 1,063 (4) (4) Reported volume movement includes impacts from acquisitions and/or disposals. For principal brand.
further details see pages 227-235.
Exceptional operating items(2) (581) 375
Operating profit 523 1,438 175 Regional performance: Market highlights:
• Asia Pacific delivered organic net sales, volume and operating • India net sales grew 8%, driven by double-digit growth in other
margin growth in challenging macroeconomic conditions whilst whisky and scotch, supported by price/mix from continued
increasing investment in the region. premiumisation and price increases, driven primarily by Prestige and
• Reported net sales declined 1%, driven by the negative impact of Above business segments. Whisky growth was driven by McDowell’s
foreign exchange and the disposal of Windsor, which was partially and Royal Challenge, and scotch growth was driven by Black &
offset by organic sales growth. White and Johnnie Walker Blonde. Black & White was one of the
• Organic net sales grew 4%, driven by strong growth of Chinese fastest-growing scotch brands in the market and drove recruitment
white spirits in Greater China, and other whisky and scotch in India, into the category.
partially offset by declines in South East Asia and Australia. • Greater China net sales grew 12%, primarily driven by strong growth
• Price/mix grew 4pps, driven by continued premiumisation and in Chinese white spirits, partially offset by a decline in scotch.
pricing within whisky in India and strong growth in Chinese white Despite the challenging macroeconomic conditions, Chinese white
spirits. spirits delivered strong double-digit growth, lapping a double-digit
• Spirits net sales grew 6%, driven by strong performance in Greater decline in the prior year and with restocking of inventory in the first
China and India. Tequila delivered double-digit sales growth, albeit half of the fiscal year. While scotch performance was impacted by
on a smaller base, with particularly strong growth in Travel Retail downtrading to lower-priced segments, focused execution and
and India, and also grew market share across most of the region. investment drove an improvement in category share within
• Organic operating margin increased by 35bps, driven by positive international spirits.
mix, attributable to growth of Chinese white spirits in Greater China • Australia net sales declined 8% primarily due to RTDs, attributable
and favourable product mix in India. to increased competitive activity. This also led to the market losing
• Marketing investment grew 2%, with focused investment in Don share in fiscal 24.
Julio across the region supporting the global launch of tequila, • South East Asia net sales declined 8%, reflecting the impact of
Chinese white spirits in Greater China, and in innovation supporting lapping double-digit growth in the prior year and a double-digit
the launch of Johnnie Walker Blonde and in Johnnie Walker Blue decline in Vietnam, most notably in Johnnie Walker. That was
Label Xordinaire in Travel Retail. partially offset by the strong performance of The Singleton across
most of the market.
• Travel Retail Asia and Middle East net sales grew 10%, primarily
driven by Johnnie Walker Blue Label Xordinaire and Don Julio 1942.
Tequila delivered strong share growth supported by focused
execution with increased portfolio and brand distribution across the
market.
• North Asia (Korea and Japan) net sales increased by 3%, however
market share declined in the fiscal year, primarily in Korea. Net
sales growth was driven by super-premium-plus scotch, led by
Johnnie Walker Blue Label, which delivered strong double-digit
growth supported by targeted investment, and the launch of
Johnnie Walker Blonde in Korea, which supported recruitment into
whisky.

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Latin America
In Latin America and Caribbean (LAC), we are aiming to
increase our market share through focused consumer-centric Markets and categories: Key brands(3):
Organic Reported Organic Reported Organic Organic Reported
delivery across core categories including scotch, gin, tequila volume volume net sales net sales volume net sales net sales

and Caribbean
and vodka. We do this through targeted marketing investment movement
%
movement
%
movement
%
movement
%
movement(4)
%
movement
%
movement
%
in consumer focused occasions where traditionally non-spirit Latin America and Caribbean (16) (16) (21) (15) Johnnie Walker (12) (17) (12)
TBA products have had a strong presence. Buchanan’s (18) (28) (15)
Brazil (10) (10) (18) (15) Don Julio (28) (37) (30)
Mexico (25) (25) (30) (24) Old Parr (15) (25) (14)
Reported net sales by market (%) Reported net sales by category (%)
CCA (20) (20) (25) (21) Smirnoff (15) (15) (18)
Andean (18) (18) (17) 19 Black & White (25) (30) (22)
ò Brazil ò Spirits
South LAC (18) (18) (9) (13) Baileys (20) (14) (9)
ò Mexico ò Beer
White Horse (2) (11) (10)
ò CCA ò Ready to drink
Spirits (16) (16) (23) (16)
ò Andean ò Other
Beer 3 3 29 33
ò South LAC
Ready to drink — — (3) (1)
ò Other (principally Travel Retail)

Reported (1) See pages 166-167 for an explanation under Accounting information and policies. (3) Spirits brands excluding ready to drink and non-alcoholic variants.
2023 Organic movement
Key financials ($ million): Latin America and Caribbean re-presented(1) Exchange movement Other (2)
2024 %
(2) Fair value remeasurements. For further details see page 45. (4) Organic equals reported volume movement.

Net sales 2,159 118 (459) — 1,839 (15)

Regional performance: Market highlights:
Marketing 355 21 (70) — 306 (14)
• Latin America & Caribbean performance was impacted by a • Brazil net sales declined 18%, primarily due to a double-digit decline
Operating profit 783 37 (302) (17) 502 (36) reduction of elevated inventory to more appropriate levels for the in scotch. In the second half of fiscal 24, Brazil gained share of spirits
current consumer environment, which remains challenging. as consumer demand stabilised after a challenging start to the year.
• Diageo LAC performance was materially weaker driven by fast- • Mexico net sales declined 30%, primarily driven by strong double-
changing consumer sentiment in the prior year which resulted in digit declines in tequila, led by Don Julio and scotch, reflecting the
elevated inventory levels and subsequent adjustments by double-digit decline in spirits consumer demand throughout the
wholesalers and customers in the fiscal year. While the consumer fiscal year. There was downtrading with consumers shifting towards
environment remains challenging in Brazil, Central America and local spirits and the operating environment remained highly
Caribbean and South LAC, some stabilisation of consumer demand competitive, particularly in tequila. Market share declined in fiscal
in the second half of fiscal 24 resulted in share gains. However, a 24, particularly in tequila and scotch.
highly competitive environment and consumer downtrading are • Central America and Caribbean (CCA) net sales declined 25%,
contributing to a persistently challenging environment in Mexico. primarily due to a strong double-digit decline in scotch due to
• Reported net sales declined 15%, reflecting weaker organic increased competition from local spirits. In the second half of fiscal
performance, partially offset by a favourable impact from foreign 24, the market gained share of spirits, supported by focused
exchange. execution.
• Organic net sales declined 21%, driven by soft demand for the • Andean (Colombia and Venezuela) net sales declined 17%,
international premium spirits category across the region, reduction primarily driven by scotch due to weakening consumer demand
of high levels of inventory to more appropriate levels for current which resulted in consumers shifting towards local spirits from
consumer demand and lapping strong double-digit growth. international spirits.
• Price/mix declined 6pps, reflecting downtrading and increased • South LAC (Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru and
trade investment to manage inventory towards appropriate levels Uruguay) net sales declined 9%, driven by scotch. Despite the
for the current consumer environment. challenging environment, the market delivered share gains in the
• Spirits net sales declined 23%, primarily driven by scotch, second half of the fiscal year.
particularly Buchanan’s, Johnnie Walker Black Label and Johnnie
Walker Red Label, as well as a strong double-digit decline in Don
Julio in Mexico.
• Organic operating margin declined by 746 bps, primarily driven by
negative mix, increased trade investment and lower operating
leverage.
• Marketing investment declined 20%, in response to the rapid
deterioration in the consumer environment.

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B U S I N E S S R E V I E W continued

Africa
In Africa we meet consumers' needs across a broad range of categories and price
points. With a long history of leadership in premium beer, we are increasingly Markets and categories Key brands(5):
Organic Reported Organic Reported Organic Organic net Reported net
focused on bringing consumers into spirits categories. We continually improve our volume volume net sales net sales volume sales sales
route to market and work with a range of business models: in some territories via movement
%
movement
%
movement
%
movement
%
movement(6)
%
movement
%
movement
%
wholly owned businesses, in other countries we partner with well established Africa(4) (6) (2) 12 (13) Guinness (1) 16 (33)
African businesses. Our goal is to be the market leader in international spirits in Senator 26 29 15
Sub-Saharan Africa and lead in premium beer in the territories where we participate.
East Africa 1 1 9 — Malta Guinness (3) 44 (22)
Africa Regional Markets(4) (6) (2) 6 (26) Johnnie Walker (19) (11) (19)
Reported net sales by market (%) Reported net sales by category (%)
Nigeria (18) (18) 31 (41) Tusker (6) — (7)
South Africa (17) 14 (11) 32 Serengeti (1) 4 (3)
ò Spirits
ò East Africa Smirnoff (19) (9) (22)
ò Beer
ò Africa Regional Markets Spirits(4) (16) (9) (2) (4)
ò Ready to drink
ò Nigeria Beer(4) 4 4 19 (16)
ò Other
ò South Africa Ready to drink(4) 2 8 35 (24)
ò Other (principally
Travel Retail)
(1) See pages 166-167 for an explanation under Accounting information and policies. (5) Spirits brands excluding ready to drink and non-alcoholic variants.
(2) See pages 167 and 228-230 for details on hyperinflation adjustments. (6) Organic equals reported volume movement, except for Guinness which remained
Acquisitions Reported (3) For further details on exceptional operating items see pages 45 and 172-173. flat.
2023 and Organic movement
Key financials ($ million): Africa re-presented(1) Exchange Reclassification disposals movement Hyperinflation(2) 2024 %
(4) Reported volume movement includes impacts from acquisitions and/or disposals. For
further details see pages 227-235.
Net sales 2,039 (518) — — 235 22 1,778 (13)
Marketing 235 (53) (12) (1) 35 1 205 (13) Regional performance: Market highlights:
Operating profit before exceptional items 289 (222) (11) 86 (11) 131 (55) • Africa delivered robust organic net sales growth despite ongoing • East Africa net sales increased 9%, lapping a softer comparator
Exceptional operating items(3) macroeconomic challenges. following price increases. The increase was led by growth in beer,
(55) —
• Diageo Africa benefitted from price increases and delivered strong mainly Senator, which also grew share of TBA in the fiscal year.
Operating profit 234 131 (44) performance in a challenging macroeconomic environment with RTDs, rum and scotch also contributed to the improvement.
persistent inflationary markets. • Africa Regional Markets net sales grew 6%, led by growth in beer,
• Reported net sales declined 13%, reflecting an unfavourable impact primarily driven by Malta Guinness and Guinness, supported by
from foreign exchange, mainly due to a weakening Nigerian naira, price increases. Growth in beer and RTDs was partially offset by a
partially offset by organic growth. decline in spirits, particularly in Johnnie Walker. Strong price/mix
• Organic net sales grew 12%, with growth across all markets except more than offset a volume decline of 6%.
South Africa. Growth was driven by price increases, partially offset • Nigeria net sales grew 31%, driven by strong price/mix supported
by a 6% volume decline, primarily in spirits. by price increases, partially offset by a decline in volume. The
• Price/mix grew 18pps, mainly due to broad based price increases in market lost share in almost all categories.
beer and spirits across the region. • South Africa net sales declined 11%, primarily driven by lower
• Spirits net sales declined 2%, driven by a volume decline of 16%, volume of 17%, primarily in Johnnie Walker Black Label and
which was partially offset by price increases across the region. Smirnoff 1818. Spirits category growth was slower than the beer
Tequila growth doubled, led by Don Julio, partially offsetting an 11% category, and Diageo South Africa lost share in spirits. This was
decline in Johnnie Walker. despite growth of the markets' share in the gin and tequila
• Beer net sales grew 19%, benefitting from price increases across the categories, led by Gordon’s and Don Julio.
region and volume growth of 4%. Malta Guinness, Guinness and
Senator each delivered double-digit net sales growth.
• Organic operating margin increased by 194bps, as price increases
and productivity savings more than offset cost inflation.
• Marketing investment grew 16%, focused on supporting spirits
premiumisation, Guinness and tequila penetration.

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B U S I N E S S R E V I E W continued GROUP FINANCIAL REVIEW

Category and brand review Key financials - certain line items

30 June 2023
Reported
Exceptional
operating items
(c)
Exchange
(a)
Acquisitions and
disposals
(b)
Organic
movement(2)
Fair value
remeasurement
(d) Reclassification Hyperinflation(2)
30 June 2024
Reported
Re-presented(1)
Key categories $ million $ million $ million $ million $ million $ million £ million $ million $ million

Organic Organic Reported Reported

Sales 28,270 — (654) (381) 168 — — 488 27,891
volume net sales net sales net sales
movement(1) movement movement by category Excise duties (7,715) — 230 313 (297) — — (153) (7,622)
% % % %
Net sales 20,555 — (424) (68) (129) — — 335 20,269
Spirits(2) (5) (4) (2) 78
Cost of sales (8,289) 23 388 5 25 (16) — (207) (8,071)
Scotch (7) (10) (6) 24
Gross profit 12,266 23 (36) (63) (104) (16) — 128 12,198
Tequila (4) (7) (7) 11
Marketing (3,663) — 19 (18) (7) — 12 (34) (3,691)
Vodka(3)(4) (9) (7) (6) 9
Other operating items (3,056) 799 9 38 (193) 2 (12) (93) (2,506)
Canadian whisky(5) (2) (1) (1) 6
Operating profit 5,547 822 (8) (43) (304) (14) — 1 6,001
Rum(4) (11) (6) (2) 5
Liqueurs (2) 2 3 5
(4) Other line items:
Gin (10) (8) 2 5
Non-operating items 364 (70)
IMFL whisky(5) 5 10 2 4
Taxation (e) (1,163) (1,294)
Chinese white spirits(5) 32 27 23 3
US whiskey(5) (3) 3 3 2 (1) See pages 166-167 for an explanation under Accounting information and policies.
(2) For the definition of organic movement and hyperinflation, see pages 227-235.
Beer 5 14 3 16 (i) Reported figures in the table above have been extracted from the income statement for the years ended 30 June 2023 and 30 June 2024.
Ready to drink (7) (1) (10) 4
(a) Exchange (b) Acquisitions and disposals
(1) Organic equals reported volume movement except for spirits (7)%, rum (10)%, gin (4) Vodka, rum and gin include IMFL variants. The impact of movements in exchange rates on reported figures for The acquisitions and disposals movement in the year ended 30 June
(2)%, IMFL whisky (7)%, US whiskey (2)%, and ready to drink (4)%. (5) See pages 34-35 for details of Canadian whisky, US whiskey and pages 38-39 for operating profit was principally in respect of the unfavourable 2024 was primarily attributable to the acquisition of Don Papa Rum
(2) Spirits brands excluding ready to drink and non-alcoholic variants. details of IMFL whisky and Chinese white spirits.
(3) Vodka includes Ketel One Botanical. exchange impact of the weakening of the Nigerian naira, the Turkish and to the disposal of Windsor Global Co., Ltd. and Guinness
lira and the Kenyan shilling, partially offset by the favourable impact of Cameroun S.A.
the Mexican peso and sterling against the US dollar.
Reported volume Reported net sales Reported marketing See pages 180-183 for further details.
by category by category spend by category The effect of movements in exchange rates and other movements on
profit before exceptional items and taxation for the year ended 30
ò Scotch ò Liqueurs June 2024 is set out in the table below. (c) Exceptional items
In the year ended 30 June 2024, exceptional operating items were a gain
ò Vodka ò Gin Gains/
(losses)
of $56 million (2023 – a loss of $766 million), mainly due to the reversal
ò US whiskey ò Tequila $ million of the Shui Jing Fang brand impairment (a gain of $379 million)
ò Canadian ò Beer Translation impact (37) partially offset by an impairment charge in respect of the Chase brand
whisky and goodwill and tangible fixed assets (a charge of $101 million),
ò Ready to drink Transaction impact 29 an impairment charge in respect of certain brands in the US ready to
ò Rum ò Other Operating profit before exceptional items (8) drink portfolio (a charge of $54 million), various dispute and litigation
ò IMFL whisky matters (a charge of $107 million) and the supply chain agility
Net finance charges – translation impact 22
programme (a charge of $61 million). In the year ended 30 June 2023,
Key brands(1): Net finance charges – transaction impact (24) exceptional operating items were a loss of $766 million, mainly due to
Organic Organic Reported Organic Organic Reported Net finance charges(1) (2) charges related to brand impairment ($613 million) and the supply
volume net sales net sales volume net sales net sales
chain agility programme ($121 million).
movement(2)
%
movement
%
movement
%
movement(2)
%
movement
%
movement
%
Associates – translation impact 15
In the year ended 30 June 2024, exceptional non-operating items were a
Johnnie Walker (5) (6) (2) Old Parr (13) (21) (12) Profit before exceptional items and taxation 5
loss of $70 million (2023 – a gain of $364 million), mainly driven by the
Guinness 5 15 6 Yenì Raki (4) 19 53 (1) For more information about Finance income and charges please see page 175. loss on the sale of the Windsor business in Korea ($58 million). In the year
Don Julio 7 3 4 Black & White (11) (7) (4) ended 30 June 2023, exceptional non-operating items were a gain of
Crown Royal — (1) (1) JεB (8) (10) (5) Year ended Year ended $364 million, mainly driven by the gain in relation to the sale of
Smirnoff (7) (3) (3) Bundaberg (3) (7) (9) 30 June 2024 30 June 2023 Guinness Cameroun S.A. ($343 million).
Baileys (1) 1 2 (1) Brands excluding ready to drink, non-alcoholic variants and beer except Guinness.
Exchange rates
See pages 172-173 for further details.
Casamigos(3) (15) (20) (20) (2) Organic equals reported volume movement, except for Guinness 4% and Gordon's 5%. Translation $1 = £0.80 £0.83
(3) Casamigos trademark includes both tequila and mezcal.
Captain Morgan (7) (5) (4) (4) Growth figures represent total Chinese white spirits of which Shui Jing Fang is the Transaction $1 = £0.82 £0.77 (d) Fair value remeasurement
Shui Jing Fang(4) 32 27 23 principal brand.
Translation $1 = €0.93 €0.96
(5) Ketel One includes Ketel One vodka and Ketel One Botanical. The adjustment to cost of sales reflects the elimination of fair value
Scotch malts (9) (14) (14)
(6) Bulleit whiskey excludes Bulleit Crafted Cocktails. changes for biological assets in respect of growing agave plants of
McDowell's (2) 3 1 $16 million loss for the year ended 30 June 2024 (2023 – $nil). The
Buchanan’s (9) (15) (7) adjustments to marketing and other operating expenses were the
Gordon's (11) (6) 20 elimination of fair value changes to contingent consideration liabilities
Tanqueray (11) (11) (10) and earn-out arrangements in respect of prior year acquisitions of
$155 million gain for the year ended 30 June 2024 (2023 – $153
Ketel One(5) (5) (5) (5)
million gain).
Bulleit whiskey(6) 6 11 11
Cîroc vodka (23) (26) (26)

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G R O U P F I N A N C I A L R E V I E W continued

(e) Taxation (g) Return of capital (6) Net sale of own shares comprised receipts from employees on the Movements in equity
exercise of share options of $38 million (2023 – $63 million) less
The reported tax rate for the year ended 30 June 2024 was 23.7% Diageo completed a total of $1.0 billion return of capital during the 2024 2023
purchase of own shares for the future settlement of obligations under
compared with 20.6% for the year ended 30 June 2023. year ended 30 June 2024. This programme followed the successful re-presented(1)
the employee share option schemes of $17 million (2023 – $27 million).
completion of Diageo's previous return of capital programme that $ million $ million
Included in the tax charge of $1,294 million in the year ended 30 June
ended on 2 June 2023, in which $0.6 billion of capital (announced as (7) In the year ended 30 June 2024, the group issued bonds of $1,700 Equity at the beginning of the year 11,709 11,511
2024 is a net exceptional tax charge of $24 million, including an
up to £0.5 billion on 26 January 2023) was returned to shareholders. million ($1,690 million - net of discount and fee) consisting of $800 Adjustment to 2023 closing equity in respect
exceptional tax charge of $95 million in relation to the reversal of the
million 5.375% fixed rate notes due 2026, $900 million 5.625% fixed of hyperinflation in Ghana (2) 51 —
Shui Jing Fang brand impairment charge, partly offset by a tax credit In the year ended 30 June 2024, the company purchased 27.4 million
rate notes due 2033, €500 million ($535 million - net of discount and
of $19 million in respect of the Chase brand impairment and the ordinary shares (2023 – 37.8 million) at a cost of $987 million, Adjusted equity at the beginning of the year 11,760 11,511
fee) floating rate notes due 2026 and repaid bonds of $500 million
related tangible fixed assets, a tax credit of $13 million comprised of including transaction costs (2023 – $1,673 million including transaction
and €600 million ($632 million) and €500 million ($535 million). In Profit for the year 4,166 4,479
brand impairments in the US ready to drink portfolio, a tax credit of costs of $16 million). All shares purchased under the share buyback
the year ended 30 June 2023, the group issued bonds of
$23 million in relation to various dispute and litigation matters in North programme were cancelled. Exchange adjustments (3) (645) (358)
$2,000 million ($1,989 million - net of discount and fee) consisting of
America and a tax credit of $15 million in respect of the supply chain Remeasurement of post-employment benefit
agility programme. Movement in net borrowings and equity $500 million 5.2% fixed rate notes due 2025, $750 million 5.3% fixed
plans net of taxation (61) (562)
rate notes due 2027, $750 million 5.5% fixed rate notes due 2033 and
Included in the tax charge of $1,163 million in the year ended 30 June
Movements in net borrowings Purchase of shares of non-controlling interests
€500 million 3.5% fixed rate notes due 2025 ($548 million - net
2023 is a net exceptional tax credit of $226 million, including an 2024 2023 discount and fee), and repaid bonds of $300 million and $1,350 (4) (223) (178)
exceptional tax credit of $154 million in respect of brand impairments, re-presented(1) million.
$ million $ million Hyperinflation adjustments net of taxation (2) 365 180
mainly the McDowell's brand, a tax credit of $68 million in respect of
the deductibility of fees paid to Diageo plc for guaranteeing externally Net borrowings at the beginning of the year (19,582) (17,107) (8) On 16 January 2024, Diageo agreed with Combs Wine and Spirits Associates' transactions with non-controlling
issued debt of its US group entities, a tax credit of $27 million in LLC to purchase the 50% of the share capital of DeLeon Holdco LLC interests — (8)
Free cash flow (2) 2,609 2,235 that Diageo did not already own. On 24 March 2023, Diageo
respect of the supply chain agility programme, partly offset by a tax Dividend declared to non-controlling interests (121) (117)
charge of $52 million in respect of the sale of Guinness Cameroun S.A. Movements in loans and other investments (47) (68) completed the purchase of an additional 14.97% of the share capital
The tax rate before exceptional items for the year ended 30 June 2024 of East African Breweries PLC (EABL). This increased Diageo's Equity dividend declared (2,243) (2,071)
Acquisitions (3) (6) (404)
was 23.2% compared with 23.0% for the year ended 30 June 2023. controlling shareholding position in EABL from 50.03% to 65.00%. Share buyback programme (5) (997) (1,543)
Investment in associates (3) (133) (112)
We expect the tax rate before exceptional items for the year ending (9) In the year ended 30 June 2024, the net movements in other Other reserve movements 69 376
Sale of businesses and brands (4) 87 559 borrowings principally arose from the $229 million increase in
30 June 2025 to be in the region of 24%. Equity at the end of the year 12,070 11,709
Share buyback programme (5) (987) (1,673) commercial paper offset by cash outflows of foreign currency swaps
(f) Dividend Net sale of own shares for share schemes (6) 21 36 and forwards of $124 million and $104 million repayment of lease
(1) See pages 166-167 for an explanation under Accounting
The group aims to increase the dividend each year. The decision in liabilities. In the year ended 30 June 2023, the net movements in other
Purchase of treasury shares in respect of information and policies.
respect of the dividend is made with reference to the dividend cover, borrowings principally arose from the increase in commercial paper,
as well as current performance trends, including sales and profit after subsidiaries (10) — collateral and bank loan balances offset by cash outflows of foreign (2) See pages 167 and 228-230 for details on hyperinflation
tax together with cash generation. Diageo targets dividend cover (the Dividend paid to non-controlling interests (117) (117) currency swaps and forwards and repayment of lease liabilities. adjustments.
ratio of basic earnings per share before exceptional items to dividend Net movements in bonds (7) 558 887 (3) Exchange movements in the year ended 30 June 2024 primarily
(10) In the year ended 30 June 2024, exchange losses arising on net
per share) within the range of 1.8 - 2.2 times. For the year ended 30 arose from exchange losses driven by the Turkish lira, the Mexican
Purchase of shares of non-controlling interests (8) (223) (178) borrowings of $199 million were primarily driven by adverse exchange
June 2024, dividend cover was 1.7 times. The recommended final peso, sterling and the euro. Exchange movements in the year ended
movements on sterling and euro denominated borrowings and
dividend for the year ended 30 June 2024, to be put to the Net movements in other borrowings (9) (106) 69 30 June 2023 primarily arose from exchange losses driven by sterling,
unfavourable movements on cash and cash equivalents partially offset
shareholders for approval at the Annual General Meeting is 62.98 the Turkish lira, the Indian rupee and the Chinese yuan, partially offset
Equity dividend paid (2,242) (2,065) by favourable movements on foreign currency swaps and forwards. In
cents, an increase of 5% on the prior year final dividend. This would by gains in the euro, the Mexican peso, and foreign exchange on
Net decrease in cash and cash equivalents (596) (831) the year ended 30 June 2023, exchange losses arising on net
bring the recommended full year dividend to 103.48 cents per share, borrowings designated into net investment hedge before the functional
borrowings of $646 million were primarily driven by unfavourable
an increase of 5% on the prior year. The group will keep future returns Net increase in bonds and other borrowings (453) (958) currency change.
exchange movements on sterling and euro denominated borrowings
of capital, including dividends, under review through the year ending
Exchange differences (10) (199) (646) and unfavourable exchange movements on cash and cash
30 June 2025, to ensure Diageo’s capital is allocated in the best way (4) On 16 January 2024, Diageo agreed with Combs Wine and Spirits
equivalents, foreign currency swaps and forwards.
to maximise value for the business and its stakeholders. Other non-cash items (187) (40) LLC to purchase the 50% of the share capital of DeLeon Holdco LLC
Subject to approval by shareholders, the final dividend will be paid to that Diageo did not already own. On 24 March 2023, Diageo
Net borrowings at the end of the year (21,017) (19,582)
holders of ordinary shares and US ADRs on the register as of completed the purchase of an additional 14.97% of the share capital
30 August 2024. The ex-dividend date will be 29 August 2024 for of East African Breweries PLC (EABL). This increased Diageo's
(1) See pages 166-167 for an explanation under Accounting
holders of ordinary shares, and 30 August 2024 for US ADR holders. controlling shareholding position in EABL from 50.03% to 65.00%.
information and policies.
Holders of ordinary shares will receive their dividends in sterling unless (5) See page 46 for details of Diageo's return of capital programmes.
(2) See page 232 for the analysis of free cash flow.
they elect to receive their dividends in US dollar by 20 September
2024. The dividend per share in pence to be paid to ordinary (3) In the year ended 30 June 2024, Diageo paid $6 million in respect Post-employment benefit plans
shareholders will be announced on 3 October 2024 and will be of prior year acquisitions (2023 – $31 million). In the year ended 30 The net surplus of the group’s post-employment benefit plans
determined by the actual foreign exchange rates achieved by Diageo June 2023, acquisitions also included upfront payments of €246 decreased by $22 million from $739 million at 30 June 2023 to $717
buying forward contracts for Sterling currency, entered into during the million ($261 million) for Kanlaon Limited and Chat Noir Co. Inc. (the million at 30 June 2024. The decrease in net surplus was
three days preceding the announcement. The final dividend, once owner of Don Papa Rum) and $102 million for Balcones Distilling. predominantly attributable to the adverse change in the market value
approved by shareholders, will be paid to both holders of ordinary of assets held by the post-employment benefit plans in the UK that was
In the years ended 30 June 2024 and 2023, investment in associates
shares and US ADRs on 17 October 2024. A dividend reinvestment partially offset by the favourable change in the inflation rate in the
included additional investments in a number of Distill Ventures
plan is available to holders of ordinary shares in respect of the final United Kingdom (from 2.7% to 2.6%).
associates.
dividend and the plan notice date is 20 September 2024.
(4) In the year ended 30 June 2024, sale of businesses and brands Total cash contributions by the group to all post-employment benefit
included a net cash consideration, net of disposal costs, of $88 million plans in the year ending 30 June 2025 are estimated to be
for the disposal of Windsor Global Co., Ltd. In the year ended 30 June approximately $55 million.
2023, sale of businesses and brands included the disposal of Guinness
Cameroun S.A. beer business for a net cash consideration, net of
disposal costs, of $438 million and the disposal of the Popular brands
of Diageo’s USL business, for a cash consideration, net of disposal
costs, of $92 million.
(5) See point (g) above for details of Diageo's return of capital
programmes.

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'SPIRIT OF PROGRESS'

'Spirit of Progress'
Responding to the issues that matter Therefore, in fiscal 24, we have reconsidered the underlying targets in
our three priority areas. Our objective has been to direct our resources
‘Spirit of Progress‘ is Diageo's environmental, social and governance
towards those areas where our learnings and engagements with
(ESG) action plan designed to address the most material issues facing
stakeholders tell us we have the best opportunity to mitigate the
our company, brands, people, suppliers and communities. Its ambitions
highest risks and deliver the highest impact. Our review has also
are embedded in our business strategy and it aims to make a positive
considered preliminary results of a refreshed double materiality
Putting positive societal impact at the heart of our business strategy impact on people and the planet everywhere we live, work, source
assessment ahead of our alignment with the requirements of the
and sell.
European Union’s Corporate Sustainability Reporting Directive (CSRD).
At the heart of ‘Spirit of Progress‘ framework are three priorities:
We are a successful global business, This section of the Annual Report sets out our progress against our
Promote positive drinking 51 • Promote positive drinking – changing the way the world drinks for 12 priority performance targets which cover the areas most material
building and nurturing some of the world’s the better, through promoting moderation and addressing the to our business. We believe the selected performance targets also
Doing business the right way 53
most recognised brands. A fundamental part harmful use of alcohol. address our highest risks and as a result, we will be directing a higher
Our people and culture 55 • Champion inclusion and diversity – creating an environment where proportion of our resources to these priorities to accelerate action,
Health and safety 57
of our success is taking focused action at scale everyone contributes to a better business. maintain momentum and refocus our efforts. The remaining targets
Champion inclusion and diversity 59
to make our business sustainable and resilient • Pioneer grain-to-glass sustainability – preserving the natural will continue to be part of ‘Spirit of Progress‘ and further details of
resources we all depend on. actions taken can be found in our ESG Reporting Index and on our
Pioneer grain-to-glass sustainability 61 for today and for future generations. At the launch in 2020, we set out a series of ambitious priority targets website. We have also included context on target changes in our
Our ESG reporting approach 74 that aimed to deliver progress against our most material ESG issues.(1) Reporting boundaries and methodologies, starting from page 238-257.
We are proud to have already met several targets well ahead of
schedule, including two, supporting the promotion of positive drinking.
Promote positive drinking
Around the world, we reach and engage audiences with messages
However, ESG strategy and reporting is a fast-moving area, and we that aim to change attitudes, whether it's highlighting the harm of
regularly assess our strategy in the context of successes and challenges, underage drinking or binge drinking, warning of the dangers of drink
changes in the reporting landscape and feedback from our stakeholders. driving, or using our brands to highlight the importance of moderation.
All companies are dealing with uncertainty in meeting ESG-related
ambitions, and we are no different. We focus on external factors We are proud to have met our 2030 targets for DRINKiQ and
we can influence, however there remain many external factors brand-led moderation campaigns in fiscal 22 and 23 respectively.
which we can't control. As a result, our roadmaps to delivery on our They remain important tools in our work to promote positive drinking
targets remain subject to uncertainty across most areas. We also and are embedded into our operations.
regularly apply our learnings from successes and challenges to
update our roadmaps.

'Spirit of Progress' framework

See page 48

See page 51 See page 59 See page 67 See page 53

• Business integrity
• Standing up for human rights
• Our people and culture
• Health and safety
See page 67 See page 69

(1) For the materiality matrix please refer to our ESG Reporting Index.

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' S P I R I T O F P R O G R E S S ' continued PROMOTE POSITIVE DRINKING

Our educational programmes, designed to change attitudes to the Maintaining and measuring culture
Promote positive drinking
risks of alcohol misuse, are targeted at areas we believe we can have
Our culture is defined by our people, who are dedicated to driving
the biggest reach and impact, particularly in the context of each
sustainable growth by doing business the right way, every day,
geography where we sell our products.
everywhere. To enable this, we focus on embedding our culture in all
As a result, we will be increasing our focus on SMASHED, an award- aspects of our business, keeping people safe, protecting human rights
winning programme providing education on the dangers of underage and living our values through our Code of Business Conduct. We report We want to change the way people drink – for the better. This is why
drinking, and on raising awareness of the dangers of drink driving on each of these topics in turn in this section (see page 55-58).
through educational programmes and other partnerships. Our reporting we promote moderate drinking and invest in education programmes
will reflect an increased emphasis on these programmes, while also Governance to discourage the harmful use of alcohol.
providing qualitative information on our wider approach to promoting Both the Board and the Executive Committee oversee ‘Spirit of
positive drinking. Progress‘. As Chief Executive, Debra Crew, is ultimately accountable
for the overall performance of Diageo's ESG action plan, and its We want to change the way the world drinks – for the better. We have educated approximately 6 million people since our baseline
Champion inclusion and diversity targets. Each target has a member of the Executive Committee Our brands have been part of people’s celebrations for generations; year of 2018.
Championing inclusion and diversity is at the heart of what we do. accountable for delivery and progress is reviewed regularly by the we make them with pride and they are made to be enjoyed responsibly.
Our experience and belief is that gender and ethnic diversity in our Executive Committee and the Board. The Board reviews our most This year, our progress toward achieving our global SMASHED target
leadership population helps drive better and more sustainable material ESG issues, our strategy to address those issues and our We embrace our responsibility to proactively promote positive has notably accelerated. From hosting regional partner summits in
performance. We also believe that providing hospitality and business targets used to measure our strategy in action. The review of our drinking. Therefore, in 2020, as part of the 'Spirit of Progress' strategy, Latin America and Caribbean, reaching young people during school
skills through Learning for Life to under-represented groups helps performance targets undertaken in fiscal 24 was led by members we unveiled our Positive Drinking approach with four pillars to deliver holidays in Africa to maximising online digital profiling of ideal partner
support both our communities and an industry that is a crucial partner of the Executive Committee and approved by the Board. impact and change: schools in South East Asia, our approach to rolling out SMASHED in
for Diageo. Therefore, we will continue to maintain a strong focus on fiscal 24 has been innovative and collaborative.
• Tackling harmful drinking through education.
Linking performance to remuneration
these areas and report on our progress in our Annual Report.
Our review of ‘Spirit of Progress’ did not change our view on five of
• Promoting moderation via our brand marketing. Driving responsibly
We will also continue to track our spend with diverse suppliers; please • Tackling underage drinking.
our ambitions which are considered key performance indicators. We've long championed awareness on the risks of drink driving,
refer to our ESG Reporting Index for more information. • Changing attitudes to drink driving.
The targets in our long-term incentive plans include: including collaborating with law enforcement and local authorities.
Our other inclusion and diversity ambitions remain important to our holistic We continuously evaluate our strategies, considering both opportunities In 2021, we launched the Wrong Side of the Road (WSOTR) digital
• Number of people who confirmed changed attitudes on the and learnings. After incorporating feedback from our stakeholders, the learning resource with the United Nations Institute for Training
value chain strategy; our qualitative reporting on our work with women in dangers of underage drinking following participation in a Diageo
our community beneficiary programmes, progressive marketing portrayal decision was taken that in fiscal 24 we would continue to scale our and Research (UNITAR), aimed at raising awareness about the
supported education programme. education programmes to address underage drinking and drink driving. consequences of drink driving on individuals and communities.
and Diageo Bar Academy is included on page 60. Inclusion and diversity – percentage of female leaders globally.
• WSOTR is available in digital and classroom formats and is now
Having hit our targets for DRINKiQ, our interactive online education
Pioneering grain-to-glass sustainability • Inclusion and diversity – percentage of ethnically diverse
platform and moderation messaging in our brand strategy, we
live in 24 countries.
leaders globally.
Our business depends on natural resources, and we are directly embedded these crucial programmes into the rhythm of our daily
• Improvement in water efficiency, measured by our water
affected by changes in climate and the related challenges of
efficiency index. business, with examples on page 52. Changing attitudes to drink driving
water- stress and nature loss. Our refined action plan focuses on
• Reduction in greenhouse gas emissions in our direct operations Protecting young people Target by 2030 Number of people educated
two key areas: water and greenhouse gas emissions.
(Scope 1 and 2). Extend our UNITAR about the dangers of drink
Water is our most important natural resource and water-stress is a We believe it is never acceptable for anyone underage to consume
These represent all three strategic priorities of our ‘Spirit of Progress‘ partnership and promote driving in fiscal 24
growing challenge in many countries. We will be accelerating our alcohol. That is why we have run campaigns and education
action plan, and reflect our vision to mitigate risks, act on opportunities changes in attitudes to
programmes to combat underage drinking for many years.
efforts to maximise our stewardship of this precious resource,
prioritising water efficiency in own operations around the world,
and make a positive impact on people and the planet.
SMASHED is a programme that educates young people aged 10-17
drink driving, reaching
five million people 1.0m
replenishment in water-stressed communities and collective action New regulatory frameworks in 38 countries on the dangers of underage drinking. It was developed
to improve water accessibility, availability and quality as priority By 2026, we expect to report under the International Sustainability by Collingwood Learning, and we have been proud to sponsor it 5m
performance targets. Standards Board (ISSB) and CSRD. We are undertaking a double since 2018.
n 2030 Target 5m
We are proud to have met our commitment to investment in access materiality assessment, the results of which will be reported on in fiscal SMASHED began in 2005 as a live theatre production and has since been
to clean water, sanitation and hygiene (WASH) in fiscal 23 and will 25. Our preliminary view is that our materiality assessment supports enhanced to enable online learning as well as live performances. To make n 2023 progress to date 1.2m
continue to partner with communities to ensure the same level of our performance target review and simplification. the programme as successful as possible, the performance can be tailored n 2024 progress to date 2.2m
impact is delivered, providing clear examples each year. We continue to report aligned to the recommendations of the to specific countries using local actors and cultural references.
Greenhouse gas emissions contribute to climate change, and we must Taskforce on Climate-related Financial Disclosures (TCFD). Given
In fiscal 24, we reached 1m people through WSOTR and other drink driving
do our part to reduce them. We will continue to focus on reducing the interconnectivity of climate and nature, we have incorporated Tackling underage drinking through SMASHED programmes. To date, we have reached 2.2m people since fiscal 20.
greenhouse gas emissions in our direct operations around the world, some of the Taskforce for Nature-related Financial Disclosures (TNFD)
investing in energy efficiency and switching to renewable energy. into our TCFD reporting, with an aim to be fully aligned with TNFD in Target by 2030 Number of people educated This fiscal, we worked to accelerate the development and roll out of
We will continue to work with our suppliers to decarbonise, but as the medium-term. Scale up our SMASHED on the dangers of underage partnerships between our in-market teams and local governments as
described on pages 69-71, we will be refocusing our supply chain partnership and educate 10 drinking through a Diageo- well as other key local stakeholders.
In the United States, California has recently enacted the Voluntary Carbon million young people, parents
efforts on areas where we exert the most control and those categories Market Disclosures Act, California Assembly Bill No. 1305 (AB-1305)
supported education
and teachers on the dangers For example, in India, we continued to partner with Regional
of emissions which are most material to our footprint. Our Scope 1, 2 requiring companies operating in California to make certain disclosures programme in fiscal 24
of underage drinking Transport Offices in eight states to embed WSOTR into the driving
2.2m
and 3 greenhouse gas emission reduction goals will remain as priority regarding carbon neutrality and carbon emissions reduction claims, and licence application process. We also ran a Greater Chennai traffic
performance targets. voluntary carbon offsets. We provide disclosures pursuant to AB-1305 in this police anti-drink drive campaign. The WSOTR team organised an
Our efforts to reduce emissions are supported by key packaging targets, section of the Annual Report, our Net Zero Carbon Strategy on our website awareness drive with the Greater Chennai Police to educate people
including reducing packaging weight and increasing recycled content, and our responses to CDP (formerly known as the Carbon Disclosure 10m on the dangers of drink driving. Over 2,500 individuals were educated
for which we will continue to provide quantitative data. We also believe Project) climate change questionnaire, available through CDP's website. at 20 different locations through this initiative.
n 2030 Target 10m
strongly that our regenerative agricultural programmes will reduce
emissions, address water-stress and nature loss over the longer term. Reporting transparently n 2023 progress to date 3.7m
In South Africa we launched the WSOTR 'WhatsApp' campaign with
We define our performance measures carefully, along with clear the Department of Gauteng Roads and Transport. The objective was
Other supporting targets relating to our efforts to reduce greenhouse n 2024 progress to date 5.9m to empower Gauteng's youth with subsidised fees for learners licences,
reporting boundaries and methodologies for each. For more details,
gas emissions, including renewable energy, our work with smallholder see pages 238-257. and through drivers' programmes promoting responsible drinking and
farmers, and other packaging and waste targets, will continue to be creating safer roads. This campaign delivered approximately 50,000
tracked and reported in our ESG Reporting Index. In fiscal 24 approximately 2.2m people have taken part in a live completions of WSOTR.
session or an online SMASHED programme. This includes a projected
△ Within PricewaterhouseCoopers LLP’s (PwC’s) independent limited assurance scope –
1.8mΔ people who have confirmed changed attitudes to the dangers
see pages 258-261 of this Annual Report. For Reporting boundaries and
of underage drinking based on our sampling of participant surveys. methodologies, see pages 238-257.

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P R O M O T E P O S I T I V E D R I N K I N G continued DOING BUSINESS THE RIGHT WAY

We also look to develop partnerships with organisations that we Marketing in a responsible way
Doing business the right way
believe will help deliver our mutual ambitions. Therefore, in February
The Diageo Marketing Code (DMC) not only sets minimum standards
we partnered with Mothers Against Drunk Driving (MADD) in the
for responsible marketing, it also represents a cornerstone of our
United States, an organisation dedicated to the eradication of drink
corporate culture and the way we do business. The DMC includes,
driving. With our combined expertise and resources, together we will
among other principles, our commitment to making sure we depict
focus on education, awareness, and prevention campaigns. As part
of this partnership, MADD joined Diageo’s Multicultural Consortium for
and encourage only responsible and moderate drinking, and never We want to do business in the right way every day, everywhere.
target underage audiences. We are proud to have a proven track
Responsible Drinking to help address the harmful use of alcohol in the
record of compliance, which is underpinned by mature business We expect all stakeholders, including our people and suppliers,
Black, Latino and Native American communities. Diageo also became
an inaugural member of the MADD Network. Together we will continue
processes, and appropriate checks and balances in every market to demonstrate integrity, live our values, and behave in an ethical
we operate in.
to build on our learnings and accelerate our progress going forward. way as set out in our Code of Business Conduct.
In support of our commitment to responsible marketing, this year
DRINKiQ we have rolled out several tools to help our marketers uphold our
For DRINKiQ, we have seen further momentum in fiscal 24 through standard more easily: Business Integrity Encouraging people to speak up
the development of creative campaigns that have weaved together We encourage everyone to report potential breaches of our Code,
• A refreshed Digital Marketing Standard, with clearer requirements Working with integrity is fundamental to our identity and organisational
the global ambitions around DRINKiQ and moderation. For example, policies or standards through our global confidential grievance and
on social media governance, targeting adults in digital media and strategy. We make sure our people and suppliers demonstrate
in March 2024, SUHO, a renowned K-pop star who leads the group whistleblowing service, SpeakUp. The service, which is available
consumer data compliance, amongst other topics. integrity, live our values and behave in an ethical way that underpins
EXO fronted a Diageo campaign ‘Enjoy the Flow, Savour Every Moment’ through various channels (email, telephone and internet) in 19
• An updated Influencer Marketing Standard, with enhanced our Code of Business Conduct (Code). Each of us has a responsibility
to promote moderation and responsible drinking. The digital campaign languages, is monitored by the Global Business Integrity team to
requirements for selection of influencers, DMC briefing, approvals for doing business the right way. By valuing not only what we do,
also led visitors in the APAC region to the DRINKiQ site. Within a week ensure that all allegations are handled appropriately, confidentially
and required disclosures. but how we conduct business, we generate success worth celebrating.
of the launch more than five million people viewed the campaign. and fairly.
• A self-certification e-learning module, for all Diageo and agency
'Diageo’s Business Integrity agenda is embedded in every
Make moderation aspirational staff to ensure understanding of the DMC.
part of their business'
In fiscal 24, we launched a new campaign, 'I Spoke Up, Ask Me
• A test of an AI-based assistant to support human DMC reviews and Anything', which addressed and enhanced awareness of the
Moderation encompasses a broad range of different consumer In September we were delighted to be named one of the winners of
approvals of marketing materials, making the process faster without anonymous nature of SpeakUp reporting. See further details on
behaviours and choices, such as choosing not to drink on certain the 2023 NAVEX Customer Excellence Awards in the Governance,
compromising accuracy and control. SpeakUp cases raised in the year and the resulting actions taken
occasions, or substituting a favourite drink with a non-alcoholic Risk and Compliance ('GRC') Programme of the Year category.
version. We aim to enable and reinforce the breadth of choices This year, the International Alliance for Responsible Drinking (IARD) in the Audit Committee Report (page 111-117).
that consumers have to moderate. As well as delivering choice reassessed our compliance with their Digital Guiding Principles. These Annually, NAVEX (the external provider of our Breach Management
Managing third-party risks
to consumers, we know through our insights work that making principles set out five measures that should be in place for all online database, EthicsPoint) honours organisations that demonstrate the
Business integrity is also vital to our relationships with third parties.
moderation feel aspirational and therefore a 'popular choice' is alcohol marketing communications. We are pleased to report that, most innovative, impactful and successful risk and compliance
Our Know Your Business Partner (KYBP) programme helps us screen
critical in driving positive drinking attitudes and behaviours. after having 155 items from 14 markets measured by an independent programmes in practice today. The judges said: 'Diageo’s Business
for potential risks before we start a contractual relationship. In fiscal
third party, our score was 100% full compliance rate. This achievement Integrity agenda is embedded in every part of their business... [It]
In fiscal 24, we have successfully driven aspiration with a variety of 24, improvements were made to our Breach Management process
showcases how we leverage technology to uphold our responsible knows that performance can only be sustained if everyone is doing
campaigns, some led by a key brand, others leveraging a number including leveraging data analytics to better assess our third-party risk.
marketing practices, combining automated monitoring with robust the right thing, every day, everywhere'.
of brands across our portfolio. Highlights include:
social media governance.
1. In October we launched Captain Morgan Spiced Gold 0.0%,
Code of Business Conduct
Finally, across some of our markets, advertising monitoring and Our Code sets out the basis for how we work and conduct business.
the brand’s first alcohol-free offering, supported in Great Britain
industry bodies publicly report breaches of self-regulatory alcohol It lists key principles which guide our day-to-day operations, decisions
and Germany by the highly engaging 'Why You Whying' advertising
marketing codes. No complaints about Diageo marketing were and interactions with colleagues and other stakeholders. Our Code
campaign. The campaign reached over 19 million people in
upheld by key industry bodies this fiscal year (see below) for any of forms what we stand for as a business and how we demonstrate our
Great Britain and 14 million in Germany, with 82% of consumers in
the following markets: United Kingdom, Australia and Ireland. high standards of integrity and ethical behaviour.
Great Britain and 90% of consumers in Germany agreeing that the
campaign 'makes drinking moderately feel like a popular choice'. One complaint was upheld in November 2023 against Casamigos, Each year, all eligible employees complete mandatory training on
2. In December we launched the 'Magic of Moderation' campaign in by the Distilled Spirits Council of the United States (DISCUS), about the Code, and at the end of the training certify that they have read,
Great Britain featuring Guinness, Johnnie Walker, Tanqueray 0.0% an ad depicting motorcycle riding without a helmet and a product understood and complied with the Code and our global policies.
and Seedlip. The campaign promotes moderate ways of drinking placement in a music video, which depicted some scenes of Training is via an interactive e-learning module accessible through
to allow people to make the most of their socialising occasions. irresponsible consumption. any device or classroom training for those who do not have regular
The campaign reached five million people in Great Britain, computer access. This year, 97% of eligible employees completed
In response, Diageo agreed to not produce new Casamigos advertising
with 85% of consumers agreeing that it 'makes drinking the training (fiscal 23: 97%).
content depicting motorcycle riding without helmets and removed all
moderately feel like a popular choice'.
references to the music video from the brand’s channels. In fiscal 24, we came together to celebrate our first ever Global Spirit
In addition to our brand moderation campaigns, our non-alcoholic of Integrity Day. The day covered key topics from our Code including
Complaints upheld by key industry bodies that report publicly:
brands also support our positive drinking ambition. We know that data privacy, cyber risk and dignity at work, as well as our controls
our 0.0 brands have a strong role to play in giving consumers choice
and that communications for these brands can promote positive
Incidents of non-compliance concerning transformation and risk management programme. Attended live by
many of our employees, a number of our markets further enhanced
moderation behaviours and attitudes. For example, in fiscal 24, marketing communications – fiscal 24(1) the themes of the day by running complimentary sessions after the Celebrating Global Spirit of Integrity Day
Guinness 0.0 has tapped into the moderation mindset to become event. We expect to continue running similar programmes in the future.
Standing up for human rights
Complaints about
the fastest growing alcohol-free beer in Great Britain and Ireland. Industry complaints Diageo brands

The brand will be the official global responsible drinking partner of

Country Body upheld upheld Training our leaders At Diageo, we strive to create an environment where all our people
the English Premier League, providing further opportunities to support United States Distilled Spirits Treating each other with dignity and respect is an important part of feel they are treated fairly and with respect. We remain committed to
our positive drinking agenda. Council of the doing business the right way. Our Dignity at Work training programme acting with integrity in our roles, to ensure we are doing business in
United States 2 1 relaunched in fiscal 24, supported leaders with the right tools and the right way, meeting external expectations and our own standards.
Australia ABAC Scheme 33 0 behavioural guides to lead with integrity. The programme was also We act in line with the UN Guiding Principles on Business and Human
United Kingdom Advertising extended to new senior leaders joining the business in the year, Rights (UNGPs) and are committed to embedding respect for human
Standards Authority 0 0 and was included in a new managing director onboarding playbook. rights into everyone’s working day, in every country throughout our
Portman Group business and value chain. Our policies cover our responsibilities to
18 0
protect the human rights of everyone working in our direct operations,
Republic of Advertising our value chain and communities.
Ireland Standards Authority
for Ireland 3 0
(1) From 1 July 2023 to 5 May 2024.

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D O I N G B U S I N E S S T H E R I G H T W A Y continued OUR PEOPLE AND CULTURE

Our human rights governance implementation of our human rights approach beyond our own

Our people and culture:

Our Code of Business Conduct and Global Human Rights Policy are operations. Our Responsible Sourcing programme follows a risk-based
an integral part of ensuring that Diageo’s culture is aligned with our approach to assessing adherence to our Partnering with Suppliers
purpose and values. Our Code is approved by our Board of Directors standard. Suppliers are risk-assessed against the following three

The key to winning

and our Global Human Rights Policy is approved by our Chief criteria: location of supplier site(s), category of product or service and
Executive Officer. Our human rights strategy is reviewed on a periodic amount of spend. Suppliers who are assessed as high risk are required
basis by the Audit Committee of the Board of Directors and by the to undertake an independent third-party Sedex Members Ethical Trade
Executive’s Audit and Risk Committee (ARC) as part of our principal Audit (SMETA) or an equivalent four-pillar ethical audit.
risk on business ethics and integrity (see page 77-85). Responsibility We have also mapped our salient risks within our full supply chain
for delivery is shared between the members of Diageo’s Executive allowing us to prioritise our actions and drive positive social impact
Our talented and diverse workforce, together with our people’s passion for our brands and
Committee that are responsible for the human rights of our employees, where it is needed most. Part of this assessment includes identifying unique culture continues to be a competitive advantage for our business, enabling our people
suppliers and communities. A number of our Executives, senior the scale, scope, remediability and likelihood of our salient risks
business leaders and functional specialists lead the agenda via our through different parts of our supply chain. These findings are helping
to perform at their best.
Human Rights Steering Group (group and market level) and assess us to focus our interventions on specific human rights issues within each
risks, emerging issues, compliance and remediation within our supply chain for greater impact. For more information, please refer to
enterprise risk management processes. our ESG Reporting Index and our Modern Slavery Statement. Highly engaged, talented and diverse workforce Embedding a culture of speed and agility
At Diageo, we are proud to have strong employee engagement levels We believe that a culture of speed and agility is important in the
Staying ahead of emerging legal requirements and Taking action to mitigate risk across our business. Despite challenging economic circumstances our current operating environment, marked by increased volatilities and
increasing stakeholder expectations Where we identify risk, we take action to mitigate the risk to our people continue to express pride and passion for our consumers, business challenging macroeconomics. Our ability to respond faster to rapid
We continue to monitor new regulations, including the EU’s business and our people. For example: and brands. In our most recent Your Voice survey, a high proportion of our changes in our internal and external environment will enable us to
Corporate Sustainability Due Diligence Directive, and in fiscal 24, people (89%) are proud to work for Diageo, significantly exceeding the deliver consistent performance and maintain our competitive edge.
• Contract labour review, recognising contract workers as a more
took preparatory steps in anticipation of this regulation. external benchmark(1) by 10 percentage points. Our overall engagement Therefore, we embarked on a culture transformation journey in fiscal
vulnerable group than direct employees. This reviewed the
We have refreshed our list of salient risks, vulnerable groups, high risk score also remains strong at 81%, which although being 3 percentage 24 to further embed speed and agility across our business. We have
effectiveness of our governance processes as well as conducting
markets and high risk commodities in our supply chain. We have points lower than last year, is 5 percentage points higher than the external an advantaged and distinct culture in Diageo – that is characterised
interviews with contract workers to share their views. Based on the
implemented new risk assessment tools for our direct operations and benchmark. This impressive engagement index puts us in an advantaged by the passion our people have for the business, a strong sense of
findings and recommendations, we will strengthen our processes to
supply chain that allow us to better detect and mitigate risk before an position as an employer of choice and enables us to attract and retain the ownership, purpose driven approach, a collaborative spirit, an
improve our governance over contract labour.
incident occurs. We are in the process of expanding our human rights due best and most diverse talent. inclusive mindset and a commitment to doing business the right way.
• Global Dignity at Work Policy which tackles harassment and bullying
diligence further along our value chain – incorporating new businesses, in the workplace, and our Domestic and Family Abuse guidelines Leadership and inclusive culture continue to be important drivers of We have continuously evolved our culture in Diageo over past 26
brand promoters, third-party operations, suppliers', stakeholders and our supporting employees, their friends and family who may be employee engagement. We have built a workforce with the right blend years, preserving our culturally distinctive strengths that continue to
customers. When material potential risks are identified, we look to put in experiencing harassment and bullying outside the workplace. of diversity and expertise in our leadership and line manager population. enhance performance, whilst accelerating the key shifts that will be
place corrective action plans to mitigate the risk. • Global Brand Promoter standard and training which establishes We continue to upskill our managers’ coaching capabilities, equipping critical to the next phase of Diageo’s growth ambition. As part of the
principles and guidelines to protect brand promoters from the risk of them with the skills needed to inspire and develop their teams, through culture transformation programme, we have designed four ’dial-up’
Focusing on salient human rights risks sexual harassment. our line manager development programme. In our recent Your Voice behaviours which represent the key cultural pivots we want to make.
In fiscal 24 we refreshed our assessment of salient risks that are most • Child labour prevention programme for smallholder farmers, survey, 81% of our people believe that their line managers encourage These behaviours have been purposefully chosen based on feedback
relevant to our business as specified in the Declaration on Fundamental where we have trained key functions and business partners in and value different perspectives and styles. from internal and external stakeholders including our employees.
Principles and Rights at Work and the UNGPs. We looked at human Africa to prevent child labour. We also deliver training direct to We have also refreshed our values to ensure proper alignment
rights benchmarks for our industry, priority commodities in our supply Career and talent management is crucial to sustaining high employee with our cultural aspirations. Our refreshed values are: passionate
our smallholder farmers.
chain and the increasing interdependence between human rights engagement levels and future-proofing our business performance. about consumers and customers, value each other, be better,
• Partnership with external parties to assess and address the health
and climate impacts. Our 'Craft my Career' initiative provides the platform for our people proud of what we do. Our four 'dial-up behaviours' are externally
impacts of heat stress in sugarcane farming for our rum supply
to have meaningful discussions on how they can grow and develop curious, collaborating efficiently, experimenting, and learning and
The assessment identified the following salient risks: health and through improved access to shade, drinking water, personal
at Diageo. We also prioritise developing key talent for future roles acting decisively.
safety, wages and benefits, working time, harassment and bullying, protective equipment and rest schedules.
through our global mobility and talent development programmes.
discrimination, freedom of association and collective bargaining, • Regular training for teams and suppliers so they can effectively Over the last nine months, we have immersed people in the culture
In fiscal 24, 71% of our leadership appointments were internal talent
child labour, forced labour, water sanitation and hygiene and land manage human rights risks. change journey and equipped our employees to practise the new
and more than 5,500 people globally succeeded to make career
rights. Whilst we conduct ongoing due diligence in all areas, we have 'dial-up behaviours'. These immersion sessions have been facilitated
Providing access to grievance mechanisms moves which translates to an average of at least 15 people every day.
by a passionate group of over 550 culture change champions and
prioritised health and safety, wages and benefits, working time, We remained committed to enhancing digital, data and analytics
We provide a global grievance and whistleblowing mechanism to our business leaders. We have also integrated the 'dial-up behaviours'
harassment and bullying and discrimination based on severity, capabilities, which are vital for our present and future growth.
our employees, business partners and communities, called ’SpeakUp’. into our performance management, reward and recognition processes.
likelihood, attribution, leverage and breach data. The Digital Talent Incubator programme was launched to further develop
For more information, see Business Integrity (previous page). Celebrate, our new and innovative recognition platform is now live
Prioritising vulnerable groups our digital capabilities and build a sustainable talent pipeline for digital
Engaging our stakeholders roles. Additionally, through our collaboration with an external partner in over 56 countries. Following an accelerated expansion in Q2
We recognise that some groups of people are more vulnerable to human and Q4 of fiscal 24, it now reaches the majority of our employees.
We recognise the importance of listening to and consulting specialising in digital capability building we successfully upskilled
rights breaches and pay particular attention to these groups within our The programme helps foster a culture of gratitude and appreciation,
risk assessments. Determined by human rights frameworks, our value stakeholders on issues that affect them. We do this on an ongoing more than 3,000 employees in digital competencies, reaffirming our
basis through different mechanisms including worker interviews, commitment to staying at the forefront of digital innovation. using instant and more frequent peer-to-peer recognition aligned
chain, and human rights impact assessments, our vulnerable groups with our purpose of celebrating life every day, everywhere. Delivered
reviewing grievance data and holding community dialogues.
are women, ethnic minorities, persons with disabilities, the LGBTQIA+ through a modern consumer grade user experience, the platform
community, indigenous peoples, migrant workers and contract/ Assessing the effectiveness of our approach has achieved a strong utilisation rate with over 90,000 recognition
temporary workers and children. We measure the effectiveness of our human rights governance moments experienced - the equivalent to one award every six minutes.
Assessing risk in our direct operations through our internal assurance framework and third-party human Furthermore, we are empowering and equipping our 4000+ people
rights assessments, in addition to monitoring allegation and breach managers across the globe with the necessary tools to role model
We use a variety of risk assessment tools in our direct operations.
trends and root causes. We continue to enhance our risk mitigation and influence behaviour change within their teams.
This includes self-assessment questionnaires for all direct operations,
plans based on lessons learned. For example, we took our brand
third-party human rights assessments for high risk direct operations While we understand that cultural change can take time, we remain
promoter training online to increase accessibility.
and deep dive assessments for groups that we consider more committed to amplifying and clarifying the expectations for our
vulnerable to risk. Where assessments identify material human rights This focus on due diligence and disclosure is crucial to us doing people. We believe that by doing so, we can build a more responsive
concerns or suggest our approach can be strengthened to better business the right way. It enables us to have transparency in our and resilient workforce that is better equipped to thrive and succeed
identify and prevent risk, we strive to put in place robust action plans engagements with employees and all stakeholders. We will continue in today's rapidly changing business landscape.
to resolve matters, working with external experts when appropriate. to focus on this important area, embedding respect for human rights
into everyone’s working day, in every country and throughout our (1) Based on a blend of Ipsos Karian and Box, Qualtrics benchmark data. Global
Assessing risk and compliance in our supply chain value chain. Dial-up behaviours in action
Manufacturing benchmark includes organisations with global coverage that operate
Within our Sustainable Procurement team, a dedicated Responsible within FMCG and other industry sectors.
Sourcing team is in place to lead the management and

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O U R P E O P L E A N D C U L T U R E continued HEALTH AND SAFETY

Creating the enabling environment for our people Additionally, we have developed a suite of resources on a range of

Health and safety

globally relevant topics such as sleep, physical activity and staying
to work and thrive resilient during seasonal changes and have hosted multiple global
We believe that people are at their best, both at work and at home, conversations on topics such as menopause and men’s health.
when they are physically and mentally thriving, emotionally balanced,
financially secure and socially connected. Our wellbeing philosophy Our Diageo Flex philosophy continues to offer employees opportunities
provides a framework around these four dimensions, ensuring that to balance their work-life integration. Our family leave policy continues We prioritise the health and safety of our people throughout our value chain to ensure everyone
wellbeing is a part of our culture every day, everywhere. In our most to be popular and amongst market leaders, with 701 employees
recent employee opinion pulse survey, 88% of respondents felt they utilising our extended paternity leave provision and 842 employees is safe when working on-site, at home, on the road, every day, everywhere.
are aware of the health and wellbeing resources and support Diageo utilising our extended maternity leave provision in fiscal 24. Lastly,
offers, which has in part been aided by active wellbeing champion our investment in a multi-year technology transformation programme
groups. Markets are supporting the wellbeing of our people in different will make it easier for our people to do more fulfilling work, improve Embedding a culture of health and safety We have completed the first of our three-year 'Safer Together' strategy
which incorporates a safety culture and a technology roadmap.
ways such as in Australia, where we have introduced ‘Wellbeing access to quality data and insights and drive greater productivity We believe that safety is everyone's responsibility and an integral part
Our overall strategy is designed to prevent severe, fatal, and process
Leave’ encouraging employees to proactively plan time away from and efficiency in our business process. of everyone's job. Empowering and involving our people in safety
safety incidents while enhancing our health and safety culture.
work to rest and support their wellbeing and in the United Kingdom, embeds our belief that there is no acceptable level of accidents.
Average number of employees by region and gender(1) Our roadmap is designed to further embed an improved safety culture
where we had a dedicated wellbeing day in May to recognise Not Our Global Health, Safety and Wellbeing Policy, along with our Global into all locations. Our technology roadmap includes digital solutions,
Mental Health Awareness Week. Region(2) Men % Women % declared(3) % Total Risk Management Standards, lay the foundation for our corporate automation, forklift truck technology, manual handling aids and
In fiscal 24, we have further challenged the stigma around mental North approach to health and safety. We conduct risk assessments and artificial intelligence with the aim of improving our health and safety
health. Building on our already launched mental wellbeing app, America 1,844 59 % 1,286 41 % 14 — 3,144 utilise compliance systems, technology, and training that help us performance. Over the next two years we plan to invest over $50
Unmind, we have created a Mental Health Awareness eLearning create and embed innovative ways of working that continuously million on 36 shuttle warehouses in our scotch operations where
Europe 5,972 57 % 4,538 43 % 14 — 10,524
and on World Mental Health Day we facilitated global conversations improve safety. casks are put away on pallets by an automatic shuttle, removing
Asia Pacific 5,797 66 % 2,965 34 % 1 — 8,763 manual handling, in an effort to improve safety and increase
where leaders shared their own experiences of mental health, to both We encourage our employees' participation and involvement in
normalise and signpost to resources. We provide a focus on financial Latin accident investigations and improvement initiatives, and also provide productivity. Our strategy and roadmaps extend to our contractors
wellbeing through regular masterclasses and mental 'wealth' first aid America them with the most up-to-date health and safety training, so they can and third-party providers.
training. Many markets have led employee physical wellness and carry out day-to-day tasks and activities safely. In addition, we conduct
challenges, such as Ireland’s ‘Go Joe Challenge’. Caribbean 2,761 62 % 1,675 38 % 1 — 4,437 company-wide communication campaigns and as such in fiscal 24
Africa 2,225 64 % 1,272 36 % 2 — 3,499 we held 'Stop and Think', 'Refocus our Minds', 'Leading for Safety'
Diageo and 'Strive for Zero' campaigns.
(total) 18,599 61 % 11,736 39 % 32 — 30,367

Average number of employees by role and gender(1) Company health and safety initiatives
Not
Role Men % Women % declared(3) % Total

Executive(4) 7 54 % 6 46 % — — 13
Senior
manager(5) 320 56 % 252 44 % 1 — 573
Line
manager(6) 2,414 64 % 1,330 35 % 7 — 3,751
Supervised
employee(7) 15,858 61 % 10,148 39 % 24 — 26,030
Diageo
(total) 18,599 61 % 11,736 39 % 32 — 30,367

(1) This data has been compiled as monthly average based on the proportion of Five elements of our 'Strive for Zero' campaign Theme from our 'Stop and Think' campaign aimed
employees who have identified their gender identity as male, female or undisclosed,
and is not fully representative of the gender identity or diversity within our employee
at commercial teams
Fostering a positive workplace
population.
(2) Employees have been allocated to the region where they live.
(3) This data represents the proportion of employees who have chosen not to disclose
their gender identity as male or female.
(4) Executive positions have been calculated based on year end as of 30 June.
(5) Top leadership positions in Diageo, excluding Executive Committee.
(6) All Diageo employees (excluding senior managers and Executive Committee)
with one or more direct reports.
(7) All Diageo employees (excluding senior managers and Executive Committee)
who have no direct reports.

Senior Leadership supporting risk assessment reviews AI platform in place at some European locations

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H E A L T H A N D S A F E T Y continued CHAMPION INCLUSION AND DIVERSITY

Empowering responsibility: Fostering a safe

work environment
Leaders across the organisation are responsible for cascading and
implementing health and safety policies and procedures among their
Champion inclusion and diversity
direct reports and third parties within their remit. We also expect all
employees to take responsibility for their health and safety and those Championing inclusion and diversity is at the heart of what we do,
around them, by acting in accordance with our Code.
and is crucial to our purpose of ‘celebrating life, every day, everywhere’.
We utilise a variety of tools to identify health and safety risks as per
our Global Health, Safety and Wellbeing Policy. Each location is
required to perform hazard identification and risk assessments which Our people are critical to our success. We believe everybody should Maintaining ethnic diversity
assist us in identifying and addressing unsafe conditions. We also have be able to work in an environment where they can thrive, and their Today, 40% of our Board and 46% of our leadership population, including
a safe observation programme across all locations to identify unsafe contributions are valued. We are proud that in our most recent Your our Executive Committee, is ethnically diverse and we are proud to have
behaviours, recognise positive behaviours and to report work-related Voice survey, 81% (fiscal 23: 84%) of employees would recommend reached our 45% ethnicity leadership representation ambition ahead of
hazards. All employees and third parties are encouraged to remove Diageo as a great place to work and 83% (fiscal 23: 85%) agreed 2030. We achieved this through 43% of internal promotions and 45%
themselves from work situations they believe could cause injury or ill that people from different backgrounds and opinions can be external appointments into the leadership cohort being ethnically diverse
health. Hazards are logged on local action planning systems and themselves and thrive in the company. Despite a small drop in in fiscal 24. We want to maintain the momentum achieved to date, while
tracked for closure. results, our outcomes are above external benchmarks. embedding the actions and enhancing our culture that has led to such
To track the effectiveness of our approach, all our locations, We are committed to shaping broader societal change, reflective of positive outcomes. Disclosure is key to this and we are proud that 96% of
markets and global functional teams regularly monitor and review our consumers. We look to champion this across our entire business – our leadership population and 71% overall, in the markets where legislation
health and safety. We report weekly our performance measures to with our people, through our value chain, across our brands and allows, have shared this information voluntarily.
the Global Supply Chain and Procurement Governance Leadership, within the communities in which we operate. Inclusion and diversity is We remain committed to creating a diverse and inclusive workforce that
to Supply Chain and Procurement Leadership monthly and to the a critical enabler of our ‘Spirit of Progress’ ambitions and every senior represents the communities we serve, and understand the importance
Executive Committee at quarterly meetings. leader plays their part and is incentivised in driving progress to deliver of diversifying our talent attraction and external partnerships. In North
this ambition. America, we've renewed partnerships with Prospanica (The Association
Our performance of Hispanic MBAs & Business Professionals) and the National Black
We report on lost time accident frequency rate (LTAFR). This year, Whilst we celebrate where we are today, we know there is more to do.
Alongside progressing our gender and ethnicity ambitions, we must MBA Association to support a diverse talent pipeline. In Great Britain,
we sustained 1.06Δ lost-time accidents (LTAs) per 1,000 full-time Shuttle Warehouse: Injuries occur on a more regular basis due to manual cask we've partnered with Multiverse to launch a two-year apprenticeship
employees (including directly supervised contractors), compared handling - we are investing to digitise and automate to reduce the risk
also focus on achieving our ambitions across all aspects of diversity.
programme aimed at under-represented groups in commercial roles.
to 0.91 in fiscal 23. Strengthening our female talent pipeline The cohort consisted of ethnically diverse and female apprentices,
5 year LTAFR trend Continuous improvement initiatives In fiscal 24, representation of women in leadership roles, including further strengthening our future leader pipeline.
Our workplaces are constantly evolving with new technologies, our Executive Committee, remained strong at 44%, against our
2024 1.06
processes, and equipment. Continuous improvement ensures that 2030 ambition of 50%. We're proud to have 70% female Board Gender representation of our leadership(1), (3)
2023 0.91 health and safety measures keep pace with these changes, representation, and 46% female Executive Committee representation. Role Men % Women % Total
addressing emerging hazards effectively. In fiscal 24 we introduced This led to Diageo being recognised as a Top Ten Best Performing
2022 0.92 Leadership population(2) 327 56% 258 44% 585(3)
several initiatives and will continue to do so as part of our culture company for both women on boards and in leadership roles in the
2021 1.03 and technology roadmaps in fiscal 25. FTSE Women Leaders Review. We have also been listed first in the
2020 0.60⁽¹⁾ • Across our commercial organisation, we have launched a driver
United Kingdom and third globally from 4,000 companies in the Ethnic representation of our leadership(1), (4)
Equileap Gender Equality Report recognising our continued
training programme – a driver behaviour monitoring application, commitment to leading the way in gender equality.
Non- Decline
Our LTAFR increased against last fiscal, driven by increased numbers which provides bespoke training modules linked to the individuals Role
Ethnically
diverse %
ethnically
diverse %
to self-
identify %
Not
disclosed % Total
of lost time accidents in Scotland and North America. Both of these driving behaviour. We focus on strengthening our female leadership pipeline and investing
markets together with tequila and Türkiye market implemented Leadership
• We continue to roll out the Diageo Behavioural Standard in Africa, in the next generation of female leaders, particularly across areas
population(2) 259 46% 270 47% 19 3% 20 4% 568
safety improvement plans aimed at improving safety performance focused on assessing the safety culture of our African locations, where women have historically been under-represented, including
and safety culture. These improvement plans will be continued into which inform action and communication plans. Plans have started commercial, general management and supply roles. Examples of this (1) This data is calculated as an average across the four quarters of fiscal 24.
the next fiscal. in Mexico to roll out this global standard across our tequila business. include our 'Horizons' development programme piloted in fiscal 24 to (2) Leadership population encompasses Executive Committee and senior managers.
Other regions such as Europe and North America are working with strengthen general manager succession and support the transition of (3) One leader has opted not to disclose their gender; they cannot be positively
Our total recordable accident frequency rate (TRAFR) records attributed to either group and therefore are included.
consultants to launch a standard suitable to their bespoke activities. leaders across functions, with 55% female representation in our first
work- related injuries that need more than first aid treatment decreased (4) 18 leaders are based in countries that do not collect ethnicity data. As such,
• We introduced a new AI platform in some of our European facilities. cohort. We launched the Global Supply Chain and Procurement
during this fiscal, demonstrating a consistent year-on-year improvement these leaders are not in scope. Please refer to the Reporting boundaries
The platform provides a 3D visual interface of the location and 'Accelerator' leadership programme of which 66% of participants and methodologies for further information, see pages 238-257.
in our overall numbers across the last three fiscal years, with a notable
allows staff to interact with various safety 'tools' in a very intuitive, were female and the 'Striding Women' initiative across LAC
improvement in our tequila and Türkiye market. We investigate each Building an inclusive culture through leading progressive
visual way within this digital space. Using a range of media strengthening retention and diversity of future talent. Our North
recordable accident to establish the root cause as well as uncover all
contributing factors and insights we can learn from. We share the key including; touch screens, large format digital kiosks, tablets and America business also launched a commercial pilot partnering with policies and guidelines
mobile devices staff and visitors can interact with all elements of Sistas in Sales (SIS), an organisation committed to serve women of Our market-leading policies and practices are shaped by and for
learnings across the organisation aiming to prevent recurrences.
the safety management systems. This includes site induction and colour in professional sales careers across the United States. our people and allow us to continue to provide an environment
For more information, please refer to our ESG Reporting Index.
familiarisation, reporting safety hazards, completing safety These initiatives are complemented by our policies and practices – where they are supported and cared for.
(Δ) Within PricewaterhouseCoopers LLP’s (PwC’s) independent limited assurance observations, communication of safety incidents and access to a
scope – see pages 258-261 of this Annual Report. For Reporting boundaries helping us to foster a gender-inclusive environment, providing support We continue to embed and scale our existing policies and guidelines,
and methodologies, see pages 238-257. range of safety documentation. In addition, the digital platform at varying life stages including our 'Family Leave' policy, ‘Thriving including 'Domestic and Family Abuse', 'Gender Expression and
(1) Fiscal 20 performance was impacted by Covid and reduced operations. provides 3D representation and digital twin model of the workplace, Through Menopause’ guidelines, 'Pregnancy Loss' guidelines and Identity’ and 'Disability Inclusion' guidelines. We also continue to
developing people's spatial awareness and providing an intuitive our 'Fertility’ guidelines which recently launched in Ireland. support our employees’ individual circumstances and needs through
medium for training and safety awareness.
Our 20 Spirited Women Network chapters are key to creating and our 'Flexible Working' and 'Wellbeing' philosophies. In fiscal 24 we
• We are continuing to improve our data capabilities to predict
amplifying our guidelines and policies, as well as partnering with the launched our Carers Leave policy in the UK, which went beyond
and prevent injuries.
business to best develop and grow talent. In fiscal 24 our Great Britain statutory entitlement giving our people up to 10 days paid leave to
• We continue to develop our global health and safety platform and
and Ireland chapters championed mentoring and coaching care, or arrange care, for dependents. This policy is accessible to all
are introducing electronic solutions for permit to work, management
programmes reaching 364 pairings, of which 84% were female. employees, regardless of gender, but we recognise that women are
of change and contractor management.
more likely to take up caring responsibilities. We will be extending this
Continuous improvement in health and safety is vital as we continue policy to other markets during fiscal 25.
to enhance workplace conditions and reduce risks.

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C H A M P I O N I N C L U S I O N A N D D I V E R S I T Y continued PIONEER GRAIN-TO-GLASS SUSTAINABILITY

Leveraging the power of our Resource Groups to drive In fiscal 24, we reached 36,000 people in 36 countries and territories
inclusion locally
At Diageo, creating a sense of belonging for everyone is at the heart
with L4L, over 50% of them women. To deliver an even greater
positive impact, this year we piloted new partnerships with our Managing climate and nature risks
and opportunities by pioneering
customers and distributors to increase employment rates for students
of everything we do. Our 60 employee resource groups (ERGs)
graduating from our programme.
worldwide champion key calendar moments that represent the voice
of our consumers and promote inclusivity. These include events such Through Diageo Bar Academy we provide accessible training and
as Hispanic Futures Month led by 'Connectados'; Black Heritage
Month sponsored by 'AHEAD' (African Heritage Employees at Diageo);
International Day of People with Disabilities in partnership with the
resources aiming to create a sustainable, inclusive, and thriving
hospitality industry that works for all. In fiscal 24 we continued to
deliver in-person and online training to hospitality workers, with an
grain-to-glass sustainability
'We Are All Able' group; the 'Rainbow Network' Pride flag-raising emphasis on women, in Africa (Zambia, Mozambique, Cameroon)
event, and our annual Inclusion Week celebration now in its seventh and India to support their industry progression. Our business depends on natural resources and we are directly affected by
year, seeing over 5,800 employees join across 29 virtual sessions.
Increasing the representation of diverse voices through our changes in climate and the related challenges of nature loss, particularly
In addition to this, fiscal 24 saw new initiatives and innovations progressive marketing practices
including: As one of the world's largest advertisers, we're committed to playing our
freshwater. We continue to address the risks and opportunities that climate
• Neuroinclusion – Diageo's first neurodivergent ERG PRISM launched part across the industry to ensure that everyone, from script to screen, change and nature pose to our business through focused programmes on our
sees themselves represented. We use our marketing to challenge
in Ireland and Great Britain. In partnership with PRISM, our Irish
Brand Homes were accredited by Ireland's National Autism Charity stereotypes and commit investment to address under-representation
most material risks, and greatest opportunities.
‘As I Am’ as autism friendly attractions in November 2023. of diverse voices in media, making mainstream media more inclusive.
LGBT+ Gold Standard – The launch of Diageo India’s ‘Rainbow
•
Network’ which saw members partner with the business to help
In fiscal 24, we are proud to have made significant advancements Introduction Governance
in our accessibility practices across our media and campaigns. We are committed to acting responsibly to mitigate our contribution Given the importance of the risks, we have governance processes
secure the prestigious Gold Award for LGBT+ Inclusion by India’s Working with television station ITV, Guinness made sporting history
Workplace Equality Index (IWEI). to global warming, to conserve the environment on which we rely and in place to ensure that we consider and factor climate and nature risk
by trialling live descriptive audio commentary for two Guinness Six to support our licence to operate and grow. Climate risk is intensifying, into our business operations and planning processes. To supplement
• Guinness Luck of the Dragon – To toast Lunar New Year the Nations rugby games, to help make sure blind and partially-sighted
‘P.A.N' (Pacific Asian Network) ERG partnered with Guinness Open with extreme weather events and temperature rises taking place even our ‘Spirit of Progress‘ governance (summarised on page 50),
fans could follow every aspect of the game. Smirnoff’s biggest global faster than many scientists had expected. While our analysis suggests our sustainability teams and senior leaders hold monthly sustainability
Gate Breweries in Baltimore and Chicago to launch a limited-edition campaign for over a decade, 'We Do We', launched across different
brew and identified two local Asian American and Pacific Islanders our business is resilient in the short- and medium-term, we must take performance reviews. We track water efficiency and carbon reduction
markets shining a light on under-represented groups and advocating action now to ensure our continued resilience, as well as that of the projects and hold quarterly strategic business reviews focusing on
(AAPI) nonprofits to support as part of the festivities. for more inclusive socialising. In the UK, the brand partnered with communities in which we operate. multi-year progress and plans. Significant risks identified are escalated
Promoting inclusivity within our value chain accessibility and inclusive consultancy, 'Tilting the Lens', to execute to enterprise risk management forums at group level. We oversee
an 'access for all' pledge to make socialising and our events more Pioneering grain-to-glass sustainability is how we adapt to climate change
Part of how we promote sustainable growth, and a resilient supply climate and nature risk specifically at the highest level of the company,
accessible. In India, Smirnoff partnered with Kala Ghoda Art festival, and address nature loss throughout our supply chain, mitigating the risks
chain is giving equal access to resources, skills, and employment managing through these governance structures and processes:
one of India’s top exhibition festivals in Mumbai to support the Hijra associated with changing environmental and biodiversity factors. Putting
opportunities in communities where we live, work, source and sell. climate, nature and people at the heart of our strategy is good for our • Executive sponsorship and responsibility is shared jointly between
An important way we deliver this is through Learning for Life (L4L), community, a transgender community facing significant social
exclusion. In Brazil, the brand partnered with IZA, launching a unique business and good for the planet. We believe that through the mitigations the President, Global Supply Chain & Procurement and Chief
our business and hospitality skills programme for people from and adaptations we have in place or planned, our business is resilient to Sustainability Officer (Ewan Andrew) and the Global Corporate
under-represented groups. L4L also tackles barriers faced by other track and dance challenge to support local Afro-Brazilian communities
and Pride activities across the country. the impacts of climate change and nature loss. Relations Director (Daniel Mobley).
under-represented groups including ethnically diverse communities • They are supported by our cross-functional Climate and Nature Risk
and people with disabilities. Our inclusive by design principles include Creating inclusive communities Our Action Plan – ‘Spirit of Progress‘ Steering Group.
recruitment practices, training content and venue accessibility, as well We champion inclusion and diversity in the communities connected Pioneering grain-to-glass sustainability means setting ambitious targets. • The Climate and Nature Risk Steering Group provides regular updates
as modules on inclusion and diversity. to our production sites and sourcing areas. We work with WaterAid Our ‘Spirit of Progress’ targets reflect our most material ESG issues and to the executive sponsors and the Board which allows for potential risks
and CARE International UK to ensure that when we provide Water align to the UN Sustainable Development Goals. We are also proud to and opportunities to be part of strategic decision-making.
Building a thriving and inclusive hospitality Sanitation and Hygiene (WASH) to communities in water-stressed be a signatory to the UN's Race to Zero and Race to Resilience campaigns • The Board retains ultimate responsibility for the oversight of climate-
markets, we also facilitate community dialogues to tackle social reflecting our commitment to climate change mitigation and adaptation. related risks and opportunities.
industry norms that prevent women's equal access to and agency over WASH. • Additionally, several cross-functional working groups are responsible
The issues surrounding climate change are complex, making progress
Ambition by 2030 Number of people reached This year more than 50% of WASH committee members were women against our ambitious targets challenging – for example the measurement for addressing the key risks and opportunities we identify.
Provide business and through Learning for Life and across our programmes in nine countries. We have also expanded and reduction of Scope 3 greenhouse gas emissions, and the development • Any impacts on our consolidated financial statements from climate
hospitality skills to 200,000 other skills programmes in our inclusive approach to our work with smallholder farmers to include of the infrastructure to reduce Scope 1 and 2 emissions are particularly and nature risks and performance against non-financial metrics are
people, increasing fiscal 24 Kenya, Tanzania, Nigeria and Ghana. In partnership with Sightsavers challenging. As we become more advanced in understanding our impacts shared with and considered by the Audit Committee annually.
employability and improving and CARE International UK, we provide equal access to agricultural • Any potential financial impacts from climate and nature risks are
36k
and taking action to address them, we will also evolve our practices and
livelihoods through Learning training and resources for women, youth and people with disabilities. metrics. We regularly review our grain-to-glass sustainability strategy, and in also reviewed and considered by the Audit Committee.
for Life and our other skills See more detail in our ESG Reporting Index. fiscal 24 we further refined it to accelerate our water ambitions and refine Board oversight Audit Committee
programmes our carbon focus. We have reconsidered how we prioritise and report on
Driving sustainable economic impact with diverse suppliers
our most important topics, focusing on our priority performance targets.
We believe diverse-owned and disadvantaged suppliers deliver Executive Committee ownership
200k Performance against supporting goals including some of our packaging and
sustainable economic impact in the many communities where we
waste targets have been separately reported in the ESG Reporting Index.
operate. We champion diverse suppliers through partnership,
n 2030 Target 200k Executive sponsors
advocacy and celebrating success. Reporting
n 2023 progress to date 62k President, Global Supply Global Corporate Relations
In fiscal 24, Diageo was awarded Platinum Top Global Champion We have used the guidance of the Task Force on Climate-related Financial
Chain & Procurement and Director
n 2024 progress to date 98k for Supplier Diversity and Inclusion by WEConnect International. Disclosures (TCFD) framework for reporting. Our Net Zero Carbon Strategy
Chief Sustainability Officer
This award recognises our deep commitment to global inclusive (first published in 2022) outlines how we will achieve our decarbonisation
sourcing from diverse groups including ethnic minority, women, vision across our business and value chain. We continually refine this
LGBT, veteran and disabled-owned businesses. More information strategy, considering the guidance of the UK Transition Plan Taskforce and Cross-functional Climate and Nature Risk Steering Group
on our supplier diversity strategy and programmes can be found in we expect to refresh our strategy in the future to adapt to ever-changing Corporate relations Supply & Procurement Strategy
our ESG Reporting Index. market, infrastructure and policy conditions.
Risk Finance Legal Marketing
Increasingly we are incorporating nature risks and dependencies into
our strategic planning. We have begun to identify and quantify our
material impacts and dependencies, following the guidance of the Working groups assigned to address key risks
Taskforce on Nature-related Financial Disclosures (TNFD)'s LEAP and opportunities identified
(Locate, Evaluate, Assess, Prepare) framework.

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Risk Management 2-3°C, and IPCC scenario RCP8.5 – severe warming of 4-5°C and two
Key climate risks to agricultural raw materials by region
timeframes (to 2030 and to 2050). These scenarios were chosen to
Identifying climate risks and opportunities represent a 'worst case' (RCP8.5) and a 'medium case' (RCP4.5) under
We divide climate risk into physical and transition risks. Physical risks which to assess our resilience. North America Europe Türkiye
include chronic changes, like sea level rises, temperature changes
and acute events like floods, droughts and heatwaves. Transition risks IPCC scenario Description Maize Barley Barley Dairy Grapes
arise from actions to mitigate climate change, such as policy and legal RCP 4.5 Warming of 2-3°C by 2100 Sugar American
changes (e.g. carbon taxes); technology changes (e.g. renewable Wheat Rye Wheat
RCP 8.5 Warming of 4-5°C by 2100 beet white oak
energy) or market changes (e.g. growing consumer demand for more Sugar
sustainable products). Both categories of risk are already occurring Rye Hops Hops Anise
For our own sites and many of our third-party operator sites producing beet
and likely to increase. As temperatures continue to rise globally, we
beverages on our behalf, we analysed climate-related risks they are Sugar beet
continue to assess and prepare for emerging physical and transition risks.
likely to be exposed to. For those that are most strategically important
We are partnering with climate resilience and nature experts to identify or at greatest risk, we carried out more detailed assessments. At each
and assess how generally recognised climate and nature risks apply location, we considered a combination of the different production
specifically to our business. The factors that determine how climate activities (e.g. distilling and packaging) as well as parts of the
change creates risks and opportunities for our business are multiple supportive processes that might be affected (e.g. infrastructure, water
and complex, creating challenges in quantifying the size of the impact supply and energy sources) and the 19 physical climate-related risks
and likelihood of these risks. Notwithstanding, scenario analysis allows that might occur.
us to test the various assumptions related to climate change and how
We also analysed our key suppliers' factories and warehouses; for
they may affect our business. This year, we have further developed our
example those handling our most critical or specialised ingredients
capability in modelling the impacts of climate change under physical
and components, key agricultural commodities, and our most critical
and transition risk scenarios.
distribution routes, to identify which might be exposed to physical risk
Climate change resilience in the future.
Our experience in managing the impact of normal variations in Given the dependence of our business on agricultural raw materials,
climatic conditions, water availability and agricultural yields has made we gave this area particular attention, conducting detailed analyses of
us more resilient and adaptable. We do this through careful planning the most important crops used in our products. This research
in our supply chain and procurement organisation. We work with highlighted the vulnerabilities of each crop type, how their exposure
peers to drive enhanced technological practices at scale, which may increase in the growing regions over time and the possible
optimise crop management and seed quality. We also collaborate on adaptation and mitigation responses to these. The diagram on page
the development of novel high-yielding, drought and temperature- 63 illustrates the main risks the most important commodities are Latin America and Caribbean Africa Asia Pacific
resilient crop varieties. We manage water in a way that makes our exposed to, by region.
operations more resilient and helps our local communities and Agave Barley Maize Rice
agricultural sourcing areas to adapt, with a specific focus on water- In addition to the bulk agricultural raw materials outlined in the illustration,
stressed areas. Since first referencing it in 2010, we have integrated we conducted a high-level analysis of raw materials included in our Sugar Molasses (sugar
Sorghum Cassava
climate risk into our enterprise risk management processes, within our products critical for the characteristics they impart – for example, juniper, cane cane)
principal risk factors. This is now an integral part of our strategic and angelica and liquorice. The results of the agricultural raw material Sugar
Vanilla Barley
assessments have informed and will continue to inform our strategy. cane
business continuity planning.
Sugar
Identifying and assessing our physical risks Risk assessment results – our most important beet
Grapes

To assess the physical risks that we are exposed to and how they may physical risks
develop under various scenarios, from 2021 to 2024, we worked with Our climate risk assessment, without consideration of mitigation or Priority raw materials by volume Climate risks likely to affect agricultural raw materials
climate resilience experts to look at all of our direct operations sites adaptation actions, confirmed three key points:
and key third-party suppliers. We have also included some sites that ò Barley ò Broken rice Precipitation (variability/
1. Water-stress, including drought, is our most significant climate- Temperature Fires
are planned or under construction, to ensure we understand their ò Agave ò Rye extremes)
related physical risk in terms of prevalence, trajectory and potential Hurricane/
exposure and prepare their resilience. This table illustrates how we ò Maize ò Dairy Drought Water-stress
financial impact. It affects our ability to produce our products, the storm
have phased the work: ò Molasses ò Others
access to agricultural ingredients that we need and, ultimately, our
Fiscal year 2021 2022 2023 2024 licence to operate. ò Wheat Flood Disease Sea level
Markets/ Largest Highest Remaining Acquisitions 2. All agricultural raw materials are at risk from climate change; we ò Grapes &
regions supply water risk locations and additions see that risk increasing under the timeframes and scenarios we raisins
assessed centres • Africa • Asia Pacific to operational analysed. Our models suggest that the costs of most commodities ò Sugar
for • Scotland • Mexico • Latin footprint are likely to increase as a result of climate change, although
ò Sorghum
physical • North • India America • Asia Pacific estimates of the precise impact vary significantly depending on the
risks America • Türkiye and • North model used and underscoring the difficulty of these projections. Geographical scope of our physical risk assessments
Caribbean America These factors potentially affect our own operations and those of
Owned/key third-party Agricultural Supplier assets
• Europe • Europe some of our suppliers. Region sites assessed Detailed assessments commodities (factories, warehouses) Ports
3. Acute weather events, including floods, winds, hurricanes/storms,
heatwaves and wildfires, are projected to increase and may North America 14 4 8 86 6
Following each successive year's analysis, the total global physical risk
footprint was refreshed. cause disruption to our operations, although their impact is unlikely Europe 79 13 18 262 27
to be as significant as that of the risks related to water and Asia Pacific 70 11 6 281 9
We conducted physical risk assessments that measured the exposure
agricultural materials.
and vulnerability of the activities at our sites, the key third-party Latin America and Caribbean 47 6 2 251 13
operations and suppliers' assets to 19 climate-related hazards. In
Africa 48 5 6 366 14
addition, we reviewed the vulnerability of the main agricultural
materials and our key distribution routes to climate change. We then Total 258 39 n/a(1) 1,246 69
considered how the climate-related hazards and our site vulnerabilities
would materialise under two different levels of future warming: (1) Some commodities were analysed in more than one location
Intergovernmental Panel on Climate Change (IPCC) scenario RCP
(Representative Concentration Pathway) 4.5 – medium warming of For more details on our scenario analysis approach, see the Non-financial Reporting boundaries and methodologies section on pages 239-241.

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Deep dive – our water scarcity risk Quantitative impact of physical risk determined by Identifying and assessing our transition risks and
Water is vital to our operations and the raw materials we use when creating our products. We give great focus to understanding water-related risks scenario analysis opportunities
so we can mitigate and adapt to them.
This year, we collaborated with climate resilience experts to develop We have performed additional scenario analysis to estimate the
In addition to our physical climate risk assessments to analyse the risks from water availability, water temperature, water quality and flooding, we and implement an automated scenario analysis tool to inform our financial impact of transition risks and opportunities under a Paris-
also conduct water-stress analyses at our sites every two years. climate adaptation strategy. The tool allows us to perform further aligned emissions scenario (RCP2.6). The analysis provided us with
scenario analyses and test numerous sensitivities to defined variables. a better understanding of our risks and opportunities associated
We undertake this work using site surveys and World Resources Institute (WRI) Aqueduct data. We also complete water source vulnerability
For example, we can analyse the sensitivity to climate risks of certain with transitioning to a low-carbon economy. Through this analysis we
assessments (SVAs) to further enhance the insights we need to address risks. By fiscal 23, we worked with our expert partners to complete SVAs at
categories or markets and estimate the impact of the adaptation have refined our financial estimation and gained further clarity on how
22 of our sites located in water-stressed areas; in fiscal 24 we completed SVAs on a further eight sites. This work provides comprehensive insights
measures that we have implemented. This is a significant step forward to respond.
into how our risk profile may vary with climate change, such as the degree of vulnerability to water-stress within our operations and supply chains.
in the integration of climate risk into our strategic planning processes.
We can then use these insights to help us act where we believe it is most needed, whether that is in increased water efficiency requirements, We identified those risks with the most potential impact by looking at
We modelled the chronic risk of water availability, the acute risk of
replenishment commitments or prioritised climate adaptation planning. our agricultural inputs, production and packaging, distribution and
drought, commodity price increases due to climate change and one-
sales channels. Through this analysis, we were able to determine the
off climate-related events.
most important transition risks and opportunities to monitor, including:
Focus on water-stress Water-stress and drought 1. Decarbonisation costs: Changes to our supply chain and production
We have been regularly assessing our wholly-owned production sites for water-stress since 2008. The most recent water risk assessment, conducted Under the warming scenarios we modelled, nearly a quarter of our costs, including carbon taxes and related changes to input costs
in 2023, identified five new water-stressed sites and was updated in fiscal 24 to reflect changes in our operations due to disposals. We follow a sales will be exposed to increased water-stress in both scenarios and (risk and opportunity).
three-step approach to assessing water-stress in our production sites, combining the results from the WRI Aqueduct mapping tool with external timeframes. Under these warming scenarios, the absolute number of
validation from independent hydrologists and internal site surveys encompassing physical, regulatory, social, and reputational considerations. 2. Consumer behaviour: Changes in consumer behaviour to opt for
sites may not increase significantly, but, under both timeframes, those
Below are the operational sites that we have identified as being in water-stressed areas, the sites for which we have conducted source vulnerability more sustainable options, e.g. choosing circular products or locally
sites affected may suffer even greater shortages of water, which may
assessments (SVAs) and the countries where we have identified priority water basins. produced brands (risk and opportunity).
impact our operations and the health and wellbeing of employees at
those sites. 3. Regulatory changes: Shifts in public policies, e.g. restrictions on
packaging, water use, agricultural materials or land that affect our
Analysing the financial impact of drought is particularly difficult due to
Diageo operational sites located in water-stressed areas, and priority water basins in 2024 the many factors involved, including the probability of drought, the
ability to make our products (risk).
length of time operations may be suspended and the impact of any 4. Technology changes: Adopting low-carbon production of our
adaptation or contingency measures. We have modelled what we are products and packaging and the associated risk of not doing this
currently able to through scenario analysis, our own assessment of fast enough (risk and opportunity).
vulnerability and with highly conservative assumptions (e.g. limited
Of those risks and opportunities outlined above, the greatest impacts
downtime in all sites due to drought). We have concluded that, by
28 33 are likely to arise from consumer behaviour and from input cost
2030, we do not anticipate that drought will have a significant impact
25 27 increases related to the cost of decarbonisation. The table on page 66
34 on our operations (including key third-party operations) or on our
26 29 summarises the physical and transition risks and opportunities we
financial condition. Beyond 2030, it is more difficult to analyse, given
21 22 30 consider the most important.
20 the increased uncertainties inherent in modelling over a significant
23 31
19 32
period of time. Our models show that adaptation actions are needed, Quantitative impact of transition risks and
24 particularly in the period between 2030 and 2050 in order to prevent
impactful interruption to our operations and supply chains. If no action opportunities
1 is taken, the outcome may potentially result in lost sales. In our strategy Transitioning to a low-carbon economy presents both risks to and
7
2 4 5 10 15 section below, we outline the interventions we are currently opportunities for our business. Through our scenario analysis, we
6 16
11 implementing to future-proof our business against drought. have been able to estimate the impact on our operations and
3 17
8 financial condition to 2030, concluding that it is unlikely to be
9
12
13
18
35
Commodity scarcity and pricing significant over that period – even assuming that we bear any
Sites Commodity price increases due to climate change are more difficult to changes in production costs.
ò
estimate, with the models we used producing highly varied estimates.
14 ò Sites where an
Climate risk is likely to result in a projected price increase for the
Packaging is the key transition risk and opportunity
SVA has been
carried out majority of our commodities. Our scenario analysis helps us build in We identified that the key driver of transition risk to 2050, was our use
commodity price risk into our raw material procurement strategies, of glass, which could contribute to an overall production cost increase.
ò Countries where
we have identified particularly for crops with unique provenance (e.g. agave and vanilla) We noted that lower transport and energy costs would partially
priority water basins or high sensitivity to growing conditions (e.g. hops). Our modelling mitigate this impact. We acknowledge that extending the analysis to
suggests the biggest risks of higher prices in 2030 and again in 2050 2050 is subject to many variables and ambiguities and, therefore,
Mexico Guatemala Brazil Uganda South Africa Türkiye India
are likely to impact agave, sorghum, rice, wheat, dairy and hops. substantial uncertainty. However, it allows us to estimate what a 'worst-
El Charcon Zacapa Itaitinga Kampala Isipingo Alaşehir Nashik Malkajgiri There are considerable differences between models, but the impacts in case scenario' may look like, based on our best available modelling of
both 2030 and 2050 may be significant. cost trajectories.
Agricultural lands Venezuela Ghana Tanzania Kenya Şarköy Baramati Kumbalgodu
Our modelling has allowed us to estimate the impact on our
La Primavera Valencia Kaase Mwanza Kisumu Acıpayam Aurangabad Asansol Flooding and tropical storms operations and the financial condition of some of the possible
Achimota Moshi East African Maltings Nevşehir Alwar Gopalpur Flooding and storms are the next most likely physical risks to affect our mitigating actions we take, which can include pricing, improvement in
financial performance, given the risk of damage to our sites and energy use, sourcing and using lightweight glass, reducing the carbon
Nigeria Dar es Salaam Tusker Tarsus Pioneer Indonesia
disruption to our supply of agricultural ingredients. Although the direct intensity of glass production and using returnable or reusable
Lagos Seychelles Taşel Nacharam LKJ Packaging risk to our sites from acute physical events will increase, our scale, packaging. The results of the scenario analysis of both physical and
Seybrew global supply footprint and capabilities in resilience management transition risks are reflected in our assessment of viability and
mean we are well-positioned to ensure flooding and storms do not impairment (see page 86).
interrupt our overall ability to serve our customers or have a significant
financial impact on a global scale.
Heatwaves, wildfires and landslides are also identified as acute
physical risks. Their potential financial impact is not modelled in our
scenario analysis but adaptations to these risks are planned where
they are projected to increase.

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Summary of our most important climate risks and opportunities Integrating nature risk into our climate risk strategy operations, supply chain, communities and advocacy. We are prioritising
In alignment with the recommendations of the Taskforce on Nature- the integration of our water programmes with other actions we are
Risks related Financial Disclosures (TNFD), we have commenced assessing taking to address impacts on climate, nature and people. For
Risk description Water scarcity Agricultural raw material availability our nature-related dependencies, impacts, risks and opportunities. We example, a key development in our refreshed strategy is that we will
Increasing water scarcity and water-stress affects our Climate-related impacts on agricultural material conducted a nature baseline across our supply chains during fiscal 24. extend our water replenishment and collective action programmes to
ability to continue to source from and produce in water- availability cause scarcity or price increases We identified material pressures across the value chain and estimated include indirect water use in our upstream supply chain. As a result, we
stressed areas our contribution to environmental impacts. We identified the will increase the number of our priority basins to prioritise action. We
Category Physical – chronic Physical – chronic geographic areas where these could be harmful to nature, using will also better leverage our brands to deliver on our goals and
datasets covering four dimensions of nature: land, water, biodiversity increase our focus on engaging with governments to encourage
Timeframe(1) Short-term (one to five years), medium-term (five to 10 Medium-, long-term progressive climate and water policy and investments. Our ambitious
and ecosystem services. Our assessment encompassed our
years) and long-term (10 to 30 years)
agricultural upstream supply chains, our direct operations and an action on water will help to ensure our sites, supply chains and
Impact (if not mitigated) Moderate(2) Moderate(2) initial assessment of some of our packaging supply chains. communities build resiliency in a changing climate.
Response examples • Improvements in water use efficiency in our operations, • Regenerative agriculture adaptations Results of our nature risk assessment
with more ambitious targets at water-stressed sites • Smallholder farmer support The greatest risks are to our agricultural raw material sourcing arising
Water efficiency
• Water replenishment plans in 100% of water-stressed • Development of drought-resistant ingredients (e.g. Target by 2030 Percentage change in water
from water scarcity, as much of our agricultural materials are grown in
areas sorghum, anise and barley varieties)
• Collective action activities to improve water security in • Alternative sourcing locations
water-stressed regions. The results aligned with the observations from Reduce water use in our efficiency index from the prior
Diageo's ‘priority water basins’ • Substitution with alternative crops our climate scenario analysis. The raw materials with the highest operations with a 40% year – in water-stressed areas
relative nature impact were assessed as agave, broken rice, improvement in water use
• Nature-based solutions that support climate mitigation,
adaptation and water replenishment
•
•
Increased use of cover cropping
Improved water management in agricultural practices sugarcane, sorghum and barley. efficiency in water-stressed areas (6.2)%Δ
• Exploring alternative formats and ingredients with Although we have been conducting climate risk assessments for
potential to reduce water use several years, this nature risk assessment is a new analysis and only a (6.2)%
• Rainwater harvesting, Aquifer recharge, Dam de-silting subset of ecosystem services could be incorporated into the model. 100.0%
Risk description Input costs Consumer behaviour We have made good progress on understanding our dependencies 83.9% 78.7%
Policy changes (carbon taxation, shift to renewables) Consumers prioritise purchasing more sustainable and impact on nature and have begun to weave nature into our 60.0%
(16.1)%
cause increases in input costs products, rejecting those perceived to have a negative broader strategy. We intend to continue our assessment of and (5.2)%
environmental impact response to nature-related dependencies, impacts, risks and
Category Transition – policy/legal Transition – market opportunities, aligned to the recommendations of the TNFD.

Timeframe (1)
Short-, medium-term Short-, medium-, long-term Our strategy for grain-to-glass sustainability Fiscal 20 Fiscal 21-23 Fiscal 23 Fiscal 24 Fiscal 24 Fiscal 30
Impact (if not mitigated) Moderate(2) Moderate(2) Our 'Pioneer grain-to-glass sustainability' strategy acknowledges the baseline change cumulative change cumulative target
breadth of the environmental and social consequences of a changing
Response examples • Supply chain decarbonisation • Reduced packaging weight climate and our dependencies on nature and people. It recognises
• Engaging suppliers in low-carbon technology options • Increased recycled content in packaging
Target by 2030 Percentage change in water
how interlinked these issues are and how deeply connected and Reduce water use in our efficiency index from the prior
for their operations • Developing circular product offerings dependent our value chain is on nature, broader society and its operations with a 30% year – across the company
• Reduced packaging weight • Purchasing more sustainably-grown raw materials evolving expectations. We continue to learn and evolve our approach, improvement across the

Opportunities
• Communicating these changes to consumers aiming to take action where it has the most material impact. company (3.7)%Δ
Our targets are mapped against our most material issues, water and
Opportunity description Supply chain decarbonisation Innovation in sustainable products and packaging carbon, and reflect the complexity of the risks and opportunities we (3.7)%
Reducing our Scope 1, 2 and 3 emissions lowers our Developing more sustainable products meets consumers face. By taking action and delivering on our commitments, we are 100.0%
exposure to carbon taxes and related costs, and increasing demands taking steps to make our business more resilient while preserving our 87.7% 84.4%
improves our reputation with customers and consumers licence to operate and grow. 70.0%
(12.3)% (3.3)%
Category Transition – policy/legal Transition – market Our carbon and water roadmaps outline the projects needed to
Timeframe(1) Short-, medium-term Short-, medium-term deliver our 2030 targets. These plans are backed by capital
Impact (if not realised) Moderate(2) Moderate(2) investment and undergo regular and rigorous stress testing to build
confidence in our ability to deliver our targets. We are learning and Fiscal 20 Fiscal 21-23 Fiscal 23 Fiscal 24 Fiscal 24 Fiscal 30
Response examples • Decarbonisation programme and capital investment in • Innovation to deliver more sustainable products (e.g. improving our plans and are extending them across our supply chain. baseline change cumulative change cumulative target
our operations refillable and reusable packaging, alternative Enhancing and digitising our sustainability data and reporting
• Renewable energy investments packaging materials) framework has and will continue to provide more detailed insight into
• Regenerative agriculture programme • ecoSPIRITS (reusable glass packaging format), lower what is required to deliver our strategy. Following a detailed review of our water use efficiency methodology in
• Collaboration, partnerships and capability building waste, lower carbon distribution technology fiscal 23, we adopted an enhanced measurement methodology – the
within our supply chain We expect to invest around $1.2 billion between 2020 and 2030 to water efficiency index. This shows the aggregated change in water use
accelerate our ambition to preserve water and take a more focused efficiency across our production processes (brewing/packaging and
(1) Timeframes chosen align to those used in our scenario analyses, where short-term (one to five years) reflects the typical strategic planning timeframe, medium-term (five to 10 years) approach to carbon reduction, with around $0.3 billion invested so far. distilling) weighted by their water use. Brewing/packaging do not require
includes the timeframe to 2030 which our scenarios model, and long-term (10 to 30 years) includes the timeframe to 2050 which is also modelled by our scenarios. Much of the progress within our own operations comes from our sites maturation; the process occurs closer to the sale of our products. However,
(2) 'Low' impact is defined as having a negligible impact on customer service, or an absorbable disruptive impact on one or more brands. 'Moderate' impact is defined as disruption to
production/supply chain creating an inability to service a small portion of our customer base, the impact of which is manageable; or a significant short-term impact on one or more of
in Africa and India. We are beginning to see the impact of our distillation can occur years before a product is packaged and sold.
our core or local priority brands that is absorbable by the business. 'High' impact is defined as an inability to service a significant portion of our customer base, or major reputational investments in our North America and Europe regions, with more Therefore, efficiency in brewing/packaging is measured against the litres
damage. action to come as we head toward 2030. of product packaged, while distillation efficiency is measured against the
litres of pure alcohol (LPA) produced, addressing the maturation period.
Preserve Water for life This year, we used 29,820 m3 of water for agricultural purposes on land
Water is the most important ingredient in our products. It is also a under our operational control in Mexico and Türkiye. We report this
precious shared resource that is facing increasing pressure in many separately from water used in our direct operations and do not include it in
parts of the world, due to the impacts of climate change and the our water efficiency calculations. More detail can be found in our Reporting
competing demands for freshwater resources. As outlined in our boundaries and methodologies section on pages 238-257. Our focus on
physical risk assessment, it is our most important climate risk. water-stressed areas has continued to deliver strong water use
In fiscal 24, we undertook a detailed review of our water strategy to efficiency performance with a 6.2% improvement versus fiscal 23 and
assess how we are addressing risks and opportunities and to further 21.3% improvement since our fiscal 20 baseline. This was primarily
accelerate our impact and approach. The results of this review driven by the continuous improvement initiatives at our sites in East
underpin our current four-pillar strategic approach, focusing on Africa, where we further optimised our water recovery plants.

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Our performance across the company on water use efficiency has water quality and water availability benefits to the catchment. In Kenya, we Our carbon commitment and learnings We recognise that policy frameworks and market signals are not
improved by 3.7% in comparison to the previous year and by 15.6% completed nine clean water and sanitation projects in schools and villages always incentivising the necessary pace of change across all markets
We are committed to accelerating towards a low-carbon future and
since our fiscal 20 baseline(1). We also delivered efficiency improvements in our supply chain, as part of our replenishment programme. In Türkiye, in which we operate. We are focusing on the areas where we can
following a science-based approach to drive the pace and scale of
in our Scottish sites, resulting from better performance of the reverse we continued to progress our irrigation improvement project with our affect the biggest positive impacts across our value chain, partnering
change required. Our targets to achieve net zero emissions(1)
osmosis plant at our Cameronbridge site. grape farmers, increasing the number of hectares of vineyards. Where with others and advocating for change to unlock some of the external
demonstrate our commitment to mitigating our impact on climate
appropriate, we implemented nature-based solutions which this year challenges we face. The pathway that we are pursuing, for the critical
Four years into our action plan, we are ahead of our water use efficiency change. To achieve this goal, we have developed decarbonisation
included reforestation in Kenya and infiltration in India. enablers that will be required to deliver against it, is outlined below.
commitments, both globally and in water-stressed areas. Our efforts to roadmaps detailing the measures we are taking and will take to
date have been primarily focused on more established production An important part of our approach on water is that it remains people-centric. reduce emissions and ensuring that new sites are developed with low Our risk assessment and scenario analysis inform us that consumer
regions with higher exposure to water-stress, like Africa and India. We have committed to providing access to clean water, sanitation and emission technologies embedded from the outset. Across our supply behaviour is an important transition risk and companies that do not
Future, planned divestments in areas where we have already made hygiene (WASH) in water-stressed communities near our sites and in water- chain we are clear on the decarbonisation levers that we control and decarbonise their operations will suffer, as consumers continue to
strong progress, for example Guinness Nigeria, may result in a slowed stressed areas that supply our raw materials. In fiscal 23, we reached our the solutions that require collaboration with others to progress. demand more sustainable products. Decarbonisation requires
progress versus our baseline, however, we will continue to drive 2030 target, meaning all nine of the markets included in our target invested investment and partnership by working with suppliers to innovate in
We acknowledge that realising this scale of transformation will require
improvements at remaining sites and will take further action at our sites in WASH projects since 2020. We will maintain this commitment, investing low-carbon manufacturing techniques.
partnering for systemic change and delivering decarbonisation
in Latin America, which have seen significant expansion. every year to 2030. For more information, refer to our ESG Reporting Index.
solutions in areas outside our direct control. Not all of our suppliers
As we continue to install or increase the capacity of water recovery (Δ) Within PricewaterhouseCoopers LLP’s (PwC’s) independent limited assurance scope – and partners are at the same stage of the net zero journey, nor is the
technologies across our sites, the volume of water recovered and see pages 258-261 of this Annual Report. For Reporting boundaries and necessary external infrastructure always available at scale.
methodologies, see pages 238-257
recycled from water-stressed areas reached 890,476 m3 in fiscal 24 –
equivalent to 17% of total water used in water-stressed areas. Our pathway to net zero(1)
Innovation and new technologies are critical to meeting our water use
Water collective action NEAR-TERM TARGETS LONG-TERM TARGETS
efficiency targets. We are partnering with Diageo Sustainable Solutions Target by 2030 Percentage of priority water
RE100 Direct Operations Net zero across total
(DSS) to find, test and embed the new technologies into our roadmaps. Engage in collective action in all basins with collective action 100% renewable value chain
In fiscal 24, we launched a DSS innovation round addressing five priority water basins to improve participation GHG emission GHG emission ‘Spirit of Progress’ targets electricity sourcing (all emission scopes)
targets set for targets set for 2020, set for 2030 + 2050
different water challenges, including water use efficiency and water accessibility, availability
67%
2015, 2007 2007 baseline Absolute Reduction Absolute Reduction
maximising the value of wastewater streams. We are concluding our and quality and contribute to baseline
Absolute reduction RE100 50% SCOPE 1: net zero SCOPE 1: net zero
4T2 Sensor pilot at our Leven site, optimising water use associated with net positive water impact SCOPE 2: net zero SCOPE 2: net zero
SCOPE 1+2: (50)% Science-Based Target Initiative renewable electricity
clean-in-place systems through sensor technology. We are now SCOPES 1-3: (30)% approves near-term targets (2021) sourcing by 2025 SCOPE 3: (50)% SCOPE 3: net zero
planning a scale adoption of this technology across other sites. 2007 baseline 2020 baseline 2020 baseline

(1) Under the previous water efficiency methodology, water use efficiency per litre of product
12
packaged (litres/litre) - across the company was 4.1Δ, measured in litres of water per litre
of product packaged (litres/litre). The percentage change in litres of water used per litre n 2030 Target 12
€100m investment to decarbonise
of product packaged from the prior year - across the company was a 2.8%Δ 2008 2015 2020 Published 2024 2030 2050
n 2023 progress to date 6 Diageo Net St. James’s Gate brewery announced
improvement compared to fiscal 23 and 11.2% improvement compared to our fiscal 20
Zero Carbon
baseline. Water use efficiency per litre of product packaged (litres/litre) – water-stressed n 2024 progress to date 8 Packaging
Strategy Investment to increase biomass, biogas
areas was 3.2Δ, measured in litres of water per litre of product packaged (litres/litre). The initiatives & biofuel use across Scotch sites
percentage change in litres of water used per litre of product packaged from the prior lower Scope
Diageo joins Race
year – water-stressed areas was a 6.6%Δ improvement compared to fiscal 23. Under the Recognising that businesses need to partner with others to build First scotch 3 emissions Partnership
to Zero Campaign Scale up of brands in EcoSPIRITS
new methodology, the water efficiency index – across the company was 84.4Δ and the
climate resilience and ensure continuity of operations, our collective bioenergy plants with Encirc to circular packaging EcoTOTE format
water efficiency index – water-stressed areas was 78.7Δ in fiscal 24. using distillery Diageo joins RE100 Diageo announces produce net zero
action programme embraces a collaborative approach towards water commitment
co-products in first carbon-neutral(3) glass bottles
stewardship in our 12 priority water-stressed basins across 10 countries. the world distilleries(4) Continuation of direct operations
Water replenishment The collective action programme involves multi-stakeholder
Scope 1 and 2 GHG emission reduction
Biomass and solar plans (see approach below)
Target by 2026 Cumulative change in partnerships including other companies, NGOs, public sector investment across
Achieved (33)% Achieved 2020 targets
Replenish more water than volumetric replenishment organisations and communities. Together these partnership initiatives reduction in Scope - SCOPE 1+2: (50)%
East Africa Continuation of Supply Chain Scope 3 greenhouse gas emission
we use for operations in capacity of projects developed aim to pool knowledge, expertise and resources to identify and 1+2 emissions - SCOPES 1-3: (33)% reduction plans (see approach below)
water-stressed areas from fiscal 16 to fiscal 24 implement solutions to address shared water challenges.
Our approach to delivery
70% In fiscal 24, through our partnership with The Nature Conservancy, we
started two more collective action initiatives; one with WaterAid under
the Lagos Aqua Initiative in Nigeria’s Ogun basin to transform WASH Scope 1 (6%)(2) Scope 2 (0.1%)(2) Scope 3 (94%)(2)
100.0% services in Lagos; and another in the Gediz basin in Türkiye for
conservation of water resources and enhanced fertiliser management. 1. Embedding energy efficiency into our 1. Continue to switch to renewable For Scope 3 greenhouse gas emissions, we will shift our
n 2026 Target 100 % processes. electricity. focus to delivering triple wins through a refreshed strategy
We were named the basin champion for two more basins in fiscal 24 – the 2. Progressing to 100% renewable 2. Create additional renewable energy focusing on three pillars of engagement, prioritising our
n 2023 progress to date 71.5% Santiago Lerma River Basin in Mexico and the Upper Godavari River Basin electricity, fuel and heat. capacity to power our sites, exporting level of engagement and investment to where we have the
n 2024 progress to date 70.0% in India. This is in addition to being basin champion for Kenya’s Upper Tana 3. Renewable energy certificates, surplus energy to the local grid, greatest level of control and in those areas that are most
Basin. As basin champion, Diageo commits to providing overall leadership innovations, partnerships and carbon through on-site developments and critical to our license to operate. These three workstreams
on efforts to rejuvenate selected basins. This is a strong reflection of Diageo’s removals to close the gap(1). using power purchase agreements. include 1) Diageo enabled projects, 2) Strategic innovation
Our water replenishment programme continues to deliver positive results, commitment to addressing shared water challenges and acknowledges and 3) Selective engagement (collaborative action).
with another strong year delivering local water projects. We are on track to that our efforts can only be successful when approached collectively.
reach our 2026 target of replenishing more water than we use for our Enabled by scalable technology and process innovations and transformational partnerships to decarbonise the end-to-end supply chain.
operations in water-stressed areas. In fiscal 24, we implemented projects Advocacy
that have the annual volumetric replenishment capacity of 1,230,000 m3Δ Water is under pressure around the world, and the issues around preserving (1) Net zero emissions are reached when anthropogenic (i.e. human-caused) emissions of greenhouse gases into the atmosphere are balanced by anthropogenic removals over a
of water. Despite the cumulative progress against this target, the year on it are challenging and complex. It will take multilateral action to address the specified period. A science-based approach to net zero covers emission scope 1, 2 and 3 with direct abatement of approximately 90% from our emissions baseline and up to 10% of
year performance can vary because of the multiple projects and challenge of the water, climate and nature crisis. At COP28, we were high-quality certified carbon offsets to neutralise hard-to-abate residual emissions to close the gap to zero.
performance changes. Cumulatively (fiscal 16 to fiscal 24) we have among businesses calling for more action on water and climate resilience. (2) This is an estimate based on current management expectations; the underlying assumptions and future developments may change over time, which would cause changes to management
expectations and this information. See pages 62-66 for more about the potential impact of climate change on Diageo and our current plans to manage and mitigate risks.
replenished 70% of our estimated fiscal 26 volume. We also attended the UN SDG Summit in New York and World Water (3) ‘Carbon-neutral’ or ‘carbon neutrality’ refers to an outcome where GHG emissions have been neutralised through a combination of emissions reductions efforts and the purchase of
Week in Stockholm to share our ambition and learnings, and advocate for carbon offsets/credits resulting in no net release of carbon dioxide. Any carbon offset purchases for discrete carbon neutral claims are specifically for certification and are not included
Overall, in fiscal 24, we completed 30 replenishment projects in 10
more companies and partners to scale up collaboration. We are members in annually reported Diageo greenhouse gas emission footprint.
countries, cumulatively implementing over 120 projects between fiscal 21 (4) Four carbon-neutral facilities have been assessed and certified using PAS 2060 – Carbon Neutrality Standard and Certification (Scope 1 and 2, Direct Operations boundary). We also
of leading international organisations such as the Water Resilience Coalition,
and fiscal 24. In Jalisco, Mexico, we were proud to partner with the local require site emissions be reduced in alignment with an equivalent net zero trajectory, allowing less than 5-10% of residual emissions to be neutralised via the purchase of carbon offsets.
Alliance for Water Stewardship and we have strategic partnerships with Any purchased carbon offsets for these specific carbon neutral claims are not applied to fiscal 24 reported greenhouse gas emissions.
authority to invest in a significant wastewater treatment plant, which will
WaterAid and The Nature Conservancy that support this call to action.
also redirect treated water to be used by local farms – delivering both

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Our continued reduction of greenhouse gas emissions has driven a

Emissions from our direct operations cumulative saving of 23.8% in greenhouse gas emissions versus our Emissions from across our value chain Regenerative agriculture programmes
fiscal 20 baseline. We have delivered these savings through
Target by 2030 Percentage change in Target by 2030 Percentage change in Target by 2030 Number of regenerative
investment in new and existing bioenergy plants in East Africa,
Become net zero carbon in absolute greenhouse gas Scotland, India and Mexico, where we have replaced fossil fuel use
Reduce our value chain absolute greenhouse gas Develop regenerative agriculture programmes
our direct operations (Scope 1 emissions (direct and indirect (Scope 3) carbon emissions emissions (ktCO2e) from the agriculture programmes in initiated
with liquid biofuel. We have also switched to renewable natural gas in
and 2) by 50% five key sourcing landscapes
3
greenhouse gas emissions by Canada and Scotland. prior year

(5.0)%
weight (market/net based))
We source renewable electricity in sites such as Africa and LAC
from the prior year
that has helped us reduce our Scope 2 emissions from our fiscal 5
(10.7)% Δ 20 baseline.
We are rolling out innovative and proven technologies at our sites,
(5.0)%
n 2030 Target 5
guided by mature decarbonisation roadmaps and detailed capital n 2023 progress to date 1
(10.7)% 19.5% 119.5% 113.5%
investment plans. We are making progress on reducing our direct 100.0% n 2024 progress to date 4
100.0% operations emissions, with our planned rate of reduction increasing
85.3% (6.0)%
50.0%
76.2% as we approach 2030, through the optimisation of energy use and
(14.7)% conversion to renewable energy sources. In fiscal 24, we progressed our ambition to help farmers test
(9.1)% regenerative agriculture across some of our key ingredients including
For more information on our use of renewable energy, please refer to Fiscal 20 Fiscal 21-23 Fiscal 23 Fiscal 24 Fiscal 24 Fiscal 30 barley, wheat and agave. Whilst these early stage programmes are
Net zero
our ESG Reporting Index. baseline change cumulative change cumulative target important, we recognise the challenges facing regenerative
(1) We assess and certify sites using PAS 2060 – Carbon Neutrality Standard and agriculture. These can only be addressed through mobilising increased
Fiscal 20 Fiscal 21-23 Fiscal 23 Fiscal 24 Fiscal 24 Fiscal 30 Certification (Scope 1 and 2, direct operations boundary). We also require that site collective action, simplifying the ask of our suppliers and designing
baseline change cumulative change cumulative target emissions be reduced in alignment with an equivalent net zero trajectory, allowing Our value chain (Scope 3 greenhouse gas emissions) target is to achieve
shared transition plans.
less than 5-10% of residual emissions to be neutralised using the purchase of carbon an absolute reduction of 50% by 2030 (and 100% by 2050) compared to
offsets. Any purchased carbon offsets for these specific carbon neutral claims are not our fiscal 20 baseline. Compared to fiscal 23, our Scope 3 greenhouse gas We launched three new regenerative agriculture programmes in the
In fiscal 24, we decreased greenhouse gas emissions from our applied to fiscal 24 reported greenhouse gas emissions. emissions were reduced by 5%, a significant improvement on the previous fiscal, with two in key geographies.
direct operations by a further 10.7%, continuing our year-on-year year. Scope 3 performance depends on many internal and external
reduction towards our 2030 target. Investing in renewable energy Total direct and indirect greenhouse gas factors. In the current year, the improvement has been driven primarily by
For the Scotch programme, 20 farms across three regions are
across our global footprint has enabled us to reduce our emissions, participating and engaging with partners to reduce their carbon
despite production increases in brewed and distilled volumes across emissions by region by year resource efficiency, improved inventory management, fluctuating demand
footprint and inform future agronomic improvements. Through our
and logistics and distribution optimisation, partially offset by increased
several markets. Total direct and indirect greenhouse gas emissions by weight (market/net partnership with James Hutton Institute, we commissioned research
based) (1,000 tonnes CO2e) emissions capital expenditure associated with our grain-to-glass
trials on cover crops and seed mixes to analyse their ability to improve
This year, our performance has benefitted from increased biomass use sustainability strategy.
Region 2020 2021 2022 2023 2024 the soil. We have also looked at how to best integrate cover crops and
at our existing bioenergy plants in Mexico, East Africa and Scotland Despite a positive performance in fiscal 24, we are still showing seed mixing into rotations to reduce fertiliser application.
North America 127 125 100 83 86
and further roll out of liquid biofuel at a number of scotch distillery and an increase of 13.5% compared to our fiscal 20 baseline, a year
malting sites. We continue to use renewable natural gas in Canada Europe 152 129 145 195 179 Our tequila regenerative agriculture programme has focused on
impacted by Covid-19, resulting in artificially low Scope 3 emissions.
and Scotland, where we directly contribute Diageo distillery co-product Asia Pacific 32 10 10 9 7 delivering a robust baseline and agronomic assessment across 19 of
Performance since then has been impacted as a result of business
feedstock to generate our green gas certificates. We also reopened our most strategic agave suppliers and on our own Don Julio agave
Latin America and growth and also a reflection of the challenge of reducing emissions
our iconic Port Ellen Scotch whisky distillery, operating on renewable Caribbean 22 27 38 25 9 farm. The results provided insights on how to decarbonise existing
across the value chain.
fuel and electricity, with a carbon-neutral commitment.(1) practices and improve nutrient management. We have set up a
Africa 137 154 132 89 77 We recognise that external factors can help or hinder our intended demonstration area on our farm to conduct improvement trials for
Across our other sites, we have been converting fossil fuel energy use Diageo (total) 470 445 424 401 358Δ progress. We are improving and refining our decarbonisation engagement with our suppliers.
to zero carbon renewable electricity. Several incremental projects at roadmap as we learn, leading to increased engagement and
our packaging sites are expected to deliver their first full year of We entered the second year of the Guinness barley regenerative
planning with key partners along our supply chain to address some
benefit in fiscal 25, with the switching of our Runcorn beer packaging programme in Ireland. Through our collaboration with Agricarbon, our
of these opportunities and challenges. However, there are still many
site natural gas combined heat and power plant to imported soil carbon measurement partner, on-the-ground field measurements
hurdles to overcome as outlined above in our pathway to net zero.
renewable electricity through the grid. have been used to establish a baseline which will act as a reference as
In fiscal 25, we will evolve our Science Based Targets Initiative (SBTi) targets we continue to identify additional levers to increase soil carbon stocks.
by disaggregating our Forest, Land and Agriculture (FLAG) emissions for
Streamlined Energy and Carbon Reporting (SECR) separate reporting where appropriate. As a first step, we are further Making packaging more sustainable
analysing all categories of material emissions in our value chain to reflect We continue to respond proactively to legislation and consumer
2020 2021 2022 2023 2024
the changes in our business since we first set SBTi targets. These steps, demand for sustainable products. We are committed to reducing our
Total Global energy consumption (MWh) 3,310,508 3,396,078 3,560,231 3,502,997 3,459,068 together with enhancements to our decarbonisation roadmap, will provide value chain carbon footprint by reducing packaging weight,
Market based (net) intensity ratio of GHG emissions clearer direction for our business and our partners. increasing our recycled content, reducing single use packaging and
(g CO2e per litre of packaged product) 139 122 105 105 96Δ deploying and scaling circular business models.
Moving towards regenerative agricultural sourcing
Total UK energy consumption (MWh) 1,056,931 1,064,795 1,091,153 1,244,375 1,247,734 Many consumers want to transition to sustainable products but, in practice,
Businesses have a shared interest in helping to restore the natural resources
Direct (MWh) experience barriers to being able to do so. To address these barriers, we
924,022 927,917 951,302 1,097,353 1,092,867 on which we all depend. We are committed to making our agricultural
are focused on value, desirability and delivering sustainable objectives.
Indirect (MWh) 132,910 136,878 139,851 147,021 154,867 supply chains economically, socially and environmentally sustainable.
Aligning with our customers is critical to making progress alongside
Total UK direct and indirect GHG emissions (kt CO2e) 86 71 84 136 121 consumers. In anticipation of future trends, we are piloting a number of test
and learn initiatives including circular business models.
Scope 1 86 71 84 136 121
Scope 2 0 0 0 0 0 We are leveraging Diageo-enabled initiatives and partnerships and
supplier programmes. For example, we have partnered with
(Δ) Within PricewaterhouseCoopers LLP’s (PwC’s) independent limited assurance scope – see pages 258-261 of this Annual Report. For Reporting boundaries and methodologies, see pages ecoSPIRITS to pilot the use of refillable spirits packaging (ecoTOTES) in
238-257. the on-trade across 18 markets over the next three years. Each
refillable container is designed to be used up to 150 times and aims to
eliminate up to 1,000 single-use bottles over their lifespan.

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Other examples of how we are reducing our packaging footprint in In fiscal 24, we continued to focus our efforts across our core portfolio How we have reported consistently with the recommendations of the Task Force on Climate-related
fiscal 24 include: and we reduced our packaging weight by 14%, in comparison to fiscal
23. This is 1% below our 2020 baseline, despite increased production Financial Disclosures (TCFD)
• We launched our Baileys aluminium bottle in selected international In this year's disclosures, we have complied with the FCA's Listing Rule 9.8.6(R). Our climate-related financial disclosures are considered to be
volumes from fiscal 20 to fiscal 24.
airports. The new aluminium bottle is five times lighter than the consistent with the TCFD's recommendations and recommended disclosures, as illustrated in the index below.
traditional 70cl Baileys bottles, with an anticipated 44% reduction in We have made significant progress in fiscal 24, with some pivotal shifts
carbon versus the current glass bottle. across our beer and ready to drink portfolios, transitioning targeted TCFD recommendation Consistency
• We rationalised select sizes of our glass beer bottle portfolio and products to aluminium cans and saving 2,000 tonnes of glass per
launched our lightweight design, saving 3,000 tonnes of glass per annum. Our ambition to eliminate cartons, wherever reasonably GOVERNANCE See page 61
annum. possible, has resulted in the elimination of 9 million cartons across our a. Describe the board’s oversight of climate-related risks and opportunities.
• We redesigned our Johnnie Walker Blue Label range, reducing tequila portfolio – in particular, across our Don Julio range – reducing b. Describe management’s role in assessing and managing climate-related Yes. See page 61.
weight across the portfolio of sizes and contributing to the overall our packaging weight by 591 tonnes. risks and opportunities.
weight saving of 170 kilotonnes of glass purchased in the year.
RISK MANAGEMENT See pages 62-66
Change in percentage of recycled content (by a. Describe the organisation’s processes for identifying and assessing climate-
Reducing packaging weight and increasing weight) in fiscal 24 related risks. Yes. See pages 62-66. Having completed comprehensive risk
recycled content
Target by 2030 Percentage change of total 3% b. Describe the organisation’s processes for managing climate-related risks.
c. Describe how processes for identifying, assessing and managing climate-
assessments our focus is now on ensuring appropriate
adaptation plans are in place for all risks identified.
Continue our work to reduce packaging (by weight) in related risks are integrated into the organisation’s overall risk management.
total packaging and increase fiscal 24 60% STRATEGY See pages 67-72
recycled content in our
packaging (delivering a 10%
reduction in packaging
(14)% n 2030 Target 60% a. Describe the climate-related risks and opportunities the organisation has
identified over the short-, medium-, and long-term.
We have described risks and opportunities for our business, in all
of our owned, operating locations and our most important third-
n 2023 progress to date 39% party operations, as well as the impact of those risks and
weight and increasing the b. Describe the impact of climate-related risks and opportunities on the
percentage of recycled n 2024 progress to date 42% opportunities on our strategy. We have modelled the resilience
organisation’s businesses, strategy and financial planning. of our strategy under three climate-related scenarios. See pages
content in our packaging to
60%) c. Describe the resilience of the organisation’s strategy, taking into 239-241. We have co-developed a scenario analysis tool with
In fiscal 24, our recycled content totalled 42%. For glass, we increased consideration different climate-related scenarios, including a 2°C or lower climate experts to enable regular updates to our scenario
recycled content in our Cîroc portfolio to 26% and across our green glass, scenario. analyses.
(14)% we continue to push towards 95%. We are working across our brands to METRICS & TARGETS See pages 67-72
obtain technical approvals of higher recycled content in our packaging
15% 115% and we continue to partner with suppliers and industry bodies. a. Disclose the metrics used by the organisation to assess climate-related risks Yes. See pages 67-72.
100% 99%
90% and opportunities in line with its strategy and risk management process.
We continue to trial increased recycled content in glass and while
(16)% b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas Yes for Scope 1 and 2. See page 70. We are working with global
access to quality cullet remains a challenge in the industry, we are
(GHG) emissions and the related risks. GHG accounting bodies and our suppliers to get more detailed
confident that we can adapt to the required changes and are already Scope 3 data. As we refine our value chain data, we can be
implementing higher recycled content across some of our brands, in more specific about our GHG footprint.
Fiscal 20 Fiscal 21-23 Fiscal 23 Fiscal 24 Fiscal 24 Fiscal 30 both green and amber glass. Diageo remains committed to identifying
baseline change cumulative change cumulative target collaborations and finding solutions to support improvements to c. Describe the targets used by the organisation to manage climate-related Yes. See pages 67-72.
infrastructure and availability of material. In North America, we risks and opportunities and performance against targets.
launched the ‘Don’t Trash Glass’ initiative during fiscal 23, a
partnership with the Glass Packaging Institute and Glass King, to
improve glass recycling rates. During its first year, the programme
collected over 900 tonnes of glass and is now expanding into
additional states.
For more information on rPET (recycled polyethylene terephthalate) in our
plastic packaging, recyclability of our packaging and waste reduction
efforts, refer to our ESG Reporting Index.

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OUR ESG REPORTING APPROACH

Our ESG reporting approach Non-financial and sustainability information statement

Reporting requirement as per
Companies Act 2006 414CA and 414CB
Focus area Read more in Diageo's reports Relevant policies, standards or documents Page
reference

Reporting transparently on the ESG issues that affect our business, and that our business creates, plays a vital role in delivering our strategy. It helps Environmental matters
us to manage ESG risks, take opportunities and promote sustainable development everywhere we live, work, source and sell. 1(a) environmental matters ‘Spirit of • Global Environment Policy(1) p.48-50
Our ESG reporting suite aims to provide comprehensive and comparable disclosures for a broad range of stakeholders. As well as publishing our (including the impact of the Progress‘ • Sustainable Agriculture Guidelines(1)
integrated Annual Report and ESG Reporting Index each year, we also submit non-financial information to benchmarking and index organisations, company’s business on the • Sustainable Packaging Commitments(1)
including those listed on the Awards and ranking page of our website. environment) • Partnering with Suppliers Standard(1)
• Deforestation Guidelines(4)
The non-financial reporting space is evolving quickly. We are committed to continually evaluating and improving our approach and to actively • Water Stewardship Strategy(4)
tracking emerging ESG regulation, frameworks and good practice. Since launching our ‘Spirit of Progress’ ESG action plan, we have set out to help • Net Zero Carbon Strategy(4)
create a more inclusive and sustainable world, creating a positive impact in our company, and for our society. Pioneer grain- • Reinventing Packaging Strategy(4) p.61-73
to-glass • Diageo Water Collective Action Implementation
How we report to our stakeholders – our reporting suite Guide (4)
sustainability
Our people
1(b) the company’s employees Our people • Talent and diverse • Code of Business Conduct(2) p.55-56
and culture workforce • Great Britain / Scotland and Republic of Ireland
• Culture Gender Pay Gap Report 2023(4)
• Gender and ethnic • Global Human Rights Policy(1)
diversity • Directors' Remuneration Policy(4)
• Inclusive hospitality
Champion industry and communities
inclusion and • Progressive marketing
diversity • Diverse suppliers
Annual Report Where we present our Diageo.com Where, through the ‘Spirit of ESG Reporting Index Where we provide Health and • Embedding culture of • Global Health, Safety and Wellbeing Policy(1) p.57-58
most material disclosures and describe how Progress‘ section, we give more details of additional disclosures in line with the GRI safety health and safety
our strategy delivers value for our business our approach and performance, with (Global Reporting Initiative) Standards, UNGC 1(c) social matters ‘Spirit of p.48-50
and other stakeholders. The performance of examples of our strategy in action. advanced reporting criteria index and our Progress‘
non-financial KPIs are integrated into the response to the Sustainability Accounting
relevant focus area sections. The document Standards Board (SASB). Promote • Tackling underage • Global Marketing and Digital Marketing Policy(1) p.51-52
positive drinking • Global Employee Alcohol Policy(1)
also includes detailed non-financial
drinking • Changing attitude to drink
reporting boundaries and methodologies. driving
• Make moderation
Who are our stakeholders? Everyone who is affected by our business, and everyone who affects it, is a stakeholder. A detailed description of our aspirational
stakeholder engagement process is on pages 100-105 of this Annual Report. • Marketing in a responsible
way
This non-financial and sustainability information statement provided on pages 75-76 provides an overview of topics and related reporting
references in our external reporting as required by sections 414CA and 414CB of the Companies Act 2006. Human rights
1(d) respect for human rights Human rights • Standing up for human • Global Human Rights Policy(1) p.53-54
rights • Modern Slavery Statement(3)
• Global Brand Promoter Standard(1)
• Privacy Policy(1)
Anti-bribery and corruption
1(e) anti-corruption and anti-bribery Doing • Code of Business Conduct(1) p.53-54
matters business the • Privacy Policy(1)
right way • Global Tax Policy(1)
• Global Information Management and Security
Policy(4)
Business model
2(a) a brief description of the Diageo's • Strategic Report p.12-23
company’s business model business • Business integrity
model • Assessing risk
• Engaging stakeholders

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O U R E S G R E P O R T I N G A P P R O A C H continued OUR PRINCIPAL RISKS AND RISK MANAGEMENT

Reporting requirement as per Focus area Read more in Diageo's reports Relevant policies, standards or documents Page

Effective risk
Companies Act 2006 414CA and 414CB reference

Risk management
Well-managed risk-taking lies at the heart of
Our principal our Growth Ambition. Effective risk
management
2(d) a description of the principal • Effective risk management • Global Quality Policy(1) p.77-85
risks relating to the matters risks and risk • Principal risks • Business Continuity Management Standard(4) management drives better commercial
mentioned in subsection management Risk Management Standard(4)
•
decisions, protects our assets and supports a
Viability • Viability statement p.86 growing, resilient and sustainable business.
statement
Non-financial performance
2(e) a description of the non- Our • Our performance p.26-27 Our approach Risk appetite
financial key performance performance: • ‘Spirit of Progress’ We believe that effective risk management starts with the right The ARC and the Audit Committee have defined the group’s risk
indicators relevant to the monitoring conversations to drive better business decisions. We identify and appetite across our risk categories (Strategic, Financial, Operational
company’s business performance embed mitigating actions for material risks that could impact our and Regulatory). A three-point risk appetite scale (Averse, Cautious
and progress current or future performance, and/or our reputation. Our risk and Open) and appetite ratings have been applied, using both
Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006 management efforts aim to be holistic and integrated, bringing quantitative and qualitative criteria that align to the delivery of our
together risk management, internal controls and business integrity, Growth Ambition. This category-led approach enables practical
(a) description of the company’s • Identifying climate risks p.61 ensuring that our activities focus on the risks that could have the application of risk appetite thresholds to all principal risks, which
governance arrangements in and opportunities greatest impact. We have recently reviewed and refreshed our informs the level of mitigation required. Examples of risks for which we
relation to assessing and • Governance principal risks and our risk appetite. Our approach is also structured to have an averse appetite include those that could: harm our people;
managing climate-related risks and ensure that we take all reasonable steps to mitigate, but not impact product quality; cause us to market irresponsibly or act without
opportunities;
necessarily eliminate, our principal risks in this context. integrity; and be non-compliant with laws and regulations, including
(b) a description of how the • Identifying climate risks p.62-67 those relating to financial reporting.
company identifies, assesses, and and opportunities Accountability for managing risk is embedded into our management
manages climate-related risks and structures, an annual risk assessment establishes mitigation plans and Risks that can be partially mitigated through insurance are also
opportunities; monitors risk on a continual basis. identified and evaluated. We purchase insurance for the most critical
areas or where there is a legal requirement, seeking a balance
(c) a description of how processes • Our principal risk and risk p.78-85 Risk is regularly assessed through the biannual Audit and Risk
between retained risk and risk transfer.
for identifying, assessing, and management Committee (ARC) and our quarterly Risk and Controls (R&C) Steering
managing climate-related risks are • Identifying climate risks Committee, a subgroup of ARC. The R&C Steering Committee Emerging risks
integrated into the company’s and opportunities p.62-67 provides oversight, guidance and co-ordination to key risks. The ARC The ARC and Audit Committee formally review emerging risks. Our
overall risk management process; has a holistic view of all key internal control and risk management Strategy and Controls, Audit and Risk Excellence teams undertake
(d) a description of— (i) the • Our principal risk and risk p.78-85 activity, including risk management of fraud; the audit and risk horizon-scanning to monitor any potential disruptions that could
principal climate-related risks and management programme; and business conduct and ethics. Both committees dramatically change our industry and/or our business, from both a
opportunities arising in connection • Identifying climate risks receive regular reports on the principal risks and the effectiveness of risk and opportunity perspective, for the Executive Committee to
with the company’s operations, and opportunities p.62-67 the actions taken to mitigate these risks. The Audit Committee, acting understand the changing landscape and take appropriate actions.
and for the Board, independently reviews the risk assessments and reports.
We use internal and external data to monitor our principal risks and to We consider Artificial Intelligence (AI) to be a potential emerging risk,
(d) a description of—(ii) the time • Identifying climate risks p.62-67 or risk driver for our principal risks, and we are currently developing
periods by reference to which those and opportunities make proactive interventions. We also establish cross-functional
working groups and use expert advice where necessary to ensure our AI governance approach to ensure the right balance between
risks and opportunities are • Quantitative impact of opportunity and risk. We are also seeing additional emerging
assessed; transitions risks and principal risks are effectively managed and, where appropriate,
Pioneer grain- escalated to the R&C Steering Committee, ARC and Audit Committee risk areas within existing principal risks, such as the increasing
opportunities significance of third-party risks in areas, for example in cyber and
to-glass See above under Environmental matters for consideration.
• Our pathway to net zero
sustainability data privacy; continuing changes in consumer demand and pervasive
(e) a description of the actual and • Identifying climate risks p.62-67 Further details about our risk management approach are described geopolitical tensions.
potential impacts of the principal and opportunities in the Corporate Governance report on page 99 and in the Audit
climate-related risks and • Identifying and assessing Committee report on pages 112 - 118. New principal risk
opportunities on the company’s our transitions risks and Last year we introduced a new emerging risk relating to our multi-year
business model and strategy; opportunities Our principal risks transformation programme. This year we are including this as a new
(f) an analysis of the resilience of • Climate change resilience p.61-67 The Audit Committee considers principal risks to be the most principal risk.
the company’s business model and • Viability statement and p.86 significant risks faced by the group, including those that are the most
strategy, taking into consideration • Scenario analysis of material to our performance and that could threaten our business
different climate-related scenarios; physical risks model or future long-term performance, solvency or liquidity. They do
not comprise all the risks associated with our business and are not set
(g) a description of the targets used • Our strategy for grain-to- p.67-72 out in priority order. Additional risks not known to management, or
by the company to manage glass sustainability currently deemed to be less significant, may also have an adverse
climate-related risks and to realise effect on the business. Our principal risks are considered over a three-
climate-related opportunities and
to five-year timescale and we give consideration to risk velocity (how
of performance against those
quickly the risk could materialise) to ensure appropriate mitigating
targets; and
actions are taken.
(h) a description of the key • Our strategy for grain-to- p.67-72
performance indicators used to glass sustainability
assess progress against targets
used to manage climate-related
risks and realise climate-related
opportunities and of the
calculations on which those key
performance indicators are based
(1) https://www.diageo.com/en/our-business/corporate-governance/code-of-business-conduct/policies-and-standards
(2) https://www.diageo.com/en/our-business/corporate-governance/code-of-business-conduct
(3) https://www.diageo.com/en/esg/doing-business-the-right-way/modern-slavery-statement
(4) Externally published documents on different subsites

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O U R P R I N C I P A L R I S K S A N D R I S K M A N A G E M E N T continued

Risk and impact Mitigation plans and developments in fiscal 24

Gross Risk Movement Risk Velocity is measured Risk Appetite definitions Strategic outcomes V Risk included

Refers to the gross movement in the

on the following scale: are as below: in viability 2. Regulation, trade Core mitigations:
Efficient growth assessment • We run multi-year public policy campaigns to minimise risk and unlock tax, trade and regulatory
barriers and indirect tax
EG
risk, before mitigations and controls, Very rapid – impact of the risk Averse – avoid unnecessary risk
from the prior year. would be evident within a month where possible
opportunities. We engage with multilateral organisations and at a market level with health and
CVC Consistent value creation EG CVC CT V
finance ministries.
Rapid – impact of the risk would be Cautious – willing to take strongly • We utilise economic modelling to demonstrate the impact of tax policy.
Increasing CT Credibility and trust Risk Appetite Cautious
evident in a quarter justified risks • With respect to our Positive Drinking programmes, we work with international and market trade bodies
Decreasing EP Engaged people Risk Velocity Slow who conduct scientific research which provides an evidence base for policy redevelopment. All
Open – willing to take justified risks
Slow – impact of the risk would be opportunity and risk is assessed and detailed quarterly in a public policy dashboard to ensure the right
Stable evident within a year Gross Risk Stable resources are deployed against each.
Movement
Developments in fiscal 24:
This list does not include all of our risks, and the risks listed are not set out in order of priority. In a volatile external landscape
• International organisations that influence governmental policy decisions on alcohol taxation are
geopolitically and economically,
Risk and impact Mitigation plans and developments in fiscal 24 increasingly focusing on measures to increase the overall level of taxation on alcohol products, rather
we see risks associated with
than more targeted measures to reduce harmful consumption.
1. Climate change and Core mitigations: ongoing conflicts in Europe and
the Middle East, global inflation,
• Within these organisations, there have been some calls to differentiate between ‘lower strength’ and
• The cross-functional Climate and Nature Risk Steering Group sets our strategy for ongoing climate and
sustainability nature risk assessment. Resource-scarcity issues have been identified and mitigated, especially within debt and energy price crises
‘higher strength’ alcoholic products, and in some areas, ‘higher strength’ has been framed as being
more harmful. Such arguments can be used to support proposals that higher taxes should be levied on
our agricultural ingredient sourcing strategy, for example developing more climate-resistant and higher- which cause pressures on
the consumption of ‘higher strength’ products.
EG CVC CT EP V

yielding varieties of sorghum for Kenya and Ghana. public finances, resulting in the
Risk Appetite Cautious • Physical risk exposures have now been identified for more than 95% of sites globally and being built need to raise new tax revenue.
We have increased our mitigations of this risk by –
Risk Velocity Slow into site and category risk footprints. We have shifted our mitigations focus from risk understanding and In addition, public health
•Expanding our advocacy efforts to challenge ineffective and discriminatory tax policies. We continue to
quantification, to building further resilience in our sites and supply chain. concerns may lead regulators in
Gross Risk Stable engage positively with a wide range of international organisations to advocate for policies and
• Our refreshed water strategy, is a 'grain-to-glass' approach which improves water use efficiency in major markets to ban or restrict
Movement interventions that promote positive drinking, whilst at the same not discriminating against our products.
operations, replenishes water in water-stressed catchments, provides clean water to our communities, the marketing or sale of alcohol,
Failure of collective climate action to supports farmers (especially smallholders), protects and restores nature and strongly advocates for while increased trade tensions
meet sustainability goals may result more collective action to contribute to a positive water impact – ultimately to build resilience and and/or fiscal pressures may
in severe warming of 4-5°C as per enable growth. prompt the introduction of
IPCC RCP8.5 modelling. Indeed any • Our ‘Spirit of Progress‘ ambition was launched and operationalised to deliver against key targets and additional trade barriers and/
global warming above the Paris longer-term goals. As part of 'Spirit of Progress', we are focused on water and energy efficiency and or disproportionate tax increases,
agreement target of 1.5-2°C carries switching to renewable energy. Our climate risk scenario modelling and mitigation plans incorporate all of which may result in
substantial risks to society, and this the risk of a 4-5°C climate change scenario, which may arise as a result of collective climate action financial loss.
scenario is increasingly likely. failure, as well as a moderate (2-3°C) scenario and a Paris-aligned (1.5-2°C) scenario.
3. Geopolitical volatility Core Mitigations:
While Diageo is currently resilient to Developments in fiscal 24: • We have global policies and programmes in place, including the Global Corporate Security Policy, to
climate risks due to ongoing • We continue to update our physical climate risk scenarios, which reflect the increase in climate
and business protect our people, property, and business. In-market Corporate Security resources are in place for
adaptation efforts, society is already extremes we are seeing today. interruption higher-risk markets.
facing a number of challenges, • The importance of nature and its links to both climate mitigation and adaptation were increasingly • We have a long-standing global Business Continuity Programme, including training, to enhance
EG CVC CT EP V

including water-stress, extreme highlighted at events like COP28. Several global reviews have highlighted 'the vital importance of capability to react effectively to a crisis and minimise disruption.
weather events, temperature rises, protecting, conserving, restoring and sustainably using nature and ecosystems for effective and Risk Appetite Cautious • Our global risk monitoring programme identifies emerging risks and supports avoidance and
food system impacts, biodiversity sustainable climate action'. mitigation.
Risk Velocity Very Rapid • The global supply chain risk programmes we have implemented improve our ability to maintain
loss and ecosystem collapse. In • In fiscal 24 we trialled a shadow carbon price model in our capital expenditure strategy. We found that
response to this, governments are incentives to reach our Scope 1 and 2 greenhouse gas emissions targets proved more impactful than Gross Risk Stable operational processes through volatility.
implementing increased regulation considering carbon pricing in our decision-making. Movement • Insurance policies are in place to protect against the financial consequences of covered events.
aimed at addressing these issues. • Our multi-channel product availability enables consumers to flexibly continue to purchase our products.
We have increased our mitigations of this risk by - Geopolitical forces, driven by
• Our global ‘Flex Philosophy’ on working patterns and home working are well-embedded and supports
Completing transition scenario analysis for our total business using an automated scenario analysis tool. several vectors globally, coupled
Failure of the business to meet • business continuity.
Further increasing the resource dedicated to the mitigation of climate impact within our sustainability, with macroeconomic stress,
environmental sustainability goals •
sourcing and finance teams. increase the likelihood of Developments in fiscal 24:
could result in loss of licence to
• Conducting a nature-baseline impact assessment, which provides deep insights on our business’s
international and domestic • The outbreak of the conflict in the Middle East was the most significant development in fiscal 24, driving
operate, financial loss, supply chain
baseline impacts on nature related to our direct operation activities, as well as our upstream sourcing of tensions, disputes, conflict, unrest, tensions and further hostilities within the region and impacting Red Sea shipping. The risk of further
disruption and reputational
beverage raw materials and packaging materials. and crime. escalation remains.
damage amongst customers,
consumers, investors and other • Other disruptive vectors have impacted us in fiscal 24, such as the ongoing war in Ukraine, unrest in
A significant interruption to our
stakeholders. business due to external events Latin America and elsewhere, and organised crime. These have been within the range of volatility
(such as a public health threat/ predicted last year, and impacts have been limited and manageable.
Failure of the business to build • We continue to monitor key and worsening regional tensions, and the risk of unrest related to the large
pandemic, war, or natural
climate resilient operations could number of elections taking place globally through the remainder of 2024.
hazard) could restrict access to
result in the inability to operate
our products, negatively affect We have increased our mitigations of this risk by -
and/or financial loss.
our operations and brands, or • Enhancing our focus on the external environment and forecasting, given anticipated volatility.
Our assessment of the impact on pose a threat to the safety of our • Heightening scrutiny on organisational business continuity planning and crisis preparedness, including
our business has not changed year- employees; any of which could for risks relating to technology and supply chain.
on-year. have a negative impact on our • Enhancing our travel risk management programme.
commercial and financial
performance.
Upcoming election cycles in
some markets may lead to
increased volatility.

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Risk and impact Mitigation plans and developments in fiscal 24 Risk and impact Mitigation plans and developments in fiscal 24
4. Macroeconomic and Core mitigations: 6. Supply chain Core mitigations:
• We monitor locally and globally key business drivers and performance to prepare for rapid changes in • The ongoing digital transformation of our supply chain has provided us with an end-to-end visibility
financial volatility the external environment, which we integrate into our market strategies to ensure we leverage the disruption enabling real-time scenario planning and faster, more intelligent decision-making.
EG CVC V
power of our total portfolio to recruit consumers. EG CVC CT V
• The process of end-to-end supply chain brand mapping identifies risks and mitigation plans at each
• Central hedging and currency monitoring take place to manage volatility. node in our supply chain. Through this process, we proactively identify and create action plans for
Risk Appetite Cautious Risk Appetite Cautious
• Strategic analysis and scenario planning is managed at both a global and a local level, to strengthen vulnerabilities, reducing the likelihood of disruption.
Risk Velocity Rapid market strategies and risk management across the business. Risk Velocity Very rapid • We have an embedded Value Chain Risk Management process which allows us to identify and
• We have multi-country investment and local sourcing strategies. mitigate critical supplier risks.
Gross Risk Stable Gross Risk Decreasing
• There are dedicated cross-functional steering groups to manage acute issues including inflation. • Our monthly scenario planning process allows us to anticipate and prepare for a range of potential
Movement Movement
futures within our supply chain. Through this scenario planning, we develop and track contingency
Failure to react quickly enough to Developments in fiscal 24: Supply chain disruption occurs as a plans and mitigation strategies.
changing macroeconomic • Macroeconomic growth is positive, but growth is slower than anticipated. result of various factors, including • Our inventory management procedures at our supply sites and in-market locations allow for prompt
conditions and financial volatility • Inflation rates, whilst slowing, remain elevated and interest rates remain relatively high. The cumulative but not limited to, demand volatility responses to shortages and supply chain delays.
could adversely impact financial effect of this longer period of sustained, elevated inflation intensifies pressures on both businesses and resulting from geopolitical tensions, • Our logistics network is diverse with multiple ports, routes, transportation modes and alternative carriers,
performance. Macroeconomic consumers. Sustained, elevated inflation and interest rates impact consumer spending power and increased likelihood of severe which reduces the likelihood of a disruption to our supply chain and the end customer.
conditions include GDP growth businesses’ ability to increase prices to offset rising input costs. weather events, global
rates, inflation, other changes to macroeconomic conditions, or Developments in fiscal 24:
We have increased our mitigations of this risk by -
consumer discretionary spending supply disruption resulting from • Geopolitical conflicts in the Red Sea have increased lead-times to Asia, Middle East and East Africa.
• Building greater capabilities to monitor, and act on, macroeconomic volatility, for example by
(e.g. unemployment), and global cyber security threats, supplier Our supply chain has proven resilient through the disruption.
developing greater visibility, resilience, and agility in supply chain management, as well as investing
trade tensions. Financial volatility failures, and regulatory changes. • There has been an increased number of cyber incidents in our extended supply chain.
behind deeper consumer insights to understand how consumer behaviours are changing in the current
risk could arise from variability in economic environment. Supply chain disruptions can result We have increased our mitigations of this risk by -
financial markets, interest rate in longer transit times, supplier • Transforming our processes including demand planning, end-to-end value chain assessments, cyber-
fluctuations and currency insolvency and material shortages health assessment programme and service level execution agreements for critical suppliers. We have
instability. and therefore may have a negative further transformed and simplified our portfolio, adding agility across markets.
impact on commercial and • Transforming our physical locations including increasing our operational resilience by adding capacity
5. International direct Core mitigations:
financial performance. across multiple areas of our operations (including our Shenzhen Free Trade Zone hub), qualifying
• We monitor and, where appropriate, express views on the formulation of tax laws either directly or
tax through trade associations or similar bodies. As the aftermath of the pandemic additional carriers, ports, and modes of transport to ensure less reliance on specific routes and
EG CVC CT V
• We continuously monitor the international tax landscape for new taxes and tax legislation introduced. has diminished, and global supply expanding our distribution network to include regional hubs.
We monitor and improve on our tax processes, data, and system capabilities to enable us to ensure chains have become more agile, • Transforming our digital capabilities including deployment of advanced supply planning, artificial
Risk Appetite Cautious the likelihood of a systemic global intelligence enabled logistics and the startup of our digital scenario planning have made us more
compliance. We also seek to standardise, centralise and automate tax activities and controls, where
Risk Velocity Slow possible, to improve efficiency. disruption has reduced. The focus connected and more resilient.
• We continue to review and adapt our global transfer pricing policies to ensure profits are taxed in line on building resiliency in our own
Gross Risk Stable with business activities and economic substance. supply chains has reduced the
Movement impact of a potential disruption.
Developments in fiscal 24:
Changes in the international tax
The international tax environment continues to be challenging.
environment may lead to
•
• Countries acting individually and collectively, for example, as part of the EU/OECD, continue to 7. Cyber and IT Core mitigations:
additional compliance • Our cyber risk management framework continues to be embedded across markets and functions.
requirements, higher compliance
propose and introduce measures that may increase the tax burden of multinational companies. resilience • We run a cyber security training and awareness outreach programme, including regular phishing
• Governments continue to face various pressures and are looking to tax measures to influence corporate exercises.
costs, an increase in our effective EG CVC CT V

behaviour and to balance national budgets. These pressures are further exacerbated by ongoing • We have an identity and access management framework in place.
tax rate, new tax exposures and Risk Appetite Cautious
global macroeconomic volatility coupled with geopolitical tensions and the challenging sustainability • For critical applications we validate that disaster recovery plans are thoroughly tested and ensure that
additional uncertainty, which
commitments made by governments. Risk Velocity Very Rapid data backup and restore procedures work reliably.
could result in financial loss.
• Tax measures resulting from these pressures may include changes to the corporation tax base or rates, • Our Security Operations Centre uses advanced technology to proactively detect and block
increases in excise/customs duties, new taxes (e.g. on-line sales taxes) or a more aggressive approach Gross Risk Stable
Movement attempted attacks.
to tax audits. • We perform secure assurance and compliance checks on our cloud-hosted IT service providers.
• The expansion of digital filing requirements, mandatory disclosure regimes and greater tax Sophisticated cyber security • Security controls are in place across our priority manufacturing plants.
transparency in public reporting will likely add to the scrutiny of multinationals’ tax affairs from tax threats (both within our network • We have a robust and sustainable IT general controls environment.
authorities, NGOs, media and the general public. and at third parties) continue to
be prevalent. This could lead to Developments in fiscal 24:
theft, loss, and misappropriation • There is a steady increase in cyber-attacks across the manufacturing sector affecting IT landscapes and
of critical assets, such as personal supply chains evidenced by recent attacks within the industry.
and consumer data, and key • Updating our cyber risk framework and processes to produce new and increased cyber-security
operational systems. Inadequate disclosure reporting requirements.
IT resilience arrangements and We have increased our mitigations of this risk by -
greater dependence on third- • Strengthening our third-party cyber risk management programme to raise the minimum standards of
party suppliers and externally cyber security across the supply chains of our critical non-IT suppliers.
hosted systems and processes • Implementing additional controls to support our cloud environments.
could cause disruption to core
business operations, resulting in
financial loss, global regulatory
enforcement, and reputational
damage.

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O U R P R I N C I P A L R I S K S A N D R I S K M A N A G E M E N T continued

Risk and impact Mitigation plans and developments in fiscal 24 Risk and impact Mitigation plans and developments in fiscal 24
8. Business ethics and Core mitigations: 9. Consumer demand Core mitigations:
• Our Code of Business Conduct and supporting policies and standards on all elements of this principal • The long-term consumer shifts are mitigated through consumer strategies and products which anticipate
integrity risk set out compliance requirements which are then embedded throughout Diageo with regular disruption altered demand. The short-term fluctuations in demand can be mitigated through improved agility and
EG CT EP V
training, communications, annual certification, and risk-based global and local engagement activities. EG CVC CT V
responsiveness. For example, if we anticipate a shift to at-home socialising, we pivot our marketing
• Effective whistleblower mechanisms are in place for complaints to be raised, properly investigated and strategies accordingly.
Risk Appetite Averse Risk Appetite Open
where required, remedial actions taken. • A large part of our mitigation strategy is our highly diversified portfolio of brands sold across the world,
Risk Velocity Very rapid • Robust third-party due diligence procedures which identify key risks are required before entering into Risk Velocity Rapid to ensure broad coverage of consumer occasions, geographies, trends and price points.
Gross Risk Stable new business relationships. • We use a suite of proprietary and third-party data tools, including our brand guidance system, global
• A well-embedded control assurance programme and centralised second line of defence continued to Gross Risk Stable performance suite and consumer choice framework which allow us to track and monitor long-range
Movement Movement
operate effectively throughout the fiscal. global trends, behaviours in TBA, brand health consumer sentiment.
Diageo’s geographic footprint Consumer demand, particularly • Data from across all sources guides decision-making through our end-to-end strategic cycle, at
coupled with the regulated Developments in fiscal 24:
in the short term, remains corporate strategy and market level, including our annual marketing business planning, integrated
nature of the beverage alcohol • There have been increases in enforcement of bribery/corruption and related offences in the United
unpredictable due to business planning, and monthly business performance management.
industry, cross-jurisdictional States and United Kingdom, and enforcement related to applicable sanctions across the United States,
macroeconomic volatility, with
regulations that apply to our European Union and the United Kingdom, since the start of the Russia/Ukraine conflict. Developments in fiscal 24:
inflation and cost-of-living crises
business and rapid changes in • Human Rights continues to be an area of high focus, with a growing number of countries transitioning • Premiumisation in TBA remains a stable long-term trend but there has been a temporary deceleration at
across many countries adversely
the technological landscape, from voluntary standards to legally mandated requirements. specific spirits price tiers following the end of a three year Covid ‘super-cycle’. Fiscal 24 saw some abrupt shifts
impacting consumer priorities and
mean that our people and • Data Privacy legislation is also broadening in scope, with the European Union developing a new digital in consumer behaviour in some markets, whilst in others the change has been more gradual.
spending power.
operations have an inherent risk agenda, with legislation covering data, digital competition and (AI), overlapping with GDPR. The US • As the rate of change of spirits premiumisation normalises, so too the new norms of socialising post-pandemic
of breaching regulations (such Securities and Exchange Commission recently issued new cyber-security disclosure requirements and Longer term, consumer demand have begun to cement themselves. We see an enduring emphasis on socialising at home; the rise of non-
as anti-corruption, money India passed its first comprehensive data protection law in 2023 and enforcement commenced in 2024. is also being shaped by the traditional channels; a growing drive towards moderation; an increasing interplay between TBA and food; and
laundering, global competition, • Macroeconomic volatility and inflationary pressures are resulting in heightened regulatory scrutiny ongoing digitalisation of society; a general expansion of the where and when of drinking alcohol that brings with it increased consumer
human rights, data protection regarding competition. by shifts in socialising beyond demand for convenience.
and economic sanctions) or traditional channels and venues; • In addition to shifts in consumer behaviour, marketing’s ability (in a general sense and not specific to Diageo)
We have added to our existing mitigations during the year by -
being seen to act in an by changing health and lifestyle to align successfully with consumer values at scale, has grown more precarious. Growing cultural and political
• Increasing our analysis on whistleblowing matters to further identify trends and insights and institute
unethical manner. priorities; by new competitive polarisation in many of the world’s leading economies requires increasingly deft and sensitive brand building.
appropriate interventions.
adjacencies in the world of
Globally we see a trend of • Forming a Fraud Risk Management Working Group and are developing our plans to put in place We have increased our mitigations of this risk by-
immersive entertainment; as well
increased regulatory expectations additional reasonable prevention procedures. • Upgrading our demand radar tool, which allows us to model value- and volume-based projections at the
as by an increasing desire for
with new legal regimes being • Refreshing our human rights strategy and introducing new risk assessment tools for our direct operations market, sub-category and price tier level based on different macroeconomic factors.
moderation – both literally in
imposed, and a heightened and supply chain. Through this process, when potential risks are identified we put in place corrective • Upgrading our consumer choice framework data program, which will deliver our largest and most detailed
terms of alcohol consumption
enforcement stance being action plans to mitigate the risk. quantitative study of TBA, with c. 200 million consumer data points across 77,000 respondents in 40 countries.
and holistically in terms of time,
adopted by regulators across • Reviewing and updating our data privacy risk assessment process and framework and refreshing our • Continuing to carve out distinct and non-overlapping cultural spaces for our brands. We choose our
social energy and financial
different markets in which identification, assessment and mitigation of risks. ambassadors and spokespeople with extreme care. However, as the marketing model leans more and more
resources. Inability to respond
Diageo operates. towards cultural vibrancy, the need to be part of the public conversation increases.
and adapt our products or
Lack of an embedded business processes to these disruptive
integrity culture could result in market forces could impact our
significant penalties, financial loss ability to effectively service our
and reputational damage. customers and consumers with
the required agility.
Although the gross risk has
remained stable, across the
different markets in which we
operate there are increasing
regulations from the governing
bodies.

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O U R P R I N C I P A L R I S K S A N D R I S K M A N A G E M E N T continued

Risk and impact Mitigation plans and developments in fiscal 24 Risk and impact Mitigation plans and developments in fiscal 24
10. Product quality and Core mitigations:
Product quality
11. Transformation Core mitigations:
• Key business transformation projects have steering groups in place led by a senior executive and
counterfeit • Food safety system standards (FSSC 22000) are implemented in wholly owned brewing and packaging sites. EG CVC CT
regular progress updates are provided to the Executive Committee and Board (where relevant).
EG CT V
The majority of these sites are certified, with tracking in place and timelines agreed for the remaining sites with • We have succession planning processes to help ensure a pipeline of high-quality, diverse talent for the
the exceptions being newly acquired and re-developed sites, where we are upgrading the systems to meet the Risk Appetite Cautious roles that are critical to our transformation projects.
Risk Appetite Cautious standards. Risk Velocity Rapid • We have heavily invested into the transformation projects hiring additional employees fully dedicated to
Risk Velocity Rapid • We monitor and track the Global Food Safety Initiative certification of our third-party operations, with the goal the projects and external consultants and partners who also bring in new skills. For example, we have
Gross Risk Movement New risk
of all third-parties obtaining certification. Exceptions to this certification requirement are being managed based partnered with SAP and IBM Consulting to redesign and improve Diageo’s processes and enhance
Gross Risk Stable Failure to execute strategic
on risk and we exercise our right to audit where necessary. Diageo’s business resilience and controls environment.
Movement
• A product integrity testing programme is in place for all product categories. The scheme covers our sites and business transformation projects • We invest in new and emerging capabilities and provide training courses in key areas such as digital,
Accidental or malicious third-party sites. Results and improvement actions are actively tracked. effectively, namely the ESG and leadership.
contamination of raw materials • We have robust, tested, processes in place to manage quality and food safety related incidents. implementation of SAP S/4 • We regularly horizon scan for important external changes that can impact us and our strategic
or finished product, and/or HANA, our ‘Spirit of Progress‘ transformation plans, such as evolving stakeholder expectations and heightened regulatory
ineffective brand protection and Counterfeit
plan and our supply chain agility requirements, and adapt project plans accordingly.
intervention to address • We have anti-counterfeiting measures embedded in our packaging to deter against reuse, making our
products more difficult to copy. programme, could result in delays Developments in fiscal 24:
counterfeiting of our products or changes to their expected
supplied to market, could cause • We run training and engagement programmes with law enforcement and customs officials across all high- • Market competition for key leadership and specialist talent remains strong, with the UK economy
and medium-risk markets, to ensure they are able to spot potential counterfeits and contact us for immediate benefits which may have a experiencing specific challenges, such as a shortage of skilled talent.
harm to consumers, damage our
action, and participate in industry initiatives to monitor and prevent counterfeiting activity, pursuing negative impact on our critical • We are part way through implementing multiple business transformation projects, with many key
corporate and brand reputation
and pose potential threats to our enforcement and prosecution where possible. business processes or on our changes still to be delivered.
people due to the illicit nature of • We run training and awareness programmes with commercial teams and distributors across markets, to operating and financial
We have increased our mitigations of this risk by -
organisations involved in educate them on the appropriate response to potential counterfeit cases. performance.
• Hiring a Chief Strategy and Transformation Officer in fiscal 24 to manage and deploy key business
counterfeiting activities. • We manage glass collection and recycling programmes in medium- and high-risk markets, to remove empty
As the external environment transformation projects and to help ensure these projects are governed appropriately.
glass bottles from the counterfeit supply chain and prevent refilling.
continues to change, the ambition • Embarking on a culture transformation journey to embed speed and agility across our business.
• We run an online monitoring and take-down programme across high-risk e-commerce and social media
and objectives of our strategic • Although implementing these projects carry significant risks, our mitigation strategies aim to gradually
platforms, and directly engage with these platforms to create awareness and stop counterfeit listings.
transformation initiatives may reduce these risks over time. For example, we have had to adapt to changes in consumer preferences
Developments in fiscal 24: need to adapt which may require by shifting priorities and resources to different productivity initiatives within our supply chain agility
Product quality new and different capabilities and programme. Ongoing evaluation and adjustment of our risk mitigation strategies are essential for
• As our partnerships with new suppliers, third parties and M&A activities continue to change, we need to skills within our workforce and effectively managing the complexities of these projects.
adapt and improve our supplier quality management, third-party producer quality management and may negatively impact our ability
acquisition quality management programmes. to deliver the anticipated benefits
• The number of food safety alerts raised by regulatory authorities in relation to alcoholic drinks continues in the time period expected, or
to rise. at all.
• As we explore new package formats, raw materials and processing solutions, these present new quality
In particular, failure to have the
challenges and risks.
right strategic partnerships and
We have increased our mitigations of this risk by - talent in key positions to deliver
• Developing a formal food safety and quality culture programme, a food loss and waste standard and and sustain our strategic business
an environmental monitoring standard. transformation projects may result
• Strengthening our hazard analysis, critical control point (HACCP) standard and rolling it out across in delays, unforeseen costs and
manufacturing sites. other disruptions to our business,
• Harmonising and strengthening our internal quality standards for our new and innovate packaging competitive positioning and
formats. financial performance.
• Standardising the global approach to quality and food safety compliance with the development of a
quality and food safety manual.
• Expanding our global quality standards to bring further rigour to our quality ways of working for non-
alcoholic and ready-to-drink products.
Counterfeit
• Geopolitical tensions are growing globally, which may increase the existing counterfeit risk in some regions.
Geo-economic pressures are also encouraging more consumers to seek out lower prices often from
unregulated sources exploited by counterfeiters.
• Counterfeit glass and closure production is leading to more counterfeit production at scale.
• The growth of tequila has continued to see a rise in counterfeit tequila cases in some markets.
• The quality of counterfeits has continued to improve to the extent that consumers cannot readily distinguish
between genuine and counterfeit.

We have increased our mitigations of this risk by -

• Changing our brand protection resourcing in China to a global model, ensuring we have the correct resource
to mitigate the risk from high-quality counterfeit glass and closure production.
• Mapping local laws and regulations relating to the transit of counterfeit and decoded products, to allow us to
implement strategies and alliances in the correct markets to mitigate against the cross-border risk.

84 Diageo Annual Report 2024 Diageo Annual Report 2024 85

VIABILITY STATEMENT

Viability statement
Governance report
The Directors have examined the group's long-term prospects to aligning with the group's strategic plan and instilling a high degree of
evaluate its sustainability. This examination encompassed an analysis confidence in the assessment of viability. Subsequently, they evaluated the
of the group's operations, principal risks, as well as factors anticipated potential repercussions of severe yet plausible scenarios throughout this
to influence its future performance, financial standing, cash flows, duration. It was determined that none of these scenarios, either individually
liquidity, and borrowing capabilities, as outlined in this Annual Report. or collectively, would cause Diageo to cease to be viable.
Assessment A summary of the modelled severe and plausible risks, along with the
severity levels examined, is provided below.
To ensure an accurate assessment of the group's long-term viability, the
Directors evaluated its overall funding capacity and available headroom to Furthermore, the Directors analysed the group's liquidity sources to
endure severe and plausible downside scenarios. Additionally, they support both the strategic plan and the potential impact of severe
conducted a thorough assessment of the significant risks confronting the scenarios over this timeframe. Diageo maintains continuous access to
group, including those posing a threat to its business model, future the debt capital markets and committed facilities throughout the
performance, solvency, or liquidity. This evaluation also included a review viability period enabling the refinancing of any maturing debt or
and understanding of the mitigating factors associated with each principal meeting new funding requirements under commercially acceptable
risk. A summary of these risks and their corresponding mitigating factors terms. The group's liquidity is underpinned by a mix of short-term and
can be found in this Annual Report. long-term debt programmes, as well as $3.25 billion in committed
credit facilities, available if necessary. Additionally, the group retains
The viability assessment has three parts flexibility in reducing discretionary expenditures, such as acquisitions
Initially, the Directors assess the periods during which they reasonably and capital outlays, and can temporarily suspend or reduce returns of
expect the group to remain operational and fulfil its obligations. A three- capital to shareholders (dividends or share buybacks).
year timeframe was deemed appropriate for this viability evaluation,
Risk scenarios modelled Description and severity Principal risks Contents
Global economic Interest rate hikes and market instability, are reducing consumer confidence and sales volumes. Geopolitical volatility Letter from the Chair of the Board of Directors 88
downturn Financial failures affecting cash deposits, and higher tax rates are reducing profitability. and business
Sales: These factors will likely result in decreased sales volumes due to reduced consumer disruption Governance at a glance 90
confidence, heightened price sensitivity, and increased volatility amongst suppliers. Supply chain disruption Board of Directors 92
International direct tax
Executive Committee 94
Increased Increased geopolitical tensions result in increased cyber-attacks on direct operations and third- Cyber and IT resilience
geopolitical party suppliers impacting supply operations across multiple Diageo sites and resulting in Geopolitical volatility Corporate governance report 96
tensions production downtime. Cash repatriation also poses a cash availability risk. and business disruption Audit Committee report 111
Sales: Lost sales from adverse impact on consumer demand/availability, production downtime Consumer demand Nomination Committee report 118
and route-to-market disruption. disruption
Directors’ remuneration report 122
Consumer choice This year's modelling expanded to include regulatory fines and product recalls. Shifting consumer Regulation, trade
changes and preferences away from alcohol due to changing lifestyles and social habits, alongside fragmented barriers and indirect Directors’ report 148
regulatory impact demand reflecting personal values, leads to decreased sales and profitability as consumers tax
abstain from purchasing our products. Additionally, high public debt levels and increased anti- Consumer demand
alcohol pressure prompt governments to impose excise increases, restrictive trade measures, or disruption
excessive regulatory actions, resulting in lost sales to the no and low segment and reduced sales
growth. Moreover, increased excise taxes further reduce profit.
Sales are anticipated to decline due to shifting consumer preferences away from alcohol,
government actions, and increased regulatory scrutiny.
Climate change Increasing global temperatures impact our ability to make products due to constrained water Climate change and
and natural hazard supply, leading to a rotational short-term shutdown occurring across some of our water-stressed sustainability
sites. Climate change drives increasing costs of raw materials, while the acceleration of taxation Supply chain
against carbon use increases our operational costs. Extreme weather events occur more frequently, disruption
impacting our supply facilities, causing production outages. The assumptions associated with this Geopolitical volatility
scenario are based upon our TCFD scenario modelling, and applied to a three-year period. and business
Sales: Loss of sales due to operational outages as a result of ceasing of production at water- disruption
stressed sites, and the impact of extreme weather events.
Combined scenarios The highly unlikely event of the combination of all of the above scenarios occurring at the same time.

Management prepared 18 month cash flow forecasts which were also lower level of A&P and investment in maturing stock, as well as a
sensitised to reflect severe but plausible downside scenarios taking into temporary suspension in its return of capital to shareholders (dividends
consideration the group's principal risks. In the base case scenario, or share buybacks) in the next 12 months, or drawdowns on committed
management included assumptions for mid-single digit net sales growth, facilities. Having considered the outcome of these assessments, the
slightly growing operating margin and global TBA market share growth. In Directors are comfortable that the company is a going concern for at
light of the ongoing geopolitical volatility, the base case outlook and severe least 12 months from the date of signing the group's consolidated
but plausible downside scenarios incorporated considerations for a financial statements.
prolonged global recession, supply chain disruptions, higher inflation and
further geopolitical deterioration. Even under these scenarios, the group’s Conclusion
liquidity is still expected to remain strong. Mitigating actions, should they be On the basis described above, the Directors have a reasonable
required, are all within management’s control and could include reductions expectation that the group will be able to continue in operation and meet
in discretionary spending such as acquisitions and capital expenditure, its liabilities as they fall due over the three-year period of their assessment.

This Strategic Report, which has been approved by a duly appointed and authorised committee of the
Board of Directors, was signed on its behalf by Tom Shropshire, the Company Secretary, on 29 July 2024.
86 Diageo Annual Report 2024 Diageo Annual Report 2024 87
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LETTER FROM THE CHAIR OF THE BOARD OF DIRECTORS

Compliance with the UK Corporate Governance Code

Supporting the business

The Board considers that, for the year ended 30 June 2024, Diageo has fully applied the Principles and complied with the Provisions of
the UK Corporate Governance Code 2018 (the Code).
The table below details where content complying with the Code's requirements can be found.

through Leadership
Visit diageo.com for more information.

1 Board Leadership & Company Purpose 3 Composition, Succession and Evaluation

A. Board of Directors Board of Directors 92 J. Appointments to the Board Chair Succession 119
Board Chair Succession 119 Board Champion Inclusion and 59
The Board is committed actively to creating long-term sustainable Performance Evaluation 105 Diversity
growth and delivering shareholder value. We aim to do so by building B. Purpose, Values and Our Business Today 4 Recruitment and election 119
Diageo's business through a portfolio of leading international brands, Culture procedures
aligned to the highest growth categories and core industry trends. This ’Spirit of Progress’ 48
K. Board Skills, Experience Composition of the Board 96
year has seen continued volatility in consumer markets in a number of C. Resources and Business Model 12
and Knowledge
different geographies. In such a challenging external environment, it is Control Framework Our Principal Risks and Risk 77
particularly important that Diageo has resilient leadership, with a clear Management L. Board Evaluation Performance Evaluation 105
strategy, underpinned by strong values and culture, while remaining Corporate Governance Structure 91 4 Audit, Risk and Internal Controls
agile and adaptable, moving swiftly to respond to consumer trends and Division of Responsibilities M. Independence, and Audit Committee Report 111
and opportunities. It is the Board's responsibility to ensure that the Effectiveness of Internal
company has the leadership required to achieve its long-term success D. Stakeholder Stakeholder Engagement 100
Engagement and External Auditors
and that management has the strategic direction and aims to achieve Section 172 Statement 9
N. Fair, Balanced, and Directors' Confirmations 110
its growth ambition, supported by and centred on a strong, values- E. Workforce Policies Our Business Today 4
Understandable
based culture. and Practices ’Spirit of Progress’ 48 Assessment
While navigating the current turbulent external environment, we have Doing Business the Right Way 53 O. Risk and Internal Corporate Governance 91
continued to invest behind the business, ensuring that Diageo is well- Business Integrity Programmes 114 Controls Structure and Division of
positioned in key categories and to take advantage of opportunities in Responsibilities
fast-moving consumer trends. We look to manage our capital 2 Division of Responsibilities
Our Principal Risks and 77
allocation in an appropriate manner, investing in growth areas, F. Role of the Chair Letter from the Chair of the Board of 88 Risk Management
managing our portfolio, resources and footprint to optimise efficiency Directors
and focusing resources where they are most effective. Corporate Governance Structure 91
5 Remuneration
and Division of Responsibilities P. Alignment to Purpose, Remuneration Committee 122
Leadership has been an area of particular focus for directors recently
Values and Long-Term Chair's letter
Dear Shareholder as we look to build the future composition of the Board, reflecting Performance Evaluation 105
Success Remuneration at a Glance 125
changes in some key roles through the coming months and into the G. Division of Corporate Governance Structure 91
It is with great pleasure that I present, on behalf second half of fiscal 25. We aim to have a balanced and experienced Responsibilities and Division of Responsibilities Director's Remuneration Policy 128
of the Board, the corporate governance report Board, comprising a diverse range of individuals with different skills
Composition of the Board 96 Q. Remuneration Policy Remuneration Committee 122
and from different backgrounds, with an ability to express informed Chair’s letter
for the year ended 30 June 2024. This report and independent views and opinions. With the recently announced H. Role of the Non- Corporate Governance Structure 91
Executive Director and Division of Responsibilities Director’s remuneration policy 128
summarises how Diageo's leadership and new appointments to the Board, I am confident that Diageo will
R. Independent Judgement Remuneration Committee 122
continue to have the effective and resilient leadership required to Board of Directors 92
governance structures have supported Diageo achieve its growth ambition over the long term. I. Board Policies, How the Board monitors Culture 108
and Discretion Chair’s letter
during the course of the year in seeking to Process, Information, Duties of the Board 96
Consideration of wider 133
Time and Resources workforce remuneration
achieve long-term sustainable success. Board Activities 99
Javier Ferrán (Chair)
Annual General Board Audit Committee Nomination Committee Remuneration Committee
Fiscal 24 Board Attendance Meeting 2023 (maximum 6) (maximum 5) (maximum 6) (maximum 6)

Javier Ferrán ü 6/6 — 5/6 —

Debra Crew ü 6/6 — — —
Lavanya Chandrashekar ü 6/6 — — —
Susan Kilsby ü 6/6 5/5 6/6 6/6
Melissa Bethell ü 6/6 5/5 6/6 6/6
Karen Blackett ü 6/6 4/5 6/6 5/6
Valérie Chapoulaud-Floquet ü 5/6 4/5 5/6 5/6
Sir John Manzoni ü 6/6 5/5 5/6 6/6
Alan Stewart ü 6/6 5/5 6/6 6/6
Ireena Vittal ü 6/6 5/5 6/6 6/6
Former Directors
Lady Mendelsohn(1) N/A 1/1 1/1 1/1 1/1
(1) Lady Mendelsohn retired from the Board prior to the company's Annual General Meeting on 28 September 2023.

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GOVERNANCE AT A GLANCE

Corporate governance structure and division of responsibilities

Enabling our Non-Executive Directors

Melissa Bethell, Karen Blackett,
Senior Independent Director
Susan Kilsby

Growth Ambition
Valérie Chapoulaud-Floquet, Sir • Acts as a sounding board for the
John Manzoni, Alan Stewart and Chair and serves as an
Ireena Vittal intermediary for the other
The Non-Executive Directors, all of Nomination Directors where necessary
whom the Board has determined Committee • Together with the other Non-
are independent, experienced and Executive Directors, leads the
influential individuals from a review of the performance of the
diverse range of industries, Audit Remuneration Chair, taking into account the
Achieving Diageo's Growth Ambition is backgrounds and countries. Committee Committee views of the Executive Directors
Building our leadership • Available to shareholders if they
dependent on our Board and Executive • Constructively challenge the have concerns where contact
During the year, the Nomination Committee and Board has
Committee providing effective leadership for been creating the leadership required at Board and Executive
•
Executive Directors
Develop proposals on strategy
through the normal channels
has failed
long-term sustainable success, despite Committee levels to continue growing Diageo's business,
including enabling smooth transitions in key roles including
• Scrutinise the performance of
challenges in the external environment. management rsight and rigoro
that of the Board Chair, Audit Committee Chair and Chief t ove us
• Satisfy themselves on the en
Financial Officer.
integrity of the financial

ch
d
Company Secretary

pen

alle
information, controls and systems Board of Directors
Tom Shropshire

Inde

nge
Board composition of risk management
• The Board is supported by the
• Set the levels of remuneration for
Executive Directors and senior Company Secretary who
ò Chair management Chief Executive has ensures information is made
delegated authority to available to Board members in a
ò Executive directors • Make recommendations to the
Board concerning appointments these Committees timely fashion
ò Non-executive directors • Supports the Chair in setting
to the Board
• Devote such time as is necessary Board agendas, designing and
L e a d ers hip delivering Board inductions and
to the proper performance of
their duties Board evaluations, and co-
ordinates post-evaluation action
A summary of the terms and Filings
Executive plans, including risk review and
conditions of appointment of the Assurance
Committee training requirements for the
Non-Executive Directors is available Committee
Board
at https://www.diageo.com/en/ • Advises on corporate
our-business/corporate- governance matters
governance. Finance Audit & Risk • Is a member of the Executive
Highlights of fiscal 24 Purpose, values and culture Committee Committee Committee as General Counsel
• Shaping Diageo's future through our business transformation The Board has a critical role in monitoring the degree to which Risk & Controls
projects, across our supply chain and systems infrastructures, culture and values are embedded within the company. A key Steering Committee
and the strategy refresh which led to creation of the Growth part of this is the Board’s workforce engagement programme
Ambition. which, during fiscal 24, enabled Non-Executive Directors, Business unit risk
usually in pairs, to engage directly with over 500 colleagues management
• Announcing changes in key Board roles to build our strong from 12 markets and all functions, through eight virtual and
leadership during the next few months and into the second seven in-person focus group sessions. Subjects being discussed
half of fiscal 25. varied broadly with a separate session being held on executive
• Refocusing our culture on our core values and behaviours to remuneration and reward policy. Attendee sentiment was also Chief Executive Chair Chief Financial Officer
embed agility and maintain our highly engaged, talented captured through a confidential survey following each session. Debra Crew Javier Ferrán Lavanya Chandrashekar
and diverse workforce. • Develops the group’s strategic direction for • Responsible for the operation, leadership and • Manages all aspects of the group's
Read more on pages 104, 107 and 108 See pages 106-107 for details of the feedback received consideration and approval by the Board governance of the Board financial affairs
• Implements the strategy agreed by the • Ensures all Directors are fully informed of • Responsible for the management of
Board matters and receive precise, timely and clear the capital structure of the company
• Leads the Executive Committee information sufficient to make informed • Contributes to the management of the
Diversity Strategy refresh • Manages the company and the group judgements group's operations
Diageo has a long-standing commitment to being an inclusive Recognising the scale of Diageo's growth over the past several • Along with the Chief Financial Officer, leads • Sets Board agendas and ensures sufficient • Along with the Chief Executive, leads
and diverse organisation, including at the most senior years and informed by shorter term external challenges, the discussions with investors time is allocated to ensure effective debate to discussions with investors
leadership levels. Our diverse Board composition has enabled Chief Executive has undertaken a review of Diageo's strategy • Is supported in her role by the Executive support sound decision-making • Is supported by the Finance Committee
Diageo to be ranked as one of the best performing FTSE 100 during fiscal 24. This review has led to the launch of the Growth Committee • Ensures the effectiveness of the Board and Filings Assurance Committee in
companies in terms of female representation, as recognised by Ambition to focus priorities and drive future growth, which was • Is supported by the Finance Committee and • Engages in discussions with shareholders the management of the financial
the FTSE Women Leaders Review, and has met the Parker approved by the Board at the Annual Strategy Conference in Filings Assurance Committee in the • Meets with the Non-Executive Directors affairs and reporting of the company
Review's target as to ethnic minority representation. As an April 2024. management of financial reporting of the independently of the Executive Directors • Is a member of the Executive
example, three of the Board's most critical roles, Chief company Committee
Executive, Chief Financial Officer and Senior Independent
Director, are held by women.
Read more on pages 120-121 Read more on page 104

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Position Board skills and competencies Key external appointments Position Board skills and competencies Key external appointments
Javier Ferrán N Key strengths: Brings extensive Current external appointments: Chair, Karen Blackett A N R Key strengths: Brings expertise in Current external appointments: Chancellor,
board-level experience from the International Consolidated Airlines Group, S.A. marketing, media and the University of Portsmouth; Founding Trustee, BEO
Chair Non-Executive Director
drinks and consumer products Previous relevant experience: Non-Executive creative industries, as well as (Black Equity Organisation); Non-Executive
Nationality: Spanish industry, including at chief Nationality: British broad experience in public policy Director, Creative UK
Director and Senior Independent Director,
Appointed: Chair and Chair executive level, and has a wealth Associated British Foods plc; Non-Executive Appointed: Non-Executive and strategic initiatives through a Previous relevant experience: UK President, WPP plc;
of the Nomination of experience in consumer goods Director, Coca-Cola European Partners plc; Director: June 2022 number of different government, UK Race Equality Business Champion, HM
Committee: January 2017 through his venture capital Member, Advisory Board of ESADE Business industry and public bodies Government; Business Ambassador, Department for
activities to draw from in his role School; President and CEO, Bacardi Limited; International Trade, HM Government; Chairwoman,
(Appointed Chair Designate as Chair and leader of the Board Non-Executive Director, SABMiller plc MediaCom UK & Ireland; Chief Executive Officer,
and Non-Executive Director:
GroupM UK, MediaCom UK; Chief Operations
July 2016)
Officer, MediaCom EMEA; Marketing Director,
MediaCom; UK Country Manager, WPP plc; Non-
Debra Crew E Key strengths: Has broad Current external appointments: Non-Executive
Executive Director, The Pipeline
experience in various consumer Director, Stanley Black & Decker, Inc.
Chief Executive
products sectors at board, chief Previous Diageo roles: Interim Chief Executive; Valérie Chapoulaud- Key strengths: Brings strong Current external appointments: Non-Executive
Nationality: American executive and management experience and expertise in the Director, Lead Independent Director and Chair of
Chief Operating Officer; President, North Floquet A N R
Appointed: Chief Executive leadership levels, as well as over America; Non-Executive Director, Diageo plc luxury consumer goods sector, Governance Committee, Danone S.A.; Non-
and Executive Director: June five years' experience in non- Non-Executive Director having spent her career in the Executive Director, Acné Studios A.B., Agrolimen
executive and executive roles at Previous relevant experience: Non-Executive
2023 Nationality: French industry working in a number of S.A., Nextstage S.C.A.; Vice Chair, Sofisport
Diageo Director, Newell Brands, Mondelēz International
Appointed: Non-Executive international markets, including Previous relevant experience: Chief Executive
Inc.; President and CEO, Reynolds American, Inc;
developed and emerging Officer, Rémy Cointreau S.A.; President and CEO
President, PepsiCo North America Nutrition, Director: January 2021
markets, and as a former CEO in for the Americas, Louis Vuitton, LVMH Group;
PepsiCo Americas Beverages, Western Europe
the premium drinks industry President and CEO for North America, Louis
Region; various positions with Kraft Foods, Nestlé,
S.A., and Mars Vuitton, LVMH Group; President South Europe,
Louis Vuitton, LVMH Group; President & CEO,
Lavanya Key strengths: Brings broad Previous Diageo roles: Chief Financial Officer, Louis Vuitton Taiwan, LVMH Group; President,
financial expertise, commercial Diageo North America and Global Head of
Chandrashekar E Luxury Product Division USA, L’Oréal Group; Non-
skills and strong consumer goods Investor Relations Executive Director, Jacobs Holding AG
Chief Financial Officer experience to manage the Previous relevant experience: VP Finance, Global
Nationality: American group’s affairs relating to Cost Leadership and Supply Chain, Mondelēz Sir John Manzoni Key strengths: Has strong Current external appointments: Chair, SSE plc;
financial controls, accounting, International; VP Finance, North America, A N R commercial executive experience Chair, Atomic Weapons Establishment; Non-
Appointed: Chief Financial tax, treasury and investor as a former CEO in the energy Executive Director, KBR Inc
Mondelēz International; VP Finance, Eastern Non-Executive Director
Officer and Executive relations sector and non-executive board-
Europe, Middle East and Africa, Mondelēz Previous relevant experience: Chief Executive of
Director: July 2021 Nationality: British level experience, including in the
International; various senior finance roles at the Civil Service and Permanent Secretary of the
Procter & Gamble Appointed: Non-Executive alcoholic beverage industry, as Cabinet Office, HM Government; President and
well as more recent expertise in Chief Executive Officer, Talisman Energy; Chief
Director: October 2020
public policy and government
Susan Kilsby A N R Key strengths: Brings wide- Current external appointments: Non-Executive
affairs
Executive, Refining & Marketing, BP p.l.c.; Chief
ranging corporate governance Chair, Fortune Brands Innovations, Inc.; Non- Executive, Gas & Power, BP p.l.c.; Non-Executive
Senior Independent
and board-level experience Executive Director and Chair of Corporate Director, SABMiller plc
Director across a number of industries, Responsibility Committee, Unilever PLC; Non-
Nationality: American/ including a consumer goods Executive Director and Chair of Talent and Alan Stewart A N R Key strengths: Has a strong Current external appointments: Non-Executive
background in financial, Director and Chair of Audit Committee, Burberry
British sector focus, with particular Remuneration Committee, COFRA Holding AG; Non-Executive Director investment banking and Group plc; Partner, Altair Advisory LLP
Appointed: Senior expertise in mergers and Member and Chair of Remuneration Committee, the
Nationality: British commercial matters, with Previous relevant experience: Chief Financial Officer,
Independent Director: acquisitions, corporate finance Takeover Panel
Appointed: Non-Executive particular expertise in consumer Tesco PLC; Non-Executive Director, Tesco Bank;
October 2019 (Appointed and transaction advisory work Previous relevant experience: Senior Independent
Director: September 2014 retail industries, as well as board Chief Financial Officer, Marks & Spencer Group plc,
Non-Executive Director: April Director and Chair of Remuneration Committee, BHP and committee-level experience
(Appointed Chair of the AWAS; Non-Executive Director, Games Workshop
2018 and Chair of the Group Plc, BHP Group Limited; Senior Independent at industry institutions
Audit Committee: January plc; Group Finance Director, WH Smith PLC; Chief
Remuneration Committee: Director, BBA Aviation plc; Chair, Shire plc; Chair,
2017) Executive, Thomas Cook UK; Non-Executive Director
January 2019) Mergers and Acquisitions EMEA, Credit Suisse; Non-
and Chair of the Remuneration Committee, Reckitt
Executive Director, Goldman Sachs International,
Benckiser Group plc
Keurig Green Mountain, L’Occitane International,
Coca-Cola HBC, NHS England Ireena Vittal A N R Key strengths: Brings a wealth of Current external appointments: Non-Executive
FMCG experience from a career Director, Compass plc, Asian Paints Limited; Non-
Melissa Bethell A N R Key strengths: Has extensive Current external appointments: Non-Executive Non-Executive Director in executive consulting with a Executive and Lead Independent Director, Godrej
international corporate and Director, Tesco PLC, Exor N.V.; Senior Advisor and Nationality: Indian focus on consumer sectors and Consumer Products Limited; Director and
Non-Executive Director
financial experience, including in Director of investee companies, Atairos Europe emerging markets, including Member, UrbanClap Technologies India Private
Nationality: American/ relation to private equity, Appointed: Non-Executive
Previous relevant experience: Managing Director Director: October 2020 India, as well as broad Limited; Advisory Board Member, Russell
British financial sectors, strategic experience in non-executive Reynolds Associates
and Senior Advisor, Private Equity, Bain Capital;
Appointed: Non-Executive consultancy and advisory Non-Executive Director, Atento S.A., Worldpay board roles in the UK and India Previous relevant experience: Head of Marketing
Director: June 2020 services, as well as having strong plc, Samsonite S.A. and Sales, Hutchinson Max Telecom; Partner,
non-executive experience at
McKinsey and Company; Non-Executive Director,
board and committee levels
Wipro Limited, Housing Development Finance
across a range of industries,
Corporation Limited, Titan Company Limited,
including retail, consumer goods
Tata Global Beverages Limited, GlaxoSmithKline
and financial services
Consumer Healthcare

Board A Audit Committee E Executive N Nomination R Remuneration Chair of the Board A Audit Committee E Executive N Nomination R Remuneration Chair of the
committees Committee Committee Committee committee committees Committee Committee Committee committee

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EXECUTIVE COMMITTEE

Position Key external appointments

1 Ewan Andrew Current external appointments: Member, Scotch Whisky Association Council, Scottish
Business Climate Collaboration Board, One Planet Business for Biodiversity Board,
President, Global Supply Chain & Procurement Gartner Executive Advisory Board
and Chief Sustainability Officer
Previous Diageo roles: Supply Director, International Supply Centre; Senior Vice
Nationality: British President, Supply Chain & Procurement, Latin America and Caribbean; Senior Vice
Appointed: September 2019 President Manufacturing & Distilling, North America; various supply chain,
operational management and procurement roles
2 Alvaro Cardenas Previous Diageo roles: Managing Director, Andean Region; Director, End-to-End
Global Commercial Processes; Finance Director, South East Asia Region, PUB
President, Latin America and Caribbean (Paraguay, Uruguay and Brazil) Region, Andean Region, Colombia
1 2 3
Nationality: Colombian
Appointed: January 2021
3 Cristina Diezhandino Previous Diageo roles: Global Category Director, Scotch & Managing Director,
Reserve Brands; Managing Director, Caribbean and Central America; Marketing &
Chief Marketing Officer Innovation Director, Diageo Africa; Category Director, Scotch Portfolio & Gins; Global
Nationality: Spanish Brand Director, Johnnie Walker
Appointed: July 2020 Previous relevant experience: Corporate Marketing Director, Allied Domecq Spain;
marketing roles, Unilever HPC US, UK and Spain
4 Sally Grimes Current external appointments: Director, Continental Grains Company
Chief Executive Officer, North America Previous relevant experience: Chief Executive Officer, Clif Bar & Company; Group
President, Prepared Foods, Tyson Foods; President, International & Chief Global
Nationality: American Growth Officer, Tyson Foods; President, Gourmet Food Group and Chief Innovation
Officer, Hillshire Brands Company
Appointed: October 2023
(1)
4 5 6 5 John Kennedy Previous Diageo roles: President, Europe and India; President, Europe and Western
Europe; Chief Operating Officer, Western Europe; Marketing Director, Australia;
President, Europe General Manager for Innovation, North America; President and Chief Executive
Nationality: American Officer, Diageo Canada; Managing Director, Diageo Ireland
Appointed: January 2024 Previous relevant experience: Brand management roles, GlaxoSmithKline, Quaker Oats
6 Daniel Mobley Previous Diageo roles: Corporate Relations Director, Europe
Global Corporate Relations Director Previous relevant experience: Regional Head of Corporate Affairs, India & South Asia,
Regional Head of Corporate Affairs, Africa, Group Head of Government Relations,
Nationality: British
Standard Chartered; extensive government experience including in HM Treasury and
Appointed: June 2017 Foreign & Commonwealth Office
7 Hina Nagarajan Current external appointments: Non-Executive Director, BP p.l.c.
Managing Director and CEO of United Spirits Previous Diageo roles: CEO-Designate, United Spirits Limited; Managing Director,
Limited Africa Regional Markets
Nationality: Indian
7 8 9 Previous relevant experience: Managing Director, China & SVP North Asia, Reckitt
Appointed: July 2021
Benckiser; General Manager, Malaysia & Singapore, Reckitt Benckiser; CEO & MD
Mary Kay India; senior marketing and general management roles, ICI Paints India
and Nestlé India
8 Dayalan Nayager Previous Diageo roles: President, Africa; Managing Director, Great Britain and
Justerini & Brooks, Ireland and France, Global Travel; Regional Director, Global Travel
President, Africa and Chief Commercial Officer Europe; Commercial Director, South Africa; Customer Marketing Director, South
Nationality: South African/British Africa; Key Account Director, South Africa
Appointed: July 2022 Previous relevant experience: Various positions, Heinz, Mars
Debra Crew and Lavanya
Chandrashekar are also members of 9 John O'Keeffe Previous Diageo roles: President, Asia Pacific & Global Travel; President, Africa &
the Executive Committee. Beer; CEO and Managing Director, Guinness Nigeria; Global Head, Innovation;
President, Asia Pacific, Global Travel and India Global Head, Beer and Baileys; Managing Director, Russia and Eastern Europe;
Their biographies can be found on Nationality: Irish various management and marketing positions
page 92.
Appointed: July 2015
10 11 10 Louise Prashad Previous Diageo roles: Global Talent Director; Talent & OE Director, Africa; HR
Director, Europe, West Latin America and Caribbean, Global Functions; Talent and
Chief HR Officer Learning Director UK, Ireland and North America; HR Director Great Britain; Global
(1) John Kennedy, who had previously been a member of the Executive Committee, most recently as President, Europe and India, from July 2016 until December 2022 when he left the
company. He rejoined the company and was reappointed to the Executive Committee as President, Europe in January 2024. Nationality: British Supply; Global Commercial
Appointed: January 2022 Previous relevant experience: various HR roles, Stakis Group and Hilton Hotels
11 Tom Shropshire Current external appointments: Member of the Court (Non-Executive Director), The
Bank of England; Trustee, New York University School of Law; Member of the Steering
General Counsel & Company Secretary Committee, The Parker Review; Interim Chair, Charity Projects Limited (Comic Relief)
Nationality: American/British
Previous relevant experience: Partner & Global US Practice Head, Linklaters LLP
Appointed: July 2021

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CORPORATE GOVERNANCE REPORT

Board of Directors Corporate governance requirements • Chair and Chief Executive: The Code requires these roles to be relevant experience of each Director are set out on pages 92 and 93,
In January 2024, the Financial Reporting Council (FRC) published a separate. There is no corresponding requirement for US companies. and a matrix of the Board’s current skills and experience is set out
Composition of the Board Diageo has a separate Chair and Chief Executive. below.
new version of the UK Corporate Governance Code, which will apply
The Board comprises the Non-Executive Chair, two Executive Directors, • Non-Executive Director meetings: NYSE rules require Non-
to companies with a premium listing on the London Stock Exchange,
the Senior Independent Director, and six independent Non-Executive Management Directors to meet regularly without management Banking and corporate finance
including Diageo, for financial periods starting on or after 1 January
Directors. The biographies of all Directors are set out in this Annual present and independent directors to meet separately at least once a
2025. Until such time, the principal corporate governance rules Commercial matters
Report on pages 92 and 93. year. The Code requires Non-Executive Directors to meet without the
applying to Diageo for the year ended 30 June 2024 are contained in
Inclusion and diversity the 2018 UK Corporate Governance Code (the Code) and the UK Chair present at least annually to appraise the Chair’s performance. Consumer products

The Board sees championing inclusion and diversity as one of the key Financial Conduct Authority (FCA) Listing Rules, which require us to During the year, Diageo has complied with these requirements with
Corporate governance
enablers for achieving Diageo’s ambition. It is also a core principle of describe, in our Annual Report, our corporate governance from two independent Non-Executive Directors, including the Chair, meeting
the company’s global Human Rights Policy which applies to all points of view: the first dealing generally with our application of the without the Executive Directors present five times and independent Emerging markets

employees, subsidiaries and third-party contractors and which has Code’s main principles and the second dealing specifically with non- Non-Executive Directors meeting without the Chair or Executive
Finance
been implemented as part of our Code of Business Conduct compliance with any of the Code’s provisions. The two descriptions Directors present twice.
programme. Our objective is to maintain and sustain an inclusive and together are designed to give shareholders a picture of governance • Board committees: Diageo has a number of Board committees that Food and beverages
diverse business, across all levels, functions and geographies, in order arrangements in relation to the Code as a criterion of good practice. A are similar in purpose and constitution to those required by NYSE
Government and public policy
to create a better working environment and a better performing copy of the Code is publicly available on the website of the FRC, rules. Diageo’s Audit, Remuneration and Nomination Committees
business. As part of this, the Board has adopted a written Board www.frc.org.uk. Diageo’s statement as to compliance with the Code consist entirely of independent Non-Executive Directors. Under NYSE General management
Diversity Policy alongside Diageo’s Code of Business Conduct and during the year ended 30 June 2024 can be found on page 89. standards, companies are required to have a nominating/corporate
governance committee, which develops and recommends a set of M&A
associated global policies, which set out Diageo’s broader commitment Diageo must also comply with corporate governance rules contained in
to inclusion and diversity. Diageo strongly supports diversity within its the FCA Disclosure Guidance and Transparency Rules and certain corporate governance principles and is composed entirely of Media
Board of Directors, including gender, ethnicity, age and professional related provisions in the Companies Act 2006 (the Act). Diageo is also independent directors. The terms of reference for Diageo’s
diversity, as well as diversity of thought. The Board is comprised of listed on the New York Stock Exchange (NYSE), and as such is subject Nomination Committee, which comply with the Code, do not contain Sales and marketing

individuals from a diverse range of skills, industries, backgrounds and to the applicable rules of this exchange and jurisdiction. For example, such a requirement. In accordance with the requirements of the Strategy
nationalities, which enables a broad evaluation of all matters Diageo is subject to the listing requirements of the NYSE and the rules Code, Diageo has disclosed on pages 105-106 the results and means
considered by the Board and contributes to a culture of collaborative of the US Securities and Exchange Commission (SEC), as they apply to of its annual evaluation of the Board, its Committees and the Sustainability

and constructive discussion. The Board’s objective, as set out in its foreign private issuers. Compliance with the provisions of the US Directors, and it provides extensive information regarding the
Technology
Diversity Policy, is that it shall include no less than 40% female Sarbanes-Oxley Act of 2002 (SOX), as it applies to foreign private Directors’ compensation in the Directors’ remuneration report on
representation (with the ultimate goal being parity between males and issuers, is continually monitored. pages 122-147. Transaction advisory
• Code of ethics: NYSE rules require a Code of Business Conduct and
females on the Board) and at least one Director from a minority ethnic Compliance with US corporate governance rules Code of Ethics to be adopted for directors, executive officers and
group. As at 24 July 2024, women make up 70% of the Board and Under applicable SEC rules and the NYSE’s corporate governance Independence
there are four Directors (40%) who self-disclose as being from minority employees and disclosure of any waivers for executive directors or The Code requires the Board to state its reasons for concluding that a
rules for listed companies, Diageo must disclose any significant ways in officers. Diageo has adopted a Code of Business Conduct for all
ethnic groups. Further information about diversity at Board and senior which its corporate governance practices differ from those followed by director is independent notwithstanding the existence of certain
executive levels can be found on page 121 and in the 'Our people and Directors, officers and employees, as well as a Code of Ethics for relationships or circumstances which are likely to impair or appear to
US companies under NYSE listing standards. Diageo believes the Senior Financial Officers in accordance with the requirements of
culture' and 'Champion inclusion and diversity' sections of the Strategic following to be the significant areas in which there are differences impair the director's independence. A non-exhaustive list of such
Report on pages 55-56 and 59-60 respectively. The Board's Diversity SOX. See page 115 for further details. circumstances is set out in provision 10 of the Code and include,
between its corporate governance practices and NYSE corporate • Compliance certification: NYSE rules require chief executives to
Policy is available at https://www.diageo.com/en/our-business/ governance rules applicable to US companies. This information is also amongst other things, the fact that a director has served on the board
corporate-governance/board-diversity. certify to the NYSE their awareness of any NYSE corporate for more than nine years. As noted in last year's annual report, Alan
provided on the company’s website at www.diageo.com. governance violations. Diageo is exempt from this as a foreign Stewart, who was first appointed to the Board in September 2014 and
Outside interests and conflicts • Basis of regulation: UK listed companies are required to include in private issuer but is required to notify the NYSE if any executive has therefore exceeded nine years on the Board, agreed to extend the
The Board has adopted guidelines for dealing with conflicts of interest, their annual report a narrative statement of (i) how they have officer becomes aware of any non-compliance with NYSE corporate term of his appointment to enable a smooth transition of the role of
with Directors' outside interests being regularly reviewed and applied the principles of the Code and (ii) whether or not they have governance standards. No such notification was necessary during Chair of the Audit Committee. As announced on 20 February 2024,
responsibility for authorising conflicts of interest reserved for the Board. complied with the best practice provisions of the Code. NYSE listed the period covered by this report. Julie Brown will be joining the Board and succeeding Alan as Chair
In the case of a potential conflict, the Nomination Committee considers companies must adopt and disclose their corporate governance
Structure and division of responsibilities of the Audit Committee with effect from 5 August 2024. Accordingly,
the circumstances, appropriate controls and protocols, and makes a guidelines. Certain UK companies are required to include in their
The Board is committed to the highest standards of corporate Alan will retire from the Board immediately prior to the 2024 AGM
recommendation to the Board. The Board confirmed that it was not annual report statements as to (i) how directors have complied with
governance and risk management, which is demonstrated in its and not stand for re-appointment. The Board considered the matter
aware of any situations that may or did give rise to conflicts with the Section 172 of the Act, which requires directors to promote the
established corporate governance framework, illustrated on page 91. of Alan's independence in light of this extension and concluded that,
interests of the company, other than those that may arise from success of the company for the benefit of the members as a whole,
This includes the three Board Committees (Audit Committee, notwithstanding his serving for more than nine years, he continues to
Directors’ other appointments as disclosed in their biographies. having regard to the interests of stakeholders and (ii) how directors
Nomination Committee and Remuneration Committee), as well as make high-quality contributions to Board and committee meetings,
have engaged with and taken account of the views of the
Duties of the Board management committees which report to the Chief Executive or Chief providing effective and constructive challenge to management and
company’s workforce and other stakeholder groups. Diageo
Financial Officer (Executive Committee, Finance Committee, Audit & demonstrating objective and independent judgement. In light of this
The Board manages overall control of the company’s affairs with complied throughout the year with the best practice provisions of the
Risk Committee and Filings Assurance Committee). There is a clear assessment, originally made in July 2023 and recently confirmed
reference to the formal schedule of matters reserved for the Board for Code and the disclosure requirements noted above.
separation of the roles of the Chair, the Senior Independent Director by the Board, the Board has determined that Alan Stewart
decision. The schedule was last reviewed in July 2024 and is available • Director independence: The Code requires at least half the Board
and the Chief Executive which has been clearly established, set out in remains independent.
at https://www.diageo.com/en/our-business/corporate-governance. (excluding the Chair) to be independent Non-Executive Directors, as
In order to fulfil their duties, procedures are in place for Directors to determined by affirmatively concluding that a Director is writing and approved by the Board. A copy of this is available at Board and Committee attendance
seek both independent advice and the advice and services of the independent in character and judgement and determining whether https://www.diageo.com/en/our-business/corporate-governance. No Directors’ attendance record at the last AGM, scheduled Board
Company Secretary, who is responsible for advising the Board on all there are relationships and circumstances which are likely to affect, individual or group dominates the Board’s decision-making processes. meetings and Board Committee meetings, for the year ended 30 June
governance matters. The Board considers a number of factors when or could appear to affect, the Director’s judgement. The Code 2024 is set out in the table shown on page 89. Directors are expected
making decisions, including the potential impact of those decisions on requires the Board to state its reasons if it determines that a director is Further details on the Board Committees can be found in the separate
to attend all meetings of the Board and its Committees and the AGM,
various stakeholder groups and on the company's ‘Spirit of Progress‘ independent notwithstanding the existence of relationships or reports from each committee on pages 111-147, and details of the
but if unable to do so they are encouraged to give their views to the
and other non-financial targets, including in respect of environmental circumstances which may appear relevant to its determination. NYSE Executive Committee can be found on pages 94-95.
Chair of the meeting in advance. The 2023 AGM was held as a
sustainability. Further information on the Board and the Audit rules require a majority of independent directors, according to the combined physical and electronic meeting via a live webcast with all
Committee's roles in climate risk governance can be found on page 61. NYSE’s own 'brightline' tests and an affirmative determination by the Board skills and experience Directors attending either physically or by video link. For Board and
The terms of reference of Board Committees are reviewed regularly, Board that the Director has no material relationship with the listed Having an appropriate mix of experience, expertise, diversity and Board Committee meetings, attendance is expressed as the number of
most recently in July 2024, and are available at company. Diageo’s Board has determined that, in its judgement and independence is essential for Diageo's Board. Such diverse attributes meetings attended of the number that each Director was eligible to
https://www.diageo.com/en/our-business/corporate-governance. without taking into account the NYSE brightline tests, all of the Non- enable the Board as a whole to provide informed opinions and advice attend. The 2024 AGM is scheduled to be held on 26 September 2024.
Executive Directors are independent. As such, currently eight of on strategy and relevant topics, thereby discharging its duty of
Diageo’s ten Directors are independent. Further details of this oversight. The Board skills matrix helps to identify the experience and
determination in relation to Alan Stewart, Non-Executive Director and expertise of existing Directors, required skill sets or competencies, and
Chair of the Audit Committee, are set out on page 97. the strategic requirements of the company. The key strengths and

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C O R P O R A T E G O V E R N A N C E R E P O R T continued

Appointment and re-appointment at AGMs

Fiscal 24 Board activities timeline The Chair has confirmed that the Non-Executive Directors standing for from the attendance records set out on page 89, Directors’ attendance
re-appointment at this year’s AGM continue to perform effectively, both levels have been consistently high throughout the year ended 30 June
During fiscal 24, there were several
individually and collectively as a Board, and that each Non-Executive 2024. Two proposed Directors, Julie Brown and Nik Jhangiani, will also
scheduled in-person meetings of the
Director demonstrates commitment to their roles and continues to stand for appointment. Further details, including biographies, are set
Board and its Committees as well as a provide constructive challenge, strategic guidance and offer specialist out in the Notice of Meeting for this year's AGM.
July 2023 – Board and Committee number of ad hoc, out-of-cycle June 2024 – Committee meetings – advice, as well as holding management to account. As can be seen
meetings – London, UK meetings held by video-conference London, UK
and electronic approvals. During the Board activities
Review by Audit Committee of fiscal Audit sub-committee meeting,
< 23 reporting, external audit, year, most physical Board and < focusing on progress in relation to
Details of the main areas of focus of the Board and its Committees during the year include those summarised below:
preliminary results announcement, Committee meetings were held at
audit and year end reporting Areas of focus Strategic outcomes Stakeholders
annual report and accounts, as well Diageo’s office in London although the
Board met in Chicago in October Review of preparation of non- Strategic • Held a two-day Annual Strategy Conference (ASC) focusing on key strategic
as internal audit, controls and
2023. The Annual General Meeting
< financial reporting and disclosures, matters matters, including implementation of strategic transformation programmes, regional
EG CVC
business integrity matters reviews of North America and Asia Pacific, whisky strategy, developments in the
was held in London in September including TCFD compliant reporting
Review by Audit Committee of non- group's ESG programme including ’Spirit of Progress’
< financial disclosures, including TCFD
2023, enabling shareholders to
< Remuneration Committee meeting,
• Regularly reviewed the group’s performance against the strategy
compliant reporting engage directly with the Board. In April focusing on executive reward cycle • Received reports on the financial performance of the group as against the annual
2024, the Board meeting was
Nomination Committee and plan
< Remuneration Committee meetings,
preceded by the Annual Strategy
Conference, a multi-day conference at
• Reviewed the group’s governance frameworks for reputation management, tax
focusing on executive reward cycle strategy and policy
which the Executive Committee and April 2024 – Annual Strategy • Received reports on the macroeconomic environment, socio-political matters and
Board meeting, focusing on fiscal 23 the Board review and discuss business Conference, Board and Committee emerging trends
< full year performance and reporting, strategy areas and initiatives, from meetings – London, UK • Carried out deep dives into key strategic topics including its operations, portfolio
finance and governance matters, which the annual cycle of strategic and footprint in North America and Africa, its digital marketing strategy, and its
Annual Strategy Conference,
'Spirit of Progress' programme, and topics for consideration by the Board < focusing on business transformation,
global travel business
workforce engagement activities over the next 12 months is determined. Operational Reviewed and approved the group's three-year plan and annual funding plan,
key regional strategies, innovation, •
EG CVC EP
Strategic and operational matters insurance, banking and capital expenditure requirements
< matters
whisky, and business planning
• Regularly reviewed and approved the group’s M&A and business development
Board review and approval of
September 2023 – Board and < Risk mitigation, audit and < materiality assessment results and
activities, reorganisations and various other projects
assurance • Reviewed the group's internal culture and values, including in respect of diversity
Committee meetings and AGM – refresh of ’Spirit of Progress’ and inclusion, values and behaviours
Environmental, social and programme Approved capital expenditure investments, and various significant procurement,
London, UK < governance matters
•
systems and other contracts, having taken into consideration financial, operational,
Audit Committee meeting, with a
< Nomination Committee meeting Talent and people < focus on principal and emerging risk sustainability and other ESG related factors
< management reviews, internal audit, controls and • Reviewed the company’s capital allocation, funding and liquidity positions, and
Board meeting, focusing on latest those of its pension schemes
< performance, reputation
business integrity matters
• Reviewed and approved the company’s return of capital proposals, including
Nomination Committee meeting,
management and strategy, and
various supply chain contract
< focusing on Executive Committee •
interim and final dividends and share buyback programme
Approved new roles and appointments to the Board, including a new future Chair
approvals succession planning, and of the Board, a new Chief Financial Officer and a new Chair of the Audit Committee
Remuneration Committee meeting of the Board
Annual General Meeting, engaging
< with shareholders and investors with < Board meeting, focusing on finance • Acting through the Nomination Committee, reviewed the company’s succession
matters, business development, planning and talent strategy
presentation and Q&A session, and
voting on resolutions reputation management, supply ESG matters • Supervised conduct of double materiality assessment, reviewed progress in relation CT EP
chain footprint and approvals to the group's ’Spirit of Progress’ programme and refreshed the programme in light
of the initial double materiality assessment results
• Received reports on workforce engagement over the year
October 2023 – Board and • Received regular investor reports
January 2024 – Board and • Received regular updates on ESG matters and progress towards ‘Spirit of Progress‘
Committee meetings – Chicago, targets
Committee meetings – London, UK
Illinois, USA • Engaged an external facilitator to carry out evaluation of the Board’s performance,
Audit Committee meeting, focusing reviewed results and agreed action points
< Audit Committee meeting, with a < on half year reporting and interim • Reviewed schedule of matters reserved for the Board and terms of reference of its
focus on principal and emerging risk results review, as well as internal Committees
reviews audit, controls and business integrity
Nomination Committee and December 2023 – Board and matters Assurance • Received reports in relation to material legal matters, including disputes, regulatory CVC CT
< Remuneration Committee meetings Committee meetings – London, UK Nomination Committee and
and risk and governance developments, and areas of legal or regulatory risk
< management • On the recommendation of the Audit Committee, approved the company’s risk
Multi-day board meeting, focusing Audit Committee meeting, with a Remuneration Committee meetings footprint, including reviewing and updating the principal risks
< on latest performance, North
< focus on principal and emerging risk External speaker on cyber security • On the recommendation of the Audit Committee, approved the company’s filings,
America business and operations, reviews, internal audit, controls and < preparedness financial and non-financial reporting including interim and preliminary results
including customer and on-premises business integrity matters, and announcements, US filings and Annual Report
Board meeting, focusing on fiscal 24
visits and a production facility tour, preparation for half year results
review
< half year performance and reporting,
Africa strategic review, digital Strategic outcomes key Stakeholders key
marketing, and values, behaviours finance matters, workforce
Nomination Committee meeting
and culture < engagement activities, and supply
chain contract approvals
EG Efficient growth CT Credibility and trust
People Customers Communities
Government
and Regulators
Board meeting, focusing on latest
< performance, global travel, business CVC Consistent value creation EP Engaged people
Consumers Suppliers Investors
development, inclusion and diversity,
and board evaluation feedback

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Stakeholder engagement Stakeholder and why we engage

What we believe matters most to them Reporting to the Board
• A portfolio of leading brands that meets evolving consumer • Regular performance updates by the

We aim to maintain open and positive dialogue The development of strong and positive relationships between Diageo preferences Chief Executive, including customer and
and its external stakeholders is an intrinsic part of our purpose and • Identification of opportunities that offer profitable growth route-to-consumer concerns
with all our stakeholders, considering their key culture. Our stakeholders include not only business partners such as • Insights into consumer behaviour and shopper trends • Deep dive reviews on key regions or
• Trusted product quality markets, such as Great Britain and
interests in our decision-making and suppliers and customers, our people and workforce, but also
Customers • Innovation, promotional support and merchandising North America, including consideration
government, consumers and the wider communities in which we
communicating with them on a regular basis. operate. As noted in the company’s statement on Section 172 of the • Our customers are a broad • Availability and reliable supply and stocking of key customer relationships and ways
• Technical expertise of working
This dialogue helps us build trust and respect Companies Act 2006 set out on page 9, in making their decisions and range of businesses, large
and small, on-trade and off- • Joint risk assessment and mitigation
in discharging their duties to promote the success of the company, the
and make choices as a business that help shape Directors must have regard to the interests of its stakeholders. We have trade, retailers, wholesalers • Sustainability and societal credentials Upcoming priorities
the role we play in society. summarised below why our stakeholders are important to us, what we and distributors, digital and
e-commerce How the Board seeks to engage
• Scheduling face-to-face meetings for
believe their principal interests are and how the Board and company Directors to meet representatives of key
seeks to engage and respond. • We want to nurture mutually • Regular review of innovation pipeline and inorganic customers during market visits and
beneficial relationships to opportunities to ensure a broad portfolio at multiple price throughout Board calendar
deliver joint value and great points • Enhancing relationships between the
Stakeholder and why we engage consumer experiences • Review of supply chain footprint to ensure efficient delivery company and its customers through
What we believe matters most to them Reporting to the Board of products to customers engagement opportunities
• Prioritisation of health, safety and well-being • Regular reports from workforce • Direct engagement with key customers during market visits
• Learning and development opportunities engagement activities What we believe matters most to them Reporting to the Board
• Purpose, culture and benefits • Feedback through employee surveys,
• Strong, mutually beneficial partnerships • Terms of material contracts with
• Contributing to the growth of our brands and including annual group-wide Your Voice
• Strategic alignment and growth opportunities suppliers are reviewed by the Board
performance survey
Our people • Promotion of inclusion and diversity • Sessions on different aspects of culture,
• Fair contract and payment terms • Periodic updates provided to the Board
• Collaboration to realise innovation in relation to supply chain agility
• People are at the core of our • Sustainability and societal credentials values and behaviours at Board meetings
• Consistent performance measures programme rollout
business led by Chief HR Officer
• We aim to build a trusting, How the Board seeks to engage
Suppliers • Joint risk assessment and mitigation • Proposals put to the Board include
• Our suppliers, service • Sustainability and societal credentials summaries of potential implications for
respectful and inclusive culture • Active dialogue maintained throughout the year as Upcoming priorities
providers and agencies are suppliers as a key stakeholder group
where people feel engaged and part of the Board's ongoing workforce engagement • Maintaining focus on simplifying internal
experts in their fields How the Board seeks to engage
fulfilled programme processes, including upgrading and
• We rely on them to deliver Periodic review of supply chain footprint in key markets to Upcoming priorities
• We want our people to be treated • Direct engagement through visits to offices, transforming business operations and •
with dignity at work and their high-quality products and ensure resilience and flexibility, monitoring environmental • Continued focus on rollout of supply
production and supply chain sites during the year systems
human rights respected market responsibly impacts and efficiencies chain agility programme
• Indirect engagement through feedback from works • Continuing workforce engagement
• We collaborate with them to • Review and approval of material supply and procurement • Monitoring impact of supply chain
councils, employee and workforce forums, activities including as part of business
improve our collective contracts including for critical raw materials disruption on operations
community groups, Your Voice and pulse surveys transformation implementation and
impact, ensure sustainable • Supporting management in improving supplier relationships • Supervision of initiatives to improve
and townhall meetings change management
and resilient supply chains, through fair contract and payment terms, compliance with sustainability and supply chain
and make positive Diageo's 'Partnering with Suppliers Standard' and working resilience
What we believe matters most to them Reporting to the Board contributions to society collaboratively to mitigate environmental impacts and
• Choice of brands for different occasions, including • Regular performance updates by the Chief achieve ESG goals
no- and lower-alcohol Executive, including on key consumer
What we believe matters most to them Reporting to the Board
• Innovation in heritage brands and creation and trends
nurturing of new brands • Papers prepared by strategy team on • Impact of our operations on the local economy • Reports provided to Board on progress
• Responsible marketing evolving consumer behaviours globally • Access to skills development, employment and supplier made in relation to 'Spirit of Progress'
Consumers • Great experiences and in key regions opportunities targets
• Understanding our consumers is • Product quality • Regular updates by Business Development • Inclusion, diversity and tackling inequality in all forms • Proposals put to the Board include
critical for our business’s long-term • Sustainability and societal credentials and Innovation teams on organic and • Responsible use of natural resources, biodiversity and summaries of potential implications for
growth • Price inorganic opportunities and portfolio Communities sustainability local communities
• Consumer motivations, attitudes choices • We aim to create long-term • Transparency and engagement • Reports on macroeconomic and socio-
How the Board seeks to engage value for the communities in political events provided to Board by
and behaviours form the basis of
our business strategy, brand • Monitoring consumer behaviours, motivations and Upcoming priorities which we live, work, source How the Board seeks to engage management
marketing and innovation insights and sell Setting targets and monitoring progress on broader societal
• Ongoing review of portfolio and category •
• We want consumers to enjoy our • Responding to and anticipating emerging • We can help build thriving matters, including promoting positive drinking, inclusion and Upcoming priorities
participation opportunities
products responsibly and for them consumer trends as part of strategic sessions, communities and strengthen diversity Enabling acceleration of key aspects of
• Developing pipeline of innovation informed •
to ‘drink better, not more’ including the Annual Strategy Conference our business through • Considering the environmental and social consequences for 'Spirit of Progress' targets, including in
by consumer insights
• Regular review of business development empowering people, communities of its key decisions, including encouraging respect of positive drinking and water
• Enhancing marketing effectiveness through
opportunities, including active brand portfolio increasing access to inclusion and diversity, equal employment opportunities, stewardship
detailed understanding of consumer
management opportunities and skills development and support for communities and • Increased focus on carbon reduction
motivation, globally and by region or
• Review of innovation pipeline as part of the Annual championing inclusion and through wider value chains initiatives
market
Strategy Conference diversity

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Stakeholder and why we engage

What we believe matters most to them Reporting to the Board
Engaging with investors and shareholders
• Compliance with applicable laws and regulations • Reports on socio-political events and Diageo's Investor Relations (IR) team support the Chief Executive, Chief
• Contribution to national and local economic development issues periodically provided to the Financial Officer and other members of the Board and Executive Committee
and public health priorities Board with arranging a programme of engagement events, attendance at analyst
• International trade, excise, regulation and tackling illicit • Developments in regulatory matters, conferences, meetings and calls with a wide variety of shareholders, investors
trade including governance and reporting and analysts. The IR team monitor Diageo's share price performance and
Governments and • Tackling harmful drinking and the impact of responsible obligations, are included in biannual trading patterns, review analyst research notes and recommendations, peer
drinking initiatives reports to the Board prepared by
regulators • Climate change and water sustainability agendas, including management
group and other sector news, providing regular reports to the Board and
• The regulatory environment is Executive Committee. During fiscal 24, there have been over 400 meetings or
carbon reduction, human rights, environmental impacts,
critical to the success of our calls between investors and management, including the Chief Executive,
sustainable agriculture, biodiversity and support for Upcoming priorities
business Chief Financial Officer or other members of the Executive Committee and IR
communities • Monitoring developments in regulation
• We share information and team. A key example of how the company engages with investors is the
and best practice in respect of non- Capital Markets Event held in November 2023 at which Diageo's Executive
perspectives with those who How the Board seeks to engage financial reporting requirements, corporate Committee highlighted the company's strategic priorities, showcased case
influence policy and regulation
• Indirect engagement through periodic updates from the governance and audit regime studies of strategy being put into action, including in relation to the
to enable them to understand
Chief Executive and corporate relations executives • Supporting management's advocacy in
our views on areas that can opportunities for whisky in India, innovation in Guinness and the rollout of
• Review of macroeconomic and geopolitical developments relation to key public policy matters
impact public health and our tequila into new markets. These engagement events allow investors to get a
as part of strategy sessions including water stewardship, positive
business more detailed understanding of our market dynamics and opportunities and
• Updates on regulatory developments, including in relation to drinking, inclusion and diversity
non-financial reporting, corporate governance and public how Diageo looks to grow its business, while also allowing management to
policy have a direct dialogue with investors.
What we believe matters most to them Reporting to the Board
• Strategic priorities, opportunities and risks • Monthly reports compiled by Investor
• Financial performance Relations team provided to the Board, Fiscal 24 investor activity timeline
• Corporate governance providing details on engagement August 2023 September 2023 October 2023 November 2023 December 2023
• Leadership credentials, experience and succession sessions with investors and key trends
• Executive remuneration policy • Chief Executive reporting investor
• Announcement of • Annual General • IR team had meetings • Trading update • CEO, CFO and other
Investors • Shareholder returns sentiment to the Board as part of Diageo's Preliminary Meeting held on 28 with investors on an announcement Executive Committee
• We want to enable equity • Environmental, inclusion and diversity, and social regular updates at Board meetings, Results for fiscal 23 on 1 September 2023 individual and group • Capital Markets Event members had various
and debt investors to have commitments and progress including feedback following August 2023 • IR team held a number basis hosted in New York by meetings and calls with
an in-depth understanding of participation at analyst and investor • Roadshow by the CEO of one-to-one meetings CEO, CFO and investors
our strategy, our operational, How the Board seeks to engage conferences and CFO in the UK and and conference calls Executive Committee
financial and holistic US with various investors members
• Regular engagement between key investors and Chief
performance, so that they Executive and Chief Financial Officer through Investor Upcoming priorities
can more accurately assess Relations programme of events • Continued proactive engagement with January 2024 February 2024 March and April 2024 May 2024 June 2024
the value of our business and • Participation in investor conferences such as the Consumer investors through structured programme • Announcement of • Roadshow by CEO and • The CEO, CFO and IR • Roadshow hosted by • CFO attended Deutsche
the opportunities and risks of Analyst Group of New York meeting (CAGNY) of engagement activities over the year Diageo's Interim Results CFO in London, New team met with several Barclays with CFO and Bank Conference in
investing in it • Hosting investor events such as the Capital Markets Event • Preparing for the Annual General for fiscal 24 on 30 York and Boston investors, individually IR team in San Paris
held in New York in November 2023 Meeting to be held in September 2024 January 2024 • CEO and CFO and in groups Francisco and Los
• Attendance at the Annual General Meeting in September • Engaging directly with investors through presented at the Angeles
2023, including responding to questions from shareholders post-results announcement roadshows CAGNY conference

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Principal Board decisions Wider stakeholder engagement Further information on our stakeholders, what we think is important to
them and how the Board engages and responds to them can be
Below are some examples of the principal decisions taken by the Board during fiscal 24 as well as summaries of some of the matters referred to in Diageo has ambitious goals across a variety of social and
found on pages 100-104. Case studies summarising how stakeholder
Section 172 of the Companies Act 2006 which were taken into consideration by the Board. environmental targets and has a long track record of working with
considerations were taken into account by the Board during fiscal 24,
stakeholders to achieve these goals. Our ambition to be one of the
Creation of our Growth Ambition as required by Section 172 of the Companies Act, in respect of three of
best performing, most trusted and respected consumer products
its principal decisions are set out on page 104.
Decision made companies in the world can only be achieved through engagement
Supported by the group strategy team and Executive Committee, the Chief Executive has carried out a review and assessment of our strategy in and partnership with our stakeholders. The Board and its members Executive direction and control
light of the evolving external environment, resulting in the identification of strategic imperatives and priorities to enable future growth. This have engaged directly and indirectly with a variety of its key
stakeholders during fiscal 24 in order to respond to stakeholder Executive Committee
overview, which was presented to and approved by the Board, led to the creation of Diageo’s Growth Ambition, further details of which are set
out on pages 14-15. considerations in making its decisions and determining the company’s The Executive Committee, appointed and chaired by the Chief
strategy and goals. These include the following activities: Executive, supports her in discharging her responsibility for
Stakeholder considerations implementing the strategy agreed by the Board and for managing the
Diageo’s strategy has been to consistently and steadily gain share and build global brands despite various challenges and dynamic external • In October 2023, the Board met and engaged with customers and company and the group. It consists of the individuals responsible for
factors, such as Covid-19, the cost of living crisis, consumer trends and stakeholder expectations. In recent years, the macroeconomic, geopolitical retailers in Chicago, touring shops and stores. During these the key operational and functional components of the business: North
and societal environment has continued to be volatile seeing a period of accelerated change in many respects, including digitalisation and meetings and visits, Directors discussed with customers and their America, Europe, Africa, Latin America and Caribbean, Asia Pacific,
technological advances, while other longer-term trends, such as premiumisation, have broadly continued, albeit in a less consistent manner. The staff what trends were emerging and how they were impacting India, Supply Chain and Procurement and Corporate. The Executive
Growth Ambition has at its core the interests and demands of consumers, which vary considerably by market, and, by extension, customers. The sales, stock and inventory levels and consumer choice. Similarly, Committee focuses its time and agenda to align with the Growth
review also considered the interests and needs of Diageo’s employees and broader workforce, who need the systems, processes, structures and when meeting in April 2024 in London, the Board heard the views of Ambition and how to achieve Diageo’s financial and non-financial
capabilities to enable growth by responding to and leading consumer trends appropriately. The review also considered the interests of senior executives from Diageo's largest on-trade customers, grocery performance objectives. Performance metrics have been developed to
shareholders, aiming to create value, which can be reinvested in our brands and business, and returned to shareholders. and wholesale customers in the United Kingdom. Feedback measure progress. There is also focus on the company’s reputation. In
’Spirit of Progress’ review and refinement received from customers in different markets is also reported to the support, monthly performance delivery calls, involving the managing
Board by the Chief Executive in her regular performance summaries. directors of each market, focus on current performance. Committees
Decision made Diageo partners with its customers to analyse the performance of its
Diageo’s ambitious global ESG action plan, ‘Spirit of Progress’, was launched in 2020, having been approved by the Board, with the aim to make appointed by the Chief Executive and intended to have an ongoing
portfolio and marketing investment as well as market trends and remit, including the Audit & Risk Committee, Finance Committee and
a positive impact on people and the planet and to help create a more inclusive and sustainable world. Approaching the mid-point of the overall consumer activity, in order to enhance the company's consumer
programme, during fiscal 24 management undertook a review of the action plan’s current status and recommended a refinement and focus of Filings Assurance Committee, are shown (with their remits) at https://
insights tools which enhance its innovation, product development www.diageo.com/en/our-business/corporate governance.
resources on those targets which address our highest risks and in respect of which we can have the greatest impact. The Board approved the and marketing initiatives.
review and resulting refinement of these targets and priority areas. • Directors, both individually and collectively, have visited a number Performance evaluation
Stakeholder considerations of different Diageo offices and production sites during the year. Our The effectiveness of the Board and its Committees is vital to the overall
Diageo has a longstanding commitment to carrying on its business in a sustainable and resilient way, given the importance of environmental and Chair, Chief Executive and Chief Financial Officer travel regularly to success of the Group. The last externally facilitated evaluation of the
social responsibility and the impact that the Company has on its different stakeholder groups. For example, Diageo’s workforce want to work for different sites around the world, but our Non-Executive Directors also Board had been carried out in 2020. After internal evaluations
a company that values the environment and community in which it operates, encourages inclusion of a diverse range of people and builds visit Diageo locations. For example, in October 2023 Non-Executive conducted in 2021 and 2022, in accordance with Provision 21 of the
respect, engagement and fulfillment. Investors and shareholders benefit from business practices which are sustainable and result in consistent Directors visited the company's packaging facility and plant in Code, another externally facilitated evaluation was conducted during
holistic performance, balancing resource and capital allocation over time. The review, which is described in more detail on pages 49-50, Plainfield, Illinois, as well as its newly opened Guinness Open Gate 2023. In line with the UK Corporate Governance Code, in August 2023
considered the underlying targets of the programme’s three priority areas and the degree to which progress had been made against them, the brewery and tap room in Chicago. A number of Non-Executive the Board instructed Dr Tracy Long of Boardroom Review Limited
reasons why significant progress had been made against certain targets but not against other targets, and the preliminary results of Directors have also visited Diageo's tequila operations and agave (BRL), an independent professional consultancy which specialises in
management's double materiality assessment. The review also included consideration of various external factors and uncertainties which impact farms in Mexico over the course of the year. These visits enabled the board reviews and evaluations, to conduct an externally facilitated
our ability to achieve certain targets, how stakeholder approaches and expectations developed over time, and areas where Diageo could have a Board to get a deeper understanding of the company's production evaluation. Dr Long and BRL have no connection with Diageo or
disproportionate impact through additional resource and focus. As a result of the review, Diageo will focus its efforts on those areas and targets processes and facilities, as well as the impact of brand homes on its directors.
which address our highest risks and in respect of which we can have the greatest impact, recognising the continuing importance of sustainability brand equity and consumer choice. Engaging directly with
to our stakeholders. employees through these visits, as well as the regular workforce The purpose of the evaluation was to conduct a comprehensive review
engagement sessions, is an important means of providing insights and evaluate how the Board and its Committees operate as measured
Appointment of future Board Chair against current best practice corporate governance principles and in
as to the complexity of managing distribution and logistics routes,
Decision made inventory management and demand forecasting, informing accordance with the Code guidance. The review encouraged candid
The Board approved the appointment of Sir John Manzoni, an existing Non-Executive Director, as Chair of the Board effective on or around 5 strategic decision-making and supply chain efficiency. reflections from the Board in order to build on strengths, identify
February 2025, succeeding Javier Ferrán, who will be standing down in his ninth year on the Board. • The Board has a well-established workforce engagement challenges and consider recommendations.
Stakeholder considerations programme, in which each Non-Executive Director is involved in The evaluation was conducted through a series of one-to-one
The Board considered Sir John Manzoni’s record since joining the Board in 2020, having made high-quality contributions to Board and regular engagement sessions with different parts of the global interviews with each Director as well as a number of key executives
committee meetings, providing effective and constructive challenge to management and demonstrating objective and independent judgment. workforce over the course of the year, both virtual and in person. and third parties who interact frequently with the Board, an
The Board considered that Sir John facilitated constructive Board relations in a manner which was consistent with the Board’s transparent and Through these sessions, Non-Executive Directors gain insights into information review and observations of meetings. Dr Long attended
open culture, and had supported the current Chair in instilling appropriate values, behaviours and culture in the Board and senior management. the company’s culture which are then fed back to the company’s and observed Board and Committee meetings during September and
Sir John has extensive leadership experience across a number of complex and fast-changing sectors, in the UK and globally, including in engagement teams and used to shape our approach to people. October 2023, including private meetings between Non-Executive
executive and non-executive capacities within the private sector as well as in the UK civil service. His experience in the public sector, working with See pages 106-107 for this year’s workforce engagement statement Directors at which no Executive Directors or management were
government, civil service and regulators, would be particularly beneficial to Diageo. Sir John’s current appointments and commitments were also which includes further details of how the programme has operated present. A report was then prepared for discussion with individual
noted, including his roles on other company boards, in light of the commitments and demands of the role, as was the fact that he was during the year. Directors and the Board as a whole.
independent on appointment, as required by the Code, and remained independent. Overall, the Board concluded that Sir John was the most • Board members, and in particular the Chief Executive and Chief
suitable candidate and that his appointment as Chair would be of benefit to the company, its shareholders and wider stakeholders. Financial Officer, participate in an extensive programme of regular The findings of the evaluation indicate that the Board is considered to
meetings, calls and other engagement activities with investors and be well governed and effective. A particular key strength of the Board
analysts, co-ordinated by the Investor Relations function. See page is in its composition, expertise and performance as well as the contents
103 for a timeline summarising this programme, which includes of its meetings. Diversity, inclusion, trust and transparency are other
highlights from fiscal 24 including the company's Capital Markets key strengths the Board is actively committed to ensuring it reflects its
Event hosted in its New York office in November 2023 and the consumer and global marketplace.
company's participation at the annual conference of the Consumer A summary of the key findings and recommendations was presented
Analyst Group of New York held in Florida in February 2024. by Dr Long to the Board in December 2023, following which the Chair
Materials from these sessions are available on https:// and Company Secretary determined areas of focus for approval by
www.diageo.com/en/investors/results-reports-and-presentations. the Board.

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• While high workloads and complex systems and processes were SpeakUp allegation reporting
highlighted as barriers that can at times prevent colleagues from Regular reports are provided by the Business Integrity team to the
Key recommendations Actions for focus in 2024/25 operating in the most efficient way, improvements in collaboration Audit Committee, providing information and data on reported
and connectivity through technology, as well as an overall cultural allegations of breaches of the Code of Business Conduct and other
General feedback shift underway, were praised. Investment being made in digital, group policies, including those received through our confidential and
• Continue to ensure Board members feel well integrated into the • Increase lines of communication between management and data and analytical capabilities is seen positively, and colleagues independent whistleblowing service SpeakUp. These reports also
Board and company Board members look forward to these investments improving workload and include analyses of emerging trends, investigation status reports and
• Ensure focus on diversity continues • Consider opportunities for more engagement between Board liberating burdensome processes. closure rates, and summaries of actions taken. These reports enable
members and the workforce These themes were also reflected in this year’s engagement results the Directors to gain an understanding of common issues and action
Board composition and succession seen in the global employee survey, Your Voice, which remains top planning, as well as providing insights into how embedded Diageo’s
quartile and above external benchmarks with 81% engagement levels purpose, values and culture are across its markets and functions.
• Nomination Committee to tailor induction programmes for • Enhance the succession planning transition process to identify
specific new Non-Executive Directors depending on their potential new Board members with relevant sector experience and 89% pride in working for Diageo. For more details of the SpeakUp service, see pages 53 and 114.
background and experience Insights gathered from workforce engagement sessions held by the
• Continue to review the balance of skills, expertise and Workforce engagement programme
• Continue to increase focus on communication channels with knowledge of the Board Board, alongside broader listening tools such as the Your Voice survey, Insights drawn from the Board’s annual programme of workforce
brokers, shareholders and other stakeholders • Focus recruitment and talent pipeline on key areas for additional annual employee engagement and pulse surveys, have helped the engagement are used by the Board to monitor and assess the culture
• Enhance and align technology with the growth agenda and with expertise company to listen and respond to the perspectives of our employees, of the company, with recommendations being fed back to
testing various assumptions as well as identify specific areas to further enhance our employee management regularly with workforce engagement being discussed
experience. at Board meeting sessions twice a year. Over the past few years, the
People and culture
• Continue external talent search for executive and senior leader • Continue to promote and protect the company’s corporate Purpose, values and culture engagement programme has enabled all Non-Executive Directors to
participate by directly engaging with employees from a variety of
roles as well as focus on the development of internal talent culture and values The Board is responsible for establishing Diageo’s purpose, values and regions, functions and levels in the business. During fiscal 24, Karen
culture and for monitoring how embedded that culture is within our Blackett has carried out the role of Non-Executive Director with
• Ensure regular structured engagement between Nomination • Continue to review the talent pipeline of executives and senior
Committee members and high potential internal candidates management business. Diageo has a long-established purpose and set of values responsibility for workforce engagement. For more information on
which resonate strongly with our employees, as indicated by the workforce engagement, see page 106.
• Review and track high potential candidates both internally and Board's engagement sessions with Diageo's workforce and our
externally employee surveys. We are very conscious that Diageo must operate
Strategy and risk with the highest standards of governance, doing business the right
way, from grain-to-glass. This principle is embedded in our Code of
• Review and track key strategic decisions and investments • Enhance the group risk appetite statement, including in relation Business Conduct and global policies, aligned with our 'Spirit of
focusing on medium and longer-term issues as well as emerging to description of risk appetite for principal risks Progress' goals, and reflected in our ways of working. We are pleased
trends • Continue to maintain strategic focus and to monitor the that we have a strong reputation for inclusion and diversity which
• Allocate appropriate time and resources during Board changing business landscape including wider external reflects our values, attracts the best talent and enables our people
discussions to ensure the right challenge and support is provided competition and consumers to succeed.
on strategic and operational risk reviews • Continue to focus on the company’s approach to ESG and There are a number of ways in which the Board monitors and assesses
effective stakeholder engagement as well as shareholder
culture, including:
communication
Site visits
Directors are encouraged to visit the group’s offices, production
Progress made against 2023/24 actions have taken place both virtually and face to face, in line with Board facilities and sites in different markets and regions so that they can get
members’ travel, and have been highly engaging. Board members a better understanding of the business and interact with employees
Good progress has been made against the actions identified following
have valued the openness of conversations and the opportunity to and the wider workforce. During fiscal 24, Board meetings have been
last year’s internally facilitated performance evaluation:
gather insights on many positive aspects of Diageo’s culture, as well as held in the company's headquarters in London on a number of
• There has been an increased focus on Board and management areas for improvement. occasions, enabling Directors to meet and interact with employees,
succession planning and ensuring a pipeline of high-quality, including with members of the local management team for Great
diverse talent. The key themes emerging from these workforce engagement Britain. The Board has also met in Chicago where they met members
• The Board has continued to improve the direct channels of discussions are: of the North America executive team and visited our spirits production
communication between management and Board members. • Diageo’s culture continues to be a source of pride and a strong facility at Plainfield, Illinois. Various Directors have also travelled to
• The Board has continued to develop and enhance induction advantage for the business, characterised as ambitious, progressive other locations, including our tequila operations in Mexico. These site
process for new Directors and ensures high-quality pre-read and collaborative, as well as high quality and accessibility of visits enable Directors to meet and discuss issues with local
materials, action closure and time allocation for Board meetings. leadership. Diageo’s leading approach to inclusion and diversity, management and workforce members, to observe Diageo’s safety
and the richness and growth this brings, were positive highlights in and sustainability processes working in practice and to assess how
Workforce Engagement statement these discussions. effectively Diageo’s culture is communicated and embedded across a
At Diageo, we believe that our people are critical to our company’s • Diageo’s unique purpose and values are highlighted frequently as variety of geographies, functions and roles. As part of the Board's
success, and that creating an inclusive culture and an environment reasons colleagues join and remain at Diageo, as well as Diageo’s workforce engagement programme, Non-Executive Directors regularly
where colleagues can freely express their views and feel listened to is commitment to its 'Spirit of Progress' agenda and embedded hold in-person and virtual meetings, townhalls, focus groups and
key to sustaining high levels of engagement and performance, as well approach to doing business the right way. question and answer sessions with Diageo employees in different
as ensuring Diageo remains a great place to work. To understand our • Confidence and belief in Diageo’s diverse brand portfolio are key locations over the course of the year.
colleagues’ experiences, we gather their feedback through both drivers of motivation for employees. Improved consumer and
formal and informal channels. Diageo’s Workforce Engagement Employee surveys
customer connectivity and high standards of execution in activating
programme is an important way for the Board to hear employees' and The Board receives reports from the Chief HR Officer on the results of
on our brands were highlighted as strengths, while the need to
other colleagues' insights on key topics, including culture, strategy, and the company’s global annual ‘Your Voice’ survey, including levels of
accelerate the speed of innovation to market was frequently cited as
ways of working. It is also a valued opportunity for teams to have employee engagement, employee perceptions of Diageo’s purpose
an area for improvement.
direct access to Board members. and of their line managers (including net promoter scores), and any
• The high calibre of talent across the business is also seen as a
themes raised. The survey results also give visibility of areas on which
In fiscal 24, Karen Blackett took over accountability as the designated strength, and colleagues spoke positively about diversity in
management must continue to focus. Results of this year's 'Your Voice'
Non-Executive Director for workforce engagement from Javier Ferrán. leadership and opportunities to further their learning and career
survey are described on page 55.
Karen, alongside all Non-Executive Directors, held fifteen sessions development. Colleagues also highlighted the value Diageo’s
across the year, engaging with 539 colleagues from all regions, Employee Resource Groups bring to the business and expressed an
functions, and organisational levels below senior leadership. Sessions appetite for greater access and visibility of these important groups.

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How the Board monitors culture Additional information

Internal control and risk management
An ongoing process has been established for identifying, evaluating and
Viability statement
In accordance with the Code, the Board has also considered the
company’s longer-term viability, based on a robust assessment of its
principal and emerging risks. This was done through the work of the
managing risks faced by the group. This process, which complies with the
Audit Committee which recommended the Viability statement to the
requirements of the Code, has been in place for the full financial year and
Board. For further information about how the Board has reviewed the
up to the date the consolidated financial statements were approved and
long-term prospects of the group, see page 86.
accords with the guidance issued by the FRC in September 2014, entitled
‘Guidance on Risk Management, Internal Control and Related Financial Going concern
Workforce engagement sessions Employee Resource Groups Your Voice surveys and Business Reporting’. The Board confirms that, through the activities of Management prepared 18 month cash flow forecasts which were also
All Non-Executive Directors participate in Diageo has a network of employee Diageo's annual global employee the Audit Committee described below, a robust assessment of the principal sensitised to reflect severe but plausible downside scenarios taking into
the Board's workforce engagement resource groups (ERGs) which create engagement survey, Your Voice, and emerging risks facing the company, including those that would consideration the group's principal risks. In the base case scenario,
programme, meeting and engaging connections and community within our provides employees with an opportunity threaten its business model, future performance, solvency or liquidity, has management included assumptions for mid-single digit net sales
been carried out. These risks and their mitigations are set out above in the growth, slightly growing operating margin and global TBA market
directly with groups of employees. We employee and workforce population, to feedback their experience of working
section of this Annual Report dealing with principal and emerging risks on share growth. In light of the ongoing geo-political volatility, the base
aim to provide the Board with a greater both in regions and globally. For at Diageo, what was working well and
pages 77-85. case outlook and severe but plausible downside scenarios
understanding of the views of colleagues example, the Spirited Women Network what could be improved. The survey,
on Diageo’s strategy, performance, and our Rainbow Network operate in a which takes the form of a questionnaire The Board acknowledges that it is responsible for the company’s incorporated considerations for a prolonged global recession, supply
values, governance, culture, working number of markets internationally. The with the ability to provide commentary, systems of internal control and risk management and for reviewing chain disruptions, higher inflation and further geo-political
environment or any other topic of ERGs provide communities of support is conducted and managed by a third their effectiveness. The Board confirms that, through the activities of the deterioration. Even under these scenarios, the group’s liquidity is still
Audit Committee described in its report, it has reviewed the expected to remain strong. Mitigating actions, should they be required,
importance to workers, and to inform the and enable management to understand party provider in multiple languages. All
effectiveness of the company’s systems of internal control and risk are all within management’s control and could include reductions in
Board on any related decision-making. better concerns of diverse groups within responses are treated confidentially with
management. During the year, the Audit Committee considered the discretionary spending such as acquisitions and capital expenditure,
For further information on this year's our workforce. Feedback from the ERGs is the results being reported back to
nature and extent of the risks that the Board was willing to take to lower level of A&P and investment in maturing stock, as well as a
workforce engagement programme and used to assist the Board in monitoring the management, enabling them to create temporary suspension or reduction in its return of capital to
the emerging themes, see page 106. culture within Diageo. action plans per team. Key themes and achieve its strategic goals and reviewed the existing internal statement
of risk appetite, which had been updated this year by the Executive shareholders (dividends or share buybacks) in the next 12 months, or
feedback is also reported to the Board. drawdowns on committed facilities. Having considered the outcome of
Audit & Risk Committee, following which the Audit Committee made a
recommendation to the Board which was then approved. The Audit these assessments, the Directors are comfortable that the company is
Committee reviews the company's principal risks regularly throughout a going concern for at least 12 months from the date of signing the
the year in accordance with a schedule proposed by management group's consolidated financial statements.
with each such risk being reviewed by management in the Audit & Political donations
Risk Committee or other management steering groups prior to it being
The group has not given any money for political purposes in the
considered by the Audit Committee. The Board also regularly reviews
United Kingdom during the year. Our US based subsidiary, Diageo
emerging and disruptive risks as part of its Annual Strategy
North America, Inc. made contributions solely at its own discretion to
How the Board Conference, held this year in April in London, from which a number of
non-UK political candidates and committees in the United States,
topics are identified for more detailed review by either the Board or the
assesses Audit Committee over the following 12 months. The company has in
where it is common practice to do so. Contributions of approximately
$1.1 million (2023: $1.0 million) were made by Diageo North America,
Diageo's culture place internal control and risk management systems in relation to the
Inc. during the financial year to US state and local candidates and
company’s financial reporting process and the group’s process for the
committees, consistent with applicable laws. Additionally, our
preparation of consolidated accounts. Further, a review of the contents
Australian based subsidiary made contributions, solely at its own
of the company's public filings and disclosures, including its
discretion, totalling approximately $0.01 million.
consolidated financial statements and non-financial disclosures, is
completed by management through the Filings Assurance Committee The US contributions reflect no endorsement of a particular political
to ensure that the contents of the company's interim and preliminary party, and contributions were made with the aim of promoting a better
results announcements, Annual Report and Form 20-F appropriately understanding of our business and our views on commercial matters,
reflect the non-financial and financial position and results of the group. as well as a generally improved business environment.
Site visits Town hall and focus group Remuneration engagement Further details of this are set out in the Audit Committee report on
Directors regularly visit Diageo's offices meetings The Chair of the Remuneration Committee pages 111-117.
and production sites as part of the Non-Executive Directors participate in meets with a focus group of employees to
Board's annual cycle of meetings. In both virtual and physical town hall discuss Diageo's approach to executive
addition to the head office in London, sessions and smaller focus group sessions pay annually. The focus group is
Directors visit other Diageo locations, during the year, as part of the Board's comprised of cross-market and functional
offices and sites during the course of the workforce engagement programme. employee representatives. Through this
year for meetings and for familiarisation Attendees are invited from particular engagement, we aim to both deepen
visits. For example, during fiscal 24 a markets and functions, including employees' understanding of the ways in
number of Non-Executive Directors visited contractors, temporary and remote which executive pay decisions are made
Diageo's production facilities, offices and workers, often in non-leadership roles. The and receive feedback and views from
agave farms in Mexico, meeting and scope of topics discussed is relatively employees on the company's approach to
engaging with employees and workforce broad, covering culture and aspects of executive remuneration in the context of
members and to experience different working at Diageo. broader reward and pay policy within
aspects of the business and operations. the group.

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Directors' responsibilities in respect of the Annual Report, Directors’ confirmations

Ensuring integrity across the business

Form 20-F and financial statements The Directors consider that the Annual Report and financial
The Directors are responsible for preparing the Annual Report, the statements, taken as a whole, is fair, balanced and understandable
information filed with the SEC on Form 20-F and the group and parent and provides the information necessary for shareholders to assess the
company financial statements in accordance with applicable law and group’s and parent company’s position and performance, business
regulation. Company law requires the Directors to prepare financial model and strategy. Each of the Directors, whose names and functions
statements for each financial year. Under company law, the Directors are listed on pages 92-93 confirm that, to the best of their knowledge:
have prepared the group consolidated financial statements in • the group consolidated financial statements, which have been During fiscal 24, the Committee undertook an external audit services
accordance with UK-adopted international accounting standards and prepared in accordance with UK-adopted international accounting tender process as the current auditors had been in role since fiscal 16.
the parent company financial statements in accordance with United standards, IFRSs issued by IASB, give a true and fair view of the Further details are set out on pages 112-113.
Kingdom Generally Accepted Accounting Practice (United Kingdom assets, liabilities, financial position and profit of the group;
Accounting Standards, comprising FRS 101 ‘Reduced Disclosure • the parent company financial statements, which have been The Committee has also kept under regular review the company's cyber
Framework’, and applicable law). In preparing the group consolidated prepared in accordance with United Kingdom Accounting security risk management processes, governance systems and capabilities,
financial statements, the Directors have also elected to comply with Standards, comprising FRS 101 ‘Reduced Disclosure Framework’ and in light of continuing risks in respect of cyber threats. See page 117 for
International Financial Reporting Standards issued by the International applicable law, give a true and fair view of the assets, liabilities, further details.
Accounting Standards Board (IFRSs as issued by IASB). financial position and profit of the parent company; and This report also describes areas of significant and particular focus for the
Under company law, the Directors must not approve the financial • the Strategic Report includes a fair review of the development and Committee over the year. During fiscal 24 this included regularly
statements unless they are satisfied that they give a true and fair view performance of the business and the position of the group and monitoring progress of the company's multi-year programme to improve its
of the state of affairs of the group and parent company and of the parent company, together with a description of the principal risks internal processes and upgrade its financial systems and technology. This
profit or loss of the group and parent company for that period. In and uncertainties that it faces. programme has been designed to enhance Diageo's business resilience
preparing the financial statements, the Directors are required to: In accordance with section 418 of the Companies Act 2006, each of and controls environment through simplifying and standardising the
the Directors who held office at the date of the approval of the group's ways of working, improving access to data, and enhancing
• select suitable accounting policies and then apply them consistently;
Directors’ report confirm that, so far as the Director is aware, there is no reporting through implementation of a new cloud-based enterprise
• state whether applicable UK-adopted international accounting
relevant audit information of which the group’s and parent company’s resource planning platform. Strategic business transformation has been
standards, IFRSs issued by IASB have been followed for the group
auditors are unaware, and each Director has taken all the steps that identified as a new principal risk this year. The Committee has also
financial statements and United Kingdom Accounting Standards,
they ought to have taken as a Director in order to make themselves increased its focus on the company's demand forecasting capabilities,
comprising FRS 101 ‘Reduced Disclosure Framework’ and applicable
aware of any relevant audit information and to establish that the stock in trade and inventory levels monitoring processes and controls,
law have been followed for the parent company financial
group's and parent company’s auditors are aware of that information. particularly in light of reduced demand in certain regions such as Latin
statements, subject to any material departures disclosed and
America and Caribbean.
explained in the financial statements; The responsibility statement was approved by a duly appointed and
• make judgements and accounting estimates that are reasonable authorised committee of the Board of Directors on 29 July 2024. As part of the company's year end reporting processes, the Committee has
and prudent; and Dear Shareholder reviewed and challenged management's approach, analysis and
• prepare the financial statements on the going concern basis unless recommendations, taking into account the views of the external auditor, in
it is inappropriate to presume that the group and company will On behalf of the Audit Committee, I am order to conclude on its Annual Report and financial statements. In
continue in business. addition, the Committee has considered and reviewed the group's
delighted to present the Committee’s report principal and emerging risks on a rolling basis throughout the course of the
The Directors are responsible for safeguarding the assets of the group
and parent company and hence for taking reasonable steps for the for the year ended 30 June 2024. year. Further information is provided on pages 114-115.
prevention and detection of fraud and other irregularities. The Having chaired the Committee since 2017, I will be stepping down from the
Directors are also responsible for keeping adequate accounting The purpose of this report is to describe how the Audit Committee has role shortly and am delighted that Julie Brown has been appointed as my
records that are sufficient to show and explain the group’s and parent carried out its responsibilities during the year. The role of the Audit successor, effective from 5 August 2024. I believe that the Committee has
company’s transactions and disclose with reasonable accuracy at any Committee is to monitor and review the integrity of financial an open and constructive relationship with management and the external
time the financial position of the group and parent company and information and reporting, and to provide assurance to the Board that auditors, whom I thank for their assistance over the year. I also thank my
enable them to ensure that the financial statements and the Directors’ the company's internal controls and risk management processes, fellow Committee members for their diligence and engagement. The
Remuneration Report comply with the Companies Act 2006. The including its internal audit, business integrity and compliance Committee remains committed to continuing to discharge its duties in an
Directors are responsible for the maintenance and integrity of the processes, are appropriate and regularly reviewed. The Audit effective and diligent manner during fiscal 25.
corporate and financial information included on the company’s Committee also oversees the work of the external auditor, monitors its
website. Legislation in the United Kingdom governing the preparation independence, approves its remuneration and recommends its
and dissemination of financial statements may differ from legislation in appointment. The Committee is also responsible for reviewing the
other jurisdictions. company's principal and emerging risks, which it carried out over the
course of the year through a series of risk review deep dives.

Alan Stewart
Chair of the Audit Committee

Role and composition of the Audit Committee

The role of the Audit Committee is fully described in its terms of General Counsel Corporate, the Group Chief Accountant and the
reference, which are available at https://www.diageo.com/en/our- external auditor regularly attend meetings of the Committee. The Audit
business/corporate-governance. The members of the Audit Committee met privately with the external auditor, the Chief Business
Committee are independent Non-Executive Directors being Alan Integrity Officer and the Head of GAR regularly during the year.
Stewart (Committee Chair), Melissa Bethell, Karen Blackett, Valérie During the course of the year, the Committee met five times and
Chapoulaud-Floquet, Susan Kilsby, Sir John Manzoni and Ireena Vittal. constituted subcommittees to manage the external audit tender
The Chair of the Board, the Chief Financial Officer, the General process and to review progress of the year end audit and reporting
Counsel & Company Secretary, the Group Controller, the Head of processes. Details of attendance of all Board and Committee meetings
Global Audit & Risk (GAR), the Chief Business Integrity Officer, the by Directors are set out on page 89.

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Reporting and financial statements The Committee has also considered the presentation of GAAP and A timeline summary of the key steps taken is set out below. Accountants in England and Wales, as well as benchmarking of the
During the year, the Audit Committee reviewed the interim results non-GAAP measures to ensure appropriate prominence is given to auditor as against its peers. The assessment also takes into
announcement, including the interim financial statements, the Annual GAAP measures and that non-GAAP measures are presented consideration PwC's annually published Transparency Report which
consistently and can be clearly reconciled. The Audit Committee has sets out how the firm upholds its professional responsibilities and seeks
Report and associated preliminary results announcement and Form
also considered the governance and processes undertaken by Audit tender process to ensure delivery of quality in its services. The results of the survey
20-F, focusing on key areas of judgement and complexity, critical
accounting policies, disclosures (including those relating to contingent management in drafting, developing and reviewing the contents of the April 2023 Review of the audit market including firms outside conducted during fiscal 24 indicated a consensus view that overall
liabilities, climate change and principal risks), viability and going Annual Report, which have been designed to ensure the robustness the ‘Big 4’ professional consultancy firms to performance is solid. Consistent strong feedback was received in
concern assessments, provisioning and any changes required in these and adequacy of the information contained in it, including review by determine their minimum capability and capacity relation to solid auditor independence and quality control, strong
areas or policies. The Audit Committee has also focused in particular and input from senior executives, the company's advisors and through requirements. professional expertise and business knowledge, and solid quality
on the company’s approach to assurance and internal approvals the work of the FAC. On this basis, the Audit Committee May to Constituted a sub-committee of the Audit communication between PwC and management. Areas where
processes. Under the supervision of the Audit Committee, recommended to the Board that it could make the required statement June 2023 Committee and identified shortlisted firms for continued focus was required remained consistent with the prior year
management has again sought to refine our non-financial reporting in that the Annual Report is 'fair, balanced and understandable'. interview. assessment including timely review and feedback on audit matters,
order to enhance consistency and intelligibility throughout the Annual September Determined list of assessment criteria, created and better alignment in internal communication, resource continuity and
SEC correspondence use, pro-activity in driving efficiencies, provision of best practice
Report, while also complying with the recommendations of the Task to October opened data room to share information, and carried
The Committee reviewed a comment letter addressed to the company examples of processes and controls, and transparency on audit
Force on Climate-related Financial Disclosures. 2023 out series of management meetings with each
which had been received in March 2024 from the SEC following its activities throughout the year. It was concluded that the relationship
shortlisted firms.
This year the Committee has continued to regularly review progress of review of the company's Form 20-F for fiscal 23. The letter raised a between the auditor and management was strong and open. The
the company's transformation project to improve Diageo’s internal question as to the presentation of non-GAAP line items in a table October to Presentation to the Audit Committee followed by auditor team communicated openly and clearly those areas which
processes and upgrading its financial systems and technology, expressed to be the company's summary income statement. The November the submission of formal requests for proposal they considered significant and their views on such matters. Senior
monitoring progress against the project's targets and timeline, company responded by proposing to rename and reformat the 2023 from the shortlisted firms. members of the PwC team had been very visible throughout the
including its controls framework and reporting capabilities. contents of the relevant table in future filings, following which the December Review of proposals from firms, consideration by business and strengthened relationships with management.
SEC confirmed that it had completed its review. The Committee notes 2023 Audit Committee and recommendation to the During the external audit, the auditor challenged management on its
The company has in place internal control and risk management
that Diageo remains responsible for the accuracy and adequacy of Board. approach taken as to brand impairment testing, including discussing
systems in relation to the company’s financial and non-financial
its disclosures. and reviewing management's plans and strategies for future growth of
reporting process including the group’s process for the preparation of
consolidated financial statements. A review of the consolidated External auditor the brands as against recent performance and forecasts. The auditor
In December 2023, a sub-committee of the Audit Committee reviewed also challenged management as to other judgemental matters such
financial statements and the draft Annual Report is completed by the During the year, the Audit Committee reviewed the external audit of the final presentations and responses to the Request for Proposal as pension obligation valuations and uncertain tax positions, assessing
Filings Assurance Committee (FAC) to ensure that the financial position strategy and the findings of the external auditor from its review of the submitted by each of the shortlisted firms and based its decision on a management's analysis as to these potential exposures and
and results of the group are appropriately reflected therein. In addition interim results and its audit of the consolidated financial statements. combination of audit approach, team continuity in key roles and disclosures in the Annual Report. The auditor also challenged
to reviewing draft financial statements for publication at the half and
The Audit Committee reviews annually the appointment of the auditor understanding Diageo’s business and risks. The sub-committee refined management while preparing the Annual Report in relation to whether
full year, the FAC is responsible for examining the company’s financial
(taking into account the auditor’s effectiveness and independence and the shortlisted firms from four to three and presented a there was sufficient balance in the Strategic Report and as to
and non-financial information and disclosures, the effectiveness of
all appropriate guidelines) and makes a recommendation to the recommendation to the Audit Committee and subsequently to the disclosures of critical accounting policies and practices, including
internal controls relating to financial and non-financial reporting and
Board accordingly. Any decision to open the external audit to tender is Board. The recommendation comprised a preferred firm and an those relating to impairment of goodwill and indefinite life intangible
disclosures, legal and compliance issues and determining whether the
taken on the recommendation of the Audit Committee, as was the alternative firm. After careful thought and consideration, the Board assets, pensions valuation and uncertain tax positions. The Audit
company’s disclosures are accurate and adequate. This year
case in 2023. There are no contractual obligations that restrict the decided to reappoint PwC as the external auditor. Feedback was Committee assessed these challenges, discussing them with
additional focus has been given to the adequacy of regional inventory
company’s current choice of external auditor. given to all participating firms as part of the tender process. management and the auditor, and seeking additional information and
monitoring processes, especially in Latin America and Caribbean. The
FAC comprises senior executives such as the Chief Executive, the Chief PwC first became Diageo’s external auditor in fiscal 16 following a Since the conclusion of the audit for the year ended 30 June 2023, evidence from management in support of these assessments.
Financial Officer, the General Counsel & Company Secretary, the tender process carried out in 2015. PwC's re-appointment for fiscal 24 Scott Berryman has been lead audit partner with responsibility for External auditor independence
General Counsel Corporate & Deputy Company Secretary, the Group was approved by shareholders at the 2023 AGM. signing the Diageo plc audit opinion on behalf of PwC. Scott will
The group has a policy on auditor independence and on the use of
Controller, the Group Chief Accountant, the Head of Investor remain as such for the year ending 30 June 2025 onwards. The Board
External audit tender process the external auditor for non-audit services, which is reviewed annually,
Relations, the Head of GAR and the Chief Business Integrity Officer. will propose the reappointment of PwC at the AGM to be held in
At the recommendation of the Audit Committee and as the company most recently in July 2024. Under the auditor independence policy,
The company’s external auditor also attends meetings of the FAC. September 2024.
is required to have a mandatory audit tender after 10 years by the any member of the PwC global network shall provide to the company,
Presidents of each region and their finance directors attend the FAC on
request. The Audit Committee reviewed the work of the FAC and a Statutory Auditors and Third Country Auditors Regulations 2016, an External auditor effectiveness and quality its subsidiaries or any related entity only permissible services, subject to
audit services tender process was undertaken during fiscal 24 to The Audit Committee assesses the ongoing effectiveness and quality of the approval of the Audit Committee after it has properly assessed
report on the conclusions of the FAC process was provided to the
provide sufficient time for an adequate transition in the event that a the external auditor and audit process through a number of methods, through its governance process the threats to independence and the
Audit Committee by the Chief Financial Officer.
new audit firm was selected. In undertaking this tender, the company commencing with identification of appropriate risks by the external safeguards applied in accordance with the FRC Ethical Standard, SEC
Diageo has carried out an evaluation, under the supervision and with the has complied with the provisions of The Statutory Audit Services for auditor as part of its detailed audit plan presented to the Audit auditor independence rules and US Public Company Accounting
participation of management, including the Chief Executive and Chief Large Companies Market Investigation (Mandatory Use of Committee at the start of the audit cycle. These risks were reviewed by Oversight Board rules. These services are set out in full in the policy
Financial Officer, of the effectiveness of the design and operation of Competitive Tender Processes and Audit Committee Responsibilities) the Committee and the work performed by the auditor was used to and are generally those which the external auditor is best placed to
Diageo's disclosure controls and procedures (as defined in the US Order 2014 for the year ended 30 June 2024. test management’s assumptions and estimates relating to such risks. provide, which may include reporting required by law or regulation to
Securities Exchange Act Rule 13a-15(e)) as of the end of the period covered The effectiveness of the audit process in addressing these matters was be performed by the auditor and services where the services are
by this Annual Report. Based upon that evaluation, Diageo's Chief In determining the process for the audit services tender, management assessed through reports presented by the auditor to the Audit closely linked to audit work and where the auditor's understanding of
Executive and Chief Financial Officer concluded that, as of 30 June 2024, took into consideration and followed the FRC's guidance on audit Committee which were discussed by the Committee at both the half- the group is relevant to the services. Any FRC permissible service to be
Diageo's disclosure controls and procedures were effective. tendering, with the Audit Committee making robust decisions to ensure year, in January, and year end, in July. Following completion of the provided by the auditor, regardless of the size of the engagement,
that the requirements of the FRC's minimum standard for audit audit process, feedback on its effectiveness was provided during must be specifically approved by the Audit Committee or its
As part of its review of the company's Annual Report and associated committees were met. Included in the process were a review of each review meetings with the company’s management and finance team, nominated delegate (being the Chair of the Audit Committee) based
disclosures, the Audit Committee has considered whether the report is 'fair, firm's most recent FRC Audit Quality Review reports, a consideration of who also completed questionnaires on their experience of the audit. on a defined scope of pre-approved services. The policy explicitly
balanced and understandable' and provides the information necessary for potential conflicts of interest and independence checks, and Both management and the auditor provided their assessments of specifies the auditor independence review and approval mechanism
shareholders to assess the company's position, performance, business identification of key individuals with appropriate skills and experience auditor effectiveness and quality to the Audit Committee for process by the Committee for permissible engagements above the
model and strategy, as required by Principle N of the Code. In doing so, the to act as potential lead partners. Clear and objective criteria for consideration at its meeting in December. The auditor assessment is specified threshold of £100,000. Fees paid to the auditor for audit,
Committee has noted the guidance issued by the FRC on this subject as well assessing success were determined and agreed. undertaken based on the requirements of the Code as well as audit-related and other services are analysed in note 4(b) to the
as best practice recommendations from external advisors. The Committee
guidance issued to audit committees by the FRC in April 2016 and consolidated financial statements. The nature and level of all services
has considered factors such as whether the report includes descriptions of
Minimum Standards for Audit Committees published by the FRC in provided by the external auditor are factors taken into account by the
the business model, strategy and principal risks which are sufficiently clear
May 2023, as well as the NYSE listing rule 303A.07. It includes Audit Committee when it reviews annually the independence of the
and detailed to enable users to understand their importance to the
consideration of the findings of the FRC's Audit Quality Review team external auditor. During the year, no non-assurance related services
company, whether the report is consistent throughout with the narrative
which published its 2022/23 Audit Quality Inspection and Supervision were provided by the external auditor to the company, its subsidiaries
reflecting the financial statements and understanding of directors during the
report on PwC in July 2023, periodic regulatory review carried out by or any related entity other than personal tax services provided to two
year, that information is presented fairly, without omission of material
the US Public Company Accounting Oversight Board (PCAOB) and the Non-Executive Directors and the provision of services in connection
information and not in a manner which might mislead users.
Quality Assurance Department of the Institute of Chartered with the issuance of senior notes by a group company.

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Internal audit, controls assurance and risk for training modules, launch and rollout of new programmes or policies, Senior financial officers’ code of ethics and Management has assessed the effectiveness of Diageo’s internal
The company’s internal GAR team undertakes an annual audit and monitoring use of whistleblowing mechanisms and investigating allegations control over financial reporting (as defined in Rules 13(a)-13(f) and
risk plan by delivering a series of internal assurance and audit of breaches. dealing code 15(d)-15(f) under the United States Securities Exchange Act of 1934)
assignments across a variety of markets, processes, business units and In accordance with the requirements of SOX and related SEC rules, based on the framework in the document ‘Internal Control –
Our Code of Business Conduct, available in 19 languages, sets out Diageo has adopted a code of ethics covering its Chief Executive,
functions. On the conclusion of each assignment, GAR issues a report Integrated Framework’, issued by the Committee of Sponsoring
what Diageo stands for as a company and how Diageo operates, Chief Financial Officer, and other senior financial officers. During the
on its findings which may also include an overall rating as to the status Organizations of the Treadway Commission (COSO) in 2013. Based on
enabling all employees to understand what is required of them in year, no waivers were granted in respect of this code of ethics. The full
of the market, process or function being audited, detailed reasons for this assessment, management concluded that, as at 30 June 2024,
working for Diageo. Annual training on the Code of Business Conduct text of the code of ethics is available at https://www.diageo.com/en/
the rating and actions to be taken within a specific timetable. The internal control over financial reporting was effective. During the
and associated policies is mandatory for all managers and their direct our-business/corporate-governance/compliance. Both the Audit &
Audit Committee receives regular reports from the Head of GAR on period covered by this report, there were no changes in internal
reports globally, encompassing over 24,000 eligible employees during Risk Committee and the Audit Committee regularly review the strategy
the latest reports issued. control over financial reporting that have materially affected or are
the year ended 30 June 2024. Training is delivered in an easily and operation of the Business Integrity programme through the year. reasonably likely to materially affect the effectiveness of internal
This year GAR has undertaken a number of audits including both accessible e-learning format, with classroom training delivered to
The company has also adopted a dealing code setting out control over financial reporting. The same independent registered
market and functional audits as well as of certain of the group's end- those employees who do not have regular access to a computer. The
requirements in relation to dealings in Diageo securities by Directors, public accounting firm which audits the group’s consolidated financial
to-end processes and procedures. The Audit Committee assesses the Code of Business Conduct and other global policies are available at
Executive Committee members and certain other employees, which statements has audited the effectiveness of the group’s internal control
effectiveness of GAR by reviewing its annual audit plan at the start of https://www.diageo.com/en/our-business/corporate-governance.
is designed to ensure compliance with applicable insider trading over financial reporting, and has issued an unqualified report thereon,
the financial year, monitoring its ongoing quality throughout the year, Third-party risk is also managed through our Know Your Business which is included in the integrated audit report which is included in the
and assessing completion rates and feedback provided following and market abuse regulations, in particular the UK Market
Partner programme, which is designed to help the company evaluate Abuse Regulation. company’s Form 20-F to be filed with the SEC.
completion of the annual audit plan. Having carried out this the risk of doing business with a third party before entering and during
assessment, the Audit Committee is of the view that the quality, a contractual relationship. Business partners are assessed for potential Management’s report on internal control over financial 'Financial expert', recent and relevant financial experience
experience and expertise of GAR is appropriate for the business. The risks including economic sanctions, bribery and corruption, money The Board has satisfied itself that the membership of the Audit
reporting
company operates a global controls assurance programme for laundering, facilitation of tax evasion, data privacy, human rights and Committee includes at least one Director with recent and relevant
financial reporting controls in each market and function, which Management, under the supervision of the Chief Executive and Chief financial experience and has competence in accounting and/or
other reputational issues. Financial Officer, is responsible for establishing and maintaining
monitors compliance with and effective operation of the company’s auditing and in the sector which the company operates, and that all
controls framework. The Audit Committee receives regular reports on Employees and third-party business partners are encouraged to raise adequate control over the group’s financial reporting. The Filings members are financially literate and have experience of corporate
the status of the controls assurance plan, actions taken to enhance concerns about potential breaches of the Code of Business Conduct or Assurance Committee supports the Chief Executive and Chief financial matters. For the purposes of the Code and the relevant rule
controls design and effectiveness, awareness training provided to policies, either to line managers, legal or HR colleagues, risk, Financial Officer in ensuring the accuracy of the company’s financial under SOX, Section 407, the Board has determined that Alan Stewart
employees, testing results and trends analysis derived from the compliance and Business Integrity teams or to SpeakUp, a confidential reporting, filings and disclosures. As summarised on page 112, prior to is independent and may be regarded as an Audit Committee financial
company’s integrated risk management system. The Committee also whistleblowing mechanism. SpeakUp is a global service administered interim reporting and preliminary reporting each year, the Filings expert, having recent and relevant financial experience, and that all
reviewed and approved changes to the principal risk descriptions and by an independent provider, accessible online or by telephone. Where Assurance Committee examines the company’s financial information members of the Audit Committee are independent Non-Executive
risk footprint, as well as receiving regular presentations and reviews of legally permitted, it can be used anonymously and reports kept and processes, the effectiveness of its controls in respect of financial Directors with relevant financial and sectoral competence. See pages
the status of its principal and emerging risks. This year, these reviews confidential. Allegations are investigated by independent Diageo reporting, and the contents of its disclosures. 92-93 for details of relevant experience of Directors.
have covered areas including business ethics and integrity, human teams, with progress being monitored by the Business Integrity team.
rights, anti-counterfeit, geo-political volatility and business interruption, When allegations are substantiated, appropriate disciplinary and
business transformation, stock in trade, cyber security and IT resilience, corrective actions are taken. The Audit Committee receives and
climate change and sustainability, and international taxation. A new reviews regular reports on allegations, including trends information, Committee activities
principal risk in relation to strategic business transformation was root cause analysis and investigation closure rates. Since all of Details of the main areas of focus of the Audit Committee during the year include those summarised below:
identified this year. Diageo's Non-Executive Directors attend the Audit Committee, all Non-
Areas of focus Strategic outcome
Executive Directors who make up the Board routinely review the
Business Integrity programmes findings of the company's whistleblowing processes in accordance Corporate • Half and full year external reporting updates EG CVC CT
Diageo is committed to conducting its business responsibly and in with the UK Corporate Governance Code. reporting • Interim and preliminary results review and approval
accordance with all laws and regulations to which it's business activities are • Annual Report and consolidated financial statements, Form 20-F review and approval
During the year ended 30 June 2024, 759 allegations of breaches Implications of group functional and presentation currency change on reporting
subject. We hold ourselves to the principles in our Code of Business •
were reported which is an increase on prior years. The substantiation
Conduct, which is embedded through a comprehensive training and Internal • GAR updates
rate of allegations confirmed as breaches is 34% (versus 33% in fiscal CT CVC
education programme for all employees. Our employees are expected to controls • Business Integrity updates including breach and reporting update
23). As of the end of fiscal 24, 70 people exited the business as a result
act in accordance with our values, the Code of Business Conduct and in • Controls testing update and Section 404 assessment
of breaches of our Code of Business Conduct or policies (fiscal 23: 57
compliance with applicable laws and regulations. The Audit Committee • Implications on controls environment of systems and process changes
people). The number of leavers for fiscal 23 has been restated due to a
monitors compliance with the company’s ethical standards through the • Business transformation projects monitoring
number of open cases from fiscal 23 being concluded this year. At the
Business Integrity framework, which helps enhance and protect all aspects • Inventory and stock in trade monitoring controls review and enhancements
end of fiscal 24, we had 223 open cases, which may lead to more
of the company’s business. Regular reports are provided to the Audit External audit Report on external audit at half and full year periods
people exiting the business. See below a summary of reported and • CT
Committee by the Chief Business Integrity Officer on progress in providing and assurance Insights and observations on reporting review
substantiated breaches over the past three years. •
guidance, training and tools for all levels in the business, completion rates • Auditor independence and non-audit work reviews
Auditor independence policy review
Reported and substantiated breaches •
• Review of management representation letters
2022 2023 2024 • Appointment of auditor and review of terms of engagement and fees
• Auditor performance and effectiveness review and assessment
635 629 759 • Commencement of auditor tender process
• Audit regime reform and approach to assurance
433 417 523
Risk • Principal and emerging risk reviews and tracking EG CVC CT
management • Risk updates, including group risk footprint and risk appetite review and approvals
156 192 170
• Business ethics and integrity, human rights, anti-counterfeit, geo-political volatility and business
54 57 70 interruption, business transformation, stock in trade, cyber security and IT resilience, climate change
and sustainability, and international taxation risk reviews
ò Reported
Key
ò Reported through SpeakUp
Strategic outcomes
ò Substantiated breaches Consistent value
EG CT CVC EP
Efficient growth Credibility and trust Engaged people
ò Code-related leavers creation

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Significant issues and judgements Cyber Security Risk Management

Significant issues and judgements that were considered in respect of the 2024 financial statements are set out below. Our consideration of issues Cyber security risk management is an integral part of Diageo’s overall group risk management programme and aligned to Diageo’s risk
included discussion of the key audit matters as outlined in the appendix to the independent auditors’ report. management framework, with cyber security risk forming a central part of the principal risk ‘Cyber and IT resilience’ as set out on page 81. Our
Matter considered How the Audit Committee addressed the matter cyber security risk management programme is aligned to industry best practices and provides a framework for handling cyber security threats and
incidents across the global organisation, including threats and incidents associated with the use of IT applications and services provided by IT and
The nature and size of any one-off items The Audit Committee assessed whether the related presentation and disclosure of those items in
non-IT third parties. Our programme is designed to work across all Diageo functions, markets, and entities. This framework includes steps for
impacting the quality of the earnings and the financial statements were appropriate based on management’s analysis, and concluded that
cash flows. they were. assessing the severity of a cyber security threat, identifying the source of a cyber security threat including whether the cyber security threat is
associated with a third-party service provider, implementing cyber security countermeasures and mitigation strategies and informing management
Items that were to be presented as The Audit Committee assessed whether the reporting of those items as exceptional, was in line and our Board of material cyber security threats and incidents. Our cyber security team also engages third-party security experts for industry
exceptional. Refer to note 3 of the Financial with the group’s accounting policy, and that sufficient disclosure was provided in the financial benchmarking analysis, risk assessments and conducting system enhancements and support when necessary. Our cyber security team is
Statements. statements, and concluded that they were. responsible for assessing our cyber security risk management programme and we engage third parties for such assessments approximately every
Whether the carrying value of assets, in The Audit Committee reviewed the methodology applied in conducting impairment reviews and one to two years. In addition, our cyber security processes includes a training and awareness outreach programme that provides training to all
particular intangible assets, was supportable. the result of management's impairment assessments that were performed during the year. The employees annually and more frequent targeted training across functions, markets, and entities.
Refer to notes 6, 9, 10 and 13 of the Financial Committee was provided with information about the carrying amounts and the key assumptions
Statements. incorporated in management’s estimate of discounted cash flows of significant assets that are The Board has overall responsibility for our risk management, including in respect of cyber security, oversight of which has been delegated to the
sensitive to key assumptions. The Committee reviewed the key assumptions used in the Audit Committee. The Audit Committee is responsible for ensuring that management has processes in place designed to identify and evaluate
impairment testing, including management’s cash flow forecasts, growth rates and the discount cyber security risks to which the company is exposed and implement processes and programmes to manage cyber security risks and mitigate
rate used in value in use calculations and agreed they were appropriate. The Committee agreed cyber security incidents. The Audit Committee also reports material cyber security risks to the Board. Management is responsible for identifying,
with management’s judgements and conclusions, whereby the previous impairment charge of considering and assessing material cyber security risks on an ongoing basis, establishing processes to ensure that such potential cyber security risk
$379 million in respect of Shui Jing Fang brand has been reversed, while Chase brand and exposures are monitored, putting in place appropriate mitigation measures and maintaining cyber security programmes. Our cyber security
related goodwill and fixed assets, certain brands in the US ready to drink portfolio, and some programmes are under the direction of our Chief Information Security Officer (CISO) who receives reports from our cyber security team and
smaller other brands and investments in associates have been impaired by $170 million in the monitors the prevention, detection, mitigation, and remediation of cyber security incidents. Our CISO and dedicated personnel are certified and
year ended 30 June 2024, out of which $155 million was reported as exceptional operating experienced information systems security professionals and information security managers with many years of relevant industry experience and
charge. The Committee agreed that the recoverable amount of the company’s other assets was in accredited certifications. Management, including the CISO and our cyber security team, regularly update the Audit Committee on the company’s
excess of their carrying value and that appropriate disclosure was provided with respect to assets cyber security programmes, material cyber security risks and mitigation strategies and provide cyber security reports on a half-yearly basis that
impaired, and whose value is more sensitive to changes in assumptions. cover, among other topics, assessments of the company’s cyber security programmes, developments in cyber security and updates to the
The group’s more significant tax exposures The Audit Committee agreed that disclosure of tax risk appropriately addresses the significant company’s cyber security programmes, security risk footprint with risk appetite, and mitigation strategies.
and the appropriateness of any related change in the international tax environment, and that appropriate provisions and other disclosure During fiscal 24, we did not identify any cyber security threats that have materially affected or are reasonably likely to materially affect our business
provisions and financial statement with respect to uncertain tax positions were reflected in the financial statements.
strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cyber security threats, or
disclosures. Refer to page 80 of 'Our
provide assurances that we have not experienced an undetected cyber security incident. For more information about these risks, please see the
principal risks and risk management' and
note 7 of the Financial Statements. section on ‘Our Principal Risks and Risk Management’ on pages 77-85.
The appropriateness of the valuation of post- The measurement of post-employment liabilities is sensitive to changes in long-term interest rates,
employment liabilities, and the recognition of inflation and mortality assumptions. Having reviewed management’s papers setting out key
any surplus. Refer to note 14 of the Financial changes to actuarial assumptions, the Audit Committee agreed that the assumptions used in the
Statements. valuation are appropriate. The Committee reviewed management’s assessment of the economic
benefit available as a refund of the surplus or as a reduction of contribution and the key
judgements made in respect of the surplus restriction and concluded that those judgements were
appropriate. The Committee reviewed and concluded that sufficient disclosures were provided in
the financial statements.
Significant legal matters impacting the group. The Committee agreed that adequate provision and/or disclosure have been made for all
Refer to note 19 of the Financial Statements. material litigation and disputes, based on the current most likely outcomes, including the litigation
summarised in note 19 of the Financial Statements.
Functional currency of Diageo plc and The Audit Committee agreed that in line with reporting requirements the functional currency of
presentation currency of Diageo group. Diageo plc has changed from sterling to US dollar which is applied prospectively from fiscal 24.
This is because the group's share of net sales and expenses in the US and other countries whose
currencies correlate closely with the US dollar has been increasing over the years, and that trend
is expected to continue in line with the group's strategic focus. Diageo has also decided to change
its presentation currency to US dollar with effect from 1 July 2023, applied retrospectively, as it
believes that this change will provide better alignment of the reporting of performance with its
business exposures.
Whether the Annual Report is fair, balanced The Audit Committee concluded that the Annual Report, taken as a whole, is fair, balanced and
and understandable. understandable and provides the information necessary for shareholders to assess the company’s
performance, business model and strategy and that there is an appropriate balance between
statutory (GAAP) and adjusted (non-GAAP) measures.
The impact of climate change on the group’s The Audit Committee agreed that the disclosures on pages 61-76 made in response to the
financial reporting and financial statements. recommendations of the Task Force on Climate-related Financial Disclosures are appropriate and
Refer to pages 61-76 and note 1 and note 9 of that the assumptions used in the financial statements are consistent with these disclosures.
the Financial Statements.

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NOMINATION COMMITTEE REPORT

capabilities of the Board should be appropriate and reflective of taking into consideration their external appointments and

Building our talent for the future

Diageo’s global scale, business and operations, its strategy, portfolio, commitments.
consumer base, culture and status as a listed company. Directors
should have sufficient understanding of the company and its Board Chair succession
operations, the markets and industry in which it participates, to The Nomination Committee plays a key role in overseeing Board level
understand the key trends and developments which are relevant for changes, considering potential candidates and making
Diageo. recommendations on appointments to the Board. During fiscal 24,
Diageo announced a number of changes in Diageo's Board
The Nomination Committee has had an active year, discharging its Recruitment and election procedures membership which will take effect over the coming months including,
responsibilities to ensure adequate succession planning for Board The recruitment process for Non-Executive Directors includes the in particular, a future change in the Board Chair.
appointments, including the maintenance of a pipeline of strong development of a candidate profile and the engagement of a
As the current Board Chair is approaching the maximum tenure that
candidates for potential nomination to the Board, and supervising professional search agency specialising in the recruitment of high-
the Code deems appropriate for a director to be considered to be
transitions for new appointments. This year the Committee has spent calibre candidates. During the year, we have engaged executive
independent, during fiscal 23 the Nomination Committee commenced
significant time looking towards the future, building on strong search companies Russell Reynolds Associates to assist with
a succession planning process to enable a smooth transition over a
foundations as Diageo continues to develop and grow its business. The recruitment of candidates for the role of Board Chair and Egon
reasonable timeframe. The process was led by the Nomination
Committee has supervised the transition of key roles such as the Board Zehnder to assist with recruitment of candidates for the roles of Audit
Committee, chaired by the Senior Independent Director and supported
Chair, the Audit Committee Chair and the Chief Financial Officer. I Committee Chair and Chief Financial Officer. Neither of these firms
by the Chief HR Officer, with the current Board Chair and any existing
look forward to welcoming Julie Brown and Nik Jhangiani to the have any other connection with the company except that Ireena Vittal,
Directors who were potential candidates for the role recusing themselves
Board in the near future, thanking Alan Stewart and Lavanya a Non-Executive Director, is a member of the advisory board of Russell
from the process and from participation in discussions on Chair
Chandrashekar for their years of service. As I will also be standing Reynolds Associates, although she did not hold this role at the time
succession during Board and Committee sessions. Clear criteria for
down in February 2025, being in my ninth year on the Board following that Diageo engaged Russell Reynolds Associates.
successful candidates were developed which included key requirements
which date I will no longer be deemed to be independent under the In the case of Executive Director or Executive Committee and priorities including in respect of background and experience,
UK Corporate Governance Code. I congratulate Sir John Manzoni on appointments, an executive leadership assessment may be carried out attributes and behaviour, within the context of the culture, strategy and
his appointment. by an external professional agency. Reports on potential appointees leadership needed for the Board and company. These were discussed
This year the Committee also managed the evaluation of the are provided to the Committee, which, after careful consideration, and approved by the Nomination Committee and used to identify
effectiveness of the Board, its Committees, members and processes. makes a recommendation to the Board. In determining its potential candidates. During the first half of fiscal 24, a variety of
As required by the Code, the evaluation was facilitated by an recommendations, the Committee has regard to a broad range of candidates were considered and interviewed by members of the
external consultancy firm which had been selected by the factors including the candidate's background, skill set and experience, Nomination Committee.
Committee following a tender process. Further details, including their ability to express independent judgement and participate across
In March 2024, the Nomination Committee recommended to the
the review’s conclusions, recommendations and actions as agreed a broad range of topics, including on sustainability and societal
Board that Sir John Manzoni was the most suitable candidate to
by the Board, are set out on pages 105-106. matters, their ability to devote sufficient time to the company and
succeed Javier Ferrán as Board Chair. The Board approved this
whether their appointment would contribute towards the Board’s
The Committee has continued to discharge its role in overseeing the recommendation and on 19 March 2024 announced the transition
Dear Shareholder company's talent planning and succession for Executive Committee
diversity objectives which are set out in the Board Diversity Policy. This
with Javier Ferrán continuing as Chair of the Board until his retirement
policy, which applies to the Board and its Committees, reflects the
I am pleased to provide the report of the members. Sally Grimes was appointed Chief Executive Officer, Board's belief that it is critical that Board membership includes a
in February 2025, at which point Sir John will succeed him. In addition
Diageo North America in October 2023 and John Kennedy was to Sir John's long-standing experience in beverage alcohol, having
Nomination Committee for the year ended welcomed back to Diageo in January 2024 when he was appointed
diverse range of skills, professional and industry backgrounds,
served on the board of SABMiller plc for eleven years and having
geographical experience and expertise, gender, tenure, ethnicity and
30 June 2024. President, Europe. diversity of thought.
been a member of the Diageo Board since 2020, he has an
outstanding track record of leadership across a number of complex
With these Board and Executive Committee changes, I am confident Any new Directors are appointed by the Board and, in accordance and fast-changing sectors in the UK and globally.
that Diageo has the leadership required for it to continue its progress with the company’s articles of association, they must be elected at the
towards fulfilling its growth ambition and to create value for its Set out below are the principal steps taken in relation to the Board
next AGM to continue in office. All existing Directors retire by rotation
shareholders and other stakeholders. Chair succession and transition process:
and stand for re-election every year. The company’s policy is for all
Directors to attend the AGM, either physically or by video conference During fiscal 23:
as permitted by the company's articles of association. Details of • In April 2023, the Nomination Committee authorised the Senior
attendance of all Board and Committee meetings by Directors are set Independent Director to engage an external professional executive
out on page 89. The 2024 AGM is scheduled to be held on 26 search agency.
Javier Ferrán September 2024. • Russell Reynolds Associates (which, at the time of engagement, had
Chair of the Nomination Committee External appointments no connection with the company other than acting as an executive
search agency) was engaged to assist with the succession process.
While the Board does not have a written policy as regards the
• Key criteria for potential candidates, set out in a success profile,
maximum number of other appointments that Directors should have,
were reviewed and discussed by the Nomination Committee.
before recommending new appointments to the Board, the
Nomination Committee considers other demands on candidates’ time. During fiscal 24:
As a general principle, the Committee takes the view that Non- • Various external candidates were considered and shortlisted for
Role and composition of the Nomination Committee Succession planning Executive Directors should have no more than four, and Executive review by members of the Nomination Committee, together with
The Nomination Committee is responsible for keeping under review The Committee reviews the effectiveness and adequacy of succession Directors no more than one, listed mandates in addition to their role as internal candidates, as against the success profile.
the composition of the Board and succession to it, reviewing planning processes and the succession plans for both the Board and a director of the company. However, each director's situation is • The Nomination Committee recommended that the Board approve
succession planning for key Executive Committee roles, and Executive Committee. Succession plans are tailored for key roles, considered individually. For example, when she joins the Board, Julie the appointment of Sir John Manzoni as Diageo's next Chair, and
succession planning and overall talent strategy for senior leadership based on merit and objective criteria, and designed to ensure Brown will not also be a member of the Remuneration Committee or the Remuneration Committee approved remuneration
positions, including in relation to ensuring and encouraging diversity in inclusion and diversity. Consideration is given to the length of tenure of the Nomination Committee, due to her other commitments. Once arrangements for the role. The Board then unanimously approved
leadership positions. It makes recommendations to the Board each incumbent with the aim prospectively to anticipate potential appointed, any proposed additional external appointments are also the appointment and a regulatory announcement was released on
concerning appointments to the Board. More details on the role of the changes to the Board or Executive Committee and address vacancies reviewed by the Nomination Committee to ensure that the additional 19 March 2024.
Nomination Committee are set out in its terms of reference which are proactively enabling smooth succession. The Board should comprise a demands on a Director’s time will not impact on the Director’s ability to • Following release of the regulatory announcement, Sir John has
available at majority of independent Non-Executive Directors, free of conflicts of perform his or her role as a Director of the company before the been undertaking a transition programme to familiarise himself with
https://www.diageo.com/en/our-business/corporate-governance. interest, and with sufficient time to discharge their duties as Board additional appointment is recommended for approval by the Board. the role of Chair and to prepare for transitioning into the role in
members. The Board has a long-standing commitment to diversity, Directors’ interests are reviewed and updated at each Board meeting.
The Nomination Committee comprises Javier Ferrán (Committee February 2025.
believing that a diverse Board enables a broad range of views to be The Board has concluded that each Non-Executive Director has
Chair), Melissa Bethell, Karen Blackett, Valérie Chapoulaud-Floquet,
expressed, enhancing decision-making for the benefit of the long-term sufficient time to discharge their duties as a director of the company,
Susan Kilsby, Sir John Manzoni, Alan Stewart and Ireena Vittal.
interests of the company and its stakeholders. The composition and

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N O M I N A T I O N C O M M I T T E E R E P O R T continued

Activities of the Nomination Committee Diversity Board and Executive Committee reporting on gender identity or sex
The principal activities of the Nomination Committee during the year The Board has a long-standing commitment to prioritise diversity and Number of senior
positions on the Board Percentage of
were: supports the recommendations of the FTSE Women Leaders Review Number of Board Percentage of the (CEO, CFO, SID and Number in executive executive
• the consideration, selection and recommendation as to the (previously the Hampton-Alexander Review) on gender diversity and members Board Chair) management management

appointment of and transition plan for a new Chief Financial Officer; the Parker Review on ethnic diversity. The Board seeks to promote Men 3 30.0 % 1 7 54.0 %
• the consideration, selection and recommendation as to the inclusion and diversity by objectively considering candidates for Board
Women 7 70.0 % 3 6 46.0 %
appointment of and transition plan for a new Chair of the Board; and Executive Committee roles on the basis of their skill set,
• the consideration of the talent pipeline for potential new Non- experience, expertise, knowledge, gender, cultural and geographical Not specified/prefer not to say — — — — —
Executive Directors and other appointments to the Board, including backgrounds, ethnicity and age. The Board Diversity Policy sets out
a new Chair of the Audit Committee; specific objectives with parity between male and female members of Board and Executive Committee reporting on ethnic background
• the design and conduct of the annual review of Board, Committee the Board being the ultimate goal in terms of gender diversity, with a Number of senior
positions on the Board Percentage of
and individual Director effectiveness and performance and a review commitment to have no less than 40% female representation on the Number of Board Percentage of the (CEO, CFO, SID and Number in executive executive
of the findings of the review and recommended actions; Board, and having at least one Director reflecting ethnic diversity as members Board Chair) management management

• consideration and approval of the report of the Committee in the defined in accordance with the Parker Review. The Committee is White British or other White (including minority-white groups) 6 60.0 % 3 7 53.8 %
company’s Annual Report and consolidated financial statements for pleased to confirm that both these objectives have currently been met.
Mixed/Multiple Ethnic Groups — — — 1 7.7 %
the year ended 30 June 2024; The Board Diversity Policy also sets out the Board’s support for
• consideration and recommendation to the Board of proposed management’s actions to increase the proportion of senior leadership Asian/Asian British 3 30.0 % 1 3 23.1 %
changes in Directors’ outside interests and any potential conflicts of roles held by women and by people from minority backgrounds and Black/African/Caribbean/Black British 1 10.0 % — 1 7.7 %
interest; and other under-represented groups. As at 30 June 2024, the percentage
of women on the Executive Committee and their direct reports is 47%. Other ethnic group, including Arab — — — 1 7.7 %
• a review of the succession plans for Executive Committee roles,
including potential candidates for such roles, their backgrounds and Not specified/prefer not to say — — — — —
experience, and how such candidates would contribute towards the
company's diversity objectives. Board Non-Executive Board gender Board ethnic
Board evaluation composition Director tenure diversity diversity
As part of the annual Board evaluation, all members of the
Nomination Committee participated in an evaluation of the
Committee. Feedback indicated that the Committee was effective and
that Directors were satisfied with its performance and that its processes
were robust, transparent and effective. Further details of the evaluation
can be found on pages 105-106.
Induction and training
Our customary induction processes for newly appointed Directors
include individual meetings with Executive Committee members and
other senior executives, visits to the company’s production facilities ò Chair ò 0 – 3 years ò Male ò Directors of colour
and offices including the company's head office in London and the ò Executive Director ò 3 – 6 years ò Female ò White European
group's spirits production facilities, scotch brand homes, visitor centres
ò Non-Executive Director ò 6 – 9 years
and archives in Scotland. This is supplemented by documents,
materials and information, including corporate governance guidance Board diversity data
materials, Diageo's Code of Business Conduct and other relevant Executive committee nationality
• Directors are defined as all Non-Executive and Executive Directors
policy documents, historical Board and Committee papers, recent
appointed to the Board. Board diversity related data are collated
results announcements and materials, investor relations reports,
directly from each Director annually using a questionnaire and are
performance data and a wide range of other internal and external 22% 30% 8% 8% 8% 8% 8% 8% given on a self-identifying basis.
reports, presentations and analyses.
• Directors of colour are defined in accordance with the Parker Review
Induction programmes for new Directors are tailored to suit the definitions as those 'who identify as or have evident heritage from
particular background and experience of the individual Director, with ò British ò Indian African, Asian, Middle Eastern, Central and South American
the Committee advising on priorities for that individual and tracking regions'.
induction activity. These induction processes supplement existing ò American ò Irish • All Board diversity data above are given as at 30 June 2024.
practices whereby a continuing understanding of the business is ò American/British ò South African/British
developed through appropriate business engagements for Non- ò Colombian ò Spanish
Executive Directors such as visits to customers, engagements with
employees, and brand events worked into the annual cycle of Board
meetings. Training on specific areas of risk and detailed reviews of
strategic matters are provided by Executive Committee members,
other internal senior leaders and external guest speakers and
specialists through presentations, roundtable discussions and other
sessions as part of the Board’s Annual Strategy Conference and
during the year as part of Board and Audit Committee meetings. In
addition, Executive Committee members and other senior executives
are invited, as appropriate, to Board and strategy meetings to make
presentations on their areas of responsibility. All Directors are also
provided with regular briefings to ensure they are kept up to date on
relevant legal and governance developments or changes, best
practice developments and changing commercial and other risks.

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DIRECTORS' REMUNERATION REPORT

Annual statement by the Chair of the

Incentive outcomes Looking forward to 2025
Achieving our ambition to be the best performing, most trusted and The 1 October 2024 salary increase proposed for Debra Crew is
respected consumer products company in the world requires the 4.25% which is slightly below the expected average salary

Remuneration Committee appropriate balance of annual and long-term incentive measures and
a process to ensure that targets that are set are challenging but
achievable and aligned to shareholders' interests.
increase budget for the wider workforce in the United Kingdom.
The salary for the newly appointed CFO will next be reviewed on 1
October 2025.
In determining the annual and long-term incentive outcomes, the The structure and performance measures for both the annual and
Organic net sales and organic operating profit declined during fiscal
Committee reviews not only the outcomes against the performance long-term incentives remain unchanged for fiscal 25 for Executive
24, primarily driven by our Latin American business performance. We
metrics in the plans, but also considers Diageo's wider business Directors. The annual incentive plan will continue to include NSV,
delivered $0.7 billion in productivity savings across all cost categories,
performance including market share performance, financial OP and OCC with relevant strategic IBOs for the Executive
gained or held share in over 75% of our net sales value in measured
performance relative to our TSR peer group, and other financial and Directors.
markets and generated free cash flow of $2.6 billion.
non-financial measures. The Committee also considers the impact on
The long-term incentive plan measures continue to drive the key
Non-financial measures are a critical indicator for building a platform Diageo's stakeholders more broadly.
drivers of sustainable business performance and remain
for future sustainable growth and we are pleased that we have
demonstrated progress in the measures that are aligned with our Annual incentive unchanged with a combination of financial metrics (NSV and PBET
The annual incentive plan (AIP) outcomes for 2024 relating to net sales growth, cumulative FCF and relative TSR) and non-financial
’Spirit of Progress’ action plan. These included a greenhouse gas
value (NSV) and operating profit (OP) were below threshold and metrics related to our 'Spirit of Progress' action plan. The
emission reduction of 23.8% and water efficiency improvement of
operating cash conversion (OCC) was close to target which led to a Committee set fiscal 25 financial targets by considering a number
15.6%, both compared to fiscal 20 baseline and strong performance
payment of 16% of maximum on financials. Further detail is provided of factors including historical performance, consumer trends amid
in the diversity of our global leadership, maintaining female
on page 135. The Committee considered this outcome against the ongoing macroeconomic challenges, market conditions and the
representation at 44% and increasing ethnically diverse leadership to
business performance and concluded that the design of the AIP competitive landscape. These targets align with our focus on
46%.
worked effectively in aligning reward and performance and the achieving our medium-term guidance ranges.
Dear Shareholder outcome was fair.
I am pleased to present the Directors' remuneration report for the In this year’s report The AIP also includes individual bonus objectives (IBOs) and the
year ended 30 June 2024, which contains: Remuneration at a glance 125 outcomes for the Executive Directors are set out in more detail on
• The current Directors' remuneration policy, which was approved Pay for performance at a glance 126 page 135. As a result of the financial and individual performance for
at the AGM on 28 September 2023; and fiscal 24, Debra Crew received 24.8% of maximum and Lavanya
Remuneration Committee governance 127
• The annual remuneration report, describing how the Chandrashekar received 22.8% of maximum.
Directors’ remuneration policy 128
Remuneration Policy has been put into practice in 2024 and will Long-term incentives
be implemented in 2025. Annual report on remuneration 134
In terms of the DLTIP vesting outcomes for the three-year performance
This is the first year of operation of the new remuneration policy Looking back on 2024 period ending 30 June 2024, an exceptional level of delivery in the
and the new Diageo Long-Term Incentive Plan (DLTIP) approved early part of the three-year period resulted in an achievement of 8.7%
Single figure of remuneration table 134
last year. On behalf of the Committee I would like to express my compound annual growth in NSV and therefore a vesting of 94% of
thanks to shareholders for their overwhelming support with 95.4% Annual incentive payouts for 2024 135 maximum. The compound annual growth in profit before exceptional
of the AGM votes cast in favour of the new Policy. Long-term incentives vesting in 2024 136 items and tax (PBET) was 6.9% which resulted in a vesting of 24% of
Pensions and benefits in 2024 138 maximum. Free cash flow (FCF) was $9,798 million and total
CFO transition shareholder return (TSR) ranked 14th in our peer group and both were
On 3 May 2024, we announced that Lavanya Chandrashekar will Long-term incentives awarded in 2024 139
below threshold of the range.
step down from the role of Chief Financial Officer (CFO) in fiscal Outstanding share plan interests 140
25 and leave Diageo, and that Nik Jhangiani will become the new Shareholding requirement and share interests 141 The 2021 performance share awards also included metrics which were
CFO. Lavanya’s remuneration arrangements, which confirm the in support of our ’Spirit of Progress’ action plan. The four metrics
CEO total remuneration and TSR performance 142 measure an increase in water efficiency, reduction in carbon
Committee exercised its discretion to treat her as a good leaver for
the purposes of incentives, are set out on page 144 and Nik’s Wider workforce remuneration and CEO pay ratio 142 emissions, promotion of positive drinking and building diversity
remuneration arrangements are disclosed in the 'Looking Ahead Change in pay for Directors and wider workforce 144 representation in leadership. Demanding three-year targets were
to 2025' section of this report (page 146). In addition to his annual Non-Executive Director pay 145 established for our goals in this area and the achievement across all of
remuneration, Nik will receive compensation for incentive plan these resulted in a 46% level of vesting for these non-financial
awards forfeited from his previous employer. Full details of the Looking ahead to 2025 measures. The detail of the performance against these metrics is set
one-off compensation awards will be disclosed at the time they are out on page 137 and more information on the 'Spirit of Progress' action
Salary increases for the year ahead 146
confirmed and will be reported in next year's report. Both sets of plan is at pages 48-76.
Annual incentive design for the year ahead 146
arrangements are in accordance with the Remuneration Policy. Overall this resulted in a final vesting outcome of 58.9% of maximum
Long-term incentives for the year ahead 146
Performance in year for the 2021 performance share award for the CEO and 56.5% for the
CFO. The share option awards will not vest for either Director.
Fiscal 24 was a challenging year for Diageo and despite
macroeconomic and geopolitical headwinds, we delivered strong The Committee believes that the DLTIP drove the desired behaviours to
full-year cash flow and improved market share. Against rapid support the company’s values and strategy and that the Directors’
fluctuations in our industry, we focused on the key drivers of remuneration policy has operated as intended in 2024. The
operational excellence, developing insights into consumers, Committee will continue to make sure the metrics and structure of the
resource allocation, routes to market and driving efficiencies in our DLTIP are appropriate in the future as the business continues to evolve.
business that will set us up to take advantage of the next stage of
growth.
During the year, the company maintained its position as a global
leader in spirits and demonstrated its capabilities as one of the
world's best brand builders. Our advantaged portfolio which is
balanced across geographies and price tiers enables us to both
premiumise and attract new consumers.

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Remuneration principles
In summary The approach to setting executive remuneration continues to be Remuneration at a glance
Diageo's resilient performance despite a challenging consumer guided by the remuneration principles set out below. The Salary Allowances and Annual incentive Long-term incentives Shareholding
environment is reflected in the incentive outcomes and the Committee considers these principles carefully when making
decisions that the Committee has made. The outcomes are in line decisions on executive remuneration in order to strike the right
benefits requirement
with the company’s philosophy of delivering competitive pay in balance between risk and reward, cost and sustainability, and Purpose
return for high performance against the company’s strategic competitiveness and fairness.
objectives. • Supports the • Provision of market- • Incentivises delivery of • Rewards consistent long-term • Ensures alignment between
The company has a strategy to grow and leverage its leaders attraction and competitive and cost- Diageo’s financial and performance in line with the interests of Executive
The Committee recognises that a key enabler of the strategy is the globally given the international nature of the business. We also need retention of the best effective benefits strategic targets Diageo’s business strategy Directors and shareholders
company’s ability to attract and retain diverse and engaged talent to have the right tools in place to source talent globally and the global talent with the supports attraction and • Provides focus on key • Provides focus on delivering
with a focus on our culture and values. To achieve this, we must increasingly restrictive corporate governance environment in the capability to deliver retention of talent financial metrics and the superior long-term returns to
ensure that remuneration structures remain competitive at all United Kingdom presents some challenges when considered against Diageo’s strategy individual’s contribution shareholders
levels. Diageo is a global business with global and local market the significantly higher pay norms in the United States and other parts to the company’s
leading brands and we therefore compete for talent in a global of the world, particularly given the increasing international mobility of performance
marketplace. The topic of retention of high calibre talent at all the senior talent pool. Key features of current policy
levels is one that is regularly considered by the Committee.
Long-term value creation for shareholders and pay for • Normally reviewed • Provision of competitive • Target opportunity is • Annual grant of performance • Minimum shareholding
During 2025 Javier Ferrán will retire as Chair and we welcome Sir performance remains at the heart of our remuneration policy annually on 1 benefits linked to local 100% of salary and shares and share options requirement within five years
John Manzoni as his successor. It has been a pleasure to work with and practices. Attracting and nurturing a vibrant mix of October market practice maximum is 200% of • CEO award up to 500% of of appointment:
Javier and I wish to personally thank him for his wise counsel and international talent with a range of backgrounds, skills and • Salaries take • Maximum company salary salary • CEO 500% of salary
leadership of the Board. Alongside a new Chair, we will also see a capabilities enables Diageo to grow and thrive, and ultimately to account of external pension contribution is • Performance measures, • CFO award up to 480% of • CFO 400% of salary
transition in CFO as I noted at the start of my statement, and I deliver our Growth Ambition. Remuneration remains a key part market and internal 14% of salary, which is weightings and salary • Post-employment
extend my thanks to Lavanya for her hard work and support to the of attracting and retaining the best people to lead our global employee context aligned to the offering stretching targets are set (% of salary for both CEO shareholding requirement
Committee and look forward to working with Nik in the coming business, balanced against the need to ensure our packages are for the wider workforce by the Remuneration and CFO described in for Executive Directors of
months. appropriate and fair in the business and wider employee context, in the United Kingdom Committee performance share 100% of the in-employment
delivering market-competitive pay in return for high performance • Subject to malus and equivalents) requirement (or, if lower,
On behalf of the Committee I would like to thank all our clawback provisions • Performance measures, their actual shareholding on
against the company’s strategic objectives.
investors, employees and stakeholders for their continued • Executive Directors defer weightings and stretching cessation) to be retained in
support and I ask that shareholders vote to approve this report a minimum of one-third targets are set annually full for two years after
at the AGM on 26 September 2024. Delivery of business strategy of earned bonus • Three-year performance leaving the company
Short and long-term incentive plans reward the payment into Diageo period plus two-year retention
delivery of our business strategy and Growth Ambition. shares held for three period
Performance measures are reviewed regularly and years • Subject to malus and
stretching targets are set relative to the company’s • Remainder paid out in clawback provisions
growth plans and peer group forecasted performance. cash after the end of the • Number of awards granted is
The Committee seeks to embed simplicity and financial year based on a six-month
transparency in the design and delivery of executive average share price to 30
reward. June preceding grant date
Susan Kilsby
Non-Executive Director Planned for year ending 30 June 2025
Creating sustainable, long-term performance
and Chair of the Remuneration Committee • 4.25% salary • Allowances and • Size of annual incentive • Performance measures are • No change to in-
A significant proportion of remuneration is delivered in
variable pay linked to business and individual increase for the benefits unchanged award opportunity is net sales growth, relative employment shareholding
performance, focused on consistent and responsible CEO, below the from prior year unchanged from prior TSR, cumulative free cash requirement
drivers of long-term growth. Performance against annual salary • Company pension year. For fiscal 25, flow, profit before • Post-employment
targets is assessed in the context of underlying budgets for the wider contributions 14% of measures are net sales exceptional items and tax shareholding in line with the
workforce in the salary growth, operating profit and ‘Spirit of Progress‘ Policy
business performance and the ‘quality of earnings’.
United Kingdom growth and operating measures
Winning best talent • New CFO cash conversion, 80% in • Size of long-term incentive
appointment from total weighted equally, award opportunity is in line
Well designed and market-competitive total autumn 2024. No with remaining 20% on with the policy
remuneration, with an appropriate balance of fixed salary increase in individual objectives
reward and upside opportunity, allows us to attract fiscal 25
and retain the best talent from all over the world in a
competitive talent market, which is critical to our
Implementation in year ended 30 June 2024
continued business success.
• 4% salary increase • Allowances and benefits • Payout of 16% of • Vesting of 2021 performance • As at 30 June 2024, Debra
Consideration of stakeholder interests for the CFO, slightly unchanged from prior maximum for the shares at 58.9% of maximum Crew's shareholding was
Executives are focused on creating sustainable share below the annual year financial elements of the for Debra Crew, and 56.5% 240% of salary (she has
price growth. The requirement to build significant salary budgets for • Company pension plan of maximum for Lavanya until June 2028 to meet her
personal shareholdings in Diageo, and to hold shares the wider workforce contribution of 14% for • Total payout of 24.8% of Chandrashekar requirement)
acquired from long-term incentive awards for two in the United CEO and CFO. Aligned maximum for the CEO • The 2021 share options lapsed • As at 30 June 2024,
Kingdom and the to the UK workforce and 22.8% for the CFO for both Debra Crew and Lavanya Chandrashekar's
years post-vesting aligns executives and shareholders.
United States Lavanya Chandrashekar shareholding was 100% of
Decisions on executive remuneration are made with
• No increase for the salary (she had until July
consideration of the interests of the wider workforce CEO in fiscal 24 2026 to meet her
and other stakeholders, as well as the external climate. following requirement)
appointment on 8
June 2023

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Pay for performance at a glance Remuneration Committee Governance

The charts below show performance outcomes against targets for the long-term and annual incentive plans. Targets under both incentive Remuneration Committee Alignment with culture – non-financial objectives may be incentivised
plans are set with reference to Diageo’s strategic plan and the historical and forecasted performance of Diageo and its peers. under the individual business objective element of the annual incentive
The Remuneration Committee consists of the following independent
plan and ‘Spirit of Progress‘ (ESG) priorities are incentivised under the
Non-Executive Directors: Susan Kilsby, Melissa Bethell, Karen Blackett,
Long-term incentives (for the period 1 July 2021 to 30 June 2024) long-term incentive plan, which reinforces the company’s purpose and
Valérie Chapoulaud-Floquet, Sir John Manzoni, Alan Stewart and
Organic net sales growth Cumulative free cash flow values. The design of remuneration, and the measures used, reflect
Ireena Vittal. Susan Kilsby is the Chair of the Remuneration Committee
Diageo's culture.
CAGR Threshold Midpoint Maximum Threshold Midpoint Maximum and also the Senior Independent Director. The Chair of the Board and
5.0% 7.0% 9.0% $10,058m $11,273m $12,488m the Chief Executive are invited to attend Remuneration Committee External advisors
meetings, except when their own remuneration is being discussed. The
l l During the year ended 30 June 2024, the Remuneration Committee
Chief Human Resources Officer and Global Performance and Reward
Actual 8.7% Actual $9,798m received advice on Directors' remuneration from FIT. FIT was
Director are also invited by the Remuneration Committee to provide
appointed by the Committee in October 2022 following a review of
their views and advice. The Chief Financial Officer may also attend to
Organic profit before exceptional items and tax growth Relative TSR ranking vs peer group alternative providers and were selected on the basis of their
provide performance context to the Committee during its discussions
understanding of the company's culture and business and the
CAGR Threshold Midpoint Maximum Threshold Midpoint Maximum about target setting and incentive outcomes. The Remuneration
capability of their team.
6.5% 10.0% 13.5% 9th (median) – 3rd (upper quintile) Committee's terms of reference are available in the corporate
l l governance section of the company's website and on request from the The fees paid to FIT in fiscal 24 for advice provided to the Committee
Actual 6.9% Actual 14th Company Secretary. were £84,671. All fees were determined on a time and expenses basis.
The Remuneration Committee is responsible for all executive The Committee is satisfied that FIT's engagement partners, and the
ESG measure Unit of measurement Threshold Midpoint Maximum Actual
remuneration decisions throughout the year, which includes setting teams that provide remuneration advice to the Committee, have no
Carbon reduction Reduction in greenhouse gas emissions (cum%) 19.1% 23.1% 27.1% 19.6% financial targets for the annual and long-term incentive plans and the connections with Diageo that may impair their independence. The
Water efficiency Improvement in water efficiency (cum%) 6.3% 9.2% 12.1% 4.2% outcomes under these plans. The Committee considered the Committee reviewed the potential for conflicts of interest and judged
remuneration policy and practices in the context of the principles of that there were appropriate safeguards against such conflicts. FIT does
Positive drinking Number of people who confirmed changed attitudes on the
the Corporate Governance Code, as follows: not provide Diageo with any other services. FIT is a founder member of
dangers of underage drinking following participation in a
the Remuneration Consultants Group (RCG) which is responsible for
Diageo supported education programme 2.3m 3.0m 3.7m 3.8m Clarity – the Committee engages regularly with executives, developing and maintaining the Code of Conduct for Consultants to
Inclusion & diversity % female leaders globally 44% 45% 46% 44% shareholders and their representative bodies in order to explain the Remuneration Committees of UK listed companies. FIT attended
39% 40% 41% 46% approach to executive pay; Remuneration Committee meetings during the year and the
% ethnically diverse leaders globally
Simplicity – the purpose, structure and strategic alignment of each Committee is satisfied that the advice it has received has been
Annual incentive (for the period 1 July 2023 to 30 June 2024) element of pay has been laid out in the remuneration policy; objective and independent.
Net sales growth Operating profit growth Risk – there is an appropriate mix of fixed and variable pay, and Statement of voting
Threshold Target Maximum Threshold Midpoint Maximum financial and non-financial objectives. There are robust measures in The following table summarises the details of votes cast in respect of
3.1% 6.1% 9.1% 1.4% 6.4% 11.4% place to ensure alignment with long-term shareholder interests, the resolutions on the Directors’ remuneration policy and the Directors'
including the DLTIP post-vesting retention period, shareholding remuneration report at the AGM on 28 September 2023. The
l l
requirement, bonus deferral into shares and malus and clawback Committee was pleased with the level of support shown for the
Actual -0.6% Actual -4.8%
provisions updated for prevailing legal and regulatory requirements. Directors' Remuneration Policy and Report and appreciates the active
The Committee also considers the impact on behaviour of both the participation of shareholders and their representative bodies in
Operating cash conversion Diageo's share price growth Growth in dividend
measures and targets set; consulting on executive remuneration matters.
over the period 30 June 2021 to distribution to shareholders in
Threshold Target Maximum 30 June 2024 year ended to 30 June 2024 Predictability – the pay opportunity under different performance
95% 100% 105% scenarios is set out in the approved Directors' remuneration policy
(28.1)% 1.5%
l (page 136 of the 2023 annual report);
Actual 99.6% 2024 £24.90 2024 81.22p
Proportionality – executives are incentivised to achieve stretching
2021 £34.61 2023 80.00p targets over annual and three-year performance periods, and the
Committee assesses performance holistically at the end of each
Historic reward outcomes under the annual and long-term incentive plans over the past five years are shown below. Vesting outcomes period, taking into account underlying business performance and the
under the long-term incentive plan are shown against annualised total shareholder return for the three-year period ended in the year of internal and external context. The Committee may exercise discretion
vesting (i.e. annualised TSR for the three years ended 30 June 2024 is shown against the vesting outcome for the 2021 long-term to ensure that payouts are appropriate; and
incentive awards vesting in 2024). Outcomes against annual incentive financial measures are shown against organic operating profit
growth for each respective financial year, as disclosed in prior-year annual reports. For Against Total votes cast Abstentions

5-year vesting outcomes of long-term incentives 5-year history of annual incentive payouts Directors’ remuneration policy Total number of votes 1,663,080,546 80,098,370 1,743,178,916 1,023,145
Executive Director vesting outcome Annualised TSR Payout Operating profit growth Percentage of votes cast 95.41% 4.59% 100% n/a
(% of maximum) % (% of maximum) %
Directors' remuneration report Total number of votes 1,640,705,024 77,090,228 1,717,795,252 26,428,462
98.7%
100% 30 100% 30 (excluding the policy)
77.5%
100%
Percentage of votes cast 95.51% 4.49% 100% n/a
80% 59.3% 61.5% 80% 24
56.5% 20
60% 60% 18
40% 27.5% 29.3% 100%
10 40% 12
20% 10% 10%
0% 20% 6
0% 0 32.5%
16% 0
-20% 0%
(10) 0% (6)
-40% (20)%
(12)
-60% (20) (40)%
2020 2021 2022 2023 2024 2020 2021 2022 2023 2024

ò Performance shares ò Annual incentive payout (financial measures

ò Share options excluding individual business objectives)
ò Annualised total shareholder return over three-year long-term ò Organic operating profit growth (% on prior year)
incentive performance period

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Directors' remuneration policy Annual Incentive Plan (AIP)

Purpose and link to strategy
Incentivises delivery of Diageo’s annual financial targets and the achievement of key individual objectives which are chosen to align with the
This section of the report sets out the details of the 2023 Directors' As referenced in the Remuneration Committee Chair’s statement, the
business strategy and create a platform for sustainable longer-term performance. Compulsory deferral of a minimum of one-third of any annual
remuneration policy which was approved by shareholders at the AGM on Committee believes the current policy continues to support the incentive earned into shares for three years promotes longer-term alignment of Executive Directors' interests with shareholders’ interests.
28 September 2023 and which applied from that date. The Policy business strategy.
Considerations section has been updated to reflect the anticipated Operation
The Committee reserves the right to make minor changes to the policy,
appointment of a new CFO in Autumn 2024, updated NED terms of • Performance measures, weightings and targets are set by the Remuneration Committee. Appropriately stretching targets are set by reference to
where required for regulatory, tax or administrative reasons.
appointment and employee engagement leadership. the operating plan and historical and projected performance for the company and its peer group.
• The level of award is determined with reference to Diageo’s overall financial and strategic performance and individual performance.
The actual current approved policy can be found on the company’s
• A minimum of one-third of the actual earned bonus payment is normally deferred into a share award (pre-tax deferral) or owned shares (post-
website at https://www.diageo.com/en/our-business/corporate-
tax deferral) under the Deferred Bonus Share Plan, to be held for a minimum period of three years, other than in exceptional circumstances. The
governance/remuneration-at-diageo.
remainder of the bonus payment is paid out in cash after the end of the financial year.
• The Remuneration Committee has discretion to adjust the level of payment if it is not deemed to reflect appropriately the individual’s contribution
Base salary or the overall business performance. Any discretionary adjustments will be detailed in the following year’s annual report on remuneration.
Purpose and link to strategy • The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below.
• In the case of pre-tax deferral, notional dividends accrue on deferred bonus share awards, delivered as shares or cash at the discretion of the
Supports the attraction and retention of the best global talent with the capability to deliver Diageo’s strategy and performance goals. Remuneration Committee at the end of the vesting period (on post-tax deferral into owned shares, actual dividends are payable).
Operation Opportunity
• Normally reviewed annually or following a change in responsibilities with any increases usually taking effect from 1 October. For threshold performance, up to 50% of salary may be earned, with up to 100% of salary earned for on-target performance and a maximum of
• The Remuneration Committee considers the following parameters when reviewing base salary levels: 200% of salary payable for outstanding performance. The maximum includes the deferred share element but excludes dividend equivalents
• Pay increases for other employees across the group. payable in respect of deferred share awards.
• Economic conditions and governance trends.
Performance conditions
• The individual’s performance, skills and responsibilities.
• Base salaries (and total remuneration) at companies of similar size and international scope to Diageo, with roles typically benchmarked against Annual incentive plan awards are normally based 70%-100% on financial measures which may include, but are not limited to, measures of sales,
the FTSE 30 excluding financial services companies, or against similar comparator groups in other locations dependent on the Executive profit and cash, and 0%-30% on broader objectives based on strategic goals and/or individual contribution.
Director’s home market as well as global consumer goods companies. The Remuneration Committee has discretion to amend the performance measures in exceptional circumstances if it considers it appropriate to do
so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and
Opportunity explained in the following year’s annual report on remuneration.
Salary increases will be made in the context of the broader employee pay environment, and will normally be in line with those made to other
employees in the relevant markets in which Diageo operates, typically the United Kingdom and the United States, unless there is a change in role or Diageo Long-Term Incentive Plan (DLTIP)
responsibility or other exceptional circumstances.
Purpose and link to strategy
Benefits Provides a long-term incentive to achieve key performance measures which support the company’s strategy, and to align interests with
shareholders.
Purpose and link to strategy
Operation
Provides market-competitive and cost-effective benefits as part of remuneration packages designed to attract and retain the best global talent.
• An annual grant of performance shares and/or market-price share options which vest subject to a performance test and continued employment,
Operation normally over a period of three years.
• The provision of benefits typically depends on the country of residence of the Executive Director and may include but is not limited to a company car • Measures and stretching targets are reviewed annually by the Remuneration Committee for each new award.
or travel allowance, the provision of a contracted car service or equivalent, product allowance, life insurance, accidental death and disability • The Remuneration Committee has the authority to exercise discretion to adjust the vesting outcome based on its assessment of the overall
insurance, medical and dental cover, tax support and tax return preparation costs. business performance over the performance period. This may include the consideration of factors such as holistic performance relative to peers,
• The Remuneration Committee has discretion to offer additional allowances, or benefits, to Executive Directors, if considered appropriate and stakeholder outcomes and significant investment projects, for example.
reasonable. These may include, but are not limited to, relocation expenses, housing allowance and school fees where a Director is asked to relocate • Following vesting, there is normally a further retention period of two years. Executive Directors are able to exercise an option or sell sufficient
from his/her home location as part of their appointment. Where appropriate, for example in relation to relocation benefits, the company may also shares to cover any tax liability when an award vests, provided they retain the net shares arising for the two-year retention period.
meet the tax costs associated with the benefit provision. • Notional dividends accrue on performance share awards to the extent that the performance conditions have been met, delivered as shares or
cash at the discretion of the Remuneration Committee at the end of the vesting period.
Opportunity • The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below.
• The benefits package is set at a level which the Remuneration Committee considers: Opportunity
• provides an appropriate level of benefits depending on the role and individual circumstances;
• is appropriate in the context of the benefits offered to the wider workforce in the relevant market; and
• The maximum annual grants for the Chief Executive and Chief Financial Officer are 500% and 480% of salary in performance share
• is in line with comparable roles in companies of a similar size and complexity in the relevant market.
equivalents respectively (where a market-price option is valued at one-third of a performance share). Included within that maximum, no more
than 375% of salary will be awarded in face-value terms in options, with the balance awarded in performance shares, to any Executive Director
in any year.
Post-retirement provision • Awards vest at 20% of maximum for threshold performance and 100% of maximum if the performance conditions are met in full. The vesting
Purpose and link to strategy schedule related to the levels of performance between threshold and maximum, including whether or not this will include an interim stretch
performance level, will be determined by the Remuneration Committee on an annual basis and disclosed in the relevant remuneration report for
Provides competitive post-retirement benefits which are part of remuneration packages designed to attract and retain the best global talent. that year. There is a ranking profile for the vesting of the part of the award based on relative total shareholder return, starting at 20% of
Operation maximum for achieving the threshold.
• Provision of market-competitive pension arrangements or a cash alternative based on a percentage of base salary.
Opportunity
• The maximum pension contribution, or cash alternative allowance, for Executive Directors is 14% of salary. The current CEO and CFO receive a
pension contribution of 14% of salary, in line with the UK workforce.

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Diageo Long-Term Incentive Plan (DLTIP) continued Chair of the Board and Non-Executive Directors' fees
Performance conditions Purpose and link to strategy
The vesting of awards is linked to a range of measures which may include, but are not limited to: • Supports the attraction and retention of world-class talent and reflects the value of the individual, their skills and experience.
• a growth measure (e.g. net sales growth, operating profit growth); Operation
• a measure of efficiency (e.g. operating margin, cumulative free cash flow, return on invested capital); • Fees for the Chair and Non-Executive Directors are normally reviewed every year.
• a measure of Diageo’s performance in relation to its peers (e.g. relative total shareholder return); and • A proportion of the Chair’s annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the
• a measure relating to our ‘Spirit of Progress‘ (environmental, social or governance) priorities. Chair retires from the company or ceases to be a Director.
Measures that apply to performance shares and market-price options may differ, as is the case for current awards. Weightings of these measures • Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and
may also vary year-on-year. potential liabilities.
The Remuneration Committee has discretion to amend the performance conditions in exceptional circumstances if it considers it appropriate to do • The Chair and Non-Executive Directors do not participate in any of the company’s incentive plans nor do they receive pension contributions or
so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and benefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by the
explained in the following year’s annual report on remuneration. company.
• The Chair and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the Executive
Malus and Clawback Directors.
• All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at
Under the AIP and DLTIP, the Remuneration Committee has discretion to apply malus and clawback in the circumstances specified in the www.diageo.com. The Chair of the Board, Javier Ferrán, was re-appointed on 6 October 2022 for a three-year term, terminable on three
applicable malus and clawback policy from time to time in place, for example: months’ notice by either party or, if terminated by the company, by payment of three months’ fees in lieu of notice.
• Material misstatement of results or an error resulting in overpayment. Opportunity
• Risk failure resulting in material financial loss or any business area being the subject of a regulatory investigation or in breach of regulation.
• Employee misconduct/disciplinary action. • Fees for Non-Executive Directors are within the limits set by the shareholders from time to time, with an aggregate limit of £1,750,000, excluding
• Employee accountability for material reputational damage to the group which could have been avoided. the Chair’s fees.
• In respect of the application of malus, deterioration in the financial situation of the group which limits the ability to fund incentive awards.
• Any other matter which, in the reasonable opinion of the Remuneration Committee, is required to be considered to comply with prevailing legal

Policy considerations
and/or regulatory requirements.
The malus and clawback provisions may be invoked for one year following an AIP cash payment and two years following a DLTIP vesting. Where
the Remuneration Committee determines that malus and/or clawback will apply, the Remuneration Committee has discretion to determine the
basis of application and the means by which malus and/or clawback will be implemented.
Performance measures
The malus and clawback policy will be reviewed from time to time to ensure that the policy is compliant with any regulatory requirements, such as Further details of the performance measures under the fiscal 25 annual incentive plan and measures and targets for DLTIP awards to be made in
the NYSE listing rules. September 2024, are set out in the annual report on remuneration, on page 146. Annual incentive targets will be disclosed retrospectively in next
year’s annual report on remuneration as they are deemed by the Board to be commercially sensitive until after the end of the fiscal year.
All-employee share plans Performance targets are set to be stretching yet achievable, and take into account the company’s strategic priorities and business environment. The
Purpose and link to strategy Remuneration Committee sets targets based on a range of reference points, including the corporate strategy and broker forecasts for both Diageo
To encourage broader employee share ownership through locally approved plans. and its peers.

Operation Approach to recruitment remuneration

• The company operates tax-efficient all-employee share acquisition plans in various jurisdictions. Diageo is a global organisation selling its products in nearly 180 countries around the world. The ability to recruit and retain the best talent from all
• Executive Directors’ eligibility may depend on their country of residence, tax status and employment company. over the world is critical to the future success of the business. People diversity in all its forms is a core element of Diageo’s global talent strategy and,
managed effectively, is a key driver in delivering Diageo’s Growth Ambition.
Opportunity
• Limits for all-employee share plans are set by the tax authorities. The company may choose to set its own lower limits. The Remuneration Committee’s overarching principle for recruitment remuneration is to pay no more than is necessary to attract an Executive
Director of the calibre required to shape and deliver Diageo’s business strategy, recognising that Diageo competes for talent in a global
Performance conditions marketplace. The Committee will seek to align any remuneration package with Diageo’s remuneration policy, but retains the discretion to offer a
• Under the UK Share Incentive Plan, the annual award of Freeshares may be based on Diageo plc financial measures which may include, but remuneration package which is necessary to meet the individual circumstances of the recruited Executive Director and to enable the hiring of an
are not limited to, measures of sales, profit and cash. individual with the necessary skills and expertise. However, the maximum short-term and long-term incentive opportunity will follow the policy,
although awards may be granted with different performance measures and targets in the first year. On appointment of an external Executive
Director, the Committee may decide to compensate for variable remuneration elements the individual forfeits when leaving their current employer.
Shareholding requirement In doing so, the Committee will ensure that any such compensation would have a fair value no higher than that of the awards forfeited, and would
Purpose and link to strategy generally be determined on a comparable basis taking into account factors including the form in which the awards were granted, performance
conditions attached, the probability of the awards vesting (e.g. past, current and likely future performance), as well as the vesting schedules.
• Ensures alignment between the interests of Executive Directors and shareholders.
Depending on individual circumstances at the time, the Committee has the discretion to determine the type of award (i.e. cash, shares or options),
Operation holding period and whether or not performance conditions would apply.
• The minimum in-employment shareholding requirement is 500% of base salary for the Chief Executive and 400% of base salary for any other Any such award would be fully disclosed and explained in the following year’s annual report on remuneration. When exercising its discretion in
Executive Directors. establishing the reward package for a new Executive Director, the Committee will carefully consider the balance between the need to secure an
• Executive Directors are normally expected to build up their in-employment shareholding within five years of their appointment to the Board. individual in the best interests of the company against the concerns of investors about the quantum of remuneration and, if considered appropriate
• Shares that count towards these minimum shareholding requirements are shares beneficially held by the Executive Director and their connected at the time, will consult with the company’s biggest shareholders. The Remuneration Committee will provide timely disclosure of the reward
persons, including Deferred Bonus Share Plan (DBSP) shares within the three-year deferral period, on a net (if post-tax deferral)/notional net (if package of any new Executive Director.
pre-tax deferral) of tax basis.
• Executive Directors are restricted from selling more than 50% of shares which vest under the long-term incentive plan or deferred bonus share
plan (excluding the sale of shares to cover tax on vesting and other exceptional circumstances to be specifically approved by the Chief
Executive and/or Chair), until the shareholding requirement is met.
• In order to provide further long-term alignment with shareholders, Executive Directors will normally be expected to maintain a Diageo
shareholding of 100% of the in-employment shareholding requirement (or, if lower, their actual shareholding on cessation) for two years after
leaving the company.
• The Executive Directors enter into a deed undertaking to comply with the requirement and committing to hold the required number of shares in a
specified nominee account.

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Service contracts and policy on payment for loss of office (including takeover provisions) Non-Executive Directors’ unexpired terms of Diageo also runs annual employee engagement surveys, which gives
employees the opportunity to provide feedback and express their
Executive Directors have rolling service contracts, details of which are set out below. These are available for inspection at the company’s registered appointment views on a variety of topics, including remuneration. Any comments
office.
All Non-Executive Directors are on three-year terms which are relating to Executive Directors' remuneration are fed back to the
Executive Director Date of service contract
expected to be extended up to a total of nine years. The date of initial Remuneration Committee.
Debra Crew 28 March 2023 appointment to the Board and the point at which the current letter of
appointment expires for Non-Executive Directors are shown in the These activities ensure that shareholder views and interests, as well as
Lavanya Chandrashekar 13 January 2021 the all-employee reward context at Diageo, are considered when
table below.
making executive remuneration decisions.
Notice period The contracts provide for a period of six months’ notice by the Executive Director or 12 months’ notice by the Current letter of
company, the same as would apply for any newly-appointed Executive Director. A payment may be made in lieu Date of appointment appointment Consideration of wider workforce remuneration
of notice consisting of a sum equivalent to the base salary which the Executive Director would have received for Non-Executive Directors to the Board expires When reviewing Executive Directors’ salaries, the Committee takes into
any notice period outstanding on the date employment ends and the cost to the company of providing account the company’s salary budgets for key geographies and, each
Javier Ferrán 22 July 2016 AGM 2025
contractual benefits for this period (including pension contributions but excluding incentive plans). year, the Committee has a session reviewing various aspects of
Susan Kilsby 4 April 2018 AGM 2024 workforce remuneration to deepen its understanding of employee pay
If, on the termination date, the Executive Director has exceeded their accrued holiday entitlement, the value of
such excess may be deducted by the company from any sums due to them. If the Executive Director, on the Melissa Bethell 30 June 2020 AGM 2026 arrangements. There is clear alignment in the approach to pay for
termination date, has accrued but untaken holiday entitlement, the company will, at its discretion, either require executives and the wider workforce in the way that remuneration
Karen Blackett 1 June 2022 AGM 2025 principles are followed, as well as the mechanics of the salary review
the Executive Director to take such unused holiday during any notice period or make a payment to them in lieu of
it, provided that if the employment is terminated for cause then the Executive Director will not be entitled to any Valérie Chapoulaud-Floquet 1 January 2021 AGM 2024 process and incentive plan design, which are broadly consistent
such payment. Sir John Manzoni 1 October 2020 AGM 2026 throughout the organisation. The performance measures under the
annual incentive plan and long-term incentive plan are the same for
Mitigation The Remuneration Committee requires (or may exercise its discretion to require) a proportion of the termination Alan Stewart 1 September 2014 AGM 2024 executives and other eligible employees. The key differences are that a
payment to be paid in instalments and, upon the Executive Director commencing new employment, to be subject larger percentage of Executive Directors' remuneration is performance
Ireena Vittal 2 October 2020 AGM 2026
to mitigation. related than that of other employees and salary, benefits and incentive
Annual Incentive Plan (AIP) Where the Executive Director leaves for reasons including retirement, death in service, disability, ill-health, injury, Payments under previous policies participation levels vary according to role, seniority and business
redundancy, transfer out of the group and other circumstances at the Remuneration Committee’s discretion priorities.
The Committee reserves the right to make any remuneration payments
during the financial year, the Executive Director is usually entitled to an incentive payment pro-rated for the period and payments for loss of office, notwithstanding that they are not in When reviewing the Directors’ remuneration policy, the Committee
of service during the performance period, which is typically payable at the usual payment date unless the line with the policy set out above, where the terms of the payment considered the remuneration arrangements for the workforce globally,
Committee decides otherwise. Where the Executive Director leaves for any other reason, no payment or bonus were agreed (i) under a previous policy, in which case the provision of as well as market practice in the FTSE 30 (excluding financial services)
deferral will be made. The amount is subject to performance measures being met and is at the discretion of the that policy shall continue to apply until such payments have been and Diageo’s global consumer peer group. Given the minimal
Committee. The Committee has discretion to determine an earlier payment date, for example, on death in made; (ii) before the policy or the relevant legislation came into effect; changes proposed for the 2023 Directors’ remuneration policy,
service. The bonus may, if the Committee decides, be paid wholly in cash. or (iii) at a time when the relevant individual was not a director of the employees were not specifically consulted on this.
2020 Deferred Bonus Share Where the Executive Director leaves for any reason other than dismissal, they are entitled to retain any deferred company and, in the opinion of the Committee, the payment was not
Plan (DBSP) bonus shares, which vest in full on departure, subject to any holding requirements under the post-employment in consideration for the individual becoming a director of the
shareholding policy. It is not considered necessary for the bonus deferral to continue to apply after leaving, since company.
the bonus is already earned based on performance, and there is a post-employment shareholding requirement
that ensures the Executive Director continues to be invested in the company’s longer-term interests. On a Approach to stakeholder engagement
takeover, awards vest in full. On other corporate events, the Remuneration Committee may allow awards to vest Shareholder engagement
in full. The Committee is interested in the views of investors and maintains an
ongoing dialogue with a broad group of shareholders and institutional
Diageo Long-Term Incentive Where the Executive Director leaves for reasons including retirement, death in service, disability, ill-health, injury,
Plan (DLTIP) advisors on remuneration matters. In advance of finalising our
redundancy, transfer out of the group and other circumstances at the Remuneration Committee’s discretion
proposed policy that was approved at the 2023 AGM, the Chair of the
during the financial year, awards continue in effect. Awards will vest on the original vesting date with the
Remuneration Committee consulted with the company's largest
exception of death in service, when awards will vest on the date of death, in each case unless the Remuneration
shareholders and their representatives about the policy and the
Committee decides otherwise. When an Executive Director leaves for any other reason, all unvested awards
implementation plan for fiscal 24. The responses received from
generally lapse immediately. The applicable retention period for vested awards continues for all leavers (other
shareholders were supportive of the proposed change to enhance the
than in cases of disability, ill-health or death in service, where the retention period will end on the date of death or
post-cessation shareholding requirement, as well as the planned
leaving employment), unless the Remuneration Committee decides otherwise. Where awards were granted in the
implementation for fiscal 24.
form of options, on vesting they are generally exercisable for 12 months (or six months for approved options).
Employee engagement on executive remuneration
The proportion of the award released depends on the extent to which the performance condition is met. The
number of shares is reduced on a pro-rata basis reflecting the length of time the Executive Director was employed Karen Blackett took over accountability for global workforce
by the company during the performance period, unless the Remuneration Committee decides otherwise (for engagement sessions during the year and there were focus group
example, in the case of death in service). sessions led by her and other Non-Executive Directors. As part of this
engagement, there was a session where the Remuneration Committee
Where an Executive Director leaves within one month of the normal vesting date of the award, awards are not Chair shared information with employees about executive
time pro-rated, unless the Remuneration Committee decides otherwise. remuneration, including the Directors' remuneration policy, the role of
On a takeover or other corporate event, awards vest subject to the extent to which the performance conditions the Remuneration Committee, executive remuneration principles and
are met and, unless the Remuneration Committee decides otherwise, the awards are time pro-rated. Otherwise structure and how executive pay aligns with pay for the wider
the Committee, in agreement with the new company, may decide that awards should be swapped for awards workforce. This is the first year of undertaking the engagement on
over shares in the new company. remuneration in this format and it was found to be productive and
informative by the Committee Chair and the participating employees.
Repatriation/other In cases where an Executive Director was recruited from outside the United Kingdom and has been relocated to
the United Kingdom as part of their appointment, the company may pay reasonable repatriation costs for leavers
at the Remuneration Committee’s discretion. The company may also pay for reasonable costs in relation to the
termination, for example, tax, legal and outplacement support, where appropriate.

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Annual report on remuneration Looking back on 2024

The following section provides details of how the company’s 2023 remuneration policy was implemented during the year ended 30 June 2024, and
how the Remuneration Committee intends to implement the proposed remuneration policy in the year ending 30 June 2025.
Annual incentive plan (AIP) payouts for 2024 (audited)
AIP payout for the year ended 30 June 2024
Single total figure of remuneration for Executive Directors (audited) AIP payouts for the Executive Directors serving during the year are based 80% on performance against the group financial measures and 20% on
The table below details the Executive Directors’ remuneration for the year ended 30 June 2024. performance against Individual Business Objectives (IBOs), as assessed by the Remuneration Committee and summarised in the table below.
Debra Crew(1)(8) Lavanya Chandrashekar(1)
2024
£ '000
2024
$ '000
2023
£ '000
2023
$ '000
2024
£ '000
2024
$ '000
2023
£ '000
2023
$ '000
Group financial measures(1)
Payout
Fixed pay (% of total AIP
Measure Weighting Threshold Target Maximum Actual opportunity)
Salary £1,392 $1,750 £105 $126 £823 $1,034 £831 $997
Payout opportunity (% maximum) 25% 50% 100%
Benefits (2) £112 $140 £4 $5 £37 $47 £53 $63 Net sales value (% growth)(2) 26.67% 3.1% 6.1% 9.1% (0.6)% —
Pension(3) £193 $242 £10 $13 £112 $140 £110 $133 Operating profit (% growth)(2) 26.67% 1.4% 6.4% 11.4% (4.8)% —
Total fixed pay(7) £1,696 $2,132 £120 $145 £972 $1,221 £993 $1,193 Operating cash conversion(3) 26.67% 95.0% 100.0% 105.0% 99.6% 12.80%
Full year performance for 1 July 2023 - 30 June 2024 80.00% 12.80%
Performance related pay
Annual incentive(4) £690 $868 £79 $95 £379 $476 £603 $723 Individual business objectives
Payout
Long-term incentives (5)
£678 $852 £166 $199 £1,350 $1,697 £258 $309 (% of total AIP
Measure (IBOs equally weighted) and target Weighting Result opportunity)
Other incentives (6) £3 $4 — — £4 $5 £3 $4
Debra Crew Chief Executive 20.00 % 12.00%
Total variable pay(7) £1,371 $1,724 £245 $294 £1,732 $2,178 £864 $1,037
Global market share performance 10.00 % We gained or held total trade market share in markets that total 75% of 5.00%
• Grow or hold total trade market share in our net sales in fiscal 24(6)
Total single figure of remuneration(7) £3,067 $3,856 £365 $439 £2,704 $3,399 £1,857 $2,230 2/3rds of total net sales in measured
markets
Notes
(1) Exchange The amounts shown in US dollars are converted to sterling using the cumulative weighted average exchange rate for Productivity improvement 10.00 % The productivity target for fiscal 24 has been exceeded as set out below: 7.00%
rate the respective financial year. For the year ended 30 June 2024, the exchange rate was £1 = $1.26 and for the year • Deliver an overall productivity • By the end of fiscal 24, we delivered $698m in productivity savings
ended 30 June 2023 it was £1 = $1.20. Debra Crew and Lavanya Chandrashekar are paid in US dollars. improvement in fiscal 24 of $505m across across all cost categories including supply, marketing and indirect
all cost categories overheads
(2) Benefits The benefits numbers include the gross value of all taxable benefits. For Debra Crew, these include flexible benefits
allowance ($22.1k), tax return preparation ($19.2k), contracted car service ($58.7k), medical and dental ($22.2k), Lavanya Chandrashekar Chief Financial 20.00 % 10.00%
product allowance and life and long-term disability cover. Lavanya Chandrashekar's benefits include flexible benefits Officer
allowance ($23.8k), travel allowance ($13.5k), product allowance and life and long-term disability cover. Productivity improvement 10.00 % The productivity target for fiscal 24 has been exceeded as set out below: 7.00%
(3) Pension Pension benefits reflect the increase in the pension fund balances over the year in the Diageo North America Inc. pension Page 138 • Deliver an overall productivity • By the end of fiscal 24, we delivered $698m in productivity savings
plans which are over and above the increase due to inflation. Debra Crew started to accrue benefits in the Supplemental improvement in fiscal 24 of $505m across across all cost categories including supply, marketing and indirect
Executive Retirement Plan (SERP) from 1 October 2022. Lavanya Chandrashekar started accruing benefits in the SERP from 1 all cost categories overheads
July 2021. The company pension contribution has been 14% of salary from 1 January 2023 for all Executive Directors, aligned Finance transformation 10.00 % A summary of performance against the finance transformation 3.00%
to the rate for the UK workforce. • Implement actions to continue the milestones for fiscal 24 is as follows:
(4) Annual The performance achieved under the fiscal 24 annual incentive plan resulted in an outcome of 16.0% of maximum for Page 135 improvement of financial forecasting and • Automated forecasting models built internally, rolled out and subject
incentive the financial elements of the plan. Financial elements represented 80% of the maximum incentive opportunity. Taking sustainable cash management to further embedding
account of performance against Individual Business Objectives (IBOs), which represent 20% of the maximum • Deliver the agreed project milestones for • Key actions completed to support the delivery of strong cash
opportunity, the annual incentive payout is 24.8% of maximum for Debra Crew and 22.8% of maximum for Lavanya the finance technology roll out within performance
Chandrashekar. In accordance with their elections to defer post-tax, one-third of the annual incentive for fiscal 24 budget • Initial stage of a significant programme of global technology change
shown in the table above for Debra Crew and Lavanya Chandrashekar will be deferred into owned shares which are • Implement the new functional and underway
held for three years in a nominee account. presentational currency into all areas of • Go live of required changes to functional currency in over 50 systems,
(5) Long- Long-term incentives represent the estimated gain (based on the average three-month ADR price to 30 June 2024 of Page 136 management and reporting restructuring of FX hedges and completion of reporting cycles
term $137.77) delivered through share options and performance shares where performance conditions have been met in the
incentives respective financial year. It also includes the value of additional shares earned in lieu of dividends on these vested
performance shares. For Debra Crew, the 2021 performance shares and share options were granted before she
became an Executive Director, and due to a slightly different vesting schedule for awards granted below the Board,
vested at 58.9% and 0.0% of maximum respectively. The long-term incentive value reflects the proportion of the three-
year period in which she was appointed as CEO. Lavanya Chandrashekar's 2021 performance shares and share
options were granted after she became an Executive Director and vested at 56.5% and 0.0% of maximum
respectively. Of the 2024 long term incentive amounts shown in the table above none are related to share price
appreciation over the fiscal 22 to fiscal 24 performance period.
For fiscal 23, long-term incentives comprise performance shares and share options awarded in 2020 that vested in
September 2023 at 98.8% and 77.5% of maximum respectively for Debra Crew and Lavanya Chandrashekar,
including dividend equivalents on performance shares. These 2020 long-term incentive amounts have been restated to
reflect the ADR share price on the vesting date of $160.19 instead of the average three-month ADR share price used in
last year’s report of $178.52.
(6) Other Other incentives include the grant face value of awards made under the all-employee share plans. Awards do not
incentives have performance conditions attached.
(7) Totals Some figures and sub-totals add up to slightly different amounts than the totals due to rounding.
(8) Other The 2023 figures shown for Debra Crew are in respect of the period from 5 June 2023 to 30 June 2023; following her
appointment as interim CEO on 5 June 2023 and CEO and Executive Director on 8 June 2023.

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Payout Vesting outcome for 2021 performance share and share option awards in September 2024 (audited)
Group IBO Total Total Total
The 2021 performance share award vested at 58.9% of maximum for Debra Crew and 56.5% of maximum for Lavanya Chandrashekar. The 2021
(weighted 80%) (weighted 20%) (% max) (% annual salary) (’000) USD share options lapsed having not met the threshold performance metric as detailed below:
Debra Crew(4),(5) 12.80% 12.00% 24.80% 49.60% $868 Lavanya
Debra Crew Chandrashekar
Lavanya Chandrashekar(4),(5) 12.80% 10.00% 22.80% 45.60% $476 vesting vesting
Vesting of 2021 DLTIP(5) Weighting Threshold Midpoint Maximum Actual (% maximum)(5)(6) (% maximum)(5)(6)

(1) Performance against the AIP measures is calculated using 2024 budgeted exchange rates and is measured on a currency-neutral basis. Vesting if performance achieved (% maximum)(6) 20%/25% 60%/62.5% 100%
(2) For AIP purposes, net sales value (NSV) growth and operating profit (OP) growth are calculated on budgeted currency exchange rates, after adjustments for acquisitions and disposals (1)
and incorporates the organic treatment of hyperinflationary economies. Organic net sales value growth (NSV) 40.0% 5.0% 7.0% 9.0% 8.7% 37.8% 37.6%
(3) For AIP purposes, operating cash conversion (OCC) is calculated by dividing cash generated from operations excluding cash inflows/outflows in respect of exceptional items,
Profit before exceptional items and tax (PBET) growth(2) 40.0% 6.5% 10.0% 13.5% 6.9% 11.7% 9.8%
dividends, maturing inventories and post-employment payments in excess of the amount charged to operating profit by operating profit before depreciation, amortisation, impairment
and exceptional items. The measure incorporates the organic treatment of hyperinflationary economies. The ratio is stated at the budgeted exchange rate for the year. Carbon reduction (ESG) 5.0% 19.1% 23.1% 27.1% 19.6% 1.5% 1.3%
(4) AIP payments are calculated using base salary as at 30 June 2024, in line with the global policy that applies to other employees across the company.
(5) In accordance with the 2023 remuneration policy and their individual elections to defer post tax, one-third of Debra Crew's and Lavanya Chandrashekar's after tax AIP payout disclosed Water efficiency (ESG) 5.0% 6.3% 9.2% 12.1% 4.2% — —
in the table above will be deferred into Diageo shares, which will be held for three years in a nominee account. These shares will be acquired in September 2024 and the number of
shares will be disclosed in the 2025 remuneration report.
Positive drinking (ESG) 5.0% 2.3m 3.0m 3.7m 3.8m 5.0% 5.0%
(6) Market share reflects internal estimates incorporating Nielsen, Association of Canadian Distillers, CGA, Dichter and Neira, Frontline, Intage, IRI, ISCAM, NABCA, Scentia, State Inclusion & diversity - % female leaders globally (ESG) 2.5% 44.0% 45.0% 46.0% 44.0% 0.6% 0.5%
Monopolies, TRAC, Ipsos and other third-party providers.
(7) No discretion was exercised by the Remuneration Committee in determining the AIP outcome. Inclusion & diversity - % ethnically diverse leaders globally
(ESG) 2.5% 39.0% 40.0% 41.0% 46.0% 2.5% 2.5%
Vesting of performance shares (% maximum) 58.9% 56.5%
Long-term incentive plans (LTIPs) vesting in 2024 (audited)
Cumulative free cash flow (FCF)(3) 50.0% $10,058m $11,273m $12,488m $9,798m — —
Long-term incentive awards up to and including September 2023 were made under the Diageo Long-Term Incentive Plan (DLTIP), which was (4)
approved by shareholders at the AGM in September 2014. Awards are designed to incentivise Executive Directors and senior managers to deliver Relative total shareholder return 50.0% 9th — 3rd 14th — —
long-term sustainable performance and are subject to performance conditions measured over a three-year period. Awards are granted on an Vesting of share options (% maximum) — —
annual basis in both performance shares and share options. Awards granted to Executive Directors vest at 20% of maximum for threshold
performance, and 100% of the award will vest if the performance conditions are met in full, with a straight-line payout between threshold and (1) NSV growth is calculated at budgeted currency exchange rates, after adjustments for acquisitions and disposals and incorporates the organic treatment of hyperinflationary economies.
maximum. (2) PBET growth is presented on a constant currency basis and it excludes the impact of acquisitions and disposals. The impact of hyperinflation on operating profit is considered under the
same organic methodology as for net sales while the impact on other lines (primarily on finance charges) is excluded. This metric also includes adjustment to exclude the fair value
Share options – granted in September 2021, vesting in September 2024 (audited) remeasurement of contingent considerations, earn out arrangements and biological assets and to exclude post-employment credits. Furthermore, the metric excluded the interest on
current year’s share repurchase program (SRP) and excludes the year-over-year change of M&A related interest.
In September 2021, Debra Crew (although not an Executive Director at the time of grant) and Lavanya Chandrashekar received share option (3) Cumulative FCF is based on the outcome for each of the three years within the performance period, measured before exceptional items and on an FX neutral basis by adjusting actual
awards over ADRs under the DLTIP, with an exercise price of $194.75. The award was subject to a performance condition assessed over a three- outcomes back to the base year exchange rates, and incorporates the organic treatment of hyperinflationary economies. Furthermore, the cash flow impact of any material business
year period based on the achievement of the following equally weighted performance measures: development activities such as share repurchase programmes, acquisitions and disposals, which were not known and planned at the beginning of the vesting period, are excluded
from the three-year performance. Note that FCF has been restated in USD following the change in functional currency.
• Relative total shareholder return (TSR) ranked against the TSR of a peer group of international drinks and consumer goods companies; and (4) Relative total shareholder return (TSR) is measured as the percentage growth in Diageo’s share price (assuming all dividends and capital distributions are re-invested) compared to the
• Cumulative free cash flow (FCF) TSR of a peer group of 16 international drinks and consumer goods companies. TSR calculations are based on an averaging period of six months and converted to a common currency
(US dollars). Calculation is performed and provided by FIT.
The vesting profile for grants to Executive Directors for relative TSR is shown below: (5) No discretion was exercised by the Remuneration Committee in determining the long-term incentive outcomes.
(6) At the time of grant of the 2021 awards, Debra Crew was not an Executive Director. The vesting schedule for awards granted to executives below the Board has a threshold vesting of
TSR ranking (out of 17) Vesting (% max) TSR ranking (out of 17) Vesting (% max) TSR peer group (16 companies) 25% of maximum (62.5% at midpoint). Vesting at threshold for awards granted to Executive Directors is 20% of maximum (60.0% at midpoint).

1st, 2nd or 3rd 100 7th 55 AB InBev Heineken Pernod Ricard

4th 95 8th 45 Brown-Forman Kimberly-Clark Procter & Gamble Summary of performance share awards and options vesting (audited)
Dividend Estimated
5th 75 9th 20 Carlsberg L'Oréal Reckitt Benckiser Awarded Vesting Vesting equivalent value
Award Award Date (ADRs) (% Max) (ADRs) Option price ADR price share ($'000)(1)
6th 65 10th or below 0 The Coca-Cola Company Mondelēz International Unilever
Debra Crew (2) Performance Shares 03/09/2021 9,663 58.9% 5,691 $137.77 494 $852
Colgate-Palmolive Nestlé
Share Options 03/09/2021 9,663 — — $194.75 $137.77 — —
Groupe Danone PepsiCo
Lavanya Chandrashekar Performance Shares 03/09/2021 20,060 56.5% 11,333 $137.77 985 $1,697
Performance shares – awarded in September 2021, vesting in September 2024 (audited) Share Options 03/09/2021 20,060 — — $194.75 $137.77 — —
In September 2021, Debra Crew (although not Executive Director at the time of grant) and Lavanya Chandrashekar received performance share
awards under the DLTIP. Awards vest after a three-year period subject to the achievement of three performance conditions outlined below: (1) The total long-term incentives value shown in the single figure of remuneration on page 134 is the total of performance shares and share options in the table above and is based on an
average ADR price for the last three months of the fiscal year ($137.77).
• Organic net sales value (NSV) growth (weighted 40%); (2) The number of ADRs and the resulting value of performance share awards and options relating to Debra Crew in the table above are pro-rata figures that reflect the proportion of the
• Profit before exceptional items and tax (PBET) growth (weighted 40%); and three-year performance period in which she was appointed as Chief Executive Officer. The original number of Performance Shares and Share Options awarded is shown on page 140.
• ESG measures (water efficiency, carbon reduction, positive drinking, and diversity & inclusion) weighted 20%. The total number of Performance Shares awarded was 27,019 and 15,914 vested in total of which 5,691 is shown above. The total value of the vested award, including dividend
equivalent shares (17,297 ADRs) is $2,383,007. No share options vested.
Notional dividends accrue on awards and are paid out either in cash or shares on the number of shares which vest.
The Committee considered Diageo’s overall business performance and value created for shareholders over the period and determined that the
outcomes were fair and appropriate; consequently no adjustment to the vesting outcomes were made. It also considered the level of difficulty of
the targets and determined that the vesting outcome was consistent with Diageo's long-term performance and returns to shareholders. No share
options were exercised by any Director during the year ended 30 June 2024.

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Pensions and benefits in the year ended 30 June 2024 Long-term incentive awards made during the year ended 30 June 2024 (audited)
Benefits provisions for the Executive Directors are in accordance with the information set out in the Directors’ remuneration policy. On 4 September 2023, Debra Crew and Lavanya Chandrashekar received awards of performance shares and market-priced share options under
the DLTIP based on a percentage of base salary as outlined below. The three-year period over which performance will be measured is 1 July 2023
Pension arrangements (audited) to 30 June 2026.
Debra Crew and Lavanya Chandrashekar are members of the Diageo North America Inc. Supplemental Executive Retirement Plan (SERP) with an
accrual rate of 14% of base salary during the year ended 30 June 2024. The SERP is an unfunded, non-qualified supplemental retirement The performance measures and targets for awards granted in September 2023 are outlined below. Net sales value and profit before exceptional
programme. Under the plan, accrued company contributions are subject to quarterly interest credits. Under the rules of the SERP, they can items and tax are key levers for driving top and bottom line growth. The free cash flow measure was selected because it represents a robust
withdraw the balance of the plan six months after leaving service or age 55, if later and the balance may be withdrawn in either a lump sum or five indicator of cash performance consistent with typical external practice and is a key strategic priority. Total shareholder return, the only relative
equal annual instalments, depending on the size of the balance. performance measure under the plan, provides good alignment with shareholder interests and increases the leverage based on share price
growth. Finally, the environmental, social and governance (ESG) measure (20% of total performance share award), which was introduced in 2020,
Debra Crew and Lavanya Chandrashekar participated in the US Cash Balance Plan and the Benefit Supplemental Plan (BSP), until 30 September reinforces the stretching and strategically important goals under Diageo's 10-year ‘Spirit of Progress’ action plan to help create an inclusive and
2022 and June 2021 respectively, and have accrued benefits under both plans. The Cash Balance Plan is a qualified funded pension arrangement. sustainable world. The definitions for the ESG measures were set out on page 152 of the annual remuneration report for fiscal 23.
Employer contributions were 10% of pay capped at the Internal Revenue Service (IRS) limit. The BSP is a non-qualified unfunded arrangement;
notional employer contributions were 10% of pay above the IRS limit. Interest (notional for the BSP) is credited quarterly on both plans. Performance shares Share options
Organic profit
In the event of death in service, a lump sum of six times base salary is payable for Debra Crew and Lavanya Chandrashekar. before exceptional
Organic net sales items and tax Greenhouse gas Water efficiency % Female % Ethnically Cumulative free
The table below shows the pension benefits accrued by each Executive Director as at year end. The accrued US benefits for Debra Crew and 2023 DLTIP value (CAGR) (CAGR) reduction index Positive drinking leaders diverse leaders cash flow(1) Relative TSR
Lavanya Chandrashekar are one-off cash balance amounts. Weighting 40% 40% 5% 5% 5% 2.5% 2.5% 50% 50%
30 June 2024 $9,400m - 9th - 3rd and
30 June 2023
Target range 4.0% - 8.0% 4.5% - 11.5% 17.9% - 25.9% 3.7% - 8.3% 2.8m - 4.2m 47% - 49% 44% - 46%
US benefit value US benefit value $12,600m above
Executive Director $'000 $'000

1,245 958 (1) The cumulative free cash flow targets are shown in USD following the change to functional currency from fiscal 24. More details can be found on this on pages 166-167.
Debra Crew(1)
Lavanya Chandrashekar (2) 689 520 20% of DLTIP awards will vest at threshold, with vesting in a straight line up to 100% if the maximum level of performance is achieved. As
explained in the remuneration policy, one performance share is deemed equal in value at grant to three share options.
(1) Debra Crew's US benefits reflect an increase of $287,000 over the year to 30 June 2024. This increase reflects $253,000 which is due to additional pension benefits earned over the
year (of which $242,000 is over and above the increase due to inflation - and is reported in the total single figure of remuneration table on page 134); and, $34,000 which is due to Awards made Exercise Face value Face value
interest earned over the year on her deferred US benefits. Executive Director Date of grant Plan Share type during the year price $'000 (% of salary)
(2) Lavanya Chandrashekar's US benefits reflect an increase of $169,000 over the year to 30 June 2024. This increase reflects $159,000 which is due to additional pension benefits earned
over the year (of which $140,000 of which is over and above the increase due to inflation – and is reported in the total single figure of remuneration table on page 134); and $10,000 of
Debra Crew 04/09/2023 DLTIP - share options ADR 36,971 $166.67 $6,563 375%
which is due to interest earned on her deferred US benefits. Debra Crew 04/09/2023 DLTIP - performance shares ADR 36,971 $6,563 375%
The Normal Retirement Age applicable to each Director’s benefits depends on the pension scheme, as outlined below. Lavanya Chandrashekar 04/09/2023 DLTIP - share options ADR 21,182 $166.67 $3,760 360%
US benefits
Lavanya Chandrashekar 04/09/2023 DLTIP - performance shares ADR 21,182 $3,760 360%
UK benefits (Cash Balance US benefits US benefits
Executive Director (DPS) Plan) (BSP) (SERP)
The proportion of the awards outlined above that will vest is dependent on the achievement of performance conditions and continued
Debra Crew n/a 65 6 months after leaving service, or age 55 if later 6 months after leaving service, or age 55 if later employment, and the actual value received may be nil. The vesting outcomes will be disclosed in the 2026 annual remuneration report.
Lavanya Chandrashekar n/a 65 6 months after leaving service, or age 55 if later 6 months after leaving service, or age 55 if later In accordance with the plan rules, the number of performance shares and share options granted under the DLTIP was calculated by using the
average closing ADR price for the last six months of the preceding financial year ($177.50). This price is used to determine the face value in the
table above. In accordance with the plan rules, the exercise price was calculated using the average closing ADR price of the three days preceding
the grant date ($166.67).

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Outstanding share plan interests (audited) Directors’ shareholding requirement and share interests (audited)
Number of Dividend Number of The beneficial interests of the Directors who held office during the year ended 30 June 2024 (and their connected persons) in the ordinary shares
Award shares/ equivalent shares/
Performance Year of calculation Exercise options at 30 Vested/ shares options at 30 (or ordinary share equivalents) of the company are shown in the table below.
Plan name Date of award period vesting share price price June 2023(1) Granted exercised released Lapsed June 2024(1)
Ordinary shares or equivalent(1),(2)
Debra Crew
30 June 2024 30 June 2023
DLTIP - Share Options(4) Sep 2021 2021-2024 2024 $194.75 27,019 27,019 ADR (or date of (or date of Shareholding Shareholding at
cessation, if appointment if requirement 30 June 2024
DLTIP - Share Options Sep 2022 2022-2025 2025 $176.95 26,629 26,629 ADR 24 July 2024 earlier) later) (% salary)(3) (% salary)(3) Shareholding requirement met

DLTIP - Share Options Sep 2023 2023-2026 2026 $166.67 36,971 36,971 ADR Chair
Total unvested share options subject to performance in Ordinary shares(2) 362,476 ORD Javier Ferrán(5) 314,830 314,498 310,468
DLTIP - Share Options(3) Sep 2020 2020-2023 2023 $133.88 30,076 23,308 6,768 23,308 ADR Executive Directors
Total vested but unexercised share options in Ordinary shares(2) 93,232 ORD Debra Crew(4)(5) 122,736 122,736 260 500% 240% No - to be met by June 2028
DLTIP - Performance Shares Sep 2020 2020-2023 2023 $143.63 30,076 29,715 2,101 361 — ADR Lavanya Chandrashekar (4),(5),(6) 30,412 30,406 17,901 400% 100% No - to be met by July 2026
DESAP - Performance Shares (5)
Sep 2020 2020-2023 2023 $143.63 19,494 20,622 1,362 234 — ADR Non-Executive Directors
Total vested shares subject to performance in Ordinary shares (2)
— ORD Susan Kilsby(5) 2,600 2,600 2,600
DLTIP - Performance Shares (4)
Sep 2021 2021-2024 2024 $174.97 27,019 27,019 ADR Melissa Bethell 2,668 2,668 2,668
DLTIP - Performance Shares Sep 2022 2022-2025 2025 $195.29 26,629 26,629 ADR Valérie Chapoulaud-Floquet 2,154 2,154 2,098
DLTIP - Performance Shares Sep 2023 2023-2026 2026 $177.50 36,971 36,971 ADR Sir John Manzoni 3,007 3,007 2,929
DESAP - Performance Shares (5)
Mar 2022 2023-2025 2026 $197.06 8,796 8,796 ADR Lady Nicola Mendelsohn (8) N/A 5,000 5,000
DESAP - Performance Shares(5) Mar 2022 2024-2026 2027 $197.06 8,930 8,930 ADR Alan Stewart(7) 7,550 7,550 7,354
DESAP - Performance Shares (5)
Mar 2022 2025-2027 2028 $197.06 8,930 8,930 ADR Ireena Vittal — — —
Total unvested shares subject to performance in Ordinary shares (2)
469,100 ORD Karen Blackett 702 702 —
(5)
DESAP - Restricted Stock Unit Mar 2022 2027 $197.06 8,796 8,796 ADR Notes
(5)
DESAP - Restricted Stock Unit Mar 2022 2028 $197.06 8,930 8,930 ADR (1) Each person listed beneficially owns less than 1% of Diageo’s ordinary shares. Ordinary shares held by Directors have the same voting rights as all other ordinary shares.
(2) Any change in shareholding between the end of the financial year on 30 June 2024 and the last practicable date before publication of this report, being 24 July 2024, is outlined in the
DESAP - Restricted Stock Unit(5) Mar 2022 2029 $197.06 8,930 8,930 ADR table above.
(3) Both the shareholding requirement and shareholding at 30 June 2024 are expressed as a percentage of base salary on 30 June 2024 and calculated using a three-month average
Total unvested shares not subject to performance in Ordinary shares (2)
106,624 ORD share price for period ending 30 June 2024 of £27.22. For the purposes of the shareholding requirement any vested but unexercised share options are reflected on an estimated net of
Lavanya Chandrashekar tax basis.
(4) The total share interests shown above include 2023 Deferred Bonus Plan Shares for Debra Crew (109 ADRs) and Lavanya Chandrashekar (754 ADRs).
DLTIP - Share Options(3) Sep 2018 2018-2021 2021 $140.89 3,832 3,832 3,832 ADR (5) Javier Ferrán, Debra Crew, Lavanya Chandrashekar and Susan Kilsby have share interests in ADRs (one ADR is equivalent to four ordinary shares). The share interests in the table are
(3) stated as ordinary share equivalents.
DLTIP - Share Options Sep 2018 2018-2021 2021 $140.89 1,064 1,064 1,064 ADR (6) The figure as at 30 June 2023 for Lavanya Chandrashekar reflects the correction of an error in last year's report which had omitted her interests in 1,698 ADRs (equivalent to 6,792
Total vested but unexercised share options in Ordinary shares(2) 19,584 ORD ordinary shares) awarded as a proportion of her annual incentive outcome for the year ended 30 June 2022. The value of this award had been correctly reflected in the single total
figure of remuneration disclosures in the 2022 and 2023 Directors' Remuneration Reports and was disclosed to shareholders at the time of the award.
DLTIP - Share Options(4) Sep 2021 2021-2024 2024 $194.75 20,060 20,060 ADR (7) The figure as at 30 June 2023 for Alan Stewart has been corrected from 7,269 shares to 7,354 shares. The correction reflects additional shares acquired via an automatic dividend
reinvestment plan.
DLTIP - Share Options Sep 2022 2022-2025 2025 $176.95 18,512 18,512 ADR (8) Lady Mendelsohn resigned from the Board on 28 September 2023 and therefore no details are included for the shareholding after her date of cessation.
DLTIP - Share Options Sep 2023 2023-2026 2026 $166.67 21,182 21,182 ADR
Total unvested share options subject to performance in Ordinary shares(2) 239,016 ORD
Relative importance of spend on pay
The graphs below illustrate the relative importance of spend on pay (total remuneration of all group employees) compared with distributions to
DLTIP - Performance Shares Sep 2020 2020-2023 2023 $143.63 1,827 1,805 127 22 — ADR shareholders (total dividends plus the share buyback programme but excluding transaction costs), and the percentage change from the year
Total vested shares subject to performance in Ordinary shares(2) — ORD ended 30 June 2023 to the year ended 30 June 2024. There are no other significant distributions or payments of profit or cash flow.
DLTIP - Performance Shares Sep 2021 2021-2024 2024 $174.97 20,060 20,060 ADR Distributions to shareholders Staff pay
DLTIP - Performance Shares Sep 2022 2022-2025 2025 $195.29 18,512 18,512 ADR
(13.7)% 5.4%
DLTIP - Performance Shares Sep 2023 2023-2026 2026 $177.50 21,182 21,182 ADR
Total unvested shares subject to performance in Ordinary shares(2) 239,016 ORD 2024 3,242 2024 2,314
(6)
DLTIP - Restricted Stock Units Sep 2020 2020-2023 2023 $143.63 2,635 2,635 2,635 — ADR
2023 3,755 2023 2,196
Total unvested shares not subject to performance in Ordinary shares (2)
— ORD

(1) For unvested awards, this is the number of shares/options initially awarded. For exercisable share options, this is the number of outstanding options. All share options have an expiry
date of 10 years after the date of grant.
(2) ADRs have been converted to ORDs (one ADR is equivalent to four ordinary shares) for the purpose of calculating the total number of vested and unvested shares and options.
(3) The total number of share options granted under the DLTIP in September 2018 and 2020 showing as outstanding as at 30 June 2024 are vested but unexercised share options.
(4) Performance shares and share options granted under the DLTIP in September 2021 and due to vest in September 2024 are included here as unvested share awards subject to
performance conditions, although the awards have also been included in the single figure of remuneration table on page 134, since the performance period ended during the year
ended 30 June 2024.
(5) The performance shares awarded to Debra Crew in 2020 and vested in 2023 under the Diageo Exceptional Stock Award Plan (DESAP) were granted in recognition of equity which was
forfeited on joining Diageo in 2020 and had the same performance measures and targets as the 2020 DLTIP performance shares. Debra Crew was granted a number of performance
shares and restricted stock units under the DESAP in March 2022 for incentive and retention purposes. The DESAP performance shares will vest based on a performance hurdle of
winning or holding market share in at least 2/3rs of total NSV in measured markets over the respective three-year performance periods (F23-F25 for awards due to vest in September
2026, F24-F26 for awards due to vest in September 2027 and F25-F27 for awards due to vest in September 2028). The DESAP restricted stock units vest subject to continued employment
up to the vesting date.
(6) Lavanya Chandrashekar was granted a number of restricted stock units prior to her appointment as CFO and joining the Board.

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Remuneration Committee review of wider workforce pay

CEO total remuneration and TSR performance Each year, the Remuneration Committee has a detailed session reviewing wider workforce remuneration. In fiscal 24, the review focused on the
prior year’s annual reward cycle outcomes, including base pay competitive positions, retaining talent in a global market, the level of differentiation
The graph below show the total shareholder return for Diageo plc and the FTSE 100 Index since 30 June 2014 and demonstrates the relationship
across our reward programmes, gender pay analysis, and how we connect performance and reward programmes. The Committee also
between pay and performance for the Chief Executive, using current and previously published single total remuneration figures. The FTSE 100 Index
considered the challenges of attracting and retaining critical talent in a global marketplace at all levels as well as the all-employee reward priorities
has been chosen because it is a widely recognised performance benchmark for large companies in the United Kingdom.
for the coming year. Information on wider workforce reward is also provided as required throughout the year to enable the Committee to consider
Total shareholder return - Chief Executive total remuneration
value of hypothetical £100 holding (includes legacy LTIP awards) (£'000) the broader employee context when making executive remuneration decisions, for example the annual salary increase budgets by country.

ò Diageo Supporting our employees

400 40,000 We focus on all aspects of the wellbeing of our employees. We monitor the cost-of-living in all our geographies using a formal monitoring process
ò FTSE 100 and have implemented actions as required, typically by awarding off-cycle salary increases in high-inflation geographies. We have provided
ò Chief Executive 360 35,000 financial education to all employees to support them in managing their personal finances more effectively. Our global group of wellbeing
total champions work with regional and market teams to drive wellbeing initiatives locally, coming together each quarter for a global connect. Over
remuneration 320 30,000 fiscal 24, activations have included mental health first aider training, external speakers on wellbeing topics such as men's health, menopause,
resilience, nutrition as well as holding masterclasses in activities to support wellbeing.
280 25,000
In fiscal 24 we rolled out Celebrate, our global recognition platform, to over 50 countries having been initially piloted in NAM and the UK. We now
have the majority of the Diageo workforce covered by the programme and have seen 90,000 recognition moments to 17,000 employees. The
240 20,000
programme supports embedding a culture of speed and agility and enables leaders and peers to recognise actions in the moment.
200 15,000 We continue to innovate with benefit policies that support and demonstrate our commitment to diversity and inclusion. In fiscal 24 we introduced a
Carers Leave policy in the UK which provides all employees with two weeks paid leave per year to care, or arrange care, for dependents. This
160 10,000 supports the attraction and retention of the best talent through a market leading policy, and by supporting flexibility and wellness. We will be
working on a wider roll out across fiscal 25.
120 5,000 Fiscal 24 saw the launch of a new Employee Resource Group (ERG) for neurodiverse colleagues (PRISM) which complements the other ERGs in
place supporting all colleagues. PRISM amplifies the voice of the neurodivergent community and is involved in our business supporting areas such
80 0 as brand mobilisation. These practices reflect our progressive culture, where our policies are a hallmark of our business and differentiates our
June 2014 June 2015 June 2016 June 2017 June 2018 June 2019 June 2020 June 2021 June 2022 June 2023 June 2024 employee value proposition.
CEO pay ratio
Ivan Ivan Ivan Ivan Ivan Ivan Ivan Ivan Ivan Debra Debra In accordance with The Companies (Miscellaneous Reporting) Regulations 2018, the table below sets out Diageo’s CEO pay ratios for the year
Menezes(1) Menezes(1) Menezes(1) Menezes(1) Menezes(1) Menezes(1) Menezes(1) Menezes(1) Menezes(1) Crew(1)(2) Crew(1)(2)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ended 30 June 2024. These CEO pay ratios provide a comparison of the Chief Executive’s total remuneration based on Debra Crew's total single
F15 F16 F17 F18 F19 F20 F21 F22 F23 F23 F24 figure of remuneration, converted into sterling, with the equivalent remuneration for the employees paid at the 25th (P25), 50th (P50) and 75th (P75)
Chief Executive total percentile of Diageo’s workforce in the United Kingdom. Also shown are the salary and total remuneration for each quartile employee.
remuneration(2) 3,888 4,156 3,399 8,995 11,776 2,273 6,019 7,343 10,582 403 3,067
Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio
Annual incentive(3) 44.0% 65.0% 68.0% 70.0% 61.0% 0.0% 93.8% 93.8% 37.3% 35.4% 24.8%
2024 (1)
Option A 69:1 51:1 40:1
Share options(3) 0.0% 0.0% 0.0% 60.0% 73.1% 27.5% 10.0% 61.5% 77.5% 77.5% 0.0%
2024 Total pay and benefits £44,668 £60,620 £77,388
Performance shares(3) 33.0% 31.0% 0.0% 70.0% 89.3% 10.0% 29.3% 59.3% 98.7% 98.8% 58.9%
2024 Salary £39,229 £50,720 £59,850
(1) To enable comparison, Ivan Menezes’ and Debra Crew's single total figure of remuneration has been converted into sterling using the average weighted exchange rate for the relevant 2023(2)(3) Option A(4) 231:1 177:1 137:1
financial year. The figure represented in the graph for fiscal 23 is the combined single figure total for Ivan Menezes and Debra Crew. (3) (4)
(2) The single total figure of remuneration for Debra Crew in fiscal 23 and fiscal 24 includes pro-rata long-term incentive plan awards proportionate to the duration of her appointment as 2022 Option A 146:1 114:1 90:1
CEO. (4)
(3) % of total maximum opportunity.
2021 Option A 127:1 100:1 79:1
2020 Option A(4) 50:1 38:1 31:1
(4)
2019 Option A 265:1 208:1 166:1
Remuneration for the wider workforce and CEO pay ratio (1) Debra Crew's total single figure of remuneration figure (see page 134 for details) in fiscal 24 used in the calculation of the CEO pay ratio includes pro-rata long-term incentive plan
awards proportionate to the duration of her appointment as CEO.
Alignment of Executive pay with the wider workforce (2) 2023 CEO pay ratios comprise the sum of both Sir Ivan Menezes' and Debra Crew's total single figure of remuneration converted to sterling.
There is clear alignment in the approach to pay for executives and the wider workforce in the way that remuneration principles are followed, as (3) 2023 and 2022 CEO pay ratios have been updated to reflect the value of the updated prior year single figure of remuneration which incorporates long-term incentives based on the
well as the mechanics of the salary review process and incentive plan design, which are broadly consistent throughout the organisation. There is a actual share price at vesting, rather than the average share price in the last three months of the financial year which had been used for the original disclosure.
strong focus on performance-related pay, and the performance measures under the annual incentive plan and long-term incentive plan are the (4) Only people employed in the United Kingdom and with the same number of contractual working hours throughout the full 12-month period have been included in the calculation.
Inclusion of employees outside of this group would require a complex simulation of full-time annual remuneration based on a number of assumptions and would not have a meaningful
same for executives and other eligible employees. The reward package for Executive Directors is consistent with that of the senior management impact on the ratio.
population, however, a much higher proportion of total remuneration for the Executive Directors is linked to business performance, compared to
the rest of the employee population. Methodology
Consistent with the approach for Diageo’s disclosure in previous years, the methodology used to identify the employees at each quartile for 2024 is
The structure of our reward packages is based on the principle that it should enable Diageo to attract and retain the best talent globally within our
Option A, as defined in the regulations. We believe this is the most robust and accurate approach, and is in line with shareholder expectations.
broader industry. It is driven by local market practice, as well as the level of seniority and accountability, reflecting the global nature of our
business. Diageo is committed to fostering an inclusive and diverse workplace, and creating a culture where every individual can thrive. Reflective Total full-time equivalent remuneration for employees reflects all pay and benefits received by an individual in respect of the relevant year and has,
of this, pay parity and consistency of treatment for all employees are critical to the reward practices across the organisation. The reward framework other than where noted below, been calculated in line with the methodology for the ‘single total figure of remuneration’ for the Chief Executive
is regularly reviewed to ensure employees are rewarded fairly and appropriately, in line with the business strategy, performance outcomes, (shown on page 134 of this report). The total remuneration calculations were based on data as at 30 June 2024. Actual remuneration was
competitive market practice and our diversity and inclusion agenda. converted into the full-time equivalent for the role and location by pro-rating earnings to reflect full-time contractual working hours and these
figures were then ranked to identify the employees sitting at the percentiles. To ensure that the total remuneration for the selected median, 25th and
During the year, the Remuneration Committee Chair explained to employees the Directors' remuneration policy, the role of the Committee,
75th percentile employee is sufficiently representative of those positions, we calculated the total remuneration for a number of employees above
executive remuneration principles and structure and sought their feedback on wider reward matters as part of the workforce engagement sessions.
and below each of the selected median, 25th and 75th percentile UK employees and used the median value. In light of financial performance
In 2024 this was a new format and was viewed by the Committee Chair, and the employees who participated, to be a productive and informative
outcomes being signed off close to the publication of the Annual Report, the Diageo Group business multiple, which is applicable to the majority of
discussion.
UK employees, has been used to calculate all payments under the annual incentive, although some employees may receive a variation on this
multiple in practice. Pension values for each employee are not calculated on an actuarial basis as for the Chief Executive, but rather as the notional
cost of the company’s pension contribution during the financial year, according to the relevant section of the pension scheme for each individual.
This approach allows meaningful data for a large group of people to be obtained in a more efficient way.

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Points to note for the year ended 30 June 2024 Lavanya’s unvested Long-Term Incentive Plan (LTIP) awards (granted in 2021, 2022 and 2023) will continue and vest (subject to the extent that the
The median remuneration and resulting pay ratio for 2024 are consistent with the pay and progression policies for Diageo’s UK employees as a relevant performance conditions, assessed at the time of vesting, are satisfied and subject to time pro-rating to reflect the period employed during
whole and reflect the impact of performance-related pay on total remuneration for the year. As the Chief Executive has a larger proportion of her the performance period) on the original vesting dates. To the extent they vest, options granted in 2021 will be exercisable until 3 March 2026 (the
total remuneration linked to business performance than other employees in the UK workforce, the ratio has decreased versus last year due to Committee having exercised discretion to slightly extend the normal exercise period), options granted in 2022 will be exercisable until 2 September
proportionate reduction in incentive outcome for the CEO for 2024 versus 2023. 2026 and options granted in 2023 will be exercisable until 4 September 2027. Regarding already vested but unexercised options granted in 2018,
the Committee exercised its discretion to allow these to be exercisable within 18 months (instead of the default 12 months) of leaving and lapse
Change in pay for Directors compared to wider workforce thereafter. All LTIP awards will continue to be subject to their respective two-year post-vesting holding periods. No further LTIP awards will be
The table below shows the percentage change in Directors’ remuneration and average remuneration of employees on an annual basis. Given the granted. Shares held under the Share Incentive Plan will be treated in accordance with the rules of that plan. The company’s Malus and Clawback
small size of Diageo plc’s workforce, data for all employees of the group has also been included. Policy will continue to apply.
As permitted under the Remuneration Policy, Lavanya will receive a contribution of up to a maximum of £25,000 excluding VAT towards legal fees
incurred in connection with agreeing her departure terms. She will also receive up to a maximum annual amount of £20,000 plus VAT per year for
2024 2023 2022 2021 2020 fees incurred in connection with UK and US tax return submissions for three years following her departure. Finally, in relation to repatriation from
Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits the UK to the US, flights and shipping of possessions will be provided in accordance with the company’s Global Mobility Policy, as well as a net
Plc employee average(1) 6.2% (44.8)% 10.0% 9.0% (61.3)% (7.2)% 11.1% 25.8% 10.5% 5.1% N/A(5) 38.8% 7.5% (100.0)% 9.0% sum of £114,500 to cover disturbance costs in connection with her repatriation to the US.
Average global
employee(2) 11.1% (17.6)% 3.1% 12.9% (41.6)% 17.0% 6.4% 38.4% 11.7% — 278.8% 12.6% 5.3% (67.8)% 6.9%
Non-Executive Directors
Executive Directors(3) Fee policy
(5) Javier Ferrán’s fee as non-executive Chair was increased by 4.5% (from £670,000 to £700,000) on 1 October 2023. The Chair’s fee is
Debra Crew N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
N/A (5)
appropriately positioned against our comparator group of FTSE 30 companies excluding financial services. The Executive Directors and the Chair
Lavanya Chandrashekar 3.8% (34.1)% (22.1)% 2.3 % (58.8)% (89.4)% N/A(5) N/A(5) N/A(5) N/A(5) N/A(5) N/A(5) N/A(5) N/A(5) N/A(5) approved an increase in the base fee for Non-Executive Directors of 3.8% (from £104,000 to £108,000), effective 1 October 2023.
Non-Executive Directors (4)
2024 2023
Melissa Bethell 3.6% _ 218.4% 3.0% — 10.1% 2.3% — 16.0% N/A(5) — — — — — Per annum fees £'000 £'000

Karen Blackett (5) 3.6% _ 4231.3% N/A(5) — N/A(5) N/A(5) — N/A(5) — — — — — — Chair of the Board 700 670
Valérie Chapoulaud- Non-Executive Directors
Floquet 3.6% _ 159.0% 3.0% — 108.5% — — — N/A(5) — — — — — Base fee 108 104
Javier Ferrán (Chair) 4.1% _ 132.9% 2.3% — (22.4)% 8.3% — 28.8% — — — — — — Senior Non-Executive Director 35 30
Susan Kilsby 4.5% _ 182.7% 2.6% — 125.7% 3.8% — 300.0% 9.6% — (87.7)% 37.3% — 68.9% Chair of the Audit Committee 35 35
Sir John Manzoni 3.6% _ 241.5% 3.0% — 20.0% — — — — — — — — — 35 35
Chair of the Remuneration Committee
Lady Nicola Mendelsohn N/A(5) _ N/A(5) 3.0% — — 2.3% — — 3.2% — — 3.3% — —
Alan Stewart 2.7% _ 252.8% 3.2% — — 4.7% — — 2.4% — — 2.5% — —
Single total figure of remuneration for Non-Executive Directors (audited)
Fees £'000 Taxable benefits £'000(1) Total £'000(2)
Ireena Vittal 3.6% _ 689.2% 3.0% — 734.0% — — — — — — — — — 2024 2023 2024 2023 2024 2023

(1) Around 15 UK-based employees are employed by Diageo plc. Their remuneration has been calculated in line with the approach used for the CEO pay-ratio calculation and the
Chair
average year-on-year change has been reported. Only those employed during the full financial year have been included in calculations. Javier Ferrán 692 665 4 1 696 666
(2) Calculated by dividing staff cost related to salaries, bonus and benefits by the average number of employees on a full-time equivalent basis, as disclosed in note 4c to the financial
statements under staff costs and average number of employees on page 174, but reduced to account for the inclusion of Executive Directors in reported figures. The salary, bonus and Non-Executive Directors
benefits cost data used for calculation are subsets of the Wages and salaries figure disclosed in this note. The salary data used for this calculation has been adjusted to exclude costs Melissa Bethell 107 103 5 2 112 105
related to severance payments which are included in staff costs, and last year’s disclosure has been updated in line with this for consistency. In line with the approach for Directors, the
bonus values used for the calculation reflect the bonus earned in relation to performance during the relevant financial year. Karen Blackett 107 103 5 1 112 104
(3) Calculated using the data from the single total figure of remuneration table on page 134 in US dollars, reflecting payment currency for Debra Crew and Lavanya Chandrashekar.
Valérie Chapoulaud-Floquet 107 103 13 10 120 113
(4) Calculated using the fees and taxable benefits disclosed under Non-Executive Directors’ remuneration in the table on page 145. Taxable benefits for Non-Executive Directors comprise a
product allowance as well as expense reimbursements relating to attendance at Board meetings, which may vary year-on-year. Susan Kilsby 176 168 14 11 190 179
(5) N/A refers to a nil value in the previous year or an incomplete prior year, meaning that the year-on-year change cannot be calculated.
Sir John Manzoni 107 103 4 2 111 105
Payments to former Directors (audited) Lady Nicola Mendelsohn(3) 26 103 1 1 27 104
There were no payments to former Directors in the year ended 30 June 2024. Alan Stewart 142 138 4 1 146 139
Payments for loss of office (audited) Ireena Vittal 107 103 10 10 117 113
It was announced on 3 May 2024 that Lavanya Chandrashekar would be stepping down as Chief Financial Officer and as a director of Diageo (1) Taxable benefits include a product allowance and expense reimbursements relating to travel, accommodation and subsistence in connection with attendance at Board meetings during
during fiscal 25. Details of the remuneration arrangements for Lavanya, which were approved by the Remuneration Committee and are in the year, which are deemed by HMRC to be taxable in the United Kingdom. The amounts in the single total figure of remuneration table above include any tax gross-ups on the benefits
accordance with the Directors’ remuneration policy, are set out below. Full details of the values of any amounts paid will be reported in the provided by the company on behalf of the Directors. Non-taxable expense reimbursements have not been included in the single figure of remuneration table above.
Directors' remuneration report next year. (2) Some figures add up to slightly different totals due to rounding.
(3) Lady Mendelsohn resigned from the Board at the 2023 AGM on 28 September 2023.
Lavanya’s service contract provides for a twelve-month notice period (which commenced on 3 May 2024) and she remains eligible for salary and
benefits until the date she leaves the company. If the company so determines, Lavanya may be paid a payment in lieu of notice to cover salary
and the cost of contractual benefits in respect of any remaining portion of the notice period.
Lavanya is required to retain the lower of the level of her actual shareholding as at the leave date, or shares to the value of 400% of salary, for two
years post her leave date in accordance with the Directors' remuneration policy.
The Remuneration Committee exercised its discretion to treat Lavanya as a good leaver under the incentive arrangements in accordance with the
remuneration policy. Lavanya will be eligible to receive a bonus under Diageo’s annual incentive plan (AIP) for the financial years ending 30 June
2024 and 30 June 2025 on a time pro-rata basis reflecting time employed in the respective financial year (excluding any period of garden leave).
Any payments due will be payable at the normal times and subject to financial performance outcomes and delivery against individual business
objectives, with one-third delivered in deferred bonus shares in accordance with the normal deferral rules (provided that in respect of any award
made after the leave date, the award will be made on terms that it will vest immediately upon award). Deferred bonus shares related to bonuses
for prior financial years, will vest on the leave date in accordance with the remuneration policy. Any deferred bonus shares which are delivered by
the leave date are subject to the post-cessation shareholding requirement.

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Looking ahead to 2025 Performance conditions for long-term incentive awards to be made in the year ending 30 June 2025(1)
Performance shares Share options
Environmental, social & governance (ESG)

management does not raise environmental, social and governance Organic profit
Salary increases for the year ending 30 June risks by inadvertently motivating irresponsible behaviour. Organic net
before
exceptional items Greenhouse
Water
efficiency Positive % Female
% Ethnically
diverse Vesting Relative Total Cumulative free Vesting
2025 As per last year, DLTIP awards to be made in September 2024 will
sales (CAGR) and tax (CAGR) gas reduction index drinking leaders leaders schedule Shareholder Return cash flow ($m) schedule

Weighting (% total) 40% 40% 5% 5% 5% 2.5% 2.5% 50.0% 50.0%

The Remuneration Committee reviewed base salaries for Executive comprise awards of both performance shares and share options,
based on stretching targets against the key performance measures as Maximum 6.0% 9.1% 29.9% 11.2% 3.7m 50% 49% 100% 3rd and above $9,950 100%
Committee members and agreed the following increase for the Chief
Executive Officer, effective 1 October 2024. outlined in the table on page 147, assessed over a three-year Midpoint 4.5% 6.1% 23.1% 8.7% 3.1m 48% 47% 60% – $8,550 60%
performance period. The relative total shareholder return measure is
Threshold 3.0% 3.1% 16.3% 6.2% 2.5m 46% 45% 20% 9th $7,150 20%
Debra Crew Lavanya Chandrashekar based on the same constituent group and vesting schedule as outlined
Salary at 1 October ('000) 2024 2023 2024 2023 on page 136.
(1) Details of the considerations taken in to account when setting the targets for the DLTIP by the Committee are set out on page 146.
Base salary $1,824 $1,750 $1,044 $1,044 The Committee set fiscal 2025 financial targets by considering a
% increase (over previous
year) 4.25% n/a 0% 4%
number of factors including historical performance, consumer trends
amid ongoing macroeconomic challenges, market conditions and the
Additional information
competitive landscape. These targets align with our focus on returning
As previously announced, Nik Jhanghiani will join the Board in to our medium-term guidance ranges.
Key management personnel related party Statutory and audit requirements
Autumn 2024. His annual salary will be £900,000 and his benefits The ESG measures in the DLTIP comprise five ambitions reflecting the This report was approved by a duly authorised Committee of the
and incentives will be in accordance with the remuneration policy. In ‘Spirit of Progress‘ action plan, to make a positive impact on the transactions (audited) Board of Directors and was signed on its behalf on 29 July 2024 by
addition, Nik will be entitled to an additional one-off award on joining environment and society. Each goal is weighted equally: Key management personnel of the group comprises the Executive and Susan Kilsby who is Chair of the Remuneration Committee.
to compensate him for the financial loss of forfeited awards from his Non-Executive Directors, the members of the Executive Committee and
previous employer. Full details will be provided when these are • reduction in greenhouse gas emissions in our direct operations The Board has followed the principles of good governance as set out
the Company Secretary.
confirmed at the time of the award and in the Directors' remuneration (Scope 1&2); in the UK Corporate Governance Code and complied with the
report next year. • improvement in the water efficiency index; Diageo plc has granted rolling indemnities to the Directors and the regulations contained in the Schedule 8 of the Large and Medium-
• number of people who confirm changed attitudes on the dangers of Company Secretary, uncapped in amount, in relation to certain losses sized Companies and Groups (Accounts and Reports) Regulations
Annual incentive design for the year ending underage drinking after participating in a Diageo-supported and liabilities which they may incur in the course of acting as Directors 2008, the Listing Rules of the Financial Conduct Authority and the
education programme; and or Company Secretary (as applicable) of Diageo plc or of one or more relevant schedules of the Companies Act 2006.
30 June 2025 • inclusion and diversity (percentage of female leaders globally and of its subsidiaries. These indemnities continue to be in place at 30 June
The Companies Act 2006 and the Listing Rules require the company’s
percentage of ethnically diverse leaders globally). 2024.
The measures and targets for the annual incentive plan are reviewed auditor to report on the audited information in their report and to state
annually by the Remuneration Committee and are carefully chosen to In setting ESG targets, the Committee took account of the material Other than disclosed in this report, no Director had any interest, that this section has been properly prepared in accordance with these
drive financial and individual business performance goals related to progress made to date across the various measures versus the 'Spirit of beneficial or non-beneficial, in the share capital of the company. Save regulations.
the company’s short-term strategic operational objectives. The plan Progress' 2030 action plan. The Committee considered the opportunity as disclosed above, no Director has or has had any interest in any
PwC has audited the report to the extent required by the regulations,
design for Executive Directors for the year ending 30 June 2025 will to continuously improve against high levels of achievement and has transaction which is or was unusual in its nature, or which is or was
being the sections headed Single total figure of remuneration for
comprise the following performance measures and weightings (no set targets in this context. significant to the business of the group and which was effected by any
Executive Directors (and notes), Payments to former Directors,
change from last year), with targets set for the full financial year: member of the group during the financial year, or which having been
The performance share element of the DLTIP applies to the Executive Payments for loss of office, Annual incentive plan (AIP) payouts for
effected during an earlier financial year, remains in any respect
• net sales value (% growth) (26.67% weighting): a key performance Committee and the top level of senior leaders across the organisation 2024, Long-term incentive plans (DLTIPs) vesting in 2024, Pensions and
outstanding or unperformed. There have been no material
measure of year-on-year top line growth; worldwide, whilst the share option element is applicable to a much benefits, Directors’ shareholding requirement and share interests,
transactions during the last three years to which any Director or officer,
• operating profit (% growth) (26.67% weighting): stretching profit smaller population comprising only members of the Executive Outstanding share plan interests, Non-Executive Directors’
or 3% or greater shareholder, or any spouse or dependent thereof,
targets drive operational efficiency and influence the level of returns Committee. One market price performance-based option is valued at remuneration and Key management personnel related party
was a party. There is no significant outstanding indebtedness to the
that can be delivered to shareholders through increases in share one-third of a performance share. transactions.
company from any Directors or officer or 3% or greater shareholder.
price and dividend income not including exceptional items or Awards are calculated on the basis of a six-month average share price The annual remuneration report is subject to an advisory vote by
exchange; for the period ending 30 June 2024. This averaging period which is in shareholders at the AGM on 26 September 2024. Terms defined in this
• operating cash conversion (26.67% weighting): ensures focus on line with Diageo's standard practice, helps to smooth out volatility in Directors' remuneration report are used solely herein.
efficient cash delivery by the end of the year; and share price. The price used to calculate the awards (on the basis of
• individual business objectives (20% weighting): measurable ordinary shares) to be granted in September 2024 was 11% higher
deliverables that are specific to the individual and are focused on than the share price at the time the Committee approved the awards
supporting the delivery of key strategic objectives. to be granted.
The Committee has discretion to adjust the payout to reflect It is intended that a DLTIP award to the equivalent of 500% of base
appropriately an individual's contribution or the overall business salary will be made to Debra Crew in September 2024, comprising
context. 375% of salary in performance shares and the equivalent of 125% of
Details of the targets for the year ending 30 June 2025 will be salary in market price performance-based share options. It is intended
disclosed retrospectively in next year’s annual report, by which time that a DLTIP award to the equivalent of 480% of salary will be made
they will no longer be deemed commercially sensitive by the Board. to Nik Jhangiani in 2024 following the commencement of his
employment, comprising 360% of salary in performance shares and
The annual incentive opportunity for Executive Directors will remain the equivalent of 120% of salary in market price share options. In
consistent with prior years, equal to 100% of base salary at target, with performance share equivalents, one market price option is valued at
a maximum opportunity of 200% of base salary. one-third of a performance share.

Long-term incentive awards to be made in the The table below summarises the annual DLTIP awards to Debra Crew
and Nik Jhangiani to be made in 2024.
year ending 30 June 2025
Chief Executive Chief Financial Officer
Grant value (% salary) Performance share equivalents (1 share: 3 options)
The long-term incentive plan measures are reviewed annually by the
Remuneration Committee and are selected to reward long-term Performance shares 375% 360%
consistent performance in line with Diageo’s business strategy and to Share options 125% 120%
create alignment with the delivery of value for shareholders. The Total 500% 480%
Committee has ensured that the incentive structure for senior

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Directors’ report who shall be given a casting vote, or require each distribution joint
venture entity to be wound up. Control Event for these purposes is
circumstances (including in relation to applications, training, career
development and promotion) on the grounds of any disability. In the
charges of, and expenses incurred by, the Depositary and any taxes,
duties or other governmental charges on account.
defined as the acquisition by any person of more than 30% of the event that an employee, worker or contractor becomes disabled in the
The Directors present the Directors’ report for the year ended 30 June outstanding voting rights or equity interests in the company, provided course of their employment or engagement, Diageo aims to ensure Direct and indirect payments by the Depositary
2024. that no other person or entity (or group of affiliated persons or entities) that reasonable steps are taken to accommodate their disability by The Depositary reimburses Diageo for certain expenses it incurs in
holds directly or indirectly more than 30% of the voting rights in the making reasonable adjustments to their existing employment or connection with the ADR programme, subject to a ceiling set out in the
Company status company. engagement. Deposit Agreement pursuant to which the Depositary provides services
Diageo plc is a public limited liability company incorporated in to Diageo. The Depositary has also agreed to waive certain standard
England and Wales with registered number 23307 and registered Related party transactions Trading market for shares fees associated with the administration of the programme. Under the
office and principal place of business at 16 Great Marlborough Street, Transactions with related parties are disclosed in note 21 to the Diageo plc ordinary shares are listed on the London Stock Exchange contractual arrangements with the Depositary, Diageo has received
London W1F 7HS, United Kingdom. The company's telephone number consolidated financial statements. (LSE). Diageo ADSs, representing four Diageo ordinary shares each, approximately $1.3 million arising out of fees charged in respect of
is +44 (0) 20 7947 9100. The company's agent in the United States is are listed on the New York Stock Exchange (NYSE). The principal dividends paid during the year and issuance and cancellation fees to
General Counsel, Diageo North America, Inc., 175 Greenwich Street, 3 Major shareholders trading market for the ordinary shares is the LSE. Diageo shares are cover the Company's ADR programme costs. These payments are
World Trade Center, New York, NY 10007, United States. The At 30 June 2024, the following substantial interests (3% or more) in the traded on the LSE’s electronic order book. Orders placed on the order received for expenses associated with non-deal road shows, third-
company was incorporated on 21 October 1886. It is the ultimate company’s ordinary share capital (voting securities) had been notified book are displayed on-screen through a central electronic system and party investor relations consultant fees and expenses, Diageo’s cost for
holding company of the group, a full list of whose subsidiaries, to the company: trades are automatically executed, in price and then time priority, administration of the ADR programme not absorbed by the Depositary
partnerships, associates, joint ventures and joint arrangements is set when orders match with corresponding buy or sell orders. Only and related activities (e.g. expenses associated with the AGM), travel
Percentage
out in note 10 to the financial statements set out on pages 220-225. of issued ordinary member firms of the LSE, or the LSE itself if requested by the member expenses to attend training and seminars, exchange listing fees, legal
Number of share (excluding Date of notification of
firm, can enter or delete orders on behalf of clients or on their own fees, auditing fees and expenses, the SEC filing fees, expenses related
Directors Shareholder ordinary shares treasury shares) interest
account. All orders are anonymous. Although use of the order book is to Diageo’s compliance with US securities law and regulations
The Directors of the company who currently serve are shown in the BlackRock Investment not mandatory, all trades, whether or not executed through the order (including, without limitation, the Sarbanes-Oxley Act) and other
section ‘Board of Directors’ on pages 92 and 93 and in accordance Management (UK) book and regardless of size, must be reported within three minutes of expenses incurred by Diageo in relation to the ADR programme.
with the UK Corporate Governance Code, all the Directors will retire by Limited (indirect 3 December
execution, but may be eligible for deferred publication. Articles of association
rotation at the AGM and offer themselves for re-election. Further holding)(1) 147,296,928 5.89% 2009
details of Directors’ contracts, remuneration and their interests in the Capital Research and The Markets in Financial Instruments Directive (MiFID) allows for The company is incorporated under the name Diageo plc, and is
shares of the company at 30 June 2024 are given in the Directors’ Management Company delayed publication of large trades with a sliding scale requirement registered in England and Wales under registered number 23307. The
remuneration report. The Directors’ powers are determined by UK (indirect holding) 124,653,096 4.99% 28 April 2009 based on qualifying minimum thresholds for the amount of following description summarises certain provisions of Diageo’s articles
legislation and Diageo’s articles of association. The Directors may consideration to be paid/the proportion of average daily turnover of association (as adopted by special resolution at the Annual General
Massachusetts Financial
exercise all the company’s powers provided that Diageo’s articles of 29 February (ADT) of a stock represented by a trade. Provided that a trade/ Meeting on 28 September 2023) and applicable English law
Services Company
association or applicable legislation do not stipulate that any powers (indirect holding) 111,560,606 4.99% 2024 consideration equals or exceeds the qualifying minimum size, it will be concerning companies (the Companies Acts), in each case as at 24
must be exercised by the members. eligible for deferred publication ranging from 60 minutes from time of July 2024. This summary is qualified in its entirety by reference to the
(1) On 25 January 2024, BlackRock Inc. filed an Amendment to Schedule 13G with the trade to three trading days after time of trade. Companies Acts and Diageo’s articles of association. Investors can
Auditor SEC in respect of the calendar year ended 31 December 2023, reporting that, as of 25 obtain copies of Diageo’s articles of association by contacting the
The auditor, PricewaterhouseCoopers LLP, is willing to continue in January 2024, 192,713,107 ordinary shares representing 8.6% of the issued ordinary American depositary shares Company Secretary at: [email protected]. Any amendment to
office and a resolution for its re-appointment as auditor of the
share capital were beneficially owned by BlackRock Inc. and its subsidiaries Fees and charges payable by ADR holders the articles of association of the company may be made in
(including BlackRock Investment Management (UK) Limited).
company will be submitted to the AGM. Citibank N.A. serves as the depositary (Depositary) for Diageo’s ADS accordance with the provisions of the Companies Act 2006, by way of
The company has not been notified of any other substantial interests in programme. Pursuant to the deposit agreement dated 14 February special resolution.
Disclosure of information to the auditor its securities since 30 June 2024. The company’s substantial 2013 between Diageo, the Depositary and owners and holders of ADSs
In accordance with Section 418 of the Companies Act 2006, the shareholders do not have different voting rights. Diageo, so far as is (the Deposit Agreement), ADR holders may be required to pay various Directors
Directors who held office at the date of approval of this Directors’ known by the company, is not directly or indirectly owned or controlled fees to the Depositary, and the Depositary may refuse to provide any Diageo’s articles of association provide for a board of directors,
report confirm that, so far as they are each aware, there is no relevant by another corporation or by any government. Diageo knows of no service for which a fee is assessed until the applicable fee has been consisting (unless otherwise determined by an ordinary resolution of
audit information of which the company’s auditor is unaware; and arrangements, the operation of which may at a subsequent date result paid. In particular, the Depositary, under the terms of the Deposit shareholders) of not fewer than three directors and not more than 25
each Director has taken all reasonable steps to ascertain any relevant in a change of control of the company. Agreement, shall charge a fee of up to $5.00 per 100 ADSs (or directors, in which all powers to manage the business and affairs of
audit information and to ensure that the company’s auditor is aware of fraction thereof) relating to the issuance of ADSs; delivery of deposited Diageo are vested.
As at the close of business on 24 July 2024, 325,119,456 ordinary
that information. shares, including those held through American Depositary Shares securities against surrender of ADSs; distribution of cash dividends or A director must not vote on, or count towards the quorum in relation
(ADSs), were held by approximately 2,598 holders (including other cash distributions (i.e. sale of rights and other entitlements); to, any resolution of the Board in respect of any contract in which they
Corporate governance statement American Depositary Receipt (ADR) holders) with registered addresses distribution of ADSs pursuant to stock dividends or other free stock have an interest and, if they do so, their vote will not be counted. This
The corporate governance statement, prepared in accordance with in the United States, representing approximately 14.6% of the distributions, or exercise of rights to purchase additional ADSs; prohibition does not apply to any resolution where that interest cannot
rule 7.2 of the Financial Conduct Authority’s Disclosure Guidance and outstanding ordinary shares (excluding treasury shares). At such date, distribution of securities other than ADSs or rights to purchase reasonably be regarded as likely to give rise to a conflict of interest or
Transparency Rules, comprises the following sections of the Annual 81,092,735 ADSs were held by 2,140 registered ADR holders. Since additional ADSs (i.e. spin-off shares); and depositary services. Citibank where that interest arises only from certain specified matters, including:
Report: the ‘Corporate governance report’, the ‘Audit Committee certain of such ordinary shares and ADSs are held by nominees or N.A. is located at 388 Greenwich Street, New York, New York, 10013, (a) indemnifying the director in respect of obligations incurred at the
report’ and the ‘Additional information for shareholders’. former Grand Metropolitan PLC or Guinness plc ADR holders who United States. In addition, ADR holders may be required under the request of or for the benefit of the company or any of its subsidiary
Deposit Agreement to pay the Depositary (a) taxes (including undertakings; (b) indemnifying a third party in respect of obligations of
Significant agreements – change of control have not re-registered their ADSs, the number of holders may not be
applicable interest and penalties) and other governmental charges; the company or any of its subsidiary undertakings for which the
representative of the number of beneficial owners in the United States
The following significant agreements contain certain termination and (b) registration fees; (c) certain cable, telex, and facsimile transmission director has assumed responsibility in whole or in part under an
or the ordinary shares held by them.
other rights for Diageo’s counterparties upon a change of control of and delivery expenses; (d) the expenses and charges incurred by the indemnity or guarantee or by the giving of security; (c) offers of
the company. Under the partners agreement governing the Employment policies Depositary in the conversion of foreign currency; (e) such fees and securities by the company or any of its subsidiary undertakings in
company’s 34% investment in Moët Hennessy SAS (MH) and Moët A key strategic imperative of the company is to attract, retain and expenses as are incurred by the Depositary in connection with which the director will or may be entitled to participate as a holder of
Hennessy International SAS (MHI), if a Competitor (as defined therein) grow a pool of diverse, talented employees. Diageo recognises that a compliance with exchange control regulations and other regulatory securities; (d) contracts concerning another company in which the
directly or indirectly takes control of the company (which, for these diversity of skills and experiences in its workplace and communities will requirements; and (f) the fees and expenses incurred by the director is the holder of or beneficially interested in less than 1% of any
purposes, would occur if such Competitor acquired more than 34% of provide a competitive advantage. To enable this, the company has Depositary, the custodian, or any nominee in connection with the class of the equity share capital of such company; (e) employee
the voting rights or equity interests in the company), LVMH Moët various global employment policies and standards, covering such servicing or delivery of ADSs. The Depositary may (a) withhold benefits in relation to the company or any of its subsidiary
Hennessy – Louis Vuitton SA (LVMH) may require the company to sell issues as resourcing, data protection, human rights, dignity at work, dividends or other distributions or sell any or all of the shares undertakings in which the director will share in a similar manner to
its interests in MH and MHI to LVMH. health, safety and wellbeing. These policies and standards seek to underlying the ADSs in order to satisfy any tax or governmental charge other employees; and (g) the purchase or maintenance of insurance
The master agreement governing the operation of the group’s market- ensure that the company treats current or prospective employees and (b) deduct from any cash distribution the applicable fees and against any liability for, or for the benefit of, any director or directors or
level distribution joint ventures with LVMH states that if any person justly, solely according to their abilities to meet the requirements and for, or for the benefit of, persons who include directors.
acquires interests and rights in the company resulting in a Control standards of their role and in a fair and consistent way. This includes
Directors may be elected by the members in a general meeting or
Event (as defined) occurring in respect of the company, LVMH may giving full and fair consideration to applications from prospective
appointed by the Board.
within 12 months of the Control Event either appoint and remove the employees who are disabled, having regard to their aptitudes and
chair of each joint venture entity governed by such master agreement, abilities, and not discriminating against employees under any

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The directors are empowered to exercise all the powers of the An ordinary resolution requires the affirmative vote of a simple Other information
company to borrow money, subject to any limitation in Diageo’s majority of the votes cast by those entitled to vote at a meeting at
Other information relevant to the Directors’ report may be found in the following sections of the Annual Report:
articles of association (currently two times the adjusted capital and which there is a quorum in order to be passed. Special resolutions
reserves of the company as defined in the articles of association), require the affirmative vote of not less than three-quarters of the votes Information (including that required by UK Listing Authority Listing
unless previously sanctioned by an ordinary resolution of the cast by those entitled to vote at a meeting at which there is a quorum Rule 9.8.4) Location in Annual Report
company. in order to be passed. The necessary quorum for a meeting of Diageo Agreements with controlling shareholders Not applicable
is a minimum of two shareholders present in person or by proxy and
At each annual general meeting, all the directors at the date on which Contracts of significance Not applicable
entitled to vote.
the notice convening the annual general meeting is approved by the
Board shall retire from office and may offer themselves for re-election A shareholder is not entitled to vote at any general meeting or class Details of long-term incentive schemes Directors’ remuneration report
by members. There is no age limit requirement in respect of directors. meeting in respect of any share held by them if they have been served Directors’ indemnities and compensation Directors’ remuneration report - Additional information; Consolidated
with a restriction notice (as defined in Diageo's articles of association) financial statements - note 21 Related party transactions
Directors may also be removed before the expiration of their term of
after failure to provide Diageo with information concerning interests in Dividends Group financial review; Consolidated financial statements - Unaudited
office in accordance with the provisions of the Companies Acts.
those shares required to be provided under the Companies Acts. financial information
Directors are not required to hold any shares of the company by way
of qualification. Pre-emption rights and new issues of shares Engagement with employees Corporate governance report - Workforce engagement statement
While holders of ordinary shares have no pre-emptive rights under Engagement with suppliers, customers and others Corporate governance report - Stakeholder engagement
Voting rights Diageo’s articles of association, the ability of the Directors to cause Events post 30 June 2024 Consolidated financial statements - note 23 Post balance sheet events
Voting on any resolution at any general meeting of the company is by Diageo to issue shares, securities convertible into shares or rights to
a show of hands unless a poll is duly demanded. On a show of hands, shares, otherwise than pursuant to an employee share scheme, is Financial risk management Consolidated financial statements - note 16 Financial instruments and risk
restricted. Under the Companies Acts, the directors of a company are, management
(a) every shareholder who is present in person at a general meeting,
with certain exceptions, unable to allot any equity securities without Future developments Chair’s statement; Chief Executive’s statement; Market overview and
and every proxy appointed by any one shareholder and present at a
express authorisation, which may be contained in a company’s articles investment case; Business model; Our growth ambition
general meeting, has/have one vote regardless of the number of
of association or given by its shareholders in a general meeting, but Greenhouse gas emissions Pioneer grain-to-glass sustainability; Non-Financial and sustainability
shares held by the shareholder (or, subject to (b), represented by the
which in either event cannot last for more than five years. Under the information statement
proxy), and
Companies Acts, Diageo may also not allot shares for cash (otherwise
(b) every proxy present at a general meeting who has been appointed Interest capitalised Not applicable
than pursuant to an employee share scheme) without first making an
by more than one shareholder has one vote regardless of the number offer to existing shareholders to allot such shares to them on the same Non-pre-emptive issues of equity for cash (including in respect of Not applicable
of shareholders who have appointed him/her or the number of shares or more favourable terms in proportion to their respective major unlisted subsidiaries)
held by those shareholders, unless he/she has been instructed to vote shareholdings, unless this requirement is waived by a special Parent participation in a placing by a listed subsidiary Not applicable
for a resolution by one or more shareholders and to vote against the resolution of the shareholders.
resolution by one or more shareholders, in which case he/she has one Political donations Corporate governance report
vote for and one vote against the resolution. Repurchase of shares Provision of services by a controlling shareholder Not applicable
Subject to authorisation by special resolution, Diageo may purchase its Publication of unaudited financial information Unaudited financial information
On a poll, every shareholder who is present in person or by proxy has
own shares in accordance with the Companies Acts. Any shares which
one vote for every share held by that shareholder, but a shareholder Purchase of own shares Repurchase of shares; Consolidated financial statements - note 18 Equity
have been bought back may be held as treasury shares or, if not so
or proxy entitled to more than one vote need not cast all his/her votes
held, must be cancelled immediately upon completion of the Research and development Other additional information - Research and development; Consolidated
or cast them all in the same way (the deadline for exercising voting
purchase, thereby reducing the amount of Diageo’s issued share financial statements - note 4 Operating costs
rights by proxy is set out in the form of proxy).
capital. Review of the business and principal risks and uncertainties Chief Executive’s statement; Our principal risks and risk management;
A poll may be demanded by any of the following: Pioneer grain-to-glass sustainability; Business review
Restrictions on transfers of shares
• the chair of the general meeting; The Board may decline to register a transfer of a certificated Diageo Share capital - structure, voting and other rights Consolidated financial statements - note 18 Equity
• at least three shareholders entitled to vote on the relevant resolution share unless the instrument of transfer (a) is duly stamped or certified Share capital - employee share plan voting rights Consolidated financial statements - note 18 Equity
and present in person or by proxy at the meeting; or otherwise shown to the satisfaction of the Board to be exempt from
• any shareholder or shareholders present in person or by proxy and Shareholder waivers of dividends Consolidated financial statements - note 18 Equity
stamp duty, and is accompanied by the relevant share certificate and
representing in the aggregate not less than one-tenth of the total such other evidence of the right to transfer as the Board may Shareholder waivers of future dividends Consolidated financial statements - note 18 Equity
voting rights of all shareholders entitled to vote on the relevant reasonably require, (b) is in respect of only one class of share and (c) if
resolution; or Streamlined Energy and Carbon Reporting (SECR) disclosures Pioneer grain-to-glass sustainability
to joint transferees, is in favour of not more than four such transferees.
• any shareholder or shareholders present in person or by proxy and Registration of a transfer of an uncertificated share may be refused in Sustainability and responsibility Pioneer grain-to-glass sustainability
holding shares conferring a right to vote on the relevant resolution the circumstances set out in the uncertificated securities rules (as Waiver of emoluments by a director Not applicable
on which there have been paid up sums in the aggregate equal to defined in Diageo’s articles of association) and where, in the case of a
not less than one-tenth of the total sum paid up on all the shares Waiver of future emoluments by a director Not applicable
transfer to joint holders, the number of joint holders to whom the
conferring that right. uncertificated share is to be transferred exceeds four.
The Directors’ report of Diageo plc for the year ended 30 June 2024 comprises these pages and the sections of the Annual Report referred to under
Diageo’s articles of association and the Companies Acts provide for The Board may decline to register a transfer of any of Diageo’s ‘Directors’, ‘Corporate governance statement’ and ‘Other information’ above, which are incorporated into the Directors’ report by reference.
matters to be transacted at general meetings of Diageo by the certificated shares by a person with a 0.25% interest (as defined in
proposing and passing of two kinds of resolutions: In addition, certain disclosures required to be contained in the Directors’ report have been incorporated into the ‘Strategic report’ as set out in
Diageo’s articles of association) if such a person has been served with
‘Other information’ above.
• ordinary resolutions, which include resolutions for the election, re- a restriction notice (as defined in Diageo’s articles of association) after
election and removal of directors, the declaration of final dividends, failure to provide Diageo with information concerning interests in those The Directors’ report, which has been approved by a duly appointed and authorised committee of the Board of Directors, was signed on its behalf
the appointment and re-appointment of the external auditor, the shares required to be provided under the Companies Acts, unless the by Tom Shropshire, the Company Secretary, on 29 July 2024.
remuneration report and remuneration policy, the increase of transfer is shown to the Board to be pursuant to an arm’s-length sale
authorised share capital and the grant of authority to allot shares; (as defined in Diageo’s articles of association).
and
• special resolutions, which include resolutions for the amendment of
Diageo’s articles of association, resolutions relating to the
disapplication of pre-emption rights, and resolutions modifying the
rights of any class of Diageo’s shares at a meeting of the holders of
such class.

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DIAGEO PLC

Financial statements Independent auditors' report to the members of

Diageo plc
Contents
Introduction
Report on the audit of the financial statements
Independent auditors' report to the members of Diageo plc 153
The group's consolidated financial statements, which have
Primary statements been prepared in accordance with international accounting
standards in conformity with the requirements of the
Consolidated income statement 161 Companies Act 2006 and International Financial Reporting
Consolidated statement of comprehensive income 162 Standards (IFRS) adopted by the UK (UK-adopted Opinion
International Accounting Standards) and IFRSs as issued by In our opinion:
Consolidated balance sheet 163
the International Accounting Standards Board (IASB), give • Diageo plc’s (“Diageo”) group financial statements and company financial statements (the “financial statements”) give a true and fair view
Consolidated statement of changes in equity 164 a true and fair view of the assets, liabilities, financial position of the state of the group’s and of the company’s affairs as at 30 June 2024 and of the group’s and company’s profit and the group’s cash flows
Consolidated statement of cash flows 165 and profit of the group. for the year then ended;
Accounting information and policies The financial statements of Diageo plc (the company) are • the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
prepared in accordance with the Companies Act 2006 and • the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice
1. Accounting information and policies 166 in accordance with Financial Reporting Standard 101 Reduced (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
Results for the year Disclosure Framework (FRS 101). • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

2. Segmental information 168 We have audited the financial statements, included within the Annual Report, which comprise: the consolidated and company balance sheets
as at 30 June 2024; the consolidated income statement, statement of comprehensive income, statement of changes in equity, and statement of
3. Exceptional items 172 cash flows for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
4. Operating cost 174 Our opinion is consistent with our reporting to the Audit Committee.
5. Finance income and charges 175 Separate opinion in relation to IFRSs as issued by the IASB
6. Investments in associates and joint ventures 176 As explained in note 1(a) to the financial statements, the group, in addition to applying UK-adopted international accounting standards, has also
applied international financial reporting standards (IFRSs) as issued by the International Accounting Standards Board (IASB).
7. Taxation 177
In our opinion, the group financial statements have been properly prepared in accordance with IFRSs as issued by the IASB.
Operating assets and liabilities
Basis for opinion
8. Acquisition and sale of businesses and brands and We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under
purchase of non-controlling interests 180 ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the
9. Intangible assets 183 audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
10. Property, plant and equipment 187 Independence
11. Biological assets 188 We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
12. Leases 188 UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
13. Other investments 189 To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
14. Post-employment benefits 189 Other than those disclosed in note 4(b) of the group financial statements, we have provided no non-audit services to the company or its controlled
undertakings in the period under audit.
15. Working capital 194
Risk management and capital structure Our audit approach
16. Financial instruments and risk management 196
Overview
Audit scope
17. Net borrowings 204 This was the first year that it has been my responsibility to form this opinion on behalf of PricewaterhouseCoopers LLP. In addition to forming this
18. Equity 206 opinion, in this report we have also provided information on how we approached the audit and details of the significant discussions that we had
with the Audit Committee. We attended each of the Audit Committee meetings held during the year. Part of each meeting involved a private
Other financial statements disclosures
discussion without management present. We also met with the Chair of the Audit Committee on an ad-hoc basis. During these various
19. Contingent liabilities and legal proceedings 210 conversations we discussed our observations on a variety of accounting matters, for example the assumptions used in the group’s impairment
20. Commitments 212 assessment over goodwill and brand intangibles assets, and observations on controls over financial reporting. In December, the Audit Committee
discussed and challenged the audit plan. The plan included the matters which we considered presented the highest risks to the financial statements
21. Related party transactions 212 and other information about our audit such as our approach to testing specific balances, how we structured our team to perform work over those
22. Principal group companies 213 balances and how technology would be used to obtain better quality audit evidence.
23. Post balance sheet events 213 Key audit matters
• Valuation of goodwill and brand intangible assets (group)
Financial statements of the company 214
• Uncertain tax positions in respect of indirect taxes in Brazil (group)
• Valuation of post-employment benefit liabilities (group & parent)
• Investments in subsidiaries (parent)
Materiality
• Overall group materiality: $270m (FY23: £251m) based on 5% of profit before exceptional items and tax.
• Overall company materiality: $332m (FY23: £273m) based on 0.5% of Net Assets.
• Performance materiality: $204m (FY23: £188m) (group) and $249m (FY23: £205m) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.

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Key audit matters Uncertain tax positions in respect of indirect taxes in Brazil (group)
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the Nature of the Key Audit Matter
auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the Impacted disclosure 2024 2023
efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the Contingent liability for indirect tax uncertainties - Brazil $764m $672m
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. The group operates across a large number of jurisdictions and in the normal course of business is subject to periodic challenges by tax authorities
on a range of matters. Due to the complexity of indirect tax legislation, particularly in developing markets, the group has a wide range of tax
This is not a complete list of all risks identified by our audit. exposures relating to indirect taxes against which provisions are held and contingent liabilities are disclosed. In common with other alcohol
The key audit matters below are consistent with last year. beverage companies, indirect taxation is particularly complex because of specific alcohol excise duties and the international distribution of
certain brands.
Valuation of goodwill and brand intangible assets (group) Diageo makes judgements in assessing the likelihood of tax exposures, developing estimates to determine provisions where required, and
determining appropriate contingent liability disclosures. Of particular significance are indirect tax assessments in developing markets and
Nature of the Key Audit Matter assessments relating to financing and transfer pricing arrangements. The impact of changes in local tax regulations and relevant rulings, together
Impacted FSLIs 2024 2023
with ongoing inspections by local tax and customs authorities and international bodies, could materially impact the amounts recorded in the group
financial statements.
Goodwill $2,860m $2,807m
The discussion with the Audit Committee
Brands $9,642m $9,475m
We discussed with the Audit Committee the judgements taken by management in assessing the likelihood of material exposure and determining
Goodwill and brand assets have been recognised as a result of acquisitions in prior years. Diageo is required to assess the recoverable amounts appropriate contingent liability disclosure regarding indirect tax risks. Our discussions focused on indirect tax matters in Brazil.
of these assets at least annually because they are deemed to have an indefinite life, and determine whether any are impaired or, for brands, a
previously recognised impairment should be reversed. How our audit addressed the Key Audit Matter
The assessments were performed by management prior to the year end, with impairment triggers considered up to the balance sheet date. We evaluated the design and tested the operating effectiveness of controls to identify uncertain tax positions related to indirect taxes, and the
Management estimated recoverable amounts, being the higher of value in use (VIU) and fair value less cost of disposal, and compared these related accounting policy for providing for and disclosing tax exposures.
to carrying values. VIU was predominantly used, unless management believed that fair value less cost of disposal would result in a higher Our tax specialists gained an understanding of the current status of material tax exposures. We read recent rulings and correspondence with
recoverable amount for any CGU or brand. tax authorities, as well as external advice provided by the group’s tax experts and legal advisors.
Certain CGUs and brands were identified as being sensitive to reasonable changes in significant assumptions and are required to be disclosed We evaluated and tested the related contingent liability disclosure in relation to uncertain tax positions.
in the Annual Report.
The methodology used to calculate VIUs is dependent on various assumptions, both short term and long term in nature. These assumptions, Relevant references in Annual Report
which are subject to estimation uncertainty, are derived from a combination of management’s judgement, experts engaged by management and Note 1(e) - Critical accounting estimates and judgements Note 7 - Taxation
market data. The significant assumptions that we focused our audit on were those with greater levels of management judgement and for which Note 19 - Contingent liabilities and legal
variations had the most significant impact on the recoverable amounts. Specifically, these included Diageo’s volume, revenue and operating profit proceedings
forecasts in their strategic plans for fiscal years 25 to 27, long-term growth rates and discount rates.
The discussion with the Audit Committee Valuation of post-employment benefit liabilities (group & parent)
We discussed with the Audit Committee the methodologies and significant assumptions used to determine the recoverable values of goodwill Nature of the Key Audit Matter
and certain brand intangible assets.
These discussions covered: Impacted FSLI 2024 2023

• the performance in fiscal 24 of material brands and CGUs; Post-employment benefit liabilities (Group) $7,696m $7,876m
• the nature and extent of evidence supporting management’s forecasts from fiscal years 25 to 29; Post-employment benefit liabilities (Company) $5,029m $5,094m
• our experts’ assessments of discount rates applied to material brands and CGUs.
The most significant post-employment schemes are in the United Kingdom, Ireland and the United States. Each of these is in a net surplus position
How our audit addressed the Key Audit Matter as at 30 June 2024.
We validated the appropriateness of the CGUs selected. The valuation of post-employment benefit liabilities is dependent on a number of actuarial assumptions. Management uses external actuaries
We evaluated the design and tested the operating effectiveness of controls in place over the methodologies, significant assumptions and to assist in determining these assumptions, and to determine the valuation of the post-employment benefit liabilities. The experts use valuation
calculation of VIU and fair value less cost of disposal (FVLCD). methodologies that require a number of market-based inputs and other financial and demographic assumptions, including salary increases,
We agreed the mathematical accuracy of the calculations to estimate the VIUs and FVLCDs. mortality rates, discount rates, inflation levels and the impact of any changes in individual pension plans. The significant assumptions that we
In respect of the significant assumptions, our testing included the following: focused our audit on were those with greater levels of management judgement, and for which variations had the most significant impact on the
• challenging the achievability of management’s strategic plan and the prospects for Diageo’s businesses for certain CGUs and brands,
liabilities. Specifically, these included the discount rates, inflation rates and mortality rates.
particularly where forecasts were significantly different to historic performance; The discussion with the Audit Committee
• obtaining and evaluating evidence where available relating to significant assumptions of forecasted growth, from a combination of historic
We discussed with the Audit Committee the significant assumptions used by management to determine the value of the post-employment benefit
experience, external market data (e.g. IWSR, the leading source of data and analysis on the global beverage alcohol market) and other liabilities, including discount rates, inflation and mortality assumptions where relevant for the UK, Irish and US schemes.
financial information;
• assessing whether the forecast cash flows included in the calculation were in accordance with the accounting standard IAS 36 “Impairment How our audit addressed the Key Audit Matter
of Assets”; We evaluated the design and tested the operating effectiveness of controls in place over the post-employment benefit liabilities.
• assessing the sensitivity of the VIU to reasonable variations in significant assumptions, both individually and in aggregate; Our actuarial experts assessed the appropriateness of the methodology used to estimate the liabilities and reviewed the calculations prepared
• determining a reasonable range for the discount rate used in the calculation, with the assistance of our valuation experts, and comparing by Diageo’s actuarial experts. They also understood the judgments made by Diageo and their actuarial experts in determining the significant
it to the discount rate used by management; and assumptions and compared these assumptions for the significant schemes to our independently compiled expected ranges based on market
• assessing the appropriateness of terminal growth rates including benchmarking to external data sources. observable indices, relevant national and industry benchmarks, and our market experience.
We also evaluated the objectivity and competence of Diageo’s experts involved in the valuation of the post-employment benefit liabilities.
We evaluated and tested the disclosures made in the Annual Report in relation to goodwill and brand intangibles.
We evaluated and tested the related disclosures in relation to the post-employment benefit liabilities.
Relevant references in Annual Report Relevant references in Annual Report
Note 1(e) - Critical accounting estimates and judgements Note 9 - Intangible assets
Note 1(e) - Critical accounting estimates and judgements Note 14 - Post-employment benefits
(Group)
Note 6 - Post-employment benefits
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Investments in subsidiaries (parent) Shared service centres (GBOs)

A significant number of operational processes which are critical to financial reporting are undertaken in the GBO shared service centres in
Nature of the Key Audit Matter Hungary, India, Philippines and Colombia. PwC teams in these locations tested controls and transactions which supported the financial information
Impacted FSLI 2024 2023 for many of the 22 reporting units in scope, to ensure that adequate audit evidence was obtained.
Investments in subsidiaries $76,104m $77,571m Group level and for the company
We ensured that appropriate further audit work was undertaken at a group level and for the company. This work included auditing, for example,
Management assessed investments in subsidiaries for indicators of impairment and indicators that impairment charges recognised in prior
the consolidation of the group’s results, the preparation of the financial statements, certain disclosures within the Directors’ Remuneration Report,
periods may no longer exist or may have decreased as at 30 June 2024. Where indicators were identified, management estimated the
litigation provisions and exposures and management’s entity level and oversight controls relevant to financial reporting. We also performed work
recoverable amount using the higher of value in use (VIU) or fair value less cost of disposal, and compared these to carrying values.
The methodology used to estimate the recoverable amount is dependent on various assumptions, both short term and long term in nature. centrally for the audit of technology and IT general controls, goodwill and intangible assets, pensions and taxation. This work was supported
These assumptions, which are subject to estimation uncertainty, are derived from a combination of management’s judgement, experts by team members who are based in Hungary and India.
engaged by management and market data. The significant assumptions that we focused our audit on were those with greater levels of Collectively, these three areas of work covered 74% of group net sales, 84% of group total assets, and 86% of group profit before exceptional
management judgement and for which variations had the most significant impact on the recoverable amount. Specifically, these included items and tax (PBET).
Diageo’s volume, revenue and operating profit forecasts in their strategic plans for fiscal years 25 to 27, EV/EBIT multiples, long-term growth rates The impact of climate risk on our audit
and discount rates. We evaluated and challenged management‘s assessment of the impact of climate change risk, which is set out on page 167, including their
Management’s assessment did not result in an impairment charge or reversal for the year ended 30 June 2024. conclusion that there is no material impact on the financial statements.
The discussion with the Audit Committee By their nature financial statements present historical information which does not fully capture future events. We did determine that the key
We discussed with the Audit Committee the methodologies and significant assumptions used to determine the recoverable amount of investments areas in the financial statements that are more likely to be materially impacted by climate change are those areas that are based on estimated
in subsidiaries. future cash flows. As a result, we considered in particular how climate risks and management’s scenario analysis would impact the assumptions
made in the forecasts prepared by Diageo used in the group’s impairment analysis and for going concern purposes. We challenged how longer
How our audit addressed the Key Audit Matter term physical chronic risks had been considered such as water scarcity from water stress and chronic weather on agricultural supply chains,
We evaluated the design and tested the operating effectiveness of controls in place over the methodologies, significant assumptions and as well as shorter-term transitional risks such as the introduction of carbon taxes. Our work did not identify any material impact on our audit for
calculation of the recoverable amounts. the year ended 30 June 2024. We ensured that the assumptions used in preparation of the financial statements are consistent with the Task Force
We assessed the appropriateness of the methodology used, and tested the mathematical accuracy of the calculations, to estimate the on Climate-related Financial Disclosures (“TCFD”) disclosure.
recoverable amounts. Diageo’s progress against its 'Spirit of Progress' metrics set out on pages 48 – 76 is not included within the scope of this audit. We were engaged
In respect of the significant assumptions, our testing included the following: separately to provide independent limited assurance to the Directors over some of these metrics marked with the symbol Δ. The independent
• challenging the achievability of management’s strategic plan and the prospects for Diageo’s businesses; limited assurance report, which explains the scope of our work and the limited procedures undertaken is included in the Annual Report 2024 on
• obtaining and evaluating evidence where available relating to significant assumptions, from a combination of historical experience, external page 258.
market data and other financial information; Limited assurance varies significantly and is substantially less in scope than that of our financial audit, which provides reasonable assurance.
• assessing whether the forecast cash flows included in the calculation were in compliance with the relevant accounting standard;
• assessing the sensitivity of the recoverable amounts to reasonable variations in significant assumptions, both individually and in aggregate; Materiality
• determining a reasonable range for the EV/EBIT multiples rate used within the market approach calculations, with the assistance of our The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
valuation experts, and comparing it to the EV/EBIT multiples used by management; qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the
• determining a reasonable range for the discount rate used within the model, with the assistance of our valuation experts, and comparing individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the
it to the discount rate used by management; and financial statements as a whole.
• assessed the appropriateness of terminal growth rates including benchmarking to external data sources. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
We evaluated and tested the disclosures made in the Annual Report in relation to investment in subsidiaries. Financial Statement - group Financial Statement - company

Relevant references in Annual Report Overall materiality $270m (FY23: £251m). $332m (FY23: £273m).
Note 1(e) - Critical accounting estimates and judgements Note 3 – Investment in subsidiary How we determined it 5% of PBET. 0.5% of Net Assets.
undertakings (Company) Rationale for We believe a standard benchmark of 5% of profit before We consider a net asset measure to reflect the nature of
benchmark exceptionals and tax (PBET) is an appropriate quantitative the company, which primarily acts as a holding company
applied indicator of materiality. for the group’s investments and holds certain liabilities on
This benchmark is consistent with the prior year and our the balance sheet.
approach for listed entities.
How we tailored the audit scope
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of
Partners and staff from 12 countries across the PwC network have performed work supporting this report, which in addition to the opinion
materiality allocated across components was $14m to $180m. Certain components were audited to a local statutory audit materiality that was also
provides amongst other things, information on how we approached the audit and how it changed from the previous year.
less than our overall group materiality.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the alcoholic
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and
beverage industry.
extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance
There were three important aspects of our approach; audit work performed on individual business units, at shared service centres, and at the
materiality was 75% (FY23: 75%) of overall materiality, amounting to $204m (FY23: £188m) for the group financial statements and $249m (FY23:
group level and for the company. In 2024, we continued to drive more standardisation in our audit work performed for individual business units
£205m) for the company financial statements.
and centralise more of our work in shared service centre locations.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation
Individual business units risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.
We obtained audit opinions from six PwC member firms and specified procedures reporting from two PwC member firms over the financial We agreed with the Audit Committee that we would report to them misstatements identified during our audit above $14m (group audit) (FY23:
information of 22 reporting units, either in relation to all the financial information or specific accounts and balances. We also obtained reporting £12m) and $16m (company audit) (FY23: £14m) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative
from a non-PwC member firm over the financial information of Moët Hennessy, the group’s principal associate. reasons.
In April 2024, we hosted in London an in-person meeting for senior staff from PwC member firms involved in the audit. At this meeting we
considered developments specific to Diageo, key audit matters and changes to our approach to audit business processes across Diageo more Conclusions relating to going concern
centrally in shared service centre locations. We heard from key members of management and the Chair of the Audit Committee. Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern basis of accounting
We issued formal instructions to each component audit team setting out the work to be performed by each of them. We were in active dialogue included:
throughout the year with the teams responsible for these audits; this included consideration of how they planned and performed their work. Senior
• performing a risk assessment to identify factors that could impact the going concern basis of accounting, including both internal risks (i.e.
team members visited the component audit teams in Great Britain, Ireland, India, Mexico, Türkiye and the United States. Senior team members
strategy execution) and external risks (i.e. macroeconomic conditions);
also attended via video conference the final audit meetings for certain reporting units. During these meetings, the findings reported by each of the
• understanding and evaluating the group’s financial forecasts, including future cash flow requirements of the group’s financing activities, and
component audit teams were discussed. We evaluated the sufficiency of the audit evidence obtained through discussions with each team and
their severe but plausible downside scenarios considering the group’s principal risks;
a review of the audit working papers.
• evaluating management’s assessment of the entity’s ability to continue as a going concern; and
• reading and evaluating the adequacy of the disclosures made in the financial statements in relation to going concern.

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Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or Responsibilities for the financial statements and the audit
collectively, may cast significant doubt on the group's and the company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
Responsibilities of the directors for the financial statements
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of As explained more fully in the Directors' responsibilities, the directors are responsible for the preparation of the financial statements in accordance
the financial statements is appropriate. with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and the company's as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
ability to continue as a going concern. error.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going
attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either
going concern basis of accounting. intend to liquidate the group or the company or to cease operations, or have no realistic alternative but to do so.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Auditors’ responsibilities for the audit of the financial statements
Reporting on other information Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon.
not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. economic decisions of users taken on the basis of these financial statements.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
detecting irregularities, including fraud, is detailed below.
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the
Based on our understanding of the group and industry, we identified the principal risks of non-compliance with laws and regulations related to
work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have anti-bribery and corruption legislation and payroll tax legislation, and we considered the extent to which non-compliance might have a material
nothing to report based on these responsibilities.
effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the Companies Act 2006 have
Companies Act 2006, the Listing Rules and UK & international tax legislation. We evaluated management’s incentives and opportunities for
been included.
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as
to posting inappropriate journal entries to, for example, suppress expenses to improve financial performance, and management bias in accounting
described below. estimates. The group engagement team shared this risk assessment with the component auditors so that they could include appropriate audit
Strategic report and Directors’ report procedures in response to such risks in their work. Audit procedures performed by the group engagement team and/or component auditors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the included:
year ended 30 June 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. • gaining an understanding of the legal and regulatory frameworks applicable to Diageo, and considering the risk of acts by Diageo which are
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not contrary to applicable laws and regulations, including fraud;
identify any material misstatements in the Strategic report and Directors' report. • performing procedures which were deliberately unexpected and could not have reasonably been predicted by Diageo’s management. This
Directors’ Remuneration included performing procedures over balances and transactions which otherwise would not have been subject to audit procedures due to their
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act size, such as additional journal testing criteria over exceptional items;
2006. • performing inquiries of senior management, including but not limited to members of the Executive Committee and regional and market chief
financial officers, to identify areas of possible breaches of laws and regulations;
Corporate governance statement • reviewing correspondence with regulators, including the FRC, Securities and Exchange Commission and the tax authorities in Diageo’s key
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate markets;
governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. • assessing matters reported through the group’s whistleblowing programme and the results of management’s investigation in so far as they
Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other related to financial reporting;
information section of this report. • challenging assumptions and judgements made by management in its significant accounting estimates, in particular in relation to key audit
matters; and
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
• inspecting correspondence with legal advisors and internal audit reports in so far as they related to the financial statements.
statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to add
or draw attention to in relation to: There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with
laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a
• the directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment
• the disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an
by, for example, forgery or intentional misrepresentations, or through collusion.
explanation of how these are being managed or mitigated;
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
• the directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target
in preparing them, and their identification of any material uncertainties to the group’s and company’s ability to continue to do so over a period
particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion
of at least twelve months from the date of approval of the financial statements;
about the population from which the sample is selected.
• the directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment covers and why the period
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
is appropriate; and
auditorsresponsibilities. This description forms part of our auditors’ report.
• the directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its
liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or Use of this report
assumptions. This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in scope than an audit of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or
and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the Other required reporting
financial statements and our knowledge and understanding of the group and company and their environment obtained in the course of the audit. Companies Act 2006 exception reporting
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate Under the Companies Act 2006 we are required to report to you if, in our opinion:
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• we have not obtained all the information and explanations we require for our audit; or
• the directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the • adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not
information necessary for the members to assess the group’s and company's position, performance, business model and strategy; visited by us; or
• the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and • certain disclosures of directors’ remuneration specified by law are not made; or
• the section of the Annual Report describing the work of the Audit Committee. • the company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the We have no exceptions to report arising from this responsibility.
Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.

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Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 15 October 2015 to audit the financial statements Consolidated income statement
for the year ended 30 June 2016 and subsequent financial periods. The period of total uninterrupted engagement is 9 years, covering the years
ended 30 June 2016 to 30 June 2024.
Year ended Year ended Year ended
Other matter 30 June 2024 30 June 2023
(1)
30 June 2022
re-presented re-presented(1)
The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial statements in Notes $ million $ million $ million
an annual financial report prepared under the structured digital format required by DTR 4.1.15R - 4.1.18R and filed on the National Storage Sales 2 27,891 28,270 29,751
Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance over whether the structured digital format annual Excise duties 4 (7,622) (7,715) (9,235)
financial report has been prepared in accordance with those requirements.
Net sales 2 20,269 20,555 20,516
Cost of sales 4 (8,071) (8,289) (7,923)
Gross profit 12,198 12,266 12,593
Scott Berryman (Senior Statutory Auditor)
Marketing 4 (3,691) (3,663) (3,616)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors Other operating items 4 (2,506) (3,056) (3,080)
London Operating profit 6,001 5,547 5,897
29 July 2024 Non-operating items 3 (70) 364 (88)
Finance income 5 400 409 661
Finance charges 5 (1,285) (1,121) (1,217)
Share of after tax results of associates and joint ventures 6 414 443 555
Profit before taxation 5,460 5,642 5,808
Taxation 7 (1,294) (1,163) (1,398)
Profit for the year 4,166 4,479 4,410

Attributable to:
Equity shareholders of the parent company 3,870 4,445 4,280
Non-controlling interests 296 34 130
4,166 4,479 4,410

Weighted average number of shares million million million

Shares in issue excluding own shares 2,234 2,264 2,318

Dilutive potential ordinary shares 5 7 7
2,239 2,271 2,325

cents cents cents

Basic earnings per share 173.2 196.3 184.6

Diluted earnings per share 172.8 195.7 184.1

The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 166-167 for an explanation under Accounting information and policies.

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Consolidated statement of comprehensive income Consolidated balance sheet

30 June 2024 30 June 2023 1 July 2022
re-presented(1) re-presented(1) re-presented(1) re-presented(1)
Notes $ million $ million $ million $ million $ million $ million
Year ended Year ended Year ended
30 June 2024 30 June 2023 30 June 2022 Non-current assets
re-presented(1) re-presented(1)
Notes $ million $ million $ million Intangible assets 9 14,814 14,506 14,401
Other comprehensive income Property, plant and equipment 10 8,509 7,738 7,076
Items that will not be recycled subsequently to the income statement Biological assets 11 199 197 114
Net remeasurement of post-employment benefit plans Investments in associates and joint ventures 6 5,032 4,825 4,418
Group 14 (76) (771) 820 Other investments 13 94 71 45
Associates and joint ventures 1 16 6 Other receivables 15 38 39 45
Non-controlling interests 14 — — (1) Other financial assets 16 373 497 418
Tax on post-employment benefit plans 14 193 (164) Deferred tax assets 7 143 178 138
Changes in the fair value of equity investments at fair value through other comprehensive Post-employment benefit assets 14 1,146 1,210 1,878
income (1) (5) (15) 30,348 29,261 28,533
(62) (567) 646 Current assets
Items that may be recycled subsequently to the income statement Inventories 15 9,720 9,653 8,584
Exchange differences on translation of foreign operations Trade and other receivables 15 3,487 3,427 3,549
Group (516) (906) 756 Corporate tax receivables 7 304 292 180
Associates and joint ventures 6 (64) 132 (570) Assets held for sale 8 130 — 269
Non-controlling interests (21) (100) (83) Other financial assets 16 355 437 303
Net investment hedges (70) 499 (829) Cash and cash equivalents 17 1,130 1,813 2,765
Exchange loss recycled to the income statement
15,126 15,622 15,650
On disposal of foreign operations 8 26 15 143
Total assets 45,474 44,883 44,183
On step acquisitions — 2 —
Current liabilities
Tax on exchange differences – group 11 2 (21)
Borrowings and bank overdrafts 17 (2,885) (2,142) (1,842)
Effective portion of changes in fair value of cash flow hedges
Other financial liabilities 16 (348) (453) (538)
Hedge of foreign currency debt of the group (58) 7 309
Share buyback liability — — (141)
Transaction exposure hedging of the group 61 328 (230)
Trade and other payables 15 (6,354) (6,678) (7,123)
Hedges by associates and joint ventures (3) 29 (20)
Liabilities held for sale 8 (48) — (74)
Commodity price risk hedging of the group 13 (67) 104
Corporate tax payables 7 (136) (170) (305)
Recycled to income statement – hedge of foreign currency debt of the group 152 65 (319)
Provisions 15 (97) (150) (192)
Recycled to income statement – transaction exposure hedging of the group (266) (16) 57
(9,868) (9,593) (10,215)
Recycled to income statement – commodity price risk hedging of the group 9 (39) (61)
Cost of hedging (51) — — Non-current liabilities
Recycled to income statement – cost of hedging (27) — — Borrowings 17 (18,616) (18,649) (17,543)
Tax on effective portion of changes in fair value of cash flow hedges 16 (46) 42 Other financial liabilities 16 (940) (941) (850)
Hyperinflation adjustments 503 229 431 Other payables 15 (304) (463) (459)
Tax on hyperinflation adjustments(2) (138) (49) (87) Provisions 15 (300) (306) (312)
(423) 85 (378) Deferred tax liabilities 7 (2,947) (2,751) (2,807)
Other comprehensive (loss)/income, net of tax, for the year (485) (482) 268 Post-employment benefit liabilities 14 (429) (471) (486)
Profit for the year 4,166 4,479 4,410 (23,536) (23,581) (22,457)
Total comprehensive income for the year 3,681 3,997 4,678 Total liabilities (33,404) (33,174) (32,672)
Net assets 12,070 11,709 11,511
Attributable to: Equity
Equity shareholders of the parent company 3,404 4,063 4,632 Share capital 18 887 898 875
Non-controlling interests 18 277 (66) 46 Share premium 1,703 1,703 1,635
Total comprehensive income for the year 3,681 3,997 4,678 Other reserves (91) 665 658
Retained earnings 7,533 6,590 6,267
The accompanying notes are an integral part of these consolidated financial statements.
Equity attributable to equity shareholders of the
(1) See pages 166-167 for an explanation under Accounting information and policies. parent company 10,032 9,856 9,435
(2) Tax on hyperinflation adjustments $(111) million and tax rate change on hyperinflation adjustments $(27) million.
Non-controlling interests 18 2,038 1,853 2,076
Total equity 12,070 11,709 11,511

The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been approved by a duly appointed and authorised committee of the Board of Directors on
29 July 2024 and were signed on its behalf by Debra Crew and Lavanya Chandrashekar, Directors.
(1) See pages 166-167 for an explanation under Accounting information and policies.

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Consolidated statement of changes in equity Consolidated statement of cash flows

Year ended 30 June 2024 Year ended 30 June 2023 Year ended 30 June 2022
Other reserves Retained earnings/(deficit)
Hedging Equity re-presented(1) re-presented(1) re-presented(1) re-presented(1)
Share Capital and Other attributable to Non- Notes $ million $ million $ million $ million $ million $ million
capital Share redemption exchange Own retained parent company controlling Total Cash flows from operating activities
$ premium reserve reserve shares earnings Total shareholders interests equity
Notes million $ million $ million $ million $ million $ million $ million $ million $ million $ million Profit for the year 4,166 4,479 4,410
At 30 June 2021 (re-presented(1)) 1,030 1,878 4,451 (3,218) (2,609) 8,055 5,446 9,587 2,132 11,719 Taxation 1,294 1,163 1,398
Adjustment to 2021 closing equity in respect of Share of after tax results of associates and joint ventures (414) (443) (555)
— — — — — 349 349 349 — 349
hyperinflation in Türkiye Net finance charges 885 712 556
Adjusted opening balance 1,030 1,878 4,451 (3,218) (2,609) 8,404 5,795 9,936 2,132 12,068
Non-operating items 70 (364) 88
Retranslation impact of opening balances(2) (131) (243) (579) 619 334 — 334 — — —
Operating profit 6,001 5,547 5,897
Profit for the year — — — — — 4,280 4,280 4,280 130 4,410
Increase in inventories (156) (810) (984)
Other comprehensive (loss)/income — — — (639) — 991 991 352 (84) 268
Total comprehensive (loss)/income for the year — — — (639) — 5,271 5,271 4,632 46 4,678 (Increase)/decrease in trade and other receivables (66) 142 (502)
Employee share schemes — — — — 52 67 119 119 — 119 (Decrease)/increase in trade and other payables and
provisions (546) (746) 1,245
Share-based incentive plans 18 — — — — — 79 79 79 — 79
Net increase in working capital (768) (1,414) (241)
Share-based incentive plans in respect of associates — — — — — 5 5 5 — 5
Tax on share-based incentive plans — — — — — 11 11 11 — 11 Depreciation, amortisation and impairment 493 1,297 1,064
Share-based payments and purchase of own shares Dividends received 269 271 238
in respect of subsidiaries — — — — — (15) (15) (15) (8) (23) Post-employment payments less amounts included in
Unclaimed dividend — — — — — 3 3 3 1 4 operating profit (18) (31) (119)
Change in fair value of put option — — — — — (45) (45) (45) — (45) Other items 88 74 70
Share buyback programme (24) — 24 — — (3,004) (3,004) (3,004) — (3,004) 832 1,611 1,253
Dividend declared for the year 18 — — — — — (2,286) (2,286) (2,286) (95) (2,381) Cash generated from operations 6,065 5,744 6,909
At 30 June 2022 (re-presented(1)) 875 1,635 3,896 (3,238) (2,223) 8,490 6,267 9,435 2,076 11,511
Interest received 156 157 146
Retranslation impact of opening balances(2) 36 68 162 (173) (93) — (93) — — —
Interest paid (1,017) (822) (582)
Profit for the year — — — — — 4,445 4,445 4,445 34 4,479
Taxation paid (1,099) (1,443) (1,260)
Other comprehensive income/(loss) — — — 5 — (387) (387) (382) (100) (482)
(1,960) (2,108) (1,696)
Total comprehensive income/(loss) for the year — — — 5 — 4,058 4,058 4,063 (66) 3,997
Employee share schemes — — — — 30 29 59 59 — 59 Net cash inflow from operating activities 4,105 3,636 5,213
Share-based incentive plans 18 — — — — — 58 58 58 — 58 Cash flows from investing activities
Share-based incentive plans in respect of associates — — — — — 6 6 6 — 6 Disposal of property, plant and equipment and computer
software 14 16 23
Tax on share-based incentive plans — — — — — 7 7 7 — 7
Share-based payments and purchase of own shares Purchase of property, plant and equipment and computer
in respect of subsidiaries — — — — — 4 4 4 2 6 software (1,510) (1,417) (1,457)
Purchase of non-controlling interests 8 — — — — — (136) (136) (136) (42) (178) Movements in loans and other investments (47) (68) (96)
Associates' transactions with non-controlling Sale of businesses and brands 8 87 559 102
interests — — — — — (8) (8) (8) — (8)
Acquisition of subsidiaries 8 (6) (404) (278)
Unclaimed dividend — — — — — 1 1 1 — 1
Investments in associates and joint ventures 8 (133) (112) (86)
Change in fair value of put option — — — — — (19) (19) (19) — (19)
Net cash outflow from investing activities (1,595) (1,426) (1,792)
Share buyback programme (13) — 13 — — (1,543) (1,543) (1,543) — (1,543)
Dividend declared for the year 18 — — — — — (2,071) (2,071) (2,071) (117) (2,188) Cash flows from financing activities
At 30 June 2023 (re-presented(1)) 898 1,703 4,071 (3,406) (2,286) 8,876 6,590 9,856 1,853 11,709 Share buyback programme 18 (987) (1,673) (2,985)
Adjustment to 2023 closing equity in respect of Net sale of own shares for share schemes 21 36 24
hyperinflation in Ghana — — — — — 41 41 41 10 51 Purchase of treasury shares in respect of subsidiaries (10) — (20)
Adjusted opening balance 898 1,703 4,071 (3,406) (2,286) 8,917 6,631 9,897 1,863 11,760 Dividends paid to non-controlling interests (117) (117) (108)
Profit for the year — — — — — 3,870 3,870 3,870 296 4,166 Proceeds from bonds 17 2,225 2,537 2,971
Other comprehensive (loss)/income — — — (767) — 301 301 (466) (19) (485) Repayment of bonds 17 (1,667) (1,650) (2,060)
Total comprehensive (loss)/income for the year — — — (767) — 4,171 4,171 3,404 277 3,681 Purchase of shares of non-controlling interests 8 (223) (178) —
Employee share schemes — — — — 36 12 48 48 — 48
Cash inflow from other borrowings 387 521 667
Share-based incentive plans 18 — — — — — 43 43 43 — 43
Cash outflow from other borrowings (493) (452) (562)
Share-based incentive plans in respect of associates — — — — — 5 5 5 — 5
Equity dividends paid (2,242) (2,065) (2,300)
Share-based payments and purchase of own shares
in respect of subsidiaries — — — — — (6) (6) (6) (4) (10) Net cash outflow from financing activities (3,106) (3,041) (4,373)
Purchase of non-controlling interests 8 — — — — — (246) (246) (246) 23 (223) Net decrease in net cash and cash equivalents 17 (596) (831) (952)
Tax on purchase of non-controlling interests — — — — — 53 53 53 — 53 Exchange differences (33) (76) (38)
Unclaimed dividend — — — — — 1 1 1 — 1 Reclassification to assets held for sale (30) — —
Change in fair value of put option — — — — — 73 73 73 — 73 Net cash and cash equivalents at beginning of the year 1,768 2,675 3,665
Share buyback programme (11) — 11 — — (997) (997) (997) — (997) Net cash and cash equivalents at end of the year 1,109 1,768 2,675
Dividend declared for the year 18 — — — — — (2,243) (2,243) (2,243) (121) (2,364)
At 30 June 2024 887 1,703 4,082 (4,173) (2,250) 9,783 7,533 10,032 2,038 12,070 Net cash and cash equivalents consist of:
Cash and cash equivalents 17 1,130 1,813 2,765
The accompanying notes are an integral part of these consolidated financial statements. Bank overdrafts 17 (21) (45) (90)
(1) See pages 166-167 for an explanation under Accounting information and policies. 1,109 1,768 2,675
(2) Includes foreign translation differences arising from the retranslation of reserves due to the change in the group’s presentation currency.
The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 166-167 for an explanation under Accounting information and policies.

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The principal foreign exchange rates used in the translation of rate published by Bloomberg. Figures for the year ended 30 June 2024
Accounting information and policies financial statements for the three years ended 30 June 2024, expressed
in sterling and euros per $1, were as follows:
show the results of the Venezuelan operation consolidated at the
official closing exchange rate.
2024 2023 2022 (g) New accounting standards and interpretations
Introduction Sterling The following standard and amendments to the accounting standards,
This section describes the basis of preparation of the consolidated financial statements and the group’s accounting policies that are applicable to issued by the IASB and endorsed by the UK, were adopted by the
Income statement and cash flows(1) 0.80 0.83 0.75
the financial statements as a whole. Accounting policies, critical accounting estimates and judgements specific to a note are included in the note to group from 1 July 2023 with no material impact on the group’s
which they relate. Furthermore, the section details new accounting standards, amendments and interpretations, that the group has adopted in the Assets and liabilities(2) 0.79 0.79 0.83 consolidated results, financial position or disclosures:
current financial year or will adopt in subsequent years. Euro • IFRS 17 – Insurance Contracts
presented in US dollar, which is the functional currency of the parent
1. Accounting information and policies company, Diageo plc. The functional currency of Diageo plc is
Income statement and cash flows(1) 0.93 0.96 0.89 • Amendments to IAS 12 Income Taxes – Deferred Tax related to Assets
and Liabilities arising from a Single Transaction
(a) Basis of preparation determined by using management judgement that considers the parent Assets and liabilities(2) 0.93 0.93 0.96
• Amendments to IAS 1, 8 – Definition of Accounting Estimates
The consolidated financial statements are prepared in accordance with company as an extension of its subsidiaries. (1) Weighted average rates • Amendments to IAS 1 Disclosure Initiative – Accounting Policies
®
IFRS Accounting Standards (IFRSs) adopted by the UK (UK-adopted Starting 1 July 2023, in line with reporting requirements, the (2) Closing rates
International Accounting Standards) and IFRSs, as issued by the functional currency of Diageo plc changed from sterling to US dollar The group uses foreign exchange hedges to mitigate the effect of The following amendments issued by the IASB have been endorsed by
International Accounting Standards Board (IASB), including which is applied prospectively. This is because the group's share of net exchange rate movements. For further information, see note 16. the UK and have not yet been adopted by the group, which are not
interpretations issued by the IFRS Interpretations Committee. IFRS as sales and expenses in the United States and other countries whose expected to have material impact on the group's consolidated results
adopted by the UK differs in certain respects from IFRS as issued by the currencies correlate closely with the US dollar has been increasing over (e) Critical accounting estimates and judgements or financial position:
IASB. The differences have no impact on the group’s consolidated the years, and that trend is expected to continue in line with the group's Details of critical estimates and judgements which the Directors • Amendments to IAS 1 – Classification of Liabilities and Non-current
financial statements for the years presented. The consolidated financial strategic focus. Diageo also decided to change its presentation consider could have a significant impact on the financial statements Liabilities with Covenants (effective from the year ending 30 June
statements are prepared on a going concern basis under the historical currency to US dollar with effect from 1 July 2023, applied are set out in the related notes as follows: 2025)
cost convention, unless stated otherwise in the relevant accounting retrospectively, as it believes that this change will provide better • Taxation – management judgement whether a provision is required • Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback
policy. alignment of the reporting of performance with its business exposures. and management estimate of amount of corporate tax payable or (effective from the year ending 30 June 2025)
The preparation of financial statements in conformity with IFRS The income statements and cash flows of non US dollar entities are receivable, the recoverability of deferred tax assets and expectation • Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
requires management to make estimates and assumptions that affect translated into US dollar at weighted average rates of exchange, on manner of recovery of deferred taxes – pages 177 and 211 (effective from the year ending 30 June 2025)
the reported amounts of assets and liabilities, the disclosure of except for subsidiaries in hyperinflationary economies that are • Brands, goodwill, other intangibles and contingent considerations –
contingent assets and liabilities at the date of the financial statements, translated with the closing rate at the end of the year and for There are a number of other standards, amendments and clarifications
management judgement whether the assets and liabilities are to be
and the reported amounts of revenues and expenses during the year. substantial transactions that are translated at the rate on the date of the to IFRSs, effective in future years, which are not expected to significantly
recognised and synergies resulting from an acquisition. Management
Actual results could differ from those estimates. transaction. Exchange differences arising on the retranslation to closing impact the group’s consolidated results or financial position.
judgement and estimate are required in determining future cash
rates are taken to the exchange reserve.
(b) Going concern
flows and appropriate applicable assumptions to support the (h) Climate change considerations
Assets and liabilities are translated at the relevant year end closing intangible asset and contingent consideration value – pages 177 and
Management prepared 18 month cash flow forecasts which were also rates. Exchange differences arising on the retranslation at closing rates The impact of climate change assessment and the net zero carbon
183 emission target for Diageo's direct operations (Scope 1 & 2) for 2030
sensitised to reflect severe but plausible downside scenarios taking into of the opening balance sheets of non US dollar entities are taken to the • Post-employment benefits – management judgement whether a
consideration the group's principal risks. In the base case scenario, exchange reserve, as are exchange differences arising on foreign have been considered as part of the assessment of estimates and
surplus can be recovered and management estimate in determining judgements in preparing the group's consolidated financial statements.
management included assumptions for mid-single digit net sales currency borrowings and financial instruments designated as net the assumptions in calculating the liabilities of the funds – page 189
growth, slightly growing operating margin and global TBA market investment hedges, to the extent that they are effective. Tax charges The climate change scenario analyses performed in 2024 –
• Contingent liabilities and legal proceedings – management conducted in line with TCFD recommendations (‘Transition
share growth. In light of the ongoing geo-political volatility, the base and credits arising on such items are also taken to the exchange judgement in assessing the likelihood of whether a liability will arise
case outlook and severe but plausible downside scenarios reserve. Gains and losses accumulated in the exchange reserve are Scenario’ (RCP 2.6), a ‘Moderate Warming’ Scenario (RCP 4.5) and a
and an estimate to quantify the possible range of any settlement; ‘Severe Warming Scenario’ (RCP 8.5)) – identified no material financial
incorporated considerations for a prolonged global recession, supply recycled to the income statement when the foreign operation is sold. and significant unprovided tax matters where maximum exposure is
chain disruptions, higher inflation and further geo-political deterioration. Other exchange differences are taken to the income statement. impact to these financial statements.
provided for each – page 211 The following considerations were made in respect of the financial
Even under these scenarios, the group’s liquidity is still expected to Transactions in foreign currencies are recorded at the rate of exchange
remain strong. Mitigating actions, should they be required, are all on the date of the transaction. (f) Hyperinflationary accounting statements:
within management’s control and could include reductions in Share capital, share premium, capital redemption reserve included The group applied hyperinflationary accounting for its operations in • The impact of climate change on factors (like residual values, useful
discretionary spending such as acquisitions and capital expenditure, in other reserves and own shares at 30 June 2023, 30 June 2022 and Türkiye, Argentina, Ghana and Venezuela. lives and depreciation methods) that determine the carrying value of
lower level of A&P and investment in maturing stock, as well as a 30 June 2021 in the statement of changes in equity are translated to US The group applies hyperinflationary accounting for its operations in non-current assets.
temporary suspension or reduction in its return of capital to dollar at the closing exchange rate at the relevant balance sheet date; Ghana starting from 1 July 2023. Hyperinflationary accounting needs to • The impact of climate change on forecasts of cash flows used
shareholders (dividends or share buybacks) in the next 12 months, or exchange differences arising on the retranslation to closing rates are be applied as if Ghana had always been a hyperinflationary economy,
(including forecast depreciation in line with capital expenditure plans
drawdowns on committed facilities. Having considered the outcome of hence, as per Diageo’s accounting policy choice, the differences
taken to the exchange reserve. From 1 July 2023, as Diageo plc for Diageo's net zero carbon emission commitment) in impairment
these assessments, the Directors are comfortable that the company is a between equity at 30 June 2023 as reported and the equity after the
changed its functional currency, the share capital, share premium, assessments for the value-in-use of non-current assets including
restatement of the non-monetary items to the measuring unit current at
going concern for at least 12 months from the date of signing the capital redemption reserve included in other reserves and own shares goodwill (see note 9).
30 June 2023 were recognised in retained earnings.
group's consolidated financial statements. in the consolidated statement of changes in equity are recorded in US • The impact of climate change on post-employment assets.
The group’s consolidated financial statements include the results
dollar. and financial position of its operations in hyperinflationary economies
(c) Consolidation The cumulative foreign exchange translation reserve was set to zero
The consolidated financial statements include the results of the restated to the measuring unit current at the end of each period, with
on 1 July 2004, the date of transition to IFRS and this reserve is re- hyperinflationary gains and losses in respect of monetary items being
company and its subsidiaries together with the group’s attributable presented as if the group reported in US dollar since that date.
share of the results of associates and joint ventures. A subsidiary is an reported in finance income and charges. Comparative amounts
As a result of the functional and presentation currency change, the presented in the consolidated financial statements are not restated.
entity controlled by Diageo plc. The group controls an investee when it group has realigned its economic hedging portfolio managing balance When applying IAS 29 on an ongoing basis, comparatives in stable
is exposed, or has rights, to variable returns from its involvement with sheet translation risk in line with the changed foreign exchange risk currency are not restated and the effect of inflating opening net assets
the investee and has the ability to affect those returns through its power management objective. The group has also realigned its net investment to the measuring unit current at the end of the reporting period is
over the investee. Where the group has the ability to exercise joint hedging portfolio in line with the new currency exposures and as part of presented in other comprehensive income. The movement in the
control over an entity but has rights to specified assets and obligations this exercise Diageo has re-designated its buy US dollar sell sterling publicly available official price index for the year ended 30 June 2024
for liabilities of that entity, the entity is included on the basis of the cross currency interest swaps in net investment hedge relationships was 72% (2023 – 38%; 2022 – 79%) in Türkiye, 270% (2023 – 116%;
group’s rights over those assets and liabilities. previously used in cash flow hedging foreign currency debt of the 2022 – 64%) in Argentina and 23% in Ghana. The inflation rate used
(d) Foreign currencies group. by the group in the case of Venezuela is provided by an independent
Items included in the financial statements of the group’s subsidiaries, valuer because no reliable, officially published rate is available.
associates and joint ventures are measured using the currency of the Movement in the price index for the year ended 30 June 2024 was
77% (2023 – 382%; 2022 – 268%) in Venezuela.
primary economic environment in which each entity operates (its
Recent developments in Venezuela led management to change its
functional currency). The consolidated financial statements are
estimate for the exchange rate of VES/$ to be the official exchange

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Results for the year (a) Segmental information for the consolidated income statement
Latin Eliminate
America inter- Total
North Asia and segment operating Corporate
America Europe Pacific Caribbean Africa SC&P sales segments and other Total
Introduction 2024 $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
This section explains the results and performance of the group for the three years ended 30 June 2024. Disclosures are provided for segmental Sales 8,514 8,024 6,320 2,432 2,478 3,551 (3,551) 27,768 123 27,891
information, operating costs, exceptional items, finance income and charges, the group's share of results of associates and joint ventures, taxation. Net sales
For associates, joint ventures and taxation, balance sheet disclosures are also provided in this section.
At budgeted exchange rates(1) 7,897 4,405 3,860 1,702 2,162 3,455 (3,353) 20,128 118 20,246
2. Segmental information Acquisitions and disposals 2 30 30 — 131 — — 193 — 193
SC&P allocation 12 65 12 11 2 (102) — — — —
Accounting policies Retranslation to actual exchange rates (3) (59) (85) 105 (539) 198 (198) (581) 5 (576)
Sales comprise revenue from contracts with customers from the sale of goods, royalties and rents receivable. Revenue from the sale of goods Hyperinflation — 363 — 21 22 — — 406 — 406
includes excise and other duties which the group pays as principal but excludes duties and taxes collected on behalf of third parties, such as Net sales 7,908 4,804 3,817 1,839 1,778 3,551 (3,551) 20,146 123 20,269
value added tax. Sales are recognised as or when performance obligations are satisfied by transferring control of a good or service to the Operating profit/(loss)
customer, which is determined by considering, among other factors, the delivery terms agreed with customers. For the sale of goods, the
transfer of control occurs when the significant risks and rewards of ownership are passed to the customer. Based on the shipping terms At budgeted exchange rates(1) 2,992 1,370 1,121 527 448 (40) — 6,418 (343) 6,075
agreed with customers, the transfer of control of goods occurs at the time of dispatch for the majority of sales. Where the transfer of control is Acquisitions and disposals (12) (14) 7 — 27 — — 8 — 8
subsequent to the dispatch of goods, the time between dispatch and receipt by the customer is generally less than five days. The group SC&P allocation (5) (22) (7) (5) (1) 40 — — — —
includes in sales the net consideration to which it expects to be entitled. Sales are recognised to the extent that it is highly probable that a
significant reversal will not occur. Therefore, sales are stated net of expected price discounts, allowances for customer loyalty and certain Fair value remeasurements 128 27 — (16) — — — 139 — 139
promotional activities and similar items. Generally, payment of the transaction price is due within credit terms that are consistent with industry Retranslation to actual exchange rates 133 26 (58) (5) (332) — — (236) (23) (259)
practices, with no element of financing. Hyperinflation — (8) — 1 (11) — — (18) — (18)
Net sales are sales less excise duties. Diageo incurs excise duties throughout the world. In the majority of countries, excise duties are Operating profit/(loss) before exceptional items 3,236 1,379 1,063 502 131 — — 6,311 (366) 5,945
effectively a production tax which becomes payable when the product is removed from bonded premises and is not directly related to the
value of sales. It is generally not included as a separate item on external invoices; increases in excise duty are not always passed on to the Exceptional operating items(2) (197) (122) 375 — — — — 56 — 56
customer and where a customer fails to pay for products received the group cannot reclaim the excise duty. The group therefore recognises Operating profit/(loss) 3,039 1,257 1,438 502 131 — — 6,367 (366) 6,001
excise duty, unless it regards itself as an agent of the regulatory authorities, as a cost to the group. Non-operating items (70)
Advertising costs, point of sale materials and sponsorship payments are charged to marketing in operating profit when the company has a Net finance charges (885)
right of access to the goods or services acquired.
Share of after tax results of associates and joint
Exceptional items are those that in management’s judgement need to be disclosed separately. Such items are included in the income ventures 414
statement caption to which they relate, and form part of the segmental reporting. Management believes that separate disclosure of Profit before taxation 5,460
exceptional items and the classification between operating and non-operating further helps investors to understand the performance of the
group. Latin Eliminate
America inter- Total
Changes in estimates and reversals in relation to items previously recognised as exceptional are presented consistently as exceptional in North Asia and segment operating Corporate
the current year. America Europe Pacific Caribbean Africa SC&P sales segments and other Total
re- re- re- re- re- re- re- re- re- re-
presented presented presented presented presented presented presented presented presented presented
Diageo is an international manufacturer and distributor of premium drinks. Diageo also owns a number of investments in associates and joint 2023 $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
ventures, as set out in note 6. Sales 8,859 7,245 6,484 2,714 2,864 3,687 (3,687) 28,166 104 28,270
The segmental information presented is consistent with management reporting provided to the Executive Committee (the chief operating
decision-maker). Net sales
The Executive Committee considers the business principally from a geographical perspective based on the location of third-party sales and the At budgeted exchange rates(1) 8,109 4,526 4,134 2,200 2,186 3,943 (3,854) 21,244 115 21,359
business analysis is presented by geographical segment. In addition to these geographical selling segments, a further segment reviewed by the Acquisitions and disposals 27 27 48 3 138 — — 243 — 243
Executive Committee is the Supply Chain and Procurement (SC&P) segment, which manufactures products for other group companies and SC&P allocation 10 52 11 12 4 (89) — — — —
includes the production sites in the United Kingdom, Ireland, Italy, Guatemala and Mexico, as well as comprises the global procurement function.
The group's operations also include the Corporate segment. Corporate costs are in respect of central costs, including finance, marketing, Retranslation to actual exchange rates (37) (537) (352) (56) (289) (167) 167 (1,271) (11) (1,282)
corporate relations, human resources and legal, as well as certain information systems, facilities and employee costs that are not allocable to the Hyperinflation — 235 — — — — — 235 — 235
geographical segments or to SC&P. Net sales 8,109 4,303 3,841 2,159 2,039 3,687 (3,687) 20,451 104 20,555
Diageo uses shared services operations to deliver transaction processing activities for markets and operational entities. These centres are Operating profit/(loss)
located in India, Hungary, Colombia and the Philippines. These captive business service centres also perform certain central finance activities,
At budgeted exchange rates(1) 3,132 1,441 1,187 800 466 (42) — 6,984 (392) 6,592
including elements of financial planning and reporting, treasury and HR services. The costs of shared services operations are recharged to the
regions. Acquisitions and disposals (23) (19) 7 — 37 — — 2 (8) (6)
For planning and management reporting purposes, Diageo uses budgeted exchange rates that are set at the prior year's weighted average SC&P allocation 3 (31) (7) (4) (3) 42 — — — —
exchange rate. In order to ensure a consistent basis on which performance is measured through the year, prior period results are also restated to Fair value remeasurements 122 34 — 1 — — — 157 — 157
the budgeted exchange rate. Segmental information for net sales and operating profit before exceptional items are reported on a consistent basis Retranslation to actual exchange rates (12) (144) (83) (14) (211) — — (464) 3 (461)
with management reporting. The adjustments required to retranslate the segmental information to actual exchange rates and to reconcile it to the
group’s reported results are shown in the tables below. The comparative segmental information, prior to retranslation, has not been restated at the Hyperinflation — 31 — — — — — 31 — 31
current year’s budgeted exchange rates but is presented at the budgeted rates for the respective year. Operating profit/(loss) before exceptional items 3,222 1,312 1,104 783 289 — — 6,710 (397) 6,313
In addition, for management reporting purposes, Diageo presents the result of acquisitions and disposals completed in the current and prior Exceptional operating items(2) (118) (12) (581) — (55) — — (766) — (766)
year separately from the results of the geographical segments. The impact of acquisitions and disposals on net sales and operating profit is Operating profit/(loss) 3,104 1,300 523 783 234 — — 5,944 (397) 5,547
disclosed under the appropriate geographical segments in the tables below at budgeted exchange rates.
Non-operating items 364
Net finance charges (712)
Share of after tax results of associates and joint
ventures 443
Profit before taxation 5,642

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Latin Eliminate (b) Other segmental information

America inter- Total
North Asia and segment operating Corporate Latin
America Europe Pacific Caribbean Africa SC&P sales segments and other Total America
North Asia and Corporate
re- re- re- re- re- re- re- re- re- re- America Europe Pacific Caribbean Africa SC&P and other Total
presented presented presented presented presented presented presented presented presented presented $ million $ million $ million $ million $ million $ million $ million $ million
2022 $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
2024
Sales 8,888 7,531 7,481 2,585 3,196 2,672 (2,672) 29,681 70 29,751
Purchase of property, plant and equipment and computer
Net sales software 305 338 154 6 83 612 12 1,510
At budgeted exchange rates(1) 8,037 4,398 3,887 2,007 2,292 2,829 (2,720) 20,730 74 20,804 Depreciation and intangible asset amortisation (122) (166) (83) (13) (88) (192) (13) (677)
Acquisitions and disposals 46 32 — 4 20 — — 102 — 102 Underlying impairment — — — (1) — — — (1)
SC&P allocation 13 63 13 16 4 (109) — — — — Exceptional impairment of tangible assets (33) (5) (8) — — — — (46)
Retranslation to actual exchange rates 10 (510) (63) — (78) (48) 48 (641) (4) (645) Exceptional impairment of intangible assets (54) (96) 379 — — — — 229
Hyperinflation — 255 — — — — — 255 — 255 2023 (re-presented)
Net sales 8,106 4,238 3,837 2,027 2,238 2,672 (2,672) 20,446 70 20,516 Purchase of property, plant and equipment and
Operating profit/(loss) computer software 236 252 198 146 152 427 6 1,417
At budgeted exchange rates(1) 3,224 1,464 948 715 466 (31) — 6,786 (343) 6,443 Depreciation and intangible asset amortisation (114) (118) (75) (22) (95) (161) (12) (597)
Acquisitions and disposals (37) 14 — — (13) — — (36) — (36) Exceptional impairment of tangible assets (63) 3 (27) — — — — (87)
SC&P allocation (3) (23) (1) (3) (1) 31 — — — — Exceptional impairment of intangible assets (36) (31) (546) — — — — (613)
Fair value remeasurements 43 48 — (10) — — — 81 — 81 2022 (re-presented)
Purchase of property, plant and equipment and
Retranslation to actual exchange rates 41 (172) — 10 (33) — — (154) 26 (128)
computer software 306 247 194 170 184 341 15 1,457
Hyperinflation — 14 — — — — — 14 — 14
Depreciation and intangible asset amortisation (107) (121) (124) (21) (106) (157) (15) (651)
Operating profit/(loss) before exceptional items 3,268 1,345 947 712 419 — — 6,691 (317) 6,374
Exceptional impairment of tangible assets — (4) — — — — — (4)
Exceptional operating items(2) (1) (184) (292) — — — — (477) — (477)
Exceptional impairment of intangible assets — (119) (290) — — — — (409)
Operating profit/(loss) 3,267 1,161 655 712 419 — — 6,214 (317) 5,897
Non-operating items (88)
Net finance charges (556)
Share of after tax results of associates and joint
ventures 555
Profit before taxation 5,808
(1) These items represent the IFRS 8 performance measures for the geographical and SC&P segments.
(2) For definition and details of exceptional items, see pages 172-173.
(i) The net sales figures for SC&P reported to the Executive Committee primarily comprise inter-segment sales and these are eliminated in a separate column in the above segmental
analysis. Apart from sales by the SC&P segment to the other operating segments, inter-segmental sales are not material.
(ii) The group’s net finance charges are managed centrally and are not attributable to individual operating segments.
(iii) Approximately 38% of annual net sales occurred in the last four months of calendar year 2023.

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(c) Category and geographical analysis (1) In the year ended 30 June 2024, a net gain of $224 million was exceptional gain of $343 million, including cumulative translation gain
Category analysis Geographic analysis
recognised in exceptional operating items, driven by the reversal of in the amount of $19 million recycled to the income statement. In the
Ready to United Great Rest of
Shui Jing Fang brand impairment of $379 million, partially offset by an year ended 30 June 2024, $10 million charges directly attributable to
Spirits Beer drink Other Total States India Britain World Total impairment charge of $101 million in respect of the Chase brand, and the disposal have been accounted for.
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
the related goodwill and tangible fixed assets, and an impairment
(9) On 11 June 2024, Diageo announced the agreement to sell its
2024 charge of $54 million in respect of certain brands in the US ready to
58.02% shareholding in Guinness Nigeria plc to N-Seven Nigeria Ltd.,
Sales(1) 22,406 4,107 949 429 27,891 8,041 3,247 2,849 13,754 27,891 drink portfolio.
part of the Tolaram group. The sale is considered to be highly probable
Non-current assets(2), (3) 7,642 2,207 3,969 14,868 28,686 In the year ended 30 June 2023, an impairment charge of $613 million as at 30 June 2024 and it is expected to be completed in the year
was recognised in exceptional operating items in respect of the ending 30 June 2025. In the year ended 30 June 2024, a charge of
2023 (re-presented) McDowell's brand ($517 million), the SIA brand ($36 million), the $6 million was recognised as a non-operating item, in respect of
Sales(1) 22,855 4,026 1,079 310 28,270 8,366 3,301 2,565 14,038 28,270 Copper Dog brand ($31 million) and the Director's Special brand transaction related and other costs directly attributable to the
Non-current assets (2), (3)
7,328 2,265 3,665 14,118 27,376 ($29 million). prospective sale of the business.

2022 (re-presented) In the year ended 30 June 2022, an impairment charge of $409 million (10) On 30 September 2022, Diageo completed the sale of the Popular
(1)
was recognised in exceptional operating items in respect of the brands of its United Spirits Limited (USL) business. The transaction
Sales 24,059 4,160 1,172 360 29,751 8,415 4,282 2,848 14,206 29,751 McDowell's brand ($290 million), the Bell's brand ($94 million) and resulted in an exceptional gain of $5 million. $4 million of the purchase
Non-current assets(2), (3) 7,137 2,899 2,920 13,143 26,099 goodwill related to Smirnov ($25 million). price, that was subject to administrative actions within 12 months and
considered uncertain at the time of the transaction, was paid to Diageo
For further information, see note 9 (d).
(1) The geographical analysis of sales is based on the location of third-party customers. in the year ended 30 June 2024 and recognised as exceptional gain.
(2) The geographical analysis of non-current assets is based on the geographical location of the assets and comprises intangible assets, property, plant and equipment, biological assets, (2) In the year ended 30 June 2024, an exceptional charge of
investments in associates and joint ventures, other investments and non-current other receivables. (11) On 26 October 2022, Diageo completed the sale of its Archers
$61 million was accounted for in respect of the supply chain agility
(3) The management information provided to the chief operating decision-maker does not include an analysis of assets and liabilities by category and therefore is not disclosed. brand. The transaction resulted in an exceptional gain of $23 million in
programme (2023 – $121 million). With this five-year spanning
the year ended 30 June 2023.
3. Exceptional items 2024 2023 2022 programme launched in July 2022, Diageo expects to strengthen its
re-presented re-presented supply chain, improve its resilience and agility, drive efficiencies, deliver (12) Certain subsidiaries of USL were sold in the year ended 30 June
$ million $ million $ million
additional productivity savings and make its supply operations more 2023. The sale of these subsidiaries resulted in an exceptional gain of
Accounting policies Exceptional operating items sustainable. Total implementation cost of the programme is expected $4 million.
Exceptional items are those that in management’s judgement Brand, goodwill and other assets to be up to $600 million over the five-year period, which will comprise
(13) In the year ended 30 June 2023, Diageo sold its Tyku brand. The
need to be disclosed separately. Such items are included in the impairment income from reversal/ non-cash items and one-off expenses, the majority of which are
(charge) (1) 224 (613) (409) transaction resulted in an exceptional loss of $5 million.
income statement caption to which they relate, and form part of expected to be recognised as exceptional operating items. The
the segmental reporting included in note 2. Management Supply chain agility programme (2) (61) (121) — exceptional charge for the years ended 30 June 2024 and 30 June (14) In May 2022, Diageo sold its Picon brand. The sale resulted in an
believes that separate disclosure of exceptional items and the 2023 was primarily in respect of accelerated depreciation, being exceptional non-operating gain of $112 million, net of disposal costs.
Various dispute and litigation matters (3) (107) — — additional depreciation of assets in the period directly attributable to
classification between operating and non-operating further helps (15) In the year ended 30 June 2022, a loss of $183 million was
investors to understand the performance of the group. Distribution termination fee (4) — (55) — the programme, and impairment of property, plant and equipment in
recognised as a non-operating item attributable to the sale of Meta
Changes in estimates and reversals in relation to items Winding down Russian operations (5) — 23 (64) respect of North America and India. Restructuring cash expenditure
Abo Brewery Share Company in Ethiopia.
previously recognised as exceptional are presented consistently was $26 million in the year ended 30 June 2024 (2023 – $14 million).
Other exceptional operating items (6) — — (4) (16) On 29 September 2022, the group acquired the part of the entire
as exceptional in the current year. (3) In the year ended 30 June 2024, $107 million was recorded as an
56 (766) (477) issued share capital of Mr Black Spirits Pty Ltd, owner of Mr Black, the
Operating items exceptional operating item in respect of various dispute and litigation
Non-operating items Australian premium cold brew coffee liqueur, that it did not already
matters in North America and Europe, including certain costs and
Exceptional operating items are those that are considered to be own. As a result of Mr Black becoming a subsidiary of the group in the
Sale of businesses and brands expenses associated therewith.
material and unusual or non-recurring in nature and are part of year ended 30 June 2023, a loss of $10 million arose, being the
the operating activities of the group, such as one-off global Windsor business (7) (58) — (25) (4) In the year ended 30 June 2023, Diageo agreed with one of its difference between the book value of the associate prior to the
restructuring programmes which can be multi-year, impairment Guinness Cameroun S.A. (8) (10) 343 — distributors in Africa to terminate the distribution licence of Gordon's, in transaction and its fair value plus transaction costs.
of intangible assets and fixed assets, indirect tax settlements, respect of which a provision of $55 million was recognised as an
Guinness Nigeria plc (9) (6) — — (17) Other exceptional non-operating items include subsequent gains
property disposals and changes in post-employment plans. operating exceptional charge. In the year ended 30 June 2024,
and charges of items that were originally recognised as exceptional at
USL Popular brands (10) 4 5 — $55 million in respect of the aforementioned termination were paid.
Non-operating items inception. In the year ended 30 June 2023, other exceptional non-
Gains and losses on the sale or directly attributable to a Archers brand (11) — 23 — (5) In the year ended 30 June 2023, Diageo released unutilised operating items resulted in a net gain of $4 million (2022 – $8 million),
prospective sale of businesses, brands or distribution rights, step USL businesses (12) — 4 — provisions of $23 million from the $64 million exceptional charge taken mainly driven by the deferred consideration received in respect of the
up gains and losses that arise when an investment becomes an in the year ended 30 June 2022, in respect of winding down its sale of United National Breweries.
Tyku brand (13) — (5) —
associate or an associate becomes a subsidiary and other operations in Russia.
For further information on acquisition and sale of businesses and
Picon brand (14) — — 112
material, unusual non-recurring items, that are not in respect of (6) Other exceptional operating items include subsequent gains and brands, see notes 8 (a) and 8 (b).
the production, marketing and distribution of premium drinks, Meta Abo Brewery (15) — — (183) charges of items that were originally recognised as exceptional at
are disclosed as exceptional non-operating items below Cash payments and receipts included in net cash inflow from operating
Step acquisition - Mr Black (16) — (10) — inception. In the year ended 30 June 2022, other exceptional operating
operating profit in the income statement. activities in respect of exceptional items were as follows:
Other non-operating exceptional items items resulted in a loss of $4 million driven by the reinvestment of
Taxation items (17) — 4 8 'Raising the Bar' corporate tax benefits. 2024 2023 2022
re-presented re-presented
Exceptional current and deferred tax items comprise material (70) 364 (88) (7) On 27 October 2023, Diageo completed the sale of Windsor Global $ million $ million $ million

and unusual or non-recurring items that impact taxation. Co., Ltd. to PT W Co., Ltd., a Korean company sponsored by Pine Tree Thalidomide (note 15 (d)) (17) (16) (22)
Examples include direct tax provisions and settlements in respect Exceptional items before taxation (14) (402) (565) Investment & Management Co., Ltd. for a total consideration of Winding down Russian operations (2) (16) (18)
of prior years and the remeasurement of deferred tax assets and KRW 206 billion ($152 million). The transaction resulted in a loss of
Tax on exceptional items (note 7 (b)) (24) 226 40 $58 million in the year ended 30 June 2024, which was recognised as Supply chain agility programme (26) (14) —
liabilities following tax rate changes.
a non-operating item attributable to the sale, including cumulative Distribution termination fee (55) — —
Total exceptional items (38) (176) (525) translation losses of $26 million recycled to the income statement. In
Litigation (88) — —
Attributable to: the year ended 30 June 2022, a loss of $25 million was recognised as
a non-operating item, mainly in relation to transaction and other costs Donations — — (50)
Equity shareholders of the parent
company (142) (3) (400) directly attributable to the prospective sale of the business. Total cash payments (188) (46) (90)
Non-controlling interests 104 (173) (125) (8) On 26 May 2023, Diageo completed the sale of its wholly owned
Total exceptional items (38) (176) (525) subsidiary in Cameroon, Guinness Cameroun S.A., to the Castel Group
for an aggregate consideration of $475 million resulting in an

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4. Operating costs (c) Staff costs and average number of employees 5. Finance income and charges 2024 2023 2022
2024 2023 2022 re-presented re-presented
2024 2023 2022 $ million $ million $ million
re-presented re-presented
re-presented re-presented
$ million $ million $ million
$ million $ million $ million Accounting policies Interest income 179 193 168
Excise duties 7,622 7,715 9,235 Aggregate remuneration Net interest includes interest income and charges in respect of Fair value gain on financial
Cost of sales 8,071 8,289 7,923 Wages and salaries 1,984 1,858 2,068 financial instruments and the results of hedging transactions instruments 100 124 454
used to manage interest rate risk.
Marketing 3,691 3,663 3,616 Share-based incentive plans 43 58 79 Total interest income(1) 279 317 622
Employer’s social security 146 138 142 Finance charges directly attributable to the acquisition, Interest charge on bonds, commercial
Other operating items 2,506 3,056 3,080 construction or production of a qualifying asset, being an asset
Employer’s pension paper, bank loans and overdrafts (665) (563) (495)
21,890 22,723 23,854 that necessarily takes a substantial period of time to get ready
for its intended use or sale, are added to the cost of that asset. Interest charge on finance leases (23) (19) (16)
Comprising: Defined benefit plans 72 80 48
Borrowing costs which are not capitalised are recognised in the Other interest charges (396) (325) (119)
Excise duties Defined contribution plans 62 53 44
income statement using the effective interest method. All other Fair value loss on financial
India 1,845 1,950 2,901 Other post-employment plans 7 10 4 finance charges are recognised primarily in the income instruments (101) (123) (461)
2,314 2,197 2,385 statement in the year in which they are incurred.
Great Britain 1,463 1,314 1,558 Total interest charges(1) (1,185) (1,030) (1,091)
Net other finance charges include items in respect of post- Net interest charges (906) (713) (469)
United States 738 825 816 The average number of employees on a full-time equivalent basis employment plans, the discount unwind of long-term obligations
Other 3,576 3,626 3,960 (excluding employees of associates and joint ventures) was as follows: Net finance income in respect of post-
and hyperinflation charges. The results of operations in
employment plans in surplus (note
Increase in inventories (112) (615) (1,208) 2024 2023 2022
hyperinflationary economies are adjusted to reflect the changes 14) 57 71 29
in the purchasing power of the local currency of the entity before
Raw materials and consumables 4,892 5,197 5,336 North America 2,869 2,884 2,811 being translated to US dollar. Monetary gain on hyperinflation in
Marketing 3,691 3,663 3,616 Europe 2,932 2,789 3,014 The impact of derivatives, excluding cash flow hedges that various economies (note 1 (f)) 49 13 1
Other external charges 3,002 3,301 3,432 are in respect of commodity price risk management or those that Interest income in respect of direct
Asia Pacific 6,588 6,856 6,500 and indirect tax
are used to hedge the currency risk of highly probable future 15 8 5
Staff costs 2,314 2,197 2,385 Latin America and Caribbean 1,650 1,495 1,500 currency cash flows, is included in interest income or interest Unwinding of discounts — — 4
Depreciation, amortisation and Africa 3,290 3,526 4,061 charge.
impairment 493 1,297 1,064 Total other finance income 121 92 39
SC&P 6,977 6,934 5,025 Net finance charge in respect of post-
Gains on disposal of properties 1 (4) (2)
Corporate and other 6,061 5,753 5,076 employment plans in deficit (note 14) (20) (18) (16)
Net foreign exchange losses 8 12 14
30,367 30,237 27,987 Monetary loss on hyperinflation in
Other operating income (21) (40) (18) various economies (note 1 (f)) (8) (3) (45)
21,890 22,723 23,854 At 30 June 2024, on a full-time equivalent basis, the group had 30,092 Interest charge in respect of direct and
(2023 – 30,269; 2022 – 28,558) employees. The average number of indirect tax (27) (29) (23)
(a) Other external charges employees of the group, including part-time employees, for the year Unwinding of discounts (23) (15) (12)
Other external charges include research and development expenditure was 30,839 (2023 – 30,419; 2022 – 28,137).
Change in financial liability - Zacapa
in respect of new drinks products and package design of $69 million (d) Exceptional operating items (Level 3) — (10) (27)
(2023 – $63 million; 2022 – $58 million) and maintenance and repairs Included in the table above are exceptional operating items as follows:
of $171 million (2023 – $171 million; 2022 – $181 million). Other finance charges (22) (16) (3)
2023 2022 Total other finance charges (100) (91) (126)
(b) Auditors fees 2024 re-
presented
re-
presented Net other finance income/(charges) 21 1 (87)
Other external charges include the fees of the principal auditor of the $ million $ million $ million
(1) Includes $59 million interest income and $765 million interest charge in respect of
group, PricewaterhouseCoopers LLP, and its affiliates (PwC) and are Depreciation, amortisation and financial assets and liabilities that are not measured at fair value through income
analysed below. impairment statement (2023 – $98 million income and $628 million charge; 2022 – $36 million
income and $554 million charge).
2024 2023 2022 Brand and goodwill impairment (gain)/
$ million
re-presented
$ million
re-presented
$ million
charges (231) 613 409
Audit of these financial statements 4.9 6.2 5.6 Tangible asset impairment and
Audit of financial statements of accelerated depreciation 46 87 —
subsidiaries 8.2 6.8 8.1 Staff costs 2 11 —
Audit related assurance services(1) 3.2 3.3 3.3 Other external charges 127 75 68
Total audit fees (Audit fees) 16.3 16.3 17.0 Other operating income — (20) —
Other assurance services (Audit
related fees)(2) 1.7 1.4 0.9 Total exceptional operating items (note 3) (56) 766 477
18.0 17.7 17.9 Cost of sales 57 80 —
Other operating (income)/expenses (113) 686 477
(1) Audit related assurance services are in respect of reporting under section 404 of the
US Sarbanes-Oxley Act and the review of the interim financial information.
(2) Other assurance services comprise the aggregate fees for assurance and related
services that are not reported under ‘total audit fees’.
(i) Disclosure requirements for auditors' fees in the United States are different from those
required in the United Kingdom. The terminology by category required in the United
States is disclosed in brackets in the above table.

Audit services provided by firms other than PwC for the year ended 30
June 2024 were $0.1 million (2023 – $0.1 million; 2022 – $0.2 million).
Further PwC fees for audit services in respect of post-employment plans
were $0.4 million for the year ended 30 June 2024 (2023 – $0.3
million; 2022 – $0.3 million).

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6. Investments in associates and joint ventures Moët

Hennessy Others Total 7. Taxation
$ million $ million $ million
Cost less provisions
Accounting policies Accounting policies
At 30 June 2022 (re-presented) 4,124 294 4,418
An associate is an undertaking in which the group has a long-term Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between
equity interest and over which it has the power to exercise significant Exchange differences 127 5 132 accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax treatments are not recognised unless it is
influence. A joint venture is a joint arrangement whereby the parties Additions — 112 112 probable that a tax authority will accept the treatment. Once considered to be probable, tax treatments are reviewed each year to assess
that have joint control of the arrangement have rights to the net Share of profit/(loss) after tax 455 (12) 443 whether a provision should be taken against full recognition of the treatment on the basis of potential settlement through negotiation and/or
assets of the arrangement. The group’s interest in the net assets of Step acquisition — (19) (19) litigation with the relevant tax authorities. Tax provisions are included in current liabilities. Penalties and interest on tax liabilities are included
associates and joint ventures is reported in investments in the in operating profit and finance charges, respectively.
consolidated balance sheet and its interest in their results (net of tax) Dividends (265) (6) (271) Full provision for deferred tax is made for temporary differences between the carrying value of assets and liabilities for financial reporting
is included in the consolidated income statement below the group’s Share of movements in other purposes and their value for tax purposes, except for deferred tax provision arising on goodwill from business combinations. The amount of
operating profit. Associates and joint ventures are initially recorded at comprehensive income and equity 43 — 43 deferred tax reflects the expected recoverable amount and is based on the expected manner of recovery or settlement of the carrying
cost including transaction costs, and the group's share of post Transfer — 1 1 amount of assets and liabilities, using the basis of taxation enacted or substantively enacted by the balance sheet date. Deferred tax assets
acquisition changes in the investee's reserves are recognised under Impairment charged during the year — (34) (34) are not recognised where it is more likely than not that the assets will not be realised in the future. No deferred tax liability is provided in
the equity method. Investments in associates and joint ventures respect of any future remittance of earnings of foreign subsidiaries where the group is able to control the remittance of earnings and it is
At 30 June 2023 (re-presented) 4,484 341 4,825
acquired prior to 1 July 1998 comprise the cost of shares less goodwill probable that such earnings will not be remitted in the foreseeable future, or where no liability would arise on the remittance.
written off to reserves that has not been reinstated, plus the group’s Exchange differences (59) (5) (64)
share of post acquisition reserves. Investments in associates and joint
Critical accounting estimates and judgements
Additions — 134 134
ventures are reviewed for impairment whenever events or Share of profit/(loss) after tax 441 (27) 414 The group is required to estimate the corporate tax in each of the jurisdictions in which it operates. Management is required to estimate the
circumstances indicate that the carrying amount may not be amount that should be recognised as a tax liability or tax asset in many countries which are subject to tax audits which by their nature are
Dividends (261) (8) (269) often complex and can take several years to resolve; current tax balances are based on such estimations. Tax provisions are based on
recoverable. The impairment review compares the net carrying value
with the recoverable amount, where the recoverable amount is the Share of movements in other management’s judgement and interpretation of country specific tax law and the likelihood of settlement. However, the actual tax liabilities
higher of the value in use calculated as the present value of the comprehensive income and equity 3 — 3 could differ from the provision and in such event the group would be required to make an adjustment in a subsequent period which could
group’s share of the associate’s future cash flows and its fair value Impairment charged during the year — (11) (11) have a material impact on the group’s profit for the year.
less costs of disposal. At 30 June 2024 4,608 424 5,032 The evaluation of deferred tax asset recoverability requires estimates to be made regarding the availability of future taxable income. For
brands with an indefinite life, management’s intention is to recover the book value through a potential sale in the future, and therefore the
(i) Investment in associates includes loans given to and preference shares invested in deferred tax on the brand value is generally recognised using the appropriate country capital gains tax rate. To the extent brands with an
Diageo’s principal associate is Moët Hennessy of which Diageo owns associates of $298 million (2023 – $218 million). indefinite life have been impaired, management considers this to be an indication of recovery through use and in such a case deferred tax
34%. Moët Hennessy is the wines and spirits division of LVMH Moët (ii) If certain performance targets are met by associates in the Distill Ventures programme, on the brand value is recognised using the appropriate country corporate income tax rate.
an additional $39 million (2023 – $35 million) will be invested in those associates.
Hennessy Louis Vuitton SA (LVMH). LVMH is based in France and is
listed on the Paris Stock Exchange. Moët Hennessy is also based in (b) Moët Hennessy prepares its financial statements under IFRS as
France and is a producer and exporter of champagne and cognac endorsed by the EU in euros to 31 December each year. The results (a) Analysis of taxation charge for the year
brands. were adjusted for alignment with Diageo accounting policies and were United Kingdom Rest of world Total
A number of joint distribution arrangements have been established translated at $1 = €0.93 (2023 – $1 = €0.96; 2022 – $1 = €0.89). 2024 2023 2022 2024 2023 2022 2024 2023 2022
with LVMH in Asia Pacific and France, principally covering distribution Income statement information for the three years ended 30 June $ million
re-presented
$ million
re-presented
$ million $ million
re-presented
$ million
re-presented
$ million $ million
re-presented
$ million
re-presented
$ million
of Diageo’s Scotch whisky and gin premium brands and Moët 2024 and balance sheet information as at 30 June 2024 and 30 June
Hennessy’s champagne and cognac premium brands. Diageo and 2023 of Moët Hennessy are as follows: Current tax
LVMH have each undertaken not to engage in any champagne or Current year 134 192 229 983 1,056 1,150 1,117 1,248 1,379
2024 2023 2022
cognac activities competing with those of Moët Hennessy. The re-presented re-presented Adjustments in respect of prior years (7) 41 14 (4) (46) 22 (11) (5) 36
arrangements also contain certain provisions for the protection of $ million $ million $ million

Diageo as a non-controlling shareholder in Moët Hennessy. Sales 6,691 7,204 7,385 127 233 243 979 1,010 1,172 1,106 1,243 1,415

(a) An analysis of the movement in the group’s investments in Profit for the year 1,299 1,339 1,662 Deferred tax
associates and joint ventures is as follows: Total comprehensive income 1,219 1,393 1,687 Origination and reversal of temporary differences 39 36 (10) 113 (93) 41 152 (57) 31
Changes in tax rates — — 2 (18) 13 2 (18) 13 4
2024 2023
re-presented Adjustments in respect of prior years 16 7 — 38 (43) (52) 54 (36) (52)
$ million $ million
55 43 (8) 133 (123) (9) 188 (80) (17)
Non-current assets 8,772 8,536
Current assets 12,025 11,534 Taxation on profit 182 276 235 1,112 887 1,163 1,294 1,163 1,398
Total assets 20,797 20,070
Non-current liabilities (2,732) (2,656)
Current liabilities (4,285) (3,982)
Total liabilities (7,017) (6,638)
Net assets 13,780 13,432

(i) Including acquisition fair value adjustments principally in respect of Moët Hennessy’s
brands and translated at $1 = €0.93 (2023 – $1 = €0.93).

(c) Information on transactions between the group and its associates

and joint ventures is disclosed in note 21.
(d) The associates and joint ventures have not reported any material
contingent liabilities in their latest financial statements.

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(b) Exceptional tax charges/(credits) In December 2021, the OECD released a framework for Pillar Two Model Rules which will introduce a global minimum corporate tax rate of
The taxation charge includes the following exceptional items: 15%, applicable to multinational enterprise groups with global revenue over €750 million. The legislation implementing the rules in the United
2024 2023 2022 Kingdom was substantively enacted on 20 June 2023 and will apply to Diageo from the financial year ending 30 June 2025 onwards. Diageo is
re-presented re-presented continuously reviewing the amendments to the legislation and also monitoring the status of implementation of the model rules outside of the United
$ million $ million $ million
Kingdom. While we expect additional tax liabilities to be incurred in some jurisdictions in which the group operates, the estimated impact on the
Brand impairment(1) 63 (154) (69) group’s effective tax rate is immaterial based on the data for the year ended 30 June 2023.
Disposal of businesses and brands(2) (1) 37 29 Diageo has applied the temporary exception under IAS 12 in relation to the accounting for deferred taxes arising from the implementation of the
Supply chain agility programme (15) (27) — Pillar Two rules.
Various dispute and litigation matters(3) (23) — — (d) Deferred tax assets and liabilities
US guarantee fee claim(4) — (68) — Deferred tax recognised in the consolidated balance sheet comprise the following net deferred tax (liabilities)/assets:
Distribution termination fee — (14) — Property, Post Other
Winding down Russian operations — — 4 plant and
equipment
Intangible
assets
employment
plans Tax losses
temporary
differences(1) Total
Other items — — (4) $ million $ million $ million $ million $ million $ million

24 (226) (40) At 30 June 2022 (re-presented) (566) (2,290) (316) 76 427 (2,669)
Exchange differences 15 42 (6) 4 (4) 51
(1) In the year ended 30 June 2024, an exceptional tax charge of $95 million was recognised in relation to the reversal of the Shui Jing Fang brand impairment charge, partly offset by an
exceptional tax credit of $19 million in respect of the Chase brand impairment and the related tangible fixed asset and an exceptional tax credit of $13 million comprised of brand Recognised in income statement (35) 116 2 (19) 29 93
impairments in the US ready to drink portfolio. In the year ended 30 June 2023, an exceptional tax credit of $154 million was recognised mainly in respect of the impairment of the
McDowell's brand. In the year ended 30 June 2022, the exceptional tax credit of $69 million related to the tax impact on the impairment of the McDowell's and Bell's brands for Recognised in other comprehensive income and equity (7) (37) 182 — (55) 83
$45 million and $24 million, respectively.
(2) In the year ended 30 June 2023, the exceptional net tax charge of $37 million mainly comprised of a tax charge of $52 million in respect of the sale of Guinness Cameroun S.A., partly
Tax rate change – recognised in income statement (2) (15) (1) 1 4 (13)
offset by a tax credit of $11 million in respect of the sale of certain USL businesses. In the year ended 30 June 2022, a $29 million exceptional tax charge was recognised in respect of Acquisition of subsidiaries — (85) — — — (85)
the gain on the sale of the Picon brand.
(3) In the year ended 30 June 2024, an exceptional tax credit of $23 million was recorded in relation to various dispute and litigation matters in North America, including certain costs and Transfer from asset held for sale (3) (44) — — 8 (39)
expenses associated therewith.
(4) In the year ended 30 June 2023, an exceptional tax credit of $68 million was recognised in respect of the deductibility of fees paid to Diageo plc for guaranteeing externally issued debt Sale of businesses 13 — (2) — (5) 6
of US group entities. Following engagement with the tax authorities, guarantee fees for the periods ended 30 June 2012 to 30 June 2022 are fully deductible. At 30 June 2023 (re-presented) (585) (2,313) (141) 62 404 (2,573)
(c) Taxation rate reconciliation and factors that may affect future tax charges Exchange differences 9 35 — (10) (13) 21
2024 2024 2023 2023 2022 2022 Recognised in income statement (79) (132) (6) 28 (17) (206)
re-presented re-presented
$ million % $ million % $ million % Recognised in other comprehensive loss and equity (34) (73) 6 — (8) (109)
Profit before taxation 5,460 5,642 5,808 Tax rate change – recognised in income statement 3 13 (1) — 3 18
Notional charge at UK corporation tax rate 1,365 25.0 1,157 20.5 1,104 19.0 Tax rate change – recognised in other comprehensive loss and
Elimination of notional tax on share of after tax results of associates equity (4) (20) — — (3) (27)
and joint ventures (103) (1.9) (91) (1.6) (105) (1.8) Acquisition (2)
— 53 — — — 53
Differences in overseas tax rates (86) (1.6) 116 2.0 217 3.7
Transfer to asset held for sale 2 4 — (16) (8) (18)
Disposal of businesses and brands 17 0.3 (42) (0.7) 38 0.7
Sale of businesses — 38 — — (1) 37
Other items not chargeable (72) (1.3) (76) (1.3) (66) (1.1)
Impairment 6 0.1 (8) (0.1) 45 0.8 At 30 June 2024 (688) (2,395) (142) 64 357 (2,804)
Other items not deductible 70 1.3 85 1.5 71 1.2 (1) Deferred tax on other temporary differences includes hyperinflation, fair value movement on cross-currency swaps, interest and finance costs, share-based payments and intra-group
Irrecoverable withholding taxes 55 1.0 46 0.8 51 0.9 sales of products.
(2) In the year ended 30 June 2024, a deferred tax asset of $53 million was recognised in relation to the purchase of shares of non-controlling interests in respect of DeLeon Holdco LLC.
Movement in provision in respect of uncertain tax positions(1) 6 0.1 34 0.6 55 0.9
After offsetting deferred tax assets and liabilities that relate to taxes 2024 2023
Changes in tax rates (18) (0.3) 13 0.2 4 0.1
levied by the same taxation authority on the same taxable fiscal unit, re-presented
Adjustments in respect of prior years(2) 54 1.0 (71) (1.3) (16) (0.3) the net deferred tax liability comprises:
$ million $ million

Taxation on profit 1,294 23.7 1,163 20.6 1,398 24.1 2024 2023 Capital losses – indefinite 123 123
re-presented
Tax rate before exceptional items — 23.2 — 23.0 — 22.6 $ million $ million Trading losses – indefinite 31 31
Deferred tax assets 143 178 Trading and capital losses – expiry dates up to
(1) Movement in provision in respect of uncertain tax positions includes both current and prior year uncertain tax position movements. 2033 33 50
(2) Excludes prior year movement in provisions. Included in the year ended 30 June 2023 was an exceptional tax credit of $68 million in respect of the deductibility of fees paid to Diageo Deferred tax liabilities (2,947) (2,751)
plc for guaranteeing externally issued debt of its US group entities. (2,804) (2,573) 187 204
The table above reconciles the notional taxation charge calculated at the UK tax rate, to the actual total tax charge. As a group operating in
multiple countries, the actual tax rates applicable to profits in those countries are different from the UK tax rate. The impact is shown in the table Deferred tax assets of $143 million include $98 million (2023 – $82 Additionally, no deferred tax asset has been recognised in respect of
above as differences in overseas tax rates. The group’s worldwide business leads to the consideration of a number of important factors which may million) arising in jurisdictions with prior year taxable losses. The certain temporary differences arising from brand valuations, as the
affect future tax charges, such as the levels and mix of profitability in different jurisdictions, transfer pricing regulations, tax rates imposed and tax majority of the asset is in respect of Germany, Colombia and Brazil. It is group is not planning to sell those brands thus the benefit from the
regime reforms, acquisitions, disposals, restructuring activities, and settlements or agreements with tax authorities. considered more likely than not that there will be sufficient future temporary differences is unlikely to be realised.
Significant ongoing changes in the international tax environment and an increase in global tax audit activity means that tax uncertainties and taxable profits to realise these deferred tax assets, which for the most
(f) Unrecognised deferred tax liabilities
associated risks have been gradually increasing. In the medium-term, these risks could result in an increase in tax liabilities or adjustments to the part arose on losses from a historic one-off transaction, and on existing
provisions. The majority of deferred tax assets can be carried forward Relevant legislation largely exempts overseas dividends remitted from
carrying value of deferred tax assets and liabilities. See note 19 (f). tax. A tax liability is more likely to arise in respect of withholding taxes
The group has a number of ongoing tax audits worldwide for which provisions are recognised in line with the relevant international accounting indefinitely. From the total recognised tax losses of $64 million, it is
expected that $13 million will be utilised in the year ending 30 June levied by the overseas jurisdiction. Deferred tax is provided where there
standard, taking into account best estimates and management’s judgements concerning the ultimate outcome of the tax audits. For the year is an intention to distribute earnings, and a tax liability arises. It is
ended 30 June 2024, ongoing audits that are provided for individually are not expected to result in a material tax liability. The current tax asset of 2025.
impractical to estimate the amount of unrecognised deferred tax
$304 million (30 June 2023 – $292 million) and tax liability of $136 million (30 June 2023 – $170 million) include $209 million (30 June 2023 – $218 (e) Unrecognised deferred tax assets liabilities in respect of these unremitted earnings.
million) of provisions for tax uncertainties. The following table shows the tax value of tax losses which has not The aggregate amount of temporary differences in respect of
The cash tax paid in the year ended 30 June 2024 amounts to $1,099 million (30 June 2023 – $1,443 million) and is $7 million lower than the been recognised due to uncertainty over their utilisation in future investments in subsidiaries, branches, interests in associates and joint
current tax charge (30 June 2023 – $200 million higher). This arises as a result of timing differences between the accrual of income taxes, the periods. The gross value of those losses is $724 million (2023 – ventures for which deferred tax liabilities have not been recognised is
movement in the provision for uncertain tax positions and the actual payment of cash. $796 million). approximately $26.3 billion (2023 – $25.0 billion).

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Operating assets and liabilities (a) Acquisition of businesses

Fair value of net assets acquired and cash consideration paid in respect of the acquisition of subsidiaries in the three years ended 30 June 2024
were as follows:
Introduction Net assets acquired and consideration

This section describes the assets used in the group’s operations and the liabilities incurred. Liabilities relating to the group’s financing activities are 2024 2023
re-presented
2022
re-presented
included in section ‘Risk management and capital structure’ and balance sheet information in respect of associates, joint ventures and taxation are $ million $ million $ million
covered in section ‘Results for the year’. This section also provides detailed disclosures on the group’s recent acquisitions and disposals, Brands and other intangibles — 402 157
performance and financial position of its defined benefit post-employment plans.
Property, plant and equipment — 28 —
8. Acquisition and sale of businesses and brands and purchase of non-controlling interests Inventories — 31 7
Other working capital — (2) 5
Accounting policies
Deferred tax — (85) (40)
The consolidated financial statements include the results of the company and its subsidiaries together with the group’s attributable share of
the results of associates and joint ventures. The results of subsidiaries acquired or sold are included in the income statement from, or up to, Cash — — 2
the date that control passes. Fair value of assets and liabilities — 374 131
Business combinations are accounted for using the acquisition method. Identifiable assets, liabilities and contingent liabilities acquired are Goodwill arising on acquisition — 109 91
measured at fair value at acquisition date. The consideration payable is measured at fair value and includes the fair value of any contingent
consideration. Among other factors, the group considers the nature of, and compensation for the selling shareholders' continuing Settlement of pre-existing relationship — — (2)
employment to determine if any contingent payments are for post-combination employee services, which are excluded from consideration. Step acquisitions — (13) (8)
On the acquisition of a business, or of an interest in an associate or joint venture, fair values, reflecting conditions at the date of
Consideration payable — 470 212
acquisition, are attributed to the net assets, including identifiable intangible assets and contingent liabilities acquired. Directly attributable
acquisition costs in respect of subsidiary companies acquired are recognised in other external charges as incurred. Satisfied by:
The non-controlling interests on the date of acquisition can be measured either at the fair value or at the non-controlling shareholder’s Cash consideration paid — (373) (116)
proportion of the net fair value of the identifiable assets assumed. This choice is made separately for each acquisition.
Where the group has issued a put option over shares held by a non-controlling interest, the group derecognises the non-controlling Contingent consideration payable — (92) (91)
interests and instead recognises a contingent deferred consideration liability for the estimated amount likely to be paid to the non-controlling Deferred consideration payable — (5) (5)
interest on the exercise of those options. Movements in the estimated liability in respect of put options are recognised in retained earnings. — (470) (212)
Transactions with non-controlling interests are recorded directly in retained earnings.
For all entities in which the company directly or indirectly owns equity, a judgement is made to determine whether it controls and therefore Cash consideration paid in respect of the acquisition of businesses and future expected cash flows which is dependent on management’s
should fully consolidate the investee. An assessment is carried out to determine whether the group has the exposure or rights to the variable purchase of shares of non-controlling interests in the three years ended estimates in respect of the forecasting of future cash flows and the
returns of the investee and has the ability to affect those returns through its power over the investee. To establish control, an analysis is carried 30 June 2024 were as follows: discount rates applicable to the future cash flows. The goodwill arising
out of the substantive and protective rights that the group and the other investors hold. This assessment is dependent on the activities and on the acquisition of Don Papa Rum represents expected revenue
purpose of the investee and the rights of the other shareholders, such as which party controls the board, executive committee and material Consideration
synergies and the acquired workforce. Don Papa Rum contributed
policies of the investee. Determining whether the rights that the group holds are substantive, requires management judgement. 2024 2023 2022
$13 million to net sales and $18 million operating loss to the period, out
Where less than 50% of the equity of an investee is held, and the group holds significantly more voting rights than any other vote holder $ million
re-presented
$ million
re-presented
$ million of which $18 million is related to acquisition transaction and integration
or organised group of vote holders, this may be an indicator of de facto control. An assessment is needed to determine all the factors costs in the year ended 30 June 2023.
relevant to the relationship with the investee to ascertain whether control has been established and whether the investee should be Acquisitions in the year - subsidiaries
Diageo completed further acquisitions in the year ended 30 June
consolidated as a subsidiary. Where voting power and returns from an investment are split equally between two entities then the Cash consideration paid — (373) (116) 2023: (i) on 29 September 2022, the acquisition of the remaining issued
arrangement is accounted for as a joint venture. Cash acquired — — 2 share capital of Mr Black Spirits Pty Ltd, owner of Mr Black, the
On an acquisition, fair values are attributed to the assets and liabilities acquired. This may involve material judgement to determine these Australian premium cold brew coffee liqueur, that it did not already
values. Prior year acquisitions - subsidiaries
own; and (ii) on 2 November 2022, the acquisition of the entire issued
Contingent consideration paid for share capital of Balcones Distilling, a Texas craft distiller and one of the
Casamigos — — (113) leading producers of American single malt whiskey in the United States.
Other consideration (6) (31) (51) The aggregate up-front cash consideration paid on completion of these
transactions in the year ended 30 June 2023 was $112 million.
Investments in associates
On 31 March 2022, Diageo acquired 100% equity interest in
Cash consideration paid - increase in 21Seeds, to support Diageo's participation in the super premium
ownership interest (5) (20) (6) flavoured tequila segment, for a total consideration of $82 million
Capital injection(1) (128) (92) (80) upfront in cash and a contingent consideration of up to $80 million
Net cash outflow on acquisition of linked to performance targets.
businesses (139) (516) (364) Diageo completed further acquisitions in the year ended 30 June
Purchase of shares of non-controlling 2022, including (i) on 27 January 2022, the acquisition of Casa UM, to
interests (223) (178) — expand Reserve portfolio with premium artisanal mezcal brand, Mezcal
Unión and (ii) on 29 June 2022, the acquisition of Vivanda, owner of
Total net cash outflow (362) (694) (364)
the technology behind 'What's your Whisky' platform and the Journey
(1) Additional investments in a number of Distill Ventures associates.
of Flavour experience at Johnnie Walker Princes Street, to support
Diageo's ambition to provide customised brand experiences across all
Prior year acquisitions channels. The aggregate upfront cash consideration paid on
On 10 March 2023, Diageo completed the acquisition of Kanlaon completion of these transactions in the year ended 30 June 2022 was
Limited and Chat Noir Co. Inc., (the owner of Don Papa Rum) to $34 million. In addition, these transactions included provision for further
support Diageo’s participation in the super-premium dark rum segment contingent consideration of up to $24 million in aggregate, linked to
for upfront cash consideration of €246 million ($261 million), deferred performance targets and a further deferred consideration of $5 million.
consideration of €4 million ($4 million) and contingent consideration of
up to €178 million ($189 million) through to 2028 subject to certain
financial performance targets, reflecting the brand’s expected growth
potential. The fair value of the contingent consideration of €82 million
($87 million) was estimated by calculating the present value of the

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Purchase of shares of non-controlling interests On 24 March 2023, Diageo completed the purchase of 14.97% of the (c) Assets and liabilities held for sale
On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC share capital of EABL for an aggregate consideration of KES 22,732 2024
to purchase the 50% of the share capital of DeLeon Holdco LLC that million ($173 million) in cash and transaction costs of $5 million. This $ million
Diageo did not already own for a total consideration of $223 million, took Diageo’s shareholding in EABL from 50.03% to 65%. EABL was Property, plant and equipment 52
including transaction costs. In connection with this acquisition, the already controlled and therefore consolidated prior to this transaction.
previously outstanding disputes between the shareholders were Transactions were recognised in retained earnings. Inventories 20
resolved and Diageo is now the 100% owner of the DeLeón brand. Trade and other receivables 10
(b) Sale of businesses and brands Deferred tax asset 18
Cash consideration received and net assets disposed of in respect of sale of businesses and brands in the three years ended 30 June 2024 were as Cash 30
follows: Assets held for sale 130
Windsor business Other 2024 2023 2022 Trade and other payables (44)
re-presented re-presented
$ million $ million $ million $ million $ million
Corporate tax (1)
Sale consideration Provisions (3)
Cash received 112 4 116 604 131 Liabilities held for sale (48)
(Cash)/overdraft disposed of (20) — (20) (16) 3 Total 82
Transaction and other directly attributable costs paid (4) (5) (9) (29) (32)
Net cash received 88 (1) 87 559 102 On 11 June 2024, Diageo announced the agreement to sell its 58.02% shareholding in Guinness Nigeria plc to N-Seven Nigeria Ltd., part of the
Tolaram group. The transaction is subject to among other things obtaining the requisite regulatory approvals in Nigeria. On completion, Guinness
Deferred consideration receivable 32 — 32 — — Nigeria plc will enter into long-term licence and royalty agreements for the continued production of the Guinness brand and its locally
Transaction and other directly attributable costs payable (13) (11) (24) (7) (22) manufactured Diageo ready-to-drink and mainstream spirits brands. The sale is considered to be highly probable as at 30 June 2024 and it is
expected to be completed in the year ending 30 June 2025. Consequently, the impacted assets and liabilities were classified as held for sale on 30
107 (12) 95 552 80
June 2024 and measured at cost as the lower of cost and fair value less cost of disposal. At 30 June 2024, cumulative translation losses recognised
Net assets disposed of in exchange reserves were $176 million, which will be recycled to the income statement at the completion of the transaction.
Brands (167) — (167) — —
9. Intangible assets
Goodwill — — — — (18)
Other non-current assets (3) — (3) (132) (14) Accounting policies
Assets and liabilities held for sale — — — (87) — Acquired intangible assets are held on the consolidated balance sheet at cost less accumulated amortisation and impairment losses.
Inventories (11) — (11) (35) (6) Acquired brands and other intangible assets are initially recognised at fair value if they are controlled through contractual or other legal
rights, or are separable from the rest of the business, and the fair value can be reliably measured. Where these assets are regarded as
Other working capital 3 — 3 85 21 having indefinite useful economic lives, they are not amortised.
Other borrowings — — — 2 1 Goodwill represents the excess of the aggregate of the consideration transferred, the value of any non-controlling interests and the fair
Corporate tax 2 — 2 (4) (6) value of any previously held equity interest in the subsidiary acquired over the fair value of the identifiable net assets. Goodwill arising on
acquisitions prior to 1 July 1998 was eliminated against reserves, and this goodwill has not been reinstated. Goodwill arising subsequent to 1
Deferred tax 37 — 37 6 (3) July 1998 has been capitalised.
Post-employment benefit liabilities — — — 5 — Amortisation and impairment of intangible assets is based on their useful economic lives and they are amortised on a straight-line basis
and reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. Goodwill and
(139) — (139) (160) (25)
intangible assets that are regarded as having indefinite useful economic lives are not amortised and are reviewed for impairment at least
Impairment charge recognised up until the date of sale — — — (3) — annually or when there is an indication that the assets may be impaired. Impairment reviews compare the net carrying value with the
Exchange recycled from other comprehensive income (26) — (26) (15) (143) recoverable amount (where recoverable amount is the higher of fair value less costs of disposal and value in use) and in case the net
carrying value exceeds the recoverable amount, an impairment charge is recognised. Amortisation and any impairment write downs are
(Loss)/gain on disposal before taxation (58) (12) (70) 374 (88) charged to other operating expenses in the income statement. It is reviewed at each reporting date whether there is any indication that an
Taxation 1 — 1 (37) (29) impairment loss recognised in prior periods for an asset other than goodwill either no longer exists or has decreased. Reversal of impairment
(Loss)/gain on disposal after taxation (57) (12) (69) 337 (117) loss is considered if the recoverable amount of the assets is constantly and significantly above the carrying value over an extended period.
The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss shall not exceed the carrying
On 27 October 2023, Diageo completed the sale of Windsor Global Co., Ltd. to PT W Co., Ltd., a Korean company sponsored by Pine Tree amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior
Investment & Management Co., Ltd. for a total consideration of KRW 206 billion ($152 million). The transaction resulted in a loss of $58 million in years. Any reversal of impairment loss is charged against the same income statement line on which the initial impairment was recorded.
the year ended 30 June 2024, which was recognised as a non-operating item attributable to the sale, including cumulative translation losses in the Computer software is amortised on a straight-line basis to estimated residual value over its expected useful life. Residual values and useful
amount of $26 million recycled to the income statement. lives are reviewed each year. Subject to these reviews, the estimated useful lives are up to eight years.
On 26 May 2023, Diageo completed the sale of Guinness Cameroun S.A., its brewery in Cameroon. The aggregate consideration for the
Critical accounting estimates and judgements
disposal was $475 million, the disposed net assets of $79 million mainly included property, plant and equipment and trade and other payables.
The transaction resulted in a non-operating exceptional gain of $343 million. The disposed Cameroon operations contributed net sales of Assessment of the recoverable amount of an intangible asset and the useful economic life of an asset are based on management's estimates.
$128 million (2022 – $165 million), and operating profit of $33 million (2022 – $36 million) in the year ended 30 June 2023. Impairment reviews are carried out to ensure that intangible assets, including brands, are not carried at above their recoverable amounts.
On 30 September 2022, Diageo completed the sale of the Popular brands of its USL business. The aggregate consideration for the disposal was Value in use and fair value less costs of disposal are both considered for these reviews and any impairment charge is based on these. The
$97 million, the disposed net assets included net working capital of $34 million and brands of $23 million, and $19 million goodwill was tests are dependent on management’s estimates in respect of the forecasting of future cash flows, the discount rates applicable to the future
derecognised. The transaction resulted in a non-operating exceptional gain of $5 million. Popular brands contributed net sales of $43 million (2022 cash flows and what expected growth rates are reasonable. Judgement is required in determining the cash-generating units. Such estimates
– $184 million), and operating profit of $6 million (2022 – $35 million) in the year ended 30 June 2023. and judgements are subject to change as a result of changing economic conditions and actual cash flows may differ from forecasts.
On 25 April 2022, Diageo sold its Ethiopian subsidiary, Meta Abo Brewery Share Company. A loss of $183 million was recognised as a non- Consideration of climate risk impact
operating item attributable to the sale, including cumulative translation losses in the amount of $143 million recycled to the income statement. The impact of climate risk on the future cash flows has also been considered for scenarios analysed in line with the climate change risk
On 10 May 2022, Diageo completed the sale of the Picon brand for an upfront consideration of €117 million ($123 million). The gain of assessment. The climate change scenario analyses performed in 2024 – conducted in line with TCFD recommendations (‘Transition
$112 million, net of disposal cost, was recognised as a non-operating item in the income statement. Scenario’ (RCP 2.6), a ‘Moderate Warming’ Scenario (RCP 4.5) and a ‘Severe Warming Scenario (RCP 8.5)) – identified no material financial
In the year ended 30 June 2023, ZAR 74 million ($4 million) (2022 – ZAR 133 million ($8 million)) of deferred consideration was paid to Diageo impact to the current year impairment assessments.
in respect of the sale of United National Breweries. The disposal was completed on 1 April 2020 for an aggregate consideration of ZAR 600 million
($34 million) from which ZAR 378 million ($22 million) was deferred.

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Other Computer (a) Brands Goodwill has arisen on the acquisition of businesses and includes
Brands
$ million
Goodwill
$ million
intangibles
$ million
software
$ million
Total
$ million The principal acquired brands, all of which are regarded as having synergies arising from cost savings, the opportunity to utilise Diageo’s
indefinite useful economic lives, are as follows: distribution network to leverage marketing of the acquired products
Cost and the extension of the group’s portfolio of brands in new markets
At 30 June 2022 (re-presented) 10,815 3,640 2,021 893 17,369 2024 2023
re-presented
around the world.
Principal markets $ million $ million
Hyperinflation adjustment 102 75 — — 177 (c) Other intangibles
Crown Royal whisky United States 1,464 1,464 Other intangibles principally comprise distribution rights. Diageo owns
Exchange differences (144) (168) 4 23 (285)
Captain Morgan rum Global 1,201 1,201 the global distribution rights for Ketel One vodka products in perpetuity,
Additions 402 109 15 187 713
Smirnoff vodka Global 824 824 and the Directors believe that it is appropriate to treat these rights as
Disposals — — — (31) (31) having an indefinite life for accounting purposes. The net book value at
Johnnie Walker whisky Global 790 787 30 June 2024 was $1,800 million (2023 – $1,800 million).
Reclassification from/(to) asset held for sale 517 (35) — — 482
Shui Jing Fang Chinese Greater
At 30 June 2023 (re-presented) 11,692 3,621 2,040 1,072 18,425 white spirit China 689 310 (d) Impairment testing
Hyperinflation adjustment 207 157 — 1 365 Impairment tests are performed annually, or more frequently if events
Casamigos tequila United States 604 604 or circumstances indicate that the carrying amount may not be
Exchange differences (146) (96) (30) 22 (250) Yenì raki Türkiye 426 313 recoverable. Recoverable amounts are calculated based on the value
Additions — — 17 150 167 McDowell's No.1 whisky, in use approach, also considering fair value less costs of disposal. The
Disposals (647) — (16) (20) (683) rum and brandy India 382 386 value in use calculations are based on discounted forecast cash flows
using the assumption that cash flows continue in perpetuity at the
At 30 June 2024 11,106 3,682 2,011 1,225 18,024 Don Papa rum Europe 353 355 terminal growth rate of each country or region. The individual brands,
Amortisation and impairment Don Julio tequila United States 277 296 other intangibles with indefinite useful lives and the associated
Aviation American Gin United States 264 264 property, plant and equipment are aggregated as separate cash-
At 30 June 2022 (re-presented) 1,261 872 105 730 2,968
generating units. Separate tests are carried out for each cash-
Exchange differences (15) (42) 3 11 (43) Seagram's 7 Crown generating unit and for each of the markets. Goodwill is attributed to
whiskey United States 223 223 each of the markets.
Amortisation for the year — — 20 48 68
Signature whisky India 219 222 The key assumptions used for the value in use calculations are as
Impairment 613 — — — 613 follows:
Zacapa rum Global 191 191
Disposals — — — (29) (29)
Black Dog whisky India 186 188 Cash flows
Reclassification from/(to) asset held for sale 358 (16) — — 342 Cash flows are forecasted for each cash-generating unit for the
Antiquity whisky India 182 184 financial years based on management's approved plans and reflect
At 30 June 2023 (re-presented) 2,217 814 128 760 3,919
Gordon's gin Europe 150 150 the following assumptions:
Exchange differences (22) (13) (29) 24 (40)
Bell's whisky Europe 128 128 • Cash flows are projected based on the actual operating results and
Amortisation for the year — — 19 58 77
Other brands 1,089 1,385 a three-year strategic plan approved by management. Cash flows
Impairment 128 21 — — 149 are extrapolated up to five years using expected growth rates in line
9,642 9,475 with management’s best estimates. Growth rates reflect expectations
Reversal of impairment (379) — — — (379)
of sales growth, operating costs and margin, based on past
Disposals (480) — (16) (20) (516) The brands are protected by trademarks which are renewable experience and external sources of information;
At 30 June 2024 1,464 822 102 822 3,210 indefinitely in all of the major markets where they are sold. There are • The five-year forecast period is extended by up to an additional ten
not believed to be any legal, regulatory or contractual provisions that years at acquisition date for some intangible assets and goodwill
Carrying amount limit the useful lives of these brands. The nature of the premium drinks when management believes that this period is justified by the
At 30 June 2024 9,642 2,860 1,909 403 14,814 industry is that obsolescence is not a common issue, with indefinite maturity of the market and expects to achieve growth in excess of
brand lives being commonplace, and Diageo has a number of brands the terminal growth rate driven by Diageo’s sales, marketing and
At 30 June 2023 (re-presented) 9,475 2,807 1,912 312 14,506
that were originally created more than 100 years ago. Accordingly, the distribution expertise. These cash flows beyond the five-year period
At 30 June 2022 (re-presented) 9,554 2,768 1,916 163 14,401 Directors believe that it is appropriate that the brands are treated as are projected using steady or progressively declining growth rates;
having indefinite lives for accounting purposes and are therefore not • Cash flows for the subsequent years after the forecast period are
amortised. extrapolated based on a terminal growth rate which does not
(b) Goodwill exceed the long-term annual inflation rate of the country or region.
For the purposes of impairment testing, goodwill has been attributed to
the following cash-generating units:
2024 2023
re-presented
$ million $ million

North America 968 968

Europe
Türkiye 370 271
Asia Pacific
Greater China 158 157
India 838 848
Latin America and Caribbean – Mexico 189 203
Other cash-generating units 337 360
2,860 2,807

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Discount rates In the year ended 30 June 2024, an impairment charge of 10. Property, plant and equipment
The discount rates used are the weighted average cost of capital which $101 million in respect of the Chase brand, the related goodwill and
reflect the returns on government bonds and an equity risk premium tangible fixed assets was charged to operating exceptional items. The
adjusted for the drinks industry specific to the cash-generating units. charge is mainly driven by the flavoured gin category slowdown in Accounting policies
The group applies post-tax discount rates to post-tax cash flows as the Great Britain. Value in use and fair value less costs of disposal Land and buildings are stated at cost less accumulated depreciation. Freehold land is not depreciated. Leaseholds are generally depreciated
valuation calculated using this method closely approximates to methodologies were both considered to assess the recoverable over the unexpired period of the lease. Other property, plant and equipment are depreciated on a straight-line basis to estimated residual
applying pre-tax discount rates to pre-tax cash flows. amount. The impairment reduced the tax liability by $19 million values over their expected useful lives, and these values and lives are reviewed each year. Subject to these reviews, the estimated useful lives
For goodwill, these assumptions are based on the cash-generating resulting in a net exceptional loss of $82 million. fall within the following ranges: buildings – 10 to 50 years; within plant and equipment casks and containers – 15 to 50 years; other plant and
unit or group of units to which the goodwill is attributed. For brands, In the year ended 30 June 2024, an impairment charge of equipment – 5 to 40 years; fixtures and fittings – 5 to 10 years; and returnable bottles and crates – 5 to 10 years.
they are based on a weighted average taking into account the country $54 million in respect of certain brands in the US ready to drink Reviews are carried out if there is an indication that assets may be impaired, to ensure that property, plant and equipment are not carried
or countries where sales are made. portfolio was recognised in exceptional operating items. The charge is at above their recoverable amounts.
The pre-tax discount rates and terminal growth rates used for mainly driven by the reduction in forecast cash flow assumptions due to
the reprioritisation of the portfolio and the more challenging Government grants
impairment testing are as follows:
macroeconomic environment. Value in use and fair value less costs of Government grants are not recognised until there is reasonable assurance that the group will comply with the conditions pursuant to which
2024 2023 disposal methodologies were both considered to assess the they have been granted and that the grants will be received. Government grants in respect of property, plant and equipment are deducted
Pre-tax Terminal Pre-tax Terminal recoverable amount. The value in use that was calculated exceeded from the asset that they relate to, reducing the depreciation expense charged to the income statement.
discount rate growth rate discount rate growth rate
% % % % the fair value less costs of disposal. The brand impairment reduced the
North America – deferred tax liability by $13 million. The recoverable amount is
United States 9 2 9 2 $49 million in respect of these US brands. Fixtures Returnable
Land and Plant and and bottles and Under
In the year ended 30 June 2023, an impairment charge of buildings equipment fittings crates construction Total
Europe $517 million in respect of the McDowell's brand and $29 million in $ million $ million $ million $ million $ million $ million
United Kingdom 9 2 9 2 respect of the Director’s Special brand were recognised in exceptional Cost
Türkiye 27 14 28 16 operating items, based on their value in use. The brand impairment At 30 June 2022 (re-presented) 3,210 6,365 150 656 1,053 11,434
reduced the deferred tax liability by $137 million. Hyperinflation adjustment 6 13 1 — 5 25
Asia Pacific In the year ended 30 June 2023, an additional impairment charge Exchange differences (66) (138) — (39) 30 (213)
India 12 3 14 4 of $67 million was recognised in exceptional operating items in respect Acquisitions 9 16 — 3 — 28
Greater China 10 2 11 2 of some brands where book value was not recoverable. The brand Sale of businesses (42) (180) (5) (66) (4) (297)
impairment reduced the deferred tax liability by $17 million. Additions
Latin America 133 257 16 60 998 1,464
and Caribbean (e) Sensitivity to change in key assumptions Disposals (78) (170) (15) (126) (2) (391)
Mexico 13 3 13 3 Impairment testing for the year ended 30 June 2024 has identified the Transfers 175 286 15 33 (509) —
following cash-generating units as being sensitive to reasonably Reclassification from assets held for sale 3 — 2 — — 5
In the year ended 30 June 2024, a reversal of an impairment charge of possible changes in assumptions. At 30 June 2023 (re-presented) 3,350 6,449 164 521 1,571 12,055
$379 million was recognised in exceptional operating items in respect The table below shows the headroom at 30 June 2024 and the Hyperinflation adjustment 48 70 2 12 16 148
of the Shui Jing Fang brand. The reversal increased the deferred tax impairment charge that would be required if the assumptions in the Exchange differences (74) (123) (3) (24) (50) (274)
liability by $95 million resulting in a net exceptional gain of calculation of their value in use were changed: Sale of businesses (1) (14) (3) — — (18)
$284 million of which $104 million was attributable to the non- 8pps decrease in annual Additions 207 383 15 30 911 1,546
controlling interest. The reversal is driven by a decrease in the pre-tax Carrying growth rate in forecast
Disposals (57) (189) (9) (19) (9) (283)
value of CGU Headroom period 2025-2030
discount rate and an increase in the forecast cash flow assumptions for $ million $ million $ million Transfers 169 679 11 13 (872) —
the brand primarily due to the continuation and acceleration of Reclassification to assets held for sale
Aviation American Gin 268 69 (108) (25) (97) — (19) (4) (145)
premiumisation driving sales growth in the baijiu category in China, the
At 30 June 2024 3,617 7,158 177 514 1,563 13,029
principal market of the brand. The net book value of the brand is
$689 million that is recoverable based on its value in use. Depreciation
At 30 June 2022 (re-presented) 907 2,921 94 436 — 4,358
Exchange differences (8) (95) — (22) — (125)
Depreciation charge for the year 150 323 16 40 — 529
Exceptional accelerated depreciation and impairment 38 49 — — — 87
Sale of businesses (26) (96) (2) (41) — (165)
Disposals (75) (156) (13) (124) — (368)
Reclassification from assets held for sale — — 1 — — 1
At 30 June 2023 (re-presented) 986 2,946 96 289 — 4,317
Exchange differences (20) (69) (3) (15) — (107)
Depreciation charge for the year 175 365 23 37 — 600
Exceptional accelerated depreciation and impairment 9 36 1 — — 46
Sale of businesses (1) (13) (3) — — (17)
Disposals (43) (156) (9) (20) — (228)
Reclassification to assets held for sale (8) (72) — (11) — (91)
At 30 June 2024 1,098 3,037 105 280 — 4,520
Carrying amount
At 30 June 2024 2,519 4,121 72 234 1,563 8,509
At 30 June 2023 (re-presented) 2,364 3,503 68 232 1,571 7,738
At 30 June 2022 (re-presented) 2,303 3,444 56 220 1,053 7,076

The net book value of land and buildings comprises freeholds of $1,970 million (2023 – $1,870 million), long leaseholds of $3 million (2023 – $3
million) and short leaseholds of $546 million (2023 – $491 million). Depreciation was not charged on $182 million (2023 – $177 million) of land.
Property, plant and equipment is net of a government grant of $185 million (2023 – $185 million) received in prior years in respect of the
construction of a rum distillery in the US Virgin Islands.

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11. Biological assets 12. Leases (c) Amounts recognised in the consolidated income 14. Post-employment benefits
statement
Accounting policies Accounting policies In the year ended 30 June 2024, other external charges (within other Accounting policies
operating items) included $70 million (2023 – $69 million) in respect
Biological assets held by the group consist of agave (Agave Azul Where the group is the lessee, all leases are recognised on the of leases of low value assets and short-term leases and $8 million (2023 The group’s principal post-employment funds are defined benefit
Tequilana Weber) plants. The harvested plants are used during balance sheet as right-of-use assets and depreciated on a – $5 million) in respect of variable lease payments. Refer to note 5 for plans. In addition, the group has defined contribution plans,
the production of tequila. The maturity cycle of agave ranges straight-line basis with the charge recognised in cost of sales or further information relating to the interest expense on lease liabilities. unfunded post-employment medical benefit liabilities and other
between six and eight years; based on this, biological assets are in other operating items depending on the nature of the costs. The total cash outflow for leases in the year ended 30 June 2024 unfunded defined benefit post-employment liabilities. For post-
classified as mature and immature. Mature biological assets are The liability, recognised as part of net borrowings, is measured at was $209 million (2023 – $209 million). employment plans other than defined contribution plans, the
measured at fair value less costs to sell on initial recognition and a discounted value and any interest is charged to finance amount charged to operating profit is the cost of accruing
at the end of each reporting period based on the present value charges. 13. Other investments pension benefits promised to employees over the year, plus any
of future cash flows discounted at an appropriate rate for The group recognises services associated with a lease as changes arising on benefits granted to members by the group
Mexico (income approach as per IFRS 13). Immature biological other operating expenses. Payments associated with leases during the year. Net finance charges comprise the net deficit/
assets are plants that have not reached the point of maturity where the value of the asset when it is new is lower than $5,000
Accounting policies surplus on the plans at the beginning of the year, adjusted for
because their sugar content yield and weight is not enough to be (leases of low value assets) and leases with a lease term of 12 Other investments are equity investments that are not classified cash flows in the year, multiplied by the discount rate for plan
harvested and there is no active market for such plants; months or less (short-term leases) are recognised as other as investments in associates or joint arrangements nor liabilities. The differences between the fair value of the plans’
consequently the Company accounts for these assets by operating expenses. A judgement in calculating the lease investments in subsidiaries. They are included in non-current assets and the present value of the plans’ liabilities are disclosed
applying fair valuation using the cost approach (replacement liability at initial recognition includes determining the lease term assets. Subsequent to initial measurement, other investments are as an asset or liability on the consolidated balance sheet. Any
cost). where extension or termination options exist. In such instances, stated at fair value. Gains and losses arising from the changes in differences due to changes in assumptions or experience are
any economic incentive to retain or end a lease are considered fair value are recognised in the income statement or in other recognised in other comprehensive income. The amount of any
and extension periods are only included when it is considered comprehensive income on a case-by-case basis. Accumulated pension fund asset recognised on the balance sheet is limited to
Changes in biological assets were as follows: reasonably certain that an option to extend a lease will be gains and losses included in other comprehensive income are any future refunds from the plan or the present value of
Biological exercised. not recycled to the income statement. Dividends from other reductions in future contributions to the plan.
assets
$ million
investments are recognised in the consolidated income Contributions payable by the group in respect of defined
statement. contribution plans are charged to operating profit as incurred.
Fair value (a) Movement in right-of-use assets Loans receivable are non-derivative financial assets that are not Critical accounting estimates and judgements
At 30 June 2022 (re-presented) 114 The company principally leases warehouses, office buildings, plant and classified as equity investments. They are subsequently
machinery, cars and distribution vehicles in the ordinary course of business. Application of IAS 19 requires the exercise of estimate and
Exchange differences 27 measured either at amortised cost using the effective interest
judgement in relation to various assumptions.
Transferred to inventories (10) method less allowance for impairment or at fair value with gains
Land and Plant and Diageo determines the assumptions on a country-by-country
buildings equipment Total and losses arising from changes in fair value recognised in the
Fair value change — $ million $ million $ million basis in conjunction with its actuaries. Estimates are required in
income statement or in other comprehensive income that are
At 30 June 2022 (re-presented) 426 257 683 respect of uncertain future events, including the life expectancy
Farming cost capitalised 66 recycled to the income statement on the de-recognition of the
of members of the funds, salary and pension increases, future
Exchange differences 13 (18) (5) asset. Allowances for expected credit losses are made based on
At 30 June 2023 (re-presented) 197 inflation rates, discount rates and employee and pensioner
the risk of non-payment taking into account ageing, previous
Exchange differences (13) Additions 53 45 98 demographics. The application of different assumptions could
experience, economic conditions and forward-looking data.
Reclassification from assets held have a significant effect on the amounts reflected in the income
Transferred to inventories (23) Such allowances are measured as either 12-months expected
for sale 2 1 3 statement, other comprehensive income and the balance sheet.
credit losses or lifetime expected credit losses depending on
Fair value change (17) There may be interdependencies between the assumptions.
Derecognition due to disposal of changes in the credit quality of the counterparty.
Where there is an accounting surplus on a defined benefit
Farming cost capitalised 55 business (1) (1) (2) plan, management judgement is necessary to determine
At 30 June 2024 199 Depreciation (67) (47) (114) Other whether the group can obtain economic benefits through a
At 30 June 2023 (re-presented) 426 237 663 Loans investments Total refund of the surplus or by reducing future contributions to the
At 30 June 2024, the number of agave plants was approximately $ million $ million $ million
plan.
32 million (2023 – 37 million), ranging from new plantations up to eight Exchange differences (6) (3) (9) Cost less allowances or fair value
year-old plants. Additions 106 60 166 At 30 June 2022 (re-presented) 21 24 45
Disposal (11) (2) (13) (a) Post-employment benefit plans
Additions 23 11 34 The group operates a number of pension plans throughout the world,
Depreciation (71) (50) (121) Repayments and disposals (3) — (3) devised in accordance with local conditions and practices. Diageo's
At 30 June 2024 444 242 686 Fair value adjustment — (5) (5) most significant plans are defined benefit plans and are funded by
payments to separately administered trusts or insurance companies.
Capitalised interest 2 — 2
(b) Lease liabilities The group also operates a number of plans that are generally
2024 2023 Impairment charged during the year — (2) (2) unfunded, primarily in the United States, which provide to employees
re-presented post-employment medical benefits.
$ million $ million At 30 June 2023 (re-presented) 43 28 71
The principal plans are in the United Kingdom, Ireland and the
Current lease liabilities (95) (94) Additions 18 9 27 United States where benefits are based on employees’ length of service
Non-current lease liabilities (509) (470) Repayments and disposals (17) — (17) and salary. All valuations were performed by independent actuaries
using the projected unit credit method to determine pension costs.
(604) (564) Fair value adjustment — (3) (3) The most recent funding valuations of the significant defined benefit
Capitalised interest 5 — 5 plans were carried out as follows:
The future cash outflows, which are not included in lease liabilities on
the balance sheet, in respect of extension and termination options Impairment reversed/(charged) Principal plans Date of valuation
which are not reasonably expected to be exercised are estimated at during the year 14 (3) 11
United Kingdom(1) 1 April 2021
$262 million (2023 – $329 million). At 30 June 2024 63 31 94 (2)
Ireland 31 December 2021
At 30 June 2024, loans comprise $6 million (2023 – $7 million; 2022 – United States 1 January 2023
$7 million) of loans to customers and other third parties, after
allowances of $138 million (2023 – $152 million; 2022 – $156 million), (1) The Diageo Pension Scheme (DPS, the UK Scheme) closed to new members in
and $57 million (2023 – $36 million; 2022 – $14 million) of loans to November 2005. Employees who joined Diageo in the United Kingdom between
November 2005 and January 2018, were eligible to become members of the Diageo
associates. Lifestyle Plan (a cash balance defined benefit plan) which was merged into the DPS in
July 2023. Since January 2018, new employees have been eligible to become

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members of a master trust defined contribution plan. The latest valuation as at 1 April The movements in the plan assets and liabilities for the two years The disclosures have been prepared in accordance with IFRIC 14. In Interest rate – The plan liabilities are determined using discount rates
2024 is currently underway and will be finalised during the course of the next financial ended 30 June 2024 are set out below: particular, where the calculation for a plan results in a surplus, the derived from yields on AA-rated corporate bonds. A decrease in
year.
(2) The Guinness Ireland Group Pension Scheme (GIGPS, the Irish scheme) closed to new recognised asset is limited to the present value of any available future corporate bond yields will increase plan liabilities though this will be
Plan Plan Net
members in May 2013. Employees who have joined Diageo in Ireland since the defined assets liabilities surplus refunds from the plan or reductions in future contributions to the plan, partially offset by an increase in the value of the bonds held by the
benefit scheme closed have been eligible to become members of a master trust $ million $ million $ million and any additional liabilities are recognised as required. At 30 June post-employment plans.
defined contribution plan. 2024, the DPS had a net surplus of $689 million (2023 – $742 million;
At 30 June 2022 (re-presented) 10,163 (8,753) 1,410 Mortality – The majority of the obligations are to provide benefits for the
The assets of the UK and Irish pension plans are held in separate trusts 2022 – $1,421 million) and the GIGPS had a net surplus of $332 million
Exchange differences 267 (238) 29 life of the members and their partners, so any increase in life
administered by trustees who are required to act in the best interests of (2023 – $328 million; 2022 – $267 million) and other schemes in a
Disposals — 5 5 expectancy will result in an increase in the plans’ liabilities.
the plans’ beneficiaries. For DPS, the trustee is Diageo Pension Trust surplus totalled $125 million (2023 – $140 million; 2022 – $191 million).
Limited. As required by legislation, one-third of the directors of the Trust Income/(charge) before taxation 357 (394) (37) The DPS and GIGPS surpluses have been recognised, with no provision Asset returns – Assets held by the pension plans are invested in a
are nominated by the members of the DPS, member nominated made against them, as they are expected to be recoverable through a diversified portfolio including equities, bonds and other assets. Volatility
Other comprehensive (loss)/income(1) (1,722) 942 (780) combination of a reduction in future cash contributions or ultimately via in asset values will lead to movements in the net deficit/surplus
directors are appointed from both the pensioner member community
and the active member community. For the Irish Scheme, Diageo Contributions by the group 121 — 121 a cash refund when the last member’s obligations have been met. reported in the consolidated balance sheet for post-employment plans
Ireland makes three nominations and appoints three further candidates which in addition will also impact the post-employment expense in the
Employee contributions 5 (5) — (b) Principal risks and assumptions consolidated income statement.
nominated by representative groupings.
Benefits paid (567) 567 — The material post-employment plans are not exposed to any unusual, The following weighted average assumptions were used to
The amounts charged to the consolidated income statement and
entity-specific or scheme-specific risks but there are general risks: determine the group’s deficit/surplus in the main post-employment
statement of comprehensive income for the group’s defined benefit At 30 June 2023 (re-presented) 8,624 (7,876) 748
plans for the three years ended 30 June 2024 are as follows: Inflation – The majority of the plans’ obligations are linked to inflation. plans at 30 June in the relevant year. The assumptions used to
Exchange differences (5) 4 (1) calculate the charge/credit in the consolidated income statement for
Higher inflation will lead to increased liabilities which is partially offset
2024 2023
re-presented
2022
re-presented
Income/(charge) before taxation 383 (425) (42) by the plans holding inflation linked gilts, swaps and caps against the the year ending 30 June are based on the assumptions disclosed as at
$ million $ million $ million
Other comprehensive (loss)/income (1)
(168) 87 (81) level of inflationary increases. the previous 30 June.
Current service cost and
Contributions by the group 97 — 97
administrative expenses (82) (91) (142) United Kingdom Ireland United States(1)

Past service gains/(losses) – ordinary Settlements (43) 43 — 2024

%
2023
%
2022
%
2024
%
2023
%
2022
%
2024
%
2023
%
2022
%
activities 3 (1) 46 Employee contributions 2 (2) — Rate of general increase in salaries(2) 3.6 3.7 3.6 3.7 3.9 3.8 — — —
Gains on curtailments and settlements — 2 44 Benefits paid (473) 473 — Rate of increase to pensions in payment 2.8 2.9 2.9 2.2 2.3 2.2 — — —
Charge to operating profit (79) (90) (52) At 30 June 2024 8,417 (7,696) 721 Rate of increase to deferred pensions 2.6 2.7 2.6 2.2 2.4 2.3 — — —
Net finance income in respect of post- Discount rate for plan liabilities 5.1 5.2 3.8 3.6 3.6 3.2 5.3 4.9 4.4
(1) Excludes surplus restriction.
employment plans 37 53 13 Inflation – CPI 2.6 2.7 2.6 2.3 2.5 2.4 2.3 2.2 2.3
Charge before taxation(1) (42) (37) (39) The plan assets and liabilities by type of post-employment benefit and Inflation – RPI 3.1 3.2 3.1 — — — — — —
country are as follows:
Actual returns less amounts included
(1) The salary increase assumption in the United States is not a significant assumption as only a minimal amount of members’ pension entitlement is dependent on a member’s projected
in finance income (168) (1,722) (1,904) 2024 2023 (re-presented)
final salary.
Experience gains/(losses) 24 (273) (46) Plan
assets
Plan
liabilities
Plan
assets
Plan
liabilities
(2) The salary increase assumptions include an allowance for age-related promotional salary increases.

Changes in financial assumptions 20 1,150 2,837 $ million $ million $ million $ million For the principal UK and Irish pension funds, the table below illustrates the expected age at death of an average worker who retires currently at the
Changes in demographic assumptions 43 65 (53) Pensions age of 65, and one who is currently aged 45 and subsequently retires at the age of 65:

Other comprehensive (loss)/income (81) (780) 834 United Kingdom 5,654 (5,028) 5,771 (5,094) United Kingdom(1) Ireland(2) United States
2024 2023 2022 2024 2023 2022 2024 2023 2022
Changes in the surplus restriction 5 9 (15) Ireland 1,954 (1,595) 1,999 (1,650) Age Age Age Age Age Age Age Age Age

Total other comprehensive (loss)/ United States 569 (534) 555 (516) Retiring currently at age 65
income (76) (771) 819 Other 216 (241) 227 (244) Male 86.8 86.8 87.1 87.2 87.2 87.7 85.7 85.6 85.5
(i) The year ended 30 June 2022 includes settlement gains of $36 million in respect of the
Post-employment medical 3 (266) 3 (288) Female 88.4 88.4 88.7 89.7 89.6 90.0 87.4 87.2 87.2
Enhanced Transfer Values (ETV) exercise carried out in the Irish Schemes and past Other post-employment 21 (32) 69 (84) Currently aged 45, retiring at age 65
service gains of $37 million as a result of the changes of the benefits in the Irish
Scheme. 8,417 (7,696) 8,624 (7,876) Male 88.1 88.1 88.5 88.8 88.8 89.3 87.2 87.1 87.0
(1) The (charge)/income before taxation is in respect of the following countries:
Female 90.5 90.4 90.7 91.4 91.3 91.7 88.9 88.7 88.6
The balance sheet analysis of the post-employment plans is as follows:
2024 2023 2022
re-presented re-presented (1) Based on the CMI’s S3 mortality tables with scaling factors based on the experience of the plan and where people live, with suitable future improvements.
$ million $ million $ million 2024 2023 (re-presented)
(2) Based on the CMI's S3 mortality tables with scaling factors based on the experience of the plan, with suitable future improvements.
Non- Non- Non- Non-
United Kingdom 5 19 (37) current current current current
assets(1) liabilities assets(1) liabilities For the significant assumptions, the following sensitivity analysis estimates the potential impacts on the consolidated income statement for the year
Ireland 3 1 61 $ million $ million $ million $ million ending 30 June 2025 and on the plan liabilities at 30 June 2024:
United States (35) (38) (42) Funded plans 1,146 (152) 1,210 (167) United Kingdom Ireland United States
Other (15) (19) (21) Unfunded plans — (277) — (304) Operating Profit after Plan Operating Profit after Plan Operating Profit after Plan
profit taxation liabilities(1) profit taxation liabilities(1) profit taxation liabilities(1)
(42) (37) (39) 1,146 (429) 1,210 (471) Benefit/(cost) $ million $ million $ million $ million $ million $ million $ million $ million $ million

Effect of 0.5% increase in discount rate 2 16 307 1 6 101 2 2 27

In addition to the charge in respect of defined benefit post-employment (1) Includes surplus restriction of $4 million (2023 – $9 million).
plans, contributions to the group’s defined contribution plans were $62 Effect of 0.5% decrease in discount rate (2) (16) (339) (1) (5) (112) (2) (2) (30)
million (2023 – $53 million; 2022 – $44 million). Effect of 0.5% increase in inflation (2) (9) (201) — (2) (62) (1) (1) (10)
Effect of 0.5% decrease in inflation 2 9 200 — 3 73 1 1 9
Effect of one year increase in life expectancy — (6) (162) — (2) (67) — (1) (17)

(1) The estimated effect on the liabilities excludes the impact of any interest rate and inflation swaps held by the pension plans.
(i) The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions and may not be representative of the actual change. Each
sensitivity is calculated on a change in the key assumption while holding all other assumptions constant. The sensitivity to inflation includes the impact on all inflation linked assumptions
(e.g. pension increases and salary increases where appropriate).

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(c) Investment and hedging strategy (d) Deficit funding arrangements

The investment strategy for the group’s funded post-employment plans is determined locally by the trustees of the plan and/or Diageo, as UK plans
appropriate, and it takes account of the relevant statutory requirements. The objective of the investment strategy is to achieve a target rate of return In the year ended 30 June 2011, the group established a Pension Funding Partnership (PFP) in respect of the UK Scheme. Whisky inventory was
in excess of the movement on the liabilities, whilst taking an acceptable level of investment risk relative to the liabilities. This objective is transferred into the partnership but the group retains control over the partnership which at 30 June 2024 held inventory with a book value of $648
implemented by using the funds of the plans to invest in a variety of asset classes that are expected over the long-term to deliver a target rate of million (2023 – $923 million). The partnership is fully consolidated in the group financial statements. The UK Scheme has a limited interest in the
return. The majority of the investment strategies have significant amounts allocated to bonds in order to provide protection against adverse partnership and, as a partner, is entitled to a distribution from the profits of the partnership. The arrangement is expected to cease in 2030, and
movements in the liabilities of the plans. This includes corporate bonds and bonds held under sale and repurchase agreements (repos) whereby contributions to the UK scheme in any year will be dependent on the funding position of the UK scheme at the previous 31 March. Given the surplus
the bond is provided as security for bank funding to enable the acquisition of additional bonds to increase the level of protection provided. Repos funding position in the DPS, there were no contributions to the DPS in the years ended 30 June 2024 and 30 June 2023.
are fully collateralised short-term agreements (typically up to 12 months in duration) and are a well-recognised investment practice as part of a risk In 2030, the group will be required, dependent upon the funding position of the UK Scheme at that time, to pay an amount not greater than the
management programme against interest rates or inflation risks. Under the UK Scheme, a significant amount of the repos are less than 3 months in actuarial deficit at that time, up to a maximum of £430 million ($542 million) in cash, to purchase the UK Scheme’s interest in the partnership. If the
duration. At 30 June 2024, approximately 95% and 100% (2023 – 97% and 98%) of the UK Scheme’s liabilities measured on the Trustee's funding UK Scheme is in surplus at an actuarial triennial valuation excluding the value of the PFP, then the group can exit the PFP with the agreement of the
basis (gilts+50bp) were protected against future adverse movements in interest rates and inflation respectively through the combined effect of trustees.
bonds and swaps. At 30 June 2024, approximately 90% and 112% (2023 – 92% and 112%) of the Irish plans’ liabilities measured on the Trustee's
funding basis (euro-swaps+50bp) were protected against future adverse movements in interest rates and inflation respectively through the Irish plans
combined effect of bonds and swaps. The 31 December 2021 triennial actuarial valuation of the Guinness Ireland Group Pension Scheme was completed during the year ended 30 June
The discount rates used are based on the yields of high-quality fixed income investments. For the UK plans, which represent approximately 65% 2023 showing the Scheme is fully funded on the Trustee’s ongoing funding basis and the statutory minimum funding standard basis. Given the fully
of total plan liabilities, the discount rate is determined by reference to the yield curves of AA-rated corporate bonds for which the timing and funded position, no deficit contributions were payable in the years ended 30 June 2024 and 30 June 2023. The company has agreed with the
amount of cash outflows are similar to those of the plans. A similar process is used to determine the discount rates used for the non-UK plans. Trustee on conditional contributions if there is a deficit in the Scheme on any of the next three valuation dates. These conditional contributions shall
An analysis of the fair value of the plan assets is as follows: be payable over the 3 years following the valuation and the aggregate payment will be equal to the ongoing deficit disclosed, subject to the caps
2024
set out below:
United Kingdom Ireland United States and other Total Valuation date
$ million $ million $ million $ million 31 December 2024 31 December 2027 31 December 2030
Quoted Unquoted Quoted Unquoted Quoted Unquoted Quoted Unquoted Total € million $ million € million $ million € million $ million
Equities 1 1,121 — 330 80 129 81 1,580 1,661 Maximum conditional contribution 35 33 39 36 39 36
Bonds
Fixed-interest government 943 25 — 60 62 10 1,005 95 1,100 (e) Timing of benefit payments
Inflation-linked government 2,112 495 — 111 — 2 2,112 608 2,720 The following table provides information on the timing of the benefit payments and the average duration of the defined benefit obligations and the
Investment grade corporate — 503 — 623 21 311 21 1,437 1,458 distribution of the timing of benefit payments:
Non-investment grade 4 448 5 346 — 146 9 940 949 United Kingdom Ireland United States

Loan securities — 421 — 107 — — — 528 528 2024 2023 2024 2023 2024 2023
re-presented re-presented re-presented
Liability Driven Investment (LDI) — — — 124 — — — 124 124 $ million $ million $ million $ million $ million $ million

Property - unquoted — 551 — 54 — 1 — 606 606 Maturity analysis of benefits expected to be paid
Hedge funds — — — — — 6 — 6 6 Within one year 311 382 88 92 64 72
Interest rate and inflation swaps — (1,126) 36 65 — — 36 (1,061) (1,025) Between 1 to 5 years 1,225 1,373 441 462 216 219
Cash and other 20 136 28 65 — 41 48 242 290 Between 6 to 15 years 3,123 3,073 870 916 456 417
Total bid value of assets 3,080 2,574 69 1,885 163 646 3,312 5,105 8,417
Between 16 to 25 years 2,948 2,827 748 813 297 260
2023 (re-presented) Beyond 25 years 3,378 3,357 816 941 230 236
United Kingdom Ireland United States and other Total Total 10,985 11,012 2,963 3,224 1,263 1,204
$ million $ million $ million $ million
years years years years years years
Quoted Unquoted Quoted Unquoted Quoted Unquoted Quoted Unquoted Total

Equities 15 1,155 — 365 81 125 96 1,645 1,741 Average duration of the defined benefit obligation 14 14 14 14 9 9
Bonds
The projected benefit payments are based on the assumptions underlying the assessment of the obligations, including inflation. They are disclosed
Fixed-interest government 739 189 — 8 60 10 799 207 1,006 undiscounted and therefore appear large relative to the discounted value of the plan liabilities recognised on the consolidated balance sheet. They
Inflation-linked government 1,286 1,393 — 121 2 2 1,288 1,516 2,804 are in respect of benefits that have accrued at the balance sheet date and make no allowance for any benefits to be accrued subsequently.
Investment grade corporate — 37 — 413 26 285 26 735 761 (f) Related party disclosures
Non-investment grade 27 364 7 234 2 168 36 766 802 Information on transactions between the group and its pension plans is given in note 21.
Loan securities 17 664 — 106 — — 17 770 787
Liability Driven Investment (LDI) — — — 102 — — — 102 102
Property - unquoted 36 582 — 79 — 1 36 662 698
Hedge funds — — — 15 — 6 — 21 21
Interest rate and inflation swaps — (1,224) 129 (22) — — 129 (1,246) (1,117)
Cash and other 128 363 6 436 — 86 134 885 1,019
Total bid value of assets 2,248 3,523 142 1,857 171 683 2,561 6,063 8,624

(i) The analyses of the fair value of plan assets has been amended to reflect the underlying asset categories of repurchase agreements. The presentation of fair value of the plan assets for
the year ended 30 June 2023 has been aligned with the presentation provided for the year ended 30 June 2024.
(ii) The asset classes include some cash holdings that are temporary. This cash is likely to be invested imminently and so has been included in the asset class where it is anticipated to be
invested in the long-term.
(iii) For the year ended 30 June 2024 the analyses of asset categories above includes $1,626 million (2023 - $2,213 million) in the United Kingdom, $1,060 million (2023 - $1,065 million) in
Ireland and $572 million (2023 - $558 million) in the United States held in unquoted pooled investment vehicles.

Total cash contributions by the group to all post-employment plans in the year ending 30 June 2025 are estimated to be approximately
$55 million.

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15. Working capital Inventories are disclosed net of provisions for obsolescence, an analysis (c) Trade and other payables
of which is as follows: 2024 2023 (re-presented)

Accounting policies 2024 2023

re-presented
2022
re-presented
Current
liabilities
Non-current
liabilities
Current
liabilities
Non-current
liabilities
$ million $ million $ million $ million
Inventories are stated at the lower of cost and net realisable $ million $ million $ million

value. Cost includes raw materials, direct labour and expenses, Balance at beginning of the year 128 113 133 Trade payables 3,071 — 3,351 —
an appropriate proportion of production and other overheads, Exchange differences (3) (27) (8) Interest payable 358 — 299 —
but not borrowing costs. Cost is calculated at the weighted
average cost incurred in acquiring inventories. All maturing Income statement charge 51 66 8 Tax and social security excluding income tax 724 — 796 —
inventories and raw materials are classified as current assets, as Utilised (47) (23) (18) Other payables 499 304 544 463
they are expected to be realised in the normal operating cycle Accruals 1,564 — 1,549 —
Sale of businesses (5) (1) (2)
which can be a period of several years.
124 128 113 Deferred income 84 — 92 —
Trade and other receivables are initially recognised at fair value
less transaction costs and subsequently carried at amortised cost Dividend payable 31 — 29 —
less any allowance for discounts and doubtful debts. Trade (b) Trade and other receivables Dividend payable to non-controlling interests 23 — 18 —
receivables arise from contracts with customers, and are
recognised when performance obligations are satisfied, and the
2024 2023 (re-presented) 6,354 304 6,678 463
Current Non-current Current Non-current
consideration due is unconditional as only the passage of time is assets assets assets assets
Interest payable at 30 June 2024 includes interest on non-derivative financial instruments of $291 million (2023 – $274 million). Accruals at 30 June
required before the payment is received. Allowance losses are $ million $ million $ million $ million
2024 include $764 million (2023 – $707 million) accrued discounts attributed to sales recognised. Deferred income represents amounts paid by
calculated by reviewing lifetime expected credit losses using Trade receivables 2,674 — 2,534 —
customers in respect of performance obligations not yet satisfied. The amount of contract liabilities recognised as revenue in the current year is
historic and forward-looking data on credit risk.
Interest receivable 31 — 15 — $92 million (2023 – $109 million). Non-current liabilities include the net present value of contingent consideration in respect of prior acquisitions of
Trade and other payables are initially recognised at fair value VAT recoverable and other $231 million (2023 – $369 million). For further information on contingent consideration, please refer to note 16 (g).
including transaction costs and subsequently carried at prepaid taxes 227 17 342 19
amortised costs. Contingent considerations recognised in Together with the group’s partner banks, supply chain financing (SCF) facilities are provided to suppliers in certain countries. These
business combinations are subsequently measured at fair value Other receivables 240 14 205 16 arrangements enable suppliers to receive funding earlier than the invoice due date at their discretion and at their own cost. Payment terms
through income statement. The group evaluates supplier Prepayments 274 7 288 4 continue to be agreed directly between the group and suppliers, independently from the availability of SCF facilities. Liabilities are settled in
arrangements against a number of indicators to assess if the accordance with the original due date of invoices. The group does not incur any fees or receive any rebates where the suppliers choose to utilise
Accrued income 41 — 43 — these facilities. The group has determined that it is appropriate to present amounts outstanding subject to SCF arrangements as trade payables.
liability has the characteristics of a trade payable or should be
classified as borrowings. This assessment considers the 3,487 38 3,427 39 Consistent with this classification, cash flows are presented either as operating cash flows or cash flows from investing activities, when related to the
commercial purpose of the facility, whether payment terms are acquisition of non-current assets. At 30 June 2024, the amount that has been subject to SCF and accounted for as trade payables was $847 million
similar to customary payment terms, whether the group is legally At 30 June 2024, approximately 21%, 16% and 9% of the group’s (2023 – $916 million).
discharged from its obligation towards suppliers before the end trade receivables of $2,674 million are due from counterparties based
(d) Provisions
of the original payment term, and the group’s involvement in in the United States, India and United Kingdom, respectively. Accrued
Thalidomide Other Total
agreeing terms between banks and suppliers. income primarily represents amounts receivable from customers in $ million $ million $ million
respect of performance obligations satisfied but not yet invoiced.
Provisions are liabilities of uncertain timing or amount. A At 30 June 2023 (re-presented) 212 244 456
provision is recognised if, as a result of a past event, the group The aged analysis of trade receivables, net of expected credit loss
Exchange differences — (3) (3)
has a present legal or constructive obligation that can be allowance, is as follows:
estimated reliably, and it is probable that an outflow of Provisions charged during the year — 61 61
2024 2023
economic benefits will be required to settle the obligation. re-presented Provisions utilised during the year (17) (103) (120)
Provisions are calculated on a discounted basis. The carrying $ million $ million
amounts of provisions are reviewed at each balance sheet date Transfers from other payables — (5) (5)
Not overdue 2,490 2,479
and adjusted to reflect the current best estimate. Unwinding of discounts 6 2 8
Overdue 1 – 30 days 43 32
At 30 June 2024 201 196 397
Overdue 31 – 60 days 31 8
(a) Inventories Current liabilities 17 80 97
Overdue 61 – 90 days 27 4
2024 2023 Non-current liabilities 184 116 300
re-presented Overdue 91 – 180 days 71 7
$ million $ million 201 196 397
Overdue more than 180 days 12 4
Raw materials and consumables 639 684
2,674 2,534 Provisions have been established in respect of the discounted value of the group’s commitment to the UK and Australian Thalidomide Trusts. These
Work in progress 118 166 provisions will be utilised over the period of the commitments up to 2037.
Maturing inventories 7,832 7,300 Increase in overdue balances in the year ended 30 June 2024 was The largest item in other provisions at 30 June 2024 is $54 million (2023 – $64 million) in respect of deferred employee compensation plans
driven by receivables against institutional customers with low credit risk which will be utilised when employees leave the group.
Finished goods and goods for resale 1,131 1,503
in certain countries.
9,720 9,653
Trade and other receivables are disclosed net of expected credit loss
Maturing inventories include whisk(e)y, rum, tequila and Chinese white allowance for doubtful debts, an analysis of which is as follows:
spirits. The following amounts of inventories can be utilised after more 2024 2023 2022
than one year: $ million
re-presented
$ million
re-presented
$ million
2024 2023 Balance at beginning of the year 112 143 154
re-presented
$ million $ million Exchange differences (3) (10) (12)
Raw materials and consumables 19 29 Income statement (release)/charge 8 (4) 28
Maturing inventories 5,885 5,119 Written off (22) (17) (27)
5,904 5,148 95 112 143

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Risk management and capital structure application of the Board-approved strategies. Transactions arising from
the application of this flexibility are carried at fair value, gains or losses
changes in the relevant fair value of the underlying hedged asset or
liability.
are taken to the income statement as they arise and are separately
The interest rate profile of the group's net borrowings is as follows:
monitored on a daily basis using Value at Risk analysis. In the years
Introduction ended 30 June 2024 and 30 June 2023, gains and losses on these 2024 2023
This section sets out the policies and procedures applied to manage the group’s capital structure and the financial risks the group is exposed to. transactions were not material. The group does not use derivatives for re-presented
Diageo considers the following components of its balance sheet to be capital: borrowings and equity. Diageo manages its capital structure to speculative purposes. All transactions in derivative financial instruments $ million % $ million %
achieve capital efficiency, provide flexibility to invest through the economic cycle and give efficient access to debt markets at attractive cost levels. are initially undertaken to manage the risks arising from underlying Fixed rate 16,174 77 15,071 77
business activities.
Floating rate(1) 4,384 21 4,064 21
16. Financial instruments and risk management The group purchases insurance for commercial or, where required,
for legal or contractual reasons. In addition, the group retains insurable Impact of financial
risk where external insurance is not considered an economic means of derivatives and fair value
Accounting policies
mitigating these risks. adjustments (145) (1) (117) (1)
Financial assets and liabilities are initially recorded at fair value including, where permitted by IFRS 9, any directly attributable transaction The Finance Committee receives a quarterly report on the key
costs. For those financial assets that are not subsequently held at fair value, the group assesses whether there is evidence of impairment at Lease liabilities 604 3 564 3
activities of the treasury department, however any exposures which
each balance sheet date. differ from the defined benchmarks are reported as they arise. Net borrowings 21,017 100 19,582 100
The group classifies its financial assets and liabilities into the following categories: financial assets and liabilities at amortised cost, financial
assets and liabilities at fair value through income statement and financial assets at fair value through other comprehensive income. (a) Currency risk (1) The floating rate portion of net borrowings includes cash and cash equivalents,
The accounting policies for other investments and loans are described in note 13, for trade and other receivables and payables in note 15 The group presents its consolidated financial statements in US dollar collaterals, floating rate loans and bonds and bank overdrafts.
and for cash and cash equivalents in note 17. and conducts business in many currencies. As a result, it is subject to The table below sets out the average monthly net borrowings and
Financial assets and liabilities at fair value through income statement include derivative assets and liabilities. Where financial assets or foreign currency risk due to exchange rate movements, which affects effective interest rate:
liabilities are eligible to be carried at either amortised cost or fair value through other comprehensive income, the group does not apply the the group’s transactions and the translation of the results and
fair value option. underlying net assets of its operations. To manage the currency risk, the Average monthly net borrowings Effective interest rate

Derivative financial instruments are carried at fair value using a discounted cash flow model based on market data applied consistently group uses certain financial instruments. Where hedge accounting is 2024 2023 2022
re-presented re-presented 2024 2023 2022
for similar types of instruments. Gains and losses on derivatives that do not qualify for hedge accounting treatment are taken to the income applied, hedges are documented and tested for effectiveness on an $ million $ million $ million % % %
statement as they arise. ongoing basis.
21,034 18,362 16,883 4.3 3.9 2.7
Other financial liabilities are carried at amortised cost unless they are part of a fair value hedge relationship when the amortised cost of Hedge of net investment in foreign operations
the financial liabilities are adjusted with the fair value change attributable to the risk being hedged from the inception of the hedge
The group hedges a certain portion of its exposure to fluctuations in the (i) For this calculation, net interest charge excludes fair value adjustments to derivative
relationship. The difference between the initial carrying amount of the financial liabilities and their redemption value is recognised in the financial instruments and average monthly net borrowings include the impact of
US dollar value of its foreign operations by designating borrowings
income statement over the contractual terms using the effective interest rate method. Financial liabilities in respect of the Zacapa acquisition interest rate swaps that are no longer in a hedge relationship but exclude the market
held in foreign currencies and using foreign currency spots, forwards,
are recognised at fair value. value adjustment for cross currency interest rate swaps.
swaps and other financial derivatives. For the year ended 30 June
Hedge accounting 2024, the group maintained the total net investment Value at Risk to (c) Commodity price risk
total net asset value below 20%, where Value at Risk is defined as the Commodity price risk is managed in line with the principles approved
The group designates and documents certain derivatives as hedging instruments against changes in fair value of recognised assets and by the Board either through long-term purchase contracts with suppliers
maximum amount of loss over a one-year period with a 95%
liabilities (fair value hedges), commodity price risk of highly probable forecast transactions, as well as the cash flow risk from a change in or, where appropriate, derivative contracts. The group policy is to
probability confidence level.
exchange or interest rates (cash flow hedges) and hedges of net investments in foreign operations (net investment hedges). Derivative maintain the Value at Risk of commodity price risk arising from
At 30 June 2024, foreign currency borrowings (euro, sterling) and
instruments designated in hedge relationship are included in other financial assets and liabilities on the consolidated balance sheet. The commodity exposures below 75 bps of forecast gross profit in any given
financial derivatives (Chinese yuan, euro, sterling) designated in net
effectiveness of such hedges is assessed at inception and at least on a quarterly basis, using prospective testing. Methods used for testing financial year. Where derivative contracts are used, the commodity
investment hedge relationships amounted to $3,198 million derivatives
effectiveness include critical terms, regression analysis and hypothetical derivative models. price risk exposure is hedged up to 24 months of forecast volume
and $8,109 million bonds (2023 – $806 million derivatives and $12,584
Fair value hedges are used to manage the currency and/or interest rate risks to which the fair value of certain assets and liabilities are million bonds). through exchange-traded and over-the-counter contracts (futures,
exposed. Changes in the fair value of the derivatives are recognised in the income statement, along with any changes in the relevant fair forwards and swaps) and cash flow hedge accounting is applied.
Hedge of foreign currency debt
value of the underlying hedged asset or liability. If such a hedge relationship no longer meets hedge accounting criteria, fair value
movements on the derivative continue to be taken to the income statement while any fair value adjustments made to the underlying hedged
The group uses cross currency interest rate swaps to hedge the foreign (d) Market risk sensitivity analysis
currency risk associated with certain foreign currency denominated The group uses a sensitivity analysis that estimates the impacts on the
item to that date are amortised through the income statement over its remaining life using the effective interest rate method.
borrowings. consolidated income statement and other comprehensive income of
Cash flow hedges are used to hedge the foreign currency risk of highly probable future foreign currency cash flows, the commodity price risk either an instantaneous increase or decrease of 0.5% in market interest
of highly probable future transactions, as well as the cash flow risk from changes in exchange or interest rates. The effective portion of the Transaction exposure hedging
rates or a 10% strengthening or weakening in US dollar against all
gain or loss on the hedges is recognised in other comprehensive income, while any ineffective part is recognised in the income statement. The group’s policy is to hedge forecast transactional foreign currency
other currencies, from the rates applicable for each class of financial
Amounts recorded in other comprehensive income are recycled to the income statement in the same period in which the underlying foreign risk on major currency pair exposures up to 24 months, targeting 75%
instruments on the consolidated balance sheet at these dates with all
currency, commodity or interest exposure affects the income statement. When a hedge relationship no longer meets the criteria for hedge coverage for the current financial year, and on other currency
other variables remaining constant. The sensitivity analysis excludes the
accounting, any cumulative gain or loss existing in equity is either transferred to the income statement or amortised over its remaining life exposures up to 18 months. The group’s exposure to foreign currency
impact of market risk on the net post-employment benefit liabilities and
using the effective interest rate method. risk arising principally on forecasted sales transactions is managed
assets, and corporate tax payable. This analysis is for illustrative
using forward agreements and options.
Net investment hedges utilise either foreign currency borrowings or derivatives as hedging instruments. Foreign exchange differences arising purposes only, as in practice interest and foreign exchange rates rarely
on translation of net investments are recorded in other comprehensive income and included in the exchange reserve. Liabilities used as (b) Interest rate risk change in isolation.
hedging instruments are revalued at closing exchange rates and the resulting gains or losses are also recognised in other comprehensive The group has an exposure to interest rate risk, arising principally on The sensitivity analysis estimates the impact of changes in interest
income to the extent that they are effective, with any ineffectiveness taken to the income statement. Foreign currency derivative contracts changes in US dollar, euro and sterling interest rates. To manage and foreign exchange rates. All hedges are expected to be highly
hedging net investments are carried at fair value. Effective fair value movements are recognised in other comprehensive income, with any interest rate risk, the group manages its proportion of fixed to floating effective for this analysis and it considers the impact of all financial
ineffectiveness taken to the income statement. Cost of hedging model is applied in case of cross-currency interest rate swaps in net rate borrowings within limits approved by the Board, primarily through instruments including financial derivatives, cash and cash equivalents,
investment hedges. The fair value changes attributable to the spot component of the hedging instruments are designated to offset foreign issuing fixed and floating rate borrowings, and by utilising interest rate borrowings and other financial assets and liabilities. The results of the
exchange differences of net investments and therefore taken to net investment hedge reserve. The fair value changes attributable to the swaps. These practices aim to minimise the group’s net finance charges sensitivity analysis should not be considered as projections of likely
forward component of the hedging instruments (including currency basis) is taken to the cost of hedging reserve and amortised to the with acceptable year-on-year volatility. To facilitate operational future events, gains or losses as actual results in the future may differ
consolidated income statement. efficiency and effective hedge accounting, for the year ended 30 June materially due to developments in the global financial markets which
2024 the group’s policy was to maintain fixed rate borrowings within a may cause fluctuations in interest and exchange rates to vary from the
band of 40% to 90% of forecast net borrowings. For these calculations, hypothetical amounts disclosed in the table below.
The group’s funding, liquidity and exposure to foreign currency, interest reviewed by the Finance Committee, chaired by the Chief Financial net borrowings exclude interest rate related fair value adjustments. The Comparative figures to currency risk sensitivity are not disclosed in
rate risks and commodity price risk are managed by the group’s Officer. The policies and guidelines include benchmark exposure and/ majority of the group’s existing interest rate derivatives are designated fiscal 24. Due to the functional currency change of the parent company
treasury department. The treasury department uses a range of financial or hedge cover levels for key areas of treasury risk which are as hedges and are expected to be effective. Fair value of these that is applied prospectively from 1 July 2023 (see note 1), it would not
instruments to manage these underlying risks. periodically reviewed by the Board following, for example, significant derivatives is recognised in the income statement, along with any be practicable to compare the re-presented results of the data prior to
Treasury operations are conducted within a framework of Board- business, strategic or accounting changes. The framework provides for the functional currency change with the results of the sensitivity analysis
approved policies and guidelines, which are recommended and limited defined levels of flexibility in execution to allow for the optimal for fiscal 24.

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Impact on income Impact on consolidated Financial credit risk Contractual cash flows
statement comprehensive income
gain/(loss) gain/(loss)(1) (2) Diageo aims to minimise its financial credit risk through the application Carrying
amount at
2024 2023 2024 2023
of risk management policies approved and monitored by the Board. Due within Due between Due between Due after balance
re-presented re-presented Counterparties are predominantly limited to investment grade banks 1 year 1 and 3 years 3 and 5 years 5 years Total sheet date
$ million $ million $ million $ million $ million $ million $ million $ million $ million $ million
and financial institutions, and policy restricts the exposure to any one
0.5% decrease in interest counterparty by setting credit limits taking into account the credit 2024
rates 22 19 43 43 quality of the counterparty. The group’s policy is designed to ensure Borrowings(1) (2,902) (4,991) (4,259) (9,812) (21,964) (21,501)
0.5% increase in interest that individual counterparty limits are adhered to and that there are no
rates (22) (19) (42) (41) significant concentrations of credit risk. The Board also defines the types Interest on borrowings(1)(2) (791) (1,043) (789) (1,866) (4,489) (291)
10% weakening of US of financial instruments which may be transacted. The credit risk arising Lease capital repayments (95) (148) (95) (266) (604) (604)
dollar(3) (39) — (974) — through the use of financial instruments for currency, interest rate and Lease future interest payments (19) (30) (22) (44) (115) —
commodity price risk management is estimated with reference to the
10% strengthening of US Trade and other financial liabilities (3)
(5,316) (280) (217) (5) (5,818) (5,619)
fair value of contracts with a positive value, rather than the notional
dollar(3) 33 — 813 —
amount of the instruments themselves. Diageo annually reviews the Non-derivative financial liabilities (9,123) (6,492) (5,382) (11,993) (32,990) (28,015)
(1) The impact on foreign currency borrowings and derivatives in net investment hedges is
credit limits applied and regularly monitors the counterparties’ credit
Cross currency swaps (gross)
largely offset by the foreign exchange difference arising on the translation of net quality reflecting market credit conditions.
investments. When derivative transactions are undertaken with bank Receivable 128 549 1,249 3,666 5,592
(2) The impact on the consolidated statement of comprehensive income includes the counterparties, the group may, where appropriate, enter into certain
impact on the income statement. Payable (126) (549) (1,303) (3,341) (5,319)
(3) In the year ended 30 June 2023, the impact of a 10% strengthening or weakening in
agreements with such bank counterparties whereby the parties agree
to post cash collateral for the benefit of the other if the net valuations of Other derivative instruments (net) (39) (139) (76) (33) (287)
sterling was £36 million gain and £45 million loss on the consolidated income
statement and £1,093 million gain and £1,336 million loss on the other comprehensive the derivatives are above a predetermined threshold. At 30 June 2024, Derivative instruments(2) (37) (139) (130) 292 (14) (23)
income. the collateral held under these agreements amounted to $(14) million 2023 (re-presented)
(e) Credit risk (2023 – $(19) million).
Borrowings(1) (2,152) (4,553) (3,754) (10,903) (21,362) (20,791)
Credit risk refers to the risk that a counterparty will default on its Business related credit risk (1)(2)
contractual obligations resulting in financial loss to the group. Credit Exposures from loans, trade and other receivables are managed Interest on borrowings (681) (945) (784) (1,894) (4,304) (274)
risk arises on cash balances (including bank deposits and cash and locally in the operating units where they arise and active risk Lease capital repayments (94) (131) (86) (253) (564) (564)
cash equivalents), derivative financial instruments and credit exposures management is applied, focusing on country risk, credit limits, ongoing Lease future interest payments (23) (35) (25) (48) (131) —
to customers, including outstanding loans, trade and other receivables, credit evaluation and monitoring procedures. There is no significant (3)
financial guarantees and committed transactions. concentration of credit risk with respect to loans, trade and other Trade and other financial liabilities (5,565) (291) (154) (121) (6,131) (6,025)
The carrying amount of financial assets of $5,221 million (2023 – receivables as the group has a large number of customers that are Non-derivative financial liabilities (8,515) (5,955) (4,803) (13,219) (32,492) (27,654)
$5,849 million) represents the group’s exposure to credit risk at the internationally dispersed.
balance sheet date as disclosed in section (i), excluding the impact of Cross currency swaps (gross)
any collateral held or other credit enhancements. A financial asset is in (f) Liquidity risk Receivable 55 109 109 1,690 1,963
default when the counterparty fails to pay its contractual obligations. Liquidity risk is the risk of Diageo encountering difficulties in meeting its Payable (35) (70) (70) (1,172) (1,347)
Financial assets are written off when there is no reasonable expectation obligations associated with financial liabilities that are settled by
of recovery. delivering cash or other financial assets. The group uses short-term Other derivative instruments (net) 24 (111) (99) (68) (254)
Credit risk is managed separately for financial and business related commercial paper to finance its day-to-day operations. The group’s Derivative instruments (2)
44 (72) (60) 450 362 168
credit exposures. policy with regard to the expected maturity profile of borrowings is to
According to the enforceable master netting agreements with limit the amount of such borrowings maturing within 12 months to 50% (1) For the purposes of these tables, borrowings are defined as gross borrowings excluding lease liabilities and fair value of derivative instruments as disclosed in note 17.
counterparties, in the event of default, derivative financial instruments (2) Carrying amount of interest on borrowings, interest on derivatives and interest on other payable is included within interest payable in note 15.
of gross borrowings less money market demand deposits, and the level
(3) Primarily consists of trade and other payables that meet the definition of financial liabilities under IAS 32.
with the same counterparty can be net settled. The table below shows of commercial paper to 30% of gross borrowings less money market
the Group’s financial assets and liabilities that could be subject to offset demand deposits. In addition, the group’s policy is to maintain The group had available undrawn committed bank facilities as follows: ranking and negative pledge covenants in respect of its material short-
in the balance sheet and the impact of a trigger for the enforcement of backstop facilities with relationship banks to support commercial paper and long-term borrowings throughout each of the years presented.
2024 2023
the master netting agreement after applying any existing collaterals. obligations.
The following tables provide an analysis of the anticipated $ million
re-presented
$ million (g) Fair value measurements
Gross Right of Right of
amount asset offset liability offset Net amount
contractual cash flows including interest payable for the group’s Fair value measurements of financial instruments are presented
$ million $ million $ million $ million Expiring within one year 625 125
financial liabilities and derivative instruments on an undiscounted basis. through the use of a three-level fair value hierarchy that prioritises the
2024 Expiring between one and two years 1,040 625 valuation techniques used in fair value calculations.
Where interest payments are calculated at a floating rate, rates of each
Derivative financial assets 483 (184) (139) 160 cash flow until maturity of the instruments are calculated based on the Expiring after two years 1,585 2,625 The group maintains policies and procedures to value instruments
forward yield curve prevailing at the respective year ends. The gross using the most relevant data available. If multiple inputs that fall into
Derivative financial 3,250 3,375 different levels of the hierarchy are used in the valuation of an
cash flows of cross currency swaps are presented for the purposes of
liabilities (486) 184 139 (163) instrument, the instrument is categorised on the basis of the least
this table. All other derivative contracts are presented on a net basis. The facilities can be used for general corporate purposes and, together
2023 Financial assets and liabilities are presented gross in the consolidated observable input.
with cash and cash equivalents, support the group’s commercial paper Foreign currency forwards and swaps, cross currency swaps and
Derivative financial assets 729 (294) (161) 274 balance sheet although, in practice, the group uses netting programmes.
arrangements to reduce its liquidity requirements on these instruments. interest rate swaps are valued using discounted cash flow techniques.
Derivative financial There are no financial covenants on the group’s material short- and These techniques incorporate inputs at levels 1 and 2, such as foreign
long-term borrowings. Certain of these borrowings contain cross default exchange rates and interest rates. These market inputs are used in the
liabilities (556) 294 161 (101) provisions and negative pledges. discounted cash flow calculation incorporating the instrument’s term,
The committed bank facilities are subject to a single financial notional amount and discount rate, and taking credit risk into account.
covenant, being minimum interest cover ratio of two times (defined as As significant inputs to the valuation are observable in active markets,
the ratio of operating profit before exceptional items, aggregated with these instruments are categorised as level 2 in the hierarchy.
share of after tax results of associates and joint ventures, to net interest Other financial liabilities include a put option, which does not have
charges). They are also subject to pari passu ranking and negative an expiry date, held by Industrias Licoreras de Guatemala (ILG) to sell
pledge covenants. the remaining 50% equity stake in Rum Creation & Products Inc., the
Any non-compliance with covenants underlying Diageo’s financing owner of the Zacapa rum brand, to Diageo. The liability is fair valued
arrangements could, if not waived, constitute an event of default with using the discounted cash flow method and as at 30 June 2024, an
respect to any such arrangements, and any non-compliance with amount of $198 million (30 June 2023 – $274 million) is recognised as a
covenants may, in particular circumstances, lead to an acceleration of liability with changes in the fair value of the put option included in
maturity on certain borrowings and the inability to access committed retained earnings. As the valuation of this option uses assumptions not
facilities. Diageo was in full compliance with its financial, pari passu

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observable in the market, it is categorised as level 3 in the hierarchy. As valued based on a discounted cash flow method using assumptions (h) Results of hedge relationships
at 30 June 2024, because it is unknown when or if ILG will exercise the not observable in the market. Contingent considerations are sensitive to The group targets a one-to-one hedge ratio. The strength of the economic relationship between the hedged items and the hedging instruments is
option, the liability is measured as if the exercise date is on the last day possible changes in assumptions; a 10% increase or 20% decrease in analysed on an ongoing basis. Ineffectiveness can arise from change in hedged balance sheet positions, group net investment positions, or
of the next financial year considering forecast future performance. The volume would increase or decrease the fair value of contingent subsequent change in the forecast transactions as a result of differences in timing, cash flows or value except when the critical terms of the hedging
option is not sensitive to reasonably possible changes in assumptions; if considerations linked to certain volume targets by approximately instrument and hedged item are closely aligned. Where applicable, the change in the credit risk of the hedging instruments or the hedged items is
the option were to be exercised as at 30 June 2026, the fair value of $25 million and $70 million, respectively, and a 10% increase or not expected to be the primary factor in the economic relationship.
the liability would not change. decrease in cash flows would increase or decrease the fair value of
Included in other financial liabilities, the contingent consideration on contingent considerations linked to certain financial performance Further to the foreign currency borrowings in net investment hedge relationships disclosed in note 16 (a), the notional amounts, contractual
acquisition of businesses represents the present value of payments up targets by approximately $30 million. maturities and rates of the hedging instruments designated in hedging relationships by the main risk categories are as follows:
to $273 million, which are expected to be paid over the next six years. There were no significant changes in the measurement and
Notional
Contingent considerations linked to certain volume targets at 30 June valuation techniques, or significant transfers between the levels of the amounts
2024 were $153 million (2023 – $279 million), mainly in respect of the financial assets and liabilities in the year ended 30 June 2024. $ million Maturity Range of hedged rates(1)

acquisition of Aviation American Gin and 21Seeds. Contingent The group’s financial assets and liabilities measured at fair value are 2024
considerations linked to certain financial performance targets at 30 categorised as follows:
Net investment hedges
June 2024 were $92 million (2023 – $112 million), mainly in respect of
Derivatives in net investment hedges of foreign operations 3,198 September 2024 - April 2043 sterling 0.53 - 0.78
the acquisition of Don Papa Rum. Contingent considerations are fair
euro 0.91 - 0.93
2024 2023 Chinese yuan 6.93 - 7.29
re-presented
$ million $ million Foreign currency borrowings in net investment hedges 8,109 September 2024 - June 2038 sterling 0.76 - 0.82
Derivative assets 497 748 euro 0.89 - 0.94
Derivative liabilities (486) (556) Cash flow hedges
Valuation techniques based on observable market input (Level 2) 11 192 Derivatives in cash flow hedge (foreign currency debt) 2,747 September 2028 - June 2034 euro 0.89 - 0.90
Derivatives in cash flow hedge (foreign currency risk) 1,855 September 2024 - sterling 0.78 - 0.94
Financial assets - other 333 249
December 2025 euro 0.87 - 0.93
Financial liabilities - other (443) (665) Mexican peso 17.73 - 20.57
Valuation techniques based on unobservable market input (Level 3) (110) (416) Derivatives in cash flow hedge (commodity price risk) 207 July 2024 - September 2025 Feed Wheat: 177.50 - 206.00 USD/Bu
Natural Gas: 0.86 - 1.40 USD/therm
In the year ended 30 June 2024 and 30 June 2023, the increase in financial assets - other of $84 million (2023 – the increase in financial asset -
Fair value hedges
other of $24 million) is principally in respect of acquisitions. The balance of financial assets - other is primarily made up of individually immaterial
convertible loans and share options in associates. Derivatives in fair value hedge (interest rate risk) 4,044 April 2025 - April 2030 EURIBOR 0.63 - 1.88%
The movements in level 3 liability instruments, measured on a recurring basis, are as follows: SOFR 1.38 - 3.09%

Contingent Contingent (1) In case of derivatives in cash flow hedges (commodity price risk and foreign currency risk), the range of the most significant contract’s hedged rates are presented.
consideration consideration
Zacapa
financial
recognised on
acquisition of
Zacapa
financial
recognised on
acquisition of
The below re-presented disclosures of the fiscal 23 sterling reporting currency group and the quoted rates are applicable to the risk exposures
liability businesses liability businesses observed by the group at the date of 30 June 2023. Accordingly, nominal amounts have been re-presented in US dollar, without adjustments to
2024 2024 2023 2023 rates achieved on hedges of exposures observed at the time. The change in functional currency at 1 July 2023 has fundamentally changed the
$ million $ million
re-presented
$ million
re-presented
$ million
group foreign currency exposures. This exposure set change resulted in a realignment of the group's financial risk management hedge portfolio,
but no change in overall risk management strategy.
At the beginning of the year (274) (391) (261) (449)
Notional
Net gains/(losses) included in the income statement — 145 (10) 145 amounts
re-presented
Net losses included in exchange in other comprehensive income — — — (4) $ million Maturity Range of hedged rates(1)
Net gains/(losses) included in retained earnings 73 — (19) — 2023 (re-presented)
Acquisitions — — — (92) Net investment hedges
Settlement of liabilities 3 1 16 9 Derivatives in net investment hedges of foreign 803 July 2023 US dollar 1.27
operations
At the end of the year (198) (245) (274) (391)
Foreign currency borrowings in net investment hedges 12,584 September 2023 - March 2032 euro 1.07 - 1.37
Cash flow hedges
Derivatives in cash flow hedge (foreign currency debt) 1,100 September 2036 - April 2043 US dollar 1.60 - 1.88
Derivatives in cash flow hedge (foreign currency risk) 2,185 September 2023 - US dollar 1.05 - 1.33,
December 2024 Mexican peso 14.76 - 18.38
Derivatives in cash flow hedge (commodity price risk) 273 July 2023 - September 2024 Feed Wheat: 183.75 - 240.00 USD/Bu
LME Aluminium: 2,248 - 3,399 USD/Mt
Fair value hedges
Derivatives in fair value hedge (interest rate risk) 5,038 September 2023 - April 2030 EURIBOR(0.01) - 1.88%
SOFR 2.38 - 2.39%
USDLIBOR 1.38 - 3.09%
(1) In case of derivatives in cash flow hedges (commodity price risk and foreign currency risk), the range of the most significant contract’s hedged rates are presented.

For hedges of the cash flow risk from a change in forward exchange rates using cross currency interest rate swaps, the retranslation of the related
bond principal to closing exchange rates and recognition of interest on the related bonds will affect the income statement in each year until the
related bonds mature in 2028, 2032 and 2034. Exchange retranslation and the interest on the hedged bonds in the income statement are
expected to offset those on the cross currency swaps in each of the years.

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In respect of cash flow hedging instruments, a gain of $13 million (2023 – $297 million gain; 2022 – $163 million gain) was recognised in other (i) Reconciliation of financial instruments
comprehensive income due to changes in fair value. A gain of $266 million was transferred out of other comprehensive income to other operating The table below sets out the group’s accounting classification of each class of financial assets and liabilities:
expenses and a loss of $152 million to other finance charges, respectively, (2023 – a gain of $16 million and a loss of $65 million; 2022 – a loss of
$57 million and a gain of $319 million) to offset the foreign exchange impact on the underlying transactions. A loss of $9 million (2023 – $39 million Fair value Assets and Not categorised
gain, 2022 – $61 million gain) was transferred out of other comprehensive income to operating profit in relation to commodity hedges. The notional through income liabilities at as a financial
statement amortised cost instrument Total Current Non-current
amount of hedged items recognised in the consolidated balance sheet in relation to hedges of cash flow risk arising from foreign currency debts $ million $ million $ million $ million $ million $ million
equals the notional value of the hedging instruments at 30 June 2024 and are included within borrowings. The notional amount for cash flow
2024
hedges of foreign currency debt at 30 June 2024 was $2,747 million (2023 – $1,100 million).
In respect of derivatives in net investment hedges, a gain of $12 million was recognised in other comprehensive income due to changes in fair Other investments and loans(1) 333 59 — 392 — 392
value. A gain of $27 million was transferred out of other comprehensive income to other finance charges. Trade and other receivables — 2,971 554 3,525 3,487 38
For cash flow hedges of forecast transactions at 30 June 2024, based on year end interest and exchange rates, a gain to the income statement
of $28 million in the year ending 30 June 2025 and a loss of $9 million in the year ending 30 June 2026 is expected to be recognised. Cash and cash equivalents — 1,130 — 1,130 1,130 —
In respect of hedges of foreign currency borrowings that are no longer applicable at 30 June 2024, a loss of $24 million (2023 – a loss of $22 Derivatives in cash flow hedge (foreign currency risk) 62 — — 62 58 4
million) was reported in reserves. There was no significant ineffectiveness on net investment and cash flow hedges during the years ended 30 June Derivatives in cash flow hedge (commodity price risk) 5 — — 5 5 —
2024 and 2023.
Out of the total exchange reserve $2,488 million (2023 - $2,418 million) is attributable to net investment hedges. Derivatives in net investment hedge 386 — — 386 17 369
The $4,044 million (2023 – $5,038 million) notional value of hedged items in fair value hedges equals to the notional value of hedging instruments Other instruments 275 — — 275 275 —
designated in these relationships at 30 June 2024 and the carrying amount of hedged items are included within borrowings in the consolidated
Total other financial assets 728 — — 728 355 373
balance sheet.
Total financial assets 1,061 4,160 554 5,775 4,972 803
The following table sets out information regarding the effectiveness of hedging relationships designated by the group, as well as the impacts on the
income statement and other comprehensive income: Borrowings(2) — (21,501) — (21,501) (2,885) (18,616)
Trade and other payables (245) (5,373) (1,040) (6,658) (6,354) (304)
Consolidated
At the beginning Consolidated income
statement of
comprehensive At the end Derivatives in fair value hedge (interest rate risk) (376) — — (376) (16) (360)
of the year statement income Other(2) of the year
$ million $ million $ million $ million $ million Derivatives in cash flow hedge (foreign currency debt) (32) — — (32) — (32)
2024 Derivatives in cash flow hedge (foreign currency risk) (35) — — (35) (14) (21)
Net investment hedges(1) Derivatives in cash flow hedge (commodity price risk) (14) — — (14) (14) —
Derivatives in net investment hedges of foreign operations — 22 (66) 411 367 Derivatives in net investment hedge (19) — — (19) (1) (18)
Foreign currency borrowings in net investment hedges (12,584) — (82) 4,557 (8,109) Other instruments (208) — — (208) (208) —
Cash flow hedges (1)
Leases — (604) — (604) (95) (509)
Derivatives in cash flow hedge (foreign currency debt) 438 (152) 94 (412) (32) Total other financial liabilities (684) (604) — (1,288) (348) (940)
Derivatives in cash flow hedge (foreign currency risk) 232 203 (205) (203) 27 Total financial liabilities (929) (27,478) (1,040) (29,447) (9,587) (19,860)
Derivatives in cash flow hedge (commodity price risk) (32) (9) 22 10 (9) Total net financial assets/(liabilities) 132 (23,318) (486) (23,672) (4,615) (19,057)
Fair value hedges(1) 2023 (re-presented)
Derivatives in fair value hedge (interest rate risk) (476) 100 — — (376) Other investments and loans(1) 249 38 2 289 — 289
Fair value hedge hedged item 469 (101) — — 368 Trade and other receivables — 2,815 651 3,466 3,427 39
Instruments in fair value hedge relationship (7) (1) — — (8) Cash and cash equivalents — 1,813 — 1,813 1,813 —
2023 (re-presented) Derivatives in cash flow hedge (foreign currency debt) 438 — — 438 — 438
Net investment hedges(1) Derivatives in cash flow hedge (foreign currency risk) 243 — — 243 186 57
Derivatives in net investment hedges of foreign operations (1) — 1 — — Derivatives in cash flow hedge (commodity price risk) 2 — — 2 2 —
Foreign currency borrowings in net investment hedges (10,558) — 499 (2,525) (12,584) Other instruments 249 — — 249 249 —
Cash flow hedges(1) Leases — 2 — 2 — 2
Derivatives in cash flow hedge (foreign currency debt) 444 (65) 90 (31) 438 Total other financial assets 932 2 — 934 437 497
Derivatives in cash flow hedge (foreign currency risk) (93) (20) 325 20 232 Total financial assets 1,181 4,668 653 6,502 5,677 825
Derivatives in cash flow hedge (commodity price risk) 60 39 (107) (24) (32) Borrowings(2) — (20,791) — (20,791) (2,142) (18,649)
Fair value hedges(1) Trade and other payables (391) (5,634) (1,116) (7,141) (6,678) (463)
Derivatives in fair value hedge (interest rate risk) (342) (113) (21) — (476) Derivatives in fair value hedge (interest rate risk) (476) — — (476) (8) (468)
Fair value hedge hedged item 335 115 19 — 469 Derivatives in cash flow hedge (foreign currency risk) (11) — — (11) (9) (2)
Instruments in fair value hedge relationship (7) 2 (2) — (7) Derivatives in cash flow hedge (commodity price risk) (34) — — (34) (33) (1)
Other instruments (309) — — (309) (309) —
(1) There was no significant ineffectiveness on net investment, cash flow hedges and fair value hedges during the years ended 30 June 2024 and 2023, accordingly the fair value
movement of the hedged items was materially similar and offsetting to the movement of the hedges. Leases — (564) — (564) (94) (470)
(2) Other movements include cash flows on result of matured derivatives, notional of bonds designated in or de-designated from net investment hedge and reclassification of hedging
instruments between hedge portfolios. Total other financial liabilities (830) (564) — (1,394) (453) (941)
Total financial liabilities (1,221) (26,989) (1,116) (29,326) (9,273) (20,053)
Total net financial liabilities (40) (22,321) (463) (22,824) (3,596) (19,228)

(1) Other investments and loans include those in respect of associates.

(2) Borrowings are defined as gross borrowings excluding lease liabilities and the fair value of derivative instruments.

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At 30 June 2024 and 30 June 2023, the carrying values of cash and 2024 2023 2024 2023 (a) Reconciliation of movement in net borrowings
cash equivalents, other financial assets and liabilities approximate fair $ million
re-presented
$ million $ million
re-presented
$ million 2024 2023
values. At 30 June 2024, the fair value of borrowings, based on re-presented
Bank overdrafts 21 45 Total borrowings before leases and derivative $ million $ million
unadjusted quoted market data, was $20,663 million (2023 – $19,707
Commercial paper 479 250 financial instruments 21,501 20,791 At beginning of the year 19,582 17,107
million).
Bank and other loans 76 153 Fair value of cross currency interest rate swaps (323) (438) Net decrease in cash and cash equivalents
(j) Capital management before exchange 596 831
Credit support obligations 14 19 Fair value of foreign currency swaps and
The group’s management is committed to enhancing shareholder forwards (11) 2
value in the long-term, both by investing in the business and brands so €600 million 0.125% bonds due 2023 — 646 Net increase in bonds and other borrowings (1)
453 958
as to deliver continued improvement in the return from those $500 million 3.5% bonds due 2023(2) — 500 Fair value of interest rate hedging instruments 376 476 Increase in net borrowings from cash flows 1,049 1,789
investments and by managing the capital structure. Diageo manages €500 million 0.5% bonds due 2024 — 537 Lease liabilities 604 564 Exchange differences on net borrowings 199 646
its capital structure to achieve capital efficiency, provide flexibility to
$600 million 2.125% bonds due 2024(2) 600 — Gross borrowings 22,147 21,395 Other non-cash items (2)
187 40
invest through the economic cycle and give efficient access to debt
markets at attractive cost levels. This is achieved by targeting an €500 million 1.75% bonds due 2024 535 — Less: Cash and cash equivalents (1,130) (1,813) Net borrowings at end of the year 21,017 19,582
adjusted net borrowings (net borrowings aggregated with post- €600 million 1% bonds due 2025 641 — Net borrowings 21,017 19,582
employment benefit liabilities) to adjusted EBITDA leverage of 2.5 - 3.0 €500 million 3.5% bonds due 2025 534 — (1) In the year ended 30 June 2024, net increase in bonds and other borrowings excludes
times, this range for Diageo being currently broadly consistent with an (1) SEC-registered debt issued on an unsecured basis by Diageo Investment Corporation, $1 million cash outflow in respect of derivatives designated in forward point hedges
Fair value adjustment to borrowings (15) (8) (2023 – $2 million).
A-band credit rating. Diageo would consider operating outside of this a 100% owned finance subsidiary of Diageo plc and fully and unconditionally
(2) In the year ended 30 June 2024, other non-cash items are principally in respect of fair
range in order to effect strategic initiatives within its stated goals, which Borrowings due within one year 2,885 2,142 guaranteed by Diageo plc. No other subsidiary of Diageo plc guarantees the security.
(2) SEC-registered debt issued on an unsecured basis by Diageo Capital plc, a 100% value gains of cross currency interest rate swaps and interest rate swaps of $111 million,
could have an impact on its rating. If Diageo’s leverage was to be $600 million 2.125% bonds due 2024(2) — 600 offsetting an increase in lease liabilities of $152 million, and fair value losses on
owned finance subsidiary of Diageo plc and fully and unconditionally guaranteed by
negatively impacted by the financing of an acquisition, it would seek €500 million 1.75% bonds due 2024 — 538 Diageo plc. No other subsidiary of Diageo plc guarantees the security. borrowings of $116 million, and $30 million reclassification of cash to assets held for
sale. In the year ended 30 June 2023, other non-cash items are principally in respect of
over time to return to the range of 2.5 – 3.0 times. The group regularly €600 million 1% bonds due 2025 — 644 (i) The interest rates shown are those contracted on the underlying borrowings before fair value gains of cross currency interest rate swaps and interest rate swaps of
assesses its debt and equity capital levels against its stated policy for $42 million, and an increase in lease liabilities of $99 million, partially offset by the
€500 million 3.5% bonds due 2025 — 537 taking into account any interest rate hedges (see note 16).
capital structure. As at 30 June 2024, the adjusted net borrowings of (ii) Bonds are stated net of unamortised finance costs of $95 million (2023 – $102 million). $101 million fair value loss on borrowings.
$21,446 million (2023 - $20,053 million) to adjusted EBITDA ratio was $500 million 5.2% bonds due 2025(2) 499 499 (iii) All bonds, medium-term notes and commercial paper issued on an unsecured basis by
3.0 (2023 - 2.7) times. For this calculation, net borrowings are adjusted $750 million 1.375% bonds due 2025(2) 749 748 the group’s 100% owned subsidiaries are fully and unconditionally guaranteed on an
(b) Analysis of gross borrowings by currency
by post-employment benefit liabilities before tax of $429 million (2023 - unsecured basis by Diageo plc and no other subsidiary of Diageo plc guarantees such 2024 2023
€850 million 2.375% bonds due 2026 908 913 securities.
$471 million) whilst adjusted EBITDA of $7,037 million (2023 - Cash and Cash and
€500 million floating bonds due 2026 535 — cash Gross cash Gross
$7,353 million) comprises operating profit excluding exceptional Gross borrowings before leases and derivative financial instruments are equivalents borrowings(1) equivalents borrowings(1)
operating items and depreciation, amortisation and impairment and £500 million 1.75% bonds due 2026 630 627 expected to mature as follows: re-presented re-presented
$ million $ million $ million $ million
includes share of after tax results of associates and joint ventures. $800 million 5.375% bonds due 2026(2) 797 —
The group aims to increase the dividend each year. The decision in 2024 2023 US dollar 130 (9,590) 682 (7,247)
$750 million 5.3% bonds due 2027(2) 748 748 re-presented
respect of the dividend is made with reference to the dividend cover, as $ million $ million Euro(2) 59 (5,820) 60 (4,870)
€750 million 1.875% bonds due 2027 800 805
well as current performance trends, including sales and profit after tax Within one year 2,885 2,142
together with cash generation. Diageo targets dividend cover (the ratio €500 million 1.5% bonds due 2027 534 537 Sterling 29 (4,767) 59 (7,846)
of basic earnings per share before exceptional items to dividend per €700 million 0.125% bonds due 2028 746 750 Between one and three years 4,873 4,437 Indian rupee 170 (57) 155 (39)
share) within the range of 1.8 - 2.2 times. For the year ended 30 June $500 million 3.875% bonds due 2028(2) 498 498 Between three and five years 4,222 3,620 Mexican peso 34 (261) 31 (361)
2024, dividend cover was 1.7 times. The recommended final dividend
for the year ended 30 June 2024, to be put to the shareholders for £300 million 2.375% bonds due 2028 377 375 Beyond five years 9,521 10,592 Hungarian forint 3 (21) 4 (329)
approval at the Annual General Meeting is 62.98 cents, an increase of $1,000 million 2.375% bonds due 2029(2) 993 992 21,501 20,791 Kenyan shilling 55 (295) 36 (318)
5% on the prior year final dividend. This would bring the £300 million 2.875% bonds due 2029 377 376
recommended full year dividend to 103.48 cents per share, an increase During the year, the following bonds were issued and repaid: Chinese yuan 258 (964) 251 (79)
€750 million 1.5% bonds due 2029 801 806
of 5% on the prior year. Nigerian naira — — 105 —
$1,000 million 2% bonds due 2030(2) 995 994
17. Net borrowings 2024 2023
re-presented
2022
re-presented Other (2)
392 (372) 430 (306)
€1,000 million 2.5% bonds due 2032 1,066 1,072 $ million $ million $ million
Accounting policies $750 million 2.125% bonds due 2032(2) 744 743 Issued Total 1,130 (22,147) 1,813 (21,395)
Borrowings are initially recognised at fair value net of transaction £400 million 1.25% bonds due 2033 500 499 € denominated 535 548 1,800 (1) Includes foreign currency forwards and swaps and leases.
costs and are subsequently reported at amortised cost. Certain $750 million 5.5% bonds due 2033(2) 744 744 (2) Includes $11 million (euro) cash and cash equivalents in cash-pooling arrangements
bonds are designated in fair value hedge relationship. In these £ denominated — — 1,171 (2023 – $26 million (euro)).
cases, the amortised cost is adjusted for the fair value of the risk $900 million 5.625% bonds due 2033(2) 894 —
$ denominated 1,690 1,989 —
being hedged, with changes in value recognised in the income €900 million 1.875% bonds due 2034 957 962
Repaid
statement. The fair value adjustment is calculated using a $400 million 7.45% bonds due 2035(1) 400 400
discounted cash flow technique based on unadjusted market $600 million 5.875% bonds due 2036(2) 594 594 € denominated (1,167) — (1,060)
data. $ denominated (500) (1,650) (1,000)
£600 million 2.75% bonds due 2038 752 750
Bank overdrafts form an integral part of the group’s cash $500 million 4.25% bonds due 2042(1) 495 495 558 887 911
management and are included as a component of net cash and
$500 million 3.875% bonds due 2043(2) 492 492
cash equivalents in the consolidated statement of cash flows.
Bank and other loans 344 372
Cash and cash equivalents comprise cash in hand and deposits
Fair value adjustment to borrowings (353) (461)
which are readily convertible to known amounts of cash and
which are subject to insignificant risk of changes in value and Borrowings due after one year 18,616 18,649
have an original maturity of three months or less, including
money market deposits, commercial paper and investments.
Net borrowings are defined as gross borrowings (short-term
borrowings and long-term borrowings plus lease liabilities plus
interest rate hedging instruments, cross currency interest rate
swaps and foreign currency forwards and swaps used to
manage borrowings) less cash and cash equivalents.

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18. Equity (c) Own shares Purchase of own shares (d) Dividends
Movements in own shares Authorisation was given by shareholders on 28 September 2023 to 2024 2023 2022
purchase a maximum of 224,704,974 ordinary shares at a minimum re-presented re-presented
Accounting policies Number Purchase
of shares consideration price of 28101/108 pence and a maximum price of the higher of (a) 105%
$ million $ million $ million

Own shares represent shares and share options of Diageo plc million $ million
of the average market value of the company's ordinary shares for the Amounts recognised as distributions to
that are held in treasury or by employee share trusts for the At 30 June 2021 (re-presented) 223 2,609 five business days prior to the day the purchase is made and (b) the equity shareholders in the year
purpose of fulfilling obligations in respect of various employee Retranslation impact of opening balances (1)
— (334) higher of the price of the last independent trade and the highest current Final dividend for the year ended 30
share plans or were acquired as part of a share buyback independent bid on the trading venue where the purchase is carried June 2023 59.98 cents per share
programme. Own shares are treated as a deduction from equity Share trust arrangements (2) (31) out. The programme expires at the conclusion of the next Annual (2022 – 52.71 cents; 2021 – 59.91
until the shares are cancelled, reissued or disposed of and when Shares used to satisfy options (2) (21) General Meeting or on 27 December 2024, if earlier. cents)(1) 1,349 1,200 1,398
vest are transferred from own shares to retained earnings at their Shares purchased - share buyback programme 61 2,985 Diageo completed a total of $1.0 billion return of capital during the Interim dividend for the year ended 30
weighted average cost. year ended 30 June 2024. This programme followed the successful June 2024 40.50 cents per share
Shares cancelled (61) (2,985) completion of Diageo's previous return of capital programme that
Share-based payments include share awards and options (2023 – 38.57 cents; 2022 – 38.38
granted to directors and employees. The fair value of equity At 30 June 2022 (re-presented) 219 2,223 ended on 2 June 2023, in which $0.6 billion of capital (announced as cents)(2) 894 871 888
settled share options and share grants is initially measured at (1) up to £0.5 billion on 26 January 2023) was returned to shareholders.
Retranslation impact of opening balances — 93 2,243 2,071 2,286
grant date based on Monte Carlo and Black Scholes models During the year ended 30 June 2024, the group purchased
and is charged to the income statement over the vesting period. Share trust arrangements (1) (15) 28 million ordinary shares (2023 – 38 million; 2022 – 61 million), (1) Re-presented at exchange rate prevailing at AGM's date (2023 - 49.17 pence per
representing approximately 1.1% of the issued ordinary share capital share; 2022 - 46.82 pence; 2021 - 44.59 pence).
For equity settled shares, the credit is included in retained Shares used to satisfy options (2) (15) (2) Re-presented at exchange date at the date of payment (2023 - 30.83 pence per share;
earnings. Cancellations of share options are treated as an (2023 – 1.5%; 2022 – 2.4%) at an average price of 2918 pence (3644 2022 - 29.36 pence). Interim dividend for the year ended 30 June 2024 was declared
Shares purchased - share buyback programme 38 1,673 cents) per share, and an aggregate cost of $987 million, including
acceleration of the vesting period and any outstanding charge is in USD.
recognised in operating profit immediately. Any surplus or deficit Shares cancelled (38) (1,673) transaction costs (2023 – 3616 pence (4382 cents) per share, and an
aggregate cost of $1,673 million, including $16 million of transaction The proposed final dividend of $1,398 million (62.98 cents per share)
arising on the sale of the Diageo plc shares held by the group is At 30 June 2023 (re-presented) 216 2,286 for the year ended 30 June 2024 was approved by a duly authorised
included as a movement in equity. costs; 2022 – 3709 pence (4842 cents) per share, and an aggregate
Share trust arrangements (2) (19) cost of $2,985 million, including $21 million of transaction costs) under committee of the Board of Directors on 29 July 2024. As this was after
Dividends are recognised in the financial statements in the year the share buyback programme. The shares purchased under the share the balance sheet date and the dividend is subject to approval by
in which they are approved. Shares used to satisfy options (2) (17)
buyback programmes were cancelled. shareholders at the Annual General Meeting, this dividend has not
Shares purchased - share buyback programme 28 987 been included as a liability in these consolidated financial statements.
The monthly breakdown of all shares purchased and the average
Shares cancelled (28) (987) price paid per share (excluding expenses) for the year ended 30 June There are no corporate tax consequences arising from this treatment.
(a) Allotted and fully paid share capital – ordinary shares of 2024 were as follows: Dividends are waived on all treasury shares owned by the company
At 30 June 2024 212 2,250
28101⁄108 pence each and all shares owned by the employee share trusts.
(1) Includes foreign translation differences arising on the retranslation of reserves due to the Number
Number Nominal of shares Average Authorised
of shares value change in the group’s presentation currency.
purchased under Total number of price purchases
million $ million share buyback shares paid unutilised at
Share trust arrangements Period programme purchased cents(2) month end
At 30 June 2022 re-presented 2,498 875 At 30 June 2024, the employee share trusts owned 3 million of ordinary July 2023 — — — 196,247,438
Retranslation impact of opening balances(1) — 36 shares in Diageo plc at a cost of $66 million and market value of
$97 million (2023 – 3 million shares at a cost of $66 million, market value August 2023 — — — 196,247,438
Shares cancelled (38) (13)
$127 million; 2022 – 2 million shares at a cost of $30 million, market value 1-28 September 2023 — — — 196,247,438
At 30 June 2023 (re-represented) 2,460 898 $76 million). Dividends receivable by the employee share trusts on the
shares are waived and the trustee abstains from voting. 29-30 September
Shares cancelled (28) (11) 2023(1) — — — 224,704,974
At 30 June 2024 2,432 887 October 2023 6,218,199 6,218,199 3768 218,486,775
(1) Includes foreign translation differences arising on the retranslation of reserves due to November 2023 4,396,943 4,396,943 3671 214,089,832
the change in the group’s presentation currency.
December 2023 2,521,196 2,521,196 3572 211,568,636
(b) Hedging and exchange reserve January 2024 3,328,361 3,328,361 3504 208,240,275
Hedging Exchange
reserve reserve Total February 2024 339,788 339,788 3737 207,900,487
$ million $ million $ million
March 2024 5,896,084 5,896,084 3685 202,004,403
At 30 June 2021 (re-presented) 150 (3,368) (3,218)
April 2024 4,475,478 4,475,478 3542 197,528,925
Other comprehensive loss (118) (521) (639)
May 2024 267,276 267,276 3440 197,261,649
Retranslation impact of opening
balances(1) — 619 619 June 2024 — — — 197,261,649

At 30 June 2022 (re-presented) 32 (3,270) (3,238) Total 27,443,325 27,443,325 3644 197,261,649

Other comprehensive income/(loss) 261 (256) 5 (1) New maximum number of purchasable shares was authorised by shareholders at the
AGM held on 28 September 2023.
Retranslation impact of opening (2) Based on daily transaction rates.
balances(1) — (173) (173)
At 30 June 2023 (re-presented) 293 (3,699) (3,406)
Other comprehensive loss (154) (613) (767)
At 30 June 2024 139 (4,312) (4,173)

(1) Includes foreign translation differences arising on the retranslation of reserves due to
the change in the group’s presentation currency.

Out of the total hedging reserve, $78 million represents the cost of
hedging arising from cross currency interest rate swaps in net
investment hedges.

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(e) Non-controlling interests (f) Employee share compensation For ROI employees, grants from 2021 were made under the Diageo
Diageo consolidates USL, a company incorporated in India, with a 42.79% non-controlling interest, Sichuan Shuijingfang Company Limited, a The group uses a number of share award and option plans to grant to 2020 Sharesave plan which is not an approved plan in the Republic of
company incorporated in China, with a 36.50% non-controlling interest and has a 50% controlling interest in Ketel One Worldwide B.V. (Ketel its directors and employees. Ireland. These plans are made available to UK and ROI employees
One), a company incorporated in the Netherlands. The annual fair value charge in respect of the equity settled plans who are employed on the annual results announcement date.
Summarised financial information for USL and other subsidiaries, after fair value adjustments on acquisition, and the amounts attributable to for the three years ended 30 June 2024 is as follows: Participants can save monthly, with deductions taken directly from net
non-controlling interests are as follows: pay, for a period of 3 or 5 years. In return, employees are granted the
2024 2023 2022
option to buy Diageo shares using the savings accrued at the end of
re-presented re-presented
2024 2023 2022
$ million $ million $ million
the relevant savings period and at a 20% discounted option price,
Total Total which is set at the time of grant. Provided participants fulfil the terms set
USL Others Total re-presented re-presented Executive share award plans 34 49 68
$ million $ million $ million $ million $ million out within the relevant UK or ROI tax approved scheme rules, any gains
Executive share option plans 7 4 5 from the option exercise are free from UK or ROI income tax. For the
Income statement
Savings plans 2 5 6 ROI Sharesave awards granted in 2021, 2022 and 2023, as these are
Sales 3,183 3,041 6,224 6,409 7,710 43 58 79 not made under a Revenue tax approved plan, the gains from the
Net sales 1,338 2,380 3,718 3,767 4,063 option exercise are subject to ROI income tax.
Executive share awards have been granted under the Diageo 2014 For US employees, the awards are made under the Diageo plc 2017
Profit for the year(1) 173 604 777 80 329 United States Employee Stock Purchase Plan. Employees agree to
Long-Term Incentive Plan (DLTIP) from September 2014 until September
Other comprehensive (loss)/income(2) (21) 5 (16) (172) (227) 2023 and are granted under the replacement plan, the Diageo 2023 make regular monthly savings for a period of one year and acquire
Total comprehensive income/(loss) 152 609 761 (92) 102 Long-Term Incentive Plan from March 2024 onwards to some American Depositary Receipts (ADRs) at 15% discounted price (which is
employees below the Board and from September 2024 to Executive set at the time of grant) using their contributions at the end of the plan
Attributable to non-controlling interests 65 212 277 (66) 46 Directors. Awards are granted as conditional awards in the form of cycle. They receive the benefit of tax relief if certain conditions are
Balance sheet performance shares, performance share options, time-vesting restricted satisfied.
stock units (RSUs) and/or time-vesting share options (or cash-based For the three years ended 30 June 2024, the calculation of the fair
Non-current assets(3) 1,336 4,405 5,741 5,354 6,071
equivalents in certain locations for regulatory reasons). Share options value of each share award used the Monte Carlo and Black Scholes
Current assets 1,172 1,373 2,545 2,316 2,422 are granted at the market value at the time of grant. Prior to the pricing model and the following assumptions:
Non-current liabilities (197) (1,577) (1,774) (1,656) (1,814) introduction of the DLTIP, employees in associated companies were
2023 2022
granted awards under the Diageo plc 2011 Associated Companies 2024 re-presented re-presented
Current liabilities (518) (1,220) (1,738) (1,788) (1,991)
Share Incentive Plan (DACSIP). In the case of Executive Directors, Risk free interest rate 4.7% 3.1% 0.4%
Net assets 1,793 2,981 4,774 4,226 4,688 conditional awards of time-vesting RSUs or forfeitable shares may be
awarded under the 2020 Deferred Bonus Share Plan (DBSP), with Expected life of the awards 33 months 35 months 40 months
Attributable to non-controlling interests 767 1,271 2,038 1,853 2,076
vesting not subject to any performance conditions and not subject to a Dividend yield 2.6% 2.0% 2.1%
Cash flow post-vesting retention period.
Weighted average share price 3118 p 3758 p 3545 p
Net cash inflow from operating activities 90 603 693 604 916 Share awards normally vest on the third anniversary of the grant
date. Participants do not make a payment to receive the award at Weighted average fair value of
Net cash outflow from investing activities (39) (172) (211) (236) (385) awards granted in the year(1) 1757 c 2318 c 3754 c
grant. Executive Directors are required to hold any vested shares
Net cash outflow from financing activities (32) (424) (456) (170) (428) awarded under DLTIP for a further two-year post-vesting holding period. Number of awards granted in
Net increase in cash and cash equivalents 19 7 26 198 103 Share options may normally be exercised between three and ten years the year 2.1 million 1.7 million 2.1 million
after the grant date. Executives in North America and Latin America Fair value of all awards granted
Exchange differences (2) (31) (33) (111) (23)
and Caribbean are granted awards over the company’s ADRs (one in the year $36 million $40 million $79 million
Dividends payable to non-controlling interests (15) (106) (121) (117) (95) ADR is equivalent to four ordinary shares).
(1) Based on transaction rate at grant date of the awards.
For Executive Directors, performance shares under the DLTIP (for
(1) Profit for the year includes exceptional operating expenses attributable to non-controlling interests. awards granted in 2020 and thereafter) are subject to the achievement
(2) Other comprehensive (loss)/income is principally in respect of exchange on translating the subsidiaries to US dollar.
Transactions on schemes
(3) Non-current assets include the global distribution rights for Ketel One vodka products worldwide. The carrying value of the distribution right at 30 June 2024 was $1,800 million (2023 – of three performance measures: 1) compound annual growth in profit Transactions on the executive share award plans for the three years
$1,800 million; 2022 – $1,800 million). before exceptional items over three years; 2) compound annual growth ended 30 June 2024 were as follows:
in organic net sales over three years; 3) environmental, social and
(i) On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC to purchase the 50% of the share capital of DeLeon Holdco LLC that Diageo North America, Inc did not already
own, whereby DeLeon Holdco LLC became a wholly-owned subsidiary of Diageo. governance (ESG) priorities, weighted 40%, 40% and 20% of the 2024
million
2023
million
2022
million
maximum respectively, as set out in the Directors’ remuneration report.
Performance share options under the DLTIP are subject to the Number of awards outstanding at
1 July 4.9 5.2 5.3
achievement of two equally weighted performance measures: 1) a
comparison of Diageo’s three-year TSR with a peer group; 2) Granted 2.1 1.7 2.1
cumulative free cash flow over a three-year period, measured at Awarded (1.8) (1.1) (1.1)
constant exchange rates. Performance measures and targets are set
annually by the Remuneration Committee. The vesting range is 20% Forfeited (0.4) (0.9) (1.1)
for Executive Directors, and 25% for other participants, for achieving Number of awards outstanding at
minimum performance targets, up to 100% for achieving the maximum 30 June 4.8 4.9 5.2
target level. Retesting of the performance measures is not permitted.
For performance shares under the DLTIP, dividends are accrued on The exercise price of share options outstanding at 30 June 2024 was in
awards and are released to participants to the extent that the awards the range of 1709 pence - 3854 pence (2023 – 1709 pence - 3864
vest at the end of the performance period. Dividend equivalents are pence; 2022 – 1704 pence - 4024 pence).
normally paid out in the form of shares. At 30 June 2024, 3.3 million share options were exercisable at a
Savings plans are provided in the form of a savings-related share weighted average exercise price of 2639 pence. Weighted average
option plan. For UK employees, awards were made under the Diageo remaining contractual life of share options was six years at 30 June
2010 Sharesave plan (for options granted up until 2020) and the 2024.
Diageo 2020 Sharesave plan (for options granted from 2021).
For Republic of Ireland (ROI) based employees, awards were made
under the Diageo 2009 Irish Sharesave Scheme (for options granted
up until 2019) and the Diageo 2019 Irish Sharesave Scheme (for options
granted in 2020). These are HMRC and Irish Revenue approved all-
employee savings plans.

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Other financial statements disclosures relation to Watson and CASL’s liability to repay DHN. The application
was successful resulting in Watson being ordered to pay approximately
submissions in the matter, including at a personal hearing before a
Deputy General Manager of SEBI. On 26 June 2019, SEBI issued an
$135 million plus various amounts in respect of interest to DHN, with order reiterating the directions contained in its previous notice dated 16
CASL being held liable as co-surety for 50% of any such amount June 2016. As with the previous SEBI notice, Diageo believes that SEBI's
Introduction unpaid by Watson. These amounts were, contrary to the relevant latest order is not consistent with applicable law. Diageo appealed
This section includes additional financial information that are either required by the relevant accounting standards or management considers these orders, not paid by the relevant deadlines and Watson and CASL’s against this order before SAT and, after a hearing in March 2023, SAT
to be material information for shareholders. remaining defences in the proceedings were struck out. Diageo and allowed Diageo’s appeal on 26 July 2023. Accordingly, SEBI’s order
DHN have accordingly sought asset disclosure and are considering dated 26 June 2019 stands quashed at present. Under applicable law,
19. Contingent liabilities and legal proceedings Diageo continues to believe that the acquisition price of INR 1,440 further enforcement steps against Watson and CASL, both in the United SEBI has filed an appeal against SAT’s order before the Supreme Court
per share paid to UBHL for the USL shares is fair and reasonable as Kingdom and in other jurisdictions where they are present or hold of India, which is scheduled to be heard in October 2024. However,
regards UBHL, UBHL’s shareholders and UBHL’s secured and assets. there can be no certainty as to its outcome or the timeframe within
Accounting policies unsecured creditors. However, adverse results for Diageo in the A trial of the remaining elements of these claims was due to which any such appeal would be concluded.
Provision is made for the anticipated settlement costs of legal or proceedings referred to above could, absent leave or relief in other commence on 21 November 2022. However, on 26 July 2021 Dr Mallya
other disputes against the group where it is considered to be proceedings, ultimately result in Diageo losing title to the 6.98% stake was declared bankrupt by the English High Court pursuant to a (e) USL’s dispute with IDBI Bank Limited
probable that a liability exists and a reliable estimate can be in USL acquired from UBHL. Diageo believes, including by reason of its bankruptcy petition presented by a consortium of Indian banks. Diageo Prior to the acquisition by Diageo of a controlling interest in USL, USL
made of the likely outcome. Where it is possible that a settlement rights under USL’s articles of association to nominate USL’s CEO and and the relevant members of its group have informed the Trustee in had prepaid a term loan taken through IDBI Bank Limited (IDBI), an
may be reached or it is not possible to make a reliable estimate CFO and the right to appoint, through USL, a majority of the directors Bankruptcy of their position as creditors in the bankruptcy and have Indian bank, which was secured on certain fixed assets and brands of
of the estimated financial effect, appropriate disclosure is made on the boards of USL’s subsidiaries as well as its ability as promoter to engaged with the Trustee regarding their claims and the status of the USL, as well as by a pledge of certain shares in USL held by the USL
but no provision created. nominate for appointment up to two-thirds of USL’s directors for so long current proceedings. An appeal by Dr Mallya against his bankruptcy Benefit Trust (of which USL is the sole beneficiary). The maturity date of
as the chairperson of USL is an independent director, that it would (and an appeal by the bank consortium against orders made in the the loan was 31 March 2015. IDBI disputed the prepayment, following
Critical accounting judgements and estimates remain in control of USL and would continue to be able to consolidate which USL filed a writ petition in November 2013 before the High Court
course of the bankruptcy proceedings) was scheduled to be heard in
Judgement is necessary in assessing the likelihood that a claim USL as a subsidiary for accounting purposes regardless of the outcome of Karnataka (the High Court) challenging the bank’s actions.
April 2024, but the court has vacated the hearing date. In light of the
will succeed, or a liability will arise, and an estimate to quantify of this litigation. Following the original maturity date of the loan, USL received
uncertainty posed by the ongoing bankruptcy appeals, the trial of
the possible range of any settlement. Due to the inherent There can be no certainty as to the outcome of the existing or any notices from IDBI seeking to recall the loan, demanding a further sum
Diageo’s claim, which was scheduled to take place in March 2025, is
uncertainty in this evaluation process, actual losses may be further related legal proceedings or the time frame within which they of INR 459 million ($6 million) on account of the outstanding principal,
expected to be deferred further based on the anticipated relisting of the
different from the liability originally estimated. The group may be would be concluded. accrued interest and other amounts, and also threatening to enforce
bankruptcy appeals.
involved in legal proceedings in respect of which it is not the security in the event that USL did not make these further payments.
(c) Continuing matters relating to Dr Vijay Mallya and At this stage, it is not possible to assess the extent to which the
possible to make a reliable estimate of any expected settlement. Pursuant to an application filed by USL before the High Court in the writ
affiliates various ongoing proceedings related to the bankruptcy will affect the
In such cases, appropriate disclosure is provided but no proceedings, the High Court directed that, subject to USL depositing
remaining elements of the claims by Diageo and the relevant members
provision is made and no contingent liability is quantified. On 25 February 2016, Diageo and USL each announced that they had such further amount with the bank (which amount was duly deposited
of its group.
entered into arrangements with Dr Mallya under which he had agreed by USL), the bank should hold the amount in a suspense account and
Upon completion of an initial inquiry in April 2015 into past improper
to resign from his position as a director and as chair of USL and from not deal with any of the secured assets including the shares until
transactions which identified references to certain additional parties
(a) Guarantees and related matters his positions in USL’s subsidiaries.
and matters, USL carried out an additional inquiry into these disposal of the original writ petition filed by USL before the High Court.
As of 30 June 2024, the group has no material unprovided guarantees Diageo’s agreement with Dr Mallya (the February 2016 Agreement) On 27 June 2019, a single judge bench of the High Court issued an
transactions (Additional Inquiry) which was completed in July 2016. The
or indemnities in respect of liabilities of third parties. provided for a payment of $75 million to Dr Mallya over a five-year order dismissing the writ petition filed by USL, amongst other things, on
Additional Inquiry, prima facie, identified transactions indicating actual
period of which $40 million was paid on the signing of the February the basis that the matter involved an issue of breach of contract by USL
(b) Acquisition of USL shares from UBHL and related 2016 Agreement with the balance being payable in equal instalments and potential diversion of funds from USL and its Indian and overseas
subsidiaries to, in most cases, entities that appeared to be affiliated or and was therefore not maintainable in exercise of the court’s writ
proceedings in relation to the USL transaction of $7 million a year over five years (2017-2021). All payments were
associated with Dr Mallya. All amounts identified in the Additional jurisdiction. USL filed an appeal against this order before a division
On 4 July 2013, Diageo completed its acquisition, under a share subject to and conditional on Dr Mallya’s compliance with the bench of the High Court, which on 30 July 2019 issued an interim order
agreement. The February 2016 Agreement also provided for the release Inquiry have been provided for or expensed in the financial statements
purchase agreement with United Breweries (Holdings) Limited (UBHL) of USL or its subsidiaries in the respective prior periods. USL has filed directing the bank to not deal with any of the secured assets until the
and various other sellers (the SPA), of shares representing 14.98% in of Dr Mallya’s personal obligations to indemnify Diageo Holdings
recovery suits against relevant parties identified pursuant to the next date of hearing. On 13 January 2020, the division bench of the
USL, including shares representing 6.98% from UBHL. The SPA was Netherlands B.V. (DHN) in respect of its earlier liability ($141 million)
under a backstop guarantee of certain borrowings of Watson Limited Additional Inquiry. High Court admitted the writ appeal and extended the interim stay.
signed on 9 November 2012 as part of the transaction announced by Further, at this stage, it is not possible for the management of USL to This appeal is currently pending. Based on the assessment of USL’s
(Watson) (a company affiliated with Dr Mallya).
Diageo in relation to USL on that day (the Original USL Transaction). estimate the financial impact on USL, if any, arising out of potential management supported by external legal opinions, USL continues to
On account of various breaches and other provisions of agreements
Following a series of further transactions, as of 30 June 2024, Diageo non-compliance with applicable laws in relation to such fund believe that it has a strong case on the merits and therefore continues
between Dr Mallya and persons connected with him and Diageo and/
has a 55.88% investment in USL (excluding 2.38% owned by the USL diversions. to believe that the secured assets will be released to USL and the
or USL, Diageo did not make the five instalment payments due during
Benefit Trust). aforesaid amount of INR 459 million ($6 million) remains recoverable
the five-year period between 2017 and 2021. In addition, Diageo has
Prior to the acquisition from UBHL on 4 July 2013, the High Court of
also demanded that Dr Mallya repay the $40 million paid by Diageo in
(d) Other matters in relation to USL from IDBI.
Karnataka (High Court) had granted leave to UBHL under the Indian In respect of the Watson backstop guarantee arrangements, the
February 2016 and sought compensation for various losses incurred by (f) Tax
Companies Act 1956 (the Leave Order) to enable the sale by UBHL to Securities and Exchange Board of India (SEBI) issued a notice to
the relevant members of the Diageo group. The international tax environment has seen increased scrutiny and
Diageo to take place (the UBHL Share Sale) notwithstanding the Diageo on 16 June 2016 that if there is any net liability incurred by
On 16 November 2017, Diageo and other relevant members of the rapid change over recent years bringing with it greater uncertainty for
continued existence of certain winding-up petitions that were pending Diageo (after any recovery under relevant security or other
Diageo group commenced claims in the High Court of Justice in multinationals. Against this backdrop, Diageo has been monitoring
against UBHL on the date of the SPA. At the time of the completion of arrangements, which matters remain pending) on account of the
England and Wales (the English High Court) against Dr Mallya in developments and continues to engage transparently with the tax
the UBHL Share Sale, the Leave Order remained subject to review on Watson backstop guarantee, such liability, if any, would be considered
relation to these matters. At the same time DHN also commenced authorities in the countries where it operates to ensure that the group
appeal. However, as stated by Diageo at the time of closing, it was to be part of the price paid for the acquisition of USL shares under the
claims in the English High Court against Dr Mallya, his son Sidhartha manages its arrangements on a sustainable basis.
considered unlikely that any appeal process in respect of the Leave SPA which formed part of the Original USL Transaction and that, in that
Mallya, Watson and Continental Administration Services Limited The group operates in a large number of markets with complex tax
Order would definitively conclude on a timely basis and, accordingly, case, additional equivalent payments would be required to be made to
(CASL) (a company affiliated with Dr Mallya and understood to hold and legislative regimes that are open to subjective interpretation. In the
Diageo waived the conditionality under the SPA relating to the absence those shareholders (representing 0.04% of the shares in USL) who
assets on trust for him and certain persons affiliated with him) for in context of these operations, it is possible that tax exposures which have
of insolvency proceedings in relation to UBHL and acquired the 6.98% tendered in the open offer made as part of the Original USL
excess of $142 million (plus interest) in relation to Watson’s liability to not yet materialised (including those which could arise as part of tax
stake in USL from UBHL at that time. Transaction. Diageo believes that the Watson backstop guarantee
DHN in respect of its borrowings referred to above and the breach of assessments) may result in losses to the group. Where the potential tax
Following appeal and counter-appeal in respect of the Leave Order, arrangements were not part of the price paid or agreed to be paid for
associated security documents. Dr Mallya, Sidhartha Mallya and the exposures are known to us and may lead to a possible material
this matter is now before the Supreme Court of India which has issued any USL shares under the Original USL Transaction and that therefore
relevant affiliated companies filed a defence to these claims, and Dr outflow, the group assesses the disclosure of such matters as contingent
an order that the status quo be maintained with regard to the UBHL SEBI's decision was not consistent with applicable law, and Diageo
Mallya also filed a counterclaim for payment of the two instalment liabilities, taking into account both assessed and unassessed amounts
Share Sale pending a hearing on the matter before it. Following a appealed against it before the Securities Appellate Tribunal, Mumbai
payments that had by that time been withheld as described above. (if any), their size and nature, relevant regulatory requirements and
number of adjournments, the next date for a substantive hearing is yet (SAT). On 1 November 2017, SAT issued an order in respect of Diageo’s
Diageo continues to prosecute its claims and to defend the potential prejudice of the future resolution or assessment thereof.
to be fixed. appeal in which, amongst other things, it observed that the relevant
counterclaim. As part of these proceedings, Diageo and the other Diageo has a large number of ongoing tax cases in Brazil and India, for
In separate proceedings, the High Court passed a winding-up order officer at SEBI had neither considered Diageo’s earlier reply nor
relevant members of its group filed an application for strike out and/or which contingent liabilities are disclosed on the basis of the current known
against UBHL on 7 February 2017, and appeals filed by UBHL against provided Diageo with an opportunity to be heard, and accordingly
summary judgement in respect of certain aspects of the defence filed possible exposure from tax assessment values. While not all of these cases
that order have since been dismissed, initially by a division bench of the directed SEBI to pass a fresh order after giving Diageo an opportunity
by Dr Mallya and the other defendants, including their defence in are individually significant, the current aggregate known possible exposure
High Court and subsequently by the Supreme Court of India. to be heard. Following SAT’s order, Diageo made its further

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from tax assessment values is up to approximately $853 million for Brazil Transactions and balances with associates and joint ventures are set 22. Principal group companies
and up to approximately $118 million for India. The group believes that the out in the table below:
The companies listed below include those which principally affect the profits and assets of the group. The operating companies listed below may
likelihood that the tax authorities will ultimately prevail is lower than
2024 2023 2022 carry on the business described in the countries listed in conjunction with their subsidiaries and other group companies.
probable but higher than remote. Due to the fiscal environment in Brazil
re-presented re-presented
and in India, the possibility of further tax assessments related to the same $ million $ million $ million Percentage of
Country of equity
matters cannot be ruled out and the judicial processes may take extended Income statement items incorporation Country of operation owned(1) Business description
periods to conclude. Based on its current assessment, Diageo believes that
Sales 14 13 15 Subsidiaries
no provision is required in respect of these issues.
Payments were made under protest in India in respect of the periods Purchases 73 16 42 Diageo Ireland Unlimited Ireland Worldwide 100% Production, marketing and distribution of premium drinks
Company
1 April 2006 to 31 March 2019 in relation to tax assessments where the Balance sheet items
risk is considered to be remote or possible. These payments have to be Group payables 2 3 2 Diageo Great Britain Limited England Great Britain 100% Marketing and distribution of premium drinks
made in order to be able to challenge the assessments and as such Group receivables 2 2 2 Diageo Scotland Limited Scotland Worldwide 100% Production, marketing and distribution of premium drinks
have been recognised as a receivable in the group's balance sheet.
The total amount of payments under protest recognised as a receivable Loans receivable 355 254 212 Diageo Brands B.V. Netherlands Worldwide 100% Marketing and distribution of premium drinks
as at 30 June 2024 is $159 million (corporate tax payments of Cash flow items Diageo North America, Inc. United States Worldwide 100% Production, importing, marketing and distribution of premium drinks
$146 million and indirect tax payments of $13 million). Loans and equity contributions, net 134 112 86 United Spirits Limited (2)
India India 55.88% Production, importing, marketing and distribution of premium drinks
(g) UK pension fund Other disclosures in respect of associates and joint ventures are Diageo Capital plc (3)
Scotland United Kingdom 100% Financing company for the group
In June 2023, the UK High Court (Virgin Media Limited v NTL Pension included in note 6. Diageo Capital B.V.(3) Netherlands Netherlands 100% Financing company for the group
Trustees II Limited) ruled that certain historical amendments for
(c) Key management personnel Diageo Finance plc (3)
England United Kingdom 100% Financing company for the group
contracted out defined benefit schemes were invalid if they were not
accompanied by the correct actuarial confirmation. Following a The key management of the group comprises the Executive and Non-
Executive Directors, the members of the Executive Committee and the Diageo Investment Corporation United States United States 100% Financing company for the US group
hearing in late June 2024, the UK Court of Appeal issued judgment on
25 July 2024 upholding this ruling. The group and its UK pension Company Secretary. They are listed under ‘Board of Directors and Mey İçki Sanayi ve Ticaret A.Ş. Türkiye Türkiye 100% Production, marketing and distribution of premium drinks
scheme trustee are reviewing this development and considering any Company Secretary’ and ‘Executive Committee’. Associates
implications for the UK pension fund. 2024 2023 2022 Moët Hennessy, SAS(4) France France 34% Production, marketing and distribution of premium drinks
(h) Other $ million
re-presented
$ million
re-presented
$ million
(1) All percentages, unless otherwise stated, are in respect of holdings of ordinary share capital and are equivalent to the percentages of voting rights held by the group.
The group has extensive international operations and routinely makes
Salaries and short-term employee (2) Percentage ownership excludes 2.38% owned by the USL Benefit Trust.
judgements on a range of legal, customs and tax matters which are benefits 12 13 13 (3) Directly owned by Diageo plc.
incidental to the group's operations. Some of these judgements are or (4) French limited liability company.
may become the subject of challenges and involve proceedings, the Annual incentive plan 4 7 17
Non-Executive Directors’ fees 2 2 2 See pages 220 to 225 for a complete list of subsidiary undertakings, associates and joint ventures.
outcome of which cannot be foreseen. In particular, the group is
currently a defendant in various customs proceedings that challenge Share-based payments(1) 7 14 25 23. Post balance sheet events
the declared customs value of products imported by certain Diageo Post-employment benefits 2 2 2 On 24 July 2024, Diageo announced its agreement with LVMH to exit from their joint operation Moët Hennessy Diageo France, and the termination
companies. Diageo continues to defend its position vigorously in these of the existing distribution agreements in place for France for all remaining Diageo brands, effective from 1 January 2025. In respect of the
27 38 59
proceedings. termination, the parties have agreed Diageo to pay a settlement amount, that will be accounted for in the year ending 30 June 2025.
Save as disclosed above, neither Diageo, nor any member of the (1) Time-apportioned fair value of unvested options and share awards.
Diageo group, is or has been engaged in, nor (so far as Diageo is
aware) is there pending or threatened by or against it, any legal or Non-Executive Directors do not receive share-based payments or post-
arbitration proceedings which may have a significant effect on the employment benefits.
financial position of the Diageo group. There were no transactions with these related parties during the year
ended 30 June 2024 on terms other than those that prevail in arm’s
20. Commitments length transactions.
(a) Capital commitments (d) Pension plans
Commitments for expenditure on intangibles and property, plant and The Diageo pension plans are recharged with the cost of administration
equipment not provided for in these consolidated financial statements services provided by the group to the pension plans and with
are estimated at $783 million (2023 – $755 million; 2022 – $482 professional fees paid by the group on behalf of the pension plans. The
million). total amount recharged for the year was $0.1 million (2023 – $0.2
million; 2022 – $0.2 million).
(b) Other commitments
The future minimum lease rentals payable in the year ended 30 June (e) Directors’ remuneration
2024 for short-term leases and leases of low-value assets are estimated
at $23 million (2023 – $45 million; 2022 – $15 million). The total future 2024 2023 2022
re-presented re-presented
cash outflows for leases that had not yet commenced, and not $ million $ million $ million
recognised as lease liabilities at 30 June 2024, are estimated at $3
million (2023 – $14 million; 2022 – $14 million). Salaries and short-term employee
benefits 4 3 4
21. Related party transactions Annual incentive plan 1 2 5
Transactions between the group and its related parties are made on Non-Executive Directors' fees 2 2 2
terms equivalent to those that prevail in arm’s length transactions. Share option exercises(1) — — 6
(a) Subsidiaries Shares vesting(1) 18 5 3
Transactions between the company and its subsidiaries are eliminated Post-employment benefits — 1 —
on consolidation and therefore are not disclosed. Details of the 25 13 20
principal group companies are given in note 22.
(1) Gains on options realised in the year and the benefit from share awards, calculated by
(b) Associates and joint ventures using the share price applicable on the date of exercise of the share options and
Sales and purchases to and from associates and joint ventures are release of the awards.
principally in respect of premium drinks products but also include the
provision of management services.

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Company balance sheet of Diageo plc Statement of changes in equity for Diageo plc
30 June 2024 30 June 2023 30 June 2022 Retained earnings/(deficit)
re-presented(1) re-presented(1) re-presented(1) re-presented(1) Capital
Notes $ million $ million $ million $ million $ million $ million redemption
Share capital Share premium Merger reserve reserve Own shares Other reserve Total Total equity
Non-current assets
$ million $ million $ million $ million $ million $ million $ million $ million
Investments in subsidiary undertakings 3 76,103 77,571 74,488 At 30 June 2022 (re-presented(1)) 875 1,635 11,083 3,896 (2,223) 52,079 49,856 67,345
Other financial assets 4 378 844 649 Retranslation impact of opening balances(2) 36 68 458 162 (93) (631) (724) —
Post-employment benefit assets 6 689 745 1,464 Profit for the year — — — — — 3,178 3,178 3,178
77,170 79,160 76,601 Other comprehensive income — — — — — 1,972 1,972 1,972
Current assets Total comprehensive income for the year — — — — — 5,150 5,150 5,150
Amounts owed by group undertakings 4 968 1,425 3,484 Employee share schemes — — — — 30 29 59 59
Trade and other receivables 4 36 35 8 Share-based incentive plans — — — — — 58 58 58
Other financial assets 4 — 3 116 Tax on share-based incentive plans — — — — — 1 1 1
Cash and cash equivalents 1 1 19 Unclaimed dividend — — — — — 1 1 1
1,005 1,464 3,627 Share buyback programme (13) — — 13 — (1,533) (1,533) (1,533)
Total assets 78,175 80,624 80,228 Dividend declared for the year — — — — — (2,071) (2,071) (2,071)
Current liabilities At 30 June 2023 (re-presented(1)) 898 1,703 11,541 4,071 (2,286) 53,083 50,797 69,010
Amounts owed to group undertakings 4 (14) (3) (58) Profit for the year — — — — — 615 615 615
Other financial liabilities 4 — (3) (197) Other comprehensive income — — — — — 11 11 11
Trade and other payables 4 (65) (74) (45) Total comprehensive income for the year — — — — — 626 626 626
Provisions 7 (15) (15) (13) Employee share schemes — — — — 36 12 48 48
(94) (95) (313) Share-based incentive plans — — — — — 43 43 43
Non-current liabilities Tax on share-based incentive plans — — — — — 1 1 1
Amounts owed to group undertakings 4 (10,940) (10,376) (11,356) Unclaimed dividend — — — — — 1 1 1
Other financial liabilities 4 (294) (771) (649) Share buyback programme (11) — — 11 — (987) (987) (987)
Provisions 7 (178) (188) (191) Dividend declared for the year — — — — — (2,243) (2,243) (2,243)
Deferred tax liabilities 5 (106) (116) (294) At 30 June 2024 887 1,703 11,541 4,082 (2,250) 50,536 48,286 66,499
Post-employment benefit liabilities 6 (64) (68) (80)
(1) See note 1. Accounting policies of the company for an explanation.
(11,582) (11,519) (12,570) (2) Includes amounts relating to foreign translation differences arising from the retranslation of reserves due to the change in the company’s presentation currency.
Total liabilities (11,676) (11,614) (12,883) The accompanying notes are an integral part of these parent company financial statements.
Net assets 66,499 69,010 67,345
Equity
Share capital (2024 – 2,432 million shares (2023 –
2,460 million shares) of 28 101/108 pence each) 9 887 898 875
Share premium 1,703 1,703 1,635
Merger reserve 9 11,541 11,541 11,083
Capital redemption reserve 4,082 4,071 3,896
18,213 18,213 17,489
Retained earnings:
At beginning of year 50,797 49,856 60,852
Profit for the year 615 3,178 1,611
Other changes in retained earnings (3,126) (2,237) (12,607)
48,286 50,797 49,856
Total equity 66,499 69,010 67,345

(1) See note 1. Accounting information and policies for an explanation.

The accompanying notes are an integral part of these parent company financial statements.
These financial statements have been approved by a duly appointed and authorised committee of the Board of Directors on 29 July 2024 and
were signed on its behalf by Debra Crew and Lavanya Chandrashekar, Directors.
Company registration number: 23307

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Notes to the company financial statements of Diageo plc Financial assets and liabilities
Financial assets and liabilities are initially recorded at fair value
2. Income statement
Note 4 to the consolidated financial statements provides details of the
including, where permitted by IFRS 9, any directly attributable remuneration of the company’s auditor for the group.
transaction costs. For those financial assets that are not subsequently Information on Directors’ emoluments, share and other interests,
1. Accounting policies of the company balance sheet and the change in net assets during the period to the
held at fair value, the company assesses whether there is evidence of transactions and pension entitlements is included in the Directors’
year end closing rate. The foreign exchange rates used in the
Basis of preparation translation of financial statements for the comparative years, expressed
impairment at each balance sheet date. The company classifies its remuneration report in this Annual Report.
The financial statements of Diageo plc (the company) are prepared in financial assets and liabilities into the following categories: financial
in US dollar per £1, were as follows:
accordance with Financial Reporting Standard 101 Reduced Disclosure assets and liabilities at amortised cost, financial assets and liabilities at 3. Investments in subsidiary undertakings
Framework (FRS 101). 2023 2022 fair value through income statement and financial assets at fair value Cost $ million
In preparing these financial statements, the company applies the Assets and liabilities(1) 0.79 0.83 through other comprehensive income. Where financial assets or
liabilities are eligible to be carried at either amortised cost or fair value, At 30 June 2022 (re-presented) 87,968
recognition, measurement, and disclosure requirements of International
Financial Reporting Standards as adopted by the UK (IFRS), but makes Income statement(2) 0.83 the company does not apply the fair value option. Additions 4
amendments where necessary in order to comply with the Companies Amounts owed by group undertakings are initially measured at fair Exchange differences 3,635
(1) Closing rates
Act 2006 and has excluded certain information as permitted by FRS (2) Weighted average rates value and are subsequently reported at amortised cost. Non-interest At 30 June 2023 (re-presented) 91,607
101. bearing trade receivables are stated at their nominal value as they are 2
Investments in subsidiaries Additions
The financial statements are prepared on a going concern basis due on demand. Allowances for expected credit losses are made
under the historical cost convention, except for certain financial Investments in subsidiaries are stated at historical cost less impairment Return of capital (1,470)
based on the risk of non-payment, taking into account ageing, previous
instruments and post-employment benefits which are measured and provisions for any permanent decrease in value. The carrying amounts At 30 June 2024 90,139
experience, economic conditions and forward-looking data. Such
stated at their fair value. of the company’s investments are reviewed at each reporting date to allowances are measured as either 12-month expected credit losses or
By virtue of section 408 of the Companies Act 2006, the company is determine whether there is an indication of impairment. If such an lifetime expected credit losses depending on changes in the credit Provision
exempt from presenting an income statement and disclosing employee indication exists, then the asset’s recoverable amount is estimated. quality of the counterparty. Expected credit loss is immaterial for At 30 June 2022 (re-presented) (13,480)
numbers and staff costs. The company has taken advantage of the Losses are recognised in the statement of comprehensive income and amounts owed by group undertakings.
reflected in an allowance against the carrying value. Where an event Exchange differences (556)
exemption under FRS 101 from preparing a cash flow statement and
related notes, disclosures in respect of transactions and the capital results in the asset’s recoverable amount being higher than the Amounts owed to group undertakings are initially measured at fair At 30 June 2023 (re-presented) (14,036)
management of wholly owned subsidiaries, the effects of new but not previously impaired carrying value, the original impairment may be value and are subsequently reported at amortised cost. Non-interest Increase in the year —
yet effective IFRSs and disclosures in respect of the compensation of reversed through the statement of comprehensive income in bearing trade payables are stated at their nominal value as they are At 30 June 2024 (14,036)
key management personnel. As the consolidated financial statements subsequent periods. due on demand. For a number of loans owed to other group
of Diageo plc include equivalent disclosures, the company has also companies, the company has a contractual right to defer payment by
utilised exemptions available under FRS 101 from disclosing IFRS 2
Dividends one year and one day and therefore these amounts are disclosed as Carrying amount
Share-based Payment in respect of group settled share-based Dividends payable and dividends receivable are recognised in the non-current liabilities. At 30 June 2024 76,103
payments, disclosures required by IFRS 7 Financial Instruments financial statements in the year in which they are approved. At 30 June 2023 (re-presented) 77,571
Financial guarantee contract liabilities
Disclosures and by IFRS 13 Fair Value Measurement. Share-based payments – employee benefits At 30 June 2022 (re-presented) 74,488
Financial guarantee contract liabilities are measured initially at their fair
Functional and presentation currency The company’s accounting policy for share-based payments is the values. These liabilities are subsequently measured at the higher of the
same as set out in note 18 to the consolidated financial statements. Investments in subsidiary undertakings are stated at historical cost of
The functional currency of Diageo plc is determined by using amount determined under IFRS 9 and the amount initially recognised
Where the company grants options over its own shares to the $90,139 million (2023 – $91,607 million) less impairment provisions of
management judgement that considers the parent company as an (fair value) less where appropriate, cumulative amortisation of the
employees of its subsidiaries, it generally recharges the cost to the $14,036 million (2023 – $14,036 million).
extension of its subsidiaries. initial amount recognised.
relevant group company. Where the amount is not recharged, the During the year ended 30 June 2024, Guinness Limited, the
Starting 1 July 2023, in line with reporting requirements the
value of the options is recognised as a capital contribution to the Judgements in applying accounting policies and key sources company’s wholly owned subsidiary undertaking, declared a
functional currency of Diageo plc has changed from sterling to US distribution to the company. The distribution was determined to be
dollar which is applied prospectively. This is because the group's share subsidiary and increases the cost of investment. of estimation uncertainty
The preparation of financial statements requires the directors to make return of capital up to the amount equal to the carrying value of the
of net sales and expenses in the United States and other countries Pensions and other post-employment benefits company's investment in Guinness Limited.
whose currencies correlate closely with the US dollar has been estimates and assumptions that affect the reported amounts of assets
The company’s accounting policy for post-employment benefits is the and liabilities, the disclosure of contingent assets and liabilities at the Investments in subsidiary undertakings include $178 million (2023 –
increasing over the years, and that trend is expected to continue in line same as set out in note 14 to the consolidated financial statements. The $176 million) of costs in respect of share-based payments, granted to
with the group's strategic focus. Diageo plc has also decided to change date of the financial statements, and the reported amounts of revenues
company acts as sponsor of all UK post-employment plans for the and expenses during the year. Actual results could differ from those subsidiary undertakings which were not recharged to the subsidiaries.
its presentation currency to US dollar with effect from 1 July 2023, benefit of employees and former employees throughout the group. The additions comprise $2 million (2023 – $4 million) not recharged
applied retrospectively, as it believes that this change will provide estimates.
There is no contractual agreement or stated policy for charging the net The critical accounting policies, which the directors consider are of and capitalised as cost of investment during the year ended 30 June
better alignment of the reporting of performance with the group’s defined benefit costs for the plan measured in accordance with FRS 101, 2024.
business exposures. greater complexity and/or particularly subject to the exercise of
to other group companies whose employees participate in these group estimates and judgements, are the same as those disclosed in note 1 to A list of group companies as at 30 June 2024 is provided in note 10.
Assets and liabilities at 30 June 2023 and 30 June 2022 were wide plans. However, recharges to other group companies are made
translated to US dollar at the relevant year end closing rate. on a funding basis and are credited against post-employment service
the consolidated financial statements in respect of taxation, post- 4. Financial assets and liabilities
Performance items and movements in assets and liabilities in the year employment benefits, contingent liabilities and legal proceedings.
costs to the extent they are in respect of current service. The fair value Other financial assets and liabilities are recorded at fair value through
ended 30 June 2023 were translated into US dollar at weighted A critical accounting estimate, specific to the company is the
of the plans’ assets less the present value of the plans’ liabilities are the income statement and comprise the fair value of interest rate swaps
average rates of exchange for the relevant period, except for assessment of the recoverable amount of the investments in
disclosed as a net asset or net liability on the company’s balance sheet with subsidiary undertakings, where the company acts as an
substantial transactions that were translated at the rate on the date of subsidiaries. Impairment reviews are carried out to ensure that the
as it is deemed to be the legal sponsor of these plans. The net income/ intermediary between group companies, therefore it is not expected
the transaction. Exchange differences arising on the retranslation to value of the investments in subsidiaries are not carried at above their
charge reflects the change in the defined benefit obligation, resulting that there will be any net impact on future cash flows.
closing rates are taken to the other reserve within retained earnings as recoverable amounts. The tests are dependent on management’s
from service in the current year, benefit changes, curtailments and Amounts owed by and to group undertakings, trade and other
other comprehensive income and expense. estimates in respect of the forecasting of future cash flows, the discount
settlements. Past service costs are recognised in income. The net receivables and trade and other payables are measured at amortised
The company opted to re-present its share capital, share premium rates applicable to the future cash flows and expected growth rates.
interest cost is calculated by applying the discount rate to the net cost.
and other capital reserves at closing rate for the comparative periods Such estimates and judgements are subject to change as a result of
balance of the defined benefit obligation and the fair value of the plan Amounts owed by and to group undertakings are interest bearing
therefore exchange differences arising on revaluation to year end changing economic conditions and actual cash flows may differ from
assets and is included in the income statement. Any differences due to and unsecured. For a majority of the loans owed to other group
closing rate at 30 June 2023 were taken to the other reserve within forecasts.
changes in assumptions or experience are recognised in other companies, the company has a contractual right to defer payment by
retained earnings. From 1 July 2023, as Diageo plc changed its Details are set out in note 9 to the consolidated financial statements.
comprehensive income. one year and one day and they are therefore classified as non-current
functional currency, the share capital, share premium, capital liabilities. Other amounts owed by and to group undertakings are
redemption reserve, merger reserve and retained earnings are Provisions repayable on demand.
recorded in US dollar, hence no such revaluation arises in the year The company’s accounting policy for provisions is the same as set out
ended 30 June 2024. in note 15 to the consolidated financial statements.
At 30 June 2023 the company’s other comprehensive income
includes income/losses in relation to post-employment benefits and the Taxation
exchange differences arising on the retranslation of the opening The company’s accounting policy for taxation is the same as set out in
note 7 to the consolidated financial statements.

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5. Deferred tax assets and liabilities 7. Provisions (c) Retained earnings

Post- Other In accordance with the Companies Act 2006, the reserves available for
employment
plans
temporary
differences Total
Thalidomide distribution are measured in the functional currency of the company.
$ million
$ million $ million $ million
On 1 July 2023, the company changed its functional currency and the
At 30 June 2023 (re-presented) 203 reserves available for distribution were translated from sterling to US
At 30 June 2022 (re-presented) (346) 52 (294) dollar at the exchange rate on the date of the functional currency
Provisions utilised during the year (15)
Changes in tax rates 32 — 32 change, resulting in reserves available for distribution of $9,117 million.
Unwinding of discounts 5 At 30 June 2024, $6,562 million of retained earnings is available for
Recognised in income statement (16) (1) (17)
At 30 June 2024 193 the payment of dividends or purchases of own shares. Determining the
Recognised in other company’s reserves available for distribution is complex and requires,
comprehensive income and in some instances, the application of judgement. The company has
The company’s commitment to the UK Thalidomide Trust is discounted
equity 166 — 166 determined what is realised and unrealised profits in accordance with
and will be utilised over the period of the commitment up to 2037.
Exchange differences (5) 2 (3) At 30 June 2024, $15 million (2023 – $15 million) of provision is the Companies Act 2006 and the guidance included in ICAEW
At 30 June 2023 (re-presented) (169) 53 (116) current and $178 million (2023 – $188 million) is non-current. Technical Release TECH 02/17BL ‘Guidance on realised and
distributable profits under the Companies Act 2006’. The company’s
Recognised in income statement (11) (3) (14) 8. Guarantees and letters of comfort reserves available for distribution include adjustments to retained
Recognised in other The company has guaranteed certain external borrowings of earnings in respect of the unrealised portion of the dividend in specie
comprehensive income and subsidiaries which at 30 June 2024 amounted to $21,550 million (2023 received by the company, post-employment benefit surpluses, share-
equity 24 — 24 – $20,800 million). based payment charges capitalised to investments and restriction due
At 30 June 2024 (156) 50 (106) The company has also provided irrevocable guarantees relating to to share capital in foreign currency.
the liabilities of certain of its Dutch subsidiaries. The company has
Deferred tax on other temporary differences includes assets in respect assessed that the likelihood of these guarantees being called is remote.
of the UK Thalidomide Trust liability of $49 million (2023 – $50 million) The Directors do not expect the company to be liable for any legal
and share-based payment liabilities of $2 million (2023 – $3 million). obligation in respect of these guarantee agreements, and they have
been recognised at $nil value.
6. Post-employment benefits The company issues letter of comfort to provide sufficient funds to
The movement in the net surplus for the two years ended 30 June 2024, directly owned subsidiary undertakings as and when required.
for all UK post-employment plans for which the company is the
sponsor, is as follows:
9. Shareholders’ funds
(a) Merger reserve
Plan assets Plan liabilities Net surplus
On the acquisition of a business, or of an interest in an associate, fair
$ million $ million $ million
values, reflecting conditions at the date of acquisition, are attributed to
At 30 June 2022 (re-presented) 7,310 (5,926) 1,384 the net assets acquired. Where merger relief is applicable under the UK
Income/(charge) before Companies Acts, the difference between the fair value of the business
taxation 269 (250) 19 acquired and the nominal value of shares issued as purchase
Other comprehensive (loss)/ consideration is treated as a merger reserve.
income (1,468) 681 (787) (b) Own shares
Contributions by group At 30 June 2024, own shares comprised 3 million ordinary shares held
companies 61 — 61 by employee share trusts (2023 – 3 million; 2022 – 2 million) and 209
Benefits paid (401) 401 — million ordinary shares repurchased and held as treasury shares (2023
– 213 million; 2022 – 217 million).
At 30 June 2023 (re-presented) 5,771 (5,094) 677
During the year ended 30 June 2024, the group purchased
Income/(charge) before 28 million ordinary shares (2023 – 38 million; 2022 – 61 million),
taxation 280 (275) 5 representing approximately 1.1% of the issued ordinary share capital
Other comprehensive (loss)/ (2023 – 1.5%; 2022 – 2.4%) at an average price of 2918 pence (3644
income (131) 36 (95) cents) per share, and an aggregate cost of $987 million, including
Contributions by group transaction costs (2023 – 3616 pence (4382 cents) per share, and an
companies 38 — 38 aggregate cost of $1,673 million, including $16 million of transaction
costs; 2022 – 3709 pence (4842 cents) per share, and an aggregate
Employee contributions 1 (1) — cost of $2,985 million, including $21 million of transaction costs) under
Benefits paid (305) 305 — the share buyback programme. The shares purchased under the share
At 30 June 2024 5,654 (5,029) 625 buyback programmes were cancelled.
Information on movements in own shares is provided in note 18(c) to
The net surplus for the UK post-employment plans of $625 million (2023 the consolidated financial statements.
– $677 million) for which the company is a sponsor comprises funded
plans of $689 million (2023 – $745 million) disclosed as part of non-
current assets and unfunded liabilities of $64 million (2023 – $68
million) disclosed as part of non-current liabilities.
The disclosures have been prepared in accordance with IFRIC 14. In
particular, where the calculation for a plan results in a surplus, the
recognised asset is limited to the present value of any available future
refunds from the plan or reductions in future contributions to the plan,
and any additional liabilities are recognised as required.
Additional information on the UK post-employment plans and the
principal risks and assumptions applicable is disclosed in note 14 to the
consolidated financial statements.

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10. Group companies Marathon Futurex, A-Wing, 2601, 26th Floor, Calle Gobernador Rafael Rebollar 95, Col Panama City, West Boulevard, PH ARIFA, 9th
In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, partnerships, associates, joint ventures and joint N M Joshi Marg, Lower Parel, Mumbai, 400 San Miguel de Chapultepec, Del Miguel and 10th, Santa Maria Business
arrangements, the country of incorporation and the effective percentage of equity owned, as at 30 June 2024 are disclosed below. Unless 013 Hidalgo CP 11850, Mexico City Diageo Taiwan Inc.
otherwise stated the share capital disclosed comprises ordinary shares which are indirectly held by Diageo plc. Diageo India Private Limited Casa Um, S.A.P.I. de C.V. Paraguay
Indonesia Carretera Atotonilco - Guadalajara,
FULLY OWNED SUBSIDIARIES Canada Denmark
Atotonilco el Alto, Jalisco, 47750
Avda Aviadores del Chaco 2050. Edificio
134 Peter Street, Suite 1501, Ontario, M5V Sundkrogsgade 19, 2. 2100, Copenhagen Jl Jend Sudirman Kav. 76-78, Sudirman World Trade Center. Torre 3 piso 11
Angola Diageo Mexico Comercializadora S.A. de
2H2, Toronto Plaza, Plaza Marein, 15th, Jakarta Selatan, Diageo Paraguay S.R.L.
Rua Fernao de Sousa, Condominio Bengo, Diageo Denmark AS 12910, Jakarta C.V.
Letter A, 11.s floor, Fraction A37, Diageo Canada Holdings Inc. Peru
Dominican Republic PT Gitaswara Indonesia(8) Diageo Mexico S.A. de C.V.
neighbourhood Vila Alice, Province of Diageo Canada Inc. Victor Andres Belaunde 147, Via Principal 133,
Luanda Num. 07 Av. Jacinto Ignacio Manon, Sector Ireland Independencia SN Santiago, Matatlán,
Boul Henri-Bourassa E., 9225, Local A, Interior 107, Piso 10, San Isidro, Lima
Ensanche Paraiso, Edificio Chez Space, Piso Oaxaca 70440
Diageo Angola Limitada Quebec, H1E 1P6 , Montreal Nangor House, Western Estate, Nangor Diageo Peru S.A.
3rd, Distrito Nacional, Santo Domingo Sombra Mezcal S. de R.L. de S.V.
Road, Dublin, 12
Argentina Diageo Americas Supply Quebec Diageo Dominicana S.R.L. Philippines
Gilbeys of Ireland Unlimited Company(2) Porfirio Diaz 17, Jalisco, 47750, Atotonilco el
Bernardo de Irigoyen 972, floor 7, office A, Distribution Inc.
France Alto 10th Floor Commerce and Industry Plaza
CABA Diageo Ireland Quebec Distribution Inc. R & A Bailey & Co Unlimited Company
6 Avenue Franklin D. Roosevelt, 75008, Paris Diageo Mexico Agavera S.A. de C.V. Building, McKinley Hill Dr, Taguig, 1634
Diageo de Argentina S.A. Chile UDV Ireland Group (Trustees) Designated Diageo Asia Pacific Shared Services Centre
Diageo France Distribution SAS Activity Company(2) Diageo Mexico Operaciones S.A. de C.V.
Australia Avenida Apoquindo 5950, Piso 4, Oficina Limited Inc.
Diageo France Holdings SAS St. James's Gate, Dublin 8 Diageo Mexico Spirits Unit 1, 17th Floor, Ore Central 9th Avenue
162 Blues Point Road, Level 1, NSW, 2060, 04-103, Las Condes Santiago de Chile
McMahons Point Diageo Chile Limitada Diageo France SAS AGS Employee Shares Nominees (Ireland) Don Julio Agavera S.A. de C.V. corner 31st Street Bonifacio Global City,
Designated Activity Company Mozambique Taguig City, 1634
Bundaberg Distilling Investments Pty Ltd(3) China 73, Rue de Provence, 75009, Paris
Arthur Guinness Son & Company (Dublin) Diageo Export SR Inc.(2)
Level 7, 99 Macquarie Street, Sydney, NSW 41F, One Museum Place, 669 Xinzha Road, United Distillers France SAS Estrada Nacional numero 1, Micanhine,
Unlimited Company(2) Marracuene Diageo Philippines Free Port Inc.(2)
2000 Jingan District, Shanghai Germany Diageo Ireland Finance 1 Unlimited Diageo Supply Marracuene Lda
Diageo Australia Limited(3) Diageo China Limited Diageo Philippines Inc.
Reeperbahn 1, 20359, Hamburg Company
Mr Black Spirits Pty Ltd Fengxiang Village Fengyu Town, Eryuan Netherlands North Island United Enterprise Holdings Inc.
Belsazar GmbH Diageo Ireland Holdings Unlimited (2)
Whittred Street, QLD, 4670, Bundaberg County, Dali Bai Minority Region, Yunnan Company De Ruyterkades, Postbus 2852 1000cw
Province Diageo Germany GmbH Amsterdam Unit 3 G/F, 134 Legaspi Parkview
Bundaberg Distilling Company Pty. Limited(5) Diageo Ireland Unlimited Company
Diageo Yuntuo Liquor (Dali) Co. Ltd Greece United Distillers & Vintners (SJ) B.V.(2) Condominium, Carlos Palanca Street cor.
Austria Diageo Turkey Holdings Limited Legaspi Street, Makati City
No. 9 Quanxing Road, Jinniu District, Leof. Kifisias 115, Athens, 115 24 Molenwerf 12, 1014 BG, Amsterdam
Teinfaltstrasse 8, 1010, Wien Guinness Storehouse Limited Chat Noir Co. Inc.
Chengdu, 610036 Diageo Hellas S.A.
R & A Bailey Pension Trustee Designated Diageo Atlantic B.V.
Diageo Austria GmbH Sichuan Chengdu Shuijingfang Group Co. Poland
Guernsey Activity Company(2) Diageo Brands B.V.
Belgium Ltd Przyokopowa Str. 31, PL 01 – 208 Warsaw
Heritage Hall, Le Marchant Street, St Peter Italy Diageo Capital B.V.(1)
No.28 Jiafeng Road, 2502, 5, Pudong Port, GY1 4HY Diageo Polska Sp. z o.o.
Z.3 Doornveld 150, 1731, Zellik
District, 200137, Shanghai Strada Statale 63, 12069, Santa Vittoria Diageo Highlands Holding B.V.
Diageo Belgium N.V. Diageo Group Insurance Company Limited Portugal
Diageo (Shanghai) Limited d'Alba (CN)
Diageo Holdings Netherlands B.V. Avenida D. Joao II, No 50, piso 2, letra D,
Bermuda Hong Kong Diageo Operations Italy S.p.A.
Unit 1101, 1102, Building 16, No.1000 Jinhai Diageo Nederland B.V. Edificio Mar Vermelho, 1990-095 Lisboa
Victoria Place, 5th Floor, 31 Victoria Street, Road, Shanghai 31/F, Tower two, Times Square, 1 Matheson Via Ernesto Lugaro 15, 10126, Torino
Hamilton, HM10 street Causeway Bay, Hong Kong Diageo Relay B.V. Diageo Portugal - Distribuidora de Bebidas,
Diageo Liquor Technology (Shanghai) Co. Diageo Italia S.p.A. Unipessoal, Lda
Atalantaf Limited Ltd Diageo RTD Hong Kong Limited Global Farming Initiative B.V.
Japan Romania
Brazil Unit B, 2nd Floor, West Logistics Center, No. Hungary Justerini & Brooks Importers B.V.
88 Linhai Avenue, Nanshan Street, Shenzhen 9-7-1 Akasaka, Minato-ku, Tokyo 164-0001 Expo Business Park, Street Aviator Popisteanu
Fazenda Santa Eliza, Zona Rural, Ceará, Dozsa Gyorgy ut 144, Budapest, 1134 Selviac Nederland B.V. 54A, Cladirea 2, et 1-3, Sector 1, Bucharest,
62.685-000, Paraipaba Diageo Supply Chain (Shenzhen) Co. Ltd Diageo Japan K.K.
Diageo Business Services Private Company New Zealand 012244
Ypioca Agricola Ltda Colombia Limited by Shares Kenya
123 Carlton Gore Road, Level 2, Newmarket, Diageo Balkans S.R.L.
Municipio de Itaitinga, Estado do Ceara, na 100 Avenida Calle, 1321, Bogota Diageo Hungary Finance Limited Liability L R NO 1870/1/176, Aln House, Eldama 1023, Auckland Russia
Rodovia BR 116, no 15.000, Bairro Jiboia, CEP Company Ravine Close, off Eldama Ravine Road,
Diageo Colombia S.A. Diageo New Zealand Limited(3) Kaspiyskaya Street, 22, main bld. 1, bld. 5,
61.880-000 Westlands, Nairobi
Diageo Hungary Marketing Services Limited floor 3, apartment VII, room 31a, 115304,
Costa Rica Diageo Kenya Limited Nigeria
Ypioca Industrial de Bebidas S.A. Liability Company Moscow
Trejos Montealegre, Edificio Escazu, Village India La Reunion Oba Akran Avenue Ikeja, 24, Lagos, PMB
Rua Olimpiadas, 205, floor 14-15, 04551-000, 21071, 100001 D Distribution Joint-Stock Company(2)
II, Oficinas 03-118 y 03-120, Distrito San
Sao Paulo Kempapura Main Road, Opp Nagawara 45 Rue Alexis De Villeneuve 97400 Saint-
Rafael, San Jose Diageo Brands Nigeria Ltd Diageo Brands Distributors LLC(2)
Diageo Brasil Ltda Lake, Karle SEZ Tower, 2nd floor, Karnataka, Denis
Diageo Costa Rica S.A. 560045, Bangalore Norway Singapore
Bulgaria Diageo Reunion SAS
Croatia WeWork Platina Tower, MG Road, Haryana, Apotekergata 10, 0180 Oslo 112 Robinson Road, 1, 5th Floor, 1, Singapore
7 Iskarsko Shose Blvd., Trade Center Europe, Lebanon
Hektoroviceva ulica 2, 10000, Zagreb 122002, Gurugram 68902
building 12, floor 2, 1528, Sofia Verdun Street, Ibiza Building, Beirut, PO Box Diageo Norway AS
Diageo Croatia d.o.o.za usluge Diageo Business Services India Private Diageo Singapore Pte. Ltd
Diageo Bulgaria Ltd 113-5631 Panama
Limited Streetcar Investment Holding Pte. Ltd
Czech Republic Diageo LENA Off-shore SAL Costa del Este, Ave La Rotonda, Business
Cameroon
Namesti I. P. Pavlova 1789/5. 4th floor, 120 Mexico Park, Torre V. piso 15 Panama City South Africa
535 rue Afcodi, Douala P.O. Box 1245
00, Prague 2 Diageo Panama S.A. Building 3, Maxwell Office Park, Magwa
Diageo Cameroon Ltd Av. Ejercito Nacional, 843-B, Torre Paseo
Diageo Czech Marketing Services LLC Acceso B, 2, Mexico City , 11520 Crescent West, Waterfall City, Midrand,
2090
Diageo Mexico II, S.A. de C.V.

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Diageo South Africa (Pty) Limited Diageo Finance US Limited 21 Seeds Inc. DV Trading, C.A.(5) Chengdu Swellfun Marketing Co. Limited(10) - East African Breweries PLC - 65.00%
United Distillers Southern Africa (Proprietary) Diageo Financing Turkey Limited ASL Leasing and Investment LLC Zeta Importers C.A. (5) 63.16% Kampala Road, Industrial Area, Nairobi, P.O.
Limited No. 38 Jiuyuan Road, Kongming Street, Box 41412-00100
Diageo Great Britain Limited DeLeon Holdco LLC Ave. San Felipe Urbanización La Castellana,
South Korea Qionglai, Chengdu East African Maltings Limited - 65.00%
Diageo Healthcare Limited(2) PDX Spirits LLC Edificio Centro Coinasa, Piso 6. Caracas,
1060 Chengdu Swellfun Liquor Co. Limited(10) -
932-94, Daewol-ro, Daewol-myun, Icheon- Tusker House, Ruaraka, P.O. Box 30161,
Diageo HF Holdings Limited Sombra Holdings LLC 63.16%
shi, Gyeonggi-do, Icheon, 17342 Diageo Venezuela C.A. 00100 Nairobi GPO
Diageo Holdings Limited(1) 175 Greenwich Street, Three World Trade No. 7 Guanghua Road, Chaoyang District,
Diageo Korea Co. Ltd CaIIe 1 Este, Edificio y Galpon BTP, Zona Allsopp (East Africa) Limited(2) - 63.05%
Center, New York, NY 10007 Beijing, 100020
Spain Diageo Holland Investments Limited(2) Industrial La Caracarita, Municipio Los EABL International Limited(2) - 65.00%
Ballroom Acquisition, Inc. Guayos, estado Carabobo Swellfun (Beijing ) Consulting Co. Ltd(10) -
Avda de la Victoria 32, Edificio Spirit, 28023, Diageo Investment Holdings Limited 63.16% Tembo Properties Limited(2) - 65.00%
Davos Services LLC Arran Tradings, C.A.
Madrid Diageo Overseas Holdings Limited(6) No. 9 Quanxing Road, Jinniu District, Lebanon
Diageo Espana S.A. Diageo Americas Inc. Calle 1 con calle CaIIe 1 Este, Edificio y Chengdu, 610036
Diageo Scotland Investment Limited Beirut Symposium Bldg, 10th floor, Beirut,
Diageo Americas Supply Inc. Galpon BTP, Zona Industrial La Caracarita,
Sweden Diageo Share Ownership Trustees Limited(1), Municipio Los Guayos, estado Carabobo Chengdu Jianghai Trade Development Co. P.O. Box 113-5250
(2) Diageo Beer Company USA Limited(10) - 63.16%
Gavlegatan street 22/C, 11330, Stockholm DV Release, C.A. Diageo - Lebanon SAL - 84.99%
Diageo UK Turkey Holdings Limited Diageo Inc. Chengdu Tengyuan Liquor Marketing Co.
Diageo Sweden AB Islay Trading, C.A. Limited(10) - 63.16% Verdun Street, Ibiza Building, Beirut, P.O. Box
Switzerland Diageo UK Turkey Limited Diageo Investment Corporation 113-5631
L4L Trading, C.A. Sichuan Swellfun Co. Ltd(10) - 63.16%
Grand Metropolitan Capital Company Diageo Latin America & Caribbean LLC Diageo Lebanon Holding SAL - 99.98%
Place de la Gare 12, Lausanne, 1003 Lismore Trading, C.A. No. 998, Juanxing Road, Hongguang
Limited Diageo Non-Alcohol Beverages LLC Mauritius
Diageo Suisse S.A. Skye Trading C.A. County, Chengdu, 610000
Grand Metropolitan Estates Limited IFS Court, Twenty Eight, Cybercity, Ebene
Tanzania Diageo North America, Inc.(5) Chengdu Ruijin Trading Co. Limited(10) -
Carretera Nacional Acarigua-Barquisimeto
Grand Metropolitan International Holdings 63.16% Asian Opportunities and Investment
CRB Africa Legal Attorneys, Plot 60, Ursino Liquor Investment LLC Casa Agropecuaria Las Marias I C.A.S-N
Limited Limited(2),(9) - 55.88%
Street P.O. Box 32840, Dar es Salaam Sector los Guayones La Miel, Lara. Cuba
Grand Metropolitan Limited Soh Spirits LLC
Agropecuarias Las Marias I C.A. 211 Avenida Malecón, entre J y K, Vedado, Netherlands
Sumagro Limited(2) Stirrings LLC
Guinness Limited (1)
Plaza de la Revolución, La Habana Molenwerf 12, 1014 BG, Amsterdam
Türkyie Vietnam
Guinness Overseas Holdings Limited(1) The Bulleit Distillery, Inc.(2)
No. 157, 21/8 Street, Phuoc My Ward, Phan Ron Santiago S.A. - 50.00% Ketel One Worldwide B.V.(4) - 50.00%
Esentepe Mah. Bahar Sk. Ozdilek River Plaza Whisky Archive Inc.
Guinness Overseas Limited Rang - Thap Cham City, Ninh Thuan Ghana Nigeria
Vyndham Grand Apt. No 13/25 Sisli, Istanbul
James Buchanan & Company Limited(2) 3411 Silverside Road Tatnall Building, Ste 104 Province Guinness Brewery, Plot 1 Block L, Industrial
Mey Alkollü İçkiler Sanayi ve Ticaret A.Ş. Wilmington, DE 19810 Oba Akran Avenue Ikeja, 24, Lagos, PMB
Diageo Vietnam Area, Kaasi, P.O. Box 1536, Kumasi 21071, 100001
Mey İçki Sanayi ve Ticaret A.Ş. John Walker and Sons Limited(2)
Casamigos Spirits Company LLC Zimbabwe Guinness Ghana Breweries PLC - 80.40%
Kanlaon Ltd Guinness Nigeria PLC - 58.02%
Ukraine Casamigos Tequila LLC 48 Midlothian Avenue, Eastlea, Harare Guatemala North Cyprus
1v Pavla Tychyny avenue , 2152, Kyiv Mr Black UK Ltd
CT Staffing Services LLC International Distillers - Zimbabwe (Private) Calle 8-19 zona 9, Quetzaltenango
Tanqueray Gordon and Company, Limited (1) Sehit Mehmet Cetin Sokak, Kucuk Sanayi
Diageo Ukraine LLC Vivanda Inc. Limited(2) Anejos De Altura, S.A. - 50.00% Bölgesi 4, 99450, Gazi Magusa
United Kingdom The Distillers Company (Biochemicals)
381 Park Avenue South, Suite 1015, New York, SUBSIDIARIES WHERE THE EFFECTIVE Turk Alkollu Icki ve Sarap Endustri Ltd -
Limited(2) Hungary
11 Lochside Place, Edinburgh, EH12 9HA NY 10016 INTEREST IS LESS THAN 100% 66.00%
The Pimm's Drinks Company Limited(2) Angola Dozsa Gyorgy ut 144, Budapest, 1134
Arthur Bell & Sons Limited(2) Aviation Gin LLC Philippines
Tipplesworth Limited Rua Dom Eduardo Andre Muaca, S/No, Diageo Employee Ownership Program
Copper Dog Whisky Limited Davos Brands LLC Unit 1, 17th Floor, Ore Central 9th Avenue
UDV (SJ) Holdings Limited(1) LOTE C4, Luanda Organization - 99.94%
5444 Westheimer 1000, Houston, TX 77056 corner 31st Street Bonifacio Global City,
Diageo Capital plc (1)
DIREF Industria de Bebidas, Lda-Angola JV - India Taguig City, 1634
UDV (SJ) Limited
Diageo Scotland Limited Balcones Distilling LLC 50.10% UB Tower, 24 Vittal Mallya Road, Bangalore,
United Distillers France Limited ULM Holdings Inc.(2) - 40.00%
J & B Scotland Limited (2) Uruguay British Virgin Islands 560001
3rd Floor Capital House, 3 Upper Queen United Distillers & Vintners Philippines Inc(2) -
Pasaje Paseo De Las Carretas, 2580, oficina Commerce House, Wickhams Cay 1, PO Box Royal Challengers Sports Private Limited(9) - 99.95%
John Haig & Company Limited Street, Belfast
1301, Montevideo 3140, Road Town, Tortola 55.88%
The Lochnagar Distillery Limited(2) Diageo Global Supply IBC Limited Rwanda
Diageo Uruguay S.A. Rum Creation & Products Inc.(4) - 50.00% United Spirits Limited(9) - 55.88%
William Sanderson and Son Limited(2) Diageo Northern Ireland Limited(1) Kimihurura, Gasabo, Umujyi was Kigali, 7130
Venezuela Sea Meadow House, Blackburne Highway, Indonesia Port Bell Luzira
Zepf Technologies UK Limited S & B Production Limited P.O. Box 116, Road Town, Tortola Jl. Raya Kaba-Kaba No. 88, Banjar Carik
Av Intercomunal Alí Primera, Los Taques, East African Breweries Rwanda Limited -
16 Great Marlborough St, London, W1F 7HS 61 St. James's Street, London, SW1A 1LZ Estado Falcón Palmer Investment Group Limited(2),(9) - Padang, Desa Nyambu, Kecamatan Kediri, 65.00%
Anna Seed 83 Limited Justerini & Brooks, Limited DV Paraguana, C.A.(2) 55.88% Kabupaten Tabanan, Provinsi Bali
Seychelles
USL Holdings Limited(2),(9) - 55.88% PT Langgeng Kreasi Jayaprima - 80.00%
Cellarers (Wines) Limited United States Av La Hormiga con Intersección de la O’Brien House, 273 Le Rocher, Mahe
Carretera via Payara, C.C. Tierra Buena China Kenya
Chase Distillery (Holdings) Limited 1 Estate Annaberg & Shannon Grove, RR1 Seychelles Breweries Limited - 54.40%
Box 9400, Kingshill, VI 00850-9703 Acarigua 5th Floor, Garden City Business Park, Block
Chase Distillery Limited 27 Shuijing Street, Jinjiang District, Chengdu, South Sudan
Diageo USVI Inc. Mull Trading C.A.(2) 610065 A, Garden City Road, Off Exit 7, Thika
Diageo (IH) Limited(2) Superhighway, Nairobi, P.O. Box Southern Sudan African Park Hotel, Juba
1209 Orange Street, New Castle, Delaware Av. Circunvalacion Norte (Jose Asunsion Chengdu Shuijingfang Fangcang Liquor
Diageo Distribution Company Limited Rodriguez) Edificio Distribuidora Metropol, 30161-00100 Town
19801 Sales Co. Ltd(10) - 63.16%
Diageo DV Limited Porlamar, Estado Nueva Esparta Kenya Breweries Limited(5) - 65.00% East African Beverages (Southern Sudan)
DV Technology LLC 41F, One Museum Place, 669 Xinzha Road,
Clyde Trading, C.A.(5) UDV Kenya Limited - 83.79% Limited(2) - 64.35%
Diageo Eire Finance & Co(2) Jingan District, Shanghai
1425 South Kingstown Road, South
Cupar Trading, C.A.(5) Swellfun (Shanghai) Consulting Co. Ltd(10) - Garden City Business Park, 5th Floor, P.O.
Diageo Employee Shares Nominees Kingstown, RI 02879
Limited(1),(2) Diageo Nueva Esparta, C.A.(2) 63.16% Office Box Number 30161-00100, Nairobi
Diageo Loyal Spirits Corporation
Diageo Finance plc(1) No. 21 Shuijing Street, Jinjiang District,
1521 Concord Pike Suite 201, Wilmington, DE Chengdu, 610011
19803

222 Diageo Annual Report 2024 Diageo Annual Report 2024 223
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F I N A N C I A L S T A T E M E N T S continued

Tanzania New World Whisky Distillery PTY Limited - Here 470 Bath Road, Arnos Vale, Bristol, BS4 Lothian Distillers Limited - 50.00% Moët Hennessy Diageo K.K.(11) - 67.00% Chervonoarmiyska Street, bld. 9/2, apt. 70,
2nd Floor, East Wing TDFL Building, Ohio 30.00% 3AP The North British Distillery Company Limited Macau Kyiv
street, P.O. Box 32840 Dar es Salaam Denmark Caleno Drinks Ltd - 20.00% - 50.00% Seagram Ukraine Limited(2) - 60.90%
Avenida Comercial de Macau, nos 251ª-301,
EABL (Tanzania) Limited(2) - 65.00% Stauningvej 38, 6900 Skjern International House, 64 Nile Street, London, AIA Tower, Level 20, Macau United Kingdom
Plot 117/2, Access Road, Nelson Mandela Stauning Whisky Holding ApS - 40.00% England, N1 7SR Moët Hennessy Diageo Macau Limited(11) - Persimmon House, Fulford, York YO19 4FE
JOINT OPERATIONS (12)

Expressway, Chang'Ombe Industrial Area, Las Olas Limited - 33.33% 67.00%

France China Trafalgar Metropolitan Homes Limited -
P.O. Box 41080, Dar es Salaam The Biscuit Factory, 4-6 Anderson Place, EH6 Malaysia 50.00%
24/32 rue Jean Goujon, 75008 Paris 804A, 488 Middle Yincheng Road,
Serengeti Breweries Limited(3) - 55.25% 5NP, Edinburgh Unit 30-01, Level 30, Tower A, Vertical
Shanghai, Pilot Free Trade Zone
Moët Hennessy International - 34.00% Freshwater Spirits Company Ltd - 25.00% (1) Directly owned by Diageo plc.
Uganda Moët Hennessy Diageo (China) Co. Ltd(11) - Business Suite, Avenue 3, Bangsar South, No. (2) Dormant company.
Moët Hennessy, SAS - 34.00% United States 67.00% 8, Jalan Kerinchi, 59200 Kuala Lumpur
Plot 3-17 Port Bell Road, Luzira, Kampala, (3) Ownership held in class of A shares.
P.O. Box 7130 Hungary 1045 Dodge Lane Fallon, NV 89406 Dominican Republic Moët Hennessy Diageo Malaysia Sdn Bhd.(11) (4) Ownership held in class of B shares.
- 67.00% (5) Ownership held in class of A shares and B shares.
Uganda Breweries Limited - 63.82% Soroksari ut 26, Budapest, 1095 Nevada Spirits DE, LLC - 24.19% Segunda (2da) Street, Los Platanitos, (6) Ownership held in preference shares.
Netherlands (7) Operation is managed by Diageo.
Plot No 1 Malt Road, Portbell Luzira P.O. Box Zwack Unicum plc - 26.00% Santiago
1209 Orange Street, Wilmington, DE 19801 (8) Companies controlled by the group based on
3221 Kampala Industria de Licores Internationales S.A. - Molenwerf 12, 1014 BG, Amsterdam management's assessments.
India Gourmet Grade LLC - 19.41%
International Distillers Uganda Limited - 60.86% Diageo-Moët Hennessy B.V.(5) - 67.00% (9) Based on 55.88% equity investment in USL that
65.00% E-47/5., Okhla Industrial Area, Phase II, New 1521 Concord Pike Suite 201, Wilmington, DE
excludes 2.38% owned by the USL Benefit Trust.
Delhi, South Delhi, DL 110020 France Singapore (10) Additional 0.34% via Treasury shares at 30 June 2024
Tusker House, Ruaraka, P.O. Box 30161, 19803 (11) Operation is managed by Moët Hennessey.
Nao Spirits & Beverages Private Limited - 105 Boulevard de la Mission Marchand, 83 Clemenceau Ave, 09-01 UE Square, (12) Diageo shares joint control over these entities under
00100 Nairobi GPO Browned Butter Bottling LLC - 40.00% Courbevoie, 92400
30.00% Singapore 239920 shareholders' agreements, and Diageo's rights to
East African Maltings (Uganda) Limited(2) - 16192 Coastal Highway, Lewes, Delaware Moët Hennessy Diageo SAS - 0.05% profit, assets and liabilities of the companies are
Italy Moët Hennessy Diageo Singapore Pte. Ltd(11)
65.00% 19958 dependent on the performance of the group's brands
Hong Kong - 67.00% rather than the effective equity ownership of the
United Kingdom Via Tortona 15, 20144, Milan Ironroot Republic Holdings LLC - 31.95%
Thailand companies.
Niococktails S.R.L. - 49.00% Level 54, Hopewell Centre, 183 Queen's
11 Lochside Place, Edinburgh, EH12 9HA 1935 W. Irving Park Chicago, IL 60613 Road East, Hong Kong No. 944, Mitrtown Office Tower, 12th Floor,
Lochside MWS Limited Partnership Japan Ritual Beverage Company LLC - 30.05% Rama 4 Road, Wangmai, Pathumwan,
Moët Hennessy Diageo Hong Kong
McDowell & Co. (Scotland) Ltd(2),(9) - 55.88% 845-3 Kaminokawa, Hiyoshi-cho Hioki-shi, 251 Little Falls Drive, Wilmington, Delaware Limited(11) - 67.00% Bangkok, 10330
Kagoshima 19808 Diageo Moët Hennessy (Thailand) Limited(7) -
16 Great Marlborough St, London, W1F 7HS Japan
Komasa Kanosuke Distillery Company Ltd - VineLab Inc. - 26.22% 63.02%
Diageo Pension Trust Limited(1),(8) - 55.00% 12.50% 13F Jimbocho Mitsui Building, 1-105
Kandajimbocho, Chiyoda-ku, Tokyo Ukraine
545 Johnson Avenue, Brooklyn, NY 11237
Lakeside MWS Limited Liability Partnership Netherlands
Analog Liquid LLC - 27.78%
Seedlip Ltd - 91.00% Ceresstraat 1, 4811 CA Breda
Shaw Wallace Overseas Limited(2),(9) - Canbrew B.V.(4) - 28.16%
6220 Avalon Boulevard, Suite 220, 11. Post balance sheet events
Alpharetta, GA 30009
55.88% On 24 July 2024, Diageo announced its agreement with LVMH to exit from their joint operation Moët Hennessy Diageo France, and the termination
Spain Pronghorn Initiative Holdings, LLC - 49.00%
United Spirits (Great Britain) Limited(2),(9) - of the existing distribution agreements in place for France of all remaining Diageo brands, effective from 1 January 2025. In respect of the
55.88% Calle General Vara del Rey 5, 1 Piso, 26003 65 SE Washington Street Portland, OR 97214 termination, the parties have agreed Diageo to pay a settlement amount, that will be accounted for in the year ending 30 June 2025.
Logroño, La Rioja
United Spirits (UK) Limited(2),(9) - 55.88% House Spirits Distillery LLC - 29.85%
El Bandarra, S.L. - 25.00%
USL Holdings (UK) Limited(2),(9) - 55.88% 735 10th Street, Fortuna, CA 95540
Calle Malí, 7 La Laguna, 38320 Santa Cruz
United States de Tenerife Redwood Spirits LLC - 25.00%
175 Greenwich Street, Three World Trade Compania Cervecera De Canarias, S.A. - 8601296, TT Administrative Services LLC, 888
Center, New York, NY 10007 20.00% SW Fifth Avenue, Ste 1600, Portland,
California Simulcast Inc.(2) - 80.00% United Kingdom Oregon, 97204
Seedlip Inc. - 91.00% Wilderton LLC - 27.78%
354 Castlehill, The Royal Mile, Edinburgh,
2950 North Loop W Ste 1200 Houston, TX EH1 2NE Vietnam
77092-8808 The Scotch Whisky Heritage Centre Limited - 94 Lo Duc Street, Pham Dinh Ho Ward, Hai
Far West Spirits LLC - 99.00% 29.00% Ba Trung District, Ha Noi City
39-45 Bermondsey Street, London, SE1 3XF Hanoi Liquor and Beverage Joint Stock
Venezuela
London Botanical Drinks Limited - 20.00% Company (Halico) - 45.57%
Ave. San Felipe Urbanización La Castellana,
Edificio Centro Coinasa, Piso 6. Caracas, 64 New Cavendish Street, London, W1G 8TB JOINT VENTURES
1060 Costa Rica
Pulpex Limited - 28.93%
Industrias Pampero C.A. - 96.80% Heredia-Flores Llorente, Cervecería de Costa
8 King Edward Street, Oxford, OX1 4HL
Vietnam Rica, Edificio Corporativo de FIFCO
Still On The Hill Limited - 28.57% HA&COM Bebidas del Mundo, S.A. -
621 Pham Van Chi Street, District 6, Ho Chi
Ballindalloch Castle, Ballindalloch, Banffshire 50.00%
Minh City
AB37 9AX India
Vietnam Spirits and Wine Ltd - 55.00%
Ballindalloch Distillery LLP - 33.33% G-8, First Floor, Hauz Khas, 110016, New
ASSOCIATES
Harbourside Brewery, Tretoil Farm, Bodmin, Delhi
Australia Cornwall, PL30 5BA Inspired Hospitality Private Limited - 15.00%
50 Bertie Street, Port Melbourne, Victoria The Southwest Fermentorium Limited - United Kingdom
3207 25.00%
9 Wheatfield Road, EDINBURGH, EH11 2PX

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UNAUDITED FINANCIAL INFORMATION

Unaudited financial information

1. Definitions and reconciliation of non-GAAP measures to GAAP measures
Diageo’s strategic planning process is based on certain non-GAAP (b) Acquisitions and disposals
measures, including organic movements. These non-GAAP measures For acquisitions in the current period, the post-acquisition results are

Additional information
are chosen for planning and reporting, and some of them are used for excluded from the organic movement calculations. For acquisitions in
incentive purposes. The group’s management believes that these the prior period, post-acquisition results are included in full in the prior
measures provide valuable additional information for users of the period but are included in the organic movement calculation from the
financial statements in understanding the group’s performance. These anniversary of the acquisition date in the current period. The
non-GAAP measures should be viewed as complementary to, and not acquisition row also eliminates the impact of transaction costs that
replacements for, the comparable GAAP measures and reported have been charged to operating profit in the current or prior period in
movements therein. respect of acquisitions that, in management’s judgement, are
It is not possible to reconcile the forecast tax rate before expected to be completed.
exceptional items, forecast organic net sales growth and forecast Where a business, brand, brand distribution right or agency
organic operating profit growth to the most comparable GAAP agreement was disposed of or terminated in the reporting period, the
measure as it is not possible to predict, without unreasonable effort, group, in the organic movement calculations, excludes the results for
with reasonable certainty, the future impact of changes in exchange that business from the current and prior period. In the calculation of
rates, acquisitions and disposals and potential exceptional items. operating profit, the overheads included in disposals are only those
directly attributable to the businesses disposed of, and do not result
Volume
from subjective judgements of management.
Volume is a performance indicator that is measured on an equivalent
units basis to nine-litre cases of spirits. An equivalent unit represents (c) Exceptional items
one nine-litre case of spirits, which is approximately 272 servings. A Exceptional items are those that in management’s judgement need to
serving comprises 33ml of spirits, 165ml of wine, or 330ml of ready to be disclosed separately. Such items are included in the income
drink or beer. Therefore, to convert volume of products other than statement caption to which they relate, and form part of the segmental
spirits to equivalent units, the following guide has been used: beer in reporting, and are excluded from the organic movement calculations.
hectolitres, divide by 0.9; wine in nine-litre cases, divide by five; ready Management believes that separate disclosure of exceptional items
to drink and certain pre-mixed products that are classified as ready to and the classification between operating and non-operating items
drink in nine-litre cases, divide by ten. further helps investors to understand the performance of the group.
Changes in estimates and reversals in relation to items previously
Organic movements recognised as exceptional are presented consistently as exceptional in
Organic information is presented using US dollar amounts on a the current year.
constant currency basis excluding the impact of exceptional items, Exceptional operating items are those that are considered to be
certain fair value remeasurements, hyperinflation and acquisitions and material and unusual or non-recurring in nature and are part of the
disposals. Organic measures enable users to focus on the operating activities of the group, such as one-off global restructuring
performance of the business which is common to both years and programmes which can be multi-year, impairment of intangible assets
which represents those measures that local managers are most and fixed assets, indirect tax settlements, property disposals and
directly able to influence. changes in post-employment plans.
Contents Calculation of organic movements
Gains and losses on the sale or directly attributable to a
prospective sale of businesses, brands or distribution rights, step up
Unaudited financial information 227 The organic movement percentage is the amount in the row titled gains and losses that arise when an investment becomes an associate
‘Organic movement’ in the tables below, expressed as a percentage or an associate becomes a subsidiary and other material, unusual
Cautionary statement 237 of the relevant absolute amount in the row titled ‘Year ended 30 June non-recurring items that are not in respect of the production,
Non-financial reporting boundaries and methodologies 238 2023 adjusted’. Organic operating margin is calculated by dividing marketing and distribution of premium drinks, are disclosed as
Independent Limited Assurance Report to the Directors of operating profit before exceptional items by net sales after excluding exceptional non-operating items below operating profit in the income
Diageo plc on selected information 258 the impact of exchange rate movements, certain fair value statement.
remeasurements, hyperinflation and acquisitions and disposals. Exceptional current and deferred tax items comprise material and
Other additional information 262
(a) Exchange rates unusual or non-recurring items that impact taxation. Examples include
direct tax provisions and settlements in respect of prior years and the
Exchange in the organic movement calculation reflects the adjustment
remeasurement of deferred tax assets and liabilities following tax rate
to recalculate the reported results as if they had been generated at the
changes.
prior period weighted average exchange rates.
Exchange impacts in respect of the external hedging of intergroup (d) Fair value remeasurement
sales by the markets in a currency other than their functional currency Fair value remeasurements in the organic movement calculation
and the intergroup recharging of services are also translated at prior reflect an adjustment to eliminate the impact of fair value changes in
period weighted average exchange rates and are allocated to the biological assets, earn-out arrangements that are accounted for as
geographical segment to which they relate. Residual exchange remuneration and fair value changes relating to contingent
impacts are reported as part of the Corporate segment. Results from consideration liabilities and equity options that arose on acquisitions
hyperinflationary economies are translated at forward-looking rates. recognised in the income statement.

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Adjustment in respect of hyperinflation Cumulative inflation over 100% (2% per month compounded) Asia Latin America
The group's experience is that hyperinflationary conditions result in over three years is one of the key indicators within IAS 29 to assess North America
$ million
Europe
$ million
Pacific
$ million
and Caribbean
$ million
Africa
$ million
Corporate
$ million
Total
$ million
price increases that include both normal pricing actions reflecting whether an economy is deemed to be hyperinflationary. As a result,
the definition of 'Organic movements' includes price growth in Net sales
changes in demand, commodity and other input costs or
considerations to drive commercial competitiveness, as well as markets deemed to be hyperinflationary economies, up to a Year ended 30 June 2023 reported (re-presented) 8,109 4,303 3,841 2,159 2,039 104 20,555
hyperinflationary elements and that for the calculation of organic maximum of 2% per month while also being on a constant currency Exchange 6 56 55 13 21 1 152
movements, the distortion from hyperinflationary elements should be basis. Corresponding adjustments have been made to all income
excluded. statement related lines in the organic movement calculations. Reclassification — 62 (62) — — — —
In the tables presenting the calculation of organic movements, Disposals(1) — (4) (126) — (131) — (261)
'hyperinflation' is included as a reconciling item between reported
Hyperinflation — (71) — — — — (71)
and organic movements and that also includes the relevant IAS 29
adjustments. Year ended 30 June 2023 adjusted 8,115 4,346 3,708 2,172 1,929 105 20,375
Organic movement calculations for the year ended 30 June 2024 were as follows: Organic movement (206) 124 164 (459) 235 13 (129)

Asia Latin America

Acquisitions and disposals (1)
2 30 30 — 131 — 193
North America Europe Pacific and Caribbean Africa Corporate Total
million million million million million million million Exchange (3) (59) (85) 105 (539) 5 (576)
Volume (equivalent units) Hyperinflation — 363 — 21 22 — 406
Year ended 30 June 2023 reported 52.4 51.3 80.8 26.2 32.7 — 243.4 Year ended 30 June 2024 reported 7,908 4,804 3,817 1,839 1,778 123 20,269
Reclassification — 0.5 (0.5) — — — — Organic movement % (3) 3 4 (21) 12 12 (1)
(1)
Disposals — (0.1) (6.2) — (1.3) — (7.6)
Asia Latin America
Year ended 30 June 2023 adjusted 52.4 51.7 74.1 26.2 31.4 — 235.8 North America
$ million
Europe
$ million
Pacific
$ million
and Caribbean
$ million
Africa
$ million
Corporate
$ million
Total
$ million
Organic movement (2.3) (0.6) 0.6 (4.1) (1.9) — (8.3) Marketing
Acquisitions and disposals (1)
— 0.2 0.2 — 2.6 — 3.0 Year ended 30 June 2023 reported (re-presented) 1,631 765 655 355 235 22 3,663
Year ended 30 June 2024 reported 50.1 51.3 74.9 22.1 32.1 — 230.5 Exchange (1) 8 4 — (3) 2 10
Organic movement % (4) (1) 1 (16) (6) — (4) Reclassification — 1 (1) — (12) — (12)
Asia Latin America
Disposals(1) — — (13) — (5) — (18)
North America Europe Pacific and Caribbean Africa Corporate Total
$ million $ million $ million $ million $ million $ million $ million Hyperinflation — (7) — — — — (7)
Sales Year ended 30 June 2023 adjusted 1,630 767 645 355 215 24 3,636
Year ended 30 June 2023 reported (re-presented) 8,859 7,245 6,484 2,714 2,864 104 28,270 Organic movement (10) 34 16 (70) 35 2 7
Exchange 6 132 59 11 28 1 237 Acquisitions and disposals(1) 5 22 5 — 4 — 36
Reclassification — 62 (62) — — — — Exchange 2 10 (15) 21 (50) 3 (29)
Disposals (1)
— (7) (377) — (196) — (580) Hyperinflation — 40 — — 1 — 41
Hyperinflation — (185) — — — — (185) Year ended 30 June 2024 reported 1,627 873 651 306 205 29 3,691
Year ended 30 June 2023 adjusted 8,865 7,247 6,104 2,725 2,696 105 27,742 Organic movement % (1) 4 2 (20) 16 8 —
Organic movement (351) 415 320 (487) 258 13 168
Acquisitions and disposals(1) 3 30 35 — 131 — 199
Exchange (3) (294) (139) 172 (632) 5 (891)
Hyperinflation — 626 — 22 25 — 673
Year ended 30 June 2024 reported 8,514 8,024 6,320 2,432 2,478 123 27,891
Organic movement % (4) 6 5 (18) 10 12 1

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Asia Latin America In the year ended 30 June 2024, the acquisitions and disposals that affected volume, sales, net sales, marketing and operating profit were as
North America
$ million
Europe
$ million
Pacific
$ million
and Caribbean
$ million
Africa
$ million
Corporate
$ million
Total
$ million
follows, as per footnote (1) on the previous page:
Operating
Operating profit before exceptional items Volume Sales Net sales Marketing profit
EU million $ million $ million $ million $ million
Year ended 30 June 2023 reported (re-presented) 3,222 1,312 1,104 783 289 (397) 6,313
Year ended 30 June 2023 (re-presented)
Exchange(2) 27 (2) 29 42 110 45 251
Acquisitions
Reclassification — 47 (47) — — — —
Balcones Distilling — — — — 2
Fair value remeasurement of contingent
considerations, equity option and earn-out Don Papa Rum — — — — 20
arrangements (122) (30) — (1) — — (153) — — — — 22
(1)
Acquisitions and disposals 2 17 (32) — (38) — (51) Disposals
Hyperinflation — 19 — — — — 19 USL Popular brands (5.9) (277) (43) — (6)
Year ended 30 June 2023 adjusted 3,129 1,363 1,054 824 361 (352) 6,379 Archers brand (0.1) (7) (4) — (3)
Organic movement (142) (15) 60 (302) 86 9 (304) Windsor (0.3) (100) (83) (13) (26)
Acquisitions and disposals(1) (12) (14) 7 — 27 — 8 Guinness Cameroun S.A. (1.3) (196) (131) (5) (38)
Fair value remeasurement of contingent (7.6) (580) (261) (18) (73)
considerations, equity option and earn-out
arrangements 128 27 — — — — 155
Acquisitions and disposals (7.6) (580) (261) (18) (51)
Fair value remeasurement of biological assets — — — (16) — — (16)
Exchange(2) 133 26 (58) (5) (332) (23) (259)
Year ended 30 June 2024
Hyperinflation — (8) — 1 (11) — (18)
Acquisitions
Year ended 30 June 2024 reported 3,236 1,379 1,063 502 131 (366) 5,945
Mr Black — 3 2 1 (4)
Organic movement % (5) (1) 6 (37) 24 3 (5)
Balcones Distilling — — — 4 (8)
Gordon's 1.2 105 105 4 8
Organic operating margin % (3)
Don Papa Rum 0.2 30 30 22 (14)
Year ended 30 June 2024 37.8 30.2 28.8 30.5 20.7 n/a 30.0
1.4 138 137 31 (18)
Year ended 30 June 2023 38.6 31.4 28.4 37.9 18.7 n/a 31.3
Disposals
Organic operating margin movement (bps) (79) (121) 35 (746) 194 n/a (130)
Windsor 0.2 35 30 5 7
(1) Acquisitions and disposals that had an effect on organic volume, sales, net sales, marketing and operating profit growth in the year ended 30 June 2024, are detailed on page 231.
(2) The impact of movements in exchange rates on reported figures for operating profit was principally in respect of the unfavourable exchange impact of the weakening of the Nigerian
Guinness Cameroun S.A. 1.4 26 26 — 19
naira, the Turkish lira and the Kenyan shilling, partially offset by the favourable impact of the Mexican peso and sterling against the US dollar. 1.6 61 56 5 26
(3) Organic operating margin calculated by dividing Operating profit before exceptional items by net sales.

(i) For the reconciliation of sales to net sales, see page 45. Acquisitions and disposals 3.0 199 193 36 8
(ii) Percentages and margin movements are calculated on rounded figures.

Earnings per share before exceptional items

Earnings per share before exceptional items is calculated by dividing profit attributable to equity shareholders of the parent company before
exceptional items by the weighted average number of shares in issue.
Earnings per share before exceptional items for the years ended 30 June 2024 and 30 June 2023 are set out in the table below:
2024 2023
re-presented
$ million $ million

Profit attributable to equity shareholders of the parent company 3,870 4,445

Exceptional operating and non-operating items 14 402
Exceptional tax items and tax in respect of exceptional operating and non-operating items 24 (226)
Exceptional items attributable to non-controlling interests 104 (173)
Profit attributable to equity shareholders of the parent company before exceptional items 4,012 4,448

Weighted average number of shares million million

Shares in issue excluding own shares 2,234 2,264

Dilutive potential ordinary shares 5 7
Diluted shares in issue excluding own shares 2,239 2,271

cents cents

Basic earnings per share before exceptional items 179.6 196.5

Diluted earnings per share before exceptional items 179.2 195.9

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Free cash flow Operating cash conversion

Free cash flow comprises the net cash flow from operating activities aggregated with the net cash expenditure paid for property, plant and Operating cash conversion is calculated by dividing cash generated from operations excluding cash inflows and outflows in respect of exceptional
equipment and computer software that are included in net cash flow from investing activities. items, dividends received from associates, maturing inventories, provisions, other items and post-employment payments in excess of the amount
The remaining components of net cash flow from investing activities that do not form part of free cash flow, as defined by the group’s charged to operating profit by operating profit before depreciation, amortisation, impairment and exceptional operating items.
management, are in respect of the acquisition and sale of businesses and loans to associates and other investments that do not meet the definition The measure is excluding any hyperinflation adjustment above the organic treatment of hyperinflationary economies. The ratio is stated at the
of cash and cash equivalents. budgeted exchange rates for the respective year and is expressed as a percentage.
The group’s management regards a portion of the purchase and disposal of property, plant and equipment and computer software as Operating cash conversion for the years ended 30 June 2024 and 30 June 2023 were as follows:
ultimately non-discretionary since ongoing investment in plant, machinery and technology is required to support the day-to-day operations, 2024 2023
whereas acquisition and sale of businesses are discretionary. re-presented
$ million $ million
Where appropriate, separate explanations are given for the impacts of acquisition and sale of businesses, dividends paid and the purchase of
own shares, each of which arises from decisions that are independent from the running of the ongoing underlying business. Profit for the year 4,166 4,479
The Directors and management have redefined free cash flow to exclude the adjustment for cash paid or received in respect of loans and other Taxation 1,294 1,163
investments. The group's management believes the redefined free cash flow definition is a more appropriate measure of the ongoing cash
generation of the group. The presentation of free cash flow for the year ended 30 June 2023 has been aligned to free cash flow for the year ended Share of after tax results of associates and joint ventures (414) (443)
30 June 2024. Net finance charges 885 712
Free cash flow reconciliations for the years ended 30 June 2024 and 30 June 2023 are set out in the table below: Non-operating items 70 (364)
2024 2023
re-presented
Operating profit 6,001 5,547
$ million $ million
Exceptional operating items (56) 766
Net cash inflow from operating activities 4,105 3,636
Fair value remeasurements (141) (153)
Disposal of property, plant and equipment and computer software 14 16
Depreciation, amortisation and impairment(1) 678 597
Purchase of property, plant and equipment and computer software (1,510) (1,417)
Hyperinflation adjustment 6 (33)
Free cash flow 2,609 2,235
Retranslation to budgeted exchange rates 248 512
6,736 7,236

Cash generated from operations 6,065 5,744

Net exceptional cash paid(2) 185 30
Post-employment payments less amounts included in operating profit (1)
18 31
Net movement in maturing inventories(3) 577 693
Provision movement 29 81
Dividends received (269) (271)
Other items(1) (88) 17
Hyperinflation adjustment (23) (34)
Retranslation to budgeted exchange rates 216 461
6,710 6,752

Operating cash conversion 99.6% 93.3%

(1) Excluding exceptional items.

(2) Exceptional cash payments in operating cash flow for various litigation matters were $102 million (2023 – $nil), for distribution termination fee was $55 million (2023 – $nil), for the
supply chain agility programme was $26 million (2023 – $14 million) and for winding down our Russian operations was $2 million (2023 – $16 million).
(3) Excluding non-cash movements such as exchange and the impact of acquisitions and disposals.

Return on average invested capital

Return on average invested capital is used by management to assess the return obtained from the group’s asset base and is calculated to aid
evaluation of the performance of the business.
The profit used in assessing the return on average invested capital reflects operating profit before exceptional items attributable to equity
shareholders of the parent company plus share of after tax results of associates and joint ventures after applying the tax rate before exceptional
items for the fiscal year. Average invested capital is calculated using the average derived from the consolidated balance sheets at the beginning,
middle and end of the year. Average capital employed comprises average net assets attributable to equity shareholders of the parent company for
the year, excluding net post-employment benefit assets/liabilities (net of deferred tax) and average net borrowings.
The Directors and management have redefined the return on average invested capital to exclude the previous adjustment in respect of average
integration and restructuring costs (net of tax) and goodwill at 1 July 2004 from average invested capital. The presentation of return on average
invested capital for the year ended 30 June 2023 has been aligned with the year ended 30 June 2024.

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Tax rate before exceptional items

Calculations for the return on average invested capital for the 30 June 2024 and 30 June 2023 are set out in the table below: Tax rate before exceptional items is calculated by dividing the total tax charge before tax charges and credits in respect of exceptional items, by
profit before taxation adjusted to exclude the impact of exceptional operating and non-operating items, expressed as a percentage. The measure
2024 2023
re-presented is used by management to assess the rate of tax applied to the group’s operations before tax on exceptional items.
$ million $ million The tax rates from operations before exceptional and after exceptional items for the years ended 30 June 2024 and 30 June 2023 are set out in
Operating profit 6,001 5,547 the table below:
Exceptional operating items (56) 766 2024 2023
re-presented
Profit before exceptional operating items attributable to non-controlling interests (192) (207) $ million $ million

Share of after tax results of associates and joint ventures 414 443 Taxation on profit (a) 1,294 1,163
Tax at the tax rate before exceptional items of 23.2% (2023 – 23.0%) (1,475) (1,554) Tax in respect of exceptional items (24) 158
4,692 4,995 Exceptional tax credit — 68
Tax before exceptional items (b) 1,270 1,389
Average net assets (excluding net post-employment benefit assets/liabilities) 11,270 10,914
Average non-controlling interests (1,941) (2,001) Profit before taxation (c) 5,460 5,642
Average net borrowings 20,361 18,297 Non-operating items 70 (364)
Average invested capital 29,690 27,210 Exceptional operating items (56) 766
Profit before taxation and exceptional items (d) 5,474 6,044
Return on average invested capital 15.8% 18.4%
Tax rate after exceptional items (a/c) 23.7 % 20.6 %
Adjusted net borrowings to adjusted EBITDA
Tax rate before exceptional items (b/d) 23.2 % 23.0 %
Diageo manages its capital structure with the aim of achieving capital efficiency, providing flexibility to invest through the economic cycle and
giving efficient access to debt markets at attractive cost levels. The group regularly assesses its debt and equity capital levels to enhance its capital
structure by reviewing the ratio of adjusted net borrowings (net borrowings plus post-employment benefit liabilities before tax) to adjusted EBITDA Other definitions References to emerging markets include Poland, Eastern Europe,
Volume share is a brand’s retail volume expressed as a percentage of Türkiye, Latin America and Caribbean, Africa and Asia Pacific
(earnings before exceptional operating items, non-operating items, interest, tax, depreciation, amortisation and impairment).
the retail volume of all brands in its segment. Value share is a brand’s (excluding Australia, Korea and Japan).
Calculations for the ratio of adjusted net borrowings to adjusted EBITDA for the years ended 30 June 2024 and 30 June 2023 are set out in the
retail sales value expressed as a percentage of the retail sales value of References to ready to drink also include ready to serve products,
table below:
all brands in its segment. Unless otherwise stated, share refers to value such as pre-mixed cans in some markets.
share. References to beer include cider, flavoured malt beverages and
Net sales are sales less excise duties. Diageo incurs excise duties some non-alcoholic products such as Malta Guinness.
2024 2023
re-presented throughout the world. In the majority of countries, excise duties are The results of Hop House 13 Lager are included in the Guinness
$ million $ million effectively a production tax which becomes payable when the product figures.
Borrowings due within one year 2,885 2,142 is removed from bonded premises and is not directly related to the There is no industry-agreed definition for price tiers and for data
value of sales. It is generally not included as a separate item on providers such as IWSR, definitions can vary by market. Diageo bases
Borrowings due after one year 18,616 18,649 price tier definitions on a methodology that uses external metrics
external invoices; increases in excise duties are not always passed on
Fair value of foreign currency derivatives and interest rate hedging instruments 42 40 to the customer and where a customer fails to pay for a product (including market pricing data from Nielsen, IRI etc., as well as the
Lease liabilities received, the group cannot reclaim the excise duty. The group therefore IWSR segmentation) for benchmarking and internal pricing metrics for
604 564
recognises excise duty as a cost to the group. a consistent segmentation.
Less: Cash and cash equivalents (1,130) (1,813) References to the disposal of the USL Popular brands include non-
Price/mix is the number of percentage points difference between
Net borrowings 21,017 19,582 the organic movement in net sales and the organic movement in exhaustively the Haywards, Old Tavern, White Mischief, Honey Bee,
volume. The difference arises because of changes in the composition of Green Label and Romanov brands.
Post-employment benefit liabilities before tax 429 471
sales between higher and lower priced variants/markets or as price References to the group include Diageo plc and its consolidated
Adjusted net borrowings 21,446 20,053 changes are implemented. subsidiaries.
Shipments comprise the volume of products sold to Diageo’s
Profit for the year 4,166 4,479 immediate (first tier) customers. Depletions are the estimated volume of
the onward sales made by Diageo's immediate customers. Both
Taxation 1,294 1,163 shipments and depletions are measured on an equivalent units basis.
Net finance charges 885 712
Depreciation, amortisation and impairment (excluding exceptional accelerated depreciation and impairment) 678 597
Exceptional accelerated depreciation and impairment (185) 700
EBITDA 6,838 7,651
Exceptional operating items (excluding accelerated depreciation and impairment) 129 66
Non-operating items 70 (364)
Adjusted EBITDA 7,037 7,353

Adjusted net borrowings to adjusted EBITDA 3.0 2.7

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2. Contractual obligations and other commitments

Payments due by period
Cautionary statement concerning forward-looking statements
Less than More than
1 year 1-3 years 3-5 years 5 years Total
$ million $ million $ million $ million $ million This document contains ‘forward-looking’ statements. These statements and assumptions and the processes and issues involved are complex.
can be identified by the fact that they do not relate only to historical or The ESG-related forward looking statements should be treated with
As at 30 June 2024
current facts and may generally, but not always, be identified by the special caution, as ESG and climate data, models and methodologies
Long-term debt obligations 2,388 4,992 4,258 9,812 21,450 use of words such as “’will”, “anticipates”, “should”, “could”, “would”, are often relatively new, are rapidly evolving and are not of the same
Interest obligations 791 1,043 789 1,866 4,489 “targets”, “aims”, “may”, “expects”, “intends” or similar expressions standard as those available in the context of other financial information,
statements. In this document, such statements include those that nor are they subject to the same or equivalent disclosure standards,
Credit support obligations 14 — — — 14 express forecasts, expectations, plans, outlook, objectives and historical reference points, benchmarks, market consensus or globally
Purchase obligations 2,413 1,009 389 37 3,848 projections with respect to future matters, including information related accepted accounting principles. In particular, it is not possible to rely on
Commitments for short-term leases and leases of low-value assets 16 6 1 — 23 to Diageo’s fiscal 25 outlook, Diageo’s medium-term guidance, historical data as a strong indicator of future trajectories in the case of
Diageo’s supply chain agility programme, future Total Beverage climate change and its evolution. Outputs of models, processed data
Provisions and other non-current payables 101 225 187 192 705 Alcohol market share ambitions and any other statements relating to and methodologies are also likely to be affected by underlying data
Lease obligations 114 178 117 310 719 Diageo’s performance for the year ending 30 June 2025 or thereafter. quality, which can be hard to assess and we expect industry guidance,
Forward-looking statements involve risk and uncertainty because they market practice, and regulations in this field to continue to change.
Capital commitments 780 3 — — 783
relate to events and depend on circumstances that will occur in the There are also challenges faced in relation to the ability to access data
Other financial liabilities 198 — — — 198 future. There is a number of factors that could cause actual results and on a timely basis and the lack of consistency and comparability
Total 6,815 7,456 5,741 12,217 32,229 developments to differ materially from those expressed or implied by between data that is available. This means the ESG-related forward-
these forward-looking statements, including factors that are outside looking statements and ESG metrics discussed in this document carry
Long-term debt obligations comprise the principal amount of borrowings (excluding foreign currency swaps) with an original maturity of greater Diageo's control, which include (but are not limited to): an additional degree of inherent risk and uncertainty, and therefore, our
than one year. Interest obligations comprise interest payable on these borrowings and are calculated based on the fixed amounts payable and (i) economic, political, social or other developments in countries and actual results and developments could differ materially from those
where the interest rate is variable on an estimate of what the variable rates will be in the future. Credit support obligations represent liabilities to markets in which Diageo operates, including geopolitical instability as a expressed or implied by the ESG-related forward-looking statements in
counterparty banks in respect of cash received as collateral under credit support agreements. Purchase obligations include various long-term result of Russia's invasion of Ukraine and the conflict in the Middle East this document.
purchase contracts entered into for the supply of raw materials, principally bulk whisk(e)y, cereals, cans and glass bottles. Contracts are used to and macroeconomic events that may affect Diageo’s customers, In light of the uncertainty as to the nature of future policy and market
guarantee the supply of raw materials over the long-term and to enable a more accurate prediction of costs of raw materials in the future. For suppliers and/or financial counterparties; (ii) the effects of climate responses to climate change, including between regions, and the
certain provisions, discounted numbers are disclosed. change, or legal, regulatory or market measures intended to address effectiveness of any such responses, Diageo may have to re-evaluate its
Corporate tax payable of $136 million and deferred tax liabilities of $2,947 million are not included in the table above, as the ultimate timing of climate change; (iii) changes in consumer preferences and tastes, progress and adapt its approach towards its ESG ambitions,
settlement cannot be reasonably estimated. including as a result of disruptive market forces, changes in commitments and targets in the future, update the methodologies it
Management believe that it has sufficient funding for its working capital requirements. demographics and evolving social trends (including any shifts in uses or alter its approach to ESG and climate analysis and may be
consumer tastes towards at-home occasions, premiumisation, small- required to amend, update and recalculate its ESG disclosures and
3. Off-balance sheet arrangements batch craft alcohol, or lower or non-alcoholic products and/or assessments in the future, as market practice and data quality and
Neither Diageo plc nor any member of the Diageo group has any off-balance sheet financing arrangements that currently have or are reasonably developments in e-commerce); (iv) changes in the domestic and availability develop rapidly.
likely to have a material future effect on the group’s financial condition, changes in financial condition, results of operations, liquidity, capital international tax environment that could lead to uncertainty around the All oral and written forward-looking statements made on or after the
expenditure or capital resources. application of existing and new tax laws and unexpected tax date of this document and attributable to Diageo are expressly
exposures; (v) changes in the cost of production, including as a result of qualified in their entirety by the cautionary statements contained or
increases in the cost of commodities, labour and/or energy due to referred to in this section. Further details of potential risks and
inflation and/or supply chain disruptions; (vi) any litigation or other uncertainties affecting Diageo are described in our filings with the
similar proceedings (including with tax, customs, competition, London Stock Exchange and the US Securities and Exchange
environmental, anti-corruption or other regulatory authorities); (vii) legal Commission (SEC), including in our Annual Report on Form 20-F for the
and regulatory developments, including changes in regulations relating year ended 30 June 2024.
to environmental issues and/or e-commerce; (viii) the consequences of Any forward-looking statements made by or on behalf of Diageo
any failure of internal controls; (ix) the consequences of any failure by speak only as of the date they are made. Diageo expressly disclaims
Diageo or its associates to comply with anti-corruption, sanctions, trade any obligation or undertaking to publicly update or revise these
restrictions or similar laws and regulations, or any failure of Diageo’s forward-looking statements other than as required by applicable law.
related internal policies and procedures to comply with applicable law The reader should, however, consult any additional disclosures that
or regulation; (x) Diageo’s ability to make sufficient progress against or Diageo may make in any documents which it publishes and/or files
achieve its ESG ambitions; (xi) cyber-attacks and IT threats or any other with the SEC.
disruptions to core business operations; (xii) contamination, All readers, wherever located, should take note of these disclosures.
counterfeiting or other circumstances which could harm the level of This document includes names of Diageo’s products, which constitute
customer support for Diageo’s brands and adversely impact its sales; trademarks or trade names which Diageo owns, or which others own
(xiii) Diageo’s ability to maintain its brand image and corporate and license to Diageo for use. All rights reserved. © Diageo plc 2024.
reputation or to adapt to a changing media environment; (xiv) The information in this document does not constitute an offer to sell
fluctuations in exchange rates and/or interest rates; (xv) Diageo’s ability or an invitation to buy shares in Diageo plc or an invitation or
to successfully execute its strategic business transformation projects; inducement to engage in any other investment activities.
(xvi) Diageo’s ability to derive the expected benefits from its business This document may include information about Diageo’s target debt
strategies, including Diageo’s investments in e-commerce and its luxury rating. A security rating is not a recommendation to buy, sell or hold
portfolio; (xvii) increased competitive product and pricing pressures, securities and may be subject to revision or withdrawal at any time by
including as a result of introductions of new products or categories that the assigning rating organisation. Each rating should be evaluated
compete with Diageo’s products and consolidations by competitors and independently of any other rating.
retailers; (xviii) increased costs for, or shortages of, talent, as well as Past performance cannot be relied upon as a guide to future
labour strikes or disputes; (xix) movements in the value of the assets performance.
and liabilities related to Diageo’s pension plans; (xx) Diageo’s ability to References in this document to information on websites are included
renew supply, distribution, manufacturing or licence agreements (or as an aid to their location and such information is not incorporated in,
related rights) and licences on favourable terms, or at all, when they and does not form part of, this document unless otherwise noted.
expire; or (xxi) any failure by Diageo to protect its intellectual property
rights.
In preparing the ESG-related information contained in this
document, Diageo has made a number of key judgements, estimations

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NON-FINANCIAL REPORTING BOUNDARIES AND METHODOLOGIES

For a restatement of environmental data, we restate the data for the Scope and methodology of physical and transition
Reporting boundaries and methodologies baseline year and intervening years.
In the case of our environmental data, we may restate prior years’
data to reflect updates to GHG emission factors, in line with the GHG
climate risk scenario analysis reported on pages
61-66
Protocol recommendations and for any changes in reporting policy Scenario analysis of physical risks
that result in a change to the baseline of more than 1%. We also Important note on scenario analysis
restate prior years’ data where structural changes regarding Climate risk scenario analysis has limitations: it is not a predictor of the
The non-financial reporting boundaries and All company-owned vehicles, specifically all vehicles used and re- outsourcing and insourcing have an impact of more than 1%. In future and it is limited by the assumptions used, which themselves are
fuelled on Diageo’s premises, are included in direct operation certain cases, where historical data is unavailable, the environmental subject to uncertainty. No single scenario is likely to materialise and
methodologies outlined here relate to the social greenhouse gas emissions (Scope 1 and 2). The emissions associated impacts for the baseline year and intervening years are extrapolated we are all likely to be exposed to both physical and transition risks as
and environmental performance disclosures set with leased vehicles not under our control are included in our indirect from current environmental impact data, based on production
patterns and other relevant factors.
the world continues to warm as a consequence of emissions already in
greenhouse gas emissions (Scope 3). In limited instances, Diageo has the atmosphere. The pathway to reducing emissions is also highly
out in the Annual Report and the ESG Reporting ownership of some benefit cars which are not used and re-fuelled on Any other restatement for all metrics is triggered by a benchmark variable, as governments and industry pursue a variety of means, such
Index. Any exceptions, differences or deviations Diageo operational sites. The emissions associated with these cars are threshold of 5%. as introducing regulation and developing new technologies.
included in our indirect greenhouse gas emissions (Scope 3). Nevertheless, scenario analysis is a powerful tool to understand how
from or limitations on these general reporting VI. Reliability and accuracy of data our business could be impacted under certain plausible but severe
Net zero emissions are reached when anthropogenic (i.e. human-
methodologies and boundaries are explicitly caused) emissions of greenhouse gases into the atmosphere are We have systems, processes and controls that govern the collection, future conditions and it allows us to understand where risks and
review and validation of non-financial data included in this report. opportunities are most likely to materialise, to understand trends and
noted alongside the respective metrics in the balanced by anthropogenic removals over a specified period. A
Reporting boundaries and methodologies are reviewed and updated to integrate these into our strategy.
science based approach to net zero covers greenhouse gas emission
subsequent tables that follow. Scope 1, 2 and 3 with direct abatement of approximately 90% from where appropriate each year by leadership teams. We are continually
Following the recommendations of the Task Force on Climate-related
our emissions baseline and up to 10% of high-quality certified carbon strengthening our data collection processes and underlying controls.
Financial Disclosures (TCFD), we conducted scenario analysis to
General reporting methodology and boundaries, offsets to neutralise hard-to-abate residual emissions to close the gap Whilst we seek to capture all information as accurately as possible, it is determine the likely financial impact of the most important physical
to zero. neither feasible nor practical to measure all data with absolute risks on our assets and operations. The physical risks we identified of
covering both non-environmental and certainty. Where we have made estimates or exercised judgement, this most importance were:
‘Carbon neutral’ or ‘carbon neutrality’ refers to an outcome in which
environmental metric reporting greenhouse gas emissions have been neutralised, through a is highlighted within the reporting methodologies for each indicator
1. Water supply: Inability to produce brands due to constrained water
Our non-financial reporting presents relevant information that is based combination of emissions reduction efforts and the purchase of carbon under ‘Limitations’.
supply as a result of drought caused by climate change.
on the data available at the time of publication, while being offsets/credits, resulting in no net release of carbon dioxide. Any The metrics with the symbol Δ are subject to independent limited
transparent about its limitations. carbon offset purchases for discrete carbon neutral claims are 2. Agricultural material supply: Increased cost of raw materials due to
assurance by PricewaterhouseCoopers LLP – see pages 258-261 of this
specifically for certification and are not included in annually reported scarcity caused by changes in growing conditions caused by
I. Reporting period document and pages 118-121 of the ESG Reporting Index.
Diageo greenhouse gas emission footprint. climate change.
Our reporting covers the financial year ended 30 June 2024 unless Some of our listed subsidiaries also publish sustainability information
3. Site integrity: Inability to produce products, or damage to stored
indicated otherwise. III. Baseline and targets either as standalone reports or as part of their annual report.
products due to acute weather events (floods or storms).
The financial year ended 30 June 2020 is our baseline year and
II. Scope applies to the majority of our ‘Spirit of Progress‘ ambitions. If a different
A non-exhaustive set of examples of this reporting are linked below:
4. Disruption to agricultural material supply: Inability to receive
(1)
Unless stated otherwise , the scope of all non-financial data disclosed baseline year is used, this is described in the following pages. The • United Spirits Limited agricultural materials due to acute weather events (floods or
in the Annual Report and the ESG Reporting Index encompasses the baseline year is used as the basis for calculating progress against our • Sichuan Swellfun Co.,Ltd storms).
performance of Diageo plc's worldwide operations and its subsidiaries, ambitions. We aim to achieve each ambition by fiscal 30, unless • East African Breweries Ltd
along with the proportionate contribution of results from significant Using available climate data and natural catastrophe-modelling
otherwise stated in the following pages. • Guinness Nigeria plc
joint ventures, associates and joint operations. Deviations from the techniques, our climate resilience partners calculated projected
reporting scope depend on the nature of each performance metric Material changes to environmental reporting boundaries and VII. Reporting systems Estimated Annual Losses (EALs) and Value at Risk (VaR) for the present
and any differences are explained for each performance metric methodologies are reviewed at 2030 grain-to-glass Strategic Business We use four main systems to collect, validate and analyse reported day and two future time periods (2030 and 2050) under two climate
below. Review meetings that are chaired by the President, Global Supply data. scenarios. For most climate variables, these climate scenarios include
Chain & Procurement and Chief Sustainability Officer. The Executive • Human Resources data is reported at site level primarily using a ‘moderate’ emissions reduction pathway (RCP4.5 or SSP245) and a
We have defined reporting boundaries for those targets and metrics Working Group - a group that leads discussion on ESG topics and our ‘worst-case’ pathway (RCP 8.5 or SSP 585). The results were expressed
Workday, our global information management systems. HR data is
which are part of our ‘Spirit of Progress’ action plan, including those 'Spirit of Progress' plan - also reviews material changes to the as:
collected on a monthly basis for all Workday markets. Non-
under the banner “Doing Business the Right Way”. The reporting reporting boundaries and methodologies on an annual basis. Workday markets data is manually captured offline. Both Workday Present day and projected EALs driven by:
boundaries for all metrics and targets are based on the nature of each
IV. Acquisitions, new sites and divestments and non-Workday markets data are then consolidated.
indicator and, in the case of our greenhouse gas (GHG) emissions • The impact of drought, river floods and tropical windstorms on
• Health and Safety information for performance measures is
metrics, with reference to the Greenhouse Gas Protocol. Acquisitions are included in the consolidated reporting for all metrics owned and third-party-operated production assets.
collected locally, on a monthly basis, using site held incident reports.
Environmental data and health and safety data is collected and from the date when control transfers or as soon as practically feasible • The impact of floods and tropical windstorms on supplier assets
This is collated and analysed using a web-based information
reported for all operational sites and office sites with more than 50 and no later than one year after that date. This duration varies as each (glass and cans).
management system.
employees where we have operational control ('direct operations')(2). new acquisition has unique systems and processes that must be
• Environmental data is collected on key measures of environmental
The environmental impacts associated with leased facilities where we integrated. and present day and projected VaR associated with:
performance monthly at site and market level and consolidated for
do not have operational control or have less than 50 employees are New sites or site extensions are included in the scope of all metrics group reporting monthly. Data is collated and analysed using a
excluded and considered immaterial to the company’s overall from the date commissioning commences. web-based environmental management system. • The exposure of production assets to water stress.
impacts. The environmental and health and safety impacts associated • Market-level ‘Spirit of Progress‘ data: Where ‘Spirit of Progress‘ • The exposure of production and supplier assets to tropical
with leased or third-party manufacturing units, where we have a lease In the case of divestments, data associated with the divestment is windstorms.
programmes are managed at a local level, data is collated every
arrangement under International Financial Reporting Standards (IFRS), removed from the baseline, intervening years and current year unless
quarter. The data is compiled at market, regional and global levels,
are excluded from our direct operations data. otherwise stated in the following pages.
alongside our other ‘Spirit of Progress‘ goals and is reviewed by
(1) Non-financial information, including baseline information, excludes the performance V. Restatements general managers, functional leadership teams, the 2030 grain-to-
attributable to one of our business units in Greater China due to local regulatory We may restate prior years’ data due to structural changes in our glass Strategic Business Review (SBR) and the Executive Committee
restrictions. We believe the exclusion of this data does not materially impact our non- operations, including from acquisitions and divestments; during quarterly meetings.
financial performance.
(2) We define operational control using the definition of accounting standards for most of improvements in data quality and calculation methods and material
our ESG metrics. For greenhouse gas emissions, our definition is aligned with the changes to relevant policies.
Greenhouse Gas Protocol. Any exceptions, limitations and judgements, including
around interpretation of the GHG protocol, are explained under each performance To determine whether we need to restate prior years’ data, we
metric. examine whether the qualitative or quantitative impacts of the
changes are material to the users of our reporting.

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A summary of the scope of our physical and transition risk assessments and scenario analysis Input costs assessed in the scenario analysis by geography
Timeframe Short term (0-5yrs) Medium term (2030) Long term (2050) Region Global United United Canada Mexico Türkiye India Africa Asia LAC Ireland
Kingdom States Pacific
Geography All Diageo and key third-party operations in North America, Scotland (fiscal 21); India, Africa, Mexico and Türkiye
Glass l
(fiscal 22); Asia Pacific, Europe and Latin America and Caribbean (fiscal 23). In fiscal 24, we assessed a further 13
new acquisitions or important third-party sites to complete our assessment. Aluminium l
Risk types Physical risks Transition risks and opportunities Land transport l
Water (availability, quality, temperature), temperature,
flooding, landslide, wildfires, wind, humidity Ocean transport l
Temperature scenarios +4 to +5ºC (extreme) +2 to +3ºC 1.5ºC to 2ºC (Paris agreement) Energy l l l l l l l l l
RCP 8.5' (moderate) RCP 2.6'
RCP 4.5' Electricity l l l l l l l l l
Scope Raw materials:
Barley l

Raw materials Processing Distribution Risks reviewed Opportunities Wheat l

1,200+ suppliers' Approximately 250 Key road, rail routes Policy and legal risks Resource efficiency Maize l
sites Diageo and third- Key sea ports (69) Technology risks Energy source
Key raw materials* party operations Market risks Products and services Rice l
(wheat, barley, sites Reputation risks Markets Sorghum l
maize, cane and Detailed
beet sugar, vanilla, assessments of 39 Sugar l
aniseed, grapes, sites
Vanilla l
broken rice, Scenario analysis Scenario analysis
sorghum, agave, Energy Pack weight Aniseed l
dairy, hops) Transport reduction
*+4 to +5ºC Packaging Circular offerings Agave l
scenario only Raw materials Grapes l

Scenario analysis of transition risks Both scenarios rely on a combination of internal assumptions (e.g. Hops l
Over fiscal years 21-24, we conducted scenario analyses of the impact production costs, sales and margin growth rates, product mix, etc.) Dairy l
on our financial performance of transition risks, stemming from a Paris- and external factors (e.g. carbon pricing, increased green energy
aligned scenario. Our modelling is based on a successful transition to production and decarbonisation of industry). External models
a low-carbon economy to limit the temperature rise to 1-2⁰C by 2100 available from the International Energy Agency, the Intergovernmental
and assumes a variety of decarbonisation challenges and Panel on Climate Change and other institutions were supplemented
opportunities relating to ingredients, energy, packaging and transport where necessary by our expert partners' internal models. Together,
costs and changes in demand for our products (to 2030 and 2050). these models gave us a range of plausible assumptions designed to
Over the course of several years, we have refined the model and capture a trajectory of changes in demand, costs, prices, regulation,
incorporated data relating to our entire business, including production technology and capital investments in relevant markets and business
volume, sales, raw materials and packaging costs and projected segments, that could result in the world achieving net zero emissions
growth rates by category and market, to inform future scenarios. by 2050. We looked at how combinations of these changes might
affect us both positively (increased demand for sustainable products)
In modelling the financial impact of a successful transition to a low- and negatively (higher costs) and estimated the combined effect on
carbon economy, we considered two scenarios: our cash flow to both 2030 and 2050. Outlined in the table on page
1. A baseline scenario which incorporates stated policies and national 241 below are the materials that most affect our input costs, which may
targets that are already in place and have detailed measures for go up or down depending on the situation. We have modelled costs
their realisation; and based on our exposure to global versus local changes; for example,
glass and aluminium are procured globally, while the cost of energy,
2. A transition scenario that assumes the world successfully reaches net for example, is local. For each scenario, we then estimated the prices
zero emissions by 2050. This scenario considers necessary changes of major input costs, where relevant by geography and modelled the
in the global energy sector and associated changes across all other impact they would have on our operating profit.
sectors of the economy that can reasonably be modelled.

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Target (continued) Scale up our SMASHED partnership and educate 10 million young people, parents and teachers on the dangers

Promote positive drinking Data preparation and

measurement
of underage drinking
The number of people educated is supplied by in-country delivery partners to Collingwood through teachers and online
records. We have assumed that teachers are an impartial and accurate provider of student numbers, with clear
knowledge of the groups allocated to SMASHED. We have also assumed that students participating in SMASHED live
and online have adequate literacy skills to understand and complete written evaluation forms.
SMASHED Live operates pre- and post-evaluation surveys of the target audience of young learners.
Target Scale up our SMASHED partnership and educate 10 million young people, parents and teachers on the dangers The following sampling criteria have been established to measure attitude change:
of underage drinking
• Assess at least 20% of programme participants through pre- and post-evaluation surveys.
Performance measures • Number of people educated on the dangers of underage drinking through a Diageo-supported education • The participants that make the 20% sample must be selected randomly.
programme • If the sample is less than 200 people, the same participants must take the pre- and post-evaluation surveys.
• Number of people who confirmed changed attitudes on the dangers of underage drinking following participation in
a Diageo-supported education programme The number of people who confirmed changed attitude is calculated by projecting the results of the survey, for those
who have confirmed in the post-survey question that they are less likely to drink underage, to the total number of
Definition SMASHED is our flagship underage drinking programme, developed and delivered in partnership with Collingwood people educated for the events run.
Learning (Collingwood) and sponsored by Diageo. Our SMASHED partnership aims to change attitudes to underage
drinking through live theatre performances, workshops and interactive online learning experiences. From September 2022, where an audience numbers over 500 students in one session, we categorised these as ‘large
scale special events’. Where large scale events were run if there are a sufficient number of facilitators (ratio 1:200
Live: A live or virtual theatre performance in schools or other community setting, with interactive workshops for students, students) then the full number of people educated were included. If the number of facilitators present is below this ratio,
resources for teachers and parents, and comprehensive evaluations. then the number of people in attendance were capped at the large-scale event number.
Online: An innovative and engaging e-learning course, telling the SMASHED story through film clips, with interactive From October 2023, we extended capping of our participants to a 1:200 teacher to student ratio across all sizes of
learning tools, student assessment and teacher support. events and formats. This enhancement balances the need for large gathering programme delivery with maintaining
Offline: SMASHED Online programme can also be delivered offline through PowerPoint and film clips. impactful instruction and participation.
People educated: Target age group (10-17), who have participated in the live or online learning experience. The data, alongside supporting evidence is supplied by delivery partners and then consolidated and reviewed by
Completions for online are counted only on course completion, and live completion is counted when the individuals, as Collingwood before being shared with Diageo for review and reporting.
recorded by the teacher, have completed the session, which is then confirmed by the local delivery partner. Limitations We consider double counting to be highly unlikely, given the SMASHED activity is only delivered once to any audience
Changed attitudes: A young person who confirmed a changed attitude is someone who responds to the post-survey within the curricular requirements for the year and our delivery partners also ensure additional quality measures, which
question by stating that they are less likely to drink underage. This is supported by evidenced progression through pre- are detailed below. No unique personal identifiers are collected, for data privacy reasons.
and post-performance surveys against all other learning outcomes, with the ‘less likely to drink underage’ results as the • Where two programmes are available, we mitigate the risk of duplication by offering programmes strategically to
core indicator. different school areas.
Reporting period 1 June to 31 May. The complexity of gathering data from hundreds of schools globally with different academic years • Our delivering markets self-declare duplication risks proactively. These self-reported risks of duplication have been
means there is a lag in reporting information from our live programmes. Each financial year we include data from 1 omitted from reported figures.
June to 31 May. The baseline year for the reporting of cumulative progress is our financial year ended 30 June 2018.
• We request all markets document steps they take to avoid duplication of audience participation year-on-year with
Scope exception When SMASHED is delivered by a third party and is partially funded by Diageo, we only claim the proportion of people an annual deduplication statement. Output from these statements provide a tailored, specific, and culturally
educated that our funding contributes to. appropriate approach to avoiding double counting.
• We have assumed that the number of students expected to either repeat a year group or change secondary schools
is negligible, based on the most recent statistics from third parties.

Target Extend our UNITAR partnership, and promote changes in attitudes to drink driving, reaching five million people
by 2030
Performance measure Number of people educated about the dangers of drink driving
Definition Our Wrong Side of the Road (WSOTR) digital learning resource with the United Nations Institute for Training and
Research (UNITAR), primarily delivered online, is designed to help people understand the consequences of drink
driving by listening to the repercussions for people who decided to get behind the wheel after drinking. All stories
shared via WSOTR are real and aim to help prevent other people from making the same mistakes. The purpose is to
show the effects that this decision can have on the individual and the people around them, helping viewers to consider
what would happen if they were in a similar situation.
We have also introduced a pilot programme called Sober versus Drink Driving. This is a gamification approach to
educating people about how alcohol impacts core driving skills. The intention is to demonstrate how drinking impacts
their ability to control the vehicle. We have initiated a trial in six markets and also in one of our brand homes, the
Guinness Storehouse in St. James’ Gate, Dublin.
People educated: Any individual who completes the WSOTR training or Sober versus Drink Driving. Completions for
online or in person training are only counted on course completion. Adaptations of the programmes are only made for
language translation.
Scope exception For programmes that are partially funded by Diageo, we only claim the proportion of people educated that our
funding contributes to.
Reporting period 1 July to 30 June. Our baseline year is fiscal 22.
Data preparation and Data preparation depends on the format of the training. For online trainings, completions are reported daily based on
measurement Diageo’s own system or via third parties who must provide back-up data. For offline trainings, data is reported
quarterly and reviewed by the Diageo global team.
Limitation -

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Our people
Governance and ethics
Health and safety
Performance measure Lost-time accident frequency rate (LTAFR)
Performance measure Code of Business Conduct mandatory training Definition LTAFR is the number of lost time accidents (LTAs) for employees and contractors who work under Diageo’s direct
supervision. The calculation is based on actual working hours and is expressed as a rate per 1,000 full-time equivalent
Definition Annually, we request all Diageo employees to complete the Code of Business Conduct e-learning. This requires
(Occupational Health and Safety (OH&S) FTE). OH&S FTE differs from our employee based FTE; it includes contractors.
employees to confirm their commitment to their compliance and ethics accountabilities, and certify that they have
read, understood, and complied with our Code of Business Conduct and supporting global policies. Direct supervision exists when Diageo directly defines the contractors’ deliverables and the methods and processes by
Scope exception Employees on long-term leave e.g. family leave, sickness leave. which the work is performed.

Data preparation and We deliver the Code of Business Conduct e-learning through our global online training tool, Diageo My Learning Hub, We define an LTA as any work-related incident resulting in injury or illness, where a healthcare professional or Diageo
measurement which holds participation and completion records for the course. Participation and completion records are reported to recommends one or more full days away from work, or where a job restriction or modification prevents the employee
market and function leadership teams and reviewed by Business Integrity leads. from conducting their routine tasks and activities and from working a full shift.
Limitation - We consider an injury or illness to be work-related when an event or exposure in the work environment (including
people working at home) either caused or contributed to the resulting condition, or significantly aggravated a
medically documented and treated pre-existing injury or illness.
Performance measure Reported and substantiated breaches
Scope exception If the injured person did not report the accident on the same shift to their immediate line manager and/or Diageo
Definition Reported breaches are potential breaches of our Code of Business Conduct, policies or standards made known to the point of contact, this accident is not in scope as work-related.
business, either via our SpeakUp service or brought to our attention internally. Substantiated breaches are those reports
that ultimately result in sufficient evidence being gathered to support the concern raised and if dismissal occurred, Data preparation and We collect and report safety data for all locations (manufacturing, corporate office, remote commercial and remote
these employees would be recorded as a Code-related leaver. measurement home working) where we have operational control, including all office sites.
Scope exception - Each month, locations are required to collate and submit details associated with all incidents, accidents and LTAs, as
well as OH&S FTE data for their site. Contractor agencies provide data on the hours worked by each contractor under
Data preparation and We restate the number of substantiated breaches and Code-related leavers from previous years to include the
Diageo’s direct supervision. This is then combined with Diageo employee data to calculate the total OH&S FTE data for
measurement outcomes of those reports made in one financial year, but for which the investigation and any associated disciplinary
the month. Data is submitted by locations onto our global reporting platform on a monthly basis.
actions are not closed until the following financial year. This enables us to make a full and accurate year-on-year
comparison. Limitation We do not report LTAFR for independent contractors because of the difficulty and administrative burden in accurately
Limitation - recording headcount.

Performance measure Total recordable accident frequency rate (TRAFR)

Definition TRAFR includes all work-related fatalities, lost time accidents and medical treatment cases for Diageo employees
wherever they carry out their work-related activities. It includes fatalities and lost time accidents for all contractors (not
only those under our direct supervision) and outsourced service providers while on Diageo premises. It also includes
medical treatment cases for all site-based contractors. The calculation is based on actual working hours and is
expressed as a rate per 1,000 OH&S workers.
Definition for ‘Injury or illness’ as under LTAFR.
Scope exception The exception is the same as under LTAFR.
Working hours are excluded from the calculation for contractors visiting Diageo premises for a short period of time.
Data preparation and The data preparation is the same as LTAFR.
measurement
Limitation We do not report medical treatment cases for contractors visiting Diageo premises on a temporary basis.

Performance measure Number of fatalities

Definition A fatality includes any work-related fatality of an employee or contractor under our direct supervision in their day-to-
day work environment (on or off our premises), or any work-related fatality suffered by an outsourced service provider
or contractor not under our direct supervision while on our premises.
We consider a fatality to be work-related when an event or exposure in the work environment (including people
working at home) either caused or contributed to the event.
Scope exception -
Data preparation and The data preparation is the same as LTAFR.
measurement
Limitation -

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Performance measure Lost-time injury frequency rate (LTIFR)

Definition

Scope exception
Lost-time injury frequency rate (LTIFR) is a standard Occupational Safety and Health Administration (OSHA) metric that
measures the number of lost-time injuries occurring in a workplace per one million hours worked.
The scope exception is the same as LTAFR.
Champion inclusion and diversity
Data preparation and The data preparation is the same as LTAFR.
measurement
Limitation We do not report LTIFR for independent contractors because of the difficulty and administrative burden in accurately
recording headcount.
Ambition Champion gender diversity, with an ambition to achieve 50% representation of women in leadership roles by
2030
Performance measure Lost-time injury rate (LTIR)
Performance measure Percentage of female leaders globally
Definition LTIR is a standard OSHA metric that calculates the number of lost-time injuries occurring in a workplace per 200,000
hours worked. Definition Leadership roles comprise Executive Committee members (Exec), Senior Leaders (SL), Level 2 (L2) and Level 3 (L3)
Scope exception The scope exception is the same as LTAFR. roles, some of which will be vacant at any point in time. Employee type includes those on regular and fixed-term
contracts. Gender data is disclosed by employees themselves on a voluntary basis on our online Human Resources
Data preparation and The data preparation is the same as LTAFR.
system (Workday).
measurement
Limitation We do not report LTIR for independent contractors because of the difficulty and administrative burden in accurately Scope exception Non-Executive Directors and extended workers (agency workers, independent contractors, freelancers and consultants)
recording headcount. are not in scope, nor are joint ventures, joint operations not managed by Diageo or associates where Diageo does not
have operational control.
Performance measure Employee Engagement Index Data preparation and The performance measure is calculated as the average of filled leadership roles at the end of each of the four quarters
Definition The Employee Engagement Index is calculated as the percentage of respondents who answer positively to three measurement across the fiscal year. The total leadership population is calculated from markets that collect gender information
questions in our Your Voice survey: I am proud to work for Diageo; I would recommend Diageo as a great place to through Workday, enabling all employees in scope to self-disclose this information.
work; I am extremely satisfied with Diageo as a place to work. Limitation Where employees have chosen not to declare their gender, this information is excluded from the gender representation
Scope exception Contractors and employees on long-term leave are excluded. data.
Reporting period The data was collected between 2 and 26 April 2024, so the results are based on feedback from participants in that
particular window. Ambition Champion ethnic diversity with an ambition to increase representation of leaders from ethnically diverse
Data preparation and The index is calculated from an anonymous annual survey run by an independent third-party. backgrounds to 45% by 2030
measurement Performance measure Percentage of ethnically diverse leaders globally
Limitation - Definition Leadership roles comprise Executive Committee members (Exec), Senior Leaders (SL), Level 2 (L2) and Level 3 (L3)
roles, some of which will be vacant at any point in time. Employee type includes those on regular and fixed-term
Employee profile data contracts.
Performance measures Average number of employees by region by gender Average number of employees by role by gender We define ethnically diverse as those ethnic groups who are, or were historically, systematically under-represented,
Definition Employees on a full-time equivalent basis who are directly Employees on a full-time equivalent basis who are directly disenfranchised and/or economically excluded.
employed by Diageo have been allocated to the region in employed by Diageo have been allocated to the role in
Ethnically diverse people can be a majority or a minority in a country.
which they reside. which they occupy.
We determined eight categories of ethnicity, considering Diageo’s market footprint, historic underrepresentation and
We define Executive as a member of the Executive
alignment across regions: Asian, Black, Hispanic/Latin American, Indian, Indigenous, Middle Eastern and Turkish,
Committee; senior manager (Senior Leaders, Level 2 and
Mixed and Other Ethnic Groups.
Level 3) as those in top leadership positions excluding
Executive Committee members; line manager as all Based on a third-party study commissioned by Diageo, ‘Hispanic/Latin American’ is adopted as a term to categorise
Diageo employees (excluding Executive Committee and all people originating from the Latin America and Caribbean (LAC) region, including both indigenous and historically
senior managers) with one or more direct reports; and migrant populations. For the purposes of this data gathering exercise, all employees identifying as White with a LAC
supervised employee as all remaining Diageo employees nationality have been recorded as Hispanic/Latin American.
who have no direct reports. Scope exception Non-Executive Directors and extended workers (agency workers, independent contractors, freelancers and consultants)
Scope exception All Diageo employees on a full-time equivalent basis are in All Diageo employees are in scope for this performance are not in scope, nor are joint ventures, joint operations not managed by Diageo or associates where Diageo does not
scope for this performance measure. However, people measure. However, people data from joint ventures and have operational control. While Workday is live across all geographies in which leaders are based, ethnicity data
data from joint ventures and associates where Diageo associates where Diageo does not have operational collection is not legally available in Denmark, France, Italy, Portugal, Spain and Sweden. Any leaders based in these
does not have operational control are not included. control are not included. locations are not in scope.
Data preparation and Total employee data comprises our average number of Total employee data comprises our average number of Data preparation and The performance target is calculated as the average of filled leadership roles at the end of each of the four quarters
measurement FTE employees across 12 months. The average is FTE employees across 12 months except Executives, which measurement across the fiscal year.
calculated based on the FTE numbers from the last day of are reported as of 30 June 2024 because of the small
Ethnicity is selected by individuals within the leadership population from a pre-defined list that encompasses those
each month over the past year. population size. The average is calculated based on the
ethnic types most readily seen within the specific country, based on local census and governmental data. Ethnicity data
FTE numbers from the last day of each month over the
Employee type includes Regular, Graduates and Fixed is disclosed by employees on a voluntary basis on Workday. The relevant ethnicity fields are based on the country in
past year.
Term Contract (FTC) across all markets. which the individual is employed to ensure all are culturally relevant.
Employee type includes Regular, Graduates and Fixed
Employees based in India are not able to submit ethnicity data through Workday due to cultural sensitivities.
Term Contract (FTC) across all markets.
Nationality is obtained by the local HR team through official identification documents during the onboarding process.
Limitations Joint operations are included but, where Diageo does not Joint operations are included but, where Diageo does not For India-based employees not of Indian nationality, the local HR director confirms their ethnicity through a confidential
have operational control, only high-level regional data is have operational control, only high-level regional data is conversation with the individual.
available. available.
Non-LAC nationals are mapped to their identified ethnicity.
Markets where our global HR system, Workday, is not in Markets where our global HR system, Workday, is not in
Limitation Employees who declined to self-identify or have not disclosed their ethnicity are not counted as ethnically diverse.
place are reliant on manual data collection or, in some place are reliant on manual data collection or, in some
cases, we may not be able to obtain data. cases, we may not be able to obtain data.
Data on family leave is only available for markets where Data on family leave is only available for markets where
we have implemented our global HR system, Workday. we have implemented our global HR system, Workday.

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Ambition Provide business and hospitality skills to 200,000 people, increasing employability and improving livelihoods

Performance measure
through Learning for Life and our other skills programmes
Number of people reached through Learning for Life and other skills programmes Pioneer grain-to-glass sustainability
Definition Our hospitality skills training programmes, including Learning for Life, aim to increase participants’ employability,
improve livelihoods and support a thriving hospitality sector.
Our entrepreneurship programmes provide business skills related to Diageo’s activities with the aim of supporting
participants to start their own business.
Our training courses are delivered in different ways: physical, live online sessions or via e-learning. Our training
curriculums includes technical skills, life skills, sustainability and inclusion and diversity.
Preserve water for life
People reached through Learning for Life: Participants are counted when an individual successfully completes the
curriculum, evidenced by either online training system records or classroom records. Target Reduce water use in our operations with a 40% improvement in water use efficiency in water-stressed areas and a 30%
Scope exception Only markets running business and hospitality programmes are in scope. improvement across the company
Data preparation and We collate the number of beneficiaries of Learning for Life and other skills programmes through participant Performance measures • Water efficiency index - water-stressed areas
measurement programme completion records (collected face-to-face or via our online training systems) maintained by Diageo • Water efficiency index - across the company
programme managers or third-party delivery partners. Additional Percentage change in water efficiency index from the prior year and from the baseline
Limitations Accuracy relies on the quality of data provided by our third-party delivery partners. performance measures Note: This metric is used in all new Long Term Incentive Plans awarded from fiscal 24 onwards.

For entrepreneurship programmes to be included, the metric owner applies judgment in determining whether the Definition We prepare and report water withdrawal (use) using internally developed reporting methodologies based on the GRI Standards.
initiatives are appropriate to be included under the definition of providing business or hospitality skills related to our
value chain. Water withdrawal (use) includes water obtained from ground water, surface water, mains supply and water delivered to
the site by tanker, less any clean water provided directly from a site to local communities. Also excluded from reported
Third-party delivery partners avoid double counting through checking the name of the participants on programme water withdrawal data is uncontaminated water abstracted and returned to the same source under local consent, water
registration forms in the case of physical trainings or using unique identifiers for online trainings and e-learnings. Even abstracted from the sea and rainwater collection.
with these procedures, there remains a limited risk of double counting which we will be addressing through increased
controls in the future. Water efficiency for distillation is measured as water use per litre of pure alcohol (LPA) distilled for finished products only.
Water efficiency for brewing and packaging is measured as water use per litre packaged.
When preparing the water efficiency index, the change in water efficiency for distillation and the change in water
efficiency for brewing and packaging are weighted by the proportion of water used (m3) by all sites in each production
type relative to the total water use, and added together. This is then compared to the baseline and prior year.
For water-stressed only: We classify a site as in water-stressed areas if the site is in a location which meets the definition
of ‘water-stressed’, which is identified through a combination of sources, including the World Resources Institute (WRI)
Aqueduct tool, UN definitions, internal water risk survey information and external reviews by independent hydrologists.
An assessment to identify our sites located in water-stressed areas is completed every two years. We include any new-
build or acquired sites and exclude any sites divested. All sites identified as water-stressed up until the 2025 water risk
assessment will be included in the scope of our current 2030 water efficiency commitment for water-stressed areas.
Newly classified water-stressed sites are retrospectively applied to the fiscal 20 baseline, including the water use and
distilled, brewed or packaged production volumes. Similarly, sites reclassified as no longer water-stressed are removed
from the fiscal 20 baseline. This approach ensures consistency in tracking performance, versus the more stretching target
of 40% improvement for water-stressed sites.
For reference, the water efficiency index formula is: 100 – (((% Change in Water efficiency, l/l distilled*% of water withdrawals for
distillation) + (% Change in Water efficiency, l/l brewing and packaging*% of water withdrawals for brewing and
packaging))*100).
Scope exception The volume of water used on land under our operational control in Mexico and Türkiye is reported separately from water
used in our direct operations and not included in our water efficiency calculations.
Data preparation and Water withdrawal (use) is measured primarily from meter readings and invoices. In limited cases, estimates are used.
measurement Distilled, brewed and packaged production volumes are based on production records.
All sites (including offices, warehouses, maltings, etc.) are mapped to either distillation or brewing and packaging, based
on their prevailing production type. This mapping is reviewed annually and applied in determining the:
• water use distillation (m3);
• water use brewing and packaging, (m3);
• proportion of total water abstracted for each production type (%); and
• water efficiency for distillation (l/LPA) and brewing and packaging, (l/l).
Water efficiency index performance is attributed to the prevailing production type and excludes the production from the
secondary production process in the calculations (e.g. a site with distillation and packaging processes allocated to
distillation only considers the distilled production and excludes the packaged production in the calculations).
We measure water withdrawal (use), litres of pure alcohol and litres of packaged product by site and aggregate them at
the production type level.
Limitation In limited cases (e.g. failure or malfunction of water meters), estimates are used for water withdrawals.

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Target Reduce water use in our operations with a 40% improvement in water use efficiency in water-stressed areas and a Target Replenish more water than we use for our operations for all of our sites in water-stressed areas by 2026
30% improvement across the company Performance measures Annual volumetric replenishment capacity of projects developed (m3)
Performance measure • Water use efficiency per litre of product packaged (Litres/Litre) - across the company Cumulative volumetric replenishment capacity of projects developed from fiscal 16 to fiscal 24
• Water use efficiency per litre of product packaged (Litres/Litre) - water-stressed areas
Additional performance Percentage improvement in litres of water used per litre of product packaged from the prior year and from the Definition Our ambition is to replenish more water than we use in sites at our defined water-stressed areas, based on 2026
measure baseline. projected production volume.

Note: This metric is used in Long Term Incentive Plans for those awarded prior to fiscal 24. Our definition of replenishment (or volumetric water benefit) is aligned with the World Resources Institute’s (WRI)
definition. Replenishment activities beneficially modify the hydrology and address shared water challenges and
Definition We prepare and report water withdrawal (use) using internally developed reporting methodologies based on the GRI improve water stewardship outcomes.
Standards.
We classify areas as water-stressed if our site is in a location which meets the definition of ‘water-stressed’ through a
Water withdrawal includes water obtained from ground water, surface water, mains supply and water delivered to the combination of sources, including the World Resources Institute (WRI) Aqueduct tool (at the Minor Basin level), UN
site by tanker, less any clean water provided back to local communities directly from a site. Uncontaminated water definitions, internal water risk survey information and external reviews by independent hydrologists.
abstracted and returned to the same source under local consent, water abstracted from the sea and rainwater
collection, are excluded from reported water withdrawal data. An assessment to identify our sites located in water-stressed areas is completed approximately every two years. We
include any new-build or acquired sites and exclude any sites divested.
For water-stressed only: We classify a site as in water-stressed areas if the site is in a location which meets the definition
of ‘water-stressed’ which is identified through a combination of sources, including the World Resources Institute (WRI) Newly classified water-stressed sites are subsequently included in our ambition. Similarly, sites reclassified as no longer
Aqueduct tool, UN definitions, internal water risk survey information and external reviews by independent hydrologists. water-stressed are removed from the ambition. This approach ensures consistency in tracking performance versus our
projected volumes for water-stressed sites which we expect will be in production in fiscal 26.
An assessment to identify our sites located in water-stressed areas is completed approximately every two years. We
include any new-build or acquired sites and exclude any sites divested. All sites identified as water-stressed up until the To be considered within the annual volumetric replenishment capacity, replenishment projects need to be in a relevant
2025 water risk assessment will be included in the scope of our current 2030 water efficiency commitment for water- water-stressed area (e.g. a site’s water basin and/or water-stressed water basins from which we source local raw
stressed areas. materials).
Newly classified water-stressed sites are retrospectively applied to the fiscal 20 baseline, including the water use and Scope exception As the target date for the water replenishment programme is fiscal 26, any newly identified sites in water-stressed areas
packaged volumes. Similarly, sites reclassified as no longer water-stressed are removed from the fiscal 20 baseline. This in our fiscal 25 water risk assessment will be out of scope for the replenishment programme. Any site located in a
approach ensures consistency in tracking performance, versus the more stretching target of 40% improvement for water-stressed area using under 1000 m3 of water is considered de minimis and out of scope.
water stressed sites. Reporting period The complexity of gathering data from different project partners means there is a lag in reporting information our
Scope exception The volume of water used on land under our operational control in Mexico and Türkiye is reported separately from projects. Each financial year we include data from 1 June to 31 May. The baseline year is fiscal 16.
water used in our direct operations and not included in our water efficiency calculations. Data preparation and The methodology for calculating the volume of water replenished is based on the WRI’s ‘Volumetric Water Benefit
measurement Accounting: A Method For Implementing and Valuing Water Stewardship Activities (2019)’, which informs the Diageo
Data preparation and Water withdrawal (use) is measured primarily from meter readings and invoices. In limited cases, estimates are used.
Water Replenishment Programme Technical Protocol 2021. Replenishment capacity created by replenishment projects
measurement Water efficiency per litre of packaged product is calculated by dividing total water withdrawal by the total packaged
is calculated using Diageo’s Water Replenishment Programme Technical Protocol 2021. The Diageo Water
volume. We use litres of packaged product as the measure for comparison, because this indicates how much water
Replenishment Implementation Guide 2022 provides instructions for markets on how to implement the Technical
has been used relative to the amount of finished product that has been packaged. We measure litres of packaged
Protocol. The Water Replenishment Implementation Guide and Technical Protocol are reviewed on an as-needed basis.
product by site and aggregate them at group level.
Implementation partners are appointed in our water-stressed areas based on their expertise in particular project types
Limitation In limited cases (e.g. failure or malfunction of water meters), estimates are used for water withdrawals.
which based on the risk assessments and consultations with local communities, NGOs and authorities, we believe will
deliver the most impact. These implementation partners are responsible for project delivery.
Data required to calculate the indicative volume of water replenished is collected by the project’s implementation
partner. An estimate of volumes is made at the inception of the project, and then validated when the project becomes
operational. This data is then validated by an external validator and confirmed by the Diageo Head of Environment. All
current year validated replenished volumes are summed together across all projects, which is the annual replenishment
volumetric capacity added in the year.
The current year annual replenishment volumetric figure (in m3) is then added to previous volumetric figures, net of any
volumes which represent over delivery at any of our water stressed sites to arrive at a cumulative replenishment
volumetric total since 2020. This amount is compared to projected fiscal 26 water usage. The estimated site water
usage for fiscal 26 is restated every year to reflect latest estimates and previous fiscal actuals.
When projects are delivered by a third party and partially funded by Diageo, to avoid double counting, we only claim
the proportion of volumetric capacity attributable to Diageo.
Limitation Our cumulative replenishment figure includes historic projects where natural changes in the amount of water
replenished can occur over time.
We reassess these projects using a risk-based approach, testing that the projects continue to deliver the replenishment
capacity which was validated at the commissioning phase. Where there are significant changes (greater than 5%) of
original replenishment capacity, this is updated in the current year cumulative figure.

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Target Engage in collective action in all of our priority water basins to improve water accessibility, availability and quality and Data preparation and We calculate CO2e emissions data based on direct measurement of energy use (meter readings/invoices) for the
contribute to a net positive water impact measurement majority of sites.
Performance measure Percentage of priority water basins with collective action participation Market-based and location-based emissions
Definition We identify priority water basins by using a Diageo criticality assessment (based on expert judgement and water We externally report Scope 1 and 2 greenhouse gas emissions using metric tonnes of CO2e to compare the emissions
consumption volumes) and by those facing high water risk, according to the WRI Aqueduct tool. We select these from the seven main greenhouse gases based on their global warming potential. We base our CO2e reduction targets
basins, where Diageo sites are located, as we believe they would benefit most from Diageo participating in collective and reporting protocols (since 2007) on market-based emissions. We also calculate our emissions using the location-
action to address shared water challenges. based approach, where direct operations greenhouse gas emissions are reported without the benefit of indirectly
supplied renewable energy.
Water collective action incorporates multi-stakeholder water stewardship initiatives and/or projects that include
partnership with government entities, local communities, NGOs, civil society organisations and other stakeholders in Direct (Scope 1) emissions
the basin. We report fuel consumption by fuel type at site level using the environmental management system. Using calorific
values, the fuel is then converted to energy consumption, in kilowatt hours (kWh), by fuel type and is multiplied by the
The way we engage in collective action is dependent on what is required from the different initiatives that we are relevant CO2e emission factor to derive total CO2e emissions. Scope 1 emission factors for fuels are typically average
involved in. Our main role is usually the contribution of funds and strategic input but we also play additional roles to fuel CO2e emissions factors and calorific values (the latest available at the end of the period) from the UK Government
deliver effective collective action. The roles include, but are not limited to, financing projects, convening stakeholders to Department for Energy Security and Net Zero (DESNZ). For market-based emissions calculations, we apply product-
join existing or to start new initiatives, basin and project modelling, project implementation, catchment monitoring and specific factors where available. Energy attribute certificates (EACs), derived from our distillery by-product feedstock
evaluation, policy and regulatory engagement, water advocacy, institutional capacity building and/or training. We and processed by a third party to generate biomethane, form a component of our decarbonisation, together with
also contribute to the global development of guidance and models for best practice, multi-stakeholder collective purchased renewable gas EACs (i.e. from certificate-backed biomethane supplied indirectly through the natural gas
action. grid). For location-based emissions calculations, we apply product-specific factors, where available, but the specific
Scope exception This metric only includes our priority water basins as defined above. Where collective action activity is deemed to be emission factors associated with EACs are not used (i.e. indirectly supplied renewable gas through grid is reported
minimal, we do not count this activity as collective action engagement in that priority water basin. using standard, natural gas grid emission factors).
Data preparation and Evidence of collective action participation in priority water basins is collected at the country level and reviewed by the Indirect (Scope 2) emissions
measurement Diageo global metric owner. We report greenhouse gas emissions from electricity (Scope 2) as market-based emissions and as location-based
Limitation Judgment is applied when determining what is considered to be greater than minimal collective action engagement. emissions in line with the WRI/WBCSD GHG Protocol Scope 2 guidance 2015. For market-based emissions, electricity
The action we engage in are multi-stakeholder and multi-year; impact is measured over time. We reflect on the consumption recorded on our environmental management system is multiplied by emissions factors specified in EACs,
collective impact, and our individual contributions in making the judgment that our engagements were greater than a contracts, power purchase agreements and supplier utility emissions, as detailed in the GHG Protocol’s Scope 2
minimal threshold. guidance. We use GHG Protocol Scope 2 to ensure EACs and associated financial instruments meet the required
standards. GHG emission factors relating to indirect, Scope 2 emissions are updated with latest available by end of the
period. For location-based emissions, grid imported electricity consumption recorded on our environmental

Accelerating to a low-carbon world

management system is multiplied by regional or sub-national emission factors (where available) to calculate Scope 2
location-based GHG emissions. These include, for example, The Commission for Regulation of Utilities (CRU) (Ireland),
DESNZ (United Kingdom), the National Inventory Report (Canada), US eGRID (United States) and the Indian power
sector report (India). In all other cases, country or sub-regional factors are provided by the International Energy Agency
(IEA). Location-based emission factors are reviewed annually and updated with latest available at the end of the
period.
Fugitive and owned agricultural [Scope 1] emissions
We calculate fugitive emissions based on the amount of emitted ozone-depleting substances and fluorinated gases,
Target Become net zero carbon in our direct operations (Scope 1 and 2)
multiplied by the relevant emission factor to represent the global warming potential in tonnes of CO2e. Annually, each
Performance measures • Percentage change in absolute greenhouse gas emissions (direct and indirect greenhouse gas emissions by weight site reports the quantity (mass) of each material/gas emitted based on any added/topped-up amount, reported via
(market/net based)) from the prior year and the fiscal 2020 year baseline the environmental management system. The mass of each emitted ozone-depleting substance and fluorinated gas is
• Direct greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e) multiplied by the relevant emission factor and then added together to report the equivalent GHG emissions in tonnes of
• Indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e) CO2e.
• Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO2e)
We calculate agricultural emissions from direct operations owned and operated by Diageo based on fertiliser use. The
• Market based (net) intensity ratio of GHG emissions (grams CO2e per litre of packaged product)
annual quantity (mass) of inorganic fertiliser is multiplied by the percentage of nitrogen content and by the relevant
• Direct greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO2e)
GHG emission and conversion factors (e.g. nitrogen to nitrous oxide, nitrous oxide GHG emission factor) to determine
• Indirect greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO2e)
the equivalent tonnes CO2e emissions.
• Total direct and indirect greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO2e)
• Location based (gross intensity) ratio of GHG emissions (grams CO2e per litre of packaged product) Scope 1 and Scope 2 data aggregation
For market-based: Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes
Definition Scope 1 and 2 greenhouse gas emissions are presented as the absolute greenhouse gas emissions (Direct – Scope 1
CO2e) is the aggregation of Scope 1 and 2 GHG emissions with fugitive and owned agriculture emissions to calculate
emissions from on-site energy consumption of fuel sources and Indirect – Scope 2 emissions from purchased electricity
total direct operations market-based emissions. The percentage reduction in absolute greenhouse gas emissions (direct
and heat) in 1,000 tonnes CO2e using market-based and location-based reporting methodologies. Market-based and
and indirect greenhouse gas emissions by weight (market/net based)) from the prior year is a percentage change
location-based greenhouse gas emission intensity ratio is calculated as grammes per CO2e per litre, using direct
calculation with reference to the corresponding prior year figure.
operations packaged product volume in litres.
Our net zero emissions target for 2030 remains consistent with earlier reporting protocols and is based on market-
Scope exception We exclude minor quantities of Scope 1 greenhouse gas emissions up to 0.5% of a site’s emissions, to a maximum of
based emissions.
50 tonnes CO2e per emission source, as well as the greenhouse gas emissions associated with biogas flaring, since
they are determined to be immaterial to our overall impacts. For location-based: We aggregate location-based Scope 1 and 2 GHG emissions with fugitive and owned agriculture
emissions (as detailed in the market-based approach above) to calculate direct operations total location-based
Biological/biogenic CO2 emissions from the combustion of bioenergy and from direct operations processes such as emissions.
fermentation to create alcohol, are outside of scope and are reported separately. However, bioenergy CO2e emissions
associated with methane and nitrous oxides that are not absorbed in bioenergy feedstock growth, are included in GHG emission intensity ratios
Scope 1 emissions. Total, aggregated direct operations market-based and location-based emissions (as detailed above) are divided,
respectively, by the volume of direct operations packaged product reported in the same period. The market-based and
We do not include carbon offsets or credits in the Scope 1 and 2 GHG emissions market-based or location-based location-based emissions are converted to grammes of CO2e and the volume of packaged product is reported in litres
approach. to generate relevant GHG emission intensity ratios in g CO2e/litre packaged.
Limitation Where invoices or site meter readings are not available, for example, due to timing differences or metering issues, we
estimate consumption.

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Target Reduce our value chain (Scope 3) carbon emissions by 50% Target Reduce our value chain (Scope 3) carbon emissions by 50%
Performance measure Percentage change in absolute greenhouse gas emissions (ktCO2e) from the prior year Data preparation and We externally report Scope 3 GHG emissions using metric tonnes of CO2e to compare the emissions from the four
Definition Scope 3 emissions are indirect greenhouse gas (GHG) emissions generated by activities upstream or downstream of measurement greenhouse gases – carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and hydrofluorocarbons (HFCs) –
our operations that are not accounted for as Scope 1 and 2 GHG emissions. included in our calculations, based on their global warming potential.

Scope 3 greenhouse gas emissions are assessed for relevance across 15 value chain categories and sub-categories Diageo uses a combination of consumption and spend based activity data to determine Scope 3 GHG emissions for all
and for Diageo, these are deemed relevant: categories deemed relevant. The Diageo GHG Emission Factors Master Database contains the specific emission factor
used and the associated source file.
• Category 1: Purchased raw materials, packaging and third party manufacturers.
• Category 2: Capital goods. This activity data is multiplied by relevant emission factors sourced from industry-average databases, unless there are
• Category 3: Fuels and energy-related activities. supplier specific factors. Where relevant, the supplier specific factors are preferred over industry-average database
• Category 4: Upstream and downstream logistics and distribution. factors. Emission factors are updated annually based on updates to the industry-average databases and with
• Category 5: Waste generated in operations. published emission factors from suppliers.
• Category 6: Business travel. Inflation and Exchange Rate Adjustment
• Category 7: Employee commuting, including the emissions associated with leased and a limited number of Diageo For all spend-based calculations in the Scope 3 inventory, the emission factors used are based on 2019/2020 US dollars.
owned vehicles not accounted for in Scope 1 and Scope 2 GHG emissions. In alignment with the GHG Protocol Scope 3 Calculation Guidance (Section 1, page 33), spend values are adjusted to
• Category 11: Use of products sold. reflect the differences in market values between the year of the spend based factors (2019) and the current period using
• Category 12: End of life of products sold. country-specific inflation and exchange rates so the emission factor can be appropriately applied. The spend values are
We do not include carbon offsets or credits in Scope 3 GHG emissions. deflated by multiplying the current year spend by a ratio of the consumer price indices (CPI) of 2019/20 and the current
year. The CPI values are obtained from S&P Global per country that Diageo has operations in, and it was assumed that all
Scope exception Any categories of Scope 3 emissions not listed in the definition above are out of scope for reporting. These are either spend per site was acquired in, and thus subject to inflation of, the country of the site. The exchange rates are obtained
excluded on the basis of materiality or a lack of reliable data. with guidance from Diageo’s internal accounting department.
Reporting period All Scope 3 data is included for the current fiscal, with the exception of transportation and distribution (category 4). We
Diageo use two calculation methods:
have moved the reporting period from a one-year lag to now including data from June - May.
1) The average data method:
The average data as described in the GHG Protocol Scope 3 Calculation Guidance are used to calculate these
emissions. The quantity of relevant goods or services purchased in the reporting year is multiplied by the secondary
(e.g. industrial average) emission factors (e.g. average emissions per unit good or service). Cradle-to-Tiers 1 supplier
emission factors of the purchased goods or services per unit of mass are used (e.g. kg CO2e /kg).
The average data method is represented by the following equation:
CO2e emissions for purchased goods or services = Σ(mass of purchased good or service (kg) x emission factor of
purchased good or service per unit of mass (kg CO2e/kg)).
This method is applied for the following scope 3 categories:
• Category 1: Purchased goods and services.
• Category 3: Fuel and energy-related activities.
• Category 4: Upstream transportation and distribution.
• Category 5: Waste generated in operations.
• Category 6: Business travel.
• Category 7: Upstream leased assets.
• Category 11: Use of sold products.
• Category 12: End of life treatment of sold products.
2) The spend-based data method:
The spend-based data method is used to calculate these emissions. The spend on relevant capital goods purchased in the
reporting year is multiplied by the spend-based emission factor (e.g. average emissions per unit spent).
The calculation method is represented by the following equation:
CO2e emissions for capital goods = Σ (spend on capital goods (USD) x emission factor of purchased capital good per
economic value (kg CO2e/USD))
This method is applied for the following scope 3 categories:
• Category 2: Capital Purchase goods and services.
For the transportation and distribution (category 4) calculation, we have updated the GHG factors to the latest Global
Logistics Emissions Council (GLEC) factors.
The latest Global Warming Potential (GWP – 2021 IPCC report) are used in Diageo’s GHG calculation and the Biogenic
GHG emissions are not included.
Limitations Due to inherent limitations related to measurement uncertainty and/or the availability of actual activity data, we utilise
Diageo and/or industry average activity data for certain purchased goods or services. Due to limited primary
greenhouse gas factors from suppliers, secondary greenhouse gas factor sources are used, such as industry recognised
emission factors and others. As such, Scope 3 greenhouse gas emissions reporting is inherently limited and processes
to refine data calculations are constantly under review.

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Target Use 100% renewable energy across all our direct operations Target Develop regenerative agriculture programmes in five key sourcing landscapes
Performance measure • Change in percentage of renewable energy across our direct operations from the prior year Performance measure Number of regenerative agriculture programmes
• Total direct (renewable and non-renewable) energy consumption (TJ) Definition We define our key sourcing landscapes as locations from which we source our most material crops, in terms of product
• Direct energy efficiency (MJ/litre packaged) dependency (e.g. agave for tequila), volumes sourced and contribution to our Scope 3 GHG footprint.
• Indirect energy efficiency (MJ/litre packaged) The programmes include:
• Total direct and indirect energy efficiency (MJ/litre packaged)
Definition We report total energy use and renewable energy use in megawatt hours (MWh) and/or terajoules (TJ). Total energy • On-the-ground programmes with farmers to test and integrate regenerative and low-carbon practices in crop
and renewable energy use are determined from direct and indirect energy consumption; energy generated on our sites production systems
and purchased energy. We determine direct energy (renewable/non-renewable) from the quantity of different fuel • On-farm measurements and data collection protocols to track improvements in soil health, soil carbon, biodiversity,
types (in metric tonnes, litres) of renewable and non-renewable fuels and by applying the relevant calorific value (either water stewardship and farm profitability
from DESNZ or the supplier). We measure indirect energy (renewable/non-renewable) in MWh and/or TJ from energy
• Collaborative programmes with our suppliers, other commodity off-takers, expert agronomists, technology providers,
utilities or suppliers and/or by applying the relevant EACs.
NGOs or specialist organisations
We include directly connected renewable energy generated on or near our sites, where all energy is used on site and
Our regenerative agriculture programmes currently expand across three crop systems and three geographies including
no EACs are created (e.g. roof-mounted solar panels with all generated renewable electricity used on site).
barley in Ireland for our beer category (Guinness), wheat and barley for our scotch and grain neutral spirit categories
Scope exception We exclude minor energy sources that account for less than 0.5% of a site's overall Scope 1 and 2 emissions, up to a in the United Kingdom and agave for our tequila category in Mexico. We are also building partnerships across
maximum of 50 t CO2e of individual emission source. They are considered immaterial to our overall impact. additional agricultural sourcing hubs to advocate for regenerative landscape transitions including Telangana state in
Data preparation and We report total energy and renewable energy in MWh and/or TJ. We calculate direct and indirect energy data based India for broken rice, Kentucky and Tennessee in the United States for corn and rye and Kenya, Ghana and Nigeria
measurement on the direct measurement of energy use (meter readings/invoices for volumes of fuel supplied). across sorghum smallholder value chains.
We report fuel consumption by fuel type at site level using the environmental management system. Using calorific Scope exception Where programme activity is in early stages of deployment in a particular sourcing area, we do not include this
values, the fuel is then converted to energy consumption, in kWh, by fuel type and classified as either renewable or sourcing area as covered by a regenerative agriculture programme.
non-renewable based on fuel type or source. EACs, derived from our distillery by-product feedstock and processed by Data preparation Data is consolidated for each pilot programme. Tracking and reporting on improvements against key outcomes is
a third-party to generate biogas, together with purchased renewable gas EACs, are applied to relevant natural gas managed centrally.
supplied to sites via a common carrier pipeline/network.
Limitation Judgement is applied when determining what is considered to be greater than minimal programme activity. The
All indirect energy generated and used on site, along with purchased indirect energy supplied through the grid is investments we make could be through a consortium, and include other stakeholders. Impact is typically measured
classified as renewable by the allocation of EACs, contracts, power purchase agreements and supplier-specific utility over time. Our approach is to assess the impact of our individual contributions in relation to the overall investment
factors, where relevant. impact in determining whether our contributions were greater than a minimal level of programme activity.
To calculate the percentage of renewable energy use, we divide total renewable energy (direct and indirect energy
supplies (in MWh)) by total energy use, comprising all reported energy sources (MWh).
Direct energy efficiency (MJ/L); indirect energy efficiency (MJ/L) and total energy efficiency (MJ/L) are determined
from total direct energy (MJ), total indirect energy (MJ) and total energy (MJ) and divided by the volume of packaged
product (litres).
Limitation Energy data is calculated based on direct measurement of energy use (meter readings/invoices) for the majority of
sites. Where invoices are not available, for example, due to timing differences, consumption is estimated.

Target Continue our work to increase recycled content in our packaging (increasing the percentage of recycled content
in our packaging to 60%)
Performance measure Change in percentage of recycled content (by weight)
Definition We determine recycled content by establishing the percentage weight of non-virgin materials used to generate the
packaging components.
Scope exception —
Data preparation We collate packaging material volume data for the total volume of packaging purchased. We collect recycled content
data through quarterly supplier questionnaires and then consolidate and internally verify it.
Limitation Reporting relies on suppliers' technical information, timely completion of quarterly questionnaires and supporting
supplementary information.

Target Continue our work to reduce total packaging (delivering a 10% reduction in packaging weight)
Performance measure Percentage reduction of total packaging (by weight)
Definition We determine changes to packaging weight by quantifying the weight reduction in grammes multiplied by the number
of product codes (SKUs) affected, on an annualised basis.
Scope exception —
Data preparation We collate packaging material volume data for total volume of packaging purchased and weight. We verify weight
data through quarterly supplier questionnaires.
Limitation Reporting relies on suppliers' technical information, timely completion of quarterly questionnaires and supporting
supplementary information.

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INDEPENDENT LIMITED ASSURANCE REPORT ON SELECTED SUBJECT MATTER

in accordance with International Standard on Assurance Engagements 3410 ‘Assurance Engagements on Greenhouse Gas Statements’, issued by

Independent Limited Assurance Report

the International Auditing and Assurance Standards Board.
Our independence and quality control
We have complied with the Institute of Chartered Accountants in England and Wales Code of Ethics, which includes independence and other

to the Directors of Diageo plc on requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behaviour, that are at least as demanding as the applicable provisions of the International Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code).

selected information We apply International Standard on Quality Management (UK) 1 and accordingly maintain a comprehensive system of quality management
including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.

Our limited assurance conclusion Summary of work performed

Based on the procedures we have performed, as described under the “Summary of work performed” and the “Key Assurance Matters” sections We performed a limited assurance engagement. Because the level of assurance obtained in a limited assurance can vary, we give more detail
below, and the evidence we have obtained, nothing has come to our attention that causes us to believe that the information marked with the about the procedures performed, so that the intended users of the Subject Matter Information can understand the nature, timing and extent of
symbol △ in Diageo plc’s (‘Diageo’s’) Annual Report for the year ended 30 June 2024 (the “Report”) and summarised below (together, the ‘Subject procedures we performed as context for our conclusion. These procedures performed vary in nature and timing from, and are less in extent than
Matter Information’), has not been prepared, in all material respects, in accordance with Diageo’s Non-financial Reporting Boundaries and for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower
Methodologies (the ‘Reporting Criteria’) set out on pages 238 - 257 of the Annual Report. than the assurance that would have been obtained had a reasonable assurance engagement been performed.
In performing our assurance procedures, which were based on our professional judgement, we performed the following:
What we were engaged to assure
The Subject Matter Information needs to be read and understood together with the Reporting Criteria which Diageo’s Directors are solely • evaluated the suitability in the circumstances of Diageo’s use of the Reporting Criteria as the basis for preparing the Subject Matter Information
responsible for selecting and applying. The Subject Matter Information set out in the table below and the Reporting Criteria set out on pages 238 - including the associated reporting boundaries;
257 of the Annual Report: • through enquiries, obtained an understanding of Diageo’s control environment, processes and systems relevant to the preparation of the Subject
Matter Information. Our procedures did not include evaluating the suitability of design, obtaining evidence about their implementation or testing
Subject Matter Information Reported Location of Subject operating effectiveness of particular control activities;
(for the year ended 30 June 2024 unless otherwise stated) figure Matter Information • evaluated whether Diageo’s methods for developing certain estimates are appropriate and had been consistently applied, noting that our
in the Report procedures did not involve testing the data on which the estimates are based or separately developing our own estimates against which to
evaluate Diageo’s estimates;
Environmental and Safety indicators: • compared year on year movements and obtained explanations from management for significant differences we identified;
Water use efficiency per litre of product packaged (litres/litre) - across the company(1) 4.1 page 68 • performed limited substantive testing on a selective basis of the Subject Matter Information, which is aggregated from information submitted by
Percentage change in litres of water used per litre of product packaged from the prior year - across the (2.8)% page 68 Diageo’s operational sites. We undertook site visits at 10 of Diageo’s operational sites which we selected based on their inherent risk, materiality
company(3) and unexpected fluctuations in the site level Subject Matter Information since the prior period. Testing involved, on a sample basis, agreeing
arithmetical accuracy of calculations, and agreeing data points to or from source information to check that the underlying subject matter had
Water use efficiency per litre of product packaged (litres/litre) - water-stressed areas(1) 3.2 page 68
been appropriately evaluated or measured, recorded, collated and reported;
Percentage change in litres of water used per litre of product packaged from the prior year - water- (6.6)% page 68 • the Subject Matter Information related to the Water Replenishment indicator is aggregated from the specific water replenishment projects
stressed areas(3) undertaken by Diageo. In order to understand the key processes and controls for reporting, we made management enquiries and performed
Water Efficiency Index - across the company(1) 84.4 page 68 limited substantive testing on a selective basis by sampling 4 out of 30 projects, based on their inherent risk and materiality to the annual
(1) volumetric water replenishment capacity. This specifically focused on understanding how projects are selected and implemented by
Water Efficiency Index - water-stressed areas 78.7 page 68
implementation partners on behalf of Diageo. This testing checked that underlying information had been appropriately evaluated or measured,
Percentage change in water efficiency index from the prior year – across the company(3) (3.7)% page 67 recorded, collated and reported;
Percentage change in water efficiency index from the prior year – water stressed areas (3)
(6.2)% page 67 • performed limited substantive testing on a selective basis of the Subject Matter Information related to the Smashed and Inclusion and Diversity
indicators. This testing was performed to check that underlying information was complete and accurate, and had been appropriately evaluated
Percentage change in absolute greenhouse gas emissions (direct and indirect greenhouse gas (10.7)% page 70 or measured, recorded, collated and reported; and
emissions by weight (market / net based)) from the prior year(3) • evaluated the disclosures in, and overall presentation of, the Subject Matter Information.
Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes 358 page 70
CO2e)(1) Materiality
Market based (net) intensity ratio of greenhouse gas emissions (g CO2e per litre of packaged product)(1) 96 page 70 We are required to plan and perform our work to address the areas where we have identified that a material misstatement of the Subject Matter
Lost time accident frequency rate per 1,000 full-time employees (FTEs) (1)
1.06 page 58 Information is likely to arise. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to
determine the nature, timing and extent of our procedures in support of our conclusion. We believe that it is important that the intended users have
Smashed indicators (for the period 1 June 2023 to 31 May 2024): the information they need to understand the concept and the level of materiality to place our conclusion in context. Based on our professional
Number of people educated on the dangers of underage drinking through a Diageo supported 2.2 million page 1 and page 51 judgement, we determined materiality for the Subject Matter Information as follows:
education programme(1)
Overall Materiality may differ depending upon the nature of the Subject Matter Information. We apply professional judgement to consider
Number of people who confirmed changed attitudes on the dangers of underage drinking following 1.8 million page 51 materiality the most appropriate materiality benchmark for each aspect of the Subject Matter Information, having considered how the intended
participation in a Diageo supported education programme(1)
users may use the information.
Inclusion and Diversity indicators:
The benchmark approach for each aspect of the Subject Matter Information is indicated in the “What we were engaged to assure”
The percentage of female leaders globally(2) 44 % page 1 and page 59 table by one of the following numbers;
The percentage of ethnically diverse leaders globally(2) 46 % page 1 and page 59 (1) This metric is an absolute number or a ratio. A benchmark materiality of 5% has been applied.
(2) This metric is a percentage. A benchmark materiality of 2.5% has been applied.
Water Replenishment indicator: (3) This metric is an absolute number or a ratio. A benchmark materiality of 5% has been applied.
Annual volumetric replenishment capacity of projects developed (m3)(1) 1,230,000 page 68
We also agreed to report to the Directors misstatements (‘reportable misstatements’) identified during our work at a level below overall materiality,
The footnotes refer to our assessment of materiality discussed in the 'Materiality' section of this report. as well as misstatements below that lower level that in our view warranted reporting for qualitative reasons. The Directors are responsible for
The scope of our work did not extend to information in respect of earlier periods or to any other information included in, or linked from, the Report. deciding whether adjustments should be made to the Subject Matter Information in respect of those items.

Our work Key Assurance Matters

Key Assurance Matters are those areas of our work that in our professional judgement required particular focus and attention, including those
Professional standards applied which had the greatest effect on the overall assurance strategy, the allocation of resources, and directing the efforts of the engagement team.
We performed a limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised)
‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’, and, in respect of the greenhouse gas (GHG) emissions,

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I N D E P E N D E N T L I M I T E D A S S U R A N C E R E P O R T O N S E L E C T E D S U B J E C T M A T T E R continued

We considered the following area to be a Key Assurance Matter and discussed it with Diageo’s management. Use of our report
Our report, including our conclusion, has been prepared solely for the Directors of Diageo in accordance with the agreement between us dated 29
Clarity and application of the organisational boundary criteria November 2023 (as varied) (the “agreement”). To the fullest extent permitted by law, we do not accept or assume responsibility or liability to
Nature of the issue The Subject Matter Information has been prepared using internally generated Reporting Criteria that draw on anyone other than the Board of Directors and Diageo for our work or our report except where terms are expressly agreed between us in writing.
aspects of sustainability reporting frameworks, such as the GHG Protocol Corporate Standard. This approach to PricewaterhouseCoopers LLP
developing Reporting Criteria is accepted practice in the UK. Chartered Accountants
As part of their Reporting Criteria, Diageo defines and applies an ‘operational control’ approach to identify its London
organisational boundary which determines what should be included within their environmental and safety 29 July 2024
reporting. Due to the nature and complexity of certain arrangements, management uses judgement in
determining whether Diageo has operational control. For example, management judgement has been applied in
assessing operational control for leased manufacturing units, third party manufacturing units, joint ventures,
associates, assets under construction and commissioning, acquisitions and disposals.
In the current period, Diageo has updated their Reporting Criteria to provide further clarity and highlight the
judgements made to improve understandability for users of what is included within the organisational boundary.
Changes to organisational boundaries can have a significant impact on the reported Subject Matter Information
which is why we have determined this to be an area of audit focus.

How our work addressed the The following procedures have been performed to address the identified risk:
Key Assurance Matter • Considered the appropriateness of Diageo’s Reporting Criteria with respect to its organisational boundary,
taking into consideration relevant sustainability reporting frameworks;
• Tested the application of the organisational boundary as defined by the updated Reporting Criteria.

Element(s) of the Subject Environmental and safety indicators referenced above within the table in the “What we were engaged to assure”
Matter Information most section.
significantly impacted

Challenges of non-financial information

The absence of a significant body of established practice upon which to draw to evaluate and measure non-financial information allows for
different, but acceptable, evaluation and measurement techniques that can affect comparability between entities, and over time.
Non-financial information is subject to more inherent limitations than financial information, given the characteristics of the underlying subject
matter, how relevant data used for reporting is obtained and aggregated, and the methods used for measuring or evaluating it. The precision of
different measurement techniques may also vary.
Reporting on Other Information
The other information comprises all of the information in the Report other than the Subject Matter Information and our assurance report. The
Directors are responsible for the other information. As explained above, our conclusion does not extend to the other information and, accordingly,
we do not express any form of assurance thereon. In connection with our assurance of the Subject Matter Information, our responsibility is to read
the other information. In doing so, we consider whether the other information is materially inconsistent with the Subject Matter Information or our
knowledge obtained during the assurance engagement, or otherwise appears to contain a material misstatement of fact. If we identify an
apparent material inconsistency or material misstatement of fact, we are required to perform procedures to conclude whether there is a material
misstatement of the Subject Matter Information or a material misstatement of the other information, and to take appropriate actions in the
circumstances.
Responsibilities of the Directors
The Directors of Diageo are responsible for:
• determining appropriate reporting topics and selecting or establishing suitable criteria for measuring or evaluating the underlying subject matter;
• ensuring that those Reporting Criteria are relevant and appropriate to Diageo and the intended users of the Report;
• the preparation of the Subject Matter Information in accordance with the Reporting Criteria including designing, implementing and maintaining
systems, processes and internal controls over the evaluation or measurement of the underlying subject matter to result in Subject Matter
Information that is free from material misstatement, whether due to fraud or error;
• documenting and retaining underlying data and records to support the Subject Matter Information; and
• producing the Report that provides a balanced reflection of Diageo’s performance in this area and discloses, with supporting rationale, matters
relevant to the intended users of the Report; and
• producing a statement of Directors’ responsibility.
Our responsibilities
We are responsible for:
• planning and performing the engagement to obtain limited assurance about whether the Subject Matter Information is free from material
misstatement, whether due to fraud or error and in accordance with the Reporting Criteria;
• forming an independent conclusion, based on the procedures we have performed and the evidence we have obtained; and
• reporting our conclusion to the Directors of Diageo.

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OTHER ADDITIONAL INFORMATION

Diageo owns a controlling equity stake in United Spirits Limited cost of sales benefit generated from a commodity price decrease. The valuable patents and trade secrets for technology and takes all

Other additional (USL) which is one of the leading alcoholic beverage companies in
India, selling close to 61 million equivalent units (reported) in fiscal 24
Red Sea conflict, weather patterns and geo-political tensions, coupled
with volatile but strong consumer demand, are the key drivers of
reasonable steps to protect these rights.
Seasonality

information
of Indian-Made Foreign Liquor (IMFL) and imported liquors. USL has a constraints we are managing.
significant market presence across India and operates 11 owned sites, Cereals, including barley, wheat, corn, and sorghum, are used in The beverage alcohol industry is subject to seasonality in each major
as well as a network of leased and third-party manufacturing facilities. our scotch and beer production and in our spirits brands through category. Our spirits sales are typically highest during the second
USL owns several Indian brands, such as McDowell’s (Indian whisky, purchased neutral spirit. Agave, a key raw material for our tequila quarter of our fiscal year, primarily due to seasonal holiday buying in
rum, and brandy), Black Dog (Scotch), Signature (Indian whisky), brands, is sourced from Mexico. Cream, the principal raw material for our largest markets.
Royal Challenge (Indian whisky), Godawan (Indian Single Malt) and Irish cream liqueur, is sourced from Ireland. Grapes and aniseed are Employees
Spirits and investments Antiquity (Indian whisky). used in the production of raki, and are sourced from suppliers in
Spirits are produced in distilleries located worldwide. The group owns Many of our employees are represented by unions, with a variety of
Türkiye. Other raw materials purchased in significant quantities to collective bargaining agreements in place. We believe our
31 Scotch whisky distilleries in Scotland, two whisky distilleries in Beer and investments produce spirits and beer are molasses, sugar, and several flavours
Canada, and five in the United States. Diageo produces Smirnoff Diageo’s principal brewing facility is at the St James’s Gate brewery in relationships with the unions that represent our employees are
(such as juniper berries, agave, chocolate, and herbs). These are satisfactory in all material respects.
internationally. Ketel One and Cîroc vodkas are purchased as finished Dublin, Ireland. Additionally, at the end of fiscal 24 Diageo owned sourced from suppliers across the globe.
breweries in several African countries: Nigeria, Kenya, Ghana,
products from The Nolet Group and Maison Villevert, respectively. Gin
Tanzania, Uganda, and the Seychelles. On 11 June 2024, Diageo
Many products are supplied to customers in glass bottles. Glass in Regulations and taxes
distilleries are in both the United Kingdom and in Santa Vittoria, Italy. purchased from a variety of multinational and local suppliers. The
announced the agreement to sell its 58.02% shareholding in Guinness Diageo’s worldwide operations are subject to extensive regulatory
Baileys is produced in the Republic of Ireland and Northern Ireland. largest suppliers are Ardagh Packaging in the United Kingdom and
Nigeria plc to N-Seven Nigeria Ltd., part of the Tolaram Group. For requirements relating to production, product liability, distribution,
Irish whiskey is distilled at the Roe & Co distillery in Dublin. Rum is Owens-Illinois in the United States.
more information see note 8 to the Financial Statements. importation, marketing, promotion, sales, pricing, labelling,
distilled in the US Virgin Islands and in Australia, Venezuela, and Like other consumer goods companies, we maintain stocks in
Guinness flavour extract is shipped from Ireland to all overseas packaging, advertising, antitrust, labour, pensions, compliance and
Guatemala and is blended and bottled in the United States, Canada, markets to compensate for extended lead times and demand
Guinness brewing operations, which use the flavour extract to brew control systems and environmental issues.
Italy, and the United Kingdom. Raki is produced in Türkiye, Chinese volatility. Diageo is managing well through the current levels of
beer locally. Guinness is transported from Ireland to Great Britain in In the United States, the beverage alcohol industry is subject to
white spirits are produced in Chengdu, in the Sichuan province of uncertainty and constraints in our supply chain by expanding our
bulk to the Runcorn facility, where the kegging, bottling and canning strict federal and state government regulations. At the federal level, the
China, cachaça is produced in Ceará State in Brazil and tequila in supplier base and maintaining agility in our logistics networks.
of Guinness Draught takes place. Alcohol and Tobacco Tax and Trade Bureau, or TTB, of the US
Mexico. The Chase Distillery in England produces vodka and gin.
Projects are underway to support future beer growth. In July 2022, Competition Treasury Department oversees the US beverage alcohol industry,
Maturing inventories increased by $532 million in fiscal 24 to
Diageo announced plans to invest €200 million ($214 million) in Diageo’s brands compete primarily on the basis of quality and including through regulating and collecting taxes on the production of
support the future growth of scotch. Maturing scotch inventory
Littleconnell, Newbridge, Co. Kildare. Construction began in summer price. Its business is built on getting the right product to the right alcohol within the United States and regulating trade practices. In
increased by $387 million, with a total balance of $4,862 million in
2024 and the plan is for brewing to start in 2026. Furthermore, in the consumer for the right occasion, and at the right price, including addition, individual US states, as well as some local authorities in US
fiscal 24. Whisk(e)y inventories were $6,290 million in fiscal 24, mainly
second half of 2023, Diageo completed the €25 million ($27 million) through taking into account ever evolving shopper landscapes, jurisdictions in which Diageo sells or produces its products, administers
used for Scotch whisky production accounting for 77% of total
investment in a new production area at St. James’s Gate increasing technologies and consumer preferences. Diageo also seeks to recruit and enforces industry-specific regulations and may apply additional
matured whisky.
the brewing capacity of Guinness 0.0. The £41 million ($52 million) and re-recruit consumers to its portfolio of brands, including through excise taxes and, in many states, sales taxes. Federal, state and local
2024 2023
investment to expand and optimise capacity at our beer packaging meaningful consumer engagement, sustainable innovation and regulations cover virtually every aspect of Diageo's US operations,
Category $ million $ million including production, importation, distribution, marketing, promotion,
facilities in Belfast and Runcorn is progressing well. The new canning investments in its brands.
Whisk(e)y 6,290 5,777 line in Belfast and upgraded bottling capability in Runcorn are now In spirits, Diageo’s major global competitors are Pernod Ricard, sales, pricing, labelling, packaging and advertising.
- From this attributable to scotch 4,862 4,475 completed. The final upgrade of canning in Runcorn will be completed Beam Suntory, Bacardi and Brown-Forman, each of which has several Spirits and beer are subject to national import and excise duties in
in early 2025. brands that compete directly with Diageo’s brands. In addition, many markets around the world. Most countries impose excise duties
Other 1,542 1,523 on beverage alcohol products, although the form of such taxation
In May 2024, plans were announced to invest over €100 million Diageo faces competition from regional and local companies in the
Total maturing inventory 7,832 7,300 ($107 million) to decarbonise St. James’s Gate brewery in Dublin. The countries in which it operates. varies significantly from a simple application to units of alcohol by
investment underpins the goal to accelerate to net zero carbon In beer, Diageo also competes globally, as well as on a regional volume, to advanced systems based on the imported or wholesale
Diageo’s maturing Scotch whisky is stored in warehouses in Scotland emissions for the site and will transform energy and water and local basis (with the profile varying between regions) with several value of the product. Several countries impose additional import duty
(Clackmannanshire area between Blackgrange, Cambus West and consumption with the aim to make it one of the most efficient competitors, including AB InBev, Molson Coors, Heineken, on distilled spirits, often discriminating between categories (such as
Menstrie, where we are holding approximately 43% of the group’s breweries in the world by 2030. Constellation Brands and Carlsberg. Scotch whisky or bourbon) in the rate of such tariffs. Within the
maturing Scotch whisky), its maturing Canadian whisky in Valleyfield The Diageo Beer Category Third-Party Operations Team provide European Union, such products are subject to different rates of excise
and Gimli in Canada, its maturing American whiskey in Kentucky and technical services to facilitate the delivery of over three million Research and development duty in each country, but within the overall European Union framework
Tennessee in the United States and maturing Chinese white spirits in hectolitres of beer and ready to drink products supplied through over Innovation forms an important part of Diageo’s growth strategy, there are minimum rates of excise duties that must first be applied to
Chengdu, China. 50 partner breweries and beverage packaging facilities worldwide. playing a key role in positioning its brands for continued growth in each relevant category of beverage alcohol. The UK introduced a new
The iconic lost distillery of Port Ellen re-opened in March 2024, The team's focus is on assuring the consistent quality of Diageo brands both developed and emerging markets. The strength and depth of alcohol duty system in August 2023 which simplified the previous duty
marking the final phase of our £185 million ($234 million) investment in produced at third-party facilities and enhancing Diageo value through Diageo’s brand range also provides a solid platform from which to regime. Further consequential amendments to the administration of
the Scotch Whisky and Tourism sectors in Scotland. Work also supporting the start-up of new partnerships and delivery of innovation drive sustainable innovation that leads to new products and this system, though expected in the second half of 2024, are not yet
continues to expand our warehousing facilities at Midtown in projects. In addition to supporting Guinness and beer, the team has an experiences for consumers, whether or not they choose to drink published. If implemented, these could impact Diageo’s business
Clackmannanshire. Alongside the new warehouses being built, there is expanding role in supporting the third-party manufacturing of ready to alcohol. Diageo focuses its innovation on its strategic priorities and the activities.
also investment in state-of-the-art automation of warehousing. drink and spirits in Asia-Pacific and Africa. most significant consumer opportunities, including the development of Import and excise duties can have a significant impact on the final
In China, the Eryuan malt whisky distillery fully opened in mid-2024 global brand extensions and new-to-world products, and continuously pricing of Diageo’s products to consumers. These duties can affect a
Flavoured malt beverages (FMB) are made from an original base invests to deepen its understanding of evolving trends and consumer product’s revenue or margin, both by reducing consumption and/or
($76.7 million investment). It will develop the highest quality China
containing malt, but then stripped of malt character, and flavoured. socialising occasions to inform product and packaging development, by encouraging consumers to switch to lower-taxed categories of
single origin whisky, placing China firmly on the global whisky
This product segment is implemented mainly in the United States, ranging from global brand redesigns to cutting edge innovations. beverages. The group devotes resources to encouraging the equitable
producer’s map.
Canada, and the Caribbean. Supporting this, the Diageo group has ongoing programmes to taxation treatment of all beverage alcohol categories and to reducing
In North America, further capacity expansion projects are now
underway to support future growth, including the C$245 million ($179 Ready to drink (RTD) develop new beverage products which are managed internally by the government imposed barriers to fair trading.
million) construction of Crown Royal distillery in Canada to supplement Diageo produces a range of ready to drink products mainly in the innovation and research and development function. The advertising, marketing and sale of alcohol are subject to
existing manufacturing operations. United Kingdom, Italy, across Africa, Australia, the United States and various restrictions in markets around the world. These range from a
Diageo’s end-to-end tequila production is in Mexico, with more Canada. Trademarks and other intellectual property complete prohibition of alcohol in certain cultures and jurisdictions,
than $500 million being invested to expand our manufacturing Diageo produces, sells and distributes branded goods, and is therefore such as in certain states in India, to the prohibition of the import into a
Raw materials and supply agreements substantially dependent on the maintenance and protection of its certain jurisdiction of spirits and beer, and to restrictions on the
footprint through new facilities in the state of Jalisco to support growth.
The group has several long-term contracts for purchasing raw trademarks. All brand names mentioned in this document are advertising style, media and content. In a number of countries,
As part of our expansion and our investments in the tequila category,
materials, including glass, other packaging, spirits, cream, rum and protected by trademarks. The Diageo group also holds trade secrets, television is a prohibited medium for the marketing of spirits brands,
we have different digital transformation projects at the El Charcón
grapes. Forward contracts are in place for the purchase of cereals and as well as has substantial trade knowledge related to its products. The while in other countries, television advertising, while permitted, is
production site to meet the growing demand in tequila and the
packaging materials to minimise the effects of short-term price group believes that its significant trademarks are registered and/or carefully regulated. Many countries also strictly regulate the use of
expansion of our operations. Projects include additional technology
fluctuations. Despite macroeconomic uncertainty and volatility, price otherwise protected (insofar as legal protection is available) in all internet-based advertising and social media in connection with alcohol
support and automation of our new bottling line on site, which will be
pressure is easing, and some key commodities are now starting to material respects in its most important markets. Diageo also owns sales. Any further prohibitions imposed on advertising or marketing,
dedicated to Casamigos tequila, allowing us to operate 24/7.
become deflationary. Our long-term hedging means there is a lag in

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O T H E R A D D I T I O N A L I N F O R M A T I O N continued

particularly within Diageo’s most significant markets, could have an shares. In addition to those persons mentioned above, this section • at the rate of 8.75%, to the extent that the relevant dividend income treated as ordinary income or loss and will not be eligible for the
adverse impact on beverage alcohol sales. does not apply to holders that are banks, regulated investment falls below the threshold for the higher rate of income tax; special tax rate applicable to qualified dividend income. The gain or
Labelling of beverage alcohol products is also regulated in many companies, other financial institutions, or to persons who have or are • at the rate of 33.75%, to the extent that the relevant dividend loss generally will be income or loss from sources within the United
markets, varying from the required inclusion of health warning labels deemed to have acquired their ordinary shares or ADSs in the course income falls above the threshold for the higher rate of income tax States for foreign tax credit limitation purposes. Distributions in excess
to manufacturer or importer identification, alcohol strength and other of an employment or trade. This summary does not apply to persons but below the threshold for the additional rate of income tax; and of current and accumulated earnings and profits, as determined for
consumer information. As well as producer, importer or bottler who are treated as non-domiciled and resident in the United Kingdom • at the rate of 39.35%, to the extent that the relevant dividend US federal income tax purposes, will be treated as a non-taxable
identification, specific warning statements related to the risks of for the purposes of UK tax law. income falls above the threshold for the additional rate of income return of capital to the extent of the holder’s basis in the ordinary
drinking beverage alcohol products are required to be included on all This section is based on the Internal Revenue Code of 1986, as tax. shares or ADSs and thereafter as capital gain. However, Diageo does
beverage alcohol products sold in the US, in certain countries within amended, its legislative history, existing and proposed regulations, not expect to calculate earnings and profits in accordance with US
In determining whether and, if so, to what extent the relevant dividend
the EU, and in a number of other jurisdictions in which Diageo published rulings and court decisions, the laws of the United Kingdom federal income tax principles. Accordingly, a US holder should expect
income falls above or below the threshold for the higher rate of
operates. and the practice of His Majesty’s Revenue and Customs (HMRC), all to generally treat distributions Diageo makes as dividends.
income tax or, as the case may be, the additional rate of income tax,
Spirits and beer are also regulated in distribution. In many as currently in effect, as well as on the Convention Between the
countries, alcohol may only be sold through licensed outlets, both on- Government of the United Kingdom of Great Britain and Northern
the individual’s total taxable dividend income for the tax year in Taxation of capital gains
question (including the part within the Nil Rate Amount) will, as noted UK taxation
and off-trade, varying from government- or state-operated monopoly Ireland and the Government of the United States of America for the
above, be treated as the highest part of that individual’s total income A citizen or resident (for tax purposes) of the United States who has at
outlets (for example, in the off-trade channel in Norway, certain Avoidance of Double Taxation and the Prevention of Fiscal Evasion
for income tax purposes. no time been resident in the United Kingdom will not be liable for UK
Canadian provinces, and certain US states) to the system of licensed with Respect to Taxes on Income and Capital Gains (the Treaty). These
Shareholders within the charge to UK corporation tax which are tax on capital gains realised or accrued on the sale or other disposal
on-trade outlets (for example, licensed bars and restaurants) which laws are subject to change, possibly on a retroactive basis.
small companies (for the purposes of the UK taxation of dividends) will of ordinary shares or ADSs, unless the ordinary shares or ADSs are
prevails in much of the Western world, including in the majority of US In addition, this section is based in part upon the representations of
not generally be subject to tax on dividends from the company. Other held in connection with a trade or business carried on by the holder in
states, in the UK and in much of the EU. In a number of states in the the Depositary and the assumption that each obligation in the Deposit
shareholders within the charge to UK corporation tax will not be the United Kingdom through a UK branch, agency or a permanent
US, wholesalers of alcoholic beverages must publish price lists Agreement and any related agreement will be performed in
subject to tax on dividends from the company so long as the dividends establishment. A disposal (or deemed disposal) of shares or ADSs by a
periodically and/or must file price changes in some instances up to accordance with its terms. In general, and taking into account this
fall within an exempt class and certain conditions are met. In general, holder who is resident in the United Kingdom may, depending on the
three months before they become effective. In a response to public assumption, for US federal income tax purposes and for the purposes
dividends paid on shares that are ordinary share capital for UK tax holder’s particular circumstances, and subject to any available
health concerns, some governments have imposed or are considering of the Treaty, holders of ADRs evidencing ADSs should be treated as
purposes and are not redeemable and dividends paid to a person exemption or relief, give rise to a chargeable gain or an allowable loss
imposing minimum pricing on beverage alcohol products and may the owner of the shares represented by those ADSs. Exchanges of
holding less than 10% of the issued share capital of the payer (or any for the purposes of UK tax on capital gains.
consider raising the legal drinking age, further limiting the number, shares for ADRs, and ADRs for shares, generally will not be subject to
class of that share capital) are examples of dividends that fall within
type or opening hours of retail outlets and/or expanding retail US federal income tax or to UK tax on profits or gains. US taxation
an exempt class.
licensing requirements. A US holder is a beneficial owner of ordinary shares or ADSs that is Subject to the PFIC rules discussed below, a US holder who sells or
Regulatory decisions and changes in the legal and regulatory for US federal income tax purposes: US taxation otherwise disposes of ordinary shares or ADSs will recognise capital
environment could also increase Diageo’s costs and liabilities and/or Under the US federal income tax laws, and subject to the passive gain or loss for US federal income tax purposes equal to the difference
• a citizen or resident for tax purposes of the United States and who is
impact on its business activities. foreign investment company (PFIC) rules discussed below, the gross between the US dollar value of the amount that is realised and the tax
not and has at no point been resident in the United Kingdom;
amount of any distribution (other than certain pro rata distribution of basis, determined in US dollars, in the ordinary shares or ADSs. Capital
Taxation • a US domestic corporation, or other US entity taxable as a
ordinary shares) paid to a US holder by Diageo in respect of its
This section provides a descriptive summary of certain US federal corporation; gain of a non-corporate US holder is generally taxed at preferential
• an estate whose income is subject to US federal income tax ordinary shares or ADSs out of its current or accumulated earnings rates where the property is held for more than one year. The gain or
income tax and UK tax consequences that are likely to be material to and profits (as determined for US federal income tax purposes) will be
the holders of the ordinary shares or ADSs, but only those who hold regardless of its source; or loss will generally be income or loss from sources within the United
• a trust if a US court can exercise primary supervision over the trust’s treated as a dividend that is subject to US federal income taxation. States for foreign tax credit limitation purposes. The deductibility of
their ordinary shares or ADSs as capital assets for tax purposes. It does Dividends paid to certain non-corporate US holders that constitute
not purport to be a complete technical analysis or a listing of all administration and one or more US persons are authorised to capital losses is subject to limitations.
control all substantial decisions of the trust. qualified dividend income will be taxed at the preferential rates
potential tax effects relevant to the ownership of the ordinary shares or applicable to long-term capital gains, provided that the ordinary PFIC rules
ADSs, and does not address the potential application of the provisions This section is not intended to provide specific advice and no action shares or ADSs are held for more than 60 days during the 121-day Diageo believes that ordinary shares and ADSs should not currently be
of the Internal Revenue Code of 1986, as amended, known as the should be taken or omitted in reliance upon it. This section addresses period beginning 60 days before the ex-dividend date and the holder treated as stock of a PFIC for US federal income tax purposes, and we
Medicare contribution tax. This section does not apply to any holder only certain aspects of US federal income tax and UK income tax, meets other holding period requirements. Dividends paid by Diageo do not expect to become a PFIC in the foreseeable future. However
who is subject to special rules, including: corporation tax, capital gains tax, inheritance tax and stamp taxes. with respect to its ordinary shares or ADSs generally will be qualified this conclusion is a factual determination that is made annually and
• certain financial institutions; Holders of the ordinary shares or ADSs are urged to consult their own dividend income to US holders that meet the holding period thus may be subject to change. It is therefore possible that we could
• a dealer in securities or foreign currency; tax advisors regarding the US federal, state and local, and UK and requirement, provided that, in the year that they receive the dividend, become a PFIC in a future taxable year.
• a trader in securities that elects to use a mark-to-market method of other tax consequences of owning and disposing of the shares or we are eligible for the benefits of the Treaty. We believe that we are If treated as a PFIC, gain realised on the sale or other disposition of
tax accounting for securities holdings; ADSs in their respective circumstances. In particular, holders are currently eligible for the benefits of the Treaty and we therefore expect ordinary shares or ADSs would in general not be treated as capital
• a tax-exempt organisation; encouraged to confirm with their advisor whether they are US holders that dividends on the ordinary shares or ADSs will be qualified gain. Instead, unless a US holder elects to be taxed annually on a
• an insurance company; eligible for the benefits of the Treaty. dividend income, but there can be no assurance that we will continue mark-to-market basis with respect to the ordinary shares or ADSs, US
a person liable for alternative minimum tax; to be eligible for the benefits of the Treaty. Under UK law, dividends holders would be treated as if the holder had realised such gain and
•
Dividends
• a person that actually or constructively owns 10% or more of the paid by the company are not subject to UK withholding tax. Therefore, certain ‘excess distributions’ pro-rated over the holder’s holding period
UK taxation the US holder will include in income for US federal income tax for the ordinary shares or ADSs. To the extent gain is allocated to the
combined voting power of voting stock of Diageo or of the total
value of stock of Diageo; The company will not be required to withhold tax at source when purposes the amount of the dividend received, and the receipt of a taxable year of the sale or other disposition of ordinary shares or ADSs
• a person that holds ordinary shares or ADSs as part of a straddle or paying a dividend. dividend will not entitle the US holder to a foreign tax credit. and to any year before Diageo became a PFIC, it would be taxed as
a hedging or conversion transaction; All dividends received by an individual shareholder or ADS holder The dividend must be included in income when the US holder, in ordinary income. The amount allocated to each other taxable year
• a person that holds ordinary shares or ADSs as part of a wash sale who is resident in the UK for tax purposes will, except to the extent that the case of ordinary shares, or the Depositary, in the case of ADSs, would be taxed at the highest tax rate in effect (for individuals or
for tax purposes; or they are earned through an ISA or other regime which exempts the receives the dividend, actually or constructively. The dividend will not corporations, as applicable) for each such year to which the gain was
• a US holder (as defined below) whose functional currency is not US dividends from tax, form part of that individual’s total income for be eligible for the dividends-received deduction generally allowed to allocated, together with an interest charge in respect of the tax
dollar. income tax purposes and will represent the highest part of that US corporations in respect of dividends received from other US attributable to each such year. With certain exceptions, a holder’s
income. corporations. Dividends will generally be income from sources outside ordinary shares or ADSs will be treated as stock in a PFIC if Diageo
If an entity or arrangement treated as a partnership for US federal A nil rate of income tax will apply to the first £500 of taxable the United States and will generally be ‘passive’ income for purposes were a PFIC at any time during the holding period in a holder’s
income tax purposes holds ordinary shares or ADSs, the US federal dividend income received by an individual shareholder in the of computing the foreign tax credit allowable to a US holder. The ordinary shares or ADSs. In addition, dividends received from Diageo
income tax treatment of a partner will generally depend on the status 2024/2025 tax year (the Nil Rate Amount), regardless of what tax rate amount of the dividend distribution that must be included in income of will not be eligible for the special tax rates applicable to qualified
of the partner and the tax treatment of the partnership. A partner in a would otherwise apply to that dividend income. Following the UK a US holder will be the US dollar value of the pounds sterling dividend income if Diageo is a PFIC (or is treated as a PFIC with
partnership holding ordinary shares or ADSs should consult its tax election on 4 July 2024, the Nil Rate Amount in respect of the payments made, determined at the spot pounds sterling/US dollar respect to the holder) either in the taxable year of the distribution or
advisor with regard to the US federal income tax treatment of an 2025/2026 tax year may be subject to change. foreign exchange rate on the date of the dividend distribution, the preceding taxable year, but instead will be taxable at rates
investment in ordinary shares or ADSs. Any taxable dividend income in excess of the Nil Rate Amount will regardless of whether the payment is in fact converted into US dollars. applicable to ordinary income. If any investor owns our shares or ADSs
For UK tax purposes, this section applies only to persons who are be subject to income tax at the following special rates (as at the Generally, any gain or loss resulting from currency exchange during any year that we are a PFIC with respect to them, they may be
the absolute beneficial owners of ordinary shares or ADSs and who 2024/2025 tax year): fluctuations during the period from the date the dividend payment is required to file IRS Form 8621.
hold their ordinary shares or ADSs as investments. It assumes that distributed to the date the payment is converted into US dollars will be
holders of ADSs will be treated as holders of the underlying ordinary

264 Diageo Annual Report 2024 Diageo Annual Report 2024 265
 S T R A T ESTRA
G I CTEGIC
R E P OREPORT
RT G O V GOVERNA
E R N A N C ENCE
R E PREPORT
ORT F I NFINANCIAL
A N C I A L SSTATEMENTS
TATEMENTS A DADDITIONAL
D I T I O N A L I NINFORMATION
FORMATION

O T H E R A D D I T I O N A L I N F O R M A T I O N continued ADDITIONAL INFORMATION FOR SHAREHOLDERS

UK inheritance tax US backup withholding and information reporting Dividend Currency Election
Subject to certain provisions relating to trusts or settlements, an
ordinary share or ADS held by an individual shareholder who is
Payments of dividends and sales proceeds with respect to ordinary
shares and ADSs may be reported to the IRS and to the US holder. Additional Following the group functional currency change in fiscal 23 to US
dollars, holders of ordinary shares will continue to receive their

information for
domiciled in the United States for the purposes of the Convention Backup withholding may apply to these reportable payments if the US dividends in sterling, unless they wish to elect to receive their dividends
between the United States and the United Kingdom relating to estate holder fails to provide an accurate taxpayer identification number or in US dollars. To elect to receive their dividends in US dollars,
and gift taxes (the Convention) and who is neither domiciled in the certification of exempt status or fails to report all interest and dividends shareholders can download the relevant election form on the

shareholders
United Kingdom nor (where certain conditions are met) a UK national required to be shown on its US federal income tax returns. Certain US shareholder portal at www.diageoregistrars.com or call +44 (0)371 277
(as defined in the Convention), will generally not be subject to UK holders (including, among others, corporations) are not subject to 1010*.
inheritance tax on the individual’s death (whether held on the date of information reporting and backup withholding. The amount of any
death or gifted during the individual’s lifetime) except where the backup withholding from a payment to a US holder will be allowed as Exchange controls
ordinary share or ADS is part of the business property of a UK a credit against the holder’s US federal income tax liability and may Other than certain economic sanctions which may be in effect from
permanent establishment of the individual or pertains to a UK fixed entitle the holder to a refund, provided that the required information is
Annual General Meeting (AGM) time to time, there are currently no UK foreign exchange control
base of an individual who performs independent personal services. In timely furnished to the IRS. US holders should consult their tax advisors The AGM will be held at Hilton London Tower Bridge, 5 More London restrictions on the payment of dividends, interest or other payments to
a case where an ordinary share or ADS is subject both to UK as to their qualification for exemption from backup withholding and Place, Tooley Street, London, SE1 2BY on 26 September 2024 at 2.30 holders of Diageo’s securities who are non-residents of the UK or on
inheritance tax and to US federal gift or estate tax, the Convention the procedure for obtaining an exemption. Certain US holders who are pm. the conduct of Diageo’s operations.
generally provides for inheritance tax paid in the United Kingdom to individuals (and certain specified entities), may be required to report Documents on display There are no restrictions under the company’s articles of association or
be credited against federal gift or estate tax payable in the United information relating to their ownership of non-US securities unless the under English law that limit the right of non-resident or foreign owners
States, or for federal gift or estate tax paid in the United States to be securities are held in accounts at financial institutions (in which case The Annual Report on Form 20-F and any other documents filed by the
company with the US Securities Exchange Commission (SEC) may be to hold or vote the company’s ordinary shares.
credited against any inheritance tax payable in the United Kingdom, the accounts may be reportable if maintained by non-US financial
based on priority rules set forth in the Convention. institutions). US holders should consult their tax advisors regarding any inspected at the SEC’s office of Investor Education and Advocacy Please refer to the ‘Taxation’ section on pages 263-266 for details
reporting obligations they may have with respect to the ordinary located at 100 F Street, NE, Washington, DC 20549-0213, USA. Please relating to the taxation of dividend payments.
UK stamp duty and stamp duty reserve tax shares or ADSs. call the SEC at 1-800-SEC-0330 for further information on the public
Stamp duty and stamp duty reserve tax (SDRT) may arise upon the reference rooms and their copy charges. Filings with the SEC are also Useful contacts
deposit of an underlying ordinary share with the Depositary, generally available to the public from commercial document retrieval services, The Registrar/Shareholder queries
at the higher rate of 1.5% of its issue price or, as the case may be, of and from the website maintained by the US Securities and Exchange Link Group acts as the company’s registrar and can be contacted as
the consideration for transfer. The Depositary will pay the stamp duty Commission at www.sec.gov. follows:
or SDRT but will recover an amount in respect of such tax from the
initial holders of ADSs. From 1 January 2024, however, new legislation Warning to shareholders – share fraud By email: [email protected]
has confirmed that the 1.5% SDRT charge on a transfer of shares to a Please beware of the share fraud of ‘boiler room’ scams, where By telephone: +44 (0) 371 277 1010*
depositary receipt issuer or to a person providing clearance services shareholders are called ‘out of the blue’ by fraudsters (sometimes claiming
(or their nominee or agent) does not apply where the transfer is an to represent Diageo) attempting to obtain money or property dishonestly. In writing: Registrars – Link Group, Central Square, 29 Wellington
integral part of a raising of capital. Further information on boiler room scams can be found on the Financial Street, Leeds, LS1 1DL.
Therefore, no UK stamp duty will be payable on the acquisition or Conduct Authority’s website (https://www.fca.org.uk/scamsmart/share- * Calls are charged at the standard geographic rate and will vary by provider. Calls
transfer of ADRs. Furthermore, an agreement to transfer ADSs in the bond-boiler-room-scams) but in short, if in doubt, take proper professional outside the United Kingdom will be charged at the applicable international rate. Lines
form of ADRs will not give rise to a liability to SDRT. advice before making any investment decision. are open 08:00 to 17:30 UK time, Monday to Friday, excluding public holidays in
England and Wales.
Purchases of ordinary shares (as opposed to ADRs) will be subject
to UK stamp duty, and/or SDRT as the case may be, at the rate of Electronic communications ADR administration
0.5% of the price payable for the ordinary shares at the time of the Shareholders can register for an account to manage their Citibank Shareholder Services acts as the company’s ADR
transfer. Stamp duty applies where a physical instrument of transfer is shareholding online, including being able to: check the number of administrator and can be contacted as follows:
used to effect the transfer. SDRT applies to any agreement to transfer shares they own and the value of their shareholding; register for
ordinary shares (regardless of whether or not the transfer is effected electronic communications; update their personal details; provide a By email: [email protected]
electronically or by way of an instrument of transfer). However, where dividend mandate instruction; access dividend confirmations; and use By telephone: +1 866 253 0933/ (International) +1 781 575 4555*
ordinary shares being acquired are transferred direct to the the online share dealing service. To register for an account,
Depositary’s nominee, the only charge will generally be the higher shareholders should visit www.diageoregistrars.com. In writing: Citibank Shareholder Services. PO Box 43077,
charge of 1.5% of the price payable for the ordinary shares so Providence, RI 02940-3077
acquired, subject to the applicability of any exemptions to the 1.5% Dividend payments * Lines are open Monday to Friday 8:30 to 18:00 EST
charge discussed above. Direct payment into bank account
Any stamp duty payable (as opposed to SDRT) is rounded up to the
General Counsel and Company Secretary
Shareholders can have their cash dividend paid directly into their UK
nearest £5. No stamp duty (as opposed to SDRT) will be payable if the Tom Shropshire
bank account on the dividend payment date. To register UK bank
amount or value of the consideration is (and is certified to be) £1,000 account details, shareholders can register for an online account at [email protected]
or less. Stamp duty and SDRT are usually paid or borne by the www.diageoregistrars.com or call the Registrar on +44 (0)371 277
purchaser. 1010* to request the relevant application form. For shareholders Investor Relations
Whilst stamp duty and SDRT may in certain circumstances both outside the UK, Link Group (a trading name of Link Market Services [email protected]
apply to the same transaction, in practice usually only one or other will Limited and Link Market Services Trustee Limited) may be able to
need to be paid. provide you with a range of services relating to your shareholding. To
learn more about the services available to you please visit the
shareholder portal at www.diageoregistrars.com or call +44 (0)371 277
1010*.
Dividend Reinvestment Plan
A Dividend Reinvestment Plan is offered by the Registrar, Link Market
Services Trustees Limited, to give shareholders the opportunity to build
up their shareholding in Diageo by using their cash dividends to
purchase additional Diageo shares. To join the Dividend Reinvestment
Plan, shareholders can call the Registrar, Link Group on +44 (0)371 277
1010* to request the relevant application form.

266 Diageo Annual Report 2024 Diageo Annual Report 2024 267
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268 Diageo Annual Report 2024

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