Interim Chief Executive's Statement

Having been appointed Interim Chief Executive in July 2025, I am pleased to be sharing Diageo’s Annual Report for the 2025 fiscal year with our shareholders and wider stakeholders. I would like to thank Debra Crew for her significant contribution to Diageo. I know I speak for everyone at the company in thanking her for her work over the last six years and wishing her the very best for the future.

I joined Diageo as Chief Financial Officer in September 2024. Since then, I have fully immersed myself into the company and have seen firsthand that this is a business full of passionate people who want to win.

The purpose Diageo was founded with in 1997 remains the same today: to help consumers around the world to celebrate life, every day, everywhere. With a broad portfolio of iconic brands in many of the largest categories in Total Beverage Alcohol (TBA), 13 billion-dollar brands, several of which are leading in their respective categories, and sales in nearly 180 countries, we are fortunate to have a number of competitive advantages. However, we must do more to continue to lead the way in premium drinks and drive growth in an evolving TBA landscape, and deliver stronger shareholder returns.

I look forward to working in my new capacity alongside the Board of Directors, the Executive Committee and our broader workforce in doing this.

Our strategy has long been centred on consumers drinking better, not more, and moderation is one of the most significant long-term trends we track. I am proud that Diageo has advocated for responsible drinking since our formation, funding and championing consumer education through our brands as well as specific programmes that target underage drinking and drink-driving.

In fiscal 25, we have seen increased attention on the moderation agenda. We view moderation as one of our greatest opportunities. The inherent versatility of spirits makes moderation more accessible and appealing, and we are leaders in the fast-growing non-alcoholic spirits category.

In addition, this segment not only clearly supports moderation but enables us to recruit consumers from beyond spirits. To extend our leadership, in fiscal 25, we acquired Ritual Beverage Company LLC, the #1 non-alcoholic spirits brand in the United States.

Our broader non-alcoholic portfolio also delivered strong performance in fiscal 25, growing c.40%, with particularly strong momentum in Guinness 0.0 which delivered double-digit net sales growth, with standout performance in Great Britain, Ireland and the United States.

This year marked the launch of Accelerate, our company-wide initiative to build a stronger, more efficient and agile business, setting out clear cash delivery targets and a disciplined approach to operational excellence and cost efficiency.

The first phase of the Accelerate programme is progressing well. Underpinning delivery of our guidance are the following targets:

1. Consistent cash delivery: Guidance remains to sustainably deliver c.$3 billion free cash flow per annum from fiscal 26, increasing as business performance improves. A renewed focus on cash has been implemented across the organisation, including delivering a positive operating leverage and reduced capex from fiscal 26.
2. Cost savings: We now expect to deliver c.$625 million cost savings over the next three years. This includes savings from A&P efficiencies, overheads, supply chain efficiencies and trade investment.
3. Commitment to deleveraging: We continue to expect to be well within the leverage target range of 2.5-3.0x net debt to adjusted EBITDA no later than fiscal 28. This will be delivered through a combination of organic growth and positive operating leverage, combined with tighter capital discipline, and appropriate and selective disposals over the coming years.

As part of Accelerate, we are also evolving our operating model to give us a competitive advantage. For example, in Europe, we have undertaken work to unlock the region’s full potential. This includes targeted investments and the creation of more standalone markets, such as Iberia and Italy, to bring us closer to customers and consumers, while driving better performance.

In March 2025, Praveen Someshwar joined Diageo as Managing Director of Diageo India and CEO of USL, taking over from Hina Nagarajan. Prior to this, Praveen was MD and CEO of HT Media, one of India’s largest and best-known media groups.

AftAfter four years as Diageo India Managing Director and CEO of USL, in March 2025, Hina Nagarajan took on the role of President of our Africa business. Prior to her successful period leading Diageo India, Hina’s first role in Diageo from 2018 onwards was Managing Director of Africa Emerging Markets.

Dayalan Nayager, previously President of Diageo Africa since July 2022, became President of Diageo Europe, taking over from John Kennedy, retaining his role of Chief Commercial Officer. Over the last 12 years, Dayalan has led several Diageo businesses in Europe, including Great Britain, Ireland and France. I want to thank John for leading the Europe business on an interim basis since January 2024 and completing his 30-year tenure at Diageo in 2023.

Randall Ingber re-joined Diageo in June 2025, succeeding Tom Shropshire as General Counsel, and taking over as Company Secretary from the start of fiscal 26. Randall had a successful 19-year career within our Legal function before serving as General Counsel and Company Secretary at Lion Group, a leading Australasian beverage alcohol business and one of the largest craft brewers in the United States.

I would like to thank Tom for his significant impact during his time with Diageo. Since 2021, he has been instrumental to shaping our agenda, advising our Board and Executive Committee on a range of topics.

Lastly, we are looking forward to Deirdre Mahlan rejoining Diageo as our interim Chief Financial Officer later in August. Deirdre’s deep spirits industry experience and financial expertise includes a 27-year career with Diageo and predecessor companies, culminating in five years as CFO and five more leading our North American business.

I am looking forward to working with the Executive Committee and the Board as we work to deliver our commitments to shareholders for fiscal 26.

We look ahead to fiscal 26 with a strong sense of purpose and resolve. Alongside the Board and the Executive Committee, I am committed to driving sustainable net sales growth, leveraging the strength of our portfolio and brand-building capabilities whilst strengthening Diageo’s commercial execution.

Our Accelerate programme is progressing at pace and is central to creating a more agile and performance-focused organisation. All of the actions currently underway will position us well to drive increased growth as the market recovers and the TBA landscape evolves.

We look forward to continuing to bring our brands to life in fiscal 26, both through superior commercial execution and via high profile partnerships and events, such as the FIFA 2026 World Cup, for which we are the official spirits partner in the Americas.

Lastly and most importantly, I want to thank my Diageo colleagues around the world, whose commitment, agility, and passion for our brands is our greatest asset and a deep source of pride.

Diageo’s ambition remains clear: to be one of the best performing, most trusted and respected consumer products companies in the world. With world-class brands and talent, highly effective global consumer insights and an ongoing focus on efficiency and effectiveness, we are confident in our ability to outperform the market, restore Diageo to a top quartile TSR consumer company, and provide stronger returns to shareholders.

Nik Jhangiani

Interim Chief Executive