Annual Report 2026

"This has been a year of significant change for Diageo, but one in which we have taken important steps to drive the company’s transformation. The operating environment has remained volatile, largely owing to continued macroeconomic and geopolitical uncertainty. We also recognise that Diageo should be doing more to reach its potential. I want to be clear about that. As we close the fiscal, we are looking to Diageo’s future with confidence and conviction."

Sir John Manzoni

Chair

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"I was delighted to be asked to join Diageo in January this year. This is a business I have long admired, a company with an extraordinary portfolio of brands, steeped in history and craft. There is no denying that fiscal 26 was a challenging year, particularly given the macroeconomic backdrop and continued pressure on consumer wallets. There are some positives, we have seen growth in three out of five of our regions, however, we have been uncompetitive in our largest market, North America, and urgent work is underway to address this."

Sir Dave Lewis

Chief Executive Officer

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Diageo at a glance

A broad portfolio of iconic brands.

Our global footprint

200 +

brands

c. 180

countries and territories

27500 +

employees

110 +

manufacturing sites

Our performance

$ 19.6 bn

fiscal 26 reported net sales

1.8 X

larger than nearest international spirits competitor

# 1

in international spirits by retail sales value

Financial Performance

Volume (equivalent units)

EU227.1m

(2025: EU230.1m)

Reported movement

(1)%

Organic movement

Reported net sales

$19,643m

(2025: $20,245m)

Reported movement

(3)%

Organic movement

(2)%

Earnings per share (eps)

78.1c

(2025: 105.9c)

Reported movement

(26)%

Eps before exceptional items movement

Reported operating profit

$3,156m

(2025: $4,335m)

Reported movement

(27)%

Organic movement

Net cash from operating activities

$4,392m

(2025: $4,297m)

2026 free cash flow

$3,211m

2025 free cash flow

$2,748m

Total recommended dividend per share

50.00c

(2025: 103.48c)

Non-Financial Performance

Positive drinking

2.96m

(2025: 3.60m) Total to date: 14.98m

Reach of Diageo Positive Drinking education programmes and partnerships. Comprising: Number of people educated on the dangers of underage drinking through a Diageo-supported education programme is 1.71m∆ (2025: 1.99m); Number of drink driving educational experiences delivered 1.25m∆ (2025: 1.61m).

Inclusion and diversity

44%^∆

(2025: 43%)

Percentage of female leaders globally

46%^∆

(2025: 46%)

Percentage of ethically diverse leaders globally

Water replenishment

100%

(2025: 84%)

Cumulative progress: Replenish more water than we use for operations in water-stressed areas.

Greenhouse gas emissions(6)

(25.7)%

(2025:(20.9)%)

Percentage change in absolute direct and indirect greenhouse gas emissions (market/net based) compared to fiscal 22 baseline

Our fiscal 26 performance

Diageo’s performance in fiscal 26 saw growth in Europe, LAC and Africa, offset by weakness in North America and Asia Pacific. Organic net sales declined 2.0% with volume down 0.4% and an unfavourable price/mix of 1.6%, primarily as a result of adverse mix due to US spirits performance and weaker results in Chinese White Spirits (CWS). Excluding CWS, organic net sales for the group would have been c.1.5% higher.

Our previous strategy, the Growth Ambition, is summarised in the table below.

Former strategy, now retired:

Strategy

Button

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

Brands and portfolio

Whisk(e)y and tequila
Winning local portfolio
Guinness growth

Consumer trends

Cocktail culture
Convenience
Moderation
With food
Exploration
Luxury

Operational excellence

Evolve brand building muscle
Commercial excellence
Accelerated productivity

Enablers

Button

Building a more ‘Digital Diageo’ with end-to-end transformation impact
Diverse and engaged talent with an inclusive culture, behaviours and new organisational capabilities
‘Spirit of Progress’ focus; doing business the right way from grain to glass

Outcomes

Button

Deliver sustainable top-line growth
Increase operating leverage
Optimise returns
Maximise free cash flow

Our new strategy, purpose and behaviours

At our Capital Markets Day on 6 August, we shared our plans for a turnaround of our performance, including a new purpose, strategy, behaviours and operating framework.

As we execute against our new strategy, which sets our where we play and how we win, we will focus all colleagues at Diageo on our three new behaviours – One Team, Decisive, Competitive – hard-wired into everything we do, including all our systems and processes, how we hire and manage our talented people and in our every day experiences of working in the organisation.

Our strategy Our purpose and behaviours

Our business model

Our business model allows us to create value across three main areas:

Financial - for our investors
Human - for our people, suppliers, customers and consumers
Social - for our communities

Our business model

An attractive investment case

Spirits including RTDs and premium beer are resilient categories with significant growth potential. Diageo will win share by using our full portfolio of brands in competitive category strategies, with a strong focus on customer partnerships. Combined with a much more competitive and efficient operating framework, a clear financial plan to improve growth, cash generation and shareholder value creation, we believe Diageo represents an attractive investment case.

Our investment case

1. Spirits including RTDs and premium beer are resilient categories with significant growth potential

We are positive on the outlook for spirits including RTDs, and we see long term growth potential. We firmly believe that we can grow both volume and value share.

2. Category strategy to serve more consumers across more occasions

While the business will continue to focus on premiumisation, a key growth driver over the last decade, we are being more active across our broader portfolio. Implementation of a category strategy across the business will allow us to serve more consumers across more occasions.

Spirits including RTDs and premium beer are resilient categories with significant growth potential

3. Operating framework creating a more agile, more competitive Diageo

Significant progress has been made redesigning our operating framework to become more competitive. We are investing $1.2 billion in a 2-year restructuring plan - $1.1 billion in the new operating framework and $100 million in the supply chain.

4. Turnaround plan for North America, while growth continues in the rest of the world

We have shared clear financial plans for the next 3 years, as the turnaround progresses and with detail on planned assumptions for the North America business, our largest market, where the need for a turnaround is pronounced.

5. Clear capital allocation priorities and significantly increased financial flexibility from fiscal 28

Cash remains a critical focus and our commitment to deliver remains key and well on track. We now expect to be at the mid-point of our target leverage range (2.5-3x net debt/EBITDA) in fiscal 27, and to be at c.2x by the end of fiscal 29 absent any actions that the Board may decide to take.

Brands in action

Our new strategy has been deliberately designed to build and extract the benefits of Diageo’s scale, capability and portfolio. Below we have highlighted some of the ways in which this is already delivering stronger performance and growth.

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