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10 FEB 2011

10 FEB 2011 Press release

Press release

Half year results, six months ended 31 December 2010

Diageo announces half year results for the six month ended 31 December 2010.

Organic net sales growth of 4%. Stronger volume growth and improved price/mix was delivered in North America; continued momentum in International again led to double digit top line growth in the region and top line growth improved in Asia Pacific. Europe’s performance was weaker given the challenging economic conditions. At a group level, top line growth delivered gross margin improvement. Investment to drive growth continued with organic marketing spend up 10% and increased overhead investment, particularly in Latin America. Organic operating profit grew 2%. Returns increased with continued strong free cash flow of £775 million.

Paul Walsh, Chief Executive of Diageo, commenting on the six months ended 31 December 2010 said:

“Momentum is building in our business. Our top line performance was stronger and price/mix improved. We have increased marketing spend significantly, up 10%, but in a very focused way.  35% of the increase was behind strategic brands in US spirits to build the brand equity as we move away from promotional support and over 60% of the increase was on our brands in the faster growing emerging markets. Despite the economic weakness in much of Europe, our first half performance gives me increased confidence that we will improve on the organic operating profit growth we delivered in fiscal 2010”.

ENDS

Enquiries

Investor enquiries to:

Nick Temperley +44 (0) 20 8978 4223
Sarah Paul +44 (0) 20 8978 4326
Angela Ryker Gallagher +44 (0) 20 8978 4911
Kelly Padgett +1 202 715 1110
Investor.relations@diageo.com

Media enquiries to:

Stephen Doherty +44 (0) 20 8978 2528
Rowan Pearman +44 (0) 20 8978 4751
media@diageo.com

About Diageo

Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits, beer and wine categories. These brands include Johnnie Walker, Crown Royal, J&B, Buchanan's and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

Diageo is a global company, and our products are sold in more than 180 countries around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). For more information about Diageo, our people, our brands, and performance, visit us at www.diageo.com. Visit Diageo’s global responsible drinking resource, www.DRINKiQ.com, for information, initiatives, and ways to share best practice.

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