Reported results
 
 
 
 
Adjusted results(1)
 

 
F26 H1
vs F25 H1
 
 
 
F26 H1
vs F25 H1

Net sales
$10,460m
(4.0)%
 
 
Organic net sales movement
$(295)m
(2.8)%(2)

Operating profit
$3,116m
(1.2)%
 
 
Operating profit before exceptional items
$3,256m
(2.8)%(2)

Operating profit margin
29.8%
85bps
 
 

Operating profit margin before exceptional items

31.1%
1bps(2)

Net profit
$2,110m
1.7%
 
 
 
 
 

Basic earnings per share
89.7c
3.0%
 
 
Basic earnings per share before exceptional items
95.3c
(2.5)%

Net cash flow from operating activities
$2,123m
$(202)m
 
 
Free cash flow
$1,532m
$(164)m

Growth in Europe, LAC and Africa offset by weakness in North America and China

Reported net sales of $10.5 billion declined 4.0% due to organic net sales
decline and the negative impact of disposals.

Organic net sales declined 2.8%, driven by organic volume down 0.9% and
negative price/mix of 1.9%. Strong organic net sales growth in Europe, Latin
America and Caribbean (LAC) and Africa was more than offset by softer
performance in North America given pressure on disposable income impacting
US Spirits, and the adverse impact of Chinese white spirits (CWS) in Asia
Pacific.

Negative price/mix primarily as a result of adverse mix due to US Spirits
performance and weaker results in CWS.

Excluding CWS, organic net sales for the group would have been c.2% higher;
with volume down c.0.5% and price/mix broadly flat.

Operating profit decline mainly from adverse mix and tariffs, partially offset
by efficiencies in A&P investment

Reported operating profit declined 1.2% due to organic operating profit
decline and lower exceptional operating charges. Reported operating profit
margin grew 85bps, primarily due to the positive impact of disposals.

Organic operating profit declined by 2.8%; organic operating profit margin
was broadly flat, mainly due to adverse market mix and tariff costs offset
by lower marketing investment given efficiencies.

EPS pre-exceptionals was 95.3 cents, down 2.5%.

Continued focus on cash flow and increased commitment to reduce leverage and
increase financial flexibility, dividend rebased

Net cash flow from operating activities decreased by $202 million to $2.1
billion. Free cash flow decreased by $164 million to $1.5 billion.

Net debt as at 31 December 2025 was $21.7 billion.

In December 2025, Diageo announced an agreement to sell its shareholding in
East African Breweries plc and its shareholding in the Kenyan spirits
business, to Asahi Group Holdings, Ltd. Estimated net proceeds after tax and
transaction costs of $2.3 billion imply a 17x EBITDA multiple. This is
expected to complete in H2 calendar year 2026 and to reduce net debt to
adjusted EBITDA(3) by c.0.25x.

Ongoing strategic review by United Spirits Limited (USL) of ownership of
Royal Challengers Bengaluru (RCB) cricket team well advanced.

Declared interim dividend of 20 cents. Committed to growing shareholder
distributions over time and targeting a 30-50% payout policy going forward,
with a minimum floor set for the dividend of 50 cents per annum.

Accelerate savings progressing well, fiscal 26 guidance updated

Cost savings programme progressing well with c.50% Accelerate savings now
expected in fiscal 26; savings in the first half driven by supply chain
agility and related cost savings, A&P efficiencies and overhead savings.

For fiscal 26, given further weakness through the first half in the US we
have updated both organic net sales and operating profit growth guidance. We
have reiterated free cash flow guidance of $3 billion.

Sir Dave Lewis, Chief Executive Officer commented:

Our performance in the first half of fiscal 26 was mixed. Strong performance
in Europe, LAC and Africa, was offset by a weakening performance in NAM and
continued weakness in Chinese white spirits in APAC. US Spirits performance
reflected pressure on disposable income, and competitive pressure from more
affordable alternatives addressing a more stretched consumer wallet.

Only several weeks in I can already see significant opportunities for Diageo
to act more decisively to enhance its competitiveness and broaden the
portfolio offering leading to higher growth. As we refine our new strategy to
deliver stronger shareholder value, the immediate priorities for the team are
clear:

– Build competitive category strategies, winning with relevant brands

– Customer, customer, customer

– Redesign of the Diageo operating framework to drive sustainable returns

To deliver on these opportunities, we need to create more financial
flexibility. Accordingly, the Board has taken the difficult decision to reduce
the dividend to a more appropriate level which will accelerate the
strengthening of our balance sheet. We are confident that this is the right
action which will ensure that Diageo can reinforce its position as the leading
international spirits business and drive stronger shareholder value over the
coming years.

I am encouraged by the depth of the passion and pride that our people have for
our brands across the business. This will be invaluable given the significant
work ahead.

(1) See pages 36-43 for an explanation and reconciliation of non-GAAP
measures.
(2) Represents organic movement.
(3) Leverage ratio calculated using adjusted net debt which is the
equivalent to adjusted net borrowings (net borrowings plus post-employment
benefit liabilities before tax).

See pages 36-43 for an explanation and reconciliation of non-GAAP measures,
including organic net sales, organic marketing investment, organic operating
profit, free cash flow, EPS before exceptional items, adjusted net debt,
adjusted EBITDA and tax rate before exceptional items. Unless otherwise
stated, movements in results are for the six months ended 31 December 2025
compared to the six months ended 31 December 2024.

Results, reports and presentations

2026 Interim Results webcast