UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
06 November 2025
Commission File Number: 001-10691
DIAGEO plc
(Translation
of registrant’s name into English)
16 Great Marlborough Street, London, United Kingdom, W1F 7HS
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F X
Form
40-F
Diageo issues
fiscal 26 Q1 trading statement
Flat Q1 organic net sales growth with volume +2.9%. Organic net
sales growth across Europe, LAC and Africa offset by weakness in
Chinese white spirits and a softer US consumer environment.
Sharpening our strategy well advanced, and moving at pace to
accelerate growth.
|
|
Q1 ended 30 September 2025
|
|||
|
|
Reported
F26
$m
|
Reported
F25
$m
|
Reported growth
YoY %
|
Organic
growth
YoY %
|
|
Net sales
|
4,875
|
4,986
|
(2.2)
|
0.0
|
|
Price/mix
|
|
|
|
(2.8)
|
|
Volume
|
-
|
-
|
-
|
2.9
|
●
Reported
net sales for the first quarter declined by 2.2% to $4.9bn, largely
reflecting the negative impact of disposals and with negligible
impact from foreign exchange.
●
Organic
net sales were flat in the quarter, with organic volume growth of
2.9% offset by negative price/mix of 2.8%, largely due to adverse
mix in Asia Pacific due to the weaker results in China in Chinese
white spirits (CWS). Excluding this, price/mix would have been
relatively flat.
●
Solid
organic net sales growth in Europe, LAC and Africa was offset by
weakness in CWS impacting Asia Pacific results and softer
performance in North America as US Spirits declined reflecting weak
consumer confidence. We estimate that weakness in CWS in China
negatively impacted group net sales by c.2.5% in the
quarter.
●
Our
Accelerate programme to create a more agile operating model is
progressing well, cost savings guidance of c.$625m over the next 3
years fully on track.
●
For
fiscal 26 we have updated organic sales and operating profit
guidance for the adverse impact from Chinese white spirits and a
weaker US consumer environment than planned for.
●
We
remain committed to delivering c.$3bn free cash flow in fiscal 26
and returning to well within our target leverage ratio range of 2.5
- 3.0x no later than fiscal 28. This will be supported by
appropriate and selective disposals over the coming years, with
plans progressing well.
Nik Jhangiani, Interim Chief Executive, said:
"Net sales were flat organically in Q1, with growth in Europe, LAC
and Africa offset by weakness in Chinese white spirits and a softer
US consumer environment than planned for. We are not satisfied with
our current performance and are focused on what we can manage and
control; acting with speed to drive efficiencies, prioritising
investment and adapting more quickly to an evolving consumer
environment.
We are well advanced in sharpening our strategy, and
we are developing and already implementing clear plans to drive
growth across
the broader portfolio, ensuring
that we meet relevant consumer occasions of the future. Early
results from our initiatives to strengthen our commercial execution
capabilities, notably in Europe, are encouraging, and we are
embedding a more rigorous performance-driven culture across the
business.
For fiscal 26 we have updated our guidance and remain committed to
delivering c.$3 billion free cash flow in fiscal 26, growing this
in future years. Our confidence in delivery of this cash guidance
is underpinned by increased rigour and agility to manage maturing
stock, A&P spend, capex, and cost discipline."
Quarterly financials are unaudited. See pages 6-8 for an
explanation and reconciliation of non-GAAP measures. Unrounded
financials - due to rounding, the numbers in this and other tables
in this release may not always cast or calculate. Unless otherwise
noted, commentary throughout this release refers to organic
net sales movement for first quarter ended 30 September 2025
compared to first quarter ended 30 September 2024.
Fiscal 26 full-year outlook
Organic net sales growth - we expect
to be flat to slightly down including the adverse impact from
Chinese white spirits and a weaker US consumer environment than
originally planned for.
Organic operating profit growth - we
expect positive operating leverage, supported by cost savings from
the Accelerate programme. Organic operating profit growth is
expected to be low to mid-single digit, including the impacts of
Chinese white spirits and a weaker US consumer environment in the
organic net sales guidance. This also includes the impact of
tariffs as at this time.
Taxation - we
expect the tax rate before exceptional items to be c.25% (fiscal
25: 24.9%).
Effective interest rate - we
expect the effective interest rate to be c.4.0% (fiscal 25:
4.1%).
Capital expenditure - we
expect capex at the lower end of the range of $1.2-1.3bn (fiscal
25: $1.5 billion).
Free cash flow - we
expect c.$3 billion (fiscal 25: $2.7 billion). This includes
exceptional cash costs related to the Accelerate
programme.
From fiscal 26, we expect free cash flow to increase from c.$3
billion per annum as business performance improves. 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, which will provide
much more financial flexibility.
Update on progress on reshaped priorities - Accelerate
In May 2025 we launched our Accelerate programme to strengthen
Diageo's foundations for long-term sustainable growth which is
progressing well, with good momentum across the group. This change
in how we do business will create a stronger platform to optimise
investment and is helping us allocate resources effectively towards
driving future growth.
During the quarter we
would highlight:
●
Good
progress in driving greater cost efficiency, particularly in
A&P. Leveraging existing capabilities, tools and systems such
as Catalyst, to target and refine investment to maximise returns.
This is enabling more disciplined prioritisation of A&P spend
where needed.
●
Fully
utilising AI to organise data for better analytics, to help deliver
efficiencies in a sustainable manner.
●
Strong
progress on the operating model review driving simplifications on
processes which will deliver efficiencies in the near
term.
●
On
track to deliver c.$625 million cost savings over the next 3
years.
Tariffs on imports into the US
Our guidance for the expected impact of tariffs into the US from UK
and European imports remains unchanged at c.$200m pre mitigation on
an annualised basis. This assumes that the current tariffs remain
at 10% on imports from the UK and 15% on imports from Europe, and
that Mexican and Canadian spirits imports remain exempt under
USMCA, with no other changes to tariffs. Given the actions to date
and before any pricing, we expect to be able to mitigate around
half of this impact on operating profit on an ongoing
basis.
Q1 review
Organic net sales in Q1 were flat with positive organic volume
growth of 2.9% offset fully by negative 2.8% price/mix, with the
latter predominantly due to adverse mix in Asia Pacific. Overall,
organic net sales growth in Europe, LAC and Africa was offset by
declines in NAM and APAC. In NAM weaker performance was due to
year-on-year decline in consumption and lapping tough comparatives
including the benefit from tequila restocking given strong Don
Julio growth through Q1 fiscal 25. In APAC the decline was driven
by Chinese white spirits with reduced consumption occasions across
the baijiu category. Overall, from a category perspective, there
was good growth in scotch, notably Johnnie Walker and in beer with
Guinness. There was also strong momentum in RTDs and RTS,
particularly Smirnoff Ice and branded cocktails, offsetting
weakness in Chinese white spirits and tequila in North
America.
Net sales, Volume and Price/mix for Q1 ended 30 September
2025
|
|
Q1 ended 30 September 2025
|
|
Volume
|
Price/mix
|
|||
|
|
Reported F26
|
Reported F25
|
Reported growth
|
Organic growth
|
|
Organic growth
|
Organic
Growth
|
|
Net sales
|
$m
|
$m
|
YoY %
|
YoY %
|
|
YoY %
|
YoY %
|
|
|
|
|
|
|
|
|
|
|
North America
|
1,849
|
1,917
|
(3.5)
|
(2.7)
|
|
(2.1)
|
(0.6)
|
|
Europe
|
1,212
|
1,152
|
5.1
|
3.5
|
|
(1.9)
|
5.3
|
|
Asia Pacific
|
864
|
957
|
(9.7)
|
(7.5)
|
|
5.2
|
(12.8)
|
|
LAC
|
512
|
461
|
11.1
|
10.9
|
|
6.7
|
4.1
|
|
Africa
|
389
|
458
|
(15.1)
|
8.9
|
|
10.7
|
(1.7)
|
|
Corporate
|
49
|
41
|
n/a
|
n/a
|
|
n/a
|
n/a
|
|
Diageo Total
|
4,875
|
4,986
|
(2.2)
|
0.0
|
|
2.9
|
(2.8)
|
Quarterly financials are unaudited. Unrounded financials - due to
rounding, the numbers in this table may not always cast or
calculate.
Q1 Regional performance
North America (38%
net sales)
●
Organic net sales declined 2.7%
primarily driven by a challenging environment across consumer
goods. While we had planned for a cautious US consumer environment,
the overall spirits market was softer than
expected, with
increased competitive pressure, particularly in
tequila.
●
Price/mix
decreased 0.6% driven primarily by negative mix in US
Spirits.
●
US Spirits organic net sales were
down 4.1%. Overall net sales were impacted by lapping tough
comparatives in tequila last year in Don Julio given restocking and
additional size extensions, with some benefit from a pull forward
of imports related to tariffs on European imports. We believe
overall distributor
inventory levels at the end of the quarter were appropriate,
reflecting some seasonality as would be typical for this time of
year, ahead of OND.
●
Scotch
growth was strong, with double-digit growth on Johnnie Walker, with
some benefit from phasing in the quarter. Strong performance on RTS
and RTDs, was led by the Bulleit and Ketel One Cocktail
Collections, and the newly launched Casamigos RTD. Tequila declined
double-digit overall driven by comparatives, competitive pressure
and category softness.
●
DBC
USA net sales grew 9.2% driven by Smirnoff Ice and
Guinness.
Europe (25%
net sales)
●
Organic
net sales grew 3.5%, driven by sustained strong momentum in
Guinness and good overall performance despite the continued
challenging backdrop. While the spirits category remained soft in
key markets, this was notably offset by strong performance in
Türkiye.
●
Price/mix
grew 5.3% driven by continued strong Guinness performance and
pricing in Türkiye.
●
Spirits
organic net sales grew low-single digit, led by Türkiye and
MENA, offsetting weakness in other markets. Guinness organic net
sales grew high-single digit in the quarter with continued momentum
from both Guinness Draught and Guinness 0.0.
●
Solid growth in scotch driven by
Johnnie Walker in Türkiye and
MENA, more than offsetting weaker performance in a number of our
smaller brands. Good growth in Baileys, driven by very strong
performance in Great Britain, with some phasing benefit in the
quarter.
Asia Pacific (18%
net sales)
●
Organic
net sales declined 7.5% driven by Greater China partially offset by
double-digit growth in India and growth across other markets across
the region.
●
Price/mix
declined 12.8% driven largely by weakness in CWS in
China.
●
In
Greater China, strong double-digit decline in both volume and net
sales, was driven in Chinese white spirits with reduced consumption
occasions across the baijiu category, primarily as a result of
market policy, adversely impacting net sales in the region by c.13%
and group net sales by c.2.5%. India grew double-digit with growth
across the portfolio despite recent excise increases in the state
of Maharashtra. The transition of our beer route-to-market to a
licence brewing model in Australia and China also adversely
impacted performance, and growth of Guinness in the
market.
●
Scotch
growth driven by Johnnie Walker growth across the
region.
Latin America and Caribbean (11%
net sales)
●
Organic
net sales grew 10.9%, mainly driven by growth in
Brazil.
●
Price/mix
grew 4.1%, driven by positive price/mix across most of the
region.
●
Brazil
delivered double-digit organic net sales growth with double-digit
volume growth and positive price/mix, supported by a stabilising
consumer environment. Mexico was broadly flat, with
mid-single-digit volume growth mostly offset by negative price/mix,
as the consumer environment continued to stabilise.
●
Scotch
growth was strong, driven by Johnnie Walker in Brazil, and very
strong growth in RTDs led by Smirnoff Ice, also in
Brazil.
●
We
are closely monitoring the news at the end of September on
counterfeit beverages in Brazil.
Africa (8%
net sales)
●
Organic
net sales grew 8.9% due to high-single-digit growth in East Africa
and strong growth in South, West and Central Africa
(SWC).
●
Price/mix
declined 1.7% due to market mix.
●
In
East Africa, Tanzania and Uganda saw strong double-digit growth.
SWC growth reflected double-digit organic volume and net sales
growth in South Africa.
●
Strong
beer growth, led by Serengeti, and strong growth in RTDs driven by
Smirnoff Ice in South Africa.
Live presentation and Q&A conference call
Nik Jhangiani, Interim Chief Executive and Deirdre Mahlan, Interim
Chief Financial Officer will host a short presentation followed by
Q&A at 9.30am UKT (10.30am CET) on Thursday 6 November 2025,
which can be accessed at: https://www.investis-live.com/diageo/68caca00e255d400105caaa2/merat
For analysts and investors wishing to ask questions, please use the
dial-in details below which will have a Q&A facility. Please
dial in 15 minutes ahead of the scheduled start time to register
before the call begins.
|
From
the UK:
|
+44
(0)20 3936 2999
|
|
From
the UK (free call):
|
0808
189 0158
|
|
From
the USA:
|
+1 646
233 4753
|
|
From
the USA (free call):
|
+1 855
979 6654
|
|
Access
code:
|
587742
|
Transcript and audio recording
Following the presentation and Q&A conference call, a
transcript and audio recording can be accessed at:
https://www.diageo.com/en/investors/results-reports-and-events/results
Presentation slides and transcript
Following the presentation, slides and a transcript will be made
available.
For further information, please contact:
Investor relations:
Sonya Ghobrial
+44 (0) 7392 784 784
Andy Ryan
+44 (0) 7803 854
842
Grace Murphy
+44 (0) 7514 726 167
Media relations:
Rebecca Perry
+44 (0) 7590 809 101
Clare Cavana
+44 (0) 7751 742 072
Isabel Batchelor
+44 (0) 7731 988 857
About Diageo
Diageo is a global leader in beverage alcohol with an outstanding
collection of brands across spirits and beer categories. These
brands include Johnnie Walker, Crown Royal, J&B and Buchanan's
whiskies, Smirnoff and Ketel One vodkas, Captain Morgan,
Baileys, Don Julio, Tanqueray and Guinness.
Diageo is a global company, and our products are sold in nearly 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.
Celebrating life, every day, everywhere.
Appendix
Foreign exchange
We are not providing specific guidance in relation to foreign
exchange for fiscal 26. However, using the hedged rates already in
place and for other exposures the spot exchange rates at 30
September 2025, including $1=£0.74 and $1=€0.85, for
fiscal 26, would result in a positive impact on net sales of
approximately $200 million and a positive impact of approximately
$50 million on operating profit. The above spot rates, currency
hedges and assumptions reflect a point in time, and may
change.
Acquisitions and disposals
Completed since 30 June 2025
●
Seychelles
Breweries Limited -
On 1 July 2025, Diageo announced completion of the sale of its
54.4% shareholding in Seychelles Breweries Limited to Phoenix
Beverages Limited, a subsidiary of Mauritius-based IBL
Group.
●
Guinness Ghana
Breweries PLC - On
3 July 2025, Diageo announced completion of the sale of its 80.4%
shareholding in Guinness Ghana Breweries PLC to Castel
Group.
●
Diageo
Operations Italy S.p.A - Santa Vittoria production
facility -
On 24 June 2025, Diageo announced the sale of Diageo Operations
Italy S.p.A, inclusive of the Santa Vittoria production facility,
to NewPrinces S.p.A. This transaction completed in September
2025.
Completed in fiscal 2025
●
The disposals
of Pampero, Safari and Cacique - All
completed in fiscal 25. No financial performance details were
shared.
●
The disposal
of majority shareholding in Guinness Nigeria PLC (GN)
- Completed
on 30 September 2024, with the sale of this stake in GN to
Tolaram.
●
Strategic
Joint Venture with Main Street Advisors Inc. -
In June 2025, Diageo completed the exchange of a majority ownership
of Cîroc brand rights in North America for a majority
ownership interest in Lobos 1707 tequila.
Volume reporting change
As
part of the move to an asset-light beer operating model,
calculation of volume for Guinness flavour extract and other
concentrate sales has been amended to represent the equivalent
finished goods volume. Comparatives for prior periods have been
restated.
Explanatory notes
Comparisons are to the three months ended 30 September 2025 unless
otherwise stated. Unless otherwise stated, percentage movements
given throughout this document for volume and net sales are organic
movements after retranslating current period reported numbers at
prior period exchange rates and after adjusting for the effect of
exceptional operating items and acquisitions and disposals,
excluding fair value remeasurements.
This document includes names of Diageo's products which constitute
trademarks or trade names which Diageo owns or which others own and
license to Diageo for use.
Definitions and reconciliation of non-GAAP measures to GAAP
measures
Diageo's strategic planning process is based on certain non-GAAP
measures, including organic movements. These non-GAAP measures are
chosen for planning and reporting, and some of them are used for
incentive purposes. The group's management believes that these
measures provide valuable additional information for users of the
financial statements in understanding the group's performance.
These non-GAAP measures should be viewed as complementary to, and
not replacements for, the comparable GAAP measures and reported
movements therein.
It is not possible to reconcile the forecast tax rate before
exceptional items, forecast organic net sales growth and forecast
organic operating profit growth to the most comparable GAAP measure
as it is not possible to predict, without unreasonable effort, with
reasonable certainty, the future impact of changes in exchange
rates, acquisitions and disposals and potential exceptional
items.
Volume
Volume is a performance indicator that is measured on an equivalent
units basis to nine-litre cases of spirits. An equivalent unit
represents one nine-litre case of spirits, which is approximately
272 servings. A serving comprises 33ml of spirits, 165ml of wine,
or 330ml of ready to drink or beer. Therefore, to convert volume of
products other than spirits to equivalent units, the following
guide has been used: beer in hectolitres, divide by 0.9; wine in
nine- litre cases, divide by five; ready to drink and certain
pre-mixed products that are classified as ready to drink in
nine-litre cases, divide by ten.
Organic movements
Organic information is presented using US dollar amounts on a
constant currency basis excluding the impact of exceptional items,
certain fair value remeasurements, hyperinflation and acquisitions
and disposals. Organic measures enable users to focus on the
performance of the business which is common to both years and which
represents those measures that local managers are most directly
able to influence.
Detailed calculation and reconciliation of non-GAAP measures can be
found in the latest Annual Report (available at https://www.diageo.com/en/investors).
Organic net sales movement calculations for the 3 months ended 30
September 2025 were as follows:
|
Net sales
|
North America
|
Europe
|
Asia Pacific
|
Latin America and Caribbean
|
Africa
|
Corporate
|
Diageo total
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
3 months ended 30 September 2024 reported
|
1,917
|
1,152
|
957
|
461
|
458
|
41
|
4,986
|
|
Exchange
|
(6)
|
(54)
|
(24)
|
(17)
|
(2)
|
(1)
|
(103)
|
|
Reclassification
|
0
|
1
|
0
|
0
|
(1)
|
0
|
0
|
|
Disposals
|
(23)
|
(11)
|
(2)
|
0
|
(112)
|
0
|
(148)
|
|
3 months ended 30 September 2024 adjusted
|
1,888
|
1,090
|
931
|
444
|
342
|
41
|
4,735
|
|
Organic movement
|
(51)
|
38
|
(70)
|
48
|
30
|
5
|
1
|
|
Acquisitions & Disposals
|
9
|
2
|
1
|
3
|
8
|
0
|
23
|
|
Exchange
|
3
|
76
|
2
|
17
|
8
|
3
|
109
|
|
Hyperinflation
|
0
|
6
|
0
|
0
|
0
|
0
|
6
|
|
3 months ended 30 September 2025 reported
|
1,849
|
1,212
|
864
|
512
|
389
|
49
|
4,875
|
|
Organic movement %
|
(2.7)
|
3.5
|
(7.5)
|
10.9
|
8.9
|
|
0.0
|
Quarterly financials are unaudited. Unrounded financials - due to
rounding, the numbers in this table may not always cast or
calculate.
Cautionary statement concerning forward-looking
statements
This document contains 'forward-looking' statements. These
statements can be identified by the fact that they do not relate
only to historical or current facts. In particular, forward-looking
statements include all statements that express forecasts,
expectations, plans, outlook, objectives and projections with
respect to future matters, including trends in results of
operations, margins, growth rates, phasing and overall
market trends,
information related to Diageo's fiscal 26 outlook and beyond,
ambitions relating to free cash flow and improved operating
leverage, Diageo's Accelerate programme, the impact of changes in
interest or exchange rates, anticipated cost savings or synergies,
expected investments, the completion of any strategic transactions
or restructuring programmes, anticipated tax rates, changes in the
international tax environment, potential tariffs and Diageo's
ability to mitigate the impact of tariffs, expected cash payments,
and general economic conditions. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements, including factors that are
outside Diageo's control. Any forward-looking statements made by or
on behalf of Diageo speak only as of the date they are made. Diageo
does not undertake to update forward-looking statements to reflect
any changes in Diageo's expectations with regard thereto or any
changes in events, conditions or circumstances on which any such
statement is based.
An explanation of non-GAAP measures, including organic movements,
is set out on pages 213-220 of Diageo's Annual Report for the year
ended 30 June 2025.
Diageo plc LEI: 213800ZVIELEA55JMJ32
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Diageo plc
|
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|
(Registrant)
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Date: 06 November
2025
|
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By:___/s/
James Edmunds
|
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James Edmunds
|
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Deputy Company Secretary
|