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2 Slide 2 Ivan Menezes Chief Executive Good morning everyone and thank you for joining us for this webcast. As I am sure you know, this is my first set of results as CEO and it is a privilege to take on that role. Paul Walsh provided Diageo with exceptional leadership and shaped our strength and global position, and I want to take this opportunity to thank him on behalf of the entire Diageo team. As these results again demonstrate, Paul did make a strong business even stronger. I know that many of you will already have seen our results announcement and so I will merely recap on the key points and set the agenda for the presentation which Deirdre and I will now make.

3 Slide 3 Making a strong business stronger Performance ambition Sustained top line growth Expand operating margin Enhanced financial strength F13 delivery 5% organic net sales growth 0.8 ppt organic operating margin improvement 1.5 billion free cash flow Double digit eps growth Improve returns to shareholders eps pre-exceptional items up 11% Recommended 9% increase in final dividend Year ended 30 June We set out our performance ambition in 2011 and I think it would be useful to measure our achievements this year against that. As I said in our release this morning, we are on track to deliver that medium term guidance. 5% net sales growth is a robust performance reflecting the strength of our US spirits business and continued double digit growth in the emerging markets. It is slightly below our expectations for the year, the result of the weaker top line growth in Asia and the slow down we have seen in Brazil. However, we don t see anything in these recent trends to change our confidence in the long term growth of these markets. Our operating margin improvement of 76 basis points is in line with our expectations. Strong price/mix, of 4 percentage points, contributed to gross margin improvement as did procurement savings and the savings we achieved through our restructuring programmes. The focus of our marketing investment continues to be on our strategic brands. Our marketing campaigns are a competitive advantage for us and this year we have seen these campaigns extend the leadership of our brands in many markets. We have kept a tight rein on overheads. They are up only 3% and that was driven by investment in route to market in Latin America, Africa and Eastern Europe. Underlying the cash flow is ahead of last year. We made a large contribution to the UK pension fund but free cash flow was still 1.5 billion. Another strong year. We delivered double digit eps growth. And this performance gives us the ability to increase the dividend by a further 9%.

4 Slide 4 My key highlights: 0.5 billion additional net sales* An incremental 1 million cases of Johnnie Walker, now over 20 million cases Innovation was up nearly 30% this year contributing over 50% of our growth We fully integrated Mey İçki, Ypióca, Shuijingfang and Meta Abo Year ended 30 June *Organic growth. 4 Those are some good numbers but they don't really give you the true picture of what 28 thousand people in Diageo have been focused on this year. So here are my highlights for what I see as being key to the future. This year we delivered net sales growth worth over half a billion pounds and in a year which had its challenges. That s the equivalent of creating a global brand the size of Captain Morgan in one year. For me the performance of Johnnie Walker this year has been amazing. It is Diageo's biggest brand across many measures and we have added another million cases this year. It is now a 20 million case brand. In fact in the last 10 years, we have added nearly 10 million cases and over 1 billion of sales. It is inspiring for me to think of how many people across production, marketing, sales, and innovation have contributed to the brand s strong continued performance. The contribution innovation has made to growth is another highlight for me. We started to build our innovation capability around 7 years ago. This year, products launched in the last 5 years account for nearly 1.5 billion of our net sales, up nearly 30% year on year. Increasing our presence in the emerging markets is key to making a strong business even stronger and so another highlight for me this year has been fully embedding the local leaders we have acquired, in Turkey, in Brazil, China and Ethiopia. And since the year ended, we have brought USL into Diageo adding 20 millionaire brands. Truly local leaders. So now I will hand over to Deirdre to give you her perspective on the results we have announced today.

5 Slide 5 Deirdre Mahlan CFO Thank you Ivan. Good morning everyone.

6 Slide 6 Delivering efficient growth Focus on strategic brands Leading position in US spirits, driving top line growth and margin expansion Scale in emerging markets is now also driving top line growth and margin expansion Our geographic breadth mitigates the impact of individual market challenges 6 In the last 2 years, I have spoken about the Diageo model for efficient growth. As Ivan often says, this is a simple business and so is our efficient growth model. If we grow our strategic brands, execute on our leading position in North America and build scale in the emerging markets, we can drive the top line and improve margins. I am pleased that I am presenting a set of results which reflects good top line growth, continued investment in our brands and market platforms, and margin expansion. Our strategic brands have performed strongly this year with net sales growth driven equally by volume and price/mix. With the exception of Windsor and JεB, where performance reflected macro challenges in their biggest markets, this good performance was consistent across the brands. In North America, net sales growth was driven equally by volume, price and mix. This expanded gross profit margin, which together with tight control on overheads improved operating margin by 120 basis points after a 10% increase in marketing. With another year of double digit net sales growth, sales from our emerging markets have reached over 4.5 billion providing the scale from which we can leverage our marketing spend and overheads to drive margin improvement. The geographic breadth of our business means that again this year we have delivered a robust performance despite individual challenges in certain markets. We have seen further weakness in Southern Europe, a tough traditional on trade in Korea, and disappointing performance in our Asia Duty Free business. In addition, Brazil and Nigeria were weak, although we did deliver net sales growth in both markets. Let me go into more detail on each of these points.

7 Slide 7 Delivering efficient growth from our strategic brands Asia Pacific emerging LAC Strategic brands 2, AEET North America Other (590) Net sales growth m (21) (58) Asia Pacific developed Western Europe Volume growth EU k Net sales growth from strategic brands m Year ended 30 June Organic growth. 7 I will start with our strategic brands. We delivered 1% volume growth in the year. This was driven by 6% volume growth of our strategic brands in the emerging markets together with 3% volume growth of these brands in North America. In Africa, the performance of Johnnie Walker, Smirnoff, Smirnoff ready to drink and Guinness drove this growth. In Latin America, Johnnie Walker and Buchanan s were the key contributors especially in Mexico and Venezuela. In emerging Asia Johnnie Walker and Guinness were the biggest drivers of growth particularly Johnnie Walker Red Label and Guinness in Indonesia, and Johnnie Walker Red Label in Thailand. The strong positions of our strategic brands in Western Europe have of course left them exposed to market weaknesses here, primarily JεB in Spain, Guinness in GB and Ireland and Baileys in Southern Europe.

8 Slide 8 Delivering efficient growth in North America 4% volume growth from strategic spirits brands 5 ppts of price/mix from strategic spirits brands Marketing up 10% Gross margin up 150 bpts Operating margin up 120 bpts Year ended 30 June Organic growth. 8 Moving now to North America where performance of our strategic spirits brands was key. This is where we focus in North America. These are the brands whose size and brand positions benefit most in the US from our superior route to market with our dedicated distributor sales force. In the year, price increases gave us a little over 2 percentage points of our net sales growth. We increased prices across our spirits brands ranging from around 3% for vodka brands, to 9% for super premium scotch. We even increased the price of Popov by 10% and Gordon s Gin by 7%. This reflects our value based approach in North America which did cost us some volume share. The mix improvement we generated here was the biggest contributor to the mix improvement Diageo achieved. Mix benefitted from the strong performance of Crown Royal and Johnnie Walker, and from the volume decline of our low margin value brands. Innovation was also a key driver of mix as Crown Royal and Bulleit Bourbon contributed almost half of our net sales growth, the result of the introduction of Crown Royal Maple Finished and Bulleit 10 year old. The stronger price, and mix improvements we delivered are the result of the up weight in marketing spend we have made on our key North American brands over the last two years. Marketing was up 10% this year focused on the strategic brands and on Bulleit and Don Julio. This strong top line growth delivered nearly 150 basis points of gross margin improvement. While marketing as a percent of sales increased by 65 basis points, overheads were up only 1% so operating margin increased 120 basis points, despite some margin dilution from the weaker performance of our beer business.

9 Slide 9 Scale in the emerging markets drives top line growth and margin expansion Net sales growth m Operating margin expansion bpts Asia Pacific emerging 70 LAC AEET Emerging markets LAC Asia Pacific emerging AEET Year ended 30 June Organic growth. 9 Moving to the emerging markets where we delivered 11% top line and 18% operating profit growth this year. Each of the 3 regions delivered robust growth although in emerging Asia our overall net sales growth reflected the weakness in duty free which was down 15%. In total including our acquisitions we added nearly 700 million in net sales in these markets. This scale creates the platform for overall margin improvement from our emerging market business. As you know I have said a number of times that we won t drive margin improvement in each market each year, as we will make investments in individual markets to drive long term growth. Our performance this year demonstrates that. In aggregate margins improved by 170 basis points in our emerging market business. It was driven primarily by the operating margin improvement we delivered in Latin America and Caribbean and emerging Asia. In Latin America, 11 percentage points of price/mix drove gross profit margin. We leveraged our marketing spend and improved overhead efficiency. In emerging Asia, the top line price/mix was muted given the negative mix from the slowdown in duty free. However, we still delivered gross margin improvement. Marketing was leveraged and the overhead efficiencies were very strong. In Africa, we have been investing heavily in production and in the year gross margin reduced. This was in part caused by some issues in Tanzania as we bed down our acquisition there. In Eastern Europe, margins declined as we up weighted our investment across the whole scotch category in Russia. In contrast in Turkey, we delivered very strong margin improvement as Mey İçki completed its first full year in Diageo.

10 Slide 10 Diageo s strength is in its geographic breadth Net sales % growth (2) (4) (6) North America Western Europe AEET LAC Asia Pacific Diageo H1 H2 FY Year ended 30 June Organic growth. 10 Our geographic breadth insulates our overall performance from individual market volatilities. Therefore, despite a change in regional trends between the first and second half, overall there is little difference in our growth between the two halves. In North America, we had a strong second half for US spirits. In the third quarter, it was driven by pricing and the launch of innovations such as Crown Royal Maple Finished and Smirnoff confectionery flavours. The fourth quarter benefited from shipments of the new Cîroc flavour ahead of its launch this July. In Western Europe, the underlying trends are unchanged. The stronger second half performance was due to the comparison against a weak third quarter in France in the prior year and in the fourth quarter, we had good momentum in Western Europe from continued growth of Captain Morgan and from innovation with the introduction of Captain Morgan Spiced and the expansion of premixes. In Africa, Eastern Europe and Turkey, Q1 was very strong with 16% net sales growth, the result of favourable shipment phasing in Russia and Turkey. That flattered the performance of the region in the first half. There has been a slight softness in the second half in some markets, however, the region delivered good growth for the year. In Nigeria, we grew net sales 5% despite the consumer weakness we have seen there. East Africa grew net sales 10% and South Africa grew 17% while Russia and Eastern Europe grew 16% and Turkey 8%. In Latin America and Caribbean, as you know shipments were brought forward into the first half and therefore sales growth was lower in the third quarter. In the fourth quarter, there was no impact from shipment phasing and net sales grew 18%. This was the result of very strong sales in Venezuela which offset the softness we have seen in Brazil. In Asia Pacific despite an improved performance in Korea and China, and continued strong performance in South East Asia, quarter four net sales were flat year on year as a result of our decision to destock in India and in Asia duty free. The second half was therefore weaker than the first although as this was in part driven by destocking, I would expect to see some improvement in the first quarter of fiscal 14. These movements demonstrated both the volatilities inherent in developing markets and our ability to absorb them due to geographic breadth.

11 Slide 11 Price increases and production and overhead efficiencies drove operating margin improvement 0.8 ppts 30.9% 29.7% 0.2 ppts 0.2 ppts F12 Reported operating margin FX Acquisitions/ Disposals Organic movement F13 Reported operating margin Year ended 30 June. 11 Before I move to other aspects of our overall financial reporting, let me bring this together looking at the movement in operating margin. Foreign exchange movements, while volatile in the year, had only minimal impact on our reported performance and therefore on margin. Acquisitions and disposals have led to improved margins mainly as we saw reduced acquisition costs in the year. The termination of the Cuervo distribution agreement will improve our reported margin in fiscal 14. The organic improvement in operating margin was driven by 11% net sales growth in the emerging markets and 5% net sales growth in North America offset by 4% net sales decline in both Western Europe and developed Asian markets. Net sales benefited from price increases in all regions and from mix improvements in Latin America and North America. Marketing increased as a percent of sales to 15.7%. This drives our future growth and therefore the biggest increases in spend were on the biggest growth opportunities, in the emerging markets, in North America and on our super and ultra premium brands. While we increased our investment in our market platforms we have leveraged our overhead spend and this drove margin expansion. In summary, we delivered good top line growth, continued our investment for the future and we delivered margin expansion. Slide 12

12 Exceptional items reflect decisions made to strengthen the business 2012 m 2013 m Business restructuring (96) (69) Other operating exceptionals 56 (30) Operating exceptional items pre-tax (40) (99) Sale of businesses 147 (83) Exceptional tax items (505) 55 Discontinued operations net of tax (11) - Net exceptional items post tax (409) (127) Cash impact of business restructuring (158) (61) Year ended 30 June. 12 Now I am going to move onto those other aspects of our reporting. As you know, we have announced a number of changes in global supply since 2009 and in March this year we announced a further change to align the supply organisation with the changes we made in the regions in The biggest components therefore of the charge for business restructuring were 36 million in respect of the project to centralise brewing on one site in Ireland, and 25 million in respect of the Supply Excellence restructuring we announced this March. Next year I expect a charge of about 85 million in respect of supply restructuring projects and a cash impact of 110 million for all restructuring programmes. Other operating exceptionals relate to a brand impairment charge for Cacique, mainly due to the continued tough trading environment in Spain, partially offset by a credit relating to changes in the way inflation is applied to our pension scheme liabilities. The charge for sale of business is the write-off of our interests in Nuvo and in our joint venture with the developer of that brand as we have decided to focus on our own innovations in this consumer space.

13 Slide 13 Another year of strong free cash flow (24) (71) 1,647 (159) 14 1,460 (400) 2012 Operating profit* Working capital movement Dividends income Net interest and tax Net capex Contribution to UK pension schemes Other operating activities 2013 Year ended 30 June. m. *Operating profit is adjusted with non-cash items and excludes pension related payments. 13 We had another year of strong cash flow. Free cash flow was 1.5 billion even after the 400 million contribution we made to our UK pension schemes. Higher operating profit was the main contributor. Operating working capital was also better than last year as a result of the strict working capital management we have implemented across the business, supported by making working capital an annual bonus target. The benefit of this reduction in operating working capital partially offset our incremental investment of 69 million in maturing stock. Dividends received from associates, mainly from Moët Hennessy, were up year on year. Net capex was 604 million, up 159 million. Our major investments were on production capacity in Africa, production in Scotland, investment in our US Virgin Islands facilities and in Ireland as we move to one brewing site. We also spent about 40 million in our newly acquired businesses. Next year, I would expect capex to be around 750 million as we continue to build capacity and drive efficiency through these major projects. Free cash flow is higher than our guidance in February, mainly due to lower than expected spend on capex and, while tax paid is up year on year, certain tax payments we thought would be made this year will now be made in fiscal 14.

14 Slide 14 Debt remains at 2.4 x EBIT* 1, ,403 7,570 (1,460) Net borrowings at 30 June 2012 Acquisitions Dividends Free cash flow Other Net borrowings at 30 June 2013 *Pre-exceptional items. m. 14 Closing net debt increased to 8.4 billion due to acquisitions. Ypióca closed last August, we increased our stake in Shuijingfang in June and subscribed for the preferential share allotment in USL in May The recent strength of the US Dollar has increased our reported debt.

15 Slide 15 Interest costs broadly flat despite increased borrowings 2012 m 2013 m Movement m Core interest (386) (403) (17) IAS Net interest charge (382) (399) (17) Finance income/(charge) from post employment obligations 7 (5) (12) Other finance charges (22) (20) 2 Net other finance charge (15) (25) (10) Net finance charges (397) (424) (27) Year ended 30 June. 15 Borrowings as you just saw increased by around 800 million. However, average net debt is broadly the same year on year given that in fiscal 12 the biggest single outflow was for Mey İçki in August The higher interest charge therefore reflects a slight increase in effective interest rates from 4.7% to 4.9%. This is the result of more modest use of commercial paper as we raised debt in the year to lock in the current low interest rates. Next year we expect the effective interest rate to be close to 4% as the benefits of our bond issuances, at lower interest rates over the last two years, flow through. Finance charges from post employment obligations were 12 million adverse to last year, primarily because the current low interest rate environment has brought down expected returns on pension assets. In fiscal 14, we will have to restate for the new accounting standard on pension accounting. I would expect to issue this restatement in October with our IMS. The application of the revision to IAS 19 will be that on a restated basis net finance charges in fiscal 13 will increase by about 30 million. I estimate that the IAS 19 charge in fiscal 14 will be about 10 million. In addition, operating profit will reduce by about 10 million in respect of pension service charges which used to be charged to finance charges. There is also a new standard on accounting for joint ventures and we will restate for this although it leaves eps unchanged.

16 Slide 16 Improved performance throughout the income statement 2012 m 2013 m Movement m Operating profit* 3,198 3, Associate income net of tax (14) Trading profit* 3,411 3, Net finance charges (397) (424) (27) PBET 3,014 3, Taxation* (533) (584) (51) Non-controlling interests (130) (109) 21 Profit after tax* 2,351 2, eps* 94.2 pence pence 10.2 pence Year ended 30 June. *Excludes exceptional items. 16 And finally moving down the income statement to eps. The effective tax rate remains at 18% and I currently expect the same for next year. Minority interests are lower as last year it included the minority share of the gain made on the sale of shares in Tanzania Breweries by EABL. eps excluding exceptional items was therefore up 10.8%, driven mainly by our organic operating profit growth.

17 Slide 17 Delivering efficient growth Strong platform + Expansion in faster growing markets + Sharper focus Faster organic net sales growth Aim: 6% CAGR in the medium term Organic operating margin improvement Aim: The first 200bps by year ending 2014 eps growth Aim: Double digit growth in core* eps Maximising cash and returns *Excluding foreign exchange and exceptional items. 17 As Ivan said earlier, we believe our performance this year leaves us on track to deliver our medium term guidance. And now let me hand back to Ivan. Ivan.

18 Slide 18 Making a strong business even stronger Enhancing our position as the #1 spirits company in North America Leading brands across categories and global reach Increasing our presence in the emerging markets of the world Respected for our actions and performance Capturing efficient growth 18 Thank you Deirdre. What I want to do now is to talk about what we did this year and what gives us the confidence that we are on track to deliver our guidance. As Deirdre said I do think this is a simple business. Global premium drinks is an attractive industry. There are a growing number of consumers and consumers are premiumising. We have the brands and the global reach. And we are very clear how we drive value from that. First by enhancing the leadership position we have in North America. The size of our North American business contributes balance between our developed and emerging markets businesses. Having a business which delivers consistent top line growth at high margins is a source of strength when we see periods of volatility in the emerging markets. Secondly by enhancing our scale in the emerging markets to drive industry leading growth. We have to have a cost focus in everything we do to drive efficient growth. And we have to deliver this in a way which creates trust and respect from all stakeholders, gives leadership to our industry and contributes to the communities we are part of.

19 Slide 19 Industry leading brands across categories Scotch whisky Other whisk(e)y Vodka Rum Tequila Liqueur Gin Local spirits Beer Ultra premium Super premium Premium Standard Value 19 Let me start with our brands. Many of you will know that I often use this slide and if I could only show one slide, this would be the one. Each year, we broaden our reach across categories.

20 Slide 20 The category breadth to deliver on consumer trends in all markets % 100 Net sales % Wine Liqueurs RTDs 75 Local spirits Vodka Rum 50 Whiskey 50 Beer Beer 25 Vodka 25 Scotch Scotch 0 Developed markets 0 Emerging markets Tequila, gin, flavoured and local spirits not included Liqueurs, rum, wine, gin, whiskey, tequila and flavoured spirits not included Vodka includes Smirnoff ready to drink Year ended 30 June And broadening our reach is important as consumers and customers are at different stages of development in different markets. In the developed markets we have a business which is balanced across all major beverage alcohol categories with leading brands in each. It gives us the brand platforms we need to meet changing consumer and customer trends in both the short and long term. In the emerging markets our leading brands in scotch and vodka give us leadership in international spirits and give us scale which we have expanded with our acquisitions of local leaders. In Africa, this position is strengthened even further by our beer brands. Our consumer base is increasing in the emerging markets. The number of high net worth individuals is set to grow by 400 million in the next decade and the number of emerging middle class consumers will increase by nearly 1.3 billion. This presents Diageo with an exceptional opportunity. We can introduce leading global brands into new categories and we can premiumise our local leaders. We can widen our reach to both luxury and emerging middle class consumers. Building our scale in both occasions and driving top line growth and margin expansion.

21 Slide 21 Marketing spend is focused on the biggest growth opportunity by market m F13 Increased spend Western Europe North America Asia Pacific Africa, Eastern Europe & Turkey Latin America & Caribbean Johnnie Walker Red Label Johnnie Walker super and ultra deluxe Year ended 30 June The fact that the consumer opportunity differs by market impacts how we build our brands. Johnnie Walker, as our biggest and most global brand, illustrates this really well. In Western Europe our biggest opportunity is in the reserve brands across all markets and so while spend on Johnnie Walker Red declined slightly we heavily upweighted spend on the super and ultra premium offerings. We did the same in North America as consumers there continue to premiumise and as we increased our focus on the opportunity in gifting. You have seen the strong growth and share gains it delivered. In Asia, while spend behind Johnnie Walker Red in Thailand and Vietnam increased double digit, the biggest increase we made was in super and ultra premium reflecting the huge opportunity we see in the luxury sector here. This spend behind high profile events in trend leading accounts also benefits the brand equity of Johnnie Walker Black Label and we have been able to reduce marketing on Black Label to fund the increase in super and ultra premium. In Africa the bulk of our incremental spend has been on Johnnie Walker Red given the opportunity we now have to expand our reach to middle class consumers with campaigns such as Step Up. We have the same opportunity in Latin America and there we have increased our spend on Johnnie Walker Red. But we are also driving the growth of super premium scotch with strong campaigns behind Johnnie Walker Gold Label Reserve and Platinum.

22 Slide 22 Enhancing our position as the #1 spirits company in North America Building our brands through world class marketing Leading the industry in innovation Building stronger routes to consumers Leading brands across categories and global reach 22 Moving now to the first of our focus areas. North America has had a very strong year with robust net sales growth from volume, price and mix. This is the world s biggest and most profitable drinks market with favourable demographics. Our brand range, our route to market and our scale create a very strong platform here. Key to delivery on this platform is great execution in marketing and innovation. Marketing is key to our brand strength. We need great campaigns but they also need to be executed well. Let me give you an example. As you know we haven t delivered a strong performance on Baileys in the last couple of years. Fiscal 13 s performance was much stronger. The team in North America have executed superbly on the new global campaign and it was ranked in the top 1% of effective ads in the US. Now I am cautious to declare success from one year s results for a brand as significant as Baileys and the key to success will be if we maintain that level of execution again next year. Innovation is the biggest driver of growth in North America. In the last few years we have led this growth. Cîroc Peach and Crown Royal Maple Finished are two of the biggest innovations the industry has ever seen and our innovations in wine have turned our performance around. Innovation in beer in the last 12 months have not been as successful and we need to crack the code in beer. Our dedicated distributor model in US spirits is now 10 years old. I sometimes have to remind myself what a bold move it was given it is now such an accepted and successful part of our business and that of our distributors. In 2011 we refined it further and increased the sales resources and skills that are brought to the sale of our brands. But the retail environment is changing and retailers now demand more from brand owners. Last month I visited a Walgreen store in Chicago. It was very impressive. Well laid out, focused on premium brands and bringing sales theatre to customers. The team there told me they needed great execution from brand owners and their distributors. High levels of service and innovation. It strengthened my belief that there is a lot of growth to go for in the US but we have to be at the top of our game to capture it.

23 Slide 23 Increasing our presence in the emerging markets of the world Leading brands across categories and global reach Through strong organic growth Through driving value from the acquisitions we have made Building stronger routes to consumers 23 Diageo s emerging market position is very strong and the opportunity which exists in the emerging markets to grow sales is well understood. As Deirdre showed you earlier, our scale means that not only are we growing top line but our emerging markets business is contributing to our margin improvement.

24 Slide 24 Increasing our presence in the new high growth markets through acquisitions Mey İçki Turkey Meta Abo Ethiopia Shui Jing Fang China Hanoi Vodka Vietnam Ypióca Brazil United Spirits India August 2011 January 2012 June 2012 June 2012 August 2012 July In the last 3 years we have invested over 2.5 billion to acquire leading local brands. These acquisitions, and I include USL here even though it completed after the financial year ended, have significantly increased our presence in the emerging markets and enhanced our platform for growth. They all met our strict acquisition criteria for strong brands with good market positions, accretive to growth and meeting our financial hurdle rates. You have seen the strong performance we have delivered from Mey İçki with 8% top line growth and 5 percentage points of margin improvement. We will have to manage the introduction of new regulations on advertising in Turkey but the business is very strong and well managed so I am confident that we can meet the requirements of the regulations and grow our business. In Ethiopia we have delivered organic growth of 40% with beer up nearly 50%, and Johnnie Walker up 25%. Shuijingfang has had a tougher year. We have fully consolidated it for the first time this year and sales were weak in the second half given the impact the anti-extravagance measures have had on baijiu sales. Current market trends do not however change our view that the premium baijiu category remains a long term growth opportunity given the unique position baijiu holds in China. The acquisition of our interest in Hanoi vodka was part of our strategy to improve our route to market in Vietnam. This year we delivered 40% net sales growth as we begin to benefit from these changes and investments. Ypióca has yet to reach its first anniversary but it is on track. Our strategy is to build Ypióca into a national champion, by improving the brand s distribution in premium and modern on trade outlets. The acquisition was hugely complementary to our international spirits business in Brazil and we will focus on delivering those synergies over the next few years. Which brings me to our newest acquisition, USL. This acquisition was about leading the Indian spirits market, a market which is premiumising with 4 million new consumers for western style spirits each year and USL have the leading brands. We closed the transaction on the 4th of this month. Since then we have made a number of appointments and our transition team is already established in Bangalore working with the USL management. The first USL Board meeting with the new non execs and the other Diageo appointees is being held today in Bangalore. This is real progress in a short period and we intend to maintain this pace. We are looking at the short term, for example ensuring we have a successful selling season around Diwali, and we are looking at the long term, at investment and organisation. We have started a new and exciting part of the Diageo story and I look forward to sharing it with you at future results presentations.

25 Slide 25 Building stronger routes to consumers in emerging markets For example in Africa: Diageo s biggest emerging market The biggest emerging middle class opportunity Driving growth in beer and spirits 25 As we drive out cost we can invest to build stronger routes to market in these emerging markets and our biggest opportunity to do this is in Africa. Incomes are growing in Africa, although from a low base. The number of high net worth individuals is also growing. These are brand conscious consumers, well aware of the status which international spirits brands confer. Our brand reach across price points and categories and the strength of our established routes to market gives us a unique advantage in Africa. We have to sustain that advantage as other international companies begin to build their presence in Africa. Beer is our biggest category at just under 70% of our sales. We have value brands which offer a trade up for those consumers entering from the illicit segment. We have also seen consumers trade up within our beer brands, and our premium beers this year grew faster than beer in total. Again this year spirits, including our Smirnoff ready to drink offering, grew strongly, up nearly 20%. Johnnie Walker being the single biggest contributor to growth. Our spirits brands are performing very well in Africa. We now sell nearly half a million cases of scotch at premium and above price points and nearly 2 million cases of Johnnie Walker. But we can do more. This is why I have added leadership capacity. With Nick and Andy working together, Nick leading our route to consumer work, we have the opportunity to build the best route to consumers in Africa. Africa has the biggest emerging middle class opportunity and my aim is to build on the strengths we already have to ensure we continue to have a healthy beer business and that we transform our spirits position.

26 Slide 26 Capturing efficient growth Leading brands across categories and global reach Managing challenges in Western Europe Drive out cost to invest in growth Premiumising especially in scotch 26 Our focus on North America and the emerging markets will drive margin. But in addition we can also deliver our efficient growth targets in 3 more ways. The first is by improving our performance in Western Europe.

27 Slide 27 Western Europe is a large and profitable business and we can improve performance m F13 Organic performance Great Britain France Ireland Iberia, Greece & Italy Germany Western Europe Net sales movement Operating profit movement Year ended 30 June Western Europe is a 2 billion business with a 30% margin. We do have markets where the consumer environment is tough but we also have markets where the consumer dynamics are strong. In addition we have momentum in reserve, in rum with Captain Morgan and in gin and from innovation. We can improve performance. I don t believe that we are through the decline yet but I think that the very destabilising period is now over and we can now plan and implement those plans with some certainty. In fiscal 14, we need to create more impact around our brands. We need to up weight our media and we need to increase our sales activations, especially for our premium brands. I expect that we can moderate the decline in fiscal 14 and hold our margins.

28 Slide 28 Driving out cost to invest in growth Deliver restructuring savings Deliver marketing efficiency Consistent focus on driving out cost creates agility 28 I have already spoken about how our markets and consumers are changing. To grow at a time of change we need to invest, in marketing and in our routes to consumers. Everyone at Diageo understands the need to drive our cost so that we can make these investments while also expanding margin. Our priorities are therefore very clear. We have to deliver the savings we identified from our restructuring programmes. We have to deliver marketing efficiencies, reducing spend on below the line activities and increasing media spend. And we have to continually drive productivity improvements that translate into cost reduction. This year the savings we identified in our 2011 operating model review have helped us keep the total increase in overheads to 3%, despite major investments in our route to market in Africa, Latin America and Eastern Europe. In North America, we have already captured savings in promotional and point of sale spend which have funded the up weighted media spend. We now need to do the same in all our markets. Having a focus on driving out cost also drives efficiency. For me the biggest benefit of the supply excellence programme is not the 60 million of cost savings it delivers, it is the agility it creates now that the in market teams and the supply function are aligned.

29 Slide 29 Building the global leader in super and ultra premium Net sales % % 100 Other 100 Latin America and Caribbean Other Western Europe Emerging Asia Pacific The Singleton of Glen Ord Buchanans Don Julio Ketel One Cîroc North America Johnnie Walker 0 Leading markets 0 Leading brands Year ended 30 June In the last five years we have grown our reserve brand business to be a significant part of Diageo, now over 10% of our total business, and the global leader in this category. This year it has continued to perform strongly with double digit growth in both developed and emerging markets. We know what grows luxury spirits brands. Great liquids and marketing which is focused on the consumer of luxury goods. We now have a commercial machine which creates great brand building events in trade leading accounts in the cities and resorts where consumers of luxury products spend their time. We know that luxury consumers are global consumers and therefore our messages are consistent across geographies. And we are building the fame of our brands with high profile events and advertising and through association with other luxury brands. No one gives an unknown brand as a gift! Looking at the performance of our reserve brands you can see that 40% of the growth in reserve came from US spirits. It was the birth place of our reserve brand focus so it is to be expected that it is the biggest market for reserve. In super and ultra deluxe vodka Ketel One and Cîroc continue to perform strongly. But this year we also saw Bulleit establish itself as a leading super deluxe bourbon and Johnnie Walker super deluxe performed very strongly with sales up 13%. In Asia the growth was driven by South East Asia and in China and Taiwan with the key brands being Johnnie Walker and The Singleton. In Latin America, Buchanan s Special Reserve drove growth, and in Western Europe as I mentioned earlier we are seeing growth in reserve in every market except France.

30 Slide 30 Respected for our actions and performance Leading brands across categories and global reach Alcohol in society Environment Socio-economic development 30 Building the trust and respect of our stakeholders is not only important to me personally, it is essential for our growth, especially in the emerging markets, which have more demanding expectations of the private sector. We have 3 areas of focus. The first is the role of alcohol in society. We now support more than 300 responsible drinking programmes in over 40 countries. These are programmes such as the contribution we made to Mexico City s Conduce sin alcohol, drive without alcohol programme. We donated 50,000 breathalyzer kits and provided thousands of leaflets on responsible drinking. Since the campaign was launched, alcohol-related deaths on the road have dropped by 30%, and the programme has been hugely popular with the public, as well as being recognized nationally and internationally for its success.

31 Slide 31 Setting targets for our environmental impact which will make a difference Target by 2015 Progress against operational targets 2013 Performance % Reduce carbon emissions by 50% Cumulative performance ( ) % Achievement On track Improve water efficiency by 30% Reduce water wasted at water-stressed sites by 50% Reduce polluting power of wastewater by 60% (9.1) (17.5) Eliminate waste to landfill On track On track Off track On track Progress against packaging targets Reduce average packaging weight by 10% Increase average recycled content across all packaging to 42% Make all packaging 100% recyclable/reusable On track On track On track Year ended 30 June Our second priority is the environment. Our environmental commitments are in two areas; operational targets around emissions, water and waste, and packaging targets. These are absolute targets to reduce our environmental impact in real terms even as we grow the business. Looking at our operation targets, this year, we reduced carbon emissions, reduced the amount of water we absorb, improved water efficiency and reduced the volume of water we use in water-stressed locations. Progress on the amount of wastewater we discharge wasn t where we wanted it to be and we have commissioned new projects in Scotland and Africa which will significantly reduce the amount of wastewater we discharge. We made enormous progress on our target to reduce waste to landfill, 25 of our production sites send no waste to landfill and 50 sites send less than a tonne. Material which would have gone to landfill is now used by farmers. In the US Virgin Islands, all the by-products from our rum distillation are now being used in animal feed. Moving to our packaging targets. We know that great brands should come in great packaging. It protects, preserves and displays our drinks. We want to keep the sense of style and distinction in our products, but we also want to reduce the environmental impact of our packaging. Since 2009, we have reduced the average weight of our packaging by 5% with projects such as reducing the weight of Smirnoff glass bottles in Venezuela, and the new lighter JεB bottle. At the same time we are increasing the recycled content in our packaging. 60% of the new Baileys bottle is recycled glass and we have increased the use of recycled glass for both Smirnoff and Bundaberg in Australia.

32 Slide 32 Respected for our actions and performance Leading brands across categories and global reach 32 We are linked to the social and economic development of the communities we are part of. Increasingly we are getting involved in the entire value chain from clean water to vocational skills in the hospitality industry, to working with smallholder farmers on increasing their yields. Most of our Water of Life projects are in Africa but we have also launched projects in Asia, in Malaysia, Vietnam and Cambodia. Our Learning for Life programmes teach skills and provide training in bartending, tourism, retailing, hospitality, and entrepreneurship, helping people find employment and become active contributors to their community. In 2013, we ran 59 programmes in 30 countries, and trained 25,000 people. We now have programmes in place to train bar staff for all the official and corporate Olympic hospitality events in Brazil. This year, we have begun to focus on women s empowerment following feedback from stakeholders about the impact the alcohol industry has on women, and because women s empowerment is now a major issue on the global policy agenda. Already in Asia, we have made a commitment to support 2 million women through community investment programmes in 17 countries. I am convinced that each of these programmes strengthens our businesses within the communities we are part of. They are the right thing to do and make our employees proud to work for Diageo.

33 Slide 33 Diageo, the world s leading premium drinks company Before we end I want to talk about the future. I believe that we have one of the strongest businesses of any consumer products company. But I also believe that our future will be about sustaining our financial performance in a rapidly changing world. Consumer companies are entering an era where demographics and consumer trends are changing far quicker than ever before. We must ensure that we build on our strengths and stay agile and adaptable to compete effectively, deliver strong performance and build our reputation in a more demanding world. My ambition for Diageo remains unwavering. I am determined that measured against consumer products companies, we should sustain top tier performance, across net sales growth, margin improvement and cash flow. I am also determined that we should deepen our reputation by becoming trusted and respected by customers who can share our success, by consumers who will be delighted by our brands, by investors who are confident in our ability to deliver what we say and by communities who value us as good citizens. Diageo s future success will be measured in the value we create and in the way we do it. I lead a fantastic team, thirty six thousand strong now that we have closed the USL transaction, and we are going to create a company that is respected for sustained financial performance and earns the trust of all of our stakeholders. Thank you for your time this morning. I look forward to our teleconference at 9.30 when Deirdre and I will be joined by the regional presidents to take your questions.

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35 Slide 35 No script Cautionary statement concerning forward-looking statements This presentation contains forward-looking statements. These forward-looking 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 and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, the completion of Diageo's strategic transactions and restructuring programmes, anticipated tax rates, expected cash payments, outcomes of litigation, anticipated deficit reductions in relation to pension schemes, general economic conditions and all statements on the slide outlook statements. 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. These factors include, but are not limited to: changes in political or economic conditions in countries and markets in which Diageo operates, including changes in levels of consumer spending, failure of customer, supplier and financial counterparties or imposition of import, investment or currency restrictions; changes in consumer preferences and tastes, demographic trends or perceptions about health related issues, or contamination, counterfeiting or other circumstances which could harm the integrity or sales of Diageo s brands; developments in any litigation or other similar proceedings (including with tax, customs and other regulatory authorities) directed at the drinks and spirits industry generally or at Diageo in particular, or the impact of a product recall or product liability claim on Diageo s profitability or reputation; the effects of climate change and regulations and other measures to address climate change including any resulting impact on the cost and supply of water; changes in the cost or supply of raw materials, labour and/or energy; legal and regulatory developments, including changes in regulations regarding production, product liability, distribution, importation, labelling, packaging, consumption or advertising; changes in tax law, rates or requirements (including with respect to the impact of excise tax increases) or accounting standards; and changes in environmental laws, health regulations and the laws governing labour and pensions; the costs associated with monitoring and maintaining compliance with anti-corruption and other laws and regulations, and the costs associated with investigating alleged breaches of internal policies, laws or regulations, whether initiated internally or by external regulators, and any penalties or fines imposed as a result of any breaches; ability to maintain Diageo s brand image and corporate reputation, and exposure to adverse publicity, whether or not justified, and any resulting impacts on Diageo s reputation and the likelihood that consumers choose products offered by Diageo s competitors; increased competitive product and pricing pressures and unanticipated actions by competitors that could impact Diageo s market share, increase expenses and hinder growth potential; the effects of Diageo s strategic focus on premium drinks, the effects of business combinations, partnerships, acquisitions or disposals, existing or future, and the ability to realise expected synergies and/or costs savings; Diageo s ability to complete existing or future business combinations, restructuring programmes, acquisitions and disposals; contamination, counterfeiting or other events that could adversely affect the perception of Diageo s brands; increased costs or shortages of talent; disruption to production facilities or business service centres, and systems change programmes, existing or future, and the ability to derive expected benefits from such programmes; changes in financial and equity markets, including significant interest rate and foreign currency exchange rate fluctuations and changes in the cost of capital, which may reduce or eliminate Diageo s access to or increase the cost of financing or which may affect Diageo s financial results and movements to the value of Diageo s pension funds; renewal of supply, distribution, manufacturing or licence agreements (or related rights) and licenses on favourable terms when they expire; and technological developments that may affect the distribution of products or impede Diageo s ability to protect its intellectual property rights. All oral and written forward-looking statements made on or after the date of this presentation and attributable to Diageo are expressly qualified in their entirety by the above factors and the Risk factors contained in Diageo s results announcement dated 31 July 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. The reader should, however, consult any additional disclosures that Diageo may make in any documents which it publishes and/or files with the US Securities and Exchange Commission. All readers, wherever located, should take note of these disclosures. 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. All rights reserved. Diageo plc The information in this presentation does not constitute an offer to sell or an invitation to buy shares in Diageo plc or an invitation or inducement to engage in any other investment activities. This presentation includes information about Diageo s target debt rating. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organisation. Each rating should be evaluated independently of any other rating. Past performance cannot be relied upon as a guide to future performance. The contents of the company s website ( should not be considered to form a part of or be incorporated into this presentation