Diageo: What do we expect/hope to hear at the CMD?

Research evidence excerpt

Diageo: What do we expect/hope to hear at the CMD?

Trevor Stirling +44 20 7676 7521 trevor.stirling@bernsteinsg.com 4 August 2026

EXHIBIT 2: Half of Diageo's profits come from North EXHIBIT 3: With the exception of China, Emerging

America, 20% from Europe and 30% from Emerging Markets are delivering fairly solid performance

Markets

OrganicRevenue Growth

Diageo Geographic-Mix (FY25)

9%

North America

-7%

18% 15% Asia Pacific Europe 8%

3% FY19-25 34%

9% CAGR

9% 13%

5% Africa

LatAm & 11% H1FY26 9%

Caribbean

10% 21% 12%

Latin America

24% Africa 5% 14%

6%

Asia Pacific

-11%

21% Europe

50% Total 9%

40% -3%

22% North America

Source: Company reports

Volume Net Sales EBIT

The chart that set the market aflutter was one that showed a new category strategy in the United Arab Emirates (Exhibit 4), and

in particular the price cuts to VAT69, Black & White and J&B scotch whiskies. We think implication that some commentators

drew that this was the precursor to a global price war were massively overblown. Firstly, Diageo has always regarded the

first of these two brands as what they call primary scotches i.e. entry-level value brands; to be grouped so closely together to

each other and to Johnnie Walk Red made no sense. Secondly, they had minuscule volumes at the old price points, especially

compared to the new post adjustment volumes i.e. the risks were very low. Thirdly, it worked. There wasn’t much competition in

Scotch in the first place; so rather than prompting a price war, the biggest impact seems to have been to persuade consumers

to trade up from Pernod Ricard’s premium IMFL brand Royal Stag (likely sold to ex-pat India workers) into Diageo’s low-end

Scotches.

EXHIBIT 4: A new whisk(e)y category strategy in the United Arab Emirates

Source: Company presentation

EUROPEAN BEVERAGES 3