01 results

1
01 results
deliveringprofitable and sustainablegrowth

• September 2001

2
Paul Walshgroup chief executive
3
Diageos journey

• exit food
• driving organic growth in premium drinks
• focus on our priority brands in their
  mostimportant markets
• consumer driven marketing and innovation
• supplement organic growth through keystrategic
  acquisition
• seizing our global growth opportunity

4
Our progress inpremium drinks

• substantial progress on our exit from food
• double digit profit growth in premium drinks,for
  the fourth consecutive period
• integration of Guinness and UDV is delivering
• EU clearance on Seagram, awaiting FTC approval
• consolidating our position as the worlds leading
  premium drinks business

5
Exit food - Pillsbury

• strong rationale for combining Pillsburywith
  General Mills remains
• awaiting FTC review
• 01 performance operating profit grew 5
• margin improvement in North America

6
Exit food - Burger King

• 01 performance operating profit down -12
• turning around business performance
• staffing
• CEO and management team in place
• structure
• centralisation brings focus to North America
• much improved franchisee relationship
• strategy
• develop brand loyalty
• more effective marketing
• greater range of products
• improve operational standards
• commitment to separate Burger King from Diageo

7
Our progress inpremium drinks

• substantial progress on our exit from food
• double digit profit growth in premium drinks,for
  the fourth consecutive period
• integration of Guinness and UDV is delivering
• EU clearance on Seagram, awaiting FTC approval
• consolidating our position as the worlds leading
  premium drinks business

8
Focus on premium drinks

• total premium drinks
• turnover up 5 7
• marketing spend up 8 10
• operating profit up 9 14
• operating margin up 0.6ppts 1.1ppts
• economic profit up 193m 179m
• EPS up 15 n/a
• ROIC up 0.9ppts 2.4ppts

9
Nick Rosefinance director
10
Focus on premium drinks

• total premium drinks
• turnover up 5 7
• marketing spend up 8 10
• operating profit up 9 14
• operating margin up 0.6ppts 1.1ppts
• economic profit up 193m 179m
• EPS up 15 n/a
• ROIC up 0.9ppts 2.4ppts

11
Sustainable growth
2001
1999
2000
11,795m 1,647m 1,903m 10.1 165m 373m
11,870m 1,706m 1,980m 10.3 203m 864m
12,821 1,917m 2,127m 11.2 345m 1,220m

• turnover
• marketing spend
• operating profit
• ROIC
• economic profit
• cash flow

12
Driving organic growthin premium drinks

• focus on our priority brands
• in their most important markets
• better marketing, and better marketing
  effectiveness
• superior consumer insight drives innovation

13
Focus on our priority brands
volume
net sales
6 4 (1) 4
15 8 (2) 9
global priority brands local priority
brands other brands total
14
Global priority brands
volume growth
million cases (equivalent units)
net sales growth
Johnnie Walker
3 3 12 2 10 (6) 4 20
7 6 52 4 11 9 7 21
10.6
Guinness
11.0
Smirnoff
18.4
JB
6.2
Baileys
5.1
Cuervo
4.3
Tanqueray
1.9
Malibu
2.3
15
Driving organic growthin premium drinks

• focus on our priority brands
• in their most important markets
• better marketing, and better marketing
  effectiveness
• superior consumer insight drives innovation

16
Market classification
100
1,432m
170m
3.6m equiv. units
453m
12
15
Venture
19
22
14
Key
24
17
31
74
61
Major
57
54
17
Major market - North America
Operating profit
Organic operating profit growth
363m 26
61m 36
Operating profit up 20 Volume up 4
Net sales up 14 Marketing up 10
18
Major market - Great Britain
Organic operating profit growth
Operating profit
13m 8
162m 11
Operating profit up 9 Volume up 6
Net sales up 9 Marketing up 6
19
Major market - Spain
Organic operating profit growth
Operating profit
14m 8
85m 6
Net sales up 9 Marketing up 14
Operating profit up 20 Volume up 4
20
Major market - Ireland
Organic operating profit growth
Operating profit
16m 9
156m 11
Net sales up 5 Marketing up 9
Operating profit up 11 Volume flat
21
Key markets
Organic operating profit growth
Operating profit
29m 17
447m 31
Net sales up 5 Marketing up 10
Operating profit up 7 Volume up 3
22
Venture markets
Organic operating profit growth
Operating profit
37m 22
219m 15
Net sales up 7 Marketing up 16
Operating profit up 20 Volume up 4
23
Paul Walshgroup chief executive
24
Diageos journey

• exit food
• driving organic growth in premium drinks
• focus on our priority brands in their
  mostimportant markets
• consumer driven marketing and innovation
• supplement organic growth through keystrategic
  acquisition
• seizing our global growth opportunity

25
Driving organic growthin premium drinks

• focus on our priority brands
• in their most important markets
• better marketing, and better marketing
  effectiveness
• superior consumer insight drives innovation

26
Driving organic growthin premium drinks

• focus on our priority brands
• in their most important markets
• better marketing, and better marketing
  effectiveness
• superior consumer insight drives innovation

27
Driving organic growthin premium drinks

• focus on our priority brands
• in their most important markets
• better marketing, and better marketing
  effectiveness
• superior consumer insight drives innovation

28
Diageos journey

• exit food
• driving organic growth in premium drinks
• focus on our priority brands in their
  mostimportant markets
• consumer driven marketing and innovation
• supplement organic growth through keystrategic
  acquisition
• seizing our global growth opportunity

29
Supplementing our growth

• strategic acquisition
• our integration plans for Seagram
• EU regulatory clearance, 8 May 2001
• awaiting outcome of FTC review

30
Diageos journey

• exit food
• driving organic growth in premium drinks
• focus on our priority brands in their
  mostimportant markets
• consumer driven marketing and innovation
• supplement organic growth through keystrategic
  acquisition
• seizing our global growth opportunity

31
Questions?
32
Appendix
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Premium drinks

• Key markets Venture markets
• Africa
• Australia Argentina Jamaica
• Brazil Austria Malaysia
• Colombia Belgium Middle East
• France Canaries Netherlands
• Global Duty Free Rest of Caribbean North Africa
• Greece/Turkey Central America Norway
• Japan China/Hong Kong Philippines
• Korea Denmark Poland
• Mexico Germany Russia
• Portugal Hungary Singapore
• Taiwan India Sweden
• Thailand Indonesia Switzerland
• Uruguay Italy The Baltic States
• Venezuela

34
Premium drinksLocal priority brands in their
most important markets

• Brand Market
• Archers Great Britain
• Beaulieu Vineyard wines USA
• Bells Extra Special Great Britain
• Bells Extra Special South Africa
• Buchanans Mexico
• Buchanans USA
• Buchanans Venezuela
• Budweiser Ireland
• Bundaberg Rum Australia
• Cardhu Spain
• Carlsberg Ireland
• Dimple/Pinch Korea
• Gilbeys GW Whisky India
• Goldschlager USA
• Gordons Gin Great Britain

Brand Market Gordons Gin USA Harp Ireland Jack
Daniels Great Britain Malta Ghana Malta Nigeria Ol
d Parr Japan Pimms Great Britain Red
Stripe Jamaica Red Stripe USA Romana
Sambuca USA Rumple Minze USA Smithwicks Ireland So
uthern Comfort Great Britain Spey
Royal Thailand Total Single Malts USA
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Premium drinksAcquisitions and Disposals
Acquisitions Completion date Bundaberg Rum
(50) October 2000 East Africa Breweries
(3) January 2001 Seagram Captain Morgan Crown
Royal 5 Star 7 Crown VO Cacique Myers Sterling
Vineyard
Disposals Completion Date Croft September
2001 Delaforce September 2001 Dreher January
2001 Drurys January 2001 Old Eight January
2001 Cruzcampo January 2000 Asbach November
1999 Cinzano November 1999 Metaxa November
1999 Vecchia Romagna October 1999
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Ready-to-drink

• Smirnoff Ice
• North America, Brazil, Ireland, GB, Holland,
  Belgium, Switzerland, Italy, Kenya, RSA,
  Canaries, Portugal, Spain, Greece
• Smirnoff Baltik
• Australia
• Smirnoff Mule
• GB, Ireland, Greece
• JB Twist
• Spain, Portugal

• Archers Aqua
• GB
• Bundaberg Cola
• Australia
• Gordon's Space
• Greece
• Johnnie Walker Cola
• Australia
• Pimm's in a Can
• UK
• Gordon's Tonic
• UK

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Volume conversion factors

• Unit Factor to be applied
• Spirits 9 litre case 1
• Ready to Drink 9 litre case ? 10
• Wine 9 litre case ? 5
• Beer hectolitre ? 0.9
• The factor is applied to the relevant units to
  arrive at equivalent unit measures.An equivalent
  unit delivers 272 servings of the product,
  assuming the following serving sizes
• Spirits 33 ml
• Ready to Drink 330 ml
• Wine 165 ml
• Beer 330 ml
• Ready to Drink volumes
• Smirnoff UK 783k equiv. cases
• Smirnoff NA 1089k equiv cases
• Gordon's Space 42k equiv cases

38
Paul Walshgroup chief executive
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Nick Rosefinance director
40
Lord Blythchairman
41
Jack Keenandeputy chief executive
officerGuinness UDV
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Tim Proctorgroup general counsel
43
Stuart Fletcherpresident - key markets
44
Ian Meakinspresident - European major markets
and global supply
45
Paul Clintonpresident - North America
46
Ivan Menezespresident - venture markets
47
Jim Grovergroup strategy director
48
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