Diageo plc Q4 FY2024 earnings call

• Met inventory position commitment in LAC and validated appropriate inventory levels in other regions.
• By end of calendar year, will complete rollout of proprietary consumer choice framework across markets, realign marketing organization into agile brand communities.
• Redeploy resources to best growth opportunities via market growth framework.
• Stepped up route to market, including significant transformation in U.S. Spirits organization.
• Delivered record $700 million in productivity savings from supply chain and marketing, with more savings from supply agility program.

Latin America and Caribbean (LAC): Organic net sales declined 21.1% year-over-year in fiscal '24, making up 8% of Diageo's organic net sales. North America (NAM): Organic net sales declined due to a cautious consumer environment and lapping inventory replenishment. Europe: Delivered resilient performance with share gains, driven by Guinness. APAC: Growth was driven by Chinese white spirits, premiumization in India, and tequila momentum. Africa: Beer was the key driver, with double-digit growth on Guinness and Malta Guinness.

• Consumer environment remains challenging with cautious consumers and high interest rates, expecting negative pressure on organic operating margin to persist into fiscal '25.
• Focus on strengthening business resilience, driving productivity, and investing in strategic initiatives to return to growth when consumer environment improves.
• Aim to get back into medium-term guidance range for organic net sales growth and deliver organic operating profit growth ahead of organic net sales growth longer term.
• Long-term growth ambition is to achieve 6% TBA value share by 2030.

• Volatile operating environment globally with inflation and cautious consumer.
• Persistent challenges in LAC markets like Mexico with competitive environment and consumer down trading in tequila and Scotch.
• Retailer inventory adjustments in NAM due to higher interest rates and cautious consumer environment leading to lag in shipments vs. depletions.