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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: 30 June 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from __ to __
Commission file number 1-10691
DIAGEO plc
(Exact name of Registrant as specified in its charter)
England and Wales
(Jurisdiction of incorporation or organisation)
16 Great Marlborough Street, London W1F 7HS, England
(Address of principal executive offices)
Thomas B. Shropshire, Jr., General Counsel & Company Secretary
Tel: +44 20 7947 9100
E-mail: the.cosec@diageo.com
16 Great Marlborough Stre et, London W1F 7HS, England
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol(s) | Name of each exchange on which registered
American Depositary Shares | DEO | New York Stock Exchange
Ordinary shares of 28 101/108 pence each |  | New York Stock Exchange(i)

(i)Not for trading, but only in connection with the registration of American Depositary Shares representing such ordinary shares, pursuant to the requirements
of the Securities and Exchange Commission.
1
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period
covered by the Annual Report: 2,432,411,924 ordinary shares of 28 101/108 pence each.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No ¨
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No þ
Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes þ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act :

Large Accelerated Filer | þ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | Emerging growth company | ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by checkmark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards† provided pursuant to Section 13(a) of the Exchange Act. ¨

† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by
the registered public accounting firm that prepared or issued its audit report. þ
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to
§240.10D-1(b). ¨
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing:

U.S. GAAP ¨ |  | International Financial Reporting Standards |  | Other ¨
|  | as issued by the International Accounting Standards Board | ☑ |

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ☐ No þ

2

5 |  | Cross reference to Form 20-F
7 |  | Introduction
10 |  | Strategic report
10 |  | Financial performance
13 |  | Our business today
15 |  | Market overview and investment case
17 |  | Chair's statement
20 |  | Chief Executive's statement
23 |  | Business model
25 |  | Our Growth ambition
26 |  | Our strategic enablers
38 |  | Key performance indicators
43 |  | Group financial review
43 |  | Chief Finance Officer introduction
44 |  | Operating results 2024 compared with 2023
68 |  | Liquidity and capital resources
74 |  | Operating results 2023 compared with 2022
97 |  | 'Spirit of progress'
132 |  | Cautionary statement concerning forward-looking statement
134 |  | Risk factors
145 |  | Non-financial and sustainability information statement
148 |  | Governance
148 |  | Letter from the Chairman
153 |  | Corporate Governance Structure
154 |  | Board of Directors
156 |  | Executive Committee
178 |  | Audit Committee report
188 |  | Nomination Committee report
192 |  | Directors’ remuneration report
225 |  | Directors’ report

Contents
3

230 |  | Financial statements
230 |  | Report of Independent Registered Public Accounting Firm - PCAOB ID 876
233 |  | Consolidated income statement
234 |  | Consolidated statement of comprehensive income
235 |  | Consolidated balance sheet
236 |  | Consolidated statement of changes in equity
237 |  | Consolidated statement of cash flows
238 |  | Notes to the consolidated financial statements
238 |  | Accounting information and policies
241 |  | Results for the year
260 |  | Operating assets and liabilities
284 |  | Risk management and capital structure
303 |  | Other financial statements disclosure
311 |  | Unaudited financial information
322 |  | Reporting boundaries and methodology
344 |  | Additional disclosures
351 |  | Additional information for shareholders
353 |  | Exhibits
355 |  | Signature
356 |  | Glossary of terms and US equivalents

Contents (continued)
4

Item | Required item in Form 20-F | Page(s)
Part I |  |
1. | Identity of directors, senior management and advisers | Not applicable
2. | Offer statistics and expected timetable | Not applicable
3. | Key information |
| A. [Reserved] | —
| B. Capitalisation and indebtedness | Not applicable
| C. Reason for the offer and use of proceeds | Not applicable
| D. Risk factors | 134-144
4. | Information on the company |
| A. History and development of the company | 7-8, 17, 64-65, 93-94, 158-159, 225, 260-264, 344-345, 351
| B. Business overview | 7-8, 17, 20-24, 48-59, 61-62, 75-76, 80-89, 91-92, 102-103, 114-119, 135-139, 144, 158-159, 241-245, 264-271, 344-346
| C. Organisational structure | 309
| D. Property, plant and equipment | 49, 76, 269-272, 344-345
4A. | Unresolved staff comments | Not applicable
5. | Operating and financial review and prospects |
| A. Operating results | 17, 20-22, 38-40, 43-96, 132-135, 137-138, 141-142, 238-250, 252-253, 311-312
| B. Liquidity and capital resources | 38-40, 46-47, 68-73, 79, 281-294, 316-317
| C. Research and development, patents and licenses, etc. | 250, 345
| D. Trend information | 17, 20-24, 43, 48-65, 74-76, 80-94, 132-133
| E. Critical Accounting Estimates | 186, 238-239
6. | Directors, senior management and employees |
| A. Directors and senior management | 153-160
| B. Compensation | 96, 192-221, 274-280, 309
| C. Board practices | 18, 148-162, 176-179, 184-185, 192-194
| D. Employees | 48, 75, 105-107, 251, 346
| E. Share ownership | 192-223, 301-302
| F. Disclosure of a registrant’s action to recover erroneously awarded compensation | Not applicable
7. | Major shareholders and related party transactions |
| A. Major shareholders | 226
| B. Related party transactions | 308-309
| C. Interests of experts and counsel | Not applicable
8. | Financial information |
| A. Consolidated statements and other financial information | 233-310
| B. Significant changes | 10, 186, 238-239, 316, 318
9. | The offer and listing |
| A. Offer and listing details | 158, 226-227, 347-348
| B. Plan of distribution | Not applicable
| C. Markets | 158, 226-227
| D. Selling shareholders | Not applicable
| E. Dilution | Not applicable
| F. Expenses of the issue | Not applicable

Cross reference to Form 20-F
5

Item | Required item in Form 20-F | Page(s)
10. | Additional information |
| A. Share capital | Not applicable
| B. Memorandum and articles of association | 158-159, 225-229
| C. Material contracts | 72, 225, 345
| D. Exchange controls | 351
| E. Taxation | 255-259, 346-350
| F. Dividends and paying agents | Not applicable
| G. Statement by experts | Not applicable
| H. Documents on display | 351
| I. Subsidiary information | Not applicable
11. | Quantitative and qualitative disclosures about market risk | 284-294
12. | Description of securities other than equity securities |
| A. Debt securities | Not applicable
| B. Warrants and rights | Not applicable
| C. Other securities | Not applicable
| D. American depositary shares | 226-227, 347-350
Part II |  |
13. | Defaults, dividend arrearages and delinquencies | Not applicable
14. | Material modifications to the rights of security holders and use of proceeds | Not applicable
15. | Controls and procedures |
| A. Disclosure controls and procedures | 177
| B. Management’s report on internal control over financial reporting | 185
| C. Attestation report of the registered public accounting firm | 230-232
| D. Changes in internal control over financial reporting | 185
16A. | Audit committee financial expert | 183
16B. | Code of ethics | 159, 183
16C. | Principal accountant fees and services | 180-182, 251
16D. | Exemptions from the listing standards for audit committees | Not applicable
16E. | Purchases of equity securities by the issuer and affiliated purchasers | 236, 297-302
16F. | Change in registrant’s certifying accountant | Not applicable
16G. | Corporate governance | 158-164, 173-190
16H. | Mine safety disclosure | Not applicable
16I. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | Not applicable
16J. | Insider trading policies | 183
16K. | Cybersecurity | 187
Part III |  |
17. | Financial statements | Not applicable
18. | Financial statements | 230-310
19. | Exhibits | 353-354
Additional information |
| Glossary of terms and US equivalents | 356-357

Cross reference to Form 20-F (continued)
6
Diageo is a global leader in the beverage alcohol industry with an outstanding collection of brands across spirits and beer. Its products
are sold in nearly 180 countries around the world and its brands include Johnnie Walker, Crown Royal, JεB and Buchanan’s whiskies,
Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Casamigos, Tanqueray and Guinness. Diageo’s
Performance Ambition is to be one of the best performing, most trusted and respected consumer products companies in the world.
Diageo plc is incorporated as a public limited company in England and Wales. The company which is now Diageo plc was
incorporated as Arthur Guinness Son and Company Limited on 21 October 1886. The Diageo group was formed by the merger of the
Grand Metropolitan Public Limited Company and Guinness plc groups in December 1997. Diageo plc’s principal executive office is
located at 16 Great Marlborough Street, London W1F 7HS, England and its telephone number is +44 (0) 20 7947 9100. Diageo plc’s
agent for service in the United States for the purposes of Diageo’s registration statement on Form F-3 (333-269929) is General
Counsel, Diageo North America, Inc., 175 Greenwich Street, 3 World Trade Center, New York, NY 10007.
This is the Annual Report on Form 20-F of Diageo plc for the year ended 30 June 2024. The information set out in this Form 20-F
does not constitute Diageo plc’s statutory accounts under the UK Companies Act for the years ended 30 June 2024, 30 June 2023 and/
or 30 June 2022. The accounts for the years ended 30 June 2023 and 30 June 2022 have been delivered to the registrar of companies
for England and Wales and those for the year ended 30 June 2024 will be delivered to the registrar of companies for England and
Wales in due course.
This document contains forward-looking statements that involve risk and uncertainty because they relate to, and are dependent upon,
events and 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 beyond Diageo’s control.
For more details, please refer to the Cautionary statement concerning forward-looking statements on pages 132-133.
This document may contain inactive textual addresses to websites operated by Diageo (including www.diageo.com) and third parties.
Reference to such websites is made for information purposes only, and any information found at such websites does not form a part of
this document and is not incorporated by reference into this document. Diageo does not make any representation or warranty with
respect to the accuracy or completeness of, or take any responsibility for, any information found at any websites operated by third
parties. This report 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. In this report, the term ‘company’ refers to Diageo plc and terms ‘group’ and ‘Diageo’ refer
to the company and its consolidated subsidiaries, except as the context otherwise requires. A glossary of terms used in this report is
included at the end of the report.
The consolidated financial statements are prepared in accordance with IFRS® Accounting Standards (IFRSs) adopted by the UK (UK-
adopted International Accounting Standards) and IFRSs, as issued by the International Accounting Standards Board (IASB), including
interpretations issued by the IFRS Interpretations Committee. IFRS as adopted by the UK differs in certain respects from IFRS as
issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the years presented. The
consolidated financial statements are prepared on a going concern basis under the historical cost convention, unless stated otherwise in
the relevant accounting policy.
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.
Introduction
7
Information presented
Organic movements and organic operating margins are before exceptional items. Commentary, unless otherwise stated, refers to
organic movements. Share, unless otherwise stated, refers to value share. See page 311 for explanation and reconciliation of non-
GAAP measures, including organic net sales, organic operating profit, free cash flow, eps b efore exceptionals, ROIC, adjusted net
debt, adjusted EBITDA and tax rate before exceptional items.
The brand ranking information presented in this report, when comparing information with competitors, reflects data published by
sources such as Global Data, Nielsen, NABCA and IWSR. Market data information and competitive set classifications are taken from
independent industry sources in the markets in which Diageo operates. In addition, Diageo’s financial year end is 30 June, and such
data may relate to dates other than 30 June or periods other than the financial year ended 30 June, such as calendar year end.
Introduction (continued)
8
Disclosures not included in Annual Report on Form 20-F
The following pages and sections of this document do not form part of the Annual Report on Form 20-F and are furnished to the SEC
for information only:
•Disclosures under the heading ‘Fiscal 24 non-financial performance’ on page 10.
•Disclosures under the headings ‘Whether you’re heading out…’ and ‘Diageo has a portfolio of iconic brands’ on pages 11 to
14.
•Disclosures under the heading ‘Diageo’s competitive advantages in an attractive industry’ on pages 15 to 16.
•Disclosures under the headings ‘Investing for the future’, ‘Employee engagement’ and ‘‘Spirit of Progress’: refreshing our
approach to ESG’ in the Chair’s sta tement on pages 17 to 18.
•Disclosures under the heading ‘Statement on Section 172 of the Companies Act 2006’ on page 19.
•Disclosures under the headings ‘Resilient performance in a challenging environment’, ‘Performance in our largest
categories’, ‘Guinness delivered its fourth fiscal year of double-digit growth’, ‘Doing business the right way:‘Spirit of
Progress’’, ‘Our people and leadership’ and ‘Outlook’ in the Chief Executive’s statement on pages 20 to 22.
•Disclosures under the heading ‘Our Growth Ambition’ on page 25.
•Disclosures under the headings ‘Strategy’ and ‘Enablers’ on page 26.
•Disclosures under the heading ‘Unleash the power of our brands and portfolio’ on page 27.
•Disclosures under the heading ‘Teaming up with the world’s biggest sporting events’ on page 28.
•Disclosures under the heading ‘To lead and shape consumer trends’ on page 30.
•Disclosures under the heading ‘Taking tequila around the world’ on page 31.
•Disclosures under the heading ‘Executed with operational excellence’ on page 33.
•Disclosures under the heading ‘F24 saw a record delivery of nearly $700 million in productivity benefits unlocked’ on page
34.
•Disclosures under the heading ‘Our strategy is underpinned by three enablers’ on pages 36 to 37.
•Disclosures under the heading 'Health and safety' on pages 107 to 109.
•Disclosures under the headings ‘Stakeholder engagement’, ‘Wider stakeholder engagement’ and ‘Workforce Engagement
statement’ on pages 165 to 174.
•Disclosures under the headings ‘Internal control and risk management’, ‘Viability statement’, ‘Going concern’, and ‘Political
donations’ on page 176.
•Disclosures under the headings ‘Disclosure of information to the auditor’ and ‘Corporate governance statement’ on page 225.
•Disclosures under the heading ‘Reporting boundaries and methodologies’ on pages 322 to 343.
Introduction (continued)
9
Strategic report
Diageo
Diageo is a global leader in Total Beverage Alcohol (TBA) and one of the world’s most successful brand builders. Our ambition is to
create one of the best performing, most trusted and respected, consumer products companies in the world.
P E R F O R M A N C E S N A P S H O T
Fiscal 24 financial performance

Volume (equivalent units) |  | Net sales(2) |  |  |  | Operating profit |  |
EU230.5m |  |  | $20,269m |  |  | $6,001m |
(2023: EU243.4m) |  |  | (2023: $20,555m) |  |  | (2023: $5,547m) |
Reported movement | (5)% |  |  | Reported movement | (1)% |  |  | Reported movement | 8% |
Organic movement(1) | (4)% |  |  | Organic movement(1) | (1)% |  |  | Organic movement(1) | (5)% |
Net cash from operating activities |  | Earnings per share (eps) |  | Total recommended dividend per share(3)
$4,105 m |  |  | 173.2c |  |  | 103.48c |
(2023: $3,636m) |  |  | (2023: 196.3c) |  |  | (2023: 98.55c) |
2024 free cash flow(1) | $2,609 m |  | Reported movement | (12)% |  |  | Increase | 5% |
2023 free cash flow(1) | $2,235m |  | Eps before exceptional items movement(1) | (9)% |  |  |  |  |

Visit diageo.com for more information.
Fiscal 24 non-financial performance

Positive drinking |  |  |  | Inclusion and diversity |  |  |  | Water efficiency - across the company |  |  |  | Greenhouse gas emissions |  |
2.2m |  |  | 44% |  |  | (15.6)% |  |  | (23.8)% |
(2023: 1.9m) |  |  | (2023: 44%) |  |  | (2023: (12.3)%) |  |  | (2023: (14.7)%) |
Number of people educated on the dangers of underage drinking through a Diageo supported education programme |  |  |  | Percentage of female leaders globally |  | Percentage change in water efficiency compared to fiscal 20 baseline |  | Percentage change in total direct and indirect greenhouse gas emissions (market/net based) compared to fiscal 20 baseline
|  |  | 46% |  |  |  |  |  |  |
|  |  | (2023: 43%) |  |  |  |  |  |  |  |  |
|  |  | Percentage of ethnically diverse leaders globally |  |  |  |  |  |  |  |

(1) See definitions and reconciliation of non-GAAP measures to GAAP measures on pages 311-321.
(2) Net sales are sales less excise duties
(3) Includes recommended final dividend of 62.98c.
Unless otherwise stated in this document, percentage movements refer to organic movements. For a definition of organic movement and reconciliation of all non-GAAP
measures to GAAP measures, see pages 311-321. Share refers to value share. Percentage figures presented are reflective of a year-on-year comparison, namely
2023-2024, unless otherwise specified.
Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc changed from sterling to US dollar which is applied prospectively.
Diageo also decided to change its presentation currency to US dollar with effect from 1 July 2023, applied retrospectively, as it believes that this change will
provide better alignment of the reporting of performance with its business exposures. Please see more information on page 238 under Accounting information and
policies.
10
11
12
Diageo has a portfolio of iconic brands
With over 200 brands and sales in nearly 180 countries, our portfolio brings together some of the most iconic brands from around the
globe that consumers have enjoyed for generations.
Our consumer insights, strong sense of purpose and pursuit of financial excellence underpin our passion to continue to be one of the
best brand builders in the world and create value for our stakeholders. We are proud custodians of 13 billion-dollar brands including
Johnnie Walker, Smirnoff, Guinness, Don Julio, Crown Royal, Baileys and Tanqueray.
We have built number one global positions in scotch, vodka, tequila, Canadian whisky, liqueurs and gin.(1)
Consumers are choosing to drink better, not more, and our advantaged portfolio, positioned towards fast-growing categories, allows
the consumer to premiumise through our extensive price ladder as well as attracting the recruitment of new, legal purchase age and
above (LPA+) consumers.
Many of our much-loved and established brands have a unique heritage, but we do not stand still. Diageo's ambition is to create one of
the best performing, most trusted and respected consumer products companies in the world. We move at pace to unleash the power of
our brands and portfolio to lead and shape consumer trends, and we execute decisively with operational excellence.
Alongside our brands, Diageo's entrepreneurial, talented and diverse workforce of more than 30,000 people globally are our biggest
asset. Led by a highly experienced Executive Committee, Diageo aims to help our consumers celebrate life, every day, everywhere,
and capture the next phase of growth in the TBA industry.
Our global footprint drives resilient growth
Share of reported net sales by region(2)(3)
(%)
(1) IWSR, 2023.
(2) The above map is intended to illustrate general geographic regions where Diageo has a presence and/or in which its products are sold. It is not intended to imply that
Diageo
has a presence in and/or that its products are sold in every country or territory within a geographic region
(3) Based on reported net sales for the year ended 30 June 2024. Does not include corporate net sales of $123 million (2022–$104 million).
13
Diageo is well positioned to win in TBA

Advantaged portfolio: reach and scale |  | Diageo reported net sales
|  | (by category, fiscal 24)

Our portfolio gives consumers choice across price tiers

Diageo reported net sales |  | Our scotch portfolio price ladder provides consumer choice within our largest category(2)
(by price tier, fiscal 24) |  | ($)

Luxury
Ultra- premium
Super- premium
Premium
Standard
Value

4%
5%
16%
37%
30%
8%

(1) Indian-Made Foreign Liquor (IMFL) whisky.
(2) Diageo’s portfolio is diversified across price tiers as shown in the bar chart. The visuals are an example within Diageo’s scotch portfolio of this diversified footprint.
14
MARKET OVERVIEW AND INVESTMENT CASE
Diageo’s competitive advantages in an attractive industry

Strong and resilient market dynamics…
Total Beverage Alcohol (TBA) is a highly attractive and exciting consumer category. TBA is resilient and growing; and the spirits category is growing even faster. TBA has grown at 4.4% CAGR in the 10 years through to 2023, and international spirits has grown at 5.1% over the same period.(1)
1 | Consumers are choosing spirits
Diageo sees a long-term trend of consumers choosing to switch to spirits from beer and wine. Spirits growth is supported by favourable population demographics, the increasing size of the middle class in key markets globally and strong premiumisation trends. These are expected to continue into the future.
2 | People are drinking better, not more
Spirits' long-term value growth is also driven by premiumisation as consumers want to drink better, not more. In the last 10 years, premium and above spirits grew from 26% of category value to almost 35%. The super-premium plus price-tier has grown in value more than two times faster than other price tiers in the category. This price tier gained 700 basis points of share of international spirits retail sales value (RSV) since 2013.(1)
3 | Long runway for growth
In 2021, we set out our ambition to grow TBA share by 50% from 4% to 6% by 2030. With 4.5% value share of TBA(1) currently, we have significant headroom for sustainable long-term growth.

aligned to our competitive advantages:
| Leading world-class brands
| •We have a proven track record in developing powerful global brands. For example, Johnnie Walker’s RSV has increased over 400% since 2002.(2) •Diageo brands have driven around 17% of total absolute dollar growth in the international spirits category since 2018.(1) •Our strategic M&A activities and reputation for active portfolio management position Diageo for sustainable long-term growth.
| Advantaged geographic footprint
| •Our geographic footprint gives us access to consumers in the world’s largest markets, such as the United States, as well as the vibrant markets of India and China. •Diageo’s geographic diversification supports resilient performance through global volatility.
| Broad portfolio across price points
| •Our advantaged portfolio enables trading up and down our extensive price ladder; whether our consumers are looking for a Smirnoff and soda or a Don Julio 1942 on the rocks, Diageo's portfolio offers consumer choice. •Our diverse and balanced portfolio enables us to respond quickly to emerging and growing category trends.
| Diverse and talented workforce
| •Our Executive Committee combines home-grown talent with externally recruited leaders who bring invaluable market experience, a wealth of functional expertise and fresh perspectives. •Our talented management team and broader workforce enable us to respond flexibly and quickly to current and future challenges. •Our global employee survey, Your Voice, remains above external benchmarks with 81% engagement levels and 89% expressing pride in working for Diageo.

(1) IWSR, 2023.
(2) Diageo consumption data.
15

| ...positioning us to drive:
| Continued discipline of growth algorithm
| •Driving long-term sustainable growth is our priority, and we believe our growth algorithm continues to support this, through winning quality market share. •Price and mix, driven by long-term premiumisation and enabled by Revenue Growth Management, remain a consistent and core part of our top-line growth. •Since fiscal 18, we have generated annual savings of approximately $500 million through productivity savings, efficiencies and disciplined cost control and utilising our scale to fuel our investments. •We take the benefits of growth, productivity and operating leverage to reinvest smartly in brand building to drive quality market share – firmly balancing short-term share gains, while building for long-term sustainable growth.
| A disciplined approach to capital allocation
| •We prioritise organic investment for long-term growth: maturing stock (increased from $5.3 billion in fiscal 18 to $7.8 billion in fiscal 24) and capex (increased from $0.8-0.9 billion per annum fiscal 18-21 to $1.4-1.5 billion per annum fiscal 22-24, driven by capacity increases). •Active and disciplined portfolio management ($2.8 billion invested in acquisitions and $1.6 billion generated from disposals since fiscal 18). •We have grown our dividend year on year for 25 years (dating back to fiscal 2000). •Through fiscal 23, circa £25 billion has been returned to shareholders in dividends and share buybacks over the preceding 10 years. •We also returned $1 billion of excess capital, via share buybacks, during fiscal 24.
| A robust strategy and clear ambition that will....
| Build towards the next phase of our ambition to achieve TBA share of 6% by 2030. Our strategy to unleash the power of our brands and portfolio includes: •Sustaining the momentum in our global brands of Guinness, Johnnie Walker and Don Julio while driving regional growth opportunities like Crown Royal in North America and accelerating malt whiskey in Asia Pacific. •Leading and shaping key consumer trends, including tapping into the convenience, moderation and with food occasions to recruit new consumers into new occasions at scale. •Continuing to focus on operational excellence, including strengthening our route-to-market and evolving our approach to A&P efficiency, while driving accelerated productivity and allocating resources with discipline.

16
Chair's statement
“It has been a true privilege to lead Diageo’s Board. I look forward to working with John, the Board and all my Diageo colleagues to
ensure a smooth transition over the coming months.”
Long-term view of the business
Fiscal 24 has been a year of challenge and change for Diageo as we navigated global economic and sectoral volatility, set new
priorities, and appointed Directors to our Board.
Despite the global economic and political headwinds we face, the Total Beverage Alcohol (TBA) industry remains an attractive and
exciting sector. TBA has grown at a 4.4% compound annual growth rate (CAGR) over the past decade, and international spirits has
grown at 5.1% as measured by IWSR(1) over the same period, while premium beer where Guinness competes has also grown ahead of
TBA.
We are confident in the long term trend of sector premiumisation and we believe that it will continue, supported by demographic
trends, rising incomes in developing markets and spirits continuing to take share from beer and wine. Diageo’s advantaged portfolio is
balanced across geographies and price tiers, and in 2021, we set out our ambition to increase our share of TBA to 6% by 2030. This
year, we set strategic priorities that will drive future performance and position Diageo to capture the next phase of growth: we plan to
drive growth in our largest categories, lead and shape consumer trends and occasions, and raise the bar on execution.
As this report sets out, we are executing decisively against our growth ambition across our advantaged footprint, reinvesting behind
our business and actively managing our portfolio through disciplined acquisitions and disposals.

Recommended final dividend per share |  | Total dividend per share(1)
62.98c |  |  | 5% to 103.48c
2023: 59.98c |  |  | 2023: 98.55c
Total shareholder return (1 year) |  | Total shareholder return (10 year)
(24)% |  |  | 6%
2023: (2)% |  |  | 2023: 9%

(1) Includes recommended final dividend of 62.98c
Fiscal 24 performance
In fiscal 24, organic net sales were down 0.6% with positive price/mix performance mostly mitigating a decline in volume. Excluding
our Latin America and Caribbean region (LAC), the business grew organic net sales by 1.8%. Organic operating margin declined by
130bps, primarily driven by LAC. Organic operating profit declined 4.8%, as a result of the organic net sales decline, primarily due to
LAC and North America. The decline was also driven by an increase in investments in strategic capabilities, including in digital and
strengthening route-to-market, primarily in the United States (US), and in marketing.
We generated free cash flow of $2.6 billion. Strong working capital management and lower tax payments more than offset the
combined impact of the decline in operating profit, higher interest payments and increased investment in capex. Pre-exceptional
earnings per share declined mainly due to lower operating profit and higher finance charges. We increased our dividend by 5%,
reflecting our continued confidence in the long-term potential of the business and our commitment to a progressive dividend policy.
Despite the 12‐month Total Shareholder Return (TSR) of -24% for fiscal 24, the ten-year TSR remains solid at 6%.
Investing for the future
Diageo remains committed to delivering value for shareholders. Investing capital in maturing inventory and related production
capacity is key to delivering long-term sustainable growth. Our total maturing inventories have increased more than 42% over the past
five years, resulting in $7.8 billion of total aged inventory by the end of fiscal 24, up $0.5 billion compared to the prior year. Scotch is
our largest category, accounting for 24% of group net sales and comprising the majority of the value of our maturing inventories, which
may be held for periods ranging from a minimum of three years to, in some cases, more than 70 years.
‘Spirit of Progress’: refreshing our approach to ESG
We are now nearly five years on from the launch of 'Spirit of Progress’, our action plan on Environmental, Social and Governance
(ESG) issues. We have reflected on our progress to date, what we have learned so far and refreshed our focus for the critical years
ahead. We have simplified and prioritised the goals that form our 'Spirit of Progress' plan. This has allowed us to prioritise the areas
that are most material to our business including reducing the harmful use of alcohol, combating water stress and the impact of climate
change. We are also accelerating our work advocating for responsible alcohol consumption and water replenishment activities in the
communities in which we operate.
17
I am encouraged by the progress we have made this year on our positive drinking agenda. We have long championed awareness on the
risks of drink driving, including collaborating with law enforcement and local authorities. In 2021, we launched the Wrong Side of the
Road (WSOTR) digital learning resource with the United Nations Institute for Training and Research, aimed at raising awareness
about the consequences of drink driving on individuals and communities. WSOTR is available in digital and classroom formats and is
now live in 24 countries, and in fiscal 24, we reached more than one million people through WSOTR and other drink driving
programmes. We have now reached more than 2 million people since fiscal 20. To embed the message of moderation in culture in
APAC we have partnered with K-Pop star SUHO to produce a new song and music video, 'Savour every moment'. This is the first
time that responsible drinking messaging is conveyed through K-Pop.
We are steadfast in our focus on water by improving water efficiency at our own sites, investing in water replenishment and collective
action. For example, we are committed to replenishing more water than we use in our tequila operations in Mexico by 2026, and
mobilising collective action to improve water security. We are partnering with the State of Jalisco and local municipality in Ocotlán,
and in fiscal 24 we enabled large scale water reuse for local farmers, replenishing over 470,000 cubic metres of water.
We continue to take significant action to create a sustainable low carbon future, and limit the damaging effects of climate change. We
are partnering with governments and institutions in key geographies on our decarbonisation pathway. In the US, we were proud that the
Departmen t of Energy selected Diageo as part of the Industrial Demonstrations Program fund to support the installation of heat
batteries at our Shelbyville and Plainfield sites, with the goal of building a model that can be replicated..
Employee engagement
Our people and inclusive culture are critical to Diageo’s success. This year, Karen Blackett took over accountability as the designated
Non-Executive Director for workforce engagement. All Non-Executive Directors participated in the programme engaging with
colleagues from all regions, functions, and organisational levels. The Board values the openness of conversations and insights on
positive aspects of Diageo’s culture, as well as areas for improvement. Diageo’s culture continues to be a source of pride and
competitive advantage, with high quality accessible leadership. This was reflected in the engagement results seen in our global
employee survey, Your Voice, which remain in the top quartile and above external benchmarks with 81% engagement levels and 89%
expressing pride in working for Diageo.
Board changes
We have announced further changes to the Board this year, and I am pleased that we have continued to attract high calibre of talent
with deep experience across beverage, consumer and regulated industries.
As we announced in March 2024, I plan to retire in February 2025 from the Diageo Board in my ninth year. My colleague and current
Non-Executive Director Sir John Manzoni has been appointed as my successor. John joined the Diageo Board in October 2020, having
been Chief Executive of the UK Civil Service. He is currently Chair of FTSE-listed multinational energy business SSE plc and a non-
executive director of engineering and technology company KBR, Inc. He was previously a non-executive director of the multinational
drinks business SAB Miller plc for 11 years. John brings a wealth of experience both from within the beverage alcohol world and from
his extensive private and public sector experience. I look forward to working with him, fellow Board members and my Diageo
colleagues to ensure a smooth transition.
Nik Jhangiani, currently Chief Financial Officer (CFO) at Coca-Cola Europacific Partners plc, the world’s largest Coca-Cola bottler,
will succeed Lavanya Chandrashekar as Diageo’s CFO on 1 September 2024 and we look forward to welcoming him to the Board.
Nik has more than 30 years of finance experience gained in roles in the UK, Europe, India, Africa and the US, including 20 years in
various CFO roles, and has spent most of his career in the consumer and beverage industries. I am confident that his record of success
as a CFO in multiple relevant markets will further strengthen our long-term track record of delivering sustainable returns for our
shareholders
After three years as CFO, the Board wishes to thank Lavanya warmly for her strong contributions to Diageo over the past six years.
She has been instrumental in framing our long-term ambitions, driving a culture of operational excellence throughout her tenure and
embedding a culture of everyday efficiency which has already delivered highly significant productivity savings across our business.
We wish Lavanya well for the future as she returns to the US.
Julie Brown, CFO and Executive Director of GSK plc since May 2023, will be appointed as a Non-Executive Director, effective 5
August 2024, and on appointment will succeed Alan Stewart as Chair of the Audit Committee. Julie brings many years of experience
in financial, commercial and strategic roles in international companies operating in highly regulated industries. She is strongly
committed to enabling diversity in business and to creating sustainable, long-term value for stakeholders. Julie previously served as
Chief Operating and Financial Officer and Executive Director, Burberry Group plc. Julie has also served as Group CFO of Smith &
Nephew plc and previously worked for 25 years at AstraZeneca plc in various finance, commercial and strategic roles including as
regional and country president and latterly as Interim Group CFO.
On behalf of the Board, I would like to thank Alan who has been a Director since 2014 and Chair of the Audit Committee since 2017.
He has served Diageo with great distinction, and we have benefitted greatly from his expertise and strategic input. We wish him the
very best for the future.
18
Summary
At Diageo, we speak of 'standing on the shoulders of giants' and honouring the founders on whose legacies this fantastic company is
built. Some years have undoubtedly been challenging, but I am proud to have been part of the company’s journey and to have worked
alongside such talented, dedicated, and entrepreneurial colleagues and leaders: the giants of today. They will carry this business
forward, live our purpose of celebrating life, every day, everywhere, and create value for our stakeholders. I am particularly proud of
the great strides we have made on the inclusion and diversity agenda, and the diverse leadership now in place on the Board and our
Executive Committee. I would like to express my deepest thanks to colleagues past and present. As I pass the baton to John, I remain
as excited about the future growth potential of Diageo as I was when I joined the Diageo Board in July 2016. I look forward to
watching the company and its people thrive under John’s stewardship.
Javier Ferrán
Chair

| Statement on Section 172 of the Companies Act 2006 |
| Section 172 of the Companies Act 2006 requires the Directors to promote the success of the company for the benefit of the members as a whole, having regard to the interests of stakeholders in their decision- making. In making decisions, the |  | Directors consider what is most likely to promote the success of the company for its shareholders in the long-term, as well as the interests of the group’s stakeholders. The Directors understand the importance of taking into account the views of stakeholders |  | and the impact of the company’s activities on local communities, the environment, including climate change, and the group’s reputation. Read more about how stakeholders were taken into account in decision-making on pages 165-171. |

19
Chief Executive's statement
Fiscal 24 was challenging for Diageo and for the broader industry, with the unwinding and normalisation following the Covid-19 super-
cycle and the ongoing macroeconomic and geopolitical backdrop. Total Beverage Alcohol (TBA) however remains a highly attractive
sector, which will deliver sustainable long-term growth and generate shareholder value.
Diageo is a resilient business, and in fiscal 24 we have taken decisive actions to improve our near-term execution, including
addressing the inventory issues in our Latin America and Caribbean (LAC) region. We are strengthening our consumer insights, and by
the end of calendar year 2024 we will have rolled out our proprietary Consumer Choice Framework across markets covering a
significant portion of our net sales. This will give us a much deeper understanding of consumer motivations and occasions. We are
redeploying our resources where we have the best opportunities to grow and we have stepped up our route-to-marke t capabilities,
including in the United States (US), our largest market. We have also delivered a record year of productivity savings, nearly $700
million, over-delivering on our three-year productivity goal by $200 million.
(1)Source: Internal estimates, incorporating AC Nielson, Association of Canadian Distillers, Dichter & Neira, Frontline, Intage, IRI, ISCAM, NAMBCA, State Monopolies, TRAC,
IPSOS and other third party providers. All analysis of data has been applied with a tolerance of +/-3bps

Reported volume movement |  | Organic net sales movement
(5)% |  |  | (1)% |
2023: (7)% |  |  | 2023: 7% |
Organic volume movement |  | Reported operating profit movement
(4)% |  |  | 8% |
2023: (1)% |  |  | 2023: (6)% |
Reported net sales movement |  | Organic operating profit movement
(1)% |  |  | (5)% |
2023: 0% |  |  | 2023: 7% |

Resilient performance in a challenging environment
After three years of extraordinary topline growth, with 14.5% CAGR from fiscal 21 to fiscal 23, this fiscal, group organic net sales
declined 0.6%. The main driver was materially weaker performance in LAC, which makes up 8% of Diageo’s organic net sales value.
Excluding LAC, organic net sales grew 1.8%, driven by good growth in Africa, Asia Pacific, and Europe, partially offset by a decline
in North America (NAM). NAM performance reflects a cautious consumer environment and the impact of lapping inventory
replenishment in the prior year.
I’m pleased that in this challenging environment we ended the fiscal gaining or holding share in over 75% of our net sales value in
measured markets including the US. We are also holding or gaining share in most of our measured billion-dollar brands globally.
20
Organic operating profit declined 4.8% and our organic operating margin declined by 130bps, both primarily driven by LAC.
Excluding LAC, organic operating margin declined by 56bps and gross margin grew 17bps, driven by price increases and productivity
which offset the impact of cost inflation.
Regional performance
In LAC, following our update to investors in November 2023, we have worked with wholesale and customer partners to manage
inventories and ended fiscal 24 with more appropriate levels for the consumer environment. We implemented five targeted actions to
improve inventory visibility: expanding our access to sellout data; incentivising sellout data reporting; incentivising independent stock
counts; investing in commercial planning; and piloting digital case tracking, initially with two customers in Mexico. In Brazil, our
largest LAC market, the category improved in the second half and we gained share. Inventory levels have dramatically reduced in
Mexico to more appropriate levels, but we see persistent challenges in a highly competitive environment and have initiated a review to
improve performance. We know the importance of staying vigilant and continue to work diligently to keep improving visibility into
the distribution channels with the aim to deliver better insights earlier. I believe we have the necessary processes, data visibility,
leadership, incentives and sellout culture across the region to more closely align future performance with consumer demand.
In NAM, our strategic priorities remain clear. We will unlock growth by driving our largest brands in our largest categories of
whisk(e)y and tequila, recruiting into new occasions with innovation and raising the bar on execution. Crown Royal Blackberry
launched this year and has been a great success, especially in recruiting new consumers to whiskey. In tequila, Don Julio saw
increased momentum in the second half as it grew 15 times faster than the total US spirits industry, with the growth led by Don Julio
Reposado where we increased investment and expanded distribution. Guinness was the fastest-growing imported beer in the on-
trade, bolstered by the new “Lovely Day” campaign with long time brand fan Jason Momoa. For spirits, we have made the biggest
change in our route-to-market for a decade. Working with our distributors, we are putting more 'feet on the street' to target categories,
regions and locations with the highest growth potential. In the US, we finished the year winning or maintaining TBA market share for
brands covering 90% of our US net sales.
In Europe, we delivered resilient growth, mainly driven by another year of strong momentum and double-digit growth for Guinness,
helped in part by Guinness 0.0 for which net sales and volume more than doubled in the year. We achieved market share growth in
most European markets, despite lower consumer confidence.
In Asia Pacific, we grew organic net sales, volume and operating margin in challenging macroeconomic conditions while increasing
investment in the region. Growth was driven by Chinese white spirits, and strong performance in India with continued premiumisation
and double-digit growth in scotch and other whisky. Tequila also continues to gain momentum.
In Africa, beer was the key driver of performance. Despite a tough macroeconomic backdrop, we delivered organic net sales growth of
12% driven by price increases partially offset by volume declines.
These regional highlights bring to life the resilience and strength of our diversified global footprint.
Strengthening our operating model in key markets
As well as transforming our US route-to-market, we are also transforming our operating model in key regions where we see growth
opportunities. We are expanding our organisational structure in Dubai to solidify our leadership in premium spirits in the Middle East
and North Africa. We transformed our business model in the vibrant Nigerian market and entered a long-term partnership with a
distributions specialist which will allow us to increase distribution of Guinness – another example of Diageo’s proven asset light
model for the brand. We also announced that Diageo has acquired the distribution rights of all remaining brands currently distributed
by our joint venture, Moët Hennessy Diageo France. This followed our previous update in March 2024, where we outlined our phased
approach to transforming our distribution model in France by creating our own in-market company.
Performance in our largest categories
It has been another strong year for Guinness with the brand delivering 15% organic net sales growth, double-digit growth for seven
consecutive halves. We held or gained share in our top three markets for Guinness (Great Britain, Ireland and US) and we continued to
expand the brand's consumer base. Guinness 0.0, our alcohol-free offering, now accounts for nearly 3% of our Guinness volume
globally.
My ambition to take tequila around the world just as Diageo did with Johnnie Walker remains. It is a fun and versatile category and
Diageo was an early entrant. Tequila remains the fastest-growing scale spirits category and we have maintained our global tequila
leadership by value. You can read a case study on our tequila roll out on page 18.
Diageo remains the world leader in scotch, our largest category. While our scotch organic net sales performance was heavily impacted by LAC
inventory reductions, momentum with consumers continued in fiscal 24. We gained category share of scotch in 9 out of 10 of our largest
measured scotch markets. Johnnie Walker is living up to its “Keep Walking” mantra, driving over half of our scotch organic net sales and
continues to be the number one international spirits brand in value in calendar year 2023 as measured by IWSR.
Doing business the right way: ‘Spirit of Progress’
This fiscal, I initiated a review of our ESG strategy and as a result, we have simplified and prioritised the commitments that form our
'Spirit of Progress' plan. We are prioritising the areas that have the most significant impact on our commercial performance and our
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advocacy efforts, including the harmful use of alcohol, water stress, carbon and our role in the communities in which we operate.
We’re not only doing the right thing for our people, consumers and communities, but also for our business in the long term.
Our people and leadership.
During my first year as CEO, I have taken great pride in the resilience and talent of our teams, including our Executive Committee
who bring together decades of experience in the industry, along with a breadth of market and functional expertise. I have spent time
with our teams around the world including in Ireland, US, Scotland, Kenya and Brazil. I have seen first-hand the commitment,
dedication, and resolve of Diageo’s people. I would like to thank every single person in our organisation for their hard work this year.
I would particularly like to thank our outgoing Chief Financial Officer (CFO) Lavanya Chandrashekar, who has been a trusted
colleague and partner to me, both when we worked together in North America, and more recently during my first year as Chief
Executive. On behalf of all Diageo colleagues, I wish her much future success as she returns to the US. I am delighted that Nik
Jhangiani will succeed Lavanya as CFO; he has more than 30 years of finance experience gained in roles in the UK, Europe, India,
Africa and the US, including 20 years as CFO; and has spent most of his career in the consumer and beverage industries including 20
years within the Coca-Cola system. His proven track-record and international mindset mean he will be a strong addition to our
leadership team.
Outlook
The consumer and macroeconomic environment and continues to be challenging with the conditions we saw towards the end of fiscal
24 persisting into fiscal 25, yet I continue to be confident in Diageo’s future.
Diageo possesses iconic and enduring brands from Guinness to Tanqueray to Johnnie Walker, all with unmatched heritage, but with
absolute relevance for today’s consumer. Our success has never come about by standing still, it has been achieved by blending those
great names with the most passionate teams, the best brand building, and a commitment to excellence. As the consumer and the
operating environment continues to evolve, we will keep adapting to emerging tastes, new social occasions and consumer passions.
We will unlock growth to create one of the best performing, most trusted and respected consumer products in the world.
Debra Crew
Chief Executive
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Business model
A business built for the
long term
We deliver our strategic priorities through a business model that leverages global and local expertise, has the consumer at its heart, and
puts our responsibilities to our stakeholders front and centre.

What we do | 1. We source |  | 2. We innovate |  | 3. We make
From smallholder farmers in Africa and Mexico, to multinational companies, we work with our suppliers to procure high-quality raw materials and services, with environmental sustainability in mind. Where it is right for our business, we grow and source locally. |  | Using our deep understanding of consumer trends and socialising occasions, we focus on driving sustainable innovation that provides new products and experiences for consumers; be that a non- alcoholic option or an offering that suits convenience or the on-trade. |  | We distil, brew and bottle our spirits and beer brands through a globally co- ordinated supply operation, working to the highest quality and manufacturing standards. We prioritise using local production where it is right for our business.

| Working in the interest of our stakeholders |  |  | People
|  | We want our people to be the best they can be. We offer a diverse and inclusive workplace with opportunities for development and progression.
|  | Consumers |  |  | Customers |  |  | Suppliers
| We are passionate about the role our brands play in celebrations globally. We are committed to promoting moderation and reducing alcohol misuse. |  | We work closely with customers to build sustainable ways of working that help grow their businesses through great insight and execution. |  | We partner with suppliers to ensure long-term, mutually beneficial relationships. Respect for human rights is embedded throughout our global value chain.
|  | Communities |  |  | Investors |  |  | Governments and regulators
| We help build thriving communities by making lasting contributions where we live, work, source and sell. |  | We aim to maximise long- term investor returns through consistent, sustainable growth and a disciplined approach to capital allocation. |  | We advocate for laws or regulatory change where we think there is a positive impact on our business and a benefit for our key stakeholders.

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4. We transport |  | 5. We sell to customers |  | 6. We market to consumers |  | 7. We help consumers celebrate
We move our products to where they need to be in the world; be that from a local distillery in market or, for example, shipping scotch. |  | We grow by working closely with our customers. Our global and local sales teams use our data, digital tools and insights to extend our sales reach, improve our execution and help generate value for us and for our customers. When our customers grow, we grow too. |  | We invest in world-class marketing to build vibrant brands that resonate with our consumers. To do this responsibly, we have our rigorous Diageo Marketing Code which guides everything we do. |  | We continually evolve our data tools to understand consumers’ attitudes and motivations. We convert this information into insights which enable us to respond with agility to our consumers’ interests and preferences.

Creating value
Our business model allows us to create value across four main areas:
| Financial – for our investors
| Human – for our people, suppliers, customers and consumers
| Social – for our communities
| Natural – for our environment

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Our Growth
Ambition
In previous years, we were led by our well-established Performance Ambition, a strategy which delivered strong results. As we navigate the
next phase in our journey, we have continued to evolve our strategy, which centres on strong consumer and customer insights. As previewed at
our Capital Markets Event in November 2023 and the Consumer Analyst Group of New York (CAGNY) investor conference in February
2024, we have sharpened our strategy in order for us to achieve quality share of TBA of 6% by 2030 and generate value for our shareholders.
Our Growth Ambition is our evolved strategy to win in fiscal 25 and beyond and to deliver the next phase of sustainable growth.
Through the Growth Ambition we will continue to focus on delivering on four key strategic outcomes that are now embedded in the
business: providing efficient growth; delivering consistent value creation; building credibility and trust; and ensuring that our people
and high-performing teams are fully engaged.

| PURPOSE | Celebrating life, every day, everywhere
| AMBITION | To create one of the best performing, most trusted and respected, consumer products companies in the world
| STRATEGY | Unleash the power of our brands and portfolio to lead and shape consumer trends executed with operational excellence
|  | BRANDS AND PORTFOLIO | CONSUMER TRENDS | OPERATIONAL EXCELLENCE
|  | Whisk(e)y and tequila Winning local portfolio Guinness growth | Premiumisation Recruitment New occasions |  | Evolve brand building muscle Commercial excellence Everyday efficiency
| ENABLERS | Building a more Digital Diageo | Diverse and engaged talent with a focus on culture | ’Spirit of Progress’ and doing business the right way from grain-to-glass
| OUTCOMES | Achieve quality TBA share of 6% by 2030

| Efficient growth | Consistent value creation | Credibility and trust | Engaged people
| Consistently grow organic net sales, grow operating profit, deliver strong free cash flow | Top-tier total shareholder returns, increase return on invested capital | Trusted by stakeholders for doing business the right way, from grain-to- glass | High-performing and engaged teams, continuous learning, inclusive culture

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|  |  | STRATEGY |  |  |
Unleash the power of our brands and portfolio… •To become the global leader in whisk(e)y and tequila. •To win with local portfolios rooted in local culture. •To ensure we continue to drive growth in Guinness, including 0.0. |  | to lead and shape consumer trends… •Premiumise the industry. •Recruit new consumers from across TBA. •Enter into new occasions. |  | executed with operational excellence •Evolving our brand building muscle through smarter A&P. •Delivering commercial excellence across all our channels. •Accelerating productivity via Revenue Growth Management and supply agility.
| Read more on page 28. |  |  | Read more on page 31. |  |  | Read more on page 33-34.
|  |  | ENABLERS |  |  |
Building a more Digital Diageo We are upweighting investment to fund a holistic, prioritised programme of digitisation, underpinned by transformation of data, analytics and systems. |  | Diverse and engaged talent with a focus on culture We continue to develop our talent, ensuring they embody our evolved values and behaviours. |  | ’Spirit of Progress’ and doing business the right way from grain-to- glass This continues to underpin everything that we do. We have refreshed our flagship ’Spirit of Progress‘ programme to maximise the impact of its next phase of delivery.
| Read more on page 36. |  |  | Read more on page 37. |  |  | Read more on page 37.

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Unleash the power
of our brands and portfolio
Our outstanding brands and broad portfolio remain a competitive advantage
Our strategy focuses on three areas:
1.Maintaining our undisputed number one value position in the whisk(e)y and tequila categories(1), maximising the large growth
opportunities they provide, while leveraging our heritage.
2.Winning with consumer-first local portfolios: markets must unleash the power of our portfolio by building strong brands with local
relevance, informed by deep consumer insight.
3.Continue Guinness breakout growth with our asset light model and innovation.
Examples of progress in fiscal 24:
•Johnnie Walker demonstrated its ability to continue to win across the price ladder. Johnnie Walker Blonde drove total trademark
share gains following its launch across Asia Pacific (APAC) and LAC. At the luxury end of the portfolio, Johnnie Walker Blue
Label gained share through the Xordinaire and Umami innovations(1).
•Godawan Single Malt, crafted with quality and sustainability at its core in the Alwar distillery, Rajasthan, was the most awarded
Indian single m alt in 2023-2024.
•We have seen continued double-digit growth of Don Julio tequila in the United States, with momentum building internationally as
we shape the global expansion of the category.
•Guinness is the number one selling beer in Great Britain by value in the second half of the fiscal.(2)
(1) IWSR, 2023.
(2) Nielsen/CGA, 52 weeks to 18 May 2024
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Teaming up with the world’s biggest sporting events
The power of sport knows no geographic limits – it is truly global. At Diageo, we are using sport to lift our brands, partnering with
iconic sporting occasions giving us incomparable visibility across the globe.
Shaping the future of Guinness with spor t
Whilst Guinness has been the official partner of the Six Nations Rugby Championship since 2019, in 2024 the tournament helped it
reach new heights. During this year's Six Nations, sales of pints of Guinness in stadiums were up 15% compared with 2022, while
there was a 26% increase in pints of Guinness 0.0 sold in stadiums compared with 2023.
This year, Guinness also tapped into new areas at the Championship, kicking off its official partnership with the Guinness Women’s
Six Nations and increasing the amount of Guinness 0.0 beer taps, driving awareness and consumption of the non-alcoholic choice.
This expanded partnership is a key pillar in delivering against our strategy of making Guinness more relevant to more people, on more
occasions, more of the time.
New English Premier League partnership
In June, Guinness announced that from August it would be the official beer of the English Premier League. Premier League games are
broadcast into 900 million homes in 189 countries, heightening the brand's relevancy and visibility even further. The four-year
agreement will also see Guinness 0.0 named as the official non-alcoholic beer of the Premier League.
Taking our brands to new heights at the Super Bowl
Diageo’s NFL platform is another example of how our iconic brands can work with similarly iconic sporting events to deliver great
results.
Over the last five years, Diageo has built official partnerships with 20 different NFL teams, enabling advertising and profiling of our
brands in stadiums and beyond. In the 2023 season alone, Diageo brands used over 70 hours of digital signage at NFL stadiums and
over 71,000 samples were distributed across NFL league and team partner events.
Great brand and sports partnerships also allow for fantastic creativity to help build awareness and excitement. Nowhere was that
creativity more evident than on Super Bowl Sunday in February. In the week leading up to the Super Bowl, Don Julio took over the
STRAT Hotel in Las Vegas – using a projection to turn the hotel tower into a 1,149 ft tall bottle of Don Julio 1942.
Winning in India with Royal Challenge
One of the world’s most popular and watched annual sporting events is the Indian Premier League Cricket (IPL). While many brands sponsor
teams, Royal Challengers Bangalore (RCB), one of the founder members of the IPL, and named after renowned Indian whisky brand Royal
Challenge, is owned by United Spirits Limited, part of Diageo plc.
This ownership gives Royal Challenge whisky unprecedented visibility in one of the largest whisky markets in the world. One of the
greatest success stories this year has been via the Women’s Premier League, with the RCB women's team winning the title in March.
The global reach and attraction of sport is undeniable. We will continue to invest to showcase our iconic brands at events that excite and
matter to consumers across the globe.
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29
To lead and shape
consumer trends
Consumers remain at the centre of everything we do
We are focused on anticipating and responding to shifts in consumer trends, enabled by capabilities and tools which we are constantly
evolving. Shaping and leading consumer trends enables us to:
1.Premiumise We want to drive and lead the ongoing trend of premiumisation in our industry, and w e continue to develop our brand
building capabilities to do this. The nuances of premiumisation vary by market, so we ensure our brands hit the relevant local
premium cues; for example being relevant in popular culture or in appropriate experiential spaces.
2.Recruit: W e continue to recruit new consumers into and from across TBA. With circa 550 million new legal purchase age
consumers forecast to enter the TBA market by 2033(1), we will respond with agility to the emerging trends that resonate with these
new cohorts, keeping our brands relevant. At the same time, we will keep winning in the right occasions to recruit from beer and
wine.
3.Win in new occasions: W e will enter into new occasions to drive the growth of our categories. The landscape of socialising is ever
evolving, from the growth of the early evening occasion in some markets to the desire for increased options to moderate in others.
We will ensure our portfolio continues to evolve as consumer occasions do the same.
Examples of progress in fiscal 24:
•Our luxury malts are playing a key part in the premiumisation of scotch. Fiscal 24 saw the announcement of the Mortlach and
Philippe Starck partnership, generating attention and momentum in key markets ready for product launches in fiscal 25.
•Convenience is an increasingly important category for consumers entering TBA. Fiscal 24 saw Smirnoff SMASH Tea and Captain
Morgan Sliced execute fast launches and distribution ramp-ups in North America, resulting in both products winning share in
the category.
•The global growth of Guinness 0.0 has supported increased consumer desire for moderation options and enables us to offer more in
a wider set of occasions. This, alongside our 0.0 spirits brands which constitute three of the five largest 0.0 brands globally, gives
us a strong portfolio to capitalise on this trend.(2)
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Taking tequila around the world
O ur global rollout of tequila continued at pace in fiscal 24, underpinned by strong commercial execution.
E arly bets on tequila are paying off
Diageo’s portfolio is positioned towards fast-growing categories and tequila is the fastest growing spirits category (+9% RSV
2022-2023). Diageo was among the early entrants into the space and continues to be the global leader in tequila with around a quarter
of value share.(2)
In NAM, our tequila portfolio grew US spirits share, driven by Don Julio, which increased momentum in the second half, growing 15
times faster than the total US spirits industry and gaining category share of tequila and spirits.(3) Spearheading this growth was Don
Julio Reposado, where we increased investment and expanded distribution to capitalise on the increasing popularity of aged tequila, as
consumers rapidly become more knowledgeable about the category.
We drove almost 12% organic net sales growth in markets outside NAM and LAC, leading to substantial market share gains across
Europe, APAC and Global Travel. Don Julio was the number one selling tequila at London Heathrow Airport throughout most of the
fiscal and is now available in nearly 60 countries. Casamigos is now in 33 countries and continues to recruit across Europe. This
summer, we have plans for over one million consumers to sample the Casa Paloma in Great Britain. Increased investment in these
brands to support their global rollout is amplified by our excellent marketing and brand building at scale, for example, Don Julio at the
Oscars and the Super Bowl.
In APAC, we have tapped into the demand for luxury products, positioning Don Julio 1942 as our flagship. It has entered the most
aspirational on-trade venues, allowing us to deliver high-quality activations, in partnership with influencers.
The Paloma
This fiscal year, we identified the Paloma cocktail as a vehicle to recruit consumers into the tequila category. Our consumer insights
showed the Paloma was emerging as the cocktail of choice for bartenders and brand ambassadors, particularly in Southern Europe.
The Paloma is a grapefruit-based, refreshing and visually appealing premium aperitif: a big glass, vibrant colour, and lots of flavour.
The Paloma is also an accessible way for consumers to discover tequila: it is light, easy to make, and fits beautifully into various
occasions whether consumers are at home, in a bar, or enjoying it with food.
(1) World Bank.
(2) IWSR, 2023.
(3) Nielsen/NABCA, 2024
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Executed with
operational excellence
Our evolved operational excellence agenda is focused on brand building, commercial excellence and productivity
•We are evolving our brand building muscle to upgrade the effectiveness and efficiency of our Advertising and Promotion
(A&P) to ensure we invest behind the right brands, in the right places and through the right channels.
•We continue to upgrade our commercial capabilities with customers and consumers, building best-in-class execution
partnerships, digital merchandising and sales processes. The on-trade is also a critical channel for brand building and
exceptional experiences and we have increased focus.
•We will continue to deliver against our productivity agenda, sharpening our resource allocation to drive efficiency. Through
our Revenue Growth Management (RGM) capabilities and supply chain excellence by investing in digitisation, incremental
margin enhancement and supply network design opportunities.
Examples of progress in fiscal 24:
•In NAM, we improved our digital media efficiencies and effectiveness by applying enhanced technology to geographical
sales data and digital bidding algorithms. By combining our data and consumer understanding, we have evolved our media
targeting strategies by showing consumers brand-relevant media at key moments across hyper-targeted locations. This is
now scaled across our US brand portfolio.
•The Crown Royal Blackberry launch was an example of commercial execution excellence and resulted in consumer
recruitment into whiskey and share gains for the trademark. We partnered with our customers to deliver standout point of sale
experiences.
•We continued to strengthen our RGM capabilities, which are key to driving sustainable growth across volume, price and mix.
We made strategic price increases and targeted A&P investments holding our overall A&P flat for the year.
•Smirnoff marketing teams in over 40 markets used the Diageo Virtual Studio to take global assets for the 'We Do We'
campaign and delivered over 2,000 localised digital assets, saving nearly $15 million. In Great Britain, we increased
marketing investment for Guinness by 14%, smartly managed pricing corridors, and drove volume growth of 18%.
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Fiscal 24 saw a record delivery
of nearly $700 million in productivity benefits unlocked
Our culture of everyday efficiency is firmly embedded into the business. We have delivered strong productivity benefits year on
year. At the end of fiscal 24, we completed a three-year period over which we delivered $1.7 billion of productivity benefits,
significantly exceeding the original commitment of $1.5 billion made at the beginning of fiscal 22. Fiscal 24 was our third consecutive
year of productivity and price offsetting the absolute impact of cost of goods inflation.
In fiscal 24, we delivered record productivity savings of nearly $700 million across cost of goods, marketing and overhead spend. The
productivity on cost of goods was across the end-to-end supply chain. We renegotiated contracts on key materials such as glass, labels
and grain neutral spirits and drove savings in logistics by further optimising warehousing capacity and container fill rate, and
renegotiating key ocean freight contracts. Across our manufacturing sites, we reduced waste and drove savings via labour optimisation
and robotics automation. In addition, we started to see benefits from our five-year supply chain agility programme, announced at the
end of fiscal 22.
Looking ahead, we have committed to significantly step up our productivity target to $2 billion over the next three years (fiscal
25-27). This will be enabled by the acceleration in annual savings across cost of goods, marketing and overheads and from our supply
agility programme.
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35
Our strategy is
underpinned by
three enablers
We are focused on transforming three of our enablers: Digital, Talent and ESG
We are upweighting investment to fund a holistic, prioritised programme of digitisation (i) to facilitate marketing transformation and
re-invent brand building; (ii) to transform commercial execution and step-change our sales partnering; (iii) to unlock the next wave of
productivity savings. This is underpinned by the transformation of data, analytics and systems.
We continue to invest in talent transformation, ensuring our people embody our evolved values and behaviours. We are developing
capabilities to ensure our talent is upskilled in areas that are key to our strategy.
We are also implementing our evolved ESG approach for the next phase of delivery of our ‘Spirit of Progress‘ programme,
which focuses on maximising impact while protecting our licence to operate and grow.
Examples of progress in fiscal 24:
•Building a more Digital Diageo with 'What’s your Cocktail?', a generative AI platform to enable consumers to pair cocktails
with food.
•We have committed to creating an environment in which everyone at Diageo can thrive, feel engaged and valued for
their contributions.
•Driving triple wins with the Baileys Minis paper-based bottle tri al.

| 1 | Building a more Digital Diageo
'What's Your Cocktail?' An AI platform pairing cocktails with food In May, we launched 'What’s Your Cocktail?', a generative AI-driven digital platform to recommend cocktail pairings with individual food preferences. The platform helps consumers demystify cocktails by asking the desired atmosphere of their event and favourite food flavours to ensure the perfect serve for every occasion. Whilst the platform is consumer-first, we are also benefiting by gathering millions of first-party consumer data points, which helps give our consumers exactly what they want. Digital planning tool delivering productivity wins in supply chain This year we implemented a new Advanced Planning Tool (OMP) across our tequila asset base. It monitors our end-to- end supply chain and gives us the ability to smoothly plan for and respond to volatile changes in product demand. For example, this fiscal we have seen accelerated demand for Don Julio Reposado. The OMP tool enabled us to quickly run scenarios, look into end-to-end demand and balance our inventory and capacity, allowing us to communicate more quickly and effectively with customers and our suppliers to fulfil that demand.

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2 | Diverse and engaged talent with a focus on culture |  | 3 | ’Spirit of Progress’ and doing business the right way from grain-to-glass
Diversity 40% of our Board and 46% of our leadership population, including our Executive Committee, are from an ethnically diverse background. We are proud to have reached our 45% ethnicity leadership representation ambition ahead of 2030. Engaged talent In the global employee survey, Your Voice, our results for the fiscal remained above external benchmarks with 81% engagement levels and 89% pride in working for Diageo. Culture To unleash greater speed and agility in our business, we are focusing strongly on culture and embedding four dial-up behaviours: external curiosity, efficient collaboration, experimentation and learning, and acting decisively. |  | Baileys Minis paper-based bottle trial In May, at the Time Out Festival in Barcelona, we launched a trial of a new innovation, the Baileys Minis paper-based bottle. We know our consumers are increasingly looking for sustainable packaging alternatives, whilst also expecting premium quality and design from our brands. These bottles are a step in our journey towards a more sustainable business. The Baileys Minis paper-based bottles are made with a dry moulded fibre bottle which is 90% paper, with a thin plastic liner and a foil seal. The development work behind these bottles is the result of strong collaboration across our Diageo teams worldwide, along with the help of valued external partners. This is further evidence of our dedication to progressing towards our ambition to accelerate to a low-carbon world.

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Monitoring performance and progress

Reported measures |

Net sales growth (%) |  | Operating profit growth (%) |  | Basic earnings per share (cents)

Definition |  |  |  |
Sales growth after deducting excise duties. |  | Operating profit growth, including exceptional operating items. |  | Profit attributable to equity shareholders of the parent company, divided by the weighted average number of shares in issue.

Non-GAAP measures |

Organic net sales growth (%)(1) |  | Organic operating profit growth (%)(1) |  | Earnings per share before exceptional items (cents)(1)
(0.6)% |  |  |  | (4.8)% |  |  |  | 179.6 |  |

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Definition |  |  |  |  |
Sales growth after deducting excise duties, excluding the impact of exchange rate movements, hyperinflation adjustment and acquisitions and disposals. |  | Organic operating profit growth is calculated on a constant currency basis, excluding the impact of exceptional items, certain fair value remeasurement, hyperinflation adjustment and acquisitions and disposals. |  | Profit before exceptional items attributable to equity shareholders of the parent company, divided by the weighted average number of shares in issue. |
Why we measure |  |  |  |  |
This measure reflects our delivery of efficient growth and consistent value creation. Organic net sales growth is the result of the choices we make between categories and market participation, and reflects Diageo's ability to build brand equity, increase prices and grow market share. |  | The movement in operating profit measures our delivery of efficient growth and consistent value creation. Consistent operating profit growth is a business imperative, driven by investment choices, our focus on driving out costs across the business and improving mix. |  | Earnings per share reflects the profitability of the business and how effectively we finance our balance sheet. Eps measures our delivery of efficient growth in the year and consistent value creation over time. |
Performance |  |  |  |  |
Reported net sales declined 1.4% due to an unfavourable foreign exchange impact, organic net sales decline and a negative impact from acquisitions and disposals, partially offset by hyperinflation adjustments. Organic net sales declined 0.6%. Positive price/mix of 2.9pps was more than offset by a 3.5% decline in volume, primarily driven by materially weaker performance in LAC, driven by fast- changing consumer sentiment and elevated inventory levels. A weaker consumer environment and the impact of lapping inventory replenishment in the prior year in North America also contributed to the decline. Excluding LAC, organic net sales grew 1.8%. |  | Reported operating profit grew 8.2%, primarily driven by the benefit from exceptional operating items, partially offset by a decrease in organic operating profit. Organic operating profit declined 4.8% as a result of the organic net sales decline, primarily due to a $302 million operating profit decline in LAC and a $142 million operating profit decline in North America. The decline was also driven by an increase in investments in strategic capabilities, including in digital and strengthening route-to- market, primarily in the US, and in marketing. |  | Basic eps decreased 23.1 cents, mainly driven by lower organic operating profit, higher finance charges and exceptional items, partially offset by lower tax and the impact of share buybacks. Basic eps before exceptional items decreased 16.9 cents. |

| More detail on page 44 |  |  | More detail on page 44 |  |  | More detail on page 46

(1) Organic net sales growth, organic operating profit growth, earnings per share before exceptional items, free cash flow and return on average invested capital are non-
GAAP measures. See definitions and reconciliation of non-GAAP measures to GAAP measures on pages 311-321.
(2) For reward purposes this measure is further adjusted for the impact of exchange rates, hyperinflation adjustment and other factors not controlled by management, to
ensure focus on our underlying performance drivers.

| Reported measures

Net cash from operating activities ($ million) |  | Return on closing invested capital (%) |  |  | Remuneration

Some KPIs are used as a measure
in the incentive plan for the
remuneration of executives. See our
Directors’ remuneration report
from page 192 for more detail.

| KPI: Key Performance Indicator

Definition |  |  |  |
Net cash from operating activities comprises the net cash flow from operating activities as disclosed on the face of the consolidated statement of cash flows. |  | Profit for the year divided by net assets at the end of the financial year. |  |

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| Non-GAAP measures

Free cash flow ($ million)(1),(2) |  | Return on average invested capital (ROIC) (%) | Total shareholder return (TSR) (%)
2,609 |  |  |  | 15.8% |  |  |  | (24)% |  |

| Definition |  |  |
| Free cash flow comprises the net cash flow from operating activities aggregated with the net cash expenditure paid for property, plant and equipment, and computer software. Definition of free cash flow has been redefined, see more details on page 46. |  | Profit before finance charges and exceptional items attributable to equity shareholders divided by average invested capital. Invested capital comprises net assets excluding net post- employment benefit assets/liabilities, net borrowings and non-controlling interests. Definition of return on average capital employed has been redefined, see more details on page 47. | Percentage growth in the value of a Diageo share (assuming all dividends and capital distributions are re-invested).
| Why we measure |  |  |
| Free cash flow is a key indicator of the financial management of the business. Free cash flow reflects the delivery of efficient growth and consistent value creation as it measures the cash generated by the business to fund payments to our shareholders and future growth. |  | ROIC is used by management to assess the return obtained from the group’s asset base. Over time, ROIC reflects consistent value creation, as the returns Diageo generates from its asset base are both reinvested in the business and used to generate returns for investors through dividends and return of capital programmes. | Diageo’s Directors have a fiduciary responsibility to maximise long-term value for shareholders. TSR measures consistent value creation as it reflects the returns Diageo has delivered to investors in the year and over time. We also monitor our relative TSR performance against our peers.
| Performance |  |  |
| Net cash from operating activities was $4,105 million, an increase of $469 million compared to fiscal 23. Free cash flow grew by $374 million to $2,609 million. Free cash flow growth was driven by strong working capital management and the positive impact of lapping one-off cash tax payments in the prior year. These favourable factors more than offset the negative impacts of lower operating profit and increased interest payments, attributable to the current higher interest rate environment. The increase in capital expenditure (capex) demonstrates our commitment to investing in the business for long-term sustainable growth. |  | ROIC decreased 255bps, mainly driven by lower operating profit, increased capex, maturing stock investment and continued portfolio optimisation through acquisitions and disposals. The decline was slightly offset by lower tax. | TSR was down 24% over the past 12 months driven by the lower year-on- year share price.

| More detail on page 46 |  |  | More detail on page 47 |  |  |

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Non-financial performance |

Positive drinking |  | Employee Engagement Index |  | Inclusion and diversity
|  |  |  | 81% |  |  |  |  |  |

Number of people educated on the dangers of underage drinking through a Diageo supported education programme | 2.2m
(2023: 1.9m)
Total to date:
5.9m(1)

Percentage of female leaders globally | 44%
(2023: 44%)
Percentage of ethnically diverse leaders globally | 46%
(2023: 43%)

Definition |  |  |  |
Number of people educated on the dangers of underage drinking through a Diageo supported education programme. |  | Measured through our Your Voice survey; includes metrics for employee satisfaction, advocacy and pride.(3) | The percentage of women and the percentage of ethnically diverse individuals who are in Diageo leadership roles. |
Why we measure |  |  |  |
We want to change the way the world drinks for the better by promoting moderation and addressing the harmful use of alcohol. We build credibility and trust by transparently reporting the total number of people educated on the dangers of underage drinking. This figure also demonstrates our commitment to engaging people on the dangers of harmful alcohol use. |  | Employee Engagement releases the full potential of our people and our business, and it’s a key enabler to our performance. The survey allows us to measure the extent to which employees believe we are living our values and is a measure of our culture. Reflecting on the results of our employee engagement level and taking action where needed each year helps us build credibility and trust with our people. | Nurturing an inclusive and diverse culture drives commercial performance and is the right thing to do. Transparently reporting the gender and ethnic diversity of our leadership cohort reflects our commitment to consistent value creation through our diverse workforce, building credibility and trust with our stakeholders and engaging with our people on inclusion and diversity. |
Performance |  |  |  |
We delivered a significant increase in our reach, particularly for the LAC region. Globally, we educated 2.2m young people about the dangers of underage drinking. |  | This year 89% of our people completed our Your Voice survey. 81% were identified as engaged. 89% declared themselves proud to work for Diageo, 81% would recommend Diageo as a great place to work and 74% were extremely satisfied with Diageo as a place to work. | This year, 44% of our leadership roles were held by women, the same percentage as last year, and 46% of our leaders were ethnically diverse, compared with 43% last year. |

| More detail on page 100 |  |  | More detail on page 105 |  |  | More detail on pages 110-111

(1) (The baseline year for our ‘Spirit of Progress’ goals is 2020 unless otherwise stated. For our target to educate 10 million young people, parents and teachers on the
dangers of underage drinking the baseline year is 2018.
(2) Because of the Covid-19 pandemic, in 2020 we did not run a full Your Voice survey. Instead we used a pulse survey tool to listen to employees’ feedback and learn
from their experiences of working during the pandemic. We therefore do not have a comparable employee engagement metric for 2020.
(3) In 2021, we updated the way we measure employee engagement in our Your Voice survey to bring it in line with standard practice.
41

| Non-financial performance

Water efficiency(4) |  | Scope 1 and 2 greenhouse gas emissions(4)
Change vs baseline year |  |  |  | Change vs baseline year |  |
(15.6)% |  |  |  | (23.8)% |  |

| Definition |
| Percentage change in water efficiency across the company compared to fiscal 20 baseline. Refer to page 334 for how this metric is measured. | Percentage change in total direct and indirect greenhouse gas emissions (market/net based) compared to fiscal 20 baseline.
| Why we measure |
| Our water efficiency programme is critical to helping us to address water security, particularly in water-stressed areas. In addition to preserving our licence to operate, minimising water use within our own operations underpins our commitment to delivering long-term value by future-proofing our business against the impacts of a changing climate. It also helps to ensure this precious resource can continue to be shared with the communities we live and work amongst. | Mitigating our impact on climate change is a business imperative. Reporting in detail on our efforts to reduce Scope 1 and 2 greenhouse gas emissions, even when it is challenging to do so, demonstrates our commitment to reducing our contribution to global warming and helps build credibility and trust. This is an important area for our business and external stakeholders, supporting our commitment to consistent value creation by future-proofing our business.
| Performance |
| This year, our water efficiency across the company improved in total by 15.6% since our fiscal 20 baseline. The main drivers contributing to the strong performance in fiscal 24 were the continuous improvement initiatives in the water recovery plants at our East Africa sites and the optimisation of the reverse osmosis plant at our Cameronbridge site. | Our Scope 1 and 2 greenhouse gas emissions reduced in total by 23.8% from our fiscal 20 baseline. The main drivers contributing to the lower emissions are the increased use of on- site bioenergy (biomass, biogas and biofuel) across Africa, scotch and tequila markets and additional renewable electricity use, particularly in North America.

| More detail on page 121-124 |  |  | More detail on page 125-128 |  |  |

(4) In accordance with Diageo’s environmental reporting methodologies and, where relevant, WRI/WBCSD GHG Protocol; data for 2019, the baseline year 2020 and
for the intervening period up to the end of last financial year has been restated where relevant.
42
Operating results 2024 compared with 2023
Chief Financial Officer’s introduction
'After three years of strong topline growth, the industry, as well as Diageo’s financial performance, was challenged in fiscal 24. This was driven
by the uncertain global consumer environment across many of our markets. Organic net sales were down 0.6% driven by a volume decline and
primarily attributable to weak performance in LAC, which was impacted by weaker consumer demand and higher than expected inventory
levels in the first half of the fiscal year. Organic operating margin declined 56bps excluding LAC and was driven by continued investment in
the business through overheads and A&P.'
In these times of an uncertain consumer environment, we have focused on what we can control to continue to invest in our future. We
have focused on driving productivity, smart price mix and cash. I’m pleased to say we have increased our annual productivity
and delivered nearly $700 million in savings in fiscal 24 with the highest-ever contribution from cost of goods and supply initiatives.
And with this, we have comfortably exceeded the delivery of our three-year commitment of $1.5 billion of productivity having
delivered $1.7 billion. The supply chain agility programme which was set up at the beginning of fiscal 22 has also contributed to this
year’s productivity and is expected to continue to deliver incremental savings over the coming years even as we continue to invest in
the business, including in overheads and in A&P.
We have also continued our disciplined conversion of profit into cash and delivered free cash flow of $2.6 billion. We have driven this
by significantly stepping up our capabilities in managing both accounts payable and inventory with more discipline.
We remain a progressive dividend payer, increasing our dividend 5% in fiscal 24 as well as completing a new share buyback
programme up to $1 billion. Our leverage ratio was 3.0x as of 30 June 2024, and we remain committed to our leverage ratio and
our disciplined approach to capital allocation.
Our brands and portfolio, as well as our ability to lead and shape consumer trends, operational excellence and talented workforce give
me confidence that we can navigate temporary volatility and uncertainty, while continuing to drive sustainable long-term growth and
deliver shareholder value. With this being my last full fiscal year at Diageo, I am proud of our accomplishments over the last few
years. I am confident that Diageo will build on its foundation and remains on track to be one of the best performing, most trusted and
respected consumer products companies in the world.

Reported net sales growth |  | Net cash from operating activities
(1)% |  |  | $4,105 m |
Organic net sales growth(1) |  | Free cash flow(1)
(1)% |  |  | $2,609m |
Reported operating profit growth |  | Return on closing invested capital
8% |  |  | 34.5% |
Organic operating profit growth(1) |  | Return on average invested capital(1)
(5)% |  |  | 15.8% |
Basic earnings per share |  | Total shareholder return
173.2 c |  |  | (24)% |
Earnings per share before exceptional items(1) |  |
179.6 c |  |  |  |

(1) Organic net sales growth, organic operating profit growth, earnings per share before exceptional items, free cash flow and return on average invested capital are non-
GAAP measures. See definitions and reconciliation of non-GAAP measures to GAAP measures on pages 311-321.
Business review
43
Key performance indicators
Net sales ($ million)
Reported net sales declined 1.4%
Organic net sales declined 0.6%
Reported net sales declined 1.4%, due to an unfavourable foreign exchange impact, organic net sales decline and a negative impact
from acquisitions and disposals, partially offset by hyperinflation adjustments.
Organic net sales declined 0.6%. Positive price/mix of 2.9pps was more than offset by a 3.5% decline in volume, primarily driven by
materially weaker performance in LAC, driven by fast-changing consumer sentiment and elevated inventory levels. A weaker
consumer environment and the impact of lapping inventory replenishment in the prior year in North America also contributed to the
decline. Excluding LAC, organic net sales grew 1.8%.
Organic movement
(1)See pages 238-240 for an explanation under Accounting information and policies.
(2)Exchange rate movements reflect the adjustment to recalculate the reported results as if they had been generated at the prior period weighted average exchange
rates.
(3)See pages 239-240 and 312-314 for details on hyperinflation adjustments.
Operating profit ($ million)
Reported operating profit grew 8.2%
Organic operating profit declined 4.8%
Reported operating profit grew 8.2%, primarily driven by the benefit from exceptional operating items, partially offset by a decrease in
organic operating profit.
Organic operating profit declined 4.8% as a result of the organic net sales decline, primarily due to a $302 million operating profit
decline in LAC and a $142 million operating profit decline in North America. The decline was also driven by an increase in
investments in strategic capabilities, including in digital and strengthening route-to-market, primarily in the US, and in marketing.
(1)See page 238-240 for an explanation under Accounting information and policies.
(2) For further details on exceptional items see page 64.
(3)Fair value remeasurements. For further details see pag e 64.
(4)See pages 239-240 and 312-314 for details on hyperinflation adjustments.
Business review (continued)
44
Operating margin (%)
Reported operating margin expanded by 262bps
Organic operating margin declined by 130 bps
Reported operating margin expanded b y 262bps, primarily due to the positive impact of exceptional operating items partially offset by
a decline in organic operating margin.
Organic operating margin declined by 130bps, primarily due to weak performance in LAC and a cautious consumer environment in
the US. The decline was also driven by continued investment in the business, primarily in overheads and marketing, partially offset by
positive gross margin. Excluding LAC, organic operating margin declined by 56bp s and gross margin grew 17bps, driven by price
increases and productivity which offset the impact of cost inflation.
Organic movement
(130)bps
(1)See pages 238-240 for an explanation under Accounting information and policies.
(2)For further details on exceptional operating items see pages 64 and 246-250.
(3)Fair value remeasurements and hyperinflation adjustments. For further details on fair value remeasurements see page 64. See pages 239-240 and 312-314 for details
on hyperinflation adjustments.
Business review (continued)
45
Basic earnings per share (cents)
Basic eps decreased 11.8% from 196.3 cents to 173.2 cents
Basic eps before exceptional items(1) decreased 8.6% from 196.5 cents to 179.6 cents
Basic eps decreased 23.1 cents, mainly driven by lower organic operating profit, higher finance charges and exceptional items,
partially offset by lower tax and the impact of share buybacks.
Basic eps before exceptional items decreased 16.9 cents.
(i
(1)See pag es 311-321 fo r an explanation of the calculation and use of non-GAAP measures.
(2)See pages 238-240 for an explanation under Accounting information and policies.
(3)For further details on exceptional items see pages 64 and 246-250.
(4)Includes finance charges net of tax.
(5)Excludes finance charges related to acquisitions, disposals, share buybacks and includes finance charges related to hyperinflation adjustments.
(6)Excludes tax related to acquisitions, disposals and share buybacks.
(7)Fair value remeasurements. For further details see page 64.
Net cash from operating activities and free cash flow(1) ($ million)
Generated $4,105 million net cash from operating activities(2) and $2,609 million free cash flow
Net cash from operating activities was $4,105 million, an increase of $469 million compared to fiscal 23. Free cash flow grew by $374
million to $2,609 million.
Free cash flow growth was driven by strong working capital management and the positive impact of lapping one-off cash tax
payments in the prior year. These favourable factors more than offset the negative impacts of lower operating profit and increased
interest payments, attributable to the current higher interest rate environment. The increase in capital expenditure (capex) demonstrates
our commitment to investing in the business for long-term sustainable growth.
(1)Definition of free cash flow has been redefined, see more details on page 316.
(2)Net cash from operating activities excludes net capex (2024 – $(1,496) million; 2023 – $(1,401) million).
(3) See pages 238-240 for an explanation under Accounting information and policies.
(4)Exchange on operating profit before exceptional items.
(5)Operating profit excludes exchange, depreciation and amortisation, post-employment charges of $11 million and other non-cash items.
(6)Working capital movement includes maturing inventory.
(7)Other items include dividends received from associates and joint ventures and other investments and post-employment payments.
Business review (continued)
46
Return on average invested capital (%)(1)(2)
ROIC decreased 255bps
ROIC decreased 255bps, mainly driven by lower operating profit, increased capex, maturing stock investment and continued portfolio
optimisation through acquisitions and disposals. The decline was slightly offset by lower tax.
(1) ROIC calculation excludes exceptional operating items from operating profit. For further details on ROIC see pages 318.
(2) Definition of return on average invested capital has been redefined, see more details on pages 318.
Business review (continued)
47
Our global reach
Our regional profile maximises the opportunity for growth in our sector. Where our products are sold each market is accountable for
its own performance and driving growth.
% share of reported net sales by region(1)(2)
(1) The above map is intended to illustrate general geographic regions where Diageo has a presence and/or in which its products are sold. It is not intended to imply
that Diageo has a
presence in and/or that its products are sold in every country or territory within a geographic region.
(2) Based on reported net sales for the year ended 30 June 2024. Does not include corporate net sales of $123 million (2023 – $104 million).

Fiscal 24 | North America | Europe | Asia Pacific | Latin America and Caribbean | Africa
Volume (EU million ) | 50.1 | 51.3 | 74.9 | 22.1 | 32.1
Reported net sales(1) ($ million) | 7,908 | 4,804 | 3,817 | 1,839 | 1,778
Reported operating profit(2) ($ million) | 3,039 | 1,257 | 1,438 | 502 | 131
Operating profit before exceptional items(3) ($ million) | 3,236 | 1,379 | 1,063 | 502 | 131
Water efficiency, percentage change compared to fiscal 20 baseline | 2% | (12)% | (38)% | 4% | (25)%
Percentage change in total direct and indirect greenhouse gas emissions (market/net based) compared to fiscal 20 baseline | (32)% | 18% | (75)% | (59)% | (43)%
Average number of employees(4) | 3,144 | 10,524 | 8,763 | 4,437 | 3,499

(1) Excluding corporate net sales of $123 million (2023 – $104 million).
(2) Excluding net corporate operating costs of $366 million (2023 – $(397) million).
(3) Excluding exceptional operating charges of $56 million (2023 – $(766) million) and net corporate operating costs of $366 million (2023 – $(397) million)
(4) Employees have been allocated to the region where they live.
Business review (continued)
48
Production facilities
The company owns manufacturing production facilities across the globe, including distilleries, breweries, packaging plants, maturation
warehouses, cooperages, and distribution warehouses. Diageo’s brands are also produced at plants owned and operated by third parties
and joint ventures at several locations around the world. We believe that our facilities are in good condition and working order. We
have adequate capacity to meet our current needs, and, in the beer and spirit categories, we have undertaken activities to increase our
production capacity to address our anticipated future demand.
The major facilities owned by Diageo with locations, principal activities, and products are presented in the table below as at 30 June
2024.

| Location | Principal activities | Products
| United Kingdom | distilling, bottling, warehousing, coopering | beer, scotch, gin, vodka, rum, ready to drink, non- alcoholic
| Ireland | distilling, brewing, bottling, warehousing | beer, liqueur, Irish whiskey, non-alcoholic
| Italy | distilling, bottling, warehousing | vodka, rum, ready to drink, non-alcoholic
| Türkiye | distilling, bottling, warehousing | raki, vodka, gin, liqueur, wine
| North America | distilling, bottling, warehousing | vodka, gin, rum, Canadian whisky, US whiskey, ready to drink
| Brazil | distilling, bottling, warehousing | cachaça, vodka, ready to drink
| Mexico | distilling, bottling, warehousing | tequila
| East Africa | distilling, brewing, bottling, warehousing | beer, rum, vodka, gin, whisky, brandy, liqueur, ready to drink, bottled in East Africa (scotch)
| Nigeria | distilling, brewing, bottling, warehousing | beer, rum, vodka, gin, ready to drink
| South Africa | distilling, bottling, warehousing | rum, vodka, gin
| ARM | distilling, brewing, bottling, warehousing | beer, vodka, gin, ready to drink
| India | distilling, bottling, warehousing | rum, vodka, Indian whisky, gin, brandy, bottled in India (scotch)
| Australia | distilling, bottling, warehousing | rum, vodka, gin, ready to drink
| Greater China | distilling, warehousing | Chinese whisky, Chinese white spirits

For more details about our capital investments please see page 344.
Our route to consumer
We have five different route to consumer models across our business. Most of the regions employ four of the five high level models
defined below; however, how each model operates in certain countries will vary, as will the percentage of net sales delivered through
the respective models in each market.
Wholesalers and Distributors
Diageo sells to a wholesaler or distributor who also sells a range of other brands and categories directly to end outlets where
consumers can purchase our brands. Where required, this model may include a government control board (or similar), such as in
certain states in the US and provinces and territories in Canada.
Modern Trade
Diageo sells directly to a customer who owns and manages retail outlets, who then in turn sells to consumers via their outlets.
eMarketplace
Diageo sells to a third-party digital marketplace customer where that customer sells to B2B customers and consumers.
Direct to Consumer
Diageo sells directly to consumers, predominantly through portals such as Thebar.com, which is a growing route to consumer model
for our business. It allows for direct interface with our consumers rather than through third-party sites as in the eMarketplace model
above.
Direct to Store
Diageo sells and delivers directly to end outlets rather than via a central purchasing customer as in the Modern Trade model above.
This model is less common than the other models. For example,
it is used in Ireland for beer distribution.
Business review (continued)
49
North America
North America (NAM) net sales performance was negatively impacted by a cautious US consumer environment while share
performance improved consistently through the year driven by focused execution.
•Diageo NAM performance was impacted by US Spirits due to a cautious consumer environment, retailer inventory adjustments
and the lapping of inventory replenishment in the prior year. Against this backdrop, Diageo held share of US TBA in fiscal 24 and
delivered share gains in the second half compared to the first half, su pported by innovation, focused investment, primarily in Don
Julio and Crown Royal, and improved execution.
•Reported net sales declined 2%, due to weaker organic net sales performance.
•Organic net sales declined 3%, due to lower sales in US Spirits and Canada, partially offset by growth in Diageo Beer Company
(DBC USA).
•Price/mix grew 2pps and was more than offset by a 4% decline in volume.
•US Spirits net sal es declined 3%, driven by a volume decline of 5%. Depletion growth was approximately one percentage point
ahead of shipment growth, with some variations across brands. Overall inventory levels at distributors at the end of fiscal 24
remained in line with historical levels.
•DBC USA net sales grew 3%, reflecting strong growth in Guinness, Smirnoff flavoured malt beverages, and the launch of Captain
Morgan Sliced Apple.
•Organic operating margin declined 79bps, primarily due to an increase in ov erhead costs in support of strategic initiatives and
marketing investments, partially offset by improvements in gros s margin. Gross margin improvement was driven by productivity
savings which more than offset an adverse impac t from mix and inflation.
•Marketing investmen t declined 1%, but increased as a percentage of net sales. Investment was focused in Don Julio and other key
brands, while maintaining focus on marketing efficiencies.
US Spirits highlights(1):
•Tequila net sales declined 5%, largely due to a 22% decline in Casamigos attributable to lower consumer demand and the impact
of lapping inventory replenishments in the prior year following supply shortages. As a result, Casamigos depletions were ahead of
shipments with a 9% decline. Don Julio net sales increased 12%, despite lapping the impact of inventory replenishments in the
prior year. Supported by strong execution, depletions grew 21%, significantly ahead of shipments, and was led primarily by Don
Julio Reposado. Diageo's tequila portfolio grew share of the spirits industry in fiscal 24, with acceleration in the second half, led by
Don Julio.
•Crown Royal whisky net sales declined 1%, primarily due to Crown Royal Deluxe and Crown Royal Peach, mostly offset by the
successful launch of Crown Royal Blackberry. Crown Royal held share for the full year and gained share of the spirits industry in
the second half of the fiscal year.
•Vodka net sales declined 8%, reflecting weakness in the category. Cîroc net sales declined 28%, partially offset by the launch of
Cîroc Limonata, which recruited consumers and gained category share. Smirnoff net sales declined 3%, primarily driven by
Smirnoff No.21. While Ketel One net sales declined 5%, primarily driven by Ketel One Botanicals, Ketel One grew share of the
vodka category supported by our 'Made to Cocktail' campaign.
•Johnnie Walker net sales declined 10%, due to continued normalisation of demand for luxury variant Johnnie Walker Blue Label
and lower demand for Johnnie Walker Red Label. The trademark continues to outperform the scotch category and held share of the
spirits industry, driven by strong performance in Johnnie Walker Black Label.
•Captain Morgan net sales declined 6%, primarily due to Captain Morgan Original Spiced as consumers shifted into other spirits
categories. Captain Morgan lost both category and spirits industry share.
•Bulleit whiskey net sales increased 12%, significantly ahead of depletions growth as in ventory levels continue to normalise. B ulleit
held share of the spirits industry.
•Buchanan's net sales increased 3%, primarily driven by continued momentum in Buchanan’s Pineapple which recruited new
consumers. Buchanan's trademark gained share of the spirits industry.
•Spirits-based cocktails(2) net sales increased 15%, driven by the successful launches of the Cocktail Collection and Smirnoff
Smash, which both gained share of category and the spirits industry. The Cocktail Collection consists of Ketel One Espresso
Martini, Ketel One Cosmopolitan, Astral Margarita and Tanqueray Negroni.
(1)S pirits brands and categories excluding cocktails, which includes ready to drink, ready-to-serve and non-alcoholic variants, except where noted.
(2) Spirits-based cocktails includes ready to serve and ready to drink variants.
Business review (continued)
50
Key financials ($ million): North America

| 2023 re-presented(1) | Exchange | Acquisitions and disposals | Organic movement | Other(2) | 2024 | Reported movement % |
Net sales | 8,109 | 3 | 2 | (206) | — | 7,908 | (2) |
Marketing | 1,631 | 1 | 5 | (10) | — | 1,627 | — |
Operating profit before exceptional items | 3,222 | 160 | (10) | (142) | 6 | 3,236 | — |
Exceptional operating items(3) | (118) |  |  |  |  | (197) |  |
Operating profit | 3,104 |  |  |  |  | 3,039 | (2) |

| Organic volume movement | Reported volume movement | Organic net sales movement | Reported net sales movement
Markets and categories: | % | % | % | %
North America(4) | (4) | (4) | (3) | (2)
US Spirits(4) | (5) | (4) | (3) | (3)
DBC USA(5) | 1 | 1 | 3 | 3
Canada | (5) | (4) | (2) | (3)
Spirits(4) | (5) | (5) | (4) | (4)
Beer | 3 | 3 | 5 | 5
Ready to drink | (8) | (8) | (3) | (3)
Key brands(6): |  |  |  |
|  | Organic volume movement(7) | Organic net sales movement | Reported net sales movement
|  | % | % | %
Crown Royal |  | — | (1) | (1)
Don Julio |  | 19 | 11 | 11
Casamigos(8) |  | (16) | (21) | (22)
Smirnoff |  | (5) | (2) | (2)
Johnnie Walker |  | (7) | (10) | (10)
Captain Morgan |  | (10) | (6) | (6)
Guinness |  | 3 | 6 | 6
Ketel One(9) |  | (4) | (5) | (5)
Baileys |  | (2) | — | —
Bulleit whiskey(10) |  | 6 | 12 | 12
Buchanan's |  | 8 | 3 | 3

North America contributed |  | North America organic net sales declined
39% of Diageo reported net sales in fiscal 24 |  | 3% in fiscal 24

Reported net sales by market (%)

Reported net sales by category (%)

(1) See pages 238-240 for an explanation under Accounting information and policies.
(2)Fair value remeasurements. For further details see page 64.
(3)Fo r further details on exceptional operating items see pages 246-250.
(4)Reported volume movement includes impacts from acquisitions and/or disposals. For further details see page 311-321.
(5)Certain spirits-based ready to drink products in certain states are distributed through DBC USA and those net sales are captured within DBC USA.
(6)Spirits brands excluding cocktails, which includes ready to drink, ready- to-serve and non-alcoholic variants.
(7)Organic equals reported volume movement.
(8)Casamigos trademark includes both tequila and mezcal.
(9)Ketel One includes Ketel One vodka and Ketel One Botanicals.
(10)Bulleit whiskey excludes Bulleit Crafted Cocktails.
Business review (continued)
51
Europe
Resilient net sales growth with continued strong momentum in Guinness.
•Diageo Europe delivere d strong performance with market share growth across most European markets d espite persistent cost
inflation and lower consumer confidence.
•Reported net sale s grew 12%, prim arily driven by a hyperinflation adjustment(1) related to Türkiye and organic growth.
•Organic net sales grew 3%, driven by double-digit growth in Türkiye and mid single-digit growth in Great Britain and Ireland,
partially offset by declines, primarily in Northern and Eastern Europe. Excluding the impact of lapping the sales of inventories
from the previously announced winding down of operations in Russia in fiscal 23, overall organic net sale s for the region gr ew 4%.
•Price/mix grew 4pps, driven by price increases across most markets, with Guinness growth driving particularly strong price/mix in
Great Britain and Ireland.
•Spirits net sales declined 1%, primarily due to softness in the spirits category despite improved market share performance through
fiscal 24, and the impact of lapping final sales of inventories in Russia. S trong growth in raki and Baileys was more than offset by
declines in scotch, gin, and rum. Excluding t he effect of lapping final sales of inventories in Russia, spirits organic net sales grew
1%.
•Beer net sales grew 18%, primarily driven by Guinness. Double-digit volume and price/mix in Guinness were driven by share
gains in Ireland and Great Britain, supported by strong marketing and innovation. Guinness 0.0 net sales and volume more than
doubled in fiscal 24.
•Organic operating margin declined by 121bps. Strategic price increases more than offset the impact of cost inflation. Margin
decline reflects increased marketing investment as well as investments in strategic commercial initiatives. Excluding the impact of
lapping the profit from sales of inventories in Russia in fiscal 23, operating margin declined by 85bps.
•Marketing investment increased 4%, primarily driven by investment in tequila, beer and Johnnie Walker.
Market highlights:
•Great Britain net sales grew 5%, primarily driven by strong performance in Guinness, whic h gained share in both the on-trade and
off-trade. Share gains were driven by continued recruitment through strong brand building and new occasions, supported by
Guinness 0.0 and Nitrosurge innovations.
•Southern Europe net sales were 2% lower, mainly due to scotch, rum and gin, reflecting category decline. This was in spite of the
majority of the markets within Southern Europe gaining share, driven by the continued momentum in Johnnie Walker.
•Northern Europe net sales declined 4%, due to macroeconomic pressures impacting higher price point segments in scotch, gin and
vodka. The decline was partially offset by double-digit growth in Johnnie Walker Red Label, as consumers shifted into the
standard price tier. Market share of spirits declined, primarily driven by ready to drink (RTD) cocktails as a result of increased
competitive activity.
•Ireland net sales grew 7%, primarily driven by double-digit growth in Guinness. Strong share gains in the on-trade were driven by
effectiv e brand building and the roll-out of Guinness 0.0 draught, now in more than 1,500 on-trade outlets.
•Eastern Europe net sales declined 7%, primarily driven by lapping the final sales of inventories in Russia in the first half of the
prior year. Excluding Russia, net sales grew 8% driven by strong performance in Guinness and scotch.
•Türkiye net sales grew 31% with volume growth of 4%, primarily reflecting the impact of price increases in response to inflation
and increased excise duties. Net sales growth was mostly driven by strong performance in raki and Johnnie Walker, with share
gains in whisky.
Key financials ($ million): Europe

| 2023 re-presented(2) | Exchange | Reclassification | Acquisitions and disposals | Organic movement | Other(3) | Hyperinflation(1) | 2024 | Reported movement %
Net sales | 4,303 | (3) | 62 | 26 | 124 | — | 292 | 4,804 | 12
Marketing | 765 | 18 | 1 | 22 | 34 | — | 33 | 873 | 14
Operating profit before exceptional items | 1,312 | 24 | 47 | 3 | (15) | (3) | 11 | 1,379 | 5
Exceptional operating items(4) | (12) |  |  |  |  |  |  | (122) |
Operating profit | 1,300 |  |  |  |  |  |  | 1,257 | (6)

(1)See pa ges 312-314 for details on hyperinflation adjustments.
(2) See pa ges 238-240 for an explanation under Accounting information and policies.
(3) Fair value remeasurements. For further details see page 64.
(4)For further details on exceptional items see page s 64 and 246-250.
Business review (continued)
52

Markets and categories: | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement %
Europe(1) | (1) | — | 3 | 12
Great Britain(1) | (1) | — | 5 | 10
Southern Europe(1) | (2) | (8) | (2) | —
Northern Europe(1) | (3) | (2) | (4) | —
Ireland(1) | (2) | (1) | 7 | 11
Türkiye(1) | 4 | 4 | 31 | 59
Eastern Europe(1) | (6) | (5) | (7) | (3)
Spirits(1) | (2) | (1) | (1) | 9
Beer | 8 | 8 | 18 | 23
Ready to drink(1) | (9) | (9) | (5) | (3)
Key brands(2): |
|  | Organic volume movement(3) % | Organic net sales movement % | Reported net sales movement %
Guinness |  | 11 | 22 | 27
Johnnie Walker |  | 5 | 3 | 21
Baileys |  | 5 | 6 | 10
Smirnoff |  | (2) | — | 5
Captain Morgan |  | (5) | (5) | —
Gordon's |  | (9) | (8) | (1)
Tanqueray |  | (8) | (9) | (4)
JεB |  | (3) | (6) | 3

Europe contributed |  | Europe organic net sales grew
24% of Diageo reported net sales in fiscal 24 |  | 3% in fiscal 24

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement includes impacts from acquisitions and/or disposals. For further details see page 311-315.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Organic equals reported volume movement except for Johnnie Walker (11)%, Gordon's (8)% and JεB (2)%.
Business review (continued)
53
Asia Pacific
Asia Pacific delivered organic net sales, volume and operating margin growth in challenging macroeconomic conditions whilst
increasing investment in the region.
•Reported net sales declined 1%, driven by the negative impact of foreign exchange and the disposal of Windsor, which was
partially offset by organic sales growth.
•Organic net sales grew 4%, driven by strong growth of Chinese white spirits in Greater China, and other whisky and scotch in
India, partially offset by declines in South East Asia and Australia.
•Price/mix grew 4pps, driven by continued premiumisation and pricing within whisky in India and strong growth in Chinese white
spirits.
•Spirits net sales grew 6%, driven by strong performance in Greater China and India. Tequila delivered double-digit sales growth,
albeit on a smaller base, with particularly strong growth in Travel Retail and India, and also grew market share across most of the
region.
•Organic operating margin increased by 35bps, driven by positive mix, attributable to growth of Chinese white spirits in Greater
China and favourable product mix in India.
•Marketing investment grew 2%, with focused investment in Don Julio across the region supporting the global launch of tequila,
Chinese white spirits in Greater China, and in innovation supporting the launch of Johnnie Walker Blonde and in Johnnie Walker
Blue Label Xordinaire in Travel Retail.
Market highlights:
•India net sales grew 8%, driven by double-digit growth in other whisky and scotch, supported by price/mix from continued
premiumisation and price increases, driven primarily by Prestige and Above business segments. Whisky growth was driven by
McDowell’s and Royal Challenge, and scotch growth was driven by Black & White and Johnnie Walker Blonde. Black & White
was one of the fastest-growing scotch brands in the market and drove recruitment into the category.
•Greater China net sales grew 12%, primarily driven by strong growth in Chinese white spirits, partially offset by a decline in
scotch. Despite the challenging macroeconomic conditions, Chinese white spirits delivered strong double-digit growth, lapping a
double-digit decline in the prior year and with restocking of inventory in the first half of the fiscal year. While scotch performance
was impacted by downtrading to lower-priced segments, focused execution and investment drove an improvement in category
share within international spirits.
•Australia net sales declined 8% primarily due to RTDs, attributable to increased competitive activity. This also led to the market
losing share in fiscal 24.
•South East Asia net sales declined 8%, reflecting the impact of lapping double-digit growth in the prior year and a double-digit
decline in Vietnam, most notably in Johnnie Walker. That was partially offset by the strong performance of The Singleton across
most of the market.
•Travel Retail Asia and Middle East net sales grew 10%, primarily driven by Johnnie Walker Blue Label Xordinaire and Don Julio
1942. Tequila delivered strong share growth supported by focused execution with increased portfolio and brand distribution across
the market.
•North Asia (Korea and Japan) net sales increased by 3%, however market share declined in the fiscal year, primarily in Korea. Net
sales growth was driven by super-premium-plus scotch, led by Johnnie Walker Blue Label, which delivered strong double-digit
growth supported by targeted investment, and the launch of Johnnie Walker Blonde in Korea, which supported recruitment into
whisky.
Key financials ($ million): Asia Pacific

| 2023 re-presented(1) | Exchange | Reclassification | Acquisitions and disposals | Organic movement | 2024 | Reported movement %
Net sales | 3,841 | (30) | (62) | (96) | 164 | 3,817 | (1)
Marketing | 655 | (11) | (1) | (8) | 16 | 651 | (1)
Operating profit before exceptional items | 1,104 | (29) | (47) | (25) | 60 | 1,063 | (4)
Exceptional operating items(2) | (581) |  |  |  |  | 375 |
Operating profit | 523 |  |  |  |  | 1,438 | 175

(1)See pages 238-240 f or an explanation under Accounting information and policies.
(2) For further details on exceptional items see page s 246-250.
Business review (continued)
54

Markets and categories: | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement %
Asia Pacific(1) | 1 | (7) | 4 | (1)
India(1) | 2 | (7) | 8 | 3
Greater China | 14 | 15 | 12 | 8
Australia | (7) | (6) | (8) | (9)
South East Asia(1) | (9) | (8) | (8) | (4)
Travel Retail Asia and Middle East | — | (28) | 10 | (3)
North Asia | (12) | (13) | 3 | (17)
Spirits(1) | 1 | (7) | 6 | 1
Beer | (2) | (3) | 4 | 2
Ready to drink | (16) | (16) | (14) | (16)
Key brands(2): |  |
|  | Organic volume movement(3) | Organic net sales movement | Reported net sales movement
|  | % | % | %
Johnnie Walker |  | (4) | 1 | —
Shui Jing Fang(4) |  | 32 | 27 | 23
McDowell's |  | (2) | 4 | 2
The Singleton |  | 14 | 12 | 10
Royal Challenge |  | 11 | 16 | 14
Guinness |  | (2) | 4 | 2
Black & White |  | 20 | 24 | 21
Smirnoff |  | 1 | (1) | (6)

Asia Pacific contributed |  | Asia Pacific organic net sales grew
19% of Diageo reported net sales of fiscal 24 |  | 4% in fiscal 24

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement includes impacts from acquisitions and/or disposals. For further details see page 311-315.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3) Organic equals reported volume movement except for Johnnie Walker (10)%, Smirnoff (1)%, Guinness (3)% and Black & White (19)%.
(4)Growth figures represent total Chinese white spirits of which Shui Jing Fang is the principal brand.
Business review (continued)
55
Latin America and Caribbean
Latin America & Caribbean performance was impacted by a reduction of elevated inventory to more appropriate levels for
the current consumer environment, which remains challenging.
•Diageo LAC performance was materially weaker driven by fast-changing consumer sentiment in the prior year which resulted in
elevated inventory levels and subsequent adjustments by wholesalers and customers in the fiscal year. While the consumer
environment remains challenging in Brazil, Central America and Caribbean and South LAC, some stabilisation of consumer
demand in the second half of fiscal 24 resulted in share gains. However, a highly competitive environment and consumer
downtrading are contributing to a persistently challenging environment in Mexico.
•Reported net sales declined 15%, reflecting weaker organic performance, partially offset by a favourable impact from foreign
exchange.
•Organic net sales declined 21%, driven by soft demand for the international premium spirits category across the region, reduction
of high levels of inventory to more appropriate levels for current consumer demand and lapping strong double-digit growth.
•Price/mix declined 6pps, reflecting downtrading and increased trade investment to manage inventory towards appropriate levels for
the current consumer environment.
•Spirits net sales declined 23%, primarily driven by scotch, particularly Buchanan’s, Johnnie Walker Black Label and Johnnie
Walker Red Label, as well as a strong double-digit decline in Don Julio in Mexico.
•Organic operating margin declined by 746 bps, primarily driven by negative mix, increased trade investment and lower operating
leverage.
•Marketing investment declined 20%, in response to the rapid deterioration in the consumer environment.
Market highlights:
•Brazil net sales declined 18%, primarily due to a double-digit decline in scotch. In the second half of fiscal 24, Brazil gained share
of spirits as consumer demand stabilised after a challenging start to the year.
•Mexico net sales declined 30%, primarily driven by strong double-digit declines in tequila, led by Don Julio and scotch, reflecting
the double-digit decline in spirits consumer demand throughout the fiscal year. There was downtrading with consumers shifting
towards local spirits and the operating environment remained highly competitive, particularly in tequila. Market share declined in
fiscal 24, particularly in tequila and scotch.
•Central America and Caribbean (CCA) net sales declined 25%, primarily due to a strong double-digit decline in scotch due to
increased competition from local spirits. In the second half of fiscal 24, the market gained share of spirits, supported by focused
execution.
•Andean (Colombia and Venezuela) net sales declined 17%, primarily driven by scotch due to weakening consumer demand which
resulted in consumers shifting towards local spirits from international spirits.
•South LAC (Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru and Uruguay) net sales declined 9%, driven by scotch. Despite the
challenging environment, the market delivered share gains in the second half of the fiscal year.
Key financials ($ million): Latin America and Caribbean

| 2023 re-presented⁽¹⁾ | Exchange | Organic movement | Other (2) | 2024 | Reported movement %
Net sales | 2,159 | 118 | (459) | — | 1,839 | (15)
Marketing | 355 | 21 | (70) | — | 306 | (14)
Operating profit | 783 | 37 | (302) | (17) | 502 | (36)

(1)See page 238-240 for an explanation under Accounting information and policies.
(2) Fair value remeasurements. For further details see page 64.
Business review (continued)
56

Markets and categories: | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement %
Latin America and Caribbean | (16) | (16) | (21) | (15)
Brazil | (10) | (10) | (18) | (15)
Mexico | (25) | (25) | (30) | (24)
CCA | (20) | (20) | (25) | (21)
Andean | (18) | (18) | (17) | 19
South LAC | (18) | (18) | (9) | (13)
Spirits | (16) | (16) | (23) | (16)
Beer | 3 | 3 | 29 | 33
Ready to drink | — | — | (3) | (1)
Key brands(1): |
|  | Organic volume movement(4) % | Organic net sales movement % | Reported net sales movement %
Johnnie Walker |  | (12) | (17) | (12)
Buchanan’s |  | (18) | (28) | (15)
Don Julio |  | (28) | (37) | (30)
Old Parr |  | (15) | (25) | (14)
Smirnoff |  | (15) | (15) | (18)
Black & White |  | (25) | (30) | (22)
Baileys |  | (20) | (14) | (9)
White Horse |  | (2) | (11) | (10)

Latin America and Caribbean contributed |  | Latin America and Caribbean organic net sales declined
9% of Diageo reported net sales in fiscal 24 |  | 21% in fiscal 24

Reported net sales by market (%)

Reported net sales by category (%)

(1)Spirits brands excluding ready to drink and non-alcoholic variants.
(2)Organic equals reported volume movement.
Business review (continued)
57
Africa
Africa delivered robust organic net sales growth despite ongoing m acroeconomic challenges.
•Diageo Africa benefitted from price increases and delivered strong performance in a challenging macroeconomic environment with
persistent inflationary markets.
•Reported net sales declined 13%, reflecting an unfavourable impact from foreign exchange, mainly due to a weakening Nigerian
naira, partially offset by organic growth.
•Organic net sales grew 12%, with growth across all markets except South Africa. Growth was driven by price increases, partially
offset by a 6% volume decline, primarily in spirits.
•Price/mix grew 18pps, mainly due to broad based price increases in beer and spirits across the region.
•Spirits net sales declined 2%, driven by a volume decline of 16%, which was partially offset by price increases across the region.
Tequila growth doubled, led by Don Julio, partially offsetting an 11% decline in Johnnie Walker.
•Beer net sales grew 19%, benefitting from price increases across the region and volume growth of 4%. Malta Guinness, Guinness
and Senator each delivered double-digit net sales growth.
•Organic operating margin increased by 194bps, as price increases and productivity savings more than offset cost inflation.
•Marketing investment grew 16%, focused on supporting spirits premiumisation, Guinness and tequila penetration.
Market highlights:
•East Africa net sales increased 9%, lapping a softer comparator following price increases. The increase was led by growth in beer,
mainly Senator, which also grew share of TBA in the fiscal year. RTDs, rum and scotch also contributed to the improvement.
•Nigeria net sales grew 31%, driven by strong price/mix supported by price increases, partially offset by a decline in volume. The
market lost share in almost all categories.
•Africa Regional Markets net sales grew 6%, led by growth in beer, primarily driven by Malta Guinness and Guinness, supported
by price increases. Growth in beer and RTDs was partially offset by a decline in spirits, particularly in Johnnie Walker. Strong
price/mix more than offset a volume decline of 6%.
•South Africa net sales declined 11%, primarily driven by lower volume of 17%, primarily in Johnnie Walker Black Label and
Smirnoff 1818. Spirits category growth was slower than the beer category, and Diageo South Africa lost share in spirits. This was
despite growth of the markets' share in the gin and tequila categories, led by Gordon’s and Don Julio.
Key financials ($ million): Africa

| 2023 re- presented⁽¹⁾ | Exchange | Reclassific ation | Acquisitions and disposals | Organic movement | Hyperinfla tion(2) | 2024 | Reported movement %
Net sales | 2,039 | (518) | — | — | 235 | 22 | 1,778 | (13)
Marketing | 235 | (53) | (12) | (1) | 35 | 1 | 205 | (13)
Operating profit before exceptional items | 289 | (222) |  | (11) | 86 | (11) | 131 | (55)
Exceptional operating items(3) | (55) |  |  |  |  |  | — |
Operating profit | 234 |  |  |  |  |  | 131 | (44)

(1)See pages 238-240 for an explanation under Accounting information and policies.
(2)See pages 239-240 and 312-314 for details on hyperinflation adjustments.
(3) For further details on exceptional operating items see page s 64 and 246-250.
Business review (continued)
58

| Organic volume movement | Reported volume movement | Organic net sales movement | Reported net sales movement
Markets and categories: | % | % | % | %
Africa(1) | (6) | (2) | 12 | (13)
East Africa | 1 | 1 | 9 | —
Africa Regional Markets(1) | (6) | (2) | 6 | (26)
Nigeria | (18) | (18) | 31 | (41)
South Africa | (17) | 14 | (11) | 32
Spirits(1) | (16) | (9) | (2) | (4)
Beer(1) | 4 | 4 | 19 | (16)
Ready to drink(1) | 2 | 8 | 35 | (24)
Key brands(2): |  |  |  |
|  | Organic volume movement(3) | Organic net sales movement | Reported net sales movement
|  | % | % | %
Guinness |  | (1) | 16 | (33)
Senator |  | 26 | 29 | 15
Malta Guinness |  | (3) | 44 | (22)
Johnnie Walker |  | (19) | (11) | (19)
Tusker |  | (6) | — | (7)
Serengeti |  | (1) | 4 | (3)
Smirnoff |  | (19) | (9) | (22)

Africa contributed |  | Africa organic net sales grew
9% of Diageo reported net sales in fiscal 24 |  | 12% in fiscal 24

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement includes impacts from acquisitions and/or disposals. For further details see pages 311-321.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Organic equals reported volume movement, except for Guinness which remained flat.
Business review (continued)
59
Corporate
Performance 2024
Sales and net sales
Corporate net sales principally arise from visitor centers and the global licensing of Diageo brands and trademarks. Corporate net sales
were $123 million in the year ended 30 June 2024, an increase of $19 million. Net sales were favorably impacted by an organic
increase of $13 million partially offset by $6 million exchange rate movement gain.
Operating costs
Corporate operating costs comprise central costs, including finance, marketing, corporate relations, human resources and legal, as well
as certain information systems, facilities and employee costs that are not allocable to the geographical segments or to the Supply Chain
and Procurement. Operating costs were $366 million in the year ended 30 June 2024 a decrease of $31 million compared to operating
costs of $397 million in the year ended 30 June 2023. The $31 million decrease in costs in the year ended 30 June 2024 was
principally a result of favourable exchange rate movements of $22 million.
Performance 2023
Sales and net sales
Corporate net sales principally arise from visitor centers and the global licensing of Diageo brands and trademarks. Corporate net sales
were $104 million in the year ended 30 June 2023, an increase of $34 million. Net sales were favorably impacted by an organic
increase of $44 million partially offset by $10 million exchange rate movement loss.
Operating costs
Corporate operating costs comprise central costs, including finance, marketing, corporate relations, human resources and legal, as well
as certain information systems, facilities and employee costs that are not allocable to the geographical segments or to the Supply Chain
and Procurement. Operating costs were $397 million in the year ended 30 June 2023 an increase of $80 million compared to operating
costs of $317 million in the year ended 30 June 2022. The $31 million increase in costs in the year ended 30 June 2023 was principally
a result of increased staff & IT costs and unfavourable exchange rate movements of $41 million.
Business review (continued)
60
Category and brand review

Key categories: | Organic volume movement(1) % | Organic net sales movement % | Reported net sales movement % | Reported net sales by category %
Spirits(2) | (5) | (4) | (2) | 78
Scotch | (7) | (10) | (6) | 24
Tequila | (4) | (7) | (7) | 11
Vodka(3)(4) | (9) | (7) | (6) | 9
Canadian whisky(5) | (2) | (1) | (1) | 6
Rum(4) | (11) | (6) | (2) | 5
Liqueurs | (2) | 2 | 3 | 5
Gin(4) | (10) | (8) | 2 | 5
IMFL whisky(5) | 5 | 10 | 2 | 4
Chinese white spirits(5) | 32 | 27 | 23 | 3
US whiskey(5) | (3) | 3 | 3 | 2
Beer | 5 | 14 | 3 | 16
Ready to drink | (7) | (1) | (10) | 4

Reported volume by category | Reported net sales by category | Reported marketing spend by category

n | Scotch | n | Vodka | n | US whiskey | n | Canadian whisky | n | Rum | n | IMFL whisky
n | Liqueurs | n | Gin | n | Tequila | n | Beer | n | Ready to drink | n | Other

(1)Organic equals reported volume movement except for spirits (7)%, rum (10)%, gin (2)%, IMFL whisky (7)%, US whiskey (2)%, and ready to drink (4)%.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Vodka includes Ketel One Botanical.
(4)Vodka, rum and gin include IMFL variants.
(5)See pages 50-51 for details of Canadian whisky, US whiskey and pages 54-55 for details of IMFL whisky and Chinese white spirits.
Business review (continued)
61

Key brands(1):
| Organic volume movement(2) % | Organic net sales movement % | Reported net sales movement %
Johnnie Walker | (5) | (6) | (2)
Guinness | 5 | 15 | 6
Don Julio | 7 | 3 | 4
Crown Royal | — | (1) | (1)
Smirnoff | (7) | (3) | (3)
Baileys | (1) | 1 | 2
Casamigos(3) | (15) | (20) | (20)
Captain Morgan | (7) | (5) | (4)
Shui Jing Fang(4) | 32 | 27 | 23
Scotch malts | (9) | (14) | (14)
McDowell's | (2) | 3 | 1
Buchanan’s | (9) | (15) | (7)
Gordon's | (11) | (6) | 20
Tanqueray | (11) | (11) | (10)
Ketel One(5) | (5) | (5) | (5)
Bulleit whiskey(6) | 6 | 11 | 11
Cîroc vodka | (23) | (26) | (26)
Old Parr | (13) | (21) | (12)
Yenì Raki | (4) | 19 | 53
Black & White | (11) | (7) | (4)
JεB | (8) | (10) | (5)
Bundaberg | (3) | (7) | (9)

(1)Brands excluding ready to drink, non-alcoholic variants and beer except Guinness.
(2)Organic equals reported volume movement, except for Guinness 4% and Gordon's 5%.
(3)Casamigos trademark includes both tequila and mezcal.
(4)Growth figures represent total Chinese white spirits of which Shui Jing Fang is the principal brand.
(5)Ketel One includes Ketel One vodka and Ketel One Botanical.
(6)Bulleit whiskey excludes Bulleit Crafted Cocktails.
Business review (continued)
62
Additional financial information
Year ended 30 June 2024

| Reported 2023 | Exceptional operating items (c) | Exchange (a) | Acquisitions and disposals (b) | Organic movement(2) | Fair value remeasure- ment (d) | Reclassifi- cation | Hyper- inflation(2) | Reported 2024
Key financials - certain line items | re-presented(1) $ million | $ million | $ million | $ million | $ million | $ million | $ million | $ million | $ million
Sales | 28,270 | — | (654) | (381) | 168 | — | — | 488 | 27,891
Excise duties | (7,715) | — | 230 | 313 | (297) | — | — | (153) | (7,622)
Net sales | 20,555 | — | (424) | (68) | (129) | — | — | 335 | 20,269
Cost of sales | (8,289) | 23 | 388 | 5 | 25 | (16) | — | (207) | (8,071)
Gross profit | 12,266 | 23 | (36) | (63) | (104) | (16) | — | 128 | 12,198
Marketing | (3,663) | — | 19 | (18) | (7) | — | 12 | (34) | (3,691)
Other operating items | (3,056) | 799 | 9 | 38 | (193) | 2 | (12) | (93) | (2,506)
Operating profit | 5,547 | 822 | (8) | (43) | (304) | (14) | — | 1 | 6,001
Other line items: |  |  |  |  |  |  |  |  |
Non-operating items | 364 |  |  |  |  |  |  |  | (70)
Taxation (e) | (1,163) |  |  |  |  |  |  |  | (1,294)

(1)See pages 238-240 for an explanation under Accounting information and policies.
(2)For the definition of organic movement and hyperinflation, see page s 311-321.
(i)Reported figures in the table above have been extracted from the income statement for the years ended 30 June 2023 and 30 June 2024.
(a) Exchange
The impact of movements in exchange rates on reported figures for operating profit was principally in respect of the unfavourable
exchange impact of the weakening of the Nigerian naira, the Turkish lira and the Kenyan shilling, partially offset by the favourable
impact of the Mexican peso and sterling against the US dollar.
The effect of movements in exchange rates and other movements on profit before exceptional items and taxation for the year ended 30
June 2024 is set out in the table below.

| Gains/ (losses) $ million
Translation impact | (37)
Transaction impact | 29
Operating profit before exceptional items | (8)
Net finance charges – translation impact | 22
Net finance charges – transaction impact | (24)
Net finance charges(1) | (2)
Associates – translation impact | 15
Profit before exceptional items and taxation | 5

(1) For more information about Finance income and charges please see page 252-253.

| Year ended 30 June 2024 | Year ended 30 June 2023
Exchange rates |  |
Translation $1 = | £0.80 | £0.83
Transaction $1 = | £0.82 | £0.77
Translation $1 = | €0.93 | €0.96

Business review (continued)
63
(b) Acquisitions and disposals
The acquisitions and disposals movement in the year ended 30 June 2024 was primarily attributable to the acquisition of Don Papa
Rum and to the disposal of Windsor Global Co., Ltd. and Guinness Cameroun S.A.
See pages 229-232 for further details.
(c) Exceptional items
In the year ended 30 June 2024, exceptional operating items were a gain of $56 million (2023 – a loss of $766 million), mainly due to
the reversal of the Shui Jing Fang brand impairment (a gain of $379 million) partially offset by an impairment charge in respect of the
Chase brand and goodwill and tangible fixed assets (a charge of $101 million), an impairment charge in respect of certain brands in
the US ready to drink portfolio (a charge of $54 million), various dispute and litigation matters (a charge of $107 million) and the
supply chain agility programme (a charge of $61 million). In the year ended 30 June 2023, exceptional operating items were a loss of
$766 million, mainly due to charges related to brand impairment ($613 million) and the supply chain agility programme ($121
million).
In the year ended 30 June 2024, exceptional non-operating items were a loss of $70 million (2023 – a gain of $364 million), mainly driven
by the loss on the sale of the Windsor business in Korea ($58 million). In the year ended 30 June 2023, exceptional non-operating items
were a gain of $364 million, mainly driven by the gain in relation to the sale of Guinness Cameroun S.A. ($343 million).
See pages 260-264 for further details.
(d) Fair value remeasurement
The adjustment to cost of sales reflects the elimination of fair value changes for biological assets in respect of growing agave plants of
$16 million loss for the year ended 30 June 2024 (2023 – $nil). The adjustments to marketing and other operating expenses were the
elimination of fair value changes to contingent consideration liabilities and earn-out arrangements in respect of prior year acquisitions
of $155 million gain for the year ended 30 June 2024 (2023 – $153 million gain).
(e) Taxation
The reported tax rate for the year ended 30 June 2024 was 23.7% compared with 20.6% for the year ended 30 June 2023.
Included in the tax charge of $1,294 million in the year ended 30 June 2024 is a net exceptional tax charge of $24 million, including
an exceptional tax charge of $95 million in relation to the reversal of the Shui Jing Fang brand impairment charge, partly offset by a
tax credit of $19 million in respect of the Chase brand impairment and the related tangible fixed assets, a tax credit of $13 million
comprised of brand impairments in the US ready to drink portfolio, a tax credit of $23 million in relation to various dispute and
litigation matters in North America and a tax credit of $15 million in respect of the supply chain agility programme.
Included in the tax charge of $1,163 million in the year ended 30 June 2023 is a net exceptional tax credit of $226 million, including
an exceptional tax credit of $154 million in respect of brand impairments, mainly the McDowell's brand, a tax credit of $68 million in
respect of the deductibility of fees paid to Diageo plc for guaranteeing externally issued debt of its US group entities, a tax credit of
$27 million in respect of the supply chain agility programme, partly offset by a tax charge of $52 million in respect of the sale of
Guinness Cameroun S.A.
The tax rate before exceptional items for the year ended 30 June 2024 was 23.2% compared with 23.0% for the year ended 30 June
2023.
We expect the tax rate before exceptional items for the year ending 30 June 2025 to be in the region of 24%.
(f) Dividend
The group aims to increase the dividend each year. The decision in respect of the dividend is made with reference to the dividend
cover, as well as current performance trends, including sales and profit after tax together with cash generation. Diageo targets dividend
cover (the ratio of basic earnings per share before exceptional items to dividend per share) within the range of 1.8 - 2.2 times. For the
year ended 30 June 2024, dividend cover was 1.7 times. The recommended final dividend for the year ended 30 June 2024, to be put
to the shareholders for approval at the Annual General Meeting is 62.98 cents, an increase of 5% on the prior year final dividend. This
would bring the recommended full year dividend to 103.48 cents per share, an increase of 5% on the prior year. The group will keep
future returns of capital, inclu ding dividends, under review through the year ending 30 June 2025, to ensure Diageo’s capital is
allocated in the best way to maximise value for the business and its stakeholders.
Subject to approval by shareholders, the final dividend will be paid to holders of ordinary shares and US ADRs on the register as of
Business review (continued)
64
30 August 2024. The ex-dividend date will be 29 August 2024 for holders of ordinary shares, and 30 August 2024 for US ADR
holders. Holders of ordinary shares will receive their dividends in sterling unless they elect to receive their dividends in US dollar by
20 September 2024. The dividend per share in pence to be paid to ordinary shareholders will be announced on 3 October 2024 and
will be determined by the actual foreign exchange rates achieved by Diageo buying forward contracts for Sterling currency, entered
into during the three days preceding the announcement. The final dividend, once approved by shareholders, will be paid to both
holders of ordinary shares and US ADRs on 17 October 2024. A dividend reinvestment plan is available to holders of ordinary shares
in respect of the final dividend and the plan notice date is 20 September 2024.
(g) Return of capital
Diageo completed a total of $1.0 billion return of capital during the year ended 30 June 2024. This programme followed the successful
completion of Diageo's previous return of capital programme that ended on 2 June 2023, in which $0.6 billion of capital (announced as
up to £0.5 billion on 26 January 2023) was returned to shareholders.
In the year ended 30 June 2024, the company purchased 27.4 million ordinary shares (2023 – 37.8 million) at a cost of $987 million,
including transaction costs (2023 – $1,673 million including transaction costs of $16 million). All shares purchased under the share
buyback programme were cancelled.
Business review (continued)
65
Movements in net borrowings and equity

Movements in net borrowings | 2024 | 2023
| $ million | re-presented(1) $ million
Net borrowings at the beginning of the year | (19,582) | (17,107)
Free cash flow (2) | 2,609 | 2,235
Movements in loans and other investments | (47) | (68)
Acquisitions (3) | (6) | (404)
Investment in associates (3) | (133) | (112)
Sale of businesses and brands (4) | 87 | 559
Share buyback programme (5) | (987) | (1,673)
Net sale of own shares for share schemes (6) | 21 | 36
Purchase of treasury shares in respect of subsidiaries | (10) | —
Dividend paid to non-controlling interests | (117) | (117)
Net movements in bonds (7) | 558 | 887
Purchase of shares of non-controlling interests (8) | (223) | (178)
Net movements in other borrowings (9) | (106) | 69
Equity dividend paid | (2,242) | (2,065)
Net decrease in cash and cash equivalents | (596) | (831)
Net increase in bonds and other borrowings | (453) | (958)
Exchange differences (10) | (199) | (646)
Other non-cash items | (187) | (40)
Net borrowings at the end of the year | (21,017) | (19,582)

(1)See pages 238-240 for an explanation under Accounting information and policies.
(2) See page 316 for the analysis of free cash flow.
(3) In the year ended 30 June 2024, Diageo paid $6 million in respect of prior year acquisitions (2023 – $31 million). In the year ended
30 June 2023, acquisitions also included upfront payments of €246 million ($261 million) for Kanlaon Limited and Chat Noir Co. Inc.
(the owner of Don Papa Rum) and $102 million for Balcones Distilling.
In the years ended 30 June 2024 and 2023, investment in associates included additional investments in a number of Distill Ventures
associates.
(4) In the year ended 30 June 2024, sale of businesses and brands included a net cash consideration, net of disposal costs, of $88
million for the disposal of Windsor Global Co., Ltd. In the year ended 30 June 2023, sale of businesses and brands included the
disposal of Guinness Cameroun S.A. beer business for a net cash consideration, net of disposal costs, of $438 million and the disposal
of the Popular brands of Diageo’s USL business, for a cash consideration, net of disposal costs, of $92 million.
(5) See page 65 and 298-299 for details of Diageo's return of capital programmes.
(6) Net sale of own shares comprised receipts from employees on the exercise of share options of $38 million (2023 – $63 million)
less purchase of own shares for the future settlement of obligations under the employee share option schemes of $17 million (2023 –
$27 million).
(7) In the year ended 30 June 2024, the group issued bonds of $1,700 million ($1,690 million - net of discount and fee) consisting of
$800 million 5.375% fixed rate notes due 2026, $900 million 5.625% fixed rate notes due 2033, €500 million ($535 million - net of
discount and fee) floating rate notes due 2026 and repaid bonds of $500 million and €600 million ($632 million) and €500 million
($535 million). In the year ended 30 June 2023, the group issued bonds of $2,000 million ($1,989 million - net of discount and fee)
consisting of $500 million 5.2% fixed rate notes due 2025, $750 million 5.3% fixed rate notes due 2027, $750 million 5.5% fixed rate
notes due 2033 and €500 million 3.5% fixed rate notes due 2025 ($548 million - net discount and fee), and repaid bonds of $300
million and $1,350 million.
(8) On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC to purchase the 50% of the share capital of DeLeon Holdco
LLC that Diageo did not already own. On 24 March 2023, Diageo completed the purchase of an additional 14.97% of the share capital
of East African Breweries PLC (EABL). This increased Diageo's controlling shareholding position in EABL from 50.03% to 65.00%.
(9) In the year ended 30 June 2024, the net movements in other borrowings principally arose from the $229 million increase in
commercial paper offset by cash outflows of foreign currency swaps and forwards of $124 million and $104 million repayment of
lease liabilities. In the year ended 30 June 2023, the net movements in other borrowings principally arose from the increase in
Business review (continued)
66
commercial paper, collateral and bank loan balances offset by cash outflows of foreign currency swaps and forwards and repayment of
lease liabilities.
(10) In the year ended 30 June 2024, exchange losses arising on net borrowings of $199 million were primarily driven by adverse
exchange movements on sterling and euro denominated borrowings and unfavourable movements on cash and cash equivalents
partially offset by favourable movements on foreign currency swaps and forwards. In the year ended 30 June 2023, exchange losses
arising on net borrowings of $646 million were primarily driven by unfavourable exchange movements on sterling and euro
denominated borrowings and unfavourable exchange movements on cash and cash equivalents, foreign currency swaps and forwards.

Movements in equity | 2024 | 2023
| $ million | re-presented(1) $ million
Equity at the beginning of the year | 11,709 | 11,511
Adjustment to 2023 closing equity in respect of hyperinflation in Ghana (2) | 51 | —
Adjusted equity at the beginning of the year | 11,760 | 11,511
Profit for the year | 4,166 | 4,479
Exchange adjustments (3) | (645) | (358)
Remeasurement of post-employment benefit plans net of taxation | (61) | (562)
Purchase of shares of non-controlling interests (4) | (223) | (178)
Hyperinflation adjustments net of taxation (2) | 365 | 180
Associates' transactions with non-controlling interests | — | (8)
Dividend declared to non-controlling interests | (121) | (117)
Equity dividend declared | (2,243) | (2,071)
Share buyback programme (5) | (997) | (1,543)
Other reserve movements | 69 | 376
Equity at the end of the year | 12,070 | 11,709

(1)See pages 238-240 for an explanation under Accounting information and policies.
(2) See pages 239-240 and 312-314 for details on hyperinflation adjustments.
(3) Exchange movements in the year ended 30 June 2024 primar ily arose from exchange losses driven by the Turkish lira, the Mexican
peso, sterling and the euro. Exchange movements in the year ended 30 June 2023 primarily arose from exchange losses driven by
sterling, the Turkish lira, the Indian rupee and the Chinese yuan, partially offset by gains in the euro, the Mexican peso, and foreign
exchange on borrowings designated into net investment hedge before the functional currency change.
(4) On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC to purchase the 50% of the share capital of DeLeon Holdco
LLC that Diageo did not already own. On 24 March 2023, Diageo completed the purchase of an additional 14.97% of the share capital
of East African Breweries PLC (EABL). This increased Diageo's controlling shareholding position in EABL from 50.03% to 65.00%.
(5) See page 65 for details of Diageo's return of capital programmes.
Post-employment benefit plans
The net surplus of the group’s post-employment benefit plans decreased by $22 million from $739 million at 30 June 2023 to $717
million at 30 June 2024. The decrease in net surplus was predominantly attributable to the adverse change in the market value of assets
held by the post-employment benefit plans in the UK that was partially offset by the favourable change in the inflation rate in the
United Kingdom (from 2.7% to 2.6%).
Total cash contributions by the group to all post-employment benefit plans in the year ending 30 June 2025 are estimated to be
approximately $55 million.
Business review (continued)
67
Liquidity and capital resources
1. Sources and uses of liquidity
The primary source of the group’s liquidity over the last three financial years has been cash generated from operations. These funds
have generally been used to pay interest, taxes and dividends, and to fund capital expenditure and acquisitions, and, together with the
group’s current strong cash position, are expected to continue to fund future operating and capital needs. The group also issues short-
term commercial paper regularly in order to finance its day-to-day operations, and accesses the term debt capital markets regularly to
refinance maturing bonds each year and to manage liquidity.
The table below sets forth the group’s available undrawn committed bank facilities as at 30 June 2024, 30 June 2023 and 30 June
2022.

| 30 June 2024 | 30 June 2023 | 30 June 2022
| $ million | re-presented $ million | re-presented $ million
Expiring within one year | 625 | 125 | 960
Expiring between one and two years | 1,040 | 625 | 125
Expiring after two years | 1,585 | 2,625 | 2,290
| 3,250 | 3,375 | 3,375

The facilities can be used for general corporate purposes and, together with cash and cash equivalents, support the group’s commercial
paper programmes.
There are no financial covenants on the group’s material short- and long-term borrowings. Certain of these borrowings contain cross
default provisions and negative pledges.
The committed bank facilities are subject to a single financial covenant, being minimum interest cover ratio of two times (defined as
the ratio of operating profit before exceptional items, aggregated with share of after tax results of associates and joint ventures, to net
interest charges). They are also subject to pari passu ranking and negative pledge covenants.
Any non-compliance with covenants underlying Diageo’s financing arrangements could, if not waived, constitute an event of default
with respect to any such arrangements, and any non-compliance with covenants may, in particular circumstances, lead to an
acceleration of maturity on certain borrowings and the inability to access committed facilities. Diageo was in full compliance with its
financial, pari passu ranking and negative pledge covenants in respect of its material short- and long-term borrowings throughout each
of the years presented.
2. Analysis of cash flows
The table below sets forth the group’s cash flows for the year ended 30 June 2024, 30 June 2023 and 30 June 2022.

| 30 June 2024 | 30 June 2023 | 30 June 2022
| $ million | re-presented $ million | re-presented $ million
Net cash inflow from operating activities | 4,105 | 3,636 | 5,213
Net cash outflow from investing activities | (1,595) | (1,426) | (1,792)
Net cash outflow from financing activities | (3,106) | (3,041) | (4,373)
Net decrease in net cash and cash equivalents | (596) | (831) | (952)
Exchange difference | (33) | (76) | (38)
Reclassification to asset held for sale | (30) | — | —
Net cash and cash equivalents at beginning of period | 1,768 | 2,675 | 3,665
Net cash and cash equivalents at end of period | 1,109 | 1,768 | 2,675

Net cash inflow from operating activities in fiscal 24 was $4,105 million (2023 – $3,636 million), an increase of $469 million
compared to fiscal 23, pri marily driven by a year-on-year decrease of $646 million in working capital outflows and a $454 million
growth in operating profit, offset by a decrease of $804 million in depreciation, amortisation and impairment charges in operating
profit, driven by lower exceptional impairment charges and reversals in fiscal 24.
Net cash inflow from operating activities in fiscal 23 was $3,636 million (2022 – $5,213 million), a decrease of $1,577 million
compared to fiscal 22, primarily driven by a year-on-year increase of $1,173 million in working capital outflows and an increase of
$412 million tax and interest payments.
Business review (continued)
68
Net cash outflow from investing activities in fiscal 24 was $1,595 million (2023 – $1,426 million), a net increase in outflow of $169
million compared to fiscal 23, primarily driven by a decrease in net consideration received in respect of sale of businesses from $559
million to $87 million, offset by a decrease in net consideration paid in respect of business acquisitions from $516 million to $139
million.
Net cash outflow from investing activities in fiscal 23 was $1,426 million (2022 – $1,792 million), a net decrease in outflow of $366
million compared to fiscal 22, primarily driven by an increase in net consideration received in respect of sale of businesses from $102
million to $559 million, offset by an increase in net consideration paid in respect of business acquisitions from $364 million to $516
million.
N et cash outflow from financing activities in fiscal 24 was $3,106 million (2023 – $3,041 million), a net increase in outflow of $65
million compared to fiscal 23. This change was driven by a decrease in net inflow in relation to bond issuances and repayments from
$887 million to $558 million and an increase in equity dividend payments from $2,065 million to $2,242 million, mainly offset by the
decreased level of share buyback programme related cash outflows from $1,673 million to $987 million.
Net cash outflow from financing activities in fiscal 23 was $3,041 million (2022 – $4,373 million), a net decrease in outflow of $1,332
million compared to fiscal 22. This change was largely driven by the decreased level of share buyback programme related cash
outflows from $2,985 million to $1,673 million and a decrease in equity dividend payments from $2,300 million to $2,065 million,
partially offset by a decrease in net inflow in relation to bond issuances and repayments from $911 million to $887 million.
The operating, investing and financing activities described above resulted in a decrease in net cash and cash equivalents of $659
million, from $1,768 million at 30 June 2023 to $1,109 million at 30 June 2024 (2023 – decrease of $907 million, 2022 – decrease of
$990 million).
3. Analysis of borrowings
The group policy with regard to the expected maturity profile of borrowings of group finance companies is to limit the proportion of
such borrowings maturing within 12 months to 50% of gross borrowings less money market demand deposits, and the level of
commercial paper to 30% of gross borrowings less money market demand deposits. In addition, it is group policy to maintain backstop
facility terms from relationship banks to support commercial paper obligations.
The group’s gross borrowings and net borrowings are measured at amortised cost with the exception of borrowings designated in fair
value hedge relationships, interest rate hedging instruments and foreign currency swaps and forwards. For borrowings designated in
fair value hedge relationships, Diageo recognises a fair value adjustment for the risk being hedged in the balance sheet, whereas
interest rate hedging instruments and foreign currency swaps and forwards are measured at fair value.
The table below sets forth the group’s gross borrowings and net borrowings as at 30 June 2024, 30 June 2023 and 30 June 2022.

| 30 June 2024 | 30 June 2023 | 30 June 2022
| $ million | re-presented $ million | re-presented $ million
Overdrafts | (21) | (45) | (90)
Other borrowings due within one year | (2,864) | (2,097) | (1,752)
Borrowings due within one year | (2,885) | (2,142) | (1,842)
Borrowings due between one and three years | (4,873) | (4,437) | (3,408)
Borrowings due between three and five years | (4,222) | (3,620) | (3,177)
Borrowings due after five years | (9,521) | (10,592) | (10,958)
Fair value of foreign currency forwards and swaps | 334 | 436 | 430
Fair value of interest rate hedging instruments | (376) | (476) | (342)
Lease liabilities | (604) | (564) | (575)
Gross borrowings | (22,147) | (21,395) | (19,872)
Offset by: |  |  |
Cash and cash equivalents | 1,130 | 1,813 | 2,765
Net borrowings | (21,017) | (19,582) | (17,107)

The table below sets forth the percentage of the group’s gross borrowings and cash and cash equivalents by currency as at 30 June
2024.
Business review (continued)
69

| Total | US dollar % | Sterling % | Euro % | Indian Rupee % | Chinese Yuan % | South Korean won % | Other %
Gross borrowings | (22,147) | 43.00% | 22.00% | 26.00% | —% | 4.00% | —% | 5.00%
Cash and cash equivalents | 1,130 | 12.00% | 3.00% | 5.00% | 15.00% | 23.00% | 4.00% | 38.00%

Based on average monthly net borrowings and net interest charge, the effective interest rate for the year ended 30 June 2024 was
4.3%. For this calculation, net interest charge excludes fair value adjustments to derivative financial instruments and borrowings and
average monthly net borrowings include the impact of interest rate swaps that are no longer in a hedge relationship but exclude the
market value adjustment for cross currency interest rate swaps.
For the year ended 30 June 2024, the group issued bonds of $1,700 million ($1,690 million - net of discount and fee) consisting of
$800 million 5.375% fixed rate notes due 2026, $900 million 5.625% fixed rate notes due 2033, €500 million ($535 million - net of
discount and fee) floating rate notes due 2026 and repaid bonds of $500 million and €600 million ($632 million) and €500 million
($535 million). In the year ended 30 June 2023, the group issued bonds of $2,000 million ($1,989 million - net of discount and fee)
consisting of $500 million 5.2% fixed rate notes due 2025, $750 million 5.3% fixed rate notes due 2027, $750 million 5.5% fixed rate
notes due 2033 and €500 million 3.5% fixed rate notes due 2025 ($548 million - net discount and fee), and repaid bonds of $300
million and $1,350 million. In the year ended 30 June 2022, the group issued bonds of €1,650 million ($1,800 million - net of discount
and fee) and £892 million ($1,171 million - net of discount and fee), and repaid bonds of €900 million ($1,060 million) and $1,000
million.
The principal components of the $1,435 million increase in net borrowings from 30 June 2023 to 30 June 2024 were mainly the
$2,609 million of free cash flow and $558 million net movements in bonds, partially offset by $2,242 million equity dividends and
$139 million in respect of the acquisitions.
The principal components of the $2,475 million increase in net borrowings from 30 June 2022 to 30 June 2023 were mainly the
$2,235 million of free cash flow and $887 million net movements in bonds, partially offset by $2,066 million equity dividends and
$516 million in respect of the acquisitions.
For information on the maturity profile of net borrowings and a further description of net borrowings, please see note 17 – Net
borrowings in the consolidated financial statements.
For information on the use of financial instruments including for hedging purposes, please see “Note 16 – Financial instruments” in
the consolidated financial statements.
The group’s management is committed to enhancing shareholder value in the long-term, both by investing in the business and brands
so as to deliver continued improvement in the return from those investments and by managing the capital structure. Diageo manages
its capital structure to achieve capital efficiency, provide flexibility to invest through the economic cycle and give efficient access to
debt markets at attractive cost levels. This is achieved by targeting an adjusted net borrowings (net borrowings aggregated with post-
employment benefit liabilities) to adjusted EBITDA leverage of 2.5 - 3.0 times, this range for Diageo being currently broadly
consistent with an A-band credit rating. Diageo would consider operating outside of this range in order to effect strategic initiatives
within its stated goals, which could have an impact on its rating. If Diageo’s leverage was to be negatively impacted by the financing
of an acquisition, it would seek over time to return to the range of 2.5 - 3.0 times. The group regularly assesses its debt and equity
capital levels against its stated policy for capital structure. As at 30 June 2024 the adjusted net borrowings of $21,446 million (2023 -
$20,053 million) to adjusted EBITDA ratio was 3.0 (2023 - 2.7) times. For this calculation, net borrowings are adjusted by post-
employment benefit liabilities before tax of $429 million (2023 - $471 million) whilst adjusted EBITDA of $7,037 million (2023 -
$7,353 million) comprises operating profit excluding exceptional operating items and depreciation, amortisation and impairment and
includes share of after tax results of associates and joint ventures.
See page 294 for the reconciliation and calculation of the adjusted net borrowing to adjusted EBITDA ratio.
The group’s funding, liquidity and exposure to foreign currency, interest rate risks, financial credit risk and commodity price risk are
conducted within a framework of board approved policies and guidelines. The group purchases insurance for commercial or, where
required, for legal or contractual reasons. In addition, the group retains some insurable risk where external insurance is not considered
to be an economic means of mitigating this risk. Loan, trade and other receivables exposures are managed locally in the operating
units where they arise and credit limits are established as deemed appropriate for the customer.
Business review (continued)
70
b) The following bonds were issued and repaid:

| 30 June 2024 | 30 June 2023 | 30 June 2022
| $ million | re-presented $ million | re-presented $ million
Issued |  |  |
€ denominated | 535 | 548 | 1,800
£ denominated | — | — | 1,171
$ denominated | 1,690 | 1,989 | —
Repaid |  |  |
€ denominated | (1,167) | — | (1,060)
$ denominated | (500) | (1,650) | (1,000)
| 558 | 887 | 911

Business review (continued)
71
4. Contractual obligations and other commitments

| Payments due by period
As at 30 June 2024 | Less than 1 year $ million | 1-3 years $ million | 3-5 years $ million | More than 5 years $ million | Total $ million
Long-term debt obligations | 2,388 | 4,992 | 4,258 | 9,812 | 21,450
Interest obligations | 791 | 1,043 | 789 | 1,866 | 4,489
Credit support obligations | 14 | — | — | — | 14
Purchase obligations | 2,413 | 1,009 | 389 | 37 | 3,848
Commitments for short-term leases and leases of low-value assets | 16 | 6 | 1 | — | 23
Provisions and other non-current payables | 101 | 225 | 187 | 192 | 705
Lease obligations | 114 | 178 | 117 | 310 | 719
Capital commitments | 780 | 3 | — | — | 783
Other financial liabilities | 198 | — | — | — | 198
Total | 6,815 | 7,456 | 5,741 | 12,217 | 32,229

Long-term debt obligations comprise the principal amount of borrowings (excluding foreign currency swaps) with an original maturity
of greater than one year. Interest obligations comprise interest payable on these borrowings and are calculated based on the fixed
amounts payable and where the interest rate is variable on an estimate of what the variable rates will be in the future. Credit support
obligations represent liabilities to counterparty banks in respect of cash received as collateral under credit support agreements.
Purchase obligations include various long-term purchase contracts entered into for the supply of raw materials, principally bulk
whisk(e)y, cereals, cans and glass bottles. Contracts are used to guarantee the supply of raw materials over the long-term and to enable
a more accurate prediction of costs of raw materials in the future. For certain provisions, discounted numbers are disclosed.
Corporate tax payable of $136 million and deferred tax liabilities of $2,947 million are not included in the table above, as the ultimate
timing of settlement cannot be reasonably estimated.
Management believe that it has sufficient funding for its working capital requirements.
Neither Diageo plc nor any member of the Diageo group has any off-balance sheet financing arrangements that currently have or are
reasonably likely to have a material future effect on the group’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditure or capital resources.
For more information on commitments and contingencies, please see note 19 – Contingent liabilities and legal proceedings in the
consolidated financial statements.
Business review (continued)
72
5. Capital repayments
Authorisation was given by shareholders on 28 September 2023 to purchase a maximum of 224,704,974 ordinary shares at a minimum
price of 28 101/108 pence and a maximum price of the higher of (a) 105% of the average market value of the company's ordinary share s
for the five business days prior to the day the purchase is made and (b) the higher of the price of the last independent trade and the
highest current independent bid on the trading venue where the purchase is carried out. The programme expires at the conclusion of
the next Annual General Meeting or on 27 December 2024, if earlier.
Diageo completed a total of $1.0 billion return of capital during the year ended 30 June 2024. This programme followed the
successful completion of Diageo's previous return of capital programme that ended on 2 June 2023, in which $0.6 billion of capital
(announced as up to £0.5 billion on 26 January 2023) was returned to shareholders.
During the year ended 30 June 2024, the group purchased 28 million ordinary shares (2023 – 38 million; 2022 – 61 million),
representing approximately 1.1% of the issued ordinary share capital (2023 – 1.5%; 2022 – 2.4%) at an average price of 2918 pence
(3644 cents) per share, and an aggregate cost of $987 million, including transaction costs (2023 – 3616 pence (4382 cents) per share,
and an aggregate cost of $1,673 million, including $16 million of transaction costs; 2022 – 3709 pence (4842 cents) per share, and an
aggregate cost of $2,985 million, including $21 million of transaction costs) under the share buyback programme. The shares
purchased under the share buyback programmes were cancelled.
For further details about the shares purchased and the average price paid per share please refer to note 18 in the consolidated financial
statements.
Business review (continued)
73
Operating results 2023 (re-presented) compared with 2022 (re-presented)
This section contains a re-presented comparative discussion of our operating results for the years ended 30 June 2022 and 2023,
reflecting a change in the presentation currency of Diageo plc from sterling to US dollars.

Reported net sales growth 0.2% |  | Net cash from operating activities $3,636m
Organic net sales growth(1) 6.5% |  | Free cash flow(1)(2) $2,235m
Reported operating profit growth (5.9)% |  | Return on closing invested capital 38.3%
Organic operating profit growth(1) 7.0% |  | Return on average invested capital(1) 18.4%
Basic earnings per share 196.3 cents |  | Total shareholder return (2)%
Earnings per share before exceptional items(1) 196.5 cents |  |

(1) Organic net sales growth, organic operating profit growth, earnings per share before exceptional items, free cash flow and return on average invested capital are non-
GAAP measures. See definitions and reconciliation of non-GAAP measures to GAAP measures on page s 311-321.
(2) Definition of free cash flow has been redefined, see more details on page 316.
Business review (continued)
74

Our global reach | Our regional profile maximises the opportunity for growth in our sector. Where our products are sold each market is accountable for its own performance and driving growth.

(1) The above map is intended to illustrate general geographic regions where Diageo has a presence and/or in which its products are sold. It is not intended to imply
that Diageo has a presence in and/or that its products are sold in every country or territory within a geographic region.
(2) Based on reported net sales for the year ended 30 June 2023. Does not include corporate net sales of $104 million (2022 – $70 million).

Fiscal 23 | North America | Europe | Asia Pacific | Latin America and Caribbean | Africa
Volume (EUm) | 52.4 | 51.3 | 80.8 | 26.2 | 32.7
Reported net sales(1) ($ million) | 8,109 | 4,303 | 3,841 | 2,159 | 2,039
Reported operating profit(2) ($ million) | 3,104 | 1,300 | 523 | 783 | 234
Operating profit before exceptional items(3) ($ million) | 3,222 | 1,312 | 1,104 | 783 | 289
Water efficiency (litres per litre of product packaged) | 5.11 | 4.98 | 2.91 | 4.15 | 3.19
Total direct and indirect carbon emissions by weight (market/net based) (1,000 tonnes CO 2 e) | 83 | 194 | 9 | 26 | 89
Average number of employees(4) | 3,115 | 10,062 | 9,000 | 4,325 | 3,735

(1) Excluding corporate net sales of $104 million (2022 – $70 million).
(2) Excluding net corporate operating costs of $397 million (2022 – $317 million).
(3) Excluding exceptional operating charges of $766 million (2022 – $477 million) and net corporate operating costs of $397 million (2022 – $317 million).
(4) Employees have been allocated to the region in which they reside.
Business review (continued)
75
Production facilities
The company owns manufacturing production facilities across the globe, including distilleries, breweries, packaging plants, maturation
warehouses, cooperages, and distribution warehouses. Diageo’s brands are also produced at plants owned and operated by third parties
and joint ventures at several locations around the world. We believe that our facilities are in good condition and working order. We
have adequate capacity to meet our current needs, and, in the beer and spirit categories, we have undertaken activities to increase our
production capacity to address our anticipated future demand.
The major facilities with locations, principal activities, and products are presented in the below table.

| Location | Principal activities | Products
| United Kingdom | distilling, bottling, warehousing, cooperage | beer, scotch, gin, vodka, rum, ready to drink, non- alcoholic
| Ireland | distilling, brewing, bottling, warehousing | beer, liqueur, Irish whiskey, non-alcoholic
| Italy | distilling, bottling, warehousing | vodka, rum, ready to drink, non-alcoholic
| Türkiye | distilling, bottling, warehousing | raki, vodka, gin
| North America | distilling, bottling, warehousing | vodka, gin, rum, Canadian whisky, US whiskey, ready to drink
| Brazil | distilling, bottling, warehousing | cachaça, vodka, ready to drink
| Mexico | distilling, bottling, warehousing | tequila
| East Africa | distilling, brewing, bottling, packaging, warehousing | beer, rum, vodka, gin, whisky, brandy, liqueur
| Nigeria | distilling, brewing, bottling, packaging | beer, rum, vodka, gin
| South Africa | distilling, bottling, warehousing | rum, vodka, gin
| ARM | distilling, brewing, bottling, warehousing | beer, vodka, gin
| India | distilling, bottling, warehousing | rum, vodka, Indian-Made Foreign Liquor (IMFL), whisky, scotch, gin
| Australia | distilling, bottling, warehousing | rum, vodka, gin, ready to drink

For more details about our capital investments please see page 344-345.
Our route to consumer
We have five different route to consumer models across our business. Most of the regions employ four of the five high level models
defined below; however, how each model operates in certain countries will vary, as will the percentage of net sales delivered through
the respective models in each market.
Wholesalers and Distributors
Diageo sells to a wholesaler or distributor who also sells a range of other brands and categories directly to end outlets where
consumers can purchase our brands. Where required, this model may include a government control board (or similar), such as in
certain states in the US and Canada.
Modern Trade
Diageo sells directly to a customer who owns and manages retail outlets, who then in turn sells to consumers via their outlets.
eMarketplace
Diageo sells to a third-party digital market place customer where that customer sells to B2B customers and consumers.
Direct to Consumer
Diageo sells directly to consumers, predominantly through portals such as Thebar.com, which is a growing route to consumer model
for our business. It allows for direct interface with our consumers rather than through third-party sites as in the eMarketplace model
above.
Direct to Store
Diageo sells and delivers directly to end outlets rather than via a central purchasing customer as in the Modern Trade model above.
This model is less common than the other models. For example, it is used in Ireland for beer distribution.
Business review (continued)
76
Key performance indicators
Net sales ($ million)
Reported net sales grew 0.2%
Organic net sales grew 6.5%
Reported net sales grew 0.2%, driven by strong organic growth offset by unfavourable foreign exchange impacts.
Organic net sales growth of 6.5%, reflects 7.3 percentage points of positive price/mix and a decline in organic volume of 0.8%. Four
out of five regions delivered growth, despite lapping strong double-digit growth at the group level in fiscal 22. Price/mix was driven
by price increases and premiumisation.
Organic movement
(i
(1)Exchange rate movements reflect the adjustment to recalculate the reported results as if they had been generated at the prior period weighted average exchange
rates.
(2)See pages 239-240 and 312-314 for details of hyperinflation adjustment.
Operating profit ($ million)
Reported operating profit decreased 5.9%
Organic operating profit grew 7.0%
Reported operating profit decreased 5.9%, mainly driven by the negative impacts from exchange rate movements and the negative
impact of exceptional operating items, primarily non-cash impairments related to India and the supply chain agility programme. These
unfavourable items were largely offset by growth in organic operating profit and fair value remeasurements.
Organic operating profit grew 7.0%, ahead of organic net sales growth, driven by growth across all regions except North America.
(1)For further details on exceptional operating items see pages 94 and 246-250.
(2)Fair value remeasurements. For further details see page 94.
(3)See pages 239-240 and 312-314 for details of hyperinflation adjustment.
Business review (continued)
77
Operating margin (%)
Reported operating margin declined by 176bps
Organic operating margin expanded by 15 bps
Reported operating margin declined b y 176bps, with organic operating margin expansion more than offset by exceptional operating
items, negative impact of foreign exchange, acquisitions, disposals and other items.
Organic operating margin expanded by 15bps, reflecting disciplined cost management despite inflation. Strong operating margin
expansion in Asia Pacific, Africa and Latin America and Caribbean was partially offset by declines in North America and Europe.
Organic gross margin declined by 97bps, primarily driven by cost pressures. Price increases more than offset the absolute impact of
cost inflation.
Organic movement
15bps
(1)Operating margin in waterfall is rounded to nearest decimal place.
(2)For further details on exceptional operating items see pages 9 4 and 246-250.
(3)Fair value remeasurements and hyperinflation adjustment. For further details on fair value remeasurements see page 94. See pages 239-240 and 312-314 for details
of hyperinflation adjustment.
Basic earnings per share (cents)
Basic eps increased 6.3% from 184.6 cents to 196.3 cents
Basic eps before exceptional items(1) decreased 2.7% from 20 1.9 cents to 196.5 cents
Basic eps increased 11.7 cents, mainly driven by exceptional items and organic operating profit growth, partially offset by th e negative
impacts from exchange rate movements an d increased finance charges.
Basic eps before exceptional items decreased 5.4 cents.
(i
(1)See page 316 for explanation of the calculation and use of non-GAAP measures.
(2)For further details on exceptional items see pages 94 and 246-250.
(3)Includes finance charges net of tax.
(4)Excludes finance charges related to acquisitions, disposals, share buybacks and includes finance charges related to hyperinflation adjustments.
(5)Excludes tax related to acquisitions, disposals and share buybacks.
(6)Fair value remeasurements. For further details see page 94.
(7)Operating profit hyperinflation adjustment movement was $16 million compared to fiscal 22 (F23 – $30 million; F22 – $14 million).
Business review (continued)
78
Net cash from operating activities and free cash flow ($ million)(1)
Generated $3,636 million net cash from operating activities(2) and $2,235 million free cash flow
Net cash from operating activities was $3,636 million, a decrease of $1,577 million compared to fiscal 22. Free cash flow declined by
$1,544 million to $2,235 million.
Free cash flow declined as strong growth in operating profit were more than offset by unfavourable foreign exchange impacts, higher
year-on-year working capital outflows, tax payments and interest paid.
The higher year-on-year working capital outflow was primarily driven by normalisation of creditors relative to fiscal 22 as our growth
rate moderated in fiscal 23.
The additional tax payments were the result of increased profit impacting tax instalments and higher balancing payments. The increase
in interest paid reflects the higher interest rate environment globally.
(1) Definition of free cash flow has been redefined, see more details on page 316.
(2)Net cash from operating activities excludes net capex (2023 – $(1,401) million; 2022 – $(1,434) million).
(3)Exchange on operating profit before exceptional items.
(4)Operating profit excludes exchange, depreciation and amortisation, post employment charges of $38 million and other non-cash items.
(5)Working capital movement includes maturing inventory.
(6)Other items include dividends received from associates and joint ventures and post employment payments.
Return on average invested capital (%)(1)(2)
ROIC decreased (145)bps
ROIC decreased (145)bps, mainly driven by increased capex, maturing stock investment and continued portfolio optimisation through
acquisitions and disposals. The decline was partially offset by higher organic operating profit growth, net of higher tax.
(1)ROIC calculation excludes exceptional operating items from operating profit. For further details on ROIC see page 318.
(2) Definition of return on average invested capital has been redefined, see more details on pages 318.
Business review (continued)
79
North America
•R eported net sales were flat driven by acquisitions and organic growth offset by an unfavourable foreign exchange impact from the
weakening Canadian dollar.
•Organic net sales were flat as growth in Canada and Diageo Beer Company USA (DBC USA) were offset by a decline in US
Spirits.
•Strong price/mix growth was offset by a decline in volume, while the region held share of TBA.
•US Spirits net sales declined 1%, lapping strong double-digit growth impacted by distributor stock replenishment and increased
inventories of imported products in fiscal 22. Depletion growth was approximately two percentage points ahead of shipment
growth in fiscal 23, with some variation across brands. Overall inventory levels at distributors at the end of fiscal 23 were in line
with historical levels.
•DBC USA net sales grew 1% reflecting strong growth in Guinness, partially offset by a decline in Smirnoff flavoured malt
beverages.
•Organic operating margin declined by 101bps, primarily driven by cost inflation and an adverse category mix. Strategic price
increases and productivity savings more than offset the absolute impact of cost inflation.
•Marketing investment grew 2% as we continue to invest and support growth across key categories.
•Doubling the number of brands running responsible drinking campaigns, we reached more than 150 million consumers. We also
led efforts with Black, Latino, and Native American organisations to address the harmful use of alcohol in the United States
through our Multicultural Consortium for Responsible Drinking.
•Our operations reduced Scope 1 and 2 carbon emissions by 17% through continued energy efficiency and renewable energy
initiatives. Key factors in this included a full year of operation for our carbon neutral distillery at Lebanon, powered by 100%
renewable electricity, and running our Valleyfield site on renewable natural gas.
•Due to higher volume of distilled products going to maturation, overall water efficiency decreased by 0.8%. We implemented
water-saving initiatives across our sites that enabled us to reduce total water usage compared to last year.
Market highlights - US Spirits:
•Tequila net sales grew 15%, and drove significant share gains in both the spirits industry and tequila category. Casamigos net sales
grew 14% driven by strong price/mix and volume growth, and the launch of Casamigos Cristalino. Don Julio net sales grew 13%,
primarily driven by aged variants and the launch of ultra-premium Don Julio Rosado Reposado. Both Casamigos and Don Julio
shipments grew ahead of depletions as supply availability enabled distributors to increase inventory to more optimal levels.
•Crown Royal whisky net sales declined 10%, lapping inventory replenishment in fiscal 22 when the brand recovered from supply
constraints. Crown Royal gained double-digit share of the Canadian whisky category, and depletions grew ahead of shipments in
fiscal 23.
•Vodka net sales declined 7%, primarily due to Cîroc, partially offset by growth in Smirnoff. Smirnoff growth of 4% was driven by
core and flavoured variants. Ketel One net sales were flat, reflecting growth in the core variant offset by a decline in Ketel One
Botanicals. Cîroc net sales declined 32% as consumers shifted into other spirits categories.
•Johnnie Walker net sales declined 13%. Johnnie Walker gained share of the scotch category driven by Johnnie Walker Black Label
and Johnnie Walker Blue Label, and depletions grew ahead of shipments.
•Rum net sales declined 1%, primarily due to Captain Morgan, which declined 2%. Zacapa grew 13% driven by super-premium and
luxury variants.
•Bulleit whiskey net sales declined 6%, lapping inventory replenishment in fiscal 22 when the brand recovered from supply
constraints. Bulleit whiskey gained both spirits industry and US whiskey category share, and depletions grew double-digit.
•Buchanan's net sales grew 10%, primarily driven by the launch of Buchanan's Pineapple, an innovation that gained spirits industry
share. Buchanan's scotch declined 4%, but gained both spirits industry and scotch category share, and depletions grew ahead of
shipments.
•Single Malts net sales grew 25%, primarily driven by ultra-premium Lagavulin 16YO and luxury innovation Lagavulin 11YO
Charred Oak Cask.
•Spirit-based ready to drink (RTD) net sales declined 44% primarily due to lapping the launch of Crown Royal RTD in fiscal 22
and Loyal 9 underperformance in certain US states.
Business review (continued)
80
Key financials

| 2022 (re- presented) | Exchange | Acquisitions and disposals | Organic movement | Other(1) | 2023 (re- presented) | Reported movement (re- presented)
| $ million | $ million | $ million | $ million | $ million | $ million | %
Net sales | 8,106 | (38) | 27 | 14 | — | 8,109 | —
Marketing | 1,595 | (14) | 20 | 29 | 1 | 1,631 | 2
Operating profit before exceptional items | 3,268 | (34) | (15) | (76) | 79 | 3,222 | (1)
Exceptional operating items(2) | (1) |  |  |  |  | (118) |
Operating profit | 3,267 |  |  |  |  | 3,104 | (5)

| Organic volume movement | Reported volume movement | Organic net sales movement | Reported net sales movement (re-presented)
Markets and categories: | % | % | % | %
North America(3) | (5) | (4) | — | —
US Spirits(3) | (6) | (6) | (1) | —
DBC USA(4) | (3) | (3) | 1 | 1
Canada | (2) | (2) | 4 | (2)
Spirits(3) | (5) | (4) | — | —
Beer | (2) | (2) | 2 | 1
Ready to drink | (11) | (11) | (16) | (18)
Global giants, local stars and reserve(5) | Organic volume movement(6) % | Organic net sales movement % | Reported net sales movement (re-presented) %
Crown Royal |  | (12) | (10) | (10)
Don Julio |  | 8 | 13 | 13
Casamigos(7) |  | 6 | 13 | 13
Johnnie Walker |  | (5) | (10) | (11)
Smirnoff |  | (1) | 4 | 3
Captain Morgan |  | (5) | (1) | (1)
Ketel One |  | (3) | — | —
Guinness |  | 4 | 9 | 8
Baileys |  | (4) | 1 | 1
Bulleit whiskey(8) |  | (8) | (6) | (6)
Buchanan's |  | — | 9 | 9

North America contributed |  | North America organic net sales were flat in fiscal 23
39% of Diageo reported net sales in fiscal 23 |  |

Reported net sales by market (%)

Reported net sales by category (%)

(1) Fair value remeasurements. For further details see pa ge 94.
(2)For further details on exceptional operating items see pages 94 and 246-250.
(3)Reported volume movement has been impacted by acquisitions and/or disposals. For further details see pages 311 and 315.
(4)Certain spirits-based ready to drink products in certain states are distributed through DBC USA and those net sales are captured within DBC USA.
(5)Spirits brands excluding ready to drink and non-alcoholic variants.
(6)Organic equals reported volume movement.
(7)Casamigos trademark includes both tequila and mezcal.
(8)Bulleit whiskey excludes Bulleit Crafted Cocktails.
Business review (continued)
81
Europe
•Reported net sales grew 2%, driven by organic growth and the hyperinflation adjustment(1) related to Türkiye, partially offset by an
unfavourable impact from foreign exchange.
•Organic net sales grew 11%, driven by double-digit growth across most markets. Growth was mainly driven by price/mix, while
holding volume.
•Price/mix was primarily driven by strong price increases across all markets, and supported by positive mix in beer and scotch.
•Spirits net sales grew 10%, driven by growth in scotch, vodka, tequila. Johnnie Walker grew 29% driven by Northern Europe,
Southern Europe and Travel Retail.
•Beer net sales grew 18%, driven by price increases and volume growth. Guinness net sales grew 20% and gained share in the on-
trade in Great Britain and Ireland.
•Organic operating margin declined by 13bps, primarily driven by cost inflation, partially offset by price increases, improved
category mix and productivity savings.
•Marketing investment grew 7%, with focused investment in Tanqueray, Johnnie Walker, Baileys and Guinness.
•The SMASHED programme educated 112,910 young people on the dangers of underage drinking.
•We built strong momentum in year two of our water replenishment projects in Türkiye, generating the annual capacity to replenish
137,349m 3 water.
•Scope 1 and 2 carbon emissions increased by 35%, primarily driven by increased scotch distillation. To mitigate some of this
growth we switched some key distilleries (Auchroisk, Talisker and Cardhu) to biofuels. Our GHG emissions for beer stayed flat,
even though production volumes were higher than planned.
•Water efficiency decreased by 2.4% due to the volume of distilled product increasing faster than packaged product, because of its
maturation period. For beer, optimising pasteurisation in Runcorn and water recovery in St James’s Gate led to a 9% improvement
in water efficiency.
•In year two of our three-year Guinness regenerative agriculture pilot, launched in February 2022, we recruited 44 farms across
Ireland and gathered baseline data to let us accurately track the project’s impact.
Market highlights:
•Great Britain net sales grew 7%, mostly driven by strong performance in Guinness with strong market share gains. Spirits net sales
growth was driven by tequila, vodka and RTDs, partially offset by gin.
•Northern Europe net sales grew 11%. Growth was primarily driven by scotch with strong double-digit growth in Johnnie Walker,
and strong growth in vodka and tequila. Spirits gained market share.
•Southern Europe net sales grew 12%, led by strong performance in scotch, in addition to tequila and gin. Growth reflected
continued recovery in the on-trade and increased tourism, alongside market share gains in spirits.
•Ireland net sales grew 16%, primarily driven by growth in Guinness reflecting share gains in a recovering on- trade.
•Eastern Europe net sales declined 3%, due to the suspension of exports to and sales in Russia as announced in March 2022 and the
winding down of its operations announced in June 2022. In the rest of the market, spirits grew double-digit and gained market
share primarily driven by Johnnie Walker.
•Türkiye net sales grew 38%, with volume growth of 9%. Growth was driven by price increases in response to inflation and higher
excise duties. Growth was broad-based, led by scotch, vodka and raki.
Key financials

| 2022 (re- presented) | Exchange | Acquisitions and disposals | Organic movement | Other(2) | Hyperinfla tion(1) | 2023 (re- presented) | Reported movement
| $ million | $ million | $ million | $ million | $ million | $ million | $ million | %
Net sales | 4,238 | (530) | (11) | 466 | — | 140 | 4,303 | 2
Marketing | 764 | (74) | 3 | 57 | — | 15 | 765 | —
Operating profit before exceptional items | 1,345 | (144) | (43) | 138 | (14) | 30 | 1,312 | (2)
Exceptional operating items(3) | (184) |  |  |  |  |  | (12) |
Operating profit | 1,161 |  |  |  |  |  | 1,300 | 12

(1)See page s 239-240 and 312-314 for details of hyperinflation adjustment.
(2) Fair value remeasurements. For further details see page 94.
(3)Exceptional items are in respect of Diageo’s decision, announced on 28 June 2022, to wind down its operations in Russia. For further details on exceptional
operating items see pages 94 and 246-250.
Business review (continued)
82

Markets and categories | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement (re-presented) %
Europe(1) | — | — | 11 | 2
Great Britain(1) | (8) | (8) | 7 | (4)
Southern Europe(1) | 4 | 5 | 12 | 2
Northern Europe(1) | 8 | 6 | 11 | 1
Ireland(1) | 3 | 3 | 16 | 7
Eastern Europe(1) | (15) | (15) | (3) | (9)
Türkiye(1) | 9 | 9 | 38 | 14
Spirits(1) | — | — | 10 | —
Beer | 5 | 5 | 18 | 8
Ready to drink(1) | (2) | (2) | 10 | 1
Global giants and local stars(2) |  | Organic volume movement(3) % | Organic net sales movement % | Reported net sales movement (re-presented) %
Guinness |  | 6 | 20 | 9
Johnnie Walker |  | 18 | 29 | 14
Baileys |  | (3) | (1) | (9)
Smirnoff |  | (1) | 14 | 4
Captain Morgan |  | — | 9 | (1)
Tanqueray |  | — | 6 | (3)
JεB |  | (7) | (1) | (8)
Yenì Raki |  | — | 7 | (6)

Europe contributed |  | Europe organic net sales grew
21% of Diageo reported net sales in fiscal 23 |  | 11% in fiscal 23

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement has been impacted by acquisitions and/or disposals. For further details see pages 311-315.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Organic equals reported volume movement, except for Tanqueray and JεB, which had reported volume movement of 1% and (6)% respectively.
Business review (continued)
83
Asia Pacific
•Reported net sales were flat, primarily reflecting strong organic growth offset by unfavourable impact from foreign exchange and
disposals.
•Organic net sales grew 13%. All markets grew, except Greater China, with strong double-digit growth in India, South East Asia,
Travel Retail Asia and Middle East and North Asia.
•Price/mix of 7% was led by strong price increases across all markets. Positive mix was driven by strength in premium-plus scotch
in most markets. Volume grew 8% in premium-plus price tiers.
•Spirits net sales grew 14%, primarily driven by double-digit growth in scotch, the region’s largest category. IMFL whisky(1) also
contributed to growth, partially offset by a decline in Chinese white spirits.
•Organic operating margin expanded by 363bps as the benefits from the continued recovery of Travel Retail, price increases and
operational efficiencies more than offset the impact of cost inflation.
•Marketing investment grew 9%, with focused investment in scotch in South East Asia, India, and Greater China.
•Advocating for responsible consumption of alcohol through DRINKiQ and brand campaigns, we reached more than 134 million
consumers with messages that promote moderation.
•The SMASHED programme educated 340,216 young people on the dangers of underage drinking.
•We trained more than 8,236 people on business and hospitality skills through our Learning for Life programme and delivered
38,467 training sessions through Diageo Bar Academy.
•Our water efficiency improved by 16.2% this year, mainly by focussing on continuous improvement across the region. We piloted
waterless cooling towers successfully in India and plan to introduce them more widely.
•Our Scope 1 and 2 carbon emissions decreased by 9%, mainly because of a green energy tariff in Australia and focussed energy
improvement across the region.
Market highlights:
•India net sales grew 17%, driven by strong consumer demand and continued premiumisation. IMFL whisky and scotch delivered
double-digit growth. Scotch growth was driven by Black Dog, Johnnie Walker Black Label and Black & White.
•Greater China net sales declined 4%. Strong performance in scotch was more than offset by a decline in Chinese white spirits
which continued to be impacted by Covid-19 restrictions, especially in the on-trade. Scotch grew 13%, driven primarily by
Taiwan, with strong performance in the super-premium-plus segment led by Johnnie Walker and The Singleton.
•Australia net sales grew 2%, primarily driven by price increases. Growth was led by rum, tequila and beer.
•South East Asia net sales grew 33%, benefitting from a strong recovery following the easing of Covid-19 restrictions and strong
growth in the super-premium-plus segment. Scotch grew 31%, mostly driven by Johnnie Walker premium variants, and single
malts, primarily The Singleton and Mortlach.
•North Asia (Korea and Japan) net sales grew 15%, benefitting from the recovery of the on-trade. Growth was primarily driven by
double-digit growth in Windsor and Johnnie Walker premium-plus variants led by Johnnie Walker Blue Label and Johnnie Walker
Black Label.
•Travel Retail Asia and Middle East net sales grew 67% primarily driven by Johnnie Walker premium-plus variants, led by Johnnie
Walker Blue Label and Johnnie Walker Black Label.
Key financials

| 2022 (re- presented) | Exchange | Acquisitions and disposals | Organic movement | 2023 (re- presented) | Reported movement (re- presented)
| $ million | $ million | $ million | $ million | $ million | %
Net sales | 3,837 | (334) | (136) | 474 | 3,841 | —
Marketing | 651 | (58) | — | 62 | 655 | 1
Operating profit before exceptional items | 947 | (83) | (28) | 268 | 1,104 | 17
Exceptional operating items(2) | (292) |  |  |  | (581) |
Operating profit | 655 |  |  |  | 523 | (20)

(1) Indian-Made Foreign Liquor (IMFL) whisky.
(2)For further details on exceptional operating items see pages 94 and 246-250.
Business review (continued)
84

Markets and categories | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement (re-presented) %
Asia Pacific(1) | 5 | (14) | 13 | —
India(1) | 6 | (18) | 17 | 3
Greater China | (2) | (2) | (4) | (11)
Australia | (10) | (10) | 2 | (5)
South East Asia(1) | 20 | 20 | 33 | 23
North Asia | 6 | 6 | 15 | 2
Travel Retail Asia and Middle East | 38 | 38 | 67 | 49
Spirits(1)(2) | 6 | (15) | 14 | 1
Beer | 5 | 5 | 10 | 1
Ready to drink | (8) | (8) | 1 | (7)
Global giants and local stars(2) |  | Organic volume movement(3) % | Organic net sales movement % | Reported net sales movement (re-presented) %
Johnnie Walker |  | 13 | 29 | 17
Shui Jing Fang(4) |  | (15) | (14) | (21)
McDowell's |  | (1) | 4 | (4)
Guinness |  | 4 | 10 | 2
The Singleton |  | 26 | 26 | 18
Smirnoff |  | 8 | 15 | 8
Windsor |  | 29 | 41 | 28
Black & White |  | 28 | 36 | 25

Asia Pacific contributed |  | Asia Pacific organic net sales grew
19% of Diageo reported net sales in fiscal 23 |  | 13% in fiscal 23

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement has been impacted by acquisitions and/or disposals. For further details see pages 311 and 315.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3) Organic equals reported volume movement.
(4)Growth figures represent total Chinese white spirits of which Shui Jing Fang is the principal brand.
Business review (continued)
85
Latin America and Caribbean
•Reported net sales grew 7%, reflecting organic growth partially offset by unfavourable impact from foreign exchange, mainly due
to a weakening of the Colombian and Argentine peso.
•Organic net sales grew 9%, with most markets delivering growth, despite lapping strong double-digit growth in fiscal 22. Growth
was broad-based across price tiers, except for value, which declined as a result of our premiumisation strategy. Strong price/mix
was partially offset by a 3% decline in volume, primarily in the value price tier. Double-digit sales growth in the first half of fiscal
23 was followed by inventory normalisation in the second half.
•Price/mix was driven by strong price increases across all markets, and positive mix supported by the strength in premium-plus
scotch in most markets.
•Spirits net sales grew 11%, primarily led by double-digit growth in scotch, particularly Johnnie Walker Black Label, Johnnie
Walker Red Label and Old Parr. Growth was also driven by strong double-digit growth in Don Julio and Smirnoff.
•Organic operating margin expanded by 72bps. The positive impact of price increases, premiumisation, leverage on operating costs
and one-off tax benefits more than offset the increases in marketing investment and cost inflation.
•Marketing investment grew 14%, ahead of organic net sales growth, with increased investment in most markets.
•We reached more than 176 million people with campaigns promoting moderation. They included ‘Derribando Mitos’, a campaign
created in fiscal 21 for Peru and expanded this year to the Caribbean and Central America market. It aims to challenge myths about
alcohol consumption.In fiscal 23, 'Derribando Mitos' reached more than 51 million people in countries.
•The SMASHED programme educated 984,213 young people on the dangers of underage drinking.
•We reduced our Scope 1 and 2 carbon emissions by 32%. Tequila was the biggest contributor, through new or upgraded biomass
boilers in Mexico, and our changing production mix has also played a part.
•We generated the annual capacity to replenish more than 280,977 m3 through water sanitation and hygiene, tree planting and water
catchment rehabilitation projects for communities in Brazil and Mexico.
Market highlights:
•Brazil net sales grew 8%, led by double-digit growth in Johnnie Walker and Old Parr. Growth was driven by price increases and
higher marketing investment, leading to market share growth.
•Mexico net sales grew 9%, primarily driven by scotch and tequila. Scotch growth was led by Johnnie Walker Red Label and
Johnnie Walker Black Label, driven by price increases. Tequila growth was driven by price increases, the lapping of aged liquid
supply constraints in fiscal 22 and increased marketing investment.
•Central America and Caribbean (CCA) net sales grew 14%, mainly driven by scotch and tequila. Growth was driven by price
increases, premiumisation and continuing momentum in the on-trade. Scotch growth was mostly driven by Johnnie Walker Black
Label and Buchanan's, supported by increased marketing investment. Tequila growth was driven by Don Julio 1942.
•South LAC (Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru and Uruguay) net sales grew 21%, primarily driven by scotch,
vodka and gin. Growth was driven by price increases and premiumisation, partially offset by a decline in volume.
•Andean (Colombia and Venezuela) net sales declined 7%, due to an adverse macroeconomic environment in Colombia. Strong
price increases and premiumisation were more than offset by a decline in volume.
Key financials

| 2022 (re- presented) | Exchange | Acquisitions and disposals | Organic movement | Other(1) | 2023 (re- presented) | Reported movement (re- presented)
| $ million | $ million | $ million | $ million | $ million | $ million | %
Net sales | 2,027 | (61) | 3 | 190 | — | 2,159 | 7
Marketing | 324 | (15) | 1 | 45 | — | 355 | 10
Operating profit | 712 | (24) | — | 83 | 12 | 783 | 10

(1)Fair value remeasurements. For further details see page 94.
Business review (continued)
86

Markets and categories | Organic volume movement % | Reported volume movement % | Organic net sales movement % | Reported net sales movement (re-presented) %
Latin America and Caribbean(1) | (3) | (3) | 9 | 7
Brazil(2) | (1) | 3 | 8 | 16
Mexico(1) | (4) | (3) | 9 | 17
CCA | 1 | 1 | 14 | 9
South LAC(2) | (3) | (11) | 21 | (8)
Andean(1) | (24) | (24) | (7) | (21)
Spirits(1) | (3) | (3) | 11 | 8
Beer | 9 | 9 | 16 | 13
Ready to drink | (13) | (13) | (7) | (10)
Global giants and local stars(3) | Organic volume movement(4) % | Organic net sales movement % | Reported net sales movement (re-presented) %
Johnnie Walker |  | 4 | 16 | 12
Buchanan’s |  | (5) | 6 | —
Don Julio |  | 6 | 22 | 26
Old Parr |  | 10 | 20 | 14
Smirnoff |  | 3 | 18 | 12
Black & White |  | (7) | 13 | 13
Tanqueray |  | — | — | (5)
Baileys |  | (18) | (5) | (8)

Latin America and Caribbean contributed |  | Latin America and Caribbean organic net sales grew
11% of Diageo reported net sales in fiscal 23 |  | 9% in fiscal 23

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement has been impacted by acquisitions and/or disposals. For further details see pages 311 and 315.
(2)From 1 July 2022 Uruguay and Paraguay domestic channels moved on a management basis from PUB (Paraguay, Uruguay and Brazil) to PEBAC (Peru, Ecuador,
Bolivia, Argentina and Chile) and the new cluster has been called South LAC. This reflects how management reviews performance.
(3)Spirits brands excluding ready to drink and non-alcoholic variants.
(4)Organic equals reported volume movement.
Business review (continued)
87
Africa
•Reported net sales declined 9%, primarily driven by an unfavourable impact from foreign exchange, partially offset by organic
growth.
•Organic net sales grew 5%, with growth across all markets, except East Africa. Growth was driven by price increases, partially
offset by a decline in volume.
•Price/mix of 12% was driven by price increases across all markets and positive mix. Volume declines were primarily in the value
and standard price tiers.
•Spirits net sales grew 8%, driven by growth in international spirits particularly Johnnie Walker Black Label, and Orijin.
•Beer net sales grew 3%, with strong growth in Africa Regional Markets and Nigeria, partially offset by a decline in East Africa.
Growth was primarily driven by Malta Guinness and Guinness, which grew 22% and 7% respectively.
•Organic operating margin expanded by 126bps, primarily driven by price increases, productivity savings, positive category mix
and lapping prior year one-off costs. These impacts were partially offset by cost inflation.
•Marketing investment grew 2%, focused on supporting spirits premiumisation and Guinness.
•The SMASHED programme educated 548,478 young people on the dangers of underage drinking.
•We reduced our Scope 1 and 2 carbon emissions by 33%, thanks largely to commissioning and optimising three biomass facilities
in Kenya and Uganda.
•Our water efficiency decreased by 2.6% because of lower production volumes. We partly mitigated this by commissioning our
water recovery plants in Nigeria and further optimising our water recovery plants in Kenya and Uganda.
•We trained more than 9,517 people (51% women) in business and hospitality skills through our Learning for Life programme in
seven countries, including for the first time, Mozambique.
•Our community water, sanitation and hygiene (WASH) programmes provided clean water, sanitation and hygiene for water-
stressed communities near our sites in all our water-stressed markets.
Market highlights:
•East Africa net sales declined 2%. Growth in spirits was more than offset by a volume decline in beer following price and duty
increases. Spirits growth was primarily driven by scotch, particularly Johnnie Walker.
•Africa Regional Markets net sales grew 22% led by growth in beer, primarily driven by Malta Guinness supported by price
increases. Spirits growth was primarily driven by Johnnie Walker Black Label.
•Nigeria net sales grew 11%. Growth was led by Guinness and Orijin.
•South Africa net sales grew 1%, primarily driven by growth in tequila and rum, which offset declines in vodka and gin. Super-
premium-plus brands grew strongly at 38%.
Key financials

| 2022 (re- presented) | Exchange | Acquisitions and disposals | Organic movement | 2023 (re- presented) | Reported movement (re- presented)
| $ million | $ million | $ million | $ million | $ million | %
Net sales | 2,238 | (273) | (37) | 111 | 2,039 | (9)
Marketing | 266 | (31) | (6) | 6 | 235 | (12)
Operating profit before exceptional items | 419 | (192) | 13 | 49 | 289 | (31)
Exceptional operating items(1) | — |  |  |  | (55) |
Operating profit | 419 |  |  |  | 234 | (44)

(1)For further details on exceptional operating items see pages 94 and 246-250.
Business review (continued)
88

| Organic volume movement | Reported volume movement | Organic net sales movement | Reported net sales movement (re-presented)
Markets and categories | % | % | % | %
Africa(1) | (7) | (8) | 5 | (9)
East Africa | (7) | (7) | (2) | (10)
Nigeria | (4) | (4) | 11 | 1
Africa Regional Markets(1) | (1) | (9) | 22 | (14)
South Africa | (18) | (18) | 1 | (13)
Spirits(1) | (2) | (2) | 8 | (4)
Beer(1) | (13) | (14) | 3 | (12)
Ready to drink(1) | — | (4) | 11 | (5)
|  | Organic volume movement(3) | Organic net sales movement | Reported net sales movement (re-presented)
Global giants and local stars(2) |  | % | % | %
Guinness |  | (8) | 7 | (8)
Johnnie Walker |  | 5 | 11 | (3)
Smirnoff |  | (23) | (6) | (18)
Other beer: |  |  |  |
Malta Guinness |  | (7) | 22 | (8)
Senator |  | (17) | (4) | (14)
Tusker |  | (8) | (5) | (13)
Serengeti |  | (7) | (1) | (3)

Africa contributed |  | Africa organic net sales grew
10% of Diageo reported net sales in fiscal 23 |  | 5% in fiscal 23

Reported net sales by market (%)

Reported net sales by category (%)

(1)Reported volume movement has been impacted by acquisitions and/or disposals. For further details see pages 311 and 315..
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Organic equals reported volume movement, except for Guinness and Malta Guinness, which had reported volume movement of (9)% and (9)% respectively.
Business review (continued)
89
Corporate (re-presented)
Performance 2023
Sales and net sales
Corporate net sales principally arise from visitor centers and the global licensing of Diageo brands and trademarks. Corporate net sales
were $104 million in the year ended 30 June 2023, an increase of $34 million. Net sales were favorably impacted by an organic
increase of $44 million partially offset by $10 million exchange rate movement loss.
Operating costs
Corporate operating costs comprise central costs, including finance, marketing, corporate relations, human resources and legal, as well
as certain information systems, facilities and employee costs that are not allocable to the geographical segments or to the Supply Chain
and Procurement. Operating costs were $397 million in the year ended 30 June 2023 an increase of $80 million compared to operating
costs of $317 million in the year ended 30 June 2022. The $31 million increase in costs in the year ended 30 June 2023 was principally
a result of increased staff & IT costs and unfavourable exchange rate movements of $41 million.
Performance 2022
Sales and net sales
Corporate net sales principally arise in the Guinness visitor centre in Dublin, Ireland and the income from the global licensing of
Diageo brands and trademarks. Corporate net sales were $70 million in the year ended 30 June 2022, an increase of $44 million
compared to the net sales of $26 million in the year ended 30 June 2021 due to organic increase of $47 million slightly offset by $3
million exchange rate movement loss.
Operating costs
Corporate operating costs comprise central costs, including finance, marketing, corporate relations, human resources and legal, as well
as certain information systems, facilities and employee costs that are not allocable to the geographical segments or to the Supply Chain
and Procurement. Operating costs were $317 million in the year ended 30 June 2022 an increase of $37 million compared to operating
costs of $280 million in the year ended 30 June 2021. The increase in costs in the year ended 30 June 2022 was principally a result of
increased staff costs of $54 million, partially offset by favourable exchange rate movements of $17 million ($12 million transactional
exchange impact and $5 million translation impact).
Business review (continued)
90
Category and brand review
•Spirits net sales grew 6%, with flat volume. Growth was across most categories, including double-digit performance in scotch,
tequila and IMFL whisky.
•Scotch net sales grew 12%, with 2% volume growth. Growth was led by Johnnie Walker, with strong growth of 15%, and
scotch malts also grew strongly at 16%.
◦Johnnie Walker Black Label grew 16%, with particularly strong growth in Asia Pacific, where it grew 30%.
◦Johnnie Walker Blue Label grew 3%, supported by the return of Travel Retail.
◦Johnnie Walker Red Label grew 16%, with double-digit growth in all regions except Africa.
◦Scotch malts grew 16%, primarily driven by strong double-digit growth in Asia Pacific and North America.
•Tequila net sales grew 19%, reflecting strong performance of Don Julio and Casamigos which grew 20% and 16% respectively,
driven by North America.
•Vodka net sales grew 1% with a volume decline of 3%. Declines in North America and Africa were offset by double-digit
growth across all other regions.
•Rum net sales grew 2% driven by Captain Morgan growth across all regions except North America. Rum volume declined 7%.
•Liqueurs net sales declined 1%, driven by Godiva.
•Beer net sales grew 9%, with growth in all regions driven by strong performance from Guinness in Great Britain, Ireland, North
America and Africa.
•Ready to drink net sales were flat, with growth in Europe and Africa offset by a decline in North America.

Key categories | Organic volume movement(1) % | Organic net sales movement % | Reported net sales movement (re-presented) % | Reported net sales by category (re-presented) %
Spirits(2) | — | 6 | 1 | 78
Scotch | 2 | 12 | 5 | 25
Tequila | 10 | 19 | 19 | 12
Vodka(3)(4) | (3) | 1 | (3) | 9
Canadian whisky(5) | (10) | (9) | (10) | 6
Rum(4) | (7) | 2 | (2) | 5
Liqueurs | (4) | (1) | (7) | 5
Gin(4) | — | 5 | (2) | 5
IMFL whisky(5) | 8 | 15 | (10) | 4
Chinese white spirits(5) | (15) | (14) | (21) | 3
US whiskey(5) | (8) | (4) | (4) | 2
Beer | (7) | 9 | (2) | 15
Ready to drink | (6) | — | (7) | 4

Reported volume by category | Reported net sales by category | Reported marketing spend by category

n | Scotch | n | Vodka | n | US whiskey | n | Canadian whisky | n | Rum | n | IMFL whisky
n | Liqueurs | n | Gin | n | Tequila | n | Beer | n | Ready to drink | n | Other

(1)Organic equals reported volume movement except for spirits (7)%, tequila 11%, vodka (4)%, gin (1)%, IMFL whisky (20)%, US whiskey (7)%, beer (8)% and
ready to drink (7)%.
(2)Spirits brands excluding ready to drink and non-alcoholic variants.
(3)Vodka includes Ketel One Botanical.
(4)Vodka, rum and gin include IMFL variants.
(5)See pages 80-81 for details of Canadian whisky, US whiskey and pages 84-85 for details of IMFL whisky and Chinese white spirits.
Business review (continued)
91

Global giants, local stars and reserve(1): | Organic volume movement(2) % | Organic net sales movement % | Reported net sales movement (re-presented) %
Global giants |  |  |
Johnnie Walker | 9 | 15 | 7
Guinness | 1 | 16 | 5
Smirnoff | (2) | 8 | 3
Baileys | (5) | — | (5)
Captain Morgan | (2) | 5 | —
Tanqueray | (4) | 1 | (4)
Local stars |  |  |
Crown Royal | (12) | (10) | (10)
Buchanan’s | (3) | 7 | 4
McDowell's | (1) | 4 | (4)
Shui Jing Fang(3) | (15) | (14) | (21)
Old Parr | 9 | 18 | 12
Black & White | 2 | 20 | 16
JεB | (9) | (3) | (10)
Yenì Raki | — | 8 | (6)
Windsor | 29 | 41 | 28
Bundaberg | — | 18 | 9
Ypióca | (9) | 7 | 9
Reserve |  |  |
Don Julio | 11 | 20 | 19
Casamigos(4) | 7 | 15 | 15
Scotch malts | 3 | 16 | 7
Ketel One(5) | (3) | 1 | —
Bulleit whiskey(6) | (9) | (6) | (6)
Cîroc vodka | (23) | (23) | (25)

(1)Brands excluding ready to drink, non-alcoholic variants and beer except Guinness.
(2)Organic equals reported volume movement except for Guinness 0% and McDowell's (2)%.
(3)Growth figures represent total Chinese white spirits of which Shui Jing Fang is the principal brand.
(4)Casamigos trademark includes both tequila and mezcal.
(5)Ketel One includes Ketel One vodka and Ketel One Botanical.
(6)Bulleit whiskey excludes Bulleit Crafted Cocktails.
Global giants
39% of Diageo’s reported net sales and grew 3%.
Local stars
18% of Diageo’s reported net sales and declined 6%.
Reserve
29% of Diageo’s reported net sales and grew 4%.
Business review (continued)
92
Additional financial information
Year ended 30 June 2023

Key financials - certain line items | 30 June 2022 (re- presented) $ million | Exceptional operating items (c) $ million | Exchange (a) $ million | Acquisitions and disposals (b) $ million | Organic movement(1) $ million | Fair value remeasurement (d) $ million | Hyperinflation(1) $ million | 30 June 2023 (re-presented) $ million
Sales | 29,751 | — | (2,122) | (916) | 1,461 | — | 96 | 28,270
Excise duties | (9,235) | — | 876 | 762 | (162) | — | 44 | (7,715)
Net sales | 20,516 | — | (1,246) | (154) | 1,299 | — | 140 | 20,555
Cost of sales | (7,923) | (80) | 378 | 113 | (699) | 7 | (85) | (8,289)
Gross profit | 12,593 | (80) | (868) | (41) | 600 | 7 | 55 | 12,266
Marketing | (3,616) | — | 193 | (21) | (203) | (1) | (15) | (3,663)
Other operating items | (3,080) | (209) | 157 | (19) | 34 | 71 | (10) | (3,056)
Operating profit | 5,897 | (289) | (518) | (81) | 431 | 77 | 30 | 5,547
Other line items: |  |  |  |  |  |  |  |
Non-operating items | (88) |  |  |  |  |  |  | 364
Taxation (e) | (1,398) |  |  |  |  |  |  | (1,163)

(1) For the definition of organic movement and hyperinflation see page s 311-315.
(i)Reported figures in the table above have been extracted from the income statement for the years ended 30 June 2022 and 30 June 2023.
(a) Exchange
The impact of movements in exchange rates on reported figures for operating profit was principally in respect of the unfavourable
exchange impact of the weakening of the sterling and Nigerian naira against the US dollar, partially offset by the strengthening of the
Mexican peso and the Brazilian real.
The effect of movements in exchange rates and other movements on profit before exceptional items and taxation for the year ended 30
June 2023 is set out in the table below.

| Gains/ (losses) (re-presented) $ million
Translation impact | (395)
Transaction impact | (123)
Operating profit before exceptional items | (518)
Net finance charges – translation impact | 29
Net finance charges – transaction impact | 8
Net finance charges | 37
Associates – translation impact | (37)
Profit before exceptional items and taxation | (518)

| Year ended 30 June 2023 | Year ended 30 June 2022
Exchange rates |  |
Translation $1 = | £0.83 | £0.75
Transaction $1 = | £0.77 | £0.78
Translation $1 = | €0.96 | €0.89

(b) Acquisitions and disposals
The acquisitions and disposals movement in the year ended 30 June 2023 was primarily attributable to the disposal of the United
Spirits Limited (USL) Popular brands and Guinness Cameroun S.A.
See pages 260-264 for further details.
Business review (continued)
93
(c) Exceptional items
In the year ended 30 June 2023, exceptional operating items were a loss of $766 million (2022 – a loss of $477 million), mainly due to
charges related to brand impairment ($613 million) and the supply chain agility programme ($121 million).
In the year ended 30 June 2023, exceptional non-operating items were a gain of $364 million (2022 – a loss of $88 million), mainly driven
by the gain in relation to the sale of Guinness Cameroun S.A. ($343 million).
See pages 246-250 for further details.
(d) Fair value remeasurement
The adjustment to cost of sales reflects the elimination of fair value changes for biological assets in respect of growing agave plants of
$nil for the year ended 30 June 2023 and $7 million loss for the year ended 30 June 2022. The adjustments to marketing and other
operating expenses were the elimination of fair value changes to contingent consideration liabilities and earn out arrangements in
respect of prior year acquisitions of $157 million gain for the year ended 30 June 2023 and $87 million gain for the year ended 30 June
2022.
(e) Taxation
The reported tax rate for the year ended 30 June 2023 was 20.6% compared with 24.1% for the year ended 30 June 2022.
Included in the tax charge of $1,163 million in the year ended 30 June 2023 is a net exceptional tax credit of $226 million, including
an exceptional tax credit of $154 million in respect of brand impairments, mainly the McDowell's brand, a tax credit of $68 million in
respect of the deductibility of fees paid to Diageo plc for guaranteeing externally issued debt of its US group entities, a tax credit of
$27 million in respect of the supply chain agility programme, partly offset by a tax charge of $52 million in respect of the sale of
Guinness Cameroun S.A.
The reported tax charge for the year ended 30 June 2022 included an exceptional tax credit of $40 million, comprising exceptional tax
credits of $45 million and $24 million on the impairment of the McDowell's and Bell's brands respectively, partly offset by an
exceptional tax charge of $29 million in respect of the gain on the sale of the Picon brand and a further tax charge of $4 million in
respect of winding down operations in Russia.
The tax rate before exceptional items for the year ended 30 June 2023 was 23.0% compared with 22.6% for the year ended 30 June
2022.
(f) Return of capital
Diageo completed a total of $1.7 billion return of capital for the year ended 30 June 2023, which included $1.1 billion related to the
successful completion of Diageo’s previous share buyback programme in which $5.8 billion of capital was returned to shareholders,
and returned an additional $0.6 b illion of capital to shareholders which was announced as a new share buyback programme on 26
January 2023 and completed on 2 June 2023.
In the year ended 30 June 2023, the company purchased 37.8 million ordinary shares (2022 – 61.2 million) at a cost of $1,673 million
(including transaction costs of $16 million) (2022 – $2,985 million including transaction costs of $21 million). All shares purchased
under the share buyback programme were cancelled.
Business review (continued)
94
Movement in net borrowings and equity

Movements in net borrowings | 2023 | 2022
| re-presented $ million | re-presented $ million
Net borrowings at the beginning of the year | (17,107) | (16,832)
Free cash flow (1) | 2,235 | 3,779
Movements in loans and other investments | (68) | (96)
Acquisitions (2) | (404) | (278)
Investment in associates (2) | (112) | (86)
Sale of businesses and brands (3) | 559 | 102
Share buyback programme (4) | (1,673) | (2,985)
Net sale of own shares for share schemes (5) | 36 | 24
Purchase of treasury shares in respect of subsidiaries | — | (20)
Dividends paid to non-controlling interests | (117) | (108)
Net movements in bonds (6) | 887 | 911
Purchase of shares of non-controlling interests (7) | (178) | —
Net movements in other borrowings (8) | 69 | 105
Equity dividend paid | (2,065) | (2,300)
Net decrease in cash and cash equivalents | (831) | (952)
Net increase in bonds and other borrowings | (958) | (1,022)
Exchange differences (9) | (646) | 1,967
Other non-cash items (10) | (40) | (268)
Net borrowings at the end of the year | (19,582) | (17,107)

(1) See page 316 for the analysis of free cash flow.
(2) In the year ended 30 June 2023, acquisitions included upfront payments of €246 million ($261 million) for Kanlaon Limited and
Chat Noir Co. Inc. (the owner of Don Papa Rum) and $102 million for Balcones Distilling.
In the year ended 30 June 2022, acquisitions included the final earn-out payment in respect of the Casamigos acquisition amounting to
$113 million and upfront payment of $82 million for 21Seeds.
In the years ended 30 June 2023 and 2022, investment in associates included additional investments in a number of Distill Ventures
associates.
(3) In the year ended 30 June 2023, sale of businesses and brands included the disposal of Guinness Cameroun S.A. beer business for
a net cash consideration, net of disposal costs, of $438 million and the disposal of the Popular brands of Diageo’s USL business, for a
cash consideration, net of disposal costs, of $92 million.
In the year ended 30 June 2022, sale of businesses and brands included the cash received on the disposal of Picon brand, net of
transaction costs.
(4) See page 94 for details of Diageo's return of capital programmes.
(5) Net sale of own shares comprised receipts from employees on the exercise of share options of $63 million (2022 – $43 million)
less purchase of own shares for the future settlement of obligations under the employee share option schemes of $27 million (2022 –
$19 million).
(6) In the year ended 30 June 2023, the group issued bonds of $2,000 million ($1,989 million - net of discount and fee) consisting of
$500 million 5.2% fixed rate notes due 2025, $750 million 5.3% fixed rate notes due 2027, $750 million 5.5% fixed rate notes due
2033 and €500 million 3.5% fixed rate notes due 2025 ($548 million - net discount and fee), and repaid bonds of $300 million and
$1,350 million. In the year ended 30 June 2022, the group issued bonds of €1,650 million ($1,800 million - net of discount and fee)
and £892 million ($1,171 million - including discount and fee), and repaid bonds of €900 million ($1,060 million) and $1,000 million.
(7) On 24 March 2023, Diageo completed the purchase of an additional 14.97% of the share capital of East African Breweries PLC
(EABL). This increased Diageo's controlling shareholding position in EABL from 50.03% to 65.00%.
(8) In the year ended 30 June 2023, the net movements in other borrowings principally arose from the increase in commercial paper,
collateral and bank loan balances offset by cash outflows of foreign currency swaps and forwards and repayment of lease liabilities. In
the year ended 30 June 2022, the net movements in other borrowings principally arose from cash movements of foreign currency
swaps and forwards partially offset by the repayment of lease liabilities.
Business review (continued)
95
(9) In the year ended 30 June 2023, exchange loss arising on net borrowings of $646 million were primarily driven by unfavourable
exchange movements on sterling and euro denominated borrowings and unfavourable exchange movements on cash and cash
equivalents, foreign currency swaps and forwards. In the year ended 30 June 2022, exchange gains arising on net borrowings of
$1,967 million were primarily driven by favourable exchange movements on sterling and euro denominated borrowings and foreign
currency swaps and forwards, partially offset by unfavourable movement on cash and cash equivalents.
(10) In the year ended 30 June 2023, other non-cash items were principally in respect of additional leases entered into during the year
partially offset by fair value movements of interest rate hedging instruments. In the year ended 30 June 2022, other non-cash items
were principally in respect of additional leases entered into during the year.

Movements in equity | 2023 (re-presented) $ million | 2022 (re-presented) $ million
Equity at the beginning of the year | 11,511 | 11,719
Adjustment to 2021 closing equity in respect of hyperinflation in Türkiye (1) | — | 349
Adjusted equity at the beginning of the year | 11,511 | 12,068
Profit for the year | 4,479 | 4,410
Exchange adjustments (2) | (358) | (583)
Remeasurement of post employment benefit plans net of taxation | (562) | 661
Purchase of shares of non-controlling interests (3) | (178) | —
Hyperinflation adjustments net of taxation (1) | 180 | 344
Associates' transactions with non-controlling interests | (8) | —
Dividend to non-controlling interests | (117) | (95)
Equity dividend declared | (2,071) | (2,286)
Share buyback programme (4) | (1,543) | (3,004)
Other reserve movements | 376 | (4)
Equity at the end of the year | 11,709 | 11,511

(1) See page 312-314 for details of hyperinflation adjustments.
(2) Exchange movements in the year ended 30 June 2023 primarily arose from exchange loss driven by sterling, the Turkish lira, the
Indian rupee and the Chinese yuan, partially offset by gains in euro, Mexican peso and foreign exchange on borrowings designated
into net investment hedge before the functional currency change. Exchange movements in the year ended 30 June 2022 primarily arose
from exchange loss driven by the euro, the Turkish lira and the the Indian rupee, and includes foreign exchange on borrowings
designated into net investment hedge before the functional currency change.
(3) On 24 March 2023, Diageo completed the purchase of an additional 14.97% of the share capital of East African Breweries PLC
(EABL). This increased Diageo's controlling shareholding position in EABL from 50.03% to 65.00%.
(4) See page 94 for details of Diageo's return of capital programmes.
Post employment benefit plans
The net surplus of the group’s post employment benefit plans decreased by $653 million from $1,392 million at 30 June 2022 to $739
million at 30 June 2023. The decrease in net surplus was predominantly attributable to the unfavourable change in the market value of
assets held by the post employment benefit plans in the UK which was partially offset by the favourable change in the discount rate
assumptions in the UK due to the increase in returns from ‘AA’ rated corporate bonds used to calculate the discount rates on the
liabilities of the post employment benefit plans (from 3.8% to 5.2%). The net operating profit charge before exceptional items
increased by $38 million from $52 million for the year ended 30 June 2022 to $90 million for the year ended 30 June 2023.
During the year ended 30 June 2023, following a remeasurement of the Diageo Lifestyle Plan, Diageo made a $19 million one-off
deficit contribution to satisfy minimum funding requirement.
Business review (continued)
96
'Spirit of Progress'
Putting positive societal impact at the heart of our business strategy
We are a successful global business, building and nurturing some of the world’s most recognised brands. A fundamental part
of our success is taking focused action at scale to make our business sustainable and resilient for today and for future
generations.
Responding to the issues that matter
‘Spirit of Progress‘ is Diageo's environmental, social and governance (ESG) action plan designed to address the most material issues
facing our company, brands, people, suppliers and communities. Its ambitions are embedded in our business strategy and it aims to
make a positive impact on people and the planet everywhere we live, work, source and sell.
At the heart of ‘Spirit of Progress‘ framework are three priorities:
•Promote positive drinking – changing the way the world drinks for the better, through promoting moderation and addressing
the harmful use of alcohol.
•Champion inclusion and diversity – creating an environment where everyone contributes to a better business.
•Pioneer grain-to-glass sustainability – preserving the natural resources we all depend on.
At the launch in 2020, we set out a series of ambitious priority targets that aimed to deliver progress against our most material ESG
issues.(1) We are proud to have already met several targets well ahead of schedule, including two, supporting the promotion of positive
drinking.
However, ESG strategy and reporting is a fast-moving area, and we regularly assess our strategy in the context of successes and
challenges, changes in the reporting landscape and feedback from our stakeholders. All companies are dealing with uncertainty in
meeting ESG-related ambitions, and we are no different. We focus on external factors we can influence, however there remain many
external factors which we can't control. As a result, our roadmaps to delivery on our targets remain subject to uncertainty across most
areas. We also regularly apply our learnings from successes and challenges to update our roadmaps.
Therefore, in fiscal 24, we have reconsidered the underlying targets in our three priority areas. Our objective has been to direct our
resources towards those areas where our learnings and engagements with stakeholders tell us we have the best opportunity to mitigate
the highest risks and deliver the highest impact. Our review has also considered preliminary results of a refreshed double materiality
assessment ahead of our alignment with the requirements of the European Union’s Corporate Sustainability Reporting Directive
(CSRD).
This section of the Annual Report sets out our progress against our 12 priority performance targets which cover the areas most
material to our business. We believe the selected performance targets also address our highest risks and as a result, we will be
directing a higher proportion of our resources to these priorities to accelerate action, maintain momentum and refocus our efforts. The
remaining targets will continue to be part of ‘Spirit of Progress‘ and further details of actions taken can be found in our ESG Reporting
Index and on our website. We have also included context on target changes in our Reporting boundaries and methodologies, starting
from page 322-343.
Promote positive drinking
Around the world, we reach and engage audiences with messages that aim to change attitudes, whether it's highlighting the harm of
underage drinking or binge drinking, warning of the dangers of drink driving, or using our brands to highlight the importance of
moderation.
We are proud to have met our 2030 targets for DRINKiQ and
brand-led moderation campaigns in fiscal 22 and 23 respectively.
They remain important tools in our work to promote positive drinking and are embedded into our operations.
Our educational programmes, designed to change attitudes to the risks of alcohol misuse, are targeted at areas we believe we can have
the biggest reach and impact, particularly in the context of each geography where we sell our products.
As a result, we will be increasing our focus on SMASHED, an award-winning programme providing education on the dangers of underage
drinking, and on raising awareness of the dangers of drink driving through educational programmes and other partnerships. Our reporting will
reflect an increased emphasis on these programmes, while also providing qualitative information on our wider approach to promoting positive
drinking.
Business description (continued)
97
(1) For the materiality matrix please refer to our ESG Reporting Index.
Champion inclusion and diversity
Championing inclusion and diversity is at the heart of what we do. Our experience and belief is that gender and ethnic diversity in our
leadership population helps drive better and more sustainable performance. We also believe that providing hospitality and business
skills through Learning for Life to under-represented groups helps support both our communities and an industry that is a crucial
partner for Diageo. Therefore, we will continue to maintain a strong focus on these areas and report on our progress in our Annual
Report.
We will also continue to track our spend with diverse suppliers; please refer to our ESG Reporting Index for more information.
Our other inclusion and diversity ambitions remain important to our holistic value chain strategy; our qualitative reporting on our work with
women in our community beneficiary programmes, progressive marketing portrayal and Diageo Bar Academy is included on page 112.
Pioneering grain-to-glass sustainability
Our business depends on natural resources, and we are directly affected by changes in climate and the related challenges of
water- stress and nature loss. Our refined action plan focuses on two key areas: water and greenhouse gas emissions.
Water is our most important natural resource and water-stress is a growing challenge in many countries. We will be accelerating our
efforts to maximise our stewardship of this precious resource, prioritising water efficiency in own operations around the world,
replenishment in water-stressed communities and collective action to improve water accessibility, availability and quality as priority
performance targets.
We are proud to have met our commitment to investment in access to clean water, sanitation and hygiene (WASH) in fiscal 23 and
will continue to partner with communities to ensure the same level of impact is delivered, providing clear examples each year.
Greenhouse gas emissions contribute to climate change, and we must do our part to reduce them.
We will continue to focus on reducing greenhouse gas emissions in our direct operations around the world, investing in energy
efficiency and switching to renewable energy. We will continue to work with our suppliers to decarbonise, but as described on pages
125-126, we will be refocusing our supply chain efforts on areas where we exert the most control and those categories of emissions
which are most material to our footprint. Our Scope 1, 2 and 3 greenhouse gas emission reduction goals will remain as priority
performance targets.
Our efforts to reduce emissions are supported by key packaging targets, including reducing packaging weight and increasing recycled content,
for which we will continue to provide quantitative data. We also believe strongly that our regenerative agricultural programmes will reduce
emissions, address water-stress and nature loss over the longer term.
Other supporting targets relating to our efforts to reduce greenhouse gas emissions, including renewable energy, our work with
smallholder farmers, and other packaging and waste targets, will continue to be tracked and reported in our ESG Reporting Index.
Business description (continued)
98
Maintaining and measuring culture
Our culture is defined by our people, who are dedicated to driving sustainable growth by doing business the right way, every day,
everywhere. To enable this, we focus on embedding our culture in all aspects of our business, keeping people safe, protecting human
rights and living our values through our Code of Business Conduct. We report on each of these topics in turn in this section (see page
105-109).
Governance
Both the Board and the Executive Committee oversee ‘Spirit of Progress‘. As Chief Executive, Debra Crew, is ultimately accountable
for the overall performance of Diageo's ESG action plan, and its targets. Each target has a member of the Executive Committee
accountable for delivery and progress is reviewed regularly by the Executive Committee and the Board. The Board reviews our most
material ESG issues, our strategy to address those issues and our targets used to measure our strategy in action. The review of our
performance targets undertaken in fiscal 24 was led by members of the Executive Committee and approved by the Board.
Linking performance to remuneration
Our review of ‘Spirit of Progress’ did not change our view on five of our ambitions which are considered key performance indicators.
The targets in our long-term incentive plans include:
•Number of people who confirmed changed attitudes on the dangers of underage drinking following participation in a Diageo
supported education programme.
•Inclusion and diversity – percentage of female leaders globally.
•Inclusion and diversity – percentage of ethnically diverse leaders globally.
•Improvement in water efficiency, measured by our water efficiency index.
•Reduction in greenhouse gas emissions in our direct operations (Scope 1 and 2).
These represent all three strategic priorities of our ‘Spirit of Progress‘ action plan, and reflect our vision to mitigate risks, act on
opportunities and make a positive impact on people and the planet.
New regulatory frameworks
By 2026, we expect to report under the International Sustainability Standards Board (ISSB) and CSRD. We are undertaking a double
materiality assessment, the results of which will be reported on in fiscal 25. Our preliminary view is that our materiality assessment
supports our performance target review and simplification.
We continue to report aligned to the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). Given
the interconnectivity of climate and nature, we have incorporated some of the Taskforce for Nature-related Financial Disclosures
(TNFD) into our TCFD reporting, with an aim to be fully aligned with TNFD in the medium-term.
In the United States, California has recently enacted the Voluntary Carbon Market Disclosures Act, California Assembly Bill No. 1305
(AB-1305) requiring companies operating in California to make certain disclosures regarding carbon neutrality and carbon emissions reduction
claims, and voluntary carbon offsets. We provide disclosures pursuant to AB-1305 in this section of the Annual Report, our Net Zero Carbon
Strategy on our website and our responses to CDP (formerly known as the Carbon Disclosure Project) climate change questionnaire, available
through CDP's website.
Reporting transparently
We define our performance measures carefully, along with clear reporting boundaries and methodologies for each. For more details,
see pages 322-343.
Business description (continued)
99

Promote positive drinking We want to change the way people drink – for the better. This is why we promote moderate drinking and invest in education programmes to discourage the harmful use of alcohol.

We want to change the way the world drinks – for the better. Our brands have been part of people’s celebrations for generations; we
make them with pride and they are made to be enjoyed responsibly.
We embrace our responsibility to proactively promote positive drinking. Therefore, in 2020, as part of the 'Spirit of Progress' strategy,
we unveiled our Positive Drinking approach with four pillars to deliver impact and change:
•Tackling harmful drinking through education.
•Promoting moderation via our brand marketing.
•Tackling underage drinking.
•Changing attitudes to drink driving.
We continuously evaluate our strategies, considering both opportunities and learnings. After incorporating feedback from our stakeholders, the
decision was taken that in fiscal 24 we would continue to scale our education programmes to address underage drinking and drink driving.
Having hit our targets for DRINKiQ, our interactive online education platform and moderation messaging in our brand strategy, we
embedded these crucial programmes into the rhythm of our daily business, with examples on page 101.
Protecting young people
We believe it is never acceptable for anyone underage to consume alcohol. That is why we have run campaigns and education
programmes to combat underage drinking for many years.
SMASHED is a programme that educates young people aged 10-17 in 38 countries on the dangers of underage drinking. It was
developed by Collingwood Learning, and we have been proud to sponsor it since 2018.
SMASHED began in 2005 as a live theatre production and has since been enhanced to enable online learning as well as live performances. To
make the programme as successful as possible, the performance can be tailored to specific countries using local actors and cultural references.

| Tackling underage drinking through SMASHED |
| Target by 2030 Scale up our SMASHED partnership and educate 10 million young people, parents and teachers on the dangers of underage drinking |  | Number of people educated on the dangers of underage drinking through a Diageo- supported education programme in fiscal 24 |
|  | 2.2m |

| n | 2030 Target | 10m |
| n | 2023 progress to date | 3.7m |
| n | 2024 progress to date | 5.9m |

In fiscal 24 approximately 2.2m people have taken part in a live session or an online SMASHED programme. This includes a
projected 1.8m people who have confirmed changed attitudes to the dangers of underage drinking based on our sampling of
participant surveys. We have educated approximately 6 million people since our baseline year of 2018.
This year, our progress toward achieving our global SMASHED target has notably accelerated. From hosting regional partner summits
in Latin America and Caribbean, reaching young people during school holidays in Africa to maximising online digital profiling of
ideal partner schools in South East Asia, our approach to rolling out SMASHED in fiscal 24 has been innovative and collaborative.
Driving responsibly
We've long championed awareness on the risks of drink driving, including collaborating with law enforcement and local authorities.
In 2021, we launched the Wrong Side of the Road (WSOTR) digital learning resource with the United Nations Institute for Training
and Research (UNITAR), aimed at raising awareness about the consequences of drink driving on individuals and communities.
WSOTR is available in digital and classroom formats and is now live in 24 countri es.
Business description (continued)
100

| Changing attitudes to drink driving |
| Target by 2030 Extend our UNITAR partnership and promote changes in attitudes to drink driving, reaching five million people |  | Number of people educated about the dangers of drink driving in fiscal 24 |
|  | 1.0m |

| n | 2030 Target | 5m |
| n | 2023 progress to date | 1.2m |
| n | 2024 progress to date | 2.2m |

In fiscal 24, we reached 1m people through WSOTR and other drink driving programmes. To date, we have reached 2.2m people since
fiscal 20.
This fiscal, we worked to accelerate the development and roll out of partnerships between our in-market teams and local governments
as well as other key local stakeholders.
For example, in India, we continued to partner with Regional Transport Offices in eight states to embed WSOTR into the driving
licence application process. We also ran a Greater Chennai traffic police anti-drink drive campaign. The WSOTR team organised an
awareness drive with the Greater Chennai Police to educate people on the dangers of drink driving. Over 2,500 individuals were
educated at 20 different locations through this initiative.
In South Africa we launched the WSOTR 'WhatsApp' campaign with the Department of Gauteng Roads and Transport. The objective
was to empower Gauteng's youth with subsidised fees for learners licences, and through drivers' programmes promoting responsible
drinking and creating safer roads. This campaign delivered approximately 50,000 completions of WSOTR.
We also look to develop partnerships with organisations that we believe will help deliver our mutual ambitions. Therefore, in February
we partnered with Mothers Against Drunk Driving (MADD) in the United States, an organisation dedicated to the eradication of drink
driving. With our combined expertise and resources, together we will focus on education, awareness, and prevention campaigns. As
part of this partnership, MADD joined Diageo’s Multicultural Consortium for Responsible Drinking to help address the harmful use of
alcohol in the Black, Latino and Native American communities. Diageo also became an inaugural member of the MADD Network.
Together we will continu e to build on our learnings and accelerate our progress going forward.
DRINKiQ
For DRINKiQ, w e have seen further momentum in fiscal 24 through the development of creative campaigns that have weaved together
the global ambitions around DRINKiQ and moderation. For example, in March 2024, SUHO, a renowned K-pop star who leads the
group EXO fronted a Diageo campaign ‘Enjoy the Flow, Savour Every Moment’ to promote moderation and responsible drinking. The
digital campaign also led visitors in the APAC region to the DRINKiQ site. Within a week of the launch more than five million people
viewed the campaign.
Business description (continued)
101
Make moderation aspirational
Moderation encompasses a broad range of different consumer behaviours and choices, such as choosing not to drink on certain
occasions, or substituting a favourite drink with a non-alcoholic version. We aim to enable and reinforce the breadth of choices
that consumers have to moderate. As well as delivering choice to consumers, we know through our insights work that making
moderation feel aspirational and therefore a 'popular choice' is critical in driving positive drinking attitudes and behaviours.
In fiscal 24, we have successfully driven aspiration with a variety of campaigns, some led by a key brand, others leveraging a number
of brands across our portfolio. Highlights include:
1.In October we launched Captain Morgan Spiced Gold 0.0%, the brand’s first alcohol-free offering, supported in Great Britain
and Germany by the highly engaging 'Why You Whying' advertising campaign. The campaign reached over 19 million
people in Great Britain and 14 million in Germany, with 82% of consumers in Great Britain and 90% of consumers in
Germany agreeing that the campaign 'makes drinking moderately feel like a popular choice'.
2.In December we launched the 'Magic of Moderation' campaign in Great Britain featuring Guinness, Johnnie Walker,
Tanqueray 0.0% and Seedlip. The campaign promotes moderate ways of drinking to allow people to make the most of their
socialising occasions. The campaign reached five million people in Great Britain, with 85% of consumers agreeing that it
'makes drinking moderately feel like a popular choice'.
In addition to our brand moderation campaigns, our non-alcoholic brands also support our positive drinking ambition. We know that
our 0.0 brands have a strong role to play in giving consumers choice and that communications for these brands can promote positive
moderation behaviours and attitudes. For example, in fiscal 24, Guinness 0.0 has tapped into the moderation mindset to become
the fastest growing alcohol-free beer in Great Britain and Ireland. The brand will be the official global responsible drinking partner of
the English Premier League, providing further opportunities to support our positive drinking agenda.
Marketing in a responsible way
The Diageo Marketing Code (DMC) not only sets minimum standards for responsible marketing, it also represents a cornerstone of
our corporate culture and the way we do business. The DMC includes, among other principles, our commitment to making sure we
depict and encourage only responsible and moderate drinking, and never target underage audiences. We are proud to have a proven
track record of compliance, which is underpinned by mature business processes, and appropriate checks and balances in every market
we operate in.
In support of our commitment to responsible marketing, this year we have rolled out several tools to help our marketers uphold our
standard more easily:
•A refreshed Digital Marketing Standard, with clearer requirements on social media governance, targeting adults in digital
media and consumer data compliance, amongst other topics.
•An updated Influencer Marketing Standard, with enhanced requirements for selection of influencers, DMC briefing,
approvals and required disclosures.
•A self-certification e-learning module, for all Diageo and agency staff to ensure understanding of the DMC.
•A test of an AI-based assistant to support human DMC reviews and approvals of marketing materials, making the process
faster without compromising accuracy and control.
This year, the International Alliance for Responsible Drinking (IARD) reassessed our compliance with their Digital Guiding
Principles. These principles set out five measures that should be in place for all online alcohol marketing communications. We are
pleased to report that, after having 155 items from 14 markets measured by an independent third party, our score was 100% full
compliance rate. This achievement showcases how we leverage technology to uphold our responsible marketing practices, combining
automated monitoring with robust social media governance.
Finally, across some of our markets, advertising monitoring and industry bodies publicly report breaches of self-regulatory alcohol
marketing codes. No complaints about Diageo marketing were upheld by key industry bodies this fiscal year (see below) for any of
the following markets: United Kingdom, Australia and Ireland.
One complaint was upheld in November 2023 against Casamigos, by the Distilled Spirits Council of the United States (DISCUS),
about an ad depicting motorcycle riding without a helmet and a product placement in a music video, which depicted some scenes of
irresponsible consumption.
In response, Diageo agreed to not produce new Casamigos advertising content depicting motorcycle riding without helmets and
removed all references to the music video from the brand’s channels.
Complaints upheld by key industry bodies that report publicly:
Business description (continued)
102

Incidents of non-compliance concerning marketing communications – fiscal 24(1)
Country | Body | Industry complaints upheld | Complaints about Diageo brands upheld
United States | Distilled Spirits Council of the United States | 2 | 1
Australia | ABAC Scheme | 33 | 0
United Kingdom | Advertising Standards Authority | 0 | 0
Portman Group | 18 | 0
Republic of Ireland | Advertising Standards Authority for Ireland | 3 | 0

(1) From 1 July 2023 to 5 May 2024.

| Doing business the right way We want to do business in the right way every day, everywhere. We expect all stakeholders, including our people and suppliers, to demonstrate integrity, live our values, and behave in an ethical way as set out in our Code of Business Conduct.

Business Integrity
Working with integrity is fundamental to our identity and organisational strategy. We make sure our people and suppliers demonstrate
integrity, live our values and behave in an ethical way that underpins our Code of Business Conduct (Code). Each of us has a
responsibility for doing business the right way. By valuing not only what we do, but how we conduct business, we generate success
worth celebrating.
'Diageo’s Business Integrity agenda is embedded in every part of their business
In September we were delighted to be named one of the winners of the 2023 NAVEX Customer Excellence Awards in the
Governance, Risk and Compliance ('GRC') Programme of the Year category.
Annually, NAVEX (the external provider of our Breach Management database, EthicsPoint) honours organisations that demonstrate
the most innovative, impactful and successful risk and compliance programmes in practice today. The judges said: 'Diageo’s Business
Integrity agenda is embedded in every part of their business... [It] knows that performance can only be sustained if everyone is doing
the right thing, every day, everywhere'.
Code of Business Conduct
Our Code sets out the basis for how we work and conduct business. It lists key principles which guide our day-to-day operations,
decisions and interactions with colleagues and other stakeholders. Our Code forms what we stand for as a business and how we
demonstrate our high standards of integrity and ethical behaviour.
Each year, all eligible employees complete mandatory training on the Code, and at the end of the training certify that they have read,
understood and complied with the Code and our global policies. Training is via an interactive e-learning module accessible through
any device or classroom training for those who do not have regular computer access. This year, 97% of eligible employees completed
the training (fiscal 23: 97%).
In fiscal 24, we came together to celebrate our first ever Global Spirit of Integrity Day. The day covered key topics from our Code
including data privacy, cyber risk and dignity at work, as well as our controls transformation and risk management programme.
Attended live by many of our employees, a number of our markets further enhanced the themes of the day by running complimentary
sessions after the event. We expect to continue running similar programmes in the future.
Training our leaders
Treating each other with dignity and respect is an important part of doing business the right way. Our Dignity at Work training
programme relaunched in fiscal 24, supported leaders with the right tools and behavioural guides to lead with integrity. The
programme was also extended to new senior leaders joining the business in the year, and was included in a new managing director
onboarding playbook.
Encouraging people to speak up
We encourage everyone to report potential breaches of our Code, policies or standards through our global confidential grievance and
whistleblowing service, SpeakUp. The service, which is available through various channels (email, telephone and internet) in 19
languages, is monitored by the Global Business Integrity team to ensure that all allegations are handled appropriately, confidentially
and fairly.
In fiscal 24, we launched a new campaign, 'I Spoke Up, Ask Me Anything', which addressed and enhanced awareness of the
anonymous nature of SpeakUp reporting. See further details on SpeakUp cases raised in the year and the resulting actions taken in the
Audit Committee Report (page 178-187).
Business description (continued)
103
Managing third-party risks
Business integrity is also vital to our relationships with third parties. Our Know Your Business Partner (KYBP) programme helps us
screen for potential risks before we start a contractual relationship. In fiscal 24, improvements were made to our Breach Management
process including leveraging data analytics to better assess our third-party risk.
Standing up for human rights
At Diageo, we strive to create an environment where all our people feel they are treated fairly and with respect. We remain committed
to acting with integrity in our roles, to ensure we are doing business in the right way, meeting external expectations and our own
standards. We act in line with the UN Guiding Principles on Business and Human Rights (UNGPs) and are committed to embedding
respect for human rights into everyone’s working day, in every country throughout our business and value chain. Our policies cover
our responsibilities to protect the human rights of everyone working in our direct operations, our value chain and communities.
Our human rights governance
Our Code of Business Conduct and Global Human Rights Policy are an integral part of ensuring that Diageo’s culture is aligned with
our purpose and values. Our Code is approved by our Board of Directors and our Global Human Rights Policy is approved by our
Chief Executive Officer. Our human rights strategy is reviewed on a periodic basis by the Audit Committee of the Board of Directors
and by the Executive’s Audit and Risk Committee (ARC) as part of our principal risk on business ethics and integrity (see page 77-85
in our UK Annual Report). Responsibility for delivery is shared between the members of Diageo’s Executive Committee that are
responsible for the human rights of our employees, suppliers and communities. A number of our Executives, senior business leaders
and functional specialists lead the agenda via our Human Rights Steering Group (group and market level) and assess risks, emerging
issues, compliance and remediation within our enterprise risk management processes.
Staying ahead of emerging legal requirements and increasing stakeholder expectations
We continue to monitor new regulations, including the EU’s Corporate Sustainability Due Diligence Directive, and in fiscal 24,
took preparatory steps in anticipation of this regulation.
We have refreshed our list of salient risks, vulnerable groups, high risk markets and high risk commodities in our supply chain. We have
implemented new risk assessment tools for our direct operations and supply chain that allow us to better detect and mitigate risk before an
incident occurs. We are in the process of expanding our human rights due diligence further along our value chain – incorporating new
businesses, brand promoters, third-party operations, suppliers', stakeholders and our customers. When material potential risks are identified, we
look to put in place corrective action plans to mitigate the risk.
Focusing on salient human rights risks
In fiscal 24 we refreshed our assessment of salient risks that are most relevant to our business as specified in the Declaration on
Fundamental Principles and Rights at Work and the UNGPs. We looked at human rights benchmarks for our industry, priority
commodities in our supply chain and the increasing interdependence between human rights and climate impacts.
The assessment identified the following salient risks: health and safety, wages and benefits, working time, harassment and bullying,
discrimination, freedom of association and collective bargaining, child labour, forced labour, water sanitation and hygiene and land
rights. Whilst we conduct ongoing due diligence in all areas, we have prioritised health and safety, wages and benefits, working time,
harassment and bullying and discrimination based on severity, likelihood, attribution, leverage and breach data.
Prioritising vulnerable groups
We recognise that some groups of people are more vulnerable to human rights breaches and pay particular attention to these groups
within our risk assessments. Determined by human rights frameworks, our value chain, and human rights impact assessments, our
vulnerable groups are women, ethnic minorities, persons with disabilities, the LGBTQIA+ community, indigenous peoples, migrant
workers and contract/temporary workers and children.
Assessing risk in our direct operations
We use a variety of risk assessment tools in our direct operations. This includes self-assessment questionnaires for all direct
operations, third-party human rights assessments for high risk direct operations and deep dive assessments for groups that we consider
more vulnerable to risk. Where assessments identify material human rights concerns or suggest our approach can be strengthened to
better identify and prevent risk, we strive to put in place robust action plans to resolve matters, working with external experts when
appropriate.
Assessing risk and compliance in our supply chain
Within our Sustainable Procurement team, a dedicated Responsible Sourcing team is in place to lead the management and
implementation of our human rights approach beyond our own operations. Our Responsible Sourcing programme follows a risk-based
approach to assessing adherence to our Partnering with Suppliers standard. Suppliers are risk-assessed against the following three
criteria: location of supplier site(s), category of product or service and amount of spend. Suppliers who are assessed as high risk are
required to undertake an independent third-party Sedex Members Ethical Trade Audit (SMETA) or an equivalent four-pillar ethical
audit.
We have also mapped our salient risks within our full supply chain allowing us to prioritise our actions and drive positive social
impact where it is needed most. Part of this assessment includes identifying the scale, scope, remediability and likelihood of our
salient risks through different parts of our supply chain. These findings are helping us to focus our interventions on specific human
Business description (continued)
104
rights issues within each supply chain for greater impact. For more information, please refer to our ESG Reporting Index and our
Modern Slavery Statement.
Taking action to mitigate risk
Where we identify risk, we take action to mitigate the risk to our business and our people. For example:
•Contract labour review, recognising contract workers as a more vulnerable group than direct employees. This reviewed the
effectiveness of our governance processes as well as conducting interviews with contract workers to share their views. Based
on the findings and recommendations, we will strengthen our processes to improve our governance over contract labour.
•Global Dignity at Work Policy which tackles harassment and bullying in the workplace, and our Domestic and Family Abuse
guidelines supporting employees, their friends and family who may be experiencing harassment and bullying outside the workplace.
•Global Brand Promoter standard and training which establishes principles and guidelines to protect brand promoters from the risk of
sexual harassment.
•Child labour prevention programme for smallholder farmers, where we have trained key functions and business partners in
Africa to prevent child labour. We also deliver training direct to our smallholder farmers.
•Partnership with external parties to assess and address the health impacts of heat stress in sugarcane farming for our rum
supply through improved access to shade, drinking water, personal protective equipment and rest schedules.
•Regular training for teams and suppliers so they can effectively manage human rights risks.
Providing access to grievance mechanisms
We provide a global grievance and whistleblowing mechanism to our employees, business partners and communities, called
’SpeakUp’. For more information, see Business Integrity (previous page)
Engaging our stakeholders
We recognise the importance of listening to and consulting stakeholders on issues that affect them. We do this on an ongoing basis
through different mechanisms including worker interviews, reviewing grievance data and holding community dialogues.
Assessing the effectiveness of our approach
We measure the effectiveness of our human rights governance through our internal assurance framework and third-party human rights
assessments, in addition to monitoring allegation and breach trends and root causes. We continue to enhance our risk mitigation plans
based on lessons learned. For example, we took our brand promoter training online to increase accessibility.
This focus on due diligence and disclosure is crucial to us doing business the right way. It enables us to have transparency in our
engagements with employees and all stakeholders. We will continue to focus on this important area, embedding respect for human
rights into everyone’s working day, in every country and throughout our value chain.

| Our people and culture: The key to winning Our talented and diverse workforce, together with our people’s passion for our brands and unique culture continues to be a competitive advantage for our business, enabling our people to perform at their best.

Highly engaged, talented and diverse workforce
At Diageo, we are proud to have strong employee engagement levels across our business. Despite challenging economic circumstances our
people continue to express pride and passion for our consumers, business and brands. In our most recent Your Voice survey, a high proportion
of our people (89%) are proud to work for Diageo, significantly exceeding the external benchmark(1) by 10 percentage points. Our overall
engagement score also remains strong at 81%, which although being 3 percentage points lower than last year, is 5 percentage points higher than
the external benchmark. This impressive engagement index puts us in an advantaged position as an employer of choice and enables us to attract
and retain the best and most diverse talent.
Leadership and inclusive culture continue to be important drivers of employee engagement. We have built a workforce with the right
blend of diversity and expertise in our leadership and line manager population. We continue to upskill our managers’ coaching
capabilities, equipping them with the skills needed to inspire and develop their teams, through our line manager development
programme. In our recent Your Voice survey, 81% of our people believe that their line managers encourage and value different
perspectives and styles.
Career and talent management is crucial to sustaining high employee engagement levels and future-proofing our business
performance. Our 'Craft my Career' initiative provides the platform for our people to have meaningful discussions on how they can
grow and develop at Diageo. We also prioritise developing key talent for future roles through our global mobility and talent
development programmes. In fiscal 24, 71% of our leadership appointments were internal talent and more than 5,500 people globally
succeeded to make career moves which translates to an average of at least 15 people every day. We remained committed to enhancing
digital, data and analytics capabilities, which are vital for our present and future growth. The Digital Talent Incubator programme was
launched to further develop our digital capabilities and build a sustainable talent pipeline for digital roles. Additionally, through our
Business description (continued)
105
collaboration with an externa l partner specialising in digital capability building we successfully upskilled more than 3,000 employees
in digital competencies, reaffirming our commitment to staying at the forefront of digital innovation.
Embedding a culture of speed and agility
We believe that a culture of speed and agility is important in the current operating environment, marked by increased volatilities and
challenging macroeconomics. Our ability to respond faster to rapid changes in our internal and external environment will enable us to
deliver consistent performance and maintain our competitive edge. Therefore, we embarked on a culture transformation journey in
fiscal 24 to further embed speed and agility across our business. We have an advantaged and distinct culture in Diageo – that is
characterised by the passion our people have for the business, a strong sense of ownership, purpose driven approach, a collaborative
spirit, an inclusive mindset and a commitment to doing business the right way. We have continuously evolved our culture in Diageo
over past 26 years, preserving our culturally distinctive strengths that continue to enhance performance, whilst accelerating the key
shifts that will be critical to the next phase of Diageo’s growth ambition. As part of the culture transformation programme, we have
designed four ’dial-up’ behaviours which represent the key cultural pivots we want to make. These behaviours have been purposefully
chosen based on feedback from internal and external stakeholders including our employees. We have also refreshed our values to
ensure proper alignment with our cultural aspirations. Our refreshed values are: passionate about consumers and customers, value each
other, be better, proud of what we do. Our four 'dial-up behaviours' are externally curious, collaborating efficiently, experimenting,
and learning and acting decisively.
Over the last nine months, we have immersed people in the culture change journey and equipped our employees to practise the new
'dial-up behaviours'. These immersion sessions have been facilitated by a passionate group of over 550 culture change champions and
our business leaders. We have also integrated the 'dial-up behaviours' into our performance management, reward and recognition
processes. Celebrate, our new and innovative recognition platform is now live in over 56 countries. Following an accelerated
expansion in Q2 and Q4 of fiscal 24, it now reaches the majority of our employees. The programme helps foster a culture of gratitude
and appreciation, using instant and more frequent peer-to-peer recognition aligned with our purpose of celebrating life every day,
everywhere. Delivered through a modern consumer grade user experience, the platform has achieved a strong utilisation rate with over
90,000 recognition moments experienced - the equivalent to one award every six minutes. Furthermore, we are empowering and
equipping our 4000+ people managers across the globe with the necessary tools to role model and influence behaviour change within
their teams.
While we understand that cultural change can take time, we remain committed to amplifying and clarifying the expectations for our
people. We believe that by doing so, we can build a more responsive and resilient workforce that is better equipped to thrive and
succeed in today's rapidly changing business landscape.
(1) Based on a blend of Ipsos Karian and Box, Qualtrics benchmark data. Global Manufacturing benchmark includes organisations with global coverage that operate
within FMCG and other industry sectors.
Creating the enabling environment for our people to work and thrive
We believe that people are at their best, both at work and at home, when they are physically and mentally thriving, emotionally
balanced, financially secure and socially connected. Our wellbeing philosophy provides a framework around these four dimensions,
ensuring that wellbeing is a part of our culture every day, everywhere. In our most recent employee opinion pulse survey, 88% of
respondents felt they are aware of the health and wellbeing resources and support Diageo offers, which has in part been aided by
active wellbeing champion groups. Markets are supporting the wellbeing of our people in different ways such as in Australia, where
we have introduced ‘Wellbeing Leave’ encouraging employees to proactively plan time away from work to rest and support their
wellbeing and in the United Kingdom, where we had a dedicated wellbeing day in May to recognise Mental Health Awareness Week.
In fiscal 24, we have further challenged the stigma around mental health. Building on our already launched mental wellbeing app,
Unmind, we have created a Mental Health Awareness eLearning and on World Mental Health Day we facilitated global conversations
where leaders shared their own experiences of mental health, to both normalise and signpost to resources. We provide a focus on
financial wellbeing through regular masterclasses and mental 'wealth' first aid training. Many markets have led employee physical
wellness challenges, such as Ireland’s ‘Go Joe Challenge’.
Additionally, we have developed a suite of resources on a range of globally relevant topics such as sleep, physical activity and staying
resilient during seasonal changes and have hosted multiple global conversations on topics such as menopause and men’s health.
Our Diageo Flex philosophy continues to offer employees opportunities to balance their work-life integration. Our family leave policy
continues to be popular and amongst market leaders, with 701 employees utilising our extended paternity leave provision and 842
employees utilising our extended maternity leave provision in fiscal 24. Lastly, our investment in a multi-year technology
transformation programme will make it easier for our people to do more fulfilling work, improve access to quality data and insights
and drive greater productivity and efficiency in our business process.
Business description (continued)
106
Average number of employees by region and gender(1)

Region(2) | Men | % | Women | % | Not declared(3) | % | Total
North America | 1,844 | 59% | 1,286 | 41% | 14 | — | 3,144
Europe | 5,972 | 57% | 4,538 | 43% | 14 | — | 10,524
Asia Pacific | 5,797 | 66% | 2,965 | 34% | 1 | — | 8,763
Latin America and Caribbean | 2,225 | 64% | 1,272 | 36% | 2 | — | 3,499
Africa | 2,761 | 62% | 1,675 | 38% | 1 | — | 4,437
Diageo (total) | 18,599 | 61% | 11,736 | 39% | 32 | — | 30,367

Average number of employees by role and gender(1)

Role | Men | % | Women | % | Not declared(3) | % | Total
Executive(4) | 7 | 54% | 6 | 46% | 0 | — | 13
Senior manager(5) | 320 | 56% | 252 | 44% | 1 | — | 573
Line manager(6) | 2,414 | 64% | 1,330 | 35% | 7 | — | 3,751
Supervised employee(7) | 15,858 | 61% | 10,148 | 39% | 24 | — | 26,030
Diageo (total) | 18,599 | 61% | 11,736 | 39% | 32 | — | 30,367

(1)This data has been compiled as monthly average based on the proportion of employees who have identified their gender identity as male, female or
undisclosed, and is not fully representative of the gender identity or diversity within our employee population.
(2)Employees have been allocated to the region where they live.
(3)This data represents the proportion of employees who have chosen not to disclose their gender identity as male or female.
(4)Executive positions have been calculated based on year end as of 30 June.
(5)Top leadership positions in Diageo, excluding Executive Committee.
(6)All Diageo employees (excluding senior managers and Executive Committee) with one or more direct reports.
(7)All Diageo employees (excluding senior managers and Executive Committee) who have no direct reports.

| Health and safety We prioritise the health and safety of our people throughout our value chain to ensure everyone is safe when working on- site, at home, on the road, every day, everywhere.

Embedding a culture of health and safety
We believe that safety is everyone's responsibility and an integral part of everyone's job. Empowering and involving our people in
safety embeds our belief that there is no acceptable level of accidents.
Our Global Health, Safety and Wellbeing Policy, along with our Global Risk Management Standards, lay the foundation for our
corporate approach to health and safety. We conduct risk assessments and utilise compliance systems, technology, and training that
help us create and embed innovative ways of working that continuously improve safety.
We encourage our employees' participation and involvement in accident investigations and improvement initiatives, and also provide
them with the most up-to-date health and safety training, so they can carry out day-to-day tasks and activities safely. In addition, we
conduct company-wide communication campaigns and as such in fiscal 24 we held 'Stop and Think', 'Refocus our Minds', 'Leading for
Safety' and 'Strive for Zero' campaigns.
We have completed the first of our three-year 'Safer Together' strategy which incorporates a safety culture and a technology roadmap.
Our overall strategy is designed to prevent severe, fatal, and process safety incidents while enhancing our health and safety culture.
Our roadmap is designed to further embed an improved safety culture into all locations. Our technology roadmap includes digital
solutions, automation, forklift truck technology, manual handling aids and artificial intelligence with the aim of improving our health
and safety performance. Over the next two years we plan to invest over $50 million on 36 shuttle warehouses in our scotch operations
where casks are put away on pallets by an automatic shuttle, removing manual handling, in an effort to improve safety and increase
productivity. Our strategy and roadmaps extend to our contractors and third-party providers.
Business description (continued)
107
Empowering responsibility: Fostering a safe work environment
Leaders across the organisation are responsible for cascading and implementing health and safety policies and procedures among their
direct reports and third parties within their remit. We also expect all employees to take responsibility for their health and safety and
those around them, by acting in accordance with our Code.
We utilise a variety of tools to identify health and safety risks as per our Global Health, Safety and Wellbeing Policy. Each location is
required to perform hazard identification and risk assessments which assist us in identifying and addressing unsafe conditions. We also
have a safe observation programme across all locations to identify unsafe behaviours, recognise positive behaviours and to report
work-related hazards. All employees and third parties are encouraged to remove themselves from work situations they believe could
cause injury or ill health. Hazards are logged on local action planning systems and tracked for closure.
To track the effectiveness of our approach, all our locations, markets and global functional teams regularly monitor and review health
and safety. We report weekly our performance measures to the Global Supply Chain and Procurement Governance Leadership,
to Supply Chain and Procurement Leadership monthly and to the Executive Committee at quarterly meetings.
Our performance
We report on lost time accident frequency rate (LTAFR). This
year, we sustained 1.06 lost-time accidents (LTAs) per 1,000
full-time employees (including directly supervised
contractors), compared to 0.91 in fiscal 23.
5 year LTAFR trend
Business description (continued)
108
Our LTAFR increased against last fiscal, driven by increased numbers of lost time accidents in Scotland and North America. Both of
these markets together with tequila and Türkiye market implemented safety improvement plans aimed at improving safety
performance and safety culture. These improvement plans will be continued into the next fiscal.
Our total recordable accident frequency rate (TRAFR) records
work- related injuries that need more than first aid treatment decreased during this fiscal, demonstrating a consistent year-on-year
improvement in our overall numbers across the last three fiscal years, with a notable improvement in our tequila and Türkiye market. We
investigate each recordable accident to establish the root cause as well as uncover all contributing factors and insights we can learn from.
We share the key learnings across the organisation aiming to prevent recurrences. For more information, please refer to our ESG
Reporting Index.
(1) Fiscal 20 performance was impacted by Covid and reduced operations.
Continuous improvement initiatives
Our workplaces are constantly evolving with new technologies, processes, and equipment. Continuous improvement ensures that
health and safety measures keep pace with these changes, addressing emerging hazards effectively. In fiscal 24 we introduced several
initiatives and will continue to do so as part of our culture and technology roadmaps in fiscal 25.
•Across our commercial organisation, we have launched a driver training programme – a driver behaviour monitoring
application, which provides bespoke training modules linked to the individuals driving behaviour.
•We continue to roll out the Diageo Behavioural Standard in Africa, focused on assessing the safety culture of our African
locations, which inform action and communication plans. Plans have started in Mexico to roll out this global standard across our
tequila business. Other regions such as Europe and North America are working with consultants to launch a standard suitable to their
bespoke activities.
•We introduced a new AI platform in some of our European facilities. The platform provides a 3D visual interface of the
location and allows staff to interact with various safety 'tools' in a very intuitive, visual way within this digital space. Using a range of
media including; touch screens, large format digital kiosks, tablets and mobile devices staff and visitors can interact with all elements
of the safety management systems. This includes site induction and familiarisation, reporting safety hazards, completing safety
observations, communication of safety incidents and access to a range of safety documentation. In addition, the digital platform
provides 3D representation and digital twin model of the workplace, developing people's spatial awareness and providing an intuitive
medium for training and safety awareness.
•We are continuing to improve our data capabilities to predict and prevent injuries.
•We continue to develop our global health and safety platform and are introducing electronic solutions for permit to work,
management of change and contractor management.
Continuous improvement in health and safety is vital as we continue to enhance workplace conditions and reduce risks.
Business description (continued)
109

| Champion inclusion and diversity Championing inclusion and diversity is at the heart of what we do, and is crucial to our purpose of ‘celebrating life, every day, everywhere’.

Our people are critical to our success. We believe everybody should be able to work in an environment where they can thrive, and
their contributions are valued. We are proud that in our most recent Your Voice survey, 81% (fiscal 23: 84%) of employees would
recommend Diageo as a great place to work and 83% (fiscal 23: 85%) agreed that people from different backgrounds and opinions can
be themselves and thrive in the company. Despite a small drop in results, our outcomes are above external benchmarks.
We are committed to shaping broader societal change, reflective of our consumers. We look to champion this across our entire
business – with our people, through our value chain, across our brands and within the communities in which we operate. Inclusion and
diversity is a critical enabler of our ‘Spirit of Progress’ ambitions and every senior leader plays their part and is incentivised in driving
progress to deliver this ambition.
Whilst we celebrate where we are today, we know there is more to do. Alongside progressing our gender and ethnicity ambitions, we
must also focus on achieving our ambitions across all aspects of diversity.
Strengthening our female talent pipeline
In fiscal 24, representation of women in leadership roles, including our Executive Committee, remained strong at 44%, against our
2030 ambition of 50%. We're proud to have 70% female Board representation, and 46% female Executive Committee representation.
This led to Diageo being recognised as a Top Ten Best Performing company for both women on boards and in leadership roles in the
FTSE Women Leaders Review. We have also been listed first in the United Kingdom and third globally from 4,000 companies in the
Equileap Gender Equality Report recognising our continued commitment to leading the way in gender equality.
We focus on strengthening our female leadership pipeline and investing in the next generation of female leaders, particularly across
areas where women have historically been under-represented, including commercial, general management and supply roles. Examples
of this include our 'Horizons' development programme piloted in fiscal 24 to strengthen general manager succession and support the
transition of leaders across functions, with 55% female representation in our first cohort. We launched the Global Supply Chain and
Procurement 'Accelerator' leadership programme of which 66% of participants were female and the 'Striding Women' initiative across
LAC strengthening retention and diversity of future talent. Our North America business also launched a commercial pilot partnering
with Sistas in Sales (SIS), an organisation committed to serve women of colour in professional sales careers across the United States.
These initiatives are complemented by our policies and practices – helping us to foster a gender-inclusive environment, providing
support at varying life stages including our 'Family Leave' policy, ‘Thriving Through Menopause’ guidelines, 'Pregnancy Loss'
guidelines and our 'Fertility’ guidelines which recently launched in Ireland.
Our 20 Spirited Women Network chapters are key to creating and amplifying our guidelines and policies, as well as partnering with
the business to best develop and grow talent. In fiscal 24 our Great Britain and Ireland chapters championed mentoring and coaching
programmes reaching 364 pairings, of which 84% were female.
Maintaining ethnic diversity
Today, 40% of our Board and 46% of our leadership population, including our Executive Committee, is ethnically diverse and we are proud to
have reached our 45% ethnicity leadership representation ambition ahead of 2030. We achieved this through 43% of internal promotions and
45% external appointments into the leadership cohort being ethnically diverse in fiscal 24. We want to maintain the momentum achieved to
date, while embedding the actions and enhancing our culture that has led to such positive outcomes. Disclosure is key to this and we are proud
that 96% of our leadership population and 71% overall, in the markets where legislation allows, have shared this information voluntarily.
We remain committed to creating a diverse and inclusive workforce that represents the communities we serve, and understand the
importance of diversifying our talent attraction and external partnerships. In North America, we've renewed partnerships with
Prospanica (The Association of Hispanic MBAs & Business Professionals) and the National Black MBA Association to support a
diverse talent pipeline. In Great Britain, we've partnered with Multiverse to launch a two-year apprenticeship programme aimed at
under-represented groups in commercial roles. The cohort consisted of ethnically diverse and female apprentices, further strengthening
our future leader pipeline.

Gender representation of our leadership(1), (3)
Role | Men | % | Women | % | Total
Leadership population(2) | 327 | 56% | 258 | 44% | 585(3)

Business description (continued)
110

Ethnic representation of our leadership(1), (4)
Role | Ethnically diverse | % | Non- ethnically diverse | % | Decline to self- identify | % | Not disclosed | % | Total
Leadership population(2) | 259 | 46% | 270 | 47% | 19 | 3% | 20 | 4% | 568

(1) This data is calculated as an average across the four quarters of fiscal 24.
(2) Leadership population encompasses Executive Committee and senior managers.
(3) One leader has opted not to disclose their gender; they cannot be positively attributed to either group and therefore are included.
(4) 18 leaders are based in countries that do not collect ethnicity data. As such, these leaders are not in scope. Please refer to the Reporting boundaries and
methodologies for further information, see pages 322-3 43.
Building an inclusive culture through leading progressive policies and guidelines
Our market-leading policies and practices are shaped by and for our people and allow us to continue to provide an environment
where they are supported and cared for.
We continue to embed and scale our existing policies and guidelines, including 'Domestic and Family Abuse', 'Gender Expression and
Identity’ and 'Disability Inclusion' guidelines. We also continue to support our employees’ individual circumstances and needs through
our 'Flexible Working' and 'Wellbeing' philosophies. In fiscal 24 we launched our Carers Leave policy in the UK, which went beyond
statutory entitlement giving our people up to 10 days paid leave to care, or arrange care, for dependents. This policy is accessible to all
employees, regardless of gender, but we recognise that women are more likely to take up caring responsibilities. We will be extending
this policy to other markets during fiscal 25.
Leveraging the power of our Resource Groups to drive inclusion locally
At Diageo, creating a sense of belonging for everyone is at the heart of everything we do. Our 60 employee resource groups (ERGs)
worldwide champion key calendar moments that represent the voice of our consumers and promote inclusivity. These include events
such as Hispanic Futures Month led by 'Connectados'; Black Heritage Month sponsored by 'AHEAD' (African Heritage Employees at
Diageo); International Day of People with Disabilities in partnership with the 'We Are All Able' group; the 'Rainbow Network' Pride
flag-raising event, and our annual Inclusion Week celebration now in its seventh year, seeing over 5,800 employees join across 29
virtual sessions.
In addition to this, fiscal 24 saw new initiatives and innovations including:
•Neuroinclusion – Diageo's first neurodivergent ERG PRISM launched in Ireland and Great Britain. In partnership with
PRISM, our Irish Brand Homes were accredited by Ireland's National Autism Charity ‘As I Am’ as autism friendly
attractions in November 2023.
•LGBT+ Gold Standard – The launch of Diageo India’s ‘Rainbow Network’ which saw members partner with the business
to help secure the prestigious Gold Award for LGBT+ Inclusion by India’s Workplace Equality Index (IWEI).
•Guinness Luck of the Dragon – To toast Lunar New Year the ‘P.A.N' (Pacific Asian Network) ERG partnered with
Guinness Open Gate Breweries in Baltimore and Chicago to launch a limited-edition brew and identified two local Asian
American and Pacific Islanders (AAPI) nonprofits to support as part of the festivities.
Business description (continued)
111
Promoting inclusivity within our value chain
Part of how we promote sustainable growth, and a resilient supply chain is giving equal access to resources, skills, and employment
opportunities in communities where we live, work, source and sell. An important way we deliver this is through Learning for Life
(L4L), our business and hospitality skills programme for people from
under-represented groups. L4L also tackles barriers faced by other under-represented groups including ethnically diverse communities
and people with disabilities. Our inclusive by design principles include recruitment practices, training content and venue accessibility,
as well as modules on inclusion and diversity.

| Building a thriving and inclusive hospitality industry |
| Ambition by 2030 Provide business and hospitality skills to 200,000 people, increasing employability and improving livelihoods through Learning for Life and our other skills programmes |  | Number of people reached through Learning for Life and other skills programmes in fiscal 24 |
|  |  | 36k |

200k

| n | 2030 Target | 200k |
| n | 2023 progress to date | 62k |
| n | 2024 progress to date | 98k |

In fiscal 24, we reached 36,000 people in 36 countries and territories with L4L, over 50% of them women. To deliver an even greater
positive impact, this year we piloted new partnerships with our customers and distributors to increase employment rates for students
graduating from our programme.
Through Diageo Bar Academy we provide accessible training and resources aiming to create a sustainable, inclusive, and thriving
hospitality industry that works for all. In fiscal 24 we continued to deliver in-person and online training to hospitality workers, with an
emphasis on women, in Africa (Zambia, Mozambique, Cameroon) and India to support their industry progression.
Increasing the representation of diverse voices through our progressive marketing practices
As one of the world's largest advertisers, we're committed to playing our part across the industry to ensure that everyone, from script to
screen, sees themselves represented. We use our marketing to challenge stereotypes and commit investment to address under-
representation of diverse voices in media, making mainstream media more inclusive.
In fiscal 24, we are proud to have made significant advancements in our accessibility practices across our media and campaigns.
Working with television station ITV, Guinness made sporting history by trialling live descriptive audio commentary for two Guinness
Six Nations rugby games, to help make sure blind and partially-sighted fans could follow every aspect of the game. Smirnoff’s biggest
global campaign for over a decade, 'We Do We', launched across different markets shining a light on under-represented groups and
advocating for more inclusive socialising. In the UK, the brand partnered with accessibility and inclusive consultancy, 'Tilting the
Lens', to execute an 'access for all' pledge to make socialising and our events more accessible. In India, Smirnoff partnered with Kala
Ghoda Art festival, one of India’s top exhibition festivals in Mumbai to support the Hijra community, a transgender community facing
significant social exclusion. In Brazil, the brand partnered with IZA, launching a unique track and dance challenge to support local
Afro-Brazilian communities and Pride activities across the country.
Creating inclusive communities
We champion inclusion and diversity in the communities connected to our production sites and sourcing areas. We work with
WaterAid and CARE International UK to ensure that when we provide Water Sanitation and Hygiene (WASH) to communities in
water-stressed markets, we also facilitate community dialogues to tackle social norms that prevent women's equal access to and
agency over WASH. This year more than 50% of WASH committee members were women across our programmes in nine countries.
We have also expanded our inclusive approach to our work with smallholder farmers to include Kenya, Tanzania, Nigeria and Ghana.
In partnership with Sightsavers and CARE International UK, we provide equal access to agricultural training and resources for
women, youth and people with disabilities. See more detail in our ESG Reporting Index.
Business description (continued)
112
Driving sustainable economic impact with diverse suppliers
We believe diverse-owned and disadvantaged suppliers deliver sustainable economic impact in the many communities where we
operate. We champion diverse suppliers through partnership, advocacy and celebrating success.
In fiscal 24, Diageo was awarded Platinum Top Global Champion for Supplier Diversity and Inclusion by WEConnect International.
This award recognises our deep commitment to global inclusive sourcing from diverse groups including ethnic minority, women,
LGBT, veteran and disabled-owned businesses. More information on our supplier diversity strategy and programmes can be found in
our ESG Reporting Index.

| Managing climate and nature risks and opportunities by pioneering grain-to-glass sustainability Our business depends on natural resources and we are directly affected by changes in climate and the related challenges of nature loss, particularly freshwater. We continue to address the risks and opportunities that climate change and nature pose to our business through focused programmes on our most material risks, and greatest opportunities.

Introduction
We are committed to acting responsibly to mitigate our contribution to global warming, to conserve the environment on which we rely
and to support our licence to operate and grow. Climate risk is intensifying, with extreme weather events and temperature rises taking
place even faster than many scientists had expected. While our analysis suggests our business is resilient in the short- and medium-
term, we must take action now to ensure our continued resilience, as well as that of the communities in which we operate.
Pioneering grain-to-glass sustainability is how we adapt to climate change and address nature loss throughout our supply chain, mitigating the
risks associated with changing environmental and biodiversity factors. Putting climate, nature and people at the heart of our strategy is good for
our business and good for the planet. We believe that through the mitigations and adaptations we have in place or planned, our business is
resilient to the impacts of climate change and nature loss.
Our Action Plan – ‘Spirit of Progress‘
Pioneering grain-to-glass sustainability means setting ambitious targets. Our ‘Spirit of Progress’ targets reflect our most material ESG issues
and align to the UN Sustainable Development Goals. We are also proud to be a signatory to the UN's Race to Zero and Race to Resilience
campaigns reflecting our commitment to climate change mitigation and adaptation.
The issues surrounding climate change are complex, making progress against our ambitious targets challenging – for example the measurement
and reduction of Scope 3 greenhouse gas emissions, and the development of the infrastructure to reduce Scope 1 and 2 emissions are
particularly challenging. As we become more advanced in understanding our impacts and taking action to address them, we will also evolve
our practices and metrics. We regularly review our grain-to-glass sustainability strategy, and in fiscal 24 we further refined it to accelerate our
water ambitions and refine our carbon focus. We have reconsidered how we prioritise and report on our most important topics, focusing on our
priority performance targets. Performance against supporting goals including some of our packaging and waste targets have been separately
reported in the ESG Reporting Index.
Reporting
We have used the guidance of the Task Force on Climate-related Financial Disclosures (TCFD) framework for reporting. Our Net Zero Carbon
Strategy (first published in 2022) outlines how we will achieve our decarbonisation vision across our business and value chain. We continually
refine this strategy, considering the guidance of the UK Transition Plan Taskforce and we expect to refresh our strategy in the future to adapt to
ever-changing market, infrastructure and policy conditions.
Increasingly we are incorporating nature risks and dependencies into our strategic planning. We have begun to identify and quantify
our material impacts and dependencies, following the guidance of the Taskforce on Nature-related Financial Disclosures (TNFD)'s
LEAP (Locate, Evaluate, Assess, Prepare) framework.
Governance
Given the importance of the risks, we have governance processes in place to ensure that we consider and factor climate and nature risk
into our business operations and planning processes. To supplement our ‘Spirit of Progress‘ governance (summarised on page 99),
our sustainability teams and senior leaders hold monthly sustainability performance reviews. We track water efficiency and carbon
reduction projects and hold quarterly strategic business reviews focusing on multi-year progress and plans. Significant risks identified
are escalated to enterprise risk management forums at group level. We oversee climate and nature risk specifically at the highest level
of the company, managing through these governance structures and processes:
•Executive sponsorship and responsibility is shared jointly between the President, Global Supply Chain & Procurement and
Chief Sustainability Officer (Ewan Andrew) and the Global Corporate Relations Director (Daniel Mobley).
•They are supported by our cross-functional Climate and Nature Risk Steering Group.
•The Climate and Nature Risk Steering Group provides regular updates to the executive sponsors and the Board which allows for
potential risks and opportunities to be part of strategic decision-making.
•The Board retains ultimate responsibility for the oversight of climate-related risks and opportunities.
Business description (continued)
113
•Additionally, several cross-functional working groups are responsible for addressing the key risks and opportunities we
identify.
•Any impacts on our consolidated financial statements from climate and nature risks and performance against non-financial
metrics are shared with and considered by the Audit Committee annually.
•Any potential financial impacts from climate and nature risks are also reviewed and considered by the Audit Committee.

Board oversight |  | Audit Committee
Executive Committee ownership
Executive sponsors
President, Global Supply Chain & Procurement and Chief Sustainability Officer |  | Global Corporate Relations Director
Cross-functional Climate and Nature Risk Steering Group
Corporate relations | Supply & Procurement | Strategy
Risk | Finance |  | Legal | Marketin g
Working groups assigned to address key risks and opportunities identified

Risk Management
Identifying climate risks and opportunities
We divide climate risk into physical and transition risks. Physical risks include chronic changes, like sea level rises, temperature
changes and acute events like floods, droughts and heatwaves. Transition risks arise from actions to mitigate climate change, such as
policy and legal changes (e.g. carbon taxes); technology changes (e.g. renewable energy) or market changes (e.g. growing consumer
demand for more sustainable products). Both categories of risk are already occurring and likely to increase. As temperatures continue
to rise globally, we continue to assess and prepare for emerging physical and transition risks.
We are partnering with climate resilience and nature experts to identify and assess how generally recognised climate and nature risks
apply specifically to our business. The factors that determine how climate change creates risks and opportunities for our business are
multiple and complex, creating challenges in quantifying the size of the impact and likelihood of these risks. Notwithstanding,
scenario analysis allows us to test the various assumptions related to climate change and how they may affect our business. This year,
we have further developed our capability in modelling the impacts of climate change under physical and transition risk scenarios.
Climate change resilience
Our experience in managing the impact of normal variations in climatic conditions, water availability and agricultural yields has made
us more resilient and adaptable. We do this through careful planning in our supply chain and procurement organisation. We work with
peers to drive enhanced technological practices at scale, which optimise crop management and seed quality. We also collaborate on
the development of novel high-yielding, drought and temperature- resilient crop varieties. We manage water in a way that makes our
operations more resilient and helps our local communities and agricultural sourcing areas to adapt, with a specific focus on water-
stressed areas. Since first referencing it in 2010, we have integrated climate risk into our enterprise risk management processes, within
our principal risk factors. This is now an integral part of our strategic and business continuity planning.
Identifying and assessing our physical risks
To assess the physical risks that we are exposed to and how they may develop under various scenarios, from 2021 to 2024, we worked
with climate resilience experts to look at all of our direct operations sites and key third-party suppliers. We have also included some
sites that are planned or under construction, to ensure we understand their exposure and prepare their resilience. This table illustrates
how we have phased the work:
Business description (continued)
114

Fiscal year | 2021 | 2022 | 2023 | 2024
Markets/ regions assessed for physical risks | Largest supply centres •Scotland •North America | Highest water risk •Africa •Mexico •India •Türkiye | Remaining locations •Asia Pacific •Latin America and Caribbean •Europe | Acquisitions and additions to operational footprint •Asia Pacific •North America •Europe

Following each successive year's analysis, the total global physical risk footprint was refreshed.
We conducted physical risk assessments that measured the exposure and vulnerability of the activities at our sites, the key third-party
operations and suppliers' assets to 19 climate-related hazards. In addition, we reviewed the vulnerability of the main agricultural
materials and our key distribution routes to climate change. We then considered how the climate-related hazards and our site
vulnerabilities would materialise under two different levels of future warming: Intergovernmental Panel on Climate Change (IPCC)
scenario RCP (Representative Concentration Pathway) 4.5 – medium warming of 2-3°C, and IPCC scenario RCP8.5 – severe warming
of 4-5°C and two timeframes (to 2030 and to 2050). These scenarios were chosen to represent a 'worst case' (RCP8.5) and a 'medium
case' (RCP4.5) under which to assess our resilience.

IPCC scenario | Description
RCP 4.5 | Warming of 2-3°C by 2100
RCP 8.5 | Warming of 4-5°C by 2100

For our own sites and many of our third-party operator sites producing beverages on our behalf, we analysed climate-related risks
they are likely to be exposed to. For those that are most strategically important or at greatest risk, we carried out more detailed
assessments. At each location, we considered a combination of the different production activities (e.g. distilling and packaging) as well
as parts of the supportive processes that might be affected (e.g. infrastructure, water supply and energy sources) and the 19 physical
climate-related risks that might occur.
We also analysed our key suppliers' factories and warehouses; for example those handling our most critical or specialised ingredients
and components, key agricultural commodities, and our most critical distribution routes, to identify which might be exposed to
physical risk in the future.
Given the dependence of our business on agricultural raw materials, we gave this area particular attention, conducting detailed
analyses of the most important crops used in our products. This research highlighted the vulnerabilities of each crop type, how their
exposure may increase in the growing regions over time and the possible adaptation and mitigation responses to these. The diagram on
page 116 illustrates the main risks the most important commodities are exposed to, by region.
In addition to the bulk agricultural raw materials outlined in the illustration, we conducted a high-level analysis of raw materials included in
our products critical for the characteristics they impart – for example, juniper, angelica and liquorice. The results of the agricultural raw
material assessments have informed and will continue to inform our strategy.
Risk assessment results – our most important physical risks
Our climate risk assessment, without consideration of mitigation or adaptation actions, confirmed three key points:
1.Water-stress, including drought, is our most significant climate-related physical risk in terms of prevalence, trajectory and
potential financial impact. It affects our ability to produce our products, the access to agricultural ingredients that we need
and, ultimately, our licence to operate.
2.All agricultural raw materials are at risk from climate change; we see that risk increasing under the timeframes and
scenarios we analysed. Our models suggest that the costs of most commodities are likely to increase as a result of climate
change, although estimates of the precise impact vary significantly depending on the model used and underscoring the
difficulty of these projections. These factors potentially affect our own operations and those of some of our suppliers.
3.Acute weather events, including floods, winds, hurricanes/storms, heatwaves and wildfires, are projected to increase and
may cause disruption to our operations, although their impact is unlikely to be as significant as that of the risks related to
water and agricultural materials.
Business description (continued)
115
Geographical scope of our physical risk assessments

Region | Owned/key third- party sites assessed | Detailed assessments | Agricultural commodities | Supplier assets (factories, warehouses) | Ports
North America | 14 | 4 | 8 | 86 | 6
Europe | 79 | 13 | 18 | 262 | 27
Asia Pacific | 70 | 11 | 6 | 281 | 9
Latin America and Caribbean | 47 | 6 | 2 | 251 | 13
Africa | 48 | 5 | 6 | 366 | 14
Total | 258 | 39 | n/a(1) | 1,246 | 69

(1) Some commodities were analysed in more than one location

| For more details on our scenario analysis approach, see the Non-financial reporting boundaries and methodologies section on pages 322-343.

Business description (continued)
116
Deep dive – our water scarcity risk
Water is vital to our operations and the raw materials we use when creating our products. We give great focus to understanding water-
related risks so we can mitigate and adapt to them.
In addition to our physical climate risk assessments to analyse the risks from water availability, water temperature, water quality and
flooding, we also conduct water-stress analyses at our sites every two years.
We undertake this work using site surveys and World Resources Institute (WRI) Aqueduct data. We also complete water source
vulnerability assessments (SVAs) to further enhance the insights we need to address risks. By fiscal 23, we worked with our expert
partners to complete SVAs at 22 of our sites located in water-stressed areas; in fiscal 24 we completed SVAs on a further eight sites.
This work provides comprehensive insights into how our risk profile may vary with climate change, such as the degree of vulnerability
to water-stress within our operations and supply chains. We can then use these insights to help us act where we believe it is most
needed, whether that is in increased water efficiency requirements, replenishment commitments or prioritised climate adaptation
planning.
Focus on water-stress
We have been regularly assessing our wholly-owned production sites for water-stress since 2008. The most recent water risk
assessment, conducted in 2023, identified five new water-stressed sites and was updated in fiscal 24 to reflect changes in our
operations due to disposals. We follow a three-step approach to assessing water-stress in our production sites, combining the results
from the WRI Aqueduct mapping tool with external validation from independent hydrologists and internal site surveys encompassing
physical, regulatory, social, and reputational considerations. Below are the operational sites that we have identified as being in water-
stressed areas, the sites for which we have conducted source vulnerability assessments (SVAs) and the countries where we have
identified priority water basins.
Business description (continued)
117
Quantitative impact of physical risk determined by scenario analysis
This year, we collaborated with climate resilience experts to develop and implement an automated scenario analysis tool to inform our
climate adaptation strategy. The tool allows us to perform further scenario analyses and test numerous sensitivities to defined
variables. For example, we can analyse the sensitivity to climate risks of certain categories or markets and estimate the impact of the
adaptation measures that we have implemented. This is a significant step forward in the integration of climate risk into our strategic
planning processes. We modelled the chronic risk of water availability, the acute risk of drought, commodity price increases due to
climate change and one-off climate-related events.
Water-stress and drought
Under the warming scenarios we modelled, nearly a quarter of our sales will be exposed to increased water-stress in both scenarios
and timeframes. Under these warming scenarios, the absolute number of sites may not increase significantly, but, under both
timeframes, those sites affected may suffer even greater shortages of water, which may impact our operations and the health and
wellbeing of employees at those sites.
Analysing the financial impact of drought is particularly difficult due to the many factors involved, including the probability of
drought, the length of time operations may be suspended and the impact of any adaptation or contingency measures. We have
modelled what we are currently able to through scenario analysis, our own assessment of vulnerability and with highly conservative
assumptions (e.g. limited downtime in all sites due to drought). We have concluded that, by 2030, we do not anticipate that drought
will have a significant impact on our operations (including key third-party operations) or on our financial condition. Beyond 2030, it is
more difficult to analyse, given the increased uncertainties inherent in modelling over a significant period of time. Our models show
that adaptation actions are needed, particularly in the period between 2030 and 2050 in order to prevent impactful interruption to our
operations and supply chains. If no action is taken, the outcome may potentially result in lost sales. In our strategy section below, we
outline the interventions we are currently implementing to future-proof our business against drought.
Commodity scarcity and pricing
Commodity price increases due to climate change are more difficult to estimate, with the models we used producing highly varied
estimates. Climate risk is likely to result in a projected price increase for the majority of our commodities. Our scenario analysis helps
us build in commodity price risk into our raw material procurement strategies, particularly for crops with unique provenance (e.g.
agave and vanilla) or high sensitivity to growing conditions (e.g. hops). Our modelling suggests the biggest risks of higher prices in
2030 and again in 2050 are likely to impact agave, sorghum, rice, wheat, dairy and hops. There are considerable differences between
models, but the impacts in both 2030 and 2050 may be significant.
Flooding and tropical storms
Flooding and storms are the next most likely physical risks to affect our financial performance, given the risk of damage to our sites
and disruption to our supply of agricultural ingredients. Although the direct risk to our sites from acute physical events will increase,
our scale, global supply footprint and capabilities in resilience management mean we are well-positioned to ensure flooding and
storms do not interrupt our overall ability to serve our customers or have a significant financial impact on a global scale.
Heatwaves, wildfires and landslides are also identified as acute physical risks. Their potential financial impact is not modelled in our
scenario analysis but adaptations to these risks are planned where they are projected to increase.
Identifying and assessing our transition risks and
opportunities
We have performed additional scenario analysis to estimate the financial impact of transition risks and opportunities under a Paris-
aligned emissions scenario (RCP2.6). The analysis provided us with a better understanding of our risks and opportunities associated
with transitioning to a low-carbon economy. Through this analysis we have refined our financial estimation and gained further clarity
on how to respond.
We identified those risks with the most potential impact by looking at our agricultural inputs, production and packaging, distribution
and sales channels. Through this analysis, we were able to determine the most important transition risks and opportunities to monitor,
including:
1.Decarbonisation costs: Changes to our supply chain and production costs, including carbon taxes and related changes to input
costs (risk and opportunity).
2.Consumer behaviour: Changes in consumer behaviour to opt for more sustainable options, e.g. choosing circular products or
locally produced brands (risk and opportunity).
3.Regulatory changes: Shifts in public policies, e.g. restrictions on packaging, water use, agricultural materials or land that
affect our ability to make our products (risk).
4.Technology changes: Adopting low-carbon production of our products and packaging and the associated risk of not doing
this fast enough (risk and opportunity).
Of those risks and opportunities outlined above, the greatest impacts are likely to arise from consumer behaviour and from input cost
increases related to the cost of decarbonisation. The table on page 120 s ummarises the physical and transition risks and opportunities
we consider the most important.
Business description (continued)
118
Quantitative impact of transition risks and opportunities
Transitioning to a low-carbon economy presents both risks to and opportunities for our business. Through our scenario analysis, we
have been able to estimate the impact on our operations and financial condition to 2030, concluding that it is unlikely to be significant
over that period – even assuming that we bear any changes in production costs.
Packaging is the key transition risk and opportunity
We identified that the key driver of transition risk to 2050, was our use of glass, which could contribute to an overall production cost
increase. We noted that lower transport and energy costs would partially mitigate this impact. We acknowledge that extending the
analysis to 2050 is subject to many variables and ambiguities and, therefore, substantial uncertainty. However, it allows us to estimate
what a 'worst-case scenario' may look like, based on our best available modelling of cost trajectories.
Our modelling has allowed us to estimate the impact on our operations and the financial condition of some of the possible mitigating
actions we take, which can include pricing, improvement in energy use, sourcing and using lightweight glass, reducing the carbon
intensity of glass production and using returnable or reusable packaging. The results of the scenario analysis of both physical and
transition risks are reflected in our assessment of viability and impairment (see page 86 of the UK Annual Report).
Business description (continued)
119
Summary of our most important climate risks and opportunities

Risks
Risk description | Water scarcity Increasing water scarcity and water-stress affects our ability to continue to source from and produce in water-stressed areas | Agricultural raw material availability Climate-related impacts on agricultural material availability cause scarcity or price increases
Category | Physical – chronic | Physical – chronic
Timeframe(1) | Short-term (one to five years), medium-term (five to 10 years) and long-term (10 to 30 years) | Medium-, long-term
Impact (if not mitigated) | Moderate(2) | Moderate(2)
Response examples | •Improvements in water use efficiency in our operations, with more ambitious targets at water-stressed sites •Water replenishment plans in 100% of water-stressed areas •Collective action activities to improve water security in Diageo's ‘priority water basins’ •Nature-based solutions that support climate mitigation, adaptation and water replenishment •Exploring alternative formats and ingredients with potential to reduce water use •Rainwater harvesting, Aquifer recharge, Dam de-silting | •Regenerative agriculture adaptations •Smallholder farmer support •Development of drought-resistant ingredients (e.g. sorghum, anise and barley varieties) •Alternative sourcing locations •Substitution with alternative crops •Increased use of cover cropping •Improved water management in agricultural practices
Risk description | Input costs Policy changes (carbon taxation, shift to renewables) cause increases in input costs | Consumer behaviour Consumers prioritise purchasing more sustainable products, rejecting those perceived to have a negative environmental impact
Category | Transition – policy/legal | Transition – market
Timeframe(1) | Short-, medium-term | Short-, medium-, long-term
Impact (if not mitigated) | Moderate(2) | Moderate(2)
Response examples | Supply chain decarbonisation Engaging suppliers in low-carbon technology options for their operations Reduced packaging weight | Reduced packaging weight Increased recycled content in packaging Developing circular product offerings Purchasing more sustainably-grown raw materials Communicating these changes to consumers
Opportunities
Opportunity description | Supply chain decarbonisation Reducing our Scope 1, 2 and 3 emissions lowers our exposure to carbon taxes and related costs, and improves our reputation with customers and consumers | Innovation in sustainable products and packaging Developing more sustainable products meets consumers increasing demands
Category | Transition – policy/legal | Transition – market
Timeframe(1) | Short-, medium-term | Short-, medium-term
Impact (if not realised) | Moderate(2) | Moderate(2)
Response examples | •Decarbonisation programme and capital investment in our operations •Renewable energy investments •Regenerative agriculture programme •Collaboration, partnerships and capability building within our supply chain | •Innovation to deliver more sustainable products (e.g. refillable and reusable packaging, alternative packaging materials) •ecoSPIRITS (reusable glass packaging format), lower waste, lower carbon distribution technology

(1) Timeframes chosen align to those used in our scenario analyses, where short-term (one to five years) reflects the typical strategic planning timeframe, medium-term
(five to 10 years) includes the timeframe to 2030 which our scenarios model, and long-term (10 to 30 years) includes the timeframe to 2050 which is also modelled by
our scenarios.
(2) 'Low' impact is defined as having a negligible impact on customer service, or an absorbable disruptive impact on one or more brands. 'Moderate' impact is defined as
disruption to production/supply chain creating an inability to service a small portion of our customer base, the impact of which is manageable; or a significant short-
term impact on one or more of our core or local priority brands that is absorbable by the business. 'High' impact is defined as an inability to service a significant portion
of our customer base, or major reputational damage.
Business description (continued)
120
Integrating nature risk into our climate risk strategy
In alignment with the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), we have commenced
assessing our nature-related dependencies, impacts, risks and opportunities. We conducted a nature baseline across our supply chains
during fiscal 24. We identified material pressures across the value chain and estimated our contribution to environmental impacts. We
identified the geographic areas where these could be harmful to nature, using datasets covering four dimensions of nature: land, water,
biodiversity and ecosystem services. Our assessment encompassed our agricultural upstream supply chains, our direct operations and
an initial assessment of some of our packaging supply chains.
Results of our nature risk assessment
The greatest risks are to our agricultural raw material sourcing arising from water scarcity, as much of our agricultural materials are
grown in water-stressed regions. The results aligned with the observations from our climate scenario analysis. The raw materials with
the highest relative nature impact were assessed as agave, broken rice, sugarcane, sorghum and barley.
Although we have been conducting climate risk assessments for several years, this nature risk assessment is a new analysis and only a
subset of ecosystem services could be incorporated into the model. We have made good progress on understanding our dependencies
and impact on nature and have begun to weave nature into our broader strategy. We intend to continue our assessment of and response
to nature-related dependencies, impacts, risks and opportunities, aligned to the recommendations of the TNFD.
Our strategy for grain-to-glass sustainability
Our 'Pioneer grain-to-glass sustainability' strategy acknowledges the breadth of the environmental and social consequences of a
changing climate and our dependencies on nature and people. It recognises how interlinked these issues are and how deeply connected
and dependent our value chain is on nature, broader society and its evolving expectations. We continue to learn and evolve our
approach, aiming to take action where it has the most material impact.
Our targets are mapped against our most material issues, water and carbon, and reflect the complexity of the risks and opportunities
we face. By taking action and delivering on our commitments, we are taking steps to make our business more resilient while
preserving our licence to operate and grow.
Our carbon and water roadmaps outline the projects needed to deliver our 2030 targets. These plans are backed by capital investment
and undergo regular and rigorous stress testing to build confidence in our ability to deliver our targets. We are learning and improving
our plans and are extending them across our supply chain. Enhancing and digitising our sustainability data and reporting framework
has and will continue to provide more detailed insight into what is required to deliver our strategy.
We expect to invest around $1.2 billion between 2020 and 2030 to accelerate our ambition to preserve water and take a more focused
approach to carbon reduction, with around $0.3 billion invested so far. Much of the progress within our own operations comes from
our sites in Africa and India. We are beginning to see the impact of our investments in our North America and Europe regions, with
more action to come as we head toward 2030.
Preserve Water for life
Water is the most important ingredient in our products. It is also a precious shared resource that is facing increasing pressure in many
parts of the world, due to the impacts of climate change and the competing demands for freshwater resources. As outlined in our
physical risk assessment, it is our most important climate risk.
In fiscal 24, we undertook a detailed review of our water strategy to assess how we are addressing risks and opportunities and to
further accelerate our impact and approach. The results of this review underpin our current four-pillar strategic approach, focusing on
operations, supply chain, communities and advocacy. We are prioritising the integration of our water programmes with other actions we
are taking to address impacts on climate, nature and people. For example, a key development in our refreshed strategy is that we will
extend our water replenishment and collective action programmes to include indirect water use in our upstream supply chain. As a
result, we will increase the number of our priority basins to prioritise action. We will also better leverage our brands to deliver on our
goals and increase our focus on engaging with governments to encourage progressive climate and water policy and investments. Our
ambitious action on water will help to ensure our sites, supply chains and communities build resiliency in a changing climate.
Business description (continued)
121

| Water efficiency |
| Target by 2030 Reduce water use in our operations with a 40% improvement in water use efficiency in water-stressed areas |  | Percentage change in water efficiency index from the prior year – in water-stressed areas |
|  | (6.2)% |

| Target by 2030 Reduce water use in our operations with a 30% improvement across the company |  | Percentage change in water efficiency index from the prior year – across the company |
|  | (3.7)% |

Following a detailed review of our water use efficiency methodology in fiscal 23, we adopted an enhanced measurement methodology – the
water efficiency index. This shows the aggregated change in water use efficiency across our production processes (brewing/packaging and
distilling) weighted by their water use. Brewing/packaging do not require maturation; the process occurs closer to the sale of our products.
However, distillation can occur years before a product is packaged and sold. Therefore, efficiency in brewing/packaging is measured against
the litres of product packaged, while distillation efficiency is measured against the litres of pure alcohol (LPA) produced, addressing the
maturation period. This year, we used 29,820 m3 of water for agricultural purposes on land under our operational control in Mexico and
Türkiye. We report this separately from water used in our direct operations and do not include it in our water efficiency calculations. More
detail can be found in our Reporting boundaries and methodologies section on pages 322-343. Our focus on water-stressed areas has
continued to deliver strong water use efficiency performance with a 6.2% improvement versus fiscal 23 and 21.3% improvement since
our fiscal 20 baseline. This was primarily driven by the continuous improvement initiatives at our sites in East Africa, where we
further optimised our water recovery plants.
Our performance across the company on water use efficiency has improved by 3.7% in comparison to the previous year and by 15.6%
since our fiscal 20 baseline(1). We also delivered efficiency improvements in our Scottish sites, resulting from better performance of the
reverse osmosis plant at our Cameronbridge site.
Four years into our action plan, we are ahead of our water use efficiency commitments, both globally and in water-stressed areas. Our
efforts to date have been primarily focused on more established production regions with higher exposure to water-stress, like Africa and
India. Future, planned divestments in areas where we have already made strong progress, for example Guinness Nigeria, may result in a
slowed progress versus our baseline, however, we will continue to drive improvements at remaining sites and will take further action at
our sites in Latin America, which have seen significant expansion.
As we continue to install or increase the capacity of water recovery technologies across our sites, the volume of water recovered and
recycled from water-stressed areas reached 890,476 m 3 in fiscal 24 – equivalent to 17% of total water used in water-stressed areas.
Innovation and new technologies are critical to meeting our water use efficiency targets. We are partnering with Diageo Sustainable
Solutions (DSS) to find, test and embed the new technologies into our roadmaps. In fiscal 24, we launched a DSS innovation round
Business description (continued)
122
addressing five different water challenges, including water use efficiency and maximising the value of wastewater streams. We are
concluding our 4T2 Sensor pilot at our Leven site, optimising water use associated with clean-in-place systems through sensor
technology. We are now planning a scale adoption of this technology across other sites.
(1) Under the previous water efficiency methodology, water use efficiency per litre of product packaged (litres/litre) - across the company was 4.1, measured in litres of water
per litre of product packaged (litres/litre). The percentage change in litres of water used per litre of product packaged from the prior year - across the company was a 2.8%
improvement compared to fiscal 23 and 11.2% improvement compared to our fiscal 20 baseline. Water use efficiency per litre of product packaged (litres/litre) – water-
stressed areas was 3.2, measured in litres of water per litre of product packaged (litres/litre). The percentage change in litres of water used per litre of product packaged
from the prior year – water-stressed areas was a 6.6% improvement compared to fiscal 23. Under the new methodology, the water efficiency index – across the company
was 84.4 and the water efficiency index – water-stressed areas was 78.7 in fiscal 24.

| Water replenishment |
| Target by 2026 Replenish more water than we use for operations in water-stressed areas |  | Cumulative change in volumetric replenishment capacity of projects developed from fiscal 16 to fiscal 24 |
|  | 70% |

| n | 2026 Target | 100% |
| n | 2023 progress to date | 71.5% |
| n | 2024 progress to date | 70.0% |

Our water replenishment programme continues to deliver positive results, with another strong year delivering local water projects. We are on
track to reach our 2026 target of replenishing more water than we use for our operations in water-stressed areas. In fiscal 24, we implemented
projects that have the annual volumetric replenishment capacity of 1,230,000 m 3 of water. Despite the cumulative progress against this target,
the year on year performance can vary because of the multiple projects and performance changes. Cumulatively (fiscal 16 to fiscal 24) we have
replenished 70% of our estimated fiscal 26 volume.
Overall, in fiscal 24, we completed 30 replenishment projects in 10 countries, cumulatively implementing over 120 projects between fiscal 21
and fiscal 24. In Jalisco, Mexico, we were proud to partner with the local authority to invest in a significant wastewater treatment plant, which
will also redirect treated water to be used by local farms – delivering both water quality and water availability benefits to the catchment. In
Kenya we completed nine clean water and sanitation projects in schools and villages in our supply chain, as part of our replenishment
programme. In Türkiye, we continued to progress our irrigation improvement project with our grape farmers, increasing the number of hectares
of vineyards. Where appropriate, we implemented nature-based solutions which this year included reforestation in Kenya and infiltration in
India.
An important part of our approach on water is that it remains people-centric. We have committed to providing access to clean water, sanitation
and hygiene (WASH) in water-stressed communities near our sites and in water-stressed areas that supply our raw materials. In fiscal 23, we
reached our 2030 target, meaning all nine of the markets included in our target invested in WASH projects since 2020. We will maintain this
commitment, investing every year to 2030. For more information, refer to our ESG Reporting Index.

| Water collective action |
| Target by 2030 Engage in collective action in all priority water basins to improve water accessibility, availability and quality and contribute to net positive water impact |  | Percentage of priority water basins with collective action participation |
|  | 67% |

|  | 12 |

| n | 2030 Target | 12 |
| n | 2023 progress to date | 6 |
| n | 2024 progress to date | 8 |

Business description (continued)
123
Recognising that businesses need to partner with others to build climate resilience and ensure continuity of operations, our collective
action programme embraces a collaborative approach towards water stewardship in our 12 priority water-stressed basins across 10
countries.
The collective action programme involves multi-stakeholder partnerships including other companies, NGOs, public sector
organisations and communities. Together these partnership initiatives aim to pool knowledge, expertise and resources to identify and
implement solutions to address shared water challenges.
In fiscal 24, through our partnership with The Nature Conservancy, we started two more collective action initiatives; one with
WaterAid under the Lagos Aqua Initiative in Nigeria’s Ogun basin to transform WASH services in Lagos; and another in the Gediz
basin in Türkiye for conservation of water resources and enhanced fertiliser management.
We were named the basin champion for two more basins in fiscal 24 – the Santiago Lerma River Basin in Mexico and the Upper Godavari River
Basin in India. This is in addition to being basin champion for Kenya’s Upper Tana Basin. As basin champion, Diageo commits to providing
overall leadership on efforts to rejuvenate selected basins. This is a strong reflection of Diageo’s commitment to addressing shared water
challenges and acknowledges that our efforts can only be successful when approached collectively.
Advocacy
Water is under pressure around the world, and the issues around preserving it are challenging and complex. It will take multilateral action to
address the challenge of the water, climate and nature crisis. At COP28, we were among businesses calling for more action on water and climate
resilience. We also attended the UN SDG Summit in New York and World Water Week in Stockholm to share our ambition and learnings, and
advocate for more companies and partners to scale up collaboration. We are members of leading international organisations such as the Water
Resilience Coalition, Alliance for Water Stewardship and we have strategic partnerships with WaterAid and The Nature Conservancy that
support this call to action.
Business description (continued)
124
Our carbon commitment and learnings
We are committed to accelerating towards a low-carbon future and following a science-based approach to drive the pace and scale of
change required. Our targets to achieve net zero emissions(1) demonstrate our commitment to mitigating our impact on climate change.
To achieve this goal, we have developed decarbonisation roadmaps detailing the measures we are taking and will take to reduce
emissions and ensuring that new sites are developed with low emission technologies embedded from the outset. Across our supply
chain we are clear on the decarbonisation levers that we control and the solutions that require collaboration with others to progress.
We acknowledge that realising this scale of transformation will require partnering for systemic change and delivering decarbonisation
solutions in areas outside our direct control. Not all of our suppliers and partners are at the same stage of the net zero journey, nor is
the necessary external infrastructure always available at scale.
We recognise that policy frameworks and market signals are not always incentivising the necessary pace of change across all markets
in which we operate. We are focusing on the areas where we can affect the biggest positive impacts across our value chain, partnering
with others and advocating for change to unlock some of the external challenges we face. The pathway that we are pursuing, for the
critical enablers that will be required to deliver against it, is outlined below.
Our risk assessment and scenario analysis inform us that consumer behaviour is an important transition risk and companies that do not
decarbonise their operations will suffer, as consumers continue to demand more sustainable products. Decarbonisation requires
investment and partnership by working with suppliers to innovate in low-carbon manufacturing techniques.
Our pathway to net zero(1)
Business description (continued)
125

Our approach to delivery |  |  |  |
Scope 1 (6%)(2) |  | Scope 2 (0.1%)(2) |  | Scope 3 (94%)(2)
1.Embedding energy efficiency into our processes. 2.Progressing to 100% renewable electricity, fuel and heat. 3.Renewable energy certificates, innovations, partnerships and carbon removals to close the gap(1). |  | 1.Continue to switch to renewable electricity. 2.Create additional renewable energy capacity to power our sites, exporting surplus energy to the local grid, through on-site developments and using power purchase agreements. |  | For Scope 3 greenhouse gas emissions, we will shift our focus to delivering triple wins through a refreshed strategy focusing on three pillars of engagement, prioritising our level of engagement and investment to where we have the greatest level of control and in those areas that are most critical to our license to operate. These three workstreams include 1) Diageo enabled projects, 2) Strategic innovation and 3) Selective engagement (collaborative action).
Enabled by scalable technology and process innovations and transformational partnerships to decarbonise the end-to-end supply chain.

(1)Net zero emissions are reached when anthropogenic (i.e. human-caused) emissions of greenhouse gases into the atmosphere are balanced by anthropogenic
removals over a specified period. A science-based approach to net zero covers emission scope 1, 2 and 3 with direct abatement of approximately 90% from our
emissions baseline and up to 10% of high-quality certified carbon offsets to neutralise hard-to-abate residual emissions to close the gap to zero.
(2)This is an estimate based on current management expectations; the underlying assumptions and future developments may change over time, which would cause changes to
management expectations and this information. See pages 114-120 for more about the potential impact of climate change on Diageo and our current plans to manage and
mitigate risks.
(3)‘Carbon-neutral’ or ‘carbon neutrality’ refers to an outcome where GHG emissions have been neutralised through a combination of emissions reductions efforts and
the purchase of carbon offsets/credits resulting in no net release of carbon dioxide. Any carbon offset purchases for discrete carbon neutral claims are specifically
for certification and are not included in annually reported Diageo greenhouse gas emission footprint.
(4)Four carbon-neutral facilities have been assessed and certified using PAS 2060 – Carbon Neutrality Standard and Certification (Scope 1 and 2, Direct Operations
boundary). We also require site emissions be reduced in alignment with an equivalent net zero trajectory, allowing less than 5-10% of residual emissions to be
neutralised via the purchase of carbon offsets. Any purchased carbon offsets for these specific carbon neutral claims are not applied to fiscal 24 reported greenhouse
gas emissions.
Business description (continued)
126

| Emissions from our direct operations |
| Target by 2030 Become net zero carbon in our direct operations (Scope 1 and 2) |  | Percentage change in absolute greenhouse gas emissions (direct and indirect greenhouse gas emissions by weight (market/net based)) from the prior year |
|  |  | (10.7)% |

In fiscal 24, we decreased greenhouse gas emissions from our direct operations by a further 10.7%, continuing our year-on-year
reduction towards our 2030 target. Investing in renewable energy across our global footprint has enabled us to reduce our emissions,
despite production increases in brewed and distilled volumes across several markets.
This year, our performance has benefitted from increased biomass use at our existing bioenergy plants in Mexico, East Africa and
Scotland and further roll out of liquid biofuel at a number of scotch distillery and malting sites. We continue to use renewable natural
gas in Canada and Scotland, where we directly contribute Diageo distillery co-product feedstock to generate our green gas certificates.
We also reopened our iconic Port Ellen Scotch whisky distillery, operating on renewable fuel and electricity, with a carbon-neutral
commitment.(1)
Across our other sites, we have been converting fossil fuel energy use to zero carbon renewable electricity. Several incremental
projects at our packaging sites are expected to deliver their first full year of benefit in fiscal 25, with the switching of our Runcorn beer
packaging site natural gas combined heat and power plant to imported renewable electricity through the grid.
Our continued reduction of greenhouse gas emissions has driven a cumulative saving of 23.8% in greenhouse gas emissions versus our
fiscal 20 baseline. We have delivered these savings through investment in new and existing bioenergy plants in East Africa, Scotland,
India and Mexico, where we have replaced fossil fuel use with liquid biofuel. We have also switched to renewable natural gas in
Canada and Scotland.
We source renewable electricity in sites such as Africa and LAC that has helped us reduce our Scope 2 emissions from our fiscal
20 baseline.
We are rolling out innovative and proven technologies at our sites, guided by mature decarbonisation roadmaps and detailed capital
investment plans. We are making progress on reducing our direct operations emissions, with our planned rate of reduction increasing
as we approach 2030, through the optimisation of energy use and conversion to renewable energy sources.
For more information on our use of renewable energy, please refer to our ESG Reporting Index.
(1) We assess and certify sites using PAS 2060 – Carbon Neutrality Standard and Certification (Scope 1 and 2, direct operations boundary). We also require that site
emissions be reduced in alignment with an equivalent net zero trajectory, allowing less than 5-10% of residual emissions to be neutralised using the purchase of carbon
offsets. Any purchased carbon offsets for these specific carbon neutral claims are not applied to fiscal 24 reported greenhouse gas emissions.
Business description (continued)
127

Total direct and indirect greenhouse gas emissions by region by year
Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO 2 e)
Region |  | 2020 | 2022 | 2023 | 2024
North America |  | 127 | 100 | 83 | 86
Europe |  | 152 | 145 | 195 | 179
Asia Pacific |  | 32 | 10 | 9 | 7
Latin America and Caribbean |  | 22 | 38 | 25 | 9
Africa |  | 137 | 132 | 89 | 77
Diageo (total) |  | 470 | 424 | 401 | 358

Streamlined Energy and Carbon Reporting (SECR)
| 2020 | 2021 | 2022 | 2023 | 2024
Total Global energy consumption (MWh) | 3,310,508 | 3,396,078 | 3,560,231 | 3,502,997 | 3,459,068
Market based (net) intensity ratio of GHG emissions (g CO 2 e per litre of packaged product) | 139 | 122 | 105 | 105 | 96
Total UK energy consumption (MWh) | 1,056,931 | 1,064,795 | 1,091,153 | 1,244,375 | 1,247,734
Direct (MWh) | 924,022 | 927,917 | 951,302 | 1,097,353 | 1,092,867
Indirect (MWh) | 132,910 | 136,878 | 139,851 | 147,021 | 154,867
Total UK direct and indirect GHG emissions (kt CO 2 e) | 86 | 71 | 84 | 136 | 121
Scope 1 | 86 | 71 | 84 | 136 | 121
Scope 2 | 0 | 0 | 0 | 0 | 0

| Emissions from across our value chain |
| Target by 2030 Reduce our value chain (Scope 3) carbon emissions by 50% |  | Percentage change in absolute greenhouse gas emissions (ktCO 2 e) from the prior year |
|  |  | (5.0)% |

Our value chain (Scope 3 greenhouse gas emissions) target is to achieve an absolute reduction of 50% by 2030 (and 100% by 2050) compared
to our fiscal 20 baseline. Compared to fiscal 23, our Scope 3 greenhouse gas emissions were reduced by 5%, a significant improvement on the
previous year. Scope 3 performance depends on many internal and external factors. In the current year, the improvement has been driven
primarily by resource efficiency, improved inventory management, fluctuating demand and logistics and distribution optimisation, partially
offset by increased emissions capital expenditure associated with our grain-to-glass sustainability strategy.
Despite a positive performance in fiscal 24, we are still showing an increase of 13.5% compared to our fiscal 20 baseline, a year
impacted by Covid-19, resulting in artificially low Scope 3 emissions. Performance since then has been impacted as a result of
business growth and also a reflection of the challenge of reducing emissions across the value chain.
We recognise that external factors can help or hinder our intended progress. We are improving and refining our decarbonisation
roadmap as we learn, leading to increased engagement and planning with key partners along our supply chain to address some of these
opportunities and challenges. However, there are still many hurdles to overcome as outlined above in our pathway to net zero.
Business description (continued)
128
In fiscal 25, we will evolve our Science Based Targets Initiative (SBTi) targets by disaggregating our Forest, Land and Agriculture (FLAG)
emissions for separate reporting where appropriate. As a first step, we are further analysing all categories of material emissions in our value
chain to reflect the changes in our business since we first set SBTi targets. These steps, together with enhancements to our decarbonisation
roadmap, will provide clearer direction for our business and our partners.
Moving towards regenerative agricultural sourcing
Businesses have a shared interest in helping to restore the natural resources on which we all depend. We are committed to making our
agricultural supply chains economically, socially and environmentally sustainable.

| Regenerative agriculture programmes |
| Target by 2030 Develop regenerative agriculture programmes in five key sourcing landscapes |  | Number of regenerative agriculture programmes initiated |
|  | 3 |

| n | 2030 Target | 5 |
| n | 2023 progress to date | 1 |
| n | 2024 progress to date | 4 |

In fiscal 24, we progressed our ambition to help farmers test regenerative agriculture across some of our key ingredients including
barley, wheat and agave. Whilst these early stage programmes are important, we recognise the challenges facing regenerative
agriculture. These can only be addressed through mobilising increased collective action, simplifying the ask of our suppliers and
designing shared transition plans.
We launched three new regenerative agriculture programmes in the fiscal, with two in key geographies.
For the Scotch programme, 20 farms across three regions are participating and engaging with partners to reduce their carbon footprint
and inform future agronomic improvements. Through our partnership with James Hutton Institute, we commissioned research trials on
cover crops and seed mixes to analyse their ability to improve the soil. We have also looked at how to best integrate cover crops and
seed mixing into rotations to reduce fertiliser application.
Our tequila regenerative agriculture programme has focused on delivering a robust baseline and agronomic assessment across 19 of
our most strategic agave suppliers and on our own Don Julio agave farm. The results provided insights on how to decarbonise existing
practices and improve nutrient management. We have set up a demonstration area on our farm to conduct improvement trials for
engagement with our suppliers.
We entered the second year of the Guinness barley regenerative programme in Ireland. Through our collaboration with Agricarbon,
our soil carbon measurement partner, on-the-ground field measurements have been used to establish a baseline which will act as a
reference as we continue to identify additional levers to increase soil carbon stocks.
Making packaging more sustainable
We continue to respond proactively to legislation and consumer demand for sustainable products. We are committed to reducing our
value chain carbon footprint by reducing packaging weight, increasing our recycled content, reducing single use packaging and
deploying and scaling circular business models.
Many consumers want to transition to sustainable products but, in practice, experience barriers to being able to do so. To address these barriers,
we are focused on value, desirability and delivering sustainable objectives. Aligning with our customers is critical to making progress alongside
consumers. In anticipation of future trends, we are piloting a number of test and learn initiatives including circular business models.
We are leveraging Diageo-enabled initiatives and partnerships and supplier programmes. For example, we have partnered with
ecoSPIRITS to pilot the use of refillable spirits packaging (ecoTOTES) in the on-trade across 18 markets over the next three years.
Each refillable container is designed to be used up to 150 times and aims to eliminate up to 1,000 single-use bottles over their lifespan.
Other examples of how we are reducing our packaging footprint in fiscal 24 include:
•We launched our Baileys aluminium bottle in selected international airports. The new aluminium bottle is five times lighter
than the traditional 70cl Baileys bottles, with an anticipated 44% reduction in carbon versus the current glass bottle
•We rationalised select sizes of our glass beer bottle portfolio and launched our lightweight design, saving 3,000 tonnes of
glass per annum.
•We redesigned our Johnnie Walker Blue Label range, reducing weight across the portfolio of sizes and contributing to the
overall weight saving of 170 kilotonnes of glass purchased in the year.
Business description (continued)
129

| Reducing packaging weight and increasing recycled content |
| Target by 2030 Continue our work to reduce total packaging and increase recycled content in our packaging (delivering a 10% reduction in packaging weight and increasing the percentage of recycled content in our packaging to 60%) |  | Percentage change of total packaging (by weight) in fiscal 24 |
|  | (14)% |

In fiscal 24, we continued to focus our efforts across our core portfolio and we reduced our packaging weight by 14%, in comparison
to fiscal 23. This is 1% below our 2020 baseline, despite increased production volumes from fiscal 20 to fiscal 24.
We have made significant progress in fiscal 24, with some pivotal shifts across our beer and ready to drink portfolios, transitioning
targeted products to aluminium cans and saving 2,000 tonnes of glass per annum. Our ambition to eliminate cartons, wherever
reasonably possible, has resulted in the elimination of 9 million cartons across our tequila portfolio – in particular, across our Don
Julio range – reducing our packaging weight by 591 tonnes.

| Change in percentage of recycled content (by weight) in fiscal 24 |
|  |  | 3% |

| n | 2030 Target | 60% |
| n | 2023 progress to date | 39% |
| n | 2024 progress to date | 42% |

In fiscal 24, our recycled content totalled 42%. For glass, we increased recycled content in our Cîroc portfolio to 26% and across our green
glass, we continue to push towards 95%. We are working across our brands to obtain technical approvals of higher recycled content in our
packaging and we continue to partner with suppliers and industry bodies.
We continue to trial increased recycled content in glass and while access to quality cullet remains a challenge in the industry, we are
confident that we can adapt to the required changes and are already implementing higher recycled content across some of our brands,
in both green and amber glass. Diageo remains committed to identifying collaborations and finding solutions to support improvements
to infrastructure and availability of material. In North America, we launched the ‘Don’t Trash Glass’ initiative during fiscal 23, a
partnership with the Glass Packaging Institute and Glass King, to improve glass recycling rates. During its first year, the programme
collected over 900 tonnes of glass and is now expanding into additional states.
For more information on rPET (recycled polyethylene terephthalate) in our plastic packaging, recyclability of our packaging and waste
reduction efforts, refer to our ESG Reporting Index.
Business description (continued)
130
How we have reported consistently with the recommendations of the Task Force on Climate-related Financial Disclosures
(TCFD)
In this year's disclosures, we have complied with the FCA's Listing Rule 9.8.6(R). Our climate-related financial disclosures are
considered to be consistent with the TCFD's recommendations and recommended disclosures, as illustrated in the index below.

TCFD recommendation | Consistency
GOVERNANCE See page 113 |
a.Describe the board’s oversight of climate-related risks and opportunities. | Yes. See page 113.
b.Describe management’s role in assessing and managing climate-related risks and opportunities.
RISK MANAGEMENT See pages 114-121 |
a.Describe the organisation’s processes for identifying and assessing climate-related risks. | Yes. See pages 114-120. Having completed comprehensive risk assessments our focus is now on ensuring appropriate adaptation plans are in place for all risks identified.
b.Describe the organisation’s processes for managing climate- related risks.
c.Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management.
STRATEGY See pages 121-130 |
a.Describe the climate-related risks and opportunities the organisation has identified over the short-, medium-, and long-term. | We have described risks and opportunities for our business, in all of our owned, operating locations and our most important third-party operations, as well as the impact of those risks and opportunities on our strategy. We have modelled the resilience of our strategy under three climate-related scenarios. See pages 323-325. We have co-developed a scenario analysis tool with climate experts to enable regular updates to our scenario analyses.
b.Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning.
c.Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
METRICS & TARGETS See pages 121-130 |
a.Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. | Yes. See pages 121-130.
b.Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. | Yes for Scope 1 and 2. See page 127. We are working with global GHG accounting bodies and our suppliers to get more detailed Scope 3 data. As we refine our value chain data, we can be more specific about our GHG footprint.
c.Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. | Yes. See pages 121-130.

Business description (continued)
131
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 and may generally, but not always, be identified by the use of words such as “’will”, “anticipates”, “should”,
“could”, “would”, “targets”, “aims”, “may”, “expects”, “intends” or similar expressions statements. In this document, such statements
include those that express forecasts, expectations, plans, outlook, objectives and projections with respect to future matters, including
information related to Diageo’s fiscal 25 outlook, Diageo’s medium-term guidance, Diageo’s supply chain agility programme, future
Total Beverage Alcohol market share ambitions and any other statements relating to Diageo’s performance for the year ending 30 June
2025 or thereafter.
Forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in
the future. There is 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, which include (but are not limited to):
(i) economic, political, social or other developments in countries and markets in which Diageo operates, including geopolitical
instability as a result of Russia's invasion of Ukraine and the conflict in the Middle East and macroeconomic events that may affect
Diageo’s customers, suppliers and/or financial counterparties; (ii) the effects of climate change, or legal, regulatory or market
measures intended to address climate change; (iii) changes in consumer preferences and tastes, including as a result of disruptive
market forces, changes in demographics and evolving social trends (including any shifts in consumer tastes towards at-home
occasions, premiumisation, small-batch craft alcohol, or lower or non-alcoholic products and/or developments in e-commerce); (iv)
changes in the domestic and international tax environment that could lead to uncertainty around the application of existing and new tax
laws and unexpected tax exposures; (v) changes in the cost of production, including as a result of increases in the cost of commodities,
labour and/or energy due to inflation and/or supply chain disruptions; (vi) any litigation or other similar proceedings (including with
tax, customs, competition, environmental, anti-corruption or other regulatory authorities); (vii) legal and regulatory developments,
including changes in regulations relating to environmental issues and/or e-commerce; (viii) the consequences of any failure of internal
controls; (ix) the consequences of any failure by Diageo or its associates to comply with anti-corruption, sanctions, trade restrictions or
similar laws and regulations, or any failure of Diageo’s related internal policies and procedures to comply with applicable law or
regulation; (x) Diageo’s ability to make sufficient progress against or achieve its ESG ambitions; (xi) cyber-attacks and IT threats or
any other disruptions to core business operations; (xii) contamination, counterfeiting or other circumstances which could harm the
level of customer support for Diageo’s brands and adversely impact its sales; (xiii) Diageo’s ability to maintain its brand image and
corporate reputation or to adapt to a changing media environment; (xiv) fluctuations in exchange rates and/or interest rates; (xv)
Diageo’s ability to successfully execute its strategic business transformation projects; (xvi) Diageo’s ability to derive the expected
benefits from its business strategies, including Diageo’s investments in e-commerce and its luxury portfolio; (xvii) increased
competitive product and pricing pressures, including as a result of introductions of new products or categories that compete with
Diageo’s products and consolidations by competitors and retailers; (xviii) increased costs for, or shortages of, talent, as well as labour
strikes or disputes; (xix) movements in the value of the assets and liabilities related to Diageo’s pension plans; (xx) Diageo’s ability to
renew supply, distribution, manufacturing or licence agreements (or related rights) and licences on favourable terms, or at all, when
they expire; or (xxi) any failure by Diageo to protect its intellectual property rights.
In preparing the ESG-related information contained in this document, Diageo has made a number of key judgements, estimations and
assumptions and the processes and issues involved are complex. The ESG-related forward looking statements should be treated with
special caution, as ESG and climate data, models and methodologies are often relatively new, are rapidly evolving and are not of the
same standard as those available in the context of other financial information, nor are they subject to the same or equivalent disclosure
standards, historical reference points, benchmarks, market consensus or globally accepted accounting principles. In particular, it is not
possible to rely on historical data as a strong indicator of future trajectories in the case of climate change and its evolution. Outputs of
models, processed data and methodologies are also likely to be affected by underlying data quality, which can be hard to assess and we
expect industry guidance, market practice, and regulations in this field to continue to change. There are also challenges faced in
relation to the ability to access data on a timely basis and the lack of consistency and comparability between data that is available. This
means the ESG-related forward-looking statements and ESG metrics discussed in this document carry an additional degree of inherent
risk and uncertainty, and therefore, our actual results and developments could differ materially from those expressed or implied by the
ESG-related forward-looking statements in this document.
In light of the uncertainty as to the nature of future policy and market responses to climate change, including between regions, and the
effectiveness of any such responses, Diageo may have to re-evaluate its progress and adapt its approach towards its ESG ambitions,
commitments and targets in the future, update the methodologies it uses or alter its approach to ESG and climate analysis and may be
required to amend, update and recalculate its ESG disclosures and assessments in the future, as market practice and data quality and
availability develop rapidly.
All oral and written forward-looking statements made on or after the date of this document and attributable to Diageo are expressly
qualified in their entirety by the cautionary statements contained or referred to in this section. Further details of potential risks and
uncertainties affecting Diageo are described in our filings with the London Stock Exchange and the US Securities and Exchange
Commission (SEC), including in our Annual Report on Form 20-F for the year ended 30 June 2024.
Business description (continued)
132
Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made. Diageo expressly disclaims
any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law.
The reader should, however, consult any additional disclosures that Diageo may make in any documents which it publishes and/or
files with the SEC.
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 2024.
The information in this document 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 document may include 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.
References in this document to information on websites are included as an aid to their location and such information is not
incorporated in, and does not form part of, this document unless otherwise noted.
Business description (continued)
133
Risk factors
Investing in the securities of Diageo involves risk. Diageo believes the following to be the principal risks and uncertainties that are
most likely to have a material adverse impact on the Diageo group. These risks should be carefully considered together with other
information included elsewhere within this annual report. If any of these risks occur, either alone or in combination with other
risks, Diageo’s business, financial condition and performance could suffer and the trading price and liquidity of its securities could
decline. The order of presentation of the risk factors below does not necessarily indicate the likelihood of a particular risk’s
occurrence or the potential magnitude of its financial consequences.
In addition, because any global business of the kind Diageo is engaged in is inherently exposed to risks that become apparent only
with the benefit of hindsight, risks which Diageo does not currently deem to be material or of which it is not presently aware could
also materially and adversely impact Diageo’s business, financial condition and performance in future periods.
Risks related to the global economy
Diageo’s business has been and may, in the future, be adversely impacted by unfavourable economic, political, social or
other developments and risks (including those resulting from a public health threat, increases in geopolitical instability,
including in relation to Russia’s invasion of Ukraine and conflict in the Middle East, and/or inflationary pressures) in the
countries in which it operates
Diageo’s products are sold in nearly 180 countries worldwide, and Diageo may be adversely affected by global economic volatility
or unfavourable economic developments in any of the countries or regions where it has distribution networks, marketing
companies or production facilities. In particular, Diageo’s business is dependent on general economic conditions in its major
markets, which include the United States, the United Kingdom, the countries that form the European Union, and certain countries
within the Latin American region, India and China, and failure to react quickly enough to changes in those economies could have
an adverse effect on financial performance.
The markets in which Diageo operates have been significantly impacted, and could be impacted in the future, by public health
threats, such as the Covid-19 pandemic. Similarly, Russia’s invasion of Ukraine and the ongoing conflict in the Middle East has,
among other things, resulted in elevated geopolitical instability and economic volatility. The economic volatility attributable to
these conflicts is part of, and contributing to, a larger trend of high inflation and a higher interest rate environment globally, which
has had and may continue to have a significant adverse effect on economic activity that could have a material adverse impact on
Diageo’s business, financial condition, results of operations and/or the price of Diageo’s securities.
Any future significant deterioration in economic conditions globally or in any of Diageo’s important markets, including economic
slowdowns, global, regional or local recessions or depressions, currency instability, increased unemployment levels, increased
custom duties, tariffs and/or other tax rates, increased inflationary pressures and/or disruptions to credit and capital markets, could
lead to eroded consumer confidence and decreased consumer spending more generally, which in turn could reduce consumer
demand for Diageo’s products. Unfavourable economic conditions could also negatively impact Diageo’s customers, distributors,
suppliers, and financial counterparties, who may experience cash flow problems, increased credit defaults, decreases in disposable
income or other financial issues, which could lead to changes to ordinary customer stocking patterns, including destocking or
stocking ahead of potential price increases as well as an increase in Diageo’s bad debt expense. In addition, volatility in the capital
and credit markets caused by unfavourable economic developments and uncertainties, including the heightened geopolitical
instability caused by Russia’s invasion of Ukraine, the conflict in the Middle East, and/or inflationary pressures, could result in a
reduction in the availability of, or a further increase in the cost of, financing to Diageo.
Diageo’s business could also be affected by other economic developments such as fluctuations in currency exchange rates, the
imposition of any import, investment or currency restrictions (including the potential impact of any global, regional or local trade
wars or any tariffs, customs duties or other restrictions or barriers imposed on the import or export of goods between territories,
including but not limited to, imports into and exports from the United States, China, the United Kingdom and/or the European
Union), the imposition of economic or trade sanctions, or any restrictions on the repatriation of earnings and capital. Any of these
developments may have a material adverse effect on Diageo’s financial performance.
Diageo’s operations are also subject to a variety of other risks and uncertainties related to its global operations, including adverse
political, social or other developments. Political and/or social unrest or uncertainties, natural disasters, public health threats
(including the Covid-19 pandemic and any future epidemics or pandemics, and government responses thereto), politically-
motivated violence and terrorist threats and/or acts, including those which are specifically directed at the alcohol industry, may also
occur in countries where Diageo has operations. Additionally, recent and upcoming elections in key countries including the United
States, United Kingdom, Europe and India may lead to increased political, economic, social, consumer and regulatory volatility.
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Many of the above risks are heightened, or occur more frequently, in emerging markets, such as Nigeria, Ghana and Türkiye. In
general, emerging markets are also exposed to relatively higher risks attributable to unstable governments, corruption, crime and
lack of law enforcement, undeveloped or biased legal systems, expropriation of assets, sovereign default, military conflicts,
liquidity constraints, inflation, devaluation, price volatility and currency convertibility issues, as well as other legal and regulatory
risks and uncertainties. Developments in emerging markets can affect Diageo’s ability to import or export products and to
repatriate funds, as well as impact levels of consumer demand (for example, in duty-free outlets at airports or in on-trade premises
in affected regions) and therefore Diageo’s levels of sales or profitability. Any of these factors may affect Diageo
disproportionately or in a different manner from its competitors, depending on Diageo’s specific exposure to any particular
emerging market, and could have a material adverse effect on Diageo’s business and financial results.
Climate change, or legal, regulatory or market measures to address climate change or other environmental concerns, may
negatively affect Diageo’s business or operations, and water scarcity or water quality issues could negatively impact
Diageo’s production costs and capacity
Climate change is occurring around the world as a result of carbon dioxide and other greenhouse gases in the atmosphere having an
adverse effect on global temperatures, weather patterns and the frequency and severity of extreme weather-related events and
disasters. To the extent that weather patterns and climate change, or legal, regulatory or market measures enacted to address such
climate change or other environmental concerns, have a negative effect on agricultural productivity in the various regions from
which Diageo procures its raw materials, Diageo may be subject to decreased availability of, or increased prices for, a number of
raw materials that are necessary in the production of Diageo’s products, including wheat, maize, barley, sugar cane/molasses,
vanilla, agave, rice, grapes, sorghum, and aniseed. Severe weather events or changes in the frequency or intensity of weather events
could also pose physical risks to Diageo’s production facilities, impair Diageo’s production operations or disrupt Diageo’s supply
chain, which may affect production operations, delivery of its products to customers and insurance costs and coverage. For
example, a number of Diageo’s distilleries in Scotland are in lower coastal areas and, as a result, may suffer disruption due to
coastal flooding and/or storms. Climate change and geographic limitations related to the production may also expose Diageo to
water scarcity and quality risks due to the water required to produce its products, including water consumed in the agricultural
supply chain. If climate change leads to droughts or water over-exploitation or has a negative effect on water availability or quality
in areas that are part of Diageo’s supply chain, the price of water may increase in certain areas and certain jurisdictions may adopt
regulations restricting the use of water or enact other unfavourable changes.
Water, which is the main ingredient in virtually all of Diageo’s products and a major component within its agricultural supply
chain, is also a limited resource in many parts of the world. As demand for water continues to increase, and as water becomes
scarcer and the quality of available water deteriorates, including as a result of climate change, Diageo may be affected by increased
production costs (including as a result of increases in certain water-related taxes or related regulations), capacity constraints, or
requests to cease production entirely in water-stressed areas, which in turn could adversely affect Diageo’s business, financial
results and reputation. A number of Diageo’s production sites are in water-stressed areas and may be exposed to potential
disruption if demand for water exceeds the available amount during a certain period or if the poor quality of available water
restricts its use.
In addition, a failure by Diageo to respond appropriately to increased governmental or public pressure for further reductions in
greenhouse gas emissions, water usage and/or to address any other perceived environmental issues could damage Diageo's
reputation. Increased governmental or public pressure for further reductions in greenhouse gas emissions or water usage may also
cause Diageo to incur increased costs for energy, transportation and raw materials, as well as potentially require Diageo to make
additional investments in facilities and equipment, thus adversely impacting Diageo’s business and financial results. As
governments and business take action to reduce or mitigate the effects of climate change, Diageo and its supply chain are expected
to incur increased costs, including those associated with required improvements to energy usage in agriculture and glass
manufacturing, water efficiency and usage, land practices and competition for land from food crops, the rising cost of natural gas
and rising worldwide carbon prices. It is possible these costs increase beyond what is currently expected or that other categories of
costs increase unexpectedly, either or both of which could have an adverse impact on Diageo’s financial results.
Diageo is also required to report greenhouse gas emissions, energy usage data and related environmental information to a variety of
entities, and comply with the European Union Emissions Trading Scheme. Regulators in various jurisdictions, including Europe,
the United States and the United Kingdom, have focused efforts on increased disclosures related to ESG matters, including climate
change and mitigation efforts. These regulations, in particular the Corporate Sustainability Reporting Directive and the Corporate
Sustainability Due Diligence Directive, have expanded the nature, scope and complexity of matters that companies are required to
control, assess and report. This will require Diageo to make additional investments and implement new practices and reporting
processes, and will entail additional compliance risk. Disparate and evolving standards for identifying, measuring and reporting
ESG metrics, including ESG-related disclosures that may be required by the US Securities and Exchange Commission, the UK
Financial Conduct Authority, and European and other regulators, will likely increase compliance burdens and associated regulatory
and reporting costs and complexity significantly. Furthermore, while ESG reporting has improved, data remains of limited quality
and consistency and is more uncertain than historical financial information. ESG data, methodologies and standards may evolve
over time in line with market practice, regulation, or owing to scientific developments. The use of inconsistent or incomplete data
135
and models could result in sub-optimal decision making. If Diageo is unable to accurately measure and disclose required data in a
timely manner, it could be subject to penalties in certain jurisdictions.
Diageo’s operations are also subject to environmental regulations by national, regional and local agencies, including, in certain
cases, regulations that impose liability without regard to fault. These regulations can result in liability that might adversely affect
Diageo’s operations and financial condition. As regulators in Diageo’s markets continue to respond to rising concerns about the
impact of climate change and other environmental threats, regulation and enforcement is becoming stricter. There can be no
assurance that Diageo will not incur a substantial liability or that applicable laws and regulations will not change or become more
stringent in the future.
Risks related to Diageo’s industry
Demand for Diageo’s products may be adversely affected by many factors, including disruptive market forces, changes in
consumer preferences and tastes and the adverse impacts of declining economies
Diageo’s portfolio of brands includes some of the world’s leading beverage alcohol brands, as well as a number of brands that are
prominent in certain regional and/or country-specific markets. Any inability by Diageo to respond and adapt either its products or
its processes to disruptive market forces, including e-commerce, artificial intelligence, digital, and new formats, could impact
Diageo’s ability to effectively service its customers and consumers with the required agility, thereby threatening market share,
revenue, profitability and growth ambitions. While Diageo is focused on expanding its digital platforms and effectively using
technology in its supply chains, there is no guarantee that these efforts will help Diageo gain and/or maintain a competitive
advantage over its peers.
Consumer preferences on a global, regional and/or local scale may shift due to a variety of factors, including changes in
demographics, evolving social trends (including any shifts in consumer tastes towards at-home consumption occasions,
premiumisation, small-batch craft alcohol, lower or no alcohol beverages, or other alternative products), changes in travel, holiday
or leisure activity patterns, weather conditions, public health regulations and/or health and wellness concerns, any or all of which
may reduce consumers’ willingness to purchase beverage alcohol products from large producers such as Diageo or at all. There is
also a risk to Diageo’s brands emerging from consumers making brand choices that reflect their increasingly polarised socio-
political views, including with respect to ESG matters. The market share, profitability and growth ambitions of Diageo’s brands, as
well as Diageo’s reputation more generally, could also be adversely affected by any failure by Diageo to service its customers and
consumers with the required agility or to provide consistent, reliable quality in its products or in its service levels to customers.
Economic pressures in the markets Diageo serves may also reduce consumer demand for Diageo’s products. In particular, inflation,
as measured by the consumer price index remains elevated in advanced and emerging market economies, including in the United
Kingdom, Europe and the United States, driven mainly by supply chain issues (including input shortages, labour constraints, rising
commodity prices and soaring shipping costs), excess demand for goods and services, and significant increases in energy prices.
Rising costs of living have negatively impacted the spending habits of consumers in various markets which Diageo serves and have
caused some consumers to choose products which have lower price points, including those of Diageo’s competitors. Changes in
consumers’ spending habits due to inflation and rising costs of living have had and may continue to have an adverse effect on
Diageo’s business and financial results.
In addition, the social acceptability of Diageo’s products may decline due to regulatory action, negative publicity surrounding, and/
or public concerns about, alcohol consumption. For example, a number of jurisdictions, such as Canada, are updating their
guidance around alcohol. Such anti-alcohol publicity or sentiment could also result in regulatory action, litigation or customer
complaints against companies in the beverage alcohol industry and have an adverse effect on Diageo’s business and financial
results.
Diageo’s business has historically benefitted from the launch of new-to-world products or variants of existing brands (with recent
examples including premium ready-to-serve cocktails, such as The Cocktail Collection, and Crown Royal Blackberry), and
continuing product innovation and the creation of extensions to existing brands remain significant elements of Diageo’s growth
plans. The launch and ongoing success of new-to-world products or global brand extensions is inherently uncertain, especially with
respect to such products’ initial and continuing appeal to consumers. Similarly, brands that Diageo acquires may not deliver the
expected benefits and/or may not scale as expected. The failure to successfully launch a new product or an extension of an existing
brand, or to maintain the product’s initial popularity, can give rise to inventory write-offs and other costs, as well as negatively
impact the consumer perception of and thus the growth of an existing brand. There can be no assurance of Diageo’s continuing
ability to develop and launch successful new products or variants of existing products, or to ensure or extend the profitable lifespan
of its existing products.
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Diageo is subject to tax uncertainties, including changes in tax obligations, tax laws, regulations and interpretations, as well
as enforcement actions by tax authorities
Changes in the political and economic climate have resulted in an increased focus on tax collection in recent years, leading to
greater uncertainty for multinational companies such as Diageo. In recent years, tax authorities have shown an increased appetite to
challenge the methodology used by multinational enterprises, even where a company complies with international best practice
guidelines. Changes in tax law (including tax rates), tax treaties, accounting policies and accounting standards, including as a result
of the Organisation for Economic Co-operation and Development’s review of base erosion and profit shifting and the European
Union’s anti-tax abuse measures, combined with increased investments by governments in the digitisation of tax administration,
could also result in increased levels of audit activity, investigations, litigation or other actions by relevant tax authorities. Diageo
also operates in a large number of jurisdictions with complex tax and legislative regimes and whose related laws and regulations
are open to subjective interpretation. These countries include Brazil, India and countries in East Africa, where Diageo is currently
involved in a large number of tax cases, including some cases that could potentially create significant exposures or liability for
Diageo. Diageo may be subject to further future tax assessments in these jurisdictions based on the same or similar matters.
Assessing the potential financial exposure arising from these and other cases is particularly challenging due to the uncertain fiscal
and political environment in these jurisdictions. Any such investigations, litigation or other actions may result in damages,
penalties or fines as well as reputational damage to Diageo or its brands, and as a result, adversely impact Diageo’s business and
financial results. For additional information with respect to legal proceedings, including potential tax liabilities in Brazil and India,
see note 19 to the consolidated financial statements.
Beverage alcohol products are also subject to national excise taxes, import duties, sales or value-added taxes and other types of
direct and indirect taxes in most countries around the world, most of which are specific to individual jurisdictions. Increases in any
such taxes, or the imposition of new taxes, have had and could continue to have a material adverse impact on Diageo’s revenue
from sales or its margin, either through reducing the overall level of beverage alcohol consumption, having a disproportionate
impact on certain categories and/or by encouraging consumers to switch to lower-taxed categories of beverage alcohol.
In addition to the above, other significant changes in tax law, tax treaties, related accounting policies and accounting standards
could also increase Diageo’s cost of doing business and lead to a rise in Diageo’s effective tax rate and/or unexpected tax
exposures, thus adversely affecting Diageo’s business and financial results.
Any increases in the cost of production could affect Diageo’s profitability, including increases in the cost of commodities,
labour and/or energy due to inflation
The components that Diageo uses for the production of its beverage alcohol products are largely commodities purchased from
suppliers which are subject to price volatility caused by factors outside of Diageo’s control, including, inflation, changes in global
and regional supply and demand, weather and/or agricultural conditions, fluctuations in relevant exchange rates and/or
governmental controls. Fluctuations in the prices of various commodities, including energy prices, may result in unexpected
increases in the cost of the raw materials Diageo uses in the production of its products, including the prices of the agricultural
commodities, flavourings and other raw materials necessary for Diageo to produce its various beverages, as well as glass bottles
and other packaging materials, thus increasing Diageo’s production costs.
Diageo may also be adversely affected by shortages of any such materials, by increases in energy costs resulting in higher
transportation, freight or other related operating costs, by inflation in any of the jurisdictions in which it produces its products.
Diageo may not be able to increase its prices or create sufficient efficiencies to offset these increased costs without suffering
reduced volumes of products sold and/or decreased operating profit.
While Diageo continues to closely monitor its operating environment, it is possible that the ongoing volatility related to significant
cost inflation along with a potential weakening of consumer spending power may have an adverse effect on Diageo’s business
financial condition and results of operations.
Diageo is subject to litigation specifically directed at the beverage alcohol industry, as well as to other litigation
Diageo and other companies operating in the beverage alcohol industry are, from time to time, exposed to class action or other
private or governmental litigation and claims relating to product liability, alcohol marketing, advertising or distribution practices,
alcohol abuse problems or other health consequences arising from the excessive consumption of or other misuse of alcohol,
including underage drinking. Diageo may also be subject to litigation arising from legacy and discontinued activities, as well as
other litigation in the ordinary course of its operations, including in connection with commercial disputes and the acquisition or
disposal of businesses or other assets. Diageo is further subject to the risk of litigation, enforcement or other regulatory actions by
tax, customs, competition, environmental, anti-corruption and other relevant regulatory authorities, including with respect to the
methodology for assessing importation value, transfer pricing or compliance matters. Diageo’s listing in the United States may also
expose it to a higher risk of securities-related class action suits, particularly following any significant decline in the price of
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Diageo’s securities. Any such litigation or other actions may be expensive to defend and result in damages, penalties or fines as
well as reputational damage to Diageo or its brands, and/or impact the ability of management to focus on other business matters,
and may adversely affect Diageo’s business and financial results. For additional information with respect to legal proceedings, see
note 19 to the consolidated financial statements.
Risks related to regulation
Regulatory decisions and changes in the legal, and regulatory environment could increase Diageo’s costs and liabilities or
limit its business activities
Diageo’s operations are subject to extensive regulatory requirements relating to production, distribution, importation, marketing,
advertising, sales, pricing, labelling, packaging, product liability, antitrust, labour, pensions, compliance and control systems, and
environmental issues. Changes in any such applicable laws, regulations or governmental or regulatory policies and/or practices
could cause Diageo to incur material additional costs or liabilities that could adversely affect its business. In particular,
governmental bodies in jurisdictions where Diageo operates may impose new product, production or labelling requirements (for
example Ireland from 2026), limitations on the marketing, advertising and/or promotion activities used to market beverage alcohol,
restrictions on retail outlets, restrictions on importation and distribution or other restrictions on the locations or occasions where
beverage alcohol is sold which directly or indirectly limit the sales of Diageo products. Regulatory authorities under whose laws
Diageo operates may also have enforcement power that can subject the group to actions such as product recalls, product seizures or
other sanctions which could have an adverse effect on Diageo’s sales or damage its reputation.
Diageo is also subject to antitrust and competition laws in many of the jurisdictions in which it operates. In a number of these
jurisdictions, there has been an increase in the enforcement of these laws during recent years. Should this trend continue, this may,
among other things, result in increased regulatory scrutiny of Diageo, potential reputational damage and/or increased costs related
to compliance.
Diageo is required to comply with data privacy laws and regulations in many of the markets in which it operates. For example,
Diageo is subject to the General Data Protection Regulation (“GDPR”) in the European Union, the United Kingdom General Data
Protection Regulation (“UK GDPR”), data privacy legislation in the United States and the Personal Information Protection Law
(“PIPL”) in China. Breach of any of these laws or regulations could lead to significant penalties (including, under the GDPR and
the UK GDPR, a fine of up to 4% of annual global turnover), other types of government enforcement actions, private litigation
and/or damage to Diageo’s reputation, as well as impact Diageo’s ability to deliver on its digital productivity and growth plans.
In many of the markets in which Diageo operates, the overall legal and regulatory landscape has become more complex in recent
years and changes to the regulatory environment in which Diageo operates could also cause Diageo to incur material additional
costs or liabilities, which could adversely affect Diageo’s business and financial performance. For additional information on the
increased complexity of the legal and regulatory landscape please see "— Climate change, or legal, regulatory or market measures
to address climate change or other environmental concerns, may negatively affect Diageo’s business or operations, and water
scarcity or water quality issues could negatively impact Diageo’s production costs and capacity" above.
Defective internal controls could adversely affect Diageo’s financial reporting and management processes, as well as the
accuracy of public disclosures
Diageo has in place internal control and risk management systems in relation to its financial reporting process and its process for
the preparation of consolidated financial statements. In addition, management undertakes a review of the consolidated financial
statements in order to ensure that the financial position and results of the group are appropriately reflected therein. Diageo is
required by the laws of various jurisdictions to publicly disclose its financial results, as well as developments that could materially
affect its financial results. Accurate disclosures provide investors and other market professionals with information to understand
Diageo’s business. In addition, the reliability of financial reporting is important in ensuring that the business’ management and its
results are based on reliable data.
Regulators routinely review the financial statements of listed companies such as Diageo for compliance with existing, new or
revised accounting and regulatory requirements. Should Diageo be subject to an investigation into potential non-compliance with
accounting and disclosure requirements or be found to have breached any such requirements, this may, among other things, lead to
restatements of previously reported results, significant penalties, public censure and/or litigation. Any such regulatory action could
adversely affect Diageo’s business and financial results, reputation and the price of Diageo’s securities. In addition, defective
internal controls could result in inaccuracies or lack of clarity in public disclosures and could result in a material misstatement of
financial reporting. This could create market uncertainty regarding the reliability of the data presented and have an adverse impact
on Diageo’s reputation and the price of Diageo’s securities.
Any failure by Diageo to comply with anti-corruption laws, anti-money laundering laws, economic sanctions laws, trade
restrictions or similar laws or regulations, or any failure of Diageo’s related internal policies and procedures designed to
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comply with applicable law, may have a material adverse effect on Diageo’s business and financial results, Diageo's
reputation and the price of Diageo' securities
Diageo produces and markets its products on a global scale, including in certain countries that, as a result of political and economic
instability, a lack of well-developed legal systems and/or potentially corrupt business environments, have a higher level of
corruption risk than other countries. There is increasing scrutiny and enforcement by regulators in many jurisdictions of anti-
corruption laws, including pursuant to the US Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and certain
jurisdictions’ equivalent local laws. Such enforcement has been enhanced by applicable regulations in the United States, which
offer substantial financial rewards to whistleblowers for reporting information that leads to monetary fines, and the United
Kingdom, which has enacted the Economic Crime and Corporate Transparency Act 2023 introducing a new corporate criminal
offence of failure to prevent fraud.
If Diageo or any of its associates fails to comply with anti-corruption laws (including anti-bribery laws), anti-money laundering
laws or with existing or new economic sanctions or trade restrictions imposed by the United States, the European Union or other
national or international authorities that are applicable to Diageo or its associates, including any sanctions introduced in response to
Russia's invasion of Ukraine, Diageo may be exposed to the costs associated with investigating potential misconduct as well as
significant financial penalties and/or reputational damage.
While Diageo has implemented and maintains internal practices, procedures and controls designed to ensure compliance with anti-
corruption laws, sanctions, trade restrictions or similar laws and regulations, and routinely conducts investigations, either at its own
initiative or in response to requests from regulators in connection with compliance with such internal controls, there is no guarantee
that such procedures will be effective in preventing compliance failures at Diageo or at third parties with whom Diageo maintains
business relationships. In addition, any lack of an embedded business integrity culture and associated control framework in any
market could increase the risk of non-compliance with relevant laws and regulations.
Any investigations and lawsuits, regardless of the ultimate outcome of the proceeding, are time consuming and expensive and can
divert the time and effort of Diageo’s personnel, including senior management, from its business. Adverse publicity, legal and
enforcement proceedings, and enhanced government scrutiny can also have a negative impact on Diageo’s reputation. To the extent
that violations of anti-corruption, sanctions and/or trade restriction laws and regulations, and/or Diageo’s internal policies and
procedures, are found, or if Diageo’s internal policies and procedures are found not to comply with applicable law, possible
regulatory sanctions, fines and other penalties or consequences, including reputational damage, may also be material. For
additional information with respect to legal proceedings, see note 19 to the consolidated financial statements.
Risks related to Diageo’s business
Diageo may incur significant cost in connection with attempting to achieve its ESG ambitions, and may be subject to
increased scrutiny and reputational risk if it is unable to make sufficient progress against or achieve its objectives
Diageo has articulated certain ESG ambitions as part of its ‘Spirit of Progress’ targets and is undertaking a number of strategic and
operational initiatives in order to achieve those ambitions. In addition, from time to time, Diageo may introduce new initiatives in
the future to make progress against those targets, as well as to address other ESG-related issues that arise. Diageo expects to incur
significant costs and investments in connection with any such initiatives (including those related to human resources, technology,
capital projects and operations), and as a result of compliance with new laws, regulations, reporting frameworks and industry
practices. Consistent with many companies across the alcohol beverage industry, Diageo expects that future innovations and
technological improvement, and increased collaboration with governments and other businesses, including those within the alcohol
beverage industry which may compete with Diageo, will be required in order to achieve and sustain its ESG-related ambitions. In
addition, the data, methodologies and standards that Diageo has used to develop its targets will likely evolve over time. Any
changes could result in revisions to Diageo’s internal frameworks and reported data, and could mean that reported figures are not
reconcilable or comparable year on year.
Furthermore, Diageo’s own current expectations with respect to its expected pathway to achieve its Spirit of Progress ambitions
(including achieving “net zero”) are subject to change as underlying assumptions and its own operations change over time,
including as a result of new information, changed expectations and innovation. In the event that Diageo is unable to make
sufficient progress in a timely manner or achieve its ESG-related ambitions, it may be subject to additional scrutiny and criticism,
and may face regulatory censure and/or fine. In addition, stakeholders and others who disagree with Diageo’s approach may speak
negatively or advocate against Diageo or its products, with the potential to harm Diageo’s reputation or business through negative
publicity, adverse government treatment, product boycotts or other means. Diageo could suffer reputation damage and a loss of
trust from consumers, investors and other stakeholders, and/or the price of Diageo’s securities could be adversely affected, if it
fails to achieve any of these goals for any reason or is otherwise perceived to be failing to act responsibly with respect to the
environment or to effectively respond to regulatory requirements concerning climate change.
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Diageo may be adversely affected by cyber-attacks and IT threats or other disruptions to core business operations
including manufacturing and supply, business service centres and/or information systems
Diageo relies on information technology (IT) systems, networks and services, including internet sites, data hosting and processing
tools, hardware (including laptops and mobile devices), software, and technical platforms and applications, to process, store and
transmit large amounts of data and to help it manage its business. Diageo uses its IT systems, networks and services for, among
other key business functions, the hosting of its primary and brand-specific websites and its internal network and communications
systems; supply and production planning, execution and shipping; the collection and storage of customer, consumer, investor
relations and employee data; processing various types of transactions, including summarising and reporting its results of
operations; the development and storage of strategic corporate plans; and ensuring compliance with various legal, regulatory and
tax requirements. As with all large systems, Diageo’s IT systems, including those managed or hosted by third parties, could be
subject to sophisticated cyber-attacks (including phishing and ransomware attacks), IT threats by external or internal parties intent
on disrupting production or other business processes or otherwise extracting or corrupting information, or other cyber incidents
such as the CrowdStrike incident in July 2024 where computers were affected on a global basis (including at Diageo). The
sophistication of cybersecurity threat actors also continues to grow and evolve, including the risks associated with emerging
technologies, such as artificial intelligence used for nefarious purposes. In recent years, ransomware attacks against some of
Diageo’s peers have become more frequent, which has increased the likelihood of Diageo being targeted for a similar cyber-attack.
Diageo’s vulnerability to such cyber-attacks could also be increased due to a significant proportion of its employees working
remotely. Unauthorised access to Diageo’s IT systems could disrupt Diageo’s business, including its beverage alcohol and other
production capabilities, and/or lead to theft, loss or misappropriation of critical assets or to outside parties having access to
confidential or even highly confidential information, including privileged data, personal data or strategic information of Diageo
and its current or former employees, customers and consumers. Such information could also be made public in a manner that harms
Diageo’s reputation and financial results and, particularly in the case of personal data, could lead to regulators imposing significant
fines on Diageo.
Diageo’s use of shared business services centres, located in Hungary, Colombia, the Philippines and India, to deliver transaction
processing activities for markets and operational entities also means that any sustained disruption to a centre or issue impacting the
reliability of the information systems used could impact a large portion of Diageo’s business operations. The captive shared
business services centres in Hungary and India also perform certain central finance activities, including elements of financial
planning and reporting, treasury and HR services. Any transitions of transaction processes to, from or within shared business
services centres, as well as other projects which impact Diageo’s IT systems, could lead to business disruption. In addition, if
Diageo does not allocate and properly manage the resources necessary to build, sustain and protect these centres or its wider IT
systems, it could be subject to losses attributable to processing inefficiencies, the unexpected failure of computer systems, devices
and software used by its IT platforms, production or supply chain disruptions, the unintended disclosure of sensitive business or
personal data and the corruption or loss of accounting data necessary for it to produce accurate and timely financial reports. In
certain circumstances, such disruptions or failures could also result in property damage, breaches of regulations, litigation, legal
liabilities and reparation costs, thereby having a material adverse effect on Diageo’s business and financial results.
Loss, operational disruptions to or closure of a production site, office or other key facility due to unforeseen or catastrophic
events or otherwise, could have a material adverse effect on Diageo's business and financial results
International and domestic security risks including terrorism and military conflicts, as well as natural hazards, also pose a threat to
the safety of Diageo’s employees and third parties at its offices, sites and events, as well as its property and products. Diageo
operates production facilities around the world. If there was a technical failure, or a fire, explosion, flood or other significant event,
at one or more of Diageo’s production facilities, this could result in significant damage to the facilities, plant or equipment, their
surroundings and/or the local environment and/or injury or loss of life. Such an event could also lead to a loss of production
capacity, result in regulatory action or legal liability, and/or damage Diageo’s reputation.
Diageo has a substantial inventory of aged product categories, including Scotch whisky, which may mature over periods of up to
30 years or more. A substantial portion of this maturing inventory is stored in Scotland, and the loss through contamination, fire or
other natural disaster of all or a portion of the stock of any one of those aged product categories, including as a result of climate
change-related severe weather events, could result in a significant reduction in supply of those products, and consequently, Diageo
would not be able to meet consumer demand for those products as such demand arises. There can be no assurance that insurance
proceeds would cover the replacement value of Diageo’s maturing inventory or other assets in the event that such assets were lost
due to contamination, fire or natural disasters, destruction resulting from negligence or the acts of third parties, or any failure of
information systems or data infrastructure.
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Contamination, counterfeiting or other events could harm the integrity of customer support for Diageo’s brands and
adversely affect the sales of those brands
The success of Diageo’s brands depends upon the positive image that consumers have of those brands, and contamination, whether
arising accidentally, or through deliberate third party action, or other events that harm the integrity of consumer support for those
brands, could adversely affect their sales and Diageo’s corporate and brand reputation. Diageo purchases most of the raw materials
for the production and packaging of its products from third party producers or on the open market. Diageo may be subject to
liability if contaminants in those raw materials or defects in the distillation, fermentation or bottling process lead to reduced
beverage quality or illness among, or injury to Diageo’s consumers, or if the products do not otherwise comply with applicable
food safety regulations. Diageo has had to recall products in the past due to contamination or damage and may have to do so again
in the future. A significant product liability judgement or a widespread product recall may cause harm to consumers and negatively
impact sales and profitability of the affected brand or all of Diageo’s brands for a period of time depending on product availability,
competitive reaction and consumer attitudes. Even if a product liability claim is unsuccessful or is not fully pursued, any resulting
negative publicity could adversely affect Diageo’s reputation with existing and potential customers as well as its corporate and
individual brand image.
Additionally, third parties sell products which are either counterfeit versions of Diageo brands or inferior brands that look like
Diageo brands, and consumers of Diageo brands could confuse Diageo products with such counterfeit products. A negative
consumer experience with such a product could cause them to refrain from purchasing Diageo brands in the future and impair
Diageo’s brand equity, thus adversely affecting Diageo’s business. There is also a risk of physical threats to Diageo’s people due to
the illicit nature of the type of organisations or individuals involved in counterfeit activities.
The value of Diageo’s brands and its net sales may be negatively affected by its failure to maintain its brand image and
corporate reputation or adapt to a changing media environment
The value of Diageo’s brands and its profitability depends heavily on its ability to maintain its brand image and corporate
reputation. Adverse publicity, whether or not justified, may tarnish Diageo’s reputation and cause consumers to purchase products
offered by its competitors instead of by Diageo. Such adverse publicity could arise as a result of a perceived failure by Diageo to
make adequate positive social contributions, including in relation to the level of taxes paid by Diageo, or ESG-related performance,
or by any failure of internal controls or compliance breaches leading to violations of Diageo’s Code of Business Conduct, Code of
Ethics, its other key policies or the laws or regulations of the jurisdictions in which it operates. Diageo has also established and
may continue to establish relationships with brand founders and/or other public figures to develop and promote its brands, and to
establish brand equity, history and authenticity with consumers. If certain such individuals were to stop promoting a Diageo brand
or brands contrary to their agreements, Diageo’s business could be adversely affected. In addition, certain such individuals could
engage in behaviour, make statements or use their platforms in a manner that reflects poorly on Diageo’s brand image and
corporate reputation or otherwise adversely affects Diageo. Diageo may be unable to prevent such actions, and the actions Diageo
takes to address them may not be effective in all cases. Negative claims or publicity involving Diageo, its culture and values,
brands, or any of its key employees or brand endorsers could damage Diageo’s brands and/or reputation, regardless of whether
such claims are accurate, causing Diageo to lose existing customers or fail to attract new customers, and may have a material
adverse effect on Diageo’s business and financial results.
In addition, Diageo’s ability to maintain, extend, and expand its brand image depends on its ability to adapt to a rapidly changing
media environment. Diageo maintains an online presence as part of its business operations, and increasingly relies on social media
and online dissemination of advertising campaigns. Diageo’s reputation may suffer if it is perceived to fail to appropriately restrict
access to its online content or if it breaches any marketing regulation, code or policy. In addition, the growing use of social and
digital media increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or
comments about Diageo, its brands or its products on social or digital media, whether or not valid, could seriously damage
Diageo’s brands and reputation. Any failure to maintain, extend, and expand Diageo’s brand image or adapt to a changing media
environment may have a material adverse effect on Diageo’s business and financial results and reputation, as well as the price of
Diageo’s securities.
Diageo’s operations and financial results may be adversely affected by fluctuations in exchange rates and fluctuations in
interest rates
Diageo is engaged in an international business that operates in, and makes sales into, countries with different currencies, while its
financial results for the year ended 30 June 2024 are presented in US dollars. As a result, Diageo is subject to foreign currency risk
due to exchange rate movements, which affect the US dollar value of its transactions, as well as the translation of the results and
underlying net assets of its operations to the US dollar. Movements in exchange rates used to translate foreign currencies into US
dollars may have a significant impact on Diageo’s reported results of operations from year to year. Exchange rate fluctuations may
also expose Diageo to increased interest expense on borrowings denominated in currencies which appreciate against the US dollar.
As a result, Diageo’s business and financial results may be adversely affected by fluctuations in exchange rates.
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In addition, Diageo may be adversely impacted by fluctuations in interest rates, mainly through increased interest expense.
Accommodative monetary policy had generally made borrowings less expensive in the markets in which Diageo operates until
recent years. However, the global economy has experienced persistently high levels of inflation, while benchmark interest rates,
such as the US federal funds rate, have risen. Such inflationary pressures stem from and are compounded by ongoing disruptions in
the global supply chain due to geopolitical tensions, including the conflicts in Ukraine and the Middle East and rising energy prices
(particularly for oil and gas). As a result, the availability and prices of inputs available to Diageo from its first- and second-tier
suppliers are expected to be volatile and inflationary pressures more broadly are expected to persist. As a result, market
expectations are currently that benchmark interests rates could continue to rise and may be accompanied by other measures to
reverse accommodative policy, such as quantitative tightening. Sharp increases and/or unexpected moves in interest rates due to
any of the foregoing factors could have macroeconomic effects that materially adversely affect Diageo’s business and its financial
results. In particular, rising interest rates could lead to a material increase in Diageo’s funding costs. In addition, if there is an
extended period of constraint in the capital markets and, at the same time, cash flows from Diageo’s business are under pressure,
Diageo’s ability to fund its long-term strategies may be materially adversely impacted.
Any failure by Diageo to execute its strategic business transformation projects could adversely affect Diageo’s business
processes, or operating and financial performance
Failure to execute strategic business transformation projects effectively, namely the implementation of SAP S/4 Hana, our Spirit of
Progress ESG action plan and our supply chain agility programme, could result in delays or changes to their expected benefits or
negatively affect our ability to continuously improve our internal control and reporting environment. Any delay or disruption in our
strategic business transformation projects may have a negative impact on our critical business processes or on our operating and
financial performance.
As the external environment continues to change, including those changes driven by evolving stakeholder expectations, consumer
behaviours and preferences, and heightened regulatory requirements, the ambition and objectives of our strategic transformation
initiatives may need to adapt, which may require new and different capabilities and skills within our workforce and may negatively
impact our ability to deliver the anticipated benefits in the time period expected, or at all.
Given the state of volatility and disruption in the external environment in recent years and the increased pace of change being
experienced in our business and industry, we have been very focused on ensuring we have the right skills and human resources to
deliver our strategic business transformation initiatives. However, failure to have the right strategic partnerships and talent in key
positions to deliver and sustain these initiatives going forward may result in delays, unforeseen costs and other disruptions to our
business, competitive positioning and financial performance.
Diageo may not be able to derive the expected benefits from its business strategies, including in relation to expansion in
emerging markets, acquisitions, investments in joint ventures, productivity initiatives or inventory forecasting
There can be no assurance that Diageo’s business strategies will result in opportunities for growth and improved margins. Part of
Diageo’s growth strategy includes expanding its business in certain emerging market countries where Diageo believes there are
strong prospects for growth. There is no guarantee that this strategy will be successful, and some of these markets may represent a
higher risk in terms of their changing regulatory environments and higher degrees of uncertainty over levels of consumer spending.
As part of its growth strategy, Diageo also made a number of acquisitions in recent years, and it is possible that Diageo may not be
able to derive the expected benefits from these acquisitions and/or may experience unexpected integration challenges. In the future,
Diageo’s business strategies will, almost certainly, give rise to further business combinations, acquisitions, disposals, joint ventures
and/or partnerships (including any associated financing or the assumption of actual or potential liabilities, depending on the
transaction contemplated). However, there can be no assurance that any such transaction would be completed and/or that it would
deliver the anticipated benefits, cost savings or synergies. The success of any transaction also depends in part on Diageo’s ability to
successfully integrate new businesses with its existing operations. Acquisitions may also expose Diageo to liabilities it may not be
aware of at the time of the acquisition, for example if acquired companies and business do not act, or have not acted, in compliance
with applicable laws and regulations. For additional information on the challenges of integration please see note 19 to the
consolidated financial statements.
Diageo may from time to time hold interests and investments in joint ventures and associated companies in which it has a non-
controlling interest and may continue to do so. In these cases, Diageo may have limited influence over, and limited or no control
of, the governance, performance and cost of operations of the joint ventures and associated companies. Some of these joint
ventures and associated companies may represent significant investments, and these investee entities or other joint venture partners
or equity holders may make business, financial or investment decisions contrary to Diageo's interests (including with respect to the
distribution of profits and dividends) or may make decisions different from those that Diageo itself may have made.
142
To strengthen the resilience and agility of Diageo’s supply chain, Diageo has recently initiated a supply chain agility programme,
expected to be implemented over the five years starting from the fiscal year ended 30 June 2023. There can be no assurance that
this programme or other programmes designed to improve the effectiveness and efficiency of end-to-end operations, will deliver
the expected benefits. Such programmes may also result in significant costs to Diageo or may have other adverse impacts on the
business and operations of the group.
Certain of Diageo’s aged product categories may mature over decades, and forecasts of demand for such products in future periods
are subject to significant uncertainty. There is an inherent risk of forecasting error in determining the quantity of maturing stock to
lay down in a given year for future consumption as a result of changes in business strategy, market demand and unplanned shifts in
consumer preferences, introductions of competing products and other changes in market conditions. Any forecasting error could
lead to Diageo being unable to meet the objectives of its business strategy, future demand or lead to a surplus of inventory and
consequent write-down in value of maturing stocks. If Diageo is unable to accurately forecast demand for its products or efficiently
manage its inventory, this may have a material adverse effect on Diageo’s business and financial results.
Diageo faces competition that may reduce its market share and margins
Diageo faces substantial competition from several international companies as well as regional and local companies (including craft
breweries and micro distilleries) in the countries in which it operates and competes with other drinks companies across a wide
range of consumer drinking occasions. Within a number of categories, the beverage alcohol industry has experienced consolidation
among major global producers, as evidenced by business combinations of substantial value carried out by significant competitors
in recent years. Consolidation is also taking place among Diageo’s customers in many countries. In addition, there has been a
recent increase in competition for distribution channels, notably e-commerce channels. These trends may lead to stronger
competitors, increased competitive pressure from customers, negative impacts on Diageo’s distribution network (including sub-
optimal routes to customers and consumers), downward pressure on prices, predatory marketing tactics by Diageo’s competitors
and/or a decline in Diageo’s market share in any of these categories. For example, expansion in the seltzer and ready to drink
categories has increased competitive pressures across product categories and in certain markets (such as in the United States).
Adverse developments in economic conditions or declines in demand or consumer spending may also result in intensified
competition for market share, with potentially adverse effects on sales volumes and prices. Any of these factors may adversely
affect Diageo’s results and potential for growth.
Diageo’s business may be adversely affected by increased costs for, or shortages of, talent, or by labour strikes or disputes
Diageo’s business could be adversely affected by labour or skill shortages or increased labour costs due to increased competition
for employees, higher employee turnover or increased employee benefit costs. There is no guarantee that Diageo will continue to
be able to recruit, retain and develop personnel possessing the skill sets that it requires to deliver its strategy, for example in
relation to sales, marketing and innovation capability within markets, or in its senior management. The loss of senior management
or other key personnel or the inability to identify, attract and retain qualified personnel in the future could make it difficult to
manage Diageo’s operations and adversely affect Diageo’s business and financial results. In addition, labour strikes, work
stoppages or slowdowns within Diageo’s operations or those of Diageo’s suppliers could adversely impact Diageo.
Diageo’s operations and financial results may be adversely affected by movements in the value of assets and liabilities
related to its pension plans
Diageo operates a number of pension plans throughout the world, which vary in accordance with local conditions and practices.
The majority of these pension plans are defined benefit plans and are funded by payments to separately administered trusts or
insurance companies. The ability of these pension plans to meet their pension obligations may be affected by, among other things,
the performance of assets owned by these pension plans, the liabilities in connection with the pension plans, the underlying
actuarial assumptions used to calculate the surplus or deficit in the plans, in particular the discount rate and long-term inflation
rates used to calculate the liabilities of the pension funds, and any changes in applicable laws and regulations. If there are
significant declines in financial markets and/or deterioration in the value of fund assets or changes in discount rates or inflation
rates, Diageo may need to make substantial contributions to these pension funds in the future.
Furthermore, if the market values of the assets held by Diageo’s pension funds decline, the valuations of assets by the pension
trustees decline or the valuation of liabilities in connection with pension plans increase, pension expenses may increase which, as a
result, could materially adversely affect Diageo’s financial position. There is no assurance that interest rates or inflation rates will
remain constant, that pension fund assets can earn the assumed rate of return annually or that the value of liabilities will not
fluctuate significantly. Diageo’s actual experience may also be significantly more negative than the assumptions used.
Diageo’s operations may be adversely affected by failure to maintain or renegotiate distribution, supply, manufacturing or
licence agreements on favourable terms
Diageo’s business has a number of distribution, supply, manufacturing or licence agreements for brands owned by it or by other
companies. These agreements vary depending on the particular brand, but tend to be for a fixed number of years. There can be no
assurance that Diageo will be able to renegotiate its rights on favourable terms when these agreements expire or that they will not
143
be terminated. Failure to renew these agreements on favourable terms, or any disputes with distributors of Diageo’s products or
suppliers of raw materials, could have an adverse impact on Diageo’s business and financial results.
Diageo may not be able to protect its intellectual property rights
Given the importance of brand recognition to its business, Diageo has invested considerable effort in protecting its intellectual
property rights, including trademark registration and domain names. Diageo’s patents cover some of its process technology,
including some aspects of its bottle marking technology. Diageo also uses security measures and agreements to protect its
confidential information and trade secrets. However, Diageo cannot be certain that the steps it has taken will be sufficient or that
third parties will not infringe on or misappropriate its intellectual property rights in its brands or products or, indeed, that Diageo
will not inadvertently infringe a third party’s intellectual property rights. Moreover, some of the countries in which Diageo
operates offer less intellectual property protection than Europe or North America. Given the attractiveness of Diageo’s brands to
consumers, it is not uncommon for counterfeit products to be manufactured and traded in certain jurisdictions. Diageo cannot be
certain that the steps it takes to assist the authorities to prevent, detect and eliminate counterfeit products will be effective in
preventing material loss of profits or erosion of brand equity resulting from lower quality or even dangerous counterfeit product
reaching the market. If Diageo is unable to protect its intellectual property rights against infringement or misappropriation, this
could materially harm its future financial results and ability to develop its business.
Risks related to Diageo’s securities
It may be difficult to effect service of US process and enforce US legal process against Diageo and its directors
Diageo is a public limited company incorporated under the laws of England and Wales. The majority of Diageo’s directors and
officers, and some of the experts named in this document, reside outside of the United States. A substantial portion of Diageo’s
assets, and all or a substantial portion of the assets of such persons, are located outside of the United States. Therefore, it may not
be possible to effect service of process within the United States upon Diageo or these persons in order to enforce judgments of US
courts against Diageo or these persons based on the civil liability provisions of US federal securities laws. There is also doubt as to
the enforceability in England and Wales, in original actions or in actions for enforcement of judgments of US courts, of civil
liabilities solely based on the US federal securities laws. In addition, punitive damages in actions brought in the United States or
elsewhere may be unenforceable in England and Wales.
144
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
Our ESG reporting approach
Reporting transparently on the ESG issues that affect our business, and that our business creates, plays a vital role in delivering our
strategy. It helps us to manage ESG risks, take opportunities and promote sustainable development everywhere we live, work, source
and sell.
Our ESG reporting suite aims to provide comprehensive and comparable disclosures for a broad range of stakeholders. As well as
publishing our integrated Annual Report and ESG Reporting Index each year, we also submit non-financial information to
benchmarking and index organisations, including those listed on the Awards and ranking page of our website.
The non-financial reporting space is evolving quickly. We are committed to continually evaluating and improving our approach and to
actively tracking emerging ESG regulation, frameworks and good practice. Since launching our ‘Spirit of Progress’ ESG action plan,
we have set out to help create a more inclusive and sustainable world, creating a positive impact in our company, and for our society.
How we report to our stakeholders – our reporting suite

Annual Report Where we present our most material disclosures and describe how our strategy delivers value for our business and other stakeholders. The performance of non-financial KPIs are integrated into the relevant focus area sections. The document also includes detailed non-financial reporting boundaries and methodologies. |  | Diageo.com Where, through the ‘Spirit of Progress‘ section, we give more details of our approach and performance, with examples of our strategy in action. | ESG Reporting Index Where we provide additional disclosures in line with the GRI (Global Reporting Initiative) Standards, UNGC advanced reporting criteria index and our response to the Sustainability Accounting Standards Board (SASB).

Who are our stakeholders? Everyone who is affected by our business, and everyone who affects it, is a stakeholder. A detailed
description of our stakeholder engagement process is on pages 100-103 of the UK Annual Report.
This non-financial and sustainability information statement provided on pages 146-147 provides an overview of topics and related
reporting references in our external reporting as required by sections 414CA and 414CB of the Companies Act 2006.
145
Non-financial and sustainability information statement

Reporting requirement as per Companies Act 2006 414CA and 414CB | Focus area | Read more in Diageo's reports | Relevant policies, standards or documents | Page reference
Environmental matters |  |  |  |  |
1(a) environmental matters (including the impact of the company’s business on the environment) | ‘Spirit of Progress‘ |  | •Global Environment Policy(1) •Sustainable Agriculture Guidelines(1) •Sustainable Packaging Commitments(1) •Partnering with Suppliers Standard(1) •Deforestation Guidelines(4) •Water Stewardship Strategy(4) •Net Zero Carbon Strategy(4) •Reinventing Packaging Strategy(4) •Diageo Water Collective Action Implementation Guide(4) | p.97-99
| Pioneer grain-to- glass sustainability
Our people |  |  |  |  |
1(b) the company’s employees | Our people and culture | •Talent and diverse workforce •Culture •Gender and ethnic diversity •Inclusive hospitality industry and communities •Progressive marketing •Diverse suppliers | •Code of Business Conduct(2) •Great Britain / Scotland and Republic of Ireland Gender Pay Gap Report 2023(4) •Global Human Rights Policy(1) •Directors' Remuneration Policy(4) | p.105-107
| Champion inclusion and diversity
| Health and safety | •Embedding culture of health and safety | •Global Health, Safety and Wellbeing Policy(1) | p.107-109
1(c) social matters | ‘Spirit of Progress‘ |  |  |  | p.97-99
| Promote positive drinking | •Tackling underage drinking •Changing attitude to drink driving •Make moderation aspirational •Marketing in a responsible way | •Global Marketing and Digital Marketing Policy(1) •Global Employee Alcohol Policy(1) | p.100-103
Human rights |  |  |  |  |
1(d) respect for human rights | Human rights | •Standing up for human rights | •Global Human Rights Policy(1) •Modern Slavery Statement(3) •Global Brand Promoter Standard(1) •Privacy Policy(1) | p.103-105
Anti-bribery and corruption |  |  |  |  |
1(e) anti-corruption and anti-bribery matters | Doing business the right way |  | •Code of Business Conduct(1) •Privacy Policy(1) •Global Tax Policy(1) •Global Information Management and Security Policy(4) | p.103-105
Business model |  |  |  |  |
2(a) a brief description of the company’s business model | Diageo's business model | •Strategic Report •Business integrity •Assessing risk •Engaging stakeholders |  |  | p.23-37
Risk management |  |  |  |  |
2(d) a description of the principal risks relating to the matters mentioned in subsection | Our principal risks and risk management | •Effective risk management •Principal risks | •Global Quality Policy(1) •Business Continuity Management Standard(4) •Risk Management Standard(4) | p.134-144 p.176
Viability statement | •Viability statement

146

Reporting requirement as per Companies Act 2006 414CA and 414CB | Focus area | Read more in Diageo's reports | Relevant policies, standards or documents | Page reference
Non-financial performance |  |  |  |  |
2(e) a description of the non-financial key performance indicators relevant to the company’s business | Our performance: monitoring performance and progress | •Our performance •‘Spirit of Progress’ |  |  | p.41-42
Climate-related financial disclosures as required by sections 414CA and 414CB of the Companies Act 2006
(a) description of the company’s governance arrangements in relation to assessing and managing climate-related risks and opportunities; | Pioneer grain-to- glass sustainability | •Identifying climate risks and opportunities •Governance | See above under Environmental matters | p.113
(b) a description of how the company identifies, assesses, and manages climate-related risks and opportunities; | •Identifying climate risks and opportunities | p.114-121
(c) a description of how processes for identifying, assessing, and managing climate-related risks are integrated into the company’s overall risk management process; | •Our principal risk and risk management •Identifying climate risks and opportunities | p.134-144 p.114-121
(d) a description of— (i) the principal climate-related risks and opportunities arising in connection with the company’s operations, and | •Our principal risk and risk management •Identifying climate risks and opportunities | p.134-144 p.114-121
(d) a description of—(ii) the time periods by reference to which those risks and opportunities are assessed; | •Identifying climate risks and opportunities •Quantitative impact of transitions risks and opportunities •Our pathway to net zero | p.114-121
(e) a description of the actual and potential impacts of the principal climate-related risks and opportunities on the company’s business model and strategy; | •Identifying climate risks and opportunities •Identifying and assessing our transitions risks and opportunities | p.114-121
(f) an analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios; | •Climate change resilience •Viability statement •Scenario analysis of physical risks | p.114-121 and p.176
(g) a description of the targets used by the company to manage climate-related risks and to realise climate-related opportunities and of performance against those targets; and | •Our strategy for grain-to-glass sustainability | p.114-130
(h) a description of the key performance indicators used to assess progress against targets used to manage climate- related risks and realise climate-related opportunities and of the calculations on which those key performance indicators are based | •Our strategy for grain-to-glass sustainability | p.114-130

(1) https://www.diageo.com/en/our-business/corporate-governance/code-of-business-conduct/policies-and-standards
(2) https://www.diageo.com/en/our-business/corporate-governance/code-of-business-conduct
(3) https://www.diageo.com/en/esg/doing-business-the-right-way/modern-slavery-statement
(4) Externally published documents on different subsites
147
LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS
Supporting the business through Leadership
Dear Shareholder
It is with great pleasure that I present, on behalf of the Board, the corporate governance report for the year ended 30 June 2024. This
report summarises how Diageo's leadership and governance structures have supported Diageo during the course of the year in
seeking to achieve long-term sustainable success.
The Board is committed actively to creating long-term sustainable growth and delivering shareholder value. We aim to do so by building
Diageo's business through a portfolio of leading international brands, aligned to the highest growth categories and core industry trends. This
year has seen continued volatility in consumer markets in a number of different geographies. In such a challenging external environment, it
is particularly important that Diageo has resilient leadership, with a clear strategy, underpinned by strong values and culture, while
remaining agile and adaptable, moving swiftly to respond to consumer trends and opportunities. It is the Board's responsibility to ensure
that the company has the leadership required to achieve its long-term success and that management has the strategic direction and aims to
achieve its growth ambition, supported by and centred on a strong, values-based culture.
While navigating the current turbulent external environment, we have continued to invest behind the business, ensuring that Diageo is well-
positioned in key categories and to take advantage of opportunities in fast-moving consumer trends. We look to manage our capital
allocation in an appropriate manner, investing in growth areas, managing our portfolio, resources and footprint to optimise efficiency and
focusing resources where they are most effective.
Leadership has been an area of particular focus for directors recently as we look to build the future composition of the Board,
reflecting changes in some key roles through the coming months and into the second half of fiscal 25. We aim to have a balanced
and experienced Board, comprising a diverse range of individuals with different skills and from different backgrounds, with an
ability to express informed and independent views and opinions. With the recently announced new appointments to the Board, I
am confident that Diageo will continue to have the effective and resilient leadership required to achieve its growth ambition over
the long term.
Javier Ferrán(Chair)
Governance
148

| Compliance with the UK Corporate Governance Code |  |
| The Board considers that, for the year ended 30 June 2024, Diageo has fully applied the Principles and complied with the Provisions of the UK Corporate Governance Code 2018 (the Code). |
| The table below details where content complying with the Code's requirements can be found. |  |
|  | Visit diageo.com for more information. |  |  |  |  |

| 1 | Board Leadership & Company Purpose
| A. | Board of Directors | Board of Directors | 154
| Board Chair Succession | 189
| Performance Evaluation | 190
| B. | Purpose, Values and Culture | Our Business Today | 13
| ’Spirit of Progress’ | 97
| C. | Resources and Control Framework | Business Model | 23
|  | Our Principal Risks and Risk Management | 134
|  | Corporate Governance Structure and Division of Responsibilities | 153
| D. | Stakeholder Engagement | Stakeholder Engagement | 165
|  | Section 172 Statement | 19
| E. | Workforce Policies and Practices | Our Business Today | 13
|  | ’Spirit of Progress’ | 97
|  | Doing Business the Right Way | 103
|  | Business Integrity Programmes | 182
| 2 | Division of Responsibilities |
| F. | Role of the Chair | Letter from the Chairman of the Board of Directors | 148
|  | Corporate Governance Structure and Division of Responsibilities | 153
|  | Performance Evaluation | 190
| G. | Division of Responsibilities | Corporate Governance Structure and Division of Responsibilities | 153
|  |  | Composition of Board | 158
| H. | Role of the Non- Executive Director | Corporate Governance Structure and Division of Responsibilities | 153
|  | Board of Directors | 154
| I. | Board Policies, Process, Information, Time and Resources | How our Board monitors Culture | 175
|  | Duties of the Board | 158
|  | Board Activities | 162

3 | Composition, Succession and Evaluation
J. | Appointments to the Board | Board Chair Succession | 189
Champion Inclusion and Diversity | 110
Recruitment and election procedures | 188
K. | Board Skills, Experience and Knowledge | Composition of the Board | 158
L. | Board Evaluation | Performance evaluation | 190
4 | Audit, Risk and Internal Controls
M. | Independence, and Effectiveness of Internal and External Auditors | Audit Committee Report | 178
N. | Fair, Balanced, and Understandable Assessment | Director's Confirmations | 177
O. | Risk and Internal Controls | Corporate Governance Structure and Division of Responsibilities | 153
Our Principal Risks and Risk Management | 134
5 | Remuneration
P. | Alignment to Purpose, Values and Long-Term Success | Remuneration Committee Chair's letter | 192
Remuneration at a Glance | 195
Director's Remuneration Policy | 200
Q. | Remuneration Policy | Remuneration Committee Chair’s letter | 192
Director’s remuneration policy | 200
R. | Independent Judgement and Discretion | Remuneration Committee Chair’s letter | 192
Consideration of wider workforce remuneration | 205

Governance (continued)
149

Fiscal 24 Board Attendance | Annual General Meeting 2023 | Board (maximum 6) | Audit Committee (maximum 5) | Nomination Committee (maximum 6) | Remuneration Committee (maximum 6)
Javier Ferrán | ü | 6/6 | — | 5/6 | —
Debra Crew | ü | 6/6 | — | — | —
Lavanya Chandrashekar | ü | 6/6 | — | — | —
Susan Kilsby | ü | 6/6 | 5/5 | 6/6 | 6/6
Melissa Bethell | ü | 6/6 | 5/5 | 6/6 | 6/6
Karen Blackett | ü | 6/6 | 4/5 | 6/6 | 5/6
Valérie Chapoulaud-Floquet | ü | 5/6 | 4/5 | 5/6 | 5/6
Sir John Manzoni | ü | 6/6 | 5/5 | 5/6 | 6/6
Alan Stewart | ü | 6/6 | 5/5 | 6/6 | 6/6
Ireena Vittal | ü | 6/6 | 5/5 | 6/6 | 6/6
Former Directors |  |  |  |  |
Lady Mendelsohn(1) | N/A | 1/1 | 1/1 | 1/1 | 1/1

(1) Lady Mendelsohn retired from the Board prior to the company's Annual General Meeting on 28 September 2023.
Governance (continued)
150
Governance at a glance
Enabling our
Growth Ambition
Achieving Diageo's Growth Ambition is dependent on our Board and Executive Committee providing effective leadership for long-
term sustainable success, despite challenges in the external environment.

| Highlights of fiscal 24 |
| •Shaping Diageo's future through our business transformation projects, across our supply chain and systems infrastructures, and the strategy refresh which led to creation of the Growth Ambition. •Announcing changes in key Board roles to build our strong leadership during the next few months and into the second half of fiscal 25. •Refocusing our culture on our core values and behaviours to embed agility and maintain our highly engaged, talented and diverse workforce. |
|  | Read more on pages 170, 173 and 175 |

| Diversity |
| Diageo has a long-standing commitment to being an inclusive and diverse organisation, including at the most senior leadership levels. Our diverse Board composition has enabled Diageo to be ranked as one of the best performing FTSE 100 companies in terms of female representation, as recognised by the FTSE Women Leaders Review, and has met the Parker Review's target as to ethnic minority representation. As an example, three of the Board's most critical roles, Chief Executive, Chief Financial Officer and Senior Independent Director, are held by women. |
|  | Read more on pages 190-191 |

| Building our leadership |
| During the year, the Nomination Committee and Board has been creating the leadership required at Board and Executive Committee levels to continue growing Diageo's business, including enabling smooth transitions in key roles including that of the Board Chair, Audit Committee Chair and Chief Financial Officer. |
| Board composition |

ò | Chair
ò | Executive director
ò | Non-executive director

Governance (continued)
151

| Purpose, values and culture |
| The Board has a critical role in monitoring the degree to which culture and values are embedded within the company. A key part of this is the Board’s workforce engagement programme which, during fiscal 24, enabled Non-Executive Directors, usually in pairs, to engage directly with over 500 colleagues from 12 markets and all functions, through eight virtual and seven in-person focus group sessions. Subjects being discussed varied broadly with a separate session being held on executive remuneration and reward policy. Attendee sentiment was also captured through a confidential survey following each session. |
|  | See pages 172-173 for details of the feedback received |

| Strategy refresh |
| Recognising the scale of Diageo's growth over the past several years and informed by shorter term external challenges, the Chief Executive has undertaken a review of Diageo's strategy during fiscal 24. This review has led to the launch of the Growth Ambition to focus priorities and drive future growth, which was approved by the Board at the Annual Strategy Conference in April 2024. |
|  | Read more on page 170 |

Governance (continued)
152
Corporate governance structure and division of responsibilities
Governance (continued)
153
BOARD OF DIRECTORS

Position |  | Board skills and competencies |  | Key external appointments
Javier Ferrán |  | Key strengths: Brings extensive board-level experience from the drinks and consumer products industry, including at chief executive level, and has a wealth of experience in consumer goods through his venture capital activities to draw from in his role as Chair and leader of the Board |  | Current external appointments: Chair, International Consolidated Airlines Group, S.A. Previous relevant experience: Non-Executive Director and Senior Independent Director, Associated British Foods plc; Non-Executive Director, Coca-Cola European Partners plc; Member, Advisory Board of ESADE Business School; President and CEO, Bacardi Limited; Non-Executive Director, SABMiller plc
Chair |  |
Nationality: Spanish |  |
Appointed: Chair and Chair of the Nomination Committee: January 2017 (Appointed Chair Designate and Non-Executive Director: July 2016) |  |
Debra Crew |  | Key strengths: Has broad experience in various consumer products sectors at board, chief executive and management leadership levels, as well as over five years' experience in non- executive and executive roles at Diageo |  | Current external appointments: Non-Executive Director, Stanley Black & Decker, Inc. Previous Diageo roles: Interim Chief Executive; Chief Operating Officer; President, North America; Non-Executive Director, Diageo plc Previous relevant experience: Non-Executive Director, Newell Brands, Mondelēz International Inc.; President and CEO, Reynolds American, Inc; President, PepsiCo North America Nutrition, PepsiCo Americas Beverages, Western Europe Region; various positions with Kraft Foods, Nestlé, S.A., and Mars
Chief Executive |  |
Nationality: American |  |
Appointed: Chief Executive and Executive Director: June 2023 |  |
Lavanya Chandrashekar |  | Key strengths: Brings broad financial expertise, commercial skills and strong consumer goods experience to manage the group’s affairs relating to financial controls, accounting, tax, treasury and investor relations |  | Previous Diageo roles: Chief Financial Officer, Diageo North America and Global Head of Investor Relations Previous relevant experience: VP Finance, Global Cost Leadership and Supply Chain, Mondelēz International; VP Finance, North America, Mondelēz International; VP Finance, Eastern Europe, Middle East and Africa, Mondelēz International; various senior finance roles at Procter & Gamble
Chief Financial Officer |  |
Nationality: American |  |
Appointed: Chief Financial Officer and Executive Director: July 2021 |  |
Susan Kilsby |  | Key strengths: Brings wide- ranging corporate governance and board- level experience across a number of industries, including a consumer goods sector focus, with particular expertise in mergers and acquisitions, corporate finance and transaction advisory work |  | Current external appointments: Non-Executive Chair, Fortune Brands Innovations, Inc.; Non-Executive Director and Chair of Corporate Responsibility Committee, Unilever PLC; Non- Executive Director and Chair of Talent and Remuneration Committee, COFRA Holding AG; Member and Chair of Remuneration Committee, the Takeover Panel Previous relevant experience: Senior Independent Director and Chair of Remuneration Committee, BHP Group Plc, BHP Group Limited; Senior Independent Director, BBA Aviation plc; Chair, Shire plc; Chair, Mergers and Acquisitions EMEA, Credit Suisse; Non- Executive Director, Goldman Sachs International, Keurig Green Mountain, L’Occitane International, Coca-Cola HBC, NHS England
Senior Independent Director |  |
Nationality: American/British |  |
Appointed: Senior Independent Director: October 2019 (Appointed Non-Executive Director: April 2018 and Chair of the Remuneration Committee: January 2019) |  |
Melissa Bethell |  | Key strengths: Has extensive international corporate and financial experience, including in relation to private equity, financial sectors, strategic consultancy and advisory services, as well as having strong non-executive experience at board and committee levels across a range of industries, including retail, consumer goods and financial services |  | Current external appointments: Non-Executive Director, Tesco PLC, Exor N.V.; Senior Advisor and Director of investee companies, Atairos Europe Previous relevant experience: Managing Director and Senior Advisor, Private Equity, Bain Capital; Non-Executive Director, Atento S.A., Worldpay plc, Samsonite S.A.
Non-Executive Director |  |
Nationality: American/British |  |
Appointed: Non-Executive Director: June 2020 |  |

| Board committees |  | Audit Committee |  | Executive Committee |  | Nomination Committee |  | Remuneration Committee |  | Chair of the committee |

Governance (continued)
154

Position |  | Board skills and competencies |  | Key external appointments |
Karen Blackett |  | Key strengths: Brings expertise in marketing, media and the creative industries, as well as broad experience in public policy and strategic initiatives through a number of different government, industry and public bodies |  | Current external appointments: Chancellor, University of Portsmouth; Founding Trustee, BEO (Black Equity Organisation); Non-Executive Director, Creative UK Previous relevant experience: UK President, WPP plc; UK Race Equality Business Champion, HM Government; Business Ambassador, Department for International Trade, HM Government; Chairwoman, MediaCom UK & Ireland; Chief Executive Officer, GroupM UK, MediaCom UK; Chief Operations Officer, MediaCom EMEA; Marketing Director, MediaCom; UK Country Manager, WPP plc; Non-Executive Director, The Pipeline |
Non-Executive Director |  |  |
Nationality: British |  |  |
Appointed: Non-Executive Director: June 2022 |  |  |
Valérie Chapoulaud-Floquet |  | Key strengths: Brings strong experience and expertise in the luxury consumer goods sector, having spent her career in the industry working in a number of international markets, including developed and emerging markets, and as a former CEO in the premium drinks industry |  | Current external appointments: Non-Executive Director, Lead Independent Director and Chair of Governance Committee, Danone S.A.; Non-Executive Director, Acné Studios A.B., Agrolimen S.A., Nextstage S.C.A.; Vice Chair, Sofisport Previous relevant experience: Chief Executive Officer, Rémy Cointreau S.A.; President and CEO for the Americas, Louis Vuitton, LVMH Group; President and CEO for North America, Louis Vuitton, LVMH Group; President South Europe, Louis Vuitton, LVMH Group; President & CEO, Louis Vuitton Taiwan, LVMH Group; President, Luxury Product Division USA, L’Oréal Group; Non-Executive Director, Jacobs Holding AG |
Non-Executive Director |  |  |
Nationality: French |  |  |
Appointed: Non-Executive Director: January 2021 |  |  |
Sir John Manzoni |  | Key strengths: Has strong commercial executive experience as a former CEO in the energy sector and non- executive board-level experience, including in the alcoholic beverage industry, as well as more recent expertise in public policy and government affairs |  | Current external appointments: Chair, SSE plc; Chair, Atomic Weapons Establishment; Non-Executive Director, KBR Inc Previous relevant experience: Chief Executive of the Civil Service and Permanent Secretary of the Cabinet Office, HM Government; President and Chief Executive Officer, Talisman Energy; Chief Executive, Refining & Marketing, BP p.l.c.; Chief Executive, Gas & Power, BP p.l.c.; Non-Executive Director, SABMiller plc |
Non-Executive Director |  |  |
Nationality: British |  |  |
Appointed: Non-Executive Director: October 2020 |  |  |
Alan Stewart |  | Key strengths: Has a strong background in financial, investment banking and commercial matters, with particular expertise in consumer retail industries, as well as board and committee- level experience at industry institutions |  | Current external appointments: Non-Executive Director and Chair of Audit Committee, Burberry Group plc; Partner, Altair Advisory LLP Previous relevant experience: Chief Financial Officer, Tesco PLC; Non- Executive Director, Tesco Bank; Chief Financial Officer, Marks & Spencer Group plc, AWAS; Non-Executive Director, Games Workshop plc; Group Finance Director, WH Smith PLC; Chief Executive, Thomas Cook UK; Non-Executive Director and Chair of the Remuneration Committee, Reckitt Benckiser Group plc |
Non-Executive Director |  |  |
Nationality: British |  |  |
Appointed: Non-Executive Director: September 2014 (Appointed Chair of the Audit Committee: January 2017) |  |  |
Ireena Vittal |  | Key strengths: Brings a wealth of FMCG experience from a career in executive consulting with a focus on consumer sectors and emerging markets, including India, as well as broad experience in non- executive board roles in the UK and India |  | Current external appointments: Non-Executive Director, Compass plc, Asian Paints Limited; Non-Executive and Lead Independent Director, Godrej Consumer Products Limited; Director and Member, UrbanClap Technologies India Private Limited; Advisory Board Member, Russell Reynolds Associates Previous relevant experience: Head of Marketing and Sales, Hutchinson Max Telecom; Partner, McKinsey and Company; Non-Executive Director, Wipro Limited, Housing Development Finance Corporation Limited, Titan Company Limited, Tata Global Beverages Limited, GlaxoSmithKline Consumer Healthcare |
Non-Executive Director |  |  |
Nationality: Indian |  |  |
Appointed: Non-Executive Director: October 2020 |  |  |

| Board committees |  | Audit Committee |  | Executive Committee |  | Nomination Committee |  | Remuneration Committee |  | Chair of the committee |

Debra Crew and Lavanya Chandrashekar are also members of the Executive Committee.
Their biographies can be found on page 154.
(1) John Kennedy, who had previously been a member of the Executive Committee, most recently as President, Europe and India, from July 2016 until December
2022 when he left the company. He rejoined the company and was reappointed to the Executive Committee as President, Europe in January 2024.
Governance (continued)
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EXECUTIVE COMMITTEE

| Position |  | Key external appointments
1 | Ewan Andrew |  | Current external appointments: Member, Scotch Whisky Association Council, Scottish Business Climate Collaboration Board, One Planet Business for Biodiversity Board, Gartner Executive Advisory Board Previous Diageo roles: Supply Director, International Supply Centre; Senior Vice President, Supply Chain & Procurement, Latin America and Caribbean; Senior Vice President Manufacturing & Distilling, North America; various supply chain, operational management and procurement roles
| President, Global Supply Chain & Procurement and Chief Sustainability Officer |
| Nationality: British |
| Appointed: September 2019 |
2 | Alvaro Cardenas |  | Previous Diageo roles: Managing Director, Andean Region; Director, End-to-End Global Commercial Processes; Finance Director, South East Asia Region, PUB (Paraguay, Uruguay and Brazil) Region, Andean Region, Colombia
| President, Latin America and Caribbean |
| Nationality: Colombian |
| Appointed: January 2021 |
3 | Cristina Diezhandino |  | Previous Diageo roles: Global Category Director, Scotch & Managing Director, Reserve Brands; Managing Director, Caribbean and Central America; Marketing & Innovation Director, Diageo Africa; Category Director, Scotch Portfolio & Gins; Global Brand Director, Johnnie Walker Previous relevant experience: Corporate Marketing Director, Allied Domecq Spain; marketing roles, Unilever HPC US, UK and Spain
| Chief Marketing Officer |
| Nationality: Spanish |
| Appointed: July 2020 |
4 | Sally Grimes |  | Current external appointments: Director, Continental Grains Company Previous relevant experience: Chief Executive Officer, Clif Bar & Company; Group President, Prepared Foods, Tyson Foods; President, International & Chief Global Growth Officer, Tyson Foods; President, Gourmet Food Group and Chief Innovation Officer, Hillshire Brands Company
| Chief Executive Officer, North America |
| Nationality: American |
| Appointed: October 2023 |
5 | John Kennedy |  | Previous Diageo roles: President, Europe and India; President, Europe and Western Europe; Chief Operating Officer, Western Europe; Marketing Director, Australia; General Manager for Innovation, North America; President and Chief Executive Officer, Diageo Canada; Managing Director, Diageo Ireland Previous relevant experience: Brand management roles, GlaxoSmithKline, Quaker Oats
| President, Europe |
| Nationality: American |
| Appointed: January 2024 |
6 | Daniel Mobley |  | Previous Diageo roles: Corporate Relations Director, Europe Previous relevant experience: Regional Head of Corporate Affairs, India & South Asia, Regional Head of Corporate Affairs, Africa, Group Head of Government Relations, Standard Chartered; extensive government experience including in HM Treasury and Foreign & Commonwealth Office
| Global Corporate Relations Director |
| Nationality: British |
| Appointed: June 2017 |
7 | Hina Nagarajan |  | Current external appointments: Non-Executive Director, BP p.l.c. Previous Diageo roles: CEO-Designate, United Spirits Limited; Managing Director, Africa Regional Markets Previous relevant experience: Managing Director, China & SVP North Asia, Reckitt Benckiser; General Manager, Malaysia & Singapore, Reckitt Benckiser; CEO & MD Mary Kay India; senior marketing and general management roles, ICI Paints India and Nestlé India
| Managing Director and CEO of United Spirits Limited |
| Nationality: Indian |
| Appointed: July 2021 |
8 | Dayalan Nayager |  | Previous Diageo roles: President, Africa; Managing Director, Great Britain and Justerini & Brooks, Ireland and France, Global Travel; Regional Director, Global Travel Europe; Commercial Director, South Africa; Customer Marketing Director, South Africa; Key Account Director, South Africa Previous relevant experience: Various positions, Heinz, Mars
| President, Africa and Chief Commercial Officer |
| Nationality: South African/British |
| Appointed: July 2022 |
9 | John O'Keeffe |  | Previous Diageo roles: President, Asia Pacific & Global Travel; President, Africa & Beer; CEO and Managing Director, Guinness Nigeria; Global Head, Innovation; Global Head, Beer and Baileys; Managing Director, Russia and Eastern Europe; various management and marketing positions
| President, Asia Pacific, Global Travel and India |
| Nationality: Irish |
| Appointed: July 2015 |

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10 | Louise Prashad |  | Previous Diageo roles: Global Talent Director; Talent & OE Director, Africa; HR Director, Europe, West Latin America and Caribbean, Global Functions; Talent and Learning Director UK, Ireland and North America; HR Director Great Britain; Global Supply; Global Commercial Previous relevant experience: various HR roles, Stakis Group and Hilton Hotels
| Chief HR Officer |
| Nationality: British |
| Appointed: January 2022 |
11 | Tom Shropshire |  | Current external appointments: Member of the Court (Non-Executive Director), The Bank of England; Trustee, New York University School of Law; Member of the Steering Committee, The Parker Review; Interim Chair, Charity Projects Limited (Comic Relief) Previous relevant experience: Partner & Global US Practice Head, Linklaters LLP
| General Counsel & Company Secretary |
| Nationality: American/British |
| Appointed: July 2021 |

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157
Board of Directors
Composition of the Board
The Board comprises the Non-Executive Chair, two Executive Directors, the Senior Independent Director, and six independent Non-
Executive Directors. The biographies of all Directors are set out in this Annual Report on pages 154-155.
Inclusion and diversity
The Board sees championing inclusion and diversity as one of the key enablers for achieving Diageo’s ambition. It is also a core
principle of the company’s global Human Rights Policy which applies to all employees, subsidiaries and third-party contractors and
which has been implemented as part of our Code of Business Conduct programme. Our objective is to maintain and sustain an
inclusive and diverse business, across all levels, functions and geographies, in order to create a better working environment and a
better performing business. As part of this, the Board has adopted a written Board Diversity Policy alongside Diageo’s Code of
Business Conduct and associated global policies, which set out Diageo’s broader commitment to inclusion and diversity. Diageo
strongly supports diversity within its Board of Directors, including gender, ethnicity, age and professional diversity, as well as
diversity of thought. The Board is comprised of individuals from a diverse range of skills, industries, backgrounds and nationalities,
which enables a broad evaluation of all matters considered by the Board and contributes to a culture of collaborative and constructive
discussion. The Board’s objective, as set out in its Diversity Policy, is that it shall include no less than 40% female representation
(with the ultimate goal being parity between males and females on the Board) and at least one Director from a minority ethnic group.
As at 24 July 2024, women make up 70% of the Board and there are four Directors (40%) who self-disclose as being from minority
ethnic groups. Further information about diversity at Board and senior executive levels can be found on page 191 and in the 'Our
people and culture' and 'Champion inclusion and diversity' sections of the Strategic Report on pages 105-107 and 110-113
respectively. The Board's Diversity Policy is available at https://www.diageo.com/en/our-business/corporate-governance/board-
diversity.
Outside interests and conflicts
The Board has adopted guidelines for dealing with conflicts of interest, with Directors' outside interests being regularly reviewed and
responsibility for authorising conflicts of interest reserved for the Board. In the case of a potential conflict, the Nomination Committee
considers the circumstances, appropriate controls and protocols, and makes a recommendation to the Board. The Board confirmed that
it was not aware of any situations that may or did give rise to conflicts with the interests of the company, other than those that may
arise from Directors’ other appointments as disclosed in their biographies.
Duties of the Board
The Board manages overall control of the company’s affairs with reference to the formal schedule of matters reserved for the Board
for decision. The schedule was last reviewed in July 2024 and is available at https://www.diageo.com/en/our-business/corporate-
governance. In order to fulfil their duties, procedures are in place for Directors to seek both independent advice and the advice and
services of the Company Secretary, who is responsible for advising the Board on all governance matters. The Board considers a
number of factors when making decisions, including the potential impact of those decisions on various stakeholder groups and on the
company's ‘Spirit of Progress‘ and other non-financial targets, including in respect of environmental sustainability. Further
information on the Board and the Audit Committee's roles in climate risk governance can be found on page 113. The terms of
reference of Board Committees are reviewed regularly, most recently in July 2024, and are available at
https://www.diageo.com/en/our-business/corporate-governance.
Corporate governance requirements
In January 2024, the Financial Reporting Council (FRC) published a new version of the UK Corporate Governance Code, which will
apply to companies with a premium listing on the London Stock Exchange, including Diageo, for financial periods starting on or after
1 January 2025. Until such time, the principal corporate governance rules applying to Diageo for the year ended 30 June 2024 are
contained in the 2018 UK Corporate Governance Code (the Code) and the UK Financial Conduct Authority (FCA) Listing Rules,
which require us to describe, in our Annual Report, our corporate governance from two points of view: the first dealing generally with
our application of the Code’s main principles and the second dealing specifically with non-compliance with any of the Code’s
provisions. The two descriptions together are designed to give shareholders a picture of governance arrangements in relation to the
Code as a criterion of good practice. A copy of the Code is publicly available on the website of the FRC, www.frc.org.uk. Diageo’s
statement as to compliance with the Code during the year ended 30 June 2024 can be found on page 158. Diageo must also comply
with corporate governance rules contained in the FCA Disclosure Guidance and Transparency Rules and certain related provisions in
the Companies Act 2006 (the Act). Diageo is also listed on the New York Stock Exchange (NYSE), and as such is subject to the
applicable rules of this exchange and jurisdiction. For example, Diageo is subject to the listing requirements of the NYSE and the rules
of the US Securities and Exchange Commission (SEC), as they apply to foreign private issuers. Compliance with the provisions of the
US Sarbanes-Oxley Act of 2002 (SOX), as it applies to foreign private issuers, is continually monitored.
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158
Compliance with US corporate governance rules
Under applicable SEC rules and the NYSE’s corporate governance rules for listed companies, Diageo must disclose any significant
ways in which its corporate governance practices differ from those followed by US companies under NYSE listing standards. Diageo
believes the following to be the significant areas in which there are differences between its corporate governance practices and NYSE
corporate governance rules applicable to US companies. This information is also provided on the company’s website at
www.diageo.com.
•Basis of regulation: UK listed companies are required to include in their annual report a narrative statement of (i) how they
have applied the principles of the Code and (ii) whether or not they have complied with the best practice provisions of the
Code. NYSE listed companies must adopt and disclose their corporate governance guidelines. Certain UK companies are
required to include in their annual report statements as to (i) how directors have complied with Section 172 of the Act, which
requires directors to promote the success of the company for the benefit of the members as a whole, having regard to the
interests of stakeholders and (ii) how directors have engaged with and taken account of the views of the company’s
workforce and other stakeholder groups. Diageo complied throughout the year with the best practice provisions of the Code
and the disclosure requirements noted above.
•Director independence: The Code requires at least half the Board (excluding the Chair) to be independent Non-Executive
Directors, as determined by affirmatively concluding that a Director is independent in character and judgement and
determining whether there are relationships and circumstances which are likely to affect, or could appear to affect, the
Director’s judgement. The Code requires the Board to state its reasons if it determines that a director is independent
notwithstanding the existence of relationships or circumstances which may appear relevant to its determination. NYSE
rules require a majority of independent directors, according to the NYSE’s own 'brightline' tests and an affirmative
determination by the Board that the Director has no material relationship with the listed company. Diageo’s Board has
determined that, in its judgement and without taking into account the NYSE brightline tests, all of the Non-Executive
Directors are independent. As such, currently eight of Diageo’s ten Directors are independent. Further details of this
determination in relation to Alan Stewart, Non-Executive Director and Chair of the Audit Committee, are set out on page
160.
•Chair and Chief Executive: The Code requires these roles to be separate. There is no corresponding requirement for US
companies. Diageo has a separate Chair and Chief Executive.
•Non-Executive Director meetings: NYSE rules require Non-Management Directors to meet regularly without management
present and independent directors to meet separately at least once a year. The Code requires Non-Executive Directors to meet
without the Chair present at least annually to appraise the Chair’s performance. During the year, Diageo has complied with
these requirements with independent Non-Executive Directors, including the Chair, meeting without the Executive Directors
present five times and independent Non-Executive Directors meeting without the Chair or Executive Directors present twice.
•Board committees: Diageo has a number of Board committees that are similar in purpose and constitution to those required by
NYSE rules. Diageo’s Audit, Remuneration and Nomination Committees consist entirely of independent Non-Executive
Directors. Under NYSE standards, companies are required to have a nominating/corporate governance committee, which
develops and recommends a set of corporate governance principles and is composed entirely of independent directors. The
terms of reference for Diageo’s Nomination Committee, which comply with the Code, do not contain such a requirement. In
accordance with the requirements of the Code, Diageo has disclosed on pages 171-172 the results and means of its annual
evaluation of the Board, its Committees and the Directors, and it provides extensive information regarding the Directors’
compensation in the Directors’ remuneration report on pages 198-224.
•Code of ethics: NYSE rules require a Code of Business Conduct and Code of Ethics to be adopted for directors, executive
officers and employees and disclosure of any waivers for executive directors or officers. Diageo has adopted a Code of
Business Conduct for all Directors, officers and employees, as well as a Code of Ethics for Senior Financial Officers in
accordance with the requirements of SOX. See page 183 for further details.
•Compliance certification: NYSE rules require chief executives to certify to the NYSE their awareness of any NYSE corporate
governance violations. Diageo is exempt from this as a foreign private issuer but is required to notify the NYSE if any
executive officer becomes aware of any non-compliance with NYSE corporate governance standards. No such notification
was necessary during the period covered by this report.
Structure and division of responsibilities
The Board is committed to the highest standards of corporate governance and risk management, which is demonstrated in its
established corporate governance framework, illustrated on page 153. This includes the three Board Committees (Audit Committee,
Nomination Committee and Remuneration Committee), as well as management committees which report to the Chief Executive or
Chief Financial Officer (Executive Committee, Finance Committee, Audit & Risk Committee and Filings Assurance Committee).
There is a clear separation of the roles of the Chair, the Senior Independent Director and the Chief Executive which has been clearly
established, set out in writing and approved by the Board. A copy of this is available at https://www.diageo.com/en/our-business/
corporate-governance. No individual or group dominates the Board’s decision-making processes.

| Further details on the Board Committees can be found in the separate reports from each committee on pages 178-224, and details of the Executive Committee can be found on pages 156.

Governance (continued)
159
Board skills and experience
Having an appropriate mix of experience, expertise, diversity and independence is essential for Diageo's Board. Such diverse attributes
enable the Board as a whole to provide informed opinions and advice on strategy and relevant topics, thereby discharging its duty of
oversight. The Board skills matrix helps to identify the experience and expertise of existing Directors, required skill sets or
competencies, and the strategic requirements of the company. The key strengths and relevant experience of each Director are set out
on pages 154-155, and a matrix of the Board’s current skills and experience is set out below.
Independence
The Code requires the Board to state its reasons for concluding that a director is independent notwithstanding the existence of certain
relationships or circumstances which are likely to impair or appear to impair the director's independence. A non-exhaustive list of such
circumstances is set out in provision 10 of the Code and include, amongst other things, the fact that a director has served on the board
for more than nine years. As noted in last year's annual report, Alan Stewart, who was first appointed to the Board in September 2014
and has therefore exceeded nine years on the Board, agreed to extend the term of his appointment to enable a smooth transition of the
role of Chair of the Audit Committee. As announced on 20 February 2024, Julie Brown will be joining the Board and succeeding Alan
as Chair of the Audit Committee with effect from 5 August 2024. Accordingly, Alan will retire from the Board immediately prior to
the 2024 AGM and not stand for re-appointment. The Board considered the matter of Alan's independence in light of this extension
and concluded that, notwithstanding his serving for more than nine years, he continues to make high-quality contributions to Board
and committee meetings, providing effective and constructive challenge to management and demonstrating objective and independent
judgement. In light of this assessment, originally made in July 2023 and recently confirmed by the Board, the Board has determined
that Alan Stewart remains independent.
Board and Committee attendance
Directors’ attendance record at the last AGM, scheduled Board meetings and Board Committee meetings, for the year ended 30 June
2024 is set out in the table shown on page 150. Directors are expected to attend all meetings of the Board and its Committees and the
AGM, but if unable to do so they are encouraged to give their views to the Chair of the meeting in advance. The 2023 AGM was held
as a combined physical and electronic meeting via a live webcast with all Directors attending either physically or by video link. For
Board and Board Committee meetings, attendance is expressed as the number of meetings attended of the number that each Director
was eligible to attend. The 2024 AGM is scheduled to be held on 26 September 2024.
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Governance (continued)
161
Appointment and re-appointment at AGMs
The Chair has confirmed that the Non-Executive Directors standing for re-appointment at this year’s AGM continue to perform
effectively, both individually and collectively as a Board, and that each Non-Executive Director demonstrates commitment to their
roles and continues to provide constructive challenge, strategic guidance and offer specialist advice, as well as holding management to
account. As can be seen from the attendance records set out on page 150, Directors’ attendance levels have been consistently high
throughout the year ended 30 June 2024. Two proposed Directors, Julie Br own and Nik Jhangiani, will also stand for appointment.
Further details, including biographies, are set out in the Notice of Meeting for this year's AGM.
Board activities
Details of the main areas of focus of the Board and its Committees during the year include those summarised below:
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Areas of focus | Strategic outcomes | Stakeholders
Strategic matters | •Held a two-day Annual Strategy Conference (ASC) focusing on key strategic matters, including implementation of strategic transformation programmes, regional reviews of North America and Asia Pacific, whisky strategy, developments in the group's ESG programme including ’Spirit of Progress’ •Regularly reviewed the group’s performance against the strategy •Received reports on the financial performance of the group as against the annual plan •Reviewed the group’s governance frameworks for reputation management, tax strategy and policy •Received reports on the macroeconomic environment, socio-political matters and emerging trends •Carried out deep dives into key strategic topics including its operations, portfolio and footprint in North America and Africa, its digital marketing strategy, and its global travel business |  |
Operational matters | •Reviewed and approved the group's three-year plan and annual funding plan, insurance, banking and capital expenditure requirements •Regularly reviewed and approved the group’s M&A and business development activities, reorganisations and various other projects •Reviewed the group's internal culture and values, including in respect of diversity and inclusion, values and behaviours •Approved capital expenditure investments, and various significant procurement, systems and other contracts, having taken into consideration financial, operational, sustainability and other ESG related factors •Reviewed the company’s capital allocation, funding and liquidity positions, and those of its pension schemes •Reviewed and approved the company’s return of capital proposals, including interim and final dividends and share buyback programme •Approved new roles and appointments to the Board, including a new future Chair of the Board, a new Chief Financial Officer and a new Chair of the Audit Committee of the Board •Acting through the Nomination Committee, reviewed the company’s succession planning and talent strategy |  |
ESG matters | •Supervised conduct of double materiality assessment, reviewed progress in relation to the group's ’Spirit of Progress’ programme and refreshed the programme in light of the initial double materiality assessment results •Received reports on workforce engagement over the year •Received regular investor reports •Received regular updates on ESG matters and progress towards ‘Spirit of Progress‘ targets •Engaged an external facilitator to carry out evaluation of the Board’s performance, reviewed results and agreed action points •Reviewed schedule of matters reserved for the Board and terms of reference of its Committees |  |
Assurance and risk management | •Received reports in relation to material legal matters, including disputes, regulatory and governance developments, and areas of legal or regulatory risk •On the recommendation of the Audit Committee, approved the company’s risk footprint, including reviewing and updating the principal risks •On the recommendation of the Audit Committee, approved the company’s filings, financial and non-financial reporting including interim and preliminary results announcements, US filings and Annual Report |  |

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| Stakeholders key |  |  |
| Unleash the power of our brands & portfolio… |  | People |  | Customers |  | Communities
| …to lead and shape consumer trends…
| Consumers |  | Suppliers |  | Investors
| …executed with operational excellence

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Stakeholder engagement
We aim to maintain open and positive dialogue with all our stakeholders, considering their key interests in our decision-making and
communicating with them on a regular basis. This dialogue helps us build trust and respect and make choices as a business that help
shape the role we play in society.
The development of strong and positive relationships between Diageo and its external stakeholders is an intrinsic part of our purpose
and culture. Our stakeholders include not only business partners such as suppliers and customers, our people and workforce, but also
government, consumers and the wider communities in which we operate. As noted in the company’s statement on Section 172 of the
Companies Act 2006 set out on page 19 in making their decisions and in discharging their duties to promote the success of the
company, the Directors must have regard to the interests of its stakeholders. We have summarised below why our stakeholders are
important to us, what we believe their principal interests are and how the Board and company seeks to engage and respond.

Stakeholder and why we engage
Our people –People are at the core of our business –We aim to build a trusting, respectful and inclusive culture where people feel engaged and fulfilled –We want our people to be treated with dignity at work and their human rights respected |  | What we believe matters most to them •Prioritisation of health, safety and well- being •Learning and development opportunities •Purpose, culture and benefits •Contributing to the growth of our brands and performance •Promotion of inclusion and diversity •Sustainability and societal credentials How the Board seeks to engage •Active dialogue maintained throughout the year as part of the Board's ongoing workforce engagement programme •Direct engagement through visits to offices, production and supply chain sites during the year •Indirect engagement through feedback from works councils, employee and workforce forums, community groups, Your Voice and pulse surveys and townhall meetings |  | Reporting to the Board •Regular reports from workforce engagement activities •Feedback through employee surveys, including annual group-wide Your Voice survey •Sessions on different aspects of culture, values and behaviours at Board meetings led by Chief HR Officer Upcoming priorities •Maintaining focus on simplifying internal processes, including upgrading and transforming business operations and systems •Continuing workforce engagement activities including as part of business transformation implementation and change management
Consumers •Understanding our consumers is critical for our business’s long-term growth •Consumer motivations, attitudes and behaviours form the basis of our business strategy, brand marketing and innovation •We want consumers to enjoy our products responsibly and for them to ‘drink better, not more’ |  | What we believe matters most to them •Choice of brands for different occasions, including no- and lower- alcohol •Innovation in heritage brands and creation and nurturing of new brands •Responsible marketing •Great experiences •Product quality •Sustainability and societal credentials •Price How the Board seeks to engage •Monitoring consumer behaviours, motivations and insights •Responding to and anticipating emerging consumer trends as part of strategic sessions, including the Annual Strategy Conference •Regular review of business development opportunities, including active brand portfolio management •Review of innovation pipeline as part of the Annual Strategy Conference |  | Reporting to the Board •Regular performance updates by the Chief Executive, including on key consumer trends •Papers prepared by strategy team on evolving consumer behaviours globally and in key regions •Regular updates by Business Development and Innovation teams on organic and inorganic opportunities and portfolio choices Upcoming priorities •Ongoing review of portfolio and category participation opportunities •Developing pipeline of innovation informed by consumer insights •Enhancing marketing effectiveness through detailed understanding of consumer motivation, globally and by region or market

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Stakeholder and why we engage
Customers •Our customers are a broad range of businesses, large and small, on-trade and off-trade, retailers, wholesalers and distributors, digital and e-commerce •We want to nurture mutually beneficial relationships to deliver joint value and great consumer experiences |  | What we believe matters most to them •A portfolio of leading brands that meets evolving consumer preferences •Identification of opportunities that offer profitable growth •Insights into consumer behaviour and shopper trends •Trusted product quality •Innovation, promotional support and merchandising •Availability and reliable supply and stocking •Technical expertise •Joint risk assessment and mitigation •Sustainability and societal credentials How the Board seeks to engage •Regular review of innovation pipeline and inorganic opportunities to ensure a broad portfolio at multiple price points •Review of supply chain footprint to ensure efficient delivery of products to customers •Direct engagement with key customers during market visits |  | Reporting to the Board •Regular performance updates by the Chief Executive, including customer and route-to-consumer concerns •Deep dive reviews on key regions or markets, such as Great Britain and North America, including consideration of key customer relationships and ways of working Upcoming priorities •Scheduling face-to-face meetings for Directors to meet representatives of key customers during market visits and throughout Board calendar •Enhancing relationships between the company and its customers through engagement opportunities
Suppliers •Our suppliers, service providers and agencies are experts in their fields •We rely on them to deliver high-quality products and market responsibly •We collaborate with them to improve our collective impact, ensure sustainable and resilient supply chains, and make positive contributions to society |  | What we believe matters most to them •Strong, mutually beneficial partnerships •Strategic alignment and growth opportunities •Fair contract and payment terms •Collaboration to realise innovation •Consistent performance measures •Joint risk assessment and mitigation •Sustainability and societal credentials How the Board seeks to engage •Periodic review of supply chain footprint in key markets to ensure resilience and flexibility, monitoring environmental impacts and efficiencies •Review and approval of material supply and procurement contracts including for critical raw materials •Supporting management in improving supplier relationships through fair contract and payment terms, compliance with Diageo's 'Partnering with Suppliers Standard' and working collaboratively to mitigate environmental impacts and achieve ESG goals |  | Reporting to the Board •Terms of material contracts with suppliers are reviewed by the Board •Periodic updates provided to the Board in relation to supply chain agility programme rollout •Proposals put to the Board include summaries of potential implications for suppliers as a key stakeholder group Upcoming priorities •Continued focus on rollout of supply chain agility programme •Monitoring impact of supply chain disruption on operations •Supervision of initiatives to improve sustainability and supply chain resilience

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Stakeholder and why we engage
Communities •We aim to create long-term value for the communities in which we live, work, source and sell •We can help build thriving communities and strengthen our business through empowering people, increasing access to opportunities and championing inclusion and diversity |  | What we believe matters most to them •Impact of our operations on the local economy •Access to skills development, employment and supplier opportunities •Inclusion, diversity and tackling inequality in all forms •Responsible use of natural resources, biodiversity and sustainability •Transparency and engagement How the Board seeks to engage •Setting targets and monitoring progress on broader societal matters, including promoting positive drinking, inclusion and diversity •Considering the environmental and social consequences for communities of its key decisions, including encouraging inclusion and diversity, equal employment opportunities, skills development and support for communities and through wider value chains |  | Reporting to the Board •Reports provided to Board on progress made in relation to 'Spirit of Progress' targets •Proposals put to the Board include summaries of potential implications for local communities •Reports on macroeconomic and socio-political events provided to Board by management Upcoming priorities •Enabling acceleration of key aspects of 'Spirit of Progress' targets, including in respect of positive drinking and water stewardship •Increased focus on carbon reduction initiatives
Governments and regulators •The regulatory environment is critical to the success of our business •We share information and perspectives with those who influence policy and regulation to enable them to understand our views on areas that can impact public health and our business |  | What we believe matters most to them •Compliance with applicable laws and regulations •Contribution to national and local economic development and public health priorities •International trade, excise, regulation and tackling illicit trade •Tackling harmful drinking and the impact of responsible drinking initiatives •Climate change and water sustainability agendas, including carbon reduction, human rights, environmental impacts, sustainable agriculture, biodiversity and support for communities How the Board seeks to engage •Indirect engagement through periodic updates from the Chief Executive and corporate relations executives •Review of macroeconomic and geopolitical developments as part of strategy sessions •Updates on regulatory developments, including in relation to non-financial reporting, corporate governance and public policy |  | Reporting to the Board •Reports on socio-political events and issues periodically provided to the Board •Developments in regulatory matters, including governance and reporting obligations, are included in biannual reports to the Board prepared by management Upcoming priorities •Monitoring developments in regulation and best practice in respect of non-financial reporting requirements, corporate governance and audit regime •Supporting management's advocacy in relation to key public policy matters including water stewardship, positive drinking, inclusion and diversity

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Stakeholder and why we engage
Investors •We want to enable equity and debt investors to have an in-depth understanding of our strategy, our operational, financial and holistic performance, so that they can more accurately assess the value of our business and the opportunities and risks of investing in it |  | What we believe matters most to them •Strategic priorities, opportunities and risks •Financial performance •Corporate governance •Leadership credentials, experience and succession •Executive remuneration policy •Shareholder returns •Environmental, inclusion and diversity, and social commitments and progress How the Board seeks to engage •Regular engagement between key investors and Chief Executive and Chief Financial Officer through Investor Relations programme of events •Participation in investor conferences such as the Consumer Analyst Group of New York meeting (CAGNY) •Hosting investor events such as the Capital Markets Event held in New York in November 2023 •Attendance at the Annual General Meeting in September 2023, including responding to questions from shareholders |  | Reporting to the Board •Monthly reports compiled by Investor Relations team provided to the Board, providing details on engagement sessions with investors and key trends •Chief Executive reporting investor sentiment to the Board as part of regular updates at Board meetings, including feedback following participation at analyst and investor conferences Upcoming priorities •Continued proactive engagement with investors through structured programme of engagement activities over the year •Preparing for the Annual General Meeting to be held in September 2024 •Engaging directly with investors through post-results announcement roadshows

| Engaging with investors and shareholders |
| Diageo's Investor Relations (IR) team support the Chief Executive, Chief Financial Officer and other members of the Board and Executive Committee with arranging a programme of engagement events, attendance at analyst conferences, meetings and calls with a wide variety of shareholders, investors and analysts. The IR team monitor Diageo's share price performance and trading patterns, review analyst research notes and recommendations, peer group and other sector news, providing regular reports to the Board and Executive Committee. During fiscal 24, there have been over 400 meetings or calls between investors and management, including the Chief Executive, Chief Financial Officer or other members of the Executive Committee and IR team. A key example of how the company engages with investors is the Capital Markets Event held in November 2023 at which Diageo's Executive Committee highlighted the company's strategic priorities, showcased case studies of strategy being put into action, including in relation to the opportunities for whisky in India, innovation in Guinness and the rollout of tequila into new markets. These engagement events allow investors to get a more detailed understanding of our market dynamics and opportunities and how Diageo looks to grow its business, while also allowing management to have a direct dialogue with investors. |

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| Fiscal 24 investor activity timeline |
| August 2023 | September 2023 | October 2023 | November 2023 | December 2023 |
| •Announcemen t of Diageo's Preliminary Results for fiscal 23 on 1 August 2023 •Roadshow by the CEO and CFO in the UK and US | •Annual General Meeting held on 28 September 2023 •IR team held a number of one-to-one meetings and conference calls with various investors | •IR team had meetings with investors on an individual and group basis | •Trading update announcement •Capital Markets Event hosted in New York by CEO, CFO and Executive Committee members | •CEO, CFO and other Executive Committee members had various meetings and calls with investors |
| January 2024 | February 2024 | March and April 2024 | May 2024 | June 2024 |
| •Announcemen t of Diageo's Interim Results for fiscal 24 on 30 January 2024 | •Roadshow by CEO and CFO in London, New York and Boston •CEO and CFO presented at the CAGNY conference | •The CEO, CFO and IR team met with several investors, individually and in groups | •Roadshow hosted by Barclays with CFO and IR team in San Francisco and Los Angeles | •CFO attended Deutsche Bank Conference in Paris |

Principal Board decision s
Below are some examples of the principal decisions taken by the Board during fiscal 24 as well as summaries of some of the matters
referred to in Section 172 of the Companies Act 2006 which were taken into consideration by the Board.
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Creation of our Growth Ambition
Decision made Supported by the group strategy team and Executive Committee, the Chief Executive has carried out a review and assessment of our strategy in light of the evolving external environment, resulting in the identification of strategic imperatives and priorities to enable future growth. This overview, which was presented to and approved by the Board, led to the creation of Diageo’s Growth Ambition, further details of which are set out on pages 25-26.
Stakeholder considerations Diageo’s strategy has been to consistently and steadily gain share and build global brands despite various challenges and dynamic external factors, such as Covid-19, the cost of living crisis, consumer trends and stakeholder expectations. In recent years, the macroeconomic, geopolitical and societal environment has continued to be volatile seeing a period of accelerated change in many respects, including digitalisation and technological advances, while other longer-term trends, such as premiumisation, have broadly continued, albeit in a less consistent manner. The Growth Ambition has at its core the interests and demands of consumers, which vary considerably by market, and, by extension, customers. The review also considered the interests and needs of Diageo’s employees and broader workforce, who need the systems, processes, structures and capabilities to enable growth by responding to and leading consumer trends appropriately. The review also considered the interests of shareholders, aiming to create value, which can be reinvested in our brands and business, and returned to shareholders.
’Spirit of Progress’ review and refinement
Decision made Diageo’s ambitious global ESG action plan, ‘Spirit of Progress’, was launched in 2020, having been approved by the Board, with the aim to make a positive impact on people and the planet and to help create a more inclusive and sustainable world. Approaching the mid-point of the overall programme, during fiscal 24 management undertook a review of the action plan’s current status and recommended a refinement and focus of resources on those targets which address our highest risks and in respect of which we can have the greatest impact. The Board approved the review and resulting refinement of these targets and priority areas.
Stakeholder considerations Diageo has a longstanding commitment to carrying on its business in a sustainable and resilient way, given the importance of environmental and social responsibility and the impact that the Company has on its different stakeholder groups. For example, Diageo’s workforce want to work for a company that values the environment and community in which it operates, encourages inclusion of a diverse range of people and builds respect, engagement and fulfillment. Investors and shareholders benefit from business practices which are sustainable and result in consistent holistic performance, balancing resource and capital allocation over time. The review, which is described in more detail on page 97, considered the underlying targets of the programme’s three priority areas and the degree to which progress had been made against them, the reasons why significant progress had been made against certain targets but not against other targets, and the preliminary results of management's double materiality assessment. The review also included consideration of various external factors and uncertainties which impact our ability to achieve certain targets, how stakeholder approaches and expectations developed over time, and areas where Diageo could have a disproportionate impact through additional resource and focus. As a result of the review, Diageo will focus its efforts on those areas and targets which address our highest risks and in respect of which we can have the greatest impact, recognising the continuing importance of sustainability to our stakeholders.
Appointment of future Board Chair
Decision made The Board approved the appointment of Sir John Manzoni, an existing Non-Executive Director, as Chair of the Board effective on or around 5 February 2025, succeeding Javier Ferrán, who will be standing down in his ninth year on the Board.
Stakeholder considerations The Board considered Sir John Manzoni’s record since joining the Board in 2020, having made high-quality contributions to Board and committee meetings, providing effective and constructive challenge to management and demonstrating objective and independent judgment. The Board considered that Sir John facilitated constructive Board relations in a manner which was consistent with the Board’s transparent and open culture, and had supported the current Chair in instilling appropriate values, behaviours and culture in the Board and senior management. Sir John has extensive leadership experience across a number of complex and fast-changing sectors, in the UK and globally, including in executive and non-executive capacities within the private sector as well as in the UK civil service. His experience in the public sector, working with government, civil service and regulators, would be particularly beneficial to Diageo. Sir John’s current appointments and commitments were also noted, including his roles on other company boards, in light of the commitments and demands of the role, as was the fact that he was independent on appointment, as required by the Code, and remained independent. Overall, the Board concluded that Sir John was the most suitable candidate and that his appointment as Chair would be of benefit to the company, its shareholders and wider stakeholders.

Wider stakeholder engagement
Diageo has ambitious goals across a variety of social and environmental targets and has a long track record of working with
stakeholders to achieve these goals. Our ambition to be one of the best performing, most trusted and respected consumer products
companies in the world can only be achieved through engagement and partnership with our stakeholders. The Board and its members
have engaged directly and indirectly with a variety of its key stakeholders during fiscal 24 in order to respond to stakeholder
considerations in making its decisions and determining the company’s strategy and goals. These include the following activities:
•In October 2023, the Board met and engaged with customers and retailers in Chicago, touring shops and stores. During these
meetings and visits, Directors discussed with customers and their staff what trends were emerging and how they were impacting sales,
stock and inventory levels and consumer choice. Similarly, when meeting in April 2024 in London, the Board heard the views of
senior executives from Diageo's largest on-trade customers, grocery and wholesale customers in the United Kingdom. Feedback
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received from customers in different markets is also reported to the Board by the Chief Executive in her regular performance
summaries. Diageo partners with its customers to analyse the performance of its portfolio and marketing investment as well as market
trends and consumer activity, in order to enhance the company's consumer insights tools which enhance its innovation, product
development and marketing initiatives.
•Directors, both individually and collectively, have visited a number of different Diageo offices and production sites
during the year. Our Chair, Chief Executive and Chief Financial Officer travel regularly to different sites around the
world, but our Non-Executive Directors also visit Diageo locations. For example, in October 2023 Non-Executive
Directors visited the company's packaging facility and plant in Plainfield, Illinois, as well as its newly opened Guinness
Open Gate brewery and tap room in Chicago. A number of Non-Executive Directors have also visited Diageo's tequila
operations and agave farms in Mexico over the course of the year. These visits enabled the Board to get a deeper
understanding of the company's production processes and facilities, as well as the impact of brand homes on brand
equity and consumer choice. Engaging directly with employees through these visits, as well as the regular workforce
engagement sessions, is an important means of providing insights as to the complexity of managing distribution and
logistics routes, inventory management and demand forecasting, informing strategic decision-making and supply chain
efficiency.
•The Board has a well-established workforce engagement programme, in which each Non-Executive Director is involved in
regular engagement sessions with different parts of the global workforce over the course of the year, both virtual and in
person. Through these sessions, Non-Executive Directors gain insights into the company’s culture which are then fed back to
the company’s engagement teams and used to shape our approach to people. See pages 172-173 for this year’s workforce
engagement statement which includes further details of how the programme has operated during the year.
•Board members, and in particular the Chief Executive and Chief Financial Officer, participate in an extensive programme of
regular meetings, calls and other engagement activities with investors and analysts, co-ordinated by the Investor Relations
function. See page 169 for a timeline summarising this programme, which includes highlights from fiscal 24 including the
company's Capital Markets Event hosted in its New York office in November 2023 and the company's participation at the
annual conference of the Consumer Analyst Group of New York held in Florida in February 2024. Materials from these
sessions are available on https://www.diageo.com/en/investors/results-reports-and-presentations.
Further information on our stakeholders, what we think is important to them and how the Board engages and responds to them can be
found on pages 165-170. Case studies summarising how stakeholder considerations were taken into account by the Board during fiscal
24, as required by Section 172 of the Companies Act, in respect of three of its principal decisions are set out on page 170.
Executive direction and control
Executive Committee
The Executive Committee, appointed and chaired by the Chief Executive, supports her in discharging her responsibility for
implementing the strategy agreed by the Board and for managing the company and the group. It consists of the individuals responsible
for the key operational and functional components of the business: North America, Europe, Africa, Latin America and Caribbean, Asia
Pacific, India, Supply Chain and Procurement and Corporate. The Executive Committee focuses its time and agenda to align with the
Growth Ambition and how to achieve Diageo’s financial and non-financial performance objectives. Performance metrics have been
developed to measure progress. There is also focus on the company’s reputation. In support, monthly performance delivery calls,
involving the managing directors of each market, focus on current performance. Committees appointed by the Chief Executive and
intended to have an ongoing remit, including the Audit & Risk Committee, Finance Committee and Filings Assurance Committee, are
shown (with their remits) at https://www.diageo.com/en/our-business/corporate governance.
Performance evaluation
The effectiveness of the Board and its Committees is vital to the overall success of the Group. The last externally facilitated evaluation
of the Board had been carried out in 2020. After internal evaluations conducted in 2021 and 2022, in accordance with Provision 21 of
the Code, another externally facilitated evaluation was conducted during 2023. In line with the UK Corporate Governance Code, in
August 2023 the Board instructed Dr Tracy Long of Boardroom Review Limited (BRL), an independent professional consultancy
which specialises in board reviews and evaluations, to conduct an externally facilitated evaluation. Dr Long and BRL have no
connection with Diageo or its directors.
The purpose of the evaluation was to conduct a comprehensive review and evaluate how the Board and its Committees operate as
measured against current best practice corporate governance principles and in accordance with the Code guidance. The review
encouraged candid reflections from the Board in order to build on strengths, identify challenges and consider recommendations.
The evaluation was conducted through a series of one-to-one interviews with each Director as well as a number of key executives and
third parties who interact frequently with the Board, an information review and observations of meetings. Dr Long attended and
observed Board and Committee meetings during September and October 2023, including private meetings between Non-Executive
Directors at which no Executive Directors or management were present. A report was then prepared for discussion with individual
Directors and the Board as a whole.
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The findings of the evaluation indicate that the Board is considered to be well governed and effective. A particular key strength of the
Board is in its composition, expertise and performance as well as the contents of its meetings. Diversity, inclusion, trust and
transparency are other key strengths the Board is actively committed to ensuring it reflects its consumer and global marketplace.
A summary of the key findings and recommendations was presented by Dr Long to the Board in December 2023, following which the
Chair and Company Secretary determined areas of focus for approval by the Board.

| Key recommendations | Actions for focus in 2024/25 |
| General feedback |  |
| •Continue to ensure Board members feel well integrated into the Board and company | •Increase lines of communication between management and Board members |
| •Ensure focus on diversity continues | •Consider opportunities for more engagement between Board members and the workforce |
| Board composition and succession |  |
| •Nomination Committee to tailor induction programmes for specific new Non-Executive Directors depending on their background and experience | •Enhance the succession planning transition process to identify potential new Board members with relevant sector experience |
| •Continue to review the balance of skills, expertise and knowledge of the Board |
| •Continue to increase focus on communication channels with brokers, shareholders and other stakeholders | •Focus recruitment and talent pipeline on key areas for additional expertise |
| •Enhance and align technology with the growth agenda and with testing various assumptions |  |
| People and culture |  |
| •Continue external talent search for executive and senior leader roles as well as focus on the development of internal talent | •Continue to promote and protect the company’s corporate culture and values |
| •Ensure regular structured engagement between Nomination Committee members and high potential internal candidates | •Continue to review the talent pipeline of executives and senior management |
|  | •Review and track high potential candidates both internally and externally |
| Strategy and risk |  |
| •Review and track key strategic decisions and investments focusing on medium and longer-term issues as well as emerging trends | •Enhance the group risk appetite statement, including in relation to description of risk appetite for principal risks |
| •Continue to maintain strategic focus and to monitor the changing business landscape including wider external competition and consumers |
| •Allocate appropriate time and resources during Board discussions to ensure the right challenge and support is provided on strategic and operational risk reviews |
| •Continue to focus on the company’s approach to ESG and effective stakeholder engagement as well as shareholder communication |

Progress made against 2023/24 actions
Good progress has been made against the actions identified following last year’s internally facilitated performance evaluation:
–There has been an increased focus on Board and management succession planning and ensuring a pipeline of high-quality,
diverse talent.
–The Board has continued to improve the direct channels of communication between management and Board members.
–The Board has continued to develop and enhance induction process for new Directors and ensures high-quality pre-read
materials, action closure and time allocation for Board meetings.
Workforce Engagement statement
At Diageo, we believe that our people are critical to our company’s success, and that creating an inclusive culture and an environment
where colleagues can freely express their views and feel listened to is key to sustaining high levels of engagement and performance, as
well as ensuring Diageo remains a great place to work. To understand our colleagues’ experiences, we gather their feedback through
both formal and informal channels. Diageo’s Workforce Engagement programme is an important way for the Board to hear
employees' and other colleagues' insights on key topics, including culture, strategy, and ways of working. It is also a valued
opportunity for teams to have direct access to Board members.
In fiscal 24, Karen Blackett took over accountability as the designated Non-Executive Director for workforce engagement from Javier
Ferrán. Karen, alongside all Non-Executive Directors, held fifteen sessions across the year, engaging with 539 colleagues from all
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regions, functions, and organisational levels below senior leadership. Sessions have taken place both virtually and face to face, in line
with Board members’ travel, and have been highly engaging. Board members have valued the openness of conversations and the
opportunity to gather insights on many positive aspects of Diageo’s culture, as well as areas for improvement.
The key themes emerging from these workforce engagement discussions are:
•Diageo’s culture continues to be a source of pride and a strong advantage for the business, characterised as ambitious,
progressive and collaborative, as well as high quality and accessibility of leadership. Diageo’s leading approach to inclusion
and diversity, and the richness and growth this brings, were positive highlights in these discussions.
•Diageo’s unique purpose and values are highlighted frequently as reasons colleagues join and remain at Diageo, as well as
Diageo’s commitment to its 'Spirit of Progress' agenda and embedded approach to doing business the right way.
•Confidence and belief in Diageo’s diverse brand portfolio are key drivers of motivation for employees. Improved consumer
and customer connectivity and high standards of execution in activating on our brands were highlighted as strengths, while
the need to accelerate the speed of innovation to market was frequently cited as an area for improvement.
•The high calibre of talent across the business is also seen as a strength, and colleagues spoke positively about diversity in
leadership and opportunities to further their learning and career development. Colleagues also highlighted the value Diageo’s
Employee Resource Groups bring to the business and expressed an appetite for greater access and visibility of these
important groups.
•While high workloads and complex systems and processes were highlighted as barriers that can at times prevent colleagues
from operating in the most efficient way, improvements in collaboration and connectivity through technology, as well as an
overall cultural shift underway, were praised. Investment being made in digital, data and analytical capabilities is seen
positively, and colleagues look forward to these investments improving workload and liberating burdensome processes.
These themes were also reflected in this year’s engagement results seen in the global employee survey, Your Voice, which remains top
quartile and above external benchmarks with 81% engagement levels and 89% pride in working for Diageo.
Insights gathered from workforce engagement sessions held by the Board, alongside broader listening tools such as the Your Voice
survey, annual employee engagement and pulse surveys, have helped the company to listen and respond to the perspectives of our
employees, as well as identify specific areas to further enhance our employee experience.
Purpose, values and culture
The Board is responsible for establishing Diageo’s purpose, values and culture and for monitoring how embedded that culture is
within our business. Diageo has a long-established purpose and set of values which resonate strongly with our employees, as indicated
by the Board's engagement sessions with Diageo's workforce and our employee surveys. We are very conscious that Diageo must
operate with the highest standards of governance, doing business the right way, from grain-to-glass. This principle is embedded in our
Code of Business Conduct and global policies, aligned with our 'Spirit of Progress' goals, and reflected in our ways of working. We
are pleased that we have a strong reputation for inclusion and diversity which reflects our values, attracts the best talent and enables
our people to succeed.
There are a number of ways in which the Board monitors and assesses culture, including:
Site visits
Directors are encouraged to visit the group’s offices, production facilities and sites in different markets and regions so that they can get
a better understanding of the business and interact with employees and the wider workforce. During fiscal 24, Board meetings have
been held in the company's headquarters in London on a number of occasions, enabling Directors to meet and interact with employees,
including with members of the local management team for Great Britain. The Board has also met in Chicago where they met members
of the North America executive team and visited our spirits production facility at Plainfield, Illinois. Various Directors have also
travelled to other locations, including our tequila operations in Mexico. These site visits enable Directors to meet and discuss issues
with local management and workforce members, to observe Diageo’s safety and sustainability processes working in practice and to
assess how effectively Diageo’s culture is communicated and embedded across a variety of geographies, functions and roles. As part
of the Board's workforce engagement programme, Non-Executive Directors regularly hold in-person and virtual meetings, townhalls,
focus groups and question and answer sessions with Diageo employees in different locations over the course of the year.
Employee surveys
The Board receives reports from the Chief HR Officer on the results of the company’s global annual ‘Your Voice’ survey, including
levels of employee engagement, employee perceptions of Diageo’s purpose and of their line managers (including net promoter scores),
and any themes raised. The survey results also give visibility of areas on which management must continue to focus. Results of this
year's 'Your Voice' survey are described on page 105.
SpeakUp allegation reporting
Regular reports are provided by the Business Integrity team to the Audit Committee, providing information and data on reported
allegations of breaches of the Code of Business Conduct and other group policies, including those received through our confidential
and independent whistleblowing service SpeakUp. These reports also include analyses of emerging trends, investigation status reports
and closure rates, and summaries of actions taken. These reports enable the Directors to gain an understanding of common issues and
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action planning, as well as providing insights into how embedded Diageo’s purpose, values and culture are across its markets and
functions.
For more details of the SpeakUp service, see pages 103 and 182.
Workforce engagement programme
Insights drawn from the Board’s annual programme of workforce engagement are used by the Board to monitor and assess the culture
of the company, with recommendations being fed back to management regularly with workforce engagement being discussed at Board
meeting sessions twice a year. Over the past few years, the engagement programme has enabled all Non-Executive Directors to
participate by directly engaging with employees from a variety of regions, functions and levels in the business. During fiscal 24, Karen
Blackett has carried out the role of Non-Executive Director with responsibility for workforce engagement. For more information on
workforce engagement, see page 172.
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Additional information
Internal control and risk management
An ongoing process has been established for identifying, evaluating and managing risks faced by the group. This process, which complies with
the requirements of the Code, has been in place for the full financial year and up to the date the consolidated financial statements were
approved and accords with the guidance issued by the FRC in September 2014, entitled ‘Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting’. The Board confirms that, through the activities of the Audit Committee described below, a robust
assessment of the principal and emerging risks facing the company, including those that would threaten its business model, future performance,
solvency or liquidity, has been carried out. These risks and their mitigations are set out above in the section of the UK Annual Report dealing
with principal and emerging risks on pages 134 to 144.
The Board acknowledges that it is responsible for the company’s systems of internal control and risk management and for reviewing
their effectiveness. The Board confirms that, through the activities of the Audit Committee described in its report, it has reviewed the
effectiveness of the company’s systems of internal control and risk management. During the year, the Audit Committee considered the
nature and extent of the risks that the Board was willing to take to achieve its strategic goals and reviewed the existing internal
statement of risk appetite, which had been updated this year by the Executive Audit & Risk Committee, following which the Audit
Committee made a recommendation to the Board which was then approved. The Audit Committee reviews the company's principal
risks regularly throughout the year in accordance with a schedule proposed by management with each such risk being reviewed by
management in the Audit & Risk Committee or other management steering groups prior to it being considered by the Audit
Committee. The Board also regularly reviews emerging and disruptive risks as part of its Annual Strategy Conference, held this year
in April in London, from which a number of topics are identified for more detailed review by either the Board or the Audit Committee
over the following 12 months. The company has in place internal control and risk management systems in relation to the company’s
financial reporting process and the group’s process for the preparation of consolidated accounts. Further, a review of the contents of
the company's public filings and disclosures, including its consolidated financial statements and non-financial disclosures, is
completed by management through the Filings Assurance Committee to ensure that the contents of the company's interim and
preliminary results announcements, Annual Report and Form 20-F appropriately reflect the non-financial and financial position and
results of the group. Further details of this are set out in the Audit Committee report on pages 178-187.
Viability statement
In accordance with the Code, the Board has also considered the company’s longer-term viability, based on a robust assessment of its
principal and emerging risks. This was done through the work of the Audit Committee which recommended the Viability statement to
the Board. For further information about how the Board has reviewed the long-term prospects of the group, see page 86 of the UK
Annual Report.
Going concern
Management prepared 18 month cash flow forecasts which were also sensitised to reflect severe but plausible downside scenarios
taking into consideration the group's principal risks. In the base case scenario, management included assumptions for mid-single digit
net sales growth, slightly growing operating margin and global TBA market share growth. In light of the ongoing geo-political
volatility, the base case outlook and severe but plausible downside scenarios incorporated considerations for a prolonged global
recession, supply chain disruptions, higher inflation and further geo-political deterioration. Even under these scenarios, the group’s
liquidity is still expected to remain strong. Mitigating actions, should they be required, are all within management’s control and could
include reductions in discretionary spending such as acquisitions and capital expenditure, lower level of A&P and investment in
maturing stock, as well as a temporary suspension or reduction in its return of capital to shareholders (dividends or share buybacks) in
the next 12 months, or drawdowns on committed facilities. Having considered the outcome of these assessments, the Directors are
comfortable that the company is a going concern for at least 12 months from the date of signing the group's consolidated financial
statements.
Political donations
The group has not given any money for political purposes in the United Kingdom during the year. Our US based subsidiary, Diageo
North America, Inc. made contributions solely at its own discretion to non-UK political candidates and committees in the United
States, where it is common practice to do so. Contributions of approximately $1.1 million (2023: $1.0 million) were made by Diageo
North America, Inc. during the financial year to US state and local candidates and committees, consistent with applicable laws.
Additionally, our Australian based subsidiary made contributions, solely at its own discretion, totalling approximately $0.01 million.
The US contributions reflect no endorsement of a particular political party, and contributions were made with the aim of promoting a
better understanding of our business and our views on commercial matters, as well as a generally improved business environment.
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Directors' responsibilities in respect of the Annual Report, Form 20-F and financial statements
The Directors are responsible for preparing the Annual Report, the information filed with the SEC on Form 20-F and the group and
parent company financial statements in accordance with applicable law and regulation. Company law requires the Directors to prepare
financial statements for each financial year. Under company law, the Directors have prepared the group consolidated financial
statements in accordance with UK-adopted international accounting standards and the parent company financial statements in
accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS
101 ‘Reduced Disclosure Framework’, and applicable law). In preparing the group consolidated financial statements, the Directors
have also elected to comply with International Financial Reporting Standards issued by the International Accounting Standards Board
(IFRSs as issued by IASB).
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company and of the profit or loss of the group and parent company for that period.
In preparing the financial statements, the Directors are required to:
•select suitable accounting policies and then apply them consistently;
•state whether applicable UK-adopted international accounting standards, IFRSs issued by IASB have been followed for the
group financial statements and United Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure
Framework’ and applicable law have been followed for the parent company financial statements, subject to any material
departures disclosed and explained in the financial statements;
•make judgements and accounting estimates that are reasonable and prudent; and
•prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company
will continue in business.
The Directors are responsible for safeguarding the assets of the group and parent company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities. The Directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at
any time the financial position of the group and parent company and enable them to ensure that the financial statements and the
Directors’ Remuneration Report comply with the Companies Act 2006. The Directors are responsible for the maintenance and
integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the group’s and parent company’s position and performance, business
model and strategy. Each of the Directors, whose names and functions are listed on pages 154 and 155 confirm that, to the best of their
knowledge:
•the group consolidated financial statements, which have been prepared in accordance with UK-adopted international
accounting standards, IFRSs issued by IASB, give a true and fair view of the assets, liabilities, financial position and profit of
the group;
•the parent company financial statements, which have been prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 101 ‘Reduced Disclosure Framework’ and applicable law, give a true and fair view of the assets,
liabilities, financial position and profit of the parent company; and
•the Strategic Report includes a fair review of the development and performance of the business and the position of the group
and parent company, together with a description of the principal risks and uncertainties that it faces.
In accordance with section 418 of the Companies Act 2006, each of the Directors who held office at the date of the approval of the
Directors’ report confirm that, so far as the Director is aware, there is no relevant audit information of which the group’s and parent
company’s auditors are unaware, and each Director has taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the group's and parent company’s auditors are aware of that
information.
The responsibility statement was approved by a duly appointed and authorised committee of the Board of Directors on 29 July 2024.
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AUDIT COMMITTEE REPORT
Ensuring integrity across the business
Dear Shareholder
On behalf of the Audit Committee, I am delighted to present the Committee’s report for the year ended 30 June 2024.
The purpose of this report is to describe how the Audit Committee has carried out its responsibilities during the year. The role of the Audit
Committee is to monitor and review the integrity of financial information and reporting, and to provide assurance to the Board that the
company's internal controls and risk management processes, including its internal audit, business integrity and compliance processes, are
appropriate and regularly reviewed. The Audit Committee also oversees the work of the external auditor, monitors its independence, approves
its remuneration and recommends its appointment. The Committee is also responsible for reviewing the company's principal and emerging
risks, which it carried out over the course of the year through a series of risk review deep dives.
During fiscal 24, the Committee undertook an external audit services tender process as the current auditors had been in role since fiscal 16.
Further details are set out on pages 180-181.
The Committee has also kept under regular review the company's cyber security risk management processes, governance systems and
capabilities, in light of continuing risks in respect of cyber threats. See page 187 for further details.
This report also describes areas of significant and particular focus for the Committee over the year. During fiscal 24 this included regularly
monitoring progress of the company's multi-year programme to improve its internal processes and upgrade its financial systems and
technology. This programme has been designed to enhance Diageo's business resilience and controls environment through simplifying and
standardising the group's ways of working, improving access to data, and enhancing reporting through implementation of a new cloud-based
enterprise resource planning platform. Strategic business transformation has been identified as a new principal risk this year. The Committee
has also increased its focus on the company's demand forecasting capabilities, stock in trade and inventory levels monitoring processes and
controls, particularly in light of reduced demand in certain regions such as Latin America and Caribbean.
As part of the company's year end reporting processes, the Committee has reviewed and challenged management's approach, analysis and
recommendations, taking into account the views of the external auditor, in order to conclude on its Annual Report and financial statements. In
addition, the Committee has considered and reviewed the group's principal and emerging risks on a rolling basis throughout the course of the
year. Further information is provided on pages 181-184.
Having chaired the Committee since 2017, I will be stepping down from the role shortly and am delighted that Julie Brown has been appointed
as my successor, effective from 5 August 2024. I believe that the Committee has an open and constructive relationship with management and
the external auditors, whom I thank for their assistance over the year. I also thank my fellow Committee members for their diligence and
engagement. The Committee remain s committed to continuing to discharge its duties in an effective and diligent manner during fiscal 25.
Alan Stewart
Chair of the Audit Committee
Governance (continued)
178
Role and composition of the Audit Committee
The role of the Audit Committee is fully described in its terms of reference, which are available at https://www.diageo.com/en/our-
business/corporate-governance. The members of the Audit Committee are independent Non-Executive Directors being Alan Stewart
(Committee Chair), Melissa Bethell, Karen Blackett, Valérie Chapoulaud-Floquet, Susan Kilsby, Sir John Manzoni and Ireena Vittal.
The Chair of the Board, the Chief Financial Officer, the General Counsel & Company Secretary, the Group Controller, the Head of
Global Audit & Risk (GAR), the Chief Business Integrity Officer, the
General Counsel Corporate, the Group Chief Accountant and the external auditor regularly attend meetings of the Committee. The
Audit Committee met privately with the external auditor, the Chief Business Integrity Officer and the Head of GAR regularly during
the year. During the course of the year, the Committee met five times and constituted subcommittees to manage the external audit
tender process and to review progress of the year end audit and reporting processes. Details of attendance of all Board and Committee
meetings by Directors are set out on page 150.
Reporting and financial statements
During the year, the Audit Committee reviewed the interim results announcement, including the interim financial statements, the
Annual Report and associated preliminary results announcement and Form 20-F, focusing on key areas of judgement and complexity,
critical accounting policies, disclosures (including those relating to contingent liabilities, climate change and principal risks), viability
and going concern assessments, provisioning and any changes required in these areas or policies. The Audit Committee has also
focused in particular on the company’s approach to assurance and internal approvals processes. Under the supervision of the Audit
Committee, management has again sought to refine our non-financial reporting in order to enhance consistency and intelligibility
throughout the Annual Report, while also complying with the recommendations of the Task Force on Climate-related Financial
Disclosures.
This year the Committee has continued to regularly review progress of the company's transformation project to improve Diageo’s
internal processes and upgrading its financial systems and technology, monitoring progress against the project's targets and timeline,
including its controls framework and reporting capabilities.
The company has in place internal control and risk management systems in relation to the company’s financial and non-financial
reporting process including the group’s process for the preparation of consolidated financial statements. A review of the consolidated
financial statements and the draft Annual Report is completed by the Filings Assurance Committee (FAC) to ensure that the financial
position and results of the group are appropriately reflected therein. In addition to reviewing draft financial statements for publication
at the half and full year, the FAC is responsible for examining the company’s financial and non-financial information and disclosures,
the effectiveness of internal controls relating to financial and non-financial reporting and disclosures, legal and compliance issues and
determining whether the company’s disclosures are accurate and adequate. This year additional focus has been given to the adequacy
of regional inventory monitoring processes, especially in Latin America and Caribbean. The FAC comprises senior executives such as
the Chief Executive, the Chief Financial Officer, the General Counsel & Company Secretary, the General Counsel Corporate &
Deputy Company Secretary, the Group Controller, the Group Chief Accountant, the Head of Investor Relations, the Head of GAR and
the Chief Business Integrity Officer. The company’s external auditor also attends meetings of the FAC. Presidents of each region and
their finance directors attend the FAC on request. The Audit Committee reviewed the work of the FAC and a report on the conclusions
of the FAC process was provided to the Audit Committee by the Chief Financial Officer.
Diageo has carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive and Chief
Financial Officer, of the effectiveness of the design and operation of Diageo's disclosure controls and procedures (as defined in the US
Securities Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Annual Report. Based upon that evaluation, Diageo's Chief
Executive and Chief Financial Officer concluded that, as of 30 June 2024, Diageo's disclosure controls and procedures were effective.
As part of its review of the company's Annual Report and associated disclosures, the Audit Committee has considered whether the report is 'fair,
balanced and understandable' and provides the information necessary for shareholders to assess the company's position, performance, business
model and strategy, as required by Principle N of the Code. In doing so, the Committee has noted the guidance issued by the FRC on this subject
as well as best practice recommendations from external advisors. The Committee has considered factors such as whether the report includes
descriptions of the business model, strategy and principal risks which are sufficiently clear and detailed to enable users to understand their
importance to the company, whether the report is consistent throughout with the narrative reflecting the financial statements and understanding of
directors during the year, that information is presented fairly, without omission of material information and not in a manner which might mislead
users.
The Committee has also considered the presentation of GAAP and non-GAAP measures to ensure appropriate prominence is given to
GAAP measures and that non-GAAP measures are presented consistently and can be clearly reconciled. The Audit Committee has
also considered the governance and processes undertaken by management in drafting, developing and reviewing the contents of the
Annual Report, which have been designed to ensure the robustness and adequacy of the information contained in it, including review
by and input from senior executives, the company's advisors and through the work of the FAC. On this basis, the Audit Committee
recommended to the Board that it could make the required statement that the Annual Report is 'fair, balanced and understandable'.
Governance (continued)
179
SEC correspondence
The Committee reviewed a comment letter addressed to the company which had been received in March 2024 from the SEC following
its review of the company's Form 20-F for fiscal 23. The letter raised a question as to the presentation of non-GAAP line items in a
table expressed to be the company's summary income statement. The company responded by proposing to rename and reformat the
contents of the relevant table in future filings, following which the SEC confirmed that it had completed its review. The Committee
notes that Diageo remains responsible for the accuracy and adequacy of its disclosures.
External auditor
During the year, the Audit Committee reviewed the external audit strategy and the findings of the external auditor from its review of
the interim results and its audit of the consolidated financial statements.
The Audit Committee reviews annually the appointment of the auditor (taking into account the auditor’s effectiveness and
independence and all appropriate guidelines) and makes a recommendation to the Board accordingly. Any decision to open the
external audit to tender is taken on the recommendation of the Audit Committee, as was the case in 2023. There are no contractual
obligations that restrict the company’s current choice of external auditor.
PwC first became Diageo’s external auditor in fiscal 16 following a tender process carried out in 2015. PwC's re-appointment for
fiscal 24 was approved by shareholders at the 2023 AGM.
External audit tender process
At the recommendation of the Audit Committee and as the company is required to have a mandatory audit tender after 10 years by the
Statutory Auditors and Third Country Auditors Regulations 2016, an audit services tender process was undertaken during fiscal 24 to
provide sufficient time for an adequate transition in the event that a new audit firm was selected. In undertaking this tender, the
company has complied with the provisions of The Statutory Audit Services for Large Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 for the year ended 30 June 2024.
In determining the process for the audit services tender, management took into consideration and followed the FRC's guidance on
audit tendering, with the Audit Committee making robust decisions to ensure that the requirements of the FRC's minimum standard for
audit committees were met. Included in the process were a review of each firm's most recent FRC Audit Quality Review reports, a
consideration of potential conflicts of interest and independence checks, and identification of key individuals with appropriate skills
and experience to act as potential lead partners. Clear and objective criteria for assessing success were determined and agreed.
A timeline summary of the key steps taken is set out below.

| Audit tender process |
| April 2023 | Review of the audit market including firms outside the ‘Big 4’ professional consultancy firms to determine their minimum capability and capacity requirements. |
| May to June 2023 | Constituted a sub-committee of the Audit Committee and identified shortlisted firms for interview. |
| September to October 2023 | Determined list of assessment criteria, created and opened data room to share information, and carried out series of management meetings with each shortlisted firms. |
| October to November 2023 | Presentation to the Audit Committee followed by the submission of formal requests for proposal from the shortlisted firms. |
| December 2023 | Review of proposals from firms, consideration by Audit Committee and recommendation to the Board. |

In December 2023, a sub-committee of the Audit Committee reviewed of the final presentations and responses to the Request for
Proposal submitted by each of the shortlisted firms and based its decision on a combination of audit approach, team continuity in key
roles and understanding Diageo’s business and risks. The sub-committee refined the shortlisted firms from four to three and presented
a recommendation to the Audit Committee and subsequently to the Board. The recommendation comprised a preferred firm and an
alternative firm. After careful thought and consideration, the Board decided to reappoint PwC as the external auditor. Feedback was
given to all participating firms as part of the tender process.
Since the conclusion of the audit for the year ended 30 June 2023, Scott Berryman has been lead audit partner with responsibility for
signing the Diageo plc audit opinion on behalf of PwC. Scott will remain as such for the year ending 30 June 2025 onwards. The
Board will propose the reappointment of PwC at the AGM to be held in September 2024.
Governance (continued)
180
External auditor effectiveness and quality
The Audit Committee assesses the ongoing effectiveness and quality of the external auditor and audit process through a number of
methods, commencing with identification of appropriate risks by the external auditor as part of its detailed audit plan presented to the
Audit Committee at the start of the audit cycle. These risks were reviewed by the Committee and the work performed by the auditor
was used to test management’s assumptions and estimates relating to such risks. The effectiveness of the audit process in addressing
these matters was assessed through reports presented by the auditor to the Audit Committee which were discussed by the Committee at
both the half-year, in January, and year end, in July. Following completion of the audit process, feedback on its effectiveness was
provided during review meetings with the company’s management and finance team, who also completed questionnaires on their
experience of the audit. Both management and the auditor provided their assessments of auditor effectiveness and quality to the Audit
Committee for consideration at its meeting in December. The auditor assessment is undertaken based on the requirements of the Code
as well as guidance issued to audit committees by the FRC in April 2016 and Minimum Standards for Audit Committees published by
the FRC in May 2023, as well as the NYSE listing rule 303A.07. It includes consideration of the findings of the FRC's Audit Quality
Review team which published its 2022/23 Audit Quality Inspection and Supervision report on PwC in July 2023, periodic regulatory
review carried out by the US Public Company Accounting Oversight Board (PCAOB) and the Quality Assurance Department of the
Institute of Chartered Accountants in England and Wales, as well as benchmarking of the auditor as against its peers. The assessment
also takes into consideration PwC's annually published Transparency Report which sets out how the firm upholds its professional
responsibilities and seeks to ensure delivery of quality in its services. The results of the survey conducted during fiscal 24 indicated a
consensus view that overall performance is solid. Consistent strong feedback was received in relation to solid auditor independence
and quality control, strong professional expertise and business knowledge, and solid quality communication between PwC and
management. Areas where continued focus was required remained consistent with the prior year assessment including timely review
and feedback on audit matters, better alignment in internal communication, resource continuity and use, pro-activity in driving
efficiencies, provision of best practice examples of processes and controls, and transparency on audit activities throughout the year. It
was concluded that the relationship between the auditor and management was strong and open. The auditor team communicated
openly and clearly those areas which they considered significant and their views on such matters. Senior members of the PwC team
had been very visible throughout the business and strengthened relationships with management.
During the external audit, the auditor challenged management on its approach taken as to brand impairment testing, including
discussing and reviewing management's plans and strategies for future growth of the brands as against recent performance and
forecasts. The auditor also challenged management as to other judgemental matters such as pension obligation valuations and
uncertain tax positions, assessing management's analysis as to these potential exposures and disclosures in the Annual Report. The
auditor also challenged management while preparing the Annual Report in relation to whether there was sufficient balance in the
Strategic Report and as to disclosures of critical accounting policies and practices, including those relating to impairment of goodwill
and indefinite life intangible assets, pensions valuation and uncertain tax positions. The Audit Committee assessed these challenges,
discussing them with management and the auditor, and seeking additional information and evidence from management in support of
these assessments.
External auditor independence
The group has a policy on auditor independence and on the use of the external auditor for non-audit services, which is reviewed
annually, most recently in July 2024. Under the auditor independence policy, any member of the PwC global network shall provide to
the company, its subsidiaries or any related entity only permissible services, subject to the approval of the Audit Committee after it has
properly assessed through its governance process the threats to independence and the safeguards applied in accordance with the FRC
Ethical Standard, SEC auditor independence rules and US Public Company Accounting Oversight Board rules. These services are set
out in full in the policy and are generally those which the external auditor is best placed to provide, which may include reporting
required by law or regulation to be performed by the auditor and services where the services are closely linked to audit work and
where the auditor's understanding of the group is relevant to the services. Any FRC permissible service to be provided by the auditor,
regardless of the size of the engagement, must be specifically approved by the Audit Committee or its nominated delegate (being the
Chair of the Audit Committee) based on a defined scope of pre-approved services. The policy explicitly specifies the auditor
independence review and approval mechanism process by the Committee for permissible engagements above the specified threshold
of £100,000. Fees paid to the auditor for audit, audit-related and other services are analysed in note 4(b) to the consolidated financial
statements. The nature and level of all services provided by the external auditor are factors taken into account by the Audit Committee
when it reviews annually the independence of the external auditor. During the year, no non-assurance related services were provided
by the external auditor to the company, its subsidiaries or any related entity other than personal tax services provided to two Non-
Executive Directors and the provision of services in connection with the issuance of senior notes by a group company.
Internal audit, controls assurance and risk
The company’s internal GAR team undertakes an annual audit and risk plan by delivering a series of internal assurance and audit
assignments across a variety of markets, processes, business units and functions. On the conclusion of each assignment, GAR issues a
report on its findings which may also include an overall rating as to the status of the market, process or function being audited,
detailed reasons for the rating and actions to be taken within a specific timetable. The Audit Committee receives regular reports from
the Head of GAR on the latest reports issued.
Governance (continued)
181
This year GAR has undertaken a number of audits including both market and functional audits as well as of certain of the group's end-
to-end processes and procedures. The Audit Committee assesses the effectiveness of GAR by reviewing its annual audit plan at the
start of the financial year, monitoring its ongoing quality throughout the year, and assessing completion rates and feedback provided
following completion of the annual audit plan. Having carried out this assessment, the Audit Committee is of the view that the quality,
experience and expertise of GAR is appropriate for the business. The company operates a global controls assurance programme for
financial reporting controls in each market and function, which monitors compliance with and effective operation of the company’s
controls framework. The Audit Committee receives regular reports on the status of the controls assurance plan, actions taken to
enhance controls design and effectiveness, awareness training provided to employees, testing results and trends analysis derived from
the company’s integrated risk management system. The Committee also reviewed and approved changes to the principal risk
descriptions and risk footprint, as well as receiving regular presentations and reviews of the status of its principal and emerging risks.
This year, these reviews have covered areas including business ethics and integrity, human rights, anti-counterfeit, geo-political
volatility and business interruption, business transformation, stock in trade, cyber security and IT resilience, climate change and
sustainability, and international taxation. A new principal risk in relation to strategic business transformation was identified this year.
Business Integrity programmes
Diageo is committed to conducting its business responsibly and in accordance with all laws and regulations to which it's business activities are
subject. We hold ourselves to the principles in our Code of Business Conduct, which is embedded through a comprehensive training and
education programme for all employees. Our employees are expected to act in accordance with our values, the Code of Business Conduct and
in compliance with applicable laws and regulations. The Audit Committee monitors compliance with the company’s ethical standards through
the Business Integrity framework, which helps enhance and protect all aspects of the company’s business. Regular reports are provided to the
Audit Committee by the Chief Business Integrity Officer on progress in providing guidance, training and tools for all levels in the business,
completion rates
for training modules, launch and rollout of new programmes or policies, monitoring use of whistleblowing mechanisms and investigating
allegations of breaches.
Our Code of Business Conduct, available in 19 languages, sets out what Diageo stands for as a company and how Diageo operates,
enabling all employees to understand what is required of them in working for Diageo. Annual training on the Code of Business
Conduct and associated policies is mandatory for all managers and their direct reports globally, encompassing over 24,000 eligible
employees during the year ended 30 June 2024. Training is delivered in an easily accessible e-learning format, with classroom training
delivered to those employees who do not have regular access to a computer. The Code of Business Conduct and other global policies
are available at https://www.diageo.com/en/our-business/corporate-governance.
Third-party risk is also managed through our Know Your Business Partner programme, which is designed to help the company
evaluate the risk of doing business with a third party before entering and during a contractual relationship. Business partners are
assessed for potential risks including economic sanctions, bribery and corruption, money laundering, facilitation of tax evasion, data
privacy, human rights and other reputational issues.
Employees and third-party business partners are encouraged to raise concerns about potential breaches of the Code of Business
Conduct or policies, either to line managers, legal or HR colleagues, risk, compliance and Business Integrity teams or to SpeakUp, a
confidential whistleblowing mechanism. SpeakUp is a global service administered by an independent provider, accessible online or by
telephone. Where legally permitted, it can be used anonymously and reports kept confidential. Allegations are investigated by
independent Diageo teams, with progress being monitored by the Business Integrity team. When allegations are substantiated,
appropriate disciplinary and corrective actions are taken. The Audit Committee receives and reviews regular reports on allegations,
including trends information, root cause analysis and investigation closure rates. Since all of Diageo's Non-Executive Directors attend
the Audit Committee, all Non-Executive Directors who make up the Board routinely review the findings of the company's
whistleblowing processes in accordance with the UK Corporate Governance Code.
During the year ended 30 June 2024, 759 allegations of breaches were reported which is an increase on prior years. The substantiation
rate of allegations confirmed as breaches is 34% (versus 33% in fiscal 23). As of the end of fiscal 24, 70 people exited the business as
a result of breaches of our Code of Business Conduct or policies (fiscal 23: 57 people). The number of leavers for fiscal 23 has been
restated due to a number of open cases from fiscal 23 being concluded this year. At the end of fiscal 24, we had 223 open cases, which
may lead to more people exiting the business. See below a summary of reported and substantiated breaches over the past three years.
Governance (continued)
182
Reported and substantiated breaches
2022
2023
2024

ò | Reported
ò | Reported through SpeakUp
ò | Substantiated breaches
ò | Code-related leavers

Senior financial officers’ code of ethics and dealing code
In accordance with the requirements of SOX and related SEC rules, Diageo has adopted a code of ethics covering its Chief Executive,
Chief Financial Officer, and other senior financial officers. During the year, no waivers were granted in respect of this code of ethics.
The full text of the code of ethics is available at https://www.diageo.com/en/our-business/corporate-governance/compliance. Both the
Audit & Risk Committee and the Audit Committee regularly review the strategy and operation of the Business Integrity programme
through the year.
The company has also adopted a dealing code setting out requirements in relation to dealings in Diageo securities by Directors,
Executive Committee members and certain other employees, which is designed to ensure compliance with applicable insider trading
and market abuse regulations, in particular the UK Market Abuse Regulation.
'Financial expert', recent and relevant financial experience
The Board has satisfied itself that the membership of the Audit Committee includes at least one Director with recent and relevant
financial experience and has competence in accounting and/or auditing and in the sector which the company operates, and that all
members are financially literate and have experience of corporate financial matters. For the purposes of the Code and the relevant rule
under SOX, Section 407, the Board has determined that Alan Stewart is independent and may be regarded as an Audit Committee
financial expert, having recent and relevant financial experience, and that all members of the Audit Committee are independent Non-
Executive Directors with relevant financial and sectoral competence. See pages 154-155 for details of relevant experience of
Directors.
Governance (continued)
183
Committee activities
Details of the main areas of focus of the Audit Committee during the year include those summarised below:

Areas of focus |  | Strategic outcome
Corporate reporting | •Half and full year external reporting updates •Interim and preliminary results review and approval •Annual Report and consolidated financial statements, Form 20-F review and approval •Implications of group functional and presentation currency change on reporting |
Internal controls | •GAR updates •Business Integrity updates including breach and reporting update •Controls testing update and Section 404 assessment •Implications on controls environment of systems and process changes •Business transformation projects monitoring •Inventory and stock in trade monitoring controls review and enhancements |
External audit and assurance | •Report on external audit at half and full year periods •Insights and observations on reporting review •Auditor independence and non-audit work reviews •Auditor independence policy review •Review of management representation letters •Appointment of auditor and review of terms of engagement and fees •Auditor performance and effectiveness review and assessment •Commencement of auditor tender process •Audit regime reform and approach to assurance |
Risk management | •Principal and emerging risk reviews and tracking •Risk updates, including group risk footprint and risk appetite review and approvals •Business ethics and integrity, human rights, anti-counterfeit, geo- political volatility and business interruption, business transformation, stock in trade, cyber security and IT resilience, climate change and sustainability, and international taxation risk reviews |

Key |  |  |  |  |  |
Strategic outcomes |  |  |
| Efficient growth |  | Credibility and trust |  | Consistent value creation |  | Engaged people

Governance (continued)
184
Management’s report on internal control over financial reporting
Management, under the supervision of the Chief Executive and Chief Financial Officer, is responsible for establishing and maintaining
adequate internal control over the group’s financial reporting.
Diageo’s internal control over financial reporting includes policies and procedures that: pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurance that transactions
are recorded as necessary to permit the preparation of financial statements in accordance with IFRS as issued by the International
Accounting Standards Board (IASB), IFRS Accounting Standards adopted by the UK; provide reasonable assurance that receipts and
expenditures are made only in accordance with authorisation of management and the directors of the company; and provide reasonable
assurance regarding prevention or timely detection of any unauthorised acquisition, use or disposition of assets that could have a
material effect on the consolidated financial statements.
Management has assessed the effectiveness of Diageo’s internal control over financial reporting (as defined in Rules 13(a)-13(f) and
15(d)-15(f) under the United States Securities Exchange Act of 1934) based on the framework in the document ‘Internal Control –
Integrated Framework’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based
on this assessment, management concluded that, as at 30 June 2024, internal control over financial reporting was effective.
Any internal control framework, no matter how well designed, has inherent limitations, including the possibility of human error and
the circumvention or overriding of controls and procedures and may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions or because the degree of compliance with the policies or procedures may deteriorate.
PricewaterhouseCoopers LLP, an independent registered public accounting firm, who also audit the group’s consolidated financial
statements, has audited the effectiveness of the group’s internal control over financial reporting as of June 30, 2024, and has issued an
unqualified repor t thereon, which is included on pages 230 to 232 of this document.
Changes in internal control over financial reporting
During the period covered by this report, there were no changes in internal control over financial reporting that have materially
affected or are reasonably likely to materially affect the effectiveness of internal control over financial reporting.
Directors’ responsibilities in respect of the Annual Report and financial statements
The Directors are responsible for preparing the Annual Report, the information filed with the SEC on Form 20-F and the group and
parent company financial statements in accordance with applicable law and regulations.
Governance (continued)
185
Significant issues and judgements
Significant issues and judgements that were considered in respect of the 2024 financial statements are set out below. Our consideration
of issues included discussion of the key audit matters as outlined in the appendix to the independent auditors’ report.

Matter considered |  | How the Audit Committee addressed the matter
The nature and size of any one-off items impacting the quality of the earnings and cash flows. |  | The Audit Committee assessed whether the related presentation and disclosure of those items in the financial statements were appropriate based on management’s analysis, and concluded that they were.
Items that were to be presented as exceptional. Refer to note 3 of the Financial Statements. |  | The Audit Committee assessed whether the reporting of those items as exceptional, was in line with the group’s accounting policy, and that sufficient disclosure was provided in the financial statements, and concluded that they were.
Whether the carrying value of assets, in particular intangible assets, was supportable. Refer to notes 6, 9, 10 and 13 of the Financial Statements. |  | The Audit Committee reviewed the methodology applied in conducting impairment reviews and the result of management's impairment assessments that were performed during the year. The Committee was provided with information about the carrying amounts and the key assumptions incorporated in management’s estimate of discounted cash flows of significant assets that are sensitive to key assumptions. The Committee reviewed the key assumptions used in the impairment testing, including management’s cash flow forecasts, growth rates and the discount rate used in value in use calculations and agreed they were appropriate. The Committee agreed with management’s judgements and conclusions, whereby the previous impairment charge of $379 million in respect of Shui Jing Fang brand has been reversed, while Chase brand and related goodwill and fixed assets, certain brands in the US ready to drink portfolio, and some smaller other brands and investments in associates have been impaired by $170 million in the year ended 30 June 2024, out of which $155 million was reported as exceptional operating charge. The Committee agreed that the recoverable amount of the company’s other assets was in excess of their carrying value and that appropriate disclosure was provided with respect to assets impaired, and whose value is more sensitive to changes in assumptions.
The group’s more significant tax exposures and the appropriateness of any related provisions and financial statement disclosures. Refer to page 134 of 'Risk factors' and note 7 of the Financial Statements. |  | The Audit Committee agreed that disclosure of tax risk appropriately addresses the significant change in the international tax environment, and that appropriate provisions and other disclosure with respect to uncertain tax positions were reflected in the financial statements.
The appropriateness of the valuation of post-employment liabilities, and the recognition of any surplus. Refer to note 14 of the Financial Statements. |  | The measurement of post-employment liabilities is sensitive to changes in long-term interest rates, inflation and mortality assumptions. Having reviewed management’s papers setting out key changes to actuarial assumptions, the Audit Committee agreed that the assumptions used in the valuation are appropriate. The Committee reviewed management’s assessment of the economic benefit available as a refund of the surplus or as a reduction of contribution and the key judgements made in respect of the surplus restriction and concluded that those judgements were appropriate. The Committee reviewed and concluded that sufficient disclosures were provided in the financial statements.
Significant legal matters impacting the group. Refer to note 19 of the Financial Statements. |  | The Committee agreed that adequate provision and/or disclosure have been made for all material litigation and disputes, based on the current most likely outcomes, including the litigation summarised in note 19 of the Financial Statements.
Functional currency of Diageo plc and presentation currency of Diageo group. |  | The Audit Committee agreed that in line with reporting requirements the functional currency of Diageo plc has changed from sterling to US dollar which is applied prospectively from fiscal 24. This is because the group's share of net sales and expenses in the US and other countries whose currencies correlate closely with the US dollar has been increasing over the years, and that trend is expected to continue in line with the group's strategic focus. Diageo has also decided to change its presentation currency to US dollar with effect from 1 July 2023, applied retrospectively, as it believes that this change will provide better alignment of the reporting of performance with its business exposures.
Whether the Annual Report is fair, balanced and understandable. |  | The Audit Committee concluded that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company’s performance, business model and strategy and that there is an appropriate balance between statutory (GAAP) and adjusted (non-GAAP) measures.
The impact of climate change on the group’s financial reporting and financial statements. Refer to pa ges 113-131 of 'Pioneer grain-to-glass sustainability' and note 1 and note 9 of the Financial Statements. |  | The Audit Committee agreed that the disclosures on pages 113-131 made in response to the recommendations of the Task Force on Climate-related Financial Disclosures are appropriate and that the assumptions used in the financial statements are consistent with these disclosures.

Governance (continued)
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Cyber Security Risk Management
Cyber security risk management is an integral part of Diageo’s overall group risk management programme and aligned to Diageo’s risk management framework, with cyber security risk forming a central part of the principal risk ‘Cyber and IT resilience’ as set out on page 140. Our cyber security risk management programme is aligned to industry best practices and provides a framework for handling cyber security threats and incidents across the global organisation, including threats and incidents associated with the use of IT applications and services provided by IT and non-IT third parties. Our programme is designed to work across all Diageo functions, markets, and entities. This framework includes steps for assessing the severity of a cyber security threat, identifying the source of a cyber security threat including whether the cyber security threat is associated with a third-party service provider, implementing cyber security countermeasures and mitigation strategies and informing management and our Board of material cyber security threats and incidents. Our cyber security team also engages third-party security experts for industry benchmarking analysis, risk assessments and conducting system enhancements and support when necessary. Our cyber security team is responsible for assessing our cyber security risk management programme and we engage third parties for such assessments approximately every one to two years. In addition, our cyber security processes includes a training and awareness outreach programme that provides training to all employees annually and more frequent targeted training across functions, markets, and entities. The Board has overall responsibility for our risk management, including in respect of cyber security, oversight of which has been delegated to the Audit Committee. The Audit Committee is responsible for ensuring that management has processes in place designed to identify and evaluate cyber security risks to which the company is exposed and implement processes and programmes to manage cyber security risks and mitigate cyber security incidents. The Audit Committee also reports material cyber security risks to the Board. Management is responsible for identifying, considering and assessing material cyber security risks on an ongoing basis, establishing processes to ensure that such potential cyber security risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cyber security programmes. Our cyber security programmes are under the direction of our Chief Information Security Officer (CISO) who receives reports from our cyber security team and monitors the prevention, detection, mitigation, and remediation of cyber security incidents. Our CISO and dedicated personnel are certified and experienced information systems security professionals and information security managers with many years of relevant industry experience and accredited certifications. Management, including the CISO and our cyber security team, regularly update the Audit Committee on the company’s cyber security programmes, material cyber security risks and mitigation strategies and provide cyber security reports on a half-yearly basis that cover, among other topics, assessments of the company’s cyber security programmes, developments in cyber security and updates to the company’s cyber security programmes, security risk footprint with risk appetite, and mitigation strategies. During fiscal 24, we did not identify any cyber security threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cyber security threats, or provide assurances that we have not experienced an undetected cyber security incident. For more information about these risks, please see the section on ‘Our Principal Risks and Risk Management’ on pages 134-144.

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NOMINATION COMMITTEE REPORT
Building our talent for the future
Dear Shareholder
I am pleased to provide the report of the Nomination Committee for the year ended
30 June 2024.
The Nomination Committee has had an active year, discharging its responsibilities to ensure adequate succession planning for Board
appointments, including the maintenance of a pipeline of strong candidates for potential nomination to the Board, and supervising
transitions for new appointments. This year the Committee has spent significant time looking towards the future, building on strong
foundations as Diageo continues to develop and grow its business. The Committee has supervised the transition of key roles such as
the Board Chair, the Audit Committee Chair and the Chief Financial Officer.
I look forward to welcoming Julie Brown and Nik Jhangiani to the Board in the near future, thanking Alan Stewart and Lavanya
Chandrashekar for their years of service. As I will also be standing down in February 2025, being in my ninth year on the Board
following which date I will no longer be deemed to be independent under the UK Corporate Governance Code. I congratulate Sir John
Manzoni on his appointment.
This year the Committee also managed the evaluation of the effectiveness of the Board, its Committees, members and processes.
As required by the Code, the evaluation was facilitated by an
external consultancy firm which had been selected by the
Committee following a tender process. Further details, including
the review’s conclusions, recommendations and actions as agreed
by the Board, are set out on page s 171-172.
The Committee has continued to discharge its role in overseeing the company's talent planning and succession for Executive
Committee members. Sally Grimes was appointed Chief Executive Officer, Diageo North America in October 2023 and John Kennedy
was welcomed back to Diageo in January 2024 when he was appointed President, Europe.
With these Board and Executive Committee changes, I am confident that Diageo has the leadership required for it to continue its
progress towards fulfilling its growth ambition and to create value for its shareholders and other stakeholders.
Javier Ferrán
Chair of the Nomination Committee
Role and composition of the Nomination Committee
The Nomination Committee is responsible for keeping under review the composition of the Board and succession to it, reviewing
succession planning for key Executive Committee roles, and succession planning and overall talent strategy for senior leadership
positions, including in relation to ensuring and encouraging diversity in leadership positions. It makes recommendations to the Board
concerning appointments to the Board. More details on the role of the Nomination Committee are set out in its terms of reference
which are available at
https://www.diageo.com/en/our-business/corporate-governance.
The Nomination Committee comprises Javier Ferrán (Committee Chair), Melissa Bethell, Karen Blackett, Valérie Chapoulaud-
Floquet, Susan Kilsby, Sir John Manzoni, Alan Stewart and Ireena Vittal.
Succession planning
The Committee reviews the effectiveness and adequacy of succession planning processes and the succession plans for both the Board
and Executive Committee. Succession plans are tailored for key roles, based on merit and objective criteria, and designed to ensure
inclusion and diversity. Consideration is given to the length of tenure of each incumbent with the aim prospectively to anticipate
potential changes to the Board or Executive Committee and address vacancies proactively enabling smooth succession. The Board
should comprise a majority of independent Non-Executive Directors, free of conflicts of interest, and with sufficient time to discharge
their duties as Board members. The Board has a long-standing commitment to diversity, believing that a diverse Board enables a broad
range of views to be expressed, enhancing decision-making for the benefit of the long-term interests of the company and its
stakeholders. The composition and capabilities of the Board should be appropriate and reflective of Diageo’s global scale, business
and operations, its strategy, portfolio, consumer base, culture and status as a listed company. Directors should have sufficient
understanding of the company and its operations, the markets and industry in which it participates, to understand the key trends and
developments which are relevant for Diageo.
Recruitment and election procedures
The recruitment process for Non-Executive Directors includes the development of a candidate profile and the engagement of a
professional search agency specialising in the recruitment of high-calibre candidates. During the year, we have engaged executive
search companies Russell Reynolds Associates to assist with recruitment of candidates for the role of Board Chair and Egon Zehnder
to assist with recruitment of candidates for the roles of Audit Committee Chair and Chief Financial Officer. Neither of these firms
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188
have any other connection with the company except that Ireena Vittal, a Non-Executive Director, is a member of the advisory board of
Russell Reynolds Associates, although she did not hold this role at the time that Diageo engaged Russell Reynolds Associates.
In the case of Executive Director or Executive Committee appointments, an executive leadership assessment may be carried out by an
external professional agency. Reports on potential appointees are provided to the Committee, which, after careful consideration, makes
a recommendation to the Board. In determining its recommendations, the Committee has regard to a broad range of factors including
the candidate's background, skill set and experience, their ability to express independent judgement and participate across a broad
range of topics, including on sustainability and societal matters, their ability to devote sufficient time to the company and whether their
appointment would contribute towards the Board’s diversity objectives which are set out in the Board Diversity Policy. This policy,
which applies to the Board and its Committees, reflects the Board's belief that it is critical that Board membership includes a diverse
range of skills, professional and industry backgrounds, geographical experience and expertise, gender, tenure, ethnicity and diversity
of thought.
Any new Directors are appointed by the Board and, in accordance with the company’s articles of association, they must be elected at
the next AGM to continue in office. All existing Directors retire by rotation and stand for re-election every year. The company’s
policy is for all Directors to attend the AGM, either physically or by video conference as permitted by the company's articles of
association. Details of attendance of all Board and Committee meetings by Directors are set out on page 150. The 2024 AGM is
scheduled to be held on 26 September 2024.
External appointments
While the Board does not have a written policy as regards the maximum number of other appointments that Directors should have,
before recommending new appointments to the Board, the Nomination Committee considers other demands on candidates’ time. As a
general principle, the Committee takes the view that Non-Executive Directors should have no more than four, and Executive Directors
no more than one, listed mandates in addition to their role as a director of the company. However, each director's situation is
considered individually. For example, when she joins the Board, Julie Brown will not also be a member of the Remuneration
Committee or the Nomination Committee, due to her other commitments. Once appointed, any proposed additional external
appointments are also reviewed by the Nomination Committee to ensure that the additional demands on a Director’s time will not
impact on the Director’s ability to perform his or her role as a Director of the company before the additional appointment is
recommended for approval by the Board. Directors’ interests are reviewed and updated at each Board meeting. The Board has
concluded that each Non-Executive Director has sufficient time to discharge their duties as a director of the company, taking into
consideration their external appointments and commitments.
Board Chair succession
The Nomination Committee plays a key role in overseeing Board level changes, considering potential candidates and making
recommendations on appointments to the Board. During fiscal 24, Diageo announced a number of changes in Diageo's Board
membership which will take effect over the coming months including, in particular, a future change in the Board Chair.
As the current Board Chair is approaching the maximum tenure that the Code deems appropriate for a director to be considered to be
independent, during fiscal 23 the Nomination Committee commenced a succession planning process to enable a smooth transition over
a reasonable timeframe. The process was led by the Nomination Committee, chaired by the Senior Independent Director and supported
by the Chief HR Officer, with the current Board Chair and any existing Directors who were potential candidates for the role recusing
themselves from the process and from participation in discussions on Chair succession during Board and Committee sessions. Clear
criteria for successful candidates were developed which included key requirements and priorities including in respect of background and
experience, attributes and behaviour, within the context of the culture, strategy and leadership needed for the Board and company. These
were discussed and approved by the Nomination Committee and used to identify potential candidates. During the first half of fiscal 24, a
variety of candidates were considered and interviewed by members of the Nomination Committee.
In March 2024, the Nomination Committee recommended to the Board that Sir John Manzoni was the most suitable candidate to
succeed Javier Ferrán as Board Chair. The Board approved this recommendation and on 19 March 2024 announced the transition with
Javier Ferrán continuing as Chair of the Board until his retirement in February 2025, at which point Sir John will succeed him. In
addition to Sir John's long-standing experience in beverage alcohol, having served on the board of SABMiller plc for eleven years and
having been a member of the Diageo Board since 2020, he has an outstanding track record of leadership across a number of complex
and fast-changing sectors in the UK and globally.
Set out below are the principal steps taken in relation to the Board Chair succession and transition process:
During fiscal 23:
•In April 2023, the Nomination Committee authorised the Senior Independent Director to engage an external professional
executive search agency.
•Russell Reynolds Associates (which, at the time of engagement, had no connection with the company other than acting as an
executive search agency) was engaged to assist with the succession process.
•Key criteria for potential candidates, set out in a success profile, were reviewed and discussed by the Nomination Committee.
During fiscal 24:
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189
•Various external candidates were considered and shortlisted for review by members of the Nomination Committee, together
with internal candidates, as against the success profile
•The Nomination Committee recommended that the Board approve the appointment of Sir John Manzoni as Diageo's next
Chair, and the Remuneration Committee approved remuneration arrangements for the role. The Board then unanimously
approved the appointment and a regulatory announcement was released on 19 March 2024.
•Following release of the regulatory announcement, Sir John has been undertaking a transition programme to familiarise
himself with the role of Chair and to prepare for transitioning into the role in February 2025.
Activities of the Nomination Committee
The principal activities of the Nomination Committee during the year were:
•the consideration, selection and recommendation as to the appointment of and transition plan for a new Chief Financial Officer;
•the consideration, selection and recommendation as to the appointment of and transition plan for a new Chair of the Board;
•the consideration of the talent pipeline for potential new Non-Executive Directors and other appointments to the Board, including a
new Chair of the Audit Committee;
•the design and conduct of the annual review of Board, Committee and individual Director effectiveness and performance and a
review of the findings of the review and recommended actions;
•consideration and approval of the report of the Committee in the company’s Annual Report and consolidated financial statements for
the year ended 30 June 2024;
•consideration and recommendation to the Board of proposed changes in Directors’ outside interests and any potential conflicts of
interest; and
•a review of the succession plans for Executive Committee roles, including potential candidates for such roles, their backgrounds and
experience, and how such candidates would contribute towards the company's diversity objectives.
Board evaluation
As part of the annual Board evaluation, all members of the Nomination Committee participated in an evaluation of the Committee.
Feedback indicated that the Committee was effective and that Directors were satisfied with its performance, that it had managed the
Chief Executive succession during the year well and that its processes were robust, transparent and effective. Further details of the
evaluation can be found on page 171-172.
Induction and training
Our customary induction processes for newly appointed Directors include individual meetings with Executive Committee members
and other senior executives, visits to the company’s production facilities and offices including the company's head office in London
and the group's spirits production facilities, scotch brand homes, visitor centres and archives in Scotland. This is supplemented by
documents, materials and information, including corporate governance guidance materials, Diageo's Code of Business Conduct and
other relevant policy documents, historical Board and Committee papers, recent results announcements and materials, investor
relations reports, performance data and a wide range of other internal and external reports, presentations and analyses.
Induction programmes for new Directors are tailored to suit the particular background and experience of the individual Director, with
the Committee advising on priorities for that individual and tracking induction activity. These induction processes supplement existing
practices whereby a continuing understanding of the business is developed through appropriate business engagements for Non-
Executive Directors such as visits to customers, engagements with employees, and brand events worked into the annual cycle of Board
meetings. Training on specific areas of risk and detailed reviews of strategic matters are provided by Executive Committee members,
other internal senior leaders and external guest speakers and specialists through presentations, roundtable discussions and other
sessions as part of the Board’s Annual Strategy Conference and during the year as part of Board and Audit Committee meetings. In
addition, Executive Committee members and other senior executives are invited, as appropriate, to Board and strategy meetings to
make presentations on their areas of responsibility. All Directors are also provided with regular briefings to ensure they are kept up to
date on relevant legal and governance developments or changes, best practice developments and changing commercial and other risks.
Diversity
The Board has a long-standing commitment to prioritise diversity and supports the recommendations of the FTSE Women Leaders
Review (previously the Hampton-Alexander Review) on gender diversity and the Parker Review on ethnic diversity. The Board seeks
to promote inclusion and diversity by objectively considering candidates for Board and Executive Committee roles on the basis of
their skill set, experience, expertise, knowledge, gender, cultural and geographical backgrounds, ethnicity and age. The Board
Diversity Policy sets out specific objectives with parity between male and female members of the Board being the ultimate goal in
terms of gender diversity, with a commitment to have no less than 40% female representation on the Board, and having at least one
Director reflecting ethnic diversity as defined in accordance with the Parker Review. The Committee is pleased to confirm that both
these objectives have currently been met. The Board Diversity Policy also sets out the Board’s support for management’s actions to
increase the proportion of senior leadership roles held by women and by people from minority backgrounds and other under-
represented groups. As at 30 June 2024, the percentage of women on the Executive Committee and their direct reports is 47%.
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190
Board and Executive Committee reporting on gender identity or sex

| Number of Board members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) | Number in executive management | Percentage of executive management
Men | 3 | 30.0% | 1 | 7 | 54.0%
Women | 7 | 70.0% | 3 | 6 | 46.0%
Not specified/prefer not to say | — | — | — | — | —

Board and Executive Committee reporting on ethnic background

| Number of Board members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) | Number in executive management | Percentage of executive management
White British or other White (including minority-white groups) | 6 | 60.0% | 3 | 7 | 53.8%
Mixed/Multiple Ethnic Groups | — | — | — | 1 | 7.7%
Asian/Asian British | 3 | 30.0% | 1 | 3 | 23.1%
Black/African/Caribbean/Black British | 1 | 10.0% | — | 1 | 7.7%
Other ethnic group, including Arab | — | — | — | 1 | 7.7%
Not specified/prefer not to say | — | — | — | — | —

Board composition |  | Non-Executive Director tenure |  | Board gender diversity |  | Board ethnic diversity

ò | Chair |  | ò | 0 – 3 years |  | ò | Male |  | ò | Directors of colour
ò | Executive Director |  | ò | 3 – 6 years |  | ò | Female |  | ò | White European
ò | Non-Executive Director |  | ò | 6 – 9 years |  |  |  |  |  |

Executive committee nationality

ò | British |  | ò | Indian
ò | American |  | ò | Irish
ò | American/British |  | ò | South African/British
ò | Colombian |  | ò | Spanish

Board diversity data
•Directors are defined as all Non-Executive and Executive Directors appointed to the Board. Board diversity related data are
collated directly from each Director annually using a questionnaire and are given on a self-identifying basis.
•Directors of colour are defined in accordance with the Parker Review definitions as those 'who identify as or have evident
heritage from African, Asian, Middle Eastern, Central and South American regions'.
•All Board diversity data above are given as at 30 June 2024.
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191
Annual statement by the Chair of the Remuneration Committee
Dear Shareholder
I am pleased to present the Directors' remuneration report for the year ended 30 June 2024, which contains:
◦The current Directors' remuneration policy, which was approved at the AGM on 28 September 2023; and
◦The annual remuneration report, describing how the Remuneration Policy has been put into practice in 2024 and will be
implemented in 2025.
This is the first year of operation of the new remuneration policy and the new Diageo Long-Term Incentive Plan (DLTIP)
approved last year. On behalf of the Committee I would like to express my thanks to shareholders for their overwhelming support
with 95.4% of the AGM votes cast in favour of the new Policy.
CFO transition
On 3 May 2024, we announced that Lavanya Chandrashekar will step down from the role of Chief Financial Officer (CFO) in
fiscal 25 and leave Diageo, and that Nik Jhangiani will become the new CFO. Lavanya’s remuneration arrangements, which
confirm the Committee exercised its discretion to treat her as a good leaver for the purposes of incentives, are set out on page 219
and Nik’s remuneration arrangements are disclosed in the 'Looking Ahead to 2025' section of this report (page 222). In addition to
his annual remuneration, Nik will receive compensation for incentive plan awards forfeited from his previous employer. Full
details of the one-off compensation awards will be disclosed at the time they are confirmed and will be reported in next year's
report. Both sets of arrangements are in accordance with the Remuneration Policy.
Performance in year
Fiscal 24 was a challenging year for Diageo and despite macroeconomic and geopolitical headwinds, we delivered strong full-year
cash flow and improved market share. Against rapid fluctuations in our industry, we focused on the key drivers of operational
excellence, developing insights into consumers, resource allocation, routes to market and driving efficiencies in our business that
will set us up to take advantage of the next stage of growth.
During the year, the company maintained its position as a global leader in spirits and demonstrated its capabilities as one of the
world's best brand builders. Our advantaged portfolio which is balanced across geographies and price tiers enables us to both
premiumise and attract new consumers.
Organic net sales and organic operating profit declined during fiscal 24, primarily driven by our Latin American business
performance. We delivered $0.7 billion in productivity savings across all cost categories, gained or held share in over 75% of our
net sales value in measured markets and generated free cash flow of $2.6 billion.
Non-financial measures are a critical indicator for building a platform for future sustainable growth and we are pleased that we
have demonstrated progress in the measures that are aligned with our ’Spirit of Progress’ action plan. These included a greenhouse
gas emission reduction of 23.8% and water efficiency improvement of 15.6%, both compared to fiscal 20 baseline and strong
performance in the diversity of our global leadership, maintaining female representation at 44% and increasing ethnically diverse
leadership to 46%.
Incentive outcomes
Achieving our ambition to be the best performing, most trusted and respected consumer products company in the world requires the
appropriate balance of annual and long-term incentive measures and a process to ensure that targets that are set are challenging but
achievable and aligned to shareholders' interests.
In determining the annual and long-term incentive outcomes, the Committee reviews not only the outcomes against the performance
metrics in the plans, but also considers Diageo's wider business performance including market share performance, financial
performance relative to our TSR peer group, and other financial and non-financial measures. The Committee also considers the impact
on Diageo's stakeholders more broadly.
Annual incentive
The annual incentive plan (AIP) outcomes for 2024 relating to net sales value (NSV) and operating profit (OP) were below threshold
and operating cash conversion (OCC) was close to target which led to a payment of 16% of maximum on financials. Further detail is
provided on page 207. The Committee considered this outcome against the business performance and concluded that the design of the
AIP worked effectively in aligning reward and performance and the outcome was fair.
The AIP also includes individual bonus objectives (IBOs) and the outcomes for the Executive Directors are set out in more detail on
page 207. As a result of the financial and individual performance for fiscal 24, Debra Crew received 24.8% of maximum and Lavanya
Chandrashekar received 22.8% of maximum.
Long-term incentives
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In terms of the DLTIP vesting outcomes for the three-year performance period ending 30 June 2024, an exceptional level of delivery
in the early part of the three-year period resulted in an achievement of 8.7% compound annual growth in NSV and therefore a vesting
of 94% of maximum. The compound annual growth in profit before exceptional items and tax (PBET) was 6.9% which resulted in a
vesting of 24% of maximum. Free cash flow (FCF) was $9,798 million and total shareholder return (TSR) ranked 14 th in our peer
group and both were below threshold of the range.
The 2021 performance share awards also included metrics which were in support of our ’Spirit of Progress’ action plan. The four
metrics measure an increase in water efficiency, reduction in carbon emissions, promotion of positive drinking and building diversity
representation in leadership. Demanding three-year targets were established for our goals in this area and the achievement across all of
these resulted in a 46% level of vesting for these non-financial measures. The detail of the performance against these metrics is set out
on page 210 and more information on the 'Spirit of Progress' action plan is at pages 97-131.
Overall this resulted in a final vesting outcome of 58.9% of maximum for the 2021 performance share award for the CEO and 56.5%
for the CFO. The share option awards will not vest for either Director.
The Committee believes that the DLTIP drove the desired behaviours to support the company’s values and strategy and that the
Directors’ remuneration policy has operated as intended in 2024. The Committee will continue to make sure the metrics and structure
of the DLTIP are appropriate in the future as the business continues to evolve.
Looking forward to 2025
The 1 October 2024 salary increase proposed for Debra Crew is 4.25% which is slightly below the expected average salary
increase budget for the wider workforce in the United Kingdom. The salary for the newly appointed CFO will next be reviewed on
1 October 2025.
The structure and performance measures for both the annual and long-term incentives remain unchanged for fiscal 25 for
Executive Directors. The annual incentive plan will continue to include NSV, OP and OCC with relevant strategic IBOs for the
Executive Directors.
The long-term incentive plan measures continue to drive the key drivers of sustainable business performance and remain
unchanged with a combination of financial metrics (NSV and PBET growth, cumulative FCF and relative TSR) and non-financial
metrics related to our 'Spirit of Progress' action plan. The Committee set fiscal 25 financial targets by considering a number of
factors including historical performance, consumer trends amid ongoing macroeconomic challenges, market conditions and the
competitive landscape. These targets align with our focus on achieving our medium-term guidance ranges.
In summary
Diageo's resilient performance despite a challenging consumer environment is reflected in the incentive outcomes and the decisions
that the Committee has made. The outcomes are in line with the company’s philosophy of delivering competitive pay in return for high
performance against the company’s strategic objectives.
The Committee recognises that a key enabler of the strategy is the company’s ability to attract and retain diverse and engaged talent
with a focus on our culture and values. To achieve this, we must ensure that remuneration structures remain competitive at all levels.
Diageo is a global business with global and local market leading brands and we therefore compete for talent in a global marketplace.
The topic of retention of high calibre talent at all levels is one that is regularly considered by the Committee.
During 2025 Javier Ferrán will retire as Chair and we welcome Sir John Manzoni as his successor. It has been a pleasure to work with
Javier and I wish to personally thank him for his wise counsel and leadership of the Board. Alongside a new Chair, we will also see a
transition in CFO as I noted at the start of my statement, and I extend my thanks to Lavanya for her hard work and support to the
Committee and look forward to working with Nik in the coming months.
On behalf of the Committee I would like to thank all our investors, employees and stakeholders for their continued support and I ask
that shareholders vote to approve this report at the AGM on 26 September 2024.
Susan Kilsby
Non-Executive Director and Chair of the Remuneration Committee
Remuneration principles
The approach to setting executive remuneration continues to be guided by the remuneration principles set out below. The Committee
considers these principles carefully when making decisions on executive remuneration in order to strike the right balance between risk
and reward, cost and sustainability, and competitiveness and fairness.
The company has a strategy to grow and leverage its leaders globally given the international nature of the business. We also need to have
the right tools in place to source talent globally and the increasingly restrictive corporate governance environment in the United Kingdom
presents some challenges when considered against the significantly higher pay norms in the United States and other parts of the world,
particularly given the increasing international mobility of the senior talent pool.
Long-term value creation for shareholders and pay for performance remains at the heart of our remuneration policy and practices.
Attracting and nurturing a vibrant mix of international talent with a range of backgrounds, skills and capabilities enables Diageo
to grow and thrive, and ultimately to deliver our Growth Ambition. Remuneration remains a key part of attracting and retaining
the best people to lead our global business, balanced against the need to ensure our packages are appropriate and fair in the
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business and wider employee context, delivering market-competitive pay in return for high performance against the company’s
strategic objectives.

| Delivery of business strategy
Short and long-term incentive plans reward the delivery of our business strategy and Growth Ambition. Performance measures are reviewed regularly and stretching targets are set relative to the company’s growth plans and peer group forecasted performance. The Committee seeks to embed simplicity and transparency in the design and delivery of executive reward.
| Creating sustainable, long-term performance
A significant proportion of remuneration is delivered in variable pay linked to business and individual performance, focused on consistent and responsible drivers of long-term growth. Performance against targets is assessed in the context of underlying business performance and the ‘quality of earnings’.
| Winning best talent
Well designed and market-competitive total remuneration, with an appropriate balance of fixed reward and upside opportunity, allows us to attract and retain the best talent from all over the world in a competitive talent market, which is critical to our continued business success.
| Consideration of stakeholder interests
Executives are focused on creating sustainable share price growth. The requirement to build significant personal shareholdings in Diageo, and to hold shares acquired from long-term incentive awards for two years post-vesting aligns executives and shareholders. Decisions on executive remuneration are made with consideration of the interests of the wider workforce and other stakeholders, as well as the external climate.

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Remuneration at a glance
| Salary | Allowances and benefits | Annual incentive | Long-term incentives | Shareholding requirement
Purpose | •Supports the attraction and retention of the best global talent with the capability to deliver Diageo’s strategy | •Provision of market-competitive and cost-effective benefits supports attraction and retention of talent | •Incentivises delivery of Diageo’s financial and strategic targets •Provides focus on key financial metrics and the individual’s contribution to the company’s performance | •Rewards consistent long-term performance in line with Diageo’s business strategy •Provides focus on delivering superior long-term returns to shareholders | •Ensures alignment between the interests of Executive Directors and shareholders
Key features of current policy | •Normally reviewed annually on 1 October •Salaries take account of external market and internal employee context | •Provision of competitive benefits linked to local market practice •Maximum company pension contribution is 14% of salary, which is aligned to the offering for the wider workforce in the United Kingdom | •Target opportunity is 100% of salary and maximum is 200% of salary •Performance measures, weightings and stretching targets are set by the Remuneration Committee •Subject to malus and clawback provisions •Executive Directors defer a minimum of one-third of earned bonus payment into Diageo shares held for three years •Remainder paid out in cash after the end of the financial year | •Annual grant of performance shares and share options ◦CEO award up to 500% of salary ◦CFO award up to 480% of salary (% of salary for both CEO and CFO described in performance share equivalents) •Performance measures, weightings and stretching targets are set annually •Three-year performance period plus two-year retention period •Subject to malus and clawback provisions •Number of awards granted is based on a six-month average share price to 30 June preceding grant date | •Minimum shareholding requirement within five years of appointment: ◦CEO 500% of salary ◦CFO 400% of salary •Post- employment shareholding requirement for Executive Directors of 100% of the in- employment requirement (or, if lower, their actual shareholding on cessation) to be retained in full for two years after leaving the company
Planned for year ending 30 June 2025 | •4.25% salary increase for the CEO, below the annual salary budgets for the wider workforce in the United Kingdom •New CFO appointment from autumn 2024. No salary increase in fiscal 25 | •Allowances and benefits unchanged from prior year •Company pension contributions 14% of salary | •Size of annual incentive award opportunity is unchanged from prior year. For fiscal 25, measures are net sales growth, operating profit growth and operating cash conversion, 80% in total weighted equally, with remaining 20% on individual objectives | –Performance measures are net sales growth, relative TSR, cumulative free cash flow, profit before exceptional items and tax and ‘Spirit of Progress‘ measures –Size of long-term incentive award opportunity is in line with the policy | •No change to in- employment shareholding requirement •Post- employment shareholding in line with the Policy
Implementation in year ended 30 June 2024 | •4% salary increase for the CFO, slightly below the annual salary budgets for the wider workforce in the United Kingdom and the United States •No increase for the CEO in fiscal 24 following appointme nt on 8 June 2023 | •Allowances and benefits unchanged from prior year •Company pension contribution of 14% for CEO and CFO. Aligned to the UK workforce | •Payout of 16% of maximum for the financial elements of the plan •Total payout of 24.8% of maximum for the CEO and 22.8% for the CFO | •Vesting of 2021 performance shares at 58.9% of maximum for Debra Crew, and 56.5% of maximum for Lavanya Chandrashekar •The 2021 share options lapsed for both Debra Crew and Lavanya Chandrashekar | •As at 30 June 202 4, Debra Crew's shareholding was 240% of salary (she has until June 2028 to meet her requirement) •As at 30 June 202 4, Lavanya Chandrashekar's shareholding was 100% of salary (she ha d until July 2026 to meet her requirement)

Governance (continued)
195
Pay for performance at a glance
The charts below show performance outcomes against targets for the long-term and annual incentive plans. Targets under both
incentive plans are set with reference to Diageo’s strategic plan and the historical and forecasted performance of Diageo and its
peers.
Long-term incentives (for the period 1 July 2021 to 30 June 2024)

Organic net sales growth |  |  | Cumulative free cash flow
CAGR | Threshold | Midpoint | Maximum |  |  | Threshold | Midpoint | Maximum |
| 5.0% | 7.0% | 9.0% |  |  | $10,058m | $11,273m | $12,488m |
|  |  |  |  | l |  |  |  | l |  |  |  |  |  |
|  |  |  |  | Actual 8.7% |  |  | Actual $9,798m |  |  |  |

Organic profit before exceptional items and tax growth |  | Relative TSR ranking vs peer group
CAGR | Threshold | Midpoint | Maximum |  |  | Threshold | Midpoint | Maximum
| 6.5% | 10.0% | 13.5% |  |  | 9th (median) | – | 3rd (upper quintile)
|  | l |  |  |  |  |  |  | l |  |  |  |  |
|  | Actual 6.9% |  |  |  |  |  | Actual 14th |  |  |  |

ESG measure | Unit of measurement | Threshold | Midpoint | Maximum | Actual
Carbon reduction | Reduction in greenhouse gas emissions (cum%) | 19.1% | 23.1% | 27.1% | 19.6%
Water efficiency | Improvement in water efficiency (cum%) | 6.3% | 9.2% | 12.1% | 4.2%
Positive drinking | Number of people who confirmed changed attitudes on the dangers of underage drinking following participation in a Diageo supported education programme | 2.3m | 3.0m | 3.7m | 3.8m
Inclusion & diversity | % female leaders globally | 44% | 45% | 46% | 44%
| % ethnically diverse leaders globally | 39% | 40% | 41% | 46%

Annual incentive (for the period 1 July 2023 to 30 June 2024)

Net sales growth |  | Operating profit growth
Threshold | Target | Maximum |  |  | Threshold | Midpoint | Maximum |
3.1% | 6.1% | 9.1% |  |  | 1.4% | 6.4% | 11.4% |
l |  |  |  |  |  | l |  |  |  |  |
Actual -0.6% |  |  |  |  |  | Actual -4.8% |  |  |  |

Operating cash conversion |
| Threshold | Target | Maximum |
| 95% | 100% | 105% |
|  |  | l |  |  |  |
|  | Actual 99.6% |  |  |

Governance (continued)
196
Historic reward outcomes under the annual and long-term incentive plans over the past five years are shown below. Vesting
outcomes under the long-term incentive plan are shown against annualised total shareholder return for the three-year period
ended in the year of vesting (i.e. annualised TSR for the three years ended 30 June 2024 is shown against the vesting
outcome for the 2021 long-term incentive awards vesting in 2024). Outcomes against annual incentive financial measures
are shown against organic operating profit growth for each respective financial year, as disclosed in prior-year annual
reports.

5-year vesting outcomes of long-term incentives |  | 5-year history of annual incentive payouts
Executive Director vesting outcome (% of maximum) | Annualised TSR % |  | Payout (% of maximum) | Operating profit growth %

ò | Performance shares
ò | Share options
ò | Annualised total shareholder return over three-year long-term incentive performance period

ò | Annual incentive payout (financial measures excluding individual business objectives)
ò | Organic operating profit growth (% on prior year)

Governance (continued)
197
Remuneration Committee Governance
Remuneration Committee
The Remuneration Committee consists of the following independent Non-Executive Directors: Susan Kilsby, Melissa Bethell, Karen
Blackett, Valérie Chapoulaud-Floquet, Sir John Manzoni, Alan Stewart and Ireena Vittal. Susan Kilsby is the Chair of the
Remuneration Committee and also the Senior Independent Director. The Chair of the Board and the Chief Executive are invited to
attend Remuneration Committee meetings, except when their own remuneration is being discussed. The Chief Human Resources
Officer and Global Performance and Reward Director are also invited by the Remuneration Committee to provide their views and
advice. The Chief Financial Officer may also attend to provide performance context to the Committee during its discussions about
target setting and incentive outcomes. The Remuneration Committee's terms of reference are available in the corporate governance
section of the company's website and on request from the Company Secretary.
The Remuneration Committee is responsible for all executive remuneration decisions throughout the year, which includes setting
financial targets for the annual and long-term incentive plans and the outcomes under these plans. The Committee considered the
remuneration policy and practices in the context of the principles of the Corporate Governance Code, as follows:
Clarity – the Committee engages regularly with executives, shareholders and their representative bodies in order to explain the
approach to executive pay;
Simplicity – the purpose, structure and strategic alignment of each element of pay has been laid out in the remuneration policy;
Risk – there is an appropriate mix of fixed and variable pay, and financial and non-financial objectives. There are robust measures in
place to ensure alignment with long-term shareholder interests, including the DLTIP post-vesting retention period, shareholding
requirement, bonus deferral into shares and malus and clawback provisions updated for prevailing legal and regulatory requirements.
The Committee also considers the impact on behaviour of both the measures and targets set;
Predictability-the pay opportunity under different performance scenarios is set out in the approved Directors' remuneration policy
(page 136 of the 2023 UK Annual Report);
Proportionality – executives are incentivised to achieve stretching targets over annual and three-year performance periods, and the
Committee assesses performance holistically at the end of each period, taking into account underlying business performance and the
internal and external context. The Committee may exercise discretion to ensure that payouts are appropriate; and
Alignment with culture – non-financial objectives may be incentivised under the individual business objective element of the annual
incentive plan and ‘Spirit of Progress‘ (ESG) priorities are incentivised under the long-term incentive plan, which reinforces the
company’s purpose and values. The design of remuneration, and the measures used, reflect Diageo's culture.
External advisors
During the year ended 30 June 2024, the Remuneration Committee received advice on Directors' remuneration from FIT. FIT was
appointed by the Committee in October 2022 following a review of alternative providers and were selected on the basis of their
understanding of the company's culture and business and the capability of their team.
The fees paid to FIT in fiscal 24 for advice provided to the Committee were £84,671. All fees were determined on a time and expenses
basis.
The Committee is satisfied that FIT's engagement partners, and the teams that provide remuneration advice to the Committee, have no
connections with Diageo that may impair their independence. The Committee reviewed the potential for conflicts of interest and
judged that there were appropriate safeguards against such conflicts. FIT does not provide Diageo with any other services. FIT is a
founder member of the Remuneration Consultants Group (RCG) which is responsible for developing and maintaining the Code of
Conduct for Consultants to Remuneration Committees of UK listed companies. FIT attended Remuneration Committee meetings
during the year and the Committee is satisfied that the advice it has received has been objective and independent.
Governance (continued)
198
Statement of voting
The following table summarises the details of votes cast in respect of the resolutions on the Directors’ remuneration policy and the
Directors' remuneration report at the AGM on 28 September 2023. The Committee was pleased with the level of support shown for the
Directors' Remuneration Policy and Report and appreciates the active participation of shareholders and their representative bodies in
consulting on executive remuneration matters.

|  | For | Against | Total votes cast | Abstentions
Directors’ remuneration policy | Total number of votes | 1,663,080,546 | 80,098,370 | 1,743,178,916 | 1,023,145
Percentage of votes cast | 95.41% | 4.59% | 100% | n/a
Directors' remuneration report (excluding the policy) | Total number of votes | 1,640,705,024 | 77,090,228 | 1,717,795,252 | 26,428,462
Percentage of votes cast | 95.51% | 4.49% | 100% | n/a

Governance (continued)
199
Directors' remuneration policy
This section of the report sets out the details of the 2023 Directors' remuneration policy which was approved by shareholders at the AGM on 28
September 2023 and which applied from that date. The Policy Considerations section has been updated to reflect the anticipated appointment of
a new CFO in Autumn 2024, updated NED terms of appointment and employee engagement leadership.
The actual current approved policy can be found on the company’s website at https://www.diageo.com/en/our-business/corporate-
governance/remuneration-at-diageo.
As referenced in the Remuneration Committee Chair’s statement, the Committee believes the current policy continues to support the
business strategy.
The Committee reserves the right to make minor changes to the policy, where required for regulatory, tax or administrative reasons.

l | Base salary
| Purpose and link to strategy
| Supports the attraction and retention of the best global talent with the capability to deliver Diageo’s strategy and performance goals.
| Operation
| •Normally reviewed annually or following a change in responsibilities with any increases usually taking effect from 1 October. •The Remuneration Committee considers the following parameters when reviewing base salary levels: ◦Pay increases for other employees across the group. ◦Economic conditions and governance trends. ◦The individual’s performance, skills and responsibilities. ◦Base salaries (and total remuneration) at companies of similar size and international scope to Diageo, with roles typically benchmarked against the FTSE 30 excluding financial services companies, or against similar comparator groups in other locations dependent on the Executive Director’s home market as well as global consumer goods companies.
| Opportunity
| Salary increases will be made in the context of the broader employee pay environment, and will normally be in line with those made to other employees in the relevant markets in which Diageo operates, typically the United Kingdom and the United States, unless there is a change in role or responsibility or other exceptional circumstances.
l | Benefits
| Purpose and link to strategy
| Provides market-competitive and cost-effective benefits as part of remuneration packages designed to attract and retain the best global talent.
| Operation
| •The provision of benefits typically depends on the country of residence of the Executive Director and may include but is not limited to a company car or travel allowance, the provision of a contracted car service or equivalent, product allowance, life insurance, accidental death and disability insurance, medical and dental cover, tax support and tax return preparation costs. •The Remuneration Committee has discretion to offer additional allowances, or benefits, to Executive Directors, if considered appropriate and reasonable. These may include, but are not limited to, relocation expenses, housing allowance and school fees where a Director is asked to relocate from his/her home location as part of their appointment. Where appropriate, for example in relation to relocation benefits, the company may also meet the tax costs associated with the benefit provision.
| Opportunity
| •The benefits package is set at a level which the Remuneration Committee considers: ◦provides an appropriate level of benefits depending on the role and individual circumstances; ◦is appropriate in the context of the benefits offered to the wider workforce in the relevant market; and ◦is in line with comparable roles in companies of a similar size and complexity in the relevant market.
l | Post-retirement provision
| Purpose and link to strategy
| Provides competitive post-retirement benefits which are part of remuneration packages designed to attract and retain the best global talent.
| Operation
| •Provision of market-competitive pension arrangements or a cash alternative based on a percentage of base salary.
| Opportunity
| •The maximum pension contribution, or cash alternative allowance, for Executive Directors is 14% of salary. The current CEO and CFO receive a pension contribution of 14% of salary, in line with the UK workforce.

Governance (continued)
200

l | Annual Incentive Plan (AIP)
| Purpose and link to strategy
| Incentivises delivery of Diageo’s annual financial targets and the achievement of key individual objectives which are chosen to align with the business strategy and create a platform for sustainable longer-term performance. Compulsory deferral of a minimum of one-third of any annual incentive earned into shares for three years promotes longer-term alignment of Executive Directors' interests with shareholders’ interests.
| Operation
| •Performance measures, weightings and targets are set by the Remuneration Committee. Appropriately stretching targets are set by reference to the operating plan and historical and projected performance for the company and its peer group. •The level of award is determined with reference to Diageo’s overall financial and strategic performance and individual performance. •A minimum of one-third of the actual earned bonus payment is normally deferred into a share award (pre-tax deferral) or owned shares (post-tax deferral) under the Deferred Bonus Share Plan, to be held for a minimum period of three years, other than in exceptional circumstances. The remainder of the bonus payment is paid out in cash after the end of the financial year. •The Remuneration Committee has discretion to adjust the level of payment if it is not deemed to reflect appropriately the individual’s contribution or the overall business performance. Any discretionary adjustments will be detailed in the following year’s annual report on remuneration. •The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below. •In the case of pre-tax deferral, notional dividends accrue on deferred bonus share awards, delivered as shares or cash at the discretion of the Remuneration Committee at the end of the vesting period (on post-tax deferral into owned shares, actual dividends are payable).
| Opportunity
| For threshold performance, up to 50% of salary may be earned, with up to 100% of salary earned for on-target performance and a maximum of 200% of salary payable for outstanding performance. The maximum includes the deferred share element but excludes dividend equivalents payable in respect of deferred share awards.
| Performance conditions
| Annual incentive plan awards are normally based 70%-100% on financial measures which may include, but are not limited to, measures of sales, profit and cash, and 0%-30% on broader objectives based on strategic goals and/or individual contribution. The Remuneration Committee has discretion to amend the performance measures in exceptional circumstances if it considers it appropriate to do so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and explained in the following year’s annual report on remuneration.
l | Diageo Long-Term Incentive Plan (DLTIP)
| Purpose and link to strategy
| Provides a long-term incentive to achieve key performance measures which support the company’s strategy, and to align interests with shareholders.
| Operation
| •An annual grant of performance shares and/or market-price share options which vest subject to a performance test and continued employment, normally over a period of three years. •Measures and stretching targets are reviewed annually by the Remuneration Committee for each new award. •The Remuneration Committee has the authority to exercise discretion to adjust the vesting outcome based on its assessment of the overall business performance over the performance period. This may include the consideration of factors such as holistic performance relative to peers, stakeholder outcomes and significant investment projects, for example. •Following vesting, there is normally a further retention period of two years. Executive Directors are able to exercise an option or sell sufficient shares to cover any tax liability when an award vests, provided they retain the net shares arising for the two-year retention period. •Notional dividends accrue on performance share awards to the extent that the performance conditions have been met, delivered as shares or cash at the discretion of the Remuneration Committee at the end of the vesting period. •The Remuneration Committee has discretion to apply malus or clawback to bonus as detailed in the 'Malus and Clawback' section below.
| Opportunity
| •The maximum annual grants for the Chief Executive and Chief Financial Officer are 500% and 480% of salary in performance share equivalents respectively (where a market-price option is valued at one-third of a performance share). Included within that maximum, no more than 375% of salary will be awarded in face-value terms in options, with the balance awarded in performance shares, to any Executive Director in any year. •Awards vest at 20% of maximum for threshold performance and 100% of maximum if the performance conditions are met in full. The vesting schedule related to the levels of performance between threshold and maximum, including whether or not this will include an interim stretch performance level, will be determined by the Remuneration Committee on an annual basis and disclosed in the relevant remuneration report for that year. There is a ranking profile for the vesting of the part of the award based on relative total shareholder return, starting at 20% of maximum for achieving the threshold.
| Performance conditions
| The vesting of awards is linked to a range of measures which may include, but are not limited to: •a growth measure (e.g. net sales growth, operating profit growth); •a measure of efficiency (e.g. operating margin, cumulative free cash flow, return on invested capital); •a measure of Diageo’s performance in relation to its peers (e.g. relative total shareholder return); and •a measure relating to our ‘Spirit of Progress‘ (environmental, social or governance) priorities. Measures that apply to performance shares and market-price options may differ, as is the case for current awards. Weightings of these measures may also vary year-on-year. The Remuneration Committee has discretion to amend the performance conditions in exceptional circumstances if it considers it appropriate to do so, e.g. in cases of accounting policy changes, merger and acquisition activities or disposals. Any such amendments would be fully disclosed and explained in the following year’s annual report on remuneration.

Governance (continued)
201

| Malus and Clawback
| Under the AIP and DLTIP, the Remuneration Committee has discretion to apply malus and clawback in the circumstances specified in the applicable malus and clawback policy from time to time in place, for example: •Material misstatement of results or an error resulting in overpayment. •Risk failure resulting in material financial loss or any business area being the subject of a regulatory investigation or in breach of regulation. •Employee misconduct/disciplinary action. •Employee accountability for material reputational damage to the group which could have been avoided. •In respect of the application of malus, deterioration in the financial situation of the group which limits the ability to fund incentive awards. •Any other matter which, in the reasonable opinion of the Remuneration Committee, is required to be considered to comply with prevailing legal and/or regulatory requirements. The malus and clawback provisions may be invoked for one year following an AIP cash payment and two years following a DLTIP vesting. Where the Remuneration Committee determines that malus and/or clawback will apply, the Remuneration Committee has discretion to determine the basis of application and the means by which malus and/or clawback will be implemented. The malus and clawback policy will be reviewed from time to time to ensure that the policy is compliant with any regulatory requirements, such as the NYSE listing rules.

l | All-employee share plans
| Purpose and link to strategy
| To encourage broader employee share ownership through locally approved plans.
| Operation
| •The company operates tax-efficient all-employee share acquisition plans in various jurisdictions. •Executive Directors’ eligibility may depend on their country of residence, tax status and employment company.
| Opportunity
| •Limits for all-employee share plans are set by the tax authorities. The company may choose to set its own lower limits.
| Performance conditions
| •Under the UK Share Incentive Plan, the annual award of Freeshares may be based on Diageo plc financial measures which may include, but are not limited to, measures of sales, profit and cash.
l | Shareholding requirement
| Purpose and link to strategy
| •Ensures alignment between the interests of Executive Directors and shareholders.
| Operation
| •The minimum in-employment shareholding requirement is 500% of base salary for the Chief Executive and 400% of base salary for any other Executive Directors. •Executive Directors are normally expected to build up their in-employment shareholding within five years of their appointment to the Board. •Shares that count towards these minimum shareholding requirements are shares beneficially held by the Executive Director and their connected persons, including Deferred Bonus Share Plan (DBSP) shares within the three-year deferral period, on a net (if post-tax deferral)/notional net (if pre-tax deferral) of tax basis. •Executive Directors are restricted from selling more than 50% of shares which vest under the long-term incentive plan or deferred bonus share plan (excluding the sale of shares to cover tax on vesting and other exceptional circumstances to be specifically approved by the Chief Executive and/or Chair), until the shareholding requirement is met. •In order to provide further long-term alignment with shareholders, Executive Directors will normally be expected to maintain a Diageo shareholding of 100% of the in-employment shareholding requirement (or, if lower, their actual shareholding on cessation) for two years after leaving the company. •The Executive Directors enter into a deed undertaking to comply with the requirement and committing to hold the required number of shares in a specified nominee account.
l | Chair of the Board and Non-Executive Directors' fees
| Purpose and link to strategy
| •Supports the attraction and retention of world-class talent and reflects the value of the individual, their skills and experience.
| Operation
| •Fees for the Chairman and Non-Executive Directors are normally reviewed every year. •A proportion of the Chairman’s annual fee may be used for the monthly purchase of Diageo ordinary shares, which have to be retained until the Chairman retires from the company or ceases to be a Director. •Fees are reviewed in light of market practice in the FTSE 30, excluding financial services companies, and anticipated workload, tasks and potential liabilities. •The Chairman and Non-Executive Directors do not participate in any of the company’s incentive plans nor do they receive pension contributions or benefits. Their travel and accommodation expenses in connection with attendance at Board meetings (and any tax thereon) are paid by the company. •The Chairman and the Non-Executive Directors are eligible to receive a product allowance or cash equivalent at the same level as the Executive Directors. •All Non-Executive Directors have letters of appointment. A summary of their terms and conditions of appointment is available at www.diageo.com. The Chairman of the Board, Javier Ferrán, was re-appointed on 6 October 2022 for a three-year term, terminable on three months’ notice by either party or, if terminated by the company, by payment of three months’ fees in lieu of notice.
| Opportunity
| •Fees for Non-Executive Directors are within the limits set by the shareholders from time to time, with an aggregate limit of £1,750,000, excluding the Chair’s fees.

Governance (continued)
202
Policy considerations
Performance measures
Further details of the performance measures under the fiscal 25 annual incentive plan and measures and targets for DLTIP awards to
be made in September 2024, are set out in the annual report on remuneration, on pag e 222.
Annual incentive targets will be disclosed retrospectively in next year’s annual report on remuneration as they are deemed by the Board to
be commercially sensitive until after the end of the fiscal year.
Performance targets are set to be stretching yet achievable, and take into account the company’s strategic priorities and business
environment. The Remuneration Committee sets targets based on a range of reference points, including the corporate strategy and
broker forecasts for both Diageo and its peers.
Approach to recruitment remuneration
Diageo is a global organisation selling its products in nearly 180 countries around the world. The ability to recruit and retain the best
talent from all over the world is critical to the future success of the business. People diversity in all its forms is a core element of
Diageo’s global talent strategy and, managed effectively, is a key driver in delivering Diageo’s Growth Ambition.
The Remuneration Committee’s overarching principle for recruitment remuneration is to pay no more than is necessary to attract an
Executive Director of the calibre required to shape and deliver Diageo’s business strategy, recognising that Diageo competes for talent
in a global marketplace. The Committee will seek to align any remuneration package with Diageo’s remuneration policy, but retains
the discretion to offer a remuneration package which is necessary to meet the individual circumstances of the recruited Executive
Director and to enable the hiring of an individual with the necessary skills and expertise. However, the maximum short-term and long-
term incentive opportunity will follow the policy, although awards may be granted with different performance measures and targets in
the first year. On appointment of an external Executive Director, the Committee may decide to compensate for variable remuneration
elements the individual forfeits when leaving their current employer. In doing so, the Committee will ensure that any such
compensation would have a fair value no higher than that of the awards forfeited, and would generally be determined on a comparable
basis taking into account factors including the form in which the awards were granted, performance conditions attached, the
probability of the awards vesting (e.g. past, current and likely future performance), as well as the vesting schedules. Depending on
individual circumstances at the time, the Committee has the discretion to determine the type of award (i.e. cash, shares or options),
holding period and whether or not performance conditions would apply.
Any such award would be fully disclosed and explained in the following year’s annual report on remuneration. When exercising its
discretion in establishing the reward package for a new Executive Director, the Committee will carefully consider the balance between
the need to secure an individual in the best interests of the company against the concerns of investors about the quantum of
remuneration and, if considered appropriate at the time, will consult with the company’s biggest shareholders. The Remuneration
Committee will provide timely disclosure of the reward package of any new Executive Director.
Governance (continued)
203
Service contracts and policy on payment for loss of office (including takeover provisions)
Executive Directors have rolling service contracts, details of which are set out below. These are available for inspection at the
company’s registered office.

Executive Director | Date of service contract
Debra Crew | 28 March 2023
Lavanya Chandrashekar | 13 January 2021

Notice period | The contracts provide for a period of six months’ notice by the Executive Director or 12 months’ notice by the company, the same as would apply for any newly-appointed Executive Director. A payment may be made in lieu of notice consisting of a sum equivalent to the base salary which the Executive Director would have received for any notice period outstanding on the date employment ends and the cost to the company of providing contractual benefits for this period (including pension contributions but excluding incentive plans). If, on the termination date, the Executive Director has exceeded their accrued holiday entitlement, the value of such excess may be deducted by the company from any sums due to them. If the Executive Director, on the termination date, has accrued but untaken holiday entitlement, the company will, at its discretion, either require the Executive Director to take such unused holiday during any notice period or make a payment to them in lieu of it, provided that if the employment is terminated for cause then the Executive Director will not be entitled to any such payment.
Mitigation | The Remuneration Committee requires (or may exercise its discretion to require) a proportion of the termination payment to be paid in instalments and, upon the Executive Director commencing new employment, to be subject to mitigation.
Annual Incentive Plan (AIP) | Where the Executive Director leaves for reasons including retirement, death in service, disability, ill-health, injury, redundancy, transfer out of the group and other circumstances at the Remuneration Committee’s discretion during the financial year, the Executive Director is usually entitled to an incentive payment pro-rated for the period of service during the performance period, which is typically payable at the usual payment date unless the Committee decides otherwise. Where the Executive Director leaves for any other reason, no payment or bonus deferral will be made. The amount is subject to performance measures being met and is at the discretion of the Committee. The Committee has discretion to determine an earlier payment date, for example, on death in service. The bonus may, if the Committee decides, be paid wholly in cash.
2020 Deferred Bonus Share Plan (DBSP) | Where the Executive Director leaves for any reason other than dismissal, they are entitled to retain any deferred bonus shares, which vest in full on departure, subject to any holding requirements under the post-employment shareholding policy. It is not considered necessary for the bonus deferral to continue to apply after leaving, since the bonus is already earned based on performance, and there is a post-employment shareholding requirement that ensures the Executive Director continues to be invested in the company’s longer-term interests. On a takeover, awards vest in full. On other corporate events, the Remuneration Committee may allow awards to vest in full.
Diageo Long-Term Incentive Plan (DLTIP) | Where the Executive Director leaves for reasons including retirement, death in service, disability, ill-health, injury, redundancy, transfer out of the group and other circumstances at the Remuneration Committee’s discretion during the financial year, awards continue in effect. Awards will vest on the original vesting date with the exception of death in service, when awards will vest on the date of death, in each case unless the Remuneration Committee decides otherwise. When an Executive Director leaves for any other reason, all unvested awards generally lapse immediately. The applicable retention period for vested awards continues for all leavers (other than in cases of disability, ill-health or death in service, where the retention period will end on the date of death or leaving employment), unless the Remuneration Committee decides otherwise. Where awards were granted in the form of options, on vesting they are generally exercisable for 12 months (or six months for approved options). The proportion of the award released depends on the extent to which the performance condition is met. The number of shares is reduced on a pro-rata basis reflecting the length of time the Executive Director was employed by the company during the performance period, unless the Remuneration Committee decides otherwise (for example, in the case of death in service). Where an Executive Director leaves within one month of the normal vesting date of the award, awards are not time pro-rated, unless the Remuneration Committee decides otherwise. On a takeover or other corporate event, awards vest subject to the extent to which the performance conditions are met and, unless the Remuneration Committee decides otherwise, the awards are time pro-rated. Otherwise the Committee, in agreement with the new company, may decide that awards should be swapped for awards over shares in the new company.
Repatriation/other | In cases where an Executive Director was recruited from outside the United Kingdom and has been relocated to the United Kingdom as part of their appointment, the company may pay reasonable repatriation costs for leavers at the Remuneration Committee’s discretion. The company may also pay for reasonable costs in relation to the termination, for example, tax, legal and outplacement support, where appropriate.

Governance (continued)
204
Non-Executive Directors’ unexpired terms of appointment
All Non-Executive Directors are on three-year terms which are expected to be extended up to a total of nine years. The date of initial
appointment to the Board and the point at which the current letter of appointment expires for Non-Executive Directors are shown in
the table below.

Non-Executive Directors | Date of appointment to the Board | Current letter of appointment expires
Javier Ferrán | 22 July 2016 | AGM 2025
Susan Kilsby | 4 April 2018 | AGM 2024
Melissa Bethell | 30 June 2020 | AGM 2026
Karen Blackett | 1 June 2022 | AGM 2025
Valérie Chapoulaud-Floquet | 1 January 2021 | AGM 2024
Sir John Manzoni | 1 October 2020 | AGM 2026
Alan Stewart | 1 September 2014 | AGM 2024
Ireena Vittal | 2 October 2020 | AGM 2026

Payments under previous policies
The Committee reserves the right to make any remuneration payments and payments for loss of office, notwithstanding that they are
not in line with the policy set out above, where the terms of the payment were agreed (i) under a previous policy, in which case the
provision of that policy shall continue to apply until such payments have been made; (ii) before the policy or the relevant legislation
came into effect; or (iii) at a time when the relevant individual was not a director of the company and, in the opinion of the Committee,
the payment was not in consideration for the individual becoming a director of the company.
Approach to stakeholder engagement
Shareholder engagement
The Committee is interested in the views of investors and maintains an ongoing dialogue with a broad group of shareholders and
institutional advisors on remuneration matters. In advance of finalising our proposed policy that was approved at the 2023 AGM, the
Chair of the Remuneration Committee consulted with the company's largest shareholders and their representatives about the policy
and the implementation plan for fiscal 24. The responses received from shareholders were supportive of the proposed change to
enhance the post-cessation shareholding requirement, as well as the planned implementation for fiscal 24.
Employee engagement on executive remuneration
Karen Blackett took over accountability for global workforce engagement sessions during the year and there were focus group
sessions led by her and other Non-Executive Directors. As part of this engagement, there was a session where the Remuneration
Committee Chair shared information with employees about executive remuneration, including the Directors' remuneration policy, the
role of the Remuneration Committee, executive remuneration principles and structure and how executive pay aligns with pay for the
wider workforce. This is the first year of undertaking the engagement on remuneration in this format and it was found to be productive
and informative by the Committee Chair and the participating employees.
Diageo also runs annual employee engagement surveys, which gives employees the opportunity to provide feedback and express their
views on a variety of topics, including remuneration. Any comments relating to Executive Directors' remuneration are fed back to the
Remuneration Committee.
These activities ensure that shareholder views and interests, as well as the all-employee reward context at Diageo, are considered when
making executive remuneration decisions.
Consideration of wider workforce remuneration
When reviewing Executive Directors’ salaries, the Committee takes into account the company’s salary budgets for key geographies
and, each year, the Committee has a session reviewing various aspects of workforce remuneration to deepen its understanding of
employee pay arrangements. There is clear alignment in the approach to pay for executives and the wider workforce in the way that
remuneration principles are followed, as well as the mechanics of the salary review process and incentive plan design, which are
broadly consistent throughout the organisation. The performance measures under the annual incentive plan and long-term incentive
plan are the same for executives and other eligible employees. The key differences are that a larger percentage of Executive Directors'
remuneration is performance related than that of other employees and salary, benefits and incentive participation levels vary according
to role, seniority and business priorities.
When reviewing the Directors’ remuneration policy, the Committee considered the remuneration arrangements for the workforce
globally, as well as market practice in the FTSE 30 (excluding financial services) and Diageo’s global consumer peer group. Given the
minimal changes proposed for the 2023 Directors’ remuneration policy, employees were not specifically consulted on this.
Governance (continued)
205
Annual report on remuneration
The following section provides details of how the company’s 2023 remuneration policy was implemented during the year ended 30
June 2024, and how the Remuneration Committee intends to implement the proposed remuneration policy in the year ending 30 June
2025.
Single total figure of remuneration for Executive Directors
The table below details the Executive Directors’ remuneration for the year ended 30 June 2024.

| Debra Crew(1)(8) | Lavanya Chandrashekar(1) |  |  |  |
| 2024 | 2024 | 2023 | 2023 | 2024 | 2024 | 2023 | 2023 |  |  |  |
£ '000 | $ '000 | £ '000 | $ '000 | £ '000 | $ '000 | £ '000 | $ '000 |  |  |  |
Fixed pay |  |  |  |  |  |  |  |  |  |  |  |
Salary | £1,392 | $1,750 | £105 | $126 | £823 | $1,034 | £831 | $997 |  |  |  |
Benefits (2) | £112 | $140 | £4 | $5 | £37 | $47 | £53 | $63 |  |  |  |
Pension(3) | £193 | $242 | £10 | $13 | £112 | $140 | £110 | $133 |  |  |  |
Total fixed pay(7) | £1,696 | $2,132 | £120 | $145 | £972 | $1,221 | £993 | $1,193 |  |  |  |
Performance related pay |  |  |  |  |  |  |  |  |  |  |  |
Annual incentive(4) | £690 | $868 | £79 | $95 | £379 | $476 | £603 | $723 |  |  |  |
Long-term incentives(5) | £678 | $852 | £166 | $199 | £1,350 | $1,697 | £258 | $309 |  |  |  |
Other incentives (6) | £3 | $4 | — | — | £4 | $5 | £3 | $4 |  |  |  |
Total variable pay(7) | £1,371 | $1,724 | £245 | $294 | £1,732 | $2,178 | £864 | $1,037 |  |  |  |
Total single figure of remuneration(7) | £3,067 | $3,856 | £365 | $439 | £2,704 | $3,399 | £1,857 | $2,230 |  |  |  |

(1) | Exchange rate | The amounts shown in US dollars are converted to sterling using the cumulative weighted average exchange rate for the respective financial year. For the year ended 30 June 2024, the exchange rate was £1 = $1.26 and for the year ended 30 June 2023 it was £1 = $1.20. Debra Crew and Lavanya Chandrashekar are paid in US dollars. |
(2) | Benefits | The benefits numbers include the gross value of all taxable benefits. For Debra Crew, these include flexible benefits allowance ($22.1k), tax return preparation ($19.2k), contracted car service ($58.7k), medical and dental ($22.2k), product allowance and life and long-term disability cover. Lavanya Chandrashekar's benefits include flexible benefits allowance ($23.8k), travel allowance ($13.5k), product allowance and life and long-term disability cover. |
(3) | Pension | Pension benefits reflect the increase in the pension fund balances over the year in the Diageo North America Inc. pension plans which are over and above the increase due to inflation. Debra Crew started to accrue benefits in the Supplemental Executive Retirement Plan (SERP) from 1 October 2022. Lavanya Chandrashekar started accruing benefits in the SERP from 1 July 2021. The company pension contribution has been 14% of salary from 1 January 2023 for all Executive Directors, aligned to the rate for the UK workforce. | Page 211
(4) | Annual incentive | The performance achieved under the fiscal 24 annual incentive plan resulted in an outcome of 16.0% of maximum for the financial elements of the plan. Financial elements represented 80% of the maximum incentive opportunity. Taking account of performance against Individual Business Objectives (IBOs), which represent 20% of the maximum opportunity, the annual incentive payout is 24.8% of maximum for Debra Crew and 22.8% of maximum for Lavanya Chandrashekar. In accordance with their elections to defer post-tax, one-third of the annual incentive for fiscal 24 shown in the table above for Debra Crew and Lavanya Chandrashekar will be deferred into owned shares which are held for three years in a nominee account. | Page 207
(5) | Long-term incentives | Long-term incentives represent the estimated gain (based on the average three-month ADR price to 30 June 2024 of $137.77) delivered through share options and performance shares where performance conditions have been met in the respective financial year. It also includes the value of additional shares earned in lieu of dividends on these vested performance shares. For Debra Crew, the 2021 performance shares and share options were granted before she became an Executive Director, and due to a slightly different vesting schedule for awards granted below the Board, vested at 58.9% and 0.0% of maximum respectively. The long-term incentive value reflects the proportion of the three-year period in which she was appointed as CEO. Lavanya Chandrashekar's 2021 performance shares and share options were granted after she became an Executive Director and vested at 56.5% and 0.0% of maximum respectively. Of the 2024 long term incentive amounts shown in the table above none are related to share price appreciation over the fiscal 22 to fiscal 24 performance period. For fiscal 23, long-term incentives comprise performance shares and share options awarded in 2020 that vested in September 2023 at 98.8% and 77.5% of maximum respectively for Debra Crew and Lavanya Chandrashekar, including dividend equivalents on performance shares. These 2020 long-term incentive amounts have been restated to reflect the ADR share price on the vesting date of $160.19 instead of the average three-month ADR share price used in last year’s report of $178.52. | Page 209
(6) | Other incentives | Other incentives include the grant face value of awards made under the all-employee share plans. Awards do not have performance conditions attached. |
(7) | Totals | Some figures and sub-totals add up to slightly different amounts than the totals due to rounding. |
(8) | Other | The 2023 figures shown for Debra Crew are in respect of the period from 5 June 2023 to 30 June 2023; following her appointment as interim CEO on 5 June 2023 and CEO and Executive Director on 8 June 2023. |

Governance (continued)
206
Looking back on 2024

Annual incentive plan (AIP) payouts for 2024

AIP payout for the year ended 30 June 2024
AIP payouts for the Executive Directors serving during the year are based 80% on performance against the group financial measures and 20%
on performance against Individual Business Objectives (IBOs), as assessed by the Remuneration Committee and summarised in the table
below.

Group financial measures(1) |  |  |  |  |  |
Measure | Weighting | Threshold | Target | Maximum | Actual | Payout (% of total AIP opportunity)
Payout opportunity (% maximum) |  | 25% | 50% | 100% |  |
Net sales value (% growth)(2) | 26.7% | 3.1% | 6.1% | 9.1% | (0.6)% | —
Operating profit (% growth)(2) | 26.7% | 1.4% | 6.4% | 11.4% | (4.8)% | —
Operating cash conversion(3) | 26.7% | 95.0% | 100.0% | 105.0% | 99.6% | 12.80%
Full year performance for 1 July 2023 - 30 June 2024 | 80.0% |  |  |  |  | 12.80%

Individual business objectives |  |  |
Measure (IBOs equally weighted) and target | Weighting | Result | Payout (% of total AIP opportunity)
Debra Crew Chief Executive | 20.00% |  | 12.00%
Global market share performance Grow or hold total trade market share in 2/3rds of total net sales in measured markets | 10.00% | We gained or held total trade market share in markets that total 75% of our net sales in fiscal 24(6) | 5.00%
Productivity improvement Deliver an overall productivity improvement in fiscal 24 of $505m across all cost categories | 10.00% | The productivity target for fiscal 24 has been exceeded as set out below: By the end of fiscal 24, we delivered $698m in productivity savings across all cost categories including supply, marketing and indirect overheads | 7.00%
Lavanya Chandrashekar Chief Financial Officer | 20.00% |  | 10.00%
Productivity improvement Deliver an overall productivity improvement in fiscal 24 of $505m across all cost categories | 10.00% | The productivity target for fiscal 24 has been exceeded as set out below: By the end of fiscal 24, we delivered $698m in productivity savings across all cost categories including supply, marketing and indirect overheads | 7.00%
Finance transformation Implement actions to continue the improvement of financial forecasting and sustainable cash management Deliver the agreed project milestones for the finance technology roll out within budget Implement the new functional and presentational currency into all areas of management and reporting | 10.00% | A summary of performance against the finance transformation milestones for fiscal 24 is as follows: Automated forecasting models built internally, rolled out and subject to further embedding Key actions completed to support the delivery of strong cash performance Initial stage of a significant programme of global technology change underway Go live of required changes to functional currency in over 50 systems, restructuring of FX hedges and completion of reporting cycles | 3.00%

Governance (continued)
207

Payout |
| Group (weighted 80%) | IBO (weighted 20%) | Total (% max) | Total (% annual salary) | Total (’000) USD
Debra Crew(4),(5) | 12.80% | 12.00% | 24.80% | 49.60% | $868
Lavanya Chandrashekar(4),(5) | 12.80% | 10.00% | 22.80% | 45.60% | $476

(1) Performance against the AIP measures is calculated using 2024 budgeted exchange rates and is measured on a currency-neutral basis.
(2) F or AIP purposes, net sales value (NSV) growth and operating profit (OP) growth are calculated on budgeted currency exchange rates, after adjustments for
acquisitions and disposals and incorporates the organic treatment of hyperinflationary economies.
(3) For AIP purposes, operating cash conversion (OCC) is calculated by dividing cash generated from operations excluding cash inflows/outflows in respect of
exceptional items, dividends, maturing inventories and post-employment payments in excess of the amount charged to operating profit by operating profit before
depreciation, amortisation, impairment and exceptional items. The measure incorporates the organic treatment of hyperinflationary economies. The ratio is stated at
the budgeted exchange rate for the year.
(4) AIP payments are calculated using base salary as at 30 June 2024, in line with the global policy that applies to other employees across the company.
(5) In accordance with the 2023 remuneration policy and their individual elections to defer post tax, one-third of Debra Crew's and Lavanya Chandrashekar's after tax
AIP payout disclosed in the table above will be deferred into Diageo shares, which will be held for three years in a nominee account. These shares will be acquired
in September 2024 and the number of shares will be disclosed in the 2025 remuneration report.
(6) Market share reflects internal estimates incorporating Nielsen, Association of Canadian Distillers, CGA, Dichter and Neira, Frontline, Intage, IRI, ISCAM,
NABCA, Scentia, State Monopolies, TRAC, Ipsos and other third-party providers.
(7)No discretion was exercised by the Remuneration Committee in determining the AIP outcome.
Governance (continued)
208

Long-term incentive plans (LTIPs) vesting in 2024

L ong-term incentive awards up to and including September 2023 were made under the Diageo Long-Term Incentive Plan (DLTIP),
which was approved by shareholders at the AGM in September 2014. Awards are designed to incentivise Executive Directors and
senior managers to deliver long-term sustainable performance and are subject to performance conditions measured over a three-year
period. Awards are granted on an annual basis in both performance shares and share options. Awards granted to Executive Directors
vest at 20% of maximum for threshold performance, and 100% of the award will vest if the performance conditions are met in full,
with a straight-line payout between threshold and maximum.
Share options – granted in September 2021, vesting in September 2024
I n September 2021, Debra Crew (although not an Executive Director at the time of grant) and Lavanya Chandrashekar received share
option awards over ADRs under the DLTIP, with an exercise price of $194.75. The award was subject to a performance condition
assessed over a three-year period based on the achievement of the following equally weighted performance measures:
•Relative total shareholder return (TSR) ranked against the TSR of a peer group of international drinks and consumer goods
companies; and
•Cumulative free cash flow (FCF)
The vesting profile for grants to Executive Directors for relative TSR is shown below:

TSR ranking (out of 17) | Vesting (% max) |  | TSR ranking (out of 17) | Vesting (% max) |  | TSR peer group (16 companies) |
1st, 2nd or 3rd | 100 |  | 7th | 55 |  | AB InBev | Heineken | Pernod Ricard
4th | 95 |  | 8th | 45 |  | Brown-Forman | Kimberly-Clark | Procter & Gamble
5th | 75 |  | 9th | 20 |  | Carlsberg | L'Oréal | Reckitt Benckiser
6th | 65 |  | 10th or below | 0 |  | The Coca-Cola Company | Mondelēz International | Unilever
|  |  |  |  |  | Colgate-Palmolive | Nestlé |
|  |  |  |  |  | Groupe Danone | PepsiCo |

Performance shares – awarded in September 2021, vesting in September 2024
I n September 2021, Debra Crew (although not Executive Director at the time of grant) and Lavanya Chandrashekar received
performance share awards under the DLTIP. Awards vest after a three-year period subject to the achievement of three performance
conditions outlined below:
•Organic net sales value (NSV) growth (weighted 40%);
•Profit before exceptional items and tax (PBET) growth (weighted 40%); and
•ESG measures (water efficiency, carbon reduction, positive drinking, and diversity & inclusion) weighted 20%.
Notional dividends accrue on awards and are paid out either in cash or shares on the number of shares which vest.
Governance (continued)
209
Vesting outcome for 2021 performance share and share option awards in September 2024
T he 2021 performance share award vested at 58.9% of maximum for Debra Crew and 56.5% of maximum for Lavanya
Chandrashekar. The 2021 share options lapsed having not met the threshold performance metric as detailed below:

Vesting of 2021 DLTIP(5) | Weighting | Threshold | Midpoint | Maximum | Actual | Debra Crew vesting (% maximum)(5)(6) | Lavanya Chandrashekar vesting (% maximum)(5)(6)
Vesting if performance achieved (% maximum)(6) |  | 20%/25% | 60%/62.5% | 100% |  |  |
Organic net sales value growth (NSV)(1) | 40.0% | 5.0% | 7.0% | 9.0% | 8.7% | 37.8% | 37.6%
Profit before exceptional items and tax (PBET) growth(2) | 40.0% | 6.5% | 10.0% | 13.5% | 6.9% | 11.7% | 9.8%
Carbon reduction (ESG) | 5.0% | 19.1% | 23.1% | 27.1% | 19.6% | 1.5% | 1.3%
Water efficiency (ESG) | 5.0% | 6.3% | 9.2% | 12.1% | 4.2% | — | —
Positive drinking (ESG) | 5.0% | 2.3m | 3.0m | 3.7m | 3.8m | 5.0% | 5.0%
Inclusion & diversity - % female leaders globally (ESG) | 2.5% | 44.0% | 45.0% | 46.0% | 44.0% | 0.6% | 0.5%
Inclusion & diversity - % ethnically diverse leaders globally (ESG) | 2.5% | 39.0% | 40.0% | 41.0% | 46.0% | 2.5% | 2.5%
Vesting of performance shares (% maximum) |  |  |  |  |  | 58.9% | 56.5%
Cumulative free cash flow (FCF)(3) | 50.0% | $10,058m | $11,273m | $12,488m | $9,798m | — | —
Relative total shareholder return(4) | 50.0% | 9th | — | 3rd | 14th | — | —
Vesting of share options (% maximum) |  |  |  |  |  | — | —

(1)NSV growth is calculated at budgeted currency exchange rates, after adjustments for acquisitions and disposals and incorporates the organic treatment of
hyperinflationary economies.
(2) PBET growth is presented on a constant currency basis and it excludes the impact of acquisitions and disposals. The impact of hyperinflation on operating profit is
considered under the same organic methodology as for net sales while the impact on other lines (primarily on finance charges) is excluded. This metric also
includes adjustment to exclude the fair value remeasurement of contingent considerations, earn out arrangements and biological assets and to exclude post-
employment credits. Furthermore, the metric excluded the interest on current year’s share repurchase program (SRP) and excludes the year-over-year change of
M&A related interest.
(3)Cumulative FCF is based on the outcome for each of the three years within the performance period, measured before exceptional items and on an FX neutral basis
by adjusting actual outcomes back to the base year exchange rates, and incorporates the organic treatment of hyperinflationary economies. Furthermore, the cash
flow impact of any material business development activities such as share repurchase programmes, acquisitions and disposals, which were not known and planned
at the beginning of the vesting period, are excluded from the three-year performance. Note that FCF has been restated in USD following the change in functional
currency.
(4)Relative total shareholder return (TSR) is measured as the percentage growth in Diageo’s share price (assuming all dividends and capital distributions are re-
invested) compared to the TSR of a peer group of 16 international drinks and consumer goods companies. TSR calculations are based on an averaging period of six
months and converted to a common currency (US dollars). Calculation is performed and provided by FIT.
(5) No discretion was exercised by the Remuneration Committee in determining the long-term incentive outcomes.
(6)At the time of grant of the 2021 awards, Debra Crew was not an Executive Director. The vesting schedule for awards granted to executives below the Board has a
threshold vesting of 25% of maximum (62.5% at midpoint). Vesting at threshold for awards granted to Executive Directors is 20% of maximum (60.0% at
midpoint).
Governance (continued)
210
Summary of performance share awards and options vesting

| Award | Award Date | Awarded (ADRs) | Vesting (% Max) | Vesting (ADRs) | Option price | ADR price | Dividend equivalent share | Estimated value ($'000)(1)
Debra Crew (2) | Performance Shares | 03/09/2021 | 9663 | 58.9% | 5,691 |  | $137.77 | 494 | $852
| Share Options | 03/09/2021 | 9663 | — | — | $194.75 | $137.77 | — | —
Lavanya Chandrashekar | Performance Shares | 03/09/2021 | 20,060 | 56.5% | 11,333 |  | $137.77 | 985 | $1,697
| Share Options | 03/09/2021 | 20,060 | — | — | $194.75 | $137.77 | — | —

1) The total long-term incentives value shown in the single figure of remuneration on page 206 is the total of performance shares and share options in the table above and is based on an
average ADR price for the last three months of the fiscal year ($137.77).
(2) The number of ADRs and the resulting value of performance share awards and options relating to Debra Crew in the table above are pro-rata figures that reflect the proportion of the
three-year performance period in which she was appointed as Chief Executive Officer. The original number of Performance Shares and Share Options awarded is shown on page 213. The
total number of Performance Shares awarded was 27,019 and 15,914 vested in total of which 5,691 is shown above. The total value of the vested award, including dividend equivalent
shares (17,297 ADRs) is $2,383,007. No share options vested.
The Committee considered Diageo’s overall business performance and value created for shareholders over the period and determined
that the outcomes were fair and appropriate; consequently no adjustment to the vesting outcomes were made. It also considered the
level of difficulty of the targets and determined that the vesting outcome was consistent with Diageo's long-term performance and
returns to shareholders. No share options were exercised by any Director during the year ended 30 June 2024.
Pensions and benefits in the year ended 30 June 2024
Benefits provisions for the Executive Directors are in accordance with the information set out in the Directors’ remuneration policy.
Pension arrangements
Debra Crew and Lavanya Chandrashekar are members of the Diageo North America Inc. Supplemental Executive Retirement Plan
(SERP) with an accrual rate of 14% of base salary during the year ended 30 June 2024. The SERP is an unfunded, non-qualified
supplemental retirement programme. Under the plan, accrued company contributions are subject to quarterly interest credits. Under
the rules of the SERP, they can withdraw the balance of the plan six months after leaving service or age 55, if later and the balance
may be withdrawn in either a lump sum or five equal annual instalments, depending on the size of the balance.
Debra Crew and Lavanya Chandrashekar participated in the US Cash Balance Plan and the Benefit Supplemental Plan (BSP), until 30
September 2022 and June 2021 respectively, and have accrued benefits under both plans. The Cash Balance Plan is a qualified funded
pension arrangement. Employer contributions were 10% of pay capped at the Internal Revenue Service (IRS) limit. The BSP is a non-
qualified unfunded arrangement; notional employer contributions were 10% of pay above the IRS limit. Interest (notional for the BSP)
is credited quarterly on both plans.
In the event of death in service, a lump sum of six times base salary is payable for Debra Crew and Lavanya Chandrashekar.
The table below shows the pension benefits accrued by each Executive Director as at year end. The accrued US benefits for Debra
Crew and Lavanya Chandrashekar are one-off cash balance amounts.

30 June 2024 | 30 June 2023 |
Executive Director | US benefit value $'000 | US benefit value $'000
Debra Crew(1) | 1,245 | 958
Lavanya Chandrashekar(2) | 689 | 520

(1) Debra Crew's US benefits reflect an increase of $287,000 over the year to 30 June 2024. This increase reflects $253,000 which is due to additional pension benefits earned over the year
(of which $242,000 is over and above the increase due to inflation - and is reported in the total single figure of remuneration table on page 206); and, $34,000 which is due to interest
earned over the year on her deferred US benefits.
(2) Lavanya Chandrashekar's US benefits reflect an increase of $169,000 over the year to 30 June 2024. This increase reflects $159,000 which is due to additional pension benefits earned
over the year (of which $140,000 of which is over and above the increase due to inflation – and is reported in the total single figure of remuneration table on page 206); and $10,000 of
which is due to interest earned on her deferred US benefits.
The Normal Retirement Age applicable to each Director’s benefits depends on the pension scheme, as outlined below.

Executive Director | UK benefits (DPS) | US benefits (Cash Balance Plan) |  | US benefits (BSP) | US benefits (SERP)
Debra Crew | n/a | 65 |  | 6 months after leaving service, or age 55 if later | 6 months after leaving service, or age 55 if later
Lavanya Chandrashekar | n/a | 65 |  | 6 months after leaving service, or age 55 if later | 6 months after leaving service, or age 55 if later

Governance (continued)
211
Long-term incentive awards made during the year ended 30 June 2024
On 4 September 2023, Debra Crew and Lavanya Chandrashekar received awards of performance shares and market-priced share
options under the DLTIP based on a percentage of base salary as outlined below. The three-year period over which performance will
be measured is 1 July 2023 to 30 June 2026.
The performance measures and targets for awards granted in September 2023 are outlined below. Net sales value and profit before
exceptional items and tax are key levers for driving top and bottom line growth. The free cash flow measure was selected because it
represents a robust indicator of cash performance consistent with typical external practice and is a key strategic priority. Total
shareholder return, the only relative performance measure under the plan, provides good alignment with shareholder interests and
increases the leverage based on share price growth. Finally, the environmental, social and governance (ESG) measure (20% of total
performance share award), which was introduced in 2020, reinforces the stretching and strategically important goals under Diageo's
10-year ‘Spirit of Progress’ action plan to help create an inclusive and sustainable world. The definitions for the ESG measures were
set out on page 152 of the annual remuneration report for fiscal 23.

| Performance shares |  | Share options
2023 DLTIP | Organic net sales value (CAGR) | Organic profit before exceptional items and tax (CAGR) | Greenhouse gas reduction | Water efficiency index | Positive drinking | % Female leaders | % Ethnically diverse leaders |  | Cumulative free cash flow(1) | Relative TSR
Weighting | 40% | 40% | 5% | 5% | 5% | 2.5% | 2.5% |  | 50% | 50%
Target range | 4.0% - 8.0% | 4.5% - 11.5% | 17.9% - 25.9% | 3.7% - 8.3% | 2.8m - 4.2m | 47% - 49% | 44% - 46% |  | $9,400m - $12,600m | 9th - 3rd and above

(1) The cumulative free cash flow targets are shown in USD following the change to functional currency from fiscal 24. More details can be found on this on pages
238-239
20% of DLTIP awards will vest at threshold, with vesting in a straight line up to 100% if the maximum level of performance is
achieved. As explained in the remuneration policy, one performance share is deemed equal in value at grant to three share options.

Executive Director | Date of grant | Plan | Share type | Awards made during the year | Exercise price | Face value $'000 | Face value (% of salary)
Debra Crew | 04/09/2023 | DLTIP - share options | ADR | 36,971 | $166.67 | $6,563 | 375%
Debra Crew | 04/09/2023 | DLTIP - performance shares | ADR | 36,971 |  | $6,563 | 375%
Lavanya Chandrashekar | 04/09/2023 | DLTIP - share options | ADR | 21,182 | $166.67 | $3,760 | 360%
Lavanya Chandrashekar | 04/09/2023 | DLTIP - performance shares | ADR | 21,182 |  | $3,760 | 360%

The proportion of the awards outlined above that will vest is dependent on the achievement of performance conditions and continued
employment, and the actual value received may be nil. The vesting outcomes will be disclosed in the 2026 annual remuneration report.
In accordance with the plan rules, the number of performance shares and share options granted under the DLTIP was calculated by
using the average closing ADR price for the last six months of the preceding financial year ($177.50). This price is used to determine
the face value in the table above. In accordance with the plan rules, the exercise price was calculated using the average closing ADR
price of the three days preceding the grant date ($166.67).
Governance (continued)
212
Outstanding share plan interests

Plan name | Date of award | Performa nce period | Year of vesting | Award calculati on share price | Exercise price | Number of shares/ options at 30 June 2023(1) | Granted | Vested/ exercised | Dividen d equivale nt shares released | Lapsed | Number of shares/ options at 30 June 2024(1) |
Debra Crew |
DLTIP - Share Options(4) | Sep 2021 | 2021-2024 | 2024 |  | $194.75 | 27,019 |  |  |  |  | 27,019 | ADR
DLTIP - Share Options | Sep 2022 | 2022-2025 | 2025 |  | $176.95 | 26,629 |  |  |  |  | 26,629 | ADR
DLTIP - Share Options | Sep 2023 | 2023-2026 | 2026 |  | $166.67 |  | 36,971 |  |  |  | 36,971 | ADR
Total unvested share options subject to performance in Ordinary shares(2) | 362,476 | ORD
DLTIP - Share Options(3) | Sep 2020 | 2020-2023 | 2023 |  | $133.88 | 30,076 |  | 23,308 |  | 6,768 | 23,308 | ADR
Total vested but unexercised share options in Ordinary shares(2) | 93,232 | ORD
DLTIP - Performance Shares | Sep 2020 | 2020-2023 | 2023 | $143.63 |  | 30,076 |  | 29,715 | 2,101 | 361 | — | ADR
DESAP - Performance Shares(5) | Sep 2020 | 2020-2023 | 2023 | $143.63 |  | 19,494 |  | 20,622 | 1,362 | 234 | — | ADR
Total vested shares subject to performance in Ordinary shares(2) | — | ORD
DLTIP - Performance Shares(4) | Sep 2021 | 2021-2024 | 2024 | $174.97 |  | 27,019 |  |  |  |  | 27,019 | ADR
DLTIP - Performance Shares | Sep 2022 | 2022-2025 | 2025 | $195.29 |  | 26,629 |  |  |  |  | 26,629 | ADR
DLTIP - Performance Shares | Sep 2023 | 2023-2026 | 2026 | $177.50 |  |  | 36,971 |  |  |  | 36,971 | ADR
DESAP - Performance Shares(5) | Mar 2022 | 2023-2025 | 2026 | $197.06 |  | 8,796 |  |  |  |  | 8,796 | ADR
DESAP - Performance Shares(5) | Mar 2022 | 2024-2026 | 2027 | $197.06 |  | 8,930 |  |  |  |  | 8,930 | ADR
DESAP - Performance Shares(5) | Mar 2022 | 2025-2027 | 2028 | $197.06 |  | 8,930 |  |  |  |  | 8,930 | ADR
Total unvested shares subject to performance in Ordinary shares(2) | 469,100 | ORD
DESAP - Restricted Stock Unit(5) | Mar 2022 |  | 2027 | $197.06 |  | 8,796 |  |  |  |  | 8,796 | ADR
DESAP - Restricted Stock Unit(5) | Mar 2022 |  | 2028 | $197.06 |  | 8,930 |  |  |  |  | 8,930 | ADR
DESAP - Restricted Stock Unit(5) | Mar 2022 |  | 2029 | $197.06 |  | 8,930 |  |  |  |  | 8,930 | ADR
Total unvested shares not subject to performance in Ordinary shares(2) | 106,624 | ORD
Lavanya Chandrashekar |
DLTIP - Share Options(3) | Sep 2018 | 2018-2021 | 2021 |  | $140.89 | 3,832 |  | 3,832 |  |  | 3,832 | ADR
DLTIP - Share Options(3) | Sep 2018 | 2018-2021 | 2021 |  | $140.89 | 1,064 |  | 1,064 |  |  | 1,064 | ADR
Total vested but unexercised share options in Ordinary shares(2) | 19,584 | ORD
DLTIP - Share Options(4) | Sep 2021 | 2021-2024 | 2024 |  | $194.75 | 20,060 |  |  |  |  | 20,060 | ADR
DLTIP - Share Options | Sep 2022 | 2022-2025 | 2025 |  | $176.95 | 18,512 |  |  |  |  | 18,512 | ADR
DLTIP - Share Options | Sep 2023 | 2023-2026 | 2026 |  | $166.67 |  | 21,182 |  |  |  | 21,182 | ADR
Total unvested share options subject to performance in Ordinary shares(2) | 239,016 | ORD
DLTIP - Performance Shares | Sep 2020 | 2020-2023 | 2023 | $143.63 |  | 1,827 |  | 1,805 | 127 | 22 | — | ADR
Total vested shares subject to performance in Ordinary shares(2) | — | ORD
DLTIP - Performance Shares | Sep 2021 | 2021-2024 | 2024 | $174.97 |  | 20,060 |  |  |  |  | 20,060 | ADR
DLTIP - Performance Shares | Sep 2022 | 2022-2025 | 2025 | $195.29 |  | 18,512 |  |  |  |  | 18,512 | ADR
DLTIP - Performance Shares | Sep 2023 | 2023-2026 | 2026 | $177.50 |  |  | 21,182 |  |  |  | 21,182 | ADR
Total unvested shares subject to performance in Ordinary shares(2) | 239,016 | ORD
DLTIP - Restricted Stock Units(6) | Sep 2020 | 2020-2023 | 2023 | $143.63 |  | 2,635 |  | 2,635 | 2,635 |  | — | ADR
Total unvested shares not subject to performance in Ordinary shares(2) | — | ORD

1) For unvested awards, this is the number of shares/options initially awarded. For exercisable share options, this is the number of outstanding options. All share
options have an expiry date of 10 years after the date of grant.
2) ADRs have been converted to ORDs (one ADR is equivalent to four ordinary shares) for the purpose of calculating the total number of vested and unvested shares
and options.
3) The total number of share options granted under the DLTIP in September 2018 and 2020 showing as outstanding as at 30 June 2024 are vested but unexercised
share options.
(4)Performance shares and share options granted under the DLTIP in September 2021 and due to vest in September 2024 are included here as unvested share awards
subject to performance conditions, although the awards have also been included in the single figure of remuneration table o n page 206, since the performance period
ended during the year ended 30 June 2024.
(5)The performance shares awarded to Debra Crew in 2020 and vested in 2023 under the Diageo Exceptional Stock Award Plan (DESAP) were granted in recognition
of equity which was forfeited on joining Diageo in 2020 and had the same performance measures and targets as the 2020 DLTIP performance shares. Debra Crew
was granted a number of performance shares and restricted stock units under the DESAP in March 2022 for incentive and retention purposes. The DESAP
performance shares will vest based on a performance hurdle of winning or holding market share in at least 2/3rs of total NSV in measured markets over the
Governance (continued)
213
respective three-year performance periods (F23-F25 for awards due to vest in September 2026, F24-F26 for awards due to vest in September 2027 and F25-F27 for
awards due to vest in September 2028). The DESAP restricted stock units vest subject to continued employment up to the vesting date.
(6)Lavanya Chandrashekar was granted a number of restricted stock units prior to her appointment as CFO and joining the Board.
Governance (continued)
214

Directors’ shareholding requirement and share interests

The beneficial interests of the Directors who held office during the year ended 30 June 2024 (and their connected persons) in the
ordinary shares (or ordinary share equivalents) of the company are shown in the table below.

| Ordinary shares or equivalent(1),(2) |  |  |
| 24 July 2024 | 30 June 2024 (or date of cessation, if earlier) | 30 June 2023 (or date of appointment if later) | Shareholding requirement (% salary)(3) | Shareholding at 30 June 2024 (% salary)(3) | Shareholding requirement met
Chair |  |  |  |  |  |
Javier Ferrán(5) | 314,830 | 314,498 | 310,468 |  |  |
Executive Directors |  |  |  |  |  |
Debra Crew(4)(5) | 122,736 | 122,736 | 260 | 500% | 240% | No - to be met by June 2028
Lavanya Chandrashekar (4),(5),(6) | 30,412 | 30,406 | 17,901 | 400% | 100% | No - to be met by July 2026
Non-Executive Directors |  |  |  |  |  |
Susan Kilsby(5) | 2,600 | 2,600 | 2,600 |  |  |
Melissa Bethell | 2,668 | 2,668 | 2,668 |  |  |
Valérie Chapoulaud-Floquet | 2,154 | 2,154 | 2,098 |  |  |
Sir John Manzoni | 3,007 | 3,007 | 2,929 |  |  |
Lady Nicola Mendelsohn(8) | N/A | 5,000 | 5,000 |  |  |
Alan Stewart(7) | 7,550 | 7,550 | 7,354 |  |  |
Ireena Vittal | — | — | — |  |  |
Karen Blackett | 702 | 702 | — |  |  |

Notes
(1) Each person listed beneficially owns less than 1% of Diageo’s ordinary shares. Ordinary shares held by Directors have the same voting rights as all other ordinary
shares.
(2) Any change in shareholding between the end of the financial year on 30 June 2024 and the last practicable date before publication of this report, being 24 July
2024, is outlined in the table above.
(3) Both the shareholding requirement and shareholding at 30 June 2024 are expressed as a percentage of base salary on 30 June 2024 and calculated using a three-
month average share price for period ending 30 June 2024 of £27.22. For the purposes of the shareholding requirement any vested but unexercised share options are
reflected on an estimated net of tax basis.
(4) The total share interests shown above include 2023 Deferred Bonus Plan Shares for Debra Crew (109 ADRs) and Lavanya Chandrashekar (754 ADRs).
(5) Javier Ferrán, Debra Crew, Lavanya Chandrashekar and Susan Kilsby have share interests in ADRs (one ADR is equivalent to four ordinary shares). The share
interests in the table are stated as ordinary share equivalents.
(6)The figure as at 30 June 2023 for Lavanya Chandrashekar reflects the correction of an error in last year's report which had omitted her interests in 1,698 ADRs
(equivalent to 6,792 ordinary shares) awarded as a proportion of her annual incentive outcome for the year ended 30 June 2022. The value of this award had been
correctly reflected in the single total figure of remuneration disclosures in the 2022 and 2023 Directors' Remuneration Reports and was disclosed to shareholders at
the time of the award.
(7)The figure as at 30 June 2023 for Alan Stewart has been corrected from 7,269 shares to 7,354 shares. The correction reflects additional shares acquired via an
automatic dividend reinvestment plan.
(8) Lady Mendelsohn resigned from the Board on 28 September 2023 and therefore no details are included for the shareholding after her date of cessation.
Governance (continued)
215
Relative importance of spend on pay
The graphs below illustrate the relative importance of spend on pay (total remuneration of all group employees) compared with
distributions to shareholders (total dividends plus the share buyback programme but excluding transaction costs), and the percentage
change from the year ended 30 June 2023 to the year ended 30 June 2024. There are no other significant distributions or payments of
profit or cash flow.

Distributions to shareholders (13.7)% | Staff pay 5.4%

CEO total remuneration and TSR performance
The graph below show the total shareholder return for Diageo plc and the FTSE 100 Index since 30 June 2014 and demonstrates the
relationship between pay and performance for the Chief Executive, using current and previously published single total remuneration
figures. The FTSE 100 Index has been chosen because it is a widely recognised performance benchmark for large companies in the
United Kingdom.

| Total shareholder return - value of hypothetical £100 holding |  | Chief Executive total remuneration (includes legacy LTIP awards) (£'000)

ò | Diageo
ò | FTSE 100
ò | Chief Executive total remuneration

| Ivan Menezes(1) £'000 F15 | Ivan Menezes(1) £'000 F16 | Ivan Menezes(1) £'000 F17 | Ivan Menezes(1) £'000 F18 | Ivan Menezes(1) £'000 F19 | Ivan Menezes(1) £'000 F20 | Ivan Menezes(1) £'000 F21 | Ivan Menezes(1) £'000 F22 | Ivan Menezes(1) £'000 F23 | Debra Crew(1)(2) £'000 F23 | Debra Crew(1)(2) £'000 F24
Chief Executive total remuneration(2) | 3,888 | 4,156 | 3,399 | 8,995 | 11,776 | 2,273 | 6,019 | 7,343 | 10,582 | 403 | 3,067
Annual incentive(3) | 44.0% | 65.0% | 68.0% | 70.0% | 61.0% | 0.0% | 93.8% | 93.8% | 37.3% | 35.4% | 24.8%
Share options(3) | 0.0% | 0.0% | 0.0% | 60.0% | 73.1% | 27.5% | 10.0% | 61.5% | 77.5% | 77.5% | 0.0%
Performance shares(3) | 33.0% | 31.0% | 0.0% | 70.0% | 89.3% | 10.0% | 29.3% | 59.3% | 98.7% | 98.8% | 58.9%

(1) To enable comparison, Ivan Menezes’ and Debra Crew's single total figure of remuneration has been converted into sterling using the average weighted exchange
rate for the relevant financial year. The figure represented in the graph for fiscal 23 is the combined single figure total for Ivan Menezes and Debra Crew.
(2) The single total figure of remuneration for Debra Crew in fiscal 23 and fiscal 24 includes pro-rata long-term incentive plan awards proportionate to the duration of
her appointment as CEO.
(3) % of total maximum opportunity.
Governance (continued)
216

Remuneration for the wider workforce and CEO pay ratio

Alignment of Executive pay with the wider workforce
There is clear alignment in the approach to pay for executives and the wider workforce in the way that remuneration principles are
followed, as well as the mechanics of the salary review process and incentive plan design, which are broadly consistent throughout the
organisation. There is a strong focus on performance-related pay, and the performance measures under the annual incentive plan and
long-term incentive plan are the same for executives and other eligible employees. The reward package for Executive Directors is
consistent with that of the senior management population, however, a much higher proportion of total remuneration for the Executive
Directors is linked to business performance, compared to the rest of the employee population.
The structure of our reward packages is based on the principle that it should enable Diageo to attract and retain the best talent globally
within our broader industry. It is driven by local market practice, as well as the level of seniority and accountability, reflecting the
global nature of our business. Diageo is committed to fostering an inclusive and diverse workplace, and creating a culture where every
individual can thrive. Reflective of this, pay parity and consistency of treatment for all employees are critical to the reward practices
across the organisation. The reward framework is regularly reviewed to ensure employees are rewarded fairly and appropriately, in
line with the business strategy, performance outcomes, competitive market practice and our diversity and inclusion agenda.
During the year, the Remuneration Committee Chair explained to employees the Directors' remuneration policy, the role of the
Committee, executive remuneration principles and structure and sought their feedback on wider reward matters as part of the
workforce engagement sessions. In 2024 this was a new format and was viewed by the Committee Chair, and the employees who
participated, to be a productive and informative discussion.
Remuneration Committee review of wider workforce pay
Each year, the Remuneration Committee has a detailed session reviewing wider workforce remuneration. In fiscal 24, the review
focused on the prior year’s annual reward cycle outcomes, including base pay competitive positions, retaining talent in a global
market, the level of differentiation across our reward programmes, gender pay analysis, and how we connect performance and reward
programmes. The Committee also considered the challenges of attracting and retaining critical talent in a global marketplace at all
levels as well as the all-employee reward priorities for the coming year. Information on wider workforce reward is also provided as
required throughout the year to enable the Committee to consider the broader employee context when making executive remuneration
decisions, for example the annual salary increase budgets by country.
Supporting our employees
We focus on all aspects of the wellbeing of our employees. We monitor the cost-of-living in all our geographies using a formal
monitoring process and have implemented actions as required, typically by awarding off-cycle salary increases in high-inflation
geographies. We have provided financial education to all employees to support them in managing their personal finances more
effectively. Our global group of wellbeing champions work with regional and market teams to drive wellbeing initiatives locally,
coming together each quarter for a global connect. Over fiscal 24, activations have included mental health first aider training, external
speakers on wellbeing topics such as men's health, menopause, resilience, nutrition as well as holding masterclasses in activities to
support wellbeing.
In fiscal 24 we rolled out Celebrate, our global recognition platform, to over 50 countries having been initially piloted in NAM and the
UK. We now have the majority of the Diageo workforce covered by the programme and have seen 90,000 recognition moments to
17,000 employees. The programme supports embedding a culture of speed and agility and enables leaders and peers to recognise
actions in the moment.
We continue to innovate with benefit policies that support and demonstrate our commitment to diversity and inclusion. In fiscal 24 we
introduced a Carers Leave policy in the UK which provides all employees with two weeks paid leave per year to care, or arrange care,
for dependents. This supports the attraction and retention of the best talent through a market leading policy, and by supporting
flexibility and wellness. We will be working on a wider roll out across fiscal 25.
Fiscal 24 saw the launch of a new Employee Resource Group (ERG) for neurodiverse colleagues (PRISM) which complements the
other ERGs in place supporting all colleagues. PRISM amplifies the voice of the neurodivergent community and is involved in our
business supporting areas such as brand mobilisation. These practices reflect our progressive culture, where our policies are a hallmark
of our business and differentiates our employee value proposition.
CEO pay ratio
In accordance with The Companies (Miscellaneous Reporting) Regulations 2018, the table below sets out Diageo’s CEO pay ratios for
the year ended 30 June 2024. These CEO pay ratios provide a comparison of the Chief Executive’s total remuneration based on Debra
Crew's total single figure of remuneration, converted into sterling, with the equivalent remuneration for the employees paid at the 25 th
(P25), 50 th (P50) and 75 th (P75) percentile of Diageo’s workforce in the United Kingdom. Also shown are the salary and total
remuneration for each quartile employee.
Governance (continued)
217

Year | Method | 25 th percentile pay ratio | Median pay ratio | 75 th percentile pay ratio
2024(1) | Option A | 69:1 | 51:1 | 40:1
2024 | Total pay and benefits | £44,668 | £60,620 | £77,388
2024 | Salary | £39,229 | £50,720 | £59,850
2023(2)(3) | Option A(4) | 231:1 | 177:1 | 137:1
2022(3) | Option A(4) | 146:1 | 114:1 | 90:1
2021 | Option A(4) | 127:1 | 100:1 | 79:1
2020 | Option A(4) | 50:1 | 38:1 | 31:1
2019 | Option A(4) | 265:1 | 208:1 | 166:1

(1) Debra Crew's total single figure of remuneration figure (see page 206 for details) in fiscal 24 used in the calculation of the CEO pay ratio includes pro-rata long-term
incentive plan awards proportionate to the duration of her appointment as CEO.
(2) 2023 CEO pay ratios comprise the sum of both Sir Ivan Menezes' and Debra Crew's total single figure of remuneration converted to sterling.
(3) 2023 and 2022 CEO pay ratios have been updated to reflect the value of the updated prior year single figure of remuneration which incorporates long-term
incentives based on the actual share price at vesting, rather than the average share price in the last three months of the financial year which had been used for the
original disclosure.
(4) Only people employed in the United Kingdom and with the same number of contractual working hours throughout the full 12-month period have been included in
the calculation. Inclusion of employees outside of this group would require a complex simulation of full-time annual remuneration based on a number of
assumptions and would not have a meaningful impact on the ratio.
Methodology
Consistent with the approach for Diageo’s disclosure in previous years, the methodology used to identify the employees at each
quartile for 2024 is Option A, as defined in the regulations. We believe this is the most robust and accurate approach, and is in line
with shareholder expectations.
Total full-time equivalent remuneration for employees reflects all pay and benefits received by an individual in respect of the relevant
year and has, other than where noted below, been calculated in line with the methodology for the ‘single total figure of remuneration’
for the Chief Executive (shown on page 206 of this report). The total remuneration calculations were based on data as at 30 June 2024.
Actual remuneration was converted into the full-time equivalent for the role and location by pro-rating earnings to reflect full-time
contractual working hours and these figures were then ranked to identify the employees sitting at the percentiles. To ensure that the
total remuneration for the selected median, 25 th and 75 th percentile employee is sufficiently representative of those positions, we
calculated the total remuneration for a number of employees above and below each of the selected median, 25 th and 75 th percentile UK
employees and used the median value. In light of financial performance outcomes being signed off close to the publication of the
Annual Report, the Diageo Group business multiple, which is applicable to the majority of UK employees, has been used to calculate
all payments under the annual incentive, although some employees may receive a variation on this multiple in practice. Pension values
for each employee are not calculated on an actuarial basis as for the Chief Executive, but rather as the notional cost of the company’s
pension contribution during the financial year, according to the relevant section of the pension scheme for each individual. This
approach allows meaningful data for a large group of people to be obtained in a more efficient way.
Points to note for the year ended 30 June 2024
The median remuneration and resulting pay ratio for 2024 are consistent with the pay and progression policies for Diageo’s UK
employees as a whole and reflect the impact of performance-related pay on total remuneration for the year. As the Chief Executive has
a larger proportion of her total remuneration linked to business performance than other employees in the UK workforce, the ratio has
decreased versus last year due to proportionate reduction in incentive outcome for the CEO for 2024 versus 2023.
Governance (continued)
218
Change in pay for Directors compared to wider workforce
The table below shows the percentage change in Directors’ remuneration and average remuneration of employees on an annual basis.
Given the small size of Diageo plc’s workforce, data for all employees of the group has also been included.

| 2024 | 2023 | 2022 | 2021 | 2020
| Salary | Bonus | Benefits | Salary | Bonus | Benefits | Salary | Bonus | Benefits | Salary | Bonus | Benefits | Salary | Bonus | Benefits
Plc employee average(1) | 6.2% | (44.8%) | 10.0% | 9.0% | (61.3%) | (7.2%) | 11.1% | 25.8% | 10.5% | 5.1% | N/A(5) | 38.8% | 7.5% | (100.0%) | 9.0%
Average global employee(2) | 11.1% | (17.6%) | 3.1% | 12.9% | (41.6%) | 17.0% | 6.4% | 38.4% | 11.7% | — | 278.8% | 12.6% | 5.3% | (67.8%) | 6.9%
Executive Directors(3) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debra Crew(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5)
Lavanya Chandrashekar | 3.8% | (34.1%) | (22.1%) | 2.3% | (58.8)% | (89.4)% | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5) | N/A(5)
Non-Executive Directors(4) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Melissa Bethell | 3.6% | _ | 218.4% | 3.0% | — | 10.1% | 2.3% | — | 16.0% | N/A(5) | — | — | — | — | —
Karen Blackett (5) | 3.6% | _ | 4231.3% | N/A(5) | — | N/A(5) | N/A(5) | — | N/A(5) | — | — | — | — | — | —
Valérie Chapoulaud- Floquet | 3.6% | _ | 159.0% | 3.0% | — | 108.5% | — | — | — | N/A(5) | — | — | — | — | —
Javier Ferrán (Chair) | 4.1% | _ | 132.9% | 2.3% | — | (22.4%) | 8.3% | — | 28.8% | — | — | — | — | — | —
Susan Kilsby | 4.5% | _ | 182.7% | 2.6% | — | 125.7% | 3.8% | — | 300.0% | 9.6% | — | (87.7%) | 37.3% | — | 68.9%
Sir John Manzoni | 3.6% | _ | 241.5% | 3.0% | — | 20.0% | — | — | — | — | — | — | — | — | —
Lady Nicola Mendelsohn | N/A(5) | _ | N/A(5) | 3.0% | — | — | 2.3% | — | — | 3.2% | — | — | 3.3% | — | —
Alan Stewart | 2.7% | _ | 252.8% | 3.2% | — | — | 4.7% | — | — | 2.4% | — | — | 2.5% | — | —
Ireena Vittal | 3.6% | _ | 689.2% | 3.0% | — | 734.0% | — | — | — | — | — | — | — | — | —

1.Around 15 UK-based employees are employed by Diageo plc. Their remuneration has been calculated in line with the approach used for the CEO pay-ratio
calculation and the average year-on-year change has been reported. Only those employed during the full financial year have been included in calculations.
2.Calculated by dividing staff cost related to salaries, bonus and benefits by the average number of employees on a full-time equivalent basis, as disclosed in note 4c
to the financial statements under staff costs and average number of employees on page 251, but reduced to account for the inclusion of Executive Directors in
reported figures. The salary, bonus and benefits cost data used for calculation are subsets of the Wages and salaries figure disclosed in this note. The salary data
used for this calculation has been adjusted to exclude costs related to severance payments which are included in staff costs, and last year’s disclosure has been
updated in line with this for consistency. In line with the approach for Directors, the bonus values used for the calculation reflect the bonus earned in relation to
performance during the relevant financial year.
3.Calculated using the data from the single total figure of remuneration table on page 206) in US dollars, reflecting payment currency for Debra Crew and Lavanya
Chandrashekar.
4.Calculated using the fees and taxable benefits disclosed under Non-Executive Directors’ remuneration in the table on page 221. Taxable benefits for Non-Executive
Directors comprise a product allowance as well as expense reimbursements relating to attendance at Board meetings, which may vary year-on-year.
5.N/A refers to a nil value in the previous year or an incomplete prior year, meaning that the year-on-year change cannot be calculated.
Payments to former Directors
There were no payments to former Directors in the year ended 30 June 2024.
Payments for loss of office
It was announced on 3 May 2024 that Lavanya Chandrashekar would be stepping down as Chief Financial Officer and as a director of
Diageo during fiscal 25. Details of the remuneration arrangements for Lavanya, which were approved by the Remuneration
Committee and are in accordance with the Directors’ remuneration policy, are set out below. Full details of the values of any amounts
paid will be reported in the Directors' remuneration report next year.
Lavanya’s service contract provides for a twelve-month notice period (which commenced on 3 May 2024) and she remains eligible for
salary and benefits until the date she leaves the company. If the company so determines, Lavanya may be paid a payment in lieu of
notice to cover salary and the cost of contractual benefits in respect of any remaining portion of the notice period.
Lavanya is required to retain the lower of the level of her actual shareholding as at the leave date, or shares to the value of 400% of
salary, for two years post her leave date in accordance with the Directors' remuneration policy.
The Remuneration Committee exercised its discretion to treat Lavanya as a good leaver under the incentive arrangements in
accordance with the remuneration policy. Lavanya will be eligible to receive a bonus under Diageo’s annual incentive plan (AIP) for
the financial years ending 30 June 2024 and 30 June 2025 on a time pro-rata basis reflecting time employed in the respective financial
year (excluding any period of garden leave). Any payments due will be payable at the normal times and subject to financial
performance outcomes and delivery against individual business objectives, with one-third delivered in deferred bonus shares in
accordance with the normal deferral rules (provided that in respect of any award made after the leave date, the award will be made on
Governance (continued)
219
terms that it will vest immediately upon award). Deferred bonus shares related to bonuses for prior financial years, will vest on the
leave date in accordance with the remuneration policy. Any deferred bonus shares which are delivered by the leave date are subject to
the post-cessation shareholding requirement.
Lavanya’s unvested Long-Term Incentive Plan (LTIP) awards (granted in 2021, 2022 and 2023) will continue and vest (subject to the
extent that the relevant performance conditions, assessed at the time of vesting, are satisfied and subject to time pro-rating to reflect
the period employed during the performance period) on the original vesting dates. To the extent they vest, options granted in 2021 will
be exercisable until 3 March 2026 (the Committee having exercised discretion to slightly extend the normal exercise period), options
granted in 2022 will be exercisable until 2 September 2026 and options granted in 2023 will be exercisable until 4 September 2027.
Regarding already vested but unexercised options granted in 2018, the Committee exercised its discretion to allow these to be
exercisable within 18 months (instead of the default 12 months) of leaving and lapse thereafter. All LTIP awards will continue to be
subject to their respective two-year post-vesting holding periods. No further LTIP awards will be granted. Shares held under the Share
Incentive Plan will be treated in accordance with the rules of that plan. The company’s Malus and Clawback Policy will continue to
apply.
As permitted under the Remuneration Policy, Lavanya will receive a contribution of up to a maximum of £25,000 excluding VAT
towards legal fees incurred in connection with agreeing her departure terms. She will also receive up to a maximum annual amount of
£20,000 plus VAT per year for fees incurred in connection with UK and US tax return submissions for three years following her
departure. Finally, in relation to repatriation from the UK to the US, flights and shipping of possessions will be provided in accordance
with the company’s Global Mobility Policy, as well as a net sum of £114,500 to cover disturbance costs in connection with her
repatriation to the US.
Governance (continued)
220

Non-Executive Directors

Fee policy
Javier Ferrán’s fee as non-executive Chair was increased by 4.5% (from £670,000 to £700,000) on 1 October 2023. The Chair’s fee is
appropriately positioned against our comparator group of FTSE 30 companies excluding financial services. The Executive Directors
and the Chair approved an increase in the base fee for Non-Executive Directors of 3.8% (from £104,000 to £108,000), effective 1
October 2023.

| 2024 | 2023
Per annum fees | £'000 | £'000
Chair of the Board | 700 | 670
Non-Executive Directors |  |
Base fee | 108 | 104
Senior Non-Executive Director | 35 | 30
Chair of the Audit Committee | 35 | 35
Chair of the Remuneration Committee | 35 | 35

Single total figure of remuneration for Non-Executive Directors

| Fees £'000 | Taxable benefits £'000(1) | Total £'000(2)
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Chair |  |  |  |  |  |
Javier Ferrán | 692 | 665 | 4 | 1 | 696 | 666
Non-Executive Directors |  |  |  |  |  |
Melissa Bethell | 107 | 103 | 5 | 2 | 112 | 105
Karen Blackett | 107 | 103 | 5 | 1 | 112 | 104
Valérie Chapoulaud-Floquet | 107 | 103 | 13 | 10 | 120 | 113
Susan Kilsby | 176 | 168 | 14 | 11 | 190 | 179
Sir John Manzoni | 107 | 103 | 4 | 2 | 111 | 105
Lady Nicola Mendelsohn(3) | 26 | 103 | 1 | 1 | 27 | 104
Alan Stewart | 142 | 138 | 4 | 1 | 146 | 139
Ireena Vittal | 107 | 103 | 10 | 10 | 117 | 113

(1)Taxable benefits include a product allowance and expense reimbursements relating to travel, accommodation and subsistence in connection with attendance at
Board meetings during the year, which are deemed by HMRC to be taxable in the United Kingdom. The amounts in the single total figure of remuneration table
above include any tax gross-ups on the benefits provided by the company on behalf of the Directors. Non-taxable expense reimbursements have not been included
in the single figure of remuneration table above.
(2) Some figures add up to slightly different totals due to rounding.
(3) Lady Mendelsohn resigned from the Board at the 2023 AGM on 28 September 2023.
Governance (continued)
221
Looking ahead to 2025

Salary increases for the year ending 30 June 2025

The Remuneration Committee reviewed base salaries for Executive Committee members and agreed the following increase for the
Chief Executive Officer, effective 1 October 2024.

| Debra Crew | Lavanya Chandrashekar
Salary at 1 October ('000) | 2024 | 2023 | 2024 | 2023
Base salary | $1,824 | $1,750 | $1,044 | $1,044
% increase (over previous year) | 4.25% | n/a | 0% | 4%

As previously announced, Nik Jhanghiani will join the Board in Autumn 2024. His annual salary will be £900,000 and his benefits and
incentives will be in accordance with the remuneration policy. In addition, Nik will be entitled to an additional one-off award on
joining to compensate him for the financial loss of forfeited awards from his previous employer. Full details will be provided when
these are confirmed at the time of the award and in the Directors' remuneration report next year.

Annual incentive design for the year ending 30 June 2025

The measures and targets for the annual incentive plan are reviewed annually by the Remuneration Committee and are carefully
chosen to drive financial and individual business performance goals related to the company’s short-term strategic operational
objectives. The plan design for Executive Directors for the year ending 30 June 2025 will comprise the following performance
measures and weightings (no change from last year), with targets set for the full financial year:
•net sales value (% growth) (26.67% weighting): a key performance measure of year-on-year top line growth;
•operating profit (% growth) (26.67% weighting): stretching profit targets drive operational efficiency and influence the level of
returns that can be delivered to shareholders through increases in share price and dividend income not including exceptional items or
exchange;
•operating cash conversion (26.67% weighting): ensures focus on efficient cash delivery by the end of the year; and
•individual business objectives (20% weighting): measurable deliverables that are specific to the individual and are focused on
supporting the delivery of key strategic objectives.
The Committee has discretion to adjust the payout to reflect appropriately an individual's contribution or the overall business context.
Details of the targets for the year ending 30 June 2025 will be disclosed retrospectively in next year’s annual report, by which time
they will no longer be deemed commercially sensitive by the Board.
The annual incentive opportunity for Executive Directors will remain consistent with prior years, equal to 100% of base salary at
target, with a maximum opportunity of 200% of base salary.

Long-term incentive awards to be made in the year ending 30 June 2025

The long-term incentive plan measures are reviewed annually by the Remuneration Committee and are selected to reward long-term
consistent performance in line with Diageo’s business strategy and to create alignment with the delivery of value for shareholders. The
Committee has ensured that the incentive structure for senior management does not raise environmental, social and governance risks
by inadvertently motivating irresponsible behaviour.
As per last year, DLTIP awards to be made in September 2024 will comprise awards of both performance shares and share options,
based on stretching targets against the key performance measures as outlined in the table on page 223, assessed over a three-year
performance period. The relative total shareholder return measure is based on the same constituent group and vesting schedule as
outlined on pag e 209.
The Committee set fiscal 2025 financial targets by considering a number of factors including historical performance, consumer trends
amid ongoing macroeconomic challenges, market conditions and the competitive landscape. These targets align with our focus on
returning to our medium-term guidance ranges.
The ESG measures in the DLTIP comprise five ambitions reflecting the ‘Spirit of Progress‘ action plan, to make a positive impact on
the environment and society. Each goal is weighted equally:
•reduction in greenhouse gas emissions in our direct operations (Scope 1&2);
•improvement in the water efficiency index;
•number of people who confirm changed attitudes on the dangers of underage drinking after participating in a Diageo-supported
education programme; and
•inclusion and diversity (percentage of female leaders globally and percentage of ethnically diverse leaders globally).
Governance (continued)
222
In setting ESG targets, the Committee took account of the material progress made to date across the various measures versus the 'Spirit
of Progress' 2030 action plan. The Committee considered the opportunity to continuously improve against high levels of achievement
and has set targets in this context.
The performance share element of the DLTIP applies to the Executive Committee and the top level of senior leaders across the
organisation worldwide, whilst the share option element is applicable to a much smaller population comprising only members of the
Executive Committee. One market price performance-based option is valued at one-third of a performance share.
Awards are calculated on the basis of a six-month average share price for the period ending 30 June 2024. This averaging period
which is in line with Diageo's standard practice, helps to smooth out volatility in share price. The price used to calculate the awards
(on the basis of ordinary shares) to be granted in September 2024 was 11% higher than the share price at the time the Committee
approved the awards to be granted.
It is intended that a DLTIP award to the equivalent of 500% of base salary will be made to Debra Crew in September 2024,
comprising 375% of salary in performance shares and the equivalent of 125% of salary in market price performance-based share
options. It is intended that a DLTIP award to the equivalent of 480% of salary will be made to Nik Jhangiani in 2024 following the
commencement of his employment, comprising 360% of salary in performance shares and the equivalent of 120% of salary in market
price share options. In performance share equivalents, one market price option is valued at one-third of a performance share.
The table below summarises the annual DLTIP awards to Debra Crew and Nik Jhangiani to be made in 2024.

Grant value (% salary) | Chief Executive | Chief Financial Officer
| Performance share equivalents (1 share: 3 options)
Performance shares | 375% | 360%
Share options | 125% | 120%
Total | 500% | 480%

Performance conditions for long-term incentive awards to be made in the year ending 30 June 2025(1)

| Performance shares |  | Share options
|  | Organic profit before exceptional items and tax (CAGR) | Environmental, social & governance (ESG) |  |  |  |  |
| Organic net sales (CAGR) | Greenhouse gas reduction | Water efficiency index | Positive drinking | % Female leaders | % Ethnically diverse leaders | Vesting schedule |  | Relative Total Shareholder Return | Cumulative free cash flow ($m) | Vesting schedule
Weighting (% total) | 40% | 40% | 5% | 5% | 5% | 2.5% | 2.5% |  |  | 50.0% | 50.0% |
Maximum | 6.0% | 9.1% | 29.9% | 11.2% | 3.7m | 50% | 49% | 100% |  | 3rd and above | $9,950 | 100%
Midpoint | 4.5% | 6.1% | 23.1% | 8.7% | 3.1m | 48% | 47% | 60% |  | — | $8,550 | 60%
Threshold | 3.0% | 3.1% | 16.3% | 6.2% | 2.5m | 46% | 45% | 20% |  | 9th | $7,150 | 20%

(1) Details of the considerations taken in to account when setting the targets for the DLTIP by the Committee are set out on page 222.
Governance (continued)
223
Additional information
Key management personnel related party transactions
Key management personnel of the group comprises the Executive and Non-Executive Directors, the members of the Executive
Committee and the Company Secretary.
Diageo plc has granted rolling indemnities to the Directors and the Company Secretary, uncapped in amount, in relation to certain
losses and liabilities which they may incur in the course of acting as Directors or Company Secretary (as applicable) of Diageo plc or
of one or more of its subsidiaries. These indemnities continue to be in place at 30 June 2024.
Other than disclosed in this report, no Director had any interest, beneficial or non-beneficial, in the share capital of the company. Save
as disclosed above, no Director has or has had any interest in any transaction which is or was unusual in its nature, or which is or was
significant to the business of the group and which was effected by any member of the group during the financial year, or which having
been effected during an earlier financial year, remains in any respect outstanding or unperformed. There have been no material
transactions during the last three years to which any Director or officer, or 3% or greater shareholder, or any spouse or dependent
thereof, was a party. There is no significant outstanding indebtedness to the company from any Directors or officer or 3% or greater
shareholder.
Statutory and audit requirements
This report was approved by a duly authorised Committee of the Board of Directors and was signed on its behalf on 29 July 2024 by
Susan Kilsby who is Chair of the Remuneration Committee.
The Board has followed the principles of good governance as set out in the UK Corporate Governance Code and complied with the
regulations contained in the Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008, the Listing Rules of the Financial Conduct Authority and the relevant schedules of the Companies Act 2006.
The Companies Act 2006 and the Listing Rules require the company’s auditor to report on the audited information in their report and
to state that this section has been properly prepared in accordance with these regulations.
The annual remuneration report is subject to an advisory vote by shareholders at the AGM on 26 September 2024. T erms defined in
this Directors' remuneration report are used solely herein.
Governance (continued)
224
Directors’ report
The Directors present the Directors’ report for the year ended 30 June 2024.
Company status
Diageo plc is a public limited liability company incorporated in England and Wales with registered number 23307 and registered
office and principal place of business at 16 Great Marlborough Street, London W1F 7HS, United Kingdom. The company's telephone
number is +44 (0) 20 7947 9100. The company's agent in the United States is General Counsel, Diageo North America, Inc., 175
Greenwich Street, 3 World Trade Center, New York, NY 10007, United States. The company was incorporated on 21 October 1886. It
is the ultimate holding company of the group, a full list of whose subsidiaries, partnerships, associates, joint ventures and joint
arrangements is set out in note 10 to the financial statements set out on page 220-225 of the UK Annual Report.
Directors
The Directors of the company who currently serve are shown in the section ‘Board of Directors’ on pages 154-155 in accordance with
the UK Corporate Governance Code, all the Directors will retire by rotation at the AGM and offer themselves for re-election. Further
details of Directors’ contracts, remuneration and their interests in the shares of the company at 30 June 2024 are given in the
Directors’ remuneration report. The Directors’ powers are determined by UK legislation and Diageo’s articles of association. The
Directors may exercise all the company’s powers provided that Diageo’s articles of association or applicable legislation do not
stipulate that any powers must be exercised by the members.
Auditor
The auditor, PricewaterhouseCoopers LLP, is willing to continue in office and a resolution for its re-appointment as auditor of the
company will be submitted to the AGM.
Disclosure of information to the auditor
In accordance with Section 418 of the Companies Act 2006, the Directors who held office at the date of approval of this Directors’
report confirm that, so far as they are each aware, there is no relevant audit information of which the company’s auditor is unaware;
and each Director has taken all reasonable steps to ascertain any relevant audit information and to ensure that the company’s auditor is
aware of that information.
Corporate governance statement
The corporate governance statement, prepared in accordance with rule 7.2 of the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, comprises the following sections of the Annual Report: the ‘Corporate governance report’, the ‘Audit
Committee report’ and the ‘Additional information for shareholders’.
Significant agreements – change of control
The following significant agreements contain certain termination and other rights for Diageo’s counterparties upon a change of control
of the company. Under the partners agreement governing the company’s 34% investment in Moët Hennessy SAS (MH) and Moët
Hennessy International SAS (MHI), if a Competitor (as defined therein) directly or indirectly takes control of the company (which, for
these purposes, would occur if such Competitor acquired more than 34% of the voting rights or equity interests in the company),
LVMH Moët Hennessy – Louis Vuitton SA (LVMH) may require the company to sell its interests in MH and MHI to LVMH.
The master agreement governing the operation of the group’s market-level distribution joint ventures with LVMH states that if any
person acquires interests and rights in the company resulting in a Control Event (as defined) occurring in respect of the company,
LVMH may within 12 months of the Control Event either appoint and remove the chair of each joint venture entity governed by such
master agreement, who shall be given a casting vote, or require each distribution joint venture entity to be wound up. Control Event
for these purposes is defined as the acquisition by any person of more than 30% of the outstanding voting rights or equity interests in
the company, provided that no other person or entity (or group of affiliated persons or entities) holds directly or indirectly more than
30% of the voting rights in the company.
Governance (continued)
225
Related party transactions
Transactions with related parties are disclosed in note 21 to the consolidated financial statements.
Major shareholders
At 30 June 2024, the following substantial interests (3% or more) in the company’s ordinary share capital (voting securities) had been
notified to the company:

Shareholder | Number of ordinary shares | Percentage of issued ordinary share (excluding treasury shares) | Date of notification of interest
BlackRock Investment Management (UK) Limited (indirect holding)(1) | 147,296,928 | 5.89% | 3 December 2009
Capital Research and Management Company (indirect holding) | 124,653,096 | 4.99% | 28 April 2009
Massachusetts Financial Services Company (indirect holding) | 111,560,606 | 4.99% | 29 February 2024

(1) On 25 January 2024, BlackRock Inc. filed an Amendment to Schedule 13G with the SEC in respect of the calendar year ended 31 December 2023, reporting that, as
of 25 January 2024, 192,713,107 ordinary shares representing 8.6% of the issued ordinary share capital were beneficially owned by BlackRock Inc. and its
subsidiaries (including BlackRock Investment Management (UK) Limited).
The company has not been notified of any other substantial interests in its securities since 30 June 2024. The company’s substantial
shareholders do not have different voting rights. Diageo, so far as is known by the company, is not directly or indirectly owned or
controlled by another corporation or by any government. Diageo knows of no arrangements, the operation of which may at a
subsequent date result in a change of control of the company.
As at the close of business on 24 July 2024, 325,119,456 ordinary shares, including those held through American Depositary Shares
(ADSs), were held by approximately 2,598 holders (including American Depositary Receipt (ADR) holders) with registered addresses
in the United States, representing approximately 14.6% of the outstanding ordinary shares (excluding treasury shares). At such date,
81,092,735 ADSs were held by 2,140 registered ADR holders. Since certain of such ordinary shares and ADSs are held by nominees
or former Grand Metropolitan PLC or Guinness plc ADR holders who have not re-registered their ADSs, the number of holders may
not be representative of the number of beneficial owners in the United States or the ordinary shares held by them.
Employment policies
A key strategic imperative of the company is to attract, retain and grow a pool of diverse, talented employees. Diageo recognises that a
diversity of skills and experiences in its workplace and communities will provide a competitive advantage. To enable this, the
company has various global employment policies and standards, covering such issues as resourcing, data protection, human rights,
dignity at work, health, safety and wellbeing. These policies and standards seek to ensure that the company treats current or
prospective employees justly, solely according to their abilities to meet the requirements and standards of their role and in a fair and
consistent way. This includes giving full and fair consideration to applications from prospective employees who are disabled, having
regard to their aptitudes and abilities, and not discriminating against employees under any circumstances (including in relation to
applications, training, career development and promotion) on the grounds of any disability. In the event that an employee, worker or
contractor becomes disabled in the course of their employment or engagement, Diageo aims to ensure that reasonable steps are taken
to accommodate their disability by making reasonable adjustments to their existing employment or engagement.
Trading market for shares
Diageo plc ordinary shares are listed on the London Stock Exchange (LSE). Diageo ADSs, representing four Diageo ordinary shares
each, are listed on the New York Stock Exchange (NYSE). The principal trading market for the ordinary shares is the LSE. Diageo
shares are traded on the LSE’s electronic order book. Orders placed on the order book are displayed on-screen through a central
electronic system and trades are automatically executed, in price and then time priority, when orders match with corresponding buy or
sell orders. Only member firms of the LSE, or the LSE itself if requested by the member firm, can enter or delete orders on behalf of
clients or on their own account. All orders are anonymous. Although use of the order book is not mandatory, all trades, whether or not
executed through the order book and regardless of size, must be reported within three minutes of execution, but may be eligible for
deferred publication.
The Markets in Financial Instruments Directive (MiFID) allows for delayed publication of large trades with a sliding scale
requirement based on qualifying minimum thresholds for the amount of consideration to be paid/the proportion of average daily
turnover (ADT) of a stock represented by a trade. Provided that a trade/consideration equals or exceeds the qualifying minimum size,
it will be eligible for deferred publication ranging from 60 minutes from time of trade to three trading days after time of trade.
American depositary shares
Fees and charges payable by ADR holders
Citibank N.A. serves as the depositary (Depositary) for Diageo’s ADS programme. Pursuant to the deposit agreement dated
14 February 2013 between Diageo, the Depositary and owners and holders of ADSs (the Deposit Agreement), ADR holders may be
required to pay various fees to the Depositary, and the Depositary may refuse to provide any service for which a fee is assessed until
Governance (continued)
226
the applicable fee has been paid. In particular, the Depositary, under the terms of the Deposit Agreement, shall charge a fee of up to
$5.00 per 100 ADSs (or fraction thereof) relating to the issuance of ADSs; delivery of deposited securities against surrender of ADSs;
distribution of cash dividends or other cash distributions (i.e. sale of rights and other entitlements); distribution of ADSs pursuant to
stock dividends or other free stock distributions, or exercise of rights to purchase additional ADSs; distribution of securities other than
ADSs or rights to purchase additional ADSs (i.e. spin-off shares); and depositary services. Citibank N.A. is located at 388 Greenwich
Street, New York, New York, 10013, United States. In addition, ADR holders may be required under the Deposit Agreement to pay
the Depositary (a) taxes (including applicable interest and penalties) and other governmental charges; (b) registration fees; (c) certain
cable, telex, and facsimile transmission and delivery expenses; (d) the expenses and charges incurred by the Depositary in the
conversion of foreign currency; (e) such fees and expenses as are incurred by the Depositary in connection with compliance with
exchange control regulations and other regulatory requirements; and (f) the fees and expenses incurred by the Depositary, the
custodian, or any nominee in connection with the servicing or delivery of ADSs. The Depositary may (a) withhold dividends or other
distributions or sell any or all of the shares underlying the ADSs in order to satisfy any tax or governmental charge and (b) deduct
from any cash distribution the applicable fees and charges of, and expenses incurred by, the Depositary and any taxes, duties or other
governmental charges on account.
Direct and indirect payments by the Depositary
The Depositary reimburses Diageo for certain expenses it incurs in connection with the ADR programme, subject to a ceiling set out in
the Deposit Agreement pursuant to which the Depositary provides services to Diageo. The Depositary has also agreed to waive certain
standard fees associated with the administration of the programme. Under the contractual arrangements with the Depositary, Diageo
has received approximately $1.3 million arising out of fees charged in respect of dividends paid during the year and issuance and
cancellation fees to cover the Company's ADR programme costs. These payments are received for expenses associated with non-deal
road shows, third-party investor relations consultant fees and expenses, Diageo’s cost for administration of the ADR programme not
absorbed by the Depositary and related activities (e.g. expenses associated with the AGM), travel expenses to attend training and
seminars, exchange listing fees, legal fees, auditing fees and expenses, the SEC filing fees, expenses related to Diageo’s compliance
with US securities law and regulations (including, without limitation, the Sarbanes-Oxley Act) and other expenses incurred by Diageo
in relation to the ADR programme.
Articles of association
The company is incorporated under the name Diageo plc, and is registered in England and Wales under registered number 23307. The
following description summarises certain provisions of Diageo’s articles of association (as adopted by special resolution at the Annual
General Meeting on 28 September 2023) and applicable English law concerning companies (the Companies Acts), in each case as at
24 July 2024. This summary is qualified in its entirety by reference to the Companies Acts and Diageo’s articles of association.
Investors can obtain copies of Diageo’s articles of association by contacting the Company Secretary at: the.cosec@diageo.com. Any
amendment to the articles of association of the company may be made in accordance with the provisions of the Companies Act 2006,
by way of special resolution.
Directors
Diageo’s articles of association provide for a board of directors, consisting (unless otherwise determined by an ordinary resolution of
shareholders) of not fewer than three directors and not more than 25 directors, in which all powers to manage the business and affairs
of Diageo are vested.
A director must not vote on, or count towards the quorum in relation to, any resolution of the Board in respect of any contract in which
they have an interest and, if they do so, their vote will not be counted. This prohibition does not apply to any resolution where that
interest cannot reasonably be regarded as likely to give rise to a conflict of interest or where that interest arises only from certain
specified matters, including: (a) indemnifying the director in respect of obligations incurred at the request of or for the benefit of the
company or any of its subsidiary undertakings; (b) indemnifying a third party in respect of obligations of the company or any of its
subsidiary undertakings for which the director has assumed responsibility in whole or in part under an indemnity or guarantee or by
the giving of security; (c) offers of securities by the company or any of its subsidiary undertakings in which the director will or may be
entitled to participate as a holder of securities; (d) contracts concerning another company in which the director is the holder of or
beneficially interested in less than 1% of any class of the equity share capital of such company; (e) employee benefits in relation to the
company or any of its subsidiary undertakings in which the director will share in a similar manner to other employees; and (g) the
purchase or maintenance of insurance against any liability for, or for the benefit of, any director or directors or for, or for the benefit
of, persons who include directors.
Directors may be elected by the members in a general meeting or appointed by the Board.
The directors are empowered to exercise all the powers of the company to borrow money, subject to any limitation in Diageo’s articles
of association (currently two times the adjusted capital and reserves of the company as defined in the articles of association), unless
previously sanctioned by an ordinary resolution of the company.
At each annual general meeting, all the directors at the date on which the notice convening the annual general meeting is approved by
the Board shall retire from office and may offer themselves for re-election by members. There is no age limit requirement in respect of
directors.
Directors may also be removed before the expiration of their term of office in accordance with the provisions of the Companies Acts.
Governance (continued)
227
Directors are not required to hold any shares of the company by way of qualification.
Voting rights
Voting on any resolution at any general meeting of the company is by a show of hands unless a poll is duly demanded. On a show of
hands,
(a) every shareholder who is present in person at a general meeting, and every proxy appointed by any one shareholder and present at a
general meeting, has/have one vote regardless of the number of shares held by the shareholder (or, subject to (b), represented by the
proxy), and
(b) every proxy present at a general meeting who has been appointed by more than one shareholder has one vote regardless of the
number of shareholders who have appointed him/her or the number of shares held by those shareholders, unless he/she has been
instructed to vote for a resolution by one or more shareholders and to vote against the resolution by one or more shareholders, in
which case he/she has one vote for and one vote against the resolution.
On a poll, every shareholder who is present in person or by proxy has one vote for every share held by that shareholder, but a
shareholder or proxy entitled to more than one vote need not cast all his/her votes or cast them all in the same way (the deadline for
exercising voting rights by proxy is set out in the form of proxy).
A poll may be demanded by any of the following:
•the chair of the general meeting;
•at least three shareholders entitled to vote on the relevant resolution and present in person or by proxy at the meeting;
•any shareholder or shareholders present in person or by proxy and representing in the aggregate not less than one-tenth of the
total voting rights of all shareholders entitled to vote on the relevant resolution; or
•any shareholder or shareholders present in person or by proxy and holding shares conferring a right to vote on the relevant
resolution on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on
all the shares conferring that right.
Diageo’s articles of association and the Companies Acts provide for matters to be transacted at general meetings of Diageo by the
proposing and passing of two kinds of resolutions:
•ordinary resolutions, which include resolutions for the election, re-election and removal of directors, the declaration of final
dividends, the appointment and re-appointment of the external auditor, the remuneration report and remuneration policy, the
increase of authorised share capital and the grant of authority to allot shares; and
•special resolutions, which include resolutions for the amendment of Diageo’s articles of association, resolutions relating to
the disapplication of pre-emption rights, and resolutions modifying the rights of any class of Diageo’s shares at a meeting of
the holders of such class.
An ordinary resolution requires the affirmative vote of a simple majority of the votes cast by those entitled to vote at a meeting at
which there is a quorum in order to be passed. Special resolutions require the affirmative vote of not less than three-quarters of the
votes cast by those entitled to vote at a meeting at which there is a quorum in order to be passed. The necessary quorum for a meeting
of Diageo is a minimum of two shareholders present in person or by proxy and entitled to vote.
A shareholder is not entitled to vote at any general meeting or class meeting in respect of any share held by them if they have been
served with a restriction notice (as defined in Diageo's articles of association) after failure to provide Diageo with information
concerning interests in those shares required to be provided under the Companies Acts.
Pre-emption rights and new issues of shares
While holders of ordinary shares have no pre-emptive rights under Diageo’s articles of association, the ability of the Directors to cause
Diageo to issue shares, securities convertible into shares or rights to shares, otherwise than pursuant to an employee share scheme, is
restricted. Under the Companies Acts, the directors of a company are, with certain exceptions, unable to allot any equity securities
without express authorisation, which may be contained in a company’s articles of association or given by its shareholders in a general
meeting, but which in either event cannot last for more than five years. Under the Companies Acts, Diageo may also not allot shares
for cash (otherwise than pursuant to an employee share scheme) without first making an offer to existing shareholders to allot such
shares to them on the same or more favourable terms in proportion to their respective shareholdings, unless this requirement is waived
by a special resolution of the shareholders.
Repurchase of shares
Subject to authorisation by special resolution, Diageo may purchase its own shares in accordance with the Companies Acts. Any
shares which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion
of the purchase, thereby reducing the amount of Diageo’s issued share capital.
Restrictions on transfers of shares
The Board may decline to register a transfer of a certificated Diageo share unless the instrument of transfer (a) is duly stamped or
certified or otherwise shown to the satisfaction of the Board to be exempt from stamp duty, and is accompanied by the relevant share
certificate and such other evidence of the right to transfer as the Board may reasonably require, (b) is in respect of only one class of
share and (c) if to joint transferees, is in favour of not more than four such transferees. Registration of a transfer of an uncertificated
Governance (continued)
228
share may be refused in the circumstances set out in the uncertificated securities rules (as defined in Diageo’s articles of association)
and where, in the case of a transfer to joint holders, the number of joint holders to whom the uncertificated share is to be transferred
exceeds four.
The Board may decline to register a transfer of any of Diageo’s certificated shares by a person with a 0.25% interest (as defined in
Diageo’s articles of association) if such a person has been served with a restriction notice (as defined in Diageo’s articles of
association) after failure to provide Diageo with information concerning interests in those shares required to be provided under the
Companies Acts, unless the transfer is shown to the Board to be pursuant to an arm’s-length sale (as defined in Diageo’s articles of
association).
Other information
Other information relevant to the Directors’ report may be found in the following sections of the Annual Report:

Information (including that required by UK Listing Authority Listing Rule 9.8.4) | Location in Annual Report
Agreements with controlling shareholders | Not applicable
Contracts of significance | Not applicable
Details of long-term incentive schemes | Directors’ remuneration report
Directors’ indemnities and compensation | Directors’ remuneration report - Additional information; Consolidated financial statements - note 21 Related party transactions
Dividends | Group financial review; Consolidated financial statements - Unaudited financial information
Engagement with employees | Corporate governance report - Workforce engagement statement
Engagement with suppliers, customers and others | Corporate governance report - Stakeholder engagement
Events post 30 June 2024 | Consolidated financial statements - note 23 Post balance sheet events
Financial risk management | Consolidated financial statements - note 16 Financial instruments and risk management
Future developments | Chair’s statement; Chief Executive’s statement; Market overview and investment case; Business model; Our growth ambition
Greenhouse gas emissions | Pioneer grain-to-glass sustainability; Non-Financial and sustainability information statement
Interest capitalised | Not applicable
Non-pre-emptive issues of equity for cash (including in respect of major unlisted subsidiaries) | Not applicable
Parent participation in a placing by a listed subsidiary | Not applicable
Political donations | Corporate governance report
Provision of services by a controlling shareholder | Not applicable
Publication of unaudited financial information | Unaudited financial information
Purchase of own shares | Repurchase of shares; Consolidated financial statements - note 18 Equity
Research and development | Other additional information - Research and development; Consolidated financial statements - note 4 Operating costs
Review of the business and principal risks and uncertainties | Chief Executive’s statement; Our principal risks and risk management; Pioneer grain-to-glass sustainability; Business review
Share capital - structure, voting and other rights | Consolidated financial statements - note 18 Equity
Share capital - employee share plan voting rights | Consolidated financial statements - note 18 Equity
Shareholder waivers of dividends | Consolidated financial statements - note 18 Equity
Shareholder waivers of future dividends | Consolidated financial statements - note 18 Equity
Streamlined Energy and Carbon Reporting (SECR) disclosures | Pioneer grain-to-glass sustainability
Sustainability and responsibility | Pioneer grain-to-glass sustainability
Waiver of emoluments by a director | Not applicable
Waiver of future emoluments by a director | Not applicable

The Directors’ report of Diageo plc for the year ended 30 June 2024 comprises these pages and the sections of the Annual Report
referred to under ‘Directors’, ‘Corporate governance statement’ and ‘Other information’ above, which are incorporated into the
Directors’ report by reference.
In addition, certain disclosures required to be contained in the Directors’ report have been incorporated into the ‘Strategic report’ as
set out in ‘Other information’ above.
The Directors’ report, which has been approved by a duly appointed and authorised committee of the Board of Directors, was signed
on its behalf by Tom Shropshire, the Company Secretary, on 29 July 2024.
Governance (continued)
229
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Diageo plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Diageo plc and its subsidiaries (the “Company”) as of 30 June 2024
and 2023, and the related consolidated income statements and consolidated statements of comprehensive income, of changes in equity
and of cash flows for each of the three years in the period ended 30 June 2024, including the related notes (collectively referred to as
the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of 30 June
2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of 30 June 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period
ended 30 June 2024 in conformity with UK-adopted International Accounting Standards and IFRS Accounting Standards as issued by
the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of 30 June 2024, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Part II. 15.B. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
230
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.
Assessment for impairment and impairment reversals associated with brand intangible assets
As described in Note 9 to the consolidated financial statements, the Company’s brand intangible assets carrying amount at 30 June
2024 was $9,642 million, with an impairment charge of $128 million and a reversal of previously recorded impairments of $379
million recognised during the year. Management performs impairment tests for brand intangible assets annually, or more frequently if
events or circumstances indicate that the carrying amount may not be recoverable. Reversal of an impairment loss is considered if the
recoverable amount of the brand intangible asset is significantly above the carrying value over an extended period. Recoverable
amounts are calculated based on the value in use approach, also considering fair value less costs of disposal. The value in use
calculations are based on discounted forecasted cash flows using assumptions that cash flows continue in perpetuity at the terminal
growth rate of each country or region. If the net carrying value exceeds the recoverable amount an impairment charge is recognised.
The increased carrying amount of a brand intangible asset attributable to a reversal of an impairment loss shall not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset in prior years. Management makes
judgements in determining the value in use. The significant assumptions used for the value in use calculations are estimated sales
growth, margin and terminal growth rate, as well as the discount rate applicable to the future cash flows.
The principal considerations for our determination that performing procedures related to the impairment and impairment reversal
assessment for brand intangible assets is a critical audit matter are (i) the significant judgement made by management when estimating
the recoverable amount; (ii) a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating
management’s significant assumptions, related to sales growth, margin and the terminal growth rate included in forecasted cash flows,
as well as the discount rate; and (iii) the audit effort involved the use of professionals with specialised skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s
impairment tests, including controls over the measurement of the recoverable amounts. These procedures also included, among others:
(i) testing management’s process for estimating the recoverable amount of brands; (ii), evaluating the appropriateness of the
methodology used to determine the recoverable amount; (iii) testing the completeness, accuracy, and relevance of underlying data
used in the models; and (iv) evaluating the reasonableness of the significant assumptions used by management in estimating future
cash flows related to revenue growth rates, cost of sales, terminal growth rate and the specific weighted-average cost of capital used to
discount future cash flows. Evaluating the reasonableness of management’s assumptions related to revenue growth rates, margin and
the terminal growth rate involved evaluating whether the assumptions used were reasonable considering (i) consistency with external
market and industry data, (ii) the current and past performance of the brand intangible assets and (iii) whether the assumptions were
consistent with evidence obtained in other areas of the audit. Professionals with specialised skill and knowledge were used to assist in
the evaluation of the weighted-average cost of capital assumption used to discount future cash flows.
Contingent liabilities associated with Brazil taxes
As described in Note 19 to the consolidated financial statements, the Company’s current aggregate known possible exposure from tax
assessment values in Brazil is up to approximately $853 million with no provision in respect to these issues. As disclosed by
management, the Company is currently involved in a large number of tax cases in Brazil and may be subject to further future tax
assessments in this jurisdiction based on the same or similar matters. Provisions are made for the anticipated settlement cost of legal
or other disputes against the Company where it is considered to be probable that a liability exists and a reliable estimate can be made
of the likely outcome. Where it is possible that a settlement may be reached or it is not possible to make a reliable estimate of the
estimated financial effect, appropriate disclosure is made but no provision is created. Management judgement is necessary in assessing
the likelihood that a claim will succeed, or a liability will arise, and an estimate to quantify the possible range of any settlement.
The principal considerations for our determination that performing procedures related to contingent liabilities associated with Brazil
taxes is a critical audit matter are (i) the significant judgments made by management in estimating a provision due to the large number
of ongoing tax cases and current possible exposure from tax assessment values; (ii) a high degree of auditor judgement, subjectivity
and effort in performing procedures and evaluating audit evidence related to the assessment of the probability of an expected
settlement; and (iii) the audit effort involved the use of professionals with specialised skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the recognition and
measurement of the contingent liabilities associated with taxes. These procedures also included, among others: (i) assessing the
reasonableness of information used in determining the likelihood that tax authorities will ultimately prevail; (ii) testing the calculation
231
of the possible exposure; (iii) evaluating management’s assessment of the ongoing tax cases in Brazil and probability of settlement
including obtaining confirmation from external counsel; (iv) evaluating the status and results of tax audits with the relevant tax
authorities; and (v) evaluating the sufficiency of the Company’s related disclosures. Professionals with specialised skill and
knowledge were used to assist in the evaluation of the recognition and measurement of the Company’s contingent liabilities associated
with Brazil taxes.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
1 August 2024
We have served as the Company's auditor since 2015.
232
Consolidated income statement

| Notes | Year ended 30 June 2024 $ million | Year ended 30 June 2023 re-presented(1) $ million | Year ended 30 June 2022 re-presented(1) $ million
Sales | 2 | 27,891 | 28,270 | 29,751
Excise duties | 4 | (7,622) | (7,715) | (9,235)
Net sales | 2 | 20,269 | 20,555 | 20,516
Cost of sales | 4 | (8,071) | (8,289) | (7,923)
Gross profit |  | 12,198 | 12,266 | 12,593
Marketing | 4 | (3,691) | (3,663) | (3,616)
Other operating items | 4 | (2,506) | (3,056) | (3,080)
Operating profit |  | 6,001 | 5,547 | 5,897
Non-operating items | 3 | (70) | 364 | (88)
Finance income | 5 | 400 | 409 | 661
Finance charges | 5 | (1,285) | (1,121) | (1,217)
Share of after tax results of associates and joint ventures | 6 | 414 | 443 | 555
Profit before taxation |  | 5,460 | 5,642 | 5,808
Taxation | 7 | (1,294) | (1,163) | (1,398)
Profit for the year |  | 4,166 | 4,479 | 4,410
Attributable to: |  |  |  |
Equity shareholders of the parent company |  | 3,870 | 4,445 | 4,280
Non-controlling interests |  | 296 | 34 | 130
|  | 4,166 | 4,479 | 4,410
|  | million | million | million
Weighted average number of shares |  |  |  |
Shares in issue excluding own shares |  | 2,234 | 2,264 | 2,318
Dilutive potential ordinary shares |  | 5 | 7 | 7
|  | 2,239 | 2,271 | 2,325
|  | cents | cents | cents
Basic earnings per share |  | 173.2 | 196.3 | 184.6
Diluted earnings per share |  | 172.8 | 195.7 | 184.1

The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 238-240 for an explanation under Accounting information and policies.
Financial statements
233
Consolidated statement of comprehensive income

| Notes | Year ended 30 June 2024 $ million | Year ended 30 June 2023 re-presented(1) $ million | Year ended 30 June 2022 re-presented(1) $ million
Other comprehensive income |  |  |  |
Items that will not be recycled subsequently to the income statement |  |  |  |
Net remeasurement of post-employment benefit plans |  |  |  |
Group | 14 | (76) | (771) | 820
Associates and joint ventures |  | 1 | 16 | 6
Non-controlling interests | 14 | — | — | (1)
Tax on post-employment benefit plans |  | 14 | 193 | (164)
Changes in the fair value of equity investments at fair value through other comprehensive income |  | (1) | (5) | (15)
|  | (62) | (567) | 646
Items that may be recycled subsequently to the income statement |  |  |  |
Exchange differences on translation of foreign operations |  |  |  |
Group |  | (516) | (906) | 756
Associates and joint ventures | 6 | (64) | 132 | (570)
Non-controlling interests |  | (21) | (100) | (83)
Net investment hedges |  | (70) | 499 | (829)
Exchange loss recycled to the income statement |  |  |  |
On disposal of foreign operations | 8 | 26 | 15 | 143
On step acquisitions |  | — | 2 | —
Tax on exchange differences – group |  | 11 | 2 | (21)
Effective portion of changes in fair value of cash flow hedges |  |  |  |
Hedge of foreign currency debt of the group |  | (58) | 7 | 309
Transaction exposure hedging of the group |  | 61 | 328 | (230)
Hedges by associates and joint ventures |  | (3) | 29 | (20)
Commodity price risk hedging of the group |  | 13 | (67) | 104
Recycled to income statement – hedge of foreign currency debt of the group |  | 152 | 65 | (319)
Recycled to income statement – transaction exposure hedging of the group |  | (266) | (16) | 57
Recycled to income statement – commodity price risk hedging of the group |  | 9 | (39) | (61)
Cost of hedging |  | (51) | — | —
Recycled to income statement – cost of hedging |  | (27) | — | —
Tax on effective portion of changes in fair value of cash flow hedges |  | 16 | (46) | 42
Hyperinflation adjustments |  | 503 | 229 | 431
Tax on hyperinflation adjustments(2) |  | (138) | (49) | (87)
|  | (423) | 85 | (378)
Other comprehensive (loss)/income, net of tax, for the year |  | (485) | (482) | 268
Profit for the year |  | 4,166 | 4,479 | 4,410
Total comprehensive income for the year |  | 3,681 | 3,997 | 4,678
Attributable to: |  |  |  |
Equity shareholders of the parent company |  | 3,404 | 4,063 | 4,632
Non-controlling interests | 18 | 277 | (66) | 46
Total comprehensive income for the year |  | 3,681 | 3,997 | 4,678

The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 238-240 for an explanation under Accounting information and policies.
(2) Tax on hyperinflation adjustments $(111) million and tax rate change on hyperinflation adjustments $(27) million.
Financial statements (continued)
234
Consolidated balance sheet

|  | 30 June 2024 | 30 June 2023 | 1 July 2022
| Notes | $ million | $ million | re-presented(1) $ million | re-presented(1) $ million | re-presented(1) $ million | re-presented(1) $ million
Non-current assets |  |  |  |  |  |  |
Intangible assets | 9 | 14,814 |  | 14,506 |  | 14,401 |
Property, plant and equipment | 10 | 8,509 |  | 7,738 |  | 7,076 |
Biological assets | 11 | 199 |  | 197 |  | 114 |
Investments in associates and joint ventures | 6 | 5,032 |  | 4,825 |  | 4,418 |
Other investments | 13 | 94 |  | 71 |  | 45 |
Other receivables | 15 | 38 |  | 39 |  | 45 |
Other financial assets | 16 | 373 |  | 497 |  | 418 |
Deferred tax assets | 7 | 143 |  | 178 |  | 138 |
Post-employment benefit assets | 14 | 1,146 |  | 1,210 |  | 1,878 |
|  |  | 30,348 |  | 29,261 |  | 28,533
Current assets |  |  |  |  |  |  |
Inventories | 15 | 9,720 |  | 9,653 |  | 8,584 |
Trade and other receivables | 15 | 3,487 |  | 3,427 |  | 3,549 |
Corporate tax receivables | 7 | 304 |  | 292 |  | 180 |
Assets held for sale | 8 | 130 |  | — |  | 269 |
Other financial assets | 16 | 355 |  | 437 |  | 303 |
Cash and cash equivalents | 17 | 1,130 |  | 1,813 |  | 2,765 |
|  |  | 15,126 |  | 15,622 |  | 15,650
Total assets |  |  | 45,474 |  | 44,883 |  | 44,183
Current liabilities |  |  |  |  |  |  |
Borrowings and bank overdrafts | 17 | (2,885) |  | (2,142) |  | (1,842) |
Other financial liabilities | 16 | (348) |  | (453) |  | (538) |
Share buyback liability |  | — |  | — |  | (141) |
Trade and other payables | 15 | (6,354) |  | (6,678) |  | (7,123) |
Liabilities held for sale | 8 | (48) |  | — |  | (74) |
Corporate tax payables | 7 | (136) |  | (170) |  | (305) |
Provisions | 15 | (97) |  | (150) |  | (192) |
|  |  | (9,868) |  | (9,593) |  | (10,215)
Non-current liabilities |  |  |  |  |  |  |
Borrowings | 17 | (18,616) |  | (18,649) |  | (17,543) |
Other financial liabilities | 16 | (940) |  | (941) |  | (850) |
Other payables | 15 | (304) |  | (463) |  | (459) |
Provisions | 15 | (300) |  | (306) |  | (312) |
Deferred tax liabilities | 7 | (2,947) |  | (2,751) |  | (2,807) |
Post-employment benefit liabilities | 14 | (429) |  | (471) |  | (486) |
|  |  | (23,536) |  | (23,581) |  | (22,457)
Total liabilities |  |  | (33,404) |  | (33,174) |  | (32,672)
Net assets |  |  | 12,070 |  | 11,709 |  | 11,511
Equity |  |  |  |  |  |  |
Share capital | 18 | 887 |  | 898 |  | 875 |
Share premium |  | 1,703 |  | 1,703 |  | 1,635 |
Other reserves |  | (91) |  | 665 |  | 658 |
Retained earnings |  | 7,533 |  | 6,590 |  | 6,267 |
Equity attributable to equity shareholders of the parent company |  |  | 10,032 |  | 9,856 |  | 9,435
Non-controlling interests | 18 |  | 2,038 |  | 1,853 |  | 2,076
Total equity |  |  | 12,070 |  | 11,709 |  | 11,511

The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements have been approved by a duly appointed and authorised committee of the Board of Directors on
29 July 2024 and were signed on its behalf by Debra Crew and Lavanya Chandrashekar, Directors.
(1) See pages 238-240 for an explanation under Accounting information and policies.
Financial statements (continued)
235
Consolidated statement of changes in equity

|  |  |  | Other reserves | Retained earnings/(deficit) |  |  |
| Notes | Share capital $ million | Share premium $ million | Capital redemption reserve $ million | Hedging and exchange reserve $ million | Own shares $ million | Other retained earnings $ million | Total $ million | Equity attributable to parent company shareholders $ million | Non- controlling interests $ million | Total equity $ million
At 30 June 2021 (re-presented(1)) |  | 1,030 | 1,878 | 4,451 | (3,218) | (2,609) | 8,055 | 5,446 | 9,587 | 2,132 | 11,719
Adjustment to 2021 closing equity in respect of hyperinflation in Türkiye |  | — | — | — | — | — | 349 | 349 | 349 | — | 349
Adjusted opening balance |  | 1,030 | 1,878 | 4,451 | (3,218) | (2,609) | 8,404 | 5,795 | 9,936 | 2,132 | 12,068
Retranslation impact of opening balances(2) |  | (131) | (243) | (579) | 619 | 334 | — | 334 | — | — | —
Profit for the year |  | — | — | — | — | — | 4,280 | 4,280 | 4,280 | 130 | 4,410
Other comprehensive (loss)/income |  | — | — | — | (639) | — | 991 | 991 | 352 | (84) | 268
Total comprehensive (loss)/income for the year |  | — | — | — | (639) | — | 5,271 | 5,271 | 4,632 | 46 | 4,678
Employee share schemes |  | — | — | — | — | 52 | 67 | 119 | 119 | — | 119
Share-based incentive plans | 18 | — | — | — | — | — | 79 | 79 | 79 | — | 79
Share-based incentive plans in respect of associates |  | — | — | — | — | — | 5 | 5 | 5 | — | 5
Tax on share-based incentive plans |  | — | — | — | — | — | 11 | 11 | 11 | — | 11
Share-based payments and purchase of own shares in respect of subsidiaries |  | — | — | — | — | — | (15) | (15) | (15) | (8) | (23)
Unclaimed dividend |  | — | — | — | — | — | 3 | 3 | 3 | 1 | 4
Change in fair value of put option |  | — | — | — | — | — | (45) | (45) | (45) | — | (45)
Share buyback programme |  | (24) | — | 24 | — | — | (3,004) | (3,004) | (3,004) | — | (3,004)
Dividend declared for the year | 18 | — | — | — | — | — | (2,286) | (2,286) | (2,286) | (95) | (2,381)
At 30 June 2022 (re-presented(1)) |  | 875 | 1,635 | 3,896 | (3,238) | (2,223) | 8,490 | 6,267 | 9,435 | 2,076 | 11,511
Retranslation impact of opening balances(2) |  | 36 | 68 | 162 | (173) | (93) | — | (93) | — | — | —
Profit for the year |  | — | — | — | — | — | 4,445 | 4,445 | 4,445 | 34 | 4,479
Other comprehensive income/(loss) |  | — | — | — | 5 | — | (387) | (387) | (382) | (100) | (482)
Total comprehensive income/(loss) for the year |  | — | — | — | 5 | — | 4,058 | 4,058 | 4,063 | (66) | 3,997
Employee share schemes |  | — | — | — | — | 30 | 29 | 59 | 59 | — | 59
Share-based incentive plans | 18 | — | — | — | — | — | 58 | 58 | 58 | — | 58
Share-based incentive plans in respect of associates |  | — | — | — | — | — | 6 | 6 | 6 | — | 6
Tax on share-based incentive plans |  | — | — | — | — | — | 7 | 7 | 7 | — | 7
Share-based payments and purchase of own shares in respect of subsidiaries |  | — | — | — | — | — | 4 | 4 | 4 | 2 | 6
Purchase of non-controlling interests | 8 | — | — | — | — | — | (136) | (136) | (136) | (42) | (178)
Associates' transactions with non-controlling interests |  | — | — | — | — | — | (8) | (8) | (8) | — | (8)
Unclaimed dividend |  | — | — | — | — | — | 1 | 1 | 1 | — | 1
Change in fair value of put option |  | — | — | — | — | — | (19) | (19) | (19) | — | (19)
Share buyback programme |  | (13) | — | 13 | — | — | (1,543) | (1,543) | (1,543) | — | (1,543)
Dividend declared for the year | 18 | — | — | — | — | — | (2,071) | (2,071) | (2,071) | (117) | (2,188)
At 30 June 2023 (re-presented(1)) |  | 898 | 1,703 | 4,071 | (3,406) | (2,286) | 8,876 | 6,590 | 9,856 | 1,853 | 11,709
Adjustment to 2023 closing equity in respect of hyperinflation in Ghana |  | — | — | — | — | — | 41 | 41 | 41 | 10 | 51
Adjusted opening balance |  | 898 | 1,703 | 4,071 | (3,406) | (2,286) | 8,917 | 6,631 | 9,897 | 1,863 | 11,760
Profit for the year |  | — | — | — | — | — | 3,870 | 3,870 | 3,870 | 296 | 4,166
Other comprehensive (loss)/income |  | — | — | — | (767) | — | 301 | 301 | (466) | (19) | (485)
Total comprehensive (loss)/income for the year |  | — | — | — | (767) | — | 4,171 | 4,171 | 3,404 | 277 | 3,681
Employee share schemes |  | — | — | — | — | 36 | 12 | 48 | 48 | — | 48
Share-based incentive plans | 18 | — | — | — | — | — | 43 | 43 | 43 | — | 43
Share-based incentive plans in respect of associates |  | — | — | — | — | — | 5 | 5 | 5 | — | 5
Share-based payments and purchase of own shares in respect of subsidiaries |  | — | — | — | — | — | (6) | (6) | (6) | (4) | (10)
Purchase of non-controlling interests | 8 | — | — | — | — | — | (246) | (246) | (246) | 23 | (223)
Tax on purchase of non-controlling interests |  | — | — | — | — | — | 53 | 53 | 53 | — | 53
Unclaimed dividend |  | — | — | — | — | — | 1 | 1 | 1 | — | 1
Change in fair value of put option |  | — | — | — | — | — | 73 | 73 | 73 | — | 73
Share buyback programme |  | (11) | — | 11 | — | — | (997) | (997) | (997) | — | (997)
Dividend declared for the year | 18 | — | — | — | — | — | (2,243) | (2,243) | (2,243) | (121) | (2,364)
At 30 June 2024 |  | 887 | 1,703 | 4,082 | (4,173) | (2,250) | 9,783 | 7,533 | 10,032 | 2,038 | 12,070

The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 238-240 for an explanation under Accounting information and policies.
(2) Includes foreign translation differences arising from the retranslation of reserves due to the change in the group’s presentation currency.
Financial statements (continued)
236
Consolidated statement of cash flows

|  | Year ended 30 June 2024 | Year ended 30 June 2023 | Year ended 30 June 2022
| Notes | $ million | $ million | re- presented(1) $ million | re- presented(1) $ million | re- presented(1) $ million | re- presented(1) $ million
Cash flows from operating activities |  |  |  |  |  |  |
Profit for the year |  | 4,166 |  | 4,479 |  | 4,410 |
Taxation |  | 1,294 |  | 1,163 |  | 1,398 |
Share of after tax results of associates and joint ventures |  | (414) |  | (443) |  | (555) |
Net finance charges |  | 885 |  | 712 |  | 556 |
Non-operating items |  | 70 |  | (364) |  | 88 |
Operating profit |  |  | 6,001 |  | 5,547 |  | 5,897
Increase in inventories |  | (156) |  | (810) |  | (984) |
(Increase)/decrease in trade and other receivables |  | (66) |  | 142 |  | (502) |
(Decrease)/increase in trade and other payables and provisions |  | (546) |  | (746) |  | 1,245 |
Net increase in working capital |  |  | (768) |  | (1,414) |  | (241)
Depreciation, amortisation and impairment |  | 493 |  | 1,297 |  | 1,064 |
Dividends received |  | 269 |  | 271 |  | 238 |
Post-employment payments less amounts included in operating profit |  | (18) |  | (31) |  | (119) |
Other items |  | 88 |  | 74 |  | 70 |
|  |  | 832 |  | 1,611 |  | 1,253
Cash generated from operations |  |  | 6,065 |  | 5,744 |  | 6,909
Interest received |  | 156 |  | 157 |  | 146 |
Interest paid |  | (1,017) |  | (822) |  | (582) |
Taxation paid |  | (1,099) |  | (1,443) |  | (1,260) |
|  |  | (1,960) |  | (2,108) |  | (1,696)
Net cash inflow from operating activities |  |  | 4,105 |  | 3,636 |  | 5,213
Cash flows from investing activities |  |  |  |  |  |  |
Disposal of property, plant and equipment and computer software |  | 14 |  | 16 |  | 23 |
Purchase of property, plant and equipment and computer software |  | (1,510) |  | (1,417) |  | (1,457) |
Movements in loans and other investments |  | (47) |  | (68) |  | (96) |
Sale of businesses and brands | 8 | 87 |  | 559 |  | 102 |
Acquisition of subsidiaries | 8 | (6) |  | (404) |  | (278) |
Investments in associates and joint ventures | 8 | (133) |  | (112) |  | (86) |
Net cash outflow from investing activities |  |  | (1,595) |  | (1,426) |  | (1,792)
Cash flows from financing activities |  |  |  |  |  |  |
Share buyback programme | 18 | (987) |  | (1,673) |  | (2,985) |
Net sale of own shares for share schemes |  | 21 |  | 36 |  | 24 |
Purchase of treasury shares in respect of subsidiaries |  | (10) |  | — |  | (20) |
Dividends paid to non-controlling interests |  | (117) |  | (117) |  | (108) |
Proceeds from bonds | 17 | 2,225 |  | 2,537 |  | 2,971 |
Repayment of bonds | 17 | (1,667) |  | (1,650) |  | (2,060) |
Purchase of shares of non-controlling interests | 8 | (223) |  | (178) |  | — |
Cash inflow from other borrowings |  | 387 |  | 521 |  | 667 |
Cash outflow from other borrowings |  | (493) |  | (452) |  | (562) |
Equity dividends paid |  | (2,242) |  | (2,065) |  | (2,300) |
Net cash outflow from financing activities |  |  | (3,106) |  | (3,041) |  | (4,373)
Net decrease in net cash and cash equivalents | 17 |  | (596) |  | (831) |  | (952)
Exchange differences |  |  | (33) |  | (76) |  | (38)
Reclassification to assets held for sale |  |  | (30) |  | — |  | —
Net cash and cash equivalents at beginning of the year |  |  | 1,768 |  | 2,675 |  | 3,665
Net cash and cash equivalents at end of the year |  |  | 1,109 |  | 1,768 |  | 2,675
Net cash and cash equivalents consist of: |  |  |  |  |  |  |
Cash and cash equivalents | 17 |  | 1,130 |  | 1,813 |  | 2,765
Bank overdrafts | 17 |  | (21) |  | (45) |  | (90)
|  |  | 1,109 |  | 1,768 |  | 2,675

The accompanying notes are an integral part of these consolidated financial statements.
(1) See pages 238-240 for an explanation under Accounting information and policies.
Financial statements (continued)
237
Accounting information and policies
Introduction
This section describes the basis of preparation of the consolidated financial statements and the group’s accounting policies that are
applicable to the financial statements as a whole. Accounting policies, critical accounting estimates and judgements specific to a note
are included in the note to which they relate. Furthermore, the section details new accounting standards, amendments and
interpretations, that the group has adopted in the current financial year or will adopt in subsequent years.
1. Accounting information and policies
(a) Basis of preparation
The consolidated financial statements are prepared in accordance with IFRS® Accounting Standards (IFRSs) adopted by the UK (UK-
adopted International Accounting Standards) and IFRSs, as issued by the International Accounting Standards Board (IASB), including
interpretations issued by the IFRS Interpretations Committee. IFRS as adopted by the UK differs in certain respects from IFRS as
issued by the IASB. The differences have no impact on the group’s consolidated financial statements for the years presented. The
consolidated financial statements are prepared on a going concern basis under the historical cost convention, unless stated otherwise in
the relevant accounting policy.
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.
(b) Going concern
Management prepared 18 month cash flow forecasts which were also sensitised to reflect severe but plausible downside scenarios
taking into consideration the group's principal risks. In the base case scenario, management included assumptions for mid-single digit
net sales growth, slightly growing operating margin and global TBA market share growth. In light of the ongoing geo-political
volatility, the base case outlook and severe but plausible downside scenarios incorporated considerations for a prolonged global
recession, supply chain disruptions, higher inflation and further geo-political deterioration. Even under these scenarios, the group’s
liquidity is still expected to remain strong. Mitigating actions, should they be required, are all within management’s control and could
include reductions in discretionary spending such as acquisitions and capital expenditure, lower level of A&P and investment in
maturing stock, as well as a temporary suspension or reduction in its return of capital to shareholders (dividends or share buybacks) in
the next 12 months, or drawdowns on committed facilities. Having considered the outcome of these assessments, the Directors are
comfortable that the company is a going concern for at least 12 months from the date of signing the group's consolidated financial
statements.
(c) Consolidation
The consolidated financial statements include the results of the company and its subsidiaries together with the group’s attributable
share of the results of associates and joint ventures. A subsidiary is an entity controlled by Diageo plc. The group controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Where the group has the ability to exercise joint control over an entity but has rights to specified
assets and obligations for liabilities of that entity, the entity is included on the basis of the group’s rights over those assets and
liabilities.
(d) Foreign currencies
Items included in the financial statements of the group’s subsidiaries, associates and joint ventures are measured using the currency of
the primary economic environment in which each entity operates (its functional currency). The consolidated financial statements are
presented in US dollar, which is the functional currency of the parent company, Diageo plc. The functional currency of Diageo plc is
determined by using management judgement that considers the parent company as an extension of its subsidiaries.
Starting 1 July 2023, in line with reporting requirements, the functional currency of Diageo plc changed from sterling to US dollar
which is applied prospectively. This is because the group's share of net sales and expenses in the United States and other countries
whose currencies correlate closely with the US dollar has been increasing over the years, and that trend is expected to continue in line
with the group's strategic focus. Diageo also decided to change its presentation currency to US dollar with effect from 1 July 2023,
applied retrospectively, as it believes that this change will provide better alignment of the reporting of performance with its business
exposures.
The income statements and cash flows of non US dollar entities are translated into US dollar at weighted average rates of
exchange, except for subsidiaries in hyperinflationary economies that are translated with the closing rate at the end of the year and for
substantial transactions that are translated at the rate on the date of the transaction. Exchange differences arising on the retranslation to
closing rates are taken to the exchange reserve.
Financial statements (continued)
238
Assets and liabilities are translated at the relevant year end closing rates. Exchange differences arising on the retranslation at closing
rates of the opening balance sheets of non US dollar entities are taken to the exchange reserve, as are exchange differences arising on
foreign currency borrowings and financial instruments designated as net investment hedges, to the extent that they are effective. Tax
charges and credits arising on such items are also taken to the exchange reserve. Gains and losses accumulated in the exchange reserve
are recycled to the income statement when the foreign operation is sold. Other exchange differences are taken to the income statement.
Transactions in foreign currencies are recorded at the rate of exchange on the date of the transaction.
Share capital, share premium, capital redemption reserve included in other reserves and own shares at 30 June 2023, 30 June 2022
and 30 June 2021 in the statement of changes in equity are translated to US dollar at the closing exchange rate at the relevant balance
sheet date; exchange differences arising on the retranslation to closing rates are taken to the exchange reserve. From 1 July 2023, as
Diageo plc changed its functional currency, the share capital, share premium, capital redemption reserve included in other reserves and
own shares in the consolidated statement of changes in equity are recorded in US dollar.
The cumulative foreign exchange translation reserve was set to zero on 1 July 2004, the date of transition to IFRS and this reserve
is re-presented as if the group reported in US dollar since that date.
As a result of the functional and presentation currency change, the group has realigned its economic hedging portfolio managing
balance sheet translation risk in line with the changed foreign exchange risk management objective. The group has also realigned its
net investment hedging portfolio in line with the new currency exposures and as part of this exercise Diageo has re-designated its buy
US dollar sell sterling cross currency interest swaps in net investment hedge relationships previously used in cash flow hedging
foreign currency debt of the group.
The principal foreign exchange rates used in the translation of financial statements for the three years ended 30 June 2024,
expressed in sterling and euros per $1, were as follows:

| 2024 | 2023 | 2022
Sterling |  |  |
Income statement and cash flows(1) | 0.80 | 0.83 | 0.75
Assets and liabilities(2) | 0.79 | 0.79 | 0.83
Euro |  |  |
Income statement and cash flows(1) | 0.93 | 0.96 | 0.89
Assets and liabilities(2) | 0.93 | 0.93 | 0.96

(1) Weighted average rates
(2) Closing rates
The group uses foreign exchange hedges to mitigate the effect of exchange rate movements. For further information, see note 16.
(e) Critical accounting estimates and judgements
Details of critical estimates and judgements which the Directors consider could have a significant impact on the financial statements
are set out in the related notes as follows:
–Taxation – management judgement whether a provision is required and management estimate of amount of corporate tax
payable or receivable, the recoverability of deferred tax assets and expectation on manner of recovery of deferred taxes – pages
256 and 306.
–Brands, goodwill, other intangibles and contingent considerations – management judgement whether the assets and liabilities
are to be recognised and synergies resulting from an acquisition. Management judgement and estimate are required in
determining future cash flows and appropriate applicable assumptions to support the intangible asset and contingent
consideration value – p age 265.
–Post-employment benefits – management judgement whether a surplus can be recovered and management estimate in
determining the assumptions in calculating the liabilities of the funds – page 274.
–Contingent liabilities and legal proceedings – management judgement in assessing the likelihood of whether a liability will arise
and an estimate to quantify the possible range of any settlement; and significant unprovided tax matters where maximum
exposure is provided for each – page 304.
(f) Hyperinflationary accounting
The group applied hyperinflationary accounting for its operations in Türkiye, Argentina, Ghana and Venezuela.
The group applies hyperinflationary accounting for its operations in Ghana starting from 1 July 2023. Hyperinflationary
accounting needs to be applied as if Ghana had always been a hyperinflationary economy, hence, as per Diageo’s accounting policy
choice, the differences between equity at 30 June 2023 as reported and the equity after the restatement of the non-monetary items to
the measuring unit current at 30 June 2023 were recognised in retained earnings.
The group’s consolidated financial statements include the results and financial position of its operations in hyperinflationary
economies restated to the measuring unit current at the end of each period, with hyperinflationary gains and losses in respect of
monetary items being reported in finance income and charges. Comparative amounts presented in the consolidated financial
Financial statements (continued)
239
statements are not restated. When applying IAS 29 on an ongoing basis, comparatives in stable currency are not restated and the effect
of inflating opening net assets to the measuring unit current at the end of the reporting period is presented in other comprehensive
income.
The movement in the publicly available official price index for the year ended 30 June 2024 was 72% (2023 – 38%; 2022 – 79%)
in Türkiye, 270% (2023 – 116%; 2022 – 64%) in Argentina and 23% in Ghana. The inflation rate used by the group in the case of
Venezuela is provided by an independent valuer because no reliable, officially published rate is available. Movement in the price
index for the year ended 30 June 2024 was 77% (2023 – 382%; 2022 – 268%) in Venezuela.
Recent developments in Venezuela led management to change its estimate for the exchange rate of VES/$ to be the official
exchange rate published by Bloomberg. Figures for the year ended 30 June 2024 show the results of the Venezuelan operation
consolidated at the official closing exchange rate.
(g) New accounting standards and interpretations
The following standard and amendments to the accounting standards, issued by the IASB and endorsed by the UK, were adopted by
the group from 1 July 2023 with no material impact on the group’s consolidated results, financial position or disclosures:
–IFRS 17 – Insurance Contracts
–Amendments to IAS 12 Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
–Amendments to IAS 1, 8 – Definition of Accounting Estimates
–Amendments to IAS 1 Disclosure Initiative – Accounting Policies
The following amendments issued by the IASB have been endorsed by the UK and have not yet been adopted by the group, which are
not expected to have material impact on the group's consolidated results or financial position:
–Amendments to IAS 1 – Classification of Liabilities and Non-current Liabilities with Covenants (effective from the year ending
30 June 2025)
–Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback (effective from the year ending 30 June 2025)
–Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements (effective from the year ending 30 June 2025)
There are a number of other standards, amendments and clarifications to IFRSs, effective in future years, which are not expected to
significantly impact the group’s consolidated results or financial position.
(h) Climate change considerations
The impact of climate change assessment and the net zero carbon emission target for Diageo's direct operations (Scope 1 & 2) for
2030 have been considered as part of the assessment of estimates and judgements in preparing the group's consolidated financial
statements.
The climate change scenario analyses performed in 2024 – conducted in line with TCFD recommendations (‘Transition
Scenario’ (RCP 2.6), a ‘Moderate Warming’ Scenario (RCP 4.5) and a ‘Severe Warming Scenario’ (RCP 8.5)) – identified no material
financial impact to these financial statements.
The following considerations were made in respect of the financial statements:
•The impact of climate change on factors (like residual values, useful lives and depreciation methods) that determine the carrying
value of non-current assets.
•The impact of climate change on forecasts of cash flows used (including forecast depreciation in line with capital expenditure
plans for Diageo's net zero carbon emission commitment) in impairment assessments for the value-in-use of non-current assets
including goodwill (see note 9).
•The impact of climate change on post-employment assets.
Financial statements (continued)
240
Results for the year
Introduction
This section explains the results and performance of the group for the three years ended 30 June 2024. Disclosures are provided for
segmental information, operating costs, exceptional items, finance income and charges, the group's share of results of associates and
joint ventures, taxation. For associates, joint ventures and taxation, balance sheet disclosures are also provided in this section.
2. Segmental information
Accounting policies
Sales comprise revenue from contracts with customers from the sale of goods, royalties and rents receivable. Revenue from the sale of
goods includes excise and other duties which the group pays as principal but excludes duties and taxes collected on behalf of third
parties, such as value added tax. Sales are recognised as or when performance obligations are satisfied by transferring control of a
good or service to the customer, which is determined by considering, among other factors, the delivery terms agreed with customers.
For the sale of goods, the transfer of control occurs when the significant risks and rewards of ownership are passed to the customer.
Based on the shipping terms agreed with customers, the transfer of control of goods occurs at the time of dispatch for the majority of
sales. Where the transfer of control is subsequent to the dispatch of goods, the time between dispatch and receipt by the customer is
generally less than five days. The group includes in sales the net consideration to which it expects to be entitled. Sales are recognised
to the extent that it is highly probable that a significant reversal will not occur. Therefore, sales are stated net of expected price
discounts, allowances for customer loyalty and certain promotional activities and similar items. Generally, payment of the transaction
price is due within credit terms that are consistent with industry practices, with no element of financing.
Net sales are sales less excise duties. Diageo incurs excise duties throughout the world. In the majority of countries, excise duties are
effectively a production tax which becomes payable when the product is removed from bonded premises and is not directly related to
the value of sales. It is generally not included as a separate item on external invoices; increases in excise duty are not always passed on
to the customer and where a customer fails to pay for products received the group cannot reclaim the excise duty. The group therefore
recognises excise duty, unless it regards itself as an agent of the regulatory authorities, as a cost to the group.
Advertising costs, point of sale materials and sponsorship payments are charged to marketing in operating profit when the company
has a right of access to the goods or services acquired.
Exceptional items are those that in management’s judgement need to be disclosed separately. Such items are included in the income
statement caption to which they relate, and form part of the segmental reporting. Management believes that separate disclosure of
exceptional items and the classification between operating and non-operating further helps investors to understand the performance of
the group.
Changes in estimates and reversals in relation to items previously recognised as exceptional are presented consistently as
exceptional in the current year.
Diageo is an international manufacturer and distributor of premium drinks. Diageo also owns a number of investments in associates
and joint ventures, as set out in note 6.
The segmental information presented is consistent with management reporting provided to the Executive Committee (the chief
operating decision-maker).
The Executive Committee considers the business principally from a geographical perspective based on the location of third-party
sales and the business analysis is presented by geographical segment. In addition to these geographical selling segments, a further
segment reviewed by the Executive Committee is the Supply Chain and Procurement (SC&P) segment, which manufactures products
for other group companies and includes the production sites in the United Kingdom, Ireland, Italy, Guatemala and Mexico, as well as
comprises the global procurement function.
The group's operations also include the Corporate segment. Corporate costs are in respect of central costs, including finance,
marketing, corporate relations, human resources and legal, as well as certain information systems, facilities and employee costs that
are not allocable to the geographical segments or to SC&P.
Diageo uses shared services operations to deliver transaction processing activities for markets and operational entities. These centres
are located in India, Hungary, Colombia and the Philippines. These captive business service centres also perform certain central
finance activities, including elements of financial planning and reporting, treasury and HR services. The costs of shared services
operations are recharged to the regions.
For planning and management reporting purposes, Diageo uses budgeted exchange rates that are set at the prior year's weighted
average exchange rate. In order to ensure a consistent basis on which performance is measured through the year, prior period results
are also restated to the budgeted exchange rate. Segmental information for net sales and operating profit before exceptional items are
reported on a consistent basis with management reporting. The adjustments required to retranslate the segmental information to actual
exchange rates and to reconcile it to the group’s reported results are shown in the tables below. The comparative segmental
information, prior to retranslation, has not been restated at the current year’s budgeted exchange rates but is presented at the budgeted
rates for the respective year.
Financial statements (continued)
241
In addition, for management reporting purposes, Diageo presents the result of acquisitions and disposals completed in the current
and prior year separately from the results of the geographical segments. The impact of acquisitions and disposals on net sales and
operating profit is disclosed under the appropriate geographical segments in the tables below at budgeted exchange rates.
(a) Segmental information for the consolidated income statement

| North America | Europe | Asia Pacific | Latin America and Caribbean | Africa | SC&P | Eliminate inter- segment sales | Total operating segments | Corporate and other | Total
| $ million | $ million | $ million | $ million | $ million | $ million | $ million | $ million | $ million | $ million
2024 |  |  |  |  |  |  |  |  |  |
Sales | 8,514 | 8,024 | 6,320 | 2,432 | 2,478 | 3,551 | (3,551) | 27,768 | 123 | 27,891
Net sales |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 7,897 | 4,405 | 3,860 | 1,702 | 2,162 | 3,455 | (3,353) | 20,128 | 118 | 20,246
Acquisitions and disposals | 2 | 30 | 30 | — | 131 | — | — | 193 | — | 193
SC&P allocation | 12 | 65 | 12 | 11 | 2 | (102) | — | — | — | —
Retranslation to actual exchange rates | (3) | (59) | (85) | 105 | (539) | 198 | (198) | (581) | 5 | (576)
Hyperinflation | — | 363 | — | 21 | 22 | — | — | 406 | — | 406
Net sales | 7,908 | 4,804 | 3,817 | 1,839 | 1,778 | 3,551 | (3,551) | 20,146 | 123 | 20,269
Operating profit/(loss) |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 2,992 | 1,370 | 1,121 | 527 | 448 | (40) | — | 6,418 | (343) | 6,075
Acquisitions and disposals | (12) | (14) | 7 | — | 27 | — | — | 8 | — | 8
SC&P allocation | (5) | (22) | (7) | (5) | (1) | 40 | — | — | — | —
Fair value remeasurements | 128 | 27 | — | (16) | — | — | — | 139 | — | 139
Retranslation to actual exchange rates | 133 | 26 | (58) | (5) | (332) | — | — | (236) | (23) | (259)
Hyperinflation | — | (8) | — | 1 | (11) | — | — | (18) | — | (18)
Operating profit/(loss) before exceptional items | 3,236 | 1,379 | 1,063 | 502 | 131 | — | — | 6,311 | (366) | 5,945
Exceptional operating items(2) | (197) | (122) | 375 | — | — | — | — | 56 | — | 56
Operating profit/(loss) | 3,039 | 1,257 | 1,438 | 502 | 131 | — | — | 6,367 | (366) | 6,001
Non-operating items |  |  |  |  |  |  |  |  |  | (70)
Net finance charges |  |  |  |  |  |  |  |  |  | (885)
Share of after tax results of associates and joint ventures |  |  |  |  |  |  |  |  |  | 414
Profit before taxation |  |  |  |  |  |  |  |  |  | 5,460

Financial statements (continued)
242

| North America | Europe | Asia Pacific | Latin America and Caribbean | Africa | SC&P | Eliminate inter- segment sales | Total operating segments | Corporate and other | Total
| re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million
2023 |  |  |  |  |  |  |  |  |  |
Sales | 8,859 | 7,245 | 6,484 | 2,714 | 2,864 | 3,687 | (3,687) | 28,166 | 104 | 28,270
Net sales |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 8,109 | 4,526 | 4,134 | 2,200 | 2,186 | 3,943 | (3,854) | 21,244 | 115 | 21,359
Acquisitions and disposals | 27 | 27 | 48 | 3 | 138 | — | — | 243 | — | 243
SC&P allocation | 10 | 52 | 11 | 12 | 4 | (89) | — | — | — | —
Retranslation to actual exchange rates | (37) | (537) | (352) | (56) | (289) | (167) | 167 | (1,271) | (11) | (1,282)
Hyperinflation | — | 235 | — | — | — | — | — | 235 | — | 235
Net sales | 8,109 | 4,303 | 3,841 | 2,159 | 2,039 | 3,687 | (3,687) | 20,451 | 104 | 20,555
Operating profit/(loss) |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 3,132 | 1,441 | 1,187 | 800 | 466 | (42) | — | 6,984 | (392) | 6,592
Acquisitions and disposals | (23) | (19) | 7 | — | 37 | — | — | 2 | (8) | (6)
SC&P allocation | 3 | (31) | (7) | (4) | (3) | 42 | — | — | — | —
Fair value remeasurements | 122 | 34 | — | 1 | — | — | — | 157 | — | 157
Retranslation to actual exchange rates | (12) | (144) | (83) | (14) | (211) | — | — | (464) | 3 | (461)
Hyperinflation | — | 31 | — | — | — | — | — | 31 | — | 31
Operating profit/(loss) before exceptional items | 3,222 | 1,312 | 1,104 | 783 | 289 | — | — | 6,710 | (397) | 6,313
Exceptional operating items(2) | (118) | (12) | (581) | — | (55) | — | — | (766) | — | (766)
Operating profit/(loss) | 3,104 | 1,300 | 523 | 783 | 234 | — | — | 5,944 | (397) | 5,547
Non-operating items |  |  |  |  |  |  |  |  |  | 364
Net finance charges |  |  |  |  |  |  |  |  |  | (712)
Share of after tax results of associates and joint ventures |  |  |  |  |  |  |  |  |  | 443
Profit before taxation |  |  |  |  |  |  |  |  |  | 5,642

Financial statements (continued)
243

| North America | Europe | Asia Pacific | Latin America and Caribbean | Africa | SC&P | Eliminate inter- segment sales | Total operating segments | Corporate and other | Total
| re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million | re- presented $ million
2022 |  |  |  |  |  |  |  |  |  |
Sales | 8,888 | 7,531 | 7,481 | 2,585 | 3,196 | 2,672 | (2,672) | 29,681 | 70 | 29,751
Net sales |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 8,037 | 4,398 | 3,887 | 2,007 | 2,292 | 2,829 | (2,720) | 20,730 | 74 | 20,804
Acquisitions and disposals | 46 | 32 | — | 4 | 20 | — | — | 102 | — | 102
SC&P allocation | 13 | 63 | 13 | 16 | 4 | (109) | — | — | — | —
Retranslation to actual exchange rates | 10 | (510) | (63) | — | (78) | (48) | 48 | (641) | (4) | (645)
Hyperinflation | — | 255 | — | — | — | — | — | 255 | — | 255
Net sales | 8,106 | 4,238 | 3,837 | 2,027 | 2,238 | 2,672 | (2,672) | 20,446 | 70 | 20,516
Operating profit/(loss) |  |  |  |  |  |  |  |  |  |
At budgeted exchange rates(1) | 3,224 | 1,464 | 948 | 715 | 466 | (31) | — | 6,786 | (343) | 6,443
Acquisitions and disposals | (37) | 14 | — | — | (13) | — | — | (36) | — | (36)
SC&P allocation | (3) | (23) | (1) | (3) | (1) | 31 | — | — | — | —
Fair value remeasurements | 43 | 48 | — | (10) | — | — | — | 81 | — | 81
Retranslation to actual exchange rates | 41 | (172) | — | 10 | (33) | — | — | (154) | 26 | (128)
Hyperinflation | — | 14 | — | — | — | — | — | 14 | — | 14
Operating profit/(loss) before exceptional items | 3,268 | 1,345 | 947 | 712 | 419 | — | — | 6,691 | (317) | 6,374
Exceptional operating items(2) | (1) | (184) | (292) | — | — | — | — | (477) | — | (477)
Operating profit/(loss) | 3,267 | 1,161 | 655 | 712 | 419 | — | — | 6,214 | (317) | 5,897
Non-operating items |  |  |  |  |  |  |  |  |  | (88)
Net finance charges |  |  |  |  |  |  |  |  |  | (556)
Share of after tax results of associates and joint ventures |  |  |  |  |  |  |  |  |  | 555
Profit before taxation |  |  |  |  |  |  |  |  |  | 5,808

(1)These items represent the IFRS 8 performance measures for the geographical and SC&P segments.
(2)For definition and details of exceptional items, see pag es 246-250.
(i)The net sales figures for SC&P reported to the Executive Committee primarily comprise inter-segment sales and these are eliminated in a separate column in the
above segmental analysis. Apart from sales by the SC&P segment to the other operating segments, inter-segmental sales are not material.
(ii)The group’s net finance charges are managed centrally and are not attributable to individual operating segments.
(iii)Approximate ly 38% of annual net sales occurred in the last four months of calendar year 2023.
Financial statements (continued)
244
(b) Other segmental information

| North America $ million | Europe $ million | Asia Pacific $ million | Latin America and Caribbean $ million | Africa $ million | SC&P $ million | Corporate and other $ million | Total $ million
2024 |  |  |  |  |  |  |  |
Purchase of property, plant and equipment and computer software | 305 | 338 | 154 | 6 | 83 | 612 | 12 | 1,510
Depreciation and intangible asset amortisation | (122) | (166) | (83) | (13) | (88) | (192) | (13) | (677)
Underlying impairment | — | — | — | (1) | — | — | — | (1)
Exceptional impairment of tangible assets | (33) | (5) | (8) | — | — | — | — | (46)
Exceptional impairment of intangible assets | (54) | (96) | 379 | — | — | — | — | 229
2023 (re-presented) |  |  |  |  |  |  |  |
Purchase of property, plant and equipment and computer software | 236 | 252 | 198 | 146 | 152 | 427 | 6 | 1,417
Depreciation and intangible asset amortisation | (114) | (118) | (75) | (22) | (95) | (161) | (12) | (597)
Exceptional impairment of tangible assets | (63) | 3 | (27) | — | — | — | — | (87)
Exceptional impairment of intangible assets | (36) | (31) | (546) | — | — | — | — | (613)
2022 (re-presented) |  |  |  |  |  |  |  |
Purchase of property, plant and equipment and computer software | 306 | 247 | 194 | 170 | 184 | 341 | 15 | 1,457
Depreciation and intangible asset amortisation | (107) | (121) | (124) | (21) | (106) | (157) | (15) | (651)
Exceptional impairment of tangible assets | — | (4) | — | — | — | — | — | (4)
Exceptional impairment of intangible assets | — | (119) | (290) | — | — | — | — | (409)

(c) Category and geographical analysis

| Category analysis | Geographic analysis
| Spirits $ million | Beer $ million | Ready to drink $ million | Other $ million | Total $ million | United States $ million | India $ million | Great Britain $ million | Rest of World $ million | Total $ million
2024 |  |  |  |  |  |  |  |  |  |
Sales(1) | 22,406 | 4,107 | 949 | 429 | 27,891 | 8,041 | 3,247 | 2,849 | 13,754 | 27,891
Non-current assets(2), (3) |  |  |  |  |  | 7,642 | 2,207 | 3,969 | 14,868 | 28,686
2023 (re-presented) |  |  |  |  |  |  |  |  |  |
Sales(1) | 22,855 | 4,026 | 1,079 | 310 | 28,270 | 8,366 | 3,301 | 2,565 | 14,038 | 28,270
Non-current assets(2), (3) |  |  |  |  |  | 7,328 | 2,265 | 3,665 | 14,118 | 27,376
2022 (re-presented) |  |  |  |  |  |  |  |  |  |
Sales(1) | 24,059 | 4,160 | 1,172 | 360 | 29,751 | 8,415 | 4,282 | 2,848 | 14,206 | 29,751
Non-current assets(2), (3) |  |  |  |  |  | 7,137 | 2,899 | 2,920 | 13,143 | 26,099

(1)The geographical analysis of sales is based on the location of third-party customers.
(2)The geographical analysis of non-current assets is based on the geographical location of the assets and comprises intangible assets, property, plant and equipment,
biological assets, investments in associates and joint ventures, other investments and non-current other receivables.
(3)The management information provided to the chief operating decision-maker does not include an analysis of assets and liabilities by category and therefore is not
disclosed.
Financial statements (continued)
245
3. Exceptional items
Accounting policies
Exceptional items are those that in management’s judgement need to be disclosed separately. Such items are included in the income
statement caption to which they relate, and form part of the segmental reporting included in note 2. Management believes that separate
disclosure of exceptional items and the classification between operating and non-operating further helps investors to understand the
performance of the group.
Changes in estimates and reversals in relation to items previously recognised as exceptional are presented consistently as
exceptional in the current year.
Operating items Exceptional operating items are those that are considered to be material and unusual or non-recurring in nature and
are part of the operating activities of the group, such as one-off global restructuring programmes which can be multi-year, impairment
of intangible assets and fixed assets, indirect tax settlements, property disposals and changes in post-employment plans.
Non-operating items Gains and losses on the sale or directly attributable to a prospective sale of businesses, brands or distribution
rights, step up gains and losses that arise when an investment becomes an associate or an associate becomes a subsidiary and other
material, unusual non-recurring items, that are not in respect of the production, marketing and distribution of premium drinks, are
disclosed as exceptional non-operating items below operating profit in the income statement.
Taxation items Exceptional current and deferred tax items comprise material and unusual or non-recurring items that impact taxation.
Examples include direct tax provisions and settlements in respect of prior years and the remeasurement of deferred tax assets and
liabilities following tax rate changes.
Financial statements (continued)
246

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Exceptional operating items |  |  |
Brand, goodwill and other assets impairment income from reversal/(charge) (1) | 224 | (613) | (409)
Supply chain agility programme (2) | (61) | (121) | —
Various dispute and litigation matters (3) | (107) | — | —
Distribution termination fee (4) | — | (55) | —
Winding down Russian operations (5) | — | 23 | (64)
Other exceptional operating items (6) | — | — | (4)
| 56 | (766) | (477)
Non-operating items |  |  |
Sale of businesses and brands |  |  |
Windsor business (7) | (58) | — | (25)
Guinness Cameroun S.A. (8) | (10) | 343 | —
Guinness Nigeria plc (9) | (6) | — | —
USL Popular brands (10) | 4 | 5 | —
Archers brand (11) | — | 23 | —
USL businesses (12) | — | 4 | —
Tyku brand (13) | — | (5) | —
Picon brand (14) | — | — | 112
Meta Abo Brewery (15) | — | — | (183)
Step acquisition - Mr Black (16) | — | (10) | —
Other non-operating exceptional items (17) | — | 4 | 8
| (70) | 364 | (88)
Exceptional items before taxation | (14) | (402) | (565)
Tax on exceptional items (note 7 (b)) | (24) | 226 | 40
Total exceptional items | (38) | (176) | (525)
Attributable to: |  |  |
Equity shareholders of the parent company | (142) | (3) | (400)
Non-controlling interests | 104 | (173) | (125)
Total exceptional items | (38) | (176) | (525)

(1) In the year ended 30 June 2024, a net gain of $224 million was recognised in exceptional operating items, driven by the reversal of
Shui Jing Fang brand impairment of $379 million, partially offset by an impairment charge of $101 million in respect of the Chase
brand, and the related goodwill and tangible fixed assets, and an impairment charge of $54 million in respect of certain brands in the
US ready to drink portfolio.
In the year ended 30 June 2023, an impairment charge of $613 million was recognised in exceptional operating items in respect of the
McDowell's brand ($517 million), the SIA brand ($36 million), the Copper Dog brand ($31 million) and the Director's Special brand
($29 million).
In the year ended 30 June 2022, an impairment charge of $409 million was recognised in exceptional operating items in respect of the
McDowell's brand ($290 million), the Bell's brand ($94 million) and goodwill related to Smirnov ($25 million).
For further information, see note 9 (d).
(2) In the year ended 30 June 2024, an exceptional charge of $61 million was accounted for in respect of the supply chain agility
programme (2023 - $121 million). With this five-year spanning programme launched in July 2022, Diageo expects to strengthen its
supply chain, improve its resilience and agility, drive efficiencies, deliver additional productivity savings and make its supply
operations more sustainable. Total implementation cost of the programme is expected to be up to $600 million over the five-year
period, which will comprise non-cash items and one-off expenses, the majority of which are expected to be recognised as exceptional
operating items. The exceptional charge for the years ended 30 June 2024 and 30 June 2023 was primarily in respect of accelerated
depreciation, being additional depreciation of assets in the period directly attributable to the programme, and impairment of property,
Financial statements (continued)
247
plant and equipment in respect of North America and India. Restructuring cash expenditure was $26 million in the year ended 30 June
2024 (2023 – $14 million).
(3) In the year ended 30 June 2024, $107 million was recorded as an exceptional operating item in respect of various dispute and
litigation matters in North America and Europe, including certain costs and expenses associated therewith.
(4) In the year ended 30 June 2023, Diageo agreed with one of its distributors in Africa to terminate the distribution licence of
Gordon's, in respect of which a provision of $55 million was recognised as an operating exceptional charge. In the year ended 30 June
2024, $55 million in respect of the aforementioned termination were paid.
(5) In the year ended 30 June 2023, Diageo released unutilised provisions of $23 million from the $64 million exceptional charge
taken in the year ended 30 June 2022, in respect of winding down its operations in Russia.
(6) Other exceptional operating items include subsequent gains and charges of items that were originally recognised as exceptional at
inception. In the year ended 30 June 2022, other exceptional operating items resulted in a loss of $4 million driven by the reinvestment
of 'Raising the Bar' corporate tax benefits.
(7) On 27 October 2023, Diageo completed the sale of Windsor Global Co., Ltd. to PT W Co., Ltd., a Korean company sponsored by
Pine Tree Investment & Management Co., Ltd. for a total consideration of KRW 206 billion ($152 million). The transaction resulted
in a loss of $58 million in the year ended 30 June 2024, which was recognised as a non-operating item attributable to the sale,
including cumulative translation losses of $26 million recycled to the income statement.In the year ended 30 June 2022, a loss of
$25 million was recognised as a non-operating item, mainly in relation to transaction and other costs directly attributable to the
prospective sale of the business.
(8) On 26 May 2023, Diageo completed the sale of its wholly owned subsidiary in Cameroon, Guinness Cameroun S.A., to the Castel
Group for an aggregate consideration of $475 million resulting in an exceptional gain of $343 million, including cumulative
translation gain in the amount of $19 million recycled to the income statement. In the year ended 30 June 2024, $10 million charges
directly attributable to the disposal have been accounted for.
(9) On 11 June 2024, Diageo announced the agreement to sell its 58.02% shareholding in Guinness Nigeria plc to N-Seven Nigeria
Ltd., part of the Tolaram group. The sale is considered to be highly probable as at 30 June 2024 and it is expected to be completed in
the year ending 30 June 2025. In the year ended 30 June 2024, a charge of $6 million was recognised as a non-operating item, in
respect of transaction related and other costs directly attributable to the prospective sale of the business.
(10) On 30 September 2022, Diageo completed the sale of the Popular brands of its United Spirits Limited (USL) business. The
transaction resulted in an exceptional gain of $5 million. $4 million of the purchase price, that was subject to administrative actions
within 12 months and considered uncertain at the time of the transaction, was paid to Diageo in the year ended 30 June 2024 and
recognised as exceptional gain.
(11) On 26 October 2022, Diageo completed the sale of its Archers brand. The transaction resulted in an exceptional gain of $23
million in the year ended 30 June 2023.
(12) Certain subsidiaries of USL were sold in the year ended 30 June 2023. The sale of these subsidiaries resulted in an exceptional
gain of $4 million.
(13) In the year ended 30 June 2023, Diageo sold its Tyku brand. The transaction resulted in an exceptional loss of $5 million.
(14) In May 2022, Diageo sold its Picon brand. The sale resulted in an exceptional non-operating gain of $112 million, net of disposal
costs.
(15) In the year ended 30 June 2022, a loss of $183 million was recognised as a non-operating item attributable to the sale of Meta
Abo Brewery Share Company in Ethiopia.
(16) On 29 September 2022, the group acquired the part of the entire issued share capital of Mr Black Spirits Pty Ltd, owner of Mr
Black, the Australian premium cold brew coffee liqueur, that it did not already own. As a result of Mr Black becoming a subsidiary of
the group in the year ended 30 June 2023, a loss of $10 million arose, being the difference between the book value of the associate
prior to the transaction and its fair value plus transaction costs.
Financial statements (continued)
248
(17) Other exceptional non-operating items include subsequent gains and charges of items that were originally recognised as
exceptional at inception. In the year ended 30 June 2023, other exceptional non-operating items resulted in a net gain of $4 million
(2022 – $8 million), mainly driven by the deferred consideration received in respect of the sale of United National Breweries.
For further information on acquisition and sale of businesses and brands, see notes 8 (a) and 8 (b).
Financial statements (continued)
249
Cash payments and receipts included in net cash inflow from operating activities in respect of exceptional items were as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Thalidomide (note 15 (d)) | (17) | (16) | (22)
Winding down Russian operations | (2) | (16) | (18)
Supply chain agility programme | (26) | (14) | —
Distribution termination fee | (55) | — | —
Litigation | (88) | — | —
Donations | — | — | (50)
Total cash payments | (188) | (46) | (90)

4. Operating costs

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Excise duties | 7,622 | 7,715 | 9,235
Cost of sales | 8,071 | 8,289 | 7,923
Marketing | 3,691 | 3,663 | 3,616
Other operating items | 2,506 | 3,056 | 3,080
| 21,890 | 22,723 | 23,854
Comprising: |  |  |
Excise duties |  |  |
India | 1,845 | 1,950 | 2,901
Great Britain | 1,463 | 1,314 | 1,558
United States | 738 | 825 | 816
Other | 3,576 | 3,626 | 3,960
Increase in inventories | (112) | (615) | (1,208)
Raw materials and consumables | 4,892 | 5,197 | 5,336
Marketing | 3,691 | 3,663 | 3,616
Other external charges | 3,002 | 3,301 | 3,432
Staff costs | 2,314 | 2,197 | 2,385
Depreciation, amortisation and impairment | 493 | 1,297 | 1,064
Gains on disposal of properties | 1 | (4) | (2)
Net foreign exchange losses | 8 | 12 | 14
Other operating income | (21) | (40) | (18)
| 21,890 | 22,723 | 23,854

(a) Other external charges
Other external charges include research and development expenditure in respect of new drinks products and package design of $69
million (2023 – $63 million; 2022 – $58 million) and maintenance and repairs of $171 million (2023 – $171 million; 2022 – $181
million).
Financial statements (continued)
250
(b) Auditors fees
Other external charges include the fees of the principal auditor of the group, PricewaterhouseCoopers LLP, and its affiliates (PwC)
and are analysed below.

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Audit of these financial statements | 4.9 | 6.2 | 5.6
Audit of financial statements of subsidiaries | 8.2 | 6.8 | 8.1
Audit related assurance services(1) | 3.2 | 3.3 | 3.3
Total audit fees (Audit fees) | 16.3 | 16.3 | 17.0
Other assurance services (Audit related fees)(2) | 1.7 | 1.4 | 0.9
| 18.0 | 17.7 | 17.9

(1)Audit related assurance services are in respect of reporting under section 404 of the US Sarbanes-Oxley Act and the review of the interim financial information.
(2)Other assurance services comprise the aggregate fees for assurance and related services that are not reported under ‘total audit fees’.
(i)Disclosure requirements for auditors' fees in the United States are different from those required in the United Kingdom. The terminology by category required in
the United States is disclosed in brackets in the above table.
Audit services provided by firms other than PwC for the year ended 30 June 2024 were $0.1 million (2023 – $0.1 million; 2022 – $0.2
million). Further PwC fees for audit services in respect of post-employment plans were $0.4 million for the year ended 30 June 2024
(2023 – $0.3 million; 2022 – $0.3 million).
(c) Staff costs and average number of employees

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Aggregate remuneration |  |  |
Wages and salaries | 1,984 | 1,858 | 2,068
Share-based incentive plans | 43 | 58 | 79
Employer’s social security | 146 | 138 | 142
Employer’s pension |  |  |
Defined benefit plans | 72 | 80 | 48
Defined contribution plans | 62 | 53 | 44
Other post-employment plans | 7 | 10 | 4
| 2,314 | 2,197 | 2,385

The average number of employees on a full-time equivalent basis (excluding employees of associates and joint ventures) was as
follows:

| 2024 | 2023 | 2022
North America | 2,869 | 2,884 | 2,811
Europe | 2,932 | 2,789 | 3,014
Asia Pacific | 6,588 | 6,856 | 6,500
Latin America and Caribbean | 1,650 | 1,495 | 1,500
Africa | 3,290 | 3,526 | 4,061
SC&P | 6,977 | 6,934 | 5,025
Corporate and other | 6,061 | 5,753 | 5,076
| 30,367 | 30,237 | 27,987

At 30 June 2024 on a full-time equivalent basis, the group had 30,092 (2023 – 30,269; 2022 – 28,558) employees. The average
number of employees of the group, including part-time employees, for the year was 30,839 (2023 – 30,419; 2022 – 28,137).
Financial statements (continued)
251
(d) Exceptional operating items
Included in the table above are exceptional operating items as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Depreciation, amortisation and impairment |  |  |
Brand and goodwill impairment (gain)/charges | (231) | 613 | 409
Tangible asset impairment and accelerated depreciation | 46 | 87 | —
Staff costs | 2 | 11 | —
Other external charges | 127 | 75 | 68
Other operating income | — | (20) | —
Total exceptional operating items (note 3) | (56) | 766 | 477
Cost of sales | 57 | 80 | —
Other operating (income)/expenses | (113) | 686 | 477

5. Finance income and charges
Accounting policies
Net interest includes interest income and charges in respect of financial instruments and the results of hedging transactions used to
manage interest rate risk.
Finance charges directly attributable to the acquisition, construction or production of a qualifying asset, being an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale, are added to the cost of that asset. Borrowing
costs which are not capitalised are recognised in the income statement using the effective interest method. All other finance charges
are recognised primarily in the income statement in the year in which they are incurred.
Net other finance charges include items in respect of post-employment plans, the discount unwind of long-term obligations and
hyperinflation charges. The results of operations in hyperinflationary economies are adjusted to reflect the changes in the purchasing
power of the local currency of the entity before being translated to US dollar.
The impact of derivatives, excluding cash flow hedges that are in respect of commodity price risk management or those that are
used to hedge the currency risk of highly probable future currency cash flows, is included in interest income or interest charge.
Financial statements (continued)
252

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Interest income | 179 | 193 | 168
Fair value gain on financial instruments | 100 | 124 | 454
Total interest income(1) | 279 | 317 | 622
Interest charge on bonds, commercial paper, bank loans and overdrafts | (665) | (563) | (495)
Interest charge on finance leases | (23) | (19) | (16)
Other interest charges | (396) | (325) | (119)
Fair value loss on financial instruments | (101) | (123) | (461)
Total interest charges(1) | (1,185) | (1,030) | (1,091)
Net interest charges | (906) | (713) | (469)
Net finance income in respect of post-employment plans in surplus (note 14) | 57 | 71 | 29
Monetary gain on hyperinflation in various economies (note 1 (f)) | 49 | 13 | 1
Interest income in respect of direct and indirect tax | 15 | 8 | 5
Unwinding of discounts | — | — | 4
Total other finance income | 121 | 92 | 39
Net finance charge in respect of post-employment plans in deficit (note 14) | (20) | (18) | (16)
Monetary loss on hyperinflation in various economies (note 1 (f)) | (8) | (3) | (45)
Interest charge in respect of direct and indirect tax | (27) | (29) | (23)
Unwinding of discounts | (23) | (15) | (12)
Change in financial liability - Zacapa (Level 3) | — | (10) | (27)
Other finance charges | (22) | (16) | (3)
Total other finance charges | (100) | (91) | (126)
Net other finance income/(charges) | 21 | 1 | (87)

(1) Includes $59 million interest income and $765 million interest charge in respect of financial assets and liabilities that are not measured at fair value through income
statement (2023 – $98 million income and $628 million charge; 2022 – $36 million income and $554 million charge).
Financial statements (continued)
253
6. Investments in associates and joint ventures
Accounting policies
An associate is an undertaking in which the group has a long-term equity interest and over which it has the power to exercise
significant influence. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the arrangement. The group’s interest in the net assets of associates and joint ventures is reported in investments in
the consolidated balance sheet and its interest in their results (net of tax) is included in the consolidated income statement below the
group’s operating profit. Associates and joint ventures are initially recorded at cost including transaction costs, and the group's share
of post acquisition changes in the investee's reserves are recognised under the equity method. Investments in associates and joint
ventures acquired prior to 1 July 1998 comprise the cost of shares less goodwill written off to reserves that has not been reinstated,
plus the group’s share of post acquisition reserves. Investments in associates and joint ventures are reviewed for impairment whenever
events or circumstances indicate that the carrying amount may not be recoverable. The impairment review compares the net carrying
value with the recoverable amount, where the recoverable amount is the higher of the value in use calculated as the present value of
the group’s share of the associate’s future cash flows and its fair value less costs of disposal.
Diageo’s principal associate is Moët Hennessy of which Diageo owns 34%. Moët Hennessy is the wines and spirits division of LVMH
Moët Hennessy Louis Vuitton SA (LVMH). LVMH is based in France and is listed on the Paris Stock Exchange. Moët Hennessy is
also based in France and is a producer and exporter of champagne and cognac brands.
A number of joint distribution arrangements have been established with LVMH in Asia Pacific and France, principally covering
distribution of Diageo’s Scotch whisky and gin premium brands and Moët Hennessy’s champagne and cognac premium brands.
Diageo and LVMH have each undertaken not to engage in any champagne or cognac activities competing with those of Moët
Hennessy. The arrangements also contain certain provisions for the protection of Diageo as a non-controlling shareholder in Moët
Hennessy.
(a) An analysis of the movement in the group’s investments in associates and joint ventures is as follows:

| Moët Hennessy $ million | Others $ million | Total $ million
Cost less provisions |  |  |
At 30 June 2022 (re-presented) | 4,124 | 294 | 4,418
Exchange differences | 127 | 5 | 132
Additions | — | 112 | 112
Share of profit/(loss) after tax | 455 | (12) | 443
Step acquisition | — | (19) | (19)
Dividends | (265) | (6) | (271)
Share of movements in other comprehensive income and equity | 43 | — | 43
Transfer | — | 1 | 1
Impairment charged during the year | — | (34) | (34)
At 30 June 2023 (re-presented) | 4,484 | 341 | 4,825
Exchange differences | (59) | (5) | (64)
Additions | — | 134 | 134
Share of profit/(loss) after tax | 441 | (27) | 414
Dividends | (261) | (8) | (269)
Share of movements in other comprehensive income and equity | 3 | — | 3
Impairment charged during the year | — | (11) | (11)
At 30 June 2024 | 4,608 | 424 | 5,032

(i) Investment in associates includes loans given to and preference shares invested in associates of $298 million (2023 – $218 million).
(ii)If certain performance targets are met by associates in the Distill Ventures programme, an additional $39 million (2023 – $35 million) will be invested in those
associates.
Financial statements (continued)
254
(b) Moët Hennessy prepares its financial statements under IFRS as endorsed by the EU in euros to 31 December each year. The results
were adjusted for alignment with Diageo accounting policies and were translated at $1 = €0.93 (2023 – $1 = €0.96; 2022 – $1 =
€0.89).
Income statement information for the three years ended 30 June 2024 and balance sheet information as at 30 June 2024 and 30 June
2023 of Moët Hennessy are as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Sales | 6,691 | 7,204 | 7,385
Profit for the year | 1,299 | 1,339 | 1,662
Total comprehensive income | 1,219 | 1,393 | 1,687

| 2024 $ million | 2023 re-presented $ million
Non-current assets | 8,772 | 8,536
Current assets | 12,025 | 11,534
Total assets | 20,797 | 20,070
Non-current liabilities | (2,732) | (2,656)
Current liabilities | (4,285) | (3,982)
Total liabilities | (7,017) | (6,638)
Net assets | 13,780 | 13,432

(i)Including acquisition fair value adjustments principally in respect of Moët Hennessy’s brands and translated at $1 = €0.93 (2023 – $1 = €0.93).
(c) Information on transactions between the group and its associates and joint ventures is disclosed in note 21.
(d) The associates and joint ventures have not reported any material contingent liabilities in their latest financial statements.
7. Taxation
Accounting policies
Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences
between accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax treatments are not recognised
unless it is probable that a tax authority will accept the treatment. Once considered to be probable, tax treatments are reviewed each
year to assess whether a provision should be taken against full recognition of the treatment on the basis of potential settlement through
negotiation and/or litigation with the relevant tax authorities. Tax provisions are included in current liabilities. Penalties and interest on
tax liabilities are included in operating profit and finance charges, respectively.
Full provision for deferred tax is made for temporary differences between the carrying value of assets and liabilities for financial
reporting purposes and their value for tax purposes, except for deferred tax provision arising on goodwill from business combinations.
The amount of deferred tax reflects the expected recoverable amount and is based on the expected manner of recovery or settlement of
the carrying amount of assets and liabilities, using the basis of taxation enacted or substantively enacted by the balance sheet date.
Deferred tax assets are not recognised where it is more likely than not that the assets will not be realised in the future. No deferred tax
liability is provided in respect of any future remittance of earnings of foreign subsidiaries where the group is able to control the
remittance of earnings and it is probable that such earnings will not be remitted in the foreseeable future, or where no liability would
arise on the remittance.
Critical accounting estimates and judgements
The group is required to estimate the corporate tax in each of the jurisdictions in which it operates. Management is required to estimate
the amount that should be recognised as a tax liability or tax asset in many countries which are subject to tax audits which by their
nature are often complex and can take several years to resolve; current tax balances are based on such estimations. Tax provisions are
based on management’s judgement and interpretation of country specific tax law and the likelihood of settlement. However, the actual
tax liabilities could differ from the provision and in such event the group would be required to make an adjustment in a subsequent
period which could have a material impact on the group’s profit for the year.
The evaluation of deferred tax asset recoverability requires estimates to be made regarding the availability of future taxable income.
For brands with an indefinite life, management’s intention is to recover the book value through a potential sale in the future, and
therefore the deferred tax on the brand value is generally recognised using the appropriate country capital gains tax rate. To the extent
Financial statements (continued)
255
brands with an indefinite life have been impaired, management considers this to be an indication of recovery through use and in such a
case deferred tax on the brand value is recognised using the appropriate country corporate income tax rate.
(a) Analysis of taxation charge for the year

| United Kingdom | Rest of world | Total
| 2024 $ million | 2023 re- presented $ million | 2022 re- presented $ million | 2024 $ million | 2023 re- presented $ million | 2022 re- presented $ million | 2024 $ million | 2023 re- presented $ million | 2022 re- presented $ million
Current tax |  |  |  |  |  |  |  |  |
Current year | 134 | 192 | 229 | 983 | 1,056 | 1,150 | 1,117 | 1,248 | 1,379
Adjustments in respect of prior years | (7) | 41 | 14 | (4) | (46) | 22 | (11) | (5) | 36
| 127 | 233 | 243 | 979 | 1,010 | 1,172 | 1,106 | 1,243 | 1,415
Deferred tax |  |  |  |  |  |  |  |  |
Origination and reversal of temporary differences | 39 | 36 | (10) | 113 | (93) | 41 | 152 | (57) | 31
Changes in tax rates | — | — | 2 | (18) | 13 | 2 | (18) | 13 | 4
Adjustments in respect of prior years | 16 | 7 | — | 38 | (43) | (52) | 54 | (36) | (52)
| 55 | 43 | (8) | 133 | (123) | (9) | 188 | (80) | (17)
Taxation on profit | 182 | 276 | 235 | 1,112 | 887 | 1,163 | 1,294 | 1,163 | 1,398

Financial statements (continued)
256
(b) Exceptional tax charges/(credits)
The taxation charge includes the following exceptional items:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Brand impairment(1) | 63 | (154) | (69)
Disposal of businesses and brands(2) | (1) | 37 | 29
Supply chain agility programme | (15) | (27) | —
Various dispute and litigation matters(3) | (23) | — | —
US guarantee fee claim(4) | — | (68) | —
Distribution termination fee | — | (14) | —
Winding down Russian operations | — | — | 4
Other items | — | — | (4)
| 24 | (226) | (40)

(1) In the year ended 30 June 2024, an exceptional tax charge of $95 million was recognised in relation to the reversal of the Shui Jing Fang brand impairment charge,
partly offset by an exceptional tax credit of $19 million in respect of the Chase brand impairment and the related tangible fixed asset and an exceptional tax credit
of $13 million comprised of brand impairments in the US ready to drink portfolio. In the year ended 30 June 2023, an exceptional tax credit of $154 million was
recognised mainly in respect of the impairment of the McDowell's brand. In the year ended 30 June 2022, the exceptional tax credit of $69 million related to the tax
impact on the impairment of the McDowell's and Bell's brands for $45 million and $24 million, respectively.
(2)In the year ended 30 June 2023, the exceptional net tax charge of $37 million mainly comprised of a tax charge of $52 million in respect of the sale of Guinness
Cameroun S.A., partly offset by a tax credit of $11 million in respect of the sale of certain USL businesses. In the year ended 30 June 2022, a $29 million
exceptional tax charge was recognised in respect of the gain on the sale of the Picon brand.
(3) In the year ended 30 June 2024, an exceptional tax credit of $23 million was recorded in relation to various dispute and litigation matters in North America,
including certain costs and expenses associated therewith.
(4) In the year ended 30 June 2023, an exceptional tax credit of $68 million was recognised in respect of the deductibility of fees paid to Diageo plc for guaranteeing
externally issued debt of US group entities. Following engagement with the tax authorities, guarantee fees for the periods ended 30 June 2012 to 30 June 2022 are
fully deductible.
(c) Taxation rate reconciliation and factors that may affect future tax charges

| 2024 $ million | 2024 % | 2023 re-presented $ million | 2023 % | 2022 re-presented $ million | 2022 %
Profit before taxation | 5,460 |  | 5,642 |  | 5,808 |
Notional charge at UK corporation tax rate | 1,365 | 25.0 | 1,157 | 20.5 | 1,104 | 19.0
Elimination of notional tax on share of after tax results of associates and joint ventures | (103) | (1.9) | (91) | (1.6) | (105) | (1.8)
Differences in overseas tax rates | (86) | (1.6) | 116 | 2.0 | 217 | 3.7
Disposal of businesses and brands | 17 | 0.3 | (42) | (0.7) | 38 | 0.7
Other items not chargeable | (72) | (1.3) | (76) | (1.3) | (66) | (1.1)
Impairment | 6 | 0.1 | (8) | (0.1) | 45 | 0.8
Other items not deductible | 70 | 1.3 | 85 | 1.5 | 71 | 1.2
Irrecoverable withholding taxes | 55 | 1.0 | 46 | 0.8 | 51 | 0.9
Movement in provision in respect of uncertain tax positions(1) | 6 | 0.1 | 34 | 0.6 | 55 | 0.9
Changes in tax rates | (18) | (0.3) | 13 | 0.2 | 4 | 0.1
Adjustments in respect of prior years(2) | 54 | 1.0 | (71) | (1.3) | (16) | (0.3)
Taxation on profit | 1,294 | 23.7 | 1,163 | 20.6 | 1,398 | 24.1
Tax rate before exceptional items | — | 23.2 | — | 23.0 | — | 22.6

(1) Movement in provision in respect of uncertain tax positions includes both current and prior year uncertain tax position movements.
(2)Excludes prior year movement in provisions. Included in the year ended 30 June 2023 was an exceptional tax credit of $68 million in respect of the deductibility of
fees paid to Diageo plc for guaranteeing externally issued debt of its US group entities.
The table above reconciles the notional taxation charge calculated at the UK tax rate, to the actual total tax charge. As a group
operating in multiple countries, the actual tax rates applicable to profits in those countries are different from the UK tax rate. The
impact is shown in the table above as differences in overseas tax rates. The group’s worldwide business leads to the consideration of a
number of important factors which may affect future tax charges, such as the levels and mix of profitability in different jurisdictions,
transfer pricing regulations, tax rates imposed and tax regime reforms, acquisitions, disposals, restructuring activities, and settlements
or agreements with tax authorities.
Financial statements (continued)
257
Significant ongoing changes in the international tax environment and an increase in global tax audit activity means that tax
uncertainties and associated risks have been gradually increasing. In the medium-term, these risks could result in an increase in tax
liabilities or adjustments to the carrying value of deferred tax assets and liabilities. See note 19 (f).
The group has a number of ongoing tax audits worldwide for which provisions are recognised in line with the relevant international
accounting standard, taking into account best estimates and management’s judgements concerning the ultimate outcome of the tax
audits. For the year ended 30 June 2024, ongoing audits that are provided for individually are not expected to result in a material tax
liability. The current tax asset of $304 million (30 June 2023 – $292 million) and tax liability of $136 million (30 June 2023 – $170
million) include $209 million (30 June 2023 – $218 million) of provisions for tax uncertainties.
The cash tax paid in the year ended 30 June 2024 amounts to $1,099 million (30 June 2023 – $1,443 million) and is $7 million
lower than the current tax charge (30 June 2023 – $200 million higher). This arises as a result of timing differences between the
accrual of income taxes, the movement in the provision for uncertain tax positions and the actual payment of cash.
In December 2021, the OECD released a framework for Pillar Two Model Rules which will introduce a global minimum corporate
tax rate of 15%, applicable to multinational enterprise groups with global revenue over €750 million. The legislation implementing the
rules in the United Kingdom was substantively enacted on 20 June 2023 and will apply to Diageo from the financial year ending 30
June 2025 onwards. Diageo is continuously reviewing the amendments to the legislation and also monitoring the status of
implementation of the model rules outside of the United Kingdom. While we expect additional tax liabilities to be incurred in some
jurisdictions in which the group operates, the estimated impact on the group’s effective tax rate is immaterial based on the data for the
year ended 30 June 2023.
Diageo has applied the temporary exception under IAS 12 in relation to the accounting for deferred taxes arising from the
implementation of the Pillar Two rules.
(d) Deferred tax assets and liabilities
Deferred tax recognised in the consolidated balance sheet comprise the following net deferred tax (liabilities)/assets:

| Property, plant and equipment $ million | Intangible assets $ million | Post employment plans $ million | Tax losses $ million | Other temporary differences(1) $ million | Total $ million
At 30 June 2022 (re-presented) | (566) | (2,290) | (316) | 76 | 427 | (2,669)
Exchange differences | 15 | 42 | (6) | 4 | (4) | 51
Recognised in income statement | (35) | 116 | 2 | (19) | 29 | 93
Recognised in other comprehensive income and equity | (7) | (37) | 182 | — | (55) | 83
Tax rate change – recognised in income statement | (2) | (15) | (1) | 1 | 4 | (13)
Acquisition of subsidiaries | — | (85) | — | — | — | (85)
Transfer from asset held for sale | (3) | (44) | — | — | 8 | (39)
Sale of businesses | 13 | — | (2) | — | (5) | 6
At 30 June 2023 (re-presented) | (585) | (2,313) | (141) | 62 | 404 | (2,573)
Exchange differences | 9 | 35 | — | (10) | (13) | 21
Recognised in income statement | (79) | (132) | (6) | 28 | (17) | (206)
Recognised in other comprehensive loss and equity | (34) | (73) | 6 | — | (8) | (109)
Tax rate change – recognised in income statement | 3 | 13 | (1) | — | 3 | 18
Tax rate change – recognised in other comprehensive loss and equity | (4) | (20) | — | — | (3) | (27)
Acquisition(2) | — | 53 | — | — | — | 53
Transfer to asset held for sale | 2 | 4 | — | (16) | (8) | (18)
Sale of businesses | — | 38 | — | — | (1) | 37
At 30 June 2024 | (688) | (2,395) | (142) | 64 | 357 | (2,804)

(1) Deferred tax on other temporary differences includes hyperinflation, fair value movement on cross-currency swaps, interest and finance costs, share-based payments
and intra-group sales of products.
(2) In the year ended 30 June 2024, a deferred tax asset of $53 million was recognised in relation to the purchase of shares of non-controlling interests in respect of
DeLeon Holdco LLC.
Financial statements (continued)
258
After offsetting deferred tax assets and liabilities that relate to taxes levied by the same taxation authority on the same taxable fiscal
unit, the net deferred tax liability comprises:

| 2024 $ million | 2023 re-presented $ million
Deferred tax assets | 143 | 178
Deferred tax liabilities | (2,947) | (2,751)
| (2,804) | (2,573)

Deferred tax assets of $143 million include $98 million (2023 – $82 million) arising in jurisdictions with prior year taxable losses.
The majority of the asset is in respect of Germany, Colombia and Brazil. It is considered more likely than not that there will be
sufficient future taxable profits to realise these deferred tax assets, which for the most part arose on losses from a historic one-off
transaction, and on existing provisions. The majority of deferred tax assets can be carried forward indefinitely. From the total
recognised tax losses of $64 million, it is expected that $13 million will be utilised in the year ending 30 June 2025.
(e) Unrecognised deferred tax assets
The following table shows the tax value of tax losses which has not been recognised due to uncertainty over their utilisation in future
periods. The gross value of those losses is $724 million (2023 – $796 million).

| 2024 $ million | 2023 re-presented $ million
Capital losses – indefinite | 123 | 123
Trading losses – indefinite | 31 | 31
Trading and capital losses – expiry dates up to 2033 | 33 | 50
| 187 | 204

Additionally, no deferred tax asset has been recognised in respect of certain temporary differences arising from brand valuations,
as the group is not planning to sell those brands thus the benefit from the temporary differences is unlikely to be realised.
(f) Unrecognised deferred tax liabilities
Relevant legislation largely exempts overseas dividends remitted from tax. A tax liability is more likely to arise in respect of
withholding taxes levied by the overseas jurisdiction. Deferred tax is provided where there is an intention to distribute earnings, and a
tax liability arises. It is impractical to estimate the amount of unrecognised deferred tax liabilities in respect of these unremitted
earnings.
The aggregate amount of temporary differences in respect of investments in subsidiaries, branches, interests in associates and joint
ventures for which deferred tax liabilities have not been recognised is approximately $26.3 billion (2023 – $25.0 billion).
Financial statements (continued)
259
Operating assets and liabilities
Introduction
This section describes the assets used in the group’s operations and the liabilities incurred. Liabilities relating to the group’s financing
activities are included in section ‘Risk management and capital structure’ and balance sheet information in respect of associates, joint
ventures and taxation are covered in section ‘Results for the year’. This section also provides detailed disclosures on the group’s recent
acquisitions and disposals, performance and financial position of its defined benefit post-employment plans.
8. Acquisition and sale of businesses and brands and purchase of non-controlling interests
Accounting policies
The consolidated financial statements include the results of the company and its subsidiaries together with the group’s attributable
share of the results of associates and joint ventures. The results of subsidiaries acquired or sold are included in the income statement
from, or up to, the date that control passes.
Business combinations are accounted for using the acquisition method. Identifiable assets, liabilities and contingent liabilities acquired
are measured at fair value at acquisition date. The consideration payable is measured at fair value and includes the fair value of any
contingent consideration. Among other factors, the group considers the nature of, and compensation for the selling shareholders'
continuing employment to determine if any contingent payments are for post-combination employee services, which are excluded
from consideration.
On the acquisition of a business, or of an interest in an associate or joint venture, fair values, reflecting conditions at the date of
acquisition, are attributed to the net assets, including identifiable intangible assets and contingent liabilities acquired. Directly
attributable acquisition costs in respect of subsidiary companies acquired are recognised in other external charges as incurred.
The non-controlling interests on the date of acquisition can be measured either at the fair value or at the non-controlling shareholder’s
proportion of the net fair value of the identifiable assets assumed. This choice is made separately for each acquisition.
Where the group has issued a put option over shares held by a non-controlling interest, the group derecognises the non-controlling
interests and instead recognises a contingent deferred consideration liability for the estimated amount likely to be paid to the non-
controlling interest on the exercise of those options. Movements in the estimated liability in respect of put options are recognised in
retained earnings.
Transactions with non-controlling interests are recorded directly in retained earnings.
For all entities in which the company directly or indirectly owns equity, a judgement is made to determine whether it controls and
therefore should fully consolidate the investee. An assessment is carried out to determine whether the group has the exposure or rights
to the variable returns of the investee and has the ability to affect those returns through its power over the investee. To establish
control, an analysis is carried out of the substantive and protective rights that the group and the other investors hold. This assessment is
dependent on the activities and purpose of the investee and the rights of the other shareholders, such as which party controls the board,
executive committee and material policies of the investee. Determining whether the rights that the group holds are substantive,
requires management judgement.
Where less than 50% of the equity of an investee is held, and the group holds significantly more voting rights than any other vote
holder or organised group of vote holders, this may be an indicator of de facto control. An assessment is needed to determine all the
factors relevant to the relationship with the investee to ascertain whether control has been established and whether the investee should
be consolidated as a subsidiary. Where voting power and returns from an investment are split equally between two entities then the
arrangement is accounted for as a joint venture.
On an acquisition, fair values are attributed to the assets and liabilities acquired. This may involve material judgement to determine
these values.
Financial statements (continued)
260
(a) Acquisition of businesses
Fair value of net assets acquired and cash consideration paid in respect of the acquisition of subsidiaries in the three years ended
30 June 2024 were as follows:

Net assets acquired and consideration |
| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Brands and other intangibles | — | 402 | 157
Property, plant and equipment | — | 28 | —
Inventories | — | 31 | 7
Other working capital | — | (2) | 5
Deferred tax | — | (85) | (40)
Cash | — | — | 2
Fair value of assets and liabilities | — | 374 | 131
Goodwill arising on acquisition | — | 109 | 91
Settlement of pre-existing relationship | — | — | (2)
Step acquisitions | — | (13) | (8)
Consideration payable | — | 470 | 212
Satisfied by: |  |  |
Cash consideration paid | — | (373) | (116)
Contingent consideration payable | — | (92) | (91)
Deferred consideration payable | — | (5) | (5)
| — | (470) | (212)

Cash consideration paid in respect of the acquisition of businesses and purchase of shares of non-controlling interests in the three years
ended 30 June 2024 were as follows:

| Consideration
| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Acquisitions in the year - subsidiaries |  |  |
Cash consideration paid | — | (373) | (116)
Cash acquired | — | — | 2
Prior year acquisitions - subsidiaries |  |  |
Contingent consideration paid for Casamigos | — | — | (113)
Other consideration | (6) | (31) | (51)
Investments in associates |  |  |
Cash consideration paid - increase in ownership interest | (5) | (20) | (6)
Capital injection(1) | (128) | (92) | (80)
Net cash outflow on acquisition of businesses | (139) | (516) | (364)
Purchase of shares of non-controlling interests | (223) | (178) | —
Total net cash outflow | (362) | (694) | (364)

(1)Additional investments in a number of Distill Ventures associates.
Financial statements (continued)
261
Prior year acquisitions
On 10 March 2023, Diageo completed the acquisition of Kanlaon Limited and Chat Noir Co. Inc., (the owner of Don Papa Rum) to
support Diageo’s participation in the super-premium dark rum segment for upfront cash consideration of €246 million ($261 million),
deferred consideration of €4 million ($4 million) and contingent consideration of up to €178 million ($189 million) through to 2028
subject to certain financial performance targets, reflecting the brand’s expected growth potential. The fair value of the contingent
consideration of €82 million ($87 million) was estimated by calculating the present value of the future expected cash flows which is
dependent on management’s estimates in respect of the forecasting of future cash flows and the discount rates applicable to the future
cash flows. The goodwill arising on the acquisition of Don Papa Rum represents expected revenue synergies and the acquired
workforce. Don Papa Rum contributed $13 million to net sales and $18 million operating loss to the period, out of which $18 million
is related to acquisition transaction and integration costs in the year ended 30 June 2023.
Diageo completed further acquisitions in the year ended 30 June 2023: (i) on 29 September 2022, the acquisition of the remaining
issued share capital of Mr Black Spirits Pty Ltd, owner of Mr Black, the Australian premium cold brew coffee liqueur, that it did not
already own; and (ii) on 2 November 2022, the acquisition of the entire issued share capital of Balcones Distilling, a Texas craft
distiller and one of the leading producers of American single malt whiskey in the United States. The aggregate up-front cash
consideration paid on completion of these transactions in the year ended 30 June 2023 was $112 million.
On 31 March 2022, Diageo acquired 100% equity interest in 21Seeds, to support Diageo's participation in the super premium
flavoured tequila segment, for a total consideration of $82 million upfront in cash and a contingent consideration of up to $80 million
linked to performance targets.
Diageo completed further acquisitions in the year ended 30 June 2022, including (i) on 27 January 2022, the acquisition of Casa UM,
to expand Reserve portfolio with premium artisanal mezcal brand, Mezcal Unión and (ii) on 29 June 2022, the acquisition of Vivanda,
owner of the technology behind 'What's your Whisky' platform and the Journey of Flavour experience at Johnnie Walker Princes
Street, to support Diageo's ambition to provide customised brand experiences across all channels. The aggregate upfront cash
consideration paid on completion of these transactions in the year ended 30 June 2022 was $34 million. In addition, these transactions
included provision for further contingent consideration of up to $24 million in aggregate, linked to performance targets and a further
deferred consideration of $5 million.
Purchase of shares of non-controlling interests
On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC to purchase the 50% of the share capital of DeLeon Holdco
LLC that Diageo did not already own for a total consideration of $223 million, including transaction costs. In connection with this
acquisition, the previously outstanding disputes between the shareholders were resolved and Diageo is now the 100% owner of the
DeLeón brand.
On 24 March 2023, Diageo completed the purchase of 14.97% of the share capital of EABL for an aggregate consideration of
KES 22,732 million ($173 million) in cash and transaction costs of $5 million. This took Diageo’s shareholding in EABL from
50.03% to 65%. EABL was already controlled and therefore consolidated prior to this transaction.
Transactions were recognised in retained earnings.
Financial statements (continued)
262
(b) Sale of businesses and brands
Cash consideration received and net assets disposed of in respect of sale of businesses and brands in the three years ended 30 June
2024 were as follows:

| Windsor business $ million | Other $ million | 2024 $ million | 2023 re- presented $ million | 2022 re- presented $ million
Sale consideration |  |  |  |  |
Cash received | 112 | 4 | 116 | 604 | 131
(Cash)/overdraft disposed of | (20) | — | (20) | (16) | 3
Transaction and other directly attributable costs paid | (4) | (5) | (9) | (29) | (32)
Net cash received | 88 | (1) | 87 | 559 | 102
Deferred consideration receivable | 32 | — | 32 | — | —
Transaction and other directly attributable costs payable | (13) | (11) | (24) | (7) | (22)
| 107 | (12) | 95 | 552 | 80
Net assets disposed of |  |  |  |  |
Brands | (167) | — | (167) | — | —
Goodwill | — | — | — | — | (18)
Other non-current assets | (3) | — | (3) | (132) | (14)
Assets and liabilities held for sale | — | — | — | (87) | —
Inventories | (11) | — | (11) | (35) | (6)
Other working capital | 3 | — | 3 | 85 | 21
Other borrowings | — | — | — | 2 | 1
Corporate tax | 2 | — | 2 | (4) | (6)
Deferred tax | 37 | — | 37 | 6 | (3)
Post-employment benefit liabilities | — | — | — | 5 | —
| (139) | — | (139) | (160) | (25)
Impairment charge recognised up until the date of sale | — | — | — | (3) | —
Exchange recycled from other comprehensive income | (26) | — | (26) | (15) | (143)
(Loss)/gain on disposal before taxation | (58) | (12) | (70) | 374 | (88)
Taxation | 1 | — | 1 | (37) | (29)
(Loss)/gain on disposal after taxation | (57) | (12) | (69) | 337 | (117)

On 27 October 2023, Diageo completed the sale of Windsor Global Co., Ltd. to PT W Co., Ltd., a Korean company sponsored by Pine
Tree Investment & Management Co., Ltd. for a total consideration of KRW 206 billion ($152 million). The transaction resulted in a
loss of $58 million in the year ended 30 June 2024, which was recognised as a non-operating item attributable to the sale, including
cumulative translation losses in the amount of $26 million recycled to the income statement.
On 26 May 2023, Diageo completed the sale of Guinness Cameroun S.A., its brewery in Cameroon. The aggregate consideration for
the disposal was $475 million, the disposed net assets of $79 million mainly included property, plant and equipment and trade and
other payables. The transaction resulted in a non-operating exceptional gain of $343 million. The disposed Cameroon operations
contributed net sales of $128 million (2022 – $165 million), and operating profit of $33 million (2022 – $36 million) in the year ended
30 June 2023.
On 30 September 2022, Diageo completed the sale of the Popular brands of its USL business. The aggregate consideration for the
disposal was $97 million, the disposed net assets included net working capital of $34 million and brands of $23 million, and
$19 million goodwill was derecognised. The transaction resulted in a non-operating exceptional gain of $5 million. Popular brands
contributed net sales of $43 million (2022 – $184 million), and operating profit of $6 million (2022 – $35 million) in the year ended
30 June 2023.
On 25 April 2022, Diageo sold its Ethiopian subsidiary, Meta Abo Brewery Share Company. A loss of $183 million was recognised as
a non-operating item attributable to the sale, including cumulative translation losses in the amount of $143 million recycled to the
income statement.
On 10 May 2022, Diageo completed the sale of the Picon brand for an upfront consideration of €117 million ($123 million). The gain
of $112 million, net of disposal cost, was recognised as a non-operating item in the income statement.
Financial statements (continued)
263
In the year ended 30 June 2023, ZAR 74 million ($4 million) (2022 – ZAR 133 million ($8 million)) of deferred consideration was
paid to Diageo in respect of the sale of United National Breweries. The disposal was completed on 1 April 2020 for an aggregate
consideration of ZAR 600 million ($34 million) from which ZAR 378 million ($22 million) was deferred.
(c) Assets and liabilities held for sale

| 2024 $ million
Property, plant and equipment | 52
Inventories | 20
Trade and other receivables | 10
Deferred tax asset | 18
Cash | 30
Assets held for sale | 130
Trade and other payables | (44)
Corporate tax | (1)
Provisions | (3)
Liabilities held for sale | (48)
Total | 82

On 11 June 2024, Diageo announced the agreement to sell its 58.02% shareholding in Guinness Nigeria plc to N-Seven Nigeria Ltd.,
part of the Tolaram group. The transaction is subject to among other things obtaining the requisite regulatory approvals in Nigeria. On
completion, Guinness Nigeria plc will enter into long-term licence and royalty agreements for the continued production of the
Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands. The sale is considered to be highly
probable as at 30 June 2024 and it is expected to be completed in the year ending 30 June 2025. Consequently, the impacted assets and
liabilities were classified as held for sale on 30 June 2024 and measured at cost as the lower of cost and fair value less cost of disposal.
At 30 June 2024, cumulative translation losses recognised in exchange reserves were $176 million, which will be recycled to the
income statement at the completion of the transaction.
Financial statements (continued)
264
9. Intangible assets
Accounting policies
Acquired intangible assets are held on the consolidated balance sheet at cost less accumulated amortisation and impairment losses.
Acquired brands and other intangible assets are initially recognised at fair value if they are controlled through contractual or other
legal rights, or are separable from the rest of the business, and the fair value can be reliably measured. Where these assets are regarded
as having indefinite useful economic lives, they are not amortised.
Goodwill represents the excess of the aggregate of the consideration transferred, the value of any non-controlling interests and the fair
value of any previously held equity interest in the subsidiary acquired over the fair value of the identifiable net assets. Goodwill
arising on acquisitions prior to 1 July 1998 was eliminated against reserves, and this goodwill has not been reinstated. Goodwill
arising subsequent to 1 July 1998 has been capitalised.
Amortisation and impairment of intangible assets is based on their useful economic lives and they are amortised on a straight-line
basis and reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.
Goodwill and intangible assets that are regarded as having indefinite useful economic lives are not amortised and are reviewed for
impairment at least annually or when there is an indication that the assets may be impaired. Impairment reviews compare the net
carrying value with the recoverable amount (where recoverable amount is the higher of fair value less costs of disposal and value in
use) and in case the net carrying value exceeds the recoverable amount, an impairment charge is recognised. Amortisation and any
impairment write downs are charged to other operating expenses in the income statement. It is reviewed at each reporting date whether
there is any indication that an impairment loss recognised in prior periods for an asset other than goodwill either no longer exists or
has decreased. Reversal of impairment loss is considered if the recoverable amount of the assets is constantly and significantly above
the carrying value over an extended period. The increased carrying amount of an asset other than goodwill attributable to a reversal of
an impairment loss shall not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no
impairment loss been recognised for the asset in prior years. Any reversal of impairment loss is charged against the same income
statement line on which the initial impairment was recorded.
Computer software is amortised on a straight-line basis to estimated residual value over its expected useful life. Residual values and
useful lives are reviewed each year. Subject to these reviews, the estimated useful lives are up to eight years.
Critical accounting estimates and judgements
Assessment of the recoverable amount of an intangible asset and the useful economic life of an asset are based on management's
estimates.
Impairment reviews are carried out to ensure that intangible assets, including brands, are not carried at above their recoverable
amounts. Value in use and fair value less costs of disposal are both considered for these reviews and any impairment charge is based
on these. The tests are dependent on management’s estimates in respect of the forecasting of future cash flows, the discount rates
applicable to the future cash flows and what expected growth rates are reasonable. Judgement is required in determining the cash-
generating units. Such estimates and judgements are subject to change as a result of changing economic conditions and actual cash
flows may differ from forecasts.
Consideration of climate risk impact
The impact of climate risk on the future cash flows has also been considered for scenarios analysed in line with the climate change risk
assessment. The climate change scenario analyses performed in 2024 – conducted in line with TCFD recommendations (‘Transition
Scenario’ (RCP 2.6), a ‘Moderate Warming’ Scenario (RCP 4.5) and a ‘Severe Warming Scenario (RCP 8.5)) – identified no material
financial impact to the current year impairment assessments.
Financial statements (continued)
265

| Brands $ million | Goodwill $ million | Other intangibles $ million | Computer software $ million | Total $ million
Cost |  |  |  |  |
At 30 June 2022 (re-presented) | 10,815 | 3,640 | 2,021 | 893 | 17,369
Hyperinflation adjustment | 102 | 75 | — | — | 177
Exchange differences | (144) | (168) | 4 | 23 | (285)
Additions | 402 | 109 | 15 | 187 | 713
Disposals | — | — | — | (31) | (31)
Reclassification from/(to) asset held for sale | 517 | (35) | — | — | 482
At 30 June 2023 (re-presented) | 11,692 | 3,621 | 2,040 | 1,072 | 18,425
Hyperinflation adjustment | 207 | 157 | — | 1 | 365
Exchange differences | (146) | (96) | (30) | 22 | (250)
Additions | — | — | 17 | 150 | 167
Disposals | (647) | — | (16) | (20) | (683)
At 30 June 2024 | 11,106 | 3,682 | 2,011 | 1,225 | 18,024
Amortisation and impairment |  |  |  |  |
At 30 June 2022 (re-presented) | 1,261 | 872 | 105 | 730 | 2,968
Exchange differences | (15) | (42) | 3 | 11 | (43)
Amortisation for the year | — | — | 20 | 48 | 68
Impairment | 613 | — | — | — | 613
Disposals | — | — | — | (29) | (29)
Reclassification from/(to) asset held for sale | 358 | (16) | — | — | 342
At 30 June 2023 (re-presented) | 2,217 | 814 | 128 | 760 | 3,919
Exchange differences | (22) | (13) | (29) | 24 | (40)
Amortisation for the year | — | — | 19 | 58 | 77
Impairment | 128 | 21 | — | — | 149
Reversal of impairment | (379) | — | — | — | (379)
Disposals | (480) | — | (16) | (20) | (516)
At 30 June 2024 | 1,464 | 822 | 102 | 822 | 3,210
Carrying amount |  |  |  |  |
At 30 June 2024 | 9,642 | 2,860 | 1,909 | 403 | 14,814
At 30 June 2023 (re-presented) | 9,475 | 2,807 | 1,912 | 312 | 14,506
At 30 June 2022 (re-presented) | 9,554 | 2,768 | 1,916 | 163 | 14,401

Financial statements (continued)
266
(a) Brands
The principal acquired brands, all of which are regarded as having indefinite useful economic lives, are as follows:

| Principal markets | 2024 $ million | 2023 re-presented $ million
Crown Royal whisky | United States | 1,464 | 1,464
Captain Morgan rum | Global | 1,201 | 1,201
Smirnoff vodka | Global | 824 | 824
Johnnie Walker whisky | Global | 790 | 787
Shui Jing Fang Chinese white spirit | Greater China | 689 | 310
Casamigos tequila | United States | 604 | 604
Yenì raki | Türkiye | 426 | 313
McDowell's No.1 whisky, rum and brandy | India | 382 | 386
Don Papa rum | Europe | 353 | 355
Don Julio tequila | United States | 277 | 296
Aviation American Gin | United States | 264 | 264
Seagram's 7 Crown whiskey | United States | 223 | 223
Signature whisky | India | 219 | 222
Zacapa rum | Global | 191 | 191
Black Dog whisky | India | 186 | 188
Antiquity whisky | India | 182 | 184
Gordon's gin | Europe | 150 | 150
Bell's whisky | Europe | 128 | 128
Other brands |  | 1,089 | 1,385
|  | 9,642 | 9,475

The brands are protected by trademarks which are renewable indefinitely in all of the major markets where they are sold. There are not
believed to be any legal, regulatory or contractual provisions that limit the useful lives of these brands. The nature of the premium
drinks industry is that obsolescence is not a common issue, with indefinite brand lives being commonplace, and Diageo has a number
of brands that were originally created more than 100 years ago. Accordingly, the Directors believe that it is appropriate that the brands
are treated as having indefinite lives for accounting purposes and are therefore not amortised.
(b) Goodwill
For the purposes of impairment testing, goodwill has been attributed to the following cash-generating units:

| 2024 $ million | 2023 re-presented $ million
North America | 968 | 968
Europe |  |
Türkiye | 370 | 271
Asia Pacific |  |
Greater China | 158 | 157
India | 838 | 848
Latin America and Caribbean – Mexico | 189 | 203
Other cash-generating units | 337 | 360
| 2,860 | 2,807

Goodwill has arisen on the acquisition of businesses and includes synergies arising from cost savings, the opportunity to utilise
Diageo’s distribution network to leverage marketing of the acquired products and the extension of the group’s portfolio of brands in
new markets around the world.
Financial statements (continued)
267
(c) Other intangibles
Other intangibles principally comprise distribution rights. Diageo owns the global distribution rights for Ketel One vodka products in
perpetuity, and the Directors believe that it is appropriate to treat these rights as having an indefinite life for accounting purposes. The
net book value at 30 June 2024 was $1,800 million (2023 – $1,800 million).
(d) Impairment testing
Impairment tests are performed annually, or more frequently if events or circumstances indicate that the carrying amount may not be
recoverable. Recoverable amounts are calculated based on the value in use approach, also considering fair value less costs of disposal.
The value in use calculations are based on discounted forecast cash flows using the assumption that cash flows continue in perpetuity
at the terminal growth rate of each country or region. The individual brands, other intangibles with indefinite useful lives and the
associated property, plant and equipment are aggregated as separate cash-generating units. Separate tests are carried out for each cash-
generating unit and for each of the markets. Goodwill is attributed to each of the markets.
The key assumptions used for the value in use calculations are as follows:
Cash flows
Cash flows are forecasted for each cash-generating unit for the financial years based on management's approved plans and reflect the
following assumptions:
–Cash flows are projected based on the actual operating results and a three-yea r strategic plan approved by management. Cash
flows are extrapolated up to five years using expected growth rates in line with management’s best estimates. Growth rates
reflect expectations of sales growth, operating costs and margin, based on past experience and external sources of information;
–The five-year forecast period is extended by up to an additional ten years at acquisition date for some intangible assets and
goodwill when management believes that this period is justified by the maturity of the market and expects to achieve growth in
excess of the terminal growth rate driven by Diageo’s sales, marketing and distribution expertise. These cash flows beyond the
five-year period are projected using steady or progressively declining growth rates;
–Cash flows for the subsequent years after the forecast period are extrapolated based on a terminal growth rate which does not
exceed the long-term annual inflation rate of the country or region.
Discount rates
The discount rates used are the weighted average cost of capital which reflect the returns on government bonds and an equity risk
premium adjusted for the drinks industry specific to the cash-generating units. The group applies post-tax discount rates to post-tax
cash flows as the valuation calculated using this method closely approximates to applying pre-tax discount rates to pre-tax cash flows.
For goodwill, these assumptions are based on the cash-generating unit or group of units to which the goodwill is attributed. For
brands, they are based on a weighted average taking into account the country or countries where sales are made.
The pre-tax discount rates and terminal growth rates used for impairment testing are as follows:

| 2024 | 2023
| Pre-tax discount rate % | Terminal growth rate % | Pre-tax discount rate % | Terminal growth rate %
North America – United States | 9 | 2 | 9 | 2
Europe |  |  |  |
United Kingdom | 9 | 2 | 9 | 2
Türkiye | 27 | 14 | 28 | 16
Asia Pacific |  |  |  |
India | 12 | 3 | 14 | 4
Greater China | 10 | 2 | 11 | 2
Latin America and Caribbean |  |  |  |
Mexico | 13 | 3 | 13 | 3

In the year ended 30 June 2024, a reversal of an impairment charge of $379 million was recognised in exceptional operating items
in respect of the Shui Jing Fang brand. The reversal increased the deferred tax liability by $95 million resulting in a net exceptional
gain of $284 million of which $104 million was attributable to the non-controlling interest. The reversal is driven by a decrease in the
pre-tax discount rate and an increase in the forecast cash flow assumptions for the brand primarily due to the continuation and
acceleration of premiumisation driving sales growth in the baijiu category in China, the principal market of the brand. The net book
value of the brand is $689 million that is recoverable based on its value in use.
Financial statements (continued)
268
In the year ended 30 June 2024, an impairment charge of $101 million in respect of the Chase brand, the related goodwill and
tangible fixed assets was charged to operating exceptional items. The charge is mainly driven by the flavoured gin category slowdown
in Great Britain. Value in use and fair value less costs of disposal methodologies were both considered to assess the recoverable
amount. The impairment reduced the tax liability by $19 million resulting in a net exceptional loss of $82 million.
In the year ended 30 June 2024, an impairment charge of $54 million in respect of certain brands in the US ready to drink portfolio
was recognised in exceptional operating items. The charge is mainly driven by the reduction in forecast cash flow assumptions due to
the reprioritisation of the portfolio and the more challenging macroeconomic environment. Value in use and fair value less costs of
disposal methodologies were both considered to assess the recoverable amount. The value in use that was calculated exceeded the fair
value less costs of disposal. The brand impairment reduced the deferred tax liability by $13 million. The recoverable amount is
$49 million in respect of these US brands.
In the year ended 30 June 2023, an impairment charge of $517 million in respect of the McDowell's brand and $29 million in
respect of the Director’s Special brand were recognised in exceptional operating items, based on their value in use. The brand
impairment reduced the deferred tax liability by $137 million.
In the year ended 30 June 2023, an additional impairment charge of $67 million was recognised in exceptional operating items in
respect of some brands where book value was not recoverable. The brand impairment reduced the deferred tax liability by $17 million.
(e) Sensitivity to change in key assumptions
Impairment testing for the year ended 30 June 2024 has identified the following cash-generating units as being sensitive to reasonably
possible changes in assumptions.
The table below shows the headroom at 30 June 2024 and the impairment charge that would be required if the assumptions in the
calculation of their value in use were changed:

| Carrying value of CGU $ million | Headroom $ million | 8pps decrease in annual growth rate in forecast period 2025-2030 $ million
Aviation American Gin | 268 | 69 | (108)

.
10. Property, plant and equipment
Accounting policies
Land and buildings are stated at cost less accumulated depreciation. Freehold land is not depreciated. Leaseholds are generally
depreciated over the unexpired period of the lease. Other property, plant and equipment are depreciated on a straight-line basis to
estimated residual values over their expected useful lives, and these values and lives are reviewed each year. Subject to these reviews,
the estimated useful lives fall within the following ranges: buildings – 10 to 50 years; within plant and equipment casks and containers
– 15 to 50 years; other plant and equipment – 5 to 40 years; fixtures and fittings – 5 to 10 years; and returnable bottles and crates – 5 to
10 years.
Reviews are carried out if there is an indication that assets may be impaired, to ensure that property, plant and equipment are not
carried at above their recoverable amounts.
Government grants
Government grants are not recognised until there is reasonable assurance that the group will comply with the conditions pursuant to
which they have been granted and that the grants will be received. Government grants in respect of property, plant and equipment are
deducted from the asset that they relate to, reducing the depreciation expense charged to the income statement.
Financial statements (continued)
269

| Land and buildings $ million | Plant and equipment $ million | Fixtures and fittings $ million | Returnable bottles and crates $ million | Under construction $ million | Total $ million
Cost |  |  |  |  |  |
At 30 June 2022 (re-presented) | 3,210 | 6,365 | 150 | 656 | 1,053 | 11,434
Hyperinflation adjustment | 6 | 13 | 1 | — | 5 | 25
Exchange differences | (66) | (138) | — | (39) | 30 | (213)
Acquisitions | 9 | 16 | — | 3 | — | 28
Sale of businesses | (42) | (180) | (5) | (66) | (4) | (297)
Additions | 133 | 257 | 16 | 60 | 998 | 1,464
Disposals | (78) | (170) | (15) | (126) | (2) | (391)
Transfers | 175 | 286 | 15 | 33 | (509) | —
Reclassification from assets held for sale | 3 | — | 2 | — | — | 5
At 30 June 2023 (re-presented) | 3,350 | 6,449 | 164 | 521 | 1,571 | 12,055
Hyperinflation adjustment | 48 | 70 | 2 | 12 | 16 | 148
Exchange differences | (74) | (123) | (3) | (24) | (50) | (274)
Sale of businesses | (1) | (14) | (3) | — | — | (18)
Additions | 207 | 383 | 15 | 30 | 911 | 1,546
Disposals | (57) | (189) | (9) | (19) | (9) | (283)
Transfers | 169 | 679 | 11 | 13 | (872) | —
Reclassification to assets held for sale | (25) | (97) | — | (19) | (4) | (145)
At 30 June 2024 | 3,617 | 7,158 | 177 | 514 | 1,563 | 13,029
Depreciation |  |  |  |  |  |
At 30 June 2022 (re-presented) | 907 | 2,921 | 94 | 436 | — | 4,358
Exchange differences | (8) | (95) | — | (22) | — | (125)
Depreciation charge for the year | 150 | 323 | 16 | 40 | — | 529
Exceptional accelerated depreciation and impairment | 38 | 49 | — | — | — | 87
Sale of businesses | (26) | (96) | (2) | (41) | — | (165)
Disposals | (75) | (156) | (13) | (124) | — | (368)
Reclassification from assets held for sale | — | — | 1 | — | — | 1
At 30 June 2023 (re-presented) | 986 | 2,946 | 96 | 289 | — | 4,317
Exchange differences | (20) | (69) | (3) | (15) | — | (107)
Depreciation charge for the year | 175 | 365 | 23 | 37 | — | 600
Exceptional accelerated depreciation and impairment | 9 | 36 | 1 | — | — | 46
Sale of businesses | (1) | (13) | (3) | — | — | (17)
Disposals | (43) | (156) | (9) | (20) | — | (228)
Reclassification to assets held for sale | (8) | (72) | — | (11) | — | (91)
At 30 June 2024 | 1,098 | 3,037 | 105 | 280 | — | 4,520
Carrying amount |  |  |  |  |  |
At 30 June 2024 | 2,519 | 4,121 | 72 | 234 | 1,563 | 8,509
At 30 June 2023 (re-presented) | 2,364 | 3,503 | 68 | 232 | 1,571 | 7,738
At 30 June 2022 (re-presented) | 2,303 | 3,444 | 56 | 220 | 1,053 | 7,076

The net book value of land and buildings comprises freeholds of $1,970 million (2023 – $1,870 million), long leaseholds of $3 million
(2023 – $3 million) and short leaseholds of $546 million (2023 – $491 million). Depreciation was not charged on $182 million (2023
– $177 million) of land.
Property, plant and equipment is net of a government grant of $185 million (2023 – $185 million) received in prior years in respect of
the construction of a rum distillery in the US Virgin Islands.
Financial statements (continued)
270
11. Biological assets
Accounting policies
Biological assets held by the group consist of agave (Agave Azul Tequilana Weber) plants. The harvested plants are used during the
production of tequila. The maturity cycle of agave ranges between six and eight years; based on this, biological assets are classified as
mature and immature. Mature biological assets are measured at fair value less costs to sell on initial recognition and at the end of each
reporting period based on the present value of future cash flows discounted at an appropriate rate for Mexico (income approach as per
IFRS 13). Immature biological assets are plants that have not reached the point of maturity because their sugar content yield and
weight is not enough to be harvested and there is no active market for such plants; consequently the Company accounts for these assets
by applying fair valuation using the cost approach (replacement cost).
Changes in biological assets were as follows:

| Biological assets $ million
Fair value |
At 30 June 2022 (re-presented) | 114
Exchange differences | 27
Transferred to inventories | (10)
Fair value change | —
Farming cost capitalised | 66
At 30 June 2023 (re-presented) | 197
Exchange differences | (13)
Transferred to inventories | (23)
Fair value change | (17)
Farming cost capitalised | 55
At 30 June 2024 | 199

At 30 June 2024, the number of agave plants was approximately 32 million (2023 – 37 million), ranging from new plantations up to
eight year-old plants.
12. Leases
Accounting policies
Where the group is the lessee, all leases are recognised on the balance sheet as right-of-use assets and depreciated on a straight-line
basis with the charge recognised in cost of sales or in other operating items depending on the nature of the costs. The liability,
recognised as part of net borrowings, is measured at a discounted value and any interest is charged to finance charges.
The group recognises services associated with a lease as other operating expenses. Payments associated with leases where the value
of the asset when it is new is lower than $5,000 (leases of low value assets) and leases with a lease term of 12 months or less (short-
term leases) are recognised as other operating expenses. A judgement in calculating the lease liability at initial recognition includes
determining the lease term where extension or termination options exist. In such instances, any economic incentive to retain or end a
lease are considered and extension periods are only included when it is considered reasonably certain that an option to extend a lease
will be exercised.
Financial statements (continued)
271
(a) Movement in right-of-use assets
The company principally leases warehouses, office buildings, plant and machinery, cars and distribution vehicles in the ordinary course of
business.

| Land and buildings $ million | Plant and equipment $ million | Total $ million
At 30 June 2022 (re-presented) | 426 | 257 | 683
Exchange differences | 13 | (18) | (5)
Additions | 53 | 45 | 98
Reclassification from assets held for sale | 2 | 1 | 3
Derecognition due to disposal of business | (1) | (1) | (2)
Depreciation | (67) | (47) | (114)
At 30 June 2023 (re-presented) | 426 | 237 | 663
Exchange differences | (6) | (3) | (9)
Additions | 106 | 60 | 166
Disposal | (11) | (2) | (13)
Depreciation | (71) | (50) | (121)
At 30 June 2024 | 444 | 242 | 686

(b) Lease liabilities

| 2024 $ million | 2023 re-presented $ million
Current lease liabilities | (95) | (94)
Non-current lease liabilities | (509) | (470)
| (604) | (564)

The future cash outflows, which are not included in lease liabilities on the balance sheet, in respect of extension and termination
options which are not reasonably expected to be exercised are estimated at $262 million (2023 – $329 million).
(c) Amounts recognised in the consolidated income statement
In the year ended 30 June 2024, other external charges (within other operating items) included $70 million (2023 – $69 million) in
respect of leases of low value assets and short-term leases and $8 million (2023 – $5 million) in respect of variable lease payments.
Refer to note 5 for further information relating to the interest expense on lease liabilities.
The total cash outflow for leases in the year ended 30 June 2024 was $209 million (2023 – $209 million).
Financial statements (continued)
272
13. Other investments
Accounting policies
Other investments are equity investments that are not classified as investments in associates or joint arrangements nor investments in
subsidiaries. They are included in non-current assets. Subsequent to initial measurement, other investments are stated at fair value.
Gains and losses arising from the changes in fair value are recognised in the income statement or in other comprehensive income on a
case-by-case basis. Accumulated gains and losses included in other comprehensive income are not recycled to the income statement.
Dividends from other investments are recognised in the consolidated income statement.
Loans receivable are non-derivative financial assets that are not classified as equity investments. They are subsequently measured
either at amortised cost using the effective interest method less allowance for impairment or at fair value with gains and losses arising
from changes in fair value recognised in the income statement or in other comprehensive income that are recycled to the income
statement on the de-recognition of the asset. Allowances for expected credit losses are made based on the risk of non-payment taking
into account ageing, previous experience, economic conditions and forward-looking data. Such allowances are measured as either 12-
months expected credit losses or lifetime expected credit losses depending on changes in the credit quality of the counterparty.

| Loans $ million | Other investments $ million | Total $ million
Cost less allowances or fair value |  |  |
At 30 June 2022 (re-presented) | 21 | 24 | 45
Additions | 23 | 11 | 34
Repayments and disposals | (3) | — | (3)
Fair value adjustment | — | (5) | (5)
Capitalised interest | 2 | — | 2
Impairment charged during the year | — | (2) | (2)
At 30 June 2023 (re-presented) | 43 | 28 | 71
Additions | 18 | 9 | 27
Repayments and disposals | (17) | — | (17)
Fair value adjustment | — | (3) | (3)
Capitalised interest | 5 | — | 5
Impairment reversed/(charged) during the year | 14 | (3) | 11
At 30 June 2024 | 63 | 31 | 94

At 30 June 2024, loans comprise $6 million (2023 – $7 million; 2022 – $7 million) of loans to customers and other third parties,
after allowances of $138 million (2023 – $152 million; 2022 – $156 million), and $57 million (2023 – $36 million; 2022 – $14
million) of loans to associates.
Financial statements (continued)
273
14. Post-employment benefits
Accounting policies
The group’s principal post-employment funds are defined benefit plans. In addition, the group has defined contribution plans,
unfunded post-employment medical benefit liabilities and other unfunded defined benefit post-employment liabilities. For post-
employment plans other than defined contribution plans, the amount charged to operating profit is the cost of accruing pension
benefits promised to employees over the year, plus any changes arising on benefits granted to members by the group during the year.
Net finance charges comprise the net deficit/surplus on the plans at the beginning of the year, adjusted for cash flows in the year,
multiplied by the discount rate for plan liabilities. The differences between the fair value of the plans’ assets and the present value of
the plans’ liabilities are disclosed as an asset or liability on the consolidated balance sheet. Any differences due to changes in
assumptions or experience are recognised in other comprehensive income. The amount of any pension fund asset recognised on the
balance sheet is limited to any future refunds from the plan or the present value of reductions in future contributions to the plan.
Contributions payable by the group in respect of defined contribution plans are charged to operating profit as incurred.
Critical accounting estimates and judgements
Application of IAS 19 requires the exercise of estimate and judgement in relation to various assumptions.
Diageo determines the assumptions on a country-by-country basis in conjunction with its actuaries. Estimates are required in
respect of uncertain future events, including the life expectancy of members of the funds, salary and pension increases, future inflation
rates, discount rates and employee and pensioner demographics. The application of different assumptions could have a significant
effect on the amounts reflected in the income statement, other comprehensive income and the balance sheet. There may be
interdependencies between the assumptions.
Where there is an accounting surplus on a defined benefit plan, management judgement is necessary to determine whether the
group can obtain economic benefits through a refund of the surplus or by reducing future contributions to the plan.
(a) Post-employment benefit plans
The group operates a number of pension plans throughout the world, devised in accordance with local conditions and practices.
Diageo's most significant plans are defined benefit plans and are funded by payments to separately administered trusts or insurance
companies. The group also operates a number of plans that are generally unfunded, primarily in the United States, which provide to
employees post-employment medical benefits.
The principal plans are in the United Kingdom, Ireland and the United States where benefits are based on employees’ length of service
and salary. All valuations were performed by independent actuaries using the projected unit credit method to determine pension costs.
The most recent funding valuations of the significant defined benefit plans were carried out as follows:

Principal plans | Date of valuation
United Kingdom(1) | 1 April 2021
Ireland(2) | 31 December 2021
United States | 1 January 2023

(1)The Diageo Pension Scheme (DPS, the UK Scheme) closed to new members in November 2005. Employees who joined Diageo in the United Kingdom between
November 2005 and January 2018, were eligible to become members of the Diageo Lifestyle Plan (a cash balance defined benefit plan) which was merged into the
DPS in July 2023.Since January 2018, new employees have been eligible to become members of a master trust defined contribution plan. The latest valuation as at
1 April 2024 is currently underway and will be finalised during the course of the next financial year.
(2) The Guinness Ireland Group Pension Scheme (GIGPS, the Irish scheme) closed to new members in May 2013. Employees who have joined Diageo in Ireland since
the defined benefit scheme closed have been eligible to become members of a master trust defined contribution plan.
The assets of the UK and Irish pension plans are held in separate trusts administered by trustees who are required to act in the best
interests of the plans’ beneficiaries. For DPS, the trustee is Diageo Pension Trust Limited. As required by legislation, one-third of the
directors of the Trust are nominated by the members of the DPS, member nominated directors are appointed from both the pensioner
member community and the active member community. For the Irish Scheme, Diageo Ireland makes three nominations and appoints
three further candidates nominated by representative groupings.
Financial statements (continued)
274
The amounts charged to the consolidated income statement and statement of comprehensive income for the group’s defined benefit
plans for the three years ended 30 June 2024 are as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Current service cost and administrative expenses | (82) | (91) | (142)
Past service gains/(losses) – ordinary activities | 3 | (1) | 46
Gains on curtailments and settlements | — | 2 | 44
Charge to operating profit | (79) | (90) | (52)
Net finance income in respect of post-employment plans | 37 | 53 | 13
Charge before taxation(1) | (42) | (37) | (39)
Actual returns less amounts included in finance income | (168) | (1,722) | (1,904)
Experience gains/(losses) | 24 | (273) | (46)
Changes in financial assumptions | 20 | 1,150 | 2,837
Changes in demographic assumptions | 43 | 65 | (53)
Other comprehensive (loss)/income | (81) | (780) | 834
Changes in the surplus restriction | 5 | 9 | (15)
Total other comprehensive (loss)/income | (76) | (771) | 819

(i) The year ended 30 June 2022 includes settlement gains of $36 million in respect of the Enhanced Transfer Values (ETV) exercise carried out in the Irish Schemes
and past service gains of $37 million as a result of the changes of the benefits in the Irish Scheme.
1) The (charge)/income before taxation is in respect of the following countries:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
United Kingdom | 5 | 19 | (37)
Ireland | 3 | 1 | 61
United States | (35) | (38) | (42)
Other | (15) | (19) | (21)
| (42) | (37) | (39)

In addition to the charge in respect of defined benefit post-employment plans, contributions to the group’s defined contribution
plans were $62 million (2023 – $53 million; 2022 – $44 million).
Financial statements (continued)
275
The movements in the plan assets and liabilities for the two years ended 30 June 2024 are set out below:

| Plan assets $ million | Plan liabilities $ million | Net surplus $ million
At 30 June 2022 (re-presented) | 10,163 | (8,753) | 1,410
Exchange differences | 267 | (238) | 29
Disposals | — | 5 | 5
Income/(charge) before taxation | 357 | (394) | (37)
Other comprehensive (loss)/income(1) | (1,722) | 942 | (780)
Contributions by the group | 121 | — | 121
Employee contributions | 5 | (5) | —
Benefits paid | (567) | 567 | —
At 30 June 2023 (re-presented) | 8,624 | (7,876) | 748
Exchange differences | (5) | 4 | (1)
Income/(charge) before taxation | 383 | (425) | (42)
Other comprehensive (loss)/income(1) | (168) | 87 | (81)
Contributions by the group | 97 | — | 97
Settlements | (43) | 43 | —
Employee contributions | 2 | (2) | —
Benefits paid | (473) | 473 | —
At 30 June 2024 | 8,417 | (7,696) | 721

(1) Excludes surplus restriction.
The plan assets and liabilities by type of post-employment benefit and country are as follows:

| 2024 | 2023 (re-presented)
| Plan assets $ million | Plan liabilities $ million | Plan assets $ million | Plan liabilities $ million
Pensions |  |  |  |
United Kingdom | 5,654 | (5,028) | 5,771 | (5,094)
Ireland | 1,954 | (1,595) | 1,999 | (1,650)
United States | 569 | (534) | 555 | (516)
Other | 216 | (241) | 227 | (244)
Post-employment medical | 3 | (266) | 3 | (288)
Other post-employment | 21 | (32) | 69 | (84)
| 8,417 | (7,696) | 8,624 | (7,876)

The balance sheet analysis of the post-employment plans is as follows:

| 2024 | 2023 (re-presented)
| Non- current assets(1) $ million | Non- current liabilities $ million | Non- current assets(1) $ million | Non- current liabilities $ million
Funded plans | 1,146 | (152) | 1,210 | (167)
Unfunded plans | — | (277) | — | (304)
| 1,146 | (429) | 1,210 | (471)

(1) Includes surplus restriction of $4 million (2023 – $9 million).
The disclosures have been prepared in accordance with IFRIC 14. In particular, where the calculation for a plan results in a surplus,
the recognised asset is limited to the present value of any available future refunds from the plan or reductions in future contributions to
the plan, and any additional liabilities are recognised as required. At 30 June 2024, the DPS had a net surplus of $689 million (2023 –
$742 million; 2022 – $1,421 million) and the GIGPS had a net surplus of $332 million (2023 – $328 million; 2022 –$267 million) and
other schemes in a surplus totalled $125 million (2023 – $140 million; 2022 – $191 million). The DPS and GIGPS surpluses have
Financial statements (continued)
276
been recognised, with no provision made against them, as they are expected to be recoverable through a combination of a reduction in
future cash contributions or ultimately via a cash refund when the last member’s obligations have been met.
(b) Principal risks and assumptions
The material post-employment plans are not exposed to any unusual, entity-specific or scheme-specific risks but there are general
risks:
Inflation – The majority of the plans’ obligations are linked to inflation. Higher inflation will lead to increased liabilities which is
partially offset by the plans holding inflation linked gilts, swaps and caps against the level of inflationary increases.
Interest rate – The plan liabilities are determined using discount rates derived from yields on AA-rated corporate bonds. A
decrease in corporate bond yields will increase plan liabilities though this will be partially offset by an increase in the value of the
bonds held by the post-employment plans.
Mortality – The majority of the obligations are to provide benefits for the life of the members and their partners, so any increase in
life expectancy will result in an increase in the plans’ liabilities.
Asset returns – Assets held by the pension plans are invested in a diversified portfolio including equities, bonds and other assets.
Volatility in asset values will lead to movements in the net deficit/surplus reported in the consolidated balance sheet for post-
employment plans which in addition will also impact the post-employment expense in the consolidated income statement.
The following weighted average assumptions were used to determine the group’s deficit/surplus in the main post-employment
plans at 30 June in the relevant year. The assumptions used to calculate the charge/credit in the consolidated income statement for the
year ending 30 June are based on the assumptions disclosed as at the previous 30 June.

| United Kingdom | Ireland | United States(1)
| 2024% | 2023% | 2022% | 2024% | 2023% | 2022% | 2024% | 2023% | 2022%
Rate of general increase in salaries(2) | 3.6 | 3.7 | 3.6 | 3.7 | 3.9 | 3.8 | — | — | —
Rate of increase to pensions in payment | 2.8 | 2.9 | 2.9 | 2.2 | 2.3 | 2.2 | — | — | —
Rate of increase to deferred pensions | 2.6 | 2.7 | 2.6 | 2.2 | 2.4 | 2.3 | — | — | —
Discount rate for plan liabilities | 5.1 | 5.2 | 3.8 | 3.6 | 3.6 | 3.2 | 5.3 | 4.9 | 4.4
Inflation – CPI | 2.6 | 2.7 | 2.6 | 2.3 | 2.5 | 2.4 | 2.3 | 2.2 | 2.3
Inflation – RPI | 3.1 | 3.2 | 3.1 | — | — | — | — | — | —

(1) The salary increase assumption in the United States is not a significant assumption as only a minimal amount of members’ pension entitlement is dependent on a
member’s projected final salary.
(2) The salary increase assumptions include an allowance for age-related promotional salary increases.
For the principal UK and Irish pension funds, the table below illustrates the expected age at death of an average worker who retires
currently at the age of 65, and one who is currently aged 45 and subsequently retires at the age of 65:

| United Kingdom(1) | Ireland(2) | United States
| 2024 Age | 2023 Age | 2022 Age | 2024 Age | 2023 Age | 2022 Age | 2024 Age | 2023 Age | 2022 Age
Retiring currently at age 65 |  |  |  |  |  |  |  |  |
Male | 86.8 | 86.8 | 87.1 | 87.2 | 87.2 | 87.7 | 85.7 | 85.6 | 85.5
Female | 88.4 | 88.4 | 88.7 | 89.7 | 89.6 | 90.0 | 87.4 | 87.2 | 87.2
Currently aged 45, retiring at age 65 |  |  |  |  |  |  |  |  |
Male | 88.1 | 88.1 | 88.5 | 88.8 | 88.8 | 89.3 | 87.2 | 87.1 | 87.0
Female | 90.5 | 90.4 | 90.7 | 91.4 | 91.3 | 91.7 | 88.9 | 88.7 | 88.6

(1) Based on the CMI’s S3 mortality tables with scaling factors based on the experience of the plan and where people live, with suitable future improvements.
(2) Based on the CMI's S3 mortality tables with scaling factors based on the experience of the plan, with suitable future improvements.
Financial statements (continued)
277
For the significant assumptions, the following sensitivity analysis estimates the potential impacts on the consolidated income
statement for the year ending 30 June 2025 and on the plan liabilities at 30 June 2024:

| United Kingdom | Ireland | United States
Benefit/(cost) | Operating profit $ million | Profit after taxation $ million | Plan liabilities(1) $ million | Operating profit $ million | Profit after taxation $ million | Plan liabilities(1) $ million | Operating profit $ million | Profit after taxation $ million | Plan liabilities(1) $ million
Effect of 0.5% increase in discount rate | 2 | 16 | 307 | 1 | 6 | 101 | 2 | 2 | 27
Effect of 0.5% decrease in discount rate | (2) | (16) | (339) | (1) | (5) | (112) | (2) | (2) | (30)
Effect of 0.5% increase in inflation | (2) | (9) | (201) | — | (2) | (62) | (1) | (1) | (10)
Effect of 0.5% decrease in inflation | 2 | 9 | 200 | — | 3 | 73 | 1 | 1 | 9
Effect of one year increase in life expectancy | — | (6) | (162) | — | (2) | (67) | — | (1) | (17)

(1) The estimated effect on the liabilities excludes the impact of any interest rate and inflation swaps held by the pension plans.
(i)The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions and may not be representative of the
actual change. Each sensitivity is calculated on a change in the key assumption while holding all other assumptions constant. The sensitivity to inflation includes the
impact on all inflation linked assumptions (e.g. pension increases and salary increases where appropriate).
(c) Investment and hedging strategy
The investment strategy for the group’s funded post-employment plans is determined locally by the trustees of the plan and/or Diageo,
as appropriate, and it takes account of the relevant statutory requirements. The objective of the investment strategy is to achieve a
target rate of return in excess of the movement on the liabilities, whilst taking an acceptable level of investment risk relative to the
liabilities. This objective is implemented by using the funds of the plans to invest in a variety of asset classes that are expected over
the long-term to deliver a target rate of return. The majority of the investment strategies have significant amounts allocated to bonds in
order to provide protection against adverse movements in the liabilities of the plans. This includes corporate bonds and bonds held
under sale and repurchase agreements (repos) whereby the bond is provided as security for bank funding to enable the acquisition of
additional bonds to increase the level of protection provided. Repos are fully collateralised short-term agreements (typically up to 12
months in duration) and are a well-recognised investment practice as part of a risk management programme against interest rates or
inflation risks. Under the UK Scheme, a significant amount of the repos are less than 3 months in duration. At 30 June 2024,
approximately 95% and 100% (2023 – 97% and 98%) of the UK Scheme’s liabilities measured on the Trustee's funding basis
(gilts+50bp) were protected against future adverse movements in interest rates and inflation respectively through the combined effect
of bonds and swaps. At 30 June 2024, approximately 90% and 112% (2023 – 92% and 112%) of the Irish plans’ liabilities measured
on the Trustee's funding basis (euro-swaps+50bp) were protected against future adverse movements in interest rates and inflation
respectively through the combined effect of bonds and swaps.
The discount rates used are based on the yields of high-quality fixed income investments. For the UK plans, which represent
approximately 65% of total plan liabilities, the discount rate is determined by reference to the yield curves of AA-rated corporate
bonds for which the timing and amount of cash outflows are similar to those of the plans. A similar process is used to determine the
discount rates used for the non-UK plans.
Financial statements (continued)
278
An analysis of the fair value of the plan assets is as follows:

| 2024
| United Kingdom $ million | Ireland $ million | United States and other $ million | Total $ million
| Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Total
Equities | 1 | 1,121 | — | 330 | 80 | 129 | 81 | 1,580 | 1,661
Bonds |  |  |  |  |  |  |  |  |
Fixed-interest government | 943 | 25 | — | 60 | 62 | 10 | 1,005 | 95 | 1,100
Inflation-linked government | 2,112 | 495 | — | 111 | — | 2 | 2,112 | 608 | 2,720
Investment grade corporate | — | 503 | — | 623 | 21 | 311 | 21 | 1,437 | 1,458
Non-investment grade | 4 | 448 | 5 | 346 | — | 146 | 9 | 940 | 949
Loan securities | — | 421 | — | 107 | — | — | — | 528 | 528
Liability Driven Investment (LDI) | — | — | — | 124 | — | — | — | 124 | 124
Property - unquoted | — | 551 | — | 54 | — | 1 | — | 606 | 606
Hedge funds | — | — | — | — | — | 6 | — | 6 | 6
Interest rate and inflation swaps | — | (1,126) | 36 | 65 | — | — | 36 | (1,061) | (1,025)
Cash and other | 20 | 136 | 28 | 65 | — | 41 | 48 | 242 | 290
Total bid value of assets | 3,080 | 2,574 | 69 | 1,885 | 163 | 646 | 3,312 | 5,105 | 8,417

| 2023 (re-presented)
| United Kingdom $ million | Ireland $ million | United States and other $ million | Total $ million
| Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Quoted | Unquoted | Total
Equities | 15 | 1,155 | — | 365 | 81 | 125 | 96 | 1,645 | 1,741
Bonds |  |  |  |  |  |  |  |  |
Fixed-interest government | 739 | 189 | — | 8 | 60 | 10 | 799 | 207 | 1,006
Inflation-linked government | 1,286 | 1,393 | — | 121 | 2 | 2 | 1,288 | 1,516 | 2,804
Investment grade corporate | — | 37 | — | 413 | 26 | 285 | 26 | 735 | 761
Non-investment grade | 27 | 364 | 7 | 234 | 2 | 168 | 36 | 766 | 802
Loan securities | 17 | 664 | — | 106 | — | — | 17 | 770 | 787
Liability Driven Investment (LDI) | — | — | — | 102 | — | — | — | 102 | 102
Property - unquoted | 36 | 582 | — | 79 | — | 1 | 36 | 662 | 698
Hedge funds | — | — | — | 15 | — | 6 | — | 21 | 21
Interest rate and inflation swaps | — | (1,224) | 129 | (22) | — | — | 129 | (1,246) | (1,117)
Cash and other | 128 | 363 | 6 | 436 | — | 86 | 134 | 885 | 1,019
Total bid value of assets | 2,248 | 3,523 | 142 | 1,857 | 171 | 683 | 2,561 | 6,063 | 8,624

(i)The analyses of the fair value of plan assets has been amended to reflect the underlying asset categories of repurchase agreements. The presentation of fair value of
the plan assets for the year ended 30 June 2023 has been aligned with the presentation provided for the year ended 30 June 2024.
(ii)The asset classes include some cash holdings that are temporary. This cash is likely to be invested imminently and so has been included in the asset class where it is
anticipated to be invested in the long-term.
(iii)For the year ended 30 June 2024 the analyses of asset categories above includes $1,626 million (2023 - $2,213 million) in the United Kingdom, $1,060 million
(2023 - $1,065 million) in Ireland and $572 million (2023 - $558 million) in the United States held in unquoted pooled investment vehicles.
Total cash contributions by the group to all post-employment plans in the year ending 30 June 2025 are estimated to be
approximately $55 million.
Financial statements (continued)
279
(d) Deficit funding arrangements
UK plans
In the year ended 30 June 2011 the group established a Pension Funding Partnership (PFP) in respect of the UK Scheme. Whisky
inventory was transferred into the partnership but the group retains control over the partnership which at 30 June 2024 held inventory
with a book value of $648 million (2023 – $923 million). The partnership is fully consolidated in the group financial statements. The
UK Scheme has a limited interest in the partnership and, as a partner, is entitled to a distribution from the profits of the partnership.
The arrangement is expected to cease in 2030, and contributions to the UK scheme in any year will be dependent on the funding
position of the UK scheme at the previous 31 March. Given the surplus funding position in the DPS, there were no contributions to the
DPS in the years ended 30 June 2024 and 30 June 2023.
In 2030, the group will be required, dependent upon the funding position of the UK Scheme at that time, to pay an amount not
greater than the actuarial deficit at that time, up to a maximum of £430 million ($542 million) in cash, to purchase the UK Scheme’s
interest in the partnership. If the UK Scheme is in surplus at an actuarial triennial valuation excluding the value of the PFP, then the
group can exit the PFP with the agreement of the trustees.
Irish plans
The 31 December 2021 triennial actuarial valuation of the Guinness Ireland Group Pension Scheme was completed during the year
ended 30 June 2023 showing the Scheme is fully funded on the Trustee’s ongoing funding basis and the statutory minimum funding
standard basis. Given the fully funded position, no deficit contributions were payable in the years ended 30 June 2024 and 30 June
2023.The company has agreed with the Trustee on conditional contributions if there is a deficit in the Scheme on any of the next three
valuation dates. These conditional contributions shall be payable over the 3 years following the valuation and the aggregate payment
will be equal to the ongoing deficit disclosed, subject to the caps set out below:

| Valuation date
| 31 December 2024 | 31 December 2027 | 31 December 2030
| € million | $ million | € million | $ million | € million | $ million
Maximum conditional contribution | 35 | 33 | 39 | 36 | 39 | 36

(e) Timing of benefit payments
The following table provides information on the timing of the benefit payments and the average duration of the defined benefit
obligations and the distribution of the timing of benefit payments:

| United Kingdom | Ireland | United States
| 2024 $ million | 2023 re-presented $ million | 2024 $ million | 2023 re-presented $ million | 2024 $ million | 2023 re-presented $ million
Maturity analysis of benefits expected to be paid |  |  |  |  |  |
Within one year | 311 | 382 | 88 | 92 | 64 | 72
Between 1 to 5 years | 1,225 | 1,373 | 441 | 462 | 216 | 219
Between 6 to 15 years | 3,123 | 3,073 | 870 | 916 | 456 | 417
Between 16 to 25 years | 2,948 | 2,827 | 748 | 813 | 297 | 260
Beyond 25 years | 3,378 | 3,357 | 816 | 941 | 230 | 236
Total | 10,985 | 11,012 | 2,963 | 3,224 | 1,263 | 1,204
| years | years | years | years | years | years
Average duration of the defined benefit obligation | 14 | 14 | 14 | 14 | 9 | 9

The projected benefit payments are based on the assumptions underlying the assessment of the obligations, including inflation.
They are disclosed undiscounted and therefore appear large relative to the discounted value of the plan liabilities recognised on the
consolidated balance sheet. They are in respect of benefits that have accrued at the balance sheet date and make no allowance for any
benefits to be accrued subsequently.
(f) Related party disclosures
Information on transactions between the group and its pension plans is given in note 21.
Financial statements (continued)
280
15. Working capital
Accounting policies
Inventories are stated at the lower of cost and net realisable value. Cost includes raw materials, direct labour and expenses, an
appropriate proportion of production and other overheads, but not borrowing costs. Cost is calculated at the weighted average cost
incurred in acquiring inventories. All maturing inventories and raw materials are classified as current assets, as they are expected to be
realised in the normal operating cycle which can be a period of several years.
Trade and other receivables are initially recognised at fair value less transaction costs and subsequently carried at amortised cost less
any allowance for discounts and doubtful debts. Trade receivables arise from contracts with customers, and are recognised when
performance obligations are satisfied, and the consideration due is unconditional as only the passage of time is required before the
payment is received. Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-looking
data on credit risk.
Trade and other payables are initially recognised at fair value including transaction costs and subsequently carried at amortised
costs. Contingent considerations recognised in business combinations are subsequently measured at fair value through income
statement. The group evaluates supplier arrangements against a number of indicators to assess if the liability has the characteristics of
a trade payable or should be classified as borrowings. This assessment considers the commercial purpose of the facility, whether
payment terms are similar to customary payment terms, whether the group is legally discharged from its obligation towards suppliers
before the end of the original payment term, and the group’s involvement in agreeing terms between banks and suppliers.
Provisions are liabilities of uncertain timing or amount. A provision is recognised if, as a result of a past event, the group has a present
legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required
to settle the obligation. Provisions are calculated on a discounted basis. The carrying amounts of provisions are reviewed at each
balance sheet date and adjusted to reflect the current best estimate.
(a) Inventories

| 2024 $ million | 2023 re-presented $ million
Raw materials and consumables | 639 | 684
Work in progress | 118 | 166
Maturing inventories | 7,832 | 7,300
Finished goods and goods for resale | 1,131 | 1,503
| 9,720 | 9,653

Maturing inventories include whisk(e)y, rum, tequila and Chinese white spirits. The following amounts of inventories can be utilised
after more than one year:

| 2024 $ million | 2023 re-presented $ million
Raw materials and consumables | 19 | 29
Maturing inventories | 5,885 | 5,119
| 5,904 | 5,148

Inventories are disclosed net of provisions for obsolescence, an analysis of which is as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Balance at beginning of the year | 128 | 113 | 133
Exchange differences | (3) | (27) | (8)
Income statement charge | 51 | 66 | 8
Utilised | (47) | (23) | (18)
Sale of businesses | (5) | (1) | (2)
| 124 | 128 | 113

Financial statements (continued)
281
(b) Trade and other receivables

| 2024 | 2023 (re-presented)
| Current assets $ million | Non-current assets $ million | Current assets $ million | Non-current assets $ million
Trade receivables | 2,674 | — | 2,534 | —
Interest receivable | 31 | — | 15 | —
VAT recoverable and other prepaid taxes | 227 | 17 | 342 | 19
Other receivables | 240 | 14 | 205 | 16
Prepayments | 274 | 7 | 288 | 4
Accrued income | 41 | — | 43 | —
| 3,487 | 38 | 3,427 | 39

At 30 June 2024, approximately 21%, 16% and 9% of the group’s trade receivables of $2,674 million are due from counterparties
based in the United States, India and United Kingdom, respectively. Accrued income primarily represents amounts receivable from
customers in respect of performance obligations satisfied but not yet invoiced.
The aged analysis of trade receivables, net of expected credit loss allowance, is as follows:

| 2024 $ million | 2023 re-presented $ million
Not overdue | 2,490 | 2,479
Overdue 1 – 30 days | 43 | 32
Overdue 31 – 60 days | 31 | 8
Overdue 61 – 90 days | 27 | 4
Overdue 91 – 180 days | 71 | 7
Overdue more than 180 days | 12 | 4
| 2,674 | 2,534

Increase in overdue balances in the year ended 30 June 2024 was driven by receivables against institutional customers with low credit
risk in certain countries.
Trade and other receivables are disclosed net of expected credit loss allowance for doubtful debts, an analysis of which is as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Balance at beginning of the year | 112 | 143 | 154
Exchange differences | (3) | (10) | (12)
Income statement (release)/charge | 8 | (4) | 28
Written off | (22) | (17) | (27)
| 95 | 112 | 143

Financial statements (continued)
282
(c) Trade and other payables

| 2024 | 2023 (re-presented)
| Current liabilities $ million | Non-current liabilities $ million | Current liabilities $ million | Non-current liabilities $ million
Trade payables | 3,071 | — | 3,351 | —
Interest payable | 358 | — | 299 | —
Tax and social security excluding income tax | 724 | — | 796 | —
Other payables | 499 | 304 | 544 | 463
Accruals | 1,564 | — | 1,549 | —
Deferred income | 84 | — | 92 | —
Dividend payable | 31 | — | 29 | —
Dividend payable to non-controlling interests | 23 | — | 18 | —
| 6,354 | 304 | 6,678 | 463

Interest payable at 30 June 2024 includes interest on non-derivative financial instruments of $291 million (2023 – $274 million).
Accruals at 30 June 2024 include $764 million (2023 – $707 million) accrued discounts attributed to sales recognised. Deferred
income represents amounts paid by customers in respect of performance obligations not yet satisfied. The amount of contract liabilities
recognised as revenue in the current year is $92 million (2023 – $109 million). Non-current liabilities include the net present value of
contingent consideration in respect of prior acquisitions of $231 million (2023 – $369 million). For further information on contingent
consideration, please refer to note 16 (g).
Together with the group’s partner banks, supply chain financing (SCF) facilities are provided to suppliers in certain countries.
These arrangements enable suppliers to receive funding earlier than the invoice due date at their discretion and at their own cost.
Payment terms continue to be agreed directly between the group and suppliers, independently from the availability of SCF facilities.
Liabilities are settled in accordance with the original due date of invoices. The group does not incur any fees or receive any rebates
where the suppliers choose to utilise these facilities. The group has determined that it is appropriate to present amounts outstanding
subject to SCF arrangements as trade payables. Consistent with this classification, cash flows are presented either as operating cash
flows or cash flows from investing activities, when related to the acquisition of non-current assets. At 30 June 2024, the amount that
has been subject to SCF and accounted for as trade payables was $847 million (2023 – $916 million).
(d) Provisions

| Thalidomide $ million | Other $ million | Total $ million
At 30 June 2023 (re-presented) | 212 | 244 | 456
Exchange differences | — | (3) | (3)
Provisions charged during the year | — | 61 | 61
Provisions utilised during the year | (17) | (103) | (120)
Transfers from other payables | — | (5) | (5)
Unwinding of discounts | 6 | 2 | 8
At 30 June 2024 | 201 | 196 | 397
Current liabilities | 17 | 80 | 97
Non-current liabilities | 184 | 116 | 300
| 201 | 196 | 397

Provisions have been established in respect of the discounted value of the group’s commitment to the UK and Australian Thalidomide
Trusts. These provisions will be utilised over the period of the commitments up to 2037.
The largest item in other provisions at 30 June 2024 is $54 million (2023 – $64 million) in respect of deferred employee compensation
plans which will be utilised when employees leave the group.
Financial statements (continued)
283
Risk management and capital structure
Introduction
This section sets out the policies and procedures applied to manage the group’s capital structure and the financial risks the group is
exposed to. Diageo considers the following components of its balance sheet to be capital: borrowings and equity. Diageo manages its
capital structure to achieve capital efficiency, provide flexibility to invest through the economic cycle and give efficient access to debt
markets at attractive cost levels.
16. Financial instruments and risk management
Accounting policies
Financial assets and liabilities are initially recorded at fair value including, where permitted by IFRS 9, any directly attributable
transaction costs. For those financial assets that are not subsequently held at fair value, the group assesses whether there is evidence of
impairment at each balance sheet date.
The group classifies its financial assets and liabilities into the following categories: financial assets and liabilities at amortised cost,
financial assets and liabilities at fair value through income statement and financial assets at fair value through other comprehensive
income.
The accounting policies for other investments and loans are described in note 13, for trade and other receivables and payables in note
15 and for cash and cash equivalents in note 17.
Financial assets and liabilities at fair value through income statement include derivative assets and liabilities. Where financial assets or
liabilities are eligible to be carried at either amortised cost or fair value through other comprehensive income, the group does not apply
the fair value option.
Derivative financial instruments are carried at fair value using a discounted cash flow model based on market data applied consistently
for similar types of instruments. Gains and losses on derivatives that do not qualify for hedge accounting treatment are taken to the
income statement as they arise.
Other financial liabilities are carried at amortised cost unless they are part of a fair value hedge relationship when the amortised cost of
the financial liabilities are adjusted with the fair value change attributable to the risk being hedged from the inception of the hedge
relationship. The difference between the initial carrying amount of the financial liabilities and their redemption value is recognised in
the income statement over the c ontractual terms using the effective interest rate method. Financial liabilities in respect of the Zacapa
acquisition are recognised at fair value.
Hedge accounting
The group designates and documents certain derivatives as hedging instruments against changes in fair value of recognised assets and
liabilities (fair value hedges), commodity price risk of highly probable forecast transactions, as well as the cash flow risk from a
change in exchange or interest rates (cash flow hedges) and hedges of net investments in foreign operations (net investment hedges).
Derivative instruments designated in hedge relationship are included in other financial assets and liabilities on the consolidated
balance sheet. The effectiveness of such hedges is assessed at inception and at least on a quarterly basis, using prospective testing.
Methods used for testing effectiveness include critical terms, regression analysis and hypothetical derivative models.
Fair value hedges are used to manage the currency and/or interest rate risks to which the fair value of certain assets and liabilities are
exposed. Changes in the fair value of the derivatives are recognised in the income statement, along with any changes in the relevant
fair value of the underlying hedged asset or liability. If such a hedge relationship no longer meets hedge accounting criteria, fair value
movements on the derivative continue to be taken to the income statement while any fair value adjustments made to the underlying
hedged item to that date are amortised through the income statement over its remaining life using the effective interest rate method.
Cash flow hedges are used to hedge the foreign currency risk of highly probable future foreign currency cash flows, the commodity
price risk of highly probable future transactions, as well as the cash flow risk from changes in exchange or interest rates. The effective
portion of the gain or loss on the hedges is recognised in other comprehensive income, while any ineffective part is recognised in the
income statement. Amounts recorded in other comprehensive income are recycled to the income statement in the same period in which
the underlying foreign currency, commodity or interest exposure affects the income statement. When a hedge relationship no longer
meets the criteria for hedge accounting, any cumulative gain or loss existing in equity is either transferred to the income statement or
amortised over its remaining life using the effective interest rate method.
Net investment hedges utilise either foreign currency borrowings or derivatives as hedging instruments. Foreign exchange differences
arising on translation of net investments are recorded in other comprehensive income and included in the exchange reserve. Liabilities
used as hedging instruments are revalued at closing exchange rates and the resulting gains or losses are also recognised in other
comprehensive income to the extent that they are effective, with any ineffectiveness taken to the income statement. Foreign currency
derivative contracts hedging net investments are carried at fair value. Effective fair value movements are recognised in other
comprehensive income, with any ineffectiveness taken to the income statement. Cost of hedging model is applied in case of cross-
currency interest rate swaps in net investment hedges. The fair value changes attributable to the spot component of the hedging
Financial statements (continued)
284
instruments are designated to offset foreign exchange differences of net investments and therefore taken to net investment hedge
reserve. The fair value changes attributable to the forward component of the hedging instruments (including currency basis) is taken to
the cost of hedging reserve and amortised to the consolidated income statement.
The group’s funding, liquidity and exposure to foreign currency, interest rate risks and commodity price risk are managed by the
group’s treasury department. The treasury department uses a range of financial instruments to manage these underlying risks.
Treasury operations are conducted within a framework of Board-approved policies and guidelines, which are recommended and
reviewed by the Finance Committee, chaired by the Chief Financial Officer. The policies and guidelines include benchmark exposure
and/or hedge cover levels for key areas of treasury risk which are periodically reviewed by the Board following, for example,
significant business, strategic or accounting changes. The framework provides for limited defined levels of flexibility in execution to
allow for the optimal application of the Board-approved strategies. Transactions arising from the application of this flexibility are
carried at fair value, gains or losses are taken to the income statement as they arise and are separately monitored on a daily basis using
Value at Risk analysis. In the years ended 30 June 2024 and 30 June 2023 gains and losses on these transactions were not material.
The group does not use derivatives for speculative purposes. All transactions in derivative financial instruments are initially
undertaken to manage the risks arising from underlying business activities.
The group purchases insurance for commercial or, where required, for legal or contractual reasons. In addition, the group retains
insurable risk where external insurance is not considered an economic means of mitigating these risks.
The Finance Committee receives a quarterly report on the key activities of the treasury department, however any exposures which
differ from the defined benchmarks are reported as they arise.
(a) Currency risk
The group presents its consolidated financial statements in US dollar and conducts business in many currencies. As a result, it is
subject to foreign currency risk due to exchange rate movements, which affects the group’s transactions and the translation of the
results and underlying net assets of its operations. To manage the currency risk, the group uses certain financial instruments. Where
hedge accounting is applied, hedges are documented and tested for effectiveness on an ongoing basis.
Hedge of net investment in foreign operations
The group hedges a certain portion of its exposure to fluctuations in the US dollar value of its foreign operations by designating
borrowings held in foreign currencies and using foreign currency spots, forwards, swaps and other financial derivatives. For the year
ended 30 June 2024, the group maintained the total net investment Value at Risk to total net asset value below 20%, where Value at
Risk is defined as the maximum amount of loss over a one-year period with a 95% probability confidence level.
At 30 June 2024, foreign currency borrowings (euro, sterling) and financial derivatives (Chinese yuan, euro, sterling) designated in
net investment hedge relationships amounted to $3,198 million derivatives and $8,109 million bonds (2023 – $806 million derivatives
and $12,584 million bonds).
Hedge of foreign currency debt
The group uses cross currency interest rate swaps to hedge the foreign currency risk associated with certain foreign currency
denominated borrowings.
Transaction exposure hedging
The group’s policy is to hedge forecast transactional foreign currency risk on major currency pair exposures up to 24 months, targeting
75% coverage for the current financial year, and on other currency exposures up to 18 months. The group’s exposure to foreign
currency risk arising principally on forecasted sales transactions is managed using forward agreements and options.
Financial statements (continued)
285
(b) Interest rate risk
The group has an exposure to interest rate risk, arising principally on changes in US dollar, euro and sterling interest rates. To manage
interest rate risk, the group manages its proportion of fixed to floating rate borrowings within limits approved by the Board, primarily
through issuing fixed and floating rate borrowings, and by utilising interest rate swaps. These practices aim to minimise the group’s
net finance charges with acceptable year-on-year volatility. To facilitate operational efficiency and effective hedge accounting, for the
year ended 30 June 2024 the group’s policy was to maintain fixed rate borrowings within a band of 40% to 90% of forecast net
borrowings. For these calculations, net borrowings exclude interest rate related fair value adjustments. The majority of the group’s
existing interest rate derivatives are designated as hedges and are expected to be effective. Fair value of these derivatives is recognised
in the income statement, along with any changes in the relevant fair value of the underlying hedged asset or liability.
The interest rate profile of the group's net borrowings is as follows:

| 2024 | 2023
| $ million | % | re-presented $ million | %
Fixed rate | 16,174 | 77 | 15,071 | 77
Floating rate(1) | 4,384 | 21 | 4,064 | 21
Impact of financial derivatives and fair value adjustments | (145) | (1) | (117) | (1)
Lease liabilities | 604 | 3 | 564 | 3
Net borrowings | 21,017 | 100 | 19,582 | 100

(1) The floating rate portion of net borrowings includes cash and cash equivalents, collaterals, floating rate loans and bonds and bank overdrafts.
The table below sets out the average monthly net borrowings and effective interest rate:

Average monthly net borrowings | Effective interest rate
2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million | 2024 % | 2023 % | 2022 %
21,034 | 18,362 | 16,883 | 4.3 | 3.9 | 2.7

(i) For this calculation, net interest charge excludes fair value adjustments to derivative financial instruments and average monthly net borrowings include the impact
of interest rate swaps that are no longer in a hedge relationship but exclude the market value adjustment for cross currency interest rate swaps.
(c) Commodity price risk
Commodity price risk is managed in line with the principles approved by the Board either through long-term purchase contracts with
suppliers or, where appropriate, derivative contracts. The group policy is to maintain the Value at Risk of commodity price risk arising
from commodity exposures below 75 bps of forecast gross profit in any given financial year. Where derivative contracts are used, the
commodity price risk exposure is hedged up to 24 months of forecast volume through exchange-traded and over-the-counter contracts
(futures, forwards and swaps) and cash flow hedge accounting is applied.
(d) Market risk sensitivity analysis
The group uses a sensitivity analysis that estimates the impacts on the consolidated income statement and other comprehensive income
of either an instantaneous increase or decrease of 0.5% in market interest rates or a 10% strengthening or weakening in US dollar
against all other currencies, from the rates applicable for each class of financial instruments on the consolidated balance sheet at these
dates with all other variables remaining constant. The sensitivity analysis excludes the impact of market risk on the net post-
employment benefit liabilities and assets, and corporate tax payable. This analysis is for illustrative purposes only, as in practice
interest and foreign exchange rates rarely change in isolation.
The sensitivity analysis estimates the impact of changes in interest and foreign exchange rates. All hedges are expected to be highly
effective for this analysis and it considers the impact of all financial instruments including financial derivatives, cash and cash
equivalents, borrowings and other financial assets and liabilities. The results of the sensitivity analysis should not be considered as
projections of likely future events, gains or losses as actual results in the future may differ materially due to developments in the
global financial markets which may cause fluctuations in interest and exchange rates to vary from the hypothetical amounts disclosed
in the table below.
Comparative figures to currency risk sensitivity are not disclosed in fiscal 24. Due to the functional currency change of the parent
company that is applied prospectively from 1 July 2023 (see note 1), it would not be practicable to compare the re-presented results of
the data prior to the functional currency change with the results of the sensitivity analysis for fiscal 24.
Financial statements (continued)
286

| Impact on income statement gain/(loss) | Impact on consolidated comprehensive income gain/(loss)(1) (2)
| 2024 | 2023 re- presented | 2024 | 2023 re- presented
| $ million | $ million | $ million | $ million
0.5% decrease in interest rates | 22 | 19 | 43 | 43
0.5% increase in interest rates | (22) | (19) | (42) | (41)
10% weakening of US dollar | (39) | — | (974) | —
10% strengthening of US dollar | 33 | — | 813 | —

(1) The impact on foreign currency borrowings and derivatives in net investment hedges is largely offset by the foreign exchange difference arising on the translation of
net investments.
(2) The impact on the consolidated statement of comprehensive income includes the impact on the income statement.
(3) In the year ended 30 June 2023, the impact of a 10% strengthening or weakening in sterling was £36 million gain and £45 million loss on the consolidated income
statement and £1,093 million gain and £1,336 million loss on the other comprehensive income.
(e) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. Credit
risk arises on cash balances (including bank deposits and cash and cash equivalents), derivative financial instruments and credit
exposures to customers, including outstanding loans, trade and other receivables, financial guarantees and committed transactions.
The carrying amount of financial assets of $5,221 million (2023 – $5,849 million) represents the group’s exposure to credit risk at
the balance sheet date as disclosed in section (i), excluding the impact of any collateral held or other credit enhancements. A financial
asset is in default when the counterparty fails to pay its contractual obligations. Financial assets are written off when there is no
reasonable expectation of recovery.
Credit risk is managed separately for financial and business related credit exposures.
According to the enforceable master netting agreements with counterparties, in the event of default, derivative financial instruments
with the same counterparty can be net settled. The table below shows the Group’s financial assets and liabilities that could be subject
to offset in the balance sheet and the impact of a trigger for the enforcement of the master netting agreement after applying any
existing collaterals.

| Gross amount $ million | Right of asset offset $ million | Right of liability offset $ million | Net amount $ million
2024 |  |  |  |
Derivative financial assets | 483 | (184) | (139) | 160
Derivative financial liabilities | (486) | 184 | 139 | (163)
2023 |  |  |  |
Derivative financial assets | 729 | (294) | (161) | 274
Derivative financial liabilities | (556) | 294 | 161 | (101)

Financial credit risk
Diageo aims to minimise its financial credit risk through the application of risk management policies approved and monitored by the
Board. Counterparties are predominantly limited to investment grade banks and financial institutions, and policy restricts the exposure
to any one counterparty by setting credit limits taking into account the credit quality of the counterparty. The group’s policy is
designed to ensure that individual counterparty limits are adhered to and that there are no significant concentrations of credit risk. The
Board also defines the types of financial instruments which may be transacted. The credit risk arising through the use of financial
instruments for currency, interest rate and commodity price risk management is estimated with reference to the fair value of contracts
with a positive value, rather than the notional amount of the instruments themselves. Diageo annually reviews the credit limits applied
and regularly monitors the counterparties’ credit quality reflecting market credit conditions.
When derivative transactions are undertaken with bank counterparties, the group may, where appropriate, enter into certain
agreements with such bank counterparties whereby the parties agree to post cash collateral for the benefit of the other if the net
valuations of the derivatives are above a predetermined threshold. At 30 June 2024, the collateral held under these agreements
amounted to $(14) million (2023 – $(19) million).
Business related credit risk
Exposures from loans, trade and other receivables are managed locally in the operating units where they arise and active risk
management is applied, focusing on country risk, credit limits, ongoing credit evaluation and monitoring procedures. There is no
significant concentration of credit risk with respect to loans, trade and other receivables as the group has a large number of customers
that are internationally dispersed.
Financial statements (continued)
287
(f) Liquidity risk
Liquidity risk is the risk of Diageo encountering difficulties in meeting its obligations associated with financial liabilities that are
settled by delivering cash or other financial assets. The group uses short-term commercial paper to finance its day-to-day operations.
The group’s policy with regard to the expected maturity profile of borrowings is to limit the amount of such borrowings maturing
within 12 months to 50% of gross borrowings less money market demand deposits, and the level of commercial paper to 30% of gross
borrowings less money market demand deposits. In addition, the group’s policy is to maintain backstop facilities with relationship
banks to support commercial paper obligations.
The following tables provide an analysis of the anticipated contractual cash flows including interest payable for the group’s
financial liabilities and derivative instruments on an undiscounted basis. Where interest payments are calculated at a floating rate, rates
of each cash flow until maturity of the instruments are calculated based on the forward yield curve prevailing at the respective year
ends. The gross cash flows of cross currency swaps are presented for the purposes of this table. All other derivative contracts are
presented on a net basis. Financial assets and liabilities are presented gross in the consolidated balance sheet although, in practice, the
group uses netting arrangements to reduce its liquidity requirements on these instruments.
Contractual cash flows

| Due within 1 year $ million | Due between 1 and 3 years $ million | Due between 3 and 5 years $ million | Due after 5 years $ million | Total $ million | Carrying amount at balance sheet date $ million
2024 |  |  |  |  |  |
Borrowings(1) | (2,902) | (4,991) | (4,259) | (9,812) | (21,964) | (21,501)
Interest on borrowings(1)(2) | (791) | (1,043) | (789) | (1,866) | (4,489) | (291)
Lease capital repayments | (95) | (148) | (95) | (266) | (604) | (604)
Lease future interest payments | (19) | (30) | (22) | (44) | (115) | —
Trade and other financial liabilities(3) | (5,316) | (280) | (217) | (5) | (5,818) | (5,619)
Non-derivative financial liabilities | (9,123) | (6,492) | (5,382) | (11,993) | (32,990) | (28,015)
Cross currency swaps (gross) |  |  |  |  |  |
Receivable | 128 | 549 | 1,249 | 3,666 | 5,592 |
Payable | (126) | (549) | (1,303) | (3,341) | (5,319) |
Other derivative instruments (net) | (39) | (139) | (76) | (33) | (287) |
Derivative instruments(2) | (37) | (139) | (130) | 292 | (14) | (23)
2023 (re-presented) |  |  |  |  |  |
Borrowings(1) | (2,152) | (4,553) | (3,754) | (10,903) | (21,362) | (20,791)
Interest on borrowings(1)(2) | (681) | (945) | (784) | (1,894) | (4,304) | (274)
Lease capital repayments | (94) | (131) | (86) | (253) | (564) | (564)
Lease future interest payments | (23) | (35) | (25) | (48) | (131) | —
Trade and other financial liabilities(3) | (5,565) | (291) | (154) | (121) | (6,131) | (6,025)
Non-derivative financial liabilities | (8,515) | (5,955) | (4,803) | (13,219) | (32,492) | (27,654)
Cross currency swaps (gross) |  |  |  |  |  |
Receivable | 55 | 109 | 109 | 1,690 | 1,963 |
Payable | (35) | (70) | (70) | (1,172) | (1,347) |
Other derivative instruments (net) | 24 | (111) | (99) | (68) | (254) |
Derivative instruments(2) | 44 | (72) | (60) | 450 | 362 | 168

(1) For the purposes of these tables, borrowings are defined as gross borrowings excluding lease liabilities and fair value of derivative instruments as disclosed in note
17.
(2) Carrying amount of interest on borrowings, interest on derivatives and interest on other payable is included within interest payable in note 15.
(3) Primarily consists of trade and other payables that meet the definition of financial liabilities under IAS 32.
Financial statements (continued)
288
The group had available undrawn committed bank facilities as follows:

| 2024 $ million | 2023 re-presented $ million
Expiring within one year | 625 | 125
Expiring between one and two years | 1,040 | 625
Expiring after two years | 1,585 | 2,625
| 3,250 | 3,375

The facilities can be used for general corporate purposes and, together with cash and cash equivalents, support the group’s commercial
paper programmes.
There are no financial covenants on the group’s material short- and long-term borrowings. Certain of these borrowings contain cross
default provisions and negative pledges.
The committed bank facilities are subject to a single financial covenant, being minimum interest cover ratio of two times (defined as
the ratio of operating profit before exceptional items, aggregated with share of after tax results of associates and joint ventures, to net
interest charges). They are also subject to pari passu ranking and negative pledge covenants.
Any non-compliance with covenants underlying Diageo’s financing arrangements could, if not waived, constitute an event of default
with respect to any such arrangements, and any non-compliance with covenants may, in particular circumstances, lead to an
acceleration of maturity on certain borrowings and the inability to access committed facilities. Diageo was in full compliance with its
financial, pari passu ranking and negative pledge covenants in respect of its material short- and long-term borrowings throughout each
of the years presented.
(g) Fair value measurements
Fair value measurements of financial instruments are presented through the use of a three-level fair value hierarchy that prioritises the
valuation techniques used in fair value calculations.
The group maintains policies and procedures to value instruments using the most relevant data available. If multiple inputs that
fall into different levels of the hierarchy are used in the valuation of an instrument, the instrument is categorised on the basis of the
least observable input.
Foreign currency forwards and swaps, cross currency swaps and interest rate swaps are valued using discounted cash flow
techniques. These techniques incorporate inputs at levels 1 and 2, such as foreign exchange rates and interest rates. These market
inputs are used in the discounted cash flow calculation incorporating the instrument’s term, notional amount and discount rate, and
taking credit risk into account. As significant inputs to the valuation are observable in active markets, these instruments are
categorised as level 2 in the hierarchy.
Other financial liabilities include a put option, which does not have an expiry date, held by Industrias Licoreras de Guatemala
(ILG) to sell the remaining 50% equity stake in Rum Creation & Products Inc., the owner of the Zacapa rum brand, to Diageo. The
liability is fair valued using the discounted cash flow method and as at 30 June 2024, an amount of $198 million (30 June 2023 –
$274 million) is recognised as a liability with changes in the fair value of the put option included in retained earnings. As the valuation
of this option uses assumptions not observable in the market, it is categorised as level 3 in the hierarchy. As at 30 June 2024, because
it is unknown when or if ILG will exercise the option, the liability is measured as if the exercise date is on the last day of the next
financial year considering forecast future performance. The option is not sensitive to reasonably possible changes in assumptions; if
the option were to be exercised as at 30 June 2026, the fair value of the liability would not change.
Included in other financial liabilities, the contingent consideration on acquisition of businesses represents the present value of
payments up to $273 million, which are expected to be paid over the next six years.
Contingent considerations linked to certain volume targets at 30 June 2024 were $153 million (2023 – $279 million), mainly in
respect of the acquisition of Aviation American Gin and 21Seeds. Contingent considerations linked to certain financial performance
targets at 30 June 2024 were $92 million (2023 – $112 million), mainly in respect of the acquisition of Don Papa Rum. Contingent
considerations are fair valued based on a discounted cash flow method using assumptions not observable in the market. Contingent
considerations are sensitive to possible changes in assumptions; a 10% increase or 20% decrease in volume would increase or decrease
the fair value of contingent considerations linked to certain volume targets by approximately $25 million and $70 million,
respectively, and a 10% increase or decrease in cash flows would increase or decrease the fair value of contingent considerations
linked to certain financial performance targets by approximately $30 million.
There were no significant changes in the measurement and valuation techniques, or significant transfers between the levels of the
financial assets and liabilities in the year ended 30 June 2024.
Financial statements (continued)
289
The group’s financial assets and liabilities measured at fair value are categorised as follows:

| 2024 $ million | 2023 re-presented $ million
Derivative assets | 497 | 748
Derivative liabilities | (486) | (556)
Valuation techniques based on observable market input (Level 2) | 11 | 192
Financial assets - other | 333 | 249
Financial liabilities - other | (443) | (665)
Valuation techniques based on unobservable market input (Level 3) | (110) | (416)

In the year ended 30 June 2024 and 30 June 2023, the increase in financial assets - other of $84 million (2023 – the increase in
financial asset - other of $24 million) is principally in respect of acquisitions. The balance of financial assets - other is primarily made
up of individually immaterial convertible loans and share options in associates.
The movements in level 3 liability instruments, measured on a recurring basis, are as follows:

| Zacapa financial liability | Contingent consideration recognised on acquisition of businesses | Zacapa financial liability | Contingent consideration recognised on acquisition of businesses
| 2024 | 2024 | 2023 | 2023
| $ million | $ million | re-presented $ million | re-presented $ million
At the beginning of the year | (274) | (391) | (261) | (449)
Net gains/(losses) included in the income statement | — | 145 | (10) | 145
Net losses included in exchange in other comprehensive income | — | — | — | (4)
Net gains/(losses) included in retained earnings | 73 | — | (19) | —
Acquisitions | — | — | — | (92)
Settlement of liabilities | 3 | 1 | 16 | 9
At the end of the year | (198) | (245) | (274) | (391)

(h) Results of hedge relationships
The group targets a one-to-one hedge ratio. The strength of the economic relationship between the hedged items and the hedging
instruments is analysed on an ongoing basis. Ineffectiveness can arise from change in hedged balance sheet positions, group net
investment positions, or subsequent change in the forecast transactions as a result of differences in timing, cash flows or value except
when the critical terms of the hedging instrument and hedged item are closely aligned. Where applicable, the change in the credit risk
of the hedging instruments or the hedged items is not expected to be the primary factor in the economic relationship.
Financial statements (continued)
290
Further to the foreign currency borrowings in net investment hedge relationships disclosed in note 16 (a), the notional amounts,
contractual maturities and rates of the hedging instruments designated in hedging relationships by the main risk categories are as
follows:

| Notional amounts $ million | Maturity | Range of hedged rates(1)
2024 |  |  |
Net investment hedges |  |  |
Derivatives in net investment hedges of foreign operations | 3,198 | September 2024 - April 2043 | sterling 0.53 - 0.78 euro 0.91 - 0.93 Chinese yuan 6.93 - 7.29
Foreign currency borrowings in net investment hedges | 8,109 | September 2024 - June 2038 | sterling 0.76 - 0.82 euro 0.89 - 0.94
Cash flow hedges |  |  |
Derivatives in cash flow hedge (foreign currency debt) | 2,747 | September 2028 - June 2034 | euro 0.89 - 0.90
Derivatives in cash flow hedge (foreign currency risk) | 1,855 | September 2024 - December 2025 | sterling 0.78 - 0.94 euro 0.87 - 0.93 Mexican peso 17.73 - 20.57
Derivatives in cash flow hedge (commodity price risk) | 207 | July 2024 - September 2025 | Feed Wheat: 177.50 - 206.00 USD/Bu Natural Gas: 0.86 - 1.40 USD/therm
Fair value hedges |  |  |
Derivatives in fair value hedge (interest rate risk) | 4,044 | April 2025 - April 2030 | EURIBOR 0.63 - 1.88% SOFR 1.38 - 3.09%

(1) In case of derivatives in cash flow hedges (commodity price risk and foreign currency risk), the range of the most significant contract’s hedged rates are presented.
The below re-presented disclosures of the fiscal 23 sterling reporting currency group and the quoted rates are applicable to the risk
exposures observed by the group at the date of 30 June 2023. Accordingly, nominal amounts have been re-presented in US dollar,
without adjustments to rates achieved on hedges of exposures observed at the time. The change in functional currency at 1 July 2023
has fundamentally changed the group foreign currency exposures. This exposure set change resulted in a realignment of the group's
financial risk management hedge portfolio, but no change in overall risk management strategy.

| Notional amounts re-presented $ million | Maturity | Range of hedged rates(1)
2023 (re-presented) |  |  |
Net investment hedges |  |  |
Derivatives in net investment hedges of foreign operations | 803 | July 2023 | US dollar 1.27
Foreign currency borrowings in net investment hedges | 12,584 | September 2023 - March 2032 | euro 1.07 - 1.37
Cash flow hedges |  |  |
Derivatives in cash flow hedge (foreign currency debt) | 1,100 | September 2036 - April 2043 | US dollar 1.60 - 1.88
Derivatives in cash flow hedge (foreign currency risk) | 2,185 | September 2023 - December 2024 | US dollar 1.05 - 1.33, Mexican peso 14.76 - 18.38
Derivatives in cash flow hedge (commodity price risk) | 273 | July 2023 - September 2024 | Feed Wheat: 183.75 - 240.00 USD/Bu LME Aluminium: 2,248 - 3,399 USD/Mt
Fair value hedges |  |  |
Derivatives in fair value hedge (interest rate risk) | 5,038 | September 2023 - April 2030 | EURIBOR(0.01) - 1.88% SOFR 2.38 - 2.39% USDLIBOR 1.38 - 3.09%

(1) In case of derivatives in cash flow hedges (commodity price risk and foreign currency risk), the range of the most significant contract’s hedged rates are presented.
For hedges of the cash flow risk from a change in forward exchange rates using cross currency interest rate swaps, the
retranslation of the related bond principal to closing exchange rates and recognition of interest on the related bonds will affect the
income statement in each year until the related bonds mature in 2028, 2032 and 2034. Exchange retranslation and the interest on the
hedged bonds in the income statement are expected to offset those on the cross currency swaps in each of the years.
In respect of cash flow hedging instruments, a gain of $13 million (2023 – $297 million gain; 2022 – $163 million gain) was
recognised in other comprehensive income due to changes in fair value. A gain of $266 million was transferred out of other
comprehensive income to other operating expenses and a loss of $152 million to other finance charges, respectively, (2023 – a gain of
$16 million and a loss of $65 million; 2022 – a loss of $57 million and a gain of $319 million) to offset the foreign exchange impact
on the underlying transactions. A loss of $9 million (2023 – $39 million gain, 2022 – $61 million gain) was transferred out of other
comprehensive income to operating profit in relation to commodity hedges. The notional amount of hedged items recognised in the
consolidated balance sheet in relation to hedges of cash flow risk arising from foreign currency debts equals the notional value of the
hedging instruments at 30 June 2024 and are included within borrowings. The notional amount for cash flow hedges of foreign
currency debt at 30 June 2024 was $2,747 million (2023 – $1,100 million).
Financial statements (continued)
291
In respect of derivatives in net investment hedges, a gain of $12 million was recognised in other comprehensive income due to
changes in fair value. A gain of $27 million was transferred out of other comprehensive income to other finance charges.
For cash flow hedges of forecast transactions at 30 June 2024, based on year end interest and exchange rates, a gain to the income
statement of $28 million in the year ending 30 June 2025 and a loss of $9 million in the year ending 30 June 2026 is expected to be
recognised.
In respect of hedges of foreign currency borrowings that are no longer applicable at 30 June 2024, a loss of $24 million (2023 – a
loss of $22 million) was reported in reserves. There was no significant ineffectiveness on net investment and cash flow hedges during
the years ended 30 June 2024 and 2023.
Out of the total exchange reserve $2,488 million (2023 - $2,418 million) is attributable to net investment hedges.
The $4,044 million (2023 – $5,038 million) notional value of hedged items in fair value hedges equals to the notional value of
hedging instruments designated in these relationships at 30 June 2024 and the carrying amount of hedged items are included within
borrowings in the consolidated balance sheet.
The following table sets out information regarding the effectiveness of hedging relationships designated by the group, as well as
the impacts on the income statement and other comprehensive income:

| At the beginning of the year $ million | Consolidated income statement $ million | Consolidated statement of comprehensive income $ million | Other(2) $ million | At the end of the year $ million
2024 |  |  |  |  |
Net investment hedges(1) |  |  |  |  |
Derivatives in net investment hedges of foreign operations | — | 22 | (66) | 411 | 367
Foreign currency borrowings in net investment hedges | (12,584) | — | (82) | 4,557 | (8,109)
Cash flow hedges(1) |  |  |  |  |
Derivatives in cash flow hedge (foreign currency debt) | 438 | (152) | 94 | (412) | (32)
Derivatives in cash flow hedge (foreign currency risk) | 232 | 203 | (205) | (203) | 27
Derivatives in cash flow hedge (commodity price risk) | (32) | (9) | 22 | 10 | (9)
Fair value hedges(1) |  |  |  |  |
Derivatives in fair value hedge (interest rate risk) | (476) | 100 | — | — | (376)
Fair value hedge hedged item | 469 | (101) | — | — | 368
Instruments in fair value hedge relationship | (7) | (1) | — | — | (8)
2023 (re-presented) |  |  |  |  |
Net investment hedges(1) |  |  |  |  |
Derivatives in net investment hedges of foreign operations | (1) | — | 1 | — | —
Foreign currency borrowings in net investment hedges | (10,558) | — | 499 | (2,525) | (12,584)
Cash flow hedges(1) |  |  |  |  |
Derivatives in cash flow hedge (foreign currency debt) | 444 | (65) | 90 | (31) | 438
Derivatives in cash flow hedge (foreign currency risk) | (93) | (20) | 325 | 20 | 232
Derivatives in cash flow hedge (commodity price risk) | 60 | 39 | (107) | (24) | (32)
Fair value hedges(1) |  |  |  |  |
Derivatives in fair value hedge (interest rate risk) | (342) | (113) | (21) | — | (476)
Fair value hedge hedged item | 335 | 115 | 19 | — | 469
Instruments in fair value hedge relationship | (7) | 2 | (2) | — | (7)

(1) There was no significant ineffectiveness on net investment, cash flow hedges and fair value hedges during the years ended 30 June 2024 and 2023, accordingly the
fair value movement of the hedged items was materially similar and offsetting to the movement of the hedges.
(2)Other movements include cash flows on result of matured derivatives, notional of bonds designated in or de-designated from net investment hedge and reclassification
of hedging instruments between hedge portfolios.
Financial statements (continued)
292
(i) Reconciliation of financial instruments
The table below sets out the group’s accounting classification of each class of financial assets and liabilities:

| Fair value through income statement $ million | Assets and liabilities at amortised cost $ million | Not categorised as a financial instrument $ million | Total $ million | Current $ million | Non-current $ million
2024 |  |  |  |  |  |
Other investments and loans(1) | 333 | 59 | — | 392 | — | 392
Trade and other receivables | — | 2,971 | 554 | 3,525 | 3,487 | 38
Cash and cash equivalents | — | 1,130 | — | 1,130 | 1,130 | —
Derivatives in cash flow hedge (foreign currency risk) | 62 | — | — | 62 | 58 | 4
Derivatives in cash flow hedge (commodity price risk) | 5 | — | — | 5 | 5 | —
Derivatives in net investment hedge | 386 | — | — | 386 | 17 | 369
Other instruments | 275 | — | — | 275 | 275 | —
Total other financial assets | 728 | — | — | 728 | 355 | 373
Total financial assets | 1,061 | 4,160 | 554 | 5,775 | 4,972 | 803
Borrowings(2) | — | (21,501) | — | (21,501) | (2,885) | (18,616)
Trade and other payables | (245) | (5,373) | (1,040) | (6,658) | (6,354) | (304)
Derivatives in fair value hedge (interest rate risk) | (376) | — | — | (376) | (16) | (360)
Derivatives in cash flow hedge (foreign currency debt) | (32) | — | — | (32) | — | (32)
Derivatives in cash flow hedge (foreign currency risk) | (35) | — | — | (35) | (14) | (21)
Derivatives in cash flow hedge (commodity price risk) | (14) | — | — | (14) | (14) | —
Derivatives in net investment hedge | (19) | — | — | (19) | (1) | (18)
Other instruments | (208) | — | — | (208) | (208) | —
Leases | — | (604) | — | (604) | (95) | (509)
Total other financial liabilities | (684) | (604) | — | (1,288) | (348) | (940)
Total financial liabilities | (929) | (27,478) | (1,040) | (29,447) | (9,587) | (19,860)
Total net financial assets/(liabilities) | 132 | (23,318) | (486) | (23,672) | (4,615) | (19,057)
2023 (re-presented) |  |  |  |  |  |
Other investments and loans(1) | 249 | 38 | 2 | 289 | — | 289
Trade and other receivables | — | 2,815 | 651 | 3,466 | 3,427 | 39
Cash and cash equivalents | — | 1,813 | — | 1,813 | 1,813 | —
Derivatives in cash flow hedge (foreign currency debt) | 438 | — | — | 438 | — | 438
Derivatives in cash flow hedge (foreign currency risk) | 243 | — | — | 243 | 186 | 57
Derivatives in cash flow hedge (commodity price risk) | 2 | — | — | 2 | 2 | —
Other instruments | 249 | — | — | 249 | 249 | —
Leases | — | 2 | — | 2 | — | 2
Total other financial assets | 932 | 2 | — | 934 | 437 | 497
Total financial assets | 1,181 | 4,668 | 653 | 6,502 | 5,677 | 825
Borrowings(2) | — | (20,791) | — | (20,791) | (2,142) | (18,649)
Trade and other payables | (391) | (5,634) | (1,116) | (7,141) | (6,678) | (463)
Derivatives in fair value hedge (interest rate risk) | (476) | — | — | (476) | (8) | (468)
Derivatives in cash flow hedge (foreign currency risk) | (11) | — | — | (11) | (9) | (2)
Derivatives in cash flow hedge (commodity price risk) | (34) | — | — | (34) | (33) | (1)
Other instruments | (309) | — | — | (309) | (309) | —
Leases | — | (564) | — | (564) | (94) | (470)
Total other financial liabilities | (830) | (564) | — | (1,394) | (453) | (941)
Total financial liabilities | (1,221) | (26,989) | (1,116) | (29,326) | (9,273) | (20,053)
Total net financial liabilities | (40) | (22,321) | (463) | (22,824) | (3,596) | (19,228)

(1)Other investments and loans include those in respect of associates.
(2)Borrowings are defined as gross borrowings excluding lease liabilities and the fair value of derivative instruments.
At 30 June 2024 and 30 June 2023, the carrying values of cash and cash equivalents, other financial assets and liabilities approximate
fair values. At 30 June 2024, the fair value of borrowings, based on unadjusted quoted market data, was $20,663 million (2023 –
$19,707 million).
Financial statements (continued)
293
(j) Capital management
The group’s management is committed to enhancing shareholder value in the long-term, both by investing in the business and brands
so as to deliver continued improvement in the return from those investments and by managing the capital structure. Diageo manages
its capital structure to achieve capital efficiency, provide flexibility to invest through the economic cycle and give efficient access to
debt markets at attractive cost levels. This is achieved by targeting an adjusted net borrowings (net borrowings aggregated with post-
employment benefit liabilities) to adjusted EBITDA leverage of 2.5 - 3.0 times, this range for Diageo being currently broadly
consistent with an A-band credit rating. Diageo would consider operating outside of this range in order to effect strategic initiatives
within its stated goals, which could have an impact on its rating. If Diageo’s leverage was to be negatively impacted by the financing
of an acquisition, it would seek over time to return to the range of 2.5 – 3.0 times. The group regularly assesses its debt and equity
capital levels against its stated policy for capital structure. As at 30 June 2024, the adjusted net borrowings of $21,446 million (2023 -
$20,053 million) to adjusted EBITDA ratio was 3.0 (2023 - 2.7) times. For this calculation, net borrowings are adjusted by post-
employment benefit liabilities before tax of $429 million (2023 - $471 million) whilst adjusted EBITDA of $7,037 million (2023 -
$7,353 million) comprises operating profit excluding exceptional operating items and depreciation, amortisation and impairment and
includes share of after tax results of associates and joint ventures.
The group aims to increase the dividend each year. The decision in respect of the dividend is made with reference to the dividend
cover, as well as current performance trends, including sales and profit after tax together with cash generation. Diageo targets dividend
cover (the ratio of basic earnings per share before exceptional items to dividend per share) within the range of 1.8 - 2.2 times. For the
year ended 30 June 2024, dividend cover was 1.7 times. The recommended final dividend for the year ended 30 June 2024, to be put
to the shareholders for approval at the Annual General Meeting is 62.98 cents, an increase of 5% on the prior year final dividend. This
would bring the recommended full year dividend to 103.48 cents per share, an increase of 5% on the prior year.
17. Net borrowings
Accounting policies
Borrowings are initially recognised at fair value net of transaction costs and are subsequently reported at amortised cost. Certain
bonds are designated in fair value hedge relationship. In these cases, the amortised cost is adjusted for the fair value of the risk being
hedged, with changes in value recognised in the income statement. The fair value adjustment is calculated using a discounted cash
flow technique based on unadjusted market data.
Bank overdrafts form an integral part of the group’s cash management and are included as a component of net cash and cash
equivalents in the consolidated statement of cash flows.
Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to known amounts of cash and which
are subject to insignificant risk of changes in value and have an original maturity of three months or less, including money market
deposits, commercial paper and investments.
Net borrowings are defined as gross borrowings (short-term borrowings and long-term borrowings plus lease liabilities plus interest
rate hedging instruments, cross currency interest rate swaps and foreign currency forwards and swaps used to manage borrowings) less
cash and cash equivalents.

| 2024 $ million | 2023 re-presented $ million
Bank overdrafts | 21 | 45
Commercial paper | 479 | 250
Bank and other loans | 76 | 153
Credit support obligations | 14 | 19
€ 600 million 0.125% bonds due 2023 | — | 646
$ 500 million 3.5% bonds due 2023(2) | — | 500
€ 500 million 0.5% bonds due 2024 | — | 537
$ 600 million 2.125% bonds due 2024(2) | 600 | —
€ 500 million 1.75% bonds due 2024 | 535 | —
€ 600 million 1% bonds due 2025 | 641 | —
€ 500 million 3.5% bonds due 2025 | 534 | —
Fair value adjustment to borrowings | (15) | (8)
Borrowings due within one year | 2,885 | 2,142
$ 600 million 2.125% bonds due 2024(2) | — | 600
€ 500 million 1.75% bonds due 2024 | — | 538
€ 600 million 1% bonds due 2025 | — | 644
€ 500 million 3.5% bonds due 2025 | — | 537

Financial statements (continued)
294

$ 500 million 5.2% bonds due 2025(2) | 499 | 499
$ 750 million 1.375% bonds due 2025(2) | 749 | 748
€ 850 million 2.375% bonds due 2026 | 908 | 913
€ 500 million floating bonds due 2026 | 535 | —
£ 500 million 1.75% bonds due 2026 | 630 | 627
$ 800 million 5.375% bonds due 2026(2) | 797 | —
$ 750 million 5.3% bonds due 2027(2) | 748 | 748
€ 750 million 1.875% bonds due 2027 | 800 | 805
€ 500 million 1.5% bonds due 2027 | 534 | 537
€ 700 million 0.125% bonds due 2028 | 746 | 750
$ 500 million 3.875% bonds due 2028(2) | 498 | 498
£ 300 million 2.375% bonds due 2028 | 377 | 375
$ 1,000 million 2.375% bonds due 2029(2) | 993 | 992
£ 300 million 2.875% bonds due 2029 | 377 | 376
€ 750 million 1.5% bonds due 2029 | 801 | 806
$ 1,000 million 2% bonds due 2030(2) | 995 | 994
€ 1,000 million 2.5% bonds due 2032 | 1,066 | 1,072
$ 750 million 2.125% bonds due 2032(2) | 744 | 743
£ 400 million 1.25% bonds due 2033 | 500 | 499
$ 750 million 5.5% bonds due 2033(2) | 744 | 744
$ 900 million 5.625% bonds due 2033(2) | 894 | —
€ 900 million 1.875% bonds due 2034 | 957 | 962
$ 400 million 7.45% bonds due 2035(1) | 400 | 400
$ 600 million 5.875% bonds due 2036(2) | 594 | 594
£ 600 million 2.75% bonds due 2038 | 752 | 750
$ 500 million 4.25% bonds due 2042(1) | 495 | 495
$ 500 million 3.875% bonds due 2043(2) | 492 | 492
Bank and other loans | 344 | 372
Fair value adjustment to borrowings | (353) | (461)
Borrowings due after one year | 18,616 | 18,649
Total borrowings before leases and derivative financial instruments | 21,501 | 20,791
Fair value of cross currency interest rate swaps | (323) | (438)
Fair value of foreign currency swaps and forwards | (11) | 2
Fair value of interest rate hedging instruments | 376 | 476
Lease liabilities | 604 | 564
Gross borrowings | 22,147 | 21,395
Less: Cash and cash equivalents | (1,130) | (1,813)
Net borrowings | 21,017 | 19,582

(1) SEC-registered debt issued on an unsecured basis by Diageo Investment Corporation, a 100% owned finance subsidiary of Diageo plc and fully and unconditionally
guaranteed by Diageo plc. No other subsidiary of Diageo plc guarantees the security.
(2)SEC-registered debt issued on an unsecured basis by Diageo Capital plc, a 100% owned finance subsidiary of Diageo plc and fully and unconditionally guaranteed
by Diageo plc. No other subsidiary of Diageo plc guarantees the security.
(i) The interest rates shown are those contracted on the underlying borrowings before taking into account any interest rate hedges (see note 16).
(ii) Bonds are stated net of unamortised finance costs of $95 million (2023 – $102 million).
(iii) All bonds, medium-term notes and commercial paper issued on an unsecured basis by the group’s 100% owned subsidiaries are fully and unconditionally
guaranteed on an unsecured basis by Diageo plc and no other subsidiary of Diageo plc guarantees such securities.
Gross borrowings before leases and derivative financial instruments are expected to mature as follows:

| 2024 $ million | 2023 re-presented $ million
Within one year | 2,885 | 2,142
Between one and three years | 4,873 | 4,437
Between three and five years | 4,222 | 3,620
Beyond five years | 9,521 | 10,592
| 21,501 | 20,791

Financial statements (continued)
295
During the year, the following bonds were issued and repaid:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Issued |  |  |
€ denominated | 535 | 548 | 1,800
£ denominated | — | — | 1,171
$ denominated | 1,690 | 1,989 | —
Repaid |  |  |
€ denominated | (1,167) | — | (1,060)
$ denominated | (500) | (1,650) | (1,000)
| 558 | 887 | 911

(a) Reconciliation of movement in net borrowings

| 2024 $ million | 2023 re-presented $ million
At beginning of the year | 19,582 | 17,107
Net decrease in cash and cash equivalents before exchange | 596 | 831
Net increase in bonds and other borrowings(1) | 453 | 958
Increase in net borrowings from cash flows | 1,049 | 1,789
Exchange differences on net borrowings | 199 | 646
Other non-cash items(2) | 187 | 40
Net borrowings at end of the year | 21,017 | 19,582

(1)In the year ended 30 June 2024, net increase in bonds and other borrowings excludes $1 million cash outflow in respect of derivatives designated in forward point
hedges (2023 – $2 million).
(2)In the year ended 30 June 2024, other non-cash items are principally in respect of fair value gains of cross currency interest rate swaps and interest rate swaps of
$111 million, offsetting an increase in lease liabilities of $152 million, and fair value losses on borrowings of $116 million, and $30 million reclassification of cash
to assets held for sale. In the year ended 30 June 2023, other non-cash items are principally in respect of fair value gains of cross currency interest rate swaps and
interest rate swaps of $42 million, and an increase in lease liabilities of $99 million, partially offset by the $101 million fair value loss on borrowings.
(b) Analysis of gross borrowings by currency

| 2024 | 2023
| Cash and cash equivalents $ million | Gross borrowings(1) $ million | Cash and cash equivalents re-presented $ million | Gross borrowings(1) re-presented $ million
US dollar | 130 | (9,590) | 682 | (7,247)
Euro(2) | 59 | (5,820) | 60 | (4,870)
Sterling | 29 | (4,767) | 59 | (7,846)
Indian rupee | 170 | (57) | 155 | (39)
Mexican peso | 34 | (261) | 31 | (361)
Hungarian forint | 3 | (21) | 4 | (329)
Kenyan shilling | 55 | (295) | 36 | (318)
Chinese yuan | 258 | (964) | 251 | (79)
Nigerian naira | — | — | 105 | —
Other(2) | 392 | (372) | 430 | (306)
Total | 1,130 | (22,147) | 1,813 | (21,395)

(1)Includes foreign currency forwards and swaps and leases.
(2)Includes $11 million (euro) cash and cash equivalents in cash-pooling arrangements (2023 – $26 million (euro)).
Financial statements (continued)
296
18. Equity
Accounting policies
Own shares represent shares and share options of Diageo plc that are held in treasury or by employee share trusts for the purpose of
fulfilling obligations in respect of various employee share plans or were acquired as part of a share buyback programme. Own shares
are treated as a deduction from equity until the shares are cancelled, reissued or disposed of and when vest are transferred from own
shares to retained earnings at their weighted average cost.
Share-based payments include share awards and options granted to directors and employees. The fair value of equity settled share
options and share grants is initially measured at grant date based on Monte Carlo and Black Scholes models and is charged to the
income statement over the vesting period. For equity settled shares, the credit is included in retained earnings. Cancellations of share
options are treated as an acceleration of the vesting period and any outstanding charge is recognised in operating profit immediately.
Any surplus or deficit arising on the sale of the Diageo plc shares held by the group is included as a movement in equity.
Dividends are recognised in the financial statements in the year in which they are approved.
(a) Allotted and fully paid share capital – ordinary shares of 28 101⁄108 pence each

| Number of shares million | Nominal value $ million
At 30 June 2022 re-presented | 2,498 | 875
Retranslation impact of opening balances(1) | — | 36
Shares cancelled | (38) | (13)
At 30 June 2023 (re-represented) | 2,460 | 898
Shares cancelled | (28) | (11)
At 30 June 2024 | 2,432 | 887

(1) Includes foreign translation differences arising on the retranslation of reserves due to the change in the group’s presentation currency.
(b) Hedging and exchange reserve

| Hedging reserve $ million | Exchange reserve $ million | Total $ million
At 30 June 2021 (re-presented) | 150 | (3,368) | (3,218)
Other comprehensive loss | (118) | (521) | (639)
Retranslation impact of opening balances(1) | — | 619 | 619
At 30 June 2022 (re-presented) | 32 | (3,270) | (3,238)
Other comprehensive income/(loss) | 261 | (256) | 5
Retranslation impact of opening balances(1) | — | (173) | (173)
At 30 June 2023 (re-presented) | 293 | (3,699) | (3,406)
Other comprehensive loss | (154) | (613) | (767)
At 30 June 2024 | 139 | (4,312) | (4,173)

(1) Includes foreign translation differences arising on the retranslation of reserves due to the change in the group’s presentation currency.
Out of the total hedging reserve, $78 million represents the cost of hedging arising from cross currency interest rate swaps in net
investment hedges.
Financial statements (continued)
297
(c) Own shares
Movements in own shares

| Number of shares million | Purchase consideration $ million
At 30 June 2021 (re-presented) | 223 | 2,609
Retranslation impact of opening balances(1) | — | (334)
Share trust arrangements | (2) | (31)
Shares used to satisfy options | (2) | (21)
Shares purchased - share buyback programme | 61 | 2,985
Shares cancelled | (61) | (2,985)
At 30 June 2022 (re-presented) | 219 | 2,223
Retranslation impact of opening balances(1) | — | 93
Share trust arrangements | (1) | (15)
Shares used to satisfy options | (2) | (15)
Shares purchased - share buyback programme | 38 | 1,673
Shares cancelled | (38) | (1,673)
At 30 June 2023 (re-presented) | 216 | 2,286
Share trust arrangements | (2) | (19)
Shares used to satisfy options | (2) | (17)
Shares purchased - share buyback programme | 28 | 987
Shares cancelled | (28) | (987)
At 30 June 2024 | 212 | 2,250

(1) Includes foreign translation differences arising on the retranslation of reserves due to the
change in the group’s presentation currency.
Share trust arrangements
At 30 June 2024, the employee share trusts owned 3 million of ordinary shares in Diageo plc at a cost of $66 million and market value of $97
million (2023 – 3 million shares at a cost of $66 million, market value $127 million; 2022 – 2 million shares at a cost of $30 million,
market value $76 million). Dividends receivable by the employee share trusts on the shares are waived and the trustee abstains from voting.
Purchase of own shares
Authorisation was given by shareholders on 28 September 2023 to purchase a maximum of 224,704,974 ordinary shares at a minimum
price of 28 101/108 pence and a maximum price of the higher of (a) 105% of the average market value of the company's ordinary share s
for the five business days prior to the day the purchase is made and (b) the higher of the price of the last independent trade and the
highest current independent bid on the trading venue where the purchase is carried out. The programme expires at the conclusion of
the next Annual General Meeting or on 27 December 2024, if earlier.
Diageo completed a total of $1.0 billion return of capital during the year ended 30 June 2024. This programme followed the
successful completion of Diageo's previous return of capital programme that ended on 2 June 2023, in which $0.6 billion of capital
(announced as up to £0.5 billion on 26 January 2023) was returned to shareholders.
During the year ended 30 June 2024, the group purchased 28 million ordinary shares (2023 – 38 million; 2022 – 61 million),
representing approximately 1.1% of the issued ordinary share capital (2023 – 1.5%; 2022 – 2.4%) at an average price of 2918 pence
(3644 cents) per share, and an aggregate cost of $987 million, including transaction costs (2023 – 3616 pence (4382 cents) per share,
and an aggregate cost of $1,673 million, including $16 million of transaction costs; 2022 – 3709 pence (4842 cents) per share, and an
aggregate cost of $2,985 million, including $21 million of transaction costs) under the share buyback programme. The shares
purchased under the share buyback programmes were cancelled.
Financial statements (continued)
298
The monthly breakdown of all shares purchased and the average price paid per share (excluding expenses) for the year ended 30
June 2024 were as follows:

Period | Number of shares purchased under share buyback programme | Total number of shares purchased | Average price paid cents(2) | Authorised purchases unutilised at month end
July 2023 | — | — | — | 196,247,438
August 2023 | — | — | — | 196,247,438
1-28 September 2023 | — | — | — | 196,247,438
29-30 September 2023(1) | — | — | — | 224,704,974
October 2023 | 6,218,199 | 6,218,199 | 3768 | 218,486,775
November 2023 | 4,396,943 | 4,396,943 | 3671 | 214,089,832
December 2023 | 2,521,196 | 2,521,196 | 3572 | 211,568,636
January 2024 | 3,328,361 | 3,328,361 | 3504 | 208,240,275
February 2024 | 339,788 | 339,788 | 3737 | 207,900,487
March 2024 | 5,896,084 | 5,896,084 | 3685 | 202,004,403
April 2024 | 4,475,478 | 4,475,478 | 3542 | 197,528,925
May 2024 | 267,276 | 267,276 | 3440 | 197,261,649
June 2024 | — | — | — | 197,261,649
Total | 27,443,325 | 27,443,325 | 3644 | 197,261,649

(1) New maximum number of purchasable shares was authorised by shareholders at the
AGM held on 28 September 2023.
(2) Based on daily transaction rates.
(d) Dividends

| 2024 | 2023 | 2022
| $ million | re-presented $ million | re-presented $ million
Amounts recognised as distributions to equity shareholders in the year |  |  |
Final dividend for the year ended 30 June 2023 |  |  |
59.98 cents per share (2022 – 52.71 cents; 2021 – 59.91 cents)(1) | 1,349 | 1,200 | 1,398
Interim dividend for the year ended 30 June 2024 |  |  |
40.50 cents per share (2023 – 38.57 cents; 2022 – 38.38 cents)(2) | 894 | 871 | 888
| 2,243 | 2,071 | 2,286

(1) Re-presented at exchange rate prevailing at AGM's date (2023 - 49.17 pence per share; 2022 - 46.82 pence; 2021 - 44.59 pence).
(2) Re-presented at exchange date at the date of payment (2023 - 30.83 pence per share; 2022 - 29.36 pence). Interim dividend for the year ended 30 June 2024 was
declared in USD.
The proposed final dividend of $1,398 million (62.98 cents per share) for the year ended 30 June 2024 was approved by a duly
authorised committee of the Board of Directors on 29 July 2024. As this was after the balance sheet date and the dividend is subject to
approval by shareholders at the Annual General Meeting, this dividend has not been included as a liability in these consolidated
financial statements. There are no corporate tax consequences arising from this treatment.
Dividends are waived on all treasury shares owned by the company and all shares owned by the employee share trusts.
Financial statements (continued)
299
(e) Non-controlling interests
Diageo consolidates USL, a company incorporated in India, with a 42.79% non-controlling interest, Sichuan Shuijingfang
Company Limited, a company incorporated in China, with a 36.50% non-controlling interest and has a 50% controlling interest in
Ketel One Worldwide B.V. (Ketel One), a company incorporated in the Netherlands.
Summarised financial information for USL and other subsidiaries, after fair value adjustments on acquisition, and the amounts
attributable to non-controlling interests are as follows:

| 2024 | 2023 | 2022
| USL $ million | Others $ million | Total $ million | Total re-presented $ million | Total re-presented $ million
Income statement |  |  |  |  |
Sales | 3,183 | 3,041 | 6,224 | 6,409 | 7,710
Net sales | 1,338 | 2,380 | 3,718 | 3,767 | 4,063
Profit for the year(1) | 173 | 604 | 777 | 80 | 329
Other comprehensive (loss)/income(2) | (21) | 5 | (16) | (172) | (227)
Total comprehensive income/(loss) | 152 | 609 | 761 | (92) | 102
Attributable to non-controlling interests | 65 | 212 | 277 | (66) | 46
Balance sheet |  |  |  |  |
Non-current assets(3) | 1,336 | 4,405 | 5,741 | 5,354 | 6,071
Current assets | 1,172 | 1,373 | 2,545 | 2,316 | 2,422
Non-current liabilities | (197) | (1,577) | (1,774) | (1,656) | (1,814)
Current liabilities | (518) | (1,220) | (1,738) | (1,788) | (1,991)
Net assets | 1,793 | 2,981 | 4,774 | 4,226 | 4,688
Attributable to non-controlling interests | 767 | 1,271 | 2,038 | 1,853 | 2,076
Cash flow |  |  |  |  |
Net cash inflow from operating activities | 90 | 603 | 693 | 604 | 916
Net cash outflow from investing activities | (39) | (172) | (211) | (236) | (385)
Net cash outflow from financing activities | (32) | (424) | (456) | (170) | (428)
Net increase in cash and cash equivalents | 19 | 7 | 26 | 198 | 103
Exchange differences | (2) | (31) | (33) | (111) | (23)
Dividends payable to non-controlling interests | (15) | (106) | (121) | (117) | (95)

(1)Profit for the year includes exceptional operating expenses attributable to non-controlling interests.
(2)Other comprehensive (loss)/income is principally in respect of exchange on translating the subsidiaries to US dollar.
(3)Non-current assets include the global distribution rights for Ketel One vodka products worldwide. The carrying value of the distribution right at 30 June 2024
was $1,800 million (2023 – $1,800 million; 2022 – $1,800 million).
(i)On 16 January 2024, Diageo agreed with Combs Wine and Spirits LLC to purchase the 50% of the share capital of DeLeon Holdco LLC that Diageo North
America, Inc did not already own, whereby DeLeon Holdco LLC became a wholly-owned subsidiary of Diageo.
Financial statements (continued)
300
(f) Employee share compensation
The group uses a number of share award and option plans to grant to its directors and employees.
The annual fair value charge in respect of the equity settled plans for the three years ended 30 June 2024 is as follows:

| 2024 $ million | 2023 re-presented $ million | 2022 re-presented $ million
Executive share award plans | 34 | 49 | 68
Executive share option plans | 7 | 4 | 5
Savings plans | 2 | 5 | 6
| 43 | 58 | 79

Executive share awards have been granted under the Diageo 2014 Long-Term Incentive Plan (DLTIP) from September 2014 until
September 2023 and are granted under the replacement plan, the Diageo 2023 Long-Term Incentive Plan from March 2024 onwards to
some employees below the Board and from September 2024 to Executive Directors. Awards are granted as conditional awards in the
form of performance shares, performance share options, time-vesting restricted stock units (RSUs) and/or time-vesting share options
(or cash-based equivalents in certain locations for regulatory reasons). Share options are granted at the market value at the time of
grant. Prior to the introduction of the DLTIP, employees in associated companies were granted awards under the Diageo plc 2011
Associated Companies Share Incentive Plan (DACSIP). In the case of Executive Directors, conditional awards of time-vesting RSUs
or forfeitable shares may be awarded under the 2020 Deferred Bonus Share Plan (DBSP), with vesting not subject to any performance
conditions and not subject to a post-vesting retention period.
Share awards normally vest on the third anniversary of the grant date. Participants do not make a payment to receive the award at
grant. Executive Directors are required to hold any vested shares awarded under DLTIP for a further two-year post-vesting holding
period. Share options may normally be exercised between three and ten years after the grant date. Executives in North America and
Latin America and Caribbean are granted awards over the company’s ADRs (one ADR is equivalent to four ordinary shares).
For Executive Directors, performance shares under the DLTIP (for awards granted in 2020 and thereafter) are subject to the
achievement of three performance measures: 1) compound annual growth in profit before exceptional items over three years; 2)
compound annual growth in organic net sales over three years; 3) environmental, social and governance (ESG) priorities, weighted
40%, 40% and 20% of the maximum respectively, as set out in the Directors’ remuneration report. Performance share options under
the DLTIP are subject to the achievement of two equally weighted performance measures: 1) a comparison of Diageo’s three-year
TSR with a peer group; 2) cumulative free cash flow over a three-year period, measured at constant exchange rates. Performance
measures and targets are set annually by the Remuneration Committee. The vesting range is 20% for Executive Directors, and 25% for
other participants, for achieving minimum performance targets, up to 100% for achieving the maximum target level. Retesting of the
performance measures is not permitted.
For performance shares under the DLTIP, dividends are accrued on awards and are released to participants to the extent that the
awards vest at the end of the performance period. Dividend equivalents are normally paid out in the form of shares.
Savings plans are provided in the form of a savings-related share option plan. For UK employees, awards were made under the
Diageo 2010 Sharesave plan (for options granted up until 2020) and the Diageo 2020 Sharesave plan (for options granted from 2021).
For Republic of Ireland (ROI) based employees, awards were made under the Diageo 2009 Irish Sharesave Scheme (for options
granted up until 2019) and the Diageo 2019 Irish Sharesave Scheme (for options granted in 2020). These are HMRC and Irish
Revenue approved all-employee savings plans.
For ROI employees, grants from 2021 were made under the Diageo 2020 Sharesave plan which is not an approved plan in the
Republic of Ireland. These plans are made available to UK and ROI employees who are employed on the annual results announcement
date. Participants can save monthly, with deductions taken directly from net pay, for a period of 3 or 5 years.In return, employees are
granted the option to buy Diageo shares using the savings accrued at the end of the relevant savings period and at a 20% discounted
option price, which is set at the time of grant. Provided participants fulfil the terms set out within the relevant UK or ROI tax approved
scheme rules, any gains from the option exercise are free from UK or ROI income tax. For the ROI Sharesave awards granted in 2021,
2022 and 2023, as these are not made under a Revenue tax approved plan, the gains from the option exercise are subject to ROI
income tax.
For US employees, the awards are made under the Diageo plc 2017 United States Employee Stock Purchase Plan. Employees agree to
make regular monthly savings for a period of one year and acquire American Depositary Receipts (ADRs) at 15% discounted price
(which is set at the time of grant) using their contributions at the end of the plan cycle. They receive the benefit of tax relief if certain
conditions are satisfied.
Financial statements (continued)
301
For the three years ended 30 June 2024, the calculation of the fair value of each share award used the Monte Carlo and Black
Scholes pricing model and the following assumptions:

| 2024 | 2023 re-presented | 2022 re-presented
Risk free interest rate | 4.7% | 3.1% | 0.4%
Expected life of the awards | 33 months | 35 months | 40 months
Dividend yield | 2.6% | 2.0% | 2.1%
Weighted average share price | 3118 p | 3758 p | 3545 p
Weighted average fair value of awards granted in the year(1) | 1757 c | 2318 c | 3754 c
Number of awards granted in the year | 2.1 million | 1.7 million | 2.1 million
Fair value of all awards granted in the year | $36 million | $40 million | $79 million

(1) Based on transaction rate at grant date of the awards.
Transactions on schemes
Transactions on the executive share award plans for the three years ended 30 June 2024 were as follows:

| 2024 million | 2023 million | 2022 million
Number of awards outstanding at 1 July | 4.9 | 5.2 | 5.3
Granted | 2.1 | 1.7 | 2.1
Awarded | (1.8) | (1.1) | (1.1)
Forfeited | (0.4) | (0.9) | (1.1)
Number of awards outstanding at 30 June | 4.8 | 4.9 | 5.2

The exercise price of share options outstanding at 30 June 2024 was in the range of 1709 pence - 3854 pence (2023 – 1709 pence -
3864 pence; 2022 – 1704 pence - 4024 pence).
At 30 June 2024, 3.3 million share options were exercisable at a weighted average exercise price of 2639 pence. Weighted average
remaining contractual life of share options was six years at 30 June 2024.
Financial statements (continued)
302
Other financial statements disclosures
Introduction
This section includes additional financial information that are either required by the relevant accounting standards or management
considers these to be material information for shareholders.
Financial statements (continued)
303
19. Contingent liabilities and legal proceedings
Accounting policies
Provision is made for the anticipated settlement costs of legal or other disputes against the group where it is considered to be
probable that a liability exists and a reliable estimate can be made of the likely outcome. Where it is possible that a settlement may
be reached or it is not possible to make a reliable estimate of the estimated financial effect, appropriate disclosure is made but no
provision created.
Critical accounting judgements and estimates
Judgement is necessary in assessing the likelihood that a claim will succeed, or a liability will arise, and an estimate to quantify the
possible range of any settlement. Due to the inherent uncertainty in this evaluation process, actual losses may be different from the
liability originally estimated. The group may be involved in legal proceedings in respect of which it is not possible to make a reliable
estimate of any expected settlement. In such cases, appropriate disclosure is provided but no provision is made and no contingent
liability is quantified.
(a) Guarantees and related matters
As of 30 June 2024, the group has no material unprovided guarantees or indemnities in respect of liabilities of third parties.
(b) Acquisition of USL shares from UBHL and related proceedings in relation to the USL transaction
On 4 July 2013, Diageo completed its acquisition, under a share purchase agreement with United Breweries (Holdings) Limited
(UBHL) and various other sellers (the SPA), of shares representing 14.98% in USL, including shares representing 6.98% from
UBHL. The SPA was signed on 9 November 2012 as part of the transaction announced by Diageo in relation to USL on that day (the
Original USL Transaction). Following a series of further transactions, as of 30 June 2024, Diageo has a 55.88% investment in USL
(excluding 2.38% owned by the USL Benefit Trust).
Prior to the acquisition from UBHL on 4 July 2013, the High Court of Karnataka (High Court) had granted leave to UBHL under the
Indian Companies Act 1956 (the Leave Order) to enable the sale by UBHL to Diageo to take place (the UBHL Share Sale)
notwithstanding the continued existence of certain winding-up petitions that were pending against UBHL on the date of the SPA. At
the time of the completion of the UBHL Share Sale, the Leave Order remained subject to review on appeal. However, as stated by
Diageo at the time of closing, it was considered unlikely that any appeal process in respect of the Leave Order would definitively
conclude on a timely basis and, accordingly, Diageo waived the conditionality under the SPA relating to the absence of insolvency
proceedings in relation to UBHL and acquired the 6.98% stake in USL from UBHL at that time.
Following appeal and counter-appeal in respect of the Leave Order, this matter is now before the Supreme Court of India which has
issued an order that the status quo be maintained with regard to the UBHL Share Sale pending a hearing on the matter before it.
Following a number of adjournments, the next date for a substantive hearing is yet to be fixed.
In separate proceedings, the High Court passed a winding-up order against UBHL on 7 February 2017, and appeals filed by UBHL
against that order have since been dismissed, initially by a division bench of the High Court and subsequently by the Supreme Court
of India.
Diageo continues to believe that the acquisition price of INR 1,440 per share paid to UBHL for the USL shares is fair and reasonable
as regards UBHL, UBHL’s shareholders and UBHL’s secured and unsecured creditors. However, adverse results for Diageo in the
proceedings referred to above could, absent leave or relief in other proceedings, ultimately result in Diageo losing title to the 6.98%
stake in USL acquired from UBHL. Diageo believes, including by reason of its rights under USL’s articles of association to
nominate USL’s CEO and CFO and the right to appoint, through USL, a majority of the directors on the boards of USL’s
subsidiaries as well as its ability as promoter to nominate for appointment up to two-thirds of USL’s directors for so long as the
chairperson of USL is an independent director, that it would remain in control of USL and would continue to be able to consolidate
USL as a subsidiary for accounting purposes regardless of the outcome of this litigation.
There can be no certainty as to the outcome of the existing or any further related legal proceedings or the time frame within which
they would be concluded.
Financial statements (continued)
304
(c) Continuing matters relating to Dr Vijay Mallya and affiliates
On 25 February 2016, Diageo and USL each announced that they had entered into arrangements with Dr Mallya under which he had
agreed to resign from his position as a director and as chair of USL and from his positions in USL’s subsidiaries.
Diageo’s agreement with Dr Mallya (the February 2016 Agreement) provided for a payment of $75 million to Dr Mallya over a five-
year period of which $40 million was paid on the signing of the February 2016 Agreement with the balance being payable in equal
instalments of $7 million a year over five years (2017-2021). All payments were subject to and conditional on Dr Mallya’s
compliance with the agreement. The February 2016 Agreement also provided for the release of Dr Mallya’s personal obligations to
indemnify Diageo Holdings Netherlands B.V. (DHN) in respect of its earlier liability ($141 million) under a backstop guarantee of
certain borrowings of Watson Limited (Watson) (a company affiliated with Dr Mallya).
On account of various breaches and other provisions of agreements between Dr Mallya and persons connected with him and Diageo
and/or USL, Diageo did not make the five instalment payments due during the five-year period between 2017 and 2021. In addition,
Diageo has also demanded that Dr Mallya repay the $40 million paid by Diageo in February 2016 and sought compensation for
various losses incurred by the relevant members of the Diageo group.
On 16 November 2017, Diageo and other relevant members of the Diageo group commenced claims in the High Court of Justice in
England and Wales (the English High Court) against Dr Mallya in relation to these matters. At the same time DHN also commenced
claims in the English High Court against Dr Mallya, his son Sidhartha Mallya, Watson and Continental Administration Services
Limited (CASL) (a company affiliated with Dr Mallya and understood to hold assets on trust for him and certain persons affiliated
with him) for in excess of $142 million (plus interest) in relation to Watson’s liability to DHN in respect of its borrowings referred to
above and the breach of associated security documents. Dr Mallya, Sidhartha Mallya and the relevant affiliated companies filed a
defence to these claims, and Dr Mallya also filed a counterclaim for payment of the two instalment payments that had by that time
been withheld as described above.
Diageo continues to prosecute its claims and to defend the counterclaim. As part of these proceedings, Diageo and the other relevant
members of its group filed an application for strike out and/or summary judgement in respect of certain aspects of the defence filed
by Dr Mallya and the other defendants, including their defence in relation to Watson and CASL’s liability to repay DHN. The
application was successful resulting in Watson being ordered to pay approximately $135 million plus various amounts in respect of
interest to DHN, with CASL being held liable as co-surety for 50% of any such amount unpaid by Watson. These amounts were,
contrary to the relevant orders, not paid by the relevant deadlines and Watson and CASL’s remaining defences in the proceedings
were struck out. Diageo and DHN have accordingly sought asset disclosure and are considering further enforcement steps against
Watson and CASL, both in the United Kingdom and in other jurisdictions where they are present or hold assets.
A trial of the remaining elements of these claims was due to commence on 21 November 2022. However, on 26 July 2021 Dr Mallya
was declared bankrupt by the English High Court pursuant to a bankruptcy petition presented by a consortium of Indian banks.
Diageo and the relevant members of its group have informed the Trustee in Bankruptcy of their position as creditors in the
bankruptcy and have engaged with the Trustee regarding their claims and the status of the current proceedings. An appeal by Dr
Mallya against his bankruptcy (and an appeal by the bank consortium a gainst orders made in the course of the bankruptcy
proceedings) was scheduled to be heard in April 2024, but the court has vacated the hearing date. In light of the uncertainty posed by
the ongoing bankruptcy appeals, the trial of Diageo’s claim, which was scheduled to take place in March 2025, is expected to be
deferred further based on the anticipated relisting of the bankruptcy appeals.
At this stage, it is not possible to assess the extent to which the various ongoing proceedings related to the bankruptcy will affect the
remaining elements of the claims by Diageo and the relevant members of its group.
Upon completion of an initial inquiry in April 2015 into past improper transactions which identified references to certain additional
parties and matters, USL carried out an additional inquiry into these transactions (Additional Inquiry) which was completed in July
2016. The Additional Inquiry, prima facie, identified transactions indicating actual and potential diversion of funds from USL and its
Indian and overseas subsidiaries to, in most cases, entities that appeared to be affiliated or associated with Dr Mallya. All amounts
identified in the Additional Inquiry have been provided for or expensed in the financial statements of USL or its subsidiaries in the
respective prior periods. USL has filed recovery suits against relevant parties identified pursuant to the Additional Inquiry.
Further, at this stage, it is not possible for the management of USL to estimate the financial impact on USL, if any, arising out of
potential non-compliance with applicable laws in relation to such fund diversions.
Financial statements (continued)
305
(d) Other matters in relation to USL
In respect of the Watson backstop guarantee arrangements, the Securities and Exchange Board of India (SEBI) issued a notice to
Diageo on 16 June 2016 that if there is any net liability incurred by Diageo (after any recovery under relevant security or other
arrangements, which matters remain pending) on account of the Watson backstop guarantee, such liability, if any, would be
considered to be part of the price paid for the acquisition of USL shares under the SPA which formed part of the Original USL
Transaction and that, in that case, additional equivalent payments would be required to be made to those shareholders (representing
0.04% of the shares in USL) who tendered in the open offer made as part of the Original USL Transaction. Diageo believes that the
Watson backstop guarantee arrangements were not part of the price paid or agreed to be paid for any USL shares under the Original
USL Transaction and that therefore SEBI's decision was not consistent with applicable law, and Diageo appealed against it before
the Securities Appellate Tribunal, Mumbai (SAT). On 1 November 2017, SAT issued an order in respect of Diageo’s appeal in
which, amongst other things, it observed that the relevant officer at SEBI had neither considered Diageo’s earlier reply nor provided
Diageo with an opportunity to be heard, and accordingly directed SEBI to pass a fresh order after giving Diageo an opportunity to be
heard. Following SAT’s order, Diageo made its further submissions in the matter, including at a personal hearing before a Deputy
General Manager of SEBI. On 26 June 2019, SEBI issued an order reiterating the directions contained in its previous notice dated 16
June 2016. A s with the previous SEBI notice, Diageo believes that SEBI's latest order is not consistent with applicable law. Diageo
appealed against this order before SAT and, after a hearing in March 2023, SAT allowed Diageo’s appeal on 26 July 2023.
Accordingly, SEBI’s order dated 26 June 2019 stands quashed at present. Under applicable law, SEBI has filed an appeal against
SAT’s order before the Supreme Court of India, which is scheduled to be heard in October 2024. However, there can be no certainty
as to its outcome or the timeframe within which any such appeal would be concluded.
(e) USL’s dispute with IDBI Bank Limited
Prior to the acquisition by Diageo of a controlling interest in USL, USL had prepaid a term loan taken through IDBI Bank Limited
(IDBI), an Indian bank, which was secured on certain fixed assets and brands of USL, as well as by a pledge of certain shares in USL
held by the USL Benefit Trust (of which USL is the sole beneficiary). The maturity date of the loan was 31 March 2015. IDBI
disputed the prepayment, following which USL filed a writ petition in November 2013 before the High Court of Karnataka (the High
Court) challenging the bank’s actions.
Following the original maturity date of the loan, USL received notices from IDBI seeking to recall the loan, demanding a further
sum of INR 459 million ($6 million) on account of the outstanding principal, accrued interest and other amounts, and also
threatening to enforce the security in the event that USL did not make these further payments. Pursuant to an application filed by
USL before the High Court in the writ proceedings, the High Court directed that, subject to USL depositing such further amount with
the bank (which amount was duly deposited by USL), the bank should hold the amount in a suspense account and not deal with any
of the secured assets including the shares until disposal of the original writ petition filed by USL before the High Court.
On 27 June 2019, a single judge bench of the High Court issued an order dismissing the writ petition filed by USL, amongst other
things, on the basis that the matter involved an issue of breach of contract by USL and was therefore not maintainable in exercise of
the court’s writ jurisdiction. USL filed an appeal against this order before a division bench of the High Court, which on 30 July 2019
issued an interim order directing the bank to not deal with any of the secured assets until the next date of hearing. On 13 January
2020, the division bench of the High Court admitted the writ appeal and extended the interim stay. This appeal is currently pending.
Based on the assessment of USL’s management supported by external legal opinions, USL continues to believe that it has a strong
case on the merits and therefore continues to believe that the secured assets will be released to USL and the aforesaid amount of
INR 459 million ($6 million) remains recoverable from IDBI.
(f) Tax
The international tax environment has seen increased scrutiny and rapid change over recent years bringing with it greater uncertainty
for multinationals. Against this backdrop, Diageo has been monitoring developments and continues to engage transparently with the
tax authorities in the countries where it operates to ensure that the group manages its arrangements on a sustainable basis.
The group operates in a large number of markets with complex tax and legislative regimes that are open to subjective interpreta tion.
In th e context of these operations, it is possible that tax exposures which have not yet materialised (including those which could arise
as part of tax assessments) may result in losses to the group. Where the potential tax exposures are known to us and may lead to a
possible material outflow, the group assesses the disclosure of such matters as contingent liabilities, taking into account both
assessed and unassessed amounts (if any), t heir size and nature, relevant regulatory requirements and potential prejudice of the future
resolution or assessment thereof.
Diageo has a large number of ongoing tax cases in Brazil and India, for which contingent liabilities are disclosed on the basis of the
current known possible exposure from tax assessment val ues. While not all of these cases are individually significant, the current
aggregate known possible exposure from tax assessment values is up to approximately $853 million for Brazil and up to
approximately $118 million for India. The group believes that the likelihood that the tax authorities will ultimately prevail is lower
than probable but higher than remote. Due to the fiscal environment in Brazil and in India, the possibility of further tax assessments
Financial statements (continued)
306
related to the same matters cannot be ruled out and the judicial processes may take extended periods to conclude. Based on its
current assessment, Diageo believes that no provision is required in respect of these issues.
Payments were made under protest in India in respect of the periods 1 April 2006 to 31 March 2019 in relation to tax assessments
where the risk is considered to be remote or possible. These payments have to be made in order to be able to challenge the
assessments and as such have been recognised as a receivable in the group's balance sheet. The total amount of payments under
protest recognised as a receivable as at 30 June 2024 is $159 million (corporate tax payments of $146 million and indirect tax
payments of $13 million).
(g) UK pension fund
In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees II Limited) ruled that certain historical
amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial
confirmation. Following a hearing in late June 2024, the UK Court of Appeal issued judgment on 25 July 2024 upholding this ruling.
The group and its UK pension scheme trustee are reviewing this development and considering any implications for the UK pension
fund.
(h) Other
The group has extensive international operations and routinely makes judgements on a range of legal, customs and tax matters which
are incidental to the group's operations. Some of these judgements are or may become the subject of challenges and involve
proceedings, the outcome of which cannot be foreseen. In particular, the group is currently a defendant in various customs
proceedings that challenge the declared customs value of products imported by certain Diageo companies. Diageo continues to
defend its position vigorously in these proceedings.
Save as disclosed above, neither Diageo, nor any member of the Diageo group, is or has been engaged in, nor (so far as Diageo is
aware) is there pending or threatened by or against it, any legal or arbitration proceedings which may have a significant effect on the
financial position of the Diageo group.
Financial statements (continued)
307
20. Commitments
(a) Capital commitments
Commitments for expenditure on intangibles and property, plant and equipment not provided for in these consolidated financial
statements are estimated at $783 million (2023 – $755 million; 2022 – $482 million).
(b) Other commitments
The future minimum lease rentals payable in the year ended 30 June 2024 for short-term leases and leases of low-value assets are
estimated at $23 million (2023 – $45 million; 2022 – $15 million). The total future cash outflows for leases that had not yet
commenced, and not recognised as lease liabilities at 30 June 2024, are estimated at $3 million (2023 – $14 million; 2022 – $14
million).
21. Related party transactions
Transactions between the group and its related parties are made on terms equivalent to those that prevail in arm’s length transactions.
(a) Subsidiaries
Transactions between the company and its subsidiaries are eliminated on consolidation and therefore are not disclosed. Details of the
principal group companies are given in note 22.
(b) Associates and joint ventures
Sales and purchases to and from associates and joint ventures are principally in respect of premium drinks products but also include
the provision of management services.
Transactions and balances with associates and joint ventures are set out in the table below:

| 2024 $ million | 2023 re- presented $ million | 2022 re- presented $ million
Income statement items |  |  |
Sales | 14 | 13 | 15
Purchases | 73 | 16 | 42
Balance sheet items |  |  |
Group payables | 2 | 3 | 2
Group receivables | 2 | 2 | 2
Loans receivable | 355 | 254 | 212
Cash flow items |  |  |
Loans and equity contributions, net | 134 | 112 | 86

Other disclosures in respect of associates and joint ventures are included in note 6.
(c) Key management personnel
The key management of the group comprises the Executive and Non-Executive Directors, the members of the Executive Committee
and the Company Secretary. They are listed under ‘Board of Directors and Company Secretary’ and ‘Executive Committee’.

| 2024 | 2023 | 2022
| $ million | re-presented $ million | re-presented $ million
Salaries and short-term employee benefits | 12 | 13 | 13
Annual incentive plan | 4 | 7 | 17
Non-Executive Directors’ fees | 2 | 2 | 2
Share-based payments(1) | 7 | 14 | 25
Post-employment benefits | 2 | 2 | 2
| 27 | 38 | 59

(1)Time-apportioned fair value of unvested options and share awards.
Non-Executive Directors do not receive share-based payments or post-employment benefits.
Financial statements (continued)
308
There were no transactions with these related parties during the year ended 30 June 2024 on terms other than those that prevail in
arm’s length transactions.
(d) Pension plans
The Diageo pension plans are recharged with the cost of administration services provided by the group to the pension plans and with
professional fees paid by the group on behalf of the pension plans. The total amount recharged for the year was $0.1 million (2023 –
$0.2 million; 2022 – $0.2 million).
(e) Directors’ remuneration

| 2024 | 2023 | 2022
| $ million | re-presented $ million | re-presented $ million
Salaries and short-term employee benefits | 4 | 3 | 4
Annual incentive plan | 1 | 2 | 5
Non-Executive Directors' fees | 2 | 2 | 2
Share option exercises(1) | — | — | 6
Shares vesting(1) | 18 | 5 | 3
Post-employment benefits | — | 1 | —
| 25 | 13 | 20

(1)Gains on options realised in the year and the benefit from share awards, calculated by using the share price applicable on the date of exercise of the share options
and release of the awards.
22. Principal group companies
The companies listed below include those which principally affect the profits and assets of the group. The operating companies listed
below may carry on the business described in the countries listed in conjunction with their subsidiaries and other group companies.

| Country of incorporation | Country of operation | Percentage of equity owned(1) | Business description
Subsidiaries |  |  |  |
Diageo Ireland Unlimited Company | Ireland | Worldwide | 100% | Production, marketing and distribution of premium drinks
Diageo Great Britain Limited | England | Great Britain | 100% | Marketing and distribution of premium drinks
Diageo Scotland Limited | Scotland | Worldwide | 100% | Production, marketing and distribution of premium drinks
Diageo Brands B.V. | Netherlands | Worldwide | 100% | Marketing and distribution of premium drinks
Diageo North America, Inc. | United States | Worldwide | 100% | Production, importing, marketing and distribution of premium drinks
United Spirits Limited(2) | India | India | 55.88% | Production, importing, marketing and distribution of premium drinks
Diageo Capital plc(3) | Scotland | United Kingdom | 100% | Financing company for the group
Diageo Capital B.V.(3) | Netherlands | Netherlands | 100% | Financing company for the group
Diageo Finance plc(3) | England | United Kingdom | 100% | Financing company for the group
Diageo Investment Corporation | United States | United States | 100% | Financing company for the US group
Mey İçki Sanayi ve Ticaret A.Ş. | Türkiye | Türkiye | 100% | Production, marketing and distribution of premium drinks
Associates |  |  |  |
Moët Hennessy, SAS(4) | France | France | 34% | Production, marketing and distribution of premium drinks

(1)All percentages, unless otherwise stated, are in respect of holdings of ordinary share capital and are equivalent to the percentages of voting rights held by the
group.
(2)Percentage ownership excludes 2.38% owned by the USL Benefit Trust.
(3)Directly owned by Diageo plc.
(4)French limited liability company.
Financial statements (continued)
309
23. Post balance sheet events
On 24 July 2024, Diageo announced its agreement with LVMH to exit from their joint operation Moët Hennessy Diageo France, and
the termination of the existing distribution agreements in place for France for all remaining Diageo brands, effective from 1 January
2025. In respect of the termination, the parties have agreed Diageo to pay a settlement amount, that will be accounted for in the year
ending 30 June 2025.
Financial statements (continued)
310
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.
Calculation of organic movements
The organic movement percentage is the amount in the row titled ‘Organic movement’ in the tables below, expressed as a percentage
of the relevant absolute amount in the row titled ‘Year ended 30 June 2023 adjusted’. Organic operating margin is calculated by
dividing operating profit before exceptional items by net sales after excluding the impact of exchange rate movements, certain fair
value remeasurements, hyperinflation and acquisitions and disposals.
(a) Exchange rates
Exchange in the organic movement calculation reflects the adjustment to recalculate the reported results as if they had been generated
at the prior period weighted average exchange rates.
Exchange impacts in respect of the external hedging of intergroup sales by the markets in a currency other than their functional
currency and the intergroup recharging of services are also translated at prior period weighted average exchange rates and are
allocated to the geographical segment to which they relate. Residual exchange impacts are reported as part of the Corporate segment.
Results from hyperinflationary economies are translated at forward-looking rates.
(b) Acquisitions and disposals
For acquisitions in the current period, the post-acquisition results are excluded from the organic movement calculations. For
acquisitions in the prior period, post-acquisition results are included in full in the prior period but are included in the organic
movement calculation from the anniversary of the acquisition date in the current period. The acquisition row also eliminates the
impact of transaction costs that have been charged to operating profit in the current or prior period in respect of acquisitions that, in
management’s judgement, are expected to be completed.
Where a business, brand, brand distribution right or agency agreement was disposed of or terminated in the reporting period, the
group, in the organic movement calculations, excludes the results for that business from the current and prior period. In the calculation
of operating profit, the overheads included in disposals are only those directly attributable to the businesses disposed of, and do not
result from subjective judgements of management.
(c) Exceptional items
Exceptional items are those that in management’s judgement need to be disclosed separately. Such items are included in the income
statement caption to which they relate, and form part of the segmental reporting, and are excluded from the organic movement
calculations. Management believes that separate disclosure of exceptional items and the classification between operating and non-
oper ating items further helps investors to understand t he performance of the group. Changes in estimates and reversals in relation to
items previously recognised as exceptional are presented consistently as exceptional in the current year.
Unaudited financial information
311
Exceptional operating items are those that are considered to be material and unusual or non-recurring in nature and are part of the
operating activities of the group, such as one-off global restructuring programmes which can be multi-year, impairment of intangible
assets and fixed assets, indirect tax settlements, property disposals and changes in post-employment plans.
Gains and losses on the sale or directly attributable to a prospective sale of businesses, brands or distribution rights, step up gains and
losses that arise when an investment becomes an associate or an associate becomes a subsidiary and other material, unusual non-
recurring items that are not in respect of the production, marketing and distribution of premium drinks, are disclosed as exceptional
non-operating items below operating profit in the income statement.
Exceptional current and deferred tax items comprise material and unusual or non-recurring items that impact taxation. Examples
include direct tax provisions and settlements in respect of prior years and the remeasurement of deferred tax assets and liabilities
following tax rate changes.
(d) Fair value remeasurement
Fair value remeasurements in the organic movement calculation reflect an adjustment to eliminate the impact of fair value changes in
biological assets, earn-out arrangements that are accounted for as remuneration and fair value changes relating to contingent
consideration liabilities and equity options that arose on acquisitions recognised in the income statement.
Adjustment in respect of hyperinflation
The group's experience is that hyperinflationary conditions result in price increases that include both normal pricing actions reflecting
changes in demand, commodity and other input costs or considerations to drive commercial competitiveness, as well as
hyperinflationary elements and that for the calculation of organic movements, the distortion from hyperinflationary elements should be
excluded.
Cumulative inflation over 100% (2% per month compounded) over three years is one of the key indicators within IAS 29 to assess
whether an economy is deemed to be hyperinflationary. As a result, the definition of 'Organic movements' includes price growth in
markets deemed to be hyperinflationary economies, up to a maximum of 2% per month while also being on a constant currency basis.
Corresponding adjustments have been made to all income statement related lines in the organic movement calculations.
In the tables presenting the calculation of organic movements, 'hyperinflation' is included as a reconciling item between reported and
organic movements and that also includes the relevant IAS 29 adjustments.
Organic movement calculations for the year ended 30 June 2024 were as follows:

| North America million | Europe million | Asia Pacific million | Latin America and Caribbean million | Africa million | Corporate million | Total million
Volume (equivalent units) |  |  |  |  |  |  |
Year ended 30 June 2023 reported | 52.4 | 51.3 | 80.8 | 26.2 | 32.7 | — | 243.4
Reclassification | — | 0.5 | (0.5) | — | — | — | —
Disposals(1) | — | (0.1) | (6.2) | — | (1.3) | — | (7.6)
Year ended 30 June 2023 adjusted | 52.4 | 51.7 | 74.1 | 26.2 | 31.4 | — | 235.8
Organic movement | (2.3) | (0.6) | 0.6 | (4.1) | (1.9) | — | (8.3)
Acquisitions and disposals(1) | — | 0.2 | 0.2 | — | 2.6 | — | 3.0
Year ended 30 June 2024 reported | 50.1 | 51.3 | 74.9 | 22.1 | 32.1 | — | 230.5
Organic movement % | (4) | (1) | 1 | (16) | (6) | — | (4)

Unaudited financial information
312

| North America $ million | Europe $ million | Asia Pacific $ million | Latin America and Caribbean $ million | Africa $ million | Corporate $ million | Total $ million
Sales |  |  |  |  |  |  |
Year ended 30 June 2023 reported (re-presented) | 8,859 | 7,245 | 6,484 | 2,714 | 2,864 | 104 | 28,270
Exchange | 6 | 132 | 59 | 11 | 28 | 1 | 237
Reclassification | — | 62 | (62) | — | — | — | —
Disposals(1) | — | (7) | (377) | — | (196) | — | (580)
Hyperinflation | — | (185) | — | — | — | — | (185)
Year ended 30 June 2023 adjusted | 8,865 | 7,247 | 6,104 | 2,725 | 2,696 | 105 | 27,742
Organic movement | (351) | 415 | 320 | (487) | 258 | 13 | 168
Acquisitions and disposals(1) | 3 | 30 | 35 | — | 131 | — | 199
Exchange | (3) | (294) | (139) | 172 | (632) | 5 | (891)
Hyperinflation | — | 626 | — | 22 | 25 | — | 673
Year ended 30 June 2024 reported | 8,514 | 8,024 | 6,320 | 2,432 | 2,478 | 123 | 27,891
Organic movement % | (4) | 6 | 5 | (18) | 10 | 12 | 1

| North America $ million | Europe $ million | Asia Pacific $ million | Latin America and Caribbean $ million | Africa $ million | Corporate $ million | Total $ million
Net sales |  |  |  |  |  |  |
Year ended 30 June 2023 reported (re-presented) | 8,109 | 4,303 | 3,841 | 2,159 | 2,039 | 104 | 20,555
Exchange | 6 | 56 | 55 | 13 | 21 | 1 | 152
Reclassification | — | 62 | (62) | — | — | — | —
Disposals(1) | — | (4) | (126) | — | (131) | — | (261)
Hyperinflation | — | (71) | — | — | — | — | (71)
Year ended 30 June 2023 adjusted | 8,115 | 4,346 | 3,708 | 2,172 | 1,929 | 105 | 20,375
Organic movement | (206) | 124 | 164 | (459) | 235 | 13 | (129)
Acquisitions and disposals(1) | 2 | 30 | 30 | — | 131 | — | 193
Exchange | (3) | (59) | (85) | 105 | (539) | 5 | (576)
Hyperinflation | — | 363 | — | 21 | 22 | — | 406
Year ended 30 June 2024 reported | 7,908 | 4,804 | 3,817 | 1,839 | 1,778 | 123 | 20,269
Organic movement % | (3) | 3 | 4 | (21) | 12 | 12 | (1)

Unaudited financial information
313

| North America $ million | Europe $ million | Asia Pacific $ million | Latin America and Caribbean $ million | Africa $ million | Corporate $ million | Total $ million
Marketing |  |  |  |  |  |  |
Year ended 30 June 2023 reported (re-presented) | 1,631 | 765 | 655 | 355 | 235 | 22 | 3,663
Exchange | (1) | 8 | 4 | — | (3) | 2 | 10
Reclassification | — | 1 | (1) | — | (12) | — | (12)
Disposals(1) | — | — | (13) | — | (5) | — | (18)
Hyperinflation | — | (7) | — | — | — | — | (7)
Year ended 30 June 2023 adjusted | 1,630 | 767 | 645 | 355 | 215 | 24 | 3,636
Organic movement | (10) | 34 | 16 | (70) | 35 | 2 | 7
Acquisitions and disposals(1) | 5 | 22 | 5 | — | 4 | — | 36
Exchange | 2 | 10 | (15) | 21 | (50) | 3 | (29)
Hyperinflation | — | 40 | — | — | 1 | — | 41
Year ended 30 June 2024 reported | 1,627 | 873 | 651 | 306 | 205 | 29 | 3,691
Organic movement % | (1) | 4 | 2 | (20) | 16 | 8 | —

| North America $ million | Europe $ million | Asia Pacific $ million | Latin America and Caribbean $ million | Africa $ million | Corporate $ million | Total $ million
Operating profit before exceptional items |  |  |  |  |  |  |
Year ended 30 June 2023 reported (re-presented) | 3,222 | 1,312 | 1,104 | 783 | 289 | (397) | 6,313
Exchange(2) | 27 | (2) | 29 | 42 | 110 | 45 | 251
Reclassification(ii) | — | 47 | (47) | — | — | — | —
Fair value remeasurement of contingent considerations, equity option and earn-out arrangements | (122) | (30) | — | (1) | — | — | (153)
Acquisitions and disposals(1) | 2 | 17 | (32) | — | (38) | — | (51)
Hyperinflation | — | 19 | — | — | — | — | 19
Year ended 30 June 2023 adjusted | 3,129 | 1,363 | 1,054 | 824 | 361 | (352) | 6,379
Organic movement | (142) | (15) | 60 | (302) | 86 | 9 | (304)
Acquisitions and disposals(1) | (12) | (14) | 7 | — | 27 | — | 8
Fair value remeasurement of contingent considerations, equity option and earn-out arrangements | 128 | 27 | — | — | — | — | 155
Fair value remeasurement of biological assets | — | — | — | (16) | — | — | (16)
Exchange(2) | 133 | 26 | (58) | (5) | (332) | (23) | (259)
Hyperinflation | — | (8) | — | 1 | (11) | — | (18)
Year ended 30 June 2024 reported | 3,236 | 1,379 | 1,063 | 502 | 131 | (366) | 5,945
Organic movement % | (5) | (1) | 6 | (37) | 24 | 3 | (5)
Organic operating margin % (3) |  |  |  |  |  |  |
Year ended 30 June 2024 | 37.8 | 30.2 | 28.8 | 30.5 | 20.7 | n/a | 30.0
Year ended 30 June 2023 | 38.6 | 31.4 | 28.4 | 37.9 | 18.7 | n/a | 31.3
Organic operating margin movement (bps) | (79) | (121) | 35 | (746) | 194 | n/a | (130)

(1)Acquisitions and disposals that had an effect on organic volume, sales, net sales, marketing and operating profit growth in the year ended 30 June 2024, are detailed
on page 315.
(2)The impact of movements in exchange rates on reported figures for operating profit was principally in respect of the unfavourable exchange impact of the
weakening of the Nigerian naira, the Turkish lira and the Kenyan shilling, partially offset by the favourable impact of the Mexican peso and sterling against the US
dollar.
(3)Organic operating margin calculated by dividing Operating profit before exceptional items by net sales.
(i)For the reconciliation of sales to net sales, see page 63.
(ii)Percentages and margin movements are calculated on rounded figures.
Unaudited financial information
314
In the year ended 30 June 2024, the acquisitions and disposals that affected volume, sales, net sales, marketing and operating profit
were as follows, as per footnote (1) on the previous page:

| Volume EU million | Sales $ million | Net sales $ million | Marketing $ million | Operating profit $ million
Year ended 30 June 2023 (re-presented) |  |  |  |  |
Acquisitions |  |  |  |  |
Balcones Distilling | — | — | — | — | 2
Don Papa Rum | — | — | — | — | 20
| — | — | — | — | 22
Disposals |  |  |  |  |
USL Popular brands | (5.9) | (277) | (43) | — | (6)
Archers brand | (0.1) | (7) | (4) | — | (3)
Windsor | (0.3) | (100) | (83) | (13) | (26)
Guinness Cameroun S.A. | (1.3) | (196) | (131) | (5) | (38)
| (7.6) | (580) | (261) | (18) | (73)
Acquisitions and disposals | (7.6) | (580) | (261) | (18) | (51)
Year ended 30 June 2024 |  |  |  |  |
Acquisitions |  |  |  |  |
Mr Black | — | 3 | 2 | 1 | (4)
Balcones Distilling | — | — | — | 4 | (8)
Gordon's | 1.2 | 105 | 105 | 4 | 8
Don Papa Rum | 0.2 | 30 | 30 | 22 | (14)
| 1.4 | 138 | 137 | 31 | (18)
Disposals |  |  |  |  |
Windsor | 0.2 | 35 | 30 | 5 | 7
Guinness Cameroun S.A. | 1.4 | 26 | 26 | — | 19
| 1.6 | 61 | 56 | 5 | 26
Acquisitions and disposals | 3.0 | 199 | 193 | 36 | 8

Unaudited financial information
315
Earnings per share before exceptional items
Earnings per share before exceptional items is calculated by dividing profit attributable to equity shareholders of the parent company
before exceptional items by the weighted average number of shares in issue.
Earnings per share before exceptional items for the years ended 30 June 2024 and 30 June 2023 are set out in the table below:

| 2024 $ million | 2023 re-presented $ million
Profit attributable to equity shareholders of the parent company | 3,870 | 4,445
Exceptional operating and non-operating items | 14 | 402
Exceptional tax items and tax in respect of exceptional operating and non-operating items | 24 | (226)
Exceptional items attributable to non-controlling interests | 104 | (173)
Profit attributable to equity shareholders of the parent company before exceptional items | 4,012 | 4,448
Weighted average number of shares | million | million
Shares in issue excluding own shares | 2,234 | 2,264
Dilutive potential ordinary shares | 5 | 7
Diluted shares in issue excluding own shares | 2,239 | 2,271
| cents | re-presented cents
Basic earnings per share before exceptional items | 179.6 | 196.5
Diluted earnings per share before exceptional items | 179.2 | 195.9

Free cash flow
Free cash flow comprises the net cash flow from operating activities aggregated with the net cash expenditure paid for property, plant
and equipment and computer software that are included in net cash flow from investing activities.
The remaining components of net cash flow from investing activities that do not form part of free cash flow, as defined by the group’s
management, are in respect of the acquisition and sale of businesses and loans to associates and other investments that do not meet the
definition of cash and cash equivalents.
The group’s management regards a portion of the purchase and disposal of property, plant and equipment and computer software as
ultimately non-discretionary since ongoing investment in plant, machinery and technology is required to support the day-to-day
operations, whereas acquisition and sale of businesses are discretionary.
Where appropriate, separate explanations are given for the impacts of acquisition and sale of businesses, dividends paid and the
purchase of own shares, each of which arises from decisions that are independent from the running of the ongoing underlying
business.
The Directors and management have redefined free cash flow to exclude the adjustment for cash paid or received in respect of loans
and other investments. The group's management believes the redefined free cash flow definition is a more appropriate measure of the
ongoing cash generation of the group. The presentation of free cash flow for the year ended 30 June 2023 has been aligned to free cash
flow for the year ended 30 June 2024.
Free cash flow reconciliations for the years ended 30 June 2024 and 30 June 2023 are set out in the table below:

| 2024 $ million | 2023 re-presented $ million
Net cash inflow from operating activities | 4,105 | 3,636
Disposal of property, plant and equipment and computer software | 14 | 16
Purchase of property, plant and equipment and computer software | (1,510) | (1,417)
Free cash flow | 2,609 | 2,235

Unaudited financial information
316
Operating cash conversion
Operating cash conversion is calculated by dividing cash generated from operations excluding cash inflows and outflows in respect of
exceptional items, dividends received from associates, maturing inventories, provisions, other items and post-employment payments in
excess of the amount charged to operating profit by operating profit before depreciation, amortisation, impairment and exceptional
operating items.
The measure is excluding any hyperinflation adjustment above the organic treatment of hyperinflationary economies. The ratio is
stated at the budgeted exchange rates for the respective year and is expressed as a percentage.
Operating cash conversion for the years ended 30 June 2024 and 30 June 2023 were as follows:

| 2024 $ million | 2023 re-presented $ million
Profit for the year | 4,166 | 4,479
Taxation | 1,294 | 1,163
Share of after tax results of associates and joint ventures | (414) | (443)
Net finance charges | 885 | 712
Non-operating items | 70 | (364)
Operating profit | 6,001 | 5,547
Exceptional operating items | (56) | 766
Fair value remeasurements | (141) | (153)
Depreciation, amortisation and impairment(1) | 678 | 597
Hyperinflation adjustment | 6 | (33)
Retranslation to budgeted exchange rates | 248 | 512
| 6,736 | 7,236
Cash generated from operations | 6,065 | 5,744
Net exceptional cash paid(2) | 185 | 30
Post-employment payments less amounts included in operating profit(1) | 18 | 31
Net movement in maturing inventories(3) | 577 | 693
Provision movement | 29 | 81
Dividends received | (269) | (271)
Other items(1) | (88) | 17
Hyperinflation adjustment | (23) | (34)
Retranslation to budgeted exchange rates | 216 | 461
| 6,710 | 6,752
Operating cash conversion | 99.6% | 93.3%

(1) Excluding exceptional items.
(2) Exceptional cash payments in operating cash flow for various litigation matters were $102 million (2023 – $nil), for distribution termination fee was $55 million
(2023 – $nil), for the supply chain agility programme was $26 million (2023 – $14 million) and for winding down our Russian operations was $2 million (2023 – $16
million).
(3) Excluding non-cash movements such as exchange and the impact of acquisitions and disposals.
Business review (continued)
317
Return on average invested capital
Return on average invested capital is used by management to assess the return obtained from the group’s asset base and is calculated
to aid evaluation of the performance of the business.
The profit used in assessing the return on average invested capital reflects operating profit before exceptional items attributable to
equity shareholders of the parent company plus share of after tax results of associates and joint ventures after applying the tax rate
before exceptional items for the fiscal year. Average invested capital is calculated using the average derived from the consolidated
balance sheets at the beginning, middle and end of the year. Average capital employed comprises average net assets attributable to
equity shareholders of the parent company for the year, excluding net post-employment benefit assets/liabilities (net of deferred tax)
and average net borrowings.
The Directors and management have redefined the return on average invested capital to exclude the previous adjustment in respect of
average integration and restructuring costs (net of tax) and goodwill at 1 July 2004 from average invested capital. The presentation of
return on average invested capital for the year ended 30 June 2023 has been aligned with the year ended 30 June 2024.
Calculations for the return on average invested capital for the 30 June 2024 and 30 June 2023 are set out in the table below:

| 2024 $ million | 2023 re-presented $ million
Operating profit | 6,001 | 5,547
Exceptional operating items | (56) | 766
Profit before exceptional operating items attributable to non-controlling interests | (192) | (207)
Share of after tax results of associates and joint ventures | 414 | 443
Tax at the tax rate before exceptional ite ms of 23.2% (2023 – 23.0%) | (1,475) | (1,554)
| 4,692 | 4,995
Average net assets (excluding net post-employment benefit assets/liabilities) | 11,270 | 10,914
Average non-controlling interests | (1,941) | (2,001)
Average net borrowings | 20,361 | 18,297
Average invested capital | 29,690 | 27,210
Return on average invested capital | 15.8% | 18.4%

Business review (continued)
318
Adjusted net borrowings to adjusted EBITDA
Diageo manages its capital structure with the aim of achieving capital efficiency, providing flexibility to invest through the economic
cycle and giving efficient access to debt markets at attractive cost levels. The group regularly assesses its debt and equity capital levels
to enhance its capital structure by reviewing the ratio of adjusted net borrowings (net borrowings plus post-employment benefit
liabilities before tax) to adjusted EBITDA (earnings before exceptional operating items, non-operating items, interest, tax,
depreciation, amortisation and impairment).
Calculations for the ratio of adjusted net borrowings to adjusted EBITDA for the years ended 30 June 2024 and 30 June 2023 are set
out in the table below:

| 2024 $ million | 2023 re-presented $ million
Borrowings due within one year | 2,885 | 2,142
Borrowings due after one year | 18,616 | 18,649
Fair value of foreign currency derivatives and interest rate hedging instruments | 42 | 40
Lease liabilities | 604 | 564
Less: Cash and cash equivalents | (1,130) | (1,813)
Net borrowings | 21,017 | 19,582
Post-employment benefit liabilities before tax | 429 | 471
Adjusted net borrowings | 21,446 | 20,053
Profit for the year | 4,166 | 4,479
Taxation | 1,294 | 1,163
Net finance charges | 885 | 712
Depreciation, amortisation and impairment (excluding exceptional accelerated depreciation and impairment) | 678 | 597
Exceptional accelerated depreciation and impairment | (185) | 700
EBITDA | 6,838 | 7,651
Exceptional operating items (excluding accelerated depreciation and impairment) | 129 | 66
Non-operating items | 70 | (364)
Adjusted EBITDA | 7,037 | 7,353
Adjusted net borrowings to adjusted EBITDA | 3.0 | 2.7

Business review (continued)
319
Tax rate before exceptional items
Tax rate before exceptional items is calculated by dividing the total tax charge before tax charges and credits in respect of exceptional
items, by profit before taxation adjusted to exclude the impact of exceptional operating and non-operating items, expressed as a
percentage. The measure is used by management to assess the rate of tax applied to the group’s operations before tax on exceptional
items.
The tax rates from operations before exceptional and after exceptional items for the years ended 30 June 2024 and 30 June 2023 are
set out in the table below:

| 2024 $ million | 2023 re-presented $ million
Taxation on profit (a) | 1,294 | 1,163
Tax in respect of exceptional items | (24) | 158
Exceptional tax credit | — | 68
Tax before exceptional items (b) | 1,270 | 1,389
Profit before taxation (c) | 5,460 | 5,642
Non-operating items | 70 | (364)
Exceptional operating items | (56) | 766
Profit before taxation and exceptional items (d) | 5,474 | 6,044
Tax rate after exceptional items (a/c) | 23.7% | 20.6%
Tax rate before exceptional items (b/d) | 23.2% | 23.0%

Business review (continued)
320
Other definitions
Volume share is a brand’s retail volume expressed as a percentage of the retail volume of all brands in its segment. Value share is a
brand’s retail sales value expressed as a percentage of the retail sales value of all brands in its segment. Unless otherwise stated, share
refers to value share.
Net sales are sales less excise duties. Diageo incurs excise duties throughout the world. In the majority of countries, excise duties are
effectively a production tax which becomes payable when the product is removed from bonded premises and is not directly related to
the value of sales. It is generally not included as a separate item on external invoices; increases in excise duties are not always passed
on to the customer and where a customer fails to pay for a product received, the group cannot reclaim the excise duty. The group
therefore recognises excise duty as a cost to the group.
Price/mix is the number of percentage points difference between the organic movement in net sales and the organic movement in
volume. The difference arises because of changes in the composition of sales between higher and lower priced variants/markets or as
price changes are implemented.
Shipments comprise the volume of products sold to Diageo’s immediate (first tier) customers. Depletions are the estimated volume of
the onward sales made by Diageo's immediate customers. Both shipments and depletions are measured on an equivalent units basis.
References to emerging markets include Poland, Eastern Europe, Türkiye, Latin America and Caribbean, Africa and Asia Pacific
(excluding Australia, Korea and Japan).
References to ready to drink also include ready to serve products, such as pre-mixed cans in some markets.
References to beer include cider, flavoured malt beverages and some non-alcoholic products such as Malta Guinness.
The results of Hop House 13 Lager are included in the Guinness figures.
There is no industry-agreed definition for price tiers and for data providers such as IWSR, definitions can vary by market. Diageo
bases price tier definitions on a methodology that uses external metrics (including market pricing data from Nielsen, IRI etc., as well
as the IWSR segmentation) for benchmarking and internal pricing metrics for a consistent segmentation.
References to the disposal of the USL Popular brands include non-exhaustively the Haywards, Old Tavern, White Mischief, Honey
Bee, Green Label and Romanov brands.
References to the group include Diageo plc and its consolidated subsidiaries.
Business review (continued)
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Reporting boundaries and methodologies
The non-financial reporting boundaries and methodologies outlined here relate to the social and environmental performance
disclosures set out in the Annual Report and the ESG Reporting Index. Any exceptions, differences or deviations from or limitations
on these general reporting methodologies and boundaries are explicitly noted alongside the respective metrics in the subsequent tables
that follow.
General reporting methodology and boundaries, covering both non-environmental and environmental metric reporting
Our non-financial reporting presents relevant information that is based on the data available at the time of publication, while being
transparent about its limitations.
I. Reporting period
Our reporting covers the financial year ended 30 June 2024 unless indicated otherwise.
II. Scope
Unless stated otherwise(1), the scope of all non-financial data disclosed in the Annual Report and the ESG Reporting Index
encompasses the performance of Diageo plc's worldwide operations and its subsidiaries, along with the proportionate contribution of
results from significant joint ventures, associates and joint operations. Deviations from the reporting scope depend on the nature of
each performance metric and any differences are explained for each performance metric below.
We have defined reporting boundaries for those targets and metrics which are part of our ‘Spirit of Progress’ action plan, including
those under the banner “Doing Business the Right Way”. The reporting boundaries for all metrics and targets are based on the nature
of each indicator and, in the case of our greenhouse gas (GHG) emissions metrics, with reference to the Greenhouse Gas Protocol.
Environmental data and health and safety data is collected and reported for all operational sites and office sites with more than 50
employees where we have operational control ('direct operations')(2). The environmental impacts associated with leased facilities where
we do not have operational control or have less than 50 employees are excluded and considered immaterial to the company’s overall
impacts. The environmental and health and safety impacts associated with leased or third-party manufacturing units, where we have a
lease arrangement under International Financial Reporting Standards (IFRS), are excluded from our direct operations data.
1.Non-financial information, including baseline information, excludes the performance attributable to one of our business units
in Greater China due to local regulatory restrictions. We believe the exclusion of this data does not materially impact our
non-financial performance.
2.We define operational control using the definition of accounting standards for most of our ESG metrics. For greenhouse gas
emissions, our definition is aligned with the Greenhouse Gas Protocol. Any exceptions, limitations and judgements, including
around interpretation of the GHG protocol, are explained under each performance metric.
All company-owned vehicles, specifically all vehicles used and re-fuelled on Diageo’s premises, are included in direct operation
greenhouse gas emissions (Scope 1 and 2). The emissions associated with leased vehicles not under our control are included in our
indirect greenhouse gas emissions (Scope 3). In limited instances, Diageo has ownership of some benefit cars which are not used and
re-fuelled on Diageo operational sites. The emissions associated with these cars are included in our indirect greenhouse gas emissions
(Scope 3).
Net zero emissions are reached when anthropogenic (i.e. human-caused) emissions of greenhouse gases into the atmosphere are
balanced by anthropogenic removals over a specified period. A science based approach to net zero covers greenhouse gas emission
Scope 1, 2 and 3 with direct abatement of approximately 90% from our emissions baseline and up to 10% of high-quality certified
carbon offsets to neutralise hard-to-abate residual emissions to close the gap to zero.
‘Carbon neutral’ or ‘carbon neutrality’ refers to an outcome in which greenhouse gas emissions have been neutralised, through a
combination of emissions reduction efforts and the purchase of carbon offsets/credits, resulting in no net release of carbon dioxide.
Any carbon offset purchases for discrete carbon neutral claims are specifically for certification and are not included in annually
reported Diageo greenhouse gas emission footprint.
III. Baseline and targets
The financial year ended 30 June 2020 is our baseline year and applies to the majority of our ‘Spirit of Progress‘ ambitions. If a
different baseline year is used, this is described in the following pages. The baseline year is used as the basis for calculating progress
against our ambitions. We aim to achieve each ambition by fiscal 30, unless otherwise stated in the following pages.
Material changes to environmental reporting boundaries and methodologies are reviewed at 2030 grain-to-glass Strategic Business
Review meetings that are chaired by the President, Global Supply Chain & Procurement and Chief Sustainability Officer. The
Executive Working Group - a group that leads discussion on ESG topics and our 'Spirit of Progress' plan - also reviews material
changes to the reporting boundaries and methodologies on an annual basis.
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IV. Acquisitions, new sites and divestments
Acquisitions are included in the consolidated reporting for all metrics from the date when control transfers or as soon as practically
feasible and no later than one year after that date. This duration varies as each new acquisition has unique systems and processes that
must be integrated.
New sites or site extensions are included in the scope of all metrics from the date commissioning commences.
In the case of divestments, data associated with the divestment is removed from the baseline, intervening years and current year unless
otherwise stated in the following pages.
V. Restatements
We may restate prior years’ data due to structural changes in our operations, including from acquisitions and divestments;
improvements in data quality and calculation methods and material changes to relevant policies.
To determine whether we need to restate prior years’ data, we examine whether the qualitative or quantitative impacts of the changes
are material to the users of our reporting.
For a restatement of environmental data, we restate the data for the baseline year and intervening years.
In the case of our environmental data, we may restate prior years’ data to reflect updates to GHG emission factors, in line with the
GHG Protocol recommendations and for any changes in reporting policy that result in a change to the baseline of more than 1%. We
also restate prior years’ data where structural changes regarding outsourcing and insourcing have an impact of more than 1%. In
certain cases, where historical data is unavailable, the environmental impacts for the baseline year and intervening years are
extrapolated from current environmental impact data, based on production patterns and other relevant factors.
Any other restatement for all metrics is triggered by a benchmark threshold of 5%.
VI. Reliability and accuracy of data
We have systems, processes and controls that govern the collection, review and validation of non-financial data included in this report.
Reporting boundaries and methodologies are reviewed and updated where appropriate each year by leadership teams. We are
continually strengthening our data collection processes and underlying controls.
Whilst we seek to capture all information as accurately as possible, it is neither feasible nor practical to measure all data with absolute
certainty. Where we have made estimates or exercised judgement, this is highlighted within the reporting methodologies for each
indicator under ‘Limitations’.
Some of our listed subsidiaries also publish sustainability information either as standalone reports or as part of their annual report.
A non-exhaustive set of examples of this reporting are linked below:
•United Spirits Limited
•Sichuan Swellfun Co.,Ltd
•East African Breweries Ltd
•Guinness Nigeria plc
VII. Reporting systems
We use four main systems to collect, validate and analyse reported data.
•Human Resources data is reported at site level primarily using Workday, our global information management systems. HR
data is collected on a monthly basis for all Workday markets. Non-Workday markets data is manually captured offline. Both
Workday and non-Workday markets data are then consolidated.
•Health and Safety information for performance measures is collected locally, on a monthly basis, using site held incident
reports. This is collated and analysed using a web-based information management system.
•Environmental data is collected on key measures of environmental performance monthly at site and market level and
consolidated for group reporting monthly. Data is collated and analysed using a web-based environmental management
system.
•Market-level ‘Spirit of Progress‘ data: Where ‘Spirit of Progress‘ programmes are managed at a local level, data is collated
every quarter. The data is compiled at market, regional and global levels, alongside our other ‘Spirit of Progress‘ goals and is
reviewed by general managers, functional leadership teams, the 2030 grain-to-glass Strategic Business Review (SBR) and the
Executive Committee during quarterly meetings.
Scope and methodology of physical and transition climate risk scenario analysis reported on page
113-121.
Scenario analysis of physical risks
Important note on scenario analysis
Climate risk scenario analysis has limitations: it is not a predictor of the future and it is limited by the assumptions used, which
themselves are subject to uncertainty. No single scenario is likely to materialise and we are all likely to be exposed to both physical
and transition risks as the world continues to warm as a consequence of emissions already in the atmosphere. The pathway to reducing
emissions is also highly variable, as governments and industry pursue a variety of means, such as introducing regulation and
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developing new technologies. Nevertheless, scenario analysis is a powerful tool to understand how our business could be impacted
under certain plausible but severe future conditions and it allows us to understand where risks and opportunities are most likely to
materialise, to understand trends and to integrate these into our strategy.
Following the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we conducted scenario analysis
to determine the likely financial impact of the most important physical risks on our assets and operations. The physical risks we
identified of most importance were:
1.Water supply: Inability to produce brands due to constrained water supply as a result of drought caused by climate change.
2.Agricultural material supply: Increased cost of raw materials due to scarcity caused by changes in growing conditions caused by
climate change.
3.Site integrity: Inability to produce products, or damage to stored products due to acute weather events (floods or storms).
4.Disruption to agricultural material supply: Inability to receive agricultural materials due to acute weather events (floods or
storms).
Using available climate data and natural catastrophe-modelling techniques, our climate resilience partners calculated projected
Estimated Annual Losses (EALs) and Value at Risk (VaR) for the present day and two future time periods (2030 and 2050) under two
climate scenarios. For most climate variables, these climate scenarios include a ‘moderate’ emissions reduction pathway (RCP4.5 or
SSP245) and a ‘worst-case’ pathway (RCP 8.5 or SSP 585). The results were expressed as:
Present day and projected EALs driven by:
•The impact of drought, river floods and tropical windstorms on owned and third-party-operated production assets.
•The impact of floods and tropical windstorms on supplier assets (glass and cans).
and present day and projected VaR associated with:
•The exposure of production assets to water stress.
•The exposure of production and supplier assets to tropical windstorms.
A summary of the scope of our physical and transition risk assessments and scenario analysis

Timeframe | Short term (0-5yrs) | Medium term (2030) | Long term (2050)
Geography | All Diageo and key third-party operations in North America, Scotland (fiscal 21); India, Africa, Mexico and Türkiye (fiscal 22); Asia Pacific, Europe and Latin America and Caribbean (fiscal 23). In fiscal 24, we assessed a further 13 new acquisitions or important third-party sites to complete our assessment.
Risk types | Physical risks Water (availability, quality, temperature), temperature, flooding, landslide, wildfires, wind, humidity | Transition risks and opportunities
Temperature scenarios | +4 to +5ºC (extreme) RCP 8.5' | +2 to +3ºC (moderate) RCP 4.5' | 1.5ºC to 2ºC (Paris agreement) RCP 2.6'
Scope |  |  |  |  |  |
Raw materials 1,200+ suppliers' sites Key raw materials* (wheat, barley, maize, cane and beet sugar, vanilla, aniseed, grapes, broken rice, sorghum, agave, dairy, hops) *+4 to +5ºC scenario only | Processing Approximately 250 Diageo and third-party operations sites Detailed assessments of 39 sites | Distribution Key road, rail routes Key sea ports (69) | Risks reviewed Policy and legal risks Technology risks Market risks Reputation risks | Opportunities Resource efficiency Energy source Products and services Markets
Scenario analysis Energy Transport Packaging Raw materials | Scenario analysis Pack weight reduction Circular offerings

Scenario analysis of transition risks
Over fiscal years 21-24, we conducted scenario analyses of the impact on our financial performance of transition risks, stemming from
a Paris-aligned scenario. Our modelling is based on a successful transition to a low-carbon economy to limit the temperature rise to
1-2⁰C by 2100 and assumes a variety of decarbonisation challenges and opportunities relating to ingredients, energy, packaging and
transport costs and changes in demand for our products (to 2030 and 2050). Over the course of several years, we have refined the
model and incorporated data relating to our entire business, including production volume, sales, raw materials and packaging costs and
projected growth rates by category and market, to inform future scenarios.
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In modelling the financial impact of a successful transition to a low-carbon economy, we considered two scenarios:
1.A baseline scenario which incorporates stated policies and national targets that are already in place and have detailed measures for
their realisation; and
2.A transition scenario that assumes the world successfully reaches net zero emissions by 2050. This scenario considers necessary
changes in the global energy sector and associated changes across all other sectors of the economy that can reasonably be
modelled.
Both scenarios rely on a combination of internal assumptions (e.g. production costs, sales and margin growth rates, product mix, etc.)
and external factors (e.g. carbon pricing, increased green energy production and decarbonisation of industry). External models
available from the International Energy Agency, the Intergovernmental Panel on Climate Change and other institutions were
supplemented where necessary by our expert partners' internal models. Together, these models gave us a range of plausible
assumptions designed to capture a trajectory of changes in demand, costs, prices, regulation, technology and capital investments in
relevant markets and business segments, that could result in the world achieving net zero emissions by 2050. We looked at how
combinations of these changes might affect us both positively (increased demand for sustainable products) and negatively (higher
costs) and estimated the combined effect on our cash flow to both 2030 and 2050. Outlined in the table below are the materials that
most affect our input costs, which may go up or down depending on the situation. We have modelled costs based on our exposure to
global versus local changes; for example, glass and aluminium are procured globally, while the cost of energy, for example, is local.
For each scenario, we then estimated the prices of major input costs, where relevant by geography and modelled the impact they
would have on our operating profit.
Input costs assessed in the scenario analysis by geography

Region | Global | United Kingdom | United States | Canada | Mexico | Türkiye | India | Africa | Asia Pacific | LAC | Ireland
Glass | l |  |  |  |  |  |  |  |  |  |
Aluminium | l |  |  |  |  |  |  |  |  |  |
Land transport | l |  |  |  |  |  |  |  |  |  |
Ocean transport | l |  |  |  |  |  |  |  |  |  |
Energy |  | l | l | l | l | l | l | l | l | l |
Electricity |  | l | l | l | l | l | l | l | l | l |
Raw materials: |  |  |  |  |  |  |  |  |  |  |
Barley | l |  |  |  |  |  |  |  |  |  |
Wheat | l |  |  |  |  |  |  |  |  |  |
Maize | l |  |  |  |  |  |  |  |  |  |
Rice | l |  |  |  |  |  |  |  |  |  |
Sorghum | l |  |  |  |  |  |  |  |  |  |
Sugar | l |  |  |  |  |  |  |  |  |  |
Vanilla |  |  |  |  |  |  |  | l |  |  |
Aniseed |  |  |  |  |  | l |  |  |  |  |
Agave |  |  |  |  | l |  |  |  |  |  |
Grapes |  |  |  |  |  | l |  |  |  |  |
Hops | l |  |  |  |  |  |  |  |  |  |
Dairy |  |  |  |  |  |  |  |  |  |  | l

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Promote positive drinking

Target | Scale up our SMASHED partnership and educate 10 million young people, parents and teachers on the dangers of underage drinking
Performance measures | •Number of people educated on the dangers of underage drinking through a Diageo-supported education programme •Number of people who confirmed changed attitudes on the dangers of underage drinking following participation in a Diageo-supported education programme
Definition | SMASHED is our flagship underage drinking programme, developed and delivered in partnership with Collingwood Learning (Collingwood) and sponsored by Diageo. Our SMASHED partnership aims to change attitudes to underage drinking through live theatre performances, workshops and interactive online learning experiences. Live: A live or virtual theatre performance in schools or other community setting, with interactive workshops for students, resources for teachers and parents, and comprehensive evaluations. Online: An innovative and engaging e-learning course, telling the SMASHED story through film clips, with interactive learning tools, student assessment and teacher support. Offline: SMASHED Online programme can also be delivered offline through PowerPoint and film clips. People educated: Target age group (10-17), who have participated in the live or online learning experience. Completions for online are counted only on course completion, and live completion is counted when the individuals, as recorded by the teacher, have completed the session, which is then confirmed by the local delivery partner. Changed attitudes: A young person who confirmed a changed attitude is someone who responds to the post- survey question by stating that they are less likely to drink underage. This is supported by evidenced progression through pre- and post-performance surveys against all other learning outcomes, with the ‘less likely to drink underage’ results as the core indicator.
Reporting period | 1 June to 31 May. The complexity of gathering data from hundreds of schools globally with different academic years means there is a lag in reporting information from our live programmes. Each financial year we include data from 1 June to 31 May. The baseline year for the reporting of cumulative progress is our financial year ended 30 June 2018.
Scope exception | When SMASHED is delivered by a third party and is partially funded by Diageo, we only claim the proportion of people educated that our funding contributes to.

Target (continued) | Scale up our SMASHED partnership and educate 10 million young people, parents and teachers on the dangers of underage drinking
Data preparation and measurement | The number of people educated is supplied by in-country delivery partners to Collingwood through teachers and online records. We have assumed that teachers are an impartial and accurate provider of student numbers, with clear knowledge of the groups allocated to SMASHED. We have also assumed that students participating in SMASHED live and online have adequate literacy skills to understand and complete written evaluation forms. SMASHED Live operates pre- and post-evaluation surveys of the target audience of young learners. The following sampling criteria have been established to measure attitude change: •Assess at least 20% of programme participants through pre- and post-evaluation surveys. •The participants that make the 20% sample must be selected randomly. •If the sample is less than 200 people, the same participants must take the pre- and post-evaluation surveys. The number of people who confirmed changed attitude is calculated by projecting the results of the survey, for those who have confirmed in the post-survey question that they are less likely to drink underage, to the total number of people educated for the events run. From September 2022, where an audience numbers over 500 students in one session, we categorised these as ‘large scale special events’. Where large scale events were run if there are a sufficient number of facilitators (ratio 1:200 students) then the full number of people educated were included. If the number of facilitators present is below this ratio, then the number of people in attendance were capped at the large-scale event number. From October 2023, we extended capping of our participants to a 1:200 teacher to student ratio across all sizes of events and formats. This enhancement balances the need for large gathering programme delivery with maintaining impactful instruction and participation. The data, alongside supporting evidence is supplied by delivery partners and then consolidated and reviewed by Collingwood before being shared with Diageo for review and reporting.

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Limitations | We consider double counting to be highly unlikely, given the SMASHED activity is only delivered once to any audience within the curricular requirements for the year and our delivery partners also ensure additional quality measures, which are detailed below. No unique personal identifiers are collected, for data privacy reasons. •Where two programmes are available, we mitigate the risk of duplication by offering programmes strategically to different school areas. •Our delivering markets self-declare duplication risks proactively. These self-reported risks of duplication have been omitted from reported figures. •We request all markets document steps they take to avoid duplication of audience participation year- on-year with an annual deduplication statement. Output from these statements provide a tailored, specific, and culturally appropriate approach to avoiding double counting. •We have assumed that the number of students expected to either repeat a year group or change secondary schools is negligible, based on the most recent statistics from third parties.
Target | Extend our UNITAR partnership, and promote changes in attitudes to drink driving, reaching five million people by 2030
Performance measure | Number of people educated about the dangers of drink driving
Definition | Our Wrong Side of the Road (WSOTR) digital learning resource with the United Nations Institute for Training and Research (UNITAR), primarily delivered online, is designed to help people understand the consequences of drink driving by listening to the repercussions for people who decided to get behind the wheel after drinking. All stories shared via WSOTR are real and aim to help prevent other people from making the same mistakes. The purpose is to show the effects that this decision can have on the individual and the people around them, helping viewers to consider what would happen if they were in a similar situation. We have also introduced a pilot programme called Sober versus Drink Driving. This is a gamification approach to educating people about how alcohol impacts core driving skills. The intention is to demonstrate how drinking impacts their ability to control the vehicle. We have initiated a trial in six markets and also in one of our brand homes, the Guinness Storehouse in St. James’ Gate, Dublin. People educated: Any individual who completes the WSOTR training or Sober versus Drink Driving. Completions for online or in person training are only counted on course completion. Adaptations of the programmes are only made for language translation.
Scope exception | For programmes that are partially funded by Diageo, we only claim the proportion of people educated that our funding contributes to.
Reporting period | 1 July to 30 June. Our baseline year is fiscal 22.
Data preparation and measurement | Data preparation depends on the format of the training. For online trainings, completions are reported daily based on Diageo’s own system or via third parties who must provide back-up data. For offline trainings, data is reported quarterly and reviewed by the Diageo global team.
Limitation | -

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Governance and ethics

Performance measure | Code of Business Conduct mandatory training
Definition | Annually, we request all Diageo employees to complete the Code of Business Conduct e-learning. This requires employees to confirm their commitment to their compliance and ethics accountabilities, and certify that they have read, understood, and complied with our Code of Business Conduct and supporting global policies.
Scope exception | Employees on long-term leave e.g. family leave, sickness leave.
Data preparation and measurement | We deliver the Code of Business Conduct e-learning through our global online training tool, Diageo My Learning Hub, which holds participation and completion records for the course. Participation and completion records are reported to market and function leadership teams and reviewed by Business Integrity leads.
Limitation | -

Performance measure | Reported and substantiated breaches
Definition | Reported breaches are potential breaches of our Code of Business Conduct, policies or standards made known to the business, either via our SpeakUp service or brought to our attention internally. Substantiated breaches are those reports that ultimately result in sufficient evidence being gathered to support the concern raised and if dismissal occurred, these employees would be recorded as a Code-related leaver.
Scope exception | -
Data preparation and measurement | We restate the number of substantiated breaches and Code-related leavers from previous years to include the outcomes of those reports made in one financial year, but for which the investigation and any associated disciplinary actions are not closed until the following financial year. This enables us to make a full and accurate year-on-year comparison.
Limitation | -

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Our people
Health and safety

Performance measure | Lost-time accident frequency rate (LTAFR)
Definition | LTAFR is the number of lost time accidents (LTAs) for employees and contractors who work under Diageo’s direct supervision. The calculation is based on actual working hours and is expressed as a rate per 1,000 full-time equivalent (Occupational Health and Safety (OH&S) FTE). OH&S FTE differs from our employee based FTE; it includes contractors. Direct supervision exists when Diageo directly defines the contractors’ deliverables and the methods and processes by which the work is performed. We define an LTA as any work-related incident resulting in injury or illness, where a healthcare professional or Diageo recommends one or more full days away from work, or where a job restriction or modification prevents the employee from conducting their routine tasks and activities and from working a full shift. We consider an injury or illness to be work-related when an event or exposure in the work environment (including people working at home) either caused or contributed to the resulting condition, or significantly aggravated a medically documented and treated pre-existing injury or illness.
Scope exception | If the injured person did not report the accident on the same shift to their immediate line manager and/or Diageo point of contact, this accident is not in scope as work-related.
Data preparation and measurement | We collect and report safety data for all locations (manufacturing, corporate office, remote commercial and remote home working) where we have operational control, including all office sites. Each month, locations are required to collate and submit details associated with all incidents, accidents and LTAs, as well as OH&S FTE data for their site. Contractor agencies provide data on the hours worked by each contractor under Diageo’s direct supervision. This is then combined with Diageo employee data to calculate the total OH&S FTE data for the month. Data is submitted by locations onto our global reporting platform on a monthly basis.
Limitation | We do not report LTAFR for independent contractors because of the difficulty and administrative burden in accurately recording headcount.

Performance measure | Total recordable accident frequency rate (TRAFR)
Definition | TRAFR includes all work-related fatalities, lost time accidents and medical treatment cases for Diageo employees wherever they carry out their work-related activities. It includes fatalities and lost time accidents for all contractors (not only those under our direct supervision) and outsourced service providers while on Diageo premises. It also includes medical treatment cases for all site-based contractors. The calculation is based on actual working hours and is expressed as a rate per 1,000 OH&S workers. Definition for ‘Injury or illness’ as under LTAFR.
Scope exception | The exception is the same as under LTAFR. Working hours are excluded from the calculation for contractors visiting Diageo premises for a short period of time.
Data preparation and measurement | The data preparation is the same as LTAFR.
Limitation | We do not report medical treatment cases for contractors visiting Diageo premises on a temporary basis.

Performance measure | Number of fatalities
Definition | A fatality includes any work-related fatality of an employee or contractor under our direct supervision in their day-to- day work environment (on or off our premises), or any work-related fatality suffered by an outsourced service provider or contractor not under our direct supervision while on our premises. We consider a fatality to be work-related when an event or exposure in the work environment (including people working at home) either caused or contributed to the event.
Scope exception | -
Data preparation and measurement | The data preparation is the same as LTAFR.
Limitation | -

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Performance measure | Lost-time injury frequency rate (LTIFR)
Definition | Lost-time injury frequency rate (LTIFR) is a standard Occupational Safety and Health Administration (OSHA) metric that measures the number of lost-time injuries occurring in a workplace per one million hours worked.
Scope exception | The scope exception is the same as LTAFR.
Data preparation and measurement | The data preparation is the same as LTAFR.
Limitation | We do not report LTIFR for independent contractors because of the difficulty and administrative burden in accurately recording headcount.

Performance measure | Lost-time injury rate (LTIR)
Definition | LTIR is a standard OSHA metric that calculates the number of lost-time injuries occurring in a workplace per 200,000 hours worked.
Scope exception | The scope exception is the same as LTAFR.
Data preparation and measurement | The data preparation is the same as LTAFR.
Limitation | We do not report LTIR for independent contractors because of the difficulty and administrative burden in accurately recording headcount.

Performance measure | Employee Engagement Index
Definition | The Employee Engagement Index is calculated as the percentage of respondents who answer positively to three questions in our Your Voice survey: I am proud to work for Diageo; I would recommend Diageo as a great place to work; I am extremely satisfied with Diageo as a place to work.
Scope exception | Contractors and employees on long-term leave are excluded.
Reporting period | The data was collected between 2 and 26 April 2024, so the results are based on feedback from participants in that particular window.
Data preparation and measurement | The index is calculated from an anonymous annual survey run by an independent third-party.
Limitation | -

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| Employee profile data
Performance measures | Average number of employees by region by gender | Average number of employees by role by gender
Definition | Employees on a full-time equivalent basis who are directly employed by Diageo have been allocated to the region in which they reside. | Employees on a full-time equivalent basis who are directly employed by Diageo have been allocated to the role in which they occupy. We define Executive as a member of the Executive Committee; senior manager (Senior Leaders, Level 2 and Level 3) as those in top leadership positions excluding Executive Committee members; line manager as all Diageo employees (excluding Executive Committee and senior managers) with one or more direct reports; and supervised employee as all remaining Diageo employees who have no direct reports.
Scope exception | All Diageo employees on a full-time equivalent basis are in scope for this performance measure. However, people data from joint ventures and associates where Diageo does not have operational control are not included. | All Diageo employees are in scope for this performance measure. However, people data from joint ventures and associates where Diageo does not have operational control are not included.
Data preparation and measurement | Total employee data comprises our average number of FTE employees across 12 months. The average is calculated based on the FTE numbers from the last day of each month over the past year. Employee type includes Regular, Graduates and Fixed Term Contract (FTC) across all markets. | Total employee data comprises our average number of FTE employees across 12 months except Executives, which are reported as of 30 June 2024 because of the small population size. The average is calculated based on the FTE numbers from the last day of each month over the past year. Employee type includes Regular, Graduates and Fixed Term Contract (FTC) across all markets.
Limitations | Joint operations are included but, where Diageo does not have operational control, only high-level regional data is available. Markets where our global HR system, Workday, is not in place are reliant on manual data collection or, in some cases, we may not be able to obtain data. Data on family leave is only available for markets where we have implemented our global HR system, Workday. | Joint operations are included but, where Diageo does not have operational control, only high-level regional data is available. Markets where our global HR system, Workday, is not in place are reliant on manual data collection or, in some cases, we may not be able to obtain data. Data on family leave is only available for markets where we have implemented our global HR system, Workday.

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Champion inclusion and diversity

Ambition | Champion gender diversity, with an ambition to achieve 50% representation of women in leadership roles by 2030
Performance measure | Percentage of female leaders globally
Definition | Leadership roles comprise Executive Committee members (Exec), Senior Leaders (SL), Level 2 (L2) and Level 3 (L3) roles, some of which will be vacant at any point in time. Employee type includes those on regular and fixed-term contracts. Gender data is disclosed by employees themselves on a voluntary basis on our online Human Resources system (Workday).
Scope exception | Non-Executive Directors and extended workers (agency workers, independent contractors, freelancers and consultants) are not in scope, nor are joint ventures, joint operations not managed by Diageo or associates where Diageo does not have operational control.
Data preparation and measurement | The performance measure is calculated as the average of filled leadership roles at the end of each of the four quarters across the fiscal year. The total leadership population is calculated from markets that collect gender information through Workday, enabling all employees in scope to self-disclose this information.
Limitation | Where employees have chosen not to declare their gender, this information is excluded from the gender representation data.

Ambition | Champion ethnic diversity with an ambition to increase representation of leaders from ethnically diverse backgrounds to 45% by 2030
Performance measure | Percentage of ethnically diverse leaders globally
Definition | Leadership roles comprise Executive Committee members (Exec), Senior Leaders (SL), Level 2 (L2) and Level 3 (L3) roles, some of which will be vacant at any point in time. Employee type includes those on regular and fixed-term contracts. We define ethnically diverse as those ethnic groups who are, or were historically, systematically under- represented, disenfranchised and/or economically excluded. Ethnically diverse people can be a majority or a minority in a country. We determined eight categories of ethnicity, considering Diageo’s market footprint, historic underrepresentation and alignment across regions: Asian, Black, Hispanic/Latin American, Indian, Indigenous, Middle Eastern and Turkish, Mixed and Other Ethnic Groups. Based on a third-party study commissioned by Diageo, ‘Hispanic/Latin American’ is adopted as a term to categorise all people originating from the Latin America and Caribbean (LAC) region, including both indigenous and historically migrant populations. For the purposes of this data gathering exercise, all employees identifying as White with a LAC nationality have been recorded as Hispanic/Latin American.
Scope exception | Non-Executive Directors and extended workers (agency workers, independent contractors, freelancers and consultants) are not in scope, nor are joint ventures, joint operations not managed by Diageo or associates where Diageo does not have operational control. While Workday is live across all geographies in which leaders are based, ethnicity data collection is not legally available in Denmark, France, Italy, Portugal, Spain and Sweden. Any leaders based in these locations are not in scope.
Data preparation and measurement | The performance target is calculated as the average of filled leadership roles at the end of each of the four quarters across the fiscal year. Ethnicity is selected by individuals within the leadership population from a pre-defined list that encompasses those ethnic types most readily seen within the specific country, based on local census and governmental data. Ethnicity data is disclosed by employees on a voluntary basis on Workday. The relevant ethnicity fields are based on the country in which the individual is employed to ensure all are culturally relevant. Employees based in India are not able to submit ethnicity data through Workday due to cultural sensitivities. Nationality is obtained by the local HR team through official identification documents during the onboarding process. For India-based employees not of Indian nationality, the local HR director confirms their ethnicity through a confidential conversation with the individual. Non-LAC nationals are mapped to their identified ethnicity.
Limitation | Employees who declined to self-identify or have not disclosed their ethnicity are not counted as ethnically diverse.

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Ambition | Provide business and hospitality skills to 200,000 people, increasing employability and improving livelihoods through Learning for Life and our other skills programmes
Performance measure | Number of people reached through Learning for Life and other skills programmes
Definition | Our hospitality skills training programmes, including Learning for Life, aim to increase participants’ employability, improve livelihoods and support a thriving hospitality sector. Our entrepreneurship programmes provide business skills related to Diageo’s activities with the aim of supporting participants to start their own business. Our training courses are delivered in different ways: physical, live online sessions or via e-learning. Our training curriculums includes technical skills, life skills, sustainability and inclusion and diversity. People reached through Learning for Life: Participants are counted when an individual successfully completes the curriculum, evidenced by either online training system records or classroom records.
Scope exception | Only markets running business and hospitality programmes are in scope.
Data preparation and measurement | We collate the number of beneficiaries of Learning for Life and other skills programmes through participant programme completion records (collected face-to-face or via our online training systems) maintained by Diageo programme managers or third-party delivery partners.
Limitations | Accuracy relies on the quality of data provided by our third-party delivery partners. For entrepreneurship programmes to be included, the metric owner applies judgment in determining whether the initiatives are appropriate to be included under the definition of providing business or hospitality skills related to our value chain. Third-party delivery partners avoid double counting through checking the name of the participants on programme registration forms in the case of physical trainings or using unique identifiers for online trainings and e-learnings. Even with these procedures, there remains a limited risk of double counting which we will be addressing through increased controls in the future.

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Pioneer grain-to-glass sustainability
Preserve water for life

Target | Reduce water use in our operations with a 40% improvement in water use efficiency in water- stressed areas and a 30% improvement across the company
Performance measures | •Water efficiency index - water-stressed areas •Water efficiency index - across the company
Additional performance measures | Percentage change in water efficiency index from the prior year and from the baseline Note: This metric is used in all new Long Term Incentive Plans awarded from fiscal 24 onwards.
Definition | We prepare and report water withdrawal (use) using internally developed reporting methodologies based on the GRI Standards. Water withdrawal (use) includes water obtained from ground water, surface water, mains supply and water delivered to the site by tanker, less any clean water provided directly from a site to local communities. Also excluded from reported water withdrawal data is uncontaminated water abstracted and returned to the same source under local consent, water abstracted from the sea and rainwater collection. Water efficiency for distillation is measured as water use per litre of pure alcohol (LPA) distilled for finished products only. Water efficiency for brewing and packaging is measured as water use per litre packaged. When preparing the water efficiency index, the change in water efficiency for distillation and the change in water efficiency for brewing and packaging are weighted by the proportion of water used (m 3) by all sites in each production type relative to the total water use, and added together. This is then compared to the baseline and prior year. For water-stressed only: We classify a site as in water-stressed areas if the site is in a location which meets the definition of ‘water-stressed’, which is identified through a combination of sources, including the World Resources Institute (WRI) Aqueduct tool, UN definitions, internal water risk survey information and external reviews by independent hydrologists. An assessment to identify our sites located in water-stressed areas is completed every two years. We include any new-build or acquired sites and exclude any sites divested. All sites identified as water-stressed up until the 2025 water risk assessment will be included in the scope of our current 2030 water efficiency commitment for water-stressed areas. Newly classified water-stressed sites are retrospectively applied to the fiscal 20 baseline, including the water use and distilled, brewed or packaged production volumes. Similarly, sites reclassified as no longer water-stressed are removed from the fiscal 20 baseline. This approach ensures consistency in tracking performance, versus the more stretching target of 40% improvement for water-stressed sites. For reference, the water efficiency index formula is: 100 – (((% Change in Water efficiency, l/l distilled*% of water withdrawals for distillation) + (% Change in Water efficiency, l/l brewing and packaging*% of water withdrawals for brewing and packaging))*100).
Scope exception | The volume of water used on land under our operational control in Mexico and Türkiye is reported separately from water used in our direct operations and not included in our water efficiency calculations.
Data preparation and measurement | Water withdrawal (use) is measured primarily from meter readings and invoices. In limited cases, estimates are used. Distilled, brewed and packaged production volumes are based on production records. All sites (including offices, warehouses, maltings, etc.) are mapped to either distillation or brewing and packaging, based on their prevailing production type. This mapping is reviewed annually and applied in determining the: •water use distillation (m 3); •water use brewing and packaging, (m 3); •proportion of total water abstracted for each production type (%); and •water efficiency for distillation (l/LPA) and brewing and packaging, (l/l). Water efficiency index performance is attributed to the prevailing production type and excludes the production from the secondary production process in the calculations (e.g. a site with distillation and packaging processes allocated to distillation only considers the distilled production and excludes the packaged production in the calculations). We measure water withdrawal (use), litres of pure alcohol and litres of packaged product by site and aggregate them at the production type level.
Limitation | In limited cases (e.g. failure or malfunction of water meters), estimates are used for water withdrawals.

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Target | Reduce water use in our operations with a 40% improvement in water use efficiency in water- stressed areas and a 30% improvement across the company
Performance measure | •Water use efficiency per litre of product packaged (Litres/Litre) - across the company •Water use efficiency per litre of product packaged (Litres/Litre) - water-stressed areas
Additional performance measure | Percentage improvement in litres of water used per litre of product packaged from the prior year and from the baseline. Note: This metric is used in Long Term Incentive Plans for those awarded prior to fiscal 24.
Definition | We prepare and report water withdrawal (use) using internally developed reporting methodologies based on the GRI Standards. Water withdrawal includes water obtained from ground water, surface water, mains supply and water delivered to the site by tanker, less any clean water provided back to local communities directly from a site. Uncontaminated water abstracted and returned to the same source under local consent, water abstracted from the sea and rainwater collection, are excluded from reported water withdrawal data. For water-stressed only: We classify a site as in water-stressed areas if the site is in a location which meets the definition of ‘water-stressed’ which is identified through a combination of sources, including the World Resources Institute (WRI) Aqueduct tool, UN definitions, internal water risk survey information and external reviews by independent hydrologists. An assessment to identify our sites located in water-stressed areas is completed approximately every two years. We include any new-build or acquired sites and exclude any sites divested. All sites identified as water-stressed up until the 2025 water risk assessment will be included in the scope of our current 2030 water efficiency commitment for water-stressed areas. Newly classified water-stressed sites are retrospectively applied to the fiscal 20 baseline, including the water use and packaged volumes. Similarly, sites reclassified as no longer water-stressed are removed from the fiscal 20 baseline. This approach ensures consistency in tracking performance, versus the more stretching target of 40% improvement for water stressed sites.
Scope exception | The volume of water used on land under our operational control in Mexico and Türkiye is reported separately from water used in our direct operations and not included in our water efficiency calculations.
Data preparation and measurement | Water withdrawal (use) is measured primarily from meter readings and invoices. In limited cases, estimates are used. Water efficiency per litre of packaged product is calculated by dividing total water withdrawal by the total packaged volume. We use litres of packaged product as the measure for comparison, because this indicates how much water has been used relative to the amount of finished product that has been packaged. We measure litres of packaged product by site and aggregate them at group level.
Limitation | In limited cases (e.g. failure or malfunction of water meters), estimates are used for water withdrawals.

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Target | Replenish more water than we use for our operations for all of our sites in water-stressed areas by 2026
Performance measures | Annual volumetric replenishment capacity of projects developed (m3) Cumulative volumetric replenishment capacity of projects developed from fiscal 16 to fiscal 24
Definition | Our ambition is to replenish more water than we use in sites at our defined water-stressed areas, based on 2026 projected production volume. Our definition of replenishment (or volumetric water benefit) is aligned with the World Resources Institute’s (WRI) definition. Replenishment activities beneficially modify the hydrology and address shared water challenges and improve water stewardship outcomes. We classify areas as water-stressed if our site is in a location which meets the definition of ‘water-stressed’ through a combination of sources, including the World Resources Institute (WRI) Aqueduct tool (at the Minor Basin level), UN definitions, internal water risk survey information and external reviews by independent hydrologists. An assessment to identify our sites located in water-stressed areas is completed approximately every two years. We include any new-build or acquired sites and exclude any sites divested. Newly classified water-stressed sites are subsequently included in our ambition. Similarly, sites reclassified as no longer water-stressed are removed from the ambition. This approach ensures consistency in tracking performance versus our projected volumes for water-stressed sites which we expect will be in production in fiscal 26. To be considered within the annual volumetric replenishment capacity, replenishment projects need to be in a relevant water-stressed area (e.g. a site’s water basin and/or water-stressed water basins from which we source local raw materials).
Scope exception | As the target date for the water replenishment programme is fiscal 26, any newly identified sites in water- stressed areas in our fiscal 25 water risk assessment will be out of scope for the replenishment programme. Any site located in a water-stressed area using under 1000 m3 of water is considered de minimis and out of scope.
Reporting period | The complexity of gathering data from different project partners means there is a lag in reporting information our projects. Each financial year we include data from 1 June to 31 May. The baseline year is fiscal 16.
Data preparation and measurement | The methodology for calculating the volume of water replenished is based on the WRI’s ‘Volumetric Water Benefit Accounting: A Method For Implementing and Valuing Water Stewardship Activities (2019)’, which informs the Diageo Water Replenishment Programme Technical Protocol 2021. Replenishment capacity created by replenishment projects is calculated using Diageo’s Water Replenishment Programme Technical Protocol 2021. The Diageo Water Replenishment Implementation Guide 2022 provides instructions for markets on how to implement the Technical Protocol. The Water Replenishment Implementation Guide and Technical Protocol are reviewed on an as-needed basis. Implementation partners are appointed in our water-stressed areas based on their expertise in particular project types which based on the risk assessments and consultations with local communities, NGOs and authorities, we believe will deliver the most impact. These implementation partners are responsible for project delivery. Data required to calculate the indicative volume of water replenished is collected by the project’s implementation partner. An estimate of volumes is made at the inception of the project, and then validated when the project becomes operational. This data is then validated by an external validator and confirmed by the Diageo Head of Environment. All current year validated replenished volumes are summed together across all projects, which is the annual replenishment volumetric capacity added in the year. The current year annual replenishment volumetric figure (in m 3) is then added to previous volumetric figures, net of any volumes which represent over delivery at any of our water stressed sites to arrive at a cumulative replenishment volumetric total since 2020. This amount is compared to projected fiscal 26 water usage. The estimated site water usage for fiscal 26 is restated every year to reflect latest estimates and previous fiscal actuals. When projects are delivered by a third party and partially funded by Diageo, to avoid double counting, we only claim the proportion of volumetric capacity attributable to Diageo.
Limitation | Our cumulative replenishment figure includes historic projects where natural changes in the amount of water replenished can occur over time. We reassess these projects using a risk-based approach, testing that the projects continue to deliver the replenishment capacity which was validated at the commissioning phase. Where there are significant changes (greater than 5%) of original replenishment capacity, this is updated in the current year cumulative figure.

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Target | Engage in collective action in all of our priority water basins to improve water accessibility, availability and quality and contribute to a net positive water impact
Performance measure | Percentage of priority water basins with collective action participation
Definition | We identify priority water basins by using a Diageo criticality assessment (based on expert judgement and water consumption volumes) and by those facing high water risk, according to the WRI Aqueduct tool. We select these basins, where Diageo sites are located, as we believe they would benefit most from Diageo participating in collective action to address shared water challenges. Water collective action incorporates multi-stakeholder water stewardship initiatives and/or projects that include partnership with government entities, local communities, NGOs, civil society organisations and other stakeholders in the basin. The way we engage in collective action is dependent on what is required from the different initiatives that we are involved in. Our main role is usually the contribution of funds and strategic input but we also play additional roles to deliver effective collective action. The roles include, but are not limited to, financing projects, convening stakeholders to join existing or to start new initiatives, basin and project modelling, project implementation, catchment monitoring and evaluation, policy and regulatory engagement, water advocacy, institutional capacity building and/or training. We also contribute to the global development of guidance and models for best practice, multi-stakeholder collective action.
Scope exception | This metric only includes our priority water basins as defined above. Where collective action activity is deemed to be minimal, we do not count this activity as collective action engagement in that priority water basin.
Data preparation and measurement | Evidence of collective action participation in priority water basins is collected at the country level and reviewed by the Diageo global metric owner.
Limitation | Judgment is applied when determining what is considered to be greater than minimal collective action engagement. The action we engage in are multi-stakeholder and multi-year; impact is measured over time. We reflect on the collective impact, and our individual contributions in making the judgment that our engagements were greater than a minimal threshold.

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Accelerating to a low-carbon world

Target | Become net zero carbon in our direct operations (Scope 1 and 2)
Performance measures | •Percentage change in absolute greenhouse gas emissions (direct and indirect greenhouse gas emissions by weight (market/net based)) from the prior year and the fiscal 2020 year baseline •Direct greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO 2 e) •Indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO 2 e) •Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO 2 e) •Market based (net) intensity ratio of GHG emissions (grams CO 2 e per litre of packaged product) •Direct greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO 2 e) •Indirect greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO 2 e) •Total direct and indirect greenhouse gas emissions by weight (location/gross based) (1,000 tonnes CO 2 e) •Location based (gross intensity) ratio of GHG emissions (grams CO 2 e per litre of packaged product)
Definition | Scope 1 and 2 greenhouse gas emissions are presented as the absolute greenhouse gas emissions (Direct – Scope 1 emissions from on-site energy consumption of fuel sources and Indirect – Scope 2 emissions from purchased electricity and heat) in 1,000 tonnes CO 2 e using market-based and location-based reporting methodologies. Market-based and location-based greenhouse gas emission intensity ratio is calculated as grammes per CO 2 e per litre, using direct operations packaged product volume in litres.
Scope exception | We exclude minor quantities of Scope 1 greenhouse gas emissions up to 0.5% of a site’s emissions, to a maximum of 50 tonnes CO 2 e per emission source, as well as the greenhouse gas emissions associated with biogas flaring, since they are determined to be immaterial to our overall impacts. Biological/biogenic CO 2 emissions from the combustion of bioenergy and from direct operations processes such as fermentation to create alcohol, are outside of scope and are reported separately. However, bioenergy CO 2 e emissions associated with methane and nitrous oxides that are not absorbed in bioenergy feedstock growth, are included in Scope 1 emissions. We do not include carbon offsets or credits in the Scope 1 and 2 GHG emissions market-based or location- based approach.

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Data preparation and measurement | We calculate CO 2 e emissions data based on direct measurement of energy use (meter readings/invoices) for the majority of sites. Market-based and location-based emissions We externally report Scope 1 and 2 greenhouse gas emissions using metric tonnes of CO 2 e to compare the emissions from the seven main greenhouse gases based on their global warming potential. We base our CO 2 e reduction targets and reporting protocols (since 2007) on market-based emissions. We also calculate our emissions using the location-based approach, where direct operations greenhouse gas emissions are reported without the benefit of indirectly supplied renewable energy. Direct (Scope 1) emissions We report fuel consumption by fuel type at site level using the environmental management system. Using calorific values, the fuel is then converted to energy consumption, in kilowatt hours (kWh), by fuel type and is multiplied by the relevant CO 2 e emission factor to derive total CO 2 e emissions. Scope 1 emission factors for fuels are typically average fuel CO 2 e emissions factors and calorific values (the latest available at the end of the period) from the UK Government Department for Energy Security and Net Zero (DESNZ). For market-based emissions calculations, we apply product-specific factors where available. Energy attribute certificates (EACs), derived from our distillery by-product feedstock and processed by a third party to generate biomethane, form a component of our decarbonisation, together with purchased renewable gas EACs (i.e. from certificate-backed biomethane supplied indirectly through the natural gas grid). For location-based emissions calculations, we apply product-specific factors, where available, but the specific emission factors associated with EACs are not used (i.e. indirectly supplied renewable gas through grid is reported using standard, natural gas grid emission factors). Indirect (Scope 2) emissions We report greenhouse gas emissions from electricity (Scope 2) as market-based emissions and as location- based emissions in line with the WRI/WBCSD GHG Protocol Scope 2 guidance 2015. For market-based emissions, electricity consumption recorded on our environmental management system is multiplied by emissions factors specified in EACs, contracts, power purchase agreements and supplier utility emissions, as detailed in the GHG Protocol’s Scope 2 guidance. We use GHG Protocol Scope 2 to ensure EACs and associated financial instruments meet the required standards. GHG emission factors relating to indirect, Scope 2 emissions are updated with latest available by end of the period. For location-based emissions, grid imported electricity consumption recorded on our environmental management system is multiplied by regional or sub-national emission factors (where available) to calculate Scope 2 location-based GHG emissions. These include, for example, The Commission for Regulation of Utilities (CRU) (Ireland), DESNZ (United Kingdom), the National Inventory Report (Canada), US eGRID (United States) and the Indian power sector report (India). In all other cases, country or sub-regional factors are provided by the International Energy Agency (IEA). Location-based emission factors are reviewed annually and updated with latest available at the end of the period. Fugitive and owned agricultural [Scope 1] emissions We calculate fugitive emissions based on the amount of emitted ozone-depleting substances and fluorinated gases, multiplied by the relevant emission factor to represent the global warming potential in tonnes of CO 2 e. Annually, each site reports the quantity (mass) of each material/gas emitted based on any added/topped-up amount, reported via the environmental management system. The mass of each emitted ozone-depleting substance and fluorinated gas is multiplied by the relevant emission factor and then added together to report the equivalent GHG emissions in tonnes of CO 2 e. We calculate agricultural emissions from direct operations owned and operated by Diageo based on fertiliser use. The annual quantity (mass) of inorganic fertiliser is multiplied by the percentage of nitrogen content and by the relevant GHG emission and conversion factors (e.g. nitrogen to nitrous oxide, nitrous oxide GHG emission factor) to determine the equivalent tonnes CO 2 e emissions. Scope 1 and Scope 2 data aggregation For market-based: Total direct and indirect greenhouse gas emissions by weight (market/net based) (1,000 tonnes CO 2 e) is the aggregation of Scope 1 and 2 GHG emissions with fugitive and owned agriculture emissions to calculate total direct operations market-based emissions. The percentage reduction in absolute greenhouse gas emissions (direct and indirect greenhouse gas emissions by weight (market/net based)) from the prior year is a percentage change calculation with reference to the corresponding prior year figure. Our net zero emissions target for 2030 remains consistent with earlier reporting protocols and is based on market-based emissions. For location-based: We aggregate location-based Scope 1 and 2 GHG emissions with fugitive and owned agriculture emissions (as detailed in the market-based approach above) to calculate direct operations total location-based emissions. GHG emission intensity ratios Total, aggregated direct operations market-based and location-based emissions (as detailed above) are divided, respectively, by the volume of direct operations packaged product reported in the same period. The market-based and location-based emissions are converted to grammes of CO 2 e and the volume of packaged product is reported in litres to generate relevant GHG emission intensity ratios in g CO 2 e/litre packaged.
Limitation | Where invoices or site meter readings are not available, for example, due to timing differences or metering issues, we estimate consumption.

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Target | Reduce our value chain (Scope 3) carbon emissions by 50%
Performance measure | Percentage change in absolute greenhouse gas emissions (ktCO 2 e) from the prior year
Definition | Scope 3 emissions are indirect greenhouse gas (GHG) emissions generated by activities upstream or downstream of our operations that are not accounted for as Scope 1 and 2 GHG emissions. Scope 3 greenhouse gas emissions are assessed for relevance across 15 value chain categories and sub- categories and for Diageo, these are deemed relevant: •Category 1: Purchased raw materials, packaging and third party manufacturers. •Category 2: Capital goods. •Category 3: Fuels and energy-related activities. •Category 4: Upstream and downstream logistics and distribution. •Category 5: Waste generated in operations. •Category 6: Business travel. •Category 7: Employee commuting, including the emissions associated with leased and a limited number of Diageo owned vehicles not accounted for in Scope 1 and Scope 2 GHG emissions. •Category 11: Use of products sold. •Category 12: End of life of products sold. We do not include carbon offsets or credits in Scope 3 GHG emissions.
Scope exception | Any categories of Scope 3 emissions not listed in the definition above are out of scope for reporting. These are either excluded on the basis of materiality or a lack of reliable data.
Reporting period | All Scope 3 data is included for the current fiscal, with the exception of transportation and distribution (category 4). We have moved the reporting period from a one-year lag to now including data from June - May.

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Target | Reduce our value chain (Scope 3) carbon emissions by 50%
Data preparation and measurement | We externally report Scope 3 GHG emissions using metric tonnes of CO 2 e to compare the emissions from the four greenhouse gases – carbon dioxide (CO 2), methane (CH 4), nitrous oxide (N 2 O) and hydrofluorocarbons (HFCs) – included in our calculations, based on their global warming potential. Diageo uses a combination of consumption and spend based activity data to determine Scope 3 GHG emissions for all categories deemed relevant. The Diageo GHG Emission Factors Master Database contains the specific emission factor used and the associated source file. This activity data is multiplied by relevant emission factors sourced from industry-average databases, unless there are supplier specific factors. Where relevant, the supplier specific factors are preferred over industry-average database factors. Emission factors are updated annually based on updates to the industry- average databases and with published emission factors from suppliers. Inflation and Exchange Rate Adjustment For all spend-based calculations in the Scope 3 inventory, the emission factors used are based on 2019/2020 US dollars. In alignment with the GHG Protocol Scope 3 Calculation Guidance (Section 1, page 49), spend values are adjusted to reflect the differences in market values between the year of the spend based factors (2019) and the current period using country-specific inflation and exchange rates so the emission factor can be appropriately applied. The spend values are deflated by multiplying the current year spend by a ratio of the consumer price indices (CPI) of 2019/20 and the current year. The CPI values are obtained from S&P Global per country that Diageo has operations in, and it was assumed that all spend per site was acquired in, and thus subject to inflation of, the country of the site. The exchange rates are obtained with guidance from Diageo’s internal accounting department. Diageo use two calculation methods: 1) The average data method: The average data as described in the GHG Protocol Scope 3 Calculation Guidance are used to calculate these emissions. The quantity of relevant goods or services purchased in the reporting year is multiplied by the secondary (e.g. industrial average) emission factors (e.g. average emissions per unit good or service). Cradle-to-Tiers 1 supplier emission factors of the purchased goods or services per unit of mass are used (e.g. kg CO 2 e /kg). The average data method is represented by the following equation: CO 2 e emissions for purchased goods or services = Σ(mass of purchased good or service (kg) x emission factor of purchased good or service per unit of mass (kg CO 2 e/kg)). This method is applied for the following scope 3 categories: •Category 1: Purchased goods and services. •Category 3: Fuel and energy-related activities. •Category 4: Upstream transportation and distribution. •Category 5: Waste generated in operations. •Category 6: Business travel. •Category 7: Upstream leased assets. •Category 11: Use of sold products. •Category 12: End of life treatment of sold products. 2) The spend-based data method: The spend-based data method is used to calculate these emissions. The spend on relevant capital goods purchased in the reporting year is multiplied by the spend-based emission factor (e.g. average emissions per unit spent). The calculation method is represented by the following equation: CO 2 e emissions for capital goods = Σ (spend on capital goods (USD) x emission factor of purchased capital good per economic value (kg CO 2 e/USD)) This method is applied for the following scope 3 categories: •Category 2: Capital Purchase goods and services. For the transportation and distribution (category 4) calculation, we have updated the GHG factors to the latest Global Logistics Emissions Council (GLEC) factors. The latest Global Warming Potential (GWP – 2021 IPCC report) are used in Diageo’s GHG calculation and the Biogenic GHG emissions are not included.
Limitations | Due to inherent limitations related to measurement uncertainty and/or the availability of actual activity data, we utilise Diageo and/or industry average activity data for certain purchased goods or services. Due to limited primary greenhouse gas factors from suppliers, secondary greenhouse gas factor sources are used, such as industry recognised emission factors and others. As such, Scope 3 greenhouse gas emissions reporting is inherently limited and processes to refine data calculations are constantly under review.

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Target | Use 100% renewable energy across all our direct operations
Performance measure | •Change in percentage of renewable energy across our direct operations from the prior year •Total direct (renewable and non-renewable) energy consumption (TJ) •Direct energy efficiency (MJ/litre packaged) •Indirect energy efficiency (MJ/litre packaged) •Total direct and indirect energy efficiency (MJ/litre packaged)
Definition | We report total energy use and renewable energy use in megawatt hours (MWh) and/or terajoules (TJ). Total energy and renewable energy use are determined from direct and indirect energy consumption; energy generated on our sites and purchased energy. We determine direct energy (renewable/non- renewable) from the quantity of different fuel types (in metric tonnes, litres) of renewable and non- renewable fuels and by applying the relevant calorific value (either from DESNZ or the supplier). We measure indirect energy (renewable/non-renewable) in MWh and/or TJ from energy utilities or suppliers and/or by applying the relevant EACs. We include directly connected renewable energy generated on or near our sites, where all energy is used on site and no EACs are created (e.g. roof-mounted solar panels with all generated renewable electricity used on site).
Scope exception | We exclude minor energy sources that account for less than 0.5% of a site's overall Scope 1 and 2 emissions, up to a maximum of 50 t CO 2 e of individual emission source. They are considered immaterial to our overall impact.
Data preparation and measurement | We report total energy and renewable energy in MWh and/or TJ. We calculate direct and indirect energy data based on the direct measurement of energy use (meter readings/invoices for volumes of fuel supplied). We report fuel consumption by fuel type at site level using the environmental management system. Using calorific values, the fuel is then converted to energy consumption, in kWh, by fuel type and classified as either renewable or non-renewable based on fuel type or source. EACs, derived from our distillery by- product feedstock and processed by a third-party to generate biogas, together with purchased renewable gas EACs, are applied to relevant natural gas supplied to sites via a common carrier pipeline/network. All indirect energy generated and used on site, along with purchased indirect energy supplied through the grid is classified as renewable by the allocation of EACs, contracts, power purchase agreements and supplier-specific utility factors, where relevant. To calculate the percentage of renewable energy use, we divide total renewable energy (direct and indirect energy supplies (in MWh)) by total energy use, comprising all reported energy sources (MWh). Direct energy efficiency (MJ/L); indirect energy efficiency (MJ/L) and total energy efficiency (MJ/L) are determined from total direct energy (MJ), total indirect energy (MJ) and total energy (MJ) and divided by the volume of packaged product (litres).
Limitation | Energy data is calculated based on direct measurement of energy use (meter readings/invoices) for the majority of sites. Where invoices are not available, for example, due to timing differences, consumption is estimated.

Target | Continue our work to increase recycled content in our packaging (increasing the percentage of recycled content in our packaging to 60%)
Performance measure | Change in percentage of recycled content (by weight)
Definition | We determine recycled content by establishing the percentage weight of non-virgin materials used to generate the packaging components.
Scope exception | —
Data preparation | We collate packaging material volume data for the total volume of packaging purchased. We collect recycled content data through quarterly supplier questionnaires and then consolidate and internally verify it.
Limitation | Reporting relies on suppliers' technical information, timely completion of quarterly questionnaires and supporting supplementary information.

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Target | Continue our work to reduce total packaging (delivering a 10% reduction in packaging weight)
Performance measure | Percentage reduction of total packaging (by weight)
Definition | We determine changes to packaging weight by quantifying the weight reduction in grammes multiplied by the number of product codes (SKUs) affected, on an annualised basis.
Scope exception | —
Data preparation | We collate packaging material volume data for total volume of packaging purchased and weight. We verify weight data through quarterly supplier questionnaires.
Limitation | Reporting relies on suppliers' technical information, timely completion of quarterly questionnaires and supporting supplementary information.

Target | Develop regenerative agriculture programmes in five key sourcing landscapes
Performance measure | Number of regenerative agriculture programmes
Definition | We define our key sourcing landscapes as locations from which we source our most material crops, in terms of product dependency (e.g. agave for tequila), volumes sourced and contribution to our Scope 3 GHG footprint. The programmes include: •On-the-ground programmes with farmers to test and integrate regenerative and low-carbon practices in crop production systems •On-farm measurements and data collection protocols to track improvements in soil health, soil carbon, biodiversity, water stewardship and farm profitability •Collaborative programmes with our suppliers, other commodity off-takers, expert agronomists, technology providers, NGOs or specialist organisations Our regenerative agriculture programmes currently expand across three crop systems and three geographies including barley in Ireland for our beer category (Guinness), wheat and barley for our scotch and grain neutral spirit categories in the United Kingdom and agave for our tequila category in Mexico. We are also building partnerships across additional agricultural sourcing hubs to advocate for regenerative landscape transitions including Telangana state in India for broken rice, Kentucky and Tennessee in the United States for corn and rye and Kenya, Ghana and Nigeria across sorghum smallholder value chains.
Scope exception | Where programme activity is in early stages of deployment in a particular sourcing area, we do not include this sourcing area as covered by a regenerative agriculture programme.
Data preparation | Data is consolidated for each pilot programme. Tracking and reporting on improvements against key outcomes is managed centrally.
Limitation | Judgement is applied when determining what is considered to be greater than minimal programme activity. The investments we make could be through a consortium, and include other stakeholders. Impact is typically measured over time. Our approach is to assess the impact of our individual contributions in relation to the overall investment impact in determining whether our contributions were greater than a minimal level of programme activity.

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Other additional information

Spirits and investments
Spirits are produced in distilleries located worldwide. The group owns 31 Scotch whisky distilleries in Scotland, two whisky
distilleries in Canada, and five in the United States. Diageo produces Smirnoff internationally. Ketel One and Cîroc vodkas are
purchased as finished products from The Nolet Group and Maison Villevert, respectively. Gin distilleries are in both the United
Kingdom and in Santa Vittoria, Italy. Baileys is produced in the Republic of Ireland and Northern Ireland. Irish whiskey is distilled at
the Roe & Co distillery in Dublin. Rum is distilled in the US Virgin Islands and in Australia, Venezuela, and Guatemala and is
blended and bottled in the United States, Canada, Italy, and the United Kingdom. Raki is produced in Türkiye, Chinese white spirits
are produced in Chengdu, in the Sichuan province of China, cachaça is produced in Ceará State in Brazil and tequila in Mexico. The
Chase Distillery in England produces vodka and gin.
Maturing inventories increased by $532 million in fiscal 24 to support the future growth of scotch. Maturing scotch inventory
increased by $387 million, with a total balance of $4,862 million in fiscal 24. Whisk(e)y inventories were $6,290 million in fiscal 24,
mainly used for Scotch whisky production accounting for 77% of total matured whisky.

| 2024 | 2023
Category | $ million | $ million
Whisk(e)y | 6,290 | 5,777
- From this attributable to scotch | 4,862 | 4,475
Other | 1,542 | 1,523
Total maturing inventory | 7,832 | 7,300

Diageo’s maturing Scotch whisky is stored in warehouses in Scotland (Clackmannanshire area between Blackgrange, Cambus West
and Menstrie, where we are holding approximately 43% of the group’s maturing Scotch whisky), its maturing Canadian whisky in
Valleyfield and Gimli in Canada, its maturing American whiskey in Kentucky and Tennessee in the United States and maturing
Chinese white spirits in Chengdu, China.
The iconic lost distillery of Port Ellen re-opened in March 2024, marking the final phase of our £185 million ($234 million)
investment in the Scotch Whisky and Tourism sectors in Scotland. Work also continues to expand our warehousing facilities at
Midtown in Clackmannanshire. Alongside the new warehouses being built, there is also investment in state-of-the-art automation of
warehousing.
In China, the Eryuan malt whisky distillery fully opened in mid-2024 ($76.7 million investment). It will develop the highest quality
China single origin whisky, placing China firmly on the global whisky producer’s map.
In North America, further capacity expansion projects are now underway to support future growth, including the C$245 million ($179
million) construction of Crown Royal distillery in Canada to supplement existing manufacturing operations.
Diageo’s end-to-end tequila production is in Mexico, with more than $500 million being invested to expand our manufacturing
footprint through new facilities in the state of Jalisco to support growth. As part of our expansion and our investments in the tequila
category, we have different digital transformation projects at the El Charcón production site to meet the growing demand in tequila
and the expansion of our operations. Projects include additional technology support and automation of our new bottling line on site,
which will be dedicated to Casamigos tequila, allowing us to operate 24/7.
Diageo owns a controlling equity stake in United Spirits Limited (USL) which is one of the leading alcoholic beverage companies in
India, selling close to 61 million equivalent units (reported) in fiscal 24 of Indian-Made Foreign Liquor (IMFL) and imported liquors.
USL has a significant market presence across India and operates 11 owned sites, as well as a network of leased and third-party
manufacturing facilities. USL owns several Indian brands, such as McDowell’s (Indian whisky, rum, and brandy), Black Dog
(Scotch), Signature (Indian whisky), Royal Challenge (Indian whisky), Godawan (Indian Single Malt) and Antiquity (Indian whisky).
Beer and investments
Diageo’s principal brewing facility is at the St James’s Gate brewery in Dublin, Ireland. Additionally, at the end of fiscal 24 Diageo
owned breweries in several African countries: Nigeria, Kenya, Ghana, Tanzania, Uganda, and the Seychelles. On 11 June 2024,
Diageo announced the agreement to sell its 58.02% shareholding in Guinness Nigeria plc to N-Seven Nigeria Ltd., part of the Tolaram
Group. For more information see note 8 to the Financial Statements.
Guinness flavour extract is shipped from Ireland to all overseas Guinness brewing operations, which use the flavour extract to brew
beer locally. Guinness is transported from Ireland to Great Britain in bulk to the Runcorn facility, where the kegging, bottling and
canning of Guinness Draught takes place.
Projects are underway to support future beer growth. In July 2022, Diageo announced plans to invest €200 million ($214 million) in
Littleconnell, Newbridge, Co. Kildare. Construction began in summer 2024 and the plan is for brewing to start in 2026. Furthermore,
in the second half of 2023, Diageo completed the €25 million ($27 million) investment in a new production area at St. James’s Gate
increasing the brewing capacity of Guinness 0.0. The £41 million ($52 million) investment to expand and optimise capacity at our beer
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packaging facilities in Belfast and Runcorn is progressing well. The new canning line in Belfast and upgraded bottling capability in
Runcorn are now completed. The final upgrade of canning in Runcorn will be completed in early 2025.
In May 2024, plans were announced to invest over €100 million ($107 million) to decarbonise St. James’s Gate brewery in Dublin.
The investment underpins the goal to accelerate to net zero carbon emissions for the site and will transform energy and water
consumption with the aim to make it one of the most efficient breweries in the world by 2030.
The Diageo Beer Category Third-Party Operations T eam provide technical services to facilitate the delivery of over three million
hectolitres of beer and ready to drink products supplied through over 50 partner breweries and beverage packaging facilities
worldwide. The team's focus is on assuring the consistent quality of Diageo brands produced at third-party facilities and enhancing
Diageo value through supporting the start-up of new partnerships and delivery of innovation projects. In addition to supporting
Guinness and beer, the team has an expanding role in supporting the third-party manufacturing of ready to drink and spirits in Asia-
Pacific and Africa.
Flavoured malt beverages (FMB) are made from an original base containing malt, but then stripped of malt character, and flavoured.
This product segment is implemented mainly in the United States, Canada, and the Caribbean.
Ready to drink (RTD)
Diageo produces a range of ready to drink products mainly in the United Kingdom, Italy, across Africa, Australia, the United States
and Canada.
Raw materials and supply agreements
The group has several long-term contracts for purchasing raw materials, including glass, other packaging, spirits, cream, rum and
grapes. Forward contracts are in place for the purchase of cereals and packaging materials to minimise the effects of short-term price
fluctuations. Despite macroeconomic uncertainty and volatility, price pressure is easing, and some key commodities are now starting
to become deflationary. Our long-term hedging means there is a lag in cost of sales benefit generated from a commodity price
decrease. The Red Sea conflict, weather patterns and geo-political tensions, coupled with volatile but strong consumer demand, are the
key drivers of constraints we are managing.
Cereals, including barley, wheat, corn, and sorghum, are used in our scotch and beer production and in our spirits brands through
purchased neutral spirit. Agave, a key raw material for our tequila brands, is sourced from Mexico. Cream, the principal raw material
for Irish cream liqueur, is sourced from Ireland. Grapes and aniseed are used in the production of raki, and are sourced from suppliers
in Türkiye. Other raw materials purchased in significant quantities to produce spirits and beer are molasses, sugar, and several flavours
(such as juniper berries, agave, chocolate, and herbs). These are sourced from suppliers across the globe.
Many products are supplied to customers in glass bottles. Glass in purchased from a variety of multinational and local suppliers. The
largest suppliers are Ardagh Packaging in the United Kingdom and Owens-Illinois in the United States.
Like other consumer goods companies, we maintain stocks in markets to compensate for extended lead times and demand volatility.
Diageo is managing well through the current levels of uncertainty and constraints in our supply chain by expanding our supplier base
and maintaining agility in our logistics networks.
Competition
Diageo’s brands compete primarily on the basis of quality and price. Its business is built on getting the right product to the right
consumer for the right occasion, and at the right price, including through taking into account ever evolving shopper landscapes,
technologies and consumer preferences. Diageo also seeks to recruit and re-recruit consumers to its portfolio of brands, including
through meaningful consumer engagement, sustainable innovation and investments in its brands.
In spirits, Diageo’s major global competitors are Pernod Ricard, Beam Suntory, Bacardi and Brown-Forman, each of which has
several brands that compete directly with Diageo’s brands. In addition, Diageo faces competition from regional and local companies in
the countries in which it operates.
In beer, Diageo also competes globally, as well as on a regional and local basis (with the profile varying between regions) with several
competitors, including AB InBev, Molson Coors, Heineken, Constellation Brands and Carlsberg.
Research and development
Innovation forms an important part of Diageo’s growth strategy, playing a key role in positioning its brands for continued growth in
both developed and emerging markets. The strength and depth of Diageo’s brand range also provides a solid platform from which to
drive sustainable innovation that leads to new products and experiences for consumers, whether or not they choose to drink alcohol.
Diageo focuses its innovation on its strategic priorities and the most significant consumer opportunities, including the development of
global brand extensions and new-to-world products, and continuously invests to deepen its understanding of evolving trends and
consumer socialising occasions to inform product and packaging development, ranging from global brand redesigns to cutting edge
innovations. Supporting this, the Diageo group has ongoing programmes to develop new beverage products which are managed
internally by the innovation and research and development function.
Trademarks and other intellectual property
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Diageo produces, sells and distributes branded goods, and is therefore substantially dependent on the maintenance and protection of its
trademarks. All brand names mentioned in this document are protected by trademarks. The Diageo group also holds trade secrets, as
well as has substantial trade knowledge related to its products. The group believes that its significant trademarks are registered and/or
otherwise protected (insofar as legal protection is available) in all material respects in its most important markets. Diageo also owns
valuable patents and trade secrets for technology and takes all reasonable steps to protect these rights.
Seasonality
The beverage alcohol industry is subject to seasonality in each major category. Our spirits sales are typically highest during the second
quarter of our fiscal year, primarily due to seasonal holiday buying in our largest markets.
Employees
Many of our employees are represented by unions, with a variety of collective bargaining agreements in place. We believe our
relationships with the unions that represent our employees are satisfactory in all material respects.
Regulations and taxes
Diageo’s worldwide operations are subject to extensive regulatory requirements relating to production, product liability, distribution,
importation, marketing, promotion, sales, pricing, labelling, packaging, advertising, antitrust, labour, pensions, compliance and control
systems and environmental issues.
In the United States, the beverage alcohol industry is subject to strict federal and state government regulations. At the federal level, the
Alcohol and Tobacco Tax and Trade Bureau, or TTB, of the US Treasury Department oversees the US beverage alcohol industry,
including through regulating and collecting taxes on the production of alcohol within the United States and regulating trade practices.
In addition, individual US states, as well as some local authorities in US jurisdictions in which Diageo sells or produces its products,
administers and enforces industry-specific regulations and may apply additional excise taxes and, in many states, sales taxes. Federal,
state and local regulations cover virtually every aspect of Diageo's US operations, including production, importation, distribution,
marketing, promotion, sales, pricing, labelling, packaging and advertising.
Spirits and beer are subject to national import and excise duties in many markets around the world. Most countries impose excise
duties on beverage alcohol products, although the form of such taxation varies significantly from a simple application to units of
alcohol by volume, to advanced systems based on the imported or wholesale value of the product. Several countries impose additional
import duty on distilled spirits, often discriminating between categories (such as Scotch whisky or bourbon) in the rate of such tariffs.
Within the European Union, such products are subject to different rates of excise duty in each country, but within the overall European
Union framework there are minimum rates of excise duties that must first be applied to each relevant category of beverage alcohol.
The UK introduced a new alcohol duty system in August 2023 which simplified the previous duty regime. Further consequential
amendments to the administration of this system, though expected in the second half of 2024, are not yet published. If implemented,
these could impact Diageo’s business activities.
Import and excise duties can have a significant impact on the final pricing of Diageo’s products to consumers. These duties can affect
a product’s revenue or margin, both by reducing consumption and/or by encouraging consumers to switch to lower-taxed categories of
beverages. The group devotes resources to encouraging the equitable taxation treatment of all beverage alcohol categories and to
reducing government imposed barriers to fair trading.
The advertising, marketing and sale of alcohol are subject to various restrictions in markets around the world. These range from a
complete prohibition of alcohol in certain cultures and jurisdictions, such as in certain states in India, to the prohibition of the import
into a certain jurisdiction of spirits and beer, and to restrictions on the advertising style, media and content. In a number of countries,
television is a prohibited medium for the marketing of spirits brands, while in other countries, television advertising, while permitted,
is carefully regulated. Many countries also strictly regulate the use of internet-based advertising and social media in connection with
alcohol sales. Any further prohibitions imposed on advertising or marketing, particularly within Diageo’s most significant markets,
could have an adverse impact on beverage alcohol sales.
Labelling of beverage alcohol products is also regulated in many markets, varying from the required inclusion of health warning labels
to manufacturer or importer identification, alcohol strength and other consumer information. As well as producer, importer or bottler
identification, specific warning statements related to the risks of drinking beverage alcohol products are required to be included on all
beverage alcohol products sold in the US, in certain countries within the EU, and in a number of other jurisdictions in which Diageo
operates.
Spirits and beer are also regulated in distribution. In many countries, alcohol may only be sold through licensed outlets, both on- and
off-trade, varying from government- or state-operated monopoly outlets (for example, in the off-trade channel in Norway, certain
Canadian provinces, and certain US states) to the system of licensed on-trade outlets (for example, licensed bars and restaurants)
which prevails in much of the Western world, including in the majority of US states, in the UK and in much of the EU. In a number of
states in the US, wholesalers of alcoholic beverages must publish price lists periodically and/or must file price changes in some
instances up to three months before they become effective. In a response to public health concerns, some governments have imposed
or are considering imposing minimum pricing on beverage alcohol products and may consider raising the legal drinking age, further
limiting the number, type or opening hours of retail outlets and/or expanding retail licensing requirements.
Regulatory decisions and changes in the legal and regulatory environment could also increase Diageo’s costs and liabilities and/or
impact on its business activities.
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Taxation
This section provides a descriptive summary of certain US federal income tax and UK tax consequences that are likely to be material
to the holders of the ordinary shares or ADSs, but only those who hold their ordinary shares or ADSs as capital assets for tax purposes.
It does not purport to be a complete technical analysis or a listing of all potential tax effects relevant to the ownership of the ordinary
shares or ADSs, and does not address the potential application of the provisions of the Internal Revenue Code of 1986, as amended,
known as the Medicare contribution tax. This section does not apply to any holder who is subject to special rules, including:
•certain financial institutions;
•a dealer in securities or foreign currency;
•a trader in securities that elects to use a mark-to-market method of tax accounting for securities holdings;
•a tax-exempt organisation;
•an insurance company;
•a person liable for alternative minimum tax;
•a person that actually or constructively owns 10% or more of the combined voting power of voting stock of Diageo or of the
total value of stock of Diageo;
•a person that holds ordinary shares or ADSs as part of a straddle or a hedging or conversion transaction;
•a person that holds ordinary shares or ADSs as part of a wash sale for tax purposes; or
•a US holder (as defined below) whose functional currency is not US dollar.
If an entity or arrangement treated as a partnership for US federal income tax purposes holds ordinary shares or ADSs, the US federal
income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner
in a partnership holding ordinary shares or ADSs should consult its tax advisor with regard to the US federal income tax treatment of
an investment in ordinary shares or ADSs.
For UK tax purposes, this section applies only to persons who are the absolute beneficial owners of ordinary shares or ADSs and who
hold their ordinary shares or ADSs as investments. It assumes that holders of ADSs will be treated as holders of the underlying
ordinary shares. In addition to those persons mentioned above, this section does not apply to holders that are banks, regulated
investment companies, other financial institutions, or to persons who have or are deemed to have acquired their ordinary shares or
ADSs in the course of an employment or trade. This summary does not apply to persons who are treated as non-domiciled and resident
in the United Kingdom for the purposes of UK tax law.
This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations,
published rulings and court decisions, the laws of the United Kingdom and the practice of His Majesty’s Revenue and Customs
(HMRC), all as currently in effect, as well as on the Convention Between the Government of the United Kingdom of Great Britain and
Northern Ireland and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect to Taxes on Income and Capital Gains (the Treaty). These laws are subject to change, possibly on a
retroactive basis.
In addition, this section is based in part upon the representations of the Depositary and the assumption that each obligation in the
Deposit Agreement and any related agreement will be performed in accordance with its terms. In general, and taking into account this
assumption, for US federal income tax purposes and for the purposes of the Treaty, holders of ADRs evidencing ADSs should be
treated as the owner of the shares represented by those ADSs. Exchanges of shares for ADRs, and ADRs for shares, generally will not
be subject to US federal income tax or to UK tax on profits or gains.
A US holder is a beneficial owner of ordinary shares or ADSs that is for US federal income tax purposes:
•a citizen or resident for tax purposes of the United States and who is not and has at no point been resident in the United
Kingdom;
•a US domestic corporation, or other US entity taxable as a corporation;
•an estate whose income is subject to US federal income tax regardless of its source; or
•a trust if a US court can exercise primary supervision over the trust’s administration and one or more US persons are
authorised to control all substantial decisions of the trust.
This section is not intended to provide specific advice and no action should be taken or omitted in reliance upon it. This section
addresses only certain aspects of US federal income tax and UK income tax, corporation tax, capital gains tax, inheritance tax and
stamp taxes. Holders of the ordinary shares or ADSs are urged to consult their own tax advisors regarding the US federal, state and
local, and UK and other tax consequences of owning and disposing of the shares or ADSs in their respective circumstances. In
particular, holders are encouraged to confirm with their advisor whether they are US holders eligible for the benefits of the Treaty.
Dividends
UK taxation
The company will not be required to withhold tax at source when paying a dividend.
All dividends received by an individual shareholder or ADS holder who is resident in the UK for tax purposes will, except to the
extent that they are earned through an ISA or other regime which exempts the dividends from tax, form part of that individual’s total
income for income tax purposes and will represent the highest part of that income.
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A nil rate of income tax will apply to the first £500 of taxable dividend income received by an individual shareholder in the 2024/2025
tax year (the Nil Rate Amount), regardless of what tax rate would otherwise apply to that dividend income. Following the UK election
on 4 July 2024, the Nil Rate Amount in respect of the 2025/2026 tax year may be subject to change.
Any taxable dividend income in excess of the Nil Rate Amount will be subject to income tax at the following special rates (as at the
2024/2025 tax year):
•at the rate of 8.75%, to the extent that the relevant dividend income falls below the threshold for the higher rate of income
tax;
•at the rate of 33.75%, to the extent that the relevant dividend income falls above the threshold for the higher rate of income
tax but below the threshold for the additional rate of income tax; and
•at the rate of 39.35%, to the extent that the relevant dividend income falls above the threshold for the additional rate of
income tax.
In determining whether and, if so, to what extent the relevant dividend income falls above or below the threshold for the higher rate of
income tax or, as the case may be, the additional rate of income tax, the individual’s total taxable dividend income for the tax year in
question (including the part within the Nil Rate Amount) will, as noted above, be treated as the highest part of that individual’s total
income for income tax purposes.
Shareholders within the charge to UK corporation tax which are small companies (for the purposes of the UK taxation of dividends)
will not generally be subject to tax on dividends from the company. Other shareholders within the charge to UK corporation tax will
not be subject to tax on dividends from the company so long as the dividends fall within an exempt class and certain conditions are
met. In general, dividends paid on shares that are ordinary share capital for UK tax purposes and are not redeemable and dividends
paid to a person holding less than 10% of the issued share capital of the payer (or any class of that share capital) are examples of
dividends that fall within an exempt class.
US taxation
Under the US federal income tax laws, and subject to the passive foreign investment company (PFIC) rules discussed below, the gross
amount of any distribution (other than certain pro rata distribution of ordinary shares) paid to a US holder by Diageo in respect of its
ordinary shares or ADSs out of its current or accumulated earnings and profits (as determined for US federal income tax purposes)
will be treated as a dividend that is subject to US federal income taxation.
Dividends paid to certain non-corporate US holders that constitute qualified dividend income will be taxed at the preferential rates
applicable to long-term capital gains, provided that the ordinary shares or ADSs are held for more than 60 days during the 121-day
period beginning 60 days before the ex-dividend date and the holder meets other holding period requirements. Dividends paid by
Diageo with respect to its ordinary shares or ADSs generally will be qualified dividend income to US holders that meet the holding
period requirement, provided that, in the year that they receive the dividend, we are eligible for the benefits of the Treaty. We believe
that we are currently eligible for the benefits of the Treaty and we therefore expect that dividends on the ordinary shares or ADSs will
be qualified dividend income, but there can be no assurance that we will continue to be eligible for the benefits of the Treaty. Under
UK law, dividends paid by the company are not subject to UK withholding tax. Therefore, the US holder will include in income for
US federal income tax purposes the amount of the dividend received, and the receipt of a dividend will not entitle the US holder to a
foreign tax credit.
The dividend must be included in income when the US holder, in the case of ordinary shares, or the Depositary, in the case of ADSs,
receives the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally
allowed to US corporations in respect of dividends received from other US corporations. Dividends will generally be income from
sources outside the United States and will generally be ‘passive’ income for purposes of computing the foreign tax credit allowable to
a US holder. The amount of the dividend distribution that must be included in income of a US holder will be the US dollar value of the
pounds sterling payments made, determined at the spot pounds sterling/US dollar foreign exchange rate on the date of the dividend
distribution, regardless of whether the payment is in fact converted into US dollars. Generally, any gain or loss resulting from currency
exchange fluctuations during the period from the date the dividend payment is distributed to the date the payment is converted into US
dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend
income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation
purposes. Distributions in excess of current and accumulated earnings and profits, as determined for US federal income tax purposes,
will be treated as a non-taxable return of capital to the extent of the holder’s basis in the ordinary shares or ADSs and thereafter as
capital gain. However, Diageo does not expect to calculate earnings and profits in accordance with US federal income tax principles.
Accordingly, a US holder should expect to generally treat distributions Diageo makes as dividends.
Taxation of capital gains
UK taxation
A citizen or resident (for tax purposes) of the United States who has at no time been resident in the United Kingdom will not be liable
for UK tax on capital gains realised or accrued on the sale or other disposal of ordinary shares or ADSs, unless the ordinary shares or
ADSs are held in connection with a trade or business carried on by the holder in the United Kingdom through a UK branch, agency or
a permanent establishment. A disposal (or deemed disposal) of shares or ADSs by a holder who is resident in the United Kingdom
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may, depending on the holder’s particular circumstances, and subject to any available exemption or relief, give rise to a chargeable
gain or an allowable loss for the purposes of UK tax on capital gains.
US taxation
Subject to the PFIC rules discussed below, a US holder who sells or otherwise disposes of ordinary shares or ADSs will recognise
capital gain or loss for US federal income tax purposes equal to the difference between the US dollar value of the amount that is
realised and the tax basis, determined in US dollars, in the ordinary shares or ADSs. Capital gain of a non-corporate US holder is
generally taxed at preferential rates where the property is held for more than one year. The gain or loss will generally be income or
loss from sources within the United States for foreign tax credit limitation purposes. The deductibility of capital losses is subject to
limitations.
PFIC rules
Diageo believes that ordinary shares and ADSs should not currently be treated as stock of a PFIC for US federal income tax purposes,
and we do not expect to become a PFIC in the foreseeable future. However this conclusion is a factual determination that is made
annually and thus may be subject to change. It is therefore possible that we could become a PFIC in a future taxable year.
If treated as a PFIC, gain realised on the sale or other disposition of ordinary shares or ADSs would in general not be treated as capital
gain. Instead, unless a US holder elects to be taxed annually on a mark-to-market basis with respect to the ordinary shares or ADSs,
US holders would be treated as if the holder had realised such gain and certain ‘excess distributions’ pro-rated over the holder’s
holding period for the ordinary shares or ADSs. To the extent gain is allocated to the taxable year of the sale or other disposition of
ordinary shares or ADSs and to any year before Diageo became a PFIC, it would be taxed as ordinary income. The amount allocated
to each other taxable year would be taxed at the highest tax rate in effect (for individuals or corporations, as applicable) for each such
year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain
exceptions, a holder’s ordinary shares or ADSs will be treated as stock in a PFIC if Diageo were a PFIC at any time during the holding
period in a holder’s ordinary shares or ADSs. In addition, dividends received from Diageo will not be eligible for the sp ecial tax rates
applicable to qualified dividend income if Diageo is a PFIC (or is treated as a PFIC with respect to the holder) either in the taxable
year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income. If any investor
owns our shares or ADSs during any year that we are a PFIC with respect to them, they may be required to file IRS Form 8621.
UK inheritance tax
Subject to certain provisions relating to trusts or settlements, an ordinary share or ADS held by an individual shareholder who is
domiciled in the United States for the purposes of the Convention between the United States and the United Kingdom relating to estate
and gift taxes (the Convention) and who is neither domiciled in the United Kingdom nor (where certain conditions are met) a UK
national (as defined in the Convention), will generally not be subject to UK inheritance tax on the individual’s death (whether held on
the date of death or gifted during the individual’s lifetime) except where the ordinary share or ADS is part of the business property of a
UK permanent establishment of the individual or pertains to a UK fixed base of an individual who performs independent personal
services. In a case where an ordinary share or ADS is subject both to UK inheritance tax and to US federal gift or estate tax, the
Convention generally provides for inheritance tax paid in the United Kingdom to be credited against federal gift or estate tax payable
in the United States, or for federal gift or estate tax paid in the United States to be credited against any inheritance tax payable in the
United Kingdom, based on priority rules set forth in the Convention.
UK stamp duty and stamp duty reserve tax
Stamp duty and stamp duty reserve tax (SDRT) may arise upon the deposit of an underlying ordinary share with the Depositary,
generally at the higher rate of 1.5% of its issue price or, as the case may be, of the consideration for transfer. The Depositary will pay
the stamp duty or SDRT but will recover an amount in respect of such tax from the initial holders of ADSs. From 1 January 2024,
however, new legislation has confirmed that the 1.5% SDRT charge on a transfer of shares to a depositary receipt issuer or to a person
providing clearance services (or their nominee or agent) does not apply where the transfer is an integral part of a raising of capital.
Therefore, no UK stamp duty will be payable on the acquisition or transfer of ADRs. Furthermore, an agreement to transfer ADSs in
the form of ADRs will not give rise to a liability to SDRT.
Purchases of ordinary shares (as opposed to ADRs) will be subject to UK stamp duty, and/or SDRT as the case may be, at the rate of
0.5% of the price payable for the ordinary shares at the time of the transfer. Stamp duty applies where a physical instrument of transfer
is used to effect the transfer. SDRT applies to any agreement to transfer ordinary shares (regardless of whether or not the transfer is
effected electronically or by way of an instrument of transfer). However, where ordinary shares being acquired are transferred direct to
the Depositary’s nominee, the only charge will generally be the higher charge of 1.5% of the price payable for the ordinary shares so
acquired, subject to the applicability of any exemptions to the 1.5% charge discussed above.
Any stamp duty payable (as opposed to SDRT) is rounded up to the nearest £5. No stamp duty (as opposed to SDRT) will be payable
if the amount or value of the consideration is (and is certified to be) £1,000 or l ess. Stamp duty and SDRT are usually paid or borne by
the purchaser.
Whilst stamp duty and SDRT may in certain circumstances both apply to the same transaction, in practice usually only one or other
will need to be paid.
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US backup withholding and information reporting
Payments of dividends and sales proceeds with respect to ordinary shares and ADSs may be reported to the IRS and to the US holder.
Backup withholding may apply to these reportable payments if the US holder fails to provide an accurate taxpayer identification
number or certification of exempt status or fails to report all interest and dividends required to be shown on its US federal income tax
returns. Certain US holders (including, among others, corporations) are not subject to information reporting and backup withholding.
The amount of any backup withholding from a payment to a US holder will be allowed as a credit against the holder’s US federal
income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS. US
holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for
obtaining an exemption. Certain US holders who are individuals (and certain specified entities), may be required to report information
relating to their ownership of non-US securities unless the securities are held in accounts at financial institutions (in which case the
accounts may be reportable if maintained by non-US financial institutions). US holders should consult their tax advisors regarding any
reporting obligations they may have with respect to the ordinary shares or ADSs.
350
Additional information for shareholders
Annual General Meeting (AGM)
The AGM will be held at Hilton London Tower Bridge, 5 More London Place, Tooley Street, London, SE1 2BY on 26 September
2024 at 2.30 pm.
Documents on display
The Annual Report on Form 20-F and any other documents filed by the company with the US Securities Exchange Commission (SEC)
may be inspected at the SEC’s office of Investor Education and Advocacy located at 100 F Street, NE, Washington, DC 20549-0213,
USA. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges. Filings
with the SEC are also available to the public from commercial document retrieval services, and from the website maintained by the US
Securities and Exchange Commission at www.sec.gov.
Annual report to security holders
Pursuant to Item 10.J of Form 20-F, Exhibit 15.2 to this annual report on Form 20-F includes Diageo's annual report to security
holders. None of such annual report is incorporated by reference into this annual report on Form 20-F. Such annual report is not
deemed to be filed as part of this annual report on Form 20-F.
Warning to shareholders – share fraud
Please beware of the share fraud of ‘boiler room’ scams, where shareholders are called ‘out of the blue’ by fraudsters (sometimes claiming to
represent Diageo) attempting to obtain money or property dishonestly. Further information on boiler room scams can be found on the Financial
Conduct Authority’s website (https://www.fca.org.uk/scamsmart/share-bond-boiler-room-scams) but in short, if in doubt, take proper
professional advice before making any investment decision.
Electronic communications
Shareholders can register for an account to manage their shareholding online, including being able to: check the number of shares they
own and the value of their shareholding; register for electronic communications; update their personal details; provide a dividend
mandate instruction; access dividend confirmations; and use the online share dealing service. To register for an account, shareholders
should visit www.diageoregistrars.com.
Dividend payments
Direct payment into bank account
Shareholders can have their cash dividend paid directly into their UK bank account on the dividend payment date. To register UK
bank account details, shareholders can register for an online account at www.diageoregistrars.com or call the Registrar on +44 (0)371
277 1010* to request the relevant application form. For shareholders outside the UK, Link Group (a trading name of Link Market
Services Limited and Link Market Services Trustee Limited) may be able to provide you with a range of services relating to your
shareholding. To learn more about the services available to you please visit the shareholder portal at www.diageoregistrars.com or call
+44 (0)371 277 1010*.
Dividend Reinvestment Plan
A Dividend Reinvestment Plan is offered by the Registrar, Link Market Services Trustees Limited, to give shareholders the
opportunity to build up their shareholding in Diageo by using their cash dividends to purchase additional Diageo shares. To join the
Dividend Reinvestment Plan, shareholders can call the Registrar, Link Group on +44 (0)371 277 1010* to request the relevant
application form.
Dividend Currency Election
Following the group functional currency change in fiscal 23 to US dollars, holders of ordinary shares will continue to receive
their dividends in sterling, unless they wish to elect to receive their dividends in US dollars. To elect to receive their dividends
in US dollars, shareholders can download the relevant election form on the shareholder portal at www.diageoregistrars.com or
call +44 (0)371 277 1010*.
Exchange controls
Other than certain economic sanctions which may be in effect from time to time, there are currently no UK foreign exchange control
restrictions on the payment of dividends, interest or other payments to holders of Diageo’s securities who are non-residents of the UK
or on the conduct of Diageo’s operations.
There are no restrictions under the company’s articles of association or under English law that limit the right of non-resident or foreign
owners to hold or vote the company’s ordinary shares.
Please refer to the ‘Taxation’ section on pages 346-350 for details relating to the taxation of dividend payments.
Useful contacts
The Registrar/Shareholder queries
351
Link Group acts as the company’s registrar and can be contacted as follows:
By email: Diageo@linkgroup.co.uk
By telephone: +44 (0) 371 277 1010*
In writing: Registrars – Link Group, Central Square, 29 Wellington Street, Leeds, LS1 1DL.
* Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate.
Lines are open 08:00 to 17:30 UK time, Monday to Friday, excluding public holidays in England and Wales.
ADR administration
Citibank Shareholder Services acts as the company’s ADR administrator and can be contacted as follows:
By email: citibank@shareholders-online.com
By telephone: +1 866 253 0933/ (International) +1 781 575 4555*
In writing: Citibank Shareholder Services. PO Box 43077,
Providence, RI 02940-3077
* Lines are open Monday to Friday 8:30 to 18:00 EST
General Counsel and Company Secretary
Tom Shropshire
The.cosec@diageo.com
Investor Relations
investor.relations@diageo.com
352
Exhibits

1.1 | Articles of Association of Diageo plc
2.1 | Indenture, dated as of 3 August 1998, among Diageo Capital plc, Diageo plc and The Bank of New York Mellon (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form F-1 (File No. 333-8874) filed with the Securities and Exchange Commission on 24 July 1998 (pages 365 to 504 of paper filing)).(i)
2.2 | Indenture, dated as of 1 June 1999, among Diageo Investment Corporation, Diageo plc and The Bank of New York Mellon (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 15 November 2001 (pages 241 to 317 of paper filing)).(i)
2.3 | Indenture, dated as of 8 December 2003, among Diageo Finance B.V., Diageo plc and The Bank of New York Mellon (incorporated by reference to Exhibit 1 to the Report on Form 6-K (File No. 001-10691) filed with the Securities and Exchange Commission on 9 December 2003).(i)
2.4 | Description of Securities registered under Section 12 of the Exchange Act
4.1 | Service Agreement, dated 13 January 2021, between Diageo plc and Lavanya Chandrashekar (incorporated by reference to Exhibit 4.27 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 5 August 2021).
4.2 | Service Agreement, dated 28 March 2023, between Diageo plc and Debra Crew.
4.3 | Form of Service Agreement for Diageo plc’s executives in the United Kingdom, dated as of 1 July 2006 (incorporated by reference to Exhibit 4.7 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 17 September 2007).
4.4 | Form of Service Agreement for Diageo plc’s executives in the United States, dated as of 1 July 2006 (incorporated by reference to Exhibit 4.8 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 17 September 2007).
4.5 | Form of Service Agreement for Diageo plc’s executives in the United Kingdom, in use as of July 2015 (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 11 August 2015).
4.6 | Form of Service Agreement for Diageo plc’s executives in the United States, in use as of July 2015 (incorporated by reference to Exhibit 4.7 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 11 August 2015).
4.7 | Diageo 2010 Sharesave Plan, dated 14 October 2010 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-8 (File No. 333-169934) filed with the Securities and Exchange Commission on 14 October 2010).
4.8 | Diageo 2001 Share Incentive Plan, dated 14 October 2010 (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-8 (File No. 333-169934) filed with the Securities and Exchange Commission on 14 October 2010).
4.9 | Diageo plc 2009 Executive Long Term Incentive Plan, dated 14 October 2009 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-8 (File No. 333-162490) filed with the Securities and Exchange Commission on 15 September 2009).
4.10 | Diageo plc Associated Companies Share Option Plan, dated as of 26 August 2008 (incorporated by reference to Exhibit 4.9 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 15 September 2008).
4.11 | Addendum to Form of Service Agreement for Diageo plc’s executives in the United States (incorporated by reference to Exhibit 4.16 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 15 September 2008).
4.12 | Diageo plc Associated Companies Share Incentive Plan, dated as of 23 August 2011 (incorporated by reference to Exhibit 4.22 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 5 September 2012).
4.13 | Diageo plc Long Term Incentive Plan, dated as of 18 September 2014 (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (File No. 333-206290) filed with the Securities and Exchange Commission on 11 August 2015).
4.14 | Letter of Agreement, dated 12 May 2016, between Diageo plc and Mr. Javier Ferrán (incorporated by reference to Exhibit 4.25 to the Annual Report on Form 20-F (File No. 001-10691) filed with the Securities and Exchange Commission on 9 August 2016).

353

4.15 | Diageo plc Share Value Plan, dated as of 20 September 2017 (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 (File No. 333-223071) filed with the Securities and Exchange Commission on 16 February 2018).
6.1 | Description of earnings per share (included in the section 'Reported measures' on page 38 of this Annual Report on Form 20-F).
8.1 | Principal group companies (included in note 22 to the consolidated financial statements on page 309 of this Annual Report on Form 20-F).
11.1 | Diageo plc Dealing in Securities Code
12.1 | Certification of Debra Crew filed pursuant to 17 CFR 240.13a-14(a).
12.2 | Certification of Lavanya Chandrashekar filed pursuant to 17 CFR 240.13a-14(a).
13.1 | Certification of Debra Crew furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C. 1350(a) and (b).
13.2 | Certification of Lavanya Chandrashekar furnished pursuant to 17 CFR 240.13a-14(b) and 18 U.S.C. 1350(a) and (b).
15.1 | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
15.2 | Diageo plc Annual Report 2024 (incorporated by reference to Exhibit 99 to the report on Form 6-K (File No. 001-10691) filed with the Securities and Exchange Commission on 1 August 2024).
97.1 | Diageo Group Malus and Clawback Policy
101.INS | Inline XBRL Instance Document
101.SCH | Inline XBRL Taxonomy Extension Schema
101.CAL | Inline XBRL Taxonomy Extension Schema Calculation Linkbase
101.DEF | Inline XBRL Taxonomy Extension Schema Definition Linkbase
101.LAB | Inline XBRL Taxonomy Extension Schema Label Linkbase
101.PRE | Inline XBRL Taxonomy Extension Schema Presentation Linkbase

(i) Pursuant to an Agreement of Resignation, Appointment and Acceptance dated 16 October 2007 by and among Diageo plc, Diageo Capital plc, Diageo Finance BV,
Diageo Investment Corporation, The Bank of New York and Citibank NA, The Bank of New York Mellon has become the successor trustee to Citibank NA under
Diageo’s indentures dated 3 August 1998, 8 December 2003 and 1 June 1999.
354
Signature
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto
duly authorised.

DIAGEO plc
(REGISTRANT)
/s/ Lavanya Chandrashekar
Name: Lavanya Chandrashekar
Title: Chief Financial Officer
1 August 2024

355
In this document the following words and expressions shall, unless the context otherwise requires, have the following meanings:

Term used in UK annual report | US equivalent or definition
Associates | Entities accounted for under the equity method
American Depositary Receipt (ADR) | Receipt evidencing ownership of an ADS
American Depositary Share (ADS) | Registered negotiable security, listed on the New York Stock Exchange, representing four Diageo plc ordinary shares of 28 101/108 pence each
Called up share capital | Common stock
Capital redemption reserve | Other additional capital
Company | Diageo plc
CPI | Consumer price index
Creditors | Accounts payable and accrued liabilities
Debtors | Accounts receivable
Employee share schemes | Employee stock benefit plans
Employment or staff costs | Payroll costs
Equivalent units | 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. To convert volume of products other than spirits to equivalent units: beer in hectolitres divide by 0.9, wine in nine-litre cases divide by five, ready to drink in nine-litre cases divide by 10, and certain pre-mixed products classified as ready to drink in nine-litre cases divide by five.
Euro, €, ¢ | Euro currency
Exceptional items | Items that, in management’s judgement, need to be disclosed separately by virtue of their size or nature
Excise duty | Tax charged by a sovereign territory on the production, manufacture, sale or distribution of selected goods (including imported goods) within that territory. It is generally based on the quantity or alcohol content of goods, rather than their value, and is typically applied to alcohol products and fuels.
Finance lease | Capital lease
Financial year | Fiscal year
Free cash flow | Net cash flow from operating activities aggregated with net purchase and disposal of property, plant and equipment and computer software and with movements in loans
Freehold | Ownership with absolute rights in perpetuity
GAAP | Generally accepted accounting principles
Group and Diageo | Diageo plc and its consolidated subsidiaries
IFRS | International Financial Reporting Standards (IFRS) Accounting Standards adopted by the UK (UK-adopted International Accounting Standards) and IFRSs, as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee
Impact Databank, IWSR, IRI, Beverage Information Group and Plato Logic | Information source companies that research the beverage alcohol industry and are independent from industry participants
Net sales | Sales after deducting excise duties
Noon buying rate | Buying rate at noon in New York City for cable transfers in sterling as certified for customs purposes by the Federal Reserve Bank of New York
Operating profit | Net operating income
Organic movement | At level foreign exchange rates and after adjusting for exceptional items, acquisitions and disposals for continuing operations
Own shares | Treasury stock
Pound sterling, sterling, £, pence, p | UK currency
Price/mix | Price/mix is the number of percentage points by which the organic movement in net sales exceeds the organic movement in volume. The difference arises because of changes in the composition of sales between higher and lower priced variants/markets or as price changes are implemented.
Profit | Earnings

Glossary of terms and US equivalents
356

Term used in UK annual report | US equivalent or definition
Profit for the year | Net income
Provisions | Accruals for losses/contingencies
Reserves | Accumulated earnings, other comprehensive income and additional paid in capital
RPI | Retail price index
Ready to drink | Ready to drink products. Ready to drink also include ready to serve products, such as pre- mix cans in some markets, and progressive adult beverages in the United States and certain markets supplied by the United States.
SEC | US Securities and Exchange Commission
Share premium | Additional paid in capital or paid in surplus
Shareholders’ funds | Shareholders’ equity
Shareholders | Stockholders
Shares | Common stock
Shares and ordinary shares | Diageo plc’s ordinary shares
Shares in issue | Shares issued and outstanding
Trade and other payables | Accounts payable and accrued liabilities
Trade and other receivables | Accounts receivable
US dollar, US$, $, ¢ | US currency

Glossary of terms and US equivalents (continued)
357
Exhibit 2.4
DESCRIPTION OF SECURITIES
REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
As of 30 June 2024 Diageo plc. (“Diageo,” the “Company,” “we,” “us,” and “our”) had the following series of securities registered
pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol(s) | Name of each exchange on which registered
American Depositary Shares | DEO | New York Stock Exchange
Ordinary shares of 28 101/108 pence each |  | New York Stock Exchange(i)

(i)Not for trading, but only in connection with the registration of American Depositary Shares representing such ordinary shares, pursuant to the requirements of the
Securities and Exchange Commission.
Capitalized terms used but not defined herein have the meanings given to them in Diageo’s annual report on Form 20-F for the fiscal
year ended 30 June 2024.
ORDINARY SHARES
The following description of our ordinary shares is a summary and does not purport to be complete. It is subject to and qualified in its
entirety by Diageo’s articles of association (as adopted by special resolution at the Annual General Meeting on 28 September 2023)
and by the Companies Act 1985 and the Companies Act 2006 and any other applicable English law concerning companies, as
amended from time to time.
A copy of Diageo’s articles of association is filed as an exhibit to Diageo’s annual report on Form 20-F for the fiscal year ended 30
June 2024, as Exhibit 1.1.
General
As at 30 June 2024 there were 2,432,411,924 ordinary shares of 28 101/108 pence each in issue with a nominal value of $886,817,044.
On 25 July 2019 the Board of Diageo approved a return of capital program to return up to £4.5 billion to shareholders over the three-
year period ending 30 June 2022. During the first phase, which completed on 31 January 2020, the group purchased 36.1 million
ordinary shares.
On 9 April 2020 Diageo announced that it had not initiated the next phase of the return of capital programme and that it would not do
so during the remainder of the year ended 30 June 2020. On 12 May 2021 it was announced that Diageo was recommencing the up to
£4.5 billion programme, extending the original completion date by two years to 30 June 2024.
The final three phases of the £4.5 billion programme completed on 11 February 2022, 5 October 2022 and 1 February 2023
respectively, having announced in July 2022 that it would bring forward the final completion date to during the year ending 30 June
2023. Under these three additional phases Diageo purchased a further 88.1 million shares in total.
On 25 January 2023 the Board of Diageo approved an additional share buyback programme to return up to £0.5 billion to shareholders
by the end of the year ending 30 June 2023. This programme commenced on 16 February 2023 and completed on 2 June 2023 with
Diageo having purchased 14 million shares.
On 31 July 2023 the Board of Diageo approved an additional return of capital programme to return up to $1.0 billion to shareholders
by 30 June 2024. This programme commenced on 12 October 2023 and completed on 29 May 2024 with Diageo having purchased
27.4 million shares.
All shares repurchased have been cancelled.
Our ordinary shares are listed on the London Stock Exchange (LSE). Diageo ADSs (as further described below), representing four
Diageo ordinary shares each, are listed on the New York Stock Exchange (NYSE) under the symbol “DEO”.
All of Diageo’s ordinary shares are fully paid. Accordingly, no further contribution of capital may be required by Diageo from the
holders of such shares. Diageo’s ordinary shares are represented in certificated form and also in uncertificated form under “CREST”.
CREST is an electronic settlement system in the United Kingdom which enables Diageo’s ordinary shares to be evidenced other than
by a physical certificate and transferred electronically rather than by delivery of a written stock transfer form. Diageo’s ordinary
shares:
358
•may be represented by certificates in registered form issued (subject to the terms of issue of the shares) following issuance of
the shares by Diageo or receipt of a form of transfer (bearing evidence of payment of the appropriate stamp duty) by Diageo
Registrar, PO Box 521, Darlington, DL1 9XS; or
•may be in uncertificated form with the relevant CREST member account being credited with the ordinary shares issued or
transferred.
Under English law, persons who are neither residents nor nationals of the United Kingdom may freely hold, vote and transfer Diageo
ordinary shares in the same manner and under the same terms as UK residents or nationals.
Dividend rights
Holders of Diageo’s ordinary shares may, by ordinary resolution, declare dividends but may not declare dividends in excess of the
amount recommended by the directors. The directors may also pay interim dividends or fixed rate dividends. No dividend may be paid
other than out of profits available for distribution. All of Diageo’s ordinary shares rank equally for dividends, but the Board may
withhold payment of all or any part of any dividends or other monies payable in respect of Diageo’s shares from a person with a
0.25% interest (as defined in Diageo’s articles of association) if such a person has been served with a restriction notice (as defined in
Diageo’s articles of association) after failure to provide Diageo with information concerning interests in those shares required to be
provided under the Companies Acts. Dividends may be paid in currencies other than sterling and such dividends will be calculated
using an appropriate market exchange rate as determined by the directors in accordance with Diageo’s articles of association.
If a dividend has not been claimed, the directors may invest the dividend or use it in some other way for the benefit of Diageo until the
dividend is claimed. If the dividend remains unclaimed for 12 years after the date such dividend was declared or became due for
payment, it will be forfeited and will revert to Diageo (unless the directors decide otherwise). Diageo may stop sending cheques,
warrants or similar financial instruments in payment of dividends by post in respect of any shares or may cease to employ any other
means for payment of dividends if either (a) at least two consecutive payments have remained uncashed or are returned undelivered or
that means of payment has failed, or (b) one payment remains uncashed or is returned undelivered or that means of payment has failed
and reasonable enquiries have failed to establish any new postal address or account of the holder. Diageo must resume sending
dividend cheques, warrants or similar financial instruments or employing that means of payment if the holder requests such
resumption in writing.
Diageo’s articles of association permit payment or satisfaction of a dividend wholly or partly by distribution of specific assets,
including fully paid shares or debentures of any other company. Such action is only permitted upon the recommendation of the board
and must be approved by ordinary resolution by the general meeting which declared the dividend.
Voting rights
Voting on any resolution at any general meeting of the company is by a show of hands unless a poll is duly demanded. On a show of
hands, (a) every shareholder who is present in person at a general meeting, and every proxy appointed by any one shareholder and
present at a general meeting, has/have one vote regardless of the number of shares held by the shareholder (or, subject to (b),
represented by the proxy), and (b) every proxy present at a general meeting who has been appointed by more than one shareholder has
one vote regardless of the number of shareholders who have appointed him or the number of shares held by those shareholders, unless
he has been instructed to vote for a resolution by one or more shareholders and to vote against the resolution by one or more
shareholders, in which case he has one vote for and one vote against the resolution. On a poll, every shareholder who is present in
person or by proxy has one vote for every share held by that shareholder, but a shareholder or proxy entitled to more than one vote
need not cast all his votes or cast them all in the same way (the deadline for exercising voting rights by proxy is set out in the form of
proxy).
A poll may be demanded by any of the following:
•the chairman of the general meeting;
•at least three shareholders entitled to vote on the relevant resolution and present in person or by proxy at the meeting;
•any shareholder or shareholders present in person or by proxy and representing in the aggregate not less than one-tenth of
the total voting rights of all shareholders entitled to vote on the relevant resolution; or
•any shareholder or shareholders present in person or by proxy and holding shares conferring a right to vote on the
relevant resolution on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total
sum paid up on all the shares conferring that right.
Diageo’s articles of association and the Companies Acts provide for matters to be transacted at general meetings of Diageo by the
proposing and passing of two kinds of resolutions:
•ordinary resolutions, which include resolutions for the election, re-election and removal of directors, the declaration of
final dividends, the appointment and re-appointment of the external auditor, the approval of the remuneration report and
remuneration policy and the grant of authority to allot shares; and
•special resolutions, which include resolutions for the amendment of Diageo’s articles of association, resolutions relating
to the disapplication of pre-emption rights, and resolutions modifying the rights of any class of Diageo’s shares at a
meeting of the holders of such class.
An ordinary resolution requires the affirmative vote of a simple majority of the votes cast at a validly constituted shareholders’
meeting. Special resolutions require the affirmative vote of not less than three-quarters of the votes cast at a validly constituted
359
shareholders’ meeting. The necessary quorum for a shareholders’ meeting of Diageo is a minimum of two shareholders present in
person or by proxy and entitled to vote.
A shareholder is not entitled to vote at any general meeting or class meeting in respect of any share held by him if he has been served
with a restriction notice (as defined in Diageo’s articles of association) after failure to provide Diageo with information concerning
interests in those shares required to be provided under the Companies Acts.
Directors
Diageo’s articles of association provide for a Board of Directors, consisting (unless otherwise determined by an ordinary resolution of
shareholders) of not fewer than three directors and not more than 25 directors, in which all powers to manage the business and affairs
of Diageo are vested. Directors may be elected by the members in a general meeting or appointed by Diageo’s Board. At each annual
general meeting, every director is required to retire and is then reconsidered for election/re-election by shareholders, assuming they
wish to stand for election/re-election. There is no age limit requirement in respect of directors. Directors may also be removed before
the expiration of their term of office in accordance with the provisions of the Companies Acts.
Liquidation rights
In the event of the liquidation of Diageo, after payment of all liabilities and deductions taking priority in accordance with English law,
the balance of assets available for distribution will be distributed among the holders of ordinary shares according to the amounts paid
up on the shares held by them.
Pre-emption rights and new issues of shares
While holders of ordinary shares have no pre-emptive rights under Diageo’s articles of association, the ability of the directors to cause
Diageo to issue shares, securities convertible into shares or rights to shares, otherwise than pursuant to an employee share scheme, is
restricted. Under the Companies Acts, the directors of a company are, with certain exceptions, unable to allot any equity securities
without express authorisation, which may be contained in a company’s articles of association or given by its shareholders in a general
meeting by way of an ordinary resolution, but which in either event cannot last for more than five years. Under the Companies Acts,
Diageo may also not allot shares for cash (otherwise than pursuant to an employee share scheme) without first making an offer to
existing shareholders to allot such shares to them on the same or more favourable terms in proportion to their respective shareholdings,
unless this requirement is disapplied by a special resolution of the shareholders. However, Diageo has in the past sought authority
from its shareholders to allot shares and disapply pre-emptive rights (in each case subject to certain limitations).
Disclosure of interests in Diageo’s shares
There are no provisions in Diageo’s articles of association whereby persons acquiring, holding or disposing of a certain percentage of
Diageo’s shares are required to make disclosure of their ownership percentage, although there are such requirements under the
Companies Acts. The basic disclosure requirement under Part 6 of the Financial Services and Markets Act 2000 and Rule 5 of the
Disclosure Guidance and Transparency Rules made by the Financial Conduct Authority (successor to the UK Financial Services
Authority) imposes a statutory obligation on a person to notify Diageo and the Financial Conduct Authority of the percentage of the
voting rights in Diageo he directly or indirectly holds or controls, or has rights over, through his direct or indirect holding of certain
financial instruments, if the percentage of those voting rights:
•reaches, exceeds or falls below 3% and/or any subsequent whole percentage figure as a result of an acquisition or
disposal of shares or financial instruments; or
•reaches, exceeds or falls below any such threshold as a result of any change in the breakdown or number of voting rights
attached to shares in Diageo.
The Disclosure Guidance and Transparency Rules set out in detail the circumstances in which an obligation of disclosure will arise, as
well as certain exemptions from those obligations for specified persons.
Under section 793 of the Companies Act 2006, Diageo may, by notice in writing, require a person that Diageo knows or has
reasonable cause to believe is or was during the three years preceding the date of notice interested in Diageo’s shares to indicate
whether or not that is the case and, if that person does or did hold an interest in Diageo’s shares, to provide certain information as set
out in that Act.
Article 19 of the EU Market Abuse Regulation (2014/596) (as it is incorporated into UK domestic law by virtue of the European
Union (Withdrawal) Act 2018 and amended by The Market Abuse (Amendment) (EU Exit) Regulation 2019) further requires persons
discharging managerial responsibilities within Diageo (and their persons closely associated) to notify Diageo of transactions
conducted on their own account in Diageo shares or derivatives or certain financial instruments relating to Diageo shares.
The City Code on Takeovers and Mergers also imposes strict disclosure requirements with regard to dealings in the securities of an
offeror or offeree company on all parties to a takeover and also on their respective associates during the course of an offer period.
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Variation of rights
If, at any time, Diageo’s share capital is divided into different classes of shares, the rights attached to any class of shares may be
varied, subject to the provisions of the Companies Acts, either with the consent in writing of the holders of not less than three-quarters
in nominal value of the issued shares of that class or upon the adoption of a special resolution passed at a separate meeting of the
holders of the shares of that class.
At every such separate meeting, all of the provisions of Diageo’s articles of association relating to proceedings at a general meeting
apply, except that (a) the quorum is to be the number of persons (which must be at least two) who hold or represent by proxy not less
than one-third in nominal value of the issued shares of the class (excluding any shares of that class held as treasury shares) or, if such
quorum is not present on an adjourned meeting, one person who holds shares of the class regardless of the number of shares he holds,
(b) any holder of shares of the class who is present in person or by proxy may demand a poll, and (c) each shareholder present in
person or by proxy and entitled to vote will have one vote per share held in that particular class in the event a poll is taken.
Class rights are deemed not to have been varied by the creation or issue of new shares ranking equally with or subsequent to that class
of shares in all respects or by the reduction of the capital paid up on such shares or by the purchase or redemption by Diageo of its
own shares, in each case in accordance with the Companies Acts and Diageo’s articles of association.
Repurchase of shares
Subject to authorisation by shareholder resolution, Diageo may purchase its own shares in accordance with the Companies Acts. Any
shares which have been bought back may be held as treasury shares or, if not so held, must be cancelled immediately upon completion
of the purchase, thereby reducing the amount of Diageo’s issued share capital. At the Annual General Meeting held on September 28,
2023, Diageo’s shareholders gave it authority to repurchase up to 224,704,974 of its ordinary shares subject to additional conditions.
The minimum price which must be paid for such shares is 28 101/108 pence and the maximum price is the higher of (a) 5% above the
average market value of Diageo’s ordinary shares for the five business days immediately preceding the day on which that ordinary
share is contracted to be purchased and (b) the higher of the price of the last independent trade and the highest current independent
purchase bid on the trading venue where the purchase is carried out.
Restrictions on transfers of shares
The Board may decline to register a transfer of a certificated Diageo share unless the instrument of transfer (a) is duly stamped or
certified or otherwise shown to the satisfaction of the Board to be exempt from stamp duty and is accompanied by the relevant share
certificate and such other evidence of the right to transfer as the Board may reasonably require, (b) is in respect of only one class of
share and (c) if to joint transferees, is in favour of not more than four such transferees.
Registration of a transfer of an uncertificated share may be refused in the circumstances set out in the uncertificated securities rules (as
defined in Diageo’s articles of association) and where, in the case of a transfer to joint holders, the number of joint holders to whom
the uncertificated share is to be transferred exceeds four.
The Board may decline to register a transfer of any of Diageo’s certificated shares by a person with a 0.25% interest (as defined in
Diageo’s articles of association) if such a person has been served with a restriction notice (as defined in Diageo’s articles of
association) after failure to provide Diageo with information concerning interests in those shares required to be provided under the
Companies Acts, unless the transfer is shown to the Board to be pursuant to an arm’s length sale (as defined in Diageo’s articles of
association).
Substantive shareholder voting rights
The company’s substantial shareholders do not have different voting rights.
AMERICAN DEPOSITARY SHARES
General
The ordinary shares of Diageo may be issued in the form of American depositary shares, or ADSs. Each Diageo ADS represents four
ordinary shares of Diageo.
Citibank, N.A. is the depositary with respect to Diageo’s ADSs, which are evidenced by American depositary receipts, or ADRs. Each
ADS represents an ownership interest in four ordinary shares deposited with the custodian, as agent of the depositary, under the
Deposit Agreement dated 14 February 2013 between Diageo, the Depositary and owners and beneficiaries of the ADRs (the “Deposit
Agreement”). Each ADS also represents any other securities, cash or other property which may be held by Citibank, N.A. as
depositary.
The principal executive office of Citibank, N.A. and the office at which the ADRs will be administered is currently located at 388
Greenwich Street, New York, New York 10013, United States. Citibank, N.A. is a national banking association organized under the
laws of the United States. The custodian will be Citibank, N.A. (London Branch) and its duties will be administered from its principal
London office, currently located at 25 Molesworth Street, Lewisham, London SE13 7EX, United Kingdom.
You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, by
having an ADS registered in your name on the books of the depositary, you are an ADR holder. If you hold the ADSs through your
broker or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert the rights of an
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ADR holder described in this section. You should consult with your broker or financial institution to find out what those procedures
are.
Diageo will not treat ADR holders as shareholders and ADR holders will not have shareholder rights. English law governs shareholder
rights. The depositary will be the holder of the ordinary shares underlying your ADSs. As a holder of ADRs, you will have ADR
holder rights, which are set out in the Deposit Agreement. The Deposit Agreement also sets out the rights and obligations of the
depositary.
The following is a summary of the material terms of the Deposit Agreement. Because it is a summary, it does not contain all the
information that may be important to you. For more complete information, you should read the entire form of Deposit Agreement and
the form of ADR, which contain the terms of the ADSs. Please refer to Exhibit 99.A on Form F-6 (File No. 333-186400) filed with the
Securities and Exchange Commission on 1 February 2013). Copies of the Deposit Agreement are also available for inspection at the
offices of the depositary.
Share Dividends and Other Distributions
Diageo may make various types of distributions with respect to its securities. The depositary has agreed to pay to you the cash
dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities, after deducting its fees and
expenses. You will receive these distributions in proportion to the number of underlying ordinary shares that your ADSs represent.
Except as stated below, to the extent the depositary is legally permitted it will deliver such distributions to ADR holders in proportion
to their interests in the following manner:
•Cash. Upon receiving notice from Diageo that Diageo intends to distribute a cash dividend or other cash
distribution, the depositary will establish a record date for such distribution. As promptly as practicable following
the receipt of a cash dividend or other cash distribution from Diageo, the depositary will: (i) if at the time of receipt
thereof any amounts received in a foreign currency can, in the judgment of the depositary, be converted on a
practicable basis into U.S. dollars transferable into the United States, promptly convert or cause to be converted such
cash dividend or cash distributions into U.S. dollars, (ii) if applicable, establish a record date for the distribution and
(iii) distribute promptly such U.S. dollar amount, net of applicable fees, charges and expenses of the depositary and
taxes withheld. The depositary shall distribute only such amount as can be distributed without attributing to any
ADR holder a fraction of one cent. Any such fractional amounts shall be rounded to the nearest whole cent and so
distributed to ADR holders entitled thereto. If the depositary cannot reasonably make such conversion or obtain any
governmental approval or license necessary for the conversion, the depositary will hold any unconvertible foreign
currency for your account without liability for any interest or, upon request, will distribute the foreign currency to
you. If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose
some or all of the value of the distribution.
•Shares. Upon receiving notice from Diageo that Diageo intends to distribute a share dividend or free distribution of
ordinary shares, the depositary will establish a record date for such distribution. The depositary will then either (i)
deliver additional ADSs representing such ordinary shares, or (ii) if additional ADSs are not so distributed, take all
actions necessary so that each ADS issued and outstanding after the ADS record date shall, to the extent permissible
by law, thenceforth also represent rights and interests in the additional ordinary shares distributed, in each case net
of applicable fees, charges and expenses of the depositary and taxes withheld. Only whole ADSs will be issued. Any
ordinary shares which would result in fractional ADSs will be sold and the net proceeds will be distributed to the
ADR holders entitled to them.
•Rights to receive additional shares. Upon receiving notice from Diageo that Diageo intends to distribute rights to
subscribe for additional ordinary shares or other rights and that Diageo wishes such rights to be made available to
holders of ADSs, the depositary shall, after consultation with Diageo, have discretion as to the procedure for making
such rights available to any ADR holders or in disposing of such rights on behalf of any ADR holders and making,
as promptly as practicable, the net proceeds available to such ADR holders. If, by the terms of the offering of rights
or for any other reason, the depositary may not either make such rights available to any ADR holders or dispose of
such rights on behalf of any ADR holders and make the net proceeds available to such ADR holders, then the
depositary shall allow such rights to lapse. If the depositary determines in its reasonable discretion that it is not
lawful or practicable to make such rights available to all or certain ADR holders, if Diageo does not furnish such
evidence or if the depositary determines it is not lawful or practicable to distribute such rights to all or some of the
registered holders, the depositary may:
•distribute such rights only to the holders to whom the depositary has determined such distribution is lawful
and practicable;
•if practicable, sell rights in proportion to the number of ADSs held by registered holders to whom the
depositary has determined it may not lawfully or practicably make such rights available and distribute the
net proceeds as cash; or
•allow rights in proportion to the number of ADSs held by registered holders to whom the depositary has
determined it may not lawfully or practicably make such rights available to lapse, in which case such
registered holders will receive nothing.
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Diageo has no obligation to file a registration statement under the Securities Act of 1933, as amended, in order to make any rights
available to ADR holders.
•Other Distributions. Upon receiving notice from Diageo that Diageo intends to distribute securities or property other
than those described above and that Diageo wishes such rights to be made available to holders of ADSs, the
depositary may distribute such securities or property in any manner it deems equitable and practicable. To the extent
the depositary deems distribution of such securities or property not to be practicable, the depositary may, after
consultation with Diageo, adopt any method that it reasonably deems to be equitable and practical, including but not
limited to the sale of such securities or property and distribution of any net proceeds in the same way that cash is
distributed.
The depositary may choose any practical method of distribution for any specific ADR holder, including the distribution of securities or
property, or it may retain such items, without paying interest on or investing them, on behalf of the ADR holder as deposited property.
There can be no assurances that the depositary will be able to convert any currency at a specified exchange rate or sell any property,
rights, shares or other securities at a specified price, nor that any of such transactions can be completed within a specified time
period.
Deposit, Withdrawal and Cancellation
The depositary will deliver ADSs if you or your broker deposit ordinary shares or evidence of rights to receive ordinary shares with
the custodian. In the case of the ADSs to be issued under a prospectus supplement, Diageo may arrange with the underwriters named
therein to deposit such ordinary shares if and as provided in the prospectus supplement.
Ordinary shares deposited with the custodian must also be accompanied by certain documents, including (a) in the case of certificated
shares, instruments showing that such ordinary shares have been properly transferred or endorsed and (b) in the case of book-entry
shares, confirmation of book-entry transfer and recordation, in each case to the person on whose behalf the deposit is being made.
The custodian will hold all deposited ordinary shares for the account of the depositary. ADR holders thus have no direct ownership
interest in the ordinary shares and have only such rights as are contained in the Deposit Agreement. The deposited shares and any
other securities, property or cash received by the depositary or the custodian and held under the Deposit Agreement are referred to as
deposited property.
Upon each deposit of ordinary shares, receipt of related delivery documentation and compliance with the other provisions of the
Deposit Agreement, including the payment of the fees and charges of the depositary and any taxes or other fees or charges owing, the
depositary will issue and deliver ADSs in the name of the person entitled thereto and, if applicable, issue ADRs evidencing the
number of ADSs to which such person is entitled. ADRs will be delivered at the depositary’s principal office.
The depositary will make arrangements for the acceptance of ADSs for book-entry settlement through The Depository Trust
Company, or DTC. All ADSs held through DTC will be registered in the name of Cede & Co., the nominee for DTC. Unless issued as
uncertificated ADSs, the ADSs registered in the name of Cede & Co. will be evidenced by one or more receipt(s) in the form of a
“Balance Certificate,” which will provide that it represents the aggregate number of ADSs from time to time indicated in the records
of the depositary as being issued to DTC hereunder and that the aggregate number of ADSs represented thereby may from time to time
be increased or decreased by making adjustments on such records of the depositary and of DTC or Cede & Co.
When you turn in your ADSs (and, if applicable, the ADRs evidencing the ADSs) at the depositary’s office, the depositary will, upon
payment of certain applicable fees, charges and taxes, and upon receipt of proper instructions, deliver the underlying ordinary shares to
you. At your risk, expense and request, the depositary will deliver (to the extent permitted by law) deposited property at the
depositary’s principal office.
The depositary may restrict the withdrawal of deposited securities only in connection with:
•temporary delays caused by closing Diageo’s transfer books or those of the depositary or the deposit of ordinary
shares in connection with voting at a shareholders’ meeting, or the payment of dividends;
•the payment of fees, taxes and similar charges; or
•compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of
deposited securities.
This right of withdrawal may not be limited by any other provision of the Deposit Agreement.
Voting Rights
If you are an ADR holder and the depositary asks you to provide it with voting instructions, you may instruct the depositary how to
exercise the voting rights for the ordinary shares which underlie your ADRs. After receiving voting materials from Diageo, the
depositary will, if Diageo asks it to, notify the ADR holders of any shareholder meeting or solicitation of consents for proxies. This
notice will describe how you may, subject to English law and the provisions of Diageo’s articles of association, instruct the depositary
to exercise the voting rights for the ordinary shares which underlie your ADSs. For instructions to be valid, the depositary must
receive them on or before the date specified. The depositary will try, as far as practical, subject to English law and the provisions of
Diageo’s articles of association, to vote or to have its agents vote the shares or other deposited securities as you instruct. The
depositary will not vote or attempt to exercise the right to vote that attaches to the shares or other deposited securities, other than in
accordance with your instructions or deemed instructions. If the depositary does not receive instructions from you on or before the
specified date and voting is by poll, the depositary will deem you to have instructed it to give a discretionary proxy to a person
designated by Diageo to vote such deposited securities.
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However, we cannot assure you that you will receive our voting materials in time for you to give the depositary instructions to vote
any deposited securities. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions to vote
the deposited securities, if, for example, the instructions are not received in time to vote the amount of the deposited securities or if
English or other applicable laws prohibit such voting.
Notwithstanding anything contained in the Deposit Agreement or any ADR, the depositary may, to the extent not prohibited by law or
regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials
provided to the depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of deposited
securities, distribute to ADR holders a notice that provides ADR holders with, or otherwise publicizes to ADR holders, instructions on
how to retrieve such materials or receive such materials upon request (i.e., by reference to a website containing the materials for
retrieval or a contact for requesting copies of the materials).
Notwithstanding anything else contained in the Deposit Agreement or any ADR, the depositary shall not have any obligation to take
any action with respect to any meeting, or solicitation of consents or proxies, of holders of deposited securities if the taking of such
action would violate applicable U.S. laws. Diageo has agreed to take any and all actions reasonably necessary and as permitted by
English law to enable ADR holders and beneficial owners to exercise the voting rights accruing to the deposited securities.
Reports and Other Communications
The depositary will make available for inspection by ADR holders any reports and communications from Diageo that are both
received by the depositary as holder of deposited property and made generally available by Diageo to the holders of deposited
property. Upon the request of Diageo, the depositary will send to you copies of reports furnished by Diageo pursuant to the Deposit
Agreement.
Reclassifications, Recapitalizations and Mergers
If Diageo takes actions that affect the deposited securities, including any change in par value, split-up, consolidation or other
reclassification of deposited securities or any recapitalization, reorganization, merger, consolidation, sale of assets or other similar
action, then the depositary may, and will if Diageo asks it to:
•distribute additional or amended ADRs;
•distribute cash, securities or other property it has received in connection with such actions; or
•sell any securities or property received and distribute the proceeds as cash.
If the depositary does not choose any of the above options, any of the cash, securities or other property it receives will constitute part
of the deposited property and each ADS will then represent a proportionate interest in such property.
Amendment and Termination
Diageo may agree with the depositary to amend the Deposit Agreement and the ADSs without your consent for any reason. ADR
holders must be given at least 30 days’ notice of any amendment that imposes or increases any fees or charges (except for taxes and
other charges specifically payable by ADR holders under the Deposit Agreement), or affects any substantial existing right of ADR
holders. If an ADR holder continues to hold ADRs when an amendment has become effective such ADR holder is deemed to agree to
such amendment.
No amendment will impair your right to surrender your ADSs and receive the underlying securities except to comply with mandatory
provisions of applicable law.
The depositary will terminate the Deposit Agreement if Diageo asks it to do so. The depositary may also terminate the Deposit
Agreement if the depositary has told Diageo that it would like to resign and Diageo has not appointed a new depositary bank within
180 days. In either case, the depositary must notify you at least 90 days before termination. After termination, the depositary’s only
responsibility will be (i) to advise you that the Deposit Agreement is terminated, (ii) to collect distributions on the deposited securities
(iii) to sell rights and other property, and (iv) to deliver ordinary shares and other deposited securities upon cancellation of the ADRs.
At any time from the termination date, the depositary may sell the deposited property which remains and hold the net proceeds of such
sales and any other cash it is holding under the Deposit Agreement, without liability for interest, for the pro rata benefit of ADR
holders who have not yet surrendered their ADRs. After making such sale, the depositary shall have no obligations except to account
for such proceeds and other cash. The depositary will not be required to invest such proceeds or pay interest on them.
Limitations on Obligations and Liability to ADR Holders
The Deposit Agreement expressly limits the obligations and liability of the depositary, Diageo and their respective agents. Neither
Diageo nor the depositary assumes any obligation nor shall either of them be subject to any liability under the Deposit Agreement to
any ADR holder, except that they each agree to perform their respective obligations specifically set forth in the Deposit Agreement
without negligence or bad faith. Neither Diageo nor the depositary will be liable if:
•law, regulation, the provisions of or governing any deposited securities, act of God, war or other circumstance
beyond its control shall prevent, delay or subject to any civil or criminal penalty any act which the Deposit
Agreement or the ADRs provide shall be done or performed by it;
•it exercises or fails to exercise discretion permitted under the Deposit Agreement or the ADR;
•it performs its obligations specifically set forth in the Deposit Agreement without negligence or bad faith; or
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•it takes any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants,
any person presenting ordinary shares for deposit, any registered holder of ADRs, or any other person believed by it
to be competent to give such advice or information.
In the Deposit Agreement, Diageo agrees to indemnify Citibank, N.A. for acting as depositary, except for losses caused by Citibank,
N.A.’s own negligence or bad faith, and Citibank, N.A. agrees to indemnify Diageo for losses resulting from its negligence or bad
faith.
The depositary will not be responsible for failing to carry out instructions to vote the deposited securities or for the manner in which
the deposited securities are voted or the effect of the vote.
The depositary may own and deal in deposited securities and in ADSs.
Neither Diageo nor the depositary nor any of their respective directors, employees, agents or affiliates shall incur any liability for any
consequential or punitive damages for any breach of the terms of the Deposit Agreement.
Books of Depositary
The depositary or its agent will maintain a register for the registration, registration of transfer, combination and split-up of ADSs and,
if applicable, ADRs evidencing such ADSs. You may inspect such records at such office during regular business hours, but solely for
the purpose of communicating with other holders in the interest of business matters relating to the Deposit Agreement.
The depositary will maintain facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs.
These facilities may be closed from time to time when the depositary considers it expedient to do so.
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Exhibit 12.1
I, Debra Crew, certify that:
1.I have reviewed this annual report on Form 20-F of Diageo plc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods
presented in this report;
4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
company’s internal control over financial reporting.
Date: 1 August 2024
/s/ Debra Crew
Name: Debra Crew
Title: Chief Executive
(Principal Executive Officer)
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Exhibit 12.2
I, Lavanya Chandrashekar, certify that:
1.I have reviewed this annual report on Form 20-F of Diageo plc;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods
presented in this report;
4.The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the
period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
5.The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
company’s internal control over financial reporting.
Date: 1 August 2024
/s/ Lavanya Chandrashekar
Name: Lavanya Chandrashekar
Title: Chief Financial Officer
(Principal Financial Officer)
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Exhibit 13.1
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United
States Code), the undersigned officer of Diageo plc, a public limited company incorporated under the laws of England and Wales (the
‘Company’), hereby certifies, to such officer’s knowledge, that:
The Annual Report on Form 20-F for the year ended 30 June 2024 (the ‘Report’) of the Company fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.
Date: 1 August 2024
/s/ Debra Crew
Name: Debra Crew
Title: Chief Executive
(Principal Executive Officer)
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure
document.
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Exhibit 13.2
Certification
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United
States Code), the undersigned officer of Diageo plc, a public limited company incorporated under the laws of England and Wales (the
‘Company’), hereby certifies, to such officer’s knowledge, that:
The Annual Report on Form 20-F for the year ended 30 June 2024 (the ‘Report’) of the Company fully complies with the
requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.
Date: 1 August 2024
/s/ Lavanya Chandrashekar
Name: Lavanya Chandrashekar
Title: Chief Financial Officer
(Principal Financial Officer)
The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Report or as a separate disclosure
document.
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Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 of Diageo plc (No. 333-269929),
Diageo Capital plc (No. 333-269929-01) and Diageo Investment Corporation (No. 333-269929-02), and Form S-8 (No. 333-153481,
333-162490, 333-169934, 333-182315, 333-206290 and 333-223071) of our report dated 1 August 2024 relating to the financial
statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers LLP
London, United Kingdom
1 August 2024
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